SEVERANCE AGREEMENT - GARY M. SPITZTermination Severance Agreement |
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Search Termination Severance Agreement by:
Exhibit 10.2
KRATON POLYMERS LLC
PERSONAL AND CONFIDENTIAL
BY FAX; E-MAIL; OR
BY REGISTERED MAIL
RETURN RECEIPT REQUESTED
April 26, 2004
Mr. Gary M. Spitz
225 Warrenton Drive
Houston, Texas 77024
Dear Gary:
Reference is made to the employment agreement between you and KRATON Polymers LLC (the “Company”), dated March 1, 2001 (the “Employment Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Employment Agreement.
In connection with your separation from the Company, this letter (this “Separation Agreement”) will confirm the agreement between you and the Company regarding your separation of employment. The parties agree that your separation will be treated as a termination without Cause under the Employment Agreement.
| 1. | You hereby agree to remain employed with the Company as Chief Financial Officer, with such duties and authority commensurate with that position as determined from time to time by the Company’s Board of Directors, until June 30, 2004, or such earlier or later date that is mutually agreed to by you and the Company. You will resign from your positions as an officer and employee of the Company and all other direct and indirect subsidiaries and affiliates of the Company as of June 30, 2004 (or such other earlier or later date that is mutually |
| agreed to by you and the Company) (June 30, 2004 or such other date, the “Separation Date”). |
| 2. | From the date hereof until the Separation Date (i) the Company shall continue to pay you your Base Salary in accordance with the Company’s usual payment practices, (ii) you will continue to be eligible to participate in the Company’s Employee Benefits (other than bonus, incentive or severance benefits) on the same basis as is made available to other senior executives of the Company in accordance with the applicable terms thereof, (iii) the Company shall reimburse you for reasonable business expenses incurred by you in the performance of your duties to the Company in accordance with Company policies and (iv) you will continue to enjoy free parking at the Company’s headquarters in Houston. |
| 3. | With the exception of the portion of the last sentence of section 8(c) relating to indemnification and director and officer insurance coverage and Section 12(k) of the Employment Agreement (the “Indemnification Clauses”) and sections 9, 10, and 11 of the Employment Agreement which shall continue in full force and effect (as amended herein), the Employment Agreement is hereby terminated and, except as set forth below, no benefits shall be paid thereunder. |
| 4. | Under the Indemnification Clauses, your rights to indemnification and director and officer insurance coverage shall survive the termination of the Employment Agreement and this Separation Agreement in accordance with the terms of such clauses. |
| 5. | Subject to this Separation Agreement becoming effective and in consideration of you executing the release attached hereto as Appendix A (the “Release”) within twenty-one days immediately following the Separation Date, and in consideration of the representations and agreements set forth therein and herein, the Company agrees to pay to you severance compensation as follows: |
| (a) | Accrued Rights as of the Separation Date, payable as soon as practicable (but in no event later than ten (10) business days) after the Separation Date. |
| (b) | A lump sum payment in cash equal to your Base Salary of $300,000, payable as soon as practicable (but in no event later than five (5) business days) after the seventh day following your execution of the Release (such seventh day, the “Final Release Effective Date”). |
| (c) | In consideration of your execution of the Release, (i) a lump sum payment in cash of $147,400 which is in full and final settlement of any and all amounts that may be due to you, including, without limitation, with respect |
| to any bonus for fiscal year 2003 and any bonuses payable in connection with the sale of the Company on December 23, 2003, payable as soon as practicable (but in no event later than five (5) business days) following the Final Release Effective Date and (ii) payment for reasonable attorneys’ fees incurred in negotiating this Separation Agreement and fees for outplacement services at a combined cost not to exceed an aggregate amount of $15,000, whether such fees are incurred prior to or following the Separation Date; provided that, if such fees (or a portion thereof) become due and payable prior to the Separation Date and an invoice for such fees is provided by your attorneys and/or outplacement service provider to the Company prior to the Separation Date in accordance with the Company’s policies, the Company will pay the fees set forth in such invoice as soon as practicable following receipt of the invoice. Such payments shall be made directly to your attorneys and outplacement service provider. |
| (d) | All payments made under paragraph 5 of this Separation Agreement shall be made subject to any applicable tax withholding. |
| (e) | After you are no longer eligible to participate in the Company’s Employee Benefits described in section 2 of this Separation Agreement, you shall be entitled at your option to continue thereafter your enrollment under any such plan at your expense for as long as allowed by law (currently eighteen (18) months) from the Separation Date, under, and in accordance with the applicable provisions of, COBRA, Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. §§ 1161 et seq.). |
| (f) | Notwithstanding anything in this Separation Agreement to the contrary, in the event that you take any action in material contravention of the covenants contained in sections 9, 10, and 11 of the Employment Agreement (as amended herein), or in material violation of the terms of this Separation Agreement, you will immediately forfeit your right to any payments (other than the Accrued Rights) under paragraph 3 of this Separation Agreement to the extent not theretofore paid to you and, if already made as of the time of action or violation, you agree that you will reimburse the Company immediately, for the amount of such payment. |
| 6. | You hereby agree not to take any action or to make any statement, written or oral, that materially disparages the business or management of the Company or any Related Persons (as defined in the Release). The Company hereby agrees that it will use its reasonable efforts to ensure that the members of the Board of Directors of the Company and its senior executive officers shall not take any action to make any statement, written or oral that materially disparages or materially injures your |
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