CONSULTING AND SEPARATION AGREEMENT
Exhibit 99.1
THIS CONSULTING AND SEPARATION AGREEMENT (this “Agreement”) is made and entered into
as of the 13th day of October 2006, between XXXXXX X. XXXXXXX, a resident of the State of Georgia
(“Executive”), and VERSO TECHNOLOGIES, INC., a Minnesota corporation (the
“Company”).
W I T N E S S E T H:
WHEREAS, Executive has heretofore served as the Company’s Executive Vice President and Chief
Financial Officer, and Executive desires to resign her positions with the Company in order to
pursue other opportunities; and
WHEREAS ¸ the Company and Executive each desire to enter into this Agreement to set forth in
writing the terms and conditions of Executive’s resignation of all positions with, and separation
from, the Company, its subsidiaries and affiliates;
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
follows:
Section 1. Separation; Separation Date. The Company and Executive separate by mutual
agreement, and such separation shall be deemed to be a termination of Executive’s employment
without cause under and within the meaning of that certain Amended and Restated Employment
Agreement between the Company and Executive dated as of October 1, 2005 (the “Employment
Agreement”). In order to effect such separation, Executive hereby resigns as the Executive
Vice President and Chief Financial Officer of the Company and from all other positions Executive
holds with the Company, its subsidiaries and affiliates effective as of November 1, 2006 (the
“Effective Date”).
Section 2. Payments and Benefits. Executive shall receive the compensation and
benefits pursuant to Section 10.1.1(ii) of the Employment Agreement commencing on December 1, 2006;
provided, however ¸ that if there shall occur a Change in Control (as that term is defined in the
Employment Agreement) at any time prior to December 31, 2008, then Executive shall receive all
remaining compensation due her pursuant to Section 10.1.1(ii)(2) of the Employment Agreement in a
lump-sum within ten (10) business days of such Change in Control.
Section 3. Continuation Period and Compensation. For the period commencing on the
Effective Date and continuing through November 30, 2006 (the “Employment Continuation
Period”), Executive shall continue to serve as an employee of the Company and, in such
capacity, shall perform such executive-level services comparable in scope to those previously
performed by Executive for or on behalf of the Company in order to facilitate the orderly
transition of matters for which Executive has heretofore been responsible. For the services
rendered by Executive during the Employment Continuation Period, Executive shall continue to
receive the same salary and benefits to which Executive is currently entitled. For the
period
commencing on December 1, 2006 and continuing through January 1, 2007 (the “Consultancy
Period”), Executive shall be available to consult with the Company and respond to appropriate
inquiries on such matters pertaining to the Company’s business as may, from time to time, be
reasonably requested of Executive by the Company; provided, however, that such services shall be
limited to executive-level services comparable in scope to those previously performed by Executive
for or on behalf of the Company. In this regard, Executive shall be available throughout the
Consultancy Period at reasonable times, and upon reasonable notice, to meet, in person or via
telephone, with the Company, for the purposes of providing such consulting services; provided,
however, that the foregoing shall not be deemed to restrict Executive from engaging in any part or
full-time employment with, or providing consulting services to, someone other than the Company. In
consideration of such consultancy services and the other matters herein, the Company shall grant to
Executive on or before December 1, 2006 an aggregate of 66,936 shares of restricted stock pursuant
to the Company’s 1999 Stock Incentive Plan, as amended, which shares shall vest on January 1, 2007.
Section 4. Confirmation of Employment; Non-Disparagement. The Company shall confirm
the dates of Executive’s employment with the Company with any future potential employer of
Executive upon inquiry thereby. The Company agrees not to take any action or say anything to any
person, including, without limitation, any future potential employer of Executive, that criticizes
or disparages Executive or xxxxx Executive’s reputation. All requests for confirmation of
Executive’s dates of employment with the Company should be directed to the Chief Executive Officer
of the Company at 000 Xxxxxxxx Xxxxxxx Xxxxx 000, Xxxxxxx, Xxxxxxx 00000. Executive shall not
direct potential employers to contact anyone else with the Company.
Section 5. Executive Non-Disparagement. Executive agrees not to take any action or
say anything to any person that: (i) criticizes or disparages the Company, any of its subsidiaries
or affiliates or their respective management teams, boards of directors, or practices, services or
products; (ii) disrupts or impairs the normal, ongoing business operations of the Company or any of
its subsidiaries or affiliates; or (iii) xxxxx the Company’s reputation with its employees,
customers, lenders, suppliers, investors or the public.
Section 6. General Release By Executive.
(a) Executive hereby acquits, withdraws, retracts and forever discharges any and all claims,
manner of actions, causes of action (in law or in equity), suits, judgments, debts, liens,
contracts, agreements, promises, liabilities, demands, damages, losses, costs, expenses or
disputes, known or unknown, fixed or contingent, directly or indirectly, personally or in a
representative capacity, at any time against the Company or any of its agents, attorneys, assigns,
heirs, executors, executives, administrators, committees, subsidiaries, affiliates, fiduciaries,
trustees, beneficiaries, participants, personal and/or legal representatives and any benefit plans
sponsored by the Company (the “Company Released Parties”) by reason of any act, omission,
matter, cause or thing whatsoever, from the beginning of time to and including the date of this
Agreement, whether based on a constitution, statute, regulation, agreement or the common law
(“Company General Release”); provided, however, nothing herein shall release the Company
Released Parties from the Company’s obligations under this Agreement or under the Employment
Agreement. This Company General Release includes, without limitation, all
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claims, manner of
actions, causes of action (in law or in equity), suits or requests for attorney’s fees and/or costs
under the Executive Retirement Income Security Act of 1974; Title VII of the Civil Rights Act of
1964; the Americans with Disabilities Act; the Age Discrimination in Employment Act of 1967 (the
“ADEA”); the Older Worker’s Benefits Protection Act (the “OWBPA”); the
Rehabilitation Act of 1973; COBRA; the Occupational Safety and Health Act; the National Labor
Relations Act; 42 U.S.C. §§ 1981 through 1988; any Federal, state or local law regarding
retaliation for protected activity or interference with protected rights; and any state or local
law, including, without limitation, the Georgia Constitution; and all claims under Georgia public
policy or common law, including, without limitation, common law claims of outrageous conduct,
intentional or negligent infliction of emotional distress, negligent hiring, breach of contract,
breach of the covenant of good faith and fair dealing, promissory estoppel, negligence, wrongful
termination of employment, interference with employment relationship, civil rights, fraud and
deceit and all other claims of any type or nature, including all claims for damages, wages,
compensation, vacation, reinstatement, medical expenses, punitive damages, and claims for
attorneys’ fees. Subject to the foregoing, Executive and the Company intend that this Company
General Release shall discharge all claims against the Company and all other Company Released
Parties to the full and maximum extent permitted by law, but not in excess of that permitted by
law.
(b) Except as necessary to enforce the terms of this Agreement, or as otherwise permitted by
law, Executive covenants and agrees not to xxx the Company or any other Company Released Party
concerning any of the matters covered by this Agreement.
(c) Executive warrants and represents that Executive has filed no administrative action
against the Company or any other Company Released Party with any local, state or Federal agency.
Executive further warrants and represents that Executive is not a plaintiff or claimant in any
lawsuit or any other action filed in any jurisdiction against the Company or any other Company
Released Party.
(d) Executive acknowledges and agrees that, in regard to Executive’s release and waiver of
claims under the ADEA and the OWBPA, as set forth in Section 6(a), Executive was informed that
Executive does not waive age rights or claims that may arise after the date this Agreement is
executed and that Executive has twenty-one (21) days after receiving this Agreement within which to
consider this Agreement. If Executive executes this Agreement before the end of such twenty-one
(21)-day period, then Executive acknowledges that Executive’s decision to do so was knowing,
voluntary and not induced by fraud, misrepresentation or a threat to withdraw, alter or provide
different terms prior to the expiration of such twenty-one (21)-day period. Executive further
acknowledges that this Agreement is effective and enforceable against Executive upon Execution’s
execution hereof, subject to Executive’s revocation of Executive’s release of any claim under the
ADEA in accordance with Section 6(e) hereof. Executive further understands and acknowledges that
if Executive revokes such release, this Agreement shall become null, void and of no effective, and
Executive will lose all benefits under this Agreement to the extent permitted by law.
(e) Executive understands that Executive has seven (7) days following Executive’s execution of
this Agreement to revoke Executive’s release of any claim under the ADEA in this
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Agreement.
Executive further understands that, if Executive elects to revoke Executive’s release of any claim
under the ADEA in this Agreement, Executive must provide notice to the Company as set forth in
Section 10.8 hereof within the applicable period for revocation.
(f) Notwithstanding any provision of this Agreement which may be to the contrary, the Company
agrees that it will defend and indemnify Executive against any legal action, proceeding, claim or
charge, action and/or proceeding commenced by a third party (collectively referred to as a
“Claim”) against Executive, individually and/or with others, to the same and fullest extent
that she would have been entitled to be defended and/or indemnified against same under any law,
rule, regulation, statute, or under any Company by-law, policy, practice, rules, regulations,
indemnity agreement or applicable insurance policy(s) in effect and/or applicable to the period
during which Executive was employed by the Company and/or the date on which each such Claim is made
or asserted. Provided further, and notwithstanding any other provision in this Agreement or the
Company General Release given by Executive hereunder to the contrary, nothing in this Agreement is
intended to waive or release any rights and benefit entitlements which Executive may otherwise have
arising out of her participation, if any, in any employee benefit, pension, retirement, deferred
compensation, Savings and Investment or 401(k) plan(s), stock, option, equity plan(s), maintained
by the Company during the term of Executive’s employment. The provisions of this Section 6(f)
shall survive execution of this Agreement. The indemnification provisions of this Section 6(f) are
not intended to enlarge Executive’s rights with respect to indemnification beyond those provided
under any law, rule, regulation, statute, or under any Company by-law, policy, practice, rules,
regulations, indemnity agreement or applicable insurance policy(s) in effect and/or applicable to
the period during which Executive was employed by the Company and/or the date on which each such
Claim is made or asserted.
Section 7. General Release By the Company. The Company, for itself and on behalf of
its directors, officers, subsidiaries, affiliates, successors and assigns, hereby acquits,
withdraws, retracts and forever discharges any and all claims, manner of actions, causes of action
(in law or in equity), suits, judgments, debts, liens, contracts, agreements, promises,
liabilities, demands, damages, losses, costs, expenses or disputes, known or unknown, fixed or
contingent, directly or indirectly, personally or in a representative capacity, at any time against
Executive or, to the extent applicable, any and all of Executive’s heirs, personal representatives,
administrators, affiliates, predecessors, successors and assigns, as the case may be
(“Executive Released Parties”), by reason of any act, omission, matter, cause or thing
whatsoever, from the beginning of time to and including the date of this Agreement whether based on
a constitution, statute, regulation, agreement or the common law; provided, however, nothing herein
shall release the Executive Released Parties from Executive’s obligations under this Agreement or
under the Employment Agreement (to the extent such obligations survive the termination of
employment). Subject to the foregoing, Executive and the Company intend that this release shall
discharge all claims against Executive and all other Executive Released Parties to the full and
maximum extent permitted by law, but not in excess of that permitted by law.
Section 8. Additional Agreements.
8.1 Cooperation. Consistent with Executive’s duties and obligations to any employer
or business entity with which she is then employed, associated, affiliated or involved,
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Executive
agrees to make herself available to the Company, at reasonable times and places, and subject to
non-interference with Executive’s then employment or business activities, to provide information to
it concerning her direct knowledge of any aspect of any litigation, arbitration, investigation,
governmental proceeding or other proceeding involving the Company in respect of work performed or
services rendered by Executive while she was employed by the Company. In addition, the Company
agrees to reimburse Executive for all out-of-pocket expenses incurred by her, including reasonable
travel expenses, and if, at the request of the Company, Executive devotes more than an immaterial
amount of time to the performance of this Section 8.1 after January 1, 2007, then the Company shall
compensate Executive for such time at a rate to be agreed upon.
8.2 Return of Company Property. Unless otherwise instructed by the Company, Executive
agrees that Executive will not retain or destroy, and will return to the Company simultaneously
with the execution of this Agreement, any and all property of the Company, its subsidiaries or
affiliates which is in Executive’s possession or subject to Executive’s control, including, without
limitation, keys, credit and identification cards, computers, files, personal items and equipment
provided to Executive for Executive’s use, together with all written or recorded materials,
documents, computer discs, plans, records, notes or other papers relating to the affairs of the
Company, its subsidiaries or affiliates, but excluding any such documents relating to Executive’s
compensation and benefits.
Section 9. Additional Acknowledgements, Representations and Warranties.
9.1 Executive hereby represents and warrants to the Company and acknowledges that:
(a) This Agreement is the result of a compromise and shall never at any time or for any
purpose be construed as an admission by the Company of any liability, and that the Company
specifically disclaims any liability to Executive or to any other person or entity.
(b) Executive has had full and adequate opportunity to discuss and consider Executive’s
claims. This Agreement is written in a manner that Executive understands. Executive has been
advised to, and has had the opportunity to, consult with Executive’s attorney prior to deciding
whether to enter into this Agreement.
(c) The promises, releases and covenants made in this Agreement by Executive are granted in
exchange for the consideration set forth in Section 3 hereof, which is in addition to anything of
value to which Executive is entitled.
(d) In executing this Agreement, Executive has not relied upon any written or oral
representations or statements not expressly made a part hereof made by any person with regard to
the subject matter, basis, or effect of this Agreement.
(e) This Agreement is executed by Executive knowingly and voluntarily, and that Executive has
not been coerced in any way to execute this Agreement, and that no promise or inducement has been
offered or made except as set forth in Section 3 hereof.
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(f) Executive has not heretofore assigned or transferred, or purported to assign or transfer,
to any person or entity, any claim or any portion thereof or interest therein, and Executive agrees
to indemnify, defend, and hold the Company and all other Company Released Parties harmless from any
and all claims based on or arising out of any such assignment or transfer, or purported assignment
or transfer, of any claims, or any portion thereof or interest therein, including, without
limitation, all attorney’s fees and expenses incurred by the Company or any other Company Released
Party in the defense thereof.
9.2 The Company hereby represents and warrants to Executive that the execution, delivery, and
performance of this Agreement by the Company have been authorized by all necessary actions on the
part of the Company.
Section 10. Miscellaneous.
10.1 Binding Effect; Assignment. This Agreement shall inure to the benefit of and
shall be binding upon the Executive, Executive’s executor, administrator, heirs, personal
representatives and assigns, and upon the Company and its successors and assigns. This Agreement
shall not be assignable by Executive, and shall be assignable by the Company to any corporation or
other entity resulting from any reorganization, merger or consolidation of the Company with any
other corporation or entity or to any corporation or entity to, or with which, the Company’s
business or substantially all of its assets may be sold, exchanged or transferred.
10.2 Governing Law; Arbitration. This Agreement shall be deemed to be made in, and in
all respects shall be interpreted, construed and governed by and in accordance with, the laws of
the State of Georgia, without giving effect to principles of conflicts of laws. Any controversy or
claim arising out of or related to this Agreement, including any dispute regarding the validity or
scope of this Agreement, shall be settled and decided by one arbitrator pursuant to arbitration
conducted in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“Rules”), as then in effect, unless the parties hereto agree otherwise in
writing. Any such arbitration shall be held and conducted in Atlanta, Georgia within 90 days of
the appointment of the arbitrator, in accordance with the provisions set forth in said Rules. The
award rendered by the arbitrator shall be final, and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof. The demand for arbitration shall be
made within a reasonable time after the claim, dispute or other matter in question has arisen. In
no event shall the demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question would be barred by
the applicable statute of limitations.
| Initials of Parties: | ||
| JMR | ||
| SAO |
10.3 Invalid Provisions. With the exception of the provisions set forth in Sections 5
and 6, the parties hereto agree that: (a) the agreements, provisions and covenants contained in
this Agreement are several and divisible, that none of such agreements, provisions or covenants
depends upon any other provision, agreement or covenant for its enforceability, and that each such
agreement, provision, and covenant constitutes an enforceable obligation between the
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Company and
Executive; and (b) neither the invalidity nor the unenforceability of any agreement, provision or
covenant of this Agreement shall affect the other agreements, provisions or covenants hereof, and
this Agreement shall remain in full force and effect and be construed in all respects as if such
invalid or unenforceable agreement, provision or covenant were omitted. The parties hereto further
agree that, if any of the provisions of Sections 5 or 6 hereof are illegal, invalid or
unenforceable, then the Company may, at its option, declare this entire Agreement null and void.
10.4 Entire Agreement. This Agreement and the Employment Agreement embody the entire
agreement of the parties hereto with respect to the subject matter hereof, except that Executive’s
obligations under the Verso Technologies Security and Confidential Information Agreement by and
between Executive and the Company shall continue to be governed by such agreement in the event any
such provisions conflict with any term herein and that certain Indemnity Agreement by and between
the Company and Executive shall remain in effect. Except as set forth in this Section 10.4, all
statements relating to the subject matter hereof and writings which pre-date the execution hereof
are superseded hereby.
10.5 Equitable Relief. It is expressly agreed among the parties hereto that monetary
damages would be inadequate to compensate a party hereto for any breach by any other party of its
covenants and agreements in this Agreement. Accordingly, the parties agree and acknowledge that
any such violation or threatened violation will cause irreparable injury to the other and that, in
addition to any other remedies which may be available, such party shall be entitled to injunctive
relief against the threatened breach of this Agreement or the continuation of any such breach
without the necessity of proving actual damages and without posting any bond or other security, and
may seek to specifically enforce the terms of this Agreement.
10.6 Headings. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning of interpretation of this Agreement.
10.7 Legal Fees. Each party hereto shall be responsible for its own, and not the
other party’s, legal fees incurred in connection herewith.
10.8 Notices. All communications provided for hereunder shall be in writing and shall
be deemed to be given when delivered in person or deposited in the United States mail, first class,
registered mail, return receipt requested, with proper postage prepaid, and
If to Executive, addressed to:
Xxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
If to the Company, addressed to:
Verso Technologies, Inc.
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
Verso Technologies, Inc.
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
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or at such other place or places or to such other person or persons as shall be designated in
writing by the parties hereto in the manner provided above for notices.
10.9 Facsimile Signature; Counterparts. This Agreement may be executed by facsimile
signature and in one or more counterparts, each of which shall be deemed to be an original but all
of which together shall constitute one and the same instrument.
10.10 Waiver. The waiver by either party hereto of a breach of any provision,
agreement or covenant of this Agreement by the other party hereto shall not operate or be construed
as a waiver of any prior or subsequent breach of the same or any other provision, agreement or
covenant by such other party hereto.
10.11 Amendment. This Agreement may be modified only by written instrument signed by
each of the parties hereto.
[Signatures on following page]
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IN WITNESS WHEREOF, Executive has executed and delivered this Agreement, and the Company has
caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized,
all as of the day and year written below.
| /s/ XXXXXX X. XXXXXXX | ||||||
| XXXXXX X. XXXXXXX | ||||||
| Date: | 10/13/06 | |||||
| VERSO TECHNOLOGIES, INC. | ||||||
| By: | /s/ Xxxxxx X. Xxxx | |||||
| Its: | Executive Chairman | |||||
| Date: | 10/13/06 | |||||
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