Document:

Employment Agreement, dated August 20, 2004

 Exhibit No. 10.02 
  
 August 20, 2004 
  
 Mr. Steve Kelchen 
 10 Lakeside Drive 
 Washington, Missouri 63090 
  

	 	Re:	Terms of Employment with Caraustar Industries, Inc. 

  
 Dear Steve: 
  
 On behalf of Caraustar Industries, Inc. (the “Company”), I am pleased to offer you employment with the Company on the following terms and conditions. 
  
 1. Title and Reporting: Vice President, Custom Packaging Group,
reporting to the Senior Vice President and Chief Operating Officer. 
  
 2. Duties: Duties will include, but are not limited to, planning, direction and coordination of the operational and sales and marketing aspects of the business units of the Custom Packaging Group, and
such other duties consistent with your position as assigned to you from time to time. 
  
 3. Compensation 
  
 (a) Base Salary: $300,000 per year (provided in accordance with the Company’s standard payroll practices for all salaried employees), which may be increased by the Board of Directors at its sole
discretion. 
  
 (b) Bonus: You will
be eligible for an annual bonus at the Company’s discretion under the terms of the Company’s Senior Management Incentive Compensation Plan as currently in effect; provided, however, that you are guaranteed to receive a bonus for plan year
2004 of not less than $20,000 and for plan year 2005 of not less than 25% of your base salary earned during that plan year. 
  
 4. Benefits 
  
 (a) Basic Benefit Plans: You will be eligible to participate in the Company’s regular health, life, disability,
retirement and other benefit plans offered to all salaried employees in accordance with the terms of those plans. 
  

 Mr. Steve Kelchen 
 August
20, 2004 
 Page 2 
  
 (b) You will be eligible for a long-term disability plan supplemental to the Company’s basic long-term disability plan to ensure the
replacement of at least 75% of your base salary in the event of a qualifying disability; 
  
 (c) Four weeks of earned vacation annually; 
  
 (d) You will be granted fifteen years of industry service credit for purposes of the Short-Term Disability income replacement plan;

  
 (e) You will become an immediate
participation upon hire in the Supplemental Employee Retirement Plan with fifteen years of industry service credit for purposes of the benefit calculation (with the total benefit payable under the plan to be offset by any vested benefit payments
from qualified pension plans of Smurfit-Stone); 
  
 (f) You will be provided full relocation services as necessary for your needs under the Company’s Relocation Program; 
  
 (g) You will be allowed to have a Country Club membership at your election with an allowance of up to $300 per month for monthly dues and
one-time reimbursement of up to $10,000 in initiation related fees; 
  
 (h) You may also participate, if you elect, in any of the Company’s other voluntary benefit plans for similarly situated employees. 
  
 5. Long Term Equity Grants: 
  
 (a) You will receive a one-time non-qualified option grant under the terms of the Caraustar Long Term Equity
Plan to purchase 15,000 restricted shares of the Company’s stock valued as of date of hire, with the grant to vest over four years and have a ten (10) year term. 
  
 (b) You will receive a one-time Performance Accelerated Restricted Stock (PARS) grant under the terms of the
Caraustar Long Term Equity Plan of 10,000 fully valued shares with a target vesting price of $20.00 per share subject to a one-year blackout period. 
  
 (c) You will be given a one-time grant of 7,500 fully valued shares as of the date of hire. These shares will vest after one year of
employment. 
  
 (d) All future equity grants will
be determined in accordance with the terms of the Caraustar Long Term Equity Plan. 
  
 6. Business Expenses: You will be reimbursed for reasonable and necessary business expenses, in accordance with the Company’s policies and upon presentation of appropriate documentation.

  

 Mr. Steve Kelchen 
 August
20, 2004 
 Page 3 
  
 7. Severance Benefits: 
  
 (a) In the event your employment is terminated other than because of your death or “disability” (as defined below), by you for
any reason, for “cause” (as defined below) or in connection with a qualifying termination under the terms of a change in control severance agreement to be entered between you and the Company, you will be entitled to a severance benefit
equal to at least six (6) months’ continuation of your then- current base salary and benefits coverage in place at the time of termination. 
  
 (b) In the event your employment is terminated because of your death or disability, for cause, or by you for any reason, you will not be
entitled to receive any compensation or benefits after the date of termination, except for any benefits accrued through the date of termination under the Company’s plans. 
  
 (c) In the event of a qualifying termination under the terms of the Change in Control severance agreement to
be entered between you and the Company, you will be entitled to receive the benefit provided thereunder. The Company will enter such change in control severance agreement with you under terms approved by the Company’s Board of Directors and
provided to its other executive officers; provided, that such agreement will at a minimum provide benefits upon a qualifying termination up to the lesser of (i) twenty-four (24) months salary continuation benefit or (ii) such lesser amount as is
necessary to ensure that no payments to you thereunder will cause any deductions to be disallowed to the Company or cause you to be assessed any excise taxes under the Internal Revenue Code. 
  
 (d) For purposes of this offer, “disability” means
termination owing to your inability to perform your duties hereunder by reason of disability or incapacity, due to physical or mental illness, for a period in excess of six (6) consecutive months, and “cause” means (i) your commission of a
felony; or (ii) fraud, misappropriation or embezzlement involving Company property or other intentional wrongful acts that materially impair the goodwill or business of the Company or that cause material damage to the Company’s property,
goodwill or business. 
  
 8. Restrictive Covenants:
You agree, as a condition to your employment, to execute any form of confidentiality, non-competition and non-solicitation agreement reasonably requested by the Company and agree that the term of such non-competition and non-solicitation agreement
shall be no less than 12 months following your termination of employment or any such longer period during which you are receiving severance benefits from the Company or any successor. 
  

 Mr. Steve Kelchen 
 August
20, 2004 
 Page 4 
  
 Steve, we are excited at the prospect of your joining the Company and hope that you accept our offer. If I can answer any questions or be of further
assistance in your decision process, please do not hesitate to contact Barry Smedstad or me. 
  

			
	 Sincerely,

	
	 CARAUSTAR INDUSTRIES, INC.

		
	 By:
	 	 /s/ Michael J. Keough

	 	 	 Michael J. Keough

	 	 	 Senior Vice President and Chief Operating

	 	 	 Officer

  

 Mr. Steve Kelchen 
 August
20, 2004 
 Page 5 
  

			
	ACKNOWLEDGED AND AGREED:
	
	 /s/ Steve Kelchen

	 Steve Kelchen

		
	 Date:
	 	 8/31/04Fourth Amendment to Credit Agreement

 Exhibit 10.03 
  
 FOURTH AMENDMENT TO CREDIT AGREEMENT 
  
 THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of this 25th day
of October, 2004, among Caraustar Industries, Inc., a North Carolina corporation (“Caraustar”), and each Subsidiary of Caraustar listed on the signature pages hereto as a “Borrower” (Caraustar and each such
Subsidiary, individually, a “Borrower”, and, collectively, “Borrowers”), and each Subsidiary of Caraustar listed on the signature pages hereto as a “Guarantor” (each such Subsidiary, individually, a
“Guarantor”, and, collectively, “Guarantors”; Borrowers and Guarantors, collectively, “Obligors”), the Lenders party to this Amendment (the “Lenders”), and Bank of America,
N.A., as Agent for the Lenders (the “Agent”). 
  
 W I T N E S S E T H : 
  
 WHEREAS, Borrowers, Guarantors, the Lenders and the Agent entered into that certain Credit Agreement, dated as of June 24, 2003, pursuant to which the
Lenders agreed to make certain loans to Borrowers (as amended, modified, supplemented and restated from time to time, the “Credit Agreement”); and 
  
 WHEREAS, Borrowers, Guarantors, the Lenders and the Agent desire to enter into this Amendment for the purpose of amending
the Credit Agreement in certain respects and waiving certain defaults existing thereunder. 
  
 NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

  
 1. All capitalized terms used herein and not otherwise
expressly defined herein shall have the respective meanings given to such terms in the Credit Agreement. 
  
 2. The Credit Agreement is amended by deleting subsection (a) of Section 7.14 and replacing it with the following: 
  
 (a) Neither any Obligor nor any of its Subsidiaries shall
prepay any Debt (whether through a prepayment, redemption, defeasance or otherwise), except the Obligations in accordance with the terms of this Agreement; provided, however, the Obligors may prepay (including through redemptions and purchases) Debt
outstanding under the Indentures so long as (i) the aggregate amount of such prepayments during the term of this Agreement does not exceed $75,000,000, (ii) no Default or Event of Default exists immediately before or immediately after giving effect
to such prepayment, (iii) immediately after giving effect to such prepayment (including any Loans made hereunder to finance such prepayment), and with all of the Obligors’ obligations current, Availability is greater than $34,000,000, and (iv)
a Responsible Officer delivers to the Agent a certificate (A) demonstrating compliance with clause (iii) above, and (B) stating that no Default or Event of Default exists immediately before or immediately after giving effect to such
prepayment. 

 3. The Credit Agreement is amended by deleting the definition of “Fixed Charges” in Annex
A and replacing it with the following: 
  
 “Fixed Charges” means, with respect to any fiscal period of the Consolidated Parties on a consolidated basis, without duplication, Interest Expense (net of cash interest income), Capital Expenditures (excluding Capital
Expenditures funded with Debt other than Revolving Loans, but including, without duplication, principal payments with respect to such Debt), scheduled principal payments of Debt, prepayments, redemptions and purchases of Debt outstanding under the
Indentures to the extent funded with Revolving Loans, and Federal, state, local and foreign income taxes, excluding deferred taxes, in each case on a consolidated basis for the Consolidated Parties for such period. 
  
 4. The post-closing letter dated June 24, 2003 among the Agent, Borrowers and
Guarantors is hereby amended by deleting item 2 thereof and substituting the following in lieu thereof: 
  
 2. Without limiting any restrictions set forth in the Credit Agreement with respect to sales of assets, in the event that one or more Obligors owns any
equity interests in Standard Gypsum or Premier Boxboard as of January 31, 2005, such Obligor(s) shall, by January 31, 2005, cause the Agent, for the benefit of the Lenders, to have a perfected, first-priority security interest in such equity
interests, all pursuant to documentation satisfactory to the Agent. 
  
 5. Borrowers acknowledge that the following Events of Default have occurred under the Credit Agreement: (a) in April 2004, Sikes Cookers sold substantially all of its assets and Borrowers failed to provide the Agent at least 10 days notice
of such sale and failed to reinvest the proceeds of such sale, in each case as required under Section 7.9(e) of the Credit Agreement; (b) in connection with such sale of assets, Jimmy Sikes transferred his equity interests in Sikes Cookers to
Paragon Plastics, which transfer constituted a transaction with an Affiliate that was not permitted under Section 7.15 of the Credit Agreement; (c) notwithstanding the existence of the Events of Default described above, the Borrowers have delivered
officer’s certificates pursuant to Section 5.2(d) of the Credit Agreement certifying that no Default or Event of Default exists; (d) the Borrowers have failed to notify the Agent and the Lenders in writing of the occurrence of the Events of
Default described above (and in clause (e) below) as required pursuant to Section 5.3(a) of the Credit Agreement; and (e) on or about September 30, 2004, Borrowers paid $10,000,000 with respect to the repurchase of Debt outstanding under the
Indentures, notwithstanding that such repurchase was not permitted under Section 7.14(a) of the Credit Agreement as a result of the Events of Default described above and Borrowers’ failure to meet the Fixed Charge Coverage Ratio condition to
such repurchase set forth in Section 7.14(a)(iv) of the Credit Agreement (collectively, the “Designated Defaults”). Borrowers represent and warrant that the Designated Defaults are the only Defaults or Events of Default that exist under
the Credit Agreement and the other Loan Documents as of the date hereof. The Agent and the Lenders hereby waive the Designated Defaults in existence on the date hereof, 
  

 -2- 

 subject to the understanding that (i) the net book value of the assets sold pursuant to the Sikes Cookers sale was
$182,376 and such amount shall be deducted from the $5,000,000 limit set forth in Section 7.9(e)(ii), and (ii) the above-described $10,000,000 prepayment of Debt outstanding under the Indentures shall be deducted from the $75,000,000 limit set forth
in Section 7.14(a)(i). In no event shall such waiver be deemed to constitute a waiver of any Default or Event of Default other than the Designated Defaults in existence on the date of this Amendment or Borrowers’ obligation to comply with all
of the terms and conditions of the Credit Agreement and the other Loan Documents from and after the date hereof. Notwithstanding any prior, temporary mutual disregard of the terms of any contracts between the parties, each Borrower hereby agrees
that it shall be required strictly to comply with all of the terms of the Loan Documents on and after the date hereof. 
  
 6. Borrowers and Guarantors hereby restate, ratify, and reaffirm each and every representation and warranty heretofore made by each of them under or in
connection with the execution and delivery of the Credit Agreement, as modified hereby, and the other Loan Documents, as fully as though such representations and warranties had been made on the date hereof and with specific reference to this
Amendment, except to the extent that any such representation or warranty relates solely to a prior date. 
  
 7. Except as expressly set forth herein, the Credit Agreement and the other Loan Documents shall be and remain in full force and effect as originally
written, and shall constitute the legal, valid, binding and enforceable obligations of Borrowers and Guarantors to the Agent and the Lenders. 
  
 8. Borrowers agree to pay on demand all reasonable costs and expenses of the Agent in connection with the preparation, execution, delivery and enforcement
of this Amendment and all other Loan Documents and any other transactions contemplated hereby, including, without limitation, the reasonable fees and out-of-pocket expenses of legal counsel to the Agent. 
  
 9. Borrowers and Guarantors agree to take such further action as the Agent
shall reasonably request in connection herewith to evidence the agreements herein contained. 
  
 10. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same instrument. 
  
 11. This Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns, and legal representatives and heirs, of the parties hereto. 
  
 12. This Amendment shall be governed by, and construed in accordance with,
the laws of the State of Georgia. 
  

 -3- 

 IN WITNESS WHEREOF, the parties have entered into this Agreement on the date first above written.

  

					
	BORROWERS:	 	CARAUSTAR INDUSTRIES, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

		
	 	 	CARAUSTAR CUSTOM PACKAGING GROUP, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

		
	 	 	CARAUSTAR RECOVERED FIBER GROUP, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

		
	 	 	 CARAUSTAR INDUSTRIAL AND
 CONSUMER PRODUCTS GROUP, INC.

			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

		
	 	 	CARAUSTAR MILL GROUP, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

		
	 	 	SPRAGUE PAPERBOARD, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

		
	GUARANTORS:	 	PBL INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

									
	 	 	GYPSUM MGC, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	Ronald J. Domanico, Vice President
		
	 	 	McQUEENEY GYPSUM COMPANY
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 Ronald J. Domanico, Vice President

		
	 	 	CARAUSTAR, G.P.
				
	 	 	 	 	 By:
	 	 CARAUSTAR INDUSTRIES, INC.,

	 	 	 	 	 	 	 general partner

					
	 	 	 	 	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 	 	 	 	 Ronald J. Domanico,
 Vice President

				
	 	 	 	 	 By:
	 	CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP, INC., general partner
					
	 	 	 	 	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 	 	 	 	 Ronald J. Domanico,
 Vice President

		
	 	 	McQUEENEY GYPSUM COMPANY, LLC
				
	 	 	 	 	 By:
	 	 McQUEENEY GYPSUM COMPANY,
 sole member

					
	 	 	 	 	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 	 	 	 	 Ronald J. Domanico, Vice President

		
	 	 	RECCMG, LLC
				
	 	 	 	 	 By:
	 	 CARAUSTAR MILL GROUP, INC.,
 sole member

					
	 	 	 	 	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	 	 	 	 	 Ronald J. Domanico, Vice President

									
	 	 	CICPG, LLC
				
	 	 	 	 	 By:
	 	CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP, INC.
					
	 	 	 	 	 	 	By:	 	 /s/    Ronald J. Domanico

	 	 	 	 	 	 	 	 	Ronald J. Domanico, Vice President
		
	 	 	FEDERAL TRANSPORT, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	Ronald J. Domanico, Vice President
		
	 	 	AUSTELL HOLDING COMPANY, LLC
				
	 	 	 	 	 By:
	 	 CARAUSTAR INDUSTRIES, INC.,
 sole
member

					
	 	 	 	 	 	 	By:	 	 /s/    Ronald J. Domanico

	 	 	 	 	 	 	 	 	Ronald J. Domanico, Vice President
		
	 	 	CAMDEN PAPERBOARD CORPORATION
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	Ronald J. Domanico, Vice President
		
	 	 	CHICAGO PAPERBOARD CORPORATION
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	Ronald J. Domanico, Vice President
		
	 	 	HALIFAX PAPER BOARD COMPANY, INC.
			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	Ronald J. Domanico, Vice President
		
	 	 	 CARAUSTAR CUSTOM PACKAGING
 (MARYLAND), INC.

			
	 	 	 By:
	 	 /s/    Ronald J. Domanico

	 	 	 	 	Ronald J. Domanico, Vice President

					
	LENDERS:	 	BANK OF AMERICA, N.A.
			
	 	 	 By:
	 	 /s/    Walter T. Shellman

	 	 	 	 	 Walter T. Shellman, Vice President

		
	 	 	 MERRILL LYNCH CAPITAL, a division of
 Merrill Lynch Business Financial Services Inc.

			
	 	 	 By:
	 	 /s/    Troy A. Oder

	 	 	 Name:
	 	 Troy A. Oder

	 	 	 Title:
	 	 Vice President

		
	 	 	THE CIT GROUP/BUSINESS CREDIT, INC.
			
	 	 	 By:
	 	  

			
	 	 	 Name:
	 	  

	 	 	 Title:
	 	  

		
	AGENT:	 	BANK OF AMERICA, N.A.
			
	 	 	 By:
	 	 /s/    Walter T. Shellman

	 	 	 	 	Walter T. Shellman, Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]