ROCK TENN CO
EX-10.7 AMEMDED AND RESTATED EMPLOYMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>5
<FILENAME>g86305exv10w7.txt
<DESCRIPTION>EX-10.7 AMEMDED AND RESTATED EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.7

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

         This Amended Employment Agreement (the "Agreement") is made and entered
into as of this _21st day of February, 2000, by and between Rock-Tenn Converting
Company, a Georgia corporation (the "Company"), and James L. Einstein, an
individual residing at 200 Arbor Road, Winston-Salem, North Carolina 27104 (the
"Executive").

                                    RECITALS

                  Whereas, the parties initially entered into an Employment
Agreement on January 31, 1995 (the "Initial Agreement") for a term of five (5)
years;

                  Whereas, the parties desire to renew the Executive's
employment relationship with the Company and to replace and supersede the
Initial Agreement with this Agreement.

                  NOW, THEREFORE, in consideration of the terms, mutual
covenants and conditions set forth in this Agreement and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive hereby agree as follows:

         1. Employment. The company and the Executive hereby agree to continue
the Executive's full-time employment beyond the term of the Initial Agreement
pursuant to the terms hereof. The Executive shall perform substantially the same
duties and responsibilities as previously performed on behalf of the Company and
its Alliance Display and Packaging Division (the "Alliance Division"), along
with such other duties as he may from time to time be delegated by the person to
whom the Executive shall report. During the term of this Agreement, the
Executive shall provide services to the Company in conformity with standards
consistent with similar executive positions and shall conduct his business
affairs in a prudent and workmanlike manner as designated by the person to whom
the Executive shall report consistent with the Company's business plan. The
Executive shall use his best efforts, skill and ability to promote the interests
of the Company in carrying out his duties and shall not, either directly or
indirectly, take any action which could reasonably be expected to have an
adverse effect on the business of the Company.

         2. Term. The Executive's employment under this Agreement shall be for a
term commencing on February 1, 2000 and ending on the fifth (5th) anniversary of
this Agreement (the "Term"). Termination of the Executive's employment shall be
governed by Section 6 of this Agreement.

<PAGE>

         3. Compensation. The Company shall pay, and the Executive shall accept,
the compensation described in this Section 3 as full compensation for his
services and for his noncompetition and other obligations under this Agreement.

                  (a) Base Compensation. The Company shall pay an initial annual
salary to the Executive ("Base Compensation") payable in accordance with the
customary payroll practices of the Company in the amount of Two Hundred Ten
Thousand Dollars ($210,000). The Base Compensation will be adjusted during the
Term in accordance with the Company's normal practice for similar executive
positions.

                  (b) Bonus and/or Commission. The Executive shall be eligible
to receive a bonus or commission pursuant to the bonus or commission
arrangements in effect during the Term of this Agreement.

                  (c) Withholding. The Company shall deduct from the
compensation described in this Section 3 any federal, state or city withholding
taxes, social security contributions and any other amounts which may be required
to be deducted or withheld by it pursuant to any federal, state or city laws,
rules or regulations or as elected by Executive in accordance with any Company
benefit plans.

         4. Benefits. The Executive shall be entitled to continue his
participation in such benefit programs in effect for executives in similar
positions during the Term of the Agreement.

         5. Reimbursement of Expenses. Upon presentation of a reasonably
itemized account thereof, the Company shall pay or reimburse the Executive, in
accordance with normal Company policy, for the reasonable and necessary expenses
incurred by the Executive, consistent with Company policy, in connection with
the performance of his duties under this Agreement.

         6. Termination.

                  (a) Termination With Cause. The Company shall have the right
to terminate the employment of the Executive under this Agreement for Cause (as
defined below) upon delivery of written notice (the "Termination Notice") to the
Executive stating in reasonable detail the grounds for termination. Upon
termination pursuant to this Section 6 (a), the Company shall have no further
obligations to the Executive hereunder other than the payment of any accrued
Based Salary, accrued commissions and reimbursable expenses, or as otherwise
required by law. As used herein, "Cause" means:

                           (i) any breach by the Executive of any material
         provisions of this Agreement;

                           (ii) commission by the Executive of an act of
         material misconduct in connection with the performance of his duties
         hereunder;

                                       2
<PAGE>

                           (iii) commission by the Executive of an act of fraud,
         misappropriation of funds or embezzlement in connection with his
         employment hereunder; or

                           (iv) conviction of, or confession to, a felony or
         other crime involving dishonesty or willful misconduct intended to
         injure the Company (whether or not a felony).

                  (b) Termination by the Company Upon Death or Disability. The
Company shall have the right to immediately terminate the employment of the
Executive upon death or disability of the Executive, and the Company shall have
no further obligations to the Executive hereunder except for these items set
forth in Section 6 (a) hereof.

                  (c) Termination by the Company Without Cause. Notwithstanding
any provision to the contrary herein, the Company may at any time during the
Term, in its sole and absolute discretion and for whatever reason, terminate the
employment of the Executive hereunder by delivery of notice to the Executive.
Any such termination by the Company which is not for Cause or by reason of the
death or disability of the Executive shall be referred to hereinafter as a
termination "Without Cause." Upon termination pursuant to this Section 6 (c),
the Company shall pay the Executive any reimbursable expenses previously
incurred, and shall provide such benefits as are in effect as of the date of
termination (or the cash value thereof) for the remainder of the Term.
Additionally, upon termination pursuant to this Section 6 (c), the Company shall
pay the Executive the greater of (i) payments for the remainder of the Term of
Base Compensation plus a monthly payment equal to the sum of the Executive's two
prior yearly bonuses, if any, or commissions for the prior twenty-four (24)
months, if any, divided by twenty-four (24) or (ii) the payment of the Company's
normal severance policy for employees in similar positions to the Executive.

                  (d) Termination by the Executive for Good Reason. In addition
to any other remedies available to him at law, in equity or as set forth in this
Agreement, the Executive shall have the right immediately to terminate his
employment under this Agreement for Good Reason (as defined below). As used
herein, "Good Reason" means:

                           (i) any breach by the Company of any material
         provision of this Agreement; or

                           (ii) if without the express written consent of the
         Executive, action by the Company requiring the Executive to be based at
         a location outside a 30 mile radius of the location of the Executive's
         current workplace as of the date hereof.

                           Before exercising his rights under this subsection
(d), the Executive shall have given written notice to the Company of such facts
giving rise to the events described in this subsection (d), and the Executive
and the Company shall have a sixty (60) day period after receipt of such notice
by the Company to resolve such matters.

                                       3
<PAGE>

In the event the Company and the Executive are unable to resolve such matters
the Executive may exercise his rights under this subsection (d). Upon
termination pursuant to this Section 6 (d), the Company shall pay the Executive
any reimbursable expenses previously incurred and shall provide such benefits as
are in effect as of the date of termination (or the cash value thereof) for the
remainder of the Term. Additionally, upon termination pursuant to 6 (d), the
Company shall pay the Executive the greater of (i) payments for the remainder of
the Term of Base Compensation plus a monthly payment equal to the sum of the
Executive's two prior yearly bonuses, if any, or commissions for the prior
twenty-four (24) months, if any, divided by twenty-four (24), or (ii) the
payment of the company's normal severance policy for employees in similar
positions to the Executive.

                  (e) Notice of Status. The Company will provide notice to the
Executive, at a time no less than six (6) months prior to the end of the Term,
as to the status of the Executive's continued employment with the Company beyond
the end of the Term.

                  (f) Arbitration. Any dispute pursuant to this Section 6 which
the parties are unable to settle within sixty (60) days of such notice shall be
resolved by arbitration. Such arbitration shall be carried out pursuant to the
expedited procedures of the American Arbitration Association in Atlanta,
Georgia.

         7. Non-Disclosure and Return of Property.

                  (a) Non-Disclosure. The Executive shall not at any time,
during or after the Term, disclose or furnish to any other person, firm or
corporation, except in the course of the proper performance of his duties
hereunder, any "Confidential Information." For the purposes hereof,
"Confidential Information" shall mean (i) any information relating to any unique
process, technique or procedure used by the Company; (ii) any information
relating to the operations or financial status of the Company, including,
without limitation, all financial data and sources of financing, which are not
specifically a matter of public record; (iii) any information of a confidential
nature obtained as a result of his prior, present or future relationship with
the Company, which is not specifically a matter of public record; (iv) any trade
secrets of the Company; and (v) the name, address, pricing or other information
relating to any customer of, or supplier to, the Company. Notwithstanding the
foregoing, the Executive may disclose Confidential Information, if required to
do so by a court of competent jurisdiction or otherwise required by law;
provided that the Executive shall provide the Company with prompt notice prior
to the date of the required disclosure so that the Company may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of
this Agreement. In the event that such protective order or other remedy is not
obtained, or that the Company waives compliance with the provisions of this
Agreement, the Executive shall furnish only that portion of the Confidential
Information which he is legally required to disclose.

                  (b) Return of Property. Upon termination of the Executive's
employment hereunder, the Executive shall return to the Company or its
successors or assigns, as the

                                       4
<PAGE>

case may be, all property of the Company held or used by the Executive and all
documents and papers relating to the Company or its affiliates, including any
Confidential Information.

                  (c) Breach of Provisions. In the event the Executive shall
breach any of the provisions of this Section 7, or in the event that any such
breach is threatened by the Executive, in addition to and without limiting or
waiving any other remedies available to the Company at law or in equity, the
Company shall be entitled to immediate injunctive relief in any court, domestic
or foreign, having the capacity to grant such relief, to restrain any such
breach or threatened breach and to enforce the provisions of this Section 7. The
Executive acknowledges and agrees that there is no adequate remedy at law for
any such breach or threatened breach and, in the event that any action or
proceeding is brought seeking injunctive relief, the Executive shall not use as
a defense thereto that there is an adequate remedy at law.

         8. Indemnification and Advancement of Expenses. The Executive or his
estate shall be indemnified and advance expenses as provided for employees of
the Company pursuant to Article VI, Sections 2 and 3 of its Bylaws.

         9. Noncompetition and Nonsolicitation.

                  (a) Definitions. The following terms shall have the following
meanings for purposes of this Section 9.

                           (i) Business. The design, manufacture, marketing and
         sale of promotional and permanent point of sale display materials,
         laminated corrugated (single face and labels) and high graphic
         corrugated paperboard packaging.

                           (ii) Customers. Those customers or suppliers of the
         Alliance Division or the Company for the Business during the two-year
         period prior to Executive's termination of employment with the Company.

                           (iii) Restricted Territory. Those states: (i) in
         which the Alliance Division or the Company had Customers during the two
         years prior to the termination of the Executive's employment with the
         Company; (ii) east of the Mississippi River; and (iii) specifically
         including, but not limited to, Connecticut, New Jersey, North Carolina,
         Ohio, and South Carolina.

                           (iv)  Noncompetition Term.  Three (3) years following
         the termination of Executive's employment with the Company.

                  (b) Noncompetition. In consideration for Executive's
acceptance of the herein provisions, conditions and the Noncompetition Term, the
Company hereby agrees to pay to the Executive, in addition to his other
consideration set forth herein, the sum of One Hundred Eighty Thousand Dollars
($180,000) to be paid in five (5) separate annual payments of Thirty-Six
Thousand Dollars ($36,000), such payments to be made at the

                                       5
<PAGE>

commencement of each year of employment. Accordingly, during the Noncompetition
Term the Executive shall not, directly or indirectly, either individually or as
an employee, agent, member, partner, shareholder, consultant or in any other
capacity, participate in or engage in the Business with Customers in the
Restricted Territory. While an employee of the Company, the Executive shall not,
directly or indirectly, either individually or as an employee, agent, member,
partner, shareholder, consultant or in any other capacity, participate in or
engage in the Business with Customers or other customers within the Business in
the Restricted Territory other than on behalf of the Company; provided, however,
that the Executive may, without violating this covenant, own as a passive
investment not in excess of one percent (1%) of the outstanding capital stock of
a corporation which participates or engages in the Business with Customers in
the Restricted Territory if such capital stock is a security which is actively
traded on an established national securities market or the national over-the
counter market.

         In the event the Company terminates the Executive "Without Cause" (as
defined in Paragraph 6 (c) hereof), then the provisions and conditions of this
Paragraph 9 (b) shall apply to the Executive, but the Noncompetition Term shall
be reduced to Two (2) years.

                  (c) Nonsolicitation. While an employee of the Company and
during the Noncompetition Term, neither the Executive nor any person or entity
controlled by the Executive shall, directly or indirectly, (i) request, induce
or attempt to influence any distributor or supplier of goods or services to the
Alliance Division or to the Company to curtail or cancel any business they are
currently, or in the past year have been, transacting with the Alliance Division
or the Company; or (ii) request, induce or attempt to influence any existing
Customers to curtail or cancel any business they are currently, or within the
past year have been, transacting with the Alliance Division or the Company; or
(iii) solicit for employment or employ any person who was an employee of the
Alliance Division or the company, except where such employee's employment has
been terminated by the Company; or (iv) influence or attempt to influence any
employee of the Company to terminate his employment for the purpose of working
for a competitor of the Company, except where such employee's employment has
been terminated by the Company.

         10. Rights and Remedies Upon Breach By the Executive. In the event of a
material breach by the Executive or any person or entity controlled by the
Executive of any provisions of this Agreement, including, but not limited to,
those set forth in Section 9 hereof, the Company shall be entitled to seek legal
and equitable relief for any breach, whether in the form of an injunction,
specific performance or other appropriate relief. All legal or equitable
remedies shall be cumulative and nonexclusive and shall be in addition to any
other remedies to which the Company may be entitled.

         11. Miscellaneous.

                  (a) Exclusive Agreement. The Executive represents and warrants
to the Company that there are no agreements or arrangements, whether written or
oral, in effect which would prevent the Executive from rendering exclusive
service to the Company

                                       6
<PAGE>

during the Term. The Executive further represents, warrants and agrees with the
Company that as of the date hereof he has not made and will not make during the
Term any commitment he has not made and will not make during the Term any
commitment or do any act in conflict with this Agreement, or take any action
that might divert from the Company any opportunity which would be in the scope
of any present or future business of the Company or any subsidiary thereof.

                  (b) Binding Effect. This Agreement shall extend to and be
         binding upon the Executive and his legal representatives, heirs and
         distributees, and upon the Company and its successors and assigns;
         provided, that the rights and obligations of the Executive hereunder
         shall not be assignable by him.

                  (c) Notices. Any notice provided for herein shall be in
writing and shall be deemed to have been given or made (i) when received, if
delivered in person or sent by telecopier and confirmed in writing within three
(3) days thereafter, or (ii) three (3) days following the mailing thereof, if
mailed by first class registered or certified mail, postage prepaid, return
receipt requested, to the address of the other party set forth below (or to such
other address as may be specified by notice given in accordance with this
Section 11):

         If to the Company, to:

                  Rock-Tenn Converting Company
                  P.O. Box 4098 (30091)
                  504 Thrasher Street
                  Norcross, GA 30071
                  Attn:  Chief Financial Officer

         If to the Executive, to:

                  James L. Einstein
                  200 Arbor Road
                  Winston-Salem, North Carolina 27104

                  (d) Waiver. A waiver by a party hereto of a breach of any
term, covenant or condition of this Agreement by the other party hereto shall
not operate or be construed as a waiver of any other or subsequent breach by
such party of the same or any other term, covenant or condition hereof.

                  (e) Prior Agreements. Any and all prior agreements, including,
but not limited to, the Initial Agreement, between the Company and the
Executive, whether written or oral, relating to the employment of the Executive
by the Company are hereby superseded by this Agreement and to the extent
inconsistent here with are hereby canceled and terminated.

                  (f) Entire Agreement; No Waiver. This Agreement sets forth the
entire

                                       7
<PAGE>

agreement between the parties with respect to the subject matter hereof and no
waiver, modification, change or amendment of any of its provisions shall be
valid unless in writing and signed by the party against whom such claimed
waiver, modification, change or amendment is sought to be enforced.

                  (g) Authority. The parties severally represent and warrant
that they have the power, authority and right to enter into this Agreement and
to carry out and perform the terms, covenant: and conditions hereof.

                  (h) Applicable Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of North Carolina
without giving effect to principles relating to conflicts of law.

                  (i) Titles. The titles of the Sections of this Agreement are
inserted for convenience and ease of reference only and shall not affect or
modify the meaning of any of the terms, covenants or conditions of this
Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                    COMPANY:ROCK-TENN CONVERTING COMPANY

                                    By: /s/ R. Evan Hardin
                                        ----------------------------------------
                                    Name: R. Evan Hardin
                                    Title: Treasurer

                                    EXECUTIVE: JAMES L. EINSTEIN

                                        /s/ James L. Einstein
                                       -----------------------------------------

                                       8

</TEXT>
</DOCUMENT>
