Exhibit 10.2
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EMPLOYMENT AGREEMENT dated as of the
Commencement Date (this "Agreement"), by and
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between RESOLUTION PERFORMANCE PRODUCTS LLC, a
Delaware limited liability company (the "Company")
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and XXXXXX X. XXXXXXXXX ("Executive").
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WHEREAS, in order to induce Executive to accept employment with the
Company, the Company desires to provide Executive with compensation and other
benefits on the terms and conditions set forth in this Agreement.
WHEREAS, Executive is willing to enter into such employment and perform
services for the Company on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, it is therefore hereby agreed by and between the parties as
follows:
1. EMPLOYMENT.
(a) Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the term hereof as the Executive Chairman of
the Board of Directors. Executive hereby accepts employment as such and agrees
to devote his full working time and efforts, to the best of his ability,
experience and talent, to the performance of services, duties and
responsibilities in connection therewith. Without limiting the professional
responsibilities detailed herein, Executive will not engage in any professional
activities except for serving on the board of directors of the companies set
forth on Exhibit A. In addition, at the request of the board of directors of
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the Company (the "Board of Directors"), Executive also will serve as the Chief
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Executive Officer of the Company. As the Executive Chairman of the Board and/or
the Chief Executive Officer, Executive shall report to the Board of Directors
and perform such duties as directed by the Board of Directors, including,
without limitation, those duties set forth on Exhibit B hereto.
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(b) The Company will use commercially reasonable efforts to cause
Executive to be elected to its Board of Directors.
2. TERM OF EMPLOYMENT.
This Agreement and the term of employment shall commence and be effective
from and after the consummation of the transactions contemplated by the Master
Sale Agreement, dated July 10, 2000 (the "MSA"), among Shell Oil Company, Resin
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Acquisition, LLC, RPP Holdings LLC (as assignee of Resin Acquisition, LLC) and
Shell Epoxy Resins Inc. (renamed Resolution Performance Products Inc.) (the
"Commencement Date") and, subject to the terms hereof, shall terminate on the
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third anniversary of the Commencement Date (the "Termination Date"); provided,
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however, that on such anniversary date and on each subsequent two year
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anniversary of such anniversary date, the Termination Date shall automatically
be extended for a period of two years, unless either party shall have given
written notice to the other party not less than one hundred and twenty days
prior to the Termination Date that the Termination Date shall not be so
extended.
3. COMPENSATION AND BENEFITS.
(a) Base Salary. The Company shall pay Executive a base salary ("Base
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Salary") at the annual rate of $400,000. The Base Salary shall be payable in
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accordance with the ordinary payroll practices of the Company and shall be
subject to increase as determined by the compensation committee of the Board of
Directors of the Company (the "Compensation Committee").
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(b) Bonus. In addition to the Base Salary, Executive shall be entitled to
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receive a cash bonus (the "Bonus") with respect to each fiscal year; provided
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that Executive is employed by the Company on the last day of such fiscal year.
The Bonus shall be based on the Company's achievement of certain operating
and/or financial goals to be established by the Compensation Committee, with an
annual target bonus amount equal to 75% of Executive's then current Base Salary.
(c) Benefits. During the term of employment hereunder, the Company shall
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provide to Executive coverage under any employee benefit programs, plans and
practices, in accordance with the terms that the Company makes available to its
executive officers. For purposes of retirement or post-retirement programs of
the Company, Executive shall be deemed fully vested as of the Commencement Date.
(d) Office. The Company shall maintain for Executive's use an office and
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small staff in Philadelphia, Pennsylvania. The scale of such office and staff
shall be subject to the Company's budget limitations and as approved by the
Board of Directors.
4. TERMINATION OF EMPLOYMENT.
(a) Termination Rights. The Company may terminate Executive's employment
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at any time, and Executive may terminate his employment at any time.
(b) Definitions.
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(i) "Affiliate" of the Company shall mean a Person that directly, or
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indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company. As used in
this definition, the term "control," including the correlative terms
"controlling," "controlled by" and "under common control with," means
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of
securities or any partnership or other ownership interest, by contract or
otherwise) of a Person. The term "Affiliate" shall not include at any time
any portfolio companies of Apollo Management IV, L.P. or its Affiliates.
(ii) "Cause" shall mean termination by the Company of Executive's
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employment (a) based on a determination that Executive has engaged in
conduct constituting willful misconduct or gross negligence, or breach of a
fiduciary duty; (b) based on a determination that Executive has failed to
perform the duties required by such Executive's employment if Executive has
received notice of such failure and has not cured such failure within 10
days of receiving such notice; (c) because Executive has
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breached or violated any of the provisions of the Company's employee
handbook or other policies in effect from time to time that by their
express terms may result in termination of employment; (d) because
Executive has been convicted of a felony, has engaged in any act involving
the misuse or misappropriation of money or other property of the Company,
has defrauded the Company, any Affiliate of the Company or any customer of
the Company, or because of habitual intoxication while performing his job
duties, or drug addiction; or (e) because Executive has knowingly failed to
take action consistent with or has taken an action inconsistent with a
directive of the Board of Directors.
(iii) "Good Reason" shall mean the occurrence of any of the
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following events without Executive's express prior written consent and
which event shall not have been cured within a reasonable period after
notice from Executive: (A) the assignment to Executive by the Company of
duties or authorities materially inconsistent with Executive's duties or
authorities as set forth in Section 1 hereof, or any material reduction by
the Company of Executive's duties, except in connection with the
termination of Executive's employment for any other reason; (B) a reduction
by the Company in Executive's Base Salary or Bonus (other than due to the
failure to meet applicable performance objectives); or (C) any material
breach by the Company of any material provision of this Agreement after a
written notice of such breach shall have been delivered to the Company and,
if such breach can be cured, such breach shall not have been cured prior to
the tenth day after delivery of such notice.
(iv) "Person" shall be construed broadly and shall include, without
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limitation, an individual, a partnership, a corporation, an association, a
joint stock company, a limited liability company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any department,
agency or political subdivision thereof.
(v) "Termination Payments" shall mean earned but unpaid amounts as of
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the date of any termination under applicable salary or benefit plans or
programs.
(c) Termination other than for Cause or Termination for Good Reason. If
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Executive's employment is terminated by the Company other than for Cause or
Executive terminates his employment for Good Reason, in each case, prior to the
Termination Date, Executive shall be entitled to receive (i) within a reasonable
time after the date of termination, the Termination Payments and any bonus for
the year of termination payable if and at such time and level as is generally
paid by the Company and (ii) in lieu of any other cash compensation provided for
herein but not in substitution for compensation already paid or earned, payable
in accordance with the Company's customary payroll practices, for a period equal
to the greater of (x) 12 months following the date of termination and (y) the
period between the date of termination and the Termination Date, an amount equal
to Executive's Base Salary at its then current annual rate.
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(d) Voluntary Termination by Executive; Discharge for other reasons. If
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Executive's employment is terminated by the Company for any reason other than a
termination without Cause or by Executive other than for Good Reason, in each
case prior to the Termination Date, Executive shall be entitled to receive,
within a reasonable time after the date of termination, the Termination
Payments.
(e) Expiration of Agreement. For the avoidance of doubt, the expiration
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and non-renewal of this Agreement as contemplated under Section 2 hereof shall
not trigger any payments that may be required under Sections 4(c) and 4(d)
hereof.
(f) DEFRA.
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(i) Notwithstanding anything in this Agreement or any other agreement
between Executive and the Company to the contrary, in the event that the
provisions of the Deficit Reduction Act of 1984 ("DEFRA"), and Section 280G
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of the Internal Revenue Code of 1986, as amended (the "Code") relating to
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"excess parachute payments" (as defined in the Code) shall be applicable to
any payment or benefit received or to be received by Executive, then the
total amount of payments or benefits payable to Executive shall be reduced
by the least amount necessary such that the provisions of DEFRA and Section
280G of the Code relating to "excess parachute payments" shall no longer be
applicable. Should such a reduction be required, Executive shall determine,
in the exercise of his sole discretion, which payment or benefit to reduce
or eliminate. Pending such determination, the Company shall continue to
make all other required payments to Executive at the time and in the manner
provided herein and shall pay the largest portion of any parachute payments
such that the provisions of DEFRA relating to "excess parachute payments"
shall no longer be applicable.
(ii) Due to the complexity in the application of Section 280(G) of the
Code, it is possible that payments made or benefits received hereunder
should not have been made under clause (e)(i) above (an "Overpayment"). If
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it is determined by the Company's outside auditors in their reasonable good
faith judgment or by any court of competent jurisdiction that an
Overpayment has been made resulting in an "Excess Parachute Payment" as
defined in Section 280G(b)(1) of the Code), then any such Overpayment shall
be treated for all purposes as an unsecured, long-term loan from the
Company to Executive, or Executive's personal representative, successors or
assigns, as the case may be, that is payable, together with accrued
interest from the date of the making of the Overpayment at the rate of 8%
per annum on the later to occur of the third anniversary of the payment of
such Overpayment, or 6 months following the date upon which it is
determined an Overpayment was made. Should it be determined that such an
Overpayment has been made, Executive shall determine, in the exercise of
his sole discretion, which payments or benefits shall be deemed to
constitute the Overpayment.
5. NOTICES.
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All notices or communications hereunder shall be in writing, addressed, in
the case of Executive, to the address set forth on the signature pages hereto,
and to the Company, as follows:
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Resolution Performance Products LLC
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Vice President -- Human Resources
Telecopy: (000) 000-0000
with a copy to:
RPP Holdings LLC
c/o Apollo Management, L.P.
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
Any such notice or communication shall be sent certified or registered mail,
return receipt requested, postage prepaid, addressed as above (or to such other
address as such party may designate in a notice duly delivered as described
above), and the actual date of mailing shall constitute the time at which notice
was given.
6. SEPARABILITY; ARBITRATION.
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If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof, which shall remain in full-force and
effect. Any controversy or claim arising out of or relating to this Agreement
or the breach of this Agreement (other than Section 9 hereof) that cannot be
resolved by Executive on the one hand and the Company on the other, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in accordance
with New York law and the procedures of the American Arbitration Association.
The determination of the arbitrators shall be conclusive and binding on the
Company and Executive, and judgment may be entered on the arbitrators' award in
any court having jurisdiction.
7. ASSIGNMENT.
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This contract shall be binding upon and inure to the benefit of the heirs
and representatives of Executive and the assigns and successors of the Company,
but neither this nor
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any rights hereunder shall be assignable or otherwise subject to hypothecation
by Executive except by will or by operation of the laws of intestate succession.
8. AMENDMENT.
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This Agreement may only be amended by written agreement of the parties
hereto.
9. NONDISCLOSURE OF CONFIDENTIAL INFORMATION; NON-COMPETITION.
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(a) Executive shall not, without the prior written consent of the Company,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information pertaining to the
business of the Company, except (i) while employed by the Company, in the
business of and for the benefit of the Company, or (ii) when required to do so
by a court of competent jurisdiction, by any governmental agency having
supervisory authority over the business of the Company, or by any administrative
body or legislative body (including a committee thereof) with purported or
apparent jurisdiction to order Executive to divulge, disclose or make accessible
such information.
(b) For purposes of this Section, "Confidential Information" shall mean
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non-public information concerning the Company's and its Affiliates' financial
data, strategic business plans, product development (or other proprietary
product data), customer lists, marketing plans and other non-public, proprietary
and confidential information of the Company and its Affiliates that is not
otherwise available to the public.
(c) For the period commencing on the date hereof and ending on (x) the
last day on which Executive receives any payment from the Company or any of its
Affiliates, with respect to a termination by the Company other than for Cause or
a termination by Executive for Good Reason, or (y) the one year anniversary of
the last day on which Executive receives any payment from the Company or any of
its Affiliates, with respect to all other terminations, without the prior
written consent of the Company, Executive shall not, directly or indirectly, (i)
either as principal, manager, agent, consultant, officer, director, stockholder,
partner, member, investor, lender or employee or in any other capacity, carry
on, be engaged in or have any financial interest in any business within the
chemicals industry, including, without limitation, any business that is in
competition with the business of the Company and/or its Affiliates, or (ii)
solicit or hire any employees of the Company and/or its Affiliates. For purposes
hereof, a business shall be deemed to be in competition with the Company if it
is significantly involved in the rendering of any good or service significantly
purchased, sold, dealt in or rendered by the Company and/or its Affiliates. As
used in the preceding sentence, the term "significantly" shall be deemed to
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refer to activities generating gross annual sales of at least $25 million.
Nothing in this Section 9(c) shall be construed so as to preclude Executive from
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serving on each board of directors of the Companies listed on Exhibit A or
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investing in any publicly held company provided Executive's beneficial ownership
of any class of such company's securities does not exceed 5% of the outstanding
securities of such class.
(d) Executive and the Company agree that the foregoing covenant not to
compete is a reasonable covenant under the circumstances, and further agree that
if in the opinion of any court of competent jurisdiction such restraint is not
reasonable in any respect, such court shall have the
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right, power and authority to excise or modify such provision or provisions of
such covenant as to the court shall appear not reasonable and to enforce the
remainder of the covenant as so amended. Executive agrees that any breach of the
covenants contained in this Section would irreparably injure the Company.
Accordingly, the Company may, in addition to pursuing any other remedies they
may have in law or in equity, obtain an injunction against Executive from any
court having jurisdiction over the matter, restraining any further violation of
this Section by Executive.
10. GOVERNING LAW.
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This Agreement shall be construed, interpreted and governed in accordance
with the laws of the State of Delaware, without reference to rules relating to
conflict of laws.
11. WITHHOLDING.
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The Company shall be entitled to withhold from any payment hereunder any
amount required by law to be withheld.
12. COUNTERPARTS.
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This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original.
13. ENTIRE AGREEMENT.
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This Agreement reflects the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof and replaces and
supercedes any prior employment agreements.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
RESOLUTION PERFORMANCE PRODUCTS LLC
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Director
/s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Address:
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00 Xxxxxxxxx Xxxxx
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Xxxxxx Xxxx, XX 00000
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Exhibit A
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BOARD MEMBERSHIPS OF EXECUTIVE
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UGI Corporation
OneChem, Ltd.
Xxxxxxx, Inc.
