Exhibit 10.11


 


Blue Ridge Paper Products Inc.


One West Pack Square, #1100


Asheville, NC 28801


 


June 28, 2000


 


 


Phillip Bowen


779 White Oak Road


Waynesville, NC 28786


 


Dear Phillip:


 


This letter
sets forth our agreement on the terms and conditions of your employment by Blue
Ridge Paper Products Inc. (the “Company”).


 


1.             Position.  The Company will employ you as Vice
President Business Development of the Company. 
In such capacity you will report to the President and Chief Executive
Officer (the “CEO”) of the Company.  You
agree you shall devote your full business time and efforts to promote the
interests of the Company.


 


2.             Term.  The term (the “Term”) of this letter
agreement shall commence on July 1, 2000 (the “Effective Date”) and shall
continue through and including the earlier of (i) the fourth anniversary of the
Effective Date or (ii) the date on which this letter agreement is terminated
pursuant to paragraphs 10, 11, 12 or 13 of this letter agreement.


 


3.             Duties.  You shall have such duties and responsibilities
as are consistent with the role of Vice President Business Development of the
Company, and such other duties and responsibilities as the President and CEO
may reasonably assign to you.


 


4.             Location.  You shall perform your services hereunder
primarily at the Company office in Asheville, North Carolina, but understand
and agree the Company may require you to travel away from such office as may
reasonably be required to fulfill your duties hereunder.


 


5.             Salary.  The Company will pay you a base salary
(“Salary”), payable in accordance with the normal payment procedures of the
Company and subject to such withholdings and other normal employee deductions
as may be required by law or elected by you in accordance with the Company’s
benefit plans, at an annual rate of $170,000.


 

















 


6.             Bonus.  You will be eligible to receive an annual
cash bonus payment (the “Annual Bonus”) calculated as follows:


 


(a)           Calculation.  If the Company’s actual EBITDA (as defined
below) for a fiscal year exceeds 75% of its target for EBITDA (the “Target
EBITDA”) for such fiscal year (such Target EBITDAs are set forth on Exhibit A,
attached to and made a part of this letter agreement), then your Annual Bonus
for such fiscal year shall be not less than the product of (i) $1814 multiplied
by (ii) the number of percentage points (not to exceed seventy-five (75),
rounded to the nearest percentage point, by which the Company’s actual EBITDA
for such fiscal year exceeds 75% of the Target EBITDA for such fiscal year.  Except in respect of a fiscal year of the
Company during which your employment is terminated pursuant to paragraphs 10,
11, 12 or 13 hereof other than by death or Disability, your Annual Bonus with
respect to any fiscal year of the Company commencing, but not ending, during the
Term shall be equal to the product of the amount calculated in the manner set
forth in the preceding sentence in respect of such fiscal year multiplied by a
fraction, the numerator of which is the number of calendar days in such fiscal
year prior to the end of the Term and the denominator of which is 365.  If the Company’s actual EBITDA for any
fiscal year commencing during the Term is less than 75% of Target EBITDA for
such fiscal year, your Annual Bonus in respect of such fiscal year shall be
determined by the Board in its sole discretion.


 


(b)           “EBITDA.”  For purposes of this letter agreement,
actual “EBITDA” means, for a given period, the accounting earnings for the
Company determined under U.S. generally accepted accounting principles, as
applied on a consistent basis, before taking into account any interest expense,
any provision for income taxes or any depreciation or amortization expense, and
excluding for this purpose extraordinary gains and losses unless included in
the determination of the applicable Target EBITDA.


 


(c)           Payment.  The Annual Bonus, if any, will be paid as
soon as practicable following the end of the fiscal year to which it relates,
but not later than thirty (30) days following the Company’s receipt of audited
financial statements for such fiscal year.


 


7.             Employee Benefit Programs.  You will be entitled to participate during
the Term in such pension, savings, life insurance, health, disability and major
medical insurance plans, and in such other employee benefit plans and programs,
for the benefit of the employees of the Company, as may be maintained by the
Company from time to time during the Term, each subject to the terms and
provisions of such plans or programs (collectively, “Benefits”).  In addition, the Company shall make annual
contributions to your account under and in accordance with the terms of the
Blue Ridge Paper Products Employee Stock Ownership Plan.


 


8.             Expenses.  The Company will reimburse you for
reasonable, business-related expenses you incur in connection with the performance
of your duties


 


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hereunder, subject, however, to
the Company’s policies relating to reimbursement of business-related expenses
as in effect from time to time during the Term, including reasonable and
customary attorney fees associated with the preparation of this letter
agreement in an amount not greater than $3,000 in the aggregate.


 


9.             Vacation.  You will be entitled to four (4) weeks of
paid vacation per annum during the Term in accordance with Company policy.  Vacation scheduling will be on a mutually
agreeable basis, in accordance with the Company’s reasonable business needs.


 


10.           Termination for Cause.  The Company may terminate your employment at
any time for “Cause,” as defined below.  If your employment is terminated by the Company for Cause, the
Company will pay to you any Salary and other compensation earned but not paid
to you prior to the date of such termination. 
Other than such payment, upon such a termination, neither you nor the
Company shall have any further rights, obligations or claims against the other
except as specifically provided under this letter agreement.


 


For purposes
of this letter agreement, “Cause” shall mean: (i) the willful failure or
refusal by you to perform your duties hereunder (other than any such failure or
refusal resulting from your incapacity due to physical or mental illness);
provided that the Company shall provide you with notice of such failure or
refusal and you shall not have remedied such failure or refusal within fifteen
days of receipt of notice thereof; (ii) the commission by you of any material
act of dishonesty or breach of trust in connection with the performance of your
duties hereunder; (iii) your being convicted of, or pleading guilty or not
contest to, any felony or any lesser crime having as its predicate element
fraud, dishonesty or misappropriation; or (iv) a termination due to a material
breach of your obligations under paragraphs 14, 15, 16 or 17 of this Agreement,
in each case as determined in good faith by the Board.  For purposes of clause (i), no failure or
refusal on your part shall be deemed “willful” if done, or omitted to be done,
by you in the reasonable belief your failure or refusal was in the best
interest of the Company.


 


11.           Termination Without Cause.  The Company may terminate your employment at
any time without Cause.  If your
employment is terminated by the Company without Cause, the Company shall (i)
pay to you Salary, in accordance with the normal pay practices of the Company,
until the date (the “Salary Continuation Date”) which shall be the later of (A)
the second anniversary of the date hereof or (B) the date which is the first
anniversary of the date of the termination of your employment; (ii) provide to
you benefits substantially equivalent to the Benefits to which you are entitled
on the date of such termination until the Salary Continuation Date and (iii)
pay to you on the Salary Continuation Date the product of (y) $14,166.67 and
(z) the number of calendar months ending prior to the date of such termination
in the fiscal year of the Company during which such termination occurs;
provided further that any obligations of the Company to you pursuant to this
paragraph 11 shall terminate upon any matter constituting a material breach of
your obligations under paragraphs 14, 15, 16 or 17 becoming known to the
Company subsequent to such termination. 
Except as set forth in


 


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this paragraph 11, upon such a
termination, neither you nor the Company shall have any further rights,
obligations or claims against the other except as specifically provided under
this letter agreement.


 


12.           Termination With Good Reason.  You may voluntarily terminate your
employment at any time with “Good Reason.” 
In the event of any such termination under this paragraph 12, the
Company shall (i) pay to you Salary until Salary Continuation Date; (ii)
provide to you Benefits substantially equivalent to the Benefits to which you
are entitled on the date of such termination until the Salary Continuation Date
and (iii) pay to you on the Salary Continuation Date the product of (y)
$14,166.67 and (z) the number of calendar months ending prior to the date of
such termination in the fiscal year of the Company during which such
termination occurs; provided further that any obligation of the Company to you
pursuant to this paragraph 12 shall terminate upon any matter constituting a
material breach of your obligations under paragraphs 14, 15, 16 or 17 becoming
known to the Company subsequent to such termination.  Except as set forth in this paragraph 12, upon such a
termination, neither you nor the Company shall have any further rights,
obligations or claims against the other except as specifically provided under
this letter agreement.


 


For purposes
of this letter agreement, “Good Reason” shall mean the Company, without your
consent, (i) assigning to you duties inconsistent with your position, title,
authority or duties which results in a substantial diminution of such position,
title, authority or duties; provided that you shall provide the Company with
notice of such diminution and the Company shall not have remedied such
diminution within fifteen days of receipt of notice thereof; or (ii) materially
breaching this letter agreement.


 


13.           Termination Without Good Reason;
Death and Disability.  You may
voluntarily terminate your employment without “Good Reason” (as defined above)
upon providing ninety (90) days written notice to the Company, or such shorter
notice period as the Company may allow. 
If your employment is terminated pursuant to this paragraph 13, the
Company will pay to you any Salary and other compensation earned but not paid
to you prior to the date of such termination. 
Other than such payment upon such a termination, neither you nor the
Company shall have any further rights, obligations or claims against the other
except as specifically provided under this letter agreement.


 


Your
employment shall terminate automatically upon your death during the Term in
which case your surviving spouse or estate shall be entitled to receive in a
lump sum your Salary for one year and any Salary and other compensation earned,
but not paid to you prior to your death. 
Your employment shall also terminate automatically upon your Disability,
in which case you shall be entitled to receive in a lump sum, the same amount
that your surviving spouse or estate is entitled to receive in the event of
your death.  For purposes of this letter
agreement, “Disability” shall be deemed to occur if, as a result of your
incapacity due to physical or mental illness, you (i) shall have been absent
from the full-time performance of your duties with the Company for a period of


 


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six (6) consecutive months, the
Company shall have given you a notice of termination for Disability and, within
thirty (30) days after such notice of termination is given, you shall not have
returned to the full-time performance of your duties or (ii) shall have been absent
from the full-time performance of your duties with the Company for 200 or more
days in any 240 consecutive day period.


 


14.           Non-Competition.  By signing this letter agreement and
accepting this offer of employment, you acknowledge and agree the services
which you will perform for the Company are services which are unique and
extraordinary and, by reason of your employment, you will acquire and have
access to proprietary and “Confidential Information,” as defined in paragraph
16 below, and trade secrets concerning the Company’s operations, future plans
and methods of doing business and those of the Company’s affiliates.  Accordingly, you agree that:


 


(a)           If, for any reason (other than Good
Reason as defined above), you decide to terminate your employment with the
Company, you will provide the Company with ninety (90) days written
notice.  To the extent available, such
written notice will include the name of your new employer and a description of
your new position, duties and responsibilities, which information the Company
agrees to keep confidential and to disclose only with your prior written
consent, other than as required by law or legal process.


 


(b)           During the term of your employment
and during the Restrictive Period, as defined below, you will not, absent prior
written consent from the Company, directly or indirectly, engage in a
Competitive Business Activity in the United States.  The term “Competitive Business Activity” shall mean:


 


(i)            engaging in, or managing or
directing persons engaged in the manufacture, sale or distribution of liquid
packaging board, including carton products manufactured by the Company’s
converting businesses, or uncoated freesheet paper for envelopes, or any other
paper product of similar specificity which the Company or any affiliate of the
Company manufactures, sells or distributes, other than a de minimus amount
(“Competing Business”), whether independently or as an employee, agent,
consultant, advisor, independent contractor, proprietor, partner, officer,
director or otherwise;


 


(ii)           acquiring or having an ownership
interest in any entity that derives more than 10% of its gross revenues from
any Competing Business, except for ownership of 1% or less of the shares of any
entity whose securities are freely tradable on an established market; or


 


(iii)          participating in the financing,
operation, management or control of any firm, partnership, corporation, entity
or business described in subparagraph (ii) immediately above.


 


The term
“Restrictive Period” shall mean the period beginning upon a


 


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termination of your employment
with the Company and ending on the date which is (i) in the event that your
employment is terminated pursuant to paragraphs 10 or 13, the second
anniversary of such termination or (ii) in the event that your employment is
terminated pursuant to paragraphs 11 or 12, the Salary Continuation Date.


 


15.           Non-Solicitation.   During the term of your employment and
during the Restrictive Period, you will not, either for your benefit or for the
benefit of any other person or entity, directly or indirectly solicit any
contractor or employee of the Company or its affiliates to terminate his or her
employment or other relationship with the Company or its affiliates.


 


16.           Non-Disclosure of Confidential
Information.   By signing this
letter agreement and accepting this offer of employment, you recognize that the
services to be performed by you as an employee of the Company are unique
services, and that by reason of your employment you will have access to and
acquire proprietary and other confidential information and trade secrets
concerning operations, future plans and methods of doing business of the
Company, its affiliates and their respective clients.  Accordingly, you hereby covenant that you will not at any time
during your employment by the Company or any time thereafter, other than as
required by law or legal process, reveal or divulge to any person, firm,
corporation or other business entity or use for your own personal or business
purposes any trade secrets or confidential information or knowledge relating to
the business or businesses of the Company, its affiliates or their respective
clients including, without limiting the generality of the foregoing, any such
information or knowledge pertaining to products, formulae or processes, and
developments or improvements with respect thereto, inventions, discoveries,
trademarks, patents, designs, sketches, manufacturing, packaging,
merchandising, advertising, distribution and sales methods, sales and profits
figures, budgeting materials, customer lists and relationships between the
Company and any of its customers, suppliers, ultimate consumers or affiliates
(collectively, “Confidential Information”). 
Notwithstanding the foregoing Confidential Information shall not include
information that (i) is, or becomes through no breach of your obligations
hereunder, generally known to the public; or (ii) becomes known to you from
sources other than the Company or its affiliates under circumstances not
involving any breach of an agreement to which any such source is a party or
(iii) was known to you prior to the Effective Date.  As used in this letter agreement, the term “affiliate” means such
corporation or other business entity at any time directly or indirectly
controlling, controlled by, or under common control with the Company, its
successors or assigns.  As of date
hereof, the Company has no affiliates other than Parent and KPS Special
Situations Fund, L.P. which, as of the date hereof, are not engaged in any
activity which constitutes a Competing Business.  As used in this letter agreement, the term “client” means any
person, firm or corporation to whom more than a de minimus amount of goods, services
or intellectual property are actively being supplied by the Company or an
affiliate for compensation at the time you learn of such person’s, firm’s or
corporation’s Confidential Information, or to whom the Company or an affiliate
is at such time actively soliciting a business relationship to engage in such
activities.  You acknowledge that any
materials or documents relating to the Company’s Confidential Information, in
existence or developed in the future, including all copies


 


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thereof are proprietary to the
Company and shall, following the termination of your employment, regardless of
the circumstances thereof or reasons therefor, remain the Company’s sole and
exclusive property and that you shall immediately return all such materials and
documents including any copies thereof to the Company upon any termination of
your employment or upon any prior request.


 


17.           Customer and Supplier Solicitation.   During the term of your employment and
during the Restrictive Period, you shall not divert, or attempt to divert any
person, business or entity from doing business with the Company, nor will you
attempt to induce any such person, business or entity to cease being a customer
of or supplier to the Company.


 


18.           Remedy.   You hereby recognize and agree that the
Company would not have an adequate remedy at law or in equity for the breach or
threatened breach by you of any one or more of the covenants set forth in
paragraphs 14, 15, 16 and 17 and agree that, in addition to such other remedies
as may be available to the Company, in law or in equity, the Company may obtain
an injunction or restraining order, without the posting of any bond or security
and without the proof of special damages, to enjoin you from the breach or
threatened breach of such covenants. 
The restrictions set forth in paragraphs 14, 15, 16 and 17 are
considered by you and the Company to be reasonable for the purposes of
protecting the business of the Company. 
However, if any such restriction is found by a court of competent
jurisdiction to be unenforceable because it is too broad, it is the intention
of you and the Company that such restriction shall be interpreted to be as
broad as possible consistent with allowing its enforceability.


 


19.           Arbitration; Costs, Fees and
Expenses.   Except for disputes with
respect to paragraphs 14, 15, 16 and 17 hereof, any dispute respecting the
meaning and intent of this letter agreement or any of its terms and provisions
shall be submitted to arbitration in Charlotte, North Carolina, before a single
arbitrator in accordance with the Commercial Rules of the American Arbitration
Association then in effect, and the arbitration determination resulting from
any such submission shall be final and binding upon the parties hereto.  All costs, fees and expenses relating to any
dispute arising out of this letter agreement or any of its terms and
provisions, including the parties’ attorney’s fees, shall be borne by the party
not prevailing in the resolution of the dispute.


 


20.           Survival of Obligations.   You agree that your obligations under
paragraphs 14, 15, 16, 17 and 19, and the Company agrees that its obligations
under paragraphs 8, 9, 10, 11, 12, 13, 14(a) and 19, will survive any
termination of your employment.


 


21.           Notices.   All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered in person, or by reputable commercial messenger service
or by registered or certified mail, postage prepaid, return receipt requested,
addressed to you at 779 White Oak Road, Waynesville, NC 28786, and to the
Company at the address appearing on the top of the first page of this letter
agreement and shall be deemed to have


 


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been received on the date of
receipt if delivered personally or by reputable commercial messenger service or
three business days after posting if by registered or certified mail.


 


22.           Conflicting Agreements.   By signing this letter agreement and
accepting this offer of employment, you hereby represent and warrant to the
Company that you are accepting this offer and agreeing to the obligations and
duties undertaken by you hereunder will not conflict with, violate or
constitute a breach of or otherwise violate the terms of any employment or
other agreement to which you are a party and that you are not required to
obtain the consent of any person, firm, corporation or other entity in order to
accept this offer of employment.  You
agree to indemnify the Company against all damages, loss and expenses which the
Company may incur in connection with a breach of the foregoing representation
and warranty.


 


23.           Entire Agreement.   This letter agreement and its Exhibits and
Appendices contains the entire understanding and agreement between you and the
Company concerning the subject matter hereof and supersedes all prior
agreements, understanding, discussions, negotiations and undertakings, whether
written or oral, between you and the Company with respect thereto.


 


24.           Amendment.   Following your execution of this letter agreement, no provision
thereof may be amended unless such amendment is agreed to in writing and signed
by you and an authorized officer of the Company.


 


Our respective
signatures below indicate our mutual assent to the terms of this letter
agreement.


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  Blue Ridge
  Paper Products Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Gordon Jones

  	
   

  
	
   

  	
   

  	
  Name:  Gordon Jones

  	
   

  
	
   

  	
   

  	
  Title:  President and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed and
  accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Phillip
  Bowen

  	
   

  	
   

  
					



 


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