EMPLOYMENT AGREEMENT
Nicholas G. Dekker
EMPLOYMENT
AGREEMENT (the “Agreement” or the “U.S.
Contract”) dated as of April 9, 2007 by and between
Kraton Polymers LLC, (“Kraton” or the
“Company”), a Delaware limited liability company, which
is a wholly owned subsidiary of Polymer Holdings LLC
(“Parent”), a Delaware limited liability company and
Nicholas G. Dekker (“Executive”).
WHEREAS, on
December 12, 2001, Kraton Polymers France SAS (“KP
France”) and Executive entered into an employment contract
(the “French Contract”) pursuant to which Executive was
entrusted with duties of Finance Manager Europe;
WHEREAS, pursuant
to an amendment to his French Contract dated November 1
st , 2005, Executive was entrusted with duties of
Vice President Europe, Africa and Middle East in addition to his
duties of Finance Manager Europe and Asia;
WHEREAS, Executive
has been appointed to the position of Chief Financial Officer of
the Company, as of October 6, 2006, and has obtained the
appropriate U.S. work permit, Executive will perform such duties
primarily in Houston, Texas;
WHEREAS, the
Company, KP France and Executive will concurrently enter into an
agreement (the “Tripartite Agreement”), pursuant to
which the French Contract will be terminated by mutual agreement,
and to which this U.S. Contract is attached;
NOW THEREFORE, in
consideration of the promises 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 October 6,
2006 (the “Effective Date”) and ending on the day
before the first anniversary of the Effective Date (the
“Employment Term”) on the terms and subject to the
conditions set forth in this Agreement; provided that, prior to the
end of the Employment Term, the Employment Term may be extended
until the day before the second anniversary of the Effective Date
upon mutual agreement of such extension by the Company and
Executive.
a. During
the Employment Term, Executive shall serve as Kraton’s
Vice-President and Chief Financial Officer. In such position,
Executive shall have the duties and authority commensurate with the
position as shall be determined from time to time by the Board of
Directors of Kraton (the “Board”). Executive shall
report to the President & Chief Executive Officer of
Kraton.
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
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board of
directors or trustees of any business corporation or any charitable
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 8.
3.
Base Salary . During the Employment Term, the Company shall
pay Executive a base salary (the “Base Salary”) at the
annual rate of Î 200,000, converted and paid as U.S. $266,000
(based on an exchange rate of 1.33 U.S. Dollars to the Euro (the
“Contract Exchange Rate”)), payable in regular
installments in accordance with the Company’s usual payment
practices. In the event that during any consecutive three-month
period during the Employment Term, the average exchange rate for
Euros to U.S. Dollars (“Actual Exchange Rate”) as
reported in http://www.oanda.com/ varies from the Contract Exchange
Rate by more than 10%, the Contract Exchange Rate shall become such
Actual Exchange Rate on a going forward basis.
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.
Incentive Compensation.
a.
Annual Bonus . With respect to each fiscal year during the
Employment Term, Executive shall be eligible to earn an annual
bonus award (an “Annual Bonus”) equal to (i) 50% of
Executive’s Base Salary (the “Target”) based upon
the achievement of performance objectives established by the Board,
and (ii) up to 100% of Executive’s Base Salary if such
performance objectives are exceeded due to extraordinary
performance, as determined by the Board. Executive shall be
eligible to earn an Annual Bonus for fiscal year 2006, with
separate weighting for the two positions held during such fiscal
year.
b.
Notional Restricted Unit Award . The Company shall grant
Executive a restricted unit award of the Company with a current
notional value of $150,000 based on the value of membership units
of TJ Chemical Holdings LLC (“TJ Chemical”), as
determined by the Board. Each “Restricted Unit” will be
the equivalent of one notional membership unit of TJ Chemical.
Executive shall not have any beneficial ownership in the notional
membership units underlying the Restricted Units and the grant of
Restricted Units shall represent an unsecured promise to deliver
membership units of TJ Chemical (either directly or through
membership units of Kraton Management LLC) on a future date. Twenty
percent of the Restricted Units shall vest on each anniversary of
the grant date, provided that Executive remains employed with the
Company or KP France through the applicable vesting date. Except as
provided in the next two succeeding sentences, upon termination of
employment for any reason all unvested Restricted Units shall
immediately and automatically be forfeited. Notwithstanding the
foregoing, in the event Executive’s employment is terminated
pursuant to Section 7(c) and Executive is offered and accepts a
Position, as defined in the Tripartite Agreement, all unvested
Restricted Units shall continue to vest as provided above. In the
event of a “change in control” of TJ Chemical (as
defined in the TJ Chemical Option Plan), if the Executive’s
employment is terminated without Cause or for Good Reason during
the two-year period immediately following the date of the change in
control, all unvested Restricted Units shall become immediately
vested. Distribution of membership units representing the portion
of vested Restricted Units shall occur as soon as
practicable
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after the
earlier of a change in control or termination of Executive’s
employment, provided that following a change in control, unvested
Restricted Units shall remain outstanding and continue to vest as
provided above until the Executive’s employment
terminates.
a.
General . 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. Notwithstanding the foregoing, Executive elects not to
participate in the U.S. Savings Plan or any of the Company’s
non-qualified deferred compensation plans (including, but not
limited to the Company’s Deferred Compensation and
Restoration Plan and the Executive Deferred Compensation
Plan).
b.
Equity Incentive Plans . During the Employment Term,
Executive shall be eligible to participate in the equity incentive
plans of the Company, its Parent and TJ Chemical.
c.
Pension . During the Employment Term, Executive elects to
forgo any Company contribution on his behalf in the U.S. Savings
Plan to which he otherwise may be entitled and accepts the terms of
the Tripartite Agreement.
d.
Housing Support . During the Employment Term, the Company
will reimburse Executive for reasonable costs associated with
maintaining housing for himself in the United States, up to a
maximum of $2,500 per month. “Reasonable costs”
include, but are not limited to, rent, utilities and cleaning
services associated with his local housing.
e.
Travel . During the Employment Term, the Company shall
provide Executive with the following:
(i) Up to six
round trip business class airline tickets per year for
Executive’s travel to and from France; and
(ii) Reimbursement
for the cost of roundtrip coach class airline tickets for
Executive’s spouse from France to the U.S., up to a maximum
of Î 13,500 per year. In addition, Executive shall be
reimbursed for costs associated with maintaining his residence in
France during such times that his spouse is in the U.S., in an
amount not to exceed Î 100 per visit, but in no event shall such
amounts exceed Î 1500 per year.
f.
Automobile . The Company shall provide Executive with an
automobile for his use during the Employment Term.
g.
Tax Equalization and Tax Preparation . In order to
compensate Executive for any additional tax (including but not
limited to income, employment and social security insurance)
liability that Executive may be subject to in the United States,
the Company shall provide Executive with an additional
tax
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equalization
payment or payments, in any year necessary, such that
Executive’s net income after such taxes from such payment or
benefit earned pursuant to the U.S. Contract is equal to what his
net income would have been if such payment or benefit were earned
in France. Such tax equalization payments will offset any taxes
associated with the benefits Executive may receive pursuant to
Sections 5(d), (e), (f) and this Section (g). The Company
shall reimburse Executive for reasonable costs incurred in
connection with tax preparation in connection with the amounts
earned pursuant to the U.S. Contract.
h.
Visa . The Company shall pay for all costs associated with
obtaining and maintaining a L1 Visa for use by Executive during the
Employment Term.
i.
Expense Reimbursement . Executive must submit proper
documentation of all expenses to be reimbursed pursuant to this
Section 5 in a timely fashion.
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 . 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.
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, and provided further that Kraton may elect to
waive such notice period and to pay Executive in lieu of such
notice.
(ii) For purposes
of this Agreement “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) failure of Executive
to maintain a residence in the same metropolitan area as
Kraton’s principal headquarters, which is currently located
in Houston, Texas, or elsewhere as mutually agreed to by Executive
and Company, (C) theft or embezzlement of
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Company
property, (D) Executive’s conviction of or plea of
guilty or no contest to (x) a felony or (y) a crime
involving moral turpitude, (E) 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 (F) Executive’s breach of the provisions of
Sections 8 or 9 of this Agreement.
(iii) In the event
Executive’s employment hereunder is terminated pursuant to
this Section 7(a), Executive will 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 expenses properly incurred by
Executive pursuant to Section 5 or Section 6 and in
accordance with Kraton policy prior to the date of termination
and
(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(a) (including, without limitation, 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 hereunder for Cause or
resignation by Executive for Good Reason, except as set forth in
this Section 7(a)(iii), Executive shall have no further rights
under the U.S. Contract, the French Contract, or the Tripartite
Agreement, to any compensation or any other benefits in the nature
of severance or termination pay or in connection with the
termination of his employment.
(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.
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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) In the event
Executive’s employment hereunder is terminated pursuant to
this Section 7(b), Executive or Executive’s estate (as
the case may be) will be entitled to receive:
(A) at the
times set forth in Section 7(a)(iii) hereof, the Accrued
Obligations; and
(B) a pro
rata portion of any Annual Bonus that Executive would have been
entitled to receive pursuant to Section 4(a) 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 employm
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