Document:

Exhibit 4.16

 

JSG PACKAGING LIMITED

JEFFERSON SMURFIT GROUP LIMITED

BEECH HILL

CLONSKEAGH

DUBLIN 4

IRELAND

 

February 6, 2004

 

PERSONAL
AND CONFIDENTIAL

 

Gary
McGann

Cherryfield

Stonehouse

Donnybrook

Dublin
4

 

Dear
Gary:

 

In
light of the proposed exchange (the “Exchange”) of ordinary shares and
convertible shares of Jefferson Smurfit Group Limited (“Existing Parent”) for
ordinary shares and convertible shares of JSG Packaging Limited (“New Parent”),
we thought it advisable to confirm and clarify the terms of your employment
upon consummation of the Exchange.

 

1.                                       In
the event that the Exchange in consummated, you will remain employed as the
chief executive officer of Existing Parent and its subsidiaries and will have
the title of chief executive officer for New Parent and JSG Holdings plc as
well.  In your capacity as chief
executive officer, you shall report to New Parent’s Board of Directors (the
“Board”) and discharge all normal responsibilities of a chief executive officer
and make recommendations to the Board for capital expenditures, investments and
divestitures in excess of €5,000,000. As long as you remain employed by
Existing Parent or one of its subsidiaries, you shall devote substantially all
of your business time and attention to New Parent and its subsidiaries and use
your best efforts in furtherance of your responsibilities for New Parent and
its subsidiaries; provided that, with the prior consent of the Existing
Parent’s Board of Directors (the “Board”), you shall be entitled to serve on
the board of directors of up to two companies or organizations as long as such
service does not materially interfere with your obligations to New Parent and
its subsidiaries and you may act as president of the Irish Business Employers
Confederation.

 

2.                                       From
and after consummation of the Exchange, your base salary shall be the same as
in effect immediately prior to consummation of the Exchange.  Your base salary is subject to increase from
time to time at the sole discretion of the Board.  All remuneration or payments payable to you
pursuant to this paragraph 2 or otherwise shall be subject to such

 

 

tax and other
statutory deductions as are required to be deducted at source and remitted to
the appropriate revenue authorities.

 

3.                                       Subject
to paragraph 4 below, all senior executive employee benefit plans of Existing
Parent and its subsidiaries in place as of the date of this letter, including
the JSG management incentive plan (the “MIP”), will remain in place after
consummation of the Exchange on substantially the same terms as present;
provided that the MIP will provide that as long as you remain the chief
executive officer of Existing Parent and its subsidiaries, your bonus under the
MIP for each of 2004, 2005 and 2006 shall be 60% of your base salary for such
year and you shall be eligible for a bonus of up to 40% of your base salary for
such year based upon achievement of certain performance targets to be
determined by the Board or its compensation committee.  You shall continue to be entitled to a
pension of two thirds final salary at age 62 and, accordingly, appropriate
annual employer contributions shall be made to the relevant Plan on your
behalf.   Moreover, you will be entitled
to (a) 30 days’ vacation annually (exclusive of public holidays), (b) use of a
leased automobile paid for by a Group Company (which automobile shall be the
current model used by you or an equivalent, renewed every four years, together
with tax, insurance, operating and maintenance costs), (c) reimbursement of
expenses, properly vouched in accordance with Group Company policies, (d)
business class travel (first class travel, where appropriate), and (e)
membership at The K Club and two other golf or similar clubs selected by
you.  In addition, for as long as you are
the chief executive officer, you will provide services at the headquarters for
the Group Companies in Dublin, Ireland, subject to frequent temporary travel
overseas.  Each of these employee benefit
plans will ultimately be subject to the supervision and periodic review of the
Board or its compensation committee; provided that your benefit package in the
aggregate shall not be decreased.

 

4.                                       Notwithstanding
paragraph 3 foregoing, all PSPs, LTIPs, SAYE Schemes, phantom stock plans,
option plans and other equity based incentive plans of the Group Companies in
effect as of September 17, 2002 not previously terminated will be terminated
forthwith upon or as soon as possible after the consummation of the Exchange in
accordance with their terms.

 

5.                                       As
long as you remain employed as chief executive officer of Existing Parent and
its subsidiaries and prior to an initial public offering, investment funds
controlled by or under common control with Madison Dearborn Partners LLC
(“MDP”) will cast all of its votes in favor of your appointment and/or
re-election to the board of directors of New Parent and Existing Parent.

 

6.                                       You
agree that Existing Parent may terminate your employment at any time with or
without cause upon 360 days prior notice. 
If your employment is terminated by Existing Parent other than as a
result of death, total and permanent disability or cause, you will be entitled
to receive as severance a payment for the two-year period from the date of
termination (the “Severance Period”) an amount equal to the sum of (a) your
annual salary as of the date of termination, plus (b) the highest annual bonus
for the most recent three years, plus (c) the regular pension contributions
made by Existing Parent or its

 

2

 

subsidiaries in respect of your annual salary, plus
(d) the cash value of any perks or benefits to which you are entitled as a
result of your employment (other than participation in equity-like incentive
schemes); provided that Existing Parent may, without prior notice,
terminate your employment, in which case the Severance Period shall be the
three-year period from the date of termination and severance payment shall be
calculated with reference to such payment. 
Such severance shall be payable to you in a lump sum within 30 days following
the date of termination of your employment. 
As a pre-condition to receiving any such severance payments and as a
material term of this agreement, you agree that you will execute a mutually
acceptable and complete release in favor of New Parent, Existing Parent and
their affiliates (including, without limitation, a full and final settlement,
discharge and waiver of all rights under law (including but not limited to
statutory, contractual and other common law rights) with respect to your
employment and/or the termination of your employment and/or such payment upon
any  termination in which you are
entitled to severance).  The rights under
this paragraph shall be in replacement of, rather than in addition to, any
rights that you may have under law (including, without limitation, payment in
lieu of notice).

 

7.                                       New
Parent understands that you are party to a “two-year” letter, a copy of which
is attached hereto as Exhibit A which provides that if within one year after a
Relevant Event (as defined therein), your employment with Existing Parent or
its subsidiaries is voluntarily terminated or involuntarily terminated without
just cause, you are entitled to receive two years’ Remuneration (as defined
therein).  You agree that you hereby
release and waive, without any claims or demands, all rights under such
two-year letter in connection with the Exchange (including any compulsory share
acquisition under Section 204 of the Irish Companies Act).  As consideration for such release and waiver,
in the event that the Exchange is consummated, New Parent will enter into a new
“two-year” letter with you in the form attached hereto as Exhibit B. In all
cases where payment obligations are triggered pursuant to both paragraphs 6 and
7, you shall be entitled to the greater of the amounts payable to you pursuant
to paragraphs 6 and 7 hereof, but in no event shall you be entitled to payments
pursuant both paragraphs 6 and 7.

 

8.                                       When
used herein and when to be used in the new two-year letter, “cause” shall mean
(a) the commission of actual or attempted fraud, embezzlement, theft,
misappropriation, serious misconduct or gross default by you against or in
respect of a Group Company or your duties for a Group Company, which relates to
a material amount or which results in a criminal conviction or settlement with
criminal penalties or future restrictions or in material loss or damage to that
Group Company or other Group Companies; (b) the refusal or failure by you to
carry out your duties to a Group Company to a material degree, following a
written warning that dismissal may result; (c) conviction of a crime in
relation to the business or assets of a Group Company, which has, in the
reasonable opinion of the Board, a material adverse effect upon any Group
Company or its shareholders, other than (i) a violation of the Road Traffic
Acts and (ii) a criminal matter in respect of which you have been indemnified
by a Group Company and are entitled to indemnification, (d) knowing violation
of the Foreign Corrupt Practices Act, or (e) material breach of a material,
formal agreement in writing (other than this letter agreement) between you and
New Parent or the Group Company by which you are

 

3

 

employed; provided
that for the avoidance of doubt, the exclusion from this clause (e) of this
letter agreement shall not exclude breach thereof from being deemed the basis
for “cause” termination pursuant the provisions of any of clauses (a) through
(d) of this paragraph 8.  For the
avoidance of doubt, the termination of your employment by a Group Company shall
not be for Cause if it results wholly or mainly from (v) your death or
disability, (w) your retirement on grounds of age or pursuant to an early
retirement plan of the Group Company that employs you, (x) your voluntary
resignation (unless you are subject to internal or external proceedings likely
to lead to a termination for Cause at the time of such resignation), (y) your
redundancy, or (z) the Group Company that employs you ceasing for any reason to
be a Group Company.  When used herein,
“Group Companies” means New Parent and each of its subsidiaries and Associated
Companies and “Group Company” means any such company and “Associated Company”
means any company having an Equity Share Capital (as defined in Section 155 of
the Companies Act, 1963) of which not less than 20% in nominal value is
beneficially owned by any Group Company.

 

9.                                       You
agree that in the event that you (a) voluntarily terminate your employment with
the Group Companies or (b) are terminated without cause, you shall not during
the Restricted Period:  (i) within the
Restricted Area or any part thereof, carry on either directly or indirectly, on
your own behalf or on behalf of any other person, firm, company or entity, any
material business of the same or similar kind to that in which any of the Group
Companies were materially engaged in the year preceding such termination, (ii)
induce or attempt to induce any employee of any Group Company to leave the
employ of the Group Companies, or in any way interfere with the relationship
between any Group Company and any employee thereof and or (iii) call on,
solicit the custom or business of or service any customer, supplier, licensee,
licensor or other business relation of any Group Company in order to induce or
attempt to induce such person or entity to cease doing or reduce the amount of
business with any Group Company, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and any Group
Company (including but not limited to making any negative statements or
communications about any Group Company, or any employee, director or
stockholder thereof).  When used herein,
(A) “Restricted Period” means the two-year period from the date of termination;
provided that “Restricted Period” shall not include any period for which or
with respect to which you are not receiving or did not receive severance
payments or payments under your “two-year” letter in violation of this letter
agreement or such “two-year” letter, and (B) “Restricted Area” means any area
of the world where any Group Company conducted a material portion of its
business in the twelve-month period immediately preceding your termination
date.  The restrictions contained in this
paragraph 9 shall not restrict you from passively owning not more than 1% of
the outstanding equity securities of a publicly traded company that competes
with the Group Companies.

 

10.                                 You
agree that all trade secrets, confidential operations, processes or dealings, or
any information concerning the organization, business, finances, transactions
and affairs, other than information that becomes publicly available other than
through breach of this provision by you, shall be kept confidential both during
the term of this letter agreement

 

4

 

and thereafter.  All notes, memoranda, reports and information
compiled by you during your employment (in whatever form compiled) regarding
the business, affairs and operations of the Group Companies shall be and at all
times remain the property of the Group Companies.

 

11.                                 Subject
to paragraph 12 below, upon execution of this letter agreement by each party
hereto, this letter agreement shall be binding and enforceable upon each party
hereto.  In the event that the Exchange
is consummated, this letter agreement shall, effective as of the date of
consummation of the Exchange, amend and supersede that certain letter
agreement, dated as of July 4, 2002, by and between Existing Parent and you and
any other agreement(s) with any Group Company regarding the subject matter
hereof to which you are a party; provided that your employment hereunder
by Existing Parent shall be deemed to be continuous with your previous
employment with the Group Companies.

 

12.                                 Notwithstanding
anything else to the contrary set forth herein, in the event that the Exchange
is not consummated, this letter agreement shall terminate without obligation or
liability to either party hereto.

 

13.                                 New
Parent shall procure that the other Group Companies shall satisfy each of its
obligations hereunder from and after the date that this letter agreement
becomes effective in accordance with its terms.

 

5

 

14.                                 This
letter agreement may be executed in multiple counterparts (including by
facsimile), each of which shall constitute one and the same original.  This letter agreement shall be construed in
accordance with the internal laws of the Republic of Ireland.

 

	
   

  	
  JEFFERSON SMURFIT GROUP
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JSG PACKAGING LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and
  Accepted:

  	
   

  
	
   

  	
   

  
	
  /s/ Gary McGann

  	
   

  	
   

  
	
  Gary McGann

  	
   

  
					

 

6

 

JSG PACKAGING LIMITED

JEFFERSON SMURFIT GROUP LIMITED

BEECH HILL

CLONSKEAGH

DUBLIN 4

IRELAND

 

February 6, 2004

 

Gary
McGann

Cherryfield

Stonehouse

Donnybrook

Dublin 4

 

You were formerly party to a letter agreement with
Smurfit International B.V. (the “First Letter”) confirming your right, on the
terms set out in the First Letter, to receive a certain amount from the
Jefferson Smurfit Group plc group of companies (the “Target”) in the event of
the occurrence of a Relevant Event (as defined therein) and are currently party
to a letter agreement (the “Existing Letter”), dated as of July 4, 2002, with
Jefferson Smurfit Group Limited (formerly MDCP Acquisitions plc, “JSG” and,
together with its subsidiaries, the “Group”) waiving your rights under the
First Letter in connection with the take-over offer for the Target by JSG.  This letter agreement amends and restates the
Existing Letter in its entirety, and on the date that the voluntary exchange of
shares of JSG for shares of JSG Packaging Limited is consummated (the
“Exchange”), the Existing Letter will cease to have any effect (and you hereby
waive all rights under the Existing Letter as of such date (including as may
result from the Exchange and any subsequent application of Section 204 of the Irish
Companies Act) and this letter will have effect.  The parties acknowledge that the rights and
obligations under the First Letter have already been terminated in full.

 

The
amended and re-stated agreement between us is as follows:

 

1.                                       If
(a) a Relevant Event (as defined below) shall occur, and (b) within the
Relevant Period, your contract of employment is terminated either (i) by you,
or (ii) without just cause by JSG or any other Group company which is your
employer (whichever shall first occur), you will be entitled to receive from
JSG or one of its subsidiaries an aggregate amount equal to twice the annual
rate of Remuneration (as defined below) payable to you by the Group company
that is your employer at the time of such termination (the “Termination Amount”).  When used herein, “Relevant Period” means the
twelve-month period from the occurrence of a Relevant Event; provided
that if you agree, as a condition to vesting of any equity interests that you
hold in JSG Packaging Limited in connection with any Relevant Event, to become
and remain employed by the Acquirer (as hereinafter defined) or remain employed
with the Group, “Relevant Period” shall mean the twelve-month period following
the expiry of such period of employment.

 

 

2.                                       The
Termination Amount is intended to be the maximum amount to be received by you
from JSG Packaging Limited and its subsidiaries and this letter does not confer
on you any additional rights to the extent that you would already be entitled
to receive amounts as a result of contractual arrangements entered into with
you or as a result of legal rights in the jurisdiction(s) in which you are
employed or operate.  You will be
entitled to receive all such benefits and will only be entitled to receive
amounts under this letter to the extent of any shortfall in the amounts
received from your employing company or companies as compared to the
Termination Amount.

 

3.                                       For
the purposes of this letter, the following expressions shall have the following
meanings:

 

(a)                                  “Relevant
Event,” the sale of JSG Packaging Limited to a person or entity or group of
persons or entities acting in concert (other than Excluded Persons) pursuant to
which such person or entity or such group of persons or entities (other than
Excluded Persons) acquire (i) equity securities of JSG Packaging Limited
possessing the voting power to elect a majority of JSG Packaging Limited’s
board of directors (whether by merger, consolidation or sale or transfer of JSG
Packaging Limited’s capital stock) or (ii) all or substantially all of JSG
Packaging Limited’s assets determined on a consolidated basis; provided,
however, that no Corporate Reorganization shall constitute a Relevant
Event.  When used herein, “Excluded
Persons” means (x) underwriters for any public offering or listing by JSG
Packaging Limited or (y) any other entity controlling, controlled by or under
common control under investment funds affiliated with Madison Dearborn
Partners, LLC.

 

(b)                                 “Corporate
Reorganization,” an acquisition of JSG Packaging Limited voting shares by any
body corporate (the “Acquirer”) (i) as a result of an offer made by it to
acquire the entire issued voting share capital of JSG Packaging Limited in
exchange for shares in the Acquirer (with or without a cash alternative) or a
court scheme, and (ii) which offer (if it had been accepted in full by all
holders of voting shares of JSG Packaging Limited at the date of the making of
the offer) or court scheme (if it had been approved by the court), would have
resulted in the voting shares of the Acquirer immediately after the acquisition
being owned by substantially the same persons as those who were the holders of
JSG Packaging Limited voting shares at the date of the making of the offer in
substantially the same percentages as those in which they held such JSG
Packaging Limited voting shares.

 

(c)                                  “Remuneration,”
the amount of (i) your salary as at the time of such termination, (ii) the
highest amount of the annual bonus (if any) paid or payable to you in respect
of the last three completed financial years of the Group prior to such
termination (but excluding, in each case, any element thereof which was of a
special or extraordinary nature), (iii) the regular pension contributions made
by your employing Group company or companies in respect of your annual salary
(excluding any special or extraordinary contributions), and (iv) the cash value
of

 

2

 

 

any perks or benefits to
which you are customarily entitled; no other amounts will be included.

 

4.                                       The
entitlements under this letter do not relieve you of any legal obligations
which may exist with regard to mitigation of damages.

 

5.                                       The
obligations of JSG Packaging Limited set out in this letter are subject to
receipt of any necessary statutory consents required by Irish law to be
obtained in relation to making any of payments hereunder.

 

6.                                       The
provisions of this letter will be governed by and construed in all respects in
accordance with Irish law.

 

Please
sign to confirm your acceptance of the terms and conditions set out herein.

 

 

	
   

  	
  JEFFERSON
  SMURFIT GROUP LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JSG
  PACKAGING LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and
  Accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Gary McGann

  	
   

  	
   

  
	
  Gary McGann

  	
   

  
					

 

3Exhibit 4.17

 

JSG PACKAGING LIMITED

JEFFERSON SMURFIT GROUP LIMITED

BEECH HILL

CLONSKEAGH

DUBLIN 4

IRELAND

 

February 6, 2004

 

PERSONAL
AND CONFIDENTIAL

 

Ian
Curley

1
Mount Salus

Knocknacree
Road

Dalkey

Co
Dublin

 

Dear
Ian:

 

In
light of the proposed exchange (the “Exchange”) of ordinary shares and
convertible shares of Jefferson Smurfit Group Limited (“Existing Parent”) for
ordinary shares and convertible shares of JSG Packaging Limited (“New Parent”),
we thought it advisable to confirm and clarify the terms of your employment
upon consummation of the Exchange.

 

1.                                       In
the event that the Exchange in consummated, you will remain employed as the
chief financial officer of Existing Parent and its subsidiaries and will have
the title of chief financial officer for New Parent and JSG Holdings plc as
well. In your capacity as chief financial officer, you shall report to the
Existing Parent’s chief executive officer and oversee the financial affairs of
New Parent and its subsidiaries. As long as you remain employed by Existing
Parent or one of its subsidiaries, you shall devote substantially all of your
business time and attention to New Parent and its subsidiaries and use your
best efforts in furtherance of your responsibilities for New Parent and its
subsidiaries; provided that, with the prior consent of the Existing
Parent’s Board of Directors (the “Board”), you shall be entitled to serve on
the board of directors of up to two companies or organizations as long as such
service does not materially interfere with your obligations to New Parent and
its subsidiaries.

 

2.                                       From
and after consummation of the Exchange, your base salary shall be the same as
in effect immediately prior to consummation of the Exchange. Your base salary
is subject to increase from time to time at the sole discretion of the Board. All
remuneration or payments payable to you pursuant to this paragraph 2 or
otherwise shall be subject to such tax and other statutory deductions as are
required to be deducted at source and remitted to the appropriate revenue
authorities.

 

 

3.                                       Subject
to paragraph 4 below, all senior executive employee benefit plans of Existing
Parent and its subsidiaries in place as of the date of this letter, including
the JSG management incentive plan (the “MIP”), will remain in place after
consummation of the Exchange on substantially the same terms as present;
provided that the MIP will provide that as long as you remain the chief
financial officer of Existing Parent and its subsidiaries, your bonus under the
MIP for each of 2004, 2005 and 2006 shall be 60% of your base salary for such
year and you shall be eligible for a bonus of up to 40% of your base salary for
such year based upon achievement of certain performance targets to be
determined by the Board or its compensation committee. Moreover, you will be
entitled to (a) 30 days’ vacation annually (exclusive of public holidays), (b)
use of a leased automobile paid for by a Group Company (which automobile shall
be the current model used by you or an equivalent, renewed every four years,
together with tax, insurance, operating and maintenance costs), (c)
reimbursement of expenses, properly vouched in accordance with Group Company
policies, (d) business class travel (first class travel, where appropriate),
and (e) membership at The K Club and two other golf or similar clubs selected
by you. In addition, for as long as you are the chief financial officer, you
will provide services at the headquarters for the Group Companies in Dublin,
Ireland, subject to frequent temporary travel overseas. Each of these employee
benefit plans will ultimately be subject to the supervision and periodic review
of the Board or its compensation committee; provided that your benefit package
in the aggregate shall not be decreased.

 

4.                                       Notwithstanding
paragraph 3 foregoing, all PSPs, LTIPs, SAYE Schemes, phantom stock plans,
option plans and other equity based incentive plans of the Group Companies in
effect as of September 17, 2002 not previously terminated will be terminated
forthwith upon or as soon as possible after the consummation of the Exchange in
accordance with their terms.

 

5.                                       As
long as you remain employed as chief financial officer of Existing Parent and
its subsidiaries and prior to an initial public offering, investment funds
controlled by or under common control with Madison Dearborn Partners LLC
(“MDP”) will cast all of its votes in favor of your appointment and/or
re-election to the board of directors of New Parent and Existing Parent.

 

6.                                       You
agree that Existing Parent may terminate your employment at any time with or
without cause upon 90 days prior notice. If your employment is terminated by
Existing Parent other than as a result of death, total and permanent disability
or cause, you will be entitled to receive as severance a payment for the two-year
period from the date of termination (the “Severance Period”) an amount equal to
the sum of (a) your annual salary as of the date of termination, plus (b) the
highest annual bonus for the most recent three years, plus (c) the regular
pension contributions made by Existing Parent or its subsidiaries in respect of
your annual salary, plus (d) the cash value of any perks or benefits to which
you are entitled as a result of your employment (other than participation in
equity-like incentive schemes); provided that Existing Parent may,
without prior notice, terminate your employment, in which case the Severance
Period shall be the two-year and 90 day period from the date of termination and
severance payment shall be

 

2

 

calculated with reference
to such payment. Such severance shall be payable to you in a lump sum within 30
days following the date of termination of your employment. As a pre-condition
to receiving any such severance payments and as a material term of this
agreement, you agree that you will execute a mutually acceptable and complete
release in favor of New Parent, Existing Parent and their affiliates
(including, without limitation, a full and final settlement, discharge and
waiver of all rights under law (including but not limited to statutory,
contractual and other common law rights) with respect to your employment and/or
the termination of your employment and/or such payment upon any  termination in which you are entitled to
severance). The rights under this paragraph shall be in replacement of, rather
than in addition to, any rights that you may have under law (including, without
limitation, payment in lieu of notice).

 

7.                                       New
Parent understands that you are party to a “two-year” letter, a copy of which
is attached hereto as Exhibit A which provides that if within one year after a
Relevant Event (as defined therein), your employment with Existing Parent or
its subsidiaries is voluntarily terminated or involuntarily terminated without
just cause, you are entitled to receive two years’ Remuneration (as defined
therein). You agree that you hereby release and waive, without any claims or
demands, all rights under such two-year letter in connection with the Exchange
(including any compulsory share acquisition under Section 204 of the Irish
Companies Act). As consideration for such release and waiver, in the event that
the Exchange is consummated, New Parent will enter into a new “two-year” letter
with you in the form attached hereto as Exhibit B. In all cases where payment
obligations are triggered pursuant to both paragraphs 6 and 7, you shall be
entitled to the greater of the amounts payable to you pursuant to paragraphs 6
and 7 hereof, but in no event shall you be entitled to payments pursuant both paragraphs
6 and 7.

 

8.                                       When
used herein and when to be used in the new two-year letter, “cause” shall mean
(a) the commission of actual or attempted fraud, embezzlement, theft,
misappropriation, serious misconduct or gross default by you against or in
respect of a Group Company or your duties for a Group Company, which relates to
a material amount or which results in a criminal conviction or settlement with
criminal penalties or future restrictions or in material loss or damage to that
Group Company or other Group Companies; (b) the refusal or failure by you to
carry out your duties to a Group Company to a material degree, following a
written warning that dismissal may result; (c) conviction of a crime in
relation to the business or assets of a Group Company, which has, in the
reasonable opinion of the Board acting in accordance with the recommendation of
the CEO, a material adverse effect upon any Group Company or its shareholders,
other than (i) a violation of the Road Traffic Acts and (ii) a criminal matter
in respect of which you have been indemnified by a Group Company and are
entitled to indemnification, (d) knowing violation of the Foreign Corrupt
Practices Act, or (e) material breach of a material, formal agreement in
writing (other than this letter agreement) between you and New Parent or the
Group Company by which you are employed; provided that for the avoidance
of doubt, the exclusion from this clause (e) of this letter agreement shall not
exclude breach thereof from being deemed the basis for “cause” termination
pursuant the provisions of any of clauses (a) through (d) of this paragraph 8. For
the avoidance of doubt, the termination of your employment by a Group Company
shall not be for Cause if it results

 

3

 

wholly or mainly from (v)
your death or disability, (w) your retirement on grounds of age or pursuant to
an early retirement plan of the Group Company that employs you, (x) your
voluntary resignation (unless you are subject to internal or external proceedings
likely to lead to a termination for Cause at the time of such resignation), (y)
your redundancy, or (z) the Group Company that employs you ceasing for any
reason to be a Group Company. When used herein, “Group Companies” means New
Parent and each of its subsidiaries and Associated Companies and “Group
Company” means any such company and “Associated Company” means any company
having an Equity Share Capital (as defined in Section 155 of the Companies Act,
1963) of which not less than 20% in nominal value is beneficially owned by any
Group Company.

 

9.                                       You
agree that in the event that you (a) voluntarily terminate your employment with
the Group Companies or (b) are terminated without cause, you shall not during
the Restricted Period:  (i) within the
Restricted Area or any part thereof, carry on either directly or indirectly, on
your own behalf or on behalf of any other person, firm, company or entity, any
material business of the same or similar kind to that in which any of the Group
Companies were materially engaged in the year preceding such termination, (ii)
induce or attempt to induce any employee of any Group Company to leave the
employ of the Group Companies, or in any way interfere with the relationship
between any Group Company and any employee thereof and or (iii) call on,
solicit the custom or business of or service any customer, supplier, licensee,
licensor or other business relation of any Group Company in order to induce or
attempt to induce such person or entity to cease doing or reduce the amount of
business with any Group Company, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and any
Group Company (including but not limited to making any negative statements or
communications about any Group Company, or any employee, director or
stockholder thereof). When used herein, (A) “Restricted Period” means the
two-year period from the date of termination; provided that “Restricted Period”
shall not include any period for which or with respect to which you are not
receiving or did not receive severance payments or payments under your
“two-year” letter in violation of this letter agreement or such “two-year”
letter, and (B) “Restricted Area” means any area of the world where any Group Company
conducted a material portion of its business in the twelve-month period
immediately preceding your termination date. The restrictions contained in this
paragraph 9 shall not restrict you from passively owning not more than 1% of
the outstanding equity securities of a publicly traded company that competes
with the Group Companies.

 

10.                                 You
agree that all trade secrets, confidential operations, processes or dealings,
or any information concerning the organization, business, finances,
transactions and affairs, other than information that becomes publicly
available other than through breach of this provision by you, shall be kept
confidential both during the term of this letter agreement and thereafter. All
notes, memoranda, reports and information compiled by you during your
employment (in whatever form compiled) regarding the business, affairs and
operations of the Group Companies shall be and at all times remain the property
of the Group Companies.

 

4

 

11.                                 Subject
to paragraph 12 below, upon execution of this letter agreement by each party
hereto, this letter agreement shall be binding and enforceable upon each party
hereto. In the event that the Exchange is consummated, this letter agreement
shall, effective as of the date of consummation of the Exchange, amend and
supersede that certain letter agreement, dated as of July 4, 2002, by and
between Existing Parent and you and any other agreement(s) with any Group
Company regarding the subject matter hereof to which you are a party; provided
that your employment hereunder by Existing Parent shall be deemed to be
continuous with your previous employment with the Group Companies.

 

12.                                 Notwithstanding
anything else to the contrary set forth herein, in the event that the Exchange
is not consummated, this letter agreement shall terminate without obligation or
liability to either party hereto.

 

13.                                 New
Parent shall procure that the other Group Companies shall satisfy each of its
obligations hereunder from and after the date that this letter agreement
becomes effective in accordance with its terms.

 

14.                                 This
letter agreement may be executed in multiple counterparts (including by
facsimile), each of which shall constitute one and the same original. This
letter agreement shall be construed in accordance with the internal laws of the
Republic of Ireland.

 

	
   

  	
  JEFFERSON SMURFIT GROUP
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JSG PACKAGING LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and
  Accepted:

  	
   

  
	
   

  	
   

  
	
  /s/ Ian J. Curley

  	
   

  	
   

  
	
  Ian J. Curley

  	
   

  
					

 

5

 

JSG PACKAGING LIMITED

JEFFERSON SMURFIT GROUP LIMITED

BEECH HILL

CLONSKEAGH

DUBLIN 4

IRELAND

 

February 6, 2004

 

Ian
Curley

1
Mount Salus

Knocknacree
Road

Dalkey

Co
Dublin

 

You were formerly party to a letter agreement with
Smurfit International B.V. (the “First Letter”) confirming your right, on the
terms set out in the First Letter, to receive a certain amount from the Jefferson
Smurfit Group plc group of companies (the “Target”) in the event of the
occurrence of a Relevant Event (as defined therein) and are currently party to
a letter agreement (the “Existing Letter”), dated as of July 4, 2002, with
Jefferson Smurfit Group Limited (formerly MDCP Acquisitions plc, “JSG” and,
together with its subsidiaries, the “Group”) waiving your rights under the
First Letter in connection with the take-over offer for the Target by JSG. This
letter agreement amends and restates the Existing Letter in its entirety, and
on the date that the voluntary exchange of shares of JSG for shares of JSG
Packaging Limited is consummated (the “Exchange”), the Existing Letter will
cease to have any effect (and you hereby waive all rights under the Existing
Letter as of such date (including as may result from the Exchange and any
subsequent application of Section 204 of the Irish Companies Act) and this
letter will have effect. The parties acknowledge that the rights and
obligations under the First Letter have already been terminated in full.

 

The
amended and re-stated agreement between us is as follows:

 

1.                                       If
(a) a Relevant Event (as defined below) shall occur, and (b) within the
Relevant Period, your contract of employment is terminated either (i) by you,
or (ii) without just cause by JSG or any other Group company which is your
employer (whichever shall first occur), you will be entitled to receive from
JSG or one of its subsidiaries an aggregate amount equal to twice the annual
rate of Remuneration (as defined below) payable to you by the Group company
that is your employer at the time of such termination (the “Termination
Amount”). When used herein, “Relevant Period” means the twelve-month period
from the occurrence of a Relevant Event; provided that if you agree, as
a condition to vesting of any equity interests that you hold in JSG Packaging
Limited in connection with any Relevant Event, to become and remain employed by
the Acquirer (as hereinafter defined) or remain employed with the Group,
“Relevant Period” shall mean the twelve-month period following the expiry of
such period of employment.

 

 

2.                                       The
Termination Amount is intended to be the maximum amount to be received by you
from JSG Packaging Limited and its subsidiaries and this letter does not confer
on you any additional rights to the extent that you would already be entitled
to receive amounts as a result of contractual arrangements entered into with
you or as a result of legal rights in the jurisdiction(s) in which you are
employed or operate. You will be entitled to receive all such benefits and will
only be entitled to receive amounts under this letter to the extent of any
shortfall in the amounts received from your employing company or companies as
compared to the Termination Amount.

 

3.                                       For
the purposes of this letter, the following expressions shall have the following
meanings:

 

(a)                                  “Relevant
Event,” the sale of JSG Packaging Limited to a person or entity or group of
persons or entities acting in concert (other than Excluded Persons) pursuant to
which such person or entity or such group of persons or entities (other than
Excluded Persons) acquire (i) equity securities of JSG Packaging Limited
possessing the voting power to elect a majority of JSG Packaging Limited’s
board of directors (whether by merger, consolidation or sale or transfer of JSG
Packaging Limited’s capital stock) or (ii) all or substantially all of JSG
Packaging Limited’s assets determined on a consolidated basis; provided,
however, that no Corporate Reorganization shall constitute a Relevant Event. When
used herein, “Excluded Persons” means (x) underwriters for any public offering
or listing by JSG Packaging Limited or (y) any other entity controlling,
controlled by or under common control under investment funds affiliated with
Madison Dearborn Partners, LLC.

 

(b)                                 “Corporate
Reorganization,” an acquisition of JSG Packaging Limited voting shares by any
body corporate (the “Acquirer”) (i) as a result of an offer made by it to
acquire the entire issued voting share capital of JSG Packaging Limited in
exchange for shares in the Acquirer (with or without a cash alternative) or a
court scheme, and (ii) which offer (if it had been accepted in full by all
holders of voting shares of JSG Packaging Limited at the date of the making of
the offer) or court scheme (if it had been approved by the court), would have
resulted in the voting shares of the Acquirer immediately after the acquisition
being owned by substantially the same persons as those who were the holders of
JSG Packaging Limited voting shares at the date of the making of the offer in
substantially the same percentages as those in which they held such JSG
Packaging Limited voting shares.

 

(c)                                  “Remuneration,”
the amount of (i) your salary as at the time of such termination, (ii) the
highest amount of the annual bonus (if any) paid or payable to you in respect
of the last three completed financial years of the Group prior to such
termination (but excluding, in each case, any element thereof which was of a
special or extraordinary nature), (iii) the regular pension contributions made
by your employing Group company or companies in respect of your annual salary
(excluding any special or extraordinary contributions), and (iv) the cash value
of

 

2

 

any perks or benefits to
which you are customarily entitled; no other amounts will be included.

 

4.                                       The
entitlements under this letter do not relieve you of any legal obligations
which may exist with regard to mitigation of damages.

 

5.                                       The
obligations of JSG Packaging Limited set out in this letter are subject to
receipt of any necessary statutory consents required by Irish law to be
obtained in relation to making any of payments hereunder.

 

6.                                       The
provisions of this letter will be governed by and construed in all respects in
accordance with Irish law.

 

Please
sign to confirm your acceptance of the terms and conditions set out herein.

 

 

	
   

  	
  JEFFERSON
  SMURFIT GROUP LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JSG PACKAGING LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Riordan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and
  Accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Ian J. Curley

  	
   

  	
   

  
	
  Ian J. Curley

  	
   

  
					

 

3

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