Exhibit 10.2


 


SECOND AMENDMENT TO


EMPLOYMENT AGREEMENT OF CHARLES
A. HINRICHS


 


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


 


WHEREAS, the Company and
the Executive entered into an Employment Agreement (the “Agreement”) effective April 1,
2002,  which has previously been amended
effective July 25, 2006, and the parties desire to further 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 4(e) is amended by adding at the end
thereof:


 


The amount of expenses
eligible for reimbursement during any taxable year of the Executive shall not
affect the reimbursement during any other taxable year.


 


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


 


For purposes of this
Agreement, termination of employment shall mean 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).


 


3.             Section 5(d)(iii) is deleted and reserved for
future use.


 


4.             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, not to exceed the amount of
reimbursement as is customary for similarly situated executives of the
Company.  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.


 


5.             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)).


 

















 


6.             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.


 


7.             Section 6(a)(v) is
deleted and reserved for future use.


 


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


 


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


 


9.             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.


 


10.           A
new Section 6(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.


 


11.           A new Section 21 is added to
read as follows:


 


21.           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/ Charles A.
  Hinrichs

  
	
   

  	
  Charles A. Hinrichs