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 Xxxx Xxxxx, the undersigned
individual (“Xxxxx”), to be effective as of March 19, 2007 (the “Effective
Date”).
RECITALS
WHEREAS,
the Company desires to employ Xxxxx and assure itself of the continued
availability of Xxxxx’x services and of reasonable protections against use of
its trade secrets and Xxxxx competing against it;
WHEREAS,
Xxxxx will be given overall responsibilities for managing the operations
associated with the Company’s businesses; and
WHEREAS,
in such capacity Xxxxx 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
Xxxxx, and Xxxxx agrees to be employed by the Company, on the following terms
and conditions:
1. Employment. Upon
the Effective Date, the Company will employ Xxxxx as Senior Vice President of
Operations. Xxxxx 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. Xxxxx 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, Xxxxx 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. Xxxxx shall report to the
Chief Executive Officer of the Company.
As an
inducement to the Company to enter into and continue this Agreement, Xxxxx
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 the Senior Vice President of
Operations.
2. Term. Xxxxx’x
employment under this Agreement shall be for twenty-four (24) months (the
“Initial Term”), thereafter renewable annually by mutual agreement of Xxxxx and
the Company’s Chief Executive Officer (the “Extension Term” and together with
the Initial Term, the “Term”). Notwithstanding the foregoing, upon a
termination of this Agreement under
1
Sections
4(d), (e) or (f), Xxxxx’x employment shall terminate except that Xxxxx will be
paid his compensation in accordance with Section 4 below.
3. Compensation and
Benefits. The Company and Xxxxx shall accept as full
consideration for his services rendered under this Agreement the
following:
(a) Base
Salary.
(i) During
the Initial Term, Xxxxx shall be paid a base salary (“Base Salary”) at the
annual rate of not less than $250,000.00, payable in installments consistent
with Company’s payroll practices.
(ii) During
the Initial Term, Xxxxx shall also be eligible each fiscal year, commencing in
the fiscal year starting on July 1, 2007, for a bonus of up to fifty percent
(50%) 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 during the Initial Term. After such adjustment during the
Initial Term or any Extension Term, Xxxxx shall be paid an annual base salary
and bonus mutually agreeable to the parties, but in no event less than the Base
Salary and the Initial Bonus.
(b) Signing
Bonus. On the first date of Xxxxx’x employment, Xxxxx shall be
paid a signing bonus in the amount of $100,000.00.
(c) Retention
Bonus. Xxxxx shall be paid a retention bonus in the amount of
$50,000.00 on June 30, 2007, provided that Xxxxx remains in the employment of
the Company on such date.
(d) Equity
Plan. Xxxxx shall be entitled to participate in the Texas
Petrochemicals Inc. Equity Plan, as such plan may be amended and restated from
time to time (the “Equity Plan”). Xxxxx will be allowed to
participate in the related plan securities and incentives as follows: (i) a
grant of 30,000 shares of restricted stock in the Company, and (ii) an option to
purchase 20,000 shares of common stock in the Company. Xxxxx’x
participation in the Equity Plan shall be subject to all of the usual and
customary terms and conditions set forth in the Equity Plan, including but not
limited to a vesting schedule based on years of service and
performance.
(e) Business
Expenses. Upon submission of itemized expense statements in
the manner specified by the Company, Xxxxx shall be entitled to reimbursement
for reasonable travel and other reasonable business expenses duly incurred by
Xxxxx in the performance of his duties under this Agreement.
(f) Benefit
Plans. Xxxxx 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. Xxxxx shall be entitled
to participate in any other benefit plan offered by the Company to its employees
during the term of this Agreement. Nothing in
2
this
Agreement shall preclude the Company from terminating or amending any employee
benefit plan or program from time to time.
(g) Vacation. Xxxxx
shall be entitled to four (4) weeks of vacation each year of full employment,
exclusive of legal holidays, as long as the scheduling of Xxxxx’x vacation does
not interfere with the Company’s normal business operations.
(h) Payment. Payment
of all compensation to Xxxxx 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.
(i) No Other
Benefits. Except with respect to any Stock Option Award
Agreements and Restricted Stock Award Agreements between the Company and Xxxxx
and subject to Section 4, Xxxxx 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 Xxxxx. The Company may terminate this Agreement without
liability if Xxxxx 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 Xxxxx 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, Xxxxx shall be entitled to all
accrued but unpaid Base Salary, accrued bonus (if any) and accrued
vacation.
(b) Termination for Death of
Xxxxx. In the event of the death of Xxxxx, the Company’s
obligations hereunder shall automatically cease and terminate; provided,
however, that within fifteen (15) days the Company shall pay to Xxxxx’x heirs or
personal representatives Xxxxx’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 Xxxxx’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 Xxxxx’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 Xxxxx’x employment with the
Company for cause, the Company shall be under no further obligation to Xxxxx 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 Xxxxx’x employment hereunder
at any time without cause; provided, however, that Xxxxx
shall be entitled to: (i) accrued but unpaid base salary and accrued vacation,
less deductions required
3
by law;
and (ii) continued payment of Xxxxx’x Section 3(a)(i) base compensation and his
Section 3(f) benefits for a period of not less than twelve (12)
months.
(e) Termination for Good
Reason. At Xxxxx’x option, Xxxxx 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 Xxxxx’x responsibilities or authority,
excluding any such change in connection with Xxxxx’x death or disability; (ii) a
reduction in Xxxxx’x total compensation (other than a reduction in bonus
compensation due to targets not being achieved); (iii) a reduction in Xxxxx’x
eligibility for participation in the Company’s benefit plans 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 Xxxxx’x concurrence;
(v) a reduction in Xxxxx’x eligibility for participation in the Company’s
Equity Plan as described in Section 3(d) above; or (vi) any material breach by
the Company of this Agreement which remains uncorrected for ten (10) days
following written notice of such breach by Xxxxx to the
Company. Under such circumstances, Xxxxx shall be entitled to the
severance benefits set forth in Section 4(d).
(f) Termination for Change of
Control.
(i) At
Xxxxx’x option, Xxxxx may terminate his 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: (A)
Texas Petrochemicals, Inc., a Delaware corporation (“TPI”) is dissolved or is
liquidated; (B) TPI sells, leases or exchanges all or substantially all of its
assets to any other person or entity; or (C) 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 March 19, 2007 (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, Xxxxx shall be entitled to the severance benefits set forth in
Section 4(d) and any benefits granted him in the Company’s Equity
Plan.
(ii) If
(A) a “Change of Control” occurs within twelve (12) months of March 19, 2007 and
(B) the Company terminates Xxxxx’x employment with the Company within twelve
(12) months of the date of such “Change of Control,” then Xxxxx shall be
entitled to: (i) accrued but unpaid base salary and accrued vacation, less
deductions required by law; and (ii) continued payment of Xxxxx’x Section
3(a)(i) base compensation and his Section 3(f) benefits for a period of not less
than twenty-four (24) months.
(g) No Duty to
Mitigate. Xxxxx 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 Xxxxx under Section 4(d) shall not
be reduced or suspended if Xxxxx accepts subsequent employment.
4
(h) Cooperation. After
notice of termination, Xxxxx shall cooperate with the Company, as reasonably
requested by the Company, to effect a transition of Xxxxx’x responsibilities and
to ensure that the Company is aware of all matters being handled by
Xxxxx.
5. Confidential
Information.
(a) Definition. While
employed with the Company, Xxxxx 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
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. Xxxxx 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 Xxxxx’x conduct, or except as may be required by law
(provided that Xxxxx 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). Xxxxx shall not use Confidential
Information to either his own or the advantage of parties other than the
Company. Xxxxx 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. Xxxxx 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. Xxxxx 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 Xxxxx
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. Xxxxx acknowledges that
the business of the Company or its subsidiaries, and
5
Xxxxx’x
connections therewith, is or will be involved in activity throughout North
America and Mexico, and that more limited geographical limitations on the
non-compete and non-solicitation covenants set forth in Sections 5, 6 and 7 are
therefore not appropriate.
6. Solicitation of Company
Customers/Diversion of Opportunities.
(a) Xxxxx
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 Xxxxx’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 Xxxxx.
(b) Xxxxx
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) Xxxxx
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. Xxxxx agrees that during and for twelve
(12) months after his 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 Xxxxx’x employment with the Company for any reason and/or termination of this
Agreement, and shall continue to bind Xxxxx by their respective
terms.
(b) Xxxxx
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
6
period or
scope shall be deemed amended and reformed to the minimum degree necessary to be
enforceable.
(d) Xxxxx
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 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;
Venue. 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, Xxxxx
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. Xxxxx 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. Except with respect to any Stock Option Award
Agreements and Restricted Stock Award Agreements between the Company and Xxxxx,
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 Xxxxx 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 Xxxxx’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 Xxxxx.
(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
7
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 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 Xxxxx) 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 Xxxxx’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. Xxxxx 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 HEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.
|
TEXAS
PETROCHEMICALS, LP
By:
/s/ Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxx
President
& Chief Executive Officer
|
EXECUTIVE:
/s/
Xxxx Xxxxx
Xxxx Xxxxx
|
|
|
TEXAS
PETROCHEMICALS, INC.
By:
/s/ Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxx
President
& Chief Executive Officer
|
8
