Exhibit 99.2
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement
(this “Agreement”), dated as of December 12, 2005
(the “Effective Date”), is made by and between Constar
International Inc., a Delaware corporation, having its principal
offices at One Crown Way, Philadelphia, Pennsylvania 19154 (the
“Company”), and Mr. Walter Sobon (the
“Executive”).
Recitals
The Company desires to employ the
Executive and the Executive desires to be employed by the Company
upon the terms and conditions set forth herein.
Agreement
NOW, THEREFORE, in consideration of
the premises and mutual covenants herein contained, and intending
to be legally bound hereby, the Company and the Executive hereby
agree as follows:
1. Definitions
.
1.1. “Affiliate” means any person or
entity controlling, controlled by or under common control with the
Company.
1.2. “Board” means the Board of Directors
of the Company.
1.3. “Cause” means (a) the
Executive, in carrying out his duties under this Agreement, engages
in gross misconduct or gross negligence resulting in a material
adverse effect on the Company, (b) the Executive embezzles any
amount of the Company’s assets, (c) the Executive is
convicted (including a plea of guilty or nolo contendere )
of a felony involving moral turpitude, (d) the
Executive’s breach of any covenant contained in
Section 9 below, or (e) the Executive’s willful and
material failure to follow the lawful instructions of the
Company’s Board (consistent with Section 4 below). For
purposes of this Section 1.3, no act, or failure to act, on
the Executive’s part shall be considered
“willful” unless done, or omitted to be done, by him in
bad faith and without reasonable belief that his action or omission
was in the best interest of the Company. Any act or omission to act
by the Executive in reliance upon an opinion of counsel to the
Company shall not be deemed to be willful.
1.4. “Change in Control” shall
mean:
1.4.1. the acquisition after the Effective Date by an
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 (the “Exchange Act”)) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of more than 30% of the combined voting power of the voting
securities of the Company entitled to vote generally in the
election of directors (the “Voting Securities”);
provided, however, that the following acquisitions shall not
constitute a Change in Control: (a) any acquisition, directly
or indirectly by or from the Company or any subsidiary of the
Company, or by any employee benefit plan
(or related trust) sponsored or
maintained by the Company or any subsidiary of the Company,
(b) any acquisition by any underwriter in connection with any
firm commitment underwriting of securities to be issued by the
Company, or (c) any acquisition by any corporation if,
immediately following such acquisition, 70% or more of the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation (entitled to vote generally in the election of
directors), are beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who,
immediately prior to such acquisition, were the beneficial owners
of the then outstanding common stock of the Company (“Common
Stock”) and the Voting Securities in substantially the same
proportions, respectively, as their ownership, immediately prior to
such acquisition, of the Common Stock and Voting Securities;
or
1.4.2. The occurrence after the Effective Date of a
reorganization, merger or consolidation, other than a
reorganization, merger or consolidation with respect to which all
or substantially all of the individuals and entities who were the
beneficial owners, immediately prior to such reorganization, merger
or consolidation, of the Common Stock and Voting Securities,
beneficially own, directly or indirectly, immediately after such
reorganization, merger or consolidation, 70% or more of the then
outstanding common stock and voting securities (entitled to vote
generally in the election of directors) of the corporation
resulting from such reorganization, merger or consolidation in
substantially the same proportions as their respective ownership,
immediately prior to such reorganization, merger or consolidation,
of the Common Stock and Voting Securities; or
1.4.3. The occurrence after the Effective Date of
(a) a complete liquidation or substantial dissolution of the
Company, or (b) the sale or other disposition of all or
substantially all of the assets of the Company, in each case other
than to a subsidiary, wholly-owned, directly or indirectly, by the
Company or to a holding company of which the Company is a direct or
indirect wholly owned subsidiary prior to such transaction;
or
1.4.4. During any period of twenty-four
(24) consecutive months commencing upon the Effective Date,
the individuals at the beginning of any such period who constitute
the Board and any new director (other than a director designated by
a person or entity who has entered into an agreement with the
Company or other person or entity to effect a transaction described
in Sections 1.4.1, 1.4.2 or 1.4.3 above) whose election by the
Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of any such period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board.
Notwithstanding the above, a “Change in
Control” shall not include any event, circumstance or
transaction which results from the action of any entity or group
which includes, is affiliated with or is wholly or partially
controlled by one or more executive officers of the Company and in
which the Executive participates.
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1.5. “Disability” means the
Executive’s inability to render, for a period of six
consecutive months, services hereunder by reason of physical or
mental disability, as determined by the written medical opinion of
an independent medical physician mutually acceptable to the
Executive and the Company. If the Executive and the Company cannot
agree as to such an independent medical physician, each shall
appoint one medical physician and those two physicians shall
appoint a third physician who shall make such determination. In no
event shall the Executive be considered disabled for the purposes
of this Agreement unless the Executive is deemed disabled pursuant
to the Company’s long-term disability plan, if one is
maintained by the Company.
1.6. “Good Reason” means and shall be
deemed to exist if, without the prior express written consent of
the Executive, (a) the Executive suffers a material change in
his reporting obligations, (b) the Executive suffers a
material change in the duties, responsibilities or effective
authority associated with his titles and positions, as set forth
and described in Section 4 of this Agreement; (c) a
reduction by the Company of the Executive’s “Base
Salary” (as increased from time to time in accordance with
Section 5.1 below) or in the other compensation and benefits
(except for benefits payable under the Company’s equity,
incentive or bonus plans) below a level which is substantially
equivalent in the aggregate, to those payable to the Executive
hereunder, or a material adverse change in the terms or conditions
on which any such compensation or benefits are payable as in effect
on the date hereof or as the same may be increased from time to
time during the term of this Agreement; (d) the Company fails
to pay the accrued Executive’s compensation or to provide for
the Executive’s accrued benefits when due; (e) the
Executive’s office location is moved to a location more than
30 miles from Philadelphia, Pennsylvania (excluding the initial
relocation of the Company’s headquarters from One Crown Way
and thereafter such new location shall be the point from which this
relocation restriction shall be applied); or (f) the failure
or refusal of the “Company’s Successor” (as
defined in Section 8.2 below) to expressly assume this
Agreement in writing, and all of the duties and obligations of the
Company hereunder in accordance with Section 8.2.
2. Employment
. Subject to the terms and
provisions set forth in this Agreement and specifically as provided
in Section 4.1, the Company hereby agrees that the Executive
shall during the “Term of Employment” (as defined in
Section 3 below) be employed as the Executive Vice President
and Chief Financial Officer of the Company, and the Executive
hereby accepts such employment.
3. Term of
Employment . The term
of employment under this Agreement shall commence on the Effective
Date and, unless earlier terminated under Section 6 below,
shall terminate on the third anniversary of the Effective Date (the
“Term of Employment”).
4. Positions, Responsibilities
and Duties .
4.1. Positions
. During the Term of Employment, the
Executive shall be employed and serve as the Executive Vice
President and Chief Financial Officer of the Company. In such
position, the Executive shall have the duties, responsibilities and
authority normally associated with the office and position of
Executive Vice President and Chief Financial Officer of a
publicly-traded corporation. The Executive shall report to the
Board and the chief executive officer. All other accounting,
finance and treasury personnel shall report to the
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Executive and/or his designees. Notwithstanding
the above, the Executive shall not be required to perform any
duties and responsibilities which would be likely to result in a
non-compliance with or violation of any applicable law or
regulation.
4.2. Duties
. During the Term of Employment,
the Executive shall have responsibility for and authority over all
accounting, finance and treasury operations of the Company and its
Affiliates. Additionally, during the Term of Employment, the
Executive shall devote substantially all of his business time,
during normal business hours, to the business and affairs of the
Company and the Executive shall use his reasonable best efforts to
perform faithfully and efficiently the duties and responsibilities
contemplated by this Agreement; provided , however ,
that the Executive shall be allowed, to the extent such activities
do not substantially interfere with the performance by the
Executive of his duties and responsibilities hereunder, to
(a) manage the Executive’s personal, financial and legal
affairs, and (b) serve on corporate, civic or charitable
boards or committees.
5. Compensation and Other
Benefits .
5.1. Base
Salary . During the
Term of Employment, the Executive shall receive a base salary per
annum payable in accordance with the Company’s normal payroll
practices of no less than US $300,000, which the Board shall review
annually and may, in its sole discretion, increase (but not
decrease) (“Base Salary”).
5.2. Annual
Bonus . During the
Term of Employment, the Executive shall participate in the
Company’s Annual Incentive & Management Stock
Purchase Plan (the “AIMSPP”) as maintained by the
Company from time to time for the benefit of senior executives. In
respect of each full or partial calendar year during the Term of
Employment, the Executive shall be eligible for an annual bonus
(the “Bonus”) if the Executive and/or the Company
achieves performance goals established by the Board in good faith
and consistent with the AIMSPP.
5.3. Retirement and Savings
Plans . During the
Term of Employment, the Executive shall be eligible to participate
in all pension, retirement, savings, 401(k) and other employee
pension benefit plans, policies and programs (the “Retirement
Plans”) maintained by the Company from time to time for the
benefit of senior executives and/or other employees. However,
nothing in this Section 5.3 shall be construed to require the
Company to establish or maintain any such Retirement
Plans.
5.4. Supplemental Executive
Retirement Plan .
During the Term of Employment, the Executive shall participate in
the Company’s Supplemental Executive Retirement Plan (the
“SERP”) as maintained by the Company from time to time
for the benefit of senior executives.
5.5. Welfare Benefit
Plans . During the
Term of Employment, the Executive, the Executive’s spouse, if
any, and his eligible dependents, if any, shall be eligible to
participate in and be covered on the same basis as other senior
executive officers of the Company under all the welfare benefit
plans, policies and/or programs maintained by the Company from time
to time including, without limitation, all medical,
hospitalization, dental, disability, life, accidental
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death and dismemberment and travel accident
insurance plans, policies and/or programs (the “Welfare
Plans”). However, nothing in this Section 5.5 shall be
construed to require the Company to establish or maintain any such
Welfare Plans. The Welfare Plans and the Retirement Plans are
sometimes referred to collectively herein as the “Benefit
Plans.”
5.6. Expense
Reimbursement .
During and in respect of the Term of Employment, the Executive
shall be entitled to receive prompt reimbursement for expenses
incurred by the Executive in performing his duties and
responsibilities hereunder in accordance with the Company’s
policy for senior executives of the Company.
5.7. Vacation and Fringe
Benefits . During the
Term of Employment, the Executive shall be entitled to at least
four weeks paid vacation each calendar year, plus paid time off due
to illness or personal reasons in accordance, in all such cases,
with Company policy.
5.8. Equity
Compensation . During
the Term of Employment, the Executive shall be eligible to
participate in and receive awards under the Company’s 2002
Stock-Based Incentive Compensation Plan, and any other equity-based
incentive plans as maintained by the Company from time to time for
the benefit of senior executives.
6. Termination
. Upon the occurrence of
any termination of the Executive’s employment as chief
financial officer, the Executive shall and shall be deemed to
immediately resign from membership on the Board, if applicable, and
from any committees thereof (and the Executive shall promptly
tender to the Board a written resignation letter effecting the
foregoing).
6.1. Termination Due to
Death . In the event
of the Executive’s death, the Executive’s estate or his
legal representative, as the case may be, shall be entitled to:
(a) any Base Salary earned but unpaid as of the date of death
and Base Salary continuation through the end of the month in which
the Executive’s death occurs; (b) a pro-rata payment for
the year of the Executive’s death equal to the
“target” Bonus plus the matching incentive under the
AIMSPP (the “Total Award”) for such year multiplied by
a fraction, the numerator which is the number of days transpired in
the calendar year up to and including the date of the death of the
Executive, and the denominator of which is 365; (c) immediate
payment of any unpaid expense reimbursements, deferred compensation
and unused accrued vacation days through the date of the
Executive’s death; and (d) any other payments and/or
benefits which the Executive, the Executive’s estate or the
Executive’s legal representative is entitled to receive under
any of the Benefit Plans, the AIMSPP, the SERP or otherwise in
accordance with the terms of such plan or arrangement.
6.2. Termination Due to the
Executive’s Disability . Upon 30 days prior written notice to the
Executive, the Company may terminate the Executive’s
employment hereunder due to Disability. In such event, the
Executive or his legal representative, as the case may be, shall be
entitled to: (a) any Base Salary earned but unpaid as of the
date of the Executive’s termination due to Disability and
Base Salary continuation through the end of the month in which such
termination occurs; (b) a pro-rata payment for the year of
termination equal to the Total Award under the AIMSPP for such year
multiplied by a fraction, the numerator of which is the number of
days transpired in the calendar year up to and including the date
on which the Executive is terminated by the Company due to
Disability, and the denominator of which is
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365; (c) immediate payment of any unpaid
expense reimbursements, deferred compensation and unused accrued
vacation days through the date of termination; and (d) any
other payments and/or benefits which the Executive or the
Executive’s legal representative is entitled to receive under
any of the Benefit Plans, the AIMSPP, the SERP or otherwise in
accordance with the terms of such plan or arrangement.
6.3. Termination Without Cause
or by the Executive for Good Reason Prior to Change in
Control . Prior to a
Change in Control and upon 30 days prior written notice to the
Executive, the Company may terminate the Executive’s
employment hereunder without Cause. Prior to a Change in Control
and upon 30 days prior written notice to the Company the Executive
may terminate his employment hereunder with the Company for Good
Reason. In either such event (unless the Executive has incurred a
termination under Section 6.1 or 6.2 above), the Executive
shall be entitled to, upon execution and effectiveness of a general
release in substantially the form attached as exhibit
“A” and upon resignation by the Executive from his
position, if any, on the Board: (a) (i) Base Salary
earned but unpaid as of the date of the Executive’s
termination, (ii) Base Salary continuation for twenty-four
months, and (iii) payment of two times the Total Award under
the AIMSPP for the year in which any termination occurs paid in 24
substantially equal payments over the Base Salary continuation
period; (b) continuation of medical benefits in effect as of
the date of termination for a period of two years following the
date of termination at the Company’s sole expense and
following the expiration of this coverage period, COBRA
continuation coverage under the Company’s medical plan for 18
months in accordance with applicable law at the Executive’s
sole expense provided that the Executive is not enrolled in another
group health plan; (c) immediate payment of any unpaid expense
reimbursements, deferred compensation and unused accrued vacation
days through the date of termination; and (d) any other
payments and/or benefits which the Executive is entitled to receive
under any of the Benefit Plans, the AIMSPP, the SERP or otherwise
in accordance with the terms of such plan or agreement. In the
event the Executive intends to terminate his employment with the
Company for Good Reason such prior written notice shall specify the
particular act or acts, or failure to act, which is or are the
basis for the Executive’s decision to so terminate his
employment for Good Reason. The Company shall be given 30 days
after such notice to correct such act or failure to act. Upon
failure of the Company, with such 30 day period, to correct such
act or failure to act, the Executive may proceed to terminate his
employment with the Company. In the event that a Change in
Con
