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Exhibit 10.2
EMPLOYMENT
AGREEMENT
DAVID A.
BRADLEY
EMPLOYMENT
AGREEMENT (the “Agreement”) dated as of April 1,
2008 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
David Bradley (the “Executive”).
WHEREAS,
KRATON, Parent and the Executive are party to an employment
agreement, dated as of March 8, 2004, as amended (the
“Existing Agreement”); and
WHEREAS,
KRATON, Parent and the Executive desire to terminate the Existing
Agreement in its entirety and enter into this Agreement, which
shall, from and after the Effective Date, as such term is defined
below, govern the terms and conditions of the Executive’s
employment.
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 January 14,
2008 (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 Chief
Operating Officer of KRATON. In such position, Executive shall have
the duties and authority commensurate with the position as shall be
determined from time to time by the Company. During the Employment
Term, the Executive shall be subject to, and shall act in
accordance with, all reasonable instructions and directions and all
applicable policies and rules of the Company.
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 Company; provided that
nothing herein shall preclude Executive, subject to the prior
approval of the Company, from accepting appointment to or continue
to serve on any 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 $350,000, 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 of directors of KRATON (the
“Board”).
4. I
ncentive Compensation . 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 (i) up to sixty percent
(60%) of Executive’s Base Salary (the “Target”)
based upon the achievement of performance objectives established by
the Board, and (ii) up to 120% of the Target if such performance
objectives are exceeded due to extraordinary performance, as
determined by the Board.
5.
Employee Benefits .
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.
b.
Other . 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, subject to and in
accordance with the provisions of this Section 7 and
subsections (a) through (f). Notwithstanding any other provision of
this Agreement, subject to Sections 8, 9, 10, 11(j) and 11(m),
the provisions of this Section 7 shall exclusively govern
Executive’s and the Company’s rights and obligations
related to termination of this Agreement and the rights and
remedies 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 his principal 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 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) 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
(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, 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 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, other than in the
event such termination occurs within one (1) year following a
Change in Control, which shall be governed exclusively by Section
7(d) hereof, 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 for a
period of 12 months following such termination (the
“Severance Continuation Period”) which shall be paid 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 during the Severance Continuation Period,
provided in any case 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 Severance Continuation
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 material 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, (C) a relocation of
Executive’s primary work location more than 50 miles from the
work location on the date hereof, without written consent, or
(D) a material reduction in Executive’s duties and
responsibilities as described in Section 2(a) of this Agreement;
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 60th day following the later of its
occurrence or Executive’s knowledge thereof, unless Executive
has given KRATON written notice thereof prior to such date.
The
payments and benefits described in subparagraphs 7(c)(ii)(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.
By KRATON Without Cause or Resignation by Executive for Good
Reason Following a Change In Control .
(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 the
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 within one
(1) year following a Change in Control, 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 for
the Severance Continuation Period which shall be paid at the same
time and in the same manner as if Executive had remained employed
by KRATON during such period;
(C) 1
times Annual Bonus calculated at the Target level payable as a lump
sum; and a pro rata portion of any Annual Bonus that Executive
would have been entitled to receive pursuant to Section 4
hereof in such year calculated by taking the product of
(a) his Target Annual Bonus multiplied by (b) a fraction,
the numerator of which is the number of days during which the
Executive was employed by the Company in the year of his
termination and the denominator of which is 365, as further
adjusted to reflect the then-current bonus accrual as it exists on
the Company’s books as of the date of termination. All sums
due under this sub-paragraph shall be payable within thirty
(30) days of Executive’s termination of employment;
and
(D) all
health benefits including medical, dental and vision for Executive
and his eligible dependents comparable to those health benefits
Executive participated in on the date of termination during the
Severance Continuation Period, provided in any case such health
benefits shall cease if Executive becomes entitled to health
benefits from a new employer. KRATON may provide such health
benefits by paying the Executive’s COBRA continuation
coverage through such Severance Continuation Period.
(iii) For
purposes of this Agreement, “Change in Control” shall
mean the occurrence of any of the following events:
(A) any
sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all of the assets of the
Company, Polymer Holdings, or TJ Chemical Holdings (together, the
“Entities”) to any Person or group of related persons
(a “Group”) for purposes of Section 13(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”),
together with any affilia
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