|
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
1
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.
2
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
3
(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
4
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.
5
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 Ter
| 
