Executive Employees CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
Exhibit
10.13
VERSO
|
Verso Paper
Suite 100
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx XX 00000-0000
T
000 000-0000
F
000 000-0000
xxx.xxxxxxxxxx.xxx
|
Executive
Employees
This
Confidentiality and Non-Competition Agreement ("Agreement") is entered into by
and between Verso Paper Holdings LLC, a Delaware limited liability company
("Verso Paper"), and Xxxxx X. Xxxxxx ("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,
General Counsel and Secretary, 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
(a) As
used in this Agreement, the term "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.
"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.
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) As
used in this Agreement, the term "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 Provisions
(a) Employee
acknowledges and agrees that by reason of employment with Verso Paper as a
senior level executive in the position of Vice President, General Counsel and
Secretary, 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.
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(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 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.
3.
Non-compete provisions
(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 the 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 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 super-calendared paper xxxxx anywhere in the
world.
(c) After the
termination of employment 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
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and
super-calendared paper products or the operation of coated and super-calendared
paper xxxxx;
(ii.) By
engaging in any sales, marketing, Research and Development or managerial duties
(including, without limitation, financial, human resources, strategic planning,
or operational duties) for, whether as an employee, consultant, or otherwise,
any entity which produces, develops, sells or markets in the business of coated
and super-calendared paper products or the operation of coated and
super-calendared paper xxxxx;
(iii.) By owning,
managing, operating, controlling or consulting for any entity which produces,
develops, sells or markets in the business of coated and super-calendared paper
products or the operation of coated and super-calendared paper xxxxx, 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
super-calendared paper products or the operation of coated and super-calendared
paper xxxxx, 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.
(d) Verso Paper and Employee
agree that, 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 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, and provided that
Employee complies with all his obligations under this Agreement (including,
without limitation, his obligations under sections 2, 3(c) and 4), Verso Paper
shall make monthly payments to Employee equal to the monthly base pay Employee
was receiving from Verso Paper in the month prior to the termination of
employment with Verso Paper for each month (or prorated for periods
less
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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.
4. Non-Solicitation/Non-hire
provision
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 set forth in
sections 3 and 4 of this Agreement shall be extended by the period of violation
if Employee is found to be in violation of those provisions.
6. 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.
7. 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.
8. Section
409A of the Code
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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.
9.
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.
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(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) Attorney's
fees. 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) Common law
duties. 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) Opportunity
to review. Employee acknowledges and agrees that Verso Paper has advised
Employee that Employee may consult with an independent attorney before signing
this Agreement.
In witness
whereof the parties hereto have caused this Agreement to be executed and
delivered effective as of the date signed below by Employee and the duly
authorized officer of Verso Paper.
| Signed (Employee): | |||
|
Xxxxx X. Xxxxxx
|
|||
| Date: | March 19, 2007 | ||
| Work address: | 0000 Xxxxx Xxxxxx Xxxxx | ||
| Xxxxxxx, XX 00000 | |||
| Verso Paper: | Xxxxxxx Xxxxxxx | ||
| Xxxxxxx Xxxxxxx, Vice President, Human Resources | |||
| Date: | 3-19-2007 |
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