Exhibit 10.23


 


Employment Security Agreement


 


THIS EMPLOYMENT SECURITY AGREEMENT is entered into
effective as of August 28, 2008, between SMURFIT-STONE CONTAINER
CORPORATION, a Delaware corporation (the “Company”), and Steven C. Strickland (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 November 15,
2006, 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 


 


2

















 


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 


 


3

















 


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:


 


4

















 


(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 


 


5

















 


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.


 


6

















 


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 


 


7

















 


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 


 


8

















 


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 November 15, 2006.


 


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/ Steven C. Strickland

  	
   

  



 


9