EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT is entered into by and between Texas Petrochemicals, Inc.,
a Delaware corporation, and Texas Petrochemicals LP, a Texas limited partnership
(collectively referred to as the “Company”), and Xxxxxxx X. Xxxxxxxx, Xx., the
undersigned individual (“Crockett”) to be effective as of September 2, 2008 (the
“Effective Date”).
RECITALS
WHEREAS,
the Company desires to employ Crockett and assure itself of the continued
availability of Xxxxxxxx’x services and of reasonable protections against use of
its trade secrets and Crockett competing against it;
WHEREAS,
Crockett will be given overall responsibilities for managing the commercial
operations associated with the Company’s businesses; and
WHEREAS,
in such capacity Crockett will develop or have access to all of the business
plans, methods and confidential information relating to the Company and its
subsidiaries, including, but not limited to, its production and marketing
strategies and methods, its customer development and business expansion
objectives and projects, its pricing practices and its customer list and
information regarding this business relationships.
AGREEMENT
NOW,
THEREFORE, intending to be legally bound and in consideration of the mutual
covenants and agreements hereinafter set forth, the Company agrees to employ
Xxxxxxxx, and Xxxxxxxx agrees to be employed by the Company, on the following
terms and conditions:
1. Employment. Upon
the Effective Date, the Company will employ Crockett as Senior Vice President –
Commercial. Crockett shall manage, direct and perform such duties as
the Company’s Chief Executive Officer from time to time may assign or delegate
to him consistent with the duties of officers with this title in similarly
situated organizations. Crockett shall devote his best efforts and
attention to these duties, and not engage or participate in activities in
conflict with the best interests of the Company or perform services for any
other person, business or entity; provided, however, Crockett may
serve as a member of the Board of Directors of other organizations that do not
compete with the Company, and may participate in other professional, civic,
governmental organizations and activities that do not materially affect his
ability to carry out his duties hereunder. Crockett shall report to
the Chief Executive Officer of the Company.
As an
inducement to the Company to enter into and continue this Agreement, Crockett
represents and warrants to the Company that he is free to accept employment and
perform his duties hereunder and that he has no prior or other obligations or
commitments of any kind to anyone that would in any way hinder or interfere with
his acceptance of, or the full, uninhibited and faithful performance of such
employment, or the exercise of his best efforts as Senior Vice President –
Commercial.
2. Term. Xxxxxxxx’x
employment under this Agreement shall be for thirty-six (36) months (the
“Initial Term”), thereafter renewable by mutual agreement of Crockett and
the
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Company’s
Compensation Committee (the “Extension Term” and together with the Initial Term,
the “Term”). Notwithstanding the foregoing, upon a termination of
this Agreement under Sections 4(d), (e) or (f), Xxxxxxxx’x employment shall
terminate except that Crockett will be paid his compensation in accordance with
Section 4(d) below.
3. Compensation and
Benefits. The Company and Crockett shall accept as full
consideration for his services rendered under this Agreement the
following:
(a) Base
Salary.
(i) During
the Initial Term, Crockett shall be paid a base salary (“Base Salary”) at the
annual rate of not less than $360,000, payable in installments consistent with
Company’s payroll practices.
(ii) During
the Initial Term, Crockett shall also be eligible for a bonus of up to
sixty-five percent (65%) of the current Base Salary (the “Initial Bonus”), based
upon the achievement of proposed company-wide and individual performance
milestones to be determined by the Company’s Compensation Committee and approved
by the Board of Directors.
(iii) The
parties agree and acknowledge that, notwithstanding the foregoing, the Company’s
Board of Directors has the right to review and adjust the annual base salary and
bonus on an annual basis during the Initial Term. During the second
and third years of the Initial Term or any Extension Term, Crockett shall be
paid an annual base salary and bonus mutually agreeable to the parties, but in
no event less that the Base Salary and the Initial Bonus.
(iv) The
parties agree and acknowledge (a) that the Company and its Board of Directors
are developing a new Long-Term Incentive Compensation Program for its senior
executives and (b) that Crockett shall be a participant in the Long-Term
Incentive Compensation Program as determined by the Company and the Board of
Directors with an initial grant valued at approximately $500,000 (based upon the
achievement of individual goals and Company targets set by the Company’s
Compensation Committee) and future annual grants valued at approximately
$400,000 (based upon the achievement of individual goals and Company targets set
by the Company’s Compensation Committee).
(b) Signing/Retention
Bonus. Crockett shall be paid a signing bonus in the amount of
$125,000 on November 3, 2008 and a retention bonus in the amount of $125,000 on
July 1, 2009, provided that Crockett remains in the employment of the Company on
each respective date.
(c) Business
Expenses. Upon submission of itemized expense statements in
the manner specified by the Company, Crockett shall be entitled to reimbursement
for reasonable travel and other reasonable business expenses duly incurred by
Crockett in the performance of his duties under this Agreement.
(d) Benefit
Plans. Crockett shall be entitled to participate in the
Company’s medical and dental plans, life and disability insurance plans and
retirement plans pursuant to their terms and conditions. Crockett
shall be entitled to participate in any other benefit plan offered by the
Company to its employees during the term of this Agreement.
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Nothing
in this Agreement shall preclude the Company from terminating or amending any
employee benefit plan or program from time to time.
(e) Vacation. Crockett
shall be entitled to four (4) weeks of vacation each year of full employment,
exclusive of legal holidays, as long as the scheduling of Xxxxxxxx’x vacation
does not interfere with the Company’s normal business operations.
(f) Payment. Payment
of all compensation to Crockett hereunder shall be made in accordance with the
relevant Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable taxes and any other required
or authorized withholdings and deductions.
(g) No Other
Benefits. Subject to Section 4, Crockett understands and
acknowledges that the compensation specified in Section 3 of this Agreement
shall be in lieu of any and all other compensation, benefits and
plans.
4. Termination of
Employment.
(a) Termination for Disability
of Crockett. The Company may terminate this Agreement without
liability if Crockett shall be permanently prevented from properly performing
his essential duties hereunder with reasonable accommodation by reason of
illness or other physical or mental incapacity and is for a period of time which
would entitle Crockett to receive benefits under the long-term disability policy
in effect at the time of such illness or other physical or mental
incapacity. Upon such termination, Crockett shall be entitled to all
accrued but unpaid Base Salary, accrued bonus (if any) and accrued
vacation.
(b) Termination for Death of
Xxxxxxxx. In the event of the death of Xxxxxxxx, the Company’s
obligations hereunder shall automatically cease and terminate; provided,
however, that within fifteen (15) days the Company shall pay to Xxxxxxxx’x heirs
or personal representatives Xxxxxxxx’x Base Salary and accrued vacation accrued
to the date of death.
(c) Termination for
Cause. Notwithstanding anything herein to the contrary, the
Company may terminate Xxxxxxxx’x employment hereunder for cause for any one of
the following reasons: (i) conviction of a felony, or a
misdemeanor where imprisonment is imposed; (ii) misconduct or negligence in
the performance of duties; (iii) the commission of acts that are dishonest or
demonstrably injurious to the Company (monetarily or otherwise); (iv) failure to
observe Company policies or compliance with applicable laws; (v) failure to
comply with all lawful and ethical directions and instructions of the Chief
Executive Officer or the Board of Directors; (vi) failure to perform his duties
with the Company which results in a material adverse financial effect on the
Company; (vii) breach of Xxxxxxxx’x representations and warranties in Section 1;
or (viii) any conduct that prejudices the reputation of the Company in the
fields of business in which it is engaged or with the investment community or
the public at large. Upon termination of Xxxxxxxx’x employment with
the Company for cause, the Company shall be under no further obligation to
Crockett for salary or bonus, except to pay all accrued but unpaid base salary,
accrued bonus (if any) and accrued vacation to the date of termination
thereof.
(d) Termination without
Cause. The Company may terminate Xxxxxxxx’x employment
hereunder at any time without cause; provided, however, that
Crockett shall be entitled to: (i) accrued but unpaid base salary and accrued
vacation, less deductions
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required
by law; and (ii) continued payment of Xxxxxxxx’x Section 3(a)(i) base
compensation and his Section 3(d) benefits for a period of not less than twelve
(12) months.
(e) Termination for Good
Reason. At Xxxxxxxx’x option, Crockett may terminate his
employment with the Company for Good Reason (as hereinafter defined). For
purposes of this Agreement, “Good Reason” shall mean any of the
following: (i) a material adverse change in the scope of
Xxxxxxxx’x responsibilities or authority, excluding any such change in
connection with Xxxxxxxx’x death or disability; (ii) a reduction in Xxxxxxxx’x
total compensation (other than a reduction in bonus compensation due to targets
not being achieved); (iii) a reduction in Xxxxxxxx’x eligibility for
participation in the Company’s benefit plan but excluding such Company-wide
reductions to any such plans that are effective for all similarly situated
executives; (iv) relocation of the Company’s executive offices more than 150
miles from the current location, without Xxxxxxxx’x concurrence; or (v) any
material breach by the Company of this Agreement which remains uncorrected for
ten (10) days following written notice of such breach by Crockett to the
Company. Under such circumstances, Crockett shall be entitled to the
severance benefits set forth in Section 4(d).
(f) Termination for Change of
Control. At Xxxxxxxx’x option, Crockett may terminate her
employment within 90 days following a “Change of Control” which occurs during
the term of this Agreement. For purposes of this Agreement, “Change
of Control” shall mean any of the following: (i) Texas Petrochemicals, Inc., a
Delaware corporation (“TPI”) is dissolved or is liquidated; (ii) TPI sells,
leases or exchanges all or substantially all of its assets to any other person
or entity; or (iii) any “person” (as that term is used in Sections 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended), other than one or
more of the persons who hold, beneficially and of record, shares of voting stock
of TPI on June 1, 2005 (the “Permitted Holders”), is or becomes a beneficial
owner (as defined in Rule 13c-3 and 13c-5 under the Securities Exchange Act of
1934, as amended, except that a person will be deemed to be a “beneficial owner”
of all shares that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than fifty percent (50%) of the total voting power of the
then outstanding shares of Voting Stock of TPI, provided that the Permitted
Holders beneficially own, directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the then outstanding shares of Voting
Stock of TPI than such other person. Under such circumstances,
Crockett shall be entitled to the severance benefits set forth in
Section 4(d) and any benefits granted him in any long-term incentive
plan.
(g) No Duty to
Mitigate. Crockett shall not be under any duty or obligation
to seek or accept other employment following termination of this Agreement under
Section 4(d), (e) or (f) and the amounts due Crockett under Section 4(d) shall
not be reduced or suspended if Employee accepts subsequent
employment.
(h) Cooperation. After
notice of termination, Crockett shall cooperate with the Company, as reasonably
requested by the Company, to effect a transition of Xxxxxxxx’x responsibilities
and to ensure that the Company is aware of all matters being handled by
Xxxxxxxx.
5. Confidential
Information.
(a) Definition. While
employed with the Company, Crockett will have access to and become acquainted
with ideas, concepts, information and material that constitute trade secrets
and/or proprietary and confidential information (hereinafter
“Confidential
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Information”)
of the Company and its subsidiaries. Confidential Information
includes, but is not limited to, information and knowledge pertaining to
products and services offered, ideas, plans, manufacturing, marketing, pricing,
distribution and sales methods and systems, sales and profit figures, customer
and client lists, and relationships between the Company or its subsidiaries and
their respective affiliates, dealers, distributors, wholesalers, customers,
clients, suppliers and other who have business dealings with the Company or any
of its subsidiaries.
(b) No
Disclosure. Confidential Information is the sole and exclusive
property of the Company. Crockett acknowledges that such Confidential
Information is a valuable and unique asset, and covenants that he will not,
either during or after the term of this Agreement, directly or indirectly
disclose any Confidential Information to any third party without the written
permission of the Company’s Board of Directors, except as required by his
employment with the Company, unless such information is in the public domain for
reasons other than Xxxxxxxx’x conduct, or except as may be required by law
(provided that Crockett shall give the Company notice of any disclosure required
by law so that the Company shall have a reasonable opportunity to attempt to
preclude such disclosure). Crockett shall not use Confidential
Information to either his own or the advantage of parties other than the
Company. Crockett shall take all steps necessary to protect the
confidentiality of all Confidential Information and to inform the Company
immediately of any attempted or actual disclosure of Confidential Information to
any third party. Crockett agrees that, upon request of the Company or
termination of employment, whichever is first, he shall turn over to the Company
all documents, memoranda, notes, plans, records or material in his possession or
control that contain or are derived from Confidential Information.
(c) No
Competition. Crockett agrees that during and for twelve (12)
months after his employment with the Company terminates for any reason, he will
not, unless acting with the prior written consent of the Company’s Board of
Directors, directly or indirectly own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise, any business enterprise which (i)
develops or manufactures products which are competitive with products developed
or manufactured by the Company or any subsidiary of the Company; (ii)
distributes, markets or otherwise sells products manufactured by others which
are competitive with products distributed, marketed or sold by the Company or
its subsidiaries; or (iii) provides services which are competitive with services
provided by the Company or its subsidiaries, including, in each case, any
products or services under development or which are subject of active planning
by the Company or its subsidiaries, at any time during the term of this
Agreement (a “Competing Venture”); provided that
Crockett may purchase or otherwise acquire up to (but not more than) ten percent
(10%) of any class of the securities of any entity (but may not otherwise
participate in the activities of such entity) if such securities are listed on
any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934, as
amended. Crockett acknowledges that the business of the Company or
its subsidiaries, and Xxxxxxxx’x connections therewith, is or will be involved
in activity throughout North American and Mexico, and that more limited
geographical limitations on the non-compete and non-solicitation covenants set
forth in Section 6 and 7 are therefore not appropriate.
6. Solicitation of Company
Customers/Diversion of Opportunities.
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(a) Crockett
agrees that during and for twelve (12) months after his employment with the
Company terminates for any reason, he will not, as an individual, employee,
consultant, agent, owner, partner, director or stockholder, directly or
indirectly solicit, call on or accept any business from any Customer of the
Company or its subsidiaries. The term “Customer” means all persons,
firms or corporations to whom the Company or its subsidiaries sold products at
any time during the one year period immediately preceding when Xxxxxxxx’x
employment with the Company ceased, notwithstanding that some or all of such
persons, firms or corporations may have been induced to give business to the
Company or its subsidiaries by Crockett.
(b) Crockett
shall not take any action at any time to divert from the Company or its
subsidiaries any opportunity in the scope of any present or contemplated future
business of the Company or its subsidiaries that arose while he was employed by
the Company.
(c) Crockett
agrees that the restrictions in this Section are reasonable and will not
preclude him from becoming gainfully employed if his employment with the Company
terminates.
7. Solicitation and Employment
of Company Employees. Crockett agrees that during and for
twelve (12) months after her employment with the Company terminates for any
reason, he will not directly or indirectly solicit, hire, employ or engage any
employee or any former employee of the Company or its subsidiaries whose
employment with the Company or its subsidiaries ceased less that one year before
the date of such solicitation, enticement, hiring or engagement.
8. Enforcement/Remedies.
(a) The
provisions in Sections 5 through 7 of this Agreement shall survive termination
of Xxxxxxxx’x employment with the Company for any reason and/or termination of
this Agreement, and shall continue to bind Crockett by their respective
terms.
(b) Crockett
acknowledges and agrees: (i) that his services to the Company are unique, (ii)
that the restrictions in Sections 5 through 7 of this Agreement are reasonable
and necessary to protect the legitimate business interests of the Company and
its subsidiaries, (iii) that any violation of any provision of these Sections
will irreparably injure the Company and its subsidiaries, (iv) that in the event
of such violation the Company shall be entitled to preliminary and permanent
injunctive relief without proof of actual damages and to an equitable accounting
of all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled.
(c) In
the event any provision relating to the time period or scope of the
non-solicitation restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time period or scope such court deems
reasonable and enforceable, such time period or scope shall be deemed amended
and reformed to the minimum degree necessary to be enforceable.
(d) Xxxxxxxx
agrees that, if he is found to have breached any provision in Sections 5 through
7 of this Agreement, then he shall be obligated to pay the
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attorney’s
fees and expenses incurred by the Company to enforce its rights in connection
with such breach.
9. Exclusivity. For
any matter which, by the express provisions of this Agreement, is to be
determined by the Compensation Committee of the Board of Directors unless and
until the Compensation Committee of the Board of Directors issues its decision,
such determination by the Compensation Committee of the Board of Directors shall
be final and binding on the parties and may not be overturned unless such
determination is found to be arbitrary and capricious or an abuse of
discretion.
10. Miscellaneous.
(a) Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without regard to conflict of law
principles. Further, for any dispute related to this Agreement,
Xxxxxxxx and Company irrevocably submit to the exclusive jurisdiction of the
Federal courts of the United States of America located in the Southern District
of Texas, Houston Division, or the State District Courts of Texas located in
Xxxxxx County, Texas. Xxxxxxxx and Company consent to and grant any
such court jurisdiction over the person of such parties and over the subject
matter of any such dispute.
(b) Entire
Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto and supersedes any prior or
contemporaneous written or oral agreements, representations and warranties
between them respecting the subject matter hereof.
(c) Amendment. This
Agreement may be amended only by a writing signed by Crockett and by a duly
authorized representative of the Company.
(d) Assignability. The
Company shall have the right to assign this Agreement and its rights hereunder,
in whole or in part, including but not limited to Xxxxxxxx’x obligations under
Sections 5 though 7 of this Agreement.
(e) Severability. If
any term, provision, covenant or condition of this Agreement, or the application
thereof to any person, place or circumstance, shall be held to be invalid,
unenforceable or void, the remainder of this Agreement and such term, provision,
covenant or condition as applied to other persons, places and circumstances
shall remain in full force and effect.
(f) Construction. The
headings and captions of this Agreement are provided for convenience only and
are intended to have no effect in construing or interpreting this
Agreement. The language in all parts of this Agreement shall be in
all cases construed according to its fair meaning and not strictly for or
against the Company or Crockett.
(g) Rights
Cumulative. The rights and remedies provided by this Agreement
are cumulative, and the exercise of any right or remedy by either party hereto
(or by its successor), whether pursuant to this Agreement, to any other
agreement, or to law, shall not preclude or waive its right to exercise any or
all other rights and remedies.
(h) Nonwaiver. No
failure or neglect of either party hereto in any instance to exercise any right,
power or privilege hereunder or under law shall constitute a
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waiver of
any other right, power or privilege or of the same right, power or privilege in
any other instance. All waivers by either party hereto must be
contained in a written instrument signed by the party to be charged and, in the
case of the Company, by an officer of the Company (other than Crockett) or other
person duly authorized by the Company.
(i) Notices. Any
notice, request, consent or approval required or permitted to be given under
this Agreement or pursuant to law shall be sufficient if in writing, and if and
when sent by certified or registered mail, with postage prepaid, to Xxxxxxxx’x
residence (as noted in the Company’s records), or to the Company’s principal
office, as the case may be.
(j) Assistance in
Litigation. Crockett shall, during and after termination of
employment, upon reasonable notice, furnish such information and proper
assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become a party; provided, however, that such assistance
following termination shall be furnished at mutually agreeable times and for
mutually agreeable compensation.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.
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TEXAS
PETROCHEMICALS LP
By:
/s/ Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxx
President
& Chief Executive Officer
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EXECUTIVE:
/s/
Xxxxxxx X. Xxxxxxxx, Xx.
Xxxxxxx X. Xxxxxxxx, Xx.
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|
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TEXAS
PETROCHEMICALS INC.
By:
/s/ Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxx
President
& Chief Executive Officer
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