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Exhibit 10.23
EMPLOYMENT
AGREEMENT
JOSEPH WAITER
EMPLOYMENT AGREEMENT (the "Agreement") dated as
of April 12, 2004 by and between KRATON Polymers LLC, ("KRATON"), a
Delaware limited liability company, which is a wholly owned
subsidiary of Polymer Holdings LLC ("Parent"), a Delaware limited
liability company and Joseph Waiter (the "Executive").
WHEREAS, Parent and Ripplewood Chemical Holding
LLC, a Delaware limited liability company, have consummated a
transaction (the "Transaction") pursuant to a merger agreement,
dated November 5, 2003 (the "Merger Agreement"), whereby KRATON and
its subsidiaries (collectively, the "Company") became wholly owned
subsidiaries of Parent;
WHEREAS, the Company desires that, upon the
consummation of the Transaction, Executive continues to be employed
by the Company and to enter into an agreement embodying the terms
of such employment and Executive desires to accept such employment
with the Company and enter into such an agreement.
NOW, THEREFORE, in consideration of the premises
and mutual covenants herein and for other good and valuable
consideration, the parties agree as follows:
1. Term of Employment . Subject to the
provisions of Section 7 of this Agreement, Executive shall continue
to be employed by the Company for a period commencing on April 1,
2004 (the "Effective Date") and ending on the day before the third
anniversary of the Effective Date (the "Employment Term") on the
terms and subject to the conditions set forth in this Agreement;
provided, however, that commencing with the third anniversary of
the Effective Date and on each anniversary thereafter (each an
"Extension Date"), the Employment Term shall be automatically
extended for an additional one-year period, unless KRATON or
Executive provides the other party hereto 30 days prior written
notice before the next Extension Date that the Employment Term
shall not be so extended.
2. Position .
a. During the Employment Term, Executive shall
serve as KRATON’s Vice President, General Counsel and
Secretary. In such position, Executive shall have the duties and
authority commensurate with the position and as shall be determined
from time to time by the Board of Directors of KRATON (the
"Board"). Executive shall report to the chief executive officer of
KRATON (the " Chief Executive Officer ").
b. During the Employment Term, Executive will
devote Executive’s full business time and best efforts to the
performance of Executive’s duties hereunder and will not
engage in any other business, profession or occupation for
compensation or otherwise which would conflict or interfere with
the rendition of such services either directly or indirectly,
without the prior written consent of the Board; provided that
nothing herein shall preclude Executive, subject to the prior
approval of the Board, from accepting appointment to or continue to
serve on any board of directors or trustees of any business
corporation or any charitable
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organization; provided in each case, and in the
aggregate, that such activities do not conflict or interfere with
the performance of Executive’s duties hereunder or conflict
with Section 9.
3. Base Salary . During the Employment
Term, the Company shall pay Executive a base salary (the "Base
Salary") at the annual rate of $195,000, payable in regular
installments in accordance with the Company’s usual payment
practices. Executive shall be entitled to annual reviews and
increases in Executive’s Base Salary, if any, as may be
determined in the sole discretion of the Board.
4. Annual Bonus . With respect to the
first partial fiscal year and each full fiscal year during the
Employment Term, Executive shall be eligible to earn an annual
bonus award (an "Annual Bonus") equal to up to thirty-five percent
(35%) of Executive’s Base Salary (the "Target") based upon
the achievement of performance objectives established by the Board,
as determined by the Board. The Company intends to establish a
deferred compensation plan, under which Executive may elect to
defer, no later than March 1 st (or such later date as is
provided in the plan) of the year in which the affected Annual
Bonus is earned, up to 50% of such Annual Bonus which may be paid
at a later date in shares or units through KRATON Management LLC.
The terms and conditions of the deferred compensation plan shall be
provided in a separate plan document, which will provide, among
other things, that the Board shall determine the value of the
shares or units as applicable for purposes of the deferred
compensation plan.
5. Employee Benefits . During the
Employment Term, Executive shall be entitled to participate in the
Company’s employee benefit plans, as amended from time to
time, (other than bonus, incentive or severance plans) as in effect
from time to time (collectively "Employee Benefits"), on the same
basis as those benefits are generally made available to other
senior executives of the Company.
During the Employment Term, Executive shall be
eligible to participate in the equity incentive plans of the
Company, its Parent and TJ Chemical Holdings LLC.
6. Business Expenses . During the
Employment Term, reasonable business expenses incurred by Executive
in the performance of Executive’s duties hereunder shall be
reimbursed by the Company in accordance with Company
policies.
7. Termination . The Employment Term and
Executive’s employment hereunder may be terminated by either
party at any time and for any reason; provided that Executive will
be required to give KRATON at least 60 days advance written notice
of any resignation of Executive’s employment. Notwithstanding
any other provision of this Agreement, the provisions of this
Section 7 shall exclusively govern Executive’s rights upon
termination of employment with the Company and its
affiliates.
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a. By KRATON For Cause or By Executive
Resignation without Good Reason .
(i) The Employment Term and Executive’s
employment hereunder may be terminated by KRATON for Cause (as
defined below) and shall terminate automatically upon
Executive’s resignation without Good Reason (as defined
below); provided that Executive will be required to give KRATON at
least 60 days advance written notice of any such resignation;
provided, that KRATON may elect to waive such notice period and to
pay Executive in lieu of such notice.
(ii) For purposes of this Agreement:
(x) "Cause" shall mean (A) Executive’s
continued failure substantially to perform Executive’s duties
hereunder (other than as a result of total or partial incapacity
due to physical or mental illness) for a period of 30 days
following written notice by KRATON to Executive of such failure;
provided that it is understood that this clause (A) shall not
permit KRATON to terminate Executive’s employment for Cause
because of dissatisfaction with the quality of services provided by
or disagreement with the actions taken by Executive in the good
faith performance of Executive’s duties to KRATON, (B) theft
or embezzlement of Company property, (C) Executive’s
conviction of or plea of guilty or no contest to (x) a felony or
(y) a crime involving moral turpitude, (D) Executive’s
willful malfeasance or willful misconduct in connection with
Executive’s duties hereunder or any act or omission which is
materially injurious to the financial condition or business
reputation of the Company or any of its subsidiaries or affiliates,
or (E) Executive’s breach of the provisions of Sections 8 or
9 of this Agreement; and
(iii) If Executive’s employment is
terminated by KRATON for Cause, or if Executive resigns without
Good Reason, Executive shall be entitled to receive, within 30 days
following such termination with respect to (A)-(C) below and at
such time, if any, as the Employee Benefits under (D) below become
due in accordance with the applicable terms thereof:
(A) the Base Salary through the date of
termination, to the extent not already paid;
(B) any Annual Bonus earned but unpaid as of the
date of termination for any previously completed fiscal
year;
(C) reimbursement for any unreimbursed business
expenses properly incurred by Executive in accordance with KRATON
policy prior to the date of Executive’s termination;
and
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(D) such vested Employee Benefits, if any, as to
which Executive may be entitled under the employee benefit plans of
the Company as described in Section 5 (including, without
limitation, any retirement benefits, medical, life insurance or
disability benefits, accrued but unpaid vacation or other benefits
Executive is entitled to pursuant to the terms of the applicable
plans then in effect (the amounts described in clauses (A) through
(D) hereof being referred to as the "Accrued
Obligations").
Following such termination of Executive’s
employment by KRATON for Cause or resignation by Executive without
Good Reason, except as set forth in this Section 7(a)(iii),
Executive shall have no further rights to any compensation or any
other benefits in the nature of severance or termination pay or in
connection with the termination of his employment.
b. Disability or Death .
(i) The Employment Term and Executive’s
employment hereunder shall terminate upon Executive’s death
and may be terminated by KRATON if Executive becomes physically or
mentally incapacitated and is therefore unable for a period of six
(6) consecutive months or for an aggregate of nine (9) months in
any twenty-four (24) consecutive month period to perform
Executive’s duties (such incapacity is hereinafter referred
to as "Disability"); provided that a termination on the basis of a
Disability must occur within 90 days of the date when Executive is
subject to termination due to Disability. Any question as to the
existence of the Disability of Executive as to which Executive and
KRATON cannot agree shall be determined in writing by a qualified
independent physician mutually acceptable to Executive and KRATON.
If Executive and KRATON cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination
in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all
purposes of the Agreement.
(ii) Upon termination of Executive’s
employment hereunder for either Disability or death, Executive or
Executive’s estate (as the case may be) shall be entitled to
receive:
(A) at the times set forth in Section 7(a)(iii)
hereof, the Accrued Obligations;
(B) a pro rata portion of any Annual Bonus that
Executive would have been entitled to receive pursuant to Section 4
hereof in such year based upon the percentage of the fiscal year
that shall have elapsed through the date of Executive’s
termination of employment, payable when such Annual Bonus would
have otherwise been payable had Executive’s employment not
terminated.
Following Executive’s termination of
employment due to death or Disability, except as set forth in this
Section 7(b)(ii), Executive shall have no further rights to
any
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compensation or any other benefits in the nature
of severance or termination pay or in connection with the
termination of his employment.
c. By KRATON Without Cause or Resignation by
Executive for Good Reason .
(i) The Employment Term and Executive’s
employment hereunder may be terminated by KRATON without Cause or
by Executive’s resignation for Good Reason.
(ii) If Executive’s employment is
terminated by KRATON without Cause (other than by reason of death
or Disability) or by Executive’s resignation for Good Reason,
Executive shall be entitled to receive:
(A) at the times set forth in Section 7(a)(iii)
hereof, the Accrued Obligations;
(B) continuation of Executive’s annual Base
Salary during the six-month period immediately following the
termination of Executive’s employment, at the same time and
in the same manner as if Executive had remained employed by KRATON
during such period; and
(C) medical benefits for Executive and his
eligible dependents comparable to those medical benefits Executive
participated in on the date of termination for a period of six (6)
months commencing on the date of Executive’s termination of
employment ("Termination Date"), provided such medical benefits
shall cease if Executive becomes entitled to medical benefits from
a new employer. KRATON may provide such medical benefits by paying
the Executive’s COBRA continuation coverage through such
6-month period.
(iii) For purposes of this Agreement, "Good
Reason" shall mean (A) the failure of the Company to pay or cause
to be paid Executive’s Base Salary or Annual Bonus (if any)
when due, (B) a reduction in Executive’s Base Salary, the
Target Annual Bonus opportunity described in Section 4 herein, or
Employee Benefits other than an across-the-board reduction in
salary or bonus opportunity for all of the members of the
Company’s management team and other than a decrease in
Employee Benefits that applies to all employees otherwise eligible
to participate in the affected plan, or (C) a relocation of
Executive’s primary work location more than 50 miles from the
work location on the date hereof, without written consent; provided
that none of these events shall constitute Good Reason unless the
Company fails to cure such event within 30 days after receipt from
Executive of written notice specifying in reasonable detail the
event which constitutes Good Reason; provided, further, that "Good
Reason" shall cease to exist for an event on the 60
th day following
the later of its occurrence or Executive’s knowledge thereof,
unless Executive has given KRATON written notice thereof prior to
such date.
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The payments and benefits described in
subparagraphs (B) - (C) above shall be subject to and conditioned
upon the Executive’s execution and delivery of a valid and
effective general release and waiver, in a form satisfactory to the
Company, waiving all claims the Executive may have against the
Company, its affiliates and their respective executives, directors,
partners, members, shareholders, successors and assigns. Following
Executive’s termination of employment by the Company without
Cause (other than by reason of Executive’s death or
Disability) or by Executive’s resignation for Good Reason,
except as set forth in Section 7(c)(ii), Executive shall have no
further rights to any compensation or any other benefits in the
nature of severance or termination pay or in connection with the
termination of his employment.
d. Expiration of Employment Term
.
(i) Election Not to E
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