Exhibit 10.3


 


AMENDMENT TO


EMPLOYMENT AGREEMENT OF STEVEN J.
KLINGER


 


This Amendment (the “Amendment” is effective as of January 1,
2008, by and between Smurfit-Stone Container Corporation (the “Company”) and
Steven J. Klinger (the “Executive”).


 


WHEREAS, the Company and the Executive entered into an
Employment Agreement (the “Agreement”) effective May 11, 2006, and the
parties desire to amend the Agreement to comply with the requirements of
section 409A of the Internal Revenue Code.


 


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


 


1.             Section 5(a) is
amended by adding at the end thereof:


 


For purposes of this Agreement, “termination of employment” means a “separation
from service” within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended, and Treasury Regulation §1.409A-1(h).


 


2.             Section 5(d)(iii) is
deleted.


 


3.             Section 5(d)(v) is
amended to read as follows:


 


(v)           The
Company will provide the Executive with reimbursement for such outplacement
services as may be selected by the Executive, in any year not to exceed the
amount of reimbursement as is customary for similarly situated executives of
the Company for such year.  The amount of
expenses eligible for reimbursement, or in-kind benefits provided, during any
taxable year of the Executive shall not affect the reimbursement, or in-kind
benefits to be provided, during any other taxable year.


 


4.             The
last two sentences of Section 5(e) are amended to read as follows:


 


The Executive’s termination for Good Reason must occur within two years
following the initial existence of one or more of the preceding conditions, and
must be preceded by written notice to the Company within 90 days of the initial
existence of one or more of the preceding conditions, and the Company must have
at least 30 days to cure the alleged deficiencies.  For purposes of this paragraph, “Company”
shall mean the Company and, following any Change in Control, the Surviving
Corporation or, if applicable, the Parent Corporation (as those terms are
defined in Section 6(d)).


 


5.             Section 5(g) is
amended to read as follows:


 


(g)           Timing
of Payments.  All payments described
above shall be made in a lump sum cash payment as soon as practicable (but in
no event more than 10 days) following the Executive’s termination of
employment.  If the total amount of
annual bonus is not determinable on that date, the Company shall pay the amount
of bonus that is determinable and the remainder


 

















 


shall be paid in a lump sum cash payment within 10 days of the date
that annual performance results are finalized, but in no event later than March 15
of the year following the year in which Executive’s termination of employment
occurs.  With respect to any reimbursements under this
Agreement, such reimbursement shall be made on or before the last day of the
Executive’s taxable year following the taxable year in which the expense was
incurred by the Executive.


 


6.             Section 6(a)(v) is
deleted.


 


7.             Section 6(a)(vii) is
amended by adding the following at the end thereof:


 


(vii)         The
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during any taxable year of the Executive shall not affect the reimbursement, or
in-kind benefits to be provided, during any other taxable year.


 


8.             Section 6(b) is
amended to read as follows:


 


(b)           Timing
of Payments.  All payments under
paragraphs (a)(i), (ii) and (iv) above, and paragraph (c) below,
shall be made in a lump sum cash payment as soon as practicable (but in no
event more than 10 days) following the Executive’s termination of
employment.  If the total amount of
annual bonus is not determinable on that date, the Company shall pay the amount
of bonus that is determinable and the remainder shall be paid in a lump sum
cash payment within 10 days of the date that annual performance results are
finalized, but in no event later than March 15 of the year following the
year in which Executive’s termination of employment occurs.  With respect to any non-tax reimbursements under this Agreement, such
reimbursement shall be made on or before the last day of the Executive’s
taxable year following the taxable year in which the expense was incurred by
the Executive.


 


9.             A
new Section 7(c)(iii) is added to read as follows:


 


(iii)   Any tax
reimbursement payment under the agreement that is subject to Section 409A
of the Code shall be made by the Company to the Executive by the end of the
Executive’s taxable year next following the Executive’s taxable year in which
the Executive remits the related taxes. 
In the event the Executive’s right to a tax reimbursement payment is
incurred due to a tax audit or litigation addressing the existence or amount of
a tax liability, whether Federal, state, local, or foreign, then payment shall
be made by the Company to the Executive by the end of the Executive’s taxable
year following the Executive’s taxable year in which the taxes that are the
subject of the audit or litigation are remitted to the taxing authority, or
where as a result of such audit or litigation no taxes are remitted, the end of
the Executive’s taxable year following the Executive’s taxable year in which
the audit is completed or there is a final and nonappealable settlement or
other resolution of the litigation.


 


10.           Section 15
is amended by adding the following at the end thereof:


 


Notwithstanding the foregoing, the parties acknowledge and agree that
they have entered into a separate Executive Retirement Agreement dated October 2,
2006, as amended, and that nothing 


 

















 


herein shall affect the payments or benefits required to be paid to the
Executive under such Executive Retirement Agreement as it may be amended from
time to time.


 


11.           A new Section 22 is added to read as follows:


 


22.           Compliance with Section 409A.  Notwithstanding any provision in this
agreement to the contrary, the agreement shall be interpreted, construed and
operated, to the extent applicable, in accordance with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and
other guidance issued thereunder.  For
purposes of determining whether any payment made pursuant to the agreement
results in a “deferral of compensation” within the meaning of Section 409A
of the Code and Treasury Regulation §1.409A-1(b), the parties shall maximize
the exemptions described in such section. 
Notwithstanding anything contained in this Agreement to the contrary, if
the Executive is a “specified employee” (determined in accordance with Code Section 409A
and Treasury Regulation Section 1.409A-3(i)(2)) as of the date of
Separation from Service (other than a Separation from Service due to
death), then any payment, benefit or entitlement provided for in this Agreement
that constitutes “deferred compensation” within the meaning of Section 409A
and that is payable during the first six months following the date of
Separation from Service shall be paid or provided to the Executive in a lump
sum cash payment to be made on the earlier of (a) the Executive’s death or
(b) the first business day (or within 30 days after such first business
day) of the seventh calendar month immediately following the month in which the
date of Separation from Service occurs.


 


IN WITNESS WHEREOF, the parties have executed this
Agreement as of January 1, 2008.


 


 


	
   

  	
   

  	
  SMURFIT-STONE CONTAINER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Craig A.
  Hunt

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Steven J.
  Klinger

  
	
   

  	
   

  	
  Steven J. Klinger