Exhibit 10.5

VERSO PAPER CORP.

2009 LONG-TERM CASH AWARD PROGRAM FOR EXECUTIVES

Effective as of January 1, 2009

1. Plan and Program. Verso Paper Corp. (the “Company”) has previously adopted
the Verso Paper Corp. Senior Executive Bonus Plan (the “Plan”) pursuant to which
the Company may pay bonuses to key employees of the Company and its subsidiaries
selected by the Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”). This Verso Paper Corp. 2009 Long-Term Cash Award
Program for Executives (this “Program”) provides that the executive officers
selected to participate in this Program (the “Participants”) shall be eligible
to receive cash bonuses pursuant to the Plan upon the Company’s attainment of
the performance targets described herein. Unless otherwise noted, capitalized
terms used but not defined in this Program shall have the meanings set forth in
the Plan.

2. Purpose. This Program is intended to provide an incentive for superior work
and to motivate the Participants toward even higher achievement and business
results, to tie their goals and interests to those of the Company and its
stockholders, and to enable the Company to attract and retain highly qualified
executives.

3. Performance Awards.

(a) Performance Cycle. The “Performance Cycle” shall be the period beginning on
January 1, 2009, and ending on December 31, 2011, unless earlier terminated in
accordance with the Plan or this Program.

(b) Eligibility. All Participants are executive officers of the Company or a
Subsidiary (as defined in the Verso Paper Corp. 2008 Incentive Award Plan (the
“Incentive Plan”)) who have been selected by the Compensation Committee to
participate in this Program. With respect to the Performance Cycle, each
Participant shall be eligible to receive a maximum long-term cash performance
award (a “Performance Award”) determined by the Compensation Committee, subject
to the terms and conditions of the Plan and such other terms and conditions as
are set forth herein.

(c) Vesting; Payment.

(i) Subject to Section 3(e), each Performance Award will be eligible to become
vested upon the achievement of performance objectives over the Performance Cycle
as follows:

(A) Up to 25% of each Performance Award shall be eligible to become vested based
upon achievement of the Annual EBITDA Target for calendar year 2009, as set
forth in Schedule A (the “2009 Tranche”);

(B) Up to 25% of each Performance Award shall be eligible to become vested based
upon achievement of the Annual EBITDA Target for calendar year 2010, as set
forth in Schedule A (the “2010 Tranche”);

(C) Up to 25% of each Performance Award shall be eligible to become vested based
upon achievement of the Annual EBITDA Target for calendar year 2011, as set
forth in Schedule A (the “2011 Tranche” and, together with the 2009 Tranche and
the 2010 Tranche, the “Annual Tranches”); and

--------------------------------------------------------------------------------

(D) Up to the remaining 25% of the Performance Award shall be eligible to become
vested based upon achievement of the Performance-Cycle EBITDA Target with
respect to calendar years 2009-2011, as set forth in Schedule A (the
“Performance-Cycle Tranche”).

(ii) The Administrator shall in good faith make the determination as to whether
the respective Annual EBITDA Targets and the Performance-Cycle EBITDA Target
have been met, and shall determine the extent, if any, to which each Annual
Tranche or the Performance-Cycle Tranche, as applicable, has become vested, on
any such date following December 31 of the applicable calendar year as the
Administrator, in its sole discretion, shall determine; provided, however, that,
with respect to each calendar year, such date shall not be later than the 120th
day following December 31 of such calendar year (each such date so determined by
the Administrator, a “Determination Date”).

(iii) Subject to Section 3(e), the vested portion of each Annual Tranche and the
Performance-Cycle Tranche shall be payable in cash as soon as reasonably
practicable after the Determination Date immediately following the completion of
the Performance Cycle, but in any event within the period required by
Section 409A (as defined below) such that it qualifies as a “short-term
deferral” pursuant to Treasury Regulation Section 1.409A-1(b)(4) (or any
successor thereto) and prior to the first meeting of the Company’s stockholders
at which members of the Board of Directors of the Company are to be elected that
occurs in 2012. Any then unvested portion of the Performance Award shall
thereupon be forfeited.

(iv) For purposes of this Program:

(A) “Annual EBITDA Target” with respect to a given calendar year shall mean an
amount of EBITDA equal to the Annual EBITDA Target for such calendar year set
forth in Schedule A.

(B) “Performance-Cycle EBITDA Target” with respect to the Performance Cycle
shall mean an amount of EBITDA equal to the Performance-Cycle EBITDA Target for
such period set forth in Schedule A.

(C) “EBITDA” shall mean the “Adjusted EBITDA” as such term is defined on the
date hereof in the Indenture dated as of August 1, 2006, relating to the 11-3/8%
Senior Subordinated Notes due 2016 issued by Verso Paper Holdings LLC and Verso
Paper Inc.

(d) Change in Control. Unless otherwise provided by the Compensation Committee,
in the event of a Change in Control (as defined in the Incentive Plan), the
Company shall require that this Program be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, and the Performance Awards shall
continue to be eligible to become vested and payable in accordance with the
terms and conditions of this Program, subject to such equitable adjustments, if
any, as the Administrator shall determine to be appropriate.

(e) Termination of Employment. Notwithstanding anything herein to the contrary,
except as otherwise provided below, in no event shall a Participant receive
payment of his or her Performance Award following the date of such Participant’s
termination of employment with the Company or any Subsidiary for any reason;
provided, however, that subject to Section 8:

(i) In the event of a Participant’s death, Disability, Retirement (as defined
below), or termination of employment by the Company or any Subsidiary without
Cause (as defined below), his or her Performance Award shall become vested with
respect to a pro-rata percentage (determined on a quarterly basis and based on
the number of completed calendar quarters that have elapsed from January 1,
2009, through the date of the Participant’s termination of employment) of the

 

2

--------------------------------------------------------------------------------

portion of the Annual Tranches and the Performance-Cycle Tranche that would have
become vested had the Participant remained continuously employed by the Company
or any Subsidiary through the completion of the Performance Cycle, based on
actual achievement of the Annual EBITDA Targets and the Performance-Cycle EBITDA
Target, payable at the same time that payment would otherwise be made under
Section 3(c)(iii).

(ii) For purposes of this Program:

(A) “Cause,” when used in connection with a Participant’s termination of
employment, shall mean the Participant’s termination of employment by the
Company or any Subsidiary due to the Participant’s (1) material breach of his or
her obligations under any agreement with the Company or any Subsidiary, which he
or she fails to cure within 15 days after receipt of a written notice of such
breach (to the extent that, in the reasonable judgment of the Administrator,
such breach can be cured by the Participant); (2) willful failure to perform his
or her material duties, which he or she fails to cure within 15 days after
receipt of a written notice of such failure to perform (to the extent that, in
the reasonable judgment of the Administrator, such failure to perform can be
cured by the Participant); (3) material breach of the Company’s or any
Subsidiary’s written policies or procedures, which he or she fails to cure
within 15 days after receipt of a written notice of such breach (to the extent
that, in the reasonable judgment of the Administrator, such breach can be cured
by the Participant); (4) willful misconduct which causes material harm to the
Company or any Subsidiary or their respective business reputations, which he or
she fails to cure within 15 days after receipt of a written notice of such
misconduct (to the extent that, in the reasonable judgment of the Administrator,
such misconduct can be cured by the Participant); (5) commission of a felony or
a crime of moral turpitude; or (6) willful commission of a material act of
dishonesty involving the Company or any Subsidiary.

(B) “Retirement” shall mean a Participant’s termination of employment with the
Company or any Subsidiary due to the Participant’s resignation after
(1) attaining at least age 50 with at least 15 years of continuous service with
Company or its Subsidiaries, (2) attaining at least age 55 with at least ten
years of continuous service with the Company or its Subsidiaries, or
(3) attaining at least age 60 with at least five years of continuous service
with the Company or its Subsidiaries.

4. Taxes. All amounts payable hereunder shall be subject to applicable federal,
state and local tax withholding.

5. Choice of Law. This Program shall be construed and interpreted, and the
rights of the parties shall be determined, in accordance with the laws of the
State of Delaware.

6. Amendment and Termination. Subject to the terms of the Plan (including,
without limitation, Article 13 of the Plan), and except as may be limited by any
applicable law, this Program may be wholly or partially amended by the Board
from time to time, including retroactive amendments; provided, however, that no
amendment shall decrease the amount that is or might be payable to any
Participant without the written consent of such Participant.

7. Severability. In the event that any one or more of the provisions contained
in this Program shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Program or any other such
instrument.

8. Section 409A. To the extent applicable, this Program shall be interpreted in
accordance with, and shall incorporate the terms and conditions required by,
Section 409A of the Code and the Treasury Regulations and other interpretive
guidance issued thereunder, including, without limitation, any

 

3

--------------------------------------------------------------------------------

such regulations or other guidance that may be issued after the effective date
hereof (collectively, “Section 409A”). Notwithstanding any provision of this
Program to the contrary, in the event that the Company determines that any
amounts payable hereunder will be immediately taxable to a Participant under
Section 409A, the Company reserves the right to (without any obligation to do so
or to indemnify such Participant for failure to do so) (a) adopt such amendments
to this Program or adopt such other policies and procedures (including
amendments, policies and procedures with retroactive effect) that it determines
to be necessary or appropriate to preserve the intended tax treatment of the
benefits provided by this Program, to preserve the economic benefits of this
Program, and to avoid less favorable accounting or tax consequences for the
Company, and/or (b) take such other actions that it determines to be necessary
or appropriate to exempt the amounts payable hereunder from Section 409A or to
comply with the requirements of Section 409A and thereby avoid the application
of penalty taxes thereunder. In addition, to the extent required to avoid the
application of the Section 409A penalty tax, with respect to any Participant who
is a “specified employee” within the meaning of Section 409A, no payment shall
be made and no benefit shall be provided hereunder until the expiration of the
six-month period immediately following the date of the Participant’s “separation
from service” (as such term is defined in the Treasury Regulations issued under
Section 409A) other than due to death or Disability.

 

4

--------------------------------------------------------------------------------

SCHEDULE A

ANNUAL AND PERFORMANCE-CYCLE EBITDA TARGETS

Performance Cycle: 2009-2011

 

     Annual
EBITDA Target
2009    Annual
EBITDA Target
2010    Annual
EBITDA Target
2011

Threshold

   $ 125 million    TBD    TBD

Target

   $ 165 million    TBD    TBD

Maximum

   $ 200 million    TBD    TBD

 

     Performance-Cycle
EBITDA Target
2009-2011

Threshold

   $ 540 million

Target

   $ 600 million

Maximum

   $ 690 million

Vesting Schedule

 

Achievement Level of
Applicable Annual/
Performance-Cycle Target

  

2009 Tranche

(25% of Total)

   2010 Tranche
(25% of Total)    2011 Tranche
(25% of Total)    Performance-Cycle
Tranche
(25% of Total)

Threshold

  

25% of Maximum

2009 Tranche

   25% of Maximum

2010 Tranche

   25% of Maximum

2011 Tranche

   25% of Maximum

Performance-Cycle
Tranche

Target

  

50% of Maximum

2009 Tranche

   50% of Maximum

2010 Tranche

   50% of Maximum

2011 Tranche

   50% of Maximum

Performance-Cycle
Tranche

Maximum

  

100% of Maximum

2009 Tranche

   100% of Maximum

2010 Tranche

   100% of Maximum

2011 Tranche

   100% of Maximum

Performance-Cycle
Tranche