SEPARATION
AGREEMENT AND GENERAL RELEASE AND WAIVER
This Separation Agreement and
General Release and Waiver (this “ Agreement ”)
is made as of October 26, 2006, between KRATON Polymers LLC
(the “Company”), and Raymond Guba (the “
Employee ”).
WHEREAS, the Company engaged the
Employee to be its Vice President and Chief Financial Officer;
WHEREAS, the Employee and the
Company are parties to an Employment Agreement dated December 15,
2005 (the “ Employment Agreement ”);
WHEREAS, the parties wish to confirm
the resignation of the Employee’s employment with the Company
and set forth their agreement as to the manner in which the
Employee’s employment with the Company will be closed
out;
NOW, THEREFORE, in consideration of
the mutual covenants set forth herein and for other good and
valuable consideration, receipt of which is hereby acknowledged,
the Company and the Employee agree as follows:
1. Termination of
Employment .
(a) The parties agree that the
Employee’s employment with the Company shall terminate as of
October 6, 2006 (the “ Date of Termination
”). The Employee will resign, effective as of the Date of
Termination, all positions, titles, duties, authorities and
responsibilities with, arising out of or relating to his employment
with the Company and its affiliates and agrees to execute all
additional documents and take such further steps as may be required
to effectuate such resignation.
(b) The parties agree that this
Agreement shall serve as and fulfill all the requirements of a
Notice of Termination for purposes of Section 7(e) of the
Employment Agreement.
(c) The Employment Agreement is
hereby terminated and, except as set forth herein, no benefits
shall be paid thereunder.
2. Accrued Obligations
.
(a) No later than
October 31, 2006, the Company shall pay the Employee a lump
sum payment of $7,294.91, in satisfaction of all of the accrued but
unused vacation time to which the Employee is entitled pursuant to
company policy. The Employee acknowledges that he is not entitled
to any bonus in connection with the 2006 fiscal year.
(b) The Employee has submitted
or will submit to the Company any requests for reimbursement for
any unreimbursed business expenses properly incurred by the
Employee in accordance with Company policy within forty-five days
of the Date of Termination. The Company will process these
reimbursement requests in a manner consistent with past practices
in effect prior to the Date of Termination.
(c) The Employee shall be
entitled to any benefit to which the Employee may be entitled under
any tax qualified pension plan of the Company or its affiliates and
any other benefits required to be provided by law.
(d) These payments and benefits
set forth in this Section 2 represent all of the Accrued
Obligations (as that term is defined in the Employment Agreement)
owed to the Employee and the Employee hereby acknowledges that
payments of the amounts and provision of the benefits outlined in
this Section 2 satisfy all of the Company’s obligations
concerning Accrued Obligations.
3. Payments and
Benefits .
(a) In exchange for the
Employee’s entering into this Agreement, including the
General Release and Waiver contained herein and subject to
Sections 10 and 11 herein, the Company shall make the
following payments to the Employee and provide the Employee with
benefits as set forth below (these payments and benefits
collectively the “Termination Payments”):
(i) continuation of Executive’s annual Base Salary of
$300,000 for a period of six (6) months following such termination
date, (the “Severance Continuation Period”), provided
that such Severance Continuation Period will be extended for an
additional six (6) months (“Additional Severance
Continuation Period”) if Executive has not secured employment
within such initial six (6) month Severance Continuation
Period;
(ii) any
additional benefits, if any, the Employee may be entitled to under
the Pension Benefit Restoration Plan;
(iii) medical benefits for the Employee 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;
(iv) a one
time payment for reasonable attorneys’ fees incurred in
negotiating this Separation Agreement not to exceed $3,000. The
Employee will submit to the Company a copy of the paid invoice from
the Employee’s attorney and Company will promptly process
such reimbursement request;
(v) Company
releases Employee from repayment of any sum due under the Kraton
Relocation Policy for Employees relocation to Houston; and
(vi) Employee may retain any airline frequent flyer mileage
earned during the Employee’s employment with the Company.
(b) All payments and other
benefits provided to the Employee, including without limitation the
Termination Payment and the Accrued Obligations shall be subject
to, and reduced by, all applicable withholding or other taxes. The
Termination Payment and Accrued Obligations shall not be taken into
account as compensation and no service credit shall be given after
the Date of Termination for purposes of determining the benefits
payable to the Employee or the Employee’s family under any
plan, program, agreement or arrangement of the Company. The
Employee acknowledges that, except for the Termination Payment and
the Accrued Obligations, he is not entitled to any other payment
from the Company, including, without limitation, any payment in the
nature of severance, termination, or bonus pay (accrued or
otherwise) from the Company.
4. Equity . The
Employee hereby acknowledges that he does not own and is not
entitled to any equity interests in Kraton Management LLC, TJ
Chemical Holdings LLC or any of their respective affiliates and all
Company Profits Units (as that term is defined in the Kraton
Management LLC Agreement) and all Options (as that term is defined
in the TJ Chemical Holdings LLC 2004 Option Plan) shall be
forfeited immediately. Additionally, all Notional Units (as defined
in the Employment Agreement) will be forfeited immediately.
5. General Release and
Waiver .
(a) The Employee, his heirs,
successors, and assigns, hereby knowingly and voluntarily remise,
release and forever discharge the Company, its subsidiaries and
affiliates, its and their respective officers, directors, partners,
shareholders, employees, successors and assigns (collectively, the
“Related Persons”), from any and all debts, demands,
actions, causes of actions, accounts, covenants, contracts,
agreements, claims, damages, omissions, promises, and any and all
claims and liabilities whatsoever, of every name and nature, known
or unknown, suspected or unsuspected, both in law and equity
(“Claims”), which the Employee has ever had, now has,
or may hereafter claim to have against the Company or any Related
Persons by reason of any matter, cause or thing whatsoever arising
from the beginning of time to the time the Employee signs this
Agreement. This Release of Claims shall apply to any Claim of any
type, including, without limitation, any and all Claims of any type
that the Employee may have arising under the common law, under
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Age Discrimination in Employment Act of 1967
(“ADEA”), the Older Workers Benefit Protection Act, the
Americans With Disabilities Act of 1967, the Family and Medical
Leave Act of 1993, the Employee Retirement Income Security Act of
1974, the Texas Labor Code, including without limitation the Texas
Commission on Human Rights Act (V.T.C.A. Section 21.001, et
seq. ), each as amended, and any other Texas law, and any other
federal, state or local statutes, regulations, ordinances or common
law, or under any policy, agreement, contract, understanding or
promise, written or oral, formal or informal, between any of the
Related Persons and the Employee, and shall further apply, without
limitation, to any and all Claims in connection with, related to or
arising out of the Employee’s relationship, employment, or
the termination of the Employee’s employment, with the
Company, and all Claims for alleged tortious, defamatory or
fraudulent conduct. The Employee also hereby waives any Claim for
reinstatement, severance pay, attorney’s fees, or costs,
except as otherwise expressly set forth in this Agreement. By
signing this Agreement, the Employee agrees and represents that he
will not be entitled to any personal recovery in any action or
proceeding that may be commenced on his behalf arising out of any
of the matters that are the subject of the Release, including but
not limited to claims brought by the Equal Employment Opportunity
Commission. This release shall not apply to any obligation of the
Company or its affiliates pursuant to this Agreement or any rights
in the nature of indemnification, which the Employee may have with
respect to claims against the Employee relating to or arising out
of his employment with the Company or its affiliates.
(b) The Employee acknowledges
the Termination Payments constitute good and valuable consideration
to which he is otherwise not entitled for the release contained in
this Section 5.
6. Confidentiality of
Agreement . The Employee and the Company shall keep the terms
of this Agreement confidential and shall not directly or indirectly
disseminate any information (in any form) regarding this Agreement
to any person or entity except to Employees spouse, legal and tax
advisors or as may be agreed to in writing by the other party.
Notwithstanding the foregoing, either party may disclose the
information described herein, to the extent compelled to do so by
lawful service of process, subpoena, court order, or as otherwise
compelled to do by law, including any disclosure requirement of the
U.S. securities laws, including full and complete disclosure in
response thereto, in which event such party agrees to provide the
other party with a copy of the document(s) seeking disclosures of
such information promptly upon receipt of such document(s) and
prior to disclosure of any such information, so that the other
party may, upon notice to the first party, take such action as it
deems to be necessary or appropriate in relation to such subpoena
or request. The obligations under this Section 6 all cease for
both parties at such time that this document (once executed b
