Exhibit 10.1(c)
January 24, 2008
George
B. Gregory
238 N. Tranquil Path Drive
The Woodlands, TX 77380
Dear George:
Pursuant to our recent conversations,
we mutually agree that you shall have ceased to be the Chief
Executive Officer of KRATON Polymers LLC
(“KRATON”) effective January 14, 2008
(“Resignation Date”) and your employment with
KRATON and any and all of its subsidiaries and affiliates (together
and each individually, the “Company”) shall
terminate effective February 1, 2008 (the “Separation
Date”). In connection with your termination of
employment, as of the Resignation Date, you shall be deemed to have
resigned all offices and directorships, including without
limitation any position on the board of directors of the Company,
that you held prior thereto in respect of the Company.
1. Conditioned upon your
executing the release and waiver attached hereto as Appendix A
(the “Release”) within 30 days of the
Separation Date and, to the extent the applicable payment has not
then become payable, within 30 days of the termination of your
provision of consulting services to the Company, pursuant to a
consulting agreement to be entered into as of the date hereof by
you and KRATON (the “Consulting Agreement”) , as
set forth in the Consulting Agreement, the Release becoming
effective following the Separation Date and the termination of the
Consulting Agreement, and your continued compliance in all material
respects with the obligations set forth in this agreement,
including without limitation Sections 5 and 6 hereof, KRATON
shall:
a. Pay to you the following ((i),
(ii) and (iii) together, the “Accrued Benefit
Payment”) :
(i) within 30 days of the
Separation Date, your annual base salary of $500,000
(“Base Salary”) through the date of termination,
to the extent not already paid;
(ii) within 30 days of the
Separation Date, reimbursement for any unreimbursed business
expenses properly incurred by you in accordance with KRATON policy
prior to the date of your termination; and
(iii) pursuant to Section7(a)(iii)(D)
of that certain employment agreement between you and KRATON dated
November 1, 2004 as amended (“Employment
Agreement”) , any vested Employee Benefits, as defined in
the Employment Agreement, to which you are entitled, pursuant to
the applicable terms of such Employee Benefits.
b. Pay an amount, in the aggregate,
equal to one and a half times (1.5x) the Base Salary, payable as
follows: (i) your Base Salary pro rated for the period from
February 2, 2008 through December 31, 2008, in accordance
with the standard payroll practices of KRATON as in effect from
time to time; and (ii) the remainder as soon as practicable on
or after January 1, 2009, but in no event later than
January 31, 2009 (the “Continuation
Payments”);
c. For eighteen months following the
Separation Date, provide to you and any eligible dependents medical
benefits substantially similar to those provided generally to
executive officers of KRATON pursuant to KRATON’s medical
plan, as applicable, provided that you shall not be responsible for
any premiums, contributions and other co-payments required to be
paid by active executive officers of KRATON under the terms of any
such medical plan as may be in effect from time to time (such
coverage may be provided by paying the applicable portion of the
COBRA premiums) (the “Continuing Medical
Benefits” ); provided, however, that if you become
eligible to receive medical benefits from a new employer under that
employer’s plan, the Continuing Medical Benefits described
herein shall be terminated. You are required to promptly notify
KRATON of any changes in your medical benefits coverage; and
d. Within 30 days following the
Separation Date, pay to you $600,000, which we agree is due to you
and which shall reflect the full amount of the retention award
granted to you by KRATON pursuant to the Retention Award Agreement,
dated as of January 1, 2008 (the “Retention
Award”), less any portion of the Retention Award
previously paid.
2. Equity and Equity Based
Awards. Conditioned in all respects upon your executing the
Release within 30 days of the Separation Date and, to the
extent the payment has not then become payable, within 30 days
of the termination of your provision of consulting services
pursuant to the Consulting Agreement, the Release becoming
effective following the Separation Date and the termination of the
Consulting Agreement, and your continued compliance in all material
respects with the obligations set forth in this agreement,
including without limitation Sections 5 and 6 hereof:
a. Set forth on Schedule I
hereto is a true, accurate and complete list of all of the equity,
equity-based and profits interest awards that are, as of the
Separation Date, vested and/or exercisable (the “Equity
Awards”) . Notwithstanding anything to the contrary in
the TJ Chemical Holdings LLC 2004 Option Plan (the
“Plan”) or applicable grant agreement, all Equity
Awards that are options shall remain outstanding and exercisable
for the lesser of (i) the period provided in the Plan or such grant
agreement, without regard to a termination of employment, and
(ii) ten years from the date of grant. Except as provided in
this Section 2, the Equity Awards and all other equity,
equity-based or profits interest awards held by you on or prior to
the Separation Date that are not Equity Awards (the
“Unvested Awards”) shall otherwise continue to
be governed by their terms; provided , that, notwithstanding
anything to the contrary in the plan or any applicable grant
agreement, the Unvested Awards shall remain outstanding, but shall
cease to vest and you shall not have any rights with respect
thereto, subject to Section 3 hereof, pending determination of
whether the Additional Vesting Condition, as defined below,
has been, and
shall be forfeited without payment and without any future
obligation or rights in the event that the Additional Vesting
Condition is not, or cannot be, satisfied.
b. The Company shall
(i) exercise its right to repurchase 149,000 restricted units,
for an aggregate purchase price of $149,000; and (ii) settle
the Phantom Equity Units listed on Schedule 1 in cash,
pursuant to the terms of the agreement governing such Phantom
Equity Units, for an aggregate payment of $101,010, in ea
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