Exhibit 99.2
EXECUTION VERSION
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement")
is made and entered into as of October 1, 2005, between VERSO TECHNOLOGIES,
INC., a Minnesota corporation (the "Company"), and XXXXXX X. XXXXXXX (the
"Employee"), an individual resident of the State of Georgia.
RECITALS:
WHEREAS, the Company and the Employee have entered into that certain
Executive Employment Agreement dated as of September 29, 2000 (the "Original
Agreement"); and
WHEREAS, the Company and the Employee desire to amend and restate the
Original Agreement as provided hereby;
NOW, THEREFORE, in consideration of the premises and of the promises and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, do hereby agree as to amend and restate the Original Agreement as
follows:
1. TERM. The term (the "Term") of this Agreement shall begin on the date
hereof (the "Effective Date") and shall continue in effect until the termination
of the Employee's employment hereunder; provided, however, the obligations and
covenants of the Company and the Employee hereunder that are to be performed or
observed following such termination shall survive the expiration of the Term.
2. EMPLOYMENT AND DUTIES. The Employee shall serve as the Company's Chief
Financial Officer, Executive Vice President and Secretary reporting only to the
Company's Board of Directors (the "Board") and shall have such powers and duties
as may from time to time be prescribed by the Company's Board of Directors (the
"Board"), provided that such duties are consistent with the Employee's position
as the senior financial officer of the Company. The Company shall provide the
Employee with a private office, secretarial and administrative assistance,
office equipment, supplies and other facilities and services suitable to the
Employee's position.
3. COMPENSATION.
3.1. SALARY. For all services to be rendered by the Employee pursuant
to this Agreement, the Company hereby agrees to pay the Employee a base salary
at an annual rate per year of $270,000 (the "Base Salary"), payable in
accordance with the Company's payroll practices in effect from time to time. The
Base Salary shall be reviewed from time to time in the discretion of the
compensation committee of the Board.. Any increase in Base Salary or other
compensation granted by the compensation committee of the Board shall in no way
limit or reduce any other obligation of the Company hereunder. Once established
at
an increased specified rate, the Base Salary hereunder shall not thereafter be
reduced, and the term Base Salary used in this Agreement shall refer to the Base
Salary as so increased.
3.2. BONUS. In addition to her Base Salary, in the discretion of the
Board, the Employee may be awarded for each calendar year during the Term an
annual bonus (an "Annual Bonus") either pursuant to a bonus or incentive plan of
the Company or otherwise on terms no less favorable than those awarded to other
executive officers of the Company.
4. [INTENTIONALLY OMITTED].
5. BENEFITS. The Employee shall be entitled to all benefits and conditions
of employment provided by the Company to its executive officers, including,
without limitation, insurance, participation in the Company's vacation policy,
and participation in any stock option or incentive compensation plans, pension,
profit sharing or other retirement plans, subject (in each case) to the terms of
such plans and any provisions, rules, regulations and laws applicable to such
plans.
6. REIMBURSEMENT FOR BUSINESS EXPENSES. The Employee shall be reimbursed
for all reasonable out-of-pocket business expenses incurred by her in the direct
performance of her duties during her employment with the Company pursuant to the
terms of this Agreement and in accordance with the Company's policies in effect
from time to time. All requests for reimbursement shall be substantiated by
invoices and other pertinent data reasonably satisfactory to the Company.
7. PERFORMANCE. The Employee shall devote all of her working time and
efforts to the business and affairs of the Company and to the diligent
performance of the duties and responsibilities assigned to her pursuant to this
Agreement, except for vacations, weekends and holidays. Notwithstanding the
foregoing, the Employee may render charitable, civic and outside board services
so long as such services do not materially interfere with the Employee's ability
to discharge her duties, including, without limitation, such outside services as
the Employee is currently performing.
8. NON-DISCLOSURE OF PROPRIETARY INFORMATION; NON-COMPETITION;
NON-SOLICITATION.
8.1. CONFIDENTIAL INFORMATION; TRADE SECRETS. As used in this
Agreement, the term "Confidential Information" shall mean valuable, non-public,
competitively sensitive data and information relating to the Company's business
or the business of any entity affiliated with the Company, other than (i) Trade
Secrets (as defined below); (ii) information contained in any publicly available
press release, a regulatory filing or other public communication which is
otherwise in the public domain on the date of this Agreement; (iii) information
that hereafter enters the public domain through no action on the part of the
Employee; (iv) information that is known by the Employee or becomes available to
her from a source other than the Company or any of its affiliates, provided that
such information was not obtained as a result of a breach of any confidentiality
obligation by the
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source of such information; (v) information that was already in the possession
of the Employee prior to the date hereof and which was not acquired from the
Company or any of its affiliates; or (vi) information obtained from discovery in
a legal proceeding, but only to the extent such information is used in such a
proceeding. "Confidential Information" shall include, among other things,
information specifically designated as a Trade Secret that is, notwithstanding
the designation, determined by a court of competent jurisdiction not to be a
"trade secret" under applicable law. As used in this Agreement, the term "Trade
Secrets" shall mean information or data of or about the Company or any entity
affiliated with the Company, including, without limitation, technical or
non-technical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans, or lists of actual or potential customers or suppliers, that (i)
derive economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
obtain economic value from their disclosure or use; and (ii) are subject of
efforts that are reasonable under the circumstances to maintain their secrecy.
To the extent that the foregoing definition is inconsistent with a definition of
"trade secret" under applicable law, the foregoing definition shall be deemed
amended to the extent necessary to render it consistent with applicable law.
8.2. NON-DISCLOSURE. The Employee will be exposed to Trade Secrets and
Confidential Information as a result of her employment by the Company as
provided in this Agreement. The Employee acknowledges and agrees that any
unauthorized disclosure or use of any of the Trade Secrets or Confidential
Information of the Company would be wrongful and would likely result in
immediate and irreparable injury to the Company. In consideration of the
Employee's right to employment (or continued employment) under the terms of this
Agreement, except as appropriate in connection with the performance of her
obligations under this Agreement, the Employee shall not, without the express
prior written consent of an executive officer of the Company other than the
Employee, redistribute, market, publish, disclose or divulge to any other person
or entity, or use or modify for use, directly or indirectly, in any way for any
person or entity (i) any Confidential Information during the Term of this
Agreement and for a period of two (2) years after the final date of the Term of
this Agreement; and (ii) any Trade Secrets at any time (during or after the Term
of this Agreement) during which such information or data shall continue to
constitute a "trade secret" under applicable law. The Employee agrees to
cooperate with any reasonable confidentiality requirements of the Company. The
Employee shall immediately notify the Company of any unauthorized disclosure or
use of any Trade Secrets or Confidential Information of which the Employee
becomes aware.
8.3. NON-COMPETITION. The Employee shall not, either directly or
indirectly, alone or in partnership, manage, control, operate or own any
business that is substantially similar to the business of the Company during the
term hereof in any geographic area of the United States of America (a "Competing
Business") during the term hereof and, if the Employee's employment with the
Company shall be terminated pursuant to Section 12.1 or Section 12.3 hereof,
during the one (1) year period following the term hereof, except that the
Employee may own up to three percent (3%) of the outstanding securities of a
Competing Business the securities of which are registered with the Securities
and Exchange
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Commission if such Competing Business is subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act").
8.4. NON-SOLICITATION. For a period of one (1) year immediately
following any termination of the Employee's employment (other than a termination
pursuant to Section 12.2. or Section 12.4 hereof), the Employee will not
solicit, or participate in any solicitation of, the customers, suppliers,
employees or representatives of the Company (or any of its subsidiaries or
affiliated companies) to breach any contract with the Company, terminate any
relationship with the Company or leave the Company. For purposes of this
Agreement, customers shall be limited to actual customers or actively-sought
prospective customers of the Company or any subsidiary or affiliate of the
Company with whom the Employee has had substantial contact during the Term of
this Agreement.
9. CERTAIN DEFINITIONS.
9.1. ACCRUED COMPENSATION. For purposes of this Agreement, "Accrued
Compensation" shall mean an amount which shall include all amounts earned or
accrued through the "Termination Date" (as hereinafter defined) but not paid as
of the Termination Date, including, without limitation, (i) Base Salary, (ii)
reimbursement for reasonable and necessary expenses incurred by the Employee on
behalf of the Company during the period ending on the Termination Date, (iii)
vacation pay, (iv) bonuses, including, without limitation, any Annual Bonus, and
incentive compensation, and (v) all other amounts to which the Employee is
entitled under any compensation plan of the Company at the times such payments
are due.
9.2. BASE AMOUNT. For purposes of this Agreement, "Base Amount" shall
mean the Employee's annual Base Salary at the highest rate in effect on, or at
any time during the ninety (90) day period prior to, the Termination Date and
shall include all amounts of the Employee's Base Salary that are deferred under
any qualified and non-qualified employee benefit plans of the Company or any
other agreement or arrangement.
9.3. CAUSE. For purposes of this Agreement, a termination of
employment is for "Cause" if the Employee has been convicted of a felony or if
the termination is evidenced by a resolution adopted in good faith by two-thirds
(2/3) of the Board that the Employee (i) intentionally and continually failed
substantially to perform her reasonably assigned duties with the Company (other
than a failure resulting from the Employee's incapacity due to physical or
mental illness or from the Employee's assignment of duties that would constitute
"Good Reason" (as hereinafter defined)) which failure continued for a period of
at least thirty (30) days after a written notice of demand for substantial
performance has been delivered to the Employee specifying the manner in which
the Employee has failed substantially to perform, or (ii) intentionally engaged
in illegal conduct or gross misconduct which results in material economic harm
to the Company; provided, however, that (A) where the Employee has been
terminated for Cause because a felony prosecution has been brought against her
and no conviction or plea of guilty or plea of nolo contendere or its equivalent
results therefrom, then said termination shall no longer be deemed to have been
for Cause
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and the Employee shall be entitled to all the benefits provided by Section
11.1(i) hereof from and after the date on which the prosecution of the Employee
has been dismissed or a judgement of acquittal has been entered, whichever shall
first occur; and (B) no termination of the Employee's employment shall be for
Cause as set forth in clause (ii) above until (x) there shall have been
delivered to the Employee a copy of a written notice setting forth that the
Employee was guilty of the conduct set forth in clause (ii) and specifying the
particulars thereof in detail, and (y) the Employee shall have been provided an
opportunity to be heard in person by the Board (with the assistance of the
Employee's counsel if the Employee so desires). No act, or failure to act, on
the Employee's part shall be considered "intentional" unless the Employee has
acted or failed to act with a lack of good faith and with a lack of reasonable
belief that the Employee's action or failure to act was in the best interests of
the Company. Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or upon the instructions of any senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Employee in
good faith and in the best interests of the Company. Any termination of the
Employee's employment by the Company hereunder shall be deemed to be a
termination other than for Cause unless it meets all requirements of this
Section 9.3.
9.4. CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" shall have occurred if:
(i) a majority of the directors of the Company shall be persons
other than persons: (A) for whose election proxies shall have been solicited by
the Board, or (B) who are then serving as directors appointed by the Board to
fill vacancies on the Board caused by death or resignation (but not by removal)
or to fill newly-created directorships;
(ii) a majority of the outstanding voting power of the Company
shall have been acquired or beneficially owned (as defined in Rule 13d-3 under
the 1934 Act or any successor rule thereto) by any person (other than the
Company, a subsidiary of the Company or the Employee) or Group (as defined
below), which Group does not include the Employee; or
(iii) there shall have occurred:
(A) a merger or consolidation of the Company with or into
another corporation (other than (1) a merger or consolidation with a subsidiary
of the Company, (2) a merger or consolidation in which (a) the holders of voting
stock of the Company immediately prior to the merger as a class continue to hold
immediately after the merger at least a majority of all outstanding voting power
of the surviving or resulting corporation or its parent and (b) all holders of
each outstanding class or series of voting stock of the Company immediately
prior to the merger or consolidation have the right to receive substantially the
same cash, securities or other property in exchange for their voting stock of
the Company as all other holders of such class or series, or (3) a merger or
consolidation in which a majority of the directors of the surviving corporation
after the consummation of such
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merger or consolidation are persons (a) who were serving as directors of the
Company immediately prior to such consummation or (b) who are appointed to serve
as directors of the surviving corporation by a majority of the directors of the
Company immediately prior to such consummation or whose appointment has been
agreed to by such majority);
(B) a statutory exchange of shares of one or more classes or
series of outstanding voting stock of the Company for cash, securities or other
property;
(C) the sale or other disposition of all or substantially
all of the assets of the Company (in one transaction or a series of
transactions); or
(D) the liquidation or dissolution of the Company;
unless more than twenty-five percent (25%) of the voting stock (or the voting
equity interest) of the surviving corporation or the corporation or other entity
acquiring all or substantially all of the assets of the Company (in the case of
a merger, consolidation or disposition of assets) or of the Company or its
resulting parent corporation (in the case of a statutory share exchange) is
beneficially owned by the Employee or a Group that includes the Employee.
9.5. GROUP. For purposes of this Agreement, "Group" shall mean any two
or more persons acting as a partnership, limited partnership, syndicate, or
other group acting in concert for the purpose of acquiring, holding or disposing
of voting stock of the Company.
9.6. DISABILITY. For purposes of this Agreement, "Disability" shall
mean a physical or mental infirmity which impairs the Employee's ability to
substantially perform her duties with the Company for a period of one hundred
eighty (180) consecutive days and the Employee has not returned to her full time
employment prior to the Termination Date as stated in the "Notice of
Termination" (as hereinafter defined).
9.7. GOOD REASON.
9.7.1. For purposes of this Agreement, "Good Reason" shall mean a
good faith determination by the Employee, in the Employee's sole and absolute
judgment, that any one or more of the following events has occurred, without the
Employee's express written consent:
(i) the assignment to the Employee of any duties
inconsistent with the Employee's position (including, without limitation,
status, titles and reporting requirements), authority, duties or
responsibilities as in effect immediately prior to the date of such assignment,
or any other action by the Company that results in a material diminution in such
position, authority, duties or responsibilities, excluding for this purpose
isolated and inadvertent action not taken in bad faith and remedied by the
Company promptly after receipt of notice thereof given by the Employee;
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(ii) a reduction by the Company in the Employee's Base
Salary, as the same may be increased from time to time, or a change in the
eligibility requirements or performance criteria under any bonus, incentive or
compensation plan, program or arrangement under which the Employee is covered
immediately prior to the Termination Date which adversely affects the Employee;
(iii) any failure to pay the Employee any compensation or
benefits to which she is entitled within five (5) days of the date due after
notice of the failure to so pay is given by the Employee;
(iv) the Company's requiring the Employee to be based
anywhere other than within fifty (50) miles of the Employee's job location as of
the date hereof, except for reasonably required travel on the Company's business
which is not greater than such travel requirements prior to the date hereof;
(v) the taking of any action by the Company that would
materially adversely affect the physical conditions existing in or under which
the Employee performs her employment duties;
(vi) the insolvency or the filing by any party, including
the Company, of a petition for bankruptcy by the Company;
(vii) any purported termination of the Employee's employment
for Cause by the Company which does not comply with the terms of Section 9.3
hereof; or
(viii) any breach by the Company of any provision of this
Agreement.
9.7.2. The Employee's right to terminate her employment pursuant
to this Section 9 shall not be affected by her incapacity due to physical or
mental illness.
9.8. NOTICE OF TERMINATION. For purposes of this Agreement, "Notice of
Termination" shall mean a written notice of termination from the Company of the
Employee's employment which indicates the specific termination provision in this
Agreement relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated.
9.9. TERMINATION DATE. For purposes of this Agreement, "Termination
Date" shall mean, in the case of the Employee's death, her date of death, in the
case of the Employee's voluntary termination, the last day of employment, and in
all other cases (other than in the case of a successor or an assignee, which is
provided for in Section 13.1 hereof), the date specified in the Notice of
Termination; provided, however, that if the Employee's employment is terminated
by the Company for Cause or due to Disability, the date specified
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in the Notice of Termination shall be at least thirty (30) days from the date
the Notice of Termination is given to the Employee; and provided further that in
the case of Disability the Employee shall not have returned to the full-time
performance of her duties during such period of at least thirty (30) days.
10. CERTAIN BENEFITS AND PAYMENTS.
10.1. COMPENSATION AND BENEFITS UPON TERMINATION OF EMPLOYMENT.
10.1.1. If, during the term of this Agreement, the Employee's
employment with the Company shall be terminated, the Employee shall be entitled
to the following compensation and benefits in the following circumstances:
(i) If the Employee's employment with the Company shall be
terminated (A) by the Company for Cause or Disability; (B) by reason of the
Employee's death; or (C) by the Employee pursuant to Section 12.3 hereof, then
the Company shall pay to the Employee all Accrued Compensation.
(ii) If the Employee's employment with the Company shall be
terminated (A) by the Company pursuant to Section 12.2 hereof or (B) by the
Employee pursuant to Section 12.4 hereof, then the Employee shall be entitled to
the following:
(1) the Company shall pay the Employee all Accrued
Compensation;
(2) the Company shall pay the Employee as severance pay
and in lieu of any further compensation for periods subsequent to the
Termination Date an amount in cash equal to two (2) times the Base Amount; and
(3) for twenty-four (24) months or such longer period
as may be provided by the terms of the appropriate program, practice or policy,
the Company shall, at its expense, continue on behalf of the Employee and her
dependents and beneficiaries the life insurance, disability, medical, dental and
hospitalization benefits generally made available to the Company's executive
officers at any time during the 90-day period prior to the Termination Date or
at any time thereafter, provided that (i) the Company's obligation hereunder
with respect to the foregoing benefits shall be limited to the extent that the
Employee obtains any such benefits pursuant to a subsequent employer's benefit
plans, in which case the Company may reduce the coverage of any benefits it is
required to provide the Employee hereunder as long as the aggregate coverages
and benefits of the combined benefit plans are no less favorable to the Employee
than the coverages and benefits required to be provided hereunder, and (ii) this
clause (3) shall not be interpreted so as to limit any benefits to which the
Employee or her dependents or beneficiaries may be entitled under any of the
Company's employee benefit plans, programs or practices following the Employee's
termination of employment, including, without limitation, retiree medical and
life insurance benefits.
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10.1.2. The amounts provided for in subsection 10.1.1(i) shall be
payable to Employee in a lump-sum on the Termination Date, and the amounts
provided for in subsection 10.1.1(ii) shall be payable to the Employee in
substantially equal bi-weekly installments for a twenty-four (24) month period
commencing on the Termination Date and otherwise in accordance with the
Company's payroll practices in effect from time to time.
10.1.3. The Employee shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise, and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment,
except as provided in subsection 10.1.1(ii)(3).
10.1.4. The severance pay and benefits provided for in this
Section 10.1 shall be in lieu of any other severance or termination pay to which
the Employee may be entitled under any Company severance or termination plan,
program, practice or arrangement.
10.1.5. The Employee's entitlement to any other compensation or
benefits upon her termination of employment with the Company shall be determined
in accordance with the Company's employee benefit plans and other applicable
programs, policies and practices then in effect.
10.2. ACCELERATION UPON CHANGE IN CONTROL. Immediately upon the
occurrence of a Change in Control, (i) the restrictions on any outstanding
incentive awards (including, without limitation, restricted stock and granted
performance shares or units) under any incentive plan or arrangement shall lapse
and such incentive awards shall become 100% vested, and (ii) all stock options,
warrants and stock appreciation rights granted to the Employee on or prior to
the date of this Agreement shall become immediately exercisable and 100% vested
(all incentive awards, stock options, warrants and stock appreciation rights
whose vesting has been accelerated hereunder are hereinafter referred to as the
"Accelerated Awards"). Notwithstanding anything to the contrary contained in the
plan, agreement or other instrument relating to any Accelerated Award with
regard to the period of time within which such Accelerated Award must be
exercised (the "Normal Exercise Period"), in the event that Employee's
employment with the Company terminates for any reason whatsoever (whether such
termination is voluntary or involuntary) following a Change in Control, all such
Accelerated Awards may be exercised at any time and from time to time (i) until
the one (1) year anniversary of the date of such termination or (ii) the end of
the Normal Exercise Period, whichever is last to occur.
11. GROSS-UP PAYMENTS.
11.1. ADDITIONAL PAYMENTS. Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of the Employee (whether paid
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or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 11) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Employee with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Employee shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Employee of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 11.1, if it shall be determined that the Employee is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to the Employee such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Employee and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
11.2. DETERMINATION. Subject to the provisions of Section 11.3, all
determinations required to be made under this Section 11, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by a nationally-recognized accounting firm selected by the Company and
reasonably acceptable to the Employee (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Employee
within fifteen (15) business days of the receipt of notice from the Employee
that there has been a Payment, or such earlier times as is requested by the
Company. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this Section 11,
shall be paid by the Company to the Employee within five (5) days of the receipt
of the Accounting Firm's determination. Any determination by the accounting Firm
shall be binding upon the Company and the Employee. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 11.3 and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.
11.3. INTERNAL REVENUE SERVICE CLAIM. The Employee shall notify the
Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten
(10) business days after the Employee is informed in writing of such claim and
shall apprise the Company of the nature of such claim
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and the date on which such claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day period following the date
on which the Employee gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Employee in writing prior to the expiration of such
period that it desires to contest such claim, the Employee shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim;
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including, without limitation, additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Employee harmless, on an after-tax basis, for any Excise Tax or income tax
(including, without limitation, interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 11.3, the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Employee to pay the
tax claimed and xxx for a refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Employee to pay such claim and xxx for a refund, the Company
shall advance the amount of such payment to the Employee on an interest-free
basis and shall indemnify and hold the Employee harmless, on an after-tax basis,
from any Excise Tax or income tax (including, without limitation, interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Employee with respect to which such contested amount
is claimed to be due is limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Employee shall be
entitled to settle or contest,
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as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
11.4. REFUNDS. If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 11.3, the Employee becomes entitled
to receive any refund with respect to such claim, then the Employee shall
(subject to the Company's complying with the requirements of Section 11.3)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Employee of an amount advanced by the Company pursuant to Section
11.3, a determination is made that the Employee shall not be entitled to any
refund with respect to such claim and the Company does not notify the Employee
in writing of its intent to contest such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
12. TERMINATION. The Employee's employment hereunder may be terminated
without any breach of this Agreement only in accordance with this Section 12.
12.1. TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
the Employee's employment at any time for Cause by providing to the Employee a
Notice of Termination, whereupon the Employee shall be entitled to all of the
benefits and payments provided for under Section 10.1 hereof.
12.2. TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Employee's employment at any time without Cause by providing to
the Employee a Notice of Termination, whereupon the Employee shall be entitled
to all of the benefits and payments provided for under Section 10.1 hereof.
12.3. TERMINATION BY THE EMPLOYEE. The Employee's employment may be
terminated by the Employee at any time by providing the Company with notice of
such termination and specifying in the notice the effective date of such
termination, which shall not be less than one hundred twenty (120) days after
giving such notice, whereupon the Employee's employment shall terminate on the
date specified in such notice and the Employee shall be entitled to all of the
benefits and payments provided for under Section 10.1 hereof; provided, however,
that following receipt of such notice, the Company may specify, in its
discretion, the date on which the Employee's employment shall terminate so long
as the date so specified is not more than one hundred twenty (120) days after
the date on which the Employee shall have given notice, in which case the
Employee's employment shall terminate on the date so specified by the Company.
12.4. TERMINATION BY THE EMPLOYEE FOR GOOD REASON FOLLOWING A CHANGE
OF CONTROL. For a (1) year period following a Change of Control, the Employee's
employment may be terminated by the Employee for Good Reason at any such time
during such one (1) year period by providing the Company with a notice of such
termination and specifying in the notice the effective date of such termination,
whereupon the Employee's
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employment shall terminate on the date specified in such notice and the Employee
shall be entitled to all of the benefits and payments provided for under Section
10.1 hereof.
12.5. TERMINATION UPON DISABILITY. The Company may terminate the
Employee's employment upon the Disability of the Employee by providing to the
Employee a Notice of Termination, whereupon the Employee shall be entitled to
all of the benefits and payments provided for under Section 10.1 hereof.
12.6. DEATH. In the event of the Employee's death during her
employment hereunder, the Employee's employment shall be automatically
terminated, whereupon the Employee shall be entitled to all of the benefits and
payments provided for under Section 10.1 hereof.
13. SUCCESSORS AND ASSIGNS.
13.1. ASSUMPTION AND AGREEMENT. This Agreement shall be binding upon
and shall inure to the benefit of the Company, its successors and assigns, and
the Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) or assign, by agreement in form and
substance satisfactory to the Employee, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession or assignment shall be a breach of this
Agreement and shall entitle the Employee to compensation from the Company in the
same amount and on the same terms as she would be entitled to hereunder if her
employment had been terminated pursuant to Section 12.2 hereof, except that for
purposes of implementing the foregoing, the date on which any such succession or
assignment becomes effective shall be deemed the Termination Date hereunder. As
used in the Agreement, Company shall mean the Company as hereinbefore defined
and any successor or assign that executes and delivers the agreement provided
for in this Section 13.1 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
13.2. RIGHTS OF EMPLOYEE. This Agreement and all rights of the
Employee hereunder shall inure to the benefit of and be enforceable by the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Employee should
die while any amounts would still be payable to her hereunder if she had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devise,
legatee or other designee or, if there be no such designee, to the Employee's
estate.
14. INJUNCTIVE RELIEF. The Company and the Employee agree that damages are
an inadequate remedy for, and that the Company or any successor to the business
of the Company would be irreparably harmed by, any breach of Section 8 of this
Agreement, and that the Company, any successor to the business of the Company or
any permitted assignee
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of the Company shall be entitled to equitable relief in the form of a
preliminary or permanent injunction upon any breach of Section 8 hereof.
15. NOTICES. For the purpose of this Agreement, notices and all other
communications to either party hereunder provided for in the Agreement shall be
in writing and shall be deemed to have been duly given when delivered in person
or mailed by first-class mail or airmail, postage prepaid, addressed:
If to the Employee:
Xx. Xxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
If to the Company:
Verso Technologies, Inc.
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
or to such other address(es) as either party may have furnished to the other
party in writing in accordance with this Section.
16. MISCELLANEOUS. No provision of this Agreement may be amended, modified
or waived unless such amendment, modification or waiver (i) is agreed to in
writing and is signed by the Employee and a representative of the Company, its
successor or permitted assignee and (ii) has been approved by the Board, its
successor or any permitted assignee of the Company. No waiver by either party to
this Agreement at any time of breach by the other party of, or compliance by the
other party with, any condition or provision of this Agreement to be performed
by the other party shall be deemed to be a waiver of similar or dissimilar
provisions or conditions at the same or any prior or subsequent time. No
agreements or representations, oral or otherwise, expressed or implied, with
respect to the subject matter of this Agreement have been made by either party
that are not expressly set forth in this Agreement.
17. VALIDITY . The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
the other provisions of this Agreement, which other provisions shall remain in
full force and effect, nor shall the invalidity or unenforceability of a portion
of any provision of this Agreement affect the validity or enforceability of the
balance of such provision.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute a single agreement.
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19. HEADINGS. The headings of the paragraphs contained in this Agreement
are for reference purposes only and shall not, in any way, affect the meaning or
interpretation of any provision of this Agreement.
20. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal substantive laws, and not the choice of law rules,
of the State of Georgia.
21. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof, other than the provisions of Section 8
hereof, shall, on the written request of one party served upon the other, be
settled by binding arbitration in Xxxxxx County, Georgia in accordance with the
commercial arbitration rules then recognized by the American Arbitration
Association, and judgment upon the award rendered may be entered and enforced in
any court having jurisdiction thereof.
22. FEES AND EXPENSES. The Company shall pay all legal fees and related
expenses incurred by the Employee as they become due as a result of or in
connection with (i) the Employee's termination of employment (including, without
limitation, all such fees and expenses, if any, incurred in contesting or
disputing any such termination of employment), (ii) the Employee seeking to
obtain or enforce any right or benefit provided by this Agreement (including,
without limitation, any such fees and expenses incurred in connection therewith)
or by any other plan or arrangement maintained by the Company under which the
Employee is or may be entitled to receive benefits, (iii) the Employee's hearing
before the Board as contemplated in Section 9.3 of this Agreement, (iv) any tax
audit or proceeding to the extent attributable to the application of any Excise
Tax with respect to any Payment or Payments hereunder, plus in each case
interest on any delayed payment at the "Applicable Federal Rate," as defined in
Section 1274(d) of the Code, as then in effect, and (v) the preparation and
execution of this Agreement.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements (if any),
understandings and arrangements (oral or written) between the parties hereto,
including, without limitation, the Original Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and delivered by its duly authorized officer, and the Employee has executed and
delivered this Agreement, all as of the date first written above.
VERSO TECHNOLOGIES, INC.
By: /s/ Xxxxxxxxxx Bannesman
-----------------------------------
Its: CEO
----------------------------------
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
XXXXXX X. XXXXXXX
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