Exhibit 10.1
EXECUTION VERSION
COOPERATION AGREEMENT
This Agreement (this
“Agreement”) is made and entered into as of January 30, 2020 by and among Verso Corporation (the “Company”)
and the entities and natural persons set forth in the signature pages hereto (each an “Investor” and collectively,
the “Investors”) (each of the Company and the Investors, a “Party” to this Agreement, and
collectively, the “Parties”).
RECITALS
WHEREAS, as of the
date hereof, the Investors are deemed to beneficially own, in the aggregate, shares of Class A Common Stock of the Company (the
“Common Stock”) totaling 3,273,123 shares, or approximately 9.43%, of the Common Stock issued and outstanding
on the date hereof;
WHEREAS, the Investors
have nominated certain individuals for election as directors at the Company’s 2019 annual meeting of the stockholders scheduled
to be held on January 31, 2020 (the “2019 Annual Meeting”);
WHEREAS, on September
23, 2019 Lapetus Capital II LLC (“Lapetus”) delivered a demand to the Company, pursuant to Section 220 of the
General Corporation Law of the State of Delaware, requesting access to certain stock list materials of the Company (the “Stocklist
Demand”);
WHEREAS, on December
6, 2019, Lapetus delivered a demand to the Company, pursuant to Section 220 of the General Corporation Law of the State of Delaware,
requesting access to certain books and records of the Company (the “Books and Records Demand”); and
WHEREAS, as of the
date hereof, the Company and the Investors have determined to come to an agreement with respect to the composition of the Board
of Directors of the Company (the “Board”) as of the date hereof and in connection with the 2019 Annual Meeting
and certain other matters, as provided in this Agreement.
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound
hereby, agree as follows:
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1.
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Board Composition and Related Matters.
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(a)
Company Withdrawing Nominees. The Company hereby irrevocably withdraws the nominations of Ms. Cholmondeley
and Messrs. Shuster and Scheiwe for election to the Board at the 2019 Annual Meeting.
(b)
Investor Withdrawing Nominee. The Investors hereby irrevocably withdraw the nomination of Mr. Lowe for election
to the Board at the 2019 Annual Meeting..
(c)
Additional Appointee. The Board shall nominate, authorize and approve (and
the Company shall effectuate) the appointment of Marvin Cooper to the Board on January 31, 2020 immediately after the 2019 Annual
Meeting to fill a vacancy on the Board with a term expiring on the later of (1) the election of directors at the annual meeting
of stockholders following the 2019 Annual Meeting (the “2020 Annual Meeting”) and (2) the date that his successors
are duly elected and qualified.
(d)
2019 Annual Meeting. The Company shall cause the 2019 Annual Meeting to occur
on January 31, 2020, and shall not cause the 2019 Annual Meeting to be postponed or adjourned with respect to the election of directors
other than in compliance with the joint stipulation to dismiss with prejudice Lapetus Capital II LLC v. Verso Corp., C.A.
No. 2019-1040-KSJM (the “Atlas Lawsuit”) under 8 Del. C. § 211 as filed in the form attached hereto
as Exhibit A (the “Joint Stipulation of Dismissal”) in accordance with this Agreement and issued by the
Court of Chancery of the State of Delaware. Each Investor agrees that, it will appear in person or by proxy at the 2019
Annual Meeting (including any adjournment thereof) and take all necessary steps and actions, individually and collectively, to
instruct and cause their nominees, brokers, agents, representatives or proxies to vote all shares of Common Stock beneficially
owned by such Investor “FOR” the 2020 Directors (as defined below) to the extent the 2020 Directors are set forth on
the Investors’ BLUE proxy card.
(e)
Board Composition. As a result of the foregoing paragraphs (a) – (d), following the appointment of Mr.
Cooper, the Board will consist of the following seven individuals: Jeffrey Kirt, Sean Erwin, Marvin Cooper (the “Investor
Directors”); Randy Nebel, Dr. Robert Beckler, Nancy Taylor (the “Company Directors”); and Adam St.
John (the “Executive Director” and together with the Investors Directors and Company Directors, the “2020
Directors”). If for any reason the 2020 directors do not make up the entire Board as of the close of business on January
31, 2020, then as promptly as practicable after (but no later than the day immediately following) the certification by the independent
inspector of elections in connection with the 2019 Annual Meeting, the Company, the Board and if necessary, the Investors, shall
take all other action necessary for the Board to consist of the 2020 Directors until the later of (1) the election of directors
at the 2020 Annual Meeting and (2) the date that their successors are duly elected and qualified.
(f) Committees. The following committees are the only standing committees of the Board: Compensation Committee,
Audit Committee and Corporate Governance and Nominating Committee (the “Standing Committees”).
(i)
Immediately following the 2019 Annual Meeting, upon recommendation of the Corporate Governance and Nominating Committee
composed of the individuals below, the Board and all applicable committees of the Board shall take all necessary actions to appoint
the members of and the committee chairs to the Standing Committees.
(ii)
Immediately following the actions contemplated by Section 1(e) above, the Board and all applicable committees of
the Board shall take all necessary actions to appoint Nancy Taylor, Jeffrey Kirt, Marvin Cooper, and Randy Nebel to the Corporate
Governance and Nominating Committee and to appoint Jeffrey Kirt as its chairman.
(g)
Chairman. Immediately following the 2019 Annual Meeting, the Board shall take all necessary actions to appoint
Sean T. Erwin as the Chairman of the Board until the election of directors at the 2020 Annual Meeting.
(h)
Investor Demands. Lapetus irrevocably withdraws the Stocklist Demand and the Books and Records Demand.
(i)
Proxy Action. The Company, the Board, and Lapetus shall promptly, but no later than the close of business
on the business day following the certification of the election of directors at the 2019 Annual Meeting, file the Joint Stipulation
of Dismissal and take all further action necessary to effect the dismissal of the Atlas Lawsuit.
(j)
Replacement Investor Director. During the term of this Agreement, the Company shall not take any action
to remove, or cause to be removed, any Investor Director other than for cause (as such term has been interpreted under the laws
of Delaware for purposes of Section 141(k) of the General Corporation Law of the State of Delaware). In the event any of
the Investor Directors is unable or unwilling to serve as a director and ceases to be a director, resigns as a director, is removed
as a director or for any reason fails to serve or is not serving as a director for any reason prior to the 2020 Annual Meeting,
the Company agrees that Lapetus (in consultation with Blue Wolf) shall have the right to select a replacement candidate who is
reasonably acceptable (as determined by the Company Directors) to the Company and determined to be “independent” under
SEC and New York Stock Exchange rules, after the Company has conducted its ordinary course interview process for directors of the
Company. The Company shall appoint such replacement candidate (the “Replacement Director”) to replace
the departing Investor Director, with such Replacement Director to be appointed to the Board and on each committee of the Board
on which the departing Investor Director served, if any, in substitution for such Investor Director to serve the unexpired term
of the departed Investor Director and the Replacement Director shall be considered an Investor Director for all purposes of this
Agreement. If the proposed Investor Director is not reasonably acceptable to the Company, Lapetus (in consultation with Blue
Wolf) shall have the right to submit another proposed Replacement Director to the Company for its reasonable approval. Lapetus
shall have the right to continue submitting the name of a proposed Replacement Directors to the Company for its reasonable approval
until the Company so approves such Replacement Director, at which time such Person shall be appointed as the Replacement Director
in substitution for such Investor Director. The Company agrees that upon Lapetus’s request to approve a proposed Replacement
Director, it shall grant or withhold its reasonable approval as promptly as practicable (but in no event later than within five
(5) business days), subject to the Board promptly conducting its ordinary course background check and interview process for directors
of the Company.
(k) Sale
Transaction. Each Investor further agrees that, it will appear in person or by proxy at the 2019 Annual Meeting
(including any adjournment or postponement thereof) and take all necessary steps and actions, individually and collectively,
to instruct and cause their nominees, brokers, agents, representatives or proxies to vote all shares of Common Stock
beneficially owned by such Investor at such meeting in accordance with the Board’s recommendation on the
Company’s proposal to approve the transactions (the “Sale Transaction”) contemplated by that certain
Membership Interest Purchase Agreement, dated November 11, 2019, by and among the Company, Verso Paper Holding LLC and
Pixelle Specialty Solutions LLC (“2019 Annual Meeting Proposal 2”). Each Investor shall take such further action
or execute such other instruments as may be necessary to effectuate the intent of this paragraph (k). Each Investor further
agrees it will not take any action that would reasonably be expected to interfere with, delay, impede or postpone the
approval or closing of the Sale Transaction.
(l)
No Other Compensation. Except as set forth in the respective Nomination Agreement between such Investor Director
and Atlas Holdings LLC, no Investor has, directly or indirectly, compensated or agreed to compensate, and will not, directly or
indirectly, compensate or agree to compensate an Investor Director for his or her respective service as a nominee or director of
the Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into
securities or any profit sharing agreement or arrangement), or other form of compensation directly or indirectly related to the
Company or its Affiliates or its securities. As used in this Agreement, the terms “Affiliate” shall have the respective
meanings set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission under the Exchange Act of 1934, as amended,
and shall include all persons or entities that at any time during the term of this Agreement become Affiliates of any person or
entity referred to in this Agreement.
(m)
Indemnification. The Company agrees that the Investor Directors shall be entitled to the same director benefits
as other members of the Board, including (i) compensation for such director’s service as a director and reimbursement for
such director’s expenses on the same basis as all other non-employee directors of the Company; (ii) equity-based compensation
grants and other benefits, if any, on the same basis as all other non-employee directors of the Company; and (iii) the same rights
of indemnification and directors’ and officers’ insurance coverage as the other non-employee directors of the Company
as such rights may exist from time to time. The Company hereby acknowledges that the Investor Directors may have certain rights
to other indemnification, advancement of expenses and/or insurance from sources outside of the Company and its insurers (collectively,
the “Other Indemnitors”). The Company hereby agrees (A) that, solely with respect to actions of an Investor
Director in his or her capacity as a member of the Board (or in such other capacity pursuant to which such Investor Director is
entitled to indemnification under the Company’s Amended and Restated Certificate of Incorporation, Amended and Restated
Bylaws or any other written agreement between the Company and an Indemnitee (collectively, and as each may be amended or supplemented
from time to time, the “Indemnification Agreements”)), it is the indemnitor of first resort (i.e., its obligations
to the Investor Directors (the “Indemnitees” and each, an “Indemnitee”) are primary and
any obligation of the Other Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities
incurred by such Indemnitee are secondary), (B) that it shall be required to advance the full amount of expenses incurred by an
Indemnitee and shall be liable for the full amount of all losses, claims, damages, liabilities and expenses (including attorneys’
fees, judgments, fines, penalties and amounts paid in settlement), in each instance, solely to the extent (1) legally permitted,
and (2) required by the terms of the Indemnification Agreements, and (C) that it irrevocably waives, relinquishes and releases
the Other Indemnitors from any and all claims against the Other Indemnitors for contribution, subrogation or any other recovery
of any kind in respect thereof. The Company further agrees that no advancement or payment by the Other Indemnitors on behalf of
an Indemnitee with respect to any claim for which such Indemnitee has sought indemnification from the Company shall affect the
foregoing and the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement
or payment to all of the rights of recovery of such Indemnitee against the Company. The Company and each Indemnitee agree that
the Other Indemnitors are express third party beneficiaries of the terms of this Section 1(n).
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2.
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Representations and Warranties of the Company.
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The Company represents
and warrants to the Investors that (a) the Company has the corporate power and authority to execute this Agreement and to bind
it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, and assuming due execution
by each counterparty hereto, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against
the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles
and (c) the execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict
with any law, rule, regulation, order, judgment or decree applicable to the Company, or (ii) result in any breach or violation
of or constitute a default (or an event which with notice or lapse of time or both would constitute such a breach, violation or
default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document or material agreement to which the Company is a party or by which
it is bound.
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3.
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Representations and Warranties of the Investors.
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Each Investor represents
and warrants to the Company severally and not jointly that (a) the authorized signatory of such Investor set forth on the signature
page hereto has the power and authority to execute this Agreement and any other documents or agreements to be entered into in connection
with this Agreement and to bind such Investor thereto, (b) this Agreement has been duly authorized, executed and delivered by such
Investor, and assuming due execution by each counterparty hereto, is a valid and binding obligation of such Investor, enforceable
against such Investor in accordance with its terms except as enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general
equity principles, (c) the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the
fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach
or violation of the organizational documents of such Investor as currently in effect, and (d) the execution, delivery and performance
of this Agreement by such Investor does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment
or decree applicable to such Investor, or (ii) result in any breach or violation of or constitute a default (or an event which
with notice or lapse of time or both would constitute such a breach, violation or default) under or pursuant to, or result in the
loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational
document, agreement, contract, commitment, understanding or arrangement to which such Investor is a party or by which it is bound.
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4.
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Press Release; Filings.
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Promptly following
the execution of this Agreement, the Company and the Investors shall jointly issue a mutually agreeable press release in the form
attached hereto as Exhibit B (the “Press Release”) announcing certain terms of this Agreement. In connection
with the execution of this Agreement, and subject to the terms of this Agreement, no Party (including the Board) shall (and each
Party shall cause its Affiliates not to) make any filing or issue any other press release or public statement regarding this Agreement
or the matters contemplated hereby, other than (a) a Form 8-K and proxy statement
materials for the 2019 Annual Meeting to be filed by the Company and the Investors and the Investor’s Schedule 13D relating
to the Company related to this Agreement to be filed by the Investors, (b) the Company’s ordinary course communications with
Company constituencies, including employees, customers, suppliers, investors and stockholders, and SEC filing disclosures consistent
with the Press Release, Form 8-K and Schedule 13D, (c) as required by law or the rules and regulations of any stock exchange or
governmental entity, (d) with the prior written consent of Lapetus (with respect to filings, statements or announcements by the
Company or its Affiliates) and the Company (with respect to filings, statements or announcements by any Investor or its Affiliates),
and (e) otherwise in accordance with this Agreement. The Company, with respect to its Form 8-K and proxy statement materials, and
the Investors, with respect to any filing or amendment to a Schedule 13D and proxy statement materials related to this Agreement
and the 2019 Annual Meeting, will provide the other Party, prior to each such filing, a reasonable opportunity to review and comment
on such documents, and each such Party will consider any comments from the other Party in good faith. Except as required by applicable
law or regulation, each Party hereto acknowledges and agrees that it will not, and will take all necessary actions to cause its
Affiliates to not, issue any release, make any filing or otherwise make any public statement or announcement, in each instance,
that is inconsistent with the Press Release.
Each of the Investors,
on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party or Parties,
as the case may be, would occur in the event any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at
law (including the payment of money damages). It is accordingly agreed that the Investors, on the one hand, and the Company, on
the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief
to prevent any violation of, the terms hereof, in each case without the posting of any bond or other undertaking, and the other
Party or Parties, as the case may be, hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking
such relief on the grounds that any other remedy or relief is available at law or in equity. This Section 5 is not the exclusive
remedy for any violation of this Agreement.
If any term,
provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the
intention of the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions
without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the Parties agree
to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for
any of such that is held invalid, void or enforceable by a court of competent jurisdiction.
Any notices, consents,
determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending Party);
(c) when sent by email (with a confirming copy sent overnight with a nationally recognized overnight delivery service); or (d)
one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to
the Party to receive the same. The addresses and facsimile numbers for such communications shall be:
If to the Company:
Verso
Corporation
8540 Gander
Creek Drive
Miamisburg,
Ohio 45342
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Attention:
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Corporate Secretary
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E-mail:
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St.John.Daugherty@Versoco.com
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with
a copy (for informational purposes only) to both:
Akin Gump
Strauss Hauer & Feld LLP
One Bryant
Park
Bank of
America Tower
New York,
NY 10036-674
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Attention:
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Kerry Berchem, Esq.
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Alice Hsu, Esq.
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Facsimile:
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(212) 872-1002
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E-mail:
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kberchem@akingump.com
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ahsu@akingump.com
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If to the Investors:
c/o Atlas Holdings LLC
100 Northfield St.
Greenwich, CT 06830
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Attention:
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Andrew Bursky; Timothy Fazio
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Email:
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abursky@atlasholdingsllc.com; tfazio@atlasholdings.com
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and
c/o
Blue Wolf Capital Partners LLC
One
Liberty Plaza, 52nd Floor
165
Broadway
New
York, New York 10006
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Attention:
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Adam Blumenthal
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Email:
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adam@bluewolfcapital.com
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with a copy (which
shall not constitute notice) to both:
Willkie
Farr & Gallagher LLP
787 Seventh
Avenue
New York,
NY 10019
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Attention:
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Steven A. Seidman, Mark A. Cognetti and Laura H. Acker
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Facsimile:
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(212) 728-8111
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E-mail:
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sseidman@willkie.com; mcognetti@willkie.com; lacker@willkie.com
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and
Greenberg
Traurig, LLP
MetLife
Building
200
Park Avenue
New
York, NY 10166
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Attention:
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Peter H. Lieberman; Dmitriy A. Tartakovskiy
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Facsimile:
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(212) 801-6400
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Email:
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liebermanp@gtlaw.com; tartakovskiyd@gtlaw.com
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This Agreement
shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without reference to the
conflict of laws principles thereof that would result in the application of the law of another jurisdiction. Each of the
Parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights
and obligations arising hereunder brought by the other Party hereto or its successors or assigns, shall be brought and
determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware
(or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal court within the
State of Delaware). Each of the Parties hereto hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts
and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each of
the Parties hereto hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (b)
any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable legal requirements, any claim that
(i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each
Party hereto agrees that notice to such Party provided in accordance with Section 7 hereof shall constitute effective
service of process in any such action or proceeding. EACH OF THE PARTIES HERETO WAIVES THE RIGHT TO TRIAL BY JURY.
This Agreement may
be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the Parties and delivered to the other Party (including by means of electronic delivery
or facsimile).
The Company promptly
(but no later than three (3) business days after the date of this Agreement shall reimburse the Investors $700,000 in connection
with, or related to, the Investors’ interactions with the Company, the negotiation and execution of this Agreement, identification
of the Investor Directors and actions in connection with the 2019 Annual Meeting.
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11.
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Mutual Non-Disparagement.
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During the term of
this Agreement, the Company and the Investors shall each refrain from making, and shall cause their respective Affiliates and
its and their respective principals, directors, members, general partners, officers and employees not to make or cause to be made
any statement or announcement, including in any document or report filed with or furnished to the SEC or through the press, media,
analysts or other Persons, that constitutes an ad hominem attack on, or otherwise disparages, defames, slanders, impugns or is
reasonably likely to damage the reputation of, (a) in the case of statements or announcements by any of the Investors and their
related Persons, the current, former or future officers, current or former director nominees, directors or employees of the Company
or any of its Affiliates or, prior to the deadline for stockholders to present director nominations to be considered at the 2020
Annual Meeting, the Company or any of its Affiliates, and (b) in the case of statements or announcements by the Company and its
related Persons, the Investors or any of the Investors’ advisors, their respective current, former or future officers, directors,
employees, members or general partners. The foregoing shall not (i) restrict the ability of any Person to comply with any subpoena
or other legal process or respond to a request for information (provided that such request is not targeted at this Agreement or
the other party hereto) from any governmental authority with competent jurisdiction over the party from whom information is sought,
(ii) apply to any private communications between the Investors, their respective Affiliates and its and their respective principals,
directors, members, general partners, officers and employees, on the one hand, and the directors of the Company, on the other
hand, pursuant to Section 12 hereof to the extent that it would not be reasonably expected that such communication would
require a public disclosure, (iii) restrict the ability of the Investors and their related Persons to make any statement in response
to any criminal or civil investigation by any governmental authority related to the Company, its Affiliates, or any of its and
their respective current, former or future officers, directors or employees; (iv) prevent the Parties or any of their respective
Affiliates from (x) bringing litigation to enforce the provisions of this Agreement, (y) making counterclaims with respect to
any proceeding initiated by, or on behalf of, a Party or its Affiliates against the other Party hereto or its Affiliates or (z)
bringing bona fide commercial disputes that do not relate to the subject matter of this Agreement, (v) restrict the ability of
any Person to comply with any subpoena or other legal process or respond to a request for information from any governmental authority
with jurisdiction over the Party from whom information is sought or (vi) restrict the ability of the Investor Directors to discharge
their fiduciary duties as directors of the Company or members of any committee of the Board. For the avoidance of doubt, any materials
publicly released by either Party prior to the date of this Agreement will not be deemed to be in breach of this provision. For
the purposes of this Agreement, “Person” shall be interpreted broadly to include, among others, any individual, general
or limited partnership, corporation, limited liability or unlimited liability company, joint venture, estate, trust, group, association
or other entity of any kind or structure.
The Company hereby
agrees that the Investor Directors shall be permitted to and may provide material non-public information, including but not limited
to, discussions or matters considered in meetings of the Board or Board committees, to the Investors, subject to the terms of a
confidentiality agreement set forth on Exhibit C attached hereto (the “Confidentiality Agreement”).
Each Investor acknowledges
that it is aware, and will advise each of its representatives who are informed as to the matters that are the subject of this Agreement,
that the United States securities laws may prohibit any person who directly or indirectly has received from an issuer material,
non-public information from purchasing or selling securities of such issuer or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
(a)
(a) As of the date hereof, the Investors, on behalf of itself, each of its Affiliates (which term as used in
this Section 14 shall not include any portfolio company of an Investor) and each of their respective predecessors, successors,
personal representatives, advisors and assigns (each, an “Investor Releasing Party” and, collectively, the
“Investor Releasing Parties”), hereby irrevocably releases and forever discharges the Company and the Company’s
officers, directors, employees, predecessors, successors, assigns, advisors and subsidiaries (each, an “Investor Released
Party” and, collectively, the “Investor Released Parties”), for and from any and all manners of actions,
causes, causes of action, suits, liabilities, rights, costs, expenses (including, without limitation, attorneys’ fees and
costs), claims and demands, of whatever kind or nature, in law or in equity, whichever have or may have existed, or which do exist,
that may now or hereafter at any time be made or brought against any Investor Released Party by any Investor Releasing Party
by reason of or in connection with any matter, cause, thing, action or omission whatsoever, arising, occurring, relating
to or in respect of any time up through and including the date of this Agreement, including without limitation arising out of
or related to the Atlas Lawsuit (collectively, the “Investor Released Matters”); provided, however, that nothing
in this paragraph will release any Investor Released Party from (i) any obligations under this Agreement or claims to enforce
the terms of this Agreement, or (ii) claims that any Investor has no knowledge of as of the date of this Agreement. From and after
the date hereof, each Investor, on behalf of itself and each of the Investor Releasing Parties, agrees to not, directly or indirectly
(including, without limitation, in a derivative proceeding), assert any claim or demand or commence, institute or maintain, or
cause to be commenced, instituted, or maintained, or knowingly facilitate or assist any other party in commencing, instituting
or maintaining, any action of any kind against any of the Investor Released Parties based upon or with respect to any Investor
Released Matter(s); provided, however, that the foregoing shall not prevent the Investor or any of their representatives from
responding to oral questions, interrogatories, requests for information or documents, subpoenas civil investigative demands or
similar processes (a “Legal Requirement”) in connection with any legal process or proceeding that has not been
initiated by, or on behalf of, the Investor or any of its representatives; provided, further, that in the event that any of the
Investors or any of their representatives receives such Legal Requirement, the Investors shall give prompt written notice of such
Legal Requirement to the Company.
(b)
As of the date hereof, the Company, on behalf of itself, each of its Affiliates and each of their respective predecessors,
successors, personal representatives, advisors and assigns (each, a “Company Releasing Party” and, collectively,
the “Company Releasing Parties”), hereby irrevocably releases and forever discharges the Investors and the
Investor’s officers, directors, employees, managers, members, partners, predecessors, successors, assigns, advisors, current
or former nominees, and subsidiaries (each, a “Company Released Party” and, collectively, the “Company
Released Parties”), for and from any and all manners of actions, causes, causes of action, suits, liabilities, rights,
costs, expenses (including, without limitation, attorneys’ fees and costs), claims and demands, of whatever kind or nature,
in law or in equity, whichever have or may have existed, or which do exist, that may now or hereafter at any time be made or brought
against any Company Released Party by any Company Releasing Party by reason of or in connection with any matter, cause, thing,
action or omission whatsoever, arising, occurring, relating to or in respect of any time up through and including the date of
this Agreement, including, without limitation arising out of or related to the Atlas Lawsuit (collectively, the “Company
Released Matters”); provided, however, that nothing in this paragraph will release any Company Released Party from (i)
any obligations under this Agreement or claims to enforce the terms of this Agreement, or (ii) claims that the Company has no
knowledge of as of the date of this Agreement. From and after the date hereof, the Company, on behalf of itself and each of the
Company Releasing Parties, agrees to not, directly or indirectly (including, without limitation, in a derivative proceeding),
assert any claim or demand or commence, institute or maintain, or cause to be commenced, instituted, or maintained, or knowingly
facilitate or assist any other party in commencing, instituting or maintaining, any action of any kind against any of the Company
Released Parties based upon or with respect to any Company Released Matter(s); provided, however, that the foregoing shall not
prevent the Company or any of its representatives from responding to a Legal Requirement in connection with any legal process
or proceeding that has not been initiated by, or on behalf of, the Company or any of its representatives; provided, further, that
in the event that any of the Company or any of its representatives receives such Legal Requirement, the Company shall give prompt
written notice of such Legal Requirement to the Investors.
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15.
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Entire Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries.
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This Agreement contains
the entire understanding of the Parties with respect to its subject matter. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings between the Parties other than those expressly set forth herein. No modifications of this
Agreement can be made except in writing signed by an authorized representative of each the Company and the Investors. No failure
on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and
be enforceable by the Parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns.
No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to the Investors, the prior written
consent of the Company, and with respect to the Company, the prior written consent of the Investors. Except as set forth in Section
1(m), this Agreement is solely for the benefit of the Parties and is not enforceable by any other persons or entities.
[The remainder of this page intentionally
left blank]
IN WITNESS WHEREOF,
this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.
VERSO CORPORATION
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By:
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/s/ Adam St. John
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Name: Adam St. John
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Title: Chief Executive Officer
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LAPETUS CAPITAL II LLC
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By:
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/s/ Timothy J. Fazio
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Name: Timothy
J. Fazio
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Title:
Vice President
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ATLAS CAPITAL RESOURCES II LP
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By:
Atlas Capital GP II LP, its general partner
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By:
Atlas Capital Resources GP II LLC, its general
partner
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By:
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/s/ Timothy J. Fazio
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Name: Timothy J. Fazio
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Title: Managing Partner
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ATLAS CAPITAL GP II LP
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By: Atlas Capital Resources GP II LLC, its general partner
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By:
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/s/ Timothy J. Fazio
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Name: Timothy J. Fazio
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Title: Managing Partner
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ATLAS CAPITAL RESOURCES GP II LLC
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By:
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/s/ Timothy J. Fazio
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Name: Timothy J. Fazio
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Title: Managing Partner
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LAPETUS CAPITAL III LLC
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By:
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/s/
Timothy J. Fazio
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Name: Timothy J. Fazio
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Title: Vice President
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ATLAS CAPITAL RESOURCES III LP
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By:
Atlas Capital GP III LP, its general partner
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By:
Atlas Capital Resources GP III LLC, its general partner
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By:
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/s/ Timothy J. Fazio
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Name: Timothy J. Fazio
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Title: Managing Partner
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ATLAS CAPITAL GP III LP
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By:
Atlas Capital Resources GP III LLC, its general partner
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By:
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/s/ Timothy J. Fazio
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Name: Timothy J. Fazio
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Title: Managing Partner
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ATLAS CAPITAL RESOURCES GP III LLC
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By:
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/s/
Timothy J. Fazio
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Name: Timothy J. Fazio
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Title: Managing Partner
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BW COATED LLC
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By:
Blue Wolf Capital Fund IV, L.P., its sole member
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By:
Blue Wolf Capital Advisors IV, L.P., its general partner
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By:
Blue Wolf Capital Advisors IV, LLC, its general partner
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By:
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/s/ Adam Blumenthal
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Name: Adam Blumenthal
Title: Managing Member
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BLUE WOLF CAPITAL FUND IV, L.P.
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By:
Blue Wolf Capital Advisors IV, L.P., its general partner
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By:
Blue Wolf Capital Advisors IV, LLC, its general partner
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By:
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/s/ Adam Blumenthal
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Name: Adam Blumenthal
Title: Managing Member
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BLUE WOLF CAPITAL ADVISORS IV, L.P.
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By:
Blue Wolf Capital Advisors IV, LLC, its general partner
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By:
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/s/ Adam Blumenthal
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Name: Adam Blumenthal
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Title: Managing Member
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BLUE WOLF CAPITAL ADVISORS IV, LLC
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By:
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/s/ Adam Blumenthal
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Name: Adam Blumenthal
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Title: Managing Member
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Exhibit A
Form of Joint Stipulation of Dismissal
Exhibit B
Press Release
Exhibit C
Confidentiality Agreement
Exhibit 99.1
Verso, Atlas and Blue Wolf Announce Agreement
to End Proxy Contest
MIAMISBURG, Ohio and GREENWICH, Connecticut – January
31, 2020 – Verso Corporation (NYSE: VRS) (the “Company”) and Lapetus Capital II LLC (together with its
affiliates, including Atlas Holdings LLC, “Atlas”) and Blue Wolf Capital Advisors IV, LLC (“Blue Wolf”)
and their respective affiliates, today announced that they have reached an agreement to settle the pending proxy contest with respect
to the Company’s 2019 Annual Meeting of Stockholders (the “Annual Meeting”) and certain other matters.
Pursuant to the cooperation agreement (the “Cooperation
Agreement”), the Company, Atlas and Blue Wolf have agreed to take all action necessary for the Board to consist of the following
individuals immediately subsequent to the Annual Meeting: Sean T. Erwin, Jeffrey E. Kirt and Marvin Cooper (the “Investor
Nominees”); Dr. Robert K. Beckler, Randy Nebel and Nancy M. Taylor (the “Company Nominees”); and Adam St. John
(the “Executive Director”). Mr. Erwin will be appointed Chairman of the Board.
As part of the Cooperation Agreement, Paula H. J. Cholmondeley,
Steven Scheiwe, Jay Shuster and Timothy Lowe have agreed to not stand for election at the Annual Meeting. Despite Ms. Cholmondeley
and Mr. Lowe enjoying widespread support for election to the Board, each agreed to withdraw their candidacy so as to facilitate
the Cooperation Agreement reached between the parties. Mr. Lowe agreed, at Atlas’ request, to withdraw his candidacy to allow
him to continue in his current active Operating Partner role with Atlas and he will be available to Verso should they seek his
pulp and paper industry expertise in the days ahead. In addition, immediately following the Annual Meeting, Marvin Cooper will
be appointed to the Board.
In addition, pursuant to the Cooperation Agreement, Atlas
and Blue Wolf have agreed to vote "FOR" the Company's pending sale of its Androscoggin and Stevens Point mills to Pixelle
Specialty Solutions LLC (the "Pixelle Transaction").
“We are pleased to have reached an agreement with Atlas
and Blue Wolf that is in the best interests of Verso’s stockholders, and we look forward to welcoming Sean Erwin, Jeff Kirt
and Marvin Cooper to the Company’s Board,” said current Chief Executive Officer, Adam St. John.
Timothy Fazio, co-founder and managing partner of Atlas, and
Adam Blumenthal, founder and managing partner of Blue Wolf Capital Partners LLC, jointly stated, “We are pleased to have
reached this resolution with Verso, which is the result of collaborative dialogue and intensive engagement with the Company. Marvin
Cooper, Sean Erwin and Jeff Kirt are highly qualified public company directors and will provide valuable perspectives to the Verso
Board, and together with the existing members, we are confident that the Board will be able to effectively oversee management’s
efforts to best position Verso for continued growth and value creation. We thank Alan Carr, Gene Davis, Steve Scheiwe and Jay Shuster
for their leadership and guidance and shepherding of the Pixelle transaction. We are excited to see where the newly reconstituted
Board takes the Company in terms of unlocking significant potential and value at the Company.”
“We are pleased to have reached this agreement and appreciate
the constructive input we have received from Atlas and Blue Wolf,” said Dr. Beckler, Mr. Nebel and Ms. Taylor. “On
behalf of the entire Board, we want to thank Alan, Gene, Steve and Jay for their many contributions to Verso since 2016. The Company
has benefitted greatly from their collective guidance and perspective, and we wish them all the best in their future endeavors.
Looking ahead, we look forward to working with Sean, Jeff and Marvin to successfully consummate the Pixelle Transaction, return
capital to stockholders and oversee the execution of Verso’s strategy so as to maximize value to all of our stockholders
over the long-term.”
Dr. Beckler, Mr. Nebel and Ms. Taylor continued, “We also
would like to extend our sincere appreciation and respect to Ms. Cholmondeley, who would have been a brilliant and productive member
of our Board due to her impressive array of executive leadership roles in the paper industry and operational experience. In addition,
we recognize Tim Lowe’s vast and extensive operating experience in the paper and pulp industry and that his voice in the
boardroom would have been an inestimable contribution. Both Paula and Tim would be a valuable addition to any boardroom.”
The complete agreement between the Company and Atlas and Blue
Wolf will be included as an exhibit to a Current Report on Form 8-K, which will be filed with the Securities and Exchange
Commission.
About Marvin Cooper
Marvin Cooper, previously served as the Chief Operating Officer
and Executive Vice President of Domtar Corporation until his retirement in 2009. Previously, he served as Senior Vice President
of Pulp, Paper, Containerboard Manufacturing and Engineering of Weyerhaeuser Co. from February 2002 to October 2006. Mr. Cooper’s
responsibilities included the operation of Weyerhaeuser’s pulp, paper and containerboard mills, and overseeing the engineering
operations. Before joining Weyerhaeuser, Mr. Cooper was with Willamette Industries for 22 years. Mr. Cooper served as an Executive
Vice President of Willamette Industries Inc., Pulp and Paper Mills beginning in May 1997 until Willamette was acquired by Weyerhaeuser
Co. in 2002. He served as Group Vice President, Pulp and Paper Mills from May 1996 to May 1997 and Division Vice President –
Fine Paper Mills from May 1989 to May 1996. He also served as Regional Manager of Willamette from May 1982 to May 1989 and Mill
Manager from May 1980 to May 1982. Mr. Cooper also served on the Board of Directors of Domtar Corporation from 2006 until 2009.
Mr. Cooper received his Bachelor of Science in engineering from Virginia Polytechnic Institute and State University.
About Verso
Verso Corporation is the turn-to company for those looking to
successfully navigate the complexities of paper sourcing and performance. A leading North American producer of specialty and graphic
papers, packaging and pulp, Verso provides insightful solutions that help drive improved customer efficiency, productivity, brand
awareness and business results. Verso's long-standing reputation for quality and reliability is directly tied to the Company’s
vision to be a company with passion that is respected and trusted by all. Verso's passion is rooted in ethical business practices
that demand safe workplaces for the Company’s employees and sustainable wood sourcing for the Company’s products. This
passion, combined with the Company’s flexible manufacturing capabilities and an unmatched commitment to product performance,
delivery and service, make Verso a preferred choice among commercial printers, paper merchants and brokers, converters, publishers
and other end users. For more information, visit us online at versoco.com.
Atlas Holdings is an industrial holding company with
a portfolio of 20 companies with aggregate annual revenues of approximately $5 billion, operating approximately 150 facilities
and employing more than 18,000 people globally. Although we are engaged in a variety of industrial sectors, Atlas Holdings has
been successfully investing in the pulp, paper and packaging industries since the Company’s formation in 1999, including
specifically in the subsectors in which Verso participates — specialty paper, graphic paper, packaging paper and pulp. We
generate profits for the Company’s investors by investing in underperforming businesses and unlocking the full potential
of those companies over the long term. Atlas Holdings has a total of approximately $3.0 billion of committed capital under management,
including $1.7 billion in its third investment fund.
Blue Wolf Capital Partners is a middle market private
equity firm whose partners have decades of experience investing in and growing companies. Blue Wolf transforms companies strategically,
operationally and collaboratively. Blue Wolf manages challenging situations and complex relationships between businesses, customers,
employees, unions and regulators to build value for stakeholders. For over a decade Blue Wolf has been an active investor in pulp,
paper and forest products companies with a highly successful track record. Blue Wolf has over $1.6 billion in committed capital.
Forward-Looking Statements
In this press release, all statements that are not purely
historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
or "Securities Act," and Section 21E of the Securities Exchange Act of 1934, as amended, or "Exchange
Act." Forward-looking statements may be identified by the words "believe," "expect,"
"anticipate," "project," "plan," "estimate," "intend" and other similar
expressions. They include, for example, statements relating to the Company’s business and operating outlook; assessment
of market conditions; and the growth potential of the industry in which we operate. Forward-looking statements are based on
currently available business, economic, financial and other information and reflect management's current beliefs,
expectations and views with respect to future developments and their potential effects on us. Actual results could vary
materially depending on risks and uncertainties that may affect the Company and the Company’s business. The following
factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the
long-term structural decline and general softening of demand facing the paper industry; the Company’s exploration of
strategic alternatives, including the possible sale or merger of the Company’s entire company or a material portion of
the Company’s business and the Company’s ability to consummate any such strategic transactions, including the
proposed sale of the Company’s Androscoggin Mill and Stevens Point Mill; the risk that the purchase agreement for the
sale transaction would limit the Company’s ability to pursue other strategic alternatives to the sale transaction; the
risk that the purchase agreement for the sale transaction might expose the Company to contingent liabilities; risks related
to the Company’s ability to obtain stockholder approval for the sale transaction; the risk that the pending sale
transaction could create unknown impacts on the Company’s future prospects; the risk that the amount of net proceeds
that we would receive from the sale transaction is subject to uncertainties; the risk that stockholders are not guaranteed to
receive any of the proceeds from the sale transaction; the risk that management could spend or invest the net proceeds from
the sale transaction in ways against stockholders' wishes; the risk that some of the Company’s executive officers might
have interests in the sale transaction that might be in addition to, or different from, stockholders' interests; the risk
that the Company’s business following the sale transaction would be reduced and less diversified; the risk that we
would be unable to compete with respect to certain specialty paper products for two years after the closing of the sale
transaction; the risk that we may be unable to obtain governmental and regulatory approvals required for the sale
transaction, or required governmental and regulatory approvals may delay the transaction or result in the imposition of
conditions that could cause the parties to abandon the sale transaction; the risk that an event, change or other
circumstances could give rise to the termination of the sale transaction; the risk that failure to consummate the sale
transaction might materially and adversely affect the Company’s business, financial condition and results of operation;
the risk that a condition to closing of the sale transaction may not be satisfied; the risk that we would be required to pay
a termination fee or expense reimbursement if the purchase agreement for the sale transaction is terminated under specified
circumstances, which might discourage third parties from submitting an alternative proposal; the timing to consummate the
sale transaction; the risk that any announcement relating to the sale transaction could have adverse effects on the market
price of the Company’s common stock; the risk of and the outcome of any pending or threatened litigation related to the
sale transaction or the Annual Meeting; the risk of disruption from the sale transaction making it more difficult to maintain
relationships with customers, employees or suppliers; the diversion of management time on transaction-related issues; the
Company’s adoption of a limited duration stockholder rights plan and its ability to delay or discourage a merger,
tender offer or change of control; developments in alternative media, which have and are expected to continue to adversely
affect the demand for some of the Company’s key products, and the effectiveness of the Company’s responses to
these developments; intense competition in the paper manufacturing industry; the Company’s dependence on a small number
of customers for a significant portion of the Company’s business; any additional closure and other restructuring costs;
the Company’s limited ability to control the pricing of the Company’s products or pass through increases in the
Company’s costs to the Company’s customers; changes in the costs of raw materials and purchased energy; negative
publicity, even if unjustified; any failure to comply with environmental or other laws or regulations, even if inadvertent;
legal proceedings or disputes; any labor disputes; the Company’s ability to continue to execute and implement the
Company’s strategic plan; the Company’s initiatives to improve the Company’s financial and operational
performance and increase the Company’s growth and profitability; the Company’s future operational and financial
performance; the future effect of the Company’s strategic plan on the Company’s probability, growth and
stockholder return; and the potential risks and uncertainties described in Part I, Item 1A, "Risk Factors" of the
Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as amended, Part I, Item 2,
"Management's Discussion and Analysis of Financial Condition and Results of Operations," Part II, Item 1A,
"Risk Factors" of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, and
"Risk Factors Relating to the Sale Proposal" of the Company’s definitive proxy statement filed with the SEC
on December 30, 2019, as such disclosures may be amended, supplemented or superseded from time to time by other reports we
file with the U.S. Securities and Exchange Commission (the “SEC”), including subsequent annual reports on Form
10-K and quarterly reports on Form 10-Q. We assume no obligation to update any forward-looking statement made in this press
release to reflect subsequent events or circumstances or actual outcomes.
Media Contacts:
Kathi Rowzie
Vice President, Communications and Public Affairs
(937) 528-3700
kathi.rowzie@versoco.com
or
Steve Frankel / Nick Lamplough / Ed Trissel
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Atlas Media Contacts:
Prosek Partners
Andrew Merrill / Brian Schaffer / Josh Clarkson
646.818.9216 / 646.818.9229 / 646.818.9259
amerrill@prosek.com / bschaffer@prosek.com / jclarkson@prosek.com
Investor Contact:
(937) 528-3220
investor.relations@versoco.com
Additional Investor Contact:
Bob Marese
MacKenzie Partners, Inc.
212-929-5500
