Document:

Exhibit 10.1

AMENDMENT
NO. 1 TO CREDIT AGREEMENT

AMENDMENT
dated as of October 2, 2006 to the Credit Agreement dated as of June 2, 2005
(the “Credit Agreement”) among
BLYTH, INC. and PARTYLITE TRADING SA, the LENDERS listed on the signature pages
hereof, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF
AMERICA, N.A. and LASALLE BANK, NATIONAL ASSOCIATION, as Co-Syndication Agents.

W I
T N E S S E T H :

WHEREAS,
the parties hereto desire to amend the Credit Agreement to (i) change the
initial scheduled Termination Date from June 2, 2010 to June 1, 2009, (ii) increase
the rates of interest applicable to Loans thereunder, (iii) modify certain
covenants and (iv) update the representations relating to financial
information;

NOW,
THEREFORE, the parties hereto agree as follows:

SECTION 1. 
Defined Terms; References.  Unless otherwise specifically
defined herein, each term used herein that is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement. Each reference to
“hereof”, “hereunder”, “herein” and “hereby” and each other similar reference
and each reference to “this Agreement” and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes
effective, refer to the Credit Agreement as amended hereby.

SECTION 2.  Change in Termination Date.  The definition of “Termination Date” in
Section 1.01 of the Credit Agreement is amended by changing the date specified
therein from “June 2, 2010” to “June 1, 2009.”

SECTION 3.  Change in Interest Rates.  The Pricing Schedule attached to
the Credit Agreement (the “Existing Pricing
Schedule”) is deleted and replaced by the Pricing Schedule attached
to this Amendment (the “New Pricing Schedule”).
The New Pricing Schedule shall apply to interest and fees accruing under the
Credit Agreement on and after the date hereof.  The Existing Pricing Schedule shall continue
to apply to interest and fees accruing under the Credit Agreement prior to the
date hereof.

SECTION 4.  Other Amendments.

The
following provisions of the Credit Agreement are further amended as set forth
below:

 1
 

 

(a)        The definition of “Consolidated EBITDA”
in Section 1.01 is amended by deleting the concluding sentence thereof and
substituting therefor the following:

In the event that during
any period of four consecutive fiscal quarters for which Consolidated EBITDA is
to be determined (the “measuring period”), the Company or a Subsidiary shall
have acquired or disposed of any Person or business unit, then (i) in the case
of a disposition, Consolidated EBITDA shall exclude amounts thereof
attributable to such Person or business unit disposed of as if such disposition
had occurred on the first day of such measuring period and (ii) in the case of
an acquisition Consolidated EBITDA shall be calculated on a pro forma basis as
if such acquisition had been consummated on the first day of such measuring
period, provided in the case of this clause (ii) that the Company shall have
furnished to the Administrative Agent audited financial statements for the
relevant period for the Person or business unit so acquired or other financial
statements acceptable to the Administrative Agent for this purpose.

(b)        The definition of “Indebtedness” in
Section 1.01 is amended by deleting the proviso to clause (e) thereof.

(c)        The definition of “Specified Non-Cash
Charges” in Section 1.01 is amended to read in its entirety as follows:

“Specified Non-Cash Charges” means (a) any non-cash
charges as a result of SFAS 141 or SFAS 142 issued by the Financial Accounting
Standards Board, (b) any other extraordinary non-cash charges and (c) any other
asset impairment charges incurred in any period commencing after July 31, 2006
which do not reflect a cash expense in the period in which incurred or in any
subsequent period; provided that (i)
in the case of an asset impairment charge that anticipates a cash expense in a
period subsequent to the period in which such charge is incurred, the Company
may at its option treat such charge as a Specified Non-Cash Charge in the
period in which incurred, in which case the Company shall reduce Consolidated
Net Income in each subsequent period in which cash outlays covered by such
charge are made (to the extent not otherwise deducted in the determination of
Consolidated Net Income for such subsequent period) and (ii) the aggregate
amount of Specified Non-Cash Charges incurred after July 31, 2006 for purposes
of calculations under this Agreement may not exceed $100,000,000.

(d)        Section 5.09 is amended by (i) deleting
the text of clause (f) and substituting therefor “[reserved;]” and (ii) changing
the figure “10%” in clause (g) thereof to “2%.”

 2
 

 

(e)        Section 5.10 is amended by changing the
figure “10%” in clause (g) thereof to “2%.”

(f)         Section 5.13 is amended by (i) changing
the figure “$471,176,000” to “$275,000,000” and (ii) changing the date “January
31, 2005” to “July 31, 2006” each place such date appears.

(g)        The second sentence of Section 5.14  is deleted and the following language is
substituted therefor:

The Company shall not
permit the sale, lease or other transfer, directly or indirectly, to any Person
or Persons (other than the Company or a Subsidiary) of any Person or business
unit if, after giving effect thereto, the aggregate Attributable EBITDA of all
Persons and business units so disposed of during the Current Compliance Period
would exceed 15% of Consolidated EBITDA for the Reference Period or (ii) the
aggregate Attributable EBITDA of all Persons and business units so disposed of
subsequent to July 31, 2006 would exceed 30% of Consolidated EBITDA for the
Reference Period.  For purposes of the
foregoing, (a) “Attributable EBITDA” means, with reference to any Person or
business unit disposed of by the Company, the contribution of such Person or
business unit to Consolidated EBITDA for the Reference Period with respect to
such disposition, (b) “Current Compliance Period” means (i) initially, the
period commencing August 1, 2006 and ending January 31, 2007 and (ii) each
subsequent fiscal year of the Company; and (c) “Reference Period” means (i)
with respect to any disposition during the period commencing August 1, 2006 and
ending January 31, 2007, the period of four fiscal quarters ended July 31, 2006
and (ii) with respect to any disposition consummated during any subsequent
fiscal year of the Company, the immediately preceding fiscal year.

(h)        The following two new covenants are
added to Article 5:

Section 5.16.  Minimum Consolidated EBITDA. 
Consolidated EBITDA will not be less than $75,000,000 for any period of
four consecutive fiscal quarters.

Section 5.17.  Minimum Cash.  The
consolidated amount of cash and Cash Equivalents of the Company and its
Consolidated Subsidiaries will at no time be less than $50,000,000.

(i)         Section 6.01(c) is amended by changing
the reference to “Section 5.15” to “Section 5.17”.

 3
 

 

(j)         The definition of “PLT Sublimit” in
Section 1.01 is amended by changing the figure “$100,000,000” to “$50,000,000.”

SECTION 5. 
Updated Financial Information.  Section 4.04 of the Credit
Agreement is amended to read as follows:

SECTION
4.04. Financial Information. (a)
The consolidated balance sheet of the Company and its Consolidated Subsidiaries
as of January 31, 2006 and the related consolidated statements of income,
common stockholders’ equity and cash flows for the fiscal year then ended,
reported on by Deloitte & Touche LLP and set forth in the Company’s report
on Form 10-K for such fiscal year, a copy of which has been delivered to each
of the Lenders, fairly present, in all material respects, in conformity with
generally accepted accounting principles, the consolidated financial position
of the Company and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.

(b)      The unaudited consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of July 31, 2006 and the
related unaudited consolidated statements of income and cash flows for the six
months then ended, set forth in the Company’s report on Form 10-Q for the
fiscal quarter then ended, a copy of which has been delivered to each of the
Lenders, fairly present, in all material respects, in conformity with generally
accepted accounting principles applied on a basis consistent with the financial
statements referred to in subsection 4.04(a), the consolidated financial
position of the Company and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such six-month
period (subject to normal year-end adjustments).

(c)      Since January 31, 2006 there has been no
material adverse change in the business, financial position or results of
operations of the Company and its Consolidated Subsidiaries, considered as a
whole, except as disclosed in the Company’s report on Form 10-Q for the fiscal
quarter ended July 31, 2006.

SECTION 6.  Reduction Of Commitments.  The Borrower hereby elects to
reduce ratably the aggregate amount of the Commitments to $75,000,000 pursuant
to Section 2.08 of the Credit Agreement, effective on the Amendment Effective
Date.  To the extent necessary in
connection with the foregoing reduction of the Commitments, the Required
Lenders hereby waive any requirement of notice pursuant to said Section 2.08.

SECTION 7. 
Representations of Borrower.  The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set forth
in

 4
 

 

Article 4 of the Credit Agreement will be true on and
as of the Amendment Effective Date and (ii) no Default will have occurred and
be continuing on such date.

SECTION 8. 
Governing Law.  This Amendment shall be governed
by and construed in accordance with the laws of the State of New York.

SECTION 9. 
Counterparts.  This Amendment may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

SECTION 10. 
Effectiveness.  This Amendment shall become
effective as of the date hereof on the date when the following conditions are
met (the “Amendment Effective Date”):

(a)        the Administrative Agent shall have
received from each of the Borrowers and the Required Lenders a counterpart
hereof signed by such party or facsimile or other written confirmation (in form
satisfactory to the Administrative Agent) that such party has signed a counterpart
hereof;

(b)       the Administrative Agent shall have
received an opinion of the General Counsel of the Company, dated the Amendment
Effective Date and substantially to the effect of Exhibit C to the Credit
Agreement with reference to this Amendment and the Credit Agreement as amended
hereby; and

(c)        the Administrative Agent shall have
received payment from the Company of an amendment fee for the account of each Lender
that shall have delivered an executed counterpart hereof in an amount equal to 0.15%
of such Lender’s Commitment and of all other fees and expenses payable by the
Company in connection herewith.

 5
 

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the date first above written.

	
   

  	
  BLYTH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Jane F.
  Casey

  
	
   

  	
   

  	
  Title:    Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTYLITE
  TRADING SA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 6
 

 

 

	
  

  	
  JPMORGAN CHASE
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA,
  N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  

  	
  LASALLE BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BARCLAYS BANK
  PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 7
 

 

 

	
  

  	
  NORDEA BANK FINLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHERN
  TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 8

 

PRICING
SCHEDULE

The
“Euro-Currency Margin”, “Facility Fee Rate” and “LC Fee Rate” for any day are
the respective percentages set forth below in the applicable row and column
corresponding to the Status and Utilization that exist on such day:

	
  Status

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  	
  Level V

  	
   

  
	
  Euro-Currency
  Margin:

  	
   

  	
  0.80

  	
  %

  	
  1.00

  	
  %

  	
  1.25

  	
  %

  	
  1.45

  	
  %

  	
  1.70

  	
  %

  
	
  Facility Fee
  Rate

  	
   

  	
  0.20

  	
  %

  	
  0.25

  	
  %

  	
  0.25

  	
  %

  	
  0.30

  	
  %

  	
  0.30

  	
  %

  
	
  LC Fee Rate:

  	
   

  	
  0.80

  	
  %

  	
  1.00

  	
  %

  	
  1.25

  	
  %

  	
  1.45

  	
  %

  	
  1.70

  	
  %

  

 

For
purposes of this Schedule, the following terms have the following meanings,
subject to the concluding paragraph of this Schedule:

“Level I Status” exists at any date if, at such date, the
Company’s senior unsecured long-term debt is rated BB+ or higher by S&P or
Ba1 or higher by Moody’s.

“Level II Status” exists at any date if, at such date, (i)
the Company’s senior unsecured long-term debt is rated BB or higher by S&P
or Ba2 or higher by Moody’s and (ii) Level I Status does not exist.

“Level III Status” exists at any date if, at such date, (i)
the Company’s senior unsecured long-term debt is rated BB- or higher by S&P
or Ba3 or higher by Moody’s and (ii) neither Level I Status nor Level II Status
exists.

“Level IV Status” exists at any date if, at such date, (i)
the Company’s senior unsecured long-term debt is rated B+ or higher by S&P
or B1 or higher by Moody’s and (ii) none of Level I Status, Level II Status or
Level III Status exists.

“Level V Status” exists at any date if, at such date, no
other Status exists.

“Status” refers to the determination of which of Level I
Status, Level II Status, Level III Status, Level IV Status or Level V Status
exists at any date.

The
credit ratings to be utilized for purposes of this Schedule are those assigned
to the senior unsecured long-term debt securities of the Company without
third-party credit enhancement, and any rating assigned to any other debt
security of the Company shall be disregarded. 
The rating in effect at any date is that in effect at the close of
business on such date.  If the Company is
split-rated and the ratings differential is one notch, the higher of the two
ratings will apply (e.g., B+/B2 results in Level IV Status).  If the Company is split-rated and the ratings
differential is more than one notch, the rating one notch higher than the lower
of the two shall be used (e.g., BB+/Ba3 results in Level II Status).

 1Exhibit 10.1

EXECUTIVE
RETIREMENT AGREEMENT

THIS AGREEMENT entered
into this 2nd of October, 2006 and becoming effective as of May 11, 2006
between Smurfit-Stone Container Corporation, a Delaware corporation, having its
principal office in Chicago, Illinois (“Smurfit-Stone”), and STEVEN J. KLINGER
(“Executive”);

W I  T  N  E  S  S
E  T  H:

WHEREAS, Executive is and
will be rendering valuable services to Smurfit-Stone and its Affiliates, and
Smurfit-Stone desires to receive the benefit of Executive’s continued loyalty,
service and counsel and to provide Executive and/or Executive’s eligible
beneficiaries with benefits in the event of Executive’s retirement or death;

IT IS HEREBY AGREED:

1.             Definitions

For purposes of this
Agreement, the capitalized terms in this Agreement shall have the meanings set
forth below:

(a)           Actuarial Equivalent. The term
“Actuarial Equivalent” shall mean a benefit of equivalent value determined
using the “applicable mortality table” and the “applicable interest rate”
prescribed under Section 417(e)(3) of the Code or any successor provision of
the Code as of the November 1 preceding the Plan Year in which the distribution
is made.

(b)           Affiliate. The term “Affiliate”
shall mean (A) any entity that directly or indirectly, is controlled by Smurfit-Stone,
(B) any entity in which Smurfit-Stone has a significant equity interest, (C)
the parent entity of Smurfit-Stone, and (D) any entity that is under common
control with Smurfit-Stone.  For purposes
of this Agreement, an Affiliate shall be considered an Affiliate only for
periods during which the Affiliate meets this definition of Affiliate.

(c)           Annuity Equivalent. The term “Annuity
Equivalent” of a given benefit shall mean an Actuarial Equivalent benefit in
the Normal Form determined as of Executive’s Retirement Benefit commencement
date and based on the statutory restrictions on qualified plan benefits (if
applicable) as in effect on Executive’s Termination Date.

(d)           Average Monthly Cash Salary.
The term “Average Monthly Cash Salary” shall mean the greater of (i) Executive’s
total Cash Salary for the highest four (4) Consecutive calendar years during
the last ten (10) calendar years of employment with Smurfit-Stone and its
Affiliates divided by 48, or (ii) Executive’s average monthly Cash Salary for
the last forty-eight (48) calendar months of employment with Smurfit-Stone and
its Affiliates (or, if fewer, all calendar months of his or her employment with

 1
 

Smurfit-Stone and its
Affiliates which immediately precede Executive’s Termination Date

(e)           Beneficiary. The term “Beneficiary”
shall mean the Executive’s Spouse at the time of the Participant’s death unless
prior to his death, (i) Executive has designated in writing another person(s)
(which may include a trust or Executive’s estate) as Beneficiary, and (ii) his
Spouse at the time of such designation has consented in writing to such other
Beneficiary.  If no Beneficiary has been
effectively designated by Executive at the time of his or her death and if
Executive has no Spouse at that time, any amounts payable to the Executive
under this Agreement at the time of his death shall be payable to the Executive’s
estate.

(f)            Cash Salary. The term “Cash
Salary” shall mean base salary and annual incentive bonuses paid by
Smurfit-Stone or its Affiliates, and any such cash salary or annual incentive
bonus which Executive elected to defer, and excludes, without limitation,
severance payments or any payment made upon the termination of Executive’s
employment (regardless of whether such payment is characterized as a severance
payment), compensation under any long-term incentive program, any bonus (other
than the annual incentive bonus), and any other incentive compensation. For
purposes of this Agreement, the annual incentive bonus shall be counted in the
year in which such annual incentive bonus is paid.

(g)           Company-Provided Benefits. The
term “Company-Provided Benefits” shall mean any benefit accrued by Executive
while participating in a Smurfit-Stone retirement plan or similar arrangement
during Executive’s employment with Smurfit-Stone and/or its Affiliates,
excluding any accruals from a retirement plan or similar arrangement that are
attributable to (i) Cash Salary deferrals elected by Executive, (ii) any
accruals attributable to matching contributions made by Smurfit-Stone and
credited to Executive under a qualified retirement plan maintained by
Smurfit-Stone and/or its Affiliates, and (iii) any Retirement Benefit provided
pursuant to this Agreement.

(h)           Disabled.  The term “Disabled” shall mean “totally
disabled” as defined under the long-term disability plan in effect generally
for salaried employees of Smurfit-Stone at Executive’s Termination Date
(regardless of whether Executive actually participates in that plan at the
time), as determined by the administrator of such plan.

(i)            G-P Provided-Benefits. The
term ‘G-P Provided Benefits” shall mean the vested benefit received by
Executive under the qualified and nonqualified deferred compensation plans and
arrangements of the Georgia-Pacific Corporation, as set forth on the attached
Exhibit A.

(j)            Normal Form. The term “Normal
Form” shall mean a single life annuity.

(k)           Retirement Benefit. The term “Retirement
Benefit” shall mean a Full or Vested Retirement Benefit, as applicable,
provided pursuant to the terms of this Agreement.

 2
 

(l)            Service. The term “Service”
shall mean a period of unbroken employment with Smurfit-Stone and/or its
Affiliates, provided however that employment with an Affiliate shall be counted
only for periods during which the Affiliate met the definition of Affiliate.

(m)          Spouse. The term “Spouse” shall
mean the person to whom the Executive is married (if any), as determined as of
any date under applicable state law.

(n)           Termination Date. The term “Termination
Date” shall mean the date of Executive’s termination of employment with
Smurfit-Stone and its Affiliates.

2.             Full Retirement Benefit

(a)           Executive shall be entitled to
receive a Full Retirement Benefit if Executive’s employment with Smurfit-Stone
and its Affiliates terminates after Executive having completed at least fifteen
(15) years of Service.

(b)           The Full Retirement Benefit shall
commence on the first day of the seventh (7th) full month following Executive’s
Termination Date and shall be paid in five (5) substantially equal annual
installments, the last four (4) annual installment payments to be made on the
successive anniversary dates of the original installment payment.

(c)           The Full Retirement Benefit payable
shall be calculated as follows:

(1)           Determine a benefit based on a
monthly amount that equals fifty percent (50%) of Executive’s Average Monthly
Cash Salary, payable in the Normal Form; and

(2)           Subtract the Annuity Equivalent of
any G-P-Provided Benefits payable to or on behalf of Executive; and

(3)           Subtract the Annuity Equivalent of
any Company-Provided Benefits; and

(4)           Determine the single sum amount that
is the Actuarial Equivalent of the Executive’s benefit resulting from the
calculations in paragraphs (1), (2), and (3), immediately above.

3.             Vested Retirement Benefit

(a)           Executive shall be entitled to
receive a Vested Retirement Benefit if Executive’s employment with
Smurfit-Stone and its Affiliates terminates for reason other that Executive
having become disabled, and such termination occurs prior to Executive having
completed fifteen (15) years of Service.

 3
 

 

(b)           The Vested Retirement Benefit shall
commence on the first day of the seventh (7th) full month following the Executive’s
Termination Date or the Executive’s attainment of the age of sixty-two (62)
years, which ever last occurs, and shall be paid in five (5) substantially
equal annual installments, the last four (4) annual installment payments to be
made on the successive anniversary dates of the original installment payment.

(c)           The Vested Retirement Benefit payable
shall be calculated as follows:

(1)           Determine the monthly amount under
Paragraph 2(c)(l);

(2)           Subtract the Annuity Equivalent of
any G-P-Provided Benefits payable to or on behalf of Executive; and

(3)           Subtract the Annuity Equivalent of
any Company-Provided Benefits payable to or on behalf of Executive; and

(4)           Multiply the result by a fraction,
the numerator of which shall equal the number of Executive’s completed years of
Service at the Termination Date or fifteen (15), whichever is less, and the
denominator of which shall be fifteen (15); and

(5)           Determine the single sum amount that
is the Actuarial Equivalent of the Executive’s benefit resulting from the
calculations in paragraphs (1), (2), (3) and (4), immediately above.

4.             Disability Retirement Benefit

(a)           Executive shall be entitled to
receive a Disability Retirement Benefit if 
Executive’s employment with Smurfit-Stone and its Affiliates terminates
prior to Executive’s attainment of the age of sixty-two (62) by reason of
Executive having become Disabled, and (ii) Executive has completed at least one
(1) year of Service.

(b)           The Disability Retirement Benefit
shall commence on the first day of the seventh (7th) full month following the Executive’s
Termination Date and shall be paid in five (5) substantially equal annual
installments, the last four (4) annual installment payments to be made on the
successive anniversary dates of the original installment payment.

(c)           The monthly Disability Retirement
Benefit payable shall be calculated as follows:

(1)           Determine the Executive’s Full
Retirement Benefit as provided in Paragraph 2(c)(1);

 4
 

(2)           Multiply the result in subparagraph
(1) by the appropriate early retirement commencement percentage as indicated
below:

	
  

  	
  Age of Executive

  At Termination

  Because of Disability

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  61

  	
   

  	
  94

  	
  %

  
	
  60

  	
   

  	
  88

  	
  %

  
	
  59

  	
   

  	
  82

  	
  %

  
	
  58

  	
   

  	
  76

  	
  %

  
	
  57

  	
   

  	
  70

  	
  %

  
	
  56

  	
   

  	
  64

  	
  %

  
	
  55

  	
   

  	
  58

  	
  %

  
	
  54 and prior

  	
   

  	
  50

  	
  %

  

 

(3)           Subtract the Annuity Equivalent of
any G-P-Provided Benefits payable to or on behalf of Executive; and

(4)           Subtract the Annuity Equivalent of
any Company-Provided Benefits payable to or on behalf of Executive; and

(5)           Determine the single sum amount that
is the Actuarial Equivalent of the Executive’s benefit resulting from the
calculations in paragraphs (1), (2), (3) and (4), immediately above.

5.             Pre-Retirement Survivor Benefits

(a)           A Pre-Retirement Survivor Benefit
shall be paid to the Executive’s Beneficiary in accordance with this Section 5
in the event of the Executive’s death prior to the commencement of his Full or
Vested Retirement Benefit and after the Executive has completed at least one
(1) year of Service.  The Pre-Retirement
Survivor Benefit shall be paid to the Executive’s Beneficiary in a single sum
on the first day of the month following the Executive’s date of death.

(b)           The Pre-Retirement Survivor Benefit
shall be calculated as follows:

(1)           Determine the Executive’s Full
Retirement Benefit or Vested Retirement Benefit, whichever applies based upon
the Executive’s years of Service at the time of his death and as if the
Executive had survived to age 62; and

 5
 

(2)           Multiply the result by the
appropriate early percentage as indicated below:

 

	
  

  	
  Age of Executive

  At Death

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  62 or older

  	
   

  	
  50

  	
  %

  
	
  61

  	
   

  	
  47

  	
  %

  
	
  60

  	
   

  	
  44

  	
  %

  
	
  59

  	
   

  	
  41

  	
  %

  
	
  58

  	
   

  	
  38

  	
  %

  
	
  57

  	
   

  	
  35

  	
  %

  
	
  56

  	
   

  	
  32

  	
  %

  
	
  55

  	
   

  	
  29

  	
  %

  
	
  54 and prior

  	
   

  	
  25

  	
  %

  

 

6.             Post-Retirement Survivor Benefit

In
the event of the Executive’s death after payment to him of his Retirement
Benefit has commenced, the remaining installments payable to the Executive
shall be paid to his Beneficiary in a single sum on the first day of the month
following the Executive’s date of death. 

7.             Source of Benefits

Nothing contained in this Agreement and no action
taken pursuant to the provisions of this Agreement shall create or be construed
to create a trust of any kind, or a fiduciary relationship between
Smurfit-Stone and Executive, or Executive’s spouse, or any other person. This
Agreement does not create any escrow account, trust fund or any other form of
asset segregation. Any Retirement Benefits due under the provisions of this
Agreement shall be paid from the general assets of Smurfit-Stone, except that
in the discretion of Smurfit-Stone, any Retirement Benefit payment may be made
from a trust, if any, established by Smurfit-Stone for such purpose.

 6
 

8.             Restrictive Covenants

Executive agrees that Section 8 (“Restrictive
Covenants”) of his employment agreement with the Company that is effective as
of May 11, 2006 (“Employment Agreement”), which is herein incorporated into
this Agreement by reference, will apply to this Agreement. Executive further
agrees that if Executive violates any provision of Section 8 of the Employment
Agreement, Executive will forfeit his right to all payments and benefits under
this Agreement.

9.             Assignment; Successors

This Agreement shall inure to the benefit and be
binding upon Smurfit-Stone and its successors. 
Smurfit-Stone may not assign this Agreement without the Executive’s
written consent, except that Smurfit-Stone’s obligations under this Agreement
shall be the binding legal obligations of any successor to Smurfit-Stone by
sale, and in the event of any transaction that results in the transfer of
substantially all of the assets or business of Smurfit-Stone, Smurfit-Stone
will use its best efforts to cause the transferee to assume the obligations of
Smurfit-Stone under this agreement.  The
Executive may not assign this Agreement during his life.  Upon the Executive death this Agreement will
inure to the benefit of Executive’s heirs, legatees, and legal representatives of
the Executive’s estate.

10.          Other Benefit Plans

The Retirement Benefits provided for by this Agreement
shall not constitute “compensation” for purposes of computing compensation for
any benefit plan maintained by Smurfit-Stone or its Affiliates.

11.          Enforcement

All actions for the enforcement of any rights under,
or interpretation of, this Agreement shall be brought in courts within Cook
County, Illinois, and Executive hereby consents and submits to the venue and
jurisdiction of any local, state, or federal court located within Cook County,
Illinois (to the extent that jurisdictional requirements permit). The laws of
the Sate of Illinois shall govern the validity, interpretation, construction
and performance of this Agreement, without regard to the conflict of laws
principles and shall be liberally construed to maximize protection of
Smurfit-Stone’s rights in its trade secrets and confidential information.

12.          Compliance with Code Section 409A

It is intended that this Agreement comply with the
requirements of section 409A(a)(2) through (4) of the Internal Revenue Code of
1986, as amended, and all regulations and guidance issued thereunder.  This Agreement shall be interpreted for all
purposes in accordance with this intent and may be amended by Smurfit-Stone at
any time if such amendment is deemed, in Smurfit-Stone’s sole discretion,
necessary to satisfy this intent.

13.          Notices

 7
 

Notices given pursuant to this Agreement shall be in
writing and shall be deemed received when personally delivered, or on the date
of written confirmation of receipt by (i) overnight carrier, (ii) telecopy,
(iii) registered or certified mail, return receipt requested, addressee only,
postage prepaid, or (iv) such other method of delivery that provides a written
confirmation of delivery.  Notice to
Smurfit-Stone shall be directed to:

Smurfit-Stone Container
Corporation

150 North Michigan Avenue

Chicago, Illinois 60610

Attention: 
General Counsel

Smurfit-Stone may change
the person and/or address to whom the Executive must give notice under this
Section by giving the Executive written notice of such change, in accordance
with the procedures described above. 
Notices to or with respect to the Executive shall be directed to the
Executive, or to the Executive’s executors, personal representatives or
distributes, if the Executive is deceased, or the assignees of the Executive,
at the Executive’s home address on the records of Smurfit-Stone.

14.          Withholding

Smurfit-Stone may withhold from any payment that it is
required to make under this Agreement amounts sufficient to satisfy applicable
withholding requirements under any federal, state or local law.

15.          Amendment or Termination

This Agreement may be amended at any time by written
agreement between Smurfit-Stone and the Executive.

16.          Severability

If any provision(s) of this Agreement shall be found
invalid or unenforceable by a court of competent jurisdiction, in whole or in
part, then it is the parties’ mutual desire that such court modify such
provision(s) to the extent and in the manner necessary to render the same valid
and enforceable, and this Agreement shall be constructed and enforced to the
maximum extent permitted by law, as if such provision(s) had been originally
incorporated herein as so modified or restricted, or as if such provision(s)
had not been originally incorporated herein, as the case may be.

17.          Entire Agreement

This Agreement sets forth the entire agreement and
understanding between Smurfit-Stone and the Executive, and supersedes all prior
agreements and understandings, written or oral, relating to the subject matter
hereof.

 8
 

18.          Consultation With Counsel

Executive acknowledges that he has had a full and
complete opportunity to consult with counsel of the Executive’s own choosing
concerning the terms, enforceability and implications of this Agreement, and
Smurfit-Stone has made no representations or warranties to the Executive
concerning the terms, enforceability or implications of this Agreement other
than as are reflected in this Agreement.

19.          No Waiver

No failure or delay by Smurfit-Stone or the Executive
in enforcing or exercising any right or remedy hereunder shall operate as a
waiver thereof.  No modification,
amendment, or waiver of this Agreement nor consent to any departure by the
Executive from any of the terms or conditions thereof, shall be effective
unless in writing and signed by the Chairman of Smurfit-Stone’s Board of
Directors.  Any such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.

20.          Effect on Other Obligations

This Agreement shall supplement the employment
agreement (“Employment Agreement”) between the parties effective as of May 11,
2006, the provisions of which shall continue in full force and effect.  Except as provided herein with respect to Company-Provided
Benefits, the payments and benefits herein provided to be paid to the Executive
by Smurfit-Stone shall be made without regard to, and in addition to any other
payments or benefits required to be paid the Executive at any time hereafter under
the terms of the Employment Agreement or under any other policy of
Smurfit-Stone relating to compensation, or retirement or other benefits.  Except as provided herein with respect to G-P
Provided Benefits, no payments or benefits provided the Executive hereunder
shall be reduced by any amount the Executive may earn or receive from
employment with another employer or from any other source.

21.          Survival

All Sections of this Agreement survive beyond the term
of Executive’s employment with Smurfit-Stone except as otherwise specifically
stated.

22.          Headings

The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.

23.          Counterparts

The parties may execute this Agreement in one or more
counterparts, all of which together shall constitute one Agreement.

24.          Term of Employment

 9
 

Nothing in this Agreement shall be construed as
providing a term of employment.

IN WITNESS WHEREOF, Smurfit-Stone Corporation has
caused this Agreement to be executed by its duly authorized Executive and
Executive has hereunto set his/her hand as of the date first above written.

	
  

  	
  SMURFIT-STONE CONTAINER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick J. Moore

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Steven J. Klinger

  
	
   

  	
  Steven J. Klinger

  
	
   

  	
   

  	
   

  
	
   

  	
  October 2, 2006

  
	
   

  	
  Date Signed

  

 

 10

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