Exhibit 10.34
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
(“Agreement”) dated as of April 17, 2006 between
NewPage Corporation (the “Company”) and Richard D.
Willett, Jr. (the “Executive”) (together, the
“Parties”).
WHEREAS, the Parties wish to
establish the terms of Executive’s future
employment.
Accordingly, the Parties agree as
follows:
1.
Employment and Acceptance . The Company shall employ
the Executive, and Executive shall accept employment, subject to
the terms of this Agreement, effective as of April 13, 2006 (the
“Effective Date”).
2.
Term . Subject to Section 5 of this Agreement, this
Agreement and the employment relationship hereunder will continue
from the Effective Date until the third anniversary of the
Effective Date (the
“Term”). There shall be no extension of this
Agreement other than by written agreement executed by both Parties
hereto. In the event of the Executive’s termination of
employment during the Term, the Company’s obligation to
continue to pay all base salary, as adjusted, bonus and other
benefits then accrued shall terminate except as may be provided for
in Section 5 of this Agreement.
3.
Duties and Title .
3.1
Title . The Company shall employ the Executive to
render exclusive and full-time services to the Company and certain
designated subsidiaries and affiliates. The Executive will
serve in the capacity of Chief Operating Officer and President of
NewPage Holding Corporation (“Holding”) and the
Company. The Executive shall also serve during the Term in
executive positions for one or more of the Company’s
subsidiaries and affiliates for no additional
consideration.
3.2
Duties . The Executive will have such authority and
responsibilities and will perform such executive duties as are
customarily performed by the chief operating officer and president
of businesses similar to those of the Company or assigned to
Executive by the Chief Executive Officer of the Company (the
“CEO”) or the Board of Directors of Holding (the
“Holding Board”). The Executive shall report to
the CEO. The Executive will devote all his full working-time
and attention to the performance of such duties and to the
promotion of the business and interests of the Company and its
subsidiaries and affiliates. This provision, however, will
not prevent the Executive from acting as an advisor to or a member
of, the board of directors of any civic or charitable organization,
so long as such actions do not violate the provisions of Section 7
of this Agreement or interfere with the Executive’s
performance of his duties hereunder.
4.
Compensation by the Company .
4.1
Base Salary . As compensation for all services
rendered pursuant to this Agreement, the Company will pay to the
Executive, an annual base salary of four hundred fifty thousand
dollars ($450,000), payable in accordance with the payroll
practices of the Company (“Base Salary”). Each
year during the Term, the Holding Board will conduct a review of
Executive’s Base Salary and, in its sole discretion, may
increase Executive’s Base Salary. Once increased, Base
Salary shall not be decreased. For the purposes of this
Agreement, “Base Salary” shall mean the
Executive’s base salary as increased pursuant to this Section
4.1.
4.2
Annual Bonus . For performance periods during the
Term, the Executive will be entitled to participate in the NewPage
Corporation Annual Management Incentive Plan approved annually by
the Board of Directors of the Company (the “Annual Incentive
Plan”). Executive’s target bonus will be 100% of
Base Salary for achieving targets set annually by the Board of
Directors of the Company in the Annual Incentive Plan. Each
annual bonus (“Annual Bonus”) shall be paid on or
before March 15th of the year following the tax year in which the
relevant services required for payment have been performed.
There shall be no cap on the amount of such Annual Bonuses.
The Executive’s bonus for 2006 will be prorated.
4.3
Participation in Employee Benefit Plans . The
Executive shall be entitled during the Term, if and to the extent
eligible, to participate in all of the applicable benefit plans of
the Company that may be available to other senior executives of the
Company, on the same terms as such other executives. The Company
may at any time or from time to time amend, modify, suspend or
terminate any employee benefit plan, program or arrangement for any
reason in its sole discretion.
4.4
Vacation . The Executive shall be entitled to four (4)
weeks of paid vacation with respect to each calendar year during
the Term. Vacation days will be prorated for any partial year
based on the number of days elapsed in such year. Executive
shall not be entitled to payment for unused vacation days upon the
termination of his employment except as set forth in Section 5
below. The accrual and carry-over of vacation days shall be
in accordance with Company policy from time to time in
effect.
4.5
Expense Reimbursement . During the Term, the Executive
shall be entitled to receive reimbursement for all appropriate
business expenses incurred by him in connection with his duties
under this Agreement in accordance with the policies of the Company
as in effect from time to time.
4.6
Moving and Relocation . Executive shall be eligible to
receive moving and relocation benefits in accordance with the terms
and conditions of the NewPage Moving & Relocation
Plan.
5.
Termination of Employment .
5.1
Upon Expiration of the Term or By the Company for Cause or By
the Executive Without Good Reason . Upon expiration of
the Term, or if during the Term, the Company terminates the
Executive’s employment for Cause (as defined below) or
Executive
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terminates his
employment without Good Reason (as defined below), the Executive
shall be entitled to receive the following:
(a)
any unpaid Base Salary through the date of termination; and any
accrued but unused vacation pay through the date of termination;
and
(b)
accrued benefits pursuant to the terms and conditions of the
Company’s benefit plans and programs.
Upon any such termination, as
applicable, the payment set forth in Section 5.1(a) shall be paid
in a lump sum within 10 business days after termination (unless an
earlier date is prescribed by law).
For the purposes of this Agreement,
“Cause” means (i) commission of a felony by the
Executive; (ii) acts of dishonesty by the Executive resulting or
intending to result in personal gain or enrichment at the expense
of the Company or its subsidiaries or affiliates; (iii) the
Executive’s material breach of any provision of any policy of
the Company, Holding or Maple Timber Acquisition LLC (Paper
Series); (iv) the Executive’s failure to follow the lawful
written directions of the Board of Directors of the Company, the
Holding Board or the Board of Directors of Maple Timber Acquisition
LLC (Paper Series); (v) conduct by the Executive in connection with
his duties that is fraudulent, willful and materially injurious to
the Company or its subsidiaries or affiliates; or (vi) conduct by
the Executive in connection with his duties that is unlawful and
materially injurious to the Company or its subsidiaries or
affiliates; provided that the Executive shall have ten (10)
business days following the Company’s written notice of its
intention to terminate the Executive’s employment to cure
such Cause, if curable, as determined by the Holding Board, in its
sole discretion.
For the purposes of this Agreement,
“Good Reason” means, without the consent of the
Executive, (i) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the
Executive’s position (including without limitation, any
reduction in offices, titles and reporting requirements),
authority, duties or responsibilities immediately following the
Effective Date, or any other action by Holding or the Company which
results in a material diminution in such position, authority,
duties or responsibilities; (ii) a reduction by Holding or the
Company in the Executive’s Base Salary or in the percentage
of Base Salary on which the Executive’s bonus is based; (iii)
Holding or the Company’s requiring the Executive to be based
in any office or location outside of fifty (50) miles from the
Executive’s principal place of employment, which shall be
Dayton, Ohio; (iv) a material reduction in the aggregate benefits
provided to the Executive, except for any across-the-board
reduction(s) affecting all similarly situated employees on
substantially the same proportional basis; or (v) any failure by
the Company to obtain the express written assumption of the
Company’s obligations to the Executive as described herein by
any successor or assign of the Company.
5.2
By the Company Without Cause or By the Executive for Good
Reason . Subject to the Executive’s compliance with
Section 7 hereof and subject to the execution by the Executive,
without revocation, of a general release in the form attached
hereto as Exhibit A (the “Release”), if during the Term
the Executive’s employment terminates without
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Cause or
Executive terminates his employment for Good Reason, the Executive
shall receive the severance payments set forth in this Section 5.2
at such times and subject to the provisions of paragraphs (I) and
(II) below (which shall be in lieu of any payments or benefits to
which the Executive may be entitled under any Company severance
plan (the “Severance Plan”)):
(a)
any unpaid Base Salary through the date of termination;
(b)
a pro rata bonus for the year of termination, calculated as the
product of (x) “Severance Bonus Amount” (as defined
below) and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the date of termination and
the denominator of which is 365, payable at the time that bonuses
are paid after the Executive’s termination date to similarly
situated employees;
(c)
any accrued but unused vacation pay;
(d)
an amount equal to two (2) times Base Salary;
(e)
continued receipt of welfare benefits for 24 months after the
Executive’s date of termination; provided, however, if the
Executive becomes reemployed with another employer and is eligible
to receive welfare benefits under another employer-provided plan,
the welfare benefits described in this clause 5.2(e) shall be
secondary to those provided under such other plan;
(f)
outplacement services substantially similar to those provided
pursuant to the terms of the Severance Plan; and
(g)
accrued benefits pursuant to the terms and conditions of the
Company’s benefit plans and programs.
(I) The payment set forth in
Section 5.2(a) shall be paid within 10 business days after the date
of termination (unless an earlier date is prescribed by
law).
(II) The payments set forth in
Sections 5.2(b)-(d) shall be paid in a lump sum after the later of
(i) the expiration of the applicable revocation period contained in
the Release and (ii) with respect to the bonus, the annual bonus
payment date for similarly situated employees after the
Executive’s termination of employment.
The Company shall have no obligation
to provide the payments and benefits set forth above in the event
that Executive breaches the provisions of Section 7.
“Severance Bonus Amount”
shall mean, in the event of a termination (i) prior to June 1st of
any calendar year, the Annual Bonus paid to the Executive for the
calendar year prior to the termination or (ii) on or after June 1st
of any calendar year, the Annual Bonus that would have been payable
to the Executive for the calendar year of the termination
(determined as of the end of such calendar year and payable when
the Company pays annual bonuses to similarly situated
employees).
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5.3
Due to Death or Disability . If during the Term the
Executive dies or the Company terminates the Executive’s
employment on account of the Executive’s Disability (as
defined below), the Executive, or the Executive’s legal
representatives (as appropriate), shall be entitled to receive the
following:
(a)
any unpaid Base Salary through the date of termination;
(b)
a pro rata bonus for the year of termination, calculated as the
product of (x) “Severance Bonus Amount” and (y) a
fraction, the numerator of which is the number of days in the
current fiscal year through the date of termination and the
denominator of which is 365, payable at the time that bonuses are
paid after the Executive’s termination date, to similarly
situated employees; and
(c)
any accrued but unused vacation pay; and
(d)
accrued benefits pursuant to the terms and conditions of the
Company’s benefit plans and programs.
The payments set forth in Section
5.3(a) and (c) shall be paid in a lump sum within ten (10) business
days after the date of termination (unless an earlier date is
prescribed by law) and with respect to 5.3(b), at such time that
annual bonuses are paid after the Executive’s termination
date to similarly situated employees.
For the purposes of this Agreement,
“Disability” means a determination by the Company, in
accordance with applicable law, based on information provided by a
physician selected by the Company or its insurers and reasonably
acceptable to the Executive that, as a result of a physical or
mental injury or illness, the Executive has been unable to perform
the essential functions of his job with or without reasonable
accommodation for a period of (i) ninety (90) consecutive days or
(ii) one hundred and eighty (180) days in any one-year
period.
5.4
No Mitigation . The obligations of the Company to
Executive which arise upon the termination of his employment
pursuant to this Section 5 shall not be subject to mitigation or
offset.
5.5
Removal from any Boards and Positions . If the
Executive’s employment terminates for any reason under this
Agreement, he shall be deemed to resign (i) if a member, from the
Board of Directors of the Company, the Holding Board and the Board
of Directors of the Paper Series of Maple Timber Acquisition LLC or
any other board of directors of any subsidiary or affiliate of the
Company or any other board to which he has been appointed or
nominated by or on behalf of the Company and (ii) from any position
with the Company or any subsidiary or affiliate of the Company,
including, but not limited to, as an officer of the Company or any
of its subsidiaries or affiliates.
6.
Nondisparagement . Except as required by law or order
of a court or governmental agency having jurisdiction or to report,
in good faith, an impropriety or financial wrongdoing affecting the
business of the Company, Executive agrees that Executive will not
at any time publish or communicate to any person or entity any
Disparaging (as defined below) remarks, comments or statements
concerning the Company, Cerberus Capital Management,
L.P.,
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their
parents, subsidiaries and affiliates, and their respective present
and former members, partners, directors, officers, shareholders,
employees, agents, attorneys, successors and
assigns.&n
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