Document:

Exhibit 10.9

 

AMENDED AND RESTATED

EMPLOYMENT SECURITY AGREEMENT OF CRAIG A. HUNT

 

This
Amended and Restated Employment Security Agreement (the “Agreement”) by and
between Craig A. Hunt (the “Executive”) and Smurfit-Stone Container Corporation
(the “Company”) shall be deemed to have been made and entered into as of the
date of the order of confirmation entered by the United States Bankruptcy Court
for the District of Delaware with respect to the Company’s plan of
reorganization in the matter of In re: Smurfit-Stone Container Corp.,
Case No. 09-10235 (BLS) (the “Chapter 11 Cases”) (such plan, the “Plan of
Reorganization” and such date, the “Confirmation Date”), and shall become
effective as of June 30, 2010, the effective date of the Plan of
Reorganization (the “Effective Date”).

 

WHEREAS,
the Executive currently is employed as the Company’s Senior Vice President,
Secretary and General Counsel and the Company desires to continue to employ the
Executive upon and subject to the terms and conditions set forth herein, and
the Executive wishes to accept such employment upon and subject to such terms
and conditions;

 

WHEREAS,
the Company and the Executive are parties to that certain Employment Security
Agreement effective as of July 16, 2008 (such agreement referred to herein
as the “Predecessor Agreement”), which Predecessor Agreement was not assumed by
the Company during the course of the Chapter 11 Cases;

 

WHEREAS,
the Company and the Executive desire to enter into the Agreement and, in so
doing, to amend and restate the Predecessor Agreement in its entirety; and

 

WHEREAS,
the Company has adopted and implemented an Equity Incentive Plan (“Equity
Incentive Plan”) as of the Confirmation Date, pursuant to the Plan of
Reorganization; and

 

NOW,
THEREFORE, in consideration of the promises and mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by both parties, the parties
hereby agree as follows:

 

1.                                      Employment
Period and Position.  The Company
hereby agrees to employ the Executive as its Senior Vice President, Secretary
and General Counsel (or such other position(s) as the Company may
reasonably designate during the Employment Period (as defined below)) and the
Executive hereby accepts such employment, subject to the terms and conditions
of this Agreement, commencing on the Effective Date until the second
anniversary of the Effective Date unless the Executive’s employment is earlier
terminated pursuant to Section 4 (such period referred to as the “Initial
Term”).  The Initial Term shall
automatically be extended on the same terms and conditions as set forth in this
Agreement for successive two-year periods unless and until either:  (a) a party gives the other party no
less than ninety (90) calendar days’ advance written notice prior to the end of
the Initial Term or any such two-year extension period (as applicable) that
such party will not further extend the Initial Term or two-year extension
period, or (b) the Company terminates the Executive’s employment in
accordance with Section 4.  The
Initial Term and any and all extensions thereof (or partial extension in the
event of an earlier 

 

 

termination
pursuant to Section 4), if any, shall be collectively referred to as the “Employment
Period”).

 

2.                                      Duties
and Responsibilities.

 

(a)           During the Employment Period, the Executive (i) shall
perform the duties assigned to him by the Company (provided that the Executive
shall not be assigned tasks inconsistent with his position as a senior executive
of the Company or any of its Affiliates) faithfully, with the utmost loyalty,
to the best of his abilities and in the best interests of the Company; (ii) shall
devote his full business time, attention and effort to the affairs of the
Company, except that the Executive may serve on (x) corporate boards or
committees with the prior written approval of the Company’s Board of Directors
(the Company’s pre- and post-Effective Date Boards of Directors hereinafter
collectively referred to herein as the “Board”), and/or (y) civic or
charitable boards or committees, in either case as long as such activities do
not, individually or in the aggregate, interfere with the performance of the
Executive’s employment duties and responsibilities or harm the business or reputation
of the Company or any of its Affiliates; and (iii) shall not engage in any
other business activities (whether or not for gain, profit, or other pecuniary
advantage) or any other actions which he knows or reasonably should know could
harm the business or reputation of the Company or any of its affiliates or
other related entities.  For purposes of
this Agreement, “Affiliates” shall mean any entity that, directly or
indirectly, is controlled by the Company, and any entity in which the Company
has a 20% or greater equity interest.

 

(b)           The Executive shall act in conformity with the Company’s
written and oral policies and within the limits, budgets and business plans set
by the Company.  The Executive will at
all times during the Employment Period strictly adhere to and obey all of the rules and
regulations in effect from time to time relating to the conduct of Company
executives.  Except as provided in Section 2(a),
the Executive shall not engage in consulting work or any trade or business for
his own account or for or on behalf of any other person, firm or company that
competes, conflicts or interferes with the performance of his duties hereunder
in any material way.

 

(c)           The Executive covenants, represents and warrants
that:  (i) the execution, delivery
and complete performance of this Agreement by him does not and will not breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Executive is a party or by which he is bound;
and (ii) he is not a party to or bound by any employment or services
agreement, confidentiality agreement, noncompetition agreement, other
restrictive covenant, or other obligation or agreement that would or could
prohibit or restrict him from being employed by the Company or from performing
any of his duties under this Agreement.

 

(d)           Mutual Non-Disparagement.  The Executive shall not, at any time during
or after his employment with the Company, make or publish any derogatory,
unfavorable, negative, disparaging, false, damaging or deleterious written or
oral statements or remarks regarding the Company or any of its Affiliates or
any members of their respective boards of directors or managements, or any of
their respective business affairs or performance.  The Company, members of its Board and its
senior executives shall not, at any time during or after 

 

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the Executive’s employment with the Company, make or
publish any derogatory, unfavorable, negative, disparaging, false, damaging or
deleterious written or oral statements or remarks regarding the Executive.

 

3.                                      Compensation
and Benefits.

 

(a)           Base Salary. 
During the Employment Period, subject to the terms and conditions of
this Agreement, the Company shall pay to the Executive an annual base salary at
the gross rate of $408,500 (the “Base Salary”), payable in installments in
accordance with the Company’s executive payroll policy (but not less frequently
than monthly).  The Base Salary shall be
subject to such annual adjustments, if any, as determined by the Board in its
discretion, provided that in no event shall the Base Salary be reduced at any
time without the Executive’s prior written consent.

 

(b)           Incentive Compensation.  During the Employment Period, the Executive
shall be eligible to participate in the Company’s annual incentive plan(s),
long-term incentive plan(s), and any equity-based and/or other incentive
compensation plans established or maintained by the Company in which its senior
executive officers are eligible to participate, including without limitation
the Company’s Management Incentive Plan (“MIP”) and Equity Incentive Plan
(and/or any other similar long-term or equity-based incentive plan).

 

(c)           Emergence Equity Grant.  The Company hereby agrees to grant the
Executive one hundred and fifty three thousandths of one percent (0.153%) on a
fully diluted basis of the new common stock of the Company issued on the
Effective Date in accordance with and pursuant to the Plan of Reorganization in
(i) a stock option award with respect to approximately 0.116% of such
shares of new common stock of the Company and (ii) a restricted stock unit
award with respect to approximately 0.037% of such shares of new common stock
of the Company (the “Emergence Equity Grants”), in accordance with and pursuant
to the Company’s Plan of Reorganization and the terms and conditions of the
Company’s Equity Incentive Plan, any applicable incentive plan documents,
and/or any award statements or agreements (each an “Award Agreement”) and this
Agreement (including without limitation with such Emergence Equity Grants to be
made on, and effective as of, the dates set forth in the Plan of
Reorganization).  The Award Agreements
for the Emergence Equity Grants shall be in substantially the form set forth in
Exhibit A hereto.

 

(d)           Employee Benefits. 
During the Employment Period, the Executive shall be eligible to
participate in such employee benefit plans (including group medical and
dental), and to receive such other fringe benefits and perquisites, as the
Company may make available to senior executives generally, subject to all
present and future terms and conditions of such benefit plans and other fringe
benefits and perquisites.  The Company reserves the right in
its sole discretion to alter, suspend, amend, or discontinue any and all of its
employee and fringe benefits, perquisites, benefit plans, policies and
procedures, in whole or in part, at any time with or without notice, provided
that the Company will not make any change to the Executive’s employee or fringe
benefits that it does not also make on a generally consistent basis for other
senior executives of the Company.

 

3

 

(e)           Expense Reimbursement.  The Company shall reimburse the Executive for
all reasonable and necessary business expenses incurred by him in connection
with his duties hereunder (in each case, as determined by the Company) after
the Executive’s timely presentation of IRS-acceptable itemized and documented
accounts of such expenditures, provided that the Executive shall secure the
Board’s approval before incurring any extraordinary expenses, and further
provided that such reimbursement for reasonable and necessary business expenses
is subject to the Company’s expense reimbursement policy.

 

(f)            Withholdings and Deductions.  Any and all payments to the Executive under
this Agreement shall be reduced by required or authorized withholding and
deductions.

 

(g)           Clawback.  In
the event that the Board determines in good faith that the amount of any
incentive and/or performance based compensation based in whole or in part on
the financial performance of the Company (or any division thereof) paid or
granted to the Executive was materially incorrect because the performance
criteria were applied incorrectly, within sixty (60) days after receiving
written notice from the Board, the Executive shall repay to the Company the
portion of any cash payments or return and forfeit the portion of any such
grant, as the case may be, that the Executive received that he was not entitled
to receive due to such incorrect application of the performance criteria (which
such amount(s) to be repaid or returned shall be reduced by the Net Tax
Costs (as defined below)), provided that the foregoing written notice from the
Board is received by the Executive no later than the earlier of (i) ninety
(90) days after the date on which the Company becomes aware of the incorrect
application of the performance criteria and (ii) the second anniversary of
the payment, vesting or delivery, as applicable, of the compensation.  “Net Tax Costs” shall mean the net amount of
any federal, state or local income and employment taxes paid by the Executive
in respect to the portion of the compensation subject to repayment or return,
after taking into account any and all available deductions, credits or other
offsets allowable to the Executive (including without limit, any deductions
permitted under the claim of right doctrine), and regardless of whether the
Executive would be required to amend any prior income or other tax returns.

 

4.                                      Termination
of Employment.

 

(a)           Termination for Cause.  Notwithstanding anything to the contrary
herein, the Company may terminate the Executive’s employment for Cause (as
defined herein) at any time immediately upon written notice.  For purposes of this Agreement, “Cause” shall
mean any of the following:  (i) the
Executive’s willful and continued failure to substantially perform his duties
as an executive of the Company (other than any such failure resulting from inability
due to physical or mental illness or Incapacity), (ii) the Executive’s
willful misconduct in the performance of the Executive’s duties or otherwise
that results in injury to the Company, monetarily or otherwise, that is
material or substantial, (iii) the Executive’s engaging in egregious
misconduct to the extent that the Executive’s credibility and reputation no
longer conforms to the standard of senior executive officers of the Company, or
(iv) the Executive’s material breach or threatened material breach of any
provision of this Agreement, including without limitation Section 8 of
this Agreement, without the prior express written consent of a duly authorized
member of the Board or the Chief Executive Officer of the Company; provided,
however, that an occurrence which otherwise may constitute Cause hereunder
shall not constitute Cause unless a notice is delivered to the Executive by the
Board or the Chief Executive Officer 

 

4

 

of the Company that specifically identifies the
conduct that the Board or the Company’s Chief Executive Officer believes
constitutes Cause and, to the extent such conduct is reasonably capable of
cure, the Company gives the Executive at least fifteen (15) days to cure such
alleged conduct.

 

(b)           Voluntary Resignation by the Executive With or Without
Good Reason.  Notwithstanding
anything to the contrary herein, the Executive may terminate his employment
with the Company for Good Reason (as defined herein) at any time by written
notice to the Company.  After the
ninetieth (90th) calendar day
after the Effective Date, the Executive may terminate his employment with the
Company upon sixty (60) calendar days’ advance written notice without Good
Reason, and the Executive’s employment shall terminate effective as of the
effective date of any such notice or such later effective termination date as
the Executive may specify in the notice (which shall in no event be later than
sixty (60) calendar days after the notice is given unless otherwise agreed to
in writing by the Board or the Chief Executive Officer of the Company).  For purposes of this Agreement, “Good Reason”
shall mean the occurrence of any of the following without the Executive’s
consent:  (i) assigning the
Executive duties that are materially inconsistent with the Executive’s
then-current status as a senior executive of the Company; (ii) requiring
the Executive to report other than to the Company’s Chief Executive Officer or
President; (iii) failure of the Company to pay any portion of the
Executive’s compensation within ten (10) days after the date such
compensation is due or first may be paid pursuant to applicable law; (iv) failure
of the Company to continue in effect any broad-based bonus or incentive plan,
welfare benefit, pension, retirement benefit or other benefit plan in which the
Executive participates or becomes eligible to participate unless such
discontinuance applies on a consistent basis to other senior executives of the
Company, or a reduction by the Company of the Executive’s target level
participation (as a percentage of the Executive’s base salary and on an
annualized basis) in its annual incentive bonus plan from the lower of such
target levels of his participation in the Company’s 2010 MIP as approved by the
Board prior to the Effective Date (unless such reduction is made on a
consistent basis for other Company executives other than the Chief Executive
Officer or President); (v) the Agreement is not assigned to a successor to
the Company pursuant to the Plan of Reorganization; or (vi) any material
breach of this Agreement or any Award Agreement applicable to an Emergence
Equity Grant; provided, however, that an occurrence which otherwise may
constitute Good Reason hereunder shall not constitute Good Reason unless the
Executive (y) provides to the Company, at least thirty (30)  calendar days prior to the Executive’s contemplated
resignation for Good Reason, a written notice containing reasonable detail
setting forth the basis for the Executive’s claim that an occurrence
constitutes Good Reason, and (z) the Company fails to cure or otherwise
remedy such occurrence within thirty (30) calendar days after receiving such
notice from the Executive. 
Notwithstanding anything to the contrary herein, the parties hereto acknowledge
and agree that the Executive must exercise his right to terminate his
employment for Good Reason within ninety (90) calendar days after the event
that gives rise to such right, and that if the Executive fails to timely
exercise such right and subsequently resigns, such resignation shall be deemed
for all purposes of this Agreement to be without Good Reason.  The Executive acknowledges and agrees that
the restructuring events that have taken place or will take place solely
pursuant to the Company’s Plan of Reorganization shall not constitute Good
Reason for purposes of this Agreement.

 

5

 

(c)                                  Termination Due
to Death or Incapacity. 
Notwithstanding anything to the contrary herein, the Executive’s
employment with the Company shall terminate automatically upon the Executive’s
death, and the Company may immediately terminate the Executive’s employment
with the Company by written notice at any time upon the Executive’s Incapacity
(as defined below) effective as of the date of the Executive’s Incapacity.  For purposes of this Agreement, “Incapacity”
shall mean such physical or mental condition of the Executive which renders and
is expected to render the Executive incapable of performing the essential
functions of his position hereunder with or without reasonable accommodation
for ninety (90) consecutive calendar days, or for 120 calendar days (whether
consecutive or not) within any 180-calendar-day period, as determined in good
faith by the Board upon consultation with a physician selected by the Board in
its discretion.  The Executive hereby
agrees to submit to any reasonable medical examination(s) as may be recommended
by the Board for the purpose of determining the existence or absence of
Incapacity.

 

(d)                                 Termination by
the Company Other Than for Cause or Incapacity.  Notwithstanding anything to the contrary
herein, the Company may terminate the Executive’s employment with the Company
for any reason other than Cause or Incapacity or for no reason, at any time
upon thirty (30) calendar days’ advance written notice to the Executive signed
by a duly authorized representative of the Board or the Company’s Chief
Executive Officer, and such termination shall be effective upon the effective
date of such notice or such later effective termination date as the Company may
specify in the notice.

 

(e)                                  Voluntary
Termination Following a Company Change in Control.  Notwithstanding anything to the contrary
herein, the Executive may terminate his employment with the Company at any time
within the 24-month period following a Company Change in Control (as defined
herein) with or without Good Reason, provided that the Executive complies with
notice requirements set forth in Section 4(b).  Neither a Change in Control with respect to
any affiliate of the Company nor the assignment of this Agreement to any
reorganized entity of the Company pursuant to the Plan of Reorganization shall
constitute a Change in Control for the purposes of this Agreement.  “Change in Control” shall mean the occurrence
of any one or more of the following:

 

(i)            The “beneficial ownership” of securities representing
more than 40% of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Company Voting Securities”) is accumulated, held or acquired by
a Person (as defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended, and used in Sections 13(d) and 14(d) thereof)
other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the Company’s stockholders in substantially the same proportions
as their ownership of stock of the Company; provided, however, that any
acquisition from the Company or any acquisition pursuant to a transaction that
complies with clauses (A), (B) and (C) of subparagraph (iii) of this
definition will not be a Change in Control under this subparagraph (i), and
provided further that immediately prior to such accumulation, holding or
acquisition, such person was not a direct or indirect beneficial owner of 40%
or more of the Company Voting Securities;

 

6

 

(ii)           Individuals who, as of the Effective Date, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that an individual becoming a
director subsequent to that date whose election, or nomination for election by
the Company’s stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board will be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board;

 

(iii)          Consummation by the Company of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all the
assets of the Company or the acquisition of assets or stock of another entity
(a “Business Combination”), in each case, unless immediately following such
Business Combination: (A) more than 60% of the combined voting power of
then outstanding voting securities entitled to vote generally in the election
of directors of (i) the corporation resulting
from such Business Combination (the “Surviving Corporation”), or (ii) if applicable, a corporation that as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries (the “Parent
Corporation”), is represented, directly or indirectly, by Company Voting
Securities outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Company
Voting Securities; (B) no person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 40% or more of the
combined voting power of the then outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) except to the extent that such
ownership of the Company existed prior to the Business Combination; and (C) at
least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
were members of the incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination;

 

(iv)          Approval by the Company’s stockholders of a complete
liquidation or dissolution of the Company; or

 

(v)           The consummation of a reorganization, complete
liquidation, or dissolution under the U.S. Bankruptcy Code subsequent to the
Effective Date (and excluding the Plan of Reorganization as defined herein).

 

5.             The Executive’s Duties After Notice of Termination.  For any period in which the Executive gives
or is given notice prior to the effective date of the Executive’s termination,
unless otherwise directed by the Company, the Executive shall be expected and
required to continue performing the Executive’s duties and responsibilities in
accordance with Section 2 of this Agreement for the notice period up to
the effective date of the termination of the Executive’s employment.

 

7

 

6.                                      Removal
from Positions.  Any termination of the Executive’s employment
shall automatically effectuate the Executive’s removal from the officer and/or
Board positions that the Executive then holds with the Company and its
Affiliates and any employee benefit plans, as of the effective termination
date.

 

7.                                      Payments
Upon Termination of Employment.

 

(a)                                  The parties
acknowledge and agree that except as expressly provided in Sections 7(b), (c) and
(d) of this Agreement, in the event of the termination of the Executive’s
employment, the Company’s sole obligation under this Agreement shall be to pay
the Executive (i) any accrued but unpaid Base Salary through the effective
date of the termination, (ii) any earned but unpaid bonus under the
Company’s annual incentive plan pursuant to, and in accordance with, the terms
and conditions of such plan; (iii) any earned but unused vacation time as
determined in accordance with the Company’s policies then in effect, and (iv) any
unreimbursed expenses pursuant to Section 3(e) of this Agreement
existing at that time.

 

(b)                                 In the event
that the Executive terminates his employment with the Company without Good
Reason in accordance with Section 4(b) of this Agreement, subject to
the terms and conditions of this Agreement, the Company’s sole obligation shall
be to pay to the Executive all such amounts due to him pursuant to Section 7(a) of
this Agreement.

 

(c)                                  In the event
that the Company terminates the Executive’s employment pursuant to Section 4(d) of
this Agreement or the Executive terminates his employment with the Company for
Good Reason in accordance with Section 4(b) of this Agreement,
subject to the terms and conditions of this Agreement, and provided that the
Executive executes (without revoking) and returns to the Company an enforceable
waiver and release in a form acceptable to the Company (a “Release Agreement”)
within the time period specified by the Company (which time period shall not be
more than sixty (60) calendar days after the effective date of the Executive’s
termination of employment) and further provided that the Executive remains in
compliance with Sections 2(d), 8 and 9 of this Agreement, the Company’s sole
obligation under this Agreement shall be:

 

(i)            to pay to the Executive all such amounts due to him
pursuant to Section 7(a) of this Agreement;

 

(ii)           to pay to the Executive a gross amount equal to two (2) times
the Executive’s then-current Base Salary, payable in equal installments during
the two (2) year period following the effective termination date of the
Executive’s employment;

 

(iii)          to pay to the Executive a gross amount equal to two (2) times
the greater of (A) the average of the gross amounts earned by the
Executive under the annual incentive plan during the three (3) complete
fiscal years prior to the effective termination date of the Executive’s
employment and (B) the actual gross amount earned by the Executive under
the annual incentive plan during the fiscal year immediately preceding the
effective termination date of the Executive’s employment, payable in equal
installments during the two (2) year period following the effective
termination date of the Executive’s employment;

 

8

 

(iv)          to continue to pay the employer portion of the Executive’s
premiums to continue his then-current coverage as of the effective termination
date of his employment under the Company’s comprehensive medical and dental
plans for the period beginning on the effective date of the Executive’s
termination of employment and ending on the earlier of (A) two years
thereafter or (B) the date the Executive becomes eligible for coverage by
a medical and dental plans maintained by an entity other than the Company or an
Affiliate that provide coverage or benefits at least comparable, in all
material respects, to the Company’s medical and dental plans, with the period
of such coverage to run concurrently with any coverage period provided under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)
(provided that the Executive has timely elected such COBRA coverage in
accordance with Company policy and applicable law); and

 

(v)           to the extent provided for in the Executive’s applicable
Award Agreements (including without limitation, such Award Agreement(s) attached
hereto as Exhibit A), cause any and all unvested portions of the Executive’s
restricted shares, stock options, and any and all other equity-based awards to
become vested and exercisable (as applicable) as of the effective date of the
Executive’s termination of employment.

 

The
Executive acknowledges and agrees that for purposes of Section 7 of this
Agreement, “annual incentive bonus” shall mean the Executive’s incentive bonus
under the Company’s MIP then in effect or such other similar annual incentive
bonus plan or program then in effect.

 

(d)                                 In the event
that the Executive dies or the Company terminates the Executive’s employment
pursuant to Section 4(c) of this Agreement due to Incapacity, subject to
the terms and conditions of this Agreement, the Company’s sole obligation under
this Agreement shall be to:  (i) pay
to the Executive all such amounts due to him pursuant to Section 7(a) of
this Agreement; (ii) pay to the Executive a pro-rated portion of any
annual incentive bonus(es) (if any) that the Executive would have earned for
the performance period(s) in which the effective termination date of his
employment occurred as though he had remained employed and been entitled to
receive such bonus(es) for the applicable incentive plan performance period(s),
the amount of which pro-rated bonus payment(s) shall be based upon the
number of full calendar months in which the Executive was employed during the
applicable performance period(s) and paid at such time(s) as provided
in such annual incentive plan; and (iii) to the extent provided for in the
Executive’s applicable Award Agreements (including without limitation, such
Award Agreement(s) attached hereto as Exhibit A), cause any and all
unvested portions of the Executive’s restricted shares, stock options, and any
and all other equity-based awards to become vested and exercisable (as
applicable) as of the effective date of the Executive’s termination of
employment.

 

(e)                                  Timing of
Payments.  Subject to
the terms and conditions of this Agreement (including without limitation Section 10)
and provided that the Executive executes (without revoking) a Release Agreement
as set forth in Section 7(c) above (as applicable) and the applicable
statutory revocation period with respect to such Release Agreement has expired,
and further provided that the Executive remains in compliance with Sections 5,
8 and 9 of this Agreement, any payments or benefits made available to the
Executive by the Company pursuant to this Section will be made or commence
(as applicable) as follows:  (i) any
payments made pursuant to Sections 7(c)(ii) and (iii) will commence
on the sixtieth (60th) calendar day
following 

 

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the effective termination date of the Executive’s
employment; and (ii) the payments and benefits in Sections 7(a), 7(b), and
7(c)(i), (iv) and (v), and 7(d) will be paid or commence (as applicable)
at such times and in such manner as set forth in the applicable Company policy
and plan documents.

 

8.                                      Confidentiality, Intellectual
Property and Restrictive Covenants.  The Company and the Executive agree that, by
virtue of his unique relationship with the Company (including pursuant to this
Agreement), the Executive has and will acquire and have access to, and has and
will continue to develop substantial and intimate knowledge of, the Company’s
Confidential Information (defined below), and has and will also continue to
develop a unique and comprehensive familiarity with the Company and the
Business Conducted by the Company or any of its Affiliates, which the Executive
would not have otherwise had but for his employment with the Company, and which
the Executive acknowledges are valuable assets of the Company.  Accordingly, the Executive agrees, in
exchange for the consideration and mutual covenants contained in this
Agreement, to undertake the following obligations, which he acknowledges are
reasonably designed to protect the legitimate business interests of the
Company, without unreasonably restricting his post-employment opportunities:

 

(a)           Confidential Information.  The Executive acknowledges that during his
employment with the Company he has had and will continue to have, and may
continue to have during the Non-Compete Period (as defined below), access to
Confidential Information of the Company, its Affiliates and, in certain
situations, certain third parties who provide information to the Company
subject to confidentiality and non-use restrictions.  All Confidential Information is of
irreplaceable value to the Company, its Affiliates and such third parties.  Except as required to properly perform the
Executive’s responsibilities for the Company and its Affiliates, to comply with
law or regulation, or as authorized in writing in advance by the Company, the
Executive shall not, at any time, use, disclose, or take any action which may
result in the use or disclosure of any Confidential Information.  For purposes of this Agreement, “Confidential
Information” shall mean all confidential and proprietary information of the
Company, its Affiliates and, in certain situations, certain third parties who
provide information to the Company subject to confidentiality and non-use
restrictions, and includes, but is not limited to, actual and prospective
customer and client lists and pricing information, business plans, programs and
tactics, research and development information (including without limitation
information relating to the formulation, testing, registration, use, safety,
efficacy and/or effects of marketed products and compounds under development),
personnel information, and all other information unique to the Company and not
readily available to the public, including designs, improvements, inventions,
formulas, compilations, methods, strategies, capabilities, forecasts, software
programs, processes, know-how, data, operating methods and techniques, “Inventions
or Developments” (as defined below), and all business costs, profits, vendors,
markets, sales, products, marketing, sales or other financial or business
information, and any modifications or enhancements of any of the foregoing.

 

(b)           Inventions or Developments.  The Executive agrees that he will, now and in
the future, promptly and fully disclose to the Company all discoveries,
improvements, inventions, formulas, ideas, processes, designs, techniques,
know-how, data and computer programs (whether or not patentable, copyrightable
or susceptible to any other form of protection), that are or have been made, conceived,
reduced to practice or developed by the

 

10

 

Executive, either alone or jointly with others,
during his employment with the Company, that are related in any way to the
past, current or future business or products of the Company or any of its
Affiliates or are devised, made, developed, reduced to practice or perfected
utilizing equipment or facilities of the Company or any of its Affiliates
(collectively, the “Inventions or Developments”).  All Inventions or Developments shall be the
sole property of the Company, including all patents, copyrights, intellectual
property or other rights related thereto and the Executive assigns to the
Company all rights (if any) that the Executive may have or acquire in such
Inventions or Developments. 
Notwithstanding the foregoing, this Section 8(b) shall not
apply to any Inventions or Developments for which no equipment, supplies,
facility or trade secret information of the Company or its Affiliates were used
and which were developed entirely on the Executive’s own time, unless:  (i) the Inventions or Developments relate
to the Business Conducted by the Company or any of its Affiliates or the actual
or demonstrably anticipated research or development of the Company or any of
its Affiliates; or (ii) the Inventions or Developments result from any
work performed by the Executive for the Company or any of its Affiliates.

 

(c)                                  Restrictive
Covenants.  The
Executive agrees that during the Executive’s employment and for the two (2) year
period following the effective date of any termination of the Executive’s
employment for any reason (the “Non-Compete Period”), unless the Company gives
its advance written consent, the Executive shall not:

 

(i)            participate or engage in, directly or indirectly (whether
as an owner, agent, representative, partner, employee, officer, director, independent
contractor, consultant, advisor, or in any other capacity calling for the
rendition of services, advice, or acts of management, operation or control),
any business that, during the Non-Compete Period, is competitive with the
Business Conducted by the Company or any of its Affiliates anywhere in the
United States, Canada, Mexico, or China (hereinafter, the “Geographic Area”)
and which business the Company was engaged (either actively as a going concern
or in the process of developing to market) during the two (2) year period
preceding his termination of employment;

 

(ii)           directly or indirectly solicit any current employee of the
Company or any of its Affiliates, or any individual who becomes an employee of
the Company or any of its Affiliates during the Non-Compete Period, to leave
such employment; or

 

(iii)          directly or indirectly solicit, seek to divert or dissuade
from continuing to do business with or entering into business with the Company
or any of its Affiliates, any supplier, customer, or other person or entity
with which the Company had, or was actively planning or pursuing, a business
relationship at any time during the two (2) year period preceding his
termination of employment.

 

Notwithstanding anything to the contrary in Section 8(c)(i),
Section 8(c)(i) shall not apply to the Executive’s activities that
constitute the practice of law with respect to a Business Conducted by the
Company or any of its Affiliates.  At all
times, whether or not the Executive is engaged in activity that constitutes the
practice of law, the Executive acknowledges and agrees that he shall be bound
by, and shall comply with, any and all applicable codes, rules and canons
of professional conduct and/or responsibility (as may be amended from time to
time) that are applicable to the Executive’s professional relationship or prior
professional relationship (as 

 

11

 

applicable) with the Company and any and all of its
Affiliates as a lawyer for the Company and its Affiliates.  For purposes of this Agreement, during the
Executive’s employment, “Business Conducted by the Company or any of its
Affiliates” shall mean (a) all businesses conducted by the Company or any
of its Affiliates and (b) any material new line of business in which the
Company or any of its Affiliates is contemplating engaging in, provided that
the plans for the Company or any of its Affiliates to engage in such material
new line of business were presented to and not rejected by the Board.  For purposes of this Agreement, for two-year
period following the effective date of any termination of the Executive’s
employment, “Business Conducted by the Company or any of its Affiliates” shall
mean (a) all business conducted by the Company or any of its Affiliates as
of the effective date of the Executive’s termination of employment and (b) any
material new line of business in which the Company or any of its Affiliates
engages within the one-year period following the effective date of the
Executive’s termination of employment, provided that the plans for the Company
or any of its Affiliates to engage in such material new line of business were
presented to and not rejected by the Board prior to the effective date of the
Executive’s termination of employment.

 

(d)           No Diversion of Business Opportunities and Prospects.  The Executive agrees that during his
employment with the Company:  (i) the
Executive shall not directly or indirectly engage in any employment, consulting
or other business activity that is competitive with the Business Conducted by
the Company or any of its Affiliates; (ii) the Executive shall promptly
disclose to the Company all business opportunities that are presented to the
Executive in his capacity as an employee of the Company or which is of a
similar nature to the Business Conducted by the Company or any of its
Affiliates or which the Company or its Affiliates have expressed an interest in
engaging in the future; and (iii) the Executive shall not usurp or take
advantage of any such business opportunity without first offering such
opportunity to the Company.

 

(e)           Return of Property. 
The Executive acknowledges and agrees that immediately upon his
termination of employment with the Company he will promptly return (without
retaining any copies) all property of the Company, its Affiliates or any third
parties that is within his possession, custody or control by virtue of his
employment with the Company.  Property to
be returned to the Company shall include without limitation any and all
documents and other things (whether in tangible or electronic format and
whether such documents or things contain information that reflect or contain
any Confidential Information or proprietary information) in the Executive’s
possession, custody or control, further including without limitation all
computer programs, passwords, files, and diskettes, all written and printed
files, manuals, contracts, memoranda, forms, notes, records and charts (and any
and all copies of, or extracts from, any of the foregoing), vehicles, keys,
cell phones, credit cards and other equipment and materials furnished to him by
the Company; provided, however, that (i) the Executive shall be entitled
to keep his home office equipment and (ii) the Company and the Executive
shall work together to ensure that any Confidential Information, Inventions
or Developments, or other Company business information is removed from such
home office equipment.

 

(f)            Irreparable Harm. 
The Executive acknowledges that:  (i) the
covenants contained in Sections 2(d) and 8 are reasonable in scope and
duration, will not unduly restrict the Executive’s ability to engage in his
livelihood, and the Executive’s compliance with Sections 

 

12

 

2(d) and 8 is necessary to preserve and protect
the Confidential Information, Inventions or Developments, and other
legitimate business interests of the Company; (ii) any failure by the
Executive to comply with the provisions of Sections 2(d) and 8 will result
in irreparable and continuing injury to the Company for which there will be no
adequate remedy at law; and (iii) in the event that the Executive should
fail to comply with the terms and conditions of Sections 2(d) and 8, in
addition to the Company’s right to set off any actual monetary damages to the
Company that are a consequence of such failure to comply against any payments
and benefits due to the Executive pursuant to Section 7 to the extent
permitted by applicable law (provided that any such set offs first shall be
taken from amounts not subject to Section 409A of the Code (as defined in Section 10
below), and if such amounts are insufficient, any additional set
off shall not be taken until the time an amount subject to Section 409A of
the Code would otherwise be paid pursuant to the terms of this Agreement), the
Company shall be entitled, in addition to and without limiting such other
relief as may be proper, to all types of equitable relief (including but not
limited to the issuance of an injunction and/or temporary restraining order) as
may be necessary to cause the Executive to comply with Sections 2(d) and
8, to restore to the Company its property, and to make the Company whole.  The Company and Executive acknowledge and
agree that the Company or the Executive’s failure to enforce or insist on its
rights under Sections 2(d) and 8 shall not constitute a waiver or
abandonment of any such rights or defense to enforcement of such rights.  If the provisions of Sections 2(d) and 8
are ever deemed by a court to exceed the limitations permitted by applicable
law, the Executive and the Company agree that such provisions shall be, and
are, automatically reformed to the maximum lesser limitations permitted by such
law.

 

9.             Cooperation. 
At the request and upon reasonable advance notice where practicable and
at the sole expense of the Company, whether during or at any time after the
Executive’s employment with the Company or any of its Affiliates, the Executive
shall cooperate fully with the Company and its Affiliates (a) in
investigating, defending, prosecuting, litigating, filing, initiating or
asserting any claims or potential claims (including without limitation in
connection with any legal proceeding of any kind) that may be made by or
against the Company or any of its Affiliates, to the extent that such claims
may relate to or arise out of the Executive’s employment with the Company or
any of its Affiliates or with respect to which the Executive has knowledge and (b) without
in any way limiting subsection (a) above, to secure any trade name,
patent, trademark, copyright or intellectual property protection or other
similar rights in the United States and/or in foreign countries, including
without limitation, the execution and delivery of assignments, patent
applications and other documents or papers. 
If such cooperation is provided during the Executive’s employment with
the Company or any of its Affiliates, the Executive shall not receive any
additional compensation from the Company for such cooperation.  If the Executive no longer is employed by the
Company or any of its Affiliates, the Executive’s obligation to cooperate shall
be reasonably limited so as not to unreasonably interfere with his other
business obligations.  If the Executive
spends in excess of ten (10) hours in compliance with this Section 9 after
he is no longer employed by the Company or any of its Affiliates, the Company
shall compensate the Executive at an hourly rate equal to the amount determined
by dividing (x) the Executive’s Base Salary as of the first day of the
fiscal year of the Company within which the Executive’s employment is
terminated by (y) 2000, and shall reimburse the Executive for any
reasonable expenses incurred as a direct result of his providing such
cooperation in accordance with Section 3(e) of this Agreement.  The Company shall provide such compensation
for the Executive’s cooperation within thirty (30) calendar days after 

 

13

 

receiving from the Executive a written statement
stating the number of hours for which he seeks payment and brief description of
the cooperation provided, provided that the Executive submits such statement
within thirty (30) calendar days after the end of the calendar month in which
the Executive provided such cooperation. 
The Executive’s obligation to cooperate hereunder shall include, without
limitation, meeting with such persons at such times and in such places as the
Company or its Affiliates may require, and giving evidence and testimony and
executing and delivering to the Company and any of its Affiliates any papers
requested by any of them (including without limitation joint defense agreements
and affidavits).  The Executive shall
provide immediate notice to the Company of any subpoena or other legal document
that he receives that relates in any way to the Company or any of its
Affiliates, along with a copy of such subpoena or other legal document.

 

10.          Compliance with Section 409A.  All references in this Agreement to the
Executive’s termination of employment shall mean his separation from service
within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
Treasury regulations promulgated thereunder.  In the event the terms of this Agreement
would subject the Executive to the
imposition of taxes and penalties (“409A Penalties”) under Section 409A
of the Code, the Company and the Executive shall cooperate diligently to amend
the terms of the Agreement to avoid such 409A Penalties, to the extent
possible.  Notwithstanding any other
provision in this Agreement, if as of the date on which the Executive’s
employment terminates, the Executive is a “specified employee” as determined by
the Company, then to the extent any amount payable or benefit provided under
this Agreement that the Company
reasonably determines would be nonqualified deferred compensation within
the meaning of Section 409A of the Code, that under the terms of this
Agreement would be payable prior to the six-month anniversary of the Executive’s
effective date of termination, such payment or benefit shall be delayed until
the earlier to occur of (a) the six-month anniversary of such termination
date or (b) the date of the Executive’s death.  In the case of taxable benefits that
constitute deferred compensation, the Company, in lieu of a delay in payment,
may require the Executive to pay the full costs of such benefits during the
period described in the preceding sentence and reimburse that Executive for
said costs within thirty (30) calendar days after the end of such period.  With respect to any reimbursements under this
Agreement, such reimbursement shall be made on or before the last day of the
Executive’s taxable year following the taxable year in which the expense was
incurred by the Executive.  The amount of
any expenses eligible for reimbursement or the amount of any in-kind benefits
provided, as the case may be, under this Agreement during any calendar year
(including without limitation pursuant to Sections 9, 11 and 17) shall not
affect the amount of expenses eligible for reimbursement or the amount of any
in-kind benefits provided during any other calendar year. The right to
reimbursement or to any in-kind benefit pursuant to this Agreement shall not be
subject to liquidation or exchange for any other benefit.  The Executive acknowledges and agrees that
notwithstanding this Section 10 or any other provision of this Agreement,
the Company and its Affiliates are not providing him with any tax advice with
respect to Section 409A of the Code or otherwise and are not making any
guarantees or other assurances of any kind to the Executive with respect to the
tax consequences or treatment of any amounts paid or payable to the Executive
under this Agreement.

 

11.          Section 280G.  Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with a Change in Control or Executive’s
Employment Termination (whether pursuant to the terms of 

 

14

 

this Agreement or any other plan, arrangement or
agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (all such
payments and benefits being hereinafter called “Total Payments”) would be an “excess
parachute payment” pursuant to Code Section 280G or any successor or
substitute provision of the Code, with the effect that Executive would be
liable for the payment of the excise tax described in Code Section 4999 or
any successor or substitute provision of the Code, or any interest or penalties
are incurred by Executive with respect to such Total Payments (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then, after taking into account any reduction
in the Total Payments provided by reason of Code Section 280G in such
other plan, arrangement or agreement, the cash payments provided in
Section 7 of this Agreement shall first be reduced, and the non-cash
payments and benefits shall thereafter be reduced, to the extent necessary so
that no portion of the Total Payments is subject to the Excise Tax.  Notwithstanding the foregoing, no payments or
benefits under this Agreement will be reduced unless: (i) the net amount
of the Total Payments, as so reduced (and after subtracting the net amount of
federal, state and local income taxes on such reduced Total Payments) is
greater than (ii) the excess of (A) the net amount of such Total
Payments, without reduction (but after subtracting the net amount of federal,
state and local income taxes on such Total Payments), over (B) the amount
of Excise Tax to which the Executive would be subject in respect of such
unreduced Total Payments.

 

(a)           Subject to the
provisions of paragraph (b) below, all determinations required to be made
under this Section, and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that serves as the
Company’s auditors (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and Executive within 15 business
days of the receipt of notice from the Company or Executive that there have
been Total Payments, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive shall designate another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company.  If
the Accounting Firm determines that no Excise Tax is payable by Executive, it
shall furnish Executive with a written opinion that failure to report the
Excise Tax on Executive’s applicable federal income tax return would not result
in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm
shall be binding upon the Company and Executive, except as provided in
paragraph (b) below.

 

(b)           As a result of the
uncertainty in the application of Code Section 280G at the time of the
initial determination by the Accounting Firm hereunder, it is possible that the
Internal Revenue Service (“IRS”) or other agency will claim that an Excise Tax,
or a greater Excise Tax, is due, and thus the Company should have made a lesser
amount of Total Payment than that determined pursuant to paragraph (a) above.  Executive shall notify the Company in writing
of any claim by the IRS or other agency that, if successful, would require
Executive to pay an Excise Tax or an additional Excise Tax.  If the IRS or other agency makes a claim
that, if successful, could require Executive to pay an Excise Tax or an
additional Excise Tax, the Company shall reduce or further reduce Executive’s
payments and benefits in accordance with this Section 11 to the amount
necessary to eliminate such Excise Tax or additional Excise Tax.  

 

15

 

The
Company shall pay all fees and expenses of the Executive relating to such a
claim by the IRS or other agency.

 

12.                               Notices.  Notices given pursuant to this Agreement
shall be in writing and shall be effective upon personal delivery, upon
confirmation of receipt of facsimile transmission, upon the fourth day after
mailing by certified mail, or upon the second day after sending by express
courier service.  Notice to the Company
shall be directed to:

 

Smurfit-Stone
Container Corporation

Six
CityPlace Drive

Creve
Coeur, Missouri 63141

Attention:  Chief Executive Officer

 

Notices
to or with respect to the Executive will be directed to the Executive, or to
the Executive’s executors, personal representatives or distributees, if the
Executive is deceased, or the assignees of the Executive, at the Executive’s
home address on the records of the Company. 
Either party may change the person and/or address to which the other
party must give notice under this Section by providing written notice of such
change, in accordance with the procedures described in this Section 12.

 

13.                               Assignment.  This Agreement is enforceable by the Company
and its affiliates and other related entities and may be assigned or
transferred by the Company to, and shall be binding upon and inure to the
benefit of, any parent, subsidiary or other Affiliate of the Company or any
entity which at any time, whether by merger, purchase, or otherwise, acquires
all or substantially all of the assets, stock or business of the Company (including
without limitation any successor and/or reorganized entit(ies) of the Company
or any of its Affiliates upon the Effective Date).  The Executive and the Company agree that upon
the Effective Date, this Agreement shall be assigned to and binding upon such
successor entit(ies) of the Company as set forth in the Plan of Reorganization,
provided that nothing herein shall limit or otherwise affect the Company’s
right to further assign or transfer this Agreement after the Effective Date as
set forth in the preceding sentence.  The
Executive may not assign any of his rights or obligations under this Agreement
during his life.  Upon the Executive’s
death, this Agreement will inure to the benefit of the Executive’s heirs,
legatees and legal representatives of the Executive’s estate.

 

14.                               Beneficiary.  If the Executive dies prior
to receiving the amounts to which he is entitled under this Agreement (if any),
subject to and in accordance with the terms and conditions of this Agreement,
such amounts shall be paid to the beneficiary designated by the Executive in
writing to the Company during his lifetime (“Beneficiary”), or if no such
Beneficiary is designated, to the Executive’s estate.  Notwithstanding anything to the contrary
herein, the Beneficiary shall not be entitled to receive any amounts pursuant
to Section 7 of this Agreement unless the Beneficiary and any other
authorized representatives of the Executive’s estate execute an enforceable
waiver and release of claims in accordance with the Executive’s obligations set
forth in Section 7(c).  The
Executive, without the consent of any prior Beneficiary, may change his
designation of Beneficiary or Beneficiaries at any time and from time to time
by submitting to the Company a new designation in writing.

 

16

 

15.          Severability.  Each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable
law.  The Executive and the Company agree
that in the event that any provision of this Agreement is found to be
unreasonable or otherwise unenforceable by a court, it is the purpose and
intent of the parties that any such provision be deemed modified or limited, so
that as modified or limited, such provision may be enforced to the fullest
extent possible.  If any provision of
this Agreement is held invalid or unenforceable for any reason (after any such
modification or limitation pursuant to the preceding sentence, as applicable),
such provision will be effective only to the extent of such invalidity or
unenforceability without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

16.          Entire Agreement, Amendment and Waiver.  Except as otherwise provided herein, this
Agreement embodies the entire agreement and understanding of the parties hereto
with regard to the matters described herein and supersedes any and all prior
and/or contemporaneous agreements and understandings, oral or written, between
said parties regarding such matters, provided that nothing herein shall limit
or otherwise affect any provision of any Emergence Equity Grant Award
Agreement.  In the event of any conflict
between any provision of this Agreement and any Emergence Equity Grant Award
Agreement, the provisions of this Agreement shall govern.  The Executive and the Company acknowledge and
agree that this Agreement amends and restates the Predecessor Agreement in its
entirety and that as of the Effective Date the provisions of this Agreement
shall replace each and every provision of the Predecessor Agreement, at which
time the provisions of the Predecessor Agreement shall be null and void, and
shall be of no further force or effect. 
Except as set forth in Sections 8(f) and 15, this Agreement may be
modified only in a written agreement signed by both the Executive and the
Company’s authorized representative.  Any
party’s failure to enforce this Agreement in the event of one or more events
which violate this Agreement shall not constitute a waiver of any right to
enforce this Agreement against subsequent violations.

 

17.          Forum Selection. 
The parties hereby irrevocably consent to, and agree not to object or
assert any defense or challenge to, the jurisdiction and venue of the state and
federal courts sitting in Chicago, Illinois, and agree that any claim
under this Agreement may be brought in any such court.  In any action or proceeding to enforce this
Agreement, the non-prevailing party shall pay for any and all costs and
expenses (including without limitation reasonable attorneys’ fees) of the
prevailing party to the maximum extent permissible by applicable law.

 

18.          Governing Law.  This Agreement shall be governed by the
internal laws of the state of Illinois, without regard to its conflict of laws
rules.

 

19.          Headings.  The Section headings used herein are for
convenience of reference only and are not to be considered in construction of
the provisions of this Agreement.

 

20.          Release of Claims Under Predecessor Agreement.  The consideration offered
herein is accepted by the Executive as being in full accord, satisfaction,
compromise and settlement of any and all amounts that are or may have been due
and owing to him pursuant to any term or condition of the Predecessor
Agreement, and the Executive expressly agrees that he is not entitled to and
will not receive any further payments, benefits, or other compensation or 

 

17

 

recovery of any kind from the Company with respect
to any such term or condition of the Predecessor Agreement.

 

21.          Survival.  Sections 2(d) and 4 through 22 herein
shall survive and continue in full force and effect in accordance with their
respective terms, notwithstanding any termination of the Employment Period or
the Executive’s employment.

 

22.          Counterparts.  This Agreement may be executed in two
counterparts, each of which shall be deemed an original, and both of which
together shall constitute one and the same instrument.

 

THE
PARTIES ACKNOWLEDGE BY SIGNING BELOW THAT THEY HAVE READ AND UNDERSTAND THE
ABOVE AND INTEND TO BE BOUND THEREBY:

 

	
  CRAIG
  A. HUNT

  	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Craig A. Hunt

  	
   

  	
  By:

  	
  /s/
  Patrick J. Moore

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  June 30,
  2010

  	
   

  	
  Position:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  June 30,
  2010

  
							

 

18

 

EXHIBIT A

 

EMERGENCE EQUITY AWARD AGREEMENTS FOR CRAIG A. HUNTExhibit
10.10

 

AMENDED AND RESTATED

EMPLOYMENT SECURITY AGREEMENT OF STEVEN C. STRICKLAND

 

This
Amended and Restated Employment Security Agreement (the “Agreement”) by and
between Steven C. Strickland (the “Executive”) and Smurfit-Stone Container
Corporation (the “Company”) shall be deemed to have been made and entered into
as of the date of the order of confirmation entered by the United States
Bankruptcy Court for the District of Delaware with respect to the Company’s
plan of reorganization in the matter of In re: Smurfit-Stone Container Corp.,
Case No. 09-10235 (BLS)  (the “Chapter
11 Cases”) (such plan, the “Plan of Reorganization” and such date, the “Confirmation
Date”), and shall become effective as of June 30, 2010, the effective date
of the Plan of Reorganization (the “Effective Date”).

 

WHEREAS,
the Executive currently is employed as the Company’s Senior Vice President and
General Manager, Corrugated Container Division and the Company desires to
continue to employ the Executive upon and subject to the terms and conditions
set forth herein, and the Executive wishes to accept such employment upon and
subject to such terms and conditions;

 

WHEREAS,
the Company and the Executive are parties to that certain Employment Security
Agreement effective as of July 16, 2008  (such
agreement referred to herein as the “Predecessor Agreement”), which Predecessor
Agreement was not assumed by the Company during the course of the Chapter 11
Cases;

 

WHEREAS,
the Company and the Executive desire to enter into the Agreement and, in so
doing, to amend and restate the Predecessor Agreement in its entirety; and

 

WHEREAS,
the Company has adopted and implemented an Equity Incentive Plan (“Equity
Incentive Plan”) as of the Confirmation Date, pursuant to the Plan of
Reorganization; and

 

NOW,
THEREFORE, in consideration of the promises and mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by both parties, the parties
hereby agree as follows:

 

1.             Employment
Period and Position.  The Company
hereby agrees to employ the Executive as its Senior Vice President and General
Manager, Corrugated Container (or such other position(s) as the Company
may reasonably designate during the Employment Period (as defined below)) and
the Executive hereby accepts such employment, subject to the terms and
conditions of this Agreement, commencing on the Effective Date until the second
anniversary of the Effective Date unless the Executive’s employment is earlier
terminated pursuant to Section 4 (such period referred to as the “Initial
Term”).  The Initial Term shall
automatically be extended on the same terms and conditions as set forth in this
Agreement for successive two-year periods unless and until either:  (a) a party gives the other party no
less than ninety (90) calendar days’ advance written notice prior to the end of
the Initial Term or any such two-year extension period (as applicable) that
such party will not further extend the Initial Term or two-year extension
period, or (b) the Company or the Executive terminates the Executive’s
employment in accordance with Section 4. 
The Initial Term and any and all extensions thereof (or partial 

 

 

extension
in the event of an earlier termination pursuant to Section 4), if any,
shall be collectively referred to as the “Employment Period”.

 

2.             Duties
and Responsibilities.

 

(a)           During the Employment
Period, the Executive (i) shall perform the duties assigned to him by the
Company (provided that the Executive shall not be assigned tasks inconsistent
with his position as a senior executive of the Company or any of its
Affiliates) faithfully, with the utmost loyalty, to the best of his abilities
and in the best interests of the Company; (ii) shall devote his full
business time, attention and effort to the affairs of the Company, except that
the Executive may serve on (x) corporate boards or committees with the
prior written approval of the Company’s Board of Directors (the Company’s pre-
and post-Effective Date Boards of Directors hereinafter collectively referred
to herein as the “Board”), and/or (y) civic or charitable boards or
committees, in either case as long as such activities do not, individually or
in the aggregate, interfere with the performance of the Executive’s employment
duties and responsibilities or harm the business or reputation of the Company
or any of its Affiliates; and (iii) shall not engage in any other business
activities (whether or not for gain, profit, or other pecuniary advantage) or
any other actions which he knows or reasonably should know could harm the
business or reputation of the Company or any of its affiliates or other related
entities.  For purposes of this
Agreement, “Affiliates” shall mean any entity that, directly or indirectly, is
controlled by the Company, and any entity in which the Company has a 20% or
greater equity interest.

 

(b)           The Executive shall act in
conformity with the Company’s written and oral policies and within the limits,
budgets and business plans set by the Company. 
The Executive will at all times during the Employment Period strictly
adhere to and obey all of the rules and regulations in effect from time to
time relating to the conduct of Company executives.  Except as provided in Section 2(a), the
Executive shall not engage in consulting work or any trade or business for his
own account or for or on behalf of any other person, firm or company that
competes, conflicts or interferes with the performance of his duties hereunder
in any material way.

 

(c)           The Executive covenants,
represents and warrants that:  (i) the
execution, delivery and complete performance of this Agreement by him does not
and will not breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Executive is a party or by
which he is bound; and (ii) he is not a party to or bound by any
employment or services agreement, confidentiality agreement, noncompetition
agreement, other restrictive covenant, or other obligation or agreement that
would or could prohibit or restrict him from being employed by the Company or
from performing any of his duties under this Agreement.

 

(d)           Mutual Non-Disparagement.  The Executive shall not, at any time during
or after his employment with the Company, make or publish any derogatory,
unfavorable, negative, disparaging, false, damaging or deleterious written or
oral statements or remarks regarding the Company or any of its Affiliates or
any members of their respective boards of directors or managements, or any of
their respective business affairs or performance.  The Company, members of its Board and its
senior executives shall not, at any time during or after 

 

2

 

the Executive’s employment with the Company, make or
publish any derogatory, unfavorable, negative, disparaging, false, damaging or
deleterious written or oral statements or remarks regarding the Executive.

 

3.             Compensation
and Benefits.

 

(a)           Base Salary.  During the Employment Period, subject to the
terms and conditions of this Agreement, the Company shall pay to the Executive
an annual base salary at the gross rate of $415,000 (the “Base Salary”),
payable in installments in accordance with the Company’s executive payroll
policy (but not less frequently than monthly). 
The Base Salary shall be subject to such annual adjustments, if any, as
determined by the Board in its discretion, provided that in no event shall the
Base Salary be reduced at any time without the Executive’s prior written
consent.

 

(b)           Incentive Compensation.  During the Employment Period, the Executive
shall be eligible to participate in the Company’s annual incentive plan(s),
long-term incentive plan(s), and any equity-based and/or other incentive
compensation plans established or maintained by the Company in which its senior
executive officers are eligible to participate, including without limitation
the Company’s Management Incentive Plan (“MIP”) and Equity Incentive Plan
(and/or any other similar long-term or equity-based incentive plan).

 

(c)           Emergence Equity Grant.  The Company hereby agrees to grant the
Executive one hundred and fifty three thousandths of one percent (0.153%) on a
fully diluted basis of the new common stock of the Company issued on the
Effective Date in accordance with and pursuant to the Plan of Reorganization in
(i) a stock option award with respect to approximately 0.116% of such
shares of new common stock of the Company and (ii) a restricted stock unit
award with respect to approximately 0.037% of such shares of new common stock
of the Company (the “Emergence Equity Grants”), in accordance with and pursuant
to the Company’s Plan of Reorganization and the terms and conditions of the
Company’s Equity Incentive Plan, any applicable incentive plan documents,
and/or any award statements or agreements (each an “Award Agreement”) and this
Agreement (including without limitation with such Emergence Equity Grants to be
made on, and effective as of, the dates set forth in the Plan of
Reorganization).  The Award Agreements
for the Emergence Equity Grants shall be in substantially the form set forth in
Exhibit A hereto.

 

(d)           Employee Benefits.  During the Employment Period, the Executive
shall be eligible to participate in such employee benefit plans (including
group medical and dental), and to receive such other fringe benefits and
perquisites, as the Company may make available to senior executives generally,
subject to all present and future terms and conditions of such benefit plans
and other fringe benefits and perquisites.  The Company reserves the right in
its sole discretion to alter, suspend, amend, or discontinue any and all of its
employee and fringe benefits, perquisites, benefit plans, policies and
procedures, in whole or in part, at any time with or without notice, provided that
the Company will not make any change to the Executive’s employee or fringe
benefits that it does not also make on a generally consistent basis for other
senior executives of the Company.

 

3

 

(e)           Expense Reimbursement.  The Company shall reimburse the Executive for
all reasonable and necessary business expenses incurred by him in connection
with his duties hereunder (in each case, as determined by the Company) after
the Executive’s timely presentation of IRS-acceptable itemized and documented
accounts of such expenditures, provided that the Executive shall secure the
Board’s approval before incurring any extraordinary expenses, and further
provided that such reimbursement for reasonable and necessary business expenses
is subject to the Company’s expense reimbursement policy.

 

(f)            Withholdings and Deductions.  Any and all payments to the Executive under
this Agreement shall be reduced by required or authorized withholding and
deductions.

 

(g)           Clawback.  In the event that the Board determines in
good faith that the amount of any incentive and/or performance based
compensation based in whole or in part on the financial performance of the
Company (or any division thereof) paid or granted to the Executive was materially
incorrect because the performance criteria were applied incorrectly, within
sixty (60) days after receiving written notice from the Board, the Executive
shall repay to the Company the portion of any cash payments or return and
forfeit the portion of any such grant, as the case may be, that the Executive
received that he was not entitled to receive due to such incorrect application
of the performance criteria (which such amount(s) to be repaid or returned
shall be reduced by the Net Tax Costs (as defined below)), provided that the
foregoing written notice from the Board is received by the Executive no later
than the earlier of (i) ninety (90) days after the date on which the
Company becomes aware of the incorrect application of the performance criteria
and (ii) the second anniversary of the payment, vesting or delivery, as
applicable, of the compensation.  “Net
Tax Costs” shall mean the net amount of any federal, state or local income and
employment taxes paid by the Executive in respect to the portion of the
compensation subject to repayment or return, after taking into account any and
all available deductions, credits or other offsets allowable to the Executive
(including without limit, any deductions permitted under the claim of right
doctrine), and regardless of whether the Executive would be required to amend
any prior income or other tax returns.

 

4.             Termination
of Employment.

 

(a)           Termination for Cause.  Notwithstanding anything to the contrary
herein, the Company may terminate the Executive’s employment for Cause (as
defined herein) at any time immediately upon written notice.  For purposes of this Agreement, “Cause” shall
mean any of the following:  (i) the
Executive’s willful and continued failure to substantially perform his duties
as an executive of the Company (other than any such failure resulting from
inability due to physical or mental illness or Incapacity), (ii) the
Executive’s willful misconduct in the performance of the Executive’s duties or
otherwise that results in injury to the Company, monetarily or otherwise, that
is material or substantial, (iii) the Executive’s engaging in egregious
misconduct to the extent that the Executive’s credibility and reputation no
longer conforms to the standard of senior executive officers of the Company, or
(iv) the Executive’s material breach or threatened material breach of any
provision of this Agreement, including without limitation Section 8 of
this Agreement, without the prior express written consent of a duly authorized
member of the Board or the Chief Executive Officer of the Company; provided,
however, that an occurrence which otherwise may constitute Cause hereunder
shall not constitute Cause unless a notice is delivered to the Executive by the
Board or the Chief Executive Officer 

 

4

 

of the Company that specifically identifies the
conduct that the Board or the Company’s Chief Executive Officer believes
constitutes Cause and, to the extent such conduct is reasonably capable of
cure, the Company gives the Executive at least fifteen (15) days to cure such
alleged conduct.

 

(b)           Voluntary Resignation by the
Executive With or Without Good Reason.  Notwithstanding anything to the contrary
herein, the Executive may terminate his employment with the Company for Good
Reason (as defined herein) at any time by written notice to the Company.  After the ninetieth (90th) calendar day after the
Effective Date, the Executive may terminate his employment with the Company
upon sixty (60) calendar days’ advance written notice without Good Reason, and
the Executive’s employment shall terminate effective as of the effective date
of any such notice or such later effective termination date as the Executive
may specify in the notice (which shall in no event be later than sixty (60)
calendar days after the notice is given unless otherwise agreed to in writing
by the Board or the Chief Executive Officer of the Company).  For purposes of this Agreement, “Good Reason”
shall mean the occurrence of any of the following without the Executive’s
consent:  (i) assigning the
Executive duties that are materially inconsistent with the Executive’s
then-current status as a senior executive of the Company; (ii) requiring
the Executive to report other than to the Company’s Chief Executive Officer or
President; (iii) failure of the Company to pay any portion of the
Executive’s compensation within ten (10) days after the date such
compensation is due or first may be paid pursuant to applicable law; (iv) failure
of the Company to continue in effect any broad-based bonus or incentive plan,
welfare benefit, pension, retirement benefit or other benefit plan in which the
Executive participates or becomes eligible to participate unless such
discontinuance applies on a consistent basis to other senior executives of the
Company, or a reduction by the Company of the Executive’s target level
participation (as a percentage of the Executive’s base salary and on an
annualized basis) in its annual incentive bonus plan from the lower of such
target levels of his participation in the Company’s 2010 MIP as approved by the
Board prior to the Effective Date (unless such reduction is made on a
consistent basis for other Company executives other than the Chief Executive
Officer or President); (v) the Agreement is not assigned to a successor to
the Company pursuant to the Plan of Reorganization; or (vi) any material
breach of this Agreement or any Award Agreement applicable to an Emergence
Equity Grant; provided, however, that an occurrence which otherwise may
constitute Good Reason hereunder shall not constitute Good Reason unless the
Executive (y) provides to the Company, at least thirty (30)  calendar days prior to the Executive’s contemplated
resignation for Good Reason, a written notice containing reasonable detail
setting forth the basis for the Executive’s claim that an occurrence
constitutes Good Reason, and (z) the Company fails to cure or otherwise
remedy such occurrence within thirty (30) calendar days after receiving such
notice from the Executive. 
Notwithstanding anything to the contrary herein, the parties hereto
acknowledge and agree that the Executive must exercise his right to terminate
his employment for Good Reason within ninety (90) calendar days after the event
that gives rise to such right, and that if the Executive fails to timely
exercise such right and subsequently resigns, such resignation shall be deemed
for all purposes of this Agreement to be without Good Reason.  The Executive acknowledges and agrees that
the restructuring events that have taken place or will take place solely
pursuant to the Company’s Plan of Reorganization shall not constitute Good
Reason for purposes of this Agreement.

 

5

 

(c)           Termination Due to Death or
Incapacity. 
Notwithstanding anything to the contrary herein, the Executive’s
employment with the Company shall terminate automatically upon the Executive’s
death, and the Company may immediately terminate the Executive’s employment
with the Company by written notice at any time upon the Executive’s Incapacity
(as defined below) effective as of the date of the Executive’s Incapacity.  For purposes of this Agreement, “Incapacity”
shall mean such physical or mental condition of the Executive which renders and
is expected to render the Executive incapable of performing the essential
functions of his position hereunder with or without reasonable accommodation
for ninety (90) consecutive calendar days, or for 120 calendar days (whether
consecutive or not) within any 180-calendar-day period, as determined in good
faith by the Board upon consultation with a physician selected by the Board in
its discretion.  The Executive hereby
agrees to submit to any reasonable medical examination(s) as may be
recommended by the Board for the purpose of determining the existence or
absence of Incapacity.

 

(d)           Termination by the Company
Other Than for Cause or Incapacity.  Notwithstanding anything to the contrary
herein, the Company may terminate the Executive’s employment with the Company
for any reason other than Cause or Incapacity or for no reason, at any time
upon thirty (30) calendar days’ advance written notice to the Executive signed
by a duly authorized representative of the Board or the Company’s Chief
Executive Officer, and such termination shall be effective upon the effective
date of such notice or such later effective termination date as the Company may
specify in the notice.

 

(e)           Voluntary Termination
Following a Company Change in Control.  Notwithstanding anything to the contrary
herein, the Executive may terminate his employment with the Company at any time
within the 24-month period following a Company Change in Control (as defined
herein) with or without Good Reason, provided that the Executive complies with
notice requirements set forth in Section 4(b).  Neither a Change in Control with respect to
any affiliate of the Company nor the assignment of this Agreement to any
reorganized entity of the Company pursuant to the Plan of Reorganization shall
constitute a Change in Control for the purposes of this Agreement.  “Change in Control” shall mean the occurrence
of any one or more of the following:

 

(i)            The “beneficial ownership” of securities
representing more than 40% of the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Company Voting Securities”) is accumulated, held or acquired by
a Person (as defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended, and used in Sections 13(d) and 14(d) thereof)
other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the Company’s stockholders in substantially the same proportions
as their ownership of stock of the Company; provided, however, that any
acquisition from the Company or any acquisition pursuant to a transaction that
complies with clauses (A), (B) and (C) of subparagraph (iii) of
this definition will not be a Change in Control under this subparagraph (i),
and provided further that immediately prior to such accumulation, holding or
acquisition, such person was not a direct or indirect beneficial owner of 40%
or more of the Company Voting Securities;

 

6

 

(ii)           Individuals who, as of the Effective Date,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that an individual
becoming a director subsequent to that date whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board will be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;

 

(iii)          Consummation by the Company of a reorganization,
merger or consolidation, or sale or other disposition of all or substantially
all the assets of the Company or the acquisition of assets or stock of another
entity (a “Business Combination”), in each case, unless immediately following
such Business Combination: (A) more than 60% of the combined voting power
of then outstanding voting securities entitled to vote generally in the
election of directors of (i) the
corporation resulting from such Business Combination (the “Surviving
Corporation”), or (ii) if
applicable, a corporation that as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or through
one or more subsidiaries (the “Parent Corporation”), is represented, directly
or indirectly, by Company Voting Securities outstanding immediately prior to
such Business Combination (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Company Voting Securities; (B) no person
(excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 40% or more of the combined voting power of the then
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
except to the extent that such ownership of the Company existed prior to the
Business Combination; and (C) at least a majority of the members of the
board of directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) were members of the incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination;

 

(iv)          Approval by the Company’s
stockholders of a complete liquidation or dissolution of the Company; or

 

(v)           The consummation of a
reorganization, complete liquidation, or dissolution under the U.S. Bankruptcy
Code subsequent to the Effective Date (and excluding the Plan of Reorganization
as defined herein).

 

5.             The
Executive’s Duties After Notice of Termination.  For any period in which the Executive gives
or is given notice prior to the effective date of the Executive’s termination,
unless otherwise directed by the Company, the Executive shall be expected and
required to continue performing the Executive’s duties and responsibilities in
accordance with Section 2 of this Agreement for the notice period up to
the effective date of the termination of the Executive’s employment.

 

7

 

6.             Removal
from Positions.  Any termination of the Executive’s employment
shall automatically effectuate the Executive’s removal from the officer and/or
Board positions that the Executive then holds with the Company and its
Affiliates and any employee benefit plans, as of the effective termination
date.

 

7.             Payments
Upon Termination of Employment.

 

(a)           The parties acknowledge and
agree that except as expressly provided in Sections 7(b), (c) and (d) of
this Agreement, in the event of the termination of the Executive’s employment,
the Company’s sole obligation under this Agreement shall be to pay the Executive
(i) any accrued but unpaid Base Salary through the effective date of the
termination, (ii) any earned but unpaid bonus under the Company’s annual
incentive plan pursuant to, and in accordance with, the terms and conditions of
such plan; (iii) any earned but unused vacation time as determined in
accordance with the Company’s policies then in effect, and (iv) any
unreimbursed expenses pursuant to Section 3(e) of this Agreement
existing at that time.

 

(b)           In the event that the
Executive terminates his employment with the Company without Good Reason in
accordance with Section 4(b) of this Agreement, subject to the terms
and conditions of this Agreement, the Company’s sole obligation shall be to pay
to the Executive all such amounts due to him pursuant to Section 7(a) of
this Agreement.

 

(c)           In the event that the
Company terminates the Executive’s employment pursuant to Section 4(d) of
this Agreement or the Executive terminates his employment with the Company for
Good Reason in accordance with Section 4(b) of this Agreement,
subject to the terms and conditions of this Agreement, and provided that the
Executive executes (without revoking) and returns to the Company an enforceable
waiver and release in a form acceptable to the Company (a “Release Agreement”)
within the time period specified by the Company (which time period shall not be
more than sixty (60) calendar days after the effective date of the Executive’s
termination of employment) and further provided that the Executive remains in
compliance with Sections 2(d), 8 and 9 of this Agreement, the Company’s sole
obligation under this Agreement shall be:

 

(i)           to pay to the Executive all
such amounts due to him pursuant to Section 7(a) of this Agreement;

 

(ii)          to pay to the Executive a
gross amount equal to two (2) times the Executive’s then-current Base
Salary, payable in equal installments during the two (2) year period
following the effective termination date of the Executive’s employment;

 

(iii)         to pay to the Executive a
gross amount equal to two (2) times the greater of (A) the average of
the gross amounts earned by the Executive under the annual incentive plan
during the three (3) complete fiscal years prior to the effective
termination date of the Executive’s employment and (B) the actual gross
amount earned by the Executive under the annual incentive plan during the
fiscal year immediately preceding the effective termination date of the
Executive’s employment, payable in equal installments during the two (2) year
period following the effective termination date of the Executive’s employment;

 

8

 

(iv)        to continue to pay the
employer portion of the Executive’s premiums to continue his then-current
coverage as of the effective termination date of his employment under the
Company’s comprehensive medical and dental plans for the period beginning on
the effective date of the Executive’s termination of employment and ending on
the earlier of (A) two years thereafter or (B) the date the Executive
becomes eligible for coverage by a medical and dental plans maintained by an
entity other than the Company or an Affiliate that provide coverage or benefits
at least comparable, in all material respects, to the Company’s medical and
dental plans, with the period of such coverage to run concurrently with any
coverage period provided under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”) (provided that the Executive has timely
elected such COBRA coverage in accordance with Company policy and applicable
law); and

 

(v)         to the extent provided for
in the Executive’s applicable Award Agreements (including without limitation,
such Award Agreement(s) attached hereto as Exhibit A), cause any and
all unvested portions of the Executive’s restricted shares, stock options, and
any and all other equity-based awards to become vested and exercisable (as
applicable) as of the effective date of the Executive’s termination of
employment.

 

The
Executive acknowledges and agrees that for purposes of Section 7 of this
Agreement, “annual incentive bonus” shall mean the Executive’s incentive bonus
under the Company’s MIP then in effect or such other similar annual incentive
bonus plan or program then in effect.

 

(d)           In the event that the
Executive dies or the Company terminates the Executive’s employment pursuant to
Section 4(c) of this Agreement due to Incapacity, subject to the
terms and conditions of this Agreement, the Company’s sole obligation under
this Agreement shall be to:  (i) pay
to the Executive all such amounts due to him pursuant to Section 7(a) of
this Agreement; (ii) pay to the Executive a pro-rated portion of any
annual incentive bonus(es) (if any) that the Executive would have earned for
the performance period(s) in which the effective termination date of his employment
occurred as though he had remained employed and been entitled to receive such
bonus(es) for the applicable incentive plan performance period(s), the amount
of which pro-rated bonus payment(s) shall be based upon the number of full
calendar months in which the Executive was employed during the applicable
performance period(s) and paid at such time(s) as provided in such
annual incentive plan; and (iii) to the extent provided for in the
Executive’s applicable Award Agreements (including without limitation, such
Award Agreement(s) attached hereto as Exhibit A), cause any and all
unvested portions of the Executive’s restricted shares, stock options, and any
and all other equity-based awards to become vested and exercisable (as
applicable) as of the effective date of the Executive’s termination of
employment.

 

(e)           Timing of Payments.  Subject to the terms and conditions of this
Agreement (including without limitation Section 10) and provided that the
Executive executes (without revoking) a Release Agreement as set forth in Section 7(c) above
(as applicable) and the applicable statutory revocation period with respect to
such Release Agreement has expired, and further provided that the Executive
remains in compliance with Sections 5, 8 and 9 of this Agreement, any payments
or benefits made available to the Executive by the Company pursuant to this Section will
be made or commence (as applicable) as follows: 
(i) any payments made pursuant to Sections 7(c)(ii) and (iii) will
commence on the sixtieth (60th) calendar day following 

 

9

 

the effective termination date of the Executive’s
employment; and (ii) the payments and benefits in Sections 7(a), 7(b), and
7(c)(i), (iv) and (v), and 7(d) will be paid or commence (as
applicable) at such times and in such manner as set forth in the applicable
Company policy and plan documents.

 

8.             Confidentiality, Intellectual
Property and Restrictive Covenants.  The Company and the Executive agree that, by
virtue of his unique relationship with the Company (including pursuant to this
Agreement), the Executive has and will acquire and have access to, and has and
will continue to develop substantial and intimate knowledge of, the Company’s
Confidential Information (defined below), and has and will also continue to
develop a unique and comprehensive familiarity with the Company and the
Business Conducted by the Company or any of its Affiliates, which the Executive
would not have otherwise had but for his employment with the Company, and which
the Executive acknowledges are valuable assets of the Company.  Accordingly, the Executive agrees, in
exchange for the consideration and mutual covenants contained in this
Agreement, to undertake the following obligations, which he acknowledges are
reasonably designed to protect the legitimate business interests of the
Company, without unreasonably restricting his post-employment opportunities:

 

(a)           Confidential Information.  The Executive acknowledges that during his
employment with the Company he has had and will continue to have, and may
continue to have during the Non-Compete Period (as defined below), access to
Confidential Information of the Company, its Affiliates and, in certain
situations, certain third parties who provide information to the Company
subject to confidentiality and non-use restrictions.  All Confidential Information is of
irreplaceable value to the Company, its Affiliates and such third parties.  Except as required to properly perform the
Executive’s responsibilities for the Company and its Affiliates, to comply with
law or regulation, or as authorized in writing in advance by the Company, the
Executive shall not, at any time, use, disclose, or take any action which may
result in the use or disclosure of any Confidential Information.  For purposes of this Agreement, “Confidential
Information” shall mean all confidential and proprietary information of the
Company, its Affiliates and, in certain situations, certain third parties who
provide information to the Company subject to confidentiality and non-use
restrictions, and includes, but is not limited to, actual and prospective
customer and client lists and pricing information, business plans, programs and
tactics, research and development information (including without limitation information
relating to the formulation, testing, registration, use, safety, efficacy
and/or effects of marketed products and compounds under development), personnel
information, and all other information unique to the Company and not readily
available to the public, including designs, improvements, inventions, formulas,
compilations, methods, strategies, capabilities, forecasts, software programs,
processes, know-how, data, operating methods and techniques, “Inventions or
Developments” (as defined below), and all business costs, profits, vendors,
markets, sales, products, marketing, sales or other financial or business
information, and any modifications or enhancements of any of the foregoing.

 

(b)           Inventions or Developments.  The Executive agrees that he will, now and in
the future, promptly and fully disclose to the Company all discoveries,
improvements, inventions, formulas, ideas, processes, designs, techniques,
know-how, data and computer programs (whether or not patentable, copyrightable
or susceptible to any other form of protection), that are or have been made,
conceived, reduced to practice or developed by the 

 

10

 

Executive, either alone or jointly with others,
during his employment with the Company, that are related in any way to the
past, current or future business or products of the Company or any of its
Affiliates or are devised, made, developed, reduced to practice or perfected
utilizing equipment or facilities of the Company or any of its Affiliates
(collectively, the “Inventions or Developments”).  All Inventions or Developments shall be the
sole property of the Company, including all patents, copyrights, intellectual
property or other rights related thereto and the Executive assigns to the
Company all rights (if any) that the Executive may have or acquire in such
Inventions or Developments. 
Notwithstanding the foregoing, this Section 8(b) shall not
apply to any Inventions or Developments for which no equipment, supplies,
facility or trade secret information of the Company or its Affiliates were used
and which were developed entirely on the Executive’s own time, unless:  (i) the Inventions or Developments
relate to the Business Conducted by the Company or any of its Affiliates or the
actual or demonstrably anticipated research or development of the Company or
any of its Affiliates; or (ii) the Inventions or Developments result from
any work performed by the Executive for the Company or any of its Affiliates.

 

(c)           Restrictive Covenants.  The Executive agrees that during the
Executive’s employment and for the two (2) year period following the
effective date of any termination of the Executive’s employment for any reason
(the “Non-Compete Period”), unless the Company gives its advance written
consent, the Executive shall not:

 

(i)           participate or engage in,
directly or indirectly (whether as an owner, agent, representative, partner,
employee, officer, director, independent contractor, consultant, advisor, or in
any other capacity calling for the rendition of services, advice, or acts of
management, operation or control), any business that, during the Non-Compete
Period, is competitive with the Business Conducted by the Company or any of its
Affiliates anywhere in the United States, Canada, Mexico, or China
(hereinafter, the “Geographic Area”) and which business the Company was engaged
(either actively as a going concern or in the process of developing to market)
during the two (2) year period preceding his termination of employment;

 

(ii)          directly or indirectly
solicit any current employee of the Company or any of its Affiliates, or any
individual who becomes an employee of the Company or any of its Affiliates
during the Non-Compete Period, to leave such employment; or

 

(iii)         directly or indirectly
solicit, seek to divert or dissuade from continuing to do business with or
entering into business with the Company or any of its Affiliates, any supplier,
customer, or other person or entity with which the Company had, or was actively
planning or pursuing, a business relationship at any time during the two (2) year
period preceding his termination of employment.

 

For purposes of this Agreement, during the Executive’s
employment, “Business Conducted by the Company or any of its Affiliates” shall
mean (a) all businesses conducted by the Company or any of its Affiliates
and (b) any material new line of business in which the Company or any of
its Affiliates is contemplating engaging in, provided that the plans for the
Company or any of its Affiliates to engage in such material new line of
business were presented to and not rejected by the Board.  For purposes of this Agreement, for two-year
period following the effective date of any termination of the Executive’s
employment, “Business Conducted by the Company or any of

 

11

 

its Affiliates” shall mean (a) all business
conducted by the Company or any of its Affiliates as of the effective date of
the Executive’s termination of employment and (b) any material new line of
business in which the Company or any of its Affiliates engages within the
one-year period following the effective date of the Executive’s termination of
employment, provided that the plans for the Company or any of its Affiliates to
engage in such material new line of business were presented to and not rejected
by the Board prior to the effective date of the Executive’s termination of
employment.

 

(d)           No Diversion of Business
Opportunities and Prospects.  The Executive agrees that during his
employment with the Company:  (i) the
Executive shall not directly or indirectly engage in any employment, consulting
or other business activity that is competitive with the Business Conducted by
the Company or any of its Affiliates; (ii) the Executive shall promptly
disclose to the Company all business opportunities that are presented to the
Executive in his capacity as an employee of the Company or which is of a
similar nature to the Business Conducted by the Company or any of its
Affiliates or which the Company or its Affiliates have expressed an interest in
engaging in the future; and (iii) the Executive shall not usurp or take
advantage of any such business opportunity without first offering such
opportunity to the Company.

 

(e)           Return of Property.  The Executive acknowledges and agrees that
immediately upon his termination of employment with the Company he will
promptly return (without retaining any copies) all property of the Company, its
Affiliates or any third parties that is within his possession, custody or
control by virtue of his employment with the Company.  Property to be returned to the Company shall
include without limitation any and all documents and other things (whether in
tangible or electronic format and whether such documents or things contain
information that reflect or contain any Confidential Information or proprietary
information) in the Executive’s possession, custody or control, further
including without limitation all computer programs, passwords, files, and
diskettes, all written and printed files, manuals, contracts, memoranda, forms,
notes, records and charts (and any and all copies of, or extracts from, any of
the foregoing), vehicles, keys, cell phones, credit cards and other equipment
and materials furnished to him by the Company; provided, however, that (i) the
Executive shall be entitled to keep his home office equipment and (ii) the
Company and the Executive shall work together to ensure that any Confidential
Information, Inventions or Developments, or other Company business
information is removed from such home office equipment.

 

(f)            Irreparable Harm.  The Executive acknowledges that:  (i) the covenants contained in Sections
2(d) and 8 are reasonable in scope and duration, will not unduly restrict
the Executive’s ability to engage in his livelihood, and the Executive’s
compliance with Sections 2(d) and 8 is necessary to preserve and protect
the Confidential Information, Inventions or Developments, and other
legitimate business interests of the Company; (ii) any failure by the
Executive to comply with the provisions of Sections 2(d) and 8 will result
in irreparable and continuing injury to the Company for which there will be no
adequate remedy at law; and (iii) in the event that the Executive should
fail to comply with the terms and conditions of Sections 2(d) and 8, in
addition to the Company’s right to set off any actual monetary damages to the
Company that are a consequence of such failure to comply against any payments
and benefits due to the Executive pursuant to Section 7 to the extent
permitted by applicable law (provided 

 

12

 

that any such set offs first shall be taken from
amounts not subject to Section 409A of the Code (as defined in Section 10
below), and if such amounts are insufficient, any additional set
off shall not be taken until the time an amount subject to Section 409A of
the Code would otherwise be paid pursuant to the terms of this Agreement), the
Company shall be entitled, in addition to and without limiting such other
relief as may be proper, to all types of equitable relief (including but not
limited to the issuance of an injunction and/or temporary restraining order) as
may be necessary to cause the Executive to comply with Sections 2(d) and
8, to restore to the Company its property, and to make the Company whole.  The Company and Executive acknowledge and
agree that the Company or the Executive’s failure to enforce or insist on its
rights under Sections 2(d) and 8 shall not constitute a waiver or
abandonment of any such rights or defense to enforcement of such rights.  If the provisions of Sections 2(d) and 8
are ever deemed by a court to exceed the limitations permitted by applicable
law, the Executive and the Company agree that such provisions shall be, and
are, automatically reformed to the maximum lesser limitations permitted by such
law.

 

9.             Cooperation.  At the request and upon
reasonable advance notice where practicable and at the sole expense of the
Company, whether during or at any time after the Executive’s employment with
the Company or any of its Affiliates, the Executive shall cooperate fully with
the Company and its Affiliates (a) in investigating, defending,
prosecuting, litigating, filing, initiating or asserting any claims or
potential claims (including without limitation in connection with any legal
proceeding of any kind) that may be made by or against the Company or any of
its Affiliates, to the extent that such claims may relate to or arise out of
the Executive’s employment with the Company or any of its Affiliates or with
respect to which the Executive has knowledge and (b) without in any way
limiting subsection (a) above, to secure any trade name, patent,
trademark, copyright or intellectual property protection or other similar
rights in the United States and/or in foreign countries, including without
limitation, the execution and delivery of assignments, patent applications and
other documents or papers.  If such
cooperation is provided during the Executive’s employment with the Company or
any of its Affiliates, the Executive shall not receive any additional
compensation from the Company for such cooperation.  If the Executive no longer is employed by the
Company or any of its Affiliates, the Executive’s obligation to cooperate shall
be reasonably limited so as not to unreasonably interfere with his other business
obligations.  If the Executive spends in
excess of ten (10) hours in compliance with this Section 9 after he
is no longer employed by the Company or any of its Affiliates, the Company
shall compensate the Executive at an hourly rate equal to the amount determined
by dividing (x) the Executive’s Base Salary as of the first day of the
fiscal year of the Company within which the Executive’s employment is
terminated by (y) 2000, and shall reimburse the Executive for any
reasonable expenses incurred as a direct result of his providing such
cooperation in accordance with Section 3(e) of this Agreement.  The Company shall provide such compensation
for the Executive’s cooperation within thirty (30) calendar days after
receiving from the Executive a written statement stating the number of hours
for which he seeks payment and brief description of the cooperation provided,
provided that the Executive submits such statement within thirty (30) calendar
days after the end of the calendar month in which the Executive provided such
cooperation.  The Executive’s obligation
to cooperate hereunder shall include, without limitation, meeting with such
persons at such times and in such places as the Company or its Affiliates may
require, and giving evidence and testimony and executing and delivering to the
Company and any of its Affiliates any papers requested by any of them
(including without limitation joint defense agreements and affidavits).  The Executive shall 

 

13

 

provide immediate notice to the Company of any
subpoena or other legal document that he receives that relates in any way to
the Company or any of its Affiliates, along with a copy of such subpoena or
other legal document.

 

10.          Compliance with Section 409A.  All references in this Agreement to the
Executive’s termination of employment shall mean his separation from service
within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
Treasury regulations promulgated thereunder.  In the event the terms of this Agreement
would subject the Executive to the
imposition of taxes and penalties (“409A Penalties”) under Section 409A
of the Code, the Company and the Executive shall cooperate diligently to amend
the terms of the Agreement to avoid such 409A Penalties, to the extent
possible.  Notwithstanding any other
provision in this Agreement, if as of the date on which the Executive’s
employment terminates, the Executive is a “specified employee” as determined by
the Company, then to the extent any amount payable or benefit provided under
this Agreement that the Company
reasonably determines would be nonqualified deferred compensation within
the meaning of Section 409A of the Code, that under the terms of this
Agreement would be payable prior to the six-month anniversary of the Executive’s
effective date of termination, such payment or benefit shall be delayed until
the earlier to occur of (a) the six-month anniversary of such termination
date or (b) the date of the Executive’s death.  In the case of taxable benefits that
constitute deferred compensation, the Company, in lieu of a delay in payment,
may require the Executive to pay the full costs of such benefits during the
period described in the preceding sentence and reimburse that Executive for
said costs within thirty (30) calendar days after the end of such period.  With respect to any reimbursements under this
Agreement, such reimbursement shall be made on or before the last day of the
Executive’s taxable year following the taxable year in which the expense was
incurred by the Executive.  The amount of
any expenses eligible for reimbursement or the amount of any in-kind benefits
provided, as the case may be, under this Agreement during any calendar year
(including without limitation pursuant to Sections 9, 11 and 17) shall not
affect the amount of expenses eligible for reimbursement or the amount of any
in-kind benefits provided during any other calendar year. The right to
reimbursement or to any in-kind benefit pursuant to this Agreement shall not be
subject to liquidation or exchange for any other benefit.  The Executive acknowledges and agrees that
notwithstanding this Section 10 or any other provision of this Agreement,
the Company and its Affiliates are not providing him with any tax advice with
respect to Section 409A of the Code or otherwise and are not making any
guarantees or other assurances of any kind to the Executive with respect to the
tax consequences or treatment of any amounts paid or payable to the Executive
under this Agreement.

 

11.          Section 280G.  Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with a Change in Control or Executive’s
Employment Termination (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the Company or such
Person) (all such payments and benefits being hereinafter called “Total
Payments”) would be an “excess parachute payment” pursuant to Code Section 280G
or any successor or substitute provision of the Code, with the effect that
Executive would be liable for the payment of the excise tax described in Code Section 4999
or any successor or substitute provision of the Code, or any interest or
penalties are incurred by Executive with respect to such Total Payments (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as 

 

14

 

the “Excise Tax”), then, after taking into account
any reduction in the Total Payments provided by reason of Code Section 280G
in such other plan, arrangement or agreement, the cash payments provided in
Section 7 of this Agreement shall first be reduced, and the non-cash
payments and benefits shall thereafter be reduced, to the extent necessary so
that no portion of the Total Payments is subject to the Excise Tax.  Notwithstanding the foregoing, no payments or
benefits under this Agreement will be reduced unless: (i) the net amount
of the Total Payments, as so reduced (and after subtracting the net amount of
federal, state and local income taxes on such reduced Total Payments) is
greater than (ii) the excess of (A) the net amount of such Total
Payments, without reduction (but after subtracting the net amount of federal,
state and local income taxes on such Total Payments), over (B) the amount
of Excise Tax to which the Executive would be subject in respect of such
unreduced Total Payments.

 

(a)           Subject to the
provisions of paragraph (b) below, all determinations required to be made
under this Section, and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that serves as the
Company’s auditors (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and Executive within 15 business
days of the receipt of notice from the Company or Executive that there have
been Total Payments, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive shall designate another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company.  If
the Accounting Firm determines that no Excise Tax is payable by Executive, it
shall furnish Executive with a written opinion that failure to report the
Excise Tax on Executive’s applicable federal income tax return would not result
in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm
shall be binding upon the Company and Executive, except as provided in
paragraph (b) below.

 

(b)           As a result of
the uncertainty in the application of Code Section 280G at the time of the
initial determination by the Accounting Firm hereunder, it is possible that the
Internal Revenue Service (“IRS”) or other agency will claim that an Excise Tax,
or a greater Excise Tax, is due, and thus the Company should have made a lesser
amount of Total Payment than that determined pursuant to paragraph (a) above.  Executive shall notify the Company in writing
of any claim by the IRS or other agency that, if successful, would require
Executive to pay an Excise Tax or an additional Excise Tax.  If the IRS or other agency makes a claim
that, if successful, could require Executive to pay an Excise Tax or an
additional Excise Tax, the Company shall reduce or further reduce Executive’s
payments and benefits in accordance with this Section 11 to the amount
necessary to eliminate such Excise Tax or additional Excise Tax.  The Company shall pay all fees and expenses
of the Executive relating to such a claim by the IRS or other agency.

 

12.          Notices.   Notices given pursuant to this Agreement
shall be in writing and shall be effective upon personal delivery, upon
confirmation of receipt of facsimile transmission, upon the fourth day after
mailing by certified mail, or upon the second day after sending by express
courier service.  Notice to the Company
shall be directed to:

 

15

 

Smurfit-Stone
Container Corporation

Six
CityPlace Drive

Creve
Coeur, Missouri 63141

Attention:  General Counsel

 

Notices
to or with respect to the Executive will be directed to the Executive, or to
the Executive’s executors, personal representatives or distributees, if the
Executive is deceased, or the assignees of the Executive, at the Executive’s
home address on the records of the Company. 
Either party may change the person and/or address to which the other
party must give notice under this Section by providing written notice of
such change, in accordance with the procedures described in this Section 12.

 

13.          Assignment.  This Agreement is enforceable by the Company
and its affiliates and other related entities and may be assigned or
transferred by the Company to, and shall be binding upon and inure to the
benefit of, any parent, subsidiary or other Affiliate of the Company or any
entity which at any time, whether by merger, purchase, or otherwise, acquires
all or substantially all of the assets, stock or business of the Company
(including without limitation any successor and/or reorganized entit(ies) of
the Company or any of its Affiliates upon the Effective Date).  The Executive and the Company agree that upon
the Effective Date, this Agreement shall be assigned to and binding upon such
successor entit(ies) of the Company as set forth in the Plan of Reorganization,
provided that nothing herein shall limit or otherwise affect the Company’s right
to further assign or transfer this Agreement after the Effective Date as set
forth in the preceding sentence.  The
Executive may not assign any of his rights or obligations under this Agreement
during his life.  Upon the Executive’s
death, this Agreement will inure to the benefit of the Executive’s heirs,
legatees and legal representatives of the Executive’s estate.

 

14.          Beneficiary.  If the Executive dies prior
to receiving the amounts to which he is entitled under this Agreement (if any),
subject to and in accordance with the terms and conditions of this Agreement,
such amounts shall be paid to the beneficiary designated by the Executive in
writing to the Company during his lifetime (“Beneficiary”), or if no such
Beneficiary is designated, to the Executive’s estate.  Notwithstanding anything to the contrary
herein, the Beneficiary shall not be entitled to receive any amounts pursuant
to Section 7 of this Agreement unless the Beneficiary and any other
authorized representatives of the Executive’s estate execute an enforceable
waiver and release of claims in accordance with the Executive’s obligations set
forth in Section 7(c).  The
Executive, without the consent of any prior Beneficiary, may change his
designation of Beneficiary or Beneficiaries at any time and from time to time
by submitting to the Company a new designation in writing.

 

15.          Severability.   Each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable
law.  The Executive and the Company agree
that in the event that any provision of this Agreement is found to be
unreasonable or otherwise unenforceable by a court, it is the purpose and
intent of the parties that any such provision be deemed modified or limited, so
that as modified or limited, such provision may be enforced to the fullest
extent possible.  If any provision of
this Agreement is held invalid or unenforceable for any reason (after any such
modification or limitation pursuant to the preceding sentence, as applicable),
such provision will be effective only to the extent of such invalidity or 

 

16

 

unenforceability without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

 

16.          Entire Agreement, Amendment and
Waiver.   Except as otherwise provided herein, this
Agreement embodies the entire agreement and understanding of the parties hereto
with regard to the matters described herein and supersedes any and all prior
and/or contemporaneous agreements and understandings, oral or written, between
said parties regarding such matters, provided that nothing herein shall limit
or otherwise affect any provision of any Emergence Equity Grant Award
Agreement.  In the event of any conflict
between any provision of this Agreement and any Emergence Equity Grant Award
Agreement, the provisions of this Agreement shall govern.  The Executive and the Company acknowledge and
agree that this Agreement amends and restates the Predecessor Agreement in its
entirety and that as of the Effective Date the provisions of this Agreement
shall replace each and every provision of the Predecessor Agreement, at which
time the provisions of the Predecessor Agreement shall be null and void, and
shall be of no further force or effect. 
Except as set forth in Sections 8(f) and 15, this Agreement may be
modified only in a written agreement signed by both the Executive and the
Company’s authorized representative.  Any
party’s failure to enforce this Agreement in the event of one or more events
which violate this Agreement shall not constitute a waiver of any right to
enforce this Agreement against subsequent violations.

 

17.          Forum Selection.  The parties hereby
irrevocably consent to, and agree not to object or assert any defense or challenge
to, the jurisdiction and venue of the state and federal courts sitting in
Chicago, Illinois, and agree that any claim under this Agreement may be
brought in any such court.  In any action
or proceeding to enforce this Agreement, the non-prevailing party shall pay for
any and all costs and expenses (including without limitation reasonable
attorneys’ fees) of the prevailing party to the maximum extent permissible by
applicable law.

 

18.          Governing Law.   This Agreement shall be governed by the
internal laws of the state of Illinois, without regard to its conflict of laws
rules.

 

19.          Headings.  The Section headings used herein are for
convenience of reference only and are not to be considered in construction of
the provisions of this Agreement.

 

20.          Release of Claims Under
Predecessor Agreement.  The
consideration offered herein is accepted by the Executive as being in full
accord, satisfaction, compromise and settlement of any and all amounts that are
or may have been due and owing to him pursuant to any term or condition of the
Predecessor Agreement, and the Executive expressly agrees that he is not
entitled to and will not receive any further payments, benefits, or other
compensation or recovery of any kind from the Company with respect to any such
term or condition of the Predecessor Agreement.

 

21.          Survival.   Sections 2(d) and 4 through 22 herein
shall survive and continue in full force and effect in accordance with their
respective terms, notwithstanding any termination of the Employment Period or
the Executive’s employment.

 

17

 

22.          Counterparts.  This Agreement may be executed in two
counterparts, each of which shall be deemed an original, and both of which
together shall constitute one and the same instrument.

 

THE
PARTIES ACKNOWLEDGE BY SIGNING BELOW THAT THEY HAVE READ AND UNDERSTAND THE
ABOVE AND INTEND TO BE BOUND THEREBY:

 

	
  STEVEN
  C. STRICKLAND

  	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Steven C. Strickland

  	
   

  	
  By:

  	
  /s/
  Patrick J. Moore

  
	
   

  	
   

  	
   

  
	
  Date: 

  	
  June 30,
  2010

  	
   

  	
  Position:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date: 

  	
  June 30, 2010

  
							

 

18

 

EXHIBIT A

 

EMERGENCE EQUITY AWARD AGREEMENTS FOR STEVEN C. STRICKLAND

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