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Exhibit 10.8    
    

        [CELLU TISSUE HOLDINGS, INC. LETTERHEAD] 

Mr. Russell
Taylor

3183 Chipping Wood Court

Alpharetta, GA 30004 

March 27,
2006 

Re:
Retention Letter 

        As
we have agreed, upon your execution of this letter, Cellu Tissue Holdings, Inc. (the "Company") shall pay to you a lump sum cash payment equal to one year's base salary (the "One-Time
Bonus"), which salary amount is as set forth in the Employment Agreement dated as of September 25, 2001 (the "Employment Agreement") between you and the Company. The Company shall withhold from
the One-Time Bonus all taxes, FICA or other amounts required to be withheld pursuant to any applicable law. 

        This
One-Time Bonus shall be subject to forfeiture if your employment is terminated on or prior to September 27, 2006 for any reason, other than due to your death or Disability
(as defined in the Employment Agreement) (a "Termination Event"). Within 30 days following a Termination Event on or prior to September 27, 2006, you shall repay the Company the One-Time Bonus.
The Company shall be entitled to offset any amounts owing to you from the Company under your Employment Agreement or otherwise in order to recoup the One-Time Bonus. 

        The
One-Time Bonus is a special incentive payment to you and will not be taken into account in computing the amount of any salary or compensation for purposes of determining any bonus,
incentive, pension, retirement, death or other benefit under any other bonus, incentive, pension, retirement, insurance or other employee benefit plan of the Company, unless such plan or agreement
expressly provides otherwise. 

        The
terms of this agreement shall not modify your Employment Agreement. 

Sincerely,

Cellu
Tissue Holdings, Inc. 

	By:	 	/s/ STEVE ZIESSLER
	 	 
	 	 	Name:	 	Steve Ziessler	 	 
	 	 	Title:	 	COO	 	 
	

By signing below, please acknowledge that you agree with the terms and conditions of this letter:
	

/s/ RUSSELL TAYLOR
 Russell Taylor	
 	

 

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Exhibit 10.9    
    

[LETTERHEAD
OF CELLU TISSUE HOLDINGS, INC. 

Dianne
Scheu

367 Hasty Trail

Canton, GA 30115 

March
27,2006 

Re:
Retention Letter 

As
we have agreed, upon your execution of this letter, Cellu Tissue Holdings, Inc. (the "Company") shall pay to you a lump sum cash payment equal to one year's current base salary (the "One-Time
Bonus"). The Company shall withhold from the One-Time Bonus all taxes, FICA or other amounts required to be withheld pursuant to any applicable law. 

This
One-Time Bonus shall be subject to forfeiture if your employment is terminated on or prior to March 27, 2007, for any reason, other than due to your death or disability (a "Termination Event").
Within 30 days following a Termination Event that occurs on or prior to March 27, 2007, you shall repay the Company the One-Time Bonus. The Company shall be entitled to offset any
amounts owing to you from the Company in order to recoup the One-Time Bonus. 

The
One-Time Bonus is a special incentive payment to you and will not be taken into account in computing the amount of any salary or compensation for purposes of determining any bonus, incentive,
pension, retirement, death or other benefit under any other bonus, incentive, pension, retirement,
insurance or other employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise. 

Sincerely,

Cellu
Tissue Holdings, Inc. 

	

By:	
 	

/s/  RUSSELL C. TAYLOR      
 Name: Russell C. Taylor

Title: President	
 	

 
	

By signing below, please acknowledge that you agree with the terms and conditions of this letter:
	

 	
 	

/s/  DIANNE SCHEU      
 Dianne Scheu	
 	

 

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Exhibit 10.10    
    

[Letterhead
of Cellu Tissue Holdings, Inc.] 

Steven
Ziessler

115 National Drive

Duluth, GA 30097 

March 27,
2006 

	Re:
	Retention
Letter 

As
we have agreed, upon your execution of this letter, Cellu Tissue Holdings, Inc. (the "Company") shall pay to you a lump sum cash payment equal to one year's current base salary (the
"One-Time Bonus"). The Company shall withhold from the One-Time Bonus all taxes, FICA or other amounts required to be withheld pursuant to any applicable law. 

This
One-Time Bonus shall be subject to forfeiture if your employment is terminated on or prior to March 27, 2007, for any reason, other than due to your death or disability (a "Termination
Event"). Within 30 days following a Termination Event that occurs on or prior to March 27, 2007, you shall repay the Company the One-Time Bonus. The Company shall be entitled to offset
any amounts owing to you from the Company in order to recoup the One-Time Bonus. 

The
One-Time Bonus is a special incentive payment to you and will not be taken into account in computing the amount of any salary or compensation for purposes of determining any bonus, incentive,
pension, retirement, death or other benefit under any other bonus, incentive, pension, retirement, insurance or other employee benefit plan of the Company, unless such plan or agreement expressly
provides otherwise. 

Sincerely, 

Cellu Tissue
Holdings, Inc. 

	By:	 	/s/  RUSSELL C. TAYLOR      
	 	 
	 	 	Name:	 	Russell C. Taylor	 	 
	 	 	Title:	 	President/CEO	 	 

By
signing below, please acknowledge that you agree with the terms and conditions of this letter: 

	/s/  STEVEN ZIESSLER      
 Steven Ziessler	 	 

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Exhibit 10.11    
    

 
 

RESTRICTED STOCK AGREEMENT    
    

        THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made as of March 27, 2006 (the
"Grant Date"), by Cellu Paper Holdings, Inc., a Delaware corporation, (the "Company") and Diane
Scheu (the "Participant"). 

        WHEREAS,
the Company has adopted the Cellu Paper Holdings, Inc. 2001 Stock Incentive Plan (the "Plan"), pursuant to which the
Company may grant shares of the Company's common stock, par value $0.01 per share (the "Common Stock") which are restricted as to transfer; 

        WHEREAS,
the Company desires to grant to the Participant shares of restricted Common Stock on the terms and conditions provided for herein; and 

        NOW,
THEREFORE, the Company and the Participant agree as follows: 

        1.    Grant of Shares.    Subject to the restrictions, terms and conditions of this Agreement, the Plan and the
Stockholders Agreement, dated as of September 28, 2001, among the Company, Charterhouse Equity Partners III, L.P., Chef Nominees Limited, WAHYAM Capital, LLC and the other parties listed
therein (the "Stockholders Agreement"), the Company hereby grants to the Participant 170.65 shares of Common Stock. The purchase price for the shares of
Common Stock is zero. Pursuant to Sections 2 and 3 hereof, the shares of Common Stock are subject to certain restrictions, which restrictions relate to the passage of time as an employee of the
Company. While such restrictions are in effect, the shares of Common Stock subject to such restrictions shall be referred to herein as "Restricted
Stock." 

        2.    Restrictions on Transfer.    The Participant shall not sell, transfer, pledge, hypothecate, assign, exchange or
otherwise dispose of the Restricted Stock, except as set forth in the Plan or this Agreement. Any attempted sale, transfer, pledge, hypothecation, assignment, exchange or other disposition of the
Restricted Stock in violation of the Plan or this Agreement shall be void and of no effect and the
Company shall have the right to disregard the same on its books and records and to issue "stop transfer" instructions to its transfer agent. 

        3.    Restricted Stock.    

        3.1.    Retention of Certificates.    Promptly after the Grant Date, the Company shall issue stock certificates
representing the Restricted Stock. The stock certificates shall be registered in the Participant's name and shall bear any legend required by the Plan or this Agreement. Such stock certificates shall
be held in custody by the Company (or its designated agent) until the restrictions thereon shall have lapsed. Upon the Company's request, the Participant shall deliver to the Company a duly signed
stock power, endorsed in blank, relating to the Restricted Stock. If (a) the Participant receives a stock dividend on the Restricted Stock, (b) the shares of Common Stock are split, or
(c) the Participant receives any other shares, securities, moneys or property representing a dividend on the Restricted Stock (other than regular cash dividends on and after the Grant Date), or
representing a distribution or return of capital upon or in respect of, the Restricted Stock or any part thereof, or resulting from a split-up, reclassification or other like changes of
the Restricted Stock, or otherwise received in exchange therefore, and any warrants, rights or options issued to the Participant in respect of the Restricted Stock (collectively
"RS Property"), the Participant shall immediately deposit with and deliver to the Company any of such RS Property, including any certificates
representing shares duly endorsed in blank or accompanied by stock powers duly endorsed in blank, and such RS Property shall be subject to the same restrictions, including that of this
Section 3.1, as the Restricted Stock with regard to which they are issued and shall herein be encompassed within the term "Restricted Stock." 

        3.2.    Rights with Regard to Restricted Stock.    The Participant will have the right to vote the Restricted Stock,
to receive and retain all cash dividends payable to holders of shares of Common Stock of record on and after the Grant Date (although such dividends shall be treated, to the extent required by
applicable law, as additional compensation for tax purposes if paid on Restricted Stock), 

 

and
to exercise all other rights, powers and privileges of a holder of shares of Common Stock with respect to the Restricted Stock set forth in the Plan, with the exceptions that: 

        (a)   the
Participant will not be entitled to delivery of the stock certificate or certificates representing the shares of Common Stock until the Restriction Period (as
defined below) shall have expired; 

        (b)   the
Company (or its designated agent) will retain custody of the stock certificate or certificates representing the Restricted Stock and the other RS Property during the
Restriction Period; 

        (c)   no
RS Property shall bear interest or be segregated in separate accounts during the Restriction Period; 

        (d)   the
Participant may not sell, transfer, pledge, hypothecate, assign, exchange or otherwise dispose of the Restricted Stock during the Restriction Period; and 

        (e)   all
stock dividends and other non-cash distributions with respect to the Restricted Stock will be RS Property, as provided in Section 3.1, and held by
the Company until the Restricted Stock becomes vested, if at all, in accordance with Section 3.3(a). 

For
purposes of this Agreement, the "Restriction Period" for the Restricted Stock means the period commencing on the Grant Date and ending at the close
of business on the date the Restricted Stock becomes vested. 

        3.3.    Vesting.    

        (a)   The
Restricted Stock shall become vested and cease to be Restricted Stock (but shall remain subject to the terms of this Agreement and the Plan) as follows if the
Participant has been continuously employed by the Company or a Subsidiary until such date: 

	Vesting Date
	 	Percentage Vested/

Number of Shares Vested

	1st Anniversary of Grant Date	 	33.33%/56.88
	2nd Anniversary of Grant Date	 	33.33%/56.88
	3rd Anniversary of Grant Date	 	33.34%/56.89

        There
shall be no proportionate or partial vesting in the periods prior to the applicable vesting dates and all vesting shall occur only on the appropriate vesting date. 

        Notwithstanding
the foregoing, any Restricted Stock outstanding at the time of a Change in Control shall become vested and cease to be Restricted Stock (but shall remain subject to the
terms of this Agreement and the Plan). 

        (b)   When
the Restricted Stock becomes vested, the Company shall promptly issue and deliver to the Participant a new stock certificate registered in the name of the
Participant for such shares of Common Stock without the legend set forth in Section 4.1 hereof and deliver to the Participant any related other RS Property, subject to applicable federal, state
and local tax withholding. The Participant shall be permitted to transfer the shares of Common Stock following the expiration of the Restriction Period, to the extent permitted by applicable law,
subject to the terms and conditions of the Stockholders Agreement. 

        (c)   The
delivery of any certificate representing the Restricted Stock or other RS Property may be postponed by the Company for such period as may be required for it to
comply with any applicable federal or state securities law or any national securities exchange listing requirements and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such shares of Common Stock shall constitute a violation by the 

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Participant
or the Company of any provisions of any law or of any regulations of any governmental authority or any national securities exchange. 

        3.4.    Forfeiture.    The Participant shall forfeit to the Company, without compensation, any and all Restricted
Stock and RS Property upon the Participant's termination of employment with the Company and its subsidiaries during the Restriction Period for any reason. 

        4.    Legends.    

        4.1.  All
certificates or instruments representing Restricted Stock shall bear a legend in substantially the following form: 

"This
certificate and the shares of stock represented hereby are subject to the terms and conditions, including forfeiture provisions and restrictions against transfer, contained in the Cellu Paper
Holdings, Inc. 2001 Stock Incentive Plan and an agreement entered into between the registered owner and the Company. Any attempt to dispose of these shares in contravention of the Restrictions,
including by way of sale, assignment, transfer, pledge, hypothecation or otherwise, shall be null and void and without effect." 

        4.2.  All
certificates evidencing Shares shall bear any legend required by the Stockholders Agreement. 

        5.    Representations and Warranties of Participant.    

        In
connection with the issuance and acquisition of shares of Common Stock, the Participant hereby represents and warrants to the Company as follows: 

        5.1.  The
Participant is acquiring and will hold the shares of Common Stock for investment for his account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act") or other applicable securities laws. 

        5.2.  The
Participant understands that the shares of Common Stock have not been registered under the Securities Act or other applicable securities laws, on the ground that no
distribution or public offering of the shares of Common Stock is to be effected (it being understood, however, that the shares of Common Stock are being issued and sold in reliance on the exemption
provided under Rule 701 under the Securities Act), and that the shares of Common Stock must be held indefinitely, unless they are subsequently registered under the applicable securities laws or
the Participant obtains an opinion of counsel (in the form and substance satisfactory to the Company and its counsel) that registration is not required. In connection with the foregoing, the Company
is relying in part on the Participant's representations set forth in this Section. The Participant further acknowledges and understands that the Company is under no obligation hereunder to register
the shares of Common Stock. 

        5.3.  The
Participant is aware of the adoption of Rule 144 by the Securities and Exchange Commission under the Securities Act, which permits limited public resales of
securities acquired in a non-public offering, subject to the satisfaction of certain conditions. The Participant acknowledges that he is familiar with the conditions for resale set forth
in Rule 144 and acknowledges and understands that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company has no plans to satisfy these conditions in
the foreseeable future. 

        5.4.  The
Participant will not sell, transfer or otherwise dispose of the shares of Common Stock in violation of the Plan, this Agreement, the Securities Act (or the rules
and regulations promulgated thereunder) or under any other applicable securities laws. The Participant is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act. 

3

 

        5.5.  The
Participant has been furnished with, and has had access to, such information as he considers necessary or appropriate for deciding whether to invest in the shares
of Common Stock, and the Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of the shares of Common Stock. 

        5.6.  The
Participant is aware that his investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. The
Participant is able, without impairing his financial condition, to hold the shares of Common Stock for an indefinite period. 

        6.    Taxes: Section 83(b) Election.    

        6.1.  The
Participant agrees that, subject to Section 6.2 below, (a) no later than the date on which any Restricted Stock shall have become vested and prior to
the delivery of such stock certificates, the Participant will pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock which shall have become so vested and (b) the Company shall, to the extent permitted by law, have the right to (but not be
obligated to) deduct from any payment of any kind (including shares of Common Stock hereunder) otherwise due to the Participant any federal, state or local taxes of any kind required by law to be
withheld with respect to the Restricted Stock which shall have become so vested. 

        6.2.  If
the Participant properly elects (as required by Section 83(b) of the Internal Revenue Code of 1986, as amended (the
"Code")) within 30 days after the issuance of the Restricted Stock to include in gross income for federal income tax purposes in the year of
issuance the fair market value of such Restricted Stock, the Participant shall pay to the Company or make arrangements satisfactory to the Company to pay to the Company upon such election, any
federal, state or local taxes required to be withheld with respect to the Restricted Stock. If the Participant shall fail to make such payment, the Company shall, to the extent permitted by law, have
the right to deduct from any payment of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Stock. THE
PARTICIPANT SHOULD CONSULT WITH HIS TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE SHARES OF COMMON STOCK AND THE ADVANTAGES AND DISADVANTAGES OF FILING THE SECTION 83(B) ELECTION. THE
PARTICIPANT ACKNOWLEDGES THAT IT IS HIS SOLE
RESPONSIBILITY, AND NOT THE EMPLOYER'S, TO FILE A TIMELY ELECTION UNDER SECTION 83(B) OF THE CODE. 

        6.3.  Notwithstanding
anything herein to the contrary, if the Participant timely makes a Section 83(b) election, the Company shall pay to the Participant an additional
amount (the "Gross-Up Payment") to fully gross up the Participant for the amount included in gross income for income tax purposes as a
result of making of a Section 83(b) election or the payment of the Gross-Up Payment. 

        7.    Not an Employment Agreement.    The issuance of the Shares hereunder does not constitute
an agreement by the Company to continue to employ the Participant during the entire, or any portion of, the term of this Agreement, including but not limited to any period during which the Restricted
Stock is outstanding. 

        8.    Power of Attorney.    The Company, its successors and assigns, is hereby appointed the
attorney-in-fact, with full power of substitution, of the Participant for the purpose of carrying out the provisions of this Agreement and taking any action and executing any
instruments which such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. In connection with actions permitted under the terms of this Agreement (including Sections 3.4 and 6), the Company, as 

4

 

attorney-in-fact
for the Participant, may in the name and stead of the Participant, make and execute all conveyances, assignments and transfers of the Restricted Stock, Shares
and property provided for herein, and the Participant hereby ratifies and confirms all that the Company, as said attorney-in-fact, shall do in good faith by virtue hereof.
Nevertheless, the Participant shall, if so requested by the Company, execute and deliver to the Company all such instruments as may, in the judgment of the Company, be advisable for such purpose. 

        9.    Miscellaneous.    

        9.1.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns. 

        9.2.  No
modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be
enforced. 

        9.3.  This
Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract. 

        9.4.  The
failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to
require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right under this Agreement. 

        9.5.  The
headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or
provisions hereof. 

        9.6.  The
Company shall pay all fees and expenses necessarily incurred by the Company in connection with this Agreement. 

        9.7.  All
notices, consents, requests, approvals, instructions and other communications provided for herein shall be in writing and validly given or made (i) on the
date of delivery if delivered by hand, (ii) on the date of transmission, if delivered by confirmed facsimile, (iii) on the first business day following the date of deposit if delivered
by guaranteed overnight delivery service, or (iv) on the fourth business day following the date delivered or mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows: 

If
to the Participant: 

At
the address (or to the facsimile number) then shown

on the records of the Company 

If
to the Company: 

Cellu
Paper Holdings, Inc.

3442 Francis Road

Suite 220

Alpharetta, GA 30004-5932

Attention: Secretary 

or
to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 

        9.8.  This
Agreement and the award hereunder are subject to all of the restrictions, terms and provisions of the Plan and the Stockholders Agreement which are incorporated
herein by reference. In the event of an inconsistency between any provision of the Plan and this Agreement, the terms of the Plan shall control. The capitalized terms in this Agreement that are not
otherwise defined shall have the same meaning as set forth in the Plan. 

5

 

        9.9.  By
executing this Agreement within 60 days after the day and year first written above, the award of Restricted Stock shall be accepted by the Participant. 

        9.10. The
validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without regard to its conflicts of
law principles. 

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

	 	 	CELLU PAPER HOLDINGS, INC.
	

 	
 	
By	

/s/  RUSSELL TAYLOR      
 Title:  President/CEO
	

 	
 	

/s/  DIANNE SCHEU      
 Dianne Scheu

6

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Exhibit 10.11

RESTRICTED STOCK AGREEMENT

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