CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
Exhibit
10.22
This
Confidentiality and Non-Competition Agreement (this “Agreement”) is
entered into as of January 1, 2008, by and between Verso Paper Holdings LLC, a
Delaware limited liability company (“Verso Paper”), and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“Employee”), to allow
Employee to have access to certain valuable competitive information and business
relationships of Verso Paper while also providing protection for such
information and relationships.
WHEREAS,
Verso Paper is willing to employ Employee in the position of Vice President –
Human Resources, and Employee is willing to accept such employment upon the
terms and conditions set forth herein; and,
WHEREAS,
Verso Paper is willing to provide Employee with certain benefits, as set forth
herein, even after the employment relationship with Employee has ended in order
to protect its valuable competitive information and business relationships;
and
WHEREAS,
after having ample opportunity to discuss, negotiate, and revise as necessary,
the parties are willing to enter into this Agreement;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Definitions. As
used in this Agreement, the terms:
(a) “Protected
Information” shall mean all information, documents or materials, owned,
developed or possessed by Verso Paper or any employee while in the employ of
Verso Paper, whether in tangible or intangible form, which (i) Verso Paper takes
reasonable measures to maintain in secrecy, and (ii) pertains in any manner to
Verso Paper’s business, including but not limited to Research and Development
(as defined below); customers or prospective customers, targeted national
accounts, or strategies or data for identifying and satisfying their needs;
present or prospective business relationships; present, short term, or long term
strategic plans; acquisition candidates; plans for corporate restructuring;
products under consideration or development; cost, margin or profit information;
data from which any of the foregoing types of information could be derived;
human resources (including compensation information and internal evaluations of
the performance, capability and potential of Verso Paper employees); business
methods, data bases and computer programs. The fact that individual
elements of the information that constitutes Protected Information may be
generally known does not prevent an integrated compilation of information,
whether or not reduced to writing, from being Protected Information if that
integrated whole is not generally known.
(b) “Research and
Development” shall include, but not be limited to (i) all short term and
long term basic, applied and developmental research and technical assistance and
specialized research support of customers or active prospects, targeted national
accounts, of Verso Paper operating divisions; (ii) information relating to
manufacturing and converting processes, methods, techniques and equipment and
the improvements and innovations relating to same; quality control procedures
and equipment; identification, selection, generation and propagation of tree
species having improved characteristics; forest resource management; innovation
and improvement to manufacturing and converting processes such as shipping,
pulping bleaching chemical recovery papermaking, coating and calendaring
processes and in equipment for use in such processes; reduction and remediation
of environmental discharges; minimization or elimination of solid and liquid
waste; use and optimization of raw materials in manufacturing processes;
recycling and manufacture paper products; recycling of other paper or pulp
products; energy conservation; computer software and application of computer
controls to manufacturing and quality control operations and to inventory
control; radio frequency identification and its use in paper and packaging
products; and product process improvement development or evaluation; and
(iii) information about methods, techniques, products equipment, and
processes which Verso Paper has learned do not work or do not provide beneficial
results (“negative know-how”) as well as those which do work which provide
beneficial results.
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(c) “Unauthorized” shall
mean (i) in contravention of Verso Paper’s policies or procedures; (ii)
otherwise inconsistent with Verso Paper’s measures to protect its interests in
the Protected Information; (iii) in contravention of any lawful instruction or
directive, either written or oral, of an Verso Paper employee empowered to issue
such instruction or directive; (iv) in contravention of any duty existing under
law or contract; or (v) to the detriment of Verso Paper.
2. Confidentiality.
(a) Employee
acknowledges and agrees that by reason of employment with Verso Paper as a
senior level executive in the position of Vice President – Human Resources,
Employee has been and will be entrusted with Protected Information and may
develop Protected Information, that such information is valuable and useful to
Verso Paper, that it would also be valuable and useful to competitors and others
who do not know it and that such information constitutes confidential and
proprietary trade secrets of Verso Paper. While an employee or
consultant of Verso Paper, or at any time thereafter, regardless of the reasons
for leaving Verso Paper, Employee agrees not to use or disclose, directly or
indirectly, any Protected Information in an Unauthorized manner or for any
Unauthorized purpose unless such information shall have become generally known
in the relevant industry or independently developed with no assistance from
Employee. Further, promptly upon termination, for any reason, of
Employee’s employment with Verso Paper or upon the request of Verso Paper
Employee agrees to deliver to Verso Paper all property and materials and copies
thereof within Employee’s possession or control which belong to Verso Paper or
which contain Protected Information and to permanently delete upon Verso Paper’s
request all Protected Information from any computers or other electronic storage
media Employee owns or uses.
(b) While
an employee of Verso Paper and after termination of Employee’s employment with
Verso Paper for any reason, Employee agrees not to take any actions which would
constitute or facilitate the Unauthorized use or disclosure of Protected
Information, including transmitting or posting such Protected Information on the
internet, anonymously or otherwise. Employee further agrees to take
all reasonable measures to prevent the Unauthorized use and disclosure of
Protected Information and to prevent Unauthorized persons or entities from
obtaining or using Protected Information.
(c) If
Employee becomes legally compelled (by deposition, interrogatory, request for
documents, subpoena, investigation, demand, order or similar process) to
disclose any Protected Information, then before any such disclosure may be made,
Employee shall immediately notify Verso Paper thereof and, at Verso Paper’s
expense, shall consult with Verso Paper on the advisability of taking steps to
resist or narrow such request and cooperate with Verso Paper in any attempt to
obtain a protective order or other appropriate remedy or assurance that the
Protected Information will be afforded confidential treatment. If
such protective order or other appropriate remedy is not obtained, Employee
shall furnish only that portion of the Protected Information that it is advised
by legal counsel is legally required to be furnished.
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3. Non-Competition.
(a) Employee
acknowledges and agrees that the business of Verso Paper and its customers is
worldwide in scope, Verso Paper’s competitors and customers are located
throughout the world, and Verso Paper’s strategic planning and Research and
Development activities have application throughout the world and are for the
benefit of customers and Verso Paper’s business throughout the world, and
therefore, the restrictions on Employee’s competition after employment as
described below apply to anywhere in the world in which Verso Paper or its
subsidiaries are doing business. Employee acknowledges that any such
competition within that geographical scope will irreparably injure Verso
Paper. Employee acknowledges and agrees that, for that reason, the
prohibitions on competition described below are reasonably tailored to protect
Verso Paper.
(b) While
an employee or consultant of Verso Paper, Employee agrees not to compete in any
manner, either directly or indirectly and whether for compensation or otherwise,
with Verso Paper or to assist any other person or entity to compete with Verso
Paper in the business of coated and supercalendared paper products or the
operation of coated and supercalendared paper ▇▇▇▇▇ anywhere in the
world.
(c) After
the termination of Employee’s employment with Verso Paper for any reason,
Employee agrees that for a period of twelve (12) months (the “Non-Compete Period”)
following such termination Employee will not compete with Verso Paper anywhere
in the world in which Verso Paper or its subsidiaries are doing
business:
(i) by
producing, developing, selling or marketing, or assisting others to produce,
develop, sell or market in the business of coated and supercalendared paper
products or the operation of coated and supercalendared paper
▇▇▇▇▇;
(ii) by
engaging in any sales, marketing, Research and Development or managerial duties
(including, without limitation, financial, human resources, strategic planning,
or operation duties) for, whether as an employee, consultant, or otherwise, any
entity which produces, develops, sells or markets in the business of coated and
supercalendared paper products or the operation of coated and supercalendared
paper ▇▇▇▇▇;
(iii) by
owning, managing, operating, controlling or consulting for any entity which
produces, develops, sells or markets in the business of coated and
supercalendared paper products or the operation of coated and supercalendared
paper ▇▇▇▇▇, provided that this Section 3(c)(iii) shall not prohibit Employee
from being a passive owner of not more than two percent (2%) of the outstanding
stock of any class of a corporation that is publicly traded, so long as Employee
has no active participation in the business of such corporation; or
(iv) by
soliciting the business of any actual or active prospective customers, or
targeted national accounts of Verso Paper for any product, process or service
which is competitive with the products, processes, or services of Verso Paper,
namely any products, processes or services of the business of coated and
supercalendared paper products or the operation of coated and supercalendared
paper ▇▇▇▇▇, whether existing or contemplated for the future, on which Employee
has worked, or concerning which Employee has in any manner acquired knowledge or
Protected Information about, during the twenty four (24) months preceding
termination of Employee’s employment.
It shall
not be a violation of this provision for Employee to accept employment with a
non-competitive division or business unit of a multi-divisional company some of
whose divisions or business units are competitors of Verso Paper, so long as
Employee does not engage in, oversee, provide input or information regarding, or
participate in any manner in the activities described in this paragraph as they
relate to the division or business unit which is a competitor of Verso
Paper. Employee shall not assist others in engaging in activities
which Employee is not permitted to take.
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4. Non-Solicitation/Non-Hire. During
the term of Employee’s employment at Verso Paper and for twelve (12) months
following the termination, for any reason, of employment, Employee agrees that
Employee will not, either on Employee’s own behalf or on behalf of any other
person or entity, directly or indirectly, hire, solicit, retain or encourage to
leave the employ of Verso Paper (or assist any other person or entity in hiring,
soliciting, retaining or encouraging) any person who is then or was within six
(6) months of the date of such hiring an employee of Verso Paper.
5. Tolling Period of
Restrictions. Employee agrees that the periods of
non-competition and non-solicitation/non-hire set forth in Sections 3 and 4,
respectively, shall be extended by the period of violation if Employee is found
to be in violation of those provisions.
6. Post-Termination Payments and
Benefits. Upon the termination of Employee’s employment with
Verso Paper for any reason, in consideration of Employee’s compliance with all
his obligations under this Agreement (including, without limitation, his
obligations under Sections 2, 3(c) and 4), and provided that Employee complies
with all such obligations, Verso Paper shall provide post-termination payments
and benefits to Employee as follows:
(a) During
the Non-Compete Period, if Employee is unable, despite diligent search, to
obtain employment consistent with Employee’s experience and education, Employee
shall so notify Verso Paper in writing, describing in reasonable detail the
efforts Employee has made to secure such employment that does not conflict with
Employee’s non-compete obligations. Upon receipt and reasonable
verification of the information contained in such notice, Verso Paper shall make
monthly payments to Employee in an amount equal to Employee’s monthly base
salary in effect in the month immediately preceding the termination of his
employment, less applicable tax and other withholdings, for each month (or
prorated for periods less than a month) of such unemployment during the
Non-Compete Period. Before the close of each month for which Employee
seeks such payment, Employee shall advise Verso Paper in writing of Employee’s
efforts to obtain non-competitive employment and shall certify that although
Employee diligently sought such employment, Employee was unable to obtain
it.
(b) Verso
Paper shall pay to Employee an amount equal to the sum of the incentive awards,
if any, payable to Employee under the Verso Paper Incentive Plan (the “Incentive Plan”) for
(i) the year immediately preceding the year in which termination of
employment occurred, to the extent not previously paid to Employee, and (ii) the
year in which such termination occurred, prorated for the period of the year in
which Employee was employed by Verso Paper, in each case less applicable tax and
other withholdings (collectively, the “Incentive
Payment”). The determination of the Incentive Payment shall be
made by Verso Paper, in its sole and absolute discretion, and, with respect to
the year in which termination occurred, shall be based on (i) Employee’s monthly
base salary in effect in the month immediately preceding the termination of his
employment and (ii) the assumptions relative to the Incentive Plan that
(A) Employee was employed by Verso Paper during the entire year and is
otherwise eligible and qualified to receive the Incentive Payment,
(B) Employee’s monthly base salary remained in effect and was not changed
during the remainder of the year, and (C) Employee achieved all of his
individual performance measures, if any, during the year. Verso Paper
shall make the Incentive Payment to Employee at the same time that it makes
other incentive payments under the Incentive Plan to the employees of Verso
Paper.
(c) Verso
Paper shall (i) continue Employee’s coverage of the employment-related benefits
described in Exhibit A for up to twenty-four (24) months following Employee’s
termination of employment with Verso Paper, in accordance with and subject to
the terms and conditions set forth in the attached Exhibit A, and (ii)
contribute on Employee’s behalf an amount equal to his Lost Retirement Benefits
(as defined below) to the Verso Paper Deferred Compensation Plan. As
used in this Agreement, the term “Lost Retirement
Benefits” shall mean the projected value of employer contributions under
the Verso Paper Retirement Savings Plan, the Verso Paper Deferred Compensation
Plan, and the Verso Paper Supplemental Salaried Retirement Savings Plan
(collectively, the “Plans”) that Employee
would have received had he remained actively employed with Verso Paper during
the twenty-four (24) months following Employee’s termination of employment with
Verso Paper. The determination of the Lost Retirement Benefits shall
be made by Verso Paper, in its sole and absolute discretion, and shall be based
on (i) Employee’s monthly base salary in effect in the month immediately
preceding the termination of his employment and (ii) the assumption that
Employee’s salary deferrals during such twenty-four (24) month period are in
such amounts as would produce the maximum possible matching contribution by
Verso Paper under the Plans. Verso Paper shall contribute on
Employee’s behalf the value of his Lost Retirement Benefits to the Verso Paper
Deferred Compensation Plan in a lump sum payment as soon as reasonably
practicable after the determination of the Lost Retirement Benefits is
made.
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7. Duty to Show Agreement to Prospective
Employer. During Employee’s employment with Verso Paper and
for twelve (12) months thereafter, Employee shall, prior to accepting other
employment, provide a copy of this Agreement to any recruiter who assists
Employee in locating employment other than with Verso Paper and to any
prospective employer with which Employee discusses potential
employment.
8. Representations, Warranties and
Acknowledgements. In addition to the representations,
warranties and obligations set forth throughout this Agreement, Employee
acknowledges that (a) Protected Information is commercially and competitively
valuable to Verso Paper and critical to its success; (b) the Unauthorized use or
disclosure of Protected Information or the violation of the covenants set forth
in Sections 2, 3, or 4 would cause irreparable harm to Verso Paper; (c) by this
Agreement, Verso Paper is taking reasonable steps to protect its legitimate
interests in its Protected Information; (d) Employee has developed, or will
develop legally unique relationships with customers of Verso Paper; and (e)
nothing herein shall prohibit Verso Paper from pursuing any remedies whether in
law or equity, available to Verso Paper for breach or threatened breach of this
Agreement. Employee further acknowledges and agrees that as a senior
executive of Verso Paper Employee performs unique and valuable services to Verso
Paper of an intellectual character and that Employee’s services will be
difficult for Verso Paper to replace. Employee further acknowledges
and agrees that Verso Paper is providing Employee with significant consideration
in this Agreement for entering into the Agreement and that Verso Paper’s
remedies for any breach of this Agreement are in addition to and not in place of
any other remedies Verso Paper may have at law or equity or under any other
agreements.
9. Section 409A of the
Code. The parties hereto acknowledge and agree that, to the
extent applicable, this Agreement shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Section 409A of the Internal
Revenue Code of 1986, as amended, and the Department of Treasury Regulations and
other interpretive guidance issued thereunder, including without limitation any
such regulations or other guidance that may be issued after the date hereof
(“Section
409A”). Notwithstanding any provision of this Agreement to the
contrary, in the event that Verso Paper determines that any amounts payable
hereunder will be immediately taxable to Employee under Section 409A, Verso
Paper and Employee shall cooperate in good faith to (a) adopt such amendments
to this Agreement and appropriate policies and procedures, including
amendments and policies with retroactive effect, that they mutually determine to
be necessary or appropriate to preserve the intended tax treatment of the
benefits provided by this Agreement, to preserve the economic benefits of this
Agreement, and to avoid less favorable accounting or tax consequences for Verso
Paper and/or (b) take such other actions as mutually determined to be necessary
or appropriate to exempt any amounts payable hereunder from Section 409A or to
comply with the requirements of Section 409A and thereby avoid the application
of penalty taxes thereunder. In addition, and notwithstanding any
provision of this Agreement to the contrary, to the extent subject to Section
409A, payment to a “specified employee” as defined in Section 409A(2)(B)(i)
shall not be made before the date which is six (6) months after the date of
termination of employment.
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10. General.
(a) Employee
acknowledges and agrees that the parties have attempted to limit Employee’s
right to compete only to the extent necessary to protect Verso Paper from unfair
competition and protect the legitimate interests of Verso Paper. If
any provision or clause of this Agreement or portion thereof shall be held by
any court of competent jurisdiction to be illegal, void or unenforceable in such
jurisdiction, the remainder of such provisions shall not thereby be affected and
shall be given full effect, without regard to the invalid portion. It
is the intention of the parties and Employee agrees, that if any court construes
any provision or clause of this Agreement or any portion thereof to be illegal,
void or unenforceable because of the duration of such provision or the area or
matter covered thereby, such court shall reduce the duration, area or matter of
such provision and in its reduced form, such provision shall then be enforceable
and shall be enforced.
(b) Employee
acknowledges that neither this Agreement nor any provision hereof can be
modified, abrogated or waived except in a written document signed by the Vice
President of Human Resource or the President and Chief Executive Officer of
Verso Paper, or in the event of the absence of either of these executives or the
vacancy of either of these positions, such other officer of Verso Paper as Verso
Paper’s Board of Directors shall designate in writing.
(c) This
Agreement shall be governed by and in accordance with the laws and public
policies of the State of Delaware.
(d) Employee
hereby consents to the jurisdiction of and agrees that any claim arising out of
or relating to this Agreement may be brought in the courts of the State of
Delaware.
(e) This
Agreement and any rights thereunder may be assigned by Verso Paper and if so
assigned shall operate to protect the Protected Information and relationships of
Verso Paper as well as such information and relationships of the
assignee.
(f) Should
either party to this Agreement breach any of the terms of this Agreement, that
party shall pay to the non-defaulting party all of the non-defaulting party’s
costs and expenses, including attorney’s and experts’ fees in enforcing the
provisions of the Agreement as to which a breach is found.
(g) Employee
agrees that Verso Paper’s determination not to enforce this or similar
agreements as to specific violations shall not operate as a waiver or release of
Employee’s obligations under this Agreement.
(h) Employee
understands that Employee owes fiduciary and common law duties to Verso Paper in
addition to the covenants set forth above prohibiting the misuse or disclosure
of trade secrets or confidential information and the unlawful interference with
Verso Paper’s business and customer relationships.
(i) Employee
acknowledges and agrees that Verso Paper has advised Employee that Employee may
consult with an independent attorney before signing this Agreement.
(j) This
Agreement sets forth the entire agreement of the parties, and fully supersedes
any and all prior agreements or understandings between the parties pertaining to
the subject matter hereof.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered effective as of the date first set forth above.
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VERSO
PAPER HOLDINGS LLC
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By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| President and Chief Executive Officer | |||
|
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
7
EXHIBIT
A
EMPLOYMENT-RELATED
BENEFITS
Benefits:
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·
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Coverage
under Verso Paper Medical and Dental Plan for Employee and his or her
eligible dependents for up to twenty-four (24)
months.
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·
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Reimbursement
for (i) all costs to convert to an individual policy the basic life
insurance coverage on Employee’s life only, in such amount as in effect at
termination of employment, and (ii) the premiums necessary to continue
such converted coverage for up to twenty-four (24)
months. Reimbursement shall be conditioned on Employee
providing Verso Paper with satisfactory evidence that the conversion costs
and premiums have been
incurred.
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Additional Terms and
Conditions:
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·
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Verso
Paper shall pay Employee an amount equal to the aggregate of any and all
federal, state and local income tax imposed on Employee resulting from the
benefits set forth above, as determined by Verso Paper in its sole and
absolute discretion.
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·
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Benefit
coverage/reimbursement is subject to early termination upon Employee’s
re-employment with comparable benefits available, as determined by Verso
Paper in its sole and absolute
discretion.
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·
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Verso
Paper reserves the right to modify, revoke, suspend, terminate or change
any or all of its benefit plans, programs or policies, in whole or in
part, at any time and from time to time, and with or without
notice, provided that any such change or modification is applicable to all
similarly situated employees of Verso
Paper.
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8
FIRST
AMENDMENT
TO
This
First Amendment to Confidentiality and Non-Competition Agreement (this “Amendment”) is made
and entered into as of December 31, 2008, by and between Verso Paper Holdings
LLC, a Delaware limited liability company (“Verso Paper”), and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“Employee”).
Introduction. Verso
Paper and Employee are parties to the Confidentiality and Non-Competition
Agreement dated as of January 1, 2008 (the “Agreement”). Verso
Paper and Employee desire to modify certain terms of the Agreement as set forth
in this Amendment. This Amendment is intended to be adopted in good
faith compliance with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the
Department of Treasury Regulations and other interpretive guidance promulgated
thereunder (collectively, “Section
409A”). Based on the foregoing, and in consideration of the
mutual promises and covenants set forth herein, Verso Paper and Employee hereby
agree as follows:
1. Defined
Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement.
2. Amendment to Section
6(a). The second sentence of Section 6(a) is hereby amended to
add the phrase “Subject to Section 9(b),” to the beginning of such
sentence.
3. Amendment to Section
6(b). The first sentence of Section 6(b) is hereby amended to
add the phrase “Subject to Section 9(b),” to the beginning of such
sentence. The last sentence of Section 6(b) is hereby amended to add
the phrase “, but in any event within the period required by Section 409A (as
defined below), such that it qualifies as a “short-term deferral” within the
meaning of Treasury Regulation Section 1.409A-1(b)(4)” to the end of such
sentence.
4. Amendment to Section
6(c). The first sentence of Section 6(c) is hereby amended to
add the phrase “Subject to Section 9(b),” to the
beginning of such sentence. The last sentence of Section 6(c) is
hereby amended and restated in its entirety as follows:
“Verso
Paper shall contribute on Employee’s behalf, on a date determined by Verso Paper
but in any event within the ninety (90) day period following the date of
Employee’s termination of employment, the value of his Lost Retirement Benefits
to the Verso Paper Deferred Compensation Plan in a lump sum
payment.”
5. Amendment to Section
9. Section 9 is hereby amended and restated in its entirety as
follows:
“9. Section 409A of the
Code.
(a) General. The
parties hereto acknowledge and agree that, to the extent applicable, this
Agreement shall be interpreted in accordance with, and incorporate the terms and
conditions required by, Section 409A of the Internal Revenue Code of 1986, as
amended, and the Department of Treasury Regulations and other interpretive
guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the date hereof (“Section
409A”). Notwithstanding any provision of this Agreement to the
contrary, in the event that Verso Paper determines that any amounts payable
hereunder will be immediately taxable to Employee under Section 409A, Verso
Paper and Employee shall cooperate in good faith to (i) adopt such amendments to
this Agreement and appropriate policies and procedures, including amendments and
policies with retroactive effect, that they mutually determine to be necessary
or appropriate to preserve the intended tax treatment of the benefits provided
by this Agreement, to preserve the economic benefits of this Agreement and to
avoid less favorable accounting or tax consequences for Verso Paper and/or (ii)
take such other actions as mutually determined to be necessary or appropriate to
exempt any amounts payable hereunder from Section 409A or to comply with the
requirements of Section 409A and thereby avoid the application of penalty taxes
thereunder. No provision of this Agreement shall be interpreted or
construed to transfer any liability for failure to comply with the requirements
of Section 409A from the Employee or any other individual to Verso Paper or any
of its affiliates, employees or agents.
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(b) Separation from Service
under 409A. Notwithstanding any provision to the contrary in
this Agreement: (i) no amount shall be payable pursuant to Section 6
unless the termination of Employee’s employment constitutes a “separation from
service” within the meaning of Section 1.409A-1(h) of the Department of Treasury
Regulations; (ii) if Employee is deemed at the time of his separation from
service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the termination
benefits to which Employee is entitled under this Agreement (after taking into
account all exclusions applicable to such termination benefits under Section
409A), including, without limitation, any portion of the additional compensation
awarded pursuant to Section 6, is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of
Employee’s termination benefits shall not be provided to Employee prior to the
earlier of (A) the expiration of the six-month period measured from the date of
Employee’s “separation from service” with Verso Paper (as such term is defined
in the Department of Treasury Regulations issued under Section 409A) or (B) the
date of Employee’s death; provided that upon
the earlier of such dates, all payments deferred pursuant to this Section
9(b)(ii) shall be paid in a lump sum to Employee, and any remaining payments due
under this Agreement shall be paid as otherwise provided herein; (iii) the
determination of whether Employee is a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code as of the time of his separation from
service shall be made by Verso Paper in accordance with the terms of Section
409A and applicable guidance thereunder (including, without limitation, Section
1.409A-1(i) of the Department of Treasury Regulations and any successor
provision thereto); (iv) for purposes of Section 409A, Employee’s right to
receive installment payments pursuant to Section 6 shall be treated as a right
to receive a series of separate and distinct payments; and (v) to the extent
that any reimbursement of expenses or in-kind benefits constitutes “deferred
compensation” under Section 409A, such reimbursement or benefit shall be
provided no later than December 31 of the year following the year in which the
expense was incurred. The amount of expenses reimbursed in one year
shall not affect the amount eligible for reimbursement in any subsequent
year. The amount of any in-kind benefits provided in one year shall
not affect the amount of in-kind benefits provided in any other
year.”
6. Section
References. Unless otherwise indicated, all references in this
Amendment to designated “Sections” are to the designated Sections of the
Agreement.
7. Continuing Effectiveness of
Agreement. Except as modified by the foregoing, the terms and
conditions of the Agreement shall remain unaffected and shall continue in full
force and effect after the date hereof.
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8. Counterparts. This
Amendment may be executed by one or more of the parties to this Amendment on any
number of separate counterparts (including counterparts delivered by telecopy),
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Any such counterpart delivered by telecopy
shall be effective as an original for all purposes.
[Signatures
are on next page.]
3
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.
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VERSO
PAPER HOLDINGS LLC
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By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| President and Chief Executive Officer | |||
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