Document:

Exhibit 10.6
    

    
      

      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 20% 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 20% 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 20% 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 40% 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 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).
    

    
      
        

        

      

      
        
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                                   (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 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.
    

    
      
        

        

      

      
        
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      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
        	
          [--]
        	
          [--]
        	
          [--]
        
	
          Target
        	
          [--]
        	
          [--]
        	
          [--]
        
	
          Maximum
        	
          [--]
        	
          [--]
        	
          [--]
        
	

        	

        	

        	
           
        

    

    
    	
           
        	
           
        	
          Performance-Cycle

          
            EBITDA Target
          

          
            2009-2011
          

        	

        
	

        	
          Threshold
        	
          [--]
        	

        
	

        	
          Target
        	
          [--]
        	

        
	

        	
          Maximum
        	
          [--]
        	

        

    

    
      

      Vesting Schedule
    

    
      

    

    
    	
          
            Achievement Level of
Applicable Annual/
Performance-Cycle
Target
          

        	
          2009 Tranche

          
            (20% of Total)
          

        	
          2010 Tranche

          
            (20% of Total)
          

        	
          2011 Tranche

          
            (20% of Total)
          

        	
          
            Performance-
Cycle Tranche
          

          
            (40% of Total)
          

        
	
          Threshold
        	
          
            35% of Maximum
2009 Tranche
          

        	
          
            35% of Maximum
2010 Tranche
          

        	
          
            35% of Maximum
2011 Tranche
          

        	
          
            35% 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
TrancheExhibit 10.1
    

    

    

    
      FIFTH ADDENDUM TO EMPLOYMENT AGREEMENT
    

    

    

    
      THIS FIFTH ADDENDUM TO EMPLOYMENT AGREEMENT (the “Fifth Addendum”) is
      made effective as of the 30th day of December, 2008, by and between
      Anworth Mortgage Asset Corporation, a Maryland corporation (“Anworth”),
      and Joseph Lloyd McAdams (the “Executive”).
    

    
      W I T N E S S E T H : 
    

    
      WHEREAS, the Executive and Anworth Mortgage Advisory Corporation (the
      “Company”) entered into an employment agreement dated January 1, 2002
      (as amended to date, the “Agreement”);
    

    
      WHEREAS, the Agreement was assumed by Anworth and the Executive, and the
      Company and Anworth entered into an addendum to such employment
      agreement dated April 18, 2002 (the “Addendum”), an addendum to such
      employment agreement dated May 28, 2004 (the “Second Addendum”) an
      addendum to such employment agreement dated June 27, 2006 (the “Third
      Addendum”); and addendum to such employment agreement dated February 22,
      2008 (the “Fourth Addendum”)
    

    
      WHEREAS, Anworth and the Executive desire to further modify the terms of
      the Executive’s employment under the Agreement.
    

    
      NOW THEREFORE, the parties hereby covenant and agree as follows:
    

    
      1. Effective Date. This Fifth Addendum shall become
      effective on the date hereof.
    

    
      2. Incentive Plan and Bonus (Section 4(b) of the Agreement).
      Paragraph 4 of Section 4(b)(iii) of the Agreement is hereby amended by
      inserting the phrase “Twenty-Five percent (25%)” and is restated as
      follows:
    

    
      “Twenty-Five percent (25%) of any amount in excess of $100,000 allocated
      to the Executive from the Pool with respect to calendar year 2009 and
      each subsequent year will be paid in common stock subject to certain
      restrictions set forth in Appendix A hereto and in accordance with the
      2004 Equity Plan.”
    

    
      3. Appendix A of the Agreement). The first paragraph of
      Appendix A of the Agreement is hereby restated as follows:
    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    
      “The Company’s return on average equity (“ROAE”) is calculated as the
      twelve-month GAAP net income available to common stockholders minus
      depreciation, gains/losses on asset sales and impairment
      charges/recoveries, divided by the average stockholder equity less
      (1) goodwill and (2) preferred stockholder equity.”
    

    

    

    
      4. Remaining Terms Unchanged. The parties agree that all
      terms and conditions of the Agreement (as modified by this Fifth
      Addendum), including, but not limited to, all provisions pertaining to
      compensation, termination, choice of law and arbitration, shall remain
      in full force and effect as modified hereby.
    

    
      IN WITNESS WHEREOF, this Fifth Addendum to Employment Agreement is
      executed as of the day and year first above written.
    

    

    

    
    	
          Executive
        	

        
	

        	
           
        
	
          /s/ Joseph Lloyd McAdams
        	

        
	
          Joseph Lloyd McAdams
        	

        

    

    

    

    
    	
          
            Anworth Mortgage Asset
          

          
            Corporation
          

        	

        
	

        	

        	
           
        
	
          By:
        	
          /s/ Thad M. Brown
        	

        
	

        	
          Name: Thad M. Brown
        	

        
	

        	
          Title: Chief Financial Officer
        	

        

    

    

    

    
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