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                                                                 EXHIBIT 10.3(b)

                          GAYLORD CONTAINER CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                        AS AMENDED AND RESTATED EFFECTIVE
                                  MARCH 1, 2000

                                    ARTICLE 1

                                  Introduction

         1.1 The Plan and Its Effective Date. Gaylord Container Corporation
Supplemental Executive Retirement Plan (the "plan") has been established by
Gaylord Container Corporation, a Delaware corporation (the "company"), effective
June 1, 1995 (the "effective date") as amended from time to time.

         1.2 Purpose. The company maintains the Gaylord Container Retirement
Plan (the "retirement plan"), which is intended to meet the requirements of a
"qualified plan" under the Internal Revenue Code. The purpose of this plan is to
provide to a select group of management or highly compensated employees benefits
in addition to those provided under the retirement plan.

                                    ARTICLE 2

                           Participation and Benefits

         2.1 Eligibility. The persons designated by the Compensation Committee
of the Board of Directors (the "committee"), shall be participants in the plan.
The following persons have been designated as participants:

         Dale E. Stahl             President and Chief Operating Officer

         Daniel P. Casey           Executive Vice President and Chief
                                   Financial Officer

         Lawrence G. Rogna         Senior Vice President

         R. Bruce Grimm            Vice President, Primary Products Sales &
                                   Marketing

         Michael J. Keough         Vice President and General Manager,
                                   Container Operations

         Ray C. Dillon             Vice President, Primary Product Operations

         Jeffrey B. Park           Vice President, Corporate Controller

         David F. Tanaka           Vice President, General Counsel and Secretary

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         2.2 Normal Benefit. Subject to the provisions of section 2.3 of the
plan and the conditions and limitations of the plan, a participant shall be
entitled to receive under this plan an annual pension benefit in an amount equal
to the excess of (a) over (b) below:

                  (a) the participant's "final average pay" multiplied by the
"applicable percentage".

                  (b) the benefit payable under the retirement plan plus the
participant's annual primary Social Security benefit, as defined in the
retirement plan.

         A participant's final average pay shall be the average of the
participant's base salary plus incentive awards, excluding awards under the
Shareholder Value Plan, for each of the four calendar years during the last 10
calendar years of the participant's employment for which such total base salary
plus incentive awards received by such participant was greatest.

         A participant's applicable percentage shall be determined in accordance
with the following table, based on the participant's age on the date of
termination of employment.

                  Age                            % Final Average Pay
                  ---                            -------------------
                  65                                       60%
                  64                                       57.5
                  63                                       55
                  62                                       50
                  61                                       45
                  60                                       40
                  55                                       35

         2.3 Termination Prior to Age 55. A participant who retires or
terminates employment on or after age 55 with five years of service shall be
entitled to the normal benefit set forth in section 2.2. If a participant
terminates employment prior to age 55 with five years of service, his benefit
shall be his normal age 55 benefit multiplied by a fraction, the numerator of
which is his actual years of service and the denominator of which is the number
of years of service he would have if he terminated on the day he attains age 55.

         If a participant terminates employment before being credited with five
years of service, his benefit shall be further reduced in accordance with the
following schedule:

                  Years of Service                 % of Benefit Payable
                  ----------------                 --------------------
                          1                                 20%
                          2                                 40
                          3                                 60
                          4                                 80

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         2.4 Change in Control. Notwithstanding anything herein to the contrary,
in the event of a "change in control", each participant shall have the absolute
right to receive payment of his benefit in the form of an immediate lump sum
payment whether or not the participant continues employment with the successor
company and the benefit payable to a participant who has not attained age 55
shall be the normal age 55 benefit without the reduction set forth in section
2.3. A "change in control" shall be deemed to have occurred;

                  (a) if any "person" or "group" as those terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), other than an Exempt Person, is or becomes the "beneficial
owner" (as defined in Rule l3d-3 under the Exchange Act), directly or
indirectly, of securities of Gaylord representing 50% or more of the combined
voting power of Gaylord's then outstanding securities; or

                  (b) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board and any new director
whose election by the Board or nomination for election by Gaylord's stockholders
was approved by at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose election was
previously so approved, cease for any reason to constitute a majority thereof,
or

                  (c) the stockholders of Gaylord approve a merger or
consolidation of Gaylord with any other corporation, other than a merger or
consolidation which would result in all or a portion of the voting securities of
Gaylord outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of Gaylord or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of Gaylord approve a plan of
complete liquidation of Gaylord or an agreement for the sale or disposition by
Gaylord of all or substantially all of Gaylord's assets, other than a sale to an
Exempt Person.

         2.5 Pre-retirement Death Benefit. If a participant dies before he has
begun to receive benefits under the plan, his spouse shall receive a lump sum
payment in the amount equal to the present actuarial value of the spouse's
benefit payable as if the participant had retired or terminated employment on
the date of his death.

         2.6 Payment of Benefits. Except as provided under Section 2.4 and 2.5,
a participant's benefit under this plan shall be paid to him, and in the event
of his death prior to his receipt of all benefits payable under the plan, to his
beneficiary, in the normal or optional form of payment elected by or otherwise
applicable to participant under the retirement plan; provided that a participant
may elect at any time prior to retirement to receive payment in a lump sum in an
amount mutually agreeable to the participant and the committee; provided,
further, that such election must be on file with the company prior to the first
day of the year in which the participant retires or otherwise terminates his
employment and provided, further that such lump sum election shall be permitted
only with the consent of the committee in its sole discretion.

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         2.7 Lump Sum Payments.

                  (a) In calculating the amount of any lump sum or installment
payments, actuarial equivalence shall be calculated based on the actuarial
assumptions applicable to a lump sum payment under the retirement plan.

                  (b) The benefit payable under Section 2.4 of the plan as a
lump sum amount shall be equal to an amount which is sufficient to provide, on
an after-tax basis, monthly benefits for the life of the participant and the
life of the participant's spouse if a joint and survivor benefit is payable
under the retirement plan commencing at the "commencement date" (as herein
defined) actuarially equivalent to the product of (i) times (ii) where:

                           (i) is one minus the participant's, or if he is
deceased his spouse's, marginal tax rate in effect as of the date of the change
in control, and

                           (ii) is the monthly benefit otherwise payable under
the plan if the participant had retired and started benefits on the commencement
date.

                  The "after-tax basis" and "marginal tax rate" as described
above shall be determined by the Committee, with the assistance of the Actuary.

                  For purposes of a lump sum payment in accordance with Section
2.4, the "commencement date" shall be the later of the date of a change in
control or the participant's attainment of age 55.

         2.8 Funding. Benefits payable under this plan to a participant or his
beneficiary shall be paid directly by the company. The company shall not be
required to segregate on its books or otherwise any amount to be used for
payment of benefits under this plan.

         2.9 Termination for Serious Misconduct. In the event a participant is
terminated for serious misconduct, as defined below, no amount shall be payable
to such participant under the plan. "Serious Misconduct" means embezzlement or
misappropriation of corporate Rinds, other acts of dishonesty, commission of a
felony, willful refusal to perform or substantial disregard of the duties
imposed by his employment contract with Gaylord, significant violation of any
statutory or common law duty of loyalty to Gaylord, or repeated acts tending to
bring Gaylord into public disgrace or disrepute, including but not limited to,
alcohol, drug or other substance abuse.

                                    ARTICLE 3

                               General Provisions

         3.1 Committee. This plan shall be administered by the committee
responsible for administration of the retirement plan. The committee shall have,
to the extent appropriate, the same powers, rights, duties and obligations with
respect to this plan as it has with respect to the retirement plan.

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         3.2 Beneficiary. A participant's "beneficiary" under this plan means
any person who becomes entitled to benefits under the retirement plan because of
the participant's death; provide that, if a participant dies while his benefits
under this plan are payable to him in installments, his beneficiary under this
plan shall be either the person or persons designated by him by signing and
filing a beneficiary designation form in the time and manner prescribed by the
committee or if the beneficiary designated above dies before the date of the
participant's death, any one or more of the participant's estate and his
relatives by blood or marriage, in such proportions as the committee shall
determine.

         3.3 Employment Rights. Establishment of the plan shall not be construed
to give any participant he right to be retained in the company's service or to
any benefits not specifically provided by the plan.

         3.4 Interest Not Transferable. Except as to withholding of any tax
under the laws of the United States or any state, the interests of the
participants and their beneficiaries under the plan are not subject to the
claims of their creditors and may not be voluntarily or involuntarily
transferred, assigned, alienated or encumbered. No participant shall have any
right to any benefit payments hereunder prior to his termination of employment
with the company and all other Gaylord Companies, as defined in the retirement
plan.

         3.5 Payment with Respect to Incapacitated Participants or
Beneficiaries. If any person entitled to benefits under the plan is under a
legal disability or in the committee's opinion is incapacitated in any way so as
to be unable to manage his financial affairs, the committee may direct the
payment of such benefit to such person's legal representative or to a relative
or friend of such person for such. Person's benefit, or the committee may direct
the application of such benefits for the benefit of such person in any manner
which the committee may select that is consistent with the plan. Any payments
made in accordance with the foregoing provisions of this section shall be a full
and complete discharge of any liability for such payments.

         3.6 Limitation of Liability. To the extent permitted by law, no person
(including the company, its Board of Directors, the committee, any present or
former member of the company's Board of Directors or the committee, and any
present or former officer of the company) shall be personally liable for any act
done or omitted to be done in good faith in the administration of the plan.

         3.7 Controlling Law. The laws of Illinois shall be controlling in all
matters relating to the plan.

         3.8 Gender and Number. Where the context admits, words in the masculine
gender shall include the feminine gender, the plural shall include the singular
and the singular shall include the plural.

         3.9 Action by the Company. Any action required of or permitted by the
company under the plan shall e by resolution of the committee.

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         3.10 Successor to the Company. The term "company" as used in the plan
shall include any successor to the company by reason of merger, consolidation,
the purchase of all or substantially all of the company's assets or otherwise.

                                    ARTICLE 4

                            Amendment and Termination

         While the company expects to continue the plan, it must necessarily
reserve and hereby does reserve the right to amend the plan from time to time or
to terminate the plan at any time; provided that no amendment of the plan, nor
the termination of the plan may cause the reduction or cessation of any benefits
that were accrued as of the date of such amendment or termination and otherwise
would be payable under this plan, but for such amendment or termination.

         IN WITNESS WHEREOF, this plan has been executed on behalf of the
company by its duly authorized officers as of the day and year first above
written.

                                              GAYLORD CONTAINER CORPORATION

                                          By:
                                              ----------------------------------
                                              Its: Chairman and Chief
                                                   Executive Officer

ATTEST:

By:
   ------------------------
   Its:  Secretary
       --------------------

                                       6<PAGE>   1
                                                                 Exhibit 10.5(b)

                               AMENDMENT NO. 1 TO
                        SEVERANCE COMPENSATION AGREEMENT

         This Amendment No. 1 to Severance Compensation Agreement ("Amendment")
is entered into as of March 1, 2000 by and between Gaylord Container Corporation
(the "Company") and ______________ (the "Executive").

                                   RECITALS:

         The Company's Board of Directors has determined that it is in the best
interest of the Company and its shareholders to provide the following provisions
which are necessary to encourage the Executive's continued and undistracted
attention to his or her duties and to protect and preserve shareholder value in
the event of a possible Change in Control of the Company.

         Therefore, in order to induce the Executive to remain in the employ of
the Company and as consideration for the Executive's covenants to continue such
employment in the face of a change in control, the Board of Directors has
determined that it is desirable to amend and supplement the Executive's
Severance Compensation Agreement, dated as of _____________.

                                   AGREEMENT:

         In consideration of the mutual covenants herein, the Company and the
Executive agree as follows:

            1. In the event a Severance Payment becomes payable to the
Executive, the Company agrees to provide:

               A. Outplacement Services
               The Executive shall be provided outplacement services reasonably
appropriate to maximize the likelihood of an effective transition to a
comparable new position.

               B. Executive Retention Plan
               The Company maintains an Executive Retention Plan which provides
for payment to the Executive of two times his or her target bonus under the
Company's Management Incentive Plan, based on target bonus and incentive as of
December 31, 2000, if the executive is on the Company's payroll and performing
acceptably as of that date.

         The Company and the Executive agree that the Change in Control
provisions shall be applicable to the Executive Retention Plan. Accordingly, if
the Executive becomes entitled to a Severance Payment on or prior to December
31, 2000, all payments under the Executive Retention Plan shall also become due
and payable, on the date of termination, calculated as if the executive had
remained on the Company's payroll and performing acceptably as of December 31,
2000.

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               C. Personal Promissory Note
               The Executive is party to a Promissory Note with the Company
which facilitated a company requested relocation. The Note was entered into by
the Executive with the understanding that the interest would be forgiven
annually and the principal forgiven on a date certain. If a Severance Payment
becomes payable, all principal and accrued interest on the Note shall be
forgiven effective with the date of termination.

            2. Management Incentive Plan

            In the event of a Change in Control, the Company's Management
Incentive Plan (MIP) shall be terminated and PRO-RATA payments made as follows:

            (A) A projection of EBITDA for the fiscal year shall be established
by the Board of Directors by reviewing results through the date of MIP
termination and the forecast EBITDA for the balance of the fiscal year based on
the best available pricing data and key performance factors available at that
time.

            (B) The projected EBITDA will create a pool of award monies based on
the current formula of 1.6%.

            (C) The pool shall be pro-rated based on the number of weeks of the
fiscal year completed at the date of MIP termination.

            (D) The pool shall be distributed to the Executive and all other
participating Executives on the payroll as of the termination date of the MIP,
proportional to each individual's target incentive.

         3. Excise Tax

         In the event Executive becomes subject to any excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or
any successor provisions thereto), the Company shall pay to Executive, no later
than 30 days following any "change in ownership or control of the Company" as
defined in Code Section 280G (or any successor provision thereto), an amount
("Gross-Up Payment") equal to (i) any excise tax to which Executive is subject
under Section 4999, including interest and penalties; and (ii) all federal
income, state income, payroll or other taxes to which Executive may be subject
with respect to the Gross-Up Payment. It is the intent of this provision that
Executive receive a Gross-Up Payment sufficient to place him in the same
position as if the excise tax imposed by Code Section 4999 did not exist.

         4. Definitions.

         Subparagraph (1) of the definition of "Constructive Termination" is
amended to read as follows:

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            (1) a significant and adverse change by the Company of any duties,
responsibilities, reporting relationships or other conditions of employment
inconsistent with, or in derogation of the Executive's position, duties, titles,
offices, responsibilities and status with the Company immediately prior to a
Change in Control;

         5. Capitalized Terms.

         Capitalized terms in this Amendment shall have the meanings ascribed to
them in the Executive's Severance Compensation Agreement.

         6. Re-Affirmation of Severance Compensation Agreement.

         Except as expressly modified herein, all other terms of the Severance
Compensation Agreement remain unchanged.

         IN WITNESS WHEREOF, the Company and the Executive have executed this
agreement on the date first written above.

EXECUTIVE:                                        GAYLORD CONTAINER CORPORATION:

                                                  By:
------------------------                          -----------------------------

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                                                                 EXHIBIT 10.4(b)

                        SEVERANCE COMPENSATION AGREEMENT

         This Severance Compensation Agreement is entered into as of April 15,
1991, by and between GAYLORD CONTAINER CORPORATION, a Delaware corporation (the
"Company"), and (the "Executive").

                                    RECITALS:

         The Company's Board of Directors has determined that the Executive is
among that group of key managers whose services and participation in management
may be critical in any period of transition, such as at the time of any change
in control of the Company or in the face of any proposed corporate
reorganization or acquisition, friendly or hostile, affecting the Company.
Accordingly, the Company's Board of Directors has determined that it is
appropriate and in the best interests of the Company and its stockholders that
provisions be made to encourage the Executive's continued attention and
undistracted dedication to his duties in the potentially disturbing
circumstances of a possible change in control of the Company, by providing the
Executive some degree of financial security under those circumstances.

         Therefore, in order to induce the Executive to remain in the employ of
the Company and as consideration for the Executive's covenants to continue such
employment in the face of a change in control as set forth in this Agreement,
the Board of Directors has determined that it is desirable to provide for the
severance compensation described in this Agreement if the Executive's employment
with the Company terminates under the circumstances described herein following a
change in control of the Company.

                                   AGREEMENT:

         In consideration of the premises and the mutual covenants herein
contained, the Company and the Executive do hereby agree with each other as
follows:

         1. Severance Payment. The Company agrees that if the employment of the
Executive by the Company is terminated at any time within twenty-four (24)
months after the effective date of a Change in Control that occurred while the
Executive was an employee of the Company, the Executive shall be entitled to the
severance payment ("the Severance Payment") provided under this Agreement unless
such termination of employment was by reason of the Executive's (a) death, (b)
Disability, (c) Retirement, (d) Termination for Cause, or (e) voluntary
termination of employment by the Executive under circumstances not constituting
a Constructive Termination. (The capitalized terms used in this paragraph are
defined hereinbelow.)

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         The Severance Payment shall be payable not later than the fifth (5th)
business day following the Executive's last day of employment.

         2. Insurance Benefits. In addition to the Severance Payment, upon any
termination of the Executive's employment that entitles the Executive to a
Severance Payment hereunder, the Company agrees to arrange to provide the
Executive with life, medical, dental, disability and accident insurance benefits
substantially similar to those which the Executive was receiving immediately
prior to the termination of Executive's employment or in effect immediately
prior to the Change in Control, whichever is higher, for a period ending on the
earliest to occur of (a) twenty-four (24) months from the effective date of
termination, or (b) the Executive's death.

         3. Calculation of Severance Payment. The "Severance Payment" hereunder
shall be a lump sum equal to two (2) times the sum of (i) the Executive's annual
base salary and (ii) the Executive's target bonus as provided in the Company's
Management Incentive Plan, as said salary and target bonus are in effect
immediately prior to the termination of Executive's employment or in effect
immediately prior to the Change in Control, whichever is higher.

         4. Covenants of the Executive. In consideration for the Company's
agreements in Paragraphs 1 and 2 herein, the Executive hereby agrees as follows:

                  (a) The Executive shall remain in the employ of the Company
during a period commencing with any public announcement by any person of any
proposed transaction or transactions which, if effected, would result in a
Change in Control and ending when the Change in Control occurs or when, in the
opinion of the Company's Board of Directors, such person has abandoned or
terminated its efforts to effect a Change in Control. Nothing contained in this
Agreement shall affect the right of the Company to terminate the employment of
the Executive, with or without cause, prior to a Change in Control.

                  (b) The Executive shall retain in confidence, and will not
directly or indirectly reveal, report, disclose, publish or transfer to any
person or firm, any confidential information of the Company, or utilize any such
confidential information for any purpose other than in furtherance of the
Executive's work as an employee of the Company. As used in this paragraph,
"confidential information" means information or material proprietary to the
Company or designated as being confidential by the Company which is not
generally known to non-Company personnel, of which or to which the Executive
obtained knowledge or access as a result of the Executive's relationship with
the Company, but information publicly known or generic information or knowledge
which the Executive would have learned in the course similar employment or work
elsewhere in the industry shall not deemed part of confidential information.

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         5. Term of Agreement. This agreement shall remain in effect until the
first to occur of (a) the expiration of twenty-four (24) months after the
effective date of any Change in Control or (b) the termination of the
Executive's employment with the Company prior to the effective date of any
Change in Control for any reason.

         6. Definitions of Certain. Terms. As used in this Agreement, the
following terms shall have the following meanings:

                  (a) "Change in Control" means the occurrence of one of the
following events:

                           (1) if any "person" or "group" as those term are used
in Sections 13(d) and 14(d) of the Securities Exchange Act Of 1934, as amended
("Exchange Act"), other than an Exempt Person, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities; or

                           (2) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board and any new
director whose election by the Board or nomination for election by the Company's
stockholders was approved by at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the period or
whose election was previously so approved, cease for any reason to constitute a
majority thereof; or

                           (3) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in all or a portion of the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets,
other than a sale to an Exempt Person.

                  (b) "Disability" means a total and permanent condition which,
  on the basis of competent medical evidence, would wholly and permanently
  prevent the Executive from engaging in any occupation or employment for wage
  or profit as the result of bodily injury or disease, either occupational or
  non-occupational in cause, except such employment as is so irregular as to
  time and nature that it should be excepted or is for purposes of
  rehabilitation.

                                       3

<PAGE>   7

                  (c) "Retirement" means the termination of the Executive's
employment after the Executive's sixty-fifth (65th) birthday under circumstances
that will entitle the Executive to full benefits under one or more of the
Company's retirement or pension plans generally applicable to officers of the
Company.

                  (d) "Termination for Cause" means termination of the
Executive's employment by the Company solely by reason of one or more of: (1) an
act by the Executive constituting a felony, and resulting in a conviction, and
resulting or intended to result directly or indirectly in substantial gain or
personal enrichment at the expense of the Company or any of its affiliated
corporations, or (2) the Executive's willful engagement in gross misconduct that
results in demonstrably material injury to the Company or any of its affiliated
corporations, or (3) the Executive's willful, repeated and continued failure
substantially to perform the Executive's duties to the Company after a written
demand, referencing this paragraph, for substantial performance is delivered to
the Executive by the Company's chief executive officer which specifically
identifies the manner in which it is believed that the Executive has not
substantially performed his or her duties.

                  (e) "Constructive Termination" means any of the following
events unless it occurs with the Executive's express prior written consent or in
connection with the termination of the Executive's employment for Disability,
Retirement or Termination for Cause:

                           (1) the assignment to the Executive by the Company of
any duties inconsistent with, or in derogation of, the Executive's position,
duties, titles, offices, responsibilities and status with the Company
immediately prior to a Change in Control;

                           (2) a reduction within twenty-four (24) months after
the effective date of a Change in Control in the Executive's base salary as in
effect on the date of the Change in Control, or the Company's failure to
increase the Executive's base salary after a Change in Control at a rate which
is substantially similar to the average increase in base salary received by such
Executive during the prior two years;

                           (3) any failure by the Company to continue in effect
any material benefit plan, bonus plan or arrangement in which the Executive was
participating immediately prior to a Change in Control, or to substitute and
continue other plans providing the Executive with substantially similar
benefits, or any action by the Company that would adversely affect the
Executive's participation in or materially reduce the Executive's benefits under
any such

                                       4

<PAGE>   8

material benefit plan or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control;

                           (4) any failure by the Company to continue in effect
any incentive plan or arrangement in which the Executive is participating at the
time of a Change in Control, or to substitute and continue other plans or
arrangements providing the Executive with substantially similar benefits, or the
taking of any action by the Company that would adversely affect the Executive's
participation in any such incentive plan or reduce the Executive's benefits
under any such incentive plan in an amount which is not substantially similar,
on a percentage basis, to the average percentage reduction of benefits under any
such incentive plan effected during the preceding twelve (12) months for all
officers of the Company participating in any such incentive plan;

                           (5) the Executive's relocation to any place other
than the location at which the Executive performed the Executive's primary
duties prior to the effective date of the Change in Control; or

                           (6) any material breach by the Company of any
provision of this Agreement or any other agreement between the Company and
Executive.

         7. Notice of Termination. Any termination of the Executive's employment
by the Company or by the Executive within twenty-four (24) months after a Change
in Control shall be communicated to the other party by a notice of termination
in writing, which shall indicate the specific termination provisions in this
Agreement relied upon and which shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment. The effective date of termination for purposes of this Agreement
shall be the date specified in such notice of termination, or if no date is
therein specified it shall be the date such notice is given, except that any
termination for Disability shall not be effective earlier than the thirtieth
(30th) day after the notice of termination is given.

         8. Successors and Assigns.

                  (a) This Agreement and the rights of the Executive hereunder
will inure to the benefit of the heirs, devisees and personal and legal
representatives of the Executive. However, the obligations of the Executive
hereunder may not be assigned or pledged or delegated.

                  (b) The rights and obligations of the Company under this
Agreement will inure to the benefit of and will be binding upon the successors
and assigns of the Company, including without limitation successors voluntarily
or by operation of law to the business of the Company or to substantially all
its assets as an entirety.

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         9. Governing Law. This Agreement is entered into and the rights and
obligations of the parties thereunder will be governed by and construed in
accordance with the laws of Illinois, although it is understood that the
validity of any corporate action taken by the Company in authorizing and
implementing this Agreement will be governed by the laws of Delaware, the
Company's state of incorporation.

         10. Other Effects of Change in Control. Nothing in this Agreement shall
supersede or reduce the Executive's benefits under any other arrangement or
contract, whether agreed to heretofore or hereafter, under which interests and
rights that the Executive may have under one or more employee benefits programs
of the Company or its subsidiaries may vest or mature or be accelerated by
reason of a Change in Control, including without limitation under the Company's
stock option, restricted stock, pension, retirement, supplemental retirement and
deferred compensation.

         11. No Mitigation Required. The Severance Payment provided for under
this Agreement is intended to compensate the Executive for remaining with the
Company in the face of a Change in Control in accordance with the covenants
rendered by the Executive herein. Therefore, the Executive is not required to
mitigate damages by seeking other employment following the termination of
employment that triggers the Executive's right to Insurance Benefits hereunder.
No wages earned by the Executive from any source will reduce or mitigate the
amount of severance payable to the Executive hereunder.

         12. General Provisions.

                  (a) Notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by U.S. mail, return receipt requested, first-class or
express postage prepaid, as follows:

                  If to the Company:

                           Gaylord Container Corporation
                           500 Lake Cook Road, Suite, 400
                           Deerfield, Illinois 60015
                           Attn:  Corporate Secretary

                  If to the Executive:

                                       6

<PAGE>   10

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

                  (b) No waiver by either party hereto at any time of any breach
of, or compliance with, any condition or provision of this Agreement to be
performed by the other party hereto shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

                  (c) No provisions of this Agreement may be modified or amended
unless such modification or amendment is agreed to in writing signed by the
Executive and the Company.

                  (d) The invalidity or unenforceability of any provision or
portion of this Agreement shall, as far as possible, not affect the validity or
unenforceability of the other provisions or portions of this Agreement.

                  (e) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original as against any
party that has signed it, but all of which together will constitute one and the
same instrument.

                  (f) Each reference in this Agreement to the Executive's being
employed by the Company, or the termination by the Company of the Executive's
employment, or references of similar import, shall also apply to employment and
terminations of employment by any subsidiary of the Company, such subsidiary
being any employer of the Executive of which more than 50% of the outstanding
voting equity securities are directly or indirectly beneficially owned by the
Company.

         13. Legal Fees and Expenses. In the event the Executive commences or is
required to defend a claim or litigation in order to obtain or retain the
benefits of this Agreement, and thereafter through litigation or settlement he
is successful in whole or part, then the Company will reimburse the Executive
for reasonable attorney fees (considering the difficulty of the case and fees
charged by other attorneys from nationally-recognized firms engaged in this type
of litigation), and will also pay all other actual out-of-pocket costs or other
expenses (including reduced salary from any other employment due to time spent
in said litigation). Upon written agreement to repay the Company if he is not
entitled to reimbursement hereunder, the Company will advance to Executive all
funds to commence or defend said litigation.

                                       7
<PAGE>   11

         IN WITNESS WHEREOF, the Company and the Executive have executed this
agreement on the date first above written.

EXECUTIVE                                 GAYLORD CONTAINER CORPORATION

By:                                       BY:
   ------------------------                  -----------------------------------

                                       8

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