Exhibit 10.2
AGREEMENT
This Agreement is dated as of May 31, 2000, by and between Smurfit-
Stone Container Corporation, a Delaware corporation (the "Company"), and Xxxxxx
X. Gurandiano (the "Executive").
WITNESSETH:
WHEREAS, on the date hereof, a subsidiary of the Company has acquired
the owner of all of the equity interest in St. Laurent Paperboard Inc., a
corporation existing under the laws of Canada ("St. Laurent");
WHEREAS, the Executive has previously served as President and Chief
Executive Officer of St. Laurent and was a party to a letter agreement dated
March 7, 1996 (the "Change of Control Agreement") pursuant to which the
Executive would receive certain severance benefits calculated as set forth on
Exhibit A (the "Severance Benefits") from St. Laurent in the event of, among
other things, a diminution of his duties or responsibilities following a change
of control with respect to St. Laurent;
WHEREAS, the Company and the Executive have entered into an Employment
Agreement as of the date hereof (the "Employment Agreement"), pursuant to which
the Executive will serve as Chief Operating Officer of the Company; and
WHEREAS, the Company and the Executive wish to evidence their
agreements regarding the Severance Benefits and certain other matters;
NOW, THEREFORE, in consideration of their mutual promises and
covenants, the parties hereby agree as follows:
1. Payment of Severance Benefits. The Company shall cause St. Laurent
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to pay the Severance Benefits, net of applicable withholdings for taxes and
other payroll deductions, to the Executive as promptly as possible (and in no
event more than five (5) business days) following the date hereof in Canadian
dollars. The payment of Severance Benefits shall be recognized as income to the
Executive under the St. Laurent Canadian qualified and supplemental pension
plans in the year 2000 for purposes of calculating benefits payable to the
Executive thereunder, and the Company shall forthwith cause St. Laurent to amend
such plans to the extent necessary to carry out the intent and purposes of this
Agreement. The Severance Benefits aggregate Cdn. $3,106,734 million, subject to
withholding taxes and other payroll deductions.
2. Receipt of payment of the Severance Benefits. Concurrent with the
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payment of the Severance Benefits, the Executive shall acknowledge full and
complete receipt of the Severance Benefits.
3. Pension Plan Arrangements. The Executive shall cease participation
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as an active employee in the Canadian supplementary employee retirement pension
plan (the "SERP" and the registered pension plans for non-unionized employees of
St. Laurent as of the date hereof. The Executive shall, without duplication,
commence participation in all United States pension plans of the Company
applicable to senior executives as of the date hereof, and shall not have any
prior service recognized for purposes of pension calculations under such plans.
For, greater certainty, prior service with those entities set forth in Exhibit B
shall be recognized for vesting and eligibility purposes under such plans.
4. Age and Service 80. Pursuant to Section II (iii) and Schedule A
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(iii) of the Change of Control Agreement, additional benefits that would have
been earned through the end of the Change of Control Severance Period (as
defined in the Change of Control Agreement) are taken into account under the
registered retirement plan for non-unionized employees of St. Laurent and the
SERP at the date of Change of Control (as defined in the Change of Control
Agreement).
Effective May 31, 2000, the Executive will have achieved the sum of age
and number of years of continuous service (as defined below) equals 80 for all
purposes and the SERP will provide, and the Executive will benefit from, the
following additional benefits:
(a) three (3) additional years of pensionable service (age and
service);
(b) increases in final average earnings that would have resulted from
those additional years as if the Executive had worked for St.
Laurent in Canada;
(c) inclusion of the Severance Benefit in the Executive's
remuneration for 2000 for pension purposes;
(d) elimination of the actuarial reduction on the total benefits
(including, without limitation, in respect of the registered
retirement plan for non-unionized employees of St. Laurent) since
the sum of the Executive's age and number of years of continuous
service would have been equal to 80 during the Change of Control
Severance Period; and
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(e) at the option of the Executive, the additional benefits as
described above and in Section II (iii) and Schedule A (iii) of
the Change of Control Agreement, payment of a lump sum or a
monthly pension commencing at any time, without duplication.
It is understood that the additional benefits described in this Section
4 are not taken into consideration in computing the amount of the Severance
Benefits described in Section 1 above. The expression "continuous service" means
service with the Corporation, together with the predecessor entities listed in
Exhibit B.
5. General Terms. The provisions set forth in Sections 9 through 20 of
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the Employment Agreement are hereby incorporated by reference and made a part of
this Agreement as if set forth in full herein.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.
/s/ Xxxxxx X. Gurandiano
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Xxxxxx X. Gurandiano
SMURFIT-STONE CONTAINER CORPORATION
By: /s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
President and Chief Executive Officer
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