SEPARATION AGREEMENT

EXHIBIT 99.2

EXECUTION COPY

SEPARATION AGREEMENT

This Separation Agreement (“Agreement”), dated as of December 3, 2006, is entered into by and between Xxxx Xxxxxxxx (“Xxxxxxxx”) and Xxxxxx Packaging Company L.P. (together with its parents, parent shareholders, subsidiaries and affiliates, “Xxxxxx”) (which, together with its successors, subsidiaries, officers, directors and each holder, directly or indirectly (as of the date of this Agreement), of at least ten percent (10%) of the outstanding common stock or other equity interests in Xxxxxx directly or through any parent or other affiliate of Xxxxxx are collectively referred to as the “Beneficiaries”).

WHEREAS, Xxxxxx and Xxxxxxxx entered into an Employment Agreement, dated as of June 27, 2002 (as amended, the “Employment Agreement”); and

WHEREAS, Xxxxxxxx’x employment as Chief Financial Officer of Xxxxxx will terminate on December 4, 2006 (the “Termination Date”) pursuant to Section 7.4 of the Employment Agreement; and

WHEREAS, Xxxxxxxx and Xxxxxx, on behalf of all the Beneficiaries, have agreed to resolve and settle any and all of their disputed claims and all differences between them with respect to events, including, but in no way limited to, any differences that might arise in connection with Xxxxxxxx’x employment with Xxxxxx, Xxxxxxxx’x rights as an equityholder or optionholder of Xxxxxx (including BMP/Xxxxxx Holdings Corporation (“BMP”)), and the termination of Xxxxxxxx’x employment, in each case through the date of this Agreement; and

NOW, THEREFORE, in consideration of the recitals, promises, and other good and valuable consideration specified herein, the receipt and sufficiency of which is hereby acknowledged, Xxxxxxxx and Xxxxxx, on behalf of all the Beneficiaries, agree as follows:

1. PAYMENTS AND BENEFITS

1.1 Payments. Subject in each case to the expiration of the Revocation Period (as defined in Section 2.2 below), Xxxxxx will pay to Xxxxxxxx the amounts specified in this Section in consideration for Xxxxxxxx entering into this Agreement, specifically including the General Release (as described in Section 2 below) and other restrictive covenants identified herein:

(a) Severance. Xxxxxx will pay to Xxxxxxxx 156 weekly payments each equal to $10,516.02, payable on Xxxxxx’x customary weekly payment dates for a total of $1,640,500.00, which amount represent all severance amounts owed to Xxxxxxxx pursuant to Section 7.4(d) of the Employment Agreement (and an additional 52 weeks of severance payments as additional consideration for the agreements contained herein).

(b) 2006 Pro Rata Annual Bonus Payment. On the date that annual bonuses for other senior executives of Xxxxxx are payable (but no later than March 15, 0000), Xxxxxx will pay to Xxxxxxxx, in a lump sum 335/365ths of the annual bonus Xxxxxxxx would have received in respect of Xxxxxx’x fiscal year ending December 31, 2006, had his employment not been terminated (the “Pro Rata Bonus Amount”). Xxxxxxxx acknowledges that the Pro Rata Bonus Amount may be zero.

(c) Attorneys Fees. Xxxxxx will pay to Xxxxxxxx’x counsel for up to $10,000 of reasonable fees (including costs and expenses incurred thereby) for such counsel’s legal services provided to Xxxxxxxx in connection with the negotiation and settlement of the subject matter contained in this Agreement, within thirty (30) days after receipt of a xxxx for all such services (provided that all such bills must be submitted no later than January 30, 2007).

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1.2 Continuing Provisions.

(a) Accrued Rights. Xxxxxx will pay to Xxxxxxxx (i) any unpaid Base Salary accrued through the Termination Date, payable in his next paycheck, (ii) accrued but unpaid vacation, payable in his next paycheck, and (iii) the amount of any unreimbursed business expenses incurred prior to the Termination Date by Xxxxxxxx in accordance with Xxxxxx policy, reasonably promptly upon submission of appropriate documentation, which documentation shall be due within 60 days following the Termination Date.

(b) Other Obligations. Xxxxxx shall continue to provide Xxxxxxxx with the protections and benefits under, and honor the provisions of, Sections 5.7 and 9.1-9.5 of the Employment Agreement, including with respect to amounts payable under this Agreement.

1.3 Equity.  

(a) Options. All outstanding options to purchase interests in Xxxxxx (“Interests”) held by Xxxxxxxx as of the date hereof (the “Options”), notwithstanding the provisions of any of the option award agreements pursuant to which Xxxxxxxx was granted such Options (as amended, if applicable, the “Option Agreements”) shall be canceled, effective as of January 5, 2007, in exchange for the cash payment specified in Section 1.3(c). Xxxxxxxx represents that, as of the date of this Agreement, he holds 90.7 Options.

(b) Stock and Interests. Notwithstanding anything to the contrary in any of the Option Agreements, the Management Stockholders Agreement dated as of February 2, 1998 between BMP, Xxxxxxxx and other parties thereto or the Partnership Agreement dated February 2, 1998 of Xxxxxx (collectively, the “Equity Documents”), Xxxxxx or one of the Beneficiaries identified by Xxxxxx shall purchase, and Xxxxxxxx (or his permitted transferees, if any) will sell, all of the Interests and all shares (the “Stock”) of common stock of BMP held by Xxxxxxxx (or his permitted transferees, if any), on January 5, 2007, in exchange for the cash payment specified in Section 1.3(c). Xxxxxxxx represents that, as of the date of this Agreement, he holds a total of 53.28 Shares and no Interests.

(c) Payment Amount. Xxxxxx and/or one of the Beneficiaries identified by Xxxxxx shall pay Xxxxxxxx $889,600.00 in exchange for the cancellation of the Options described in Section 1.3(a) and the purchase of the shares described in Section 1.3(b), which payment shall be made on or about January 5, 2007, subject to reduction for any withholding taxes applicable in respect of the Options and for the amount of principal and accrued interest through January 5, 2007 on promissory notes issued by Xxxxxxxx to Xxxxxx with an aggregate principal amount and accrued unpaid interest of $222,072.00).

1.4 Other Employee Benefits

(a) Group Health Coverage. Effective as of the Termination Date, Xxxxxx shall continue to provide Xxxxxxxx and his eligible dependents with health and dental benefits pursuant to Xxxxxx’x health and dental benefit program provided to senior employees of Xxxxxx, as in effect from time to time, as if he had continued to be an active employee commensurate with the position he held prior to the Termination Date, at such levels as are provided to senior employees of Xxxxxx and their eligible dependents from time to time (“Medical Coverage”) until the earlier of (i) the expiration of the twenty-four month period commencing at the end of the consulting period (the “Coverage Period”), or (ii) the date or dates that Xxxxxxxx becomes eligible for comparable benefits under plans and programs of a subsequent employer, as applicable. Notwithstanding the foregoing, (w) as a condition to receiving the benefits hereunder, Xxxxxxxx and his eligible dependents shall elect to receive group health benefit coverage from Xxxxxx as

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permitted pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), which coverage shall begin on the Termination Date and run through the period provided pursuant to COBRA (the “COBRA Coverage Period”), which coverage shall be deemed to be satisfied by the provision of the Medical Coverage through the COBRA Coverage Period, (x) during the Coverage Period, Xxxxxxxx shall only be required to pay for the Medical Coverage at the same rates that Xxxxxxxx is required to pay for such coverage immediately prior to the Termination Date, (y) the Medical Coverage provided to Xxxxxxxx and his eligible dependents by Xxxxxx under this Agreement shall be in full satisfaction of Xxxxxx’x obligations to Xxxxxxxx and his eligible dependents under COBRA, the Employment Agreement and this Agreement, and (z) if at any time during the Coverage Period it is not possible for Xxxxxx to provide the Medical Coverage in accordance with this Section 1.4(a), Xxxxxx shall pay Xxxxxxxx an amount which, after payment by Xxxxxxxx of applicable taxes, is sufficient for him to purchase equivalent benefits.

(b) Automobile Coverage. Effective as of the Termination Date, Xxxxxx shall continue to provide to Xxxxxxxx benefits pursuant to Xxxxxx’x automobile expense program, as in effect from time to time, as if he had continued to be an active employee commensurate with the position he held prior to the Termination Date, until the earlier of (i) 12 months from the Termination Date or (ii) the date that Xxxxxxxx becomes eligible for comparable benefits under plans and programs of a subsequent employer.

(c) Career Transition Services. Effective as of the end of the consulting period, Xxxxxx shall provide to Xxxxxxxx, until the earlier of (i) 12 months from the end of the consulting period or (ii) the date that Xxxxxxxx becomes eligible for comparable benefits under plans and programs of a subsequent employer, (A) full use of a national outplacement consultant (e.g., Challenger, Xxxx & Christmas, Inc., Right Associates) or other consultant mutually agreeable to Xxxxxx and Xxxxxxxx, (B) office space and secretarial support; (C) technological support; (D) equipment and supplies of a quality substantively equal to those provided while Xxxxxxxx was employed by Xxxxxx; and (E) continuation of expense reimbursement for professional and trade association participation on the same terms as while Xxxxxxxx was employed by Xxxxxx; provided that the foregoing benefits shall not exceed $45,000 in the aggregate.

(d) Benefit Plans. In addition to any amounts or benefits payable hereunder, Xxxxxxxx shall, except for severance-based plans, be entitled to any payments or benefits provided under the terms of any plan, policy or program (including any Xxxxxx pension plan or 401(k) plan) in which Xxxxxxxx participates or as otherwise required by applicable law (provided that Xxxxxxxx shall not accrue any new benefits nor receive further service credit under any such plan, policy or program), in each case subject to the terms and conditions set forth in such plan, policy or program.

1.5 Consulting Services. Xxxxxx agrees that the continued involvement of Xxxxxxxx in Xxxxxx’x financial matters, primarily related to the transitioning and integration of a new chief financial officer, will be highly beneficial to Xxxxxx and, therefore, agrees to retain Xxxxxxxx as a consultant for a period of six months following the Termination Date (the “consulting period”). Xxxxxx hereby retains Xxxxxxxx, and Xxxxxxxx hereby agrees to serve, as a consultant to Xxxxxx, providing advice with respect to Xxxxxx’x transitioning and integrating a new chief financial officer (and other assignments comparable to those of a person with his position before the Termination Date) on a full-time basis. Xxxxxxxx shall report to Xxxxxx’x chief executive officer. Xxxxxx shall pay Xxxxxxxx a monthly consulting fee equal to $45,567.00 as compensation for the consulting services. Xxxxxx acknowledges that no services are expected or will be requested from Xxxxxxxx between December 22, 2006 and January 1, 2007, inclusive, and he will have additional short-term leave periods consistent with prior practices. Xxxxxx may terminate the consulting period at any time, except that Xxxxxx shall pay a minimum of two months of consulting fee if the consulting period is terminated by Xxxxxx for any reason other than a failure by Xxxxxxxx, as reasonably determined by Xxxxxx’x board of directors (the “Board”), to professionally and non-detrimentally perform his consulting services or as a result of a violation of the provisions of Section 4 of

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this Agreement. Xxxxxx shall provide two weeks’ notice prior to terminating the consulting period, and shall pay the consulting fee until the later of the end of the initial two months of the consulting period or the end of the two-week notice period, provided that such payment will occur even if Xxxxxxxx is excused from continuing to provide services after such notice is provided. While serving as a consultant, Xxxxxxxx shall continue to be entitled to the indemnification provided for in Section 6.4 of his Employment Agreement and customary reimbursement for business expenses and customer entertaining, consistent with Xxxxxx policies.

1.6 Tax Withholding. Xxxxxx may withhold from any amounts payable in cash under this Agreement such Federal, state and local income, employment and other taxes as may be required to be withheld in respect of any payment and/or any benefit provided for under this Agreement pursuant to any applicable law or regulation.

1.7 Full Satisfaction of Potential Claims. Xxxxxxxx hereby acknowledges and agrees that his receipt and satisfaction of all payments and benefits provided in this Section 1 of this Agreement will constitute full and final payment, accord and satisfaction of any and all potential claims described in the General Release (as defined in Section 2 of this Agreement and subject to the terms and limitations in the General Release) against the Company Releasees (as defined in General Release and subject to the terms and limitations in the General Release). Xxxxxx hereby acknowledges and agrees that the release provided in this Section 2 of this Agreement will constitute full and final payment, accord and satisfaction of any and all potential claims described in the Xxxxxx Release (as defined in Section 2 of this Agreement and subject to the terms and limitations in the Xxxxxx Release) against the Releasees (as defined in the Xxxxxx Release and subject to the terms and limitations in the Xxxxxx Release).

1.8 Committee and Board Positions. Xxxxxxxx hereby resigns from Xxxxxx’x pension committee and any other committees or boards of directors (or equivalent positions) at Xxxxxx or any of the Beneficiaries, effective as of the Termination Date, and Xxxxxx and Xxxxxxxx shall, within 30 days following the Termination Date, execute or cause to be executed any documentation reasonably necessary to effect the resignation.

1.9 Timely Payment. Xxxxxx acknowledges that timely payment of amounts as set forth in this Agreement is a material term of this Agreement, and Xxxxxx will be in breach of its obligations if it fails to make such payments unless, after receipt of notice by Xxxxxxxx, it promptly makes such payment. In addition to other rights under this Agreement, if any amount owed by Xxxxxx under this Agreement is not paid when due, such unpaid amount will bear interest from the notice date (for up to five late payments and, thereafter, from the due date) until paid at a rate equal to the lower of: (i) twelve percent (12%) per annum or (ii) the maximum rate permitted by law. Such interest on overdue amounts under this Agreement shall be payable on demand and shall be compounded monthly until the obligations of Xxxxxx with respect to the payment of such interest has been discharged (whether before or after judgment). After such due date, all payments will be credited first to accrued interest and then to principal. The foregoing interest payment shall not apply to any payments owed under any Xxxxxx benefit plan that is administered by a third party, including under any pension or 401(k) plan, provided that this exclusion is not intended to diminish the importance of timely payments of all amounts due.

2. RELEASES; XXXXXXXX REPRESENTATIONS

2.1 General Release.

(a) For and in consideration of the payment of the amounts and the provision of the benefits described in Section 1 of this Agreement and Xxxxxx’x agreement set forth in Section 2.1(b) below, Xxxxxxxx hereby agrees to execute a release of all claims against the Beneficiaries in the form attached as Exhibit I hereto (the “General Release”).

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(b) Subject to Xxxxxxxx’x execution of the General Release and for and in consideration of Xxxxxxxx’x agreement set forth in Section 2.1(a) above, Xxxxxx hereby agrees that, immediately following the expiration of the Revocation Period, Xxxxxx shall, on behalf of the Beneficiaries, execute a release of all claims against Xxxxxxxx in the form attached as Exhibit II hereto (the “Xxxxxx Release”, together with the General Release, the “Mutual Releases”). To the extent any claim that is the subject of the Xxxxxx Release is successfully made against a Releasee by a Beneficiary, notwithstanding the legality and enforceability of the Xxxxxx Release, Xxxxxx shall indemnify such Releasee for its actual costs, charges, damages and expenses in respect of such claim (provided prompt notice of any such claim is made by the Releasee to Xxxxxx and Xxxxxx is given an opportunity to control the defense of such claim). In furtherance of the foregoing, Xxxxxx shall, upon request and a reasonable finding by Xxxxxx that any claim described in the foregoing sentence has been made, promptly advance or pay any amounts for reasonable costs, charges, or expenses (including any legal fees and expenses incurred by counsel retained by Xxxxxxxx) in respect of his right to indemnification.

2.2 Xxxxxxxx’x Representations and Warranties. Xxxxxxxx represents that he has read carefully and fully understands the terms of this Agreement, and that Xxxxxxxx has been advised to consult with an attorney and has availed himself of the opportunity to consult with an attorney prior to signing this Agreement. Xxxxxxxx acknowledges and agrees that he is executing this Agreement willingly, voluntarily and knowingly, of his own free will, in exchange for the payments and benefits described in Section 1 of this Agreement, and that he has not relied on any representations, promises or agreements of any kind made to him in connection with his decision to accept the terms of this Agreement, other than those set forth in this Agreement. Xxxxxxxx further acknowledges, understands, and agrees that as of the Termination Date his employment with Xxxxxx terminated, that the provisions of Section 1 of this Agreement are in lieu of any and all payments and benefits to which Xxxxxxxx may otherwise be entitled to receive pursuant to the Employment Agreement, that Xxxxxxxx will not be reemployed by Xxxxxx, and that Xxxxxxxx will not apply for or otherwise seek employment with Xxxxxx or any of its parents, companies, subsidiaries, divisions or affiliates. Xxxxxxxx understands that, except as otherwise expressly provided for under this Agreement, he will not receive any payments or benefits under this Agreement (other than under Section 1.2) until the seven (7) day revocation period provided for under the General Release has passed, and then, only if he has not revoked the General Release (such period during which no such revocation has occurred, the “Revocation Period”); provided, however, that if such revocation occurs, Xxxxxx and Xxxxxxxx acknowledge that the parties will retain or be restored to all rights under the Employment Agreement or otherwise that applied absent signing of this Agreement, the General Release and the Company Release.

3. EFFECTS OF SETTLEMENT; WAIVER OF JURY TRIAL

3.1 No Admission. Xxxxxxxx and Xxxxxx, on behalf of the Beneficiaries, agree that the payments and benefits by Xxxxxx, and the acceptance by Xxxxxxxx of the same, all as provided in Section 1 of this Agreement, and the execution of this Agreement are the result of a compromise of disputed claims, and shall never for any purpose be considered an admission of liability or responsibility by the Beneficiaries, and Xxxxxx, on behalf of the Beneficiaries, expressly denies any liability.

3.2 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREIN. Each of the parties hereto also waives any bond or surety or security upon such bond, which might, but for this waiver, be required of any of the other parties. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement or the General Release, including, without

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limitation, contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Each of the parties hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on the waiver in entering into this Agreement, and that each will continue to rely on the waiver in their related future dealings. Each of the parties hereto further warrants and represents that each has reviewed this waiver with his or its legal counsel and that each knowingly and voluntarily waives his or its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing, and the waiver shall apply to any subsequent amendments, renewals, supplements or modifications to this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

4. CONFIDENTIALITY OF THIS AGREEMENT; CONTINUING EFFECTIVENESS OF COVENANTS IN EMPLOYMENT AGREEMENT

4.1 Public Statements. Except as otherwise required by law (including disclosure requirements under federal securities laws) from the date of this Agreement, Xxxxxxxx and Xxxxxx hereby mutually agree not to issue any press release or otherwise publicize this Agreement or the Mutual Releases or the settlement of their disputes, and to limit any statement in response to inquiry from the news media or otherwise to: “The matter has been resolved on a satisfactory basis.” Notwithstanding the foregoing, the parties agree that Xxxxxx will issue a press release in substantially the form previously agreed by Xxxxxx and Xxxxxxxx.

4.2 Statements by Xxxxxx. From the date of this Agreement, Xxxxxx shall not issue or make any press release or public statement, as applicable, about Xxxxxxxx which is intended or reasonably likely to disparage Xxxxxxxx, or otherwise degrade Xxxxxxxx’x reputation in the business or industry in which Xxxxxxxx operates; provided that Xxxxxx shall be permitted to (a) make any statement that is required by applicable securities or other laws to be included in a filing or disclosure document, subject to prior notice to, and review by, Xxxxxxxx thereof, (b) issue any press release or public statement regarding the fact of a termination of Xxxxxxxx’x employment, subject to Xxxxxxxx’x prior review and comment, (c) defend itself against any statement made by Xxxxxxxx that is intended or reasonably likely to disparage any member of the Beneficiaries or otherwise degrade any member of the Beneficiaries’ reputation in the business, industry or legal community in which such member of the Beneficiaries operates, only if Xxxxxx believes that the statements made in such defense are not false statements and (d) provide truthful testimony in any legal proceeding or process.

4.3 Statements by Xxxxxxxx. From the date of this Agreement, Xxxxxxxx shall not at any time issue or make any press release or public statement, as applicable, about the Beneficiaries or Xxxxxx regarding any of the foregoing’s financial status, business, compliance with laws, ethics, members, managing members, partners, personnel, directors, officers, employees, consultants, agents, services, business methods or otherwise, which is intended or reasonably likely to disparage any of the Beneficiaries or Xxxxxx, or otherwise degrade any Beneficiary’s or Xxxxxx reputation in the business, industry or legal community in which any such Beneficiary or person operates; provided that Xxxxxxxx shall be permitted to (a) make any statement that is required by applicable securities or other laws to be included in a filing or disclosure document, subject to prior notice to, and review by, Xxxxxx thereof, (b) issue any press release or public statement regarding the fact of a termination of Xxxxxxxx’x employment, subject to Xxxxxx’x prior review and comment, (c) defend himself against any statement made by Xxxxxx or such other Beneficiary, as applicable, that is intended or reasonably likely to disparage Xxxxxxxx or otherwise degrade Xxxxxxxx’x reputation in the business or industry in which Xxxxxxxx operates, only if Xxxxxxxx reasonably believes that the statements made in such defense are not false statements and (d) provide truthful testimony in any legal proceeding or process.

4.4 Continuation of Restrictive Covenants and Indemnification; Separate Liability. Xxxxxxxx agrees and acknowledges that, except as may be expressly otherwise agreed by the parties hereto

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in writing, the restrictive covenants set forth in Article VIII of the Employment Agreement and the indemnification provisions set forth in Section 6.4 of the Employment Agreement shall continue in full force and effect following the Termination Date, pursuant to their terms (except that (1) the phrase “Competitor” shall include (a) Alpla Werke Xxxxx Xxxxxx GmbH, Amcor Limited, Ball Corporation, Consolidated Container Company LLC, Constar International Inc, Plastipak, Inc., Xxxxx Plastics Corporation and Silgan Holdings Inc. and (b) any private equity, hedge, or investment fund to the extent Xxxxxxxx is involved in the review or evaluation of an investment in a Competitor, (2) the “Restricted Period shall continue during the consulting period and for a period of 24 months thereafter and (3) no person shall be a “Competitor” if, prior to a violation of Section 8.1(a) of the Employment Agreement, Xxxxxxxx has requested and received confirmation from the Board that it does not consider such person to be a “Competitor” for purposes of the Employment Agreement (which request shall be considered in good faith by the Board and granted or denied within 7 days of the request). Xxxxxxxx further agrees and understands that his obligations set forth in Sections 4.1 and 4.3 of this Agreement (and the restrictive covenants set forth in the Employment Agreement) are separate from any other provisions in this Agreement and that any breach of those provisions (or any of the restrictive covenants of the Employment Agreement) may be treated by the Beneficiaries as a breach of this covenant for which Xxxxxxxx may be separately liable, and for which Xxxxxx may, seek any remedies to which it is entitled as set forth in Section 8.3 of the Employment Agreement or otherwise at law or in equity.

5. GOVERNING LAW; RESOLUTION OF DISPUTES

5.1 Governing Law.

This Agreement and the Mutual Releases shall each be governed and interpreted in accordance with and enforced in all respects pursuant to the laws of the Commonwealth of Pennsylvania, irrespective of the choice of law rules of that or any other jurisdiction that direct the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

5.2 Resolution of Disputes

Any disagreement or controversy arising out of or relating to this Agreement (other than pursuant to Section 4 of this Agreement or Article VIII of the Employment Agreement) shall be exclusively resolved by way of confidential arbitration. Either party may submit the disagreement or controversy to arbitration in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”), such arbitration to be conducted before a panel of three arbitrators, one selected by each of the parties hereto and the third by the two other arbitrators so selected. The arbitration shall be held in New York, New York. The arbitrators shall be bound by the express terms of the Agreement. The award rendered in any such proceeding, which may include an award of attorneys’ fees, shall be made in writing and shall be final and binding on the parties, and judgment upon the award may be entered in any court having competent jurisdiction thereof. Xxxxxx and Xxxxxxxx shall each pay half of all costs of the arbitrators (provided that if such costs exceed $50,000, Xxxxxxxx shall pay $25,000 and Xxxxxx shall pay the remainder).

6. SEVERABILITY

If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement or the remaining portion of a partially invalid provision, which shall remain in force, and the provision in question shall be modified by the court so as to be rendered enforceable.

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7. CONSTRUCTION

Each party and its counsel have reviewed this Agreement and the Mutual Releases and have been provided the opportunity to review this Agreement and the Mutual Releases and accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or the Mutual Releases. Instead, the language of all parts of this Agreement and the Mutual Releases shall be construed as a whole, and according to their fair meaning, and not strictly for or against either party.

8. ACCEPTANCE AND EFFECTIVENESS

This Agreement shall become effective immediately upon the parties’ execution of this Agreement; provided, however, that the parties’ obligations hereunder shall not become effective until the eighth (8^th) day following the Termination Date, so long as Xxxxxxxx has not then revoked the General Release. Xxxxxx represents that Xxxxx Xxxxxx has been fully and duly authorized to execute this Agreement on its behalf.

9. ENTIRE AGREEMENT; COUNTERPARTS

9.1 The Agreement and the Mutual Releases together set forth the entire agreement between the parties hereto and fully supersede any and all prior agreements or understandings, including the Employment Agreement (other than as expressly set forth herein, including with respect to the Employment Agreement to the extent described in Section 4.4 hereof) between the parties hereto pertaining to the subject matter hereof.

9.2 This Agreement may be executed in one or more counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

[Signatures on next page.]

IN WITNESS WHEREOF, the parties hereto have executed this Separation Agreement effective as of the date first above written.

XXXXXX PACKAGING COMPANY L.P.

By:	/s/ Xxxxx X. Xxxxxx
Title:	President and Chief Operating Officer
XXXX XXXXXXXX
	/s/ Xxxx Xxxxxxxx

Exhibit I

GENERAL RELEASE

Section 1. Release. For and in consideration of the payment of the amounts and the provision of the benefits described in Section 1 of that certain Separation Agreement dated as of December 3, 2006 by and between Xxxx Xxxxxxxx (“Xxxxxxxx”) and Xxxxxx Packaging Company L.P. (“Xxxxxx”) (the “Separation Agreement”), Xxxxxxxx hereby agrees on behalf of himself, his agents, assignees, attorneys, successors, assigns, heirs and executors, to, and Xxxxxxxx does hereby, fully and completely forever release the Beneficiaries (as such term is defined in the Separation Agreement) and their respective past, current and future affiliates, predecessors and successors and all of their respective past and/or present officers, directors, partners, members, managing members, managers, employees, agents, representatives, administrators, attorneys, insurers and fiduciaries, in their individual and/or representative capacities (hereinafter collectively referred to as the “Company Releasees”), from any and all causes of action, suits, agreements, promises, damages, disputes, controversies, contentions, differences, judgments, claims, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities, covenants, contracts, variances, trespasses, extents, executions and demands of any kind whatsoever, which Xxxxxxxx or his agents, assignees, attorneys, successors, assigns, heirs and executors ever had, now have or may have against Company Releasees or any of them, in law, admiralty or equity, whether known or unknown to Xxxxxxxx, for, upon, or by reason of, any matter, action, omission, course or thing whatsoever occurring up to the date this General Release is signed by Xxxxxxxx, including, without limitation, in connection with or in relationship to Xxxxxxxx’x employment or other service relationship with Xxxxxx, the termination of any such employment or service relationship and any applicable employment, compensatory or equity arrangement with Xxxxxx (including, without limitation, the Employment Agreement (as such term is defined in the Separation Agreement), any exhibits attached thereto, any amendments thereto, and any equity or employee benefit plans, programs, policies or other arrangements), any claims of breach of contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress or national origin, race, age, sex, sexual orientation, disability, medical condition or other discrimination or harassment, (such released claims are collectively referred to herein as the “Released Claims”); provided that such Released Claims shall not include any claims to enforce Xxxxxxxx’x rights or obligations under, or with respect to, the Separation Agreement.

Section 2. Waiver. Notwithstanding the generality of Section 1 above, the Released Claims include, without limitation: (i) any and all claims relating to base salary or bonus payments or benefits pursuant to the Employment Agreement, other than those payments and benefits specifically provided for in Section 1 the Separation Agreement; (ii) any and all claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Fair Employment and Housing Act, and any and all other federal, state or local laws, statutes, rules and regulations pertaining to employment or otherwise; and (iii) any claims for wrongful discharge, breach of contract, fraud, misrepresentation or any compensation claims, or any other claims under any statute, rule or regulation or under the common law, including compensatory damages, punitive damages, attorney’s fees, costs, expenses and all claims for any other type of damage or relief; provided, however, that nothing in this Exhibit I is intended to or does prevent Xxxxxxxx from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission or a state Fair Employment Practices Agency (except that he acknowledges that he may not be able to recover any monetary benefits in connection with any such claim, charge, or proceeding) and provided further that Xxxxxxxx’x waiver of claims relating to or arising under the Employee Retirement Income Security Act of 1974, as amended, or with respect to Xxxxxx’x employee benefit plans, programs, policies, or other

arrangements shall not be construed as a waiver of his right to receive his benefits under such plans, programs, policies, or other arrangements, if any, in accordance with the terms and provisions of such plan, or as a waiver of his right to reimbursement for covered expenses under and in accordance with the terms and provisions of the foregoing, to the extent such covered expenses were incurred during a period in which Xxxxxxxx was eligible to participate and in fact was participating in such plans.

THIS MEANS THAT, EXCEPT AS PROVIDED ABOVE, BY SIGNING THIS GENERAL RELEASE, XXXXXXXX WILL HAVE WAIVED ANY RIGHT XXXXXXXX MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST COMPANY RELEASEES BASED ON ANY ACTS OR OMISSIONS OF COMPANY RELEASEES UP TO THE DATE OF THE SIGNING OF THIS AGREEMENT.

Section 3. Waiver of Equity Rights. Except with respect to the Options, Interests and Stock as provided for in Section 1.3 of the Separation Agreement, in consideration of the payments and benefits provided for elsewhere in Section 1 of the Separation Agreement, and for other good and valuable consideration, Xxxxxxxx hereby forever waives, releases and fully relinquishes any right or title to any and all equity, including but not limited to Options, Interests and Stock (as defined in the Separation Agreement), whether granted to Xxxxxxxx as of the Termination Date or not, in Xxxxxx or any subsidiary, partner or joint venture of Xxxxxx.

Section 4. Xxxxxxxx’x Representations and Warranties. Xxxxxxxx represents that he has read carefully and fully understands the terms of this General Release, and that Xxxxxxxx has been advised to consult with an attorney and has availed himself of the opportunity to consult with an attorney prior to signing this General Release. Xxxxxxxx acknowledges and agrees that he is executing this General Release willingly, voluntarily and knowingly, of his own free will, in exchange for the payments and benefits described in Section 1 of the Separation Agreement, and that he has not relied on any representations, promises or agreements of any kind made to him in connection with his decision to accept the terms of the Separation Agreement or the General Release, other than those set forth in the Separation Agreement. Xxxxxxxx further acknowledges, understands, and agrees that his employment with Xxxxxx has terminated, that the provisions of Section 1 of the Separation Agreement are in lieu of any and all payments and benefits to which Xxxxxxxx may otherwise be entitled to receive pursuant to the Employment Agreement, that Xxxxxxxx will not be reemployed by Xxxxxx, and that Xxxxxxxx will not apply for or otherwise seek employment with Xxxxxx or any of its parents, companies, subsidiaries, divisions or affiliates. Xxxxxxxx acknowledges that he has been advised that he is entitled to take at least twenty-one (21) days to consider whether he wants to sign this General Release and that the Age Discrimination in Employment Act gives him the right to revoke this General Release within seven (7) days after it is signed, and Xxxxxxxx understands that he will not receive any payments under the Separation Agreement until such seven (7) day revocation period has passed and then, only if he has not revoked this General Release. To the extent Xxxxxxxx has executed this General Release within less than twenty-one (21) days after its delivery to him, Xxxxxxxx hereby acknowledges that his decision to execute this General Release prior to the expiration of such twenty-one (21) day period was entirely voluntary, and taken after consultation with his attorney.

Xxxxxxxx fully understands that this General Release is a legally binding document and that by signing this General Release Xxxxxxxx is prevented from filing, commencing or maintaining any action against any of Company Releasees, other than to enforce his rights under the Separation Agreement and the Xxxxxx Release (as such terms are defined in the Separation Agreement) as well as his rights as set forth in Section 2 above of this General Release.

This General Release is final and binding and may not be changed or modified, except by written agreement by both of Xxxxxx and Xxxxxxxx.

Dated:

XXXX XXXXXXXX

Exhibit II

XXXXXX GENERAL RELEASE

Xxxxxx Packaging Company L.P. (“Xxxxxx”) hereby agrees on behalf of itself and the other Beneficiaries (as such term is defined in that certain Separation Agreement dated as of December 3, 2006 by and between Xxxx Xxxxxxxx (“Xxxxxxxx”) and Xxxxxx (the “Separation Agreement”)), in consideration of the covenants and agreements referred to in the Separation Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby irrevocably acknowledged, that the Beneficiaries hereby, fully and completely forever release Xxxxxxxx (hereinafter referred to as the “Releasee”, which term includes all successors, heirs, executors, administrators, estate trustees and assigns of Xxxxxxxx) from any and all causes of action, suits, agreements, promises, damages, disputes, controversies, contentions, differences, judgments, claims, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities, covenants, contracts, variances, trespasses, extents, executions and demands of any kind whatsoever, which the Beneficiaries or any of their respective agents, assignees, attorneys, successors, assigns, heirs and executors ever had, now have or may have against the Releasee, in law, admiralty or equity, whether known or unknown to the Beneficiaries, for, upon, or by reason of, any matter, action, omission, course or thing whatsoever occurring up to the date this Release is signed by Xxxxxx on behalf of itself and the other Beneficiaries, provided that the foregoing shall not include any claims to enforce the Beneficiaries’ rights or Xxxxxxxx’x obligations under, or with respect to, the Separation Agreement (or any exhibits, attachments, agreements or benefit plans or arrangements referenced therein).

THIS MEANS THAT, EXCEPT AS PROVIDED ABOVE, BY SIGNING THIS GENERAL RELEASE, XXXXXX WILL HAVE WAIVED ANY RIGHT XXXXXX MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST RELEASEES BASED ON ANY ACTS OR OMISSIONS OF RELEASEES UP TO THE DATE OF THE SIGNING OF THIS AGREEMENT.

Xxxxxx acknowledges and agrees that it has not relied on any representations, promises or agreements of any kind made to it in connection with its decision to accept the terms of the Separation Agreement or this Release, other than those set forth in the Separation Agreement.

Xxxxxx, on behalf of itself and the other Beneficiaries, fully understands that this Release is a legally binding document and that by signing this Release Xxxxxx and the other Beneficiaries are prevented from filing, commencing or maintaining any action against any Releasee, other than to enforce Xxxxxx’x or the other Beneficiaries’ rights under the Separation Agreement and the General Release (as such terms are defined in the Separation Agreement).

This Release is final and binding and may not be changed or modified, except by written agreement by both of Xxxxxx and the Releasee.

Dated:			XXXXXX PACKAGING COMPANY L.P.
		By:
		Title: