**EXHIBIT 10.23**

 

**Employment Agreement of JohnRiconosciuto**

 

This Employment Agreement (the “Agreement”) iseffective as of August 1, 2000 (the “Effective Date”), by and betweenSmurfit-Stone Container Corporation (the “Company”) and John Riconosciuto (the “Executive”).

 

WHEREAS, the Company desires to employ the Executiveas the Vice President and General Manager of its Specialty Packaging Division;and

 

WHEREAS, the Company and the Executive have reachedagreement concerning the terms and conditions of his employment and wish toformalize that agreement;

 

NOW, THEREFORE, in consideration of the mutual terms,covenants and conditions stated in this Agreement, the Company and theExecutive hereby agree as follows:

 

1.                                       **Employment.**  The Company hereby employs the Executive andthe Executive hereby accepts employment with the Company as Vice President andGeneral Manager of the Company’s Specialty Packaging Division.  During the Employment Term (as hereinafterdefined), Executive will have the title, status and duties of Vice Presidentand General Manager of the Company’s Specialty Packaging Division and willreport directly to the Company’s President and Chief Executive Officer.

 

2.                                       **Term of Employment.**  The term of employment (“Employment Term”)will commence on the Effective Date, and will continue thereafter until twoyears from the Effective Date and will be automatically extended for subsequentone (1) day periods for each day of the Employment Term that passes after theEffective Date, unless sooner terminated by either party in accordance with theprovisions of this Agreement.  The intentof the foregoing provision is that the Agreement becomes “evergreen” on theEffective Date so that on each passing day after the Effective Date theEmployment Term automatically extends to a full two-year period.

 

3.                                       **Duties.**  During the Employment Term:

 

(a)                                  TheExecutive will perform duties assigned by the Company’s President and ChiefExecutive Officer, Chief Operating Officer or Chief Financial Officer, or theCompany’s Board of Directors (the “Board”), from time to time; provided thatthe Executive shall not be assigned tasks inconsistent with those of VicePresident and General Manager of the Company’s Specialty Packaging Division.

 

(b)                                 TheExecutive will devote his full time and best efforts, talents, knowledge andexperience to serving as the Company’s Vice President and General Manager ofits Specialty Packaging Division. However, the Executive may devote reasonable time to activities such assupervision of personal investments and activities involving professional,charitable, educational, religious and similar types of activities, speakingengagements and membership on other boards of directors, provided such

 

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activities do notinterfere in any material way with the business of the Company; providedthat, the Executive cannot serve on the board of directors of more thanone publicly-traded company without the Board’s written consent.  The time involved in such activities shallnot be treated as vacation time.  The Executiveshall be entitled to keep any amounts paid to him in connection with suchactivities (*e.g.*, director fees and honoraria).

 

(c)                                  TheExecutive will perform his duties diligently and competently and shall act inconformity with Company’s written and oral policies and within the limits,budgets and business plans set by the Company. The Executive will at all times during the Employment Term strictlyadhere to and obey all of the rules and regulations in effect from time to timerelating to the conduct of executives of the Company.  Except as provided in (b) above, theExecutive shall not engage in consulting work or any trade or business for hisown account or for or on behalf of any other person, firm or company thatcompetes, conflicts or interferes with the performance of his duties hereunderin any material way.

 

4.                                       **Compensation and Benefits.**  During Executive’s employment hereunder,Company shall provide to Executive, and Executive shall accept from Company asfull compensation for Executive’s services hereunder, compensation and benefitsas follows:

 

(a)                                  BaseSalary.  The Company shall pay theExecutive at an annual base salary (“Base Salary”) of two hundred seventy-five thousanddollars ($275,000).  The Board, or suchcommittee of the Board as is responsible for setting the compensation of seniorexecutive officers, shall review the Executive’s performance and Base Salaryannually in April of each year, and determine whether to adjust the Executive’sBase Salary on a prospective basis.  Thefirst review shall be in April 2001. Such adjusted annual salary then shall become the Executive’s “BaseSalary” for purposes of this Agreement. The Executive’s annual Base Salary shall not be reduced after anyincrease, without the Executive’s consent. The Company shall pay the Executive’s Base Salary according to payrollpractices in effect for all senior executive officers of the Company.

 

(b)                                 IncentiveCompensation.  The Executive shall beeligible to participate in any annual performance bonus plans, long-termincentive plans, and/or equity-based compensation plans established ormaintained by the Company for its senior executive officers, including, but notlimited to, the Management Incentive Plan and the Smurfit-Stone ContainerCorporation 1998 Long-Term Incentive Plan. The Board (or appropriate Boardcommittee) will determine and communicate to the Executive his annual incentiveplan participation for subsequent fiscal years, no later than May 31 of suchfiscal year.

 

(c)                                  ExecutiveBenefit Plans.  The Executive will beeligible to participate on substantially the same basis as the Company’s othersenior executive officers in any executive benefit plans offered by the Companyincluding, without limitation, medical, dental, short-term and long-termdisability, life, pension, profit sharing and nonqualified deferredcompensation arrangements.  The Companyreserves the right to modify, suspend or discontinue any and all of the plans,practices, policies and programs at any

 

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time withoutrecourse by the Executive, so long as Company takes such action generally withrespect to other similarly situated senior executive officers.

 

(d)                                 Perquisites.  The Company shall continue to provide to theExecutive such perquisites as are provided to him on the effective date of thisAgreement.

 

(e)                                  BusinessExpenses.  The Company shallreimburse the Executive for all reasonable and necessary business expensesincurred in the performance of services with the Company, according to Company’spolicies and upon Executive’s presentation of an itemized written statement andsuch verification as the Company may require.

 

5.                                       **Payments on Termination of Employment.**

 

(a)                                  Terminationof Employment for any Reason.  Thefollowing payments will be made upon the Executive’s termination of employmentfor any reason:

 

(i)                                     Earnedbut unpaid Base Salary through the date of termination;

 

(ii)                                  Anyannual incentive plan bonus, or other form of incentive compensation, for whichthe performance measurement period has ended, but which is unpaid at the timeof termination;

 

(iii)                               Anyaccrued but unpaid vacation;

 

(iv)                              Anyamounts payable under any of the Company’s executive benefit plans inaccordance with the terms of those plans, except as may be required under CodeSection 401(a)(13); and

 

(v)                                 Unreimbursedbusiness expenses incurred by the Executive on the Company’s behalf.

 

(b)                                 VoluntaryTermination of Employment for Other Than Good Reason.  In addition to the amounts determined under(a) above, if the Executive voluntarily terminates employment for other thanGood Reason, then in addition to the amounts determined under (a) above, theExecutive shall be entitled to a pro rata portion of the target bonus under theCompany’s annual incentive plan for the year in which such termination occurs.

 

(c)                                  Terminationof Employment for Death or Disability. In addition to the amounts determined under (a) above, if the Executive’stermination of employment occurs by reason of death or Disability, theExecutive (or his estate) will receive a pro rata portion of any bonus payableunder the Company’s annual incentive plan for the year in which suchtermination occurs determined based on the highest of (i) the actual annualbonus paid for the fiscal year immediately preceding such termination, (ii) thetarget bonus for the fiscal year in which such termination occurs, or (iii) theactual bonus attained for the fiscal year in which such terminationoccurs.  For purposes of this Agreement, “Disability”means the Executive’s long-term disability as defined under the Company’slong-term disability plan, or (iii) if the Executive is not covered by a long-

 

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term disabilityplan sponsored by the Company, the Executive’s inability to engage in anysubstantial gainful activity by reason of any medically-determined physical ormental impairment that can be expected to result in death or to be oflong-continued and indefinite duration.

 

(d)                                 Terminationby the Company Without Cause, or Voluntary Termination by the Executive forGood Reason.  If the Companyterminates the Executive’s employment other than for Cause, or the Executivevoluntarily terminates his employment for Good Reason, in addition to thebenefits payable under (a), the Company will pay the following amounts andprovide the following benefits:

 

(i)                                     TheBase Salary and annual bonus that the Company would have paid under theAgreement had the Executive’s employment continued to the end of the EmploymentTerm.  For this purpose, annual bonuswill be determined as the highest of (i) the actual bonus paid for the fiscalyear immediately preceding such termination, (ii) the target bonus for thefiscal year in which such termination occurs, or (iii) the actual bonusattained for the fiscal year in which such termination occurs.

 

(ii)                                  Continuedcoverage under the Company’s medical, dental, life, disability, pension, profitsharing and other executive benefit plans through the end of the EmploymentTerm, at the same cost to the Executive as in effect on the date of theExecutive’s termination.  If the Companydetermines that the Executive cannot participate in any benefit plan because heis not actively performing services for the Company, the Company may providesuch benefits under an alternate arrangement, such as through the purchase ofan individual insurance policy that provides similar benefits or, ifapplicable, through a nonqualified pension or profit sharing plan.  To the extent that the Executive’scompensation is necessary for determining the amount of any such continuedcoverage or benefits, such compensation (Base Salary and annual bonus) throughthe end of the Employment Term shall be at the highest rate in effect duringthe 12-month period immediately preceding the Executive’s termination ofemployment.

 

(iii)                               TheCompany will provide the Executive with reimbursement for club dues on the samebasis on which the Executive was receiving such reimbursement prior to hisemployment termination through the end of the Employment Term; and the Companywill bear the cost of such reimbursement, at the same level in effectimmediately prior to the Executive’s employment termination.  Reimbursement otherwise receivable by theExecutive pursuant to this paragraph shall be reduced to the extent comparablebenefits are actually received by or made available to the Executive withoutcost during the 24 month period following the Executive’s employmenttermination.  The Executive shall reportto the Company any such benefits actually received by or made available to theExecutive.

 

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(iv)                              Theperiod through the end of the Employment Term shall continue to count forpurposes of determining the Executive’s age and service with the Company withrespect to (i) eligibility, vesting and the amount of benefits under theCompany’s executive benefit plans, and (ii) the vesting of any outstandingstock options, restricted stock or other equity-based compensation awards.

 

(v)                                 TheCompany will provide the Executive with reimbursement for such outplacementservices as may be selected by the Executive, not to exceed the amount ofreimbursement as is customary for similarly situated executives of the Company.

 

(e)                                  GoodReason.  For purposes of thisAgreement, “Good Reason” shall mean the occurrence of any of the followingwithout the Executive’s consent:  (i)assigning duties to the Executive that are inconsistent with those of theposition of Vice President and General Manager for similar companies in similarindustries (except to the extent the Company promotes the Executive to a higherexecutive position); (ii) requiring the Executive to report to other than theCompany’s President and Chief Executive Officer, or the Company’s Board; (iii)the failure of the Company to pay any portion of the Executive’s compensationwithin 10 days of the date such compensation is due; (iv) the Company requiresthe Executive to relocate his principal business office to a location notwithin 50 miles of either the Company’s principal business office located inthe St. Louis, Missouri metropolitan area, or the Company’s principal businessoffice located in the Chicago, Illinois metropolitan area (provided, that, theCompany’s requiring the Executive to relocate his principal office from Chicagoto St. Louis, or from St. Louis to Chicago, will not constitute Good Reason);or (v) the Company’s failure to continue in effect any cash or stock-basedincentive or bonus plan, pension plan, welfare benefit plan or other benefitplan, program or arrangement, unless the aggregate value of all sucharrangements provided to the Executive after such discontinuance is notmaterially less than the aggregate value as of the Effective Date.  For purposes of this paragraph, “Company”shall mean the Company and, following any Change in Control, the SurvivingCorporation or, if applicable, the Parent Corporation (as those terms aredefined in Section 6(d)).

 

(f)                                    Cause.  For purposes of this Agreement, “Cause” shallmean:  (i) the Executive’s willful and continuedfailure to substantially perform his duties as an executive of the Company(other than any such failure resulting from incapacity due to physical ormental illness) after a written demand for substantial performance is deliveredto the Executive by the Board, which demand specifically identifies the mannerin which the Board believes that the Executive has not substantially performedhis duties, and which gives the Executive at least 30 days to cure such allegeddeficiencies, (ii) the Executive’s willful misconduct, which is demonstrablyand materially injurious to the Company, monetarily or otherwise, or (iii) theExecutive’s engaging in egregious misconduct involving serious moral turpitudeto the extent that his creditability and reputation no longer conforms to thestandard of senior executive officers of the Company.

 

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(g)                                 Timingof Payments.  All payments describedabove shall be made in a lump sum cash payment as soon as practicable (but inno event more than 10 days) following the Executive’s termination ofemployment.  If the total amount ofannual bonus is not determinable on that date, the Company shall pay the amountof bonus that is determinable and the remainder shall be paid in a lump sumcash payment within 10 days of the date that annual performance results arefinalized.

 

6.**                                       Changein Control.**

 

(a)                                  Paymentsand Benefits Upon Employment Termination After a Change in Control.  If within two years after a Change in Control(as defined below), the Company terminates the Executive’s employment otherthan for Cause, or the Executive voluntarily terminates his employment for GoodReason, the Company will provide the following payments and benefits to theExecutive, in lieu of those payments and benefits provided under Sections 5(c)or (d) above, but in addition to the amounts payable under Section 5(a) above:

 

(i)                                     Twotimes the Executive’s Base Salary as in effect on the date of the Executive’stermination of employment.

 

(ii)                                  Twotimes the highest of (i) the average annual bonus paid for the two fiscal yearsimmediately preceding the Executive’s employment termination, (ii) the targetbonus for the fiscal year in which such termination of employment occurs, or(iii) the actual bonus attained for the fiscal year in which such terminationoccurs.

 

(iii)                               Continuedcoverage for a period of 24 months from the Executive’s termination under theCompany’s medical, dental, life, disability and other welfare benefit plans, atthe same cost to the Executive as in effect on the date of the Change inControl (or, if lower, as in effect at any time thereafter).  If the Company determines that the Executivecannot participate in any benefit plan because he is not actively performingservices for the Company, the Company may provide such benefits under analternate arrangement, such as through the purchase of an individual insurancepolicy that provides similar benefits. The amount of such continued coverage shall be determined, ifapplicable, by adding 24 additional months of age and service to the Executive’sactual age and service as of the Executive’s termination date and as if theExecutive earned compensation during such 24-month period at the rate in effectduring the 12-month period immediately preceding his termination date.  The Executive’s eligibility for any retireemedical or life coverage following such termination date shall also bedetermined by adding 24 additional months of age and service to the Executive’sactual age and service as of the termination date.

 

(iv)                              Thevalue of continued coverage for a period of 24 months under any pension, profitsharing or other retirement plan maintained by the Company.  The value of such coverage under a taxqualified plan may be provided through a nonqualified pension or profit sharingplan and shall be determined by adding 24

 

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additional monthsof age and service to the Executive’s actual age and service at the date of theExecutive’s termination of employment and as if the Executive earnedcompensation during such 24-month period at the rate in effect during the12-month period immediately preceding his termination date.  In the case of a defined benefit pensionplan, such value shall include any early retirement subsidies to which theExecutive would have become entitled under the plan and shall be determinedusing the actuarial factors set forth in such plan.

 

(v)                                 TheCompany will provide the Executive with reimbursement for club dues on the samebasis on which the Executive was receiving such reimbursement prior to theChange in Control for 24 months following the Executive’s employmenttermination.  The Company will bear thecost of such reimbursement, at the same level in effect immediately prior tothe Change in Control.  Reimbursementotherwise receivable by the Executive pursuant to this paragraph shall bereduced to the extent comparable benefits are actually received by or madeavailable to the Executive without cost during the 24 month period followingthe Executive’s employment termination. The Executive shall report to the Company any such benefits actuallyreceived by or made available to the Executive.

 

(vi)                              Immediatevesting of all stock options, restricted stock and other equity-based awards.

 

 (vii)                        The Company will provide theExecutive with reimbursement for such outplacement services as may be selectedby the Executive, not to exceed the amount of reimbursement as is customary forsimilarly situated executives of the Company.

 

(b)                                 Timingof Payment.  All payments underparagraphs (a)(i), (ii) and (iv) above, and paragraph (c) below, shall be madein a lump sum cash payment as soon as practicable, but in no event more than 10days after the Executive’s termination of employment (or the date of the Changein Control, if applicable).  If the totalamount of bonus is not determinable on that date, the Company shall pay theamount of bonus that is determinable, and shall pay the remainder in a lump sumcash payment within 10 days of the date that annual performance results arefinalized.

 

(c)                                  Definitionof Change in Control.  For purposesof the Agreement, a “Change in Control” of the Company will be deemed to occuras of the first day that any one or more of the following condition issatisfied:

 

(i)                                     The“beneficial ownership” (as defined in Rule 13d-3 under the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) of securities representing morethan 20 percent (20%) of the combined voting power of the then outstandingvoting securities of the Company entitled to vote generally in the election ofdirectors (the “Company Voting Securities”) is accumulated, held or acquired bya Person (as defined in Section 3(a)(9) of the Exchange Act, as modified, andused in Sections 13(d) and 14(d) thereof) (other than the Company,

 

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any trustee orother fiduciary holding securities under an employee benefit plan of theCompany or an affiliate thereof, any corporation owned, directly or indirectly,by the Company’s stockholders in substantially the same proportions as theirownership of stock of the Company); provided, however that any acquisition fromthe Company or any acquisition pursuant to a transaction that complies withclauses (A), (B) and (C) of subparagraph (iii) of this paragraph will not be aChange in Control under this subparagraph (i), and provided further, thatimmediately prior to such accumulation, holding or acquisition, such Person wasnot a direct or indirect beneficial owner of 20 percent or more of the CompanyVoting Securities; or

 

(ii)                                  Individualswho, as of the date of the Agreement, constitute the Board of Directors (the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Board ofDirectors; provided, however, that any individual becoming a directorsubsequent to the date hereof whose election, or nomination for election by theCompany’s stockholders, was approved by a vote of at least a majority of thedirectors then comprising the Incumbent Board will be considered as though suchindividual were a member of the Incumbent Board, but excluding, for thispurpose, any such individual whose initial assumption of office occurs as aresult of an actual or threatened election contest with respect to the electionor removal of directors or other actual or threatened solicitation of proxiesor consents by or on behalf of a Person other than the Board of Directors; or

 

(iii)                               Consummationby the Company of a reorganization, merger or consolidation, or sale or other dispositionof all or substantially all of the assets of the Company or the acquisition ofassets or stock of another entity (a “Business Combination”), in each case,unless immediately following such Business Combination:  (A) more than 60% of the combined votingpower of then outstanding voting securities entitled to vote generally in theelection of directors of (x) the corporation resulting from such BusinessCombination (the “Surviving Corporation”), or (y) if applicable, a corporationthat as a result of such transaction owns the Company or all or substantiallyall of the Company’s assets either directly or through one or more subsidiaries(the “Parent Corporation”), is represented, directly or indirectly by CompanyVoting Securities outstanding immediately prior to such Business Combination(or, if applicable, is represented by shares into which such Company VotingSecurities were converted pursuant to such Business Combination), and suchvoting power among the holders thereof is in substantially the same proportionsas their ownership, immediately prior to such Business Combination, of theCompany Voting Securities, (B) no Person (excluding any employee benefit plan(or related trust) of the Company or such corporation resulting from suchBusiness Combination) beneficially owns, directly or indirectly, 20% or more ofthe combined voting power of the then outstanding voting securities eligible toelect directors of the Parent Corporation (or, if there is no ParentCorporation, the Surviving Corporation) except to the extent that suchownership of the Company existed prior to the Business Combination and (C) atleast a majority of the members of the board of directors of the ParentCorporation (or, if there is no Parent Corporation, the Surviving

 

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Corporation) weremembers of the Incumbent Board at the time of the execution of the initialagreement, or of the action of the Board, providing for such BusinessCombination; or

 

(iv)                              Approvalby the Company’s stockholders of a complete liquidation or dissolution of theCompany.

 

However, in no event willa Change in Control be deemed to have occurred, with respect to the Executive,if the Executive is part of a purchasing group that consummates the Change inControl transaction.  The Executive willbe deemed “part of a purchasing group” for purposes of the preceding sentenceif the Executive is an equity participant in the purchasing company or group(except:  (i) passive ownership of lessthan two percent (2%) of the stock of the purchasing company; or (ii) ownershipof equity participation in the purchasing company or group that is otherwisenot significant, as determined prior to the Change in Control by a majority ofthe nonemployee continuing Directors).

 

7.                                       **Restrictive Covenants.**

 

(a)                                  Definitions.  For purposes of this Agreement, the followingterms will be defined as follows:

 

(i)                                     “ConfidentialInformation” shall mean the Company’s trade secrets and all other informationunique to the Company and not readily available to the public, includingdevelopments, designs, improvements, inventions, formulas, compilations,methods, strategies, forecasts, software programs, processes, know-how, data,research, operating methods and techniques, and all business plans, strategies,costs, profits, customers, vendors, markets, sales, products, key personnel,pricing policies, marketing, sales or other financial or business information,and any modifications or enhancements of any of the foregoing.

 

(ii)                                  Theterm “Business Conducted by the Company or any of its Affiliates” shall meanall businesses conducted by the Company or any of its Affiliates as of theEffective Date, of whatever kind, within or outside of the United States.

 

(iii)                               Theterm “Affiliates” shall mean (i) any entity that directly or indirectly, iscontrolled by the Company, and (ii) any entity in which the Company has asignificant equity interest.

 

(b)                                 Inventionsor Developments.  The Executiveagrees that he will promptly and fully disclose to the Company all discoveries,improvements, inventions, formulas, ideas, processes, designs, techniques,know-how, data and computer programs (whether or not patentable, copyrightableor susceptible to any other form of protection), made, conceived, reduced topractice or developed by the Executive, either alone or jointly with others,during his employment with the Company (collectively, the “Inventions orDevelopments”).  All Inventions andDevelopments shall be the sole property of the Company, including all patents,copyrights, intellectual property or other rights related

 

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thereto andExecutive assigns to the Company all rights (if any) that the Executive mayhave or acquire in such Inventions or Developments.

 

Notwithstandingthe foregoing, any right of the Company or assignment by the Executive asprovided in this paragraph shall not apply to any Inventions or Developmentsfor which no equipment, supplies, facility or trade secret information of theCompany or its Affiliates were used and which were developed entirely on theExecutive’s own time, unless: (i) the Inventions or Developments relate to theBusiness Conducted by the Company or any of its Affiliates or the actual ordemonstrably anticipated research or development of the Company or any of itsAffiliates; or (ii) the Inventions or Developments result from any workperformed by the Executive for the Company or any of its Affiliates.

 

(c)                                  Non-Disclosureof Confidential Information or Inventions or Developments.  The Executive acknowledges that he has had andwill have access to Confidential Information or Inventions or Developments ofthe Company and/or its Affiliates and agrees that he shall not, at any time,directly or indirectly use, divulge, furnish or make accessible to any personany Confidential Information or Inventions or Developments, but instead shallkeep all such matters strictly and absolutely confidential.

 

(d)                                 NoDiversion of Business Opportunities and Prospects.  The Executive agrees that during hisemployment with the Company: (i) the Executive shall not directly or indirectlyengage in any employment, consulting or other business activity that iscompetitive with the Business Conducted by the Company or any of itsAffiliates; (ii) the Executive shall promptly disclose to the Company allbusiness opportunities that are presented to the Executive in his capacity asan employee of the Company or which is of a similar nature to the BusinessConducted by the Company or any of its Affiliates or which the Company or itsAffiliates have expressed an interest in engaging in the future; and (iii) theExecutive shall not usurp or take advantage of any such business opportunitywithout first offering such opportunity to the Company.

 

(e)                                  ActionsUpon Termination.  Upon the Executive’semployment termination for whatever reason, the Executive shall neither take orcopy nor allow a third party to take or copy, and shall deliver to the Companyall property of the Company, including, but not limited to, all ConfidentialInformation or Inventions or Developments, regardless of the medium (*i.e.*, hard copy, computer disk, CD ROM) on which theinformation is contained.

 

(f)                                    Non-Competition.  The Executive agrees that so long as he isemployed 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 orengage in, directly or indirectly (as an owner, partner, employee, officer,director, independent contractor, consultant, advisor or in any other capacitycalling for the rendition of services, advice, or acts of management, operationor control), any business that, during the Period, is competitive with theBusiness Conducted by the Company or any of its Affiliates within the UnitedStates (hereinafter, the “Geographic Area”).

 

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(g)                                 Non-Solicitationof Employees.  The Executive agreesthat, during the Period, he shall not, without the prior written consent of theCompany, directly or indirectly solicit any current employee of the Company orany of its Affiliates, or any individual who becomes an employee during thePeriod, to leave such employment and join or become affiliated with anybusiness that is, during the Period, competitive with the Business Conducted bythe Company or any of its Affiliates within the Geographic Area.

 

(h)                                 Non-Solicitationof Suppliers or Customers.  TheExecutive agrees that, during the Period, he shall not, without the priorwritten consent of the Company, directly or indirectly solicit, seek to divertor dissuade from continuing to do business with or entering into business withthe Company or any of its Affiliates, any supplier, customer, or other personor entity that had a business relationship with or with which the Company wasactively planning or pursuing a business relationship at or before the date oftermination of his employment.

 

(j)                                     IrreparableHarm.  The Executive acknowledgesthat: (i) the Executive’s compliance with this Section is necessary to preserveand protect the Confidential Information, Inventions or Developments and thegoodwill of the Company and its Affiliates as going concerns; (ii) any failureby the Executive to comply with the provisions of this Section will result inirreparable and continuing injury for which there will be no adequate remedy atlaw; and (iii) in the event that the Executive should fail to comply with theterms and conditions of this Section, the Company shall be entitled, inaddition to such other relief as may be proper, to all types of equitablerelief (including, but not limited to, the issuance of an injunction and/ortemporary restraining order) as may be necessary to cause the Executive tocomply with this Section, to restore to the Company its property, and to makethe Company whole.

 

(j)                                     Survival.  The provisions set forth in this Sectionshall, as noted, survive termination of this Agreement.

 

(k)                                  Forfeiture.  If the Executive violates any provision ofthis Section, the Executive will forfeit his right to all payments and benefitsunder Section 5(d) and Section 6, except to the extent otherwise providedby law.

 

(l)                                     Unenforceability.  If any provision(s) of this Section shall befound invalid or unenforceable, in whole or in part, then such provision(s)shall be deemed to be modified or restricted to the extent and in the mannernecessary to render the same valid and enforceable, or shall be deemed excisedfrom this Agreement, as the case may require, and this Agreement shall beconstrued and enforced to the maximum extent permitted by law, as if suchprovision(s) had been originally incorporated herein as so modified orrestricted, or as if such provision(s) had not been originally incorporatedherein, as the case may be.

 

8.                                       **Assignment; Successors.**  This Agreement shall inure to the benefit ofand be binding upon the Company and its successors.  The Company may not assign this Agreementwithout the Executive’s written consent, except that the Company’s obligationsunder this

 

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Agreement shall be the binding legal obligations of any successor tothe Company by sale, and in the event of any transaction that results in thetransfer of substantially all of the assets or business of the Company, theCompany will use its best efforts to cause the transferee to assume theobligations of the Company under this Agreement.  The Executive may not assign this Agreementduring his life. Upon the Executive’s death this Agreement will inure to thebenefit of Executive’s heirs, legatees and legal representatives of theExecutive’s estate.

 

9.                                       **Interpretation.**  The laws of the State of Illinois shallgovern the validity, interpretation, construction and performance of thisAgreement, without regard to the conflict of laws principles thereof.

 

10.                                 **Withholding.**  The Company may withhold from any paymentthat it is required to make under this Agreement amounts sufficient to satisfyapplicable withholding requirements under any federal, state or local law.

 

11.                                 **Amendment or Termination.**  This Agreement may be amended at any time bywritten agreement between the Company and the Executive.

 

12.                                 **Notices.**  Notices given pursuant to this Agreementshall be in writing and shall be deemed received when personally delivered, oron the date of written confirmation of receipt by (i) overnight carrier, (ii)telecopy, (iii) registered or certified mail, return receipt requested,addressee only, postage prepaid, or (iv) such other method of delivery thatprovides a written confirmation of delivery. Notice to the Company shall be directed to:

 

Smurfit-Stone ContainerCorporation

150 North Michigan Avenue

Chicago, Illinois 60610

Attention:  Chief Financial Officer

 

The Company may change the person and/or address to whom the Executivemust give notice under this Section by giving the Executive written notice ofsuch change, in accordance with the procedures described above.  Notices to or with respect to the Executivewill be directed to the Executive, or to the Executive’s executors, personalrepresentatives or distributees, if the Executive is deceased, or the assigneesof the Executive, at the Executive’s home address on the records of theCompany.

 

13.                                 **Severability.**  If any provisions(s) of this Agreement shallbe found invalid or unenforceable by a court of competent jurisdiction, inwhole or in part, then it is the parties’ mutual desire that such court modifysuch provision(s) to the extent and in the manner necessary to render the samevalid and enforceable, and this Agreement shall be construed and enforced tothe maximum extent permitted by law, as if such provision(s) had beenoriginally incorporated herein as so modified or restricted, or as if suchprovision(s) had not been originally incorporated herein, as the case may be.

 

14.                                 **Entire Agreement.**  This Agreement sets forth the entireagreement and understanding between the Company and the Executive andsupersedes all prior agreements and understandings, written or oral, relatingto the subject matter hereof, including, without

 

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limitation, the Change in Control Agreement between the Company andExecutive dated July 24, 1996.

 

15.                                 **Consultation With Counsel.**  Executive acknowledges that he has had a fulland complete opportunity to consult with counsel of Executive’s own choosingconcerning the terms, enforceability and implications of this Agreement, andthe Company has made no representations or warranties to Executive concerningthe terms, enforceability or implications of this Agreement other than as arereflected in this Agreement.

 

16.                                 **No Waiver.**  No failure or delay by the Company or theExecutive in enforcing or exercising any right or remedy hereunder shalloperate as a waiver thereof.  Nomodification, amendment or waiver of this Agreement nor consent to anydeparture by the Executive from any of the terms or conditions thereof, shallbe effective unless in writing and signed by the Chairman of the Company’sBoard.  Any such waiver or consent shallbe effective only in the specific instance and for the purpose for which given.

 

17.                                 **Effect on Other Obligations.**  Payments and benefits herein provided to bepaid to the Executive by the Company shall be made without regard to and inaddition to any other payments or benefits required to be paid the Executive atany time hereafter under the terms of any other agreement between the Executiveand the Company or under any other policy of the Company relating tocompensation, or retirement or other benefits. No payments or benefits provided the Executive hereunder shall bereduced by any amount the Executive may earn or receive from employment withanother employer or from any other source.

 

18.                                 **Survival.**  All Sections of this Agreement survive beyondthe Employment Term except as otherwise specifically stated.

 

19.**                                 Headings.**  The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning thereof.

 

20.                                 **Counterparts.**  The parties may execute this Agreement in oneor more counterparts, all of which together shall constitute but one Agreement.

 

**IN WITNESS WHEREOF,** the parties have executed this Agreement effective asof the date first above written.

 
| ** **             | **SMURFIT-STONE  CONTAINER CORPORATION** |
|------------------------|------------------------------------------|
| ** **             | ** **                               |
| /s/  John Riconosciuto |                                     |   |   |
| **JOHN RICONOSCIUTO**  |                                     | By: |   /s/ Patrick  J. Moore |   |
|                   |                                     | Its: |   Vice  President & CFO |   |
|                        |                                          |  |  |  |  |  |

 

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Addendum

 

 

WHEREAS, Smurfit-Stone Container Corporation (the “Company”)and John Riconosciuto (the “Executive”) have entered into an Employment Agreementdated as of August 1, 2000****(the “Agreement”);and

 

WHEREAS, the Company and the Executive have agreedthat certain terms as set forth in this Addendum will be added to the terms andconditions of the Agreement;

 

NOW, THEREFORE, in consideration of the premises andthe mutual terms, covenants and conditions stated in the Agreement and this Addendum, the Company andthe Executive hereby agree as follows:

 

A.                                   TheExecutive’s compensation and benefits under Section 4 of the Agreement shallinclude a club membership consisting of initiation fee not exceeding $50,000.

 

B.                                     Allother terms of the Agreement shall continue in full force and effect.

 

IN WITNESS WHEREOF, the parties have executed thisinstrument on the dates set forth below, but effective as of the day and yearfirst written above.

 

 
| Date: February 20, 2001 |   |  /s/ John Riconosciuto |                                 |
|-------------------------|--------|-----------------------------|--------------------------------------|
|                    |   | John Riconosciuto           |                                 |
|                    |   |                        |
|                    |   | SMURFIT-STONE CONTAINER     |
|                    |   | CORPORATION                 |
|                    |   |                        |
| Date: February 20, 2001 |   | By:                         |   /s/ Patrick J. Moore     |   |
|                    |   | Its:                        |   Vice President & CFO |   |

 

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