Document:

Exhibit 10.42

 

Director
Compensation Summary

 

Non-management
directors receive an annual retainer of $150,000 per year, $60,000 of which
will be paid in cash and $90,000 of which is paid in stock units or restricted
stock (as described below), though a director may elect to receive all of his
compensation in stock units or restricted stock. Non-management directors also
received a one-time cash award of $25,000 upon their election, concurrent with
the closing of the Company’s initial public offering. The Chairman of the Board
receives an additional $15,000 annual retainer, the Chairman of the Audit
Committee receives an additional $20,000 annual retainer, the Chairman of the
Compensation Committee receives an additional $10,000 annual retainer and the
Chairman of the Nominating and Governance Committee receives an additional
$5,000 annual retainer. Members of the Audit Committee receive an additional
$10,000 annual retainer and members of the Compensation Committee receive an
additional $5,000 annual retainer. 
Commencing with the May 2005 Annual General Meeting, the compensation
for the Nominating and Governance Committee will be on the same basis as that
of the Compensation Committee, with members of the Nominating and Governance
Committee receiving an additional annual retainer of $5,000 and the Chairman of
the Nominating and Governance Committee receiving an additional annual retainer
of $10,000.  The Company will generally
not pay a fee for attendance at board or committee meetings, though the Chief
Executive Officer has the discretion to pay attendance fees of $2,000 for
extraordinary or special meetings.

 

An initial
(one-time) grant of restricted shares with a value of $100,000 was awarded to
each non-management director upon his initial election upon closing of the IPO.
These restricted shares will vest on the day immediately prior to the third
annual shareholders meeting at which directors are elected following the grant
of the shares.

 

Retainer
equity awards were granted upon completion of the IPO and will be granted
annually thereafter (usually on the date of the Company’s annual shareholders’
meeting) in the form of stock units until the share ownership guidelines set
forth in the next paragraph have been met. The first 10,000 stock units awarded
to each director will become non-forfeitable on the day immediately prior to
the first annual shareholders meeting at which directors are elected following
the grant of the units. The issuance of Common Shares for these units will be
mandatorily deferred until six months after termination of the director’s
service on the Board of Directors. After the share ownership guidelines
discussed below are met, directors may elect to receive their annual retainer
equity award in the form of either restricted shares that vest on the day
immediately prior to the first annual shareholders meeting at which directors
are elected following the grant of the shares, or stock units that become
non-forfeitable on the day immediately prior to the first annual shareholders
meeting at which directors are elected following the grant of the units, with
the issuance of Common Shares deferred to a later date chosen by the director.
Stock units cannot be sold or transferred until the Common Shares are issued.
Dividend equivalents will be credited to stock units and reinvested as
additional stock units.

 

The Board of
Directors has recommended that each director own at least 10,000 Common Shares
within three years after joining the board. Common Shares represented by stock
units will count toward that guideline, though restricted shares awarded upon a
director’s initial election will not.Exhibit 10.43

 

ASSURED
GUARANTY LTD.

 

DESCRIPTION
OF EXECUTIVE OFFICER CASH COMPENSATION

 

FOR 2004
AND 2005

 

Set
forth below are the annual base salaries of the Chief Executive Officer and
each of the four most highly compensated executive officers in 2004 and their
increased annual base salary effective January 1, 2005, together with their
bonuses for 2004.

 

Dominic J. Frederico

 

President and Chief Executive Officer, Assured Guaranty Ltd.

 

	
   

  	
   

  	
  Base

  	
   

  	
  Bonus

  	
   

  	
  Other Annual Compensation

  	
   

  
	
  2004

  	
   

  	
  $

  	
  700,000

  	
   

  	
  $

  	
  1,4000,000

  	
   

  	
  $

  	
  612,438

  	
   

  
	
  2005

  	
   

  	
  $

  	
  700,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

Robert B. Mills

 

Chief Financial Officer Assured
Guaranty Ltd.

 

	
   

  	
   

  	
  Base

  	
   

  	
  Bonus

  	
   

  	
  Other Annual Compensation

  	
   

  
	
  2004

  	
   

  	
  $

  	
  500,000

  	
   

  	
  $

  	
  750,000

  	
   

  	
  $

  	
  10,500

  	
   

  
	
  2005

  	
   

  	
  $

  	
  500,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

Michael J. Schozer

 

President, Assured Guaranty Corp.

 

	
   

  	
   

  	
  Base

  	
   

  	
  Bonus

  	
   

  	
  Other Annual Compensation

  	
   

  
	
  2004

  	
   

  	
  $

  	
  350,000

  	
   

  	
  $

  	
  675,000

  	
   

  	
  $

  	
  21,338

  	
   

  
	
  2005

  	
   

  	
  $

  	
  375,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

James M. Michener

 

General Counsel Assured Guaranty
Ltd.

 

	
   

  	
   

  	
  Base

  	
   

  	
  Bonus

  	
   

  	
  Other Annual Compensation

  	
   

  
	
  2004

  	
   

  	
  $

  	
  350,000

  	
   

  	
  $

  	
  550,000

  	
   

  	
  $

  	
  96,803

  	
   

  
	
  2005

  	
   

  	
  $

  	
  375,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

Pierre A. Samson

 

President, Assured Guaranty Re
International Ltd.

 

	
   

  	
   

  	
  Base

  	
   

  	
  Bonus

  	
   

  	
  Other Annual Compensation

  	
   

  
	
  2004

  	
   

  	
  $

  	
  350,000

  	
   

  	
  $

  	
  525,000

  	
   

  	
  $

  	
  172,683

  	
   

  
	
  2005

  	
   

  	
  $

  	
  350,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

 

NOTE:  Prior to the Company’s
April 28, 2004 initial public, Messrs. Frederico and Samson had an annual base
salary for service with ACE Limited and its subsidiaries of $975,00 and
$430,000, respectively.  In addition, Mr.
Frederico received a $250,000 bonus from ACE with respect to his 2004
compensation from ACE.

 

In
addition to the above, these officers received the following other annual
compensation:

 

Other annual compensation for the year ended
December 31, 2004 for Mr. Frederico includes home loan forgiveness as well
as imputed interest on home loan of $265,189 prior to the IPO by ACE, housing
allowance of $240,500 paid by ACE and the Company and taxes of $74,372 paid by
ACE and the Company.  Other annual
compensation for Mr. Frederico also includes club fees, car allowance, financial
planning, personal travel on ACE’s corporate aircraft and family travel
benefit.  Other annual compensation for
the year ended December 31, 2004 for Mr. Mills includes club dues and family
travel benefit.  Other annual
compensation for the year ended December 31, 2004 for Mr. Schozer includes
financial planning and club dues.  Other
annual compensation for the year ended December 31, 2004 for Mr. Michener
includes housing allowance of $71,000. 
Other annual compensation for Mr. Michener also includes family
travel benefit, club dues, car allowance and taxes paid by the Company.  Other annual compensation for the year ended
December 31, 2004 for Mr. Samson includes housing allowance of $72,000
paid by ACE and the Company and taxes, including tax gross ups, of $79,106 paid
by ACE and the Company.  Other annual
compensation for Mr. Samson also includes club dues, car allowance, family
travel benefit and financial planning.Exhibit 10.10

 

LETTER OF AGREEMENT

 

BLUE RIDGE PAPER PRODUCTS INC.

 

As of March 21, 2005

 

Richard A. Lozyniak

1 Stuyvesant Crescent

Asheville, North Carolina 28803

 

Dear Rich:

 

This letter
confirms the terms and conditions of your continued employment as President and
Chief Executive Officer of Blue Ridge Paper Products Inc. (the “Company”):

 

1.                                       Position.  You are employed as President and Chief Executive
Officer of the Company.  In that
capacity, you report to the Board of Directors of the Company (the “Board”).  You agree that you shall continue to devote
your full business time and efforts to promote the interests of the Company.

 

2.                                       Term.  The term of your continued employment
pursuant to this letter agreement commenced on March [21], 2005 (the “Commencement
Date”) and shall continue through and including the earlier of (i) the end
of the Term (as hereinafter defined)  or (ii) the
date on which your employment is terminated pursuant to this letter
agreement.  As used herein, the “Term”
shall mean the period commencing on the Commencement Date and ending on the 3rd
anniversary of the Commencement Date; provided, however, that the Term shall be
automatically renewed for successive additional one-year periods unless either
party shall give the other party at least thirty (30) days’ prior written
notice of non-renewal before the end of the then-current period.

 

3.                                       Duties.  You shall have such duties and
responsibilities as are consistent with the role of President and Chief
Executive, and such other duties and responsibilities as the Board may
reasonably assign you.

 

4.                                       Salary.  The Company pays you a base 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 a
current annual rate of $325,000 (such salary, as the same may be changed from
time to time in the sole discretion of the Board, your “Salary”).  You also are eligible to receive an annual
cash bonus payment in accordance with the Blue Ridge Paper Products Performance
Incentive Plan as the same may be in effect from time to time in the sole
discretion of the Board.

 

1

 

5.                                       Employee
Benefit Programs.  You are entitled
to participate during your term of employment in such pension, 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 from time to time during the term, in each case,
subject to the terms and provisions of such plans or programs.  In addition, the Company shall make annual
contributions to your account under the Blue Ridge Paper Products Employee
Stock Ownership Plan maintained by the parent company of the Company, Blue
Ridge Holding Corp., in accordance with the terms and conditions thereof.  You will also continue to be eligible to participate
in the Restricted Stock Unit Plan maintained by Blue Ridge Holding Corp. for
the benefit of certain executive officers of the Company in accordance with the
terms and conditions thereof.

 

6.                                       Vacation.  You are currently entitled to five weeks of
paid vacation per annum during the term of your employment in accordance with
Company policy.  Vacation scheduling will
be on a mutually agreeable basis, in accordance with the Company’s business
needs.

 

7.                                       Termination
for Cause.  The Company may terminate
your employment at any time for “Cause,” as defined below upon written notice
to you to take effect on the date specified in such notice.  If your employment is terminated by the
Company for Cause, the Company will pay to you any salary or other compensation
earned but not paid to you prior to the date of such termination.  Upon such termination, the Company shall have
no obligation to pay you severance of any kind, nor shall the Company have any
further obligation to pay you salary, bonus or benefits.

 

For purposes
of this letter agreement, “Cause” shall mean: 
(i) the willful or negligent failure or refusal by you to perform
your duties hereunder; provided that the Company shall provide you with at
least 15 days’ prior written notice of such failure or refusal and an
opportunity to cure the same; (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 no
contest to, any felony or any lesser crime having as its predicate element
fraud, dishonesty or misappropriation; or (iv) a termination due to breach
of your obligations under paragraphs 12, 13, 14, 15 or 16 of this letter
agreement, in each case, as determined in good faith by the Board.

 

8.                                       Termination
Without Cause.  The Company may
terminate your employment at any time without Cause upon written notice to you
to take effect on the date specified in such notice.  If your employment is terminated by the
Company without Cause, the Company shall pay to you the equivalent of your
average annual compensation (based on the last five years’ average) and
benefits for a period of one (1) year from the date of your termination,
in accordance with the normal pay practices of the Company; provided, however,
that any obligations of the Company to you pursuant to this paragraph shall
terminate upon any matter constituting Cause becoming known to the Company
subsequent to such termination.  Except
as set forth in this paragraph, 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 or imposed by law.

 

2

 

9.                                       Termination
With Good Reason.  You may voluntarily
terminate your employment at any time with “Good Reason,” as defined below,
upon written notice to take effect on the date specified in such notice.  In the event of any such termination under
this paragraph, the Company shall pay to you the equivalent of your average
annual compensation (based on the last five years’ average) and benefits for a
period of one (1) year from the date of your termination, in accordance
with the normal pay practices of the Company; provided, however, that any
obligations of the Company to you pursuant to this paragraph shall terminate
upon any matter constituting Cause becoming known to the Company subsequent to
such termination.  Except as set forth in
this paragraph, 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 or imposed by law.

 

For purposes
of this letter agreement, “Good Reason” shall mean the Company, without your
consent, (i) assigns to you duties inconsistent with your position, title,
authority or duties that results in a substantial diminution of such position,
title, authority or duties; provided that you shall provide the Company with at
least 15 days’ prior written notice of such diminution and the Company shall
not have remedied such diminution within fifteen days of receipt of such
notice; or (ii) the Company materially breaches this letter agreement and
fails to cure such breach within 15 days of written notice thereof.

 

10.                                 Termination
Following a Change of Control. 
Anything contained herein to the contrary notwithstanding, if, within 12
months of a Change of Control, as defined below, your employment is terminated
for any reason or no reason by the Company (including any such termination for “Cause”)
or for any reason or no reason by you (including any such termination without “Good
Reason”), the Company shall pay to you the equivalent of your average annual
compensation (based on the last five year’s average) and benefits for a period
of one (1) year from the date of your termination, in accordance with the
normal pay practices of the Company, provided, however, that any obligations of
the Company to you pursuant to this paragraph shall be satisfied by the payment
to you of such amounts pursuant to paragraph 8 or 9 hereof.

 

For purposes
of this letter agreement, “Change of Control” means the occurrence of one or
more of the following events:  (i) any
direct or indirect sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one transaction or a series of
related transactions, of all or substantially all of the assets of the Company
to any person, other than a transaction in which the transferee is controlled
by one or more Permitted Holders (as hereinafter defined); (ii) the
Company consolidates or mergers with or into any Person other than a
transaction in which the surviving person is controlled by one or more
Permitted Holders or any such transaction where the voting stock of the Company
outstanding immediately prior to such transaction is converted or exchanged for
voting stock of the surviving person constituting a majority of the outstanding
shares of such voting stock of such surviving person and one or more Permitted
Holders have the right to elect a majority of the board of directors of such
surviving person; (iii) the approval by the holders of capital stock of
the Company of any plan or proposal for the liquidation or dissolution of the
Company; or (iv) the Permitted Holders, or any one ore more of them, cease
for any reason to be the beneficial owner, directly or indirectly, in the
aggregate of at least a majority of the total voting power of the voting stock
of the Company (or if the voting stock of the Company is wholly owned by a
parent holding company, the voting

 

3

 

stock of such parent holding company).  For purposes of this letter agreement, “Permitted
Holders” shall mean and include each of the Blue Ridge Paper Products Employee
Stock Ownership Plan, KPS Investors. LLC, KPS Special Situations Fund, L.P.,
KPS Supplemental Fund, L.P. and their respective affiliates.

 

11.                                 Termination
Without Good Reason.  You may
voluntarily terminate your employment without Good Reason upon providing at
least thirty (30) days’ written notice to the Company, or such shorter period
as the Company may allow.  If your
employment is terminated pursuant to this paragraph, the Company will pay to
you any salary or other compensation earned but not paid to you prior to the
date of such termination.  Upon such
termination, the Company shall have no obligation to pay you severance of any
kind, nor shall the Company have any further obligation to pay you salary,
bonus or benefits.

 

12.                                 Non-Competition.  By signing this letter agreement, you
acknowledge and agree that the services you perform for the Company are
services that are unique and extraordinary and that, by reason of your
employment, you will acquire and have access to proprietary and Confidential
Information, as defined herein 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)                                  In
connection with any termination of your employment by you pursuant to the terms
of this letter agreement, whether with or without Good Reason, the written
notice of such termination shall include, to the extent available, the name of
your new employer and a description of your new position, duties and
responsibilities.

 

(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 engaging in the manufacture, sale or
distribution of liquid packaging board, including gable top cartons and/or
uncoated freesheet paper for envelopes, and/or any other product that the
Company or any “affiliate” (as defined below) manufactures, sells or
distributes (“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 an entity that derives more than 10% of its
gross revenue from any Competing Business, except for ownership of 1% or less
of any entity whose securities are freely tradable on an established market; or

 

4

 

(ii)                      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 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 7 or 11, the second
anniversary of such termination or (ii) in the event that your employment
is terminated pursuant to paragraphs 8, 9 or 10, the first anniversary of such
termination.

 

13.                                 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 it affiliates.

 

14.                                 Non-Disclosure
of Confidential Information.  By
signing this letter agreement, you recognize that your services 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 reveal or divulge to any person, firm, corporation or other business
entity or use for your own personal or business purposes or for the personal or
business purposes of any other person (other than the Company) 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 information or
knowledge pertaining to products, formulae or processes, and developments or
improvements with respect thereto, inventions, discoveries, trademark, 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) was, 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
under circumstances not involving any breach of an agreement to which any such
source is a party.  As used in this
letter agreement, the term “affiliate” means the Parent and each corporation or
other business entity at any time directly or indirectly controlled by the
Parent, its successors or assigns.  As
used in this letter agreement, the term “client” means any person, firm or
corporation to whom 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 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

 

5

 

and documents including any copies thereof to
the Company upon any termination of your employment or upon any prior request.

 

15.                                 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.

 

16.                                 Non-Disparagement.  You will not, during your employment with the
Company or at any time thereafter, publicly disparage the Company, its
affiliates and shareholders or any of their officers, directors, employees or
agents, other than in connection with disclosures required by applicable law,
regulation or order of court or governmental agency.

 

17.                                 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 12, 13, 14, 15 and 16 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 12, 13, 14, 15 and 16 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.

 

18.                                 Arbitration:
Costs, Fees and Expenses.  Except for
disputes with respect to paragraphs 12, 13, 14, 15 and 16 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 associated with any dispute respecting the meaning and intent of
this letter agreement or any of its terms and provisions shall be borne by the
party unsuccessful in such dispute.

 

19.                                 Survival
of Obligations.  You agree that your
obligations under paragraphs 12, 13, 14, 15 and 16 will survive any termination
of your employment.

 

20.                                 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.

 

6

 

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

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Blue Ridge Paper Products Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John B. Wadsworth

  	
   

  
	
   

  	
  By:

  	
  John B. Wadsworth

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed to and accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Richard A. Lozyniak

  	
   

  	
   

  
	
  Richard A. Lozyniak

  	
   

  
					

 

7

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