Exhibit 10.2

 

FIRST AMENDED AND RESTATED EMPLOYMENT

AND NONCOMPETITION AGREEMENT

 

This First Amended and Restated Employment and Noncompetition Agreement (this
“Agreement”) is made as of March 25, 2003 by and between GEO SPECIALTY
CHEMICALS, INC., an Ohio corporation (“Company”), and GEORGE P. AHEARN
(“Executive”).

 

WITNESSETH

 

WHEREAS, Company and Executive are parties to that certain Employment and
Noncompetition Agreement, dated as of March 25, 1997 (the “Original Employment
Agreement”). The parties desire to amend and restate the Original Employment
Agreement such that this Agreement shall supersede and replace the rights and
obligations of Company and Executive thereunder;

 

WHEREAS, the Company desires to employ Executive, and Executive desires to be
employed by the Company to undertake such responsibilities as are necessary to
assist in running the businesses of the Company, all in accordance with the
provisions of this Agreement;

 

WHEREAS, Executive has been an officer of the Company and a Member of GEO
Chemicals Limited, an Ohio Limited Liability Company and shareholder of the
Company, and has valuable knowledge and experience pertaining to the business of
the Company, and the parties desire to arrange for the continuation of his
services to the Company; and

 

WHEREAS, as an inducement to the Company extending its employment arrangement
with Executive, the parties also desire to arrange for Executive’s undertaking
not to compete with the Company.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, it is hereby agreed as follows:

 

1.    Employment. Commencing as of the effective date hereof and continuing
through three (3) years following the effective date hereof (the “Renewal
Term”), the Company hereby employs Executive as President and Chief Executive
Officer of the Company with responsibility for the performance of such executive
services and duties as shall be reasonably assigned to and requested of him by,
and subject to the direction and supervision of, the Board of Directors of the
Company. In addition, Executive shall be the Chairman of the Board of Directors
during the Employment Period (as hereinafter defined). Subject to the provisions
of Section 11 hereof, commencing on March 25, 2006 and the 25th day of each
March thereafter, the term of this Agreement shall be automatically extended for
additional one (1) year period(s), on the same terms and conditions as contained
herein, unless either party gives written notice to the other party of his or
its intention not to extend the employment hereunder at least ninety (90) days
prior to March 25th of any year following the Renewal Term of this Agreement
(the “Additional Term(s)”) (the Renewal Term and the Additional Term(s), if any,
are hereinafter referred to as the “Employment Period”). Executive hereby
accepts such employment and agrees that he will devote his full time and
undivided efforts to the business and affairs of the Company and serve the
Company in its business and perform his duties to the best of his ability.

 

1

--------------------------------------------------------------------------------

2.    Salary and Bonus.  (a) As compensation for his services during the
Employment Period, Executive shall receive a base salary at the rate of Three
Hundred Eighty Thousand Dollars ($380,000) per year. The Company will make a
good faith effort to adjust Executive’s salary to be consistent with the top
quartile of similarly situated executives. Such salary shall be subject to being
increased, but not decreased, based upon an annual review, although any increase
shall be at the sole discretion of the Board of Directors of the Company. Such
salary shall be payable no less frequently than in equal monthly installments.
In the event Executive’s employment with the Company is terminated for any
reason prior to the expiration of the Employment Period, other than a discharge
by the Company without Cause, as defined in that certain Shareholders Agreement,
originally dated March 25, 1997, and amended and restated as of July 31, 1998,
entered into by and among the Company, Charter Oak Partners, Charter Oak Capital
Partners L.P., GEO Chemicals Limited, Executive, William P. Eckman, and others,
Executive’s receipt of such salary shall terminate immediately. In the event
Executive is discharged by the Company without Cause, such salary shall be
either (i) payable for (A) the remainder of the Employment Period or (B) one (1)
year after the date of Executive’s termination, whichever is greater, or (ii) at
the election of Executive, waived in consideration for the release of Executive
by the Company from the restrictive covenant contained in Section 7. Any such
waiver shall be in writing and shall be deemed, without further action on the
part of Executive, to be a waiver of the right to receive the employee benefits
referred to in the last sentence of Section 4.

 

(b)    In addition to the base salary referred to in Section 2(a) hereof, and
subject to the discretion of the Company’s Board of Directors, Executive will be
eligible to receive bonus compensation in each year of the Employment Period
based upon the achievement of annual financial and non-financial executive goals
as agreed between the Company’s Board of Directors and Executive. The parties
shall seek to agree upon such executive goals in writing each year concurrently
with the determination of Executive’s salary. The executive goals for any period
may be attached to this Agreement from time to time and marked Exhibit A.

 

3.    Expenses. The Company shall reimburse Executive for reasonable expenses
incurred by him on behalf of the Company in the performance of his duties during
the Employment Period. Executive shall furnish the Company with such
documentation as is requested by the Company in order for it to comply with the
Internal Revenue Code and regulations thereunder in connection with the proper
deduction of such expenses.

 

4.    Benefits. During the Employment Period, Executive shall be entitled to
participate in any employee benefit plans which are maintained or established by
the Company for its senior executives generally, subject, however, to all of the
terms and conditions thereof, including any eligibility requirements therefor.
In any event, the Company agrees to provide (i) medical insurance coverage equal
to that provided for other senior executives of the Company; (ii) life insurance
coverage equal to two (2) times Executive’s base salary; and (iii) participation
in the Company’s 401(k) plan or other standard retirement plan maintained by the
Company. In the event Executive’s employment with the Company is terminated for
any reason prior to the expiration of the Employment Period, other than a
discharge without Cause, Executive’s receipt of such benefits shall immediately
cease. In the event Executive is discharged without Cause, Executive shall
either (i) receive such benefits for (A) the remainder of the Employment Period
or (B) for one (1) year after the date of Executive’s termination, whichever is
greater, or (ii) elect to waive his right to receive such benefits in
consideration for

 

2

--------------------------------------------------------------------------------

the release of Executive by the Company from the restrictive covenant contained
in Section 7 below.

 

5.    Vacations. During the Employment Period, Executive shall be entitled to
four (4) weeks of paid vacation per annum.

 

6.    Nondisclosure. Except for information which is already in the public
domain, which is publicly disclosed by persons other than Executive, or which is
required by law to be disclosed, Executive shall at all times during and after
his employment with the Company hold in strictest confidence any and all
confidential information within his knowledge (whether acquired prior to or
during his employment with the Company) concerning the products, processes,
services, business, suppliers and customers of the Company. Such confidential
information includes, without limitation, financial information, sales and
distribution information, price lists, the identity and lists of actual and
potential customers and technical information, all to the extent that such
information is not intended by the Company for public dissemination.

 

7.    Noncompetition. Subject to the right of Executive to obtain a release as
provided in Sections 2(a) and 4 above, and to the last sentence of this Section
7, commencing as of the effective date hereof and continuing through the date of
the expiration of the Employment Period, or, one (1) year after the termination
of his employment with the Company, whichever is later, Executive shall not,
without the prior written consent of the Company, (a) solicit business from or
compete with the Company for the business of any customer of the Company as
reflected on the books of the Company either as of the date hereof or as of the
date of Executive’s termination of employment with the Company or (b) either
directly or indirectly operate or perform any advisory or consulting services
for, invest in (other than stock in a publicly-held corporation which is traded
on a recognized securities exchange or in an established over-the-counter
market, provided that the ownership of such equity interest does not give
Executive the right to control or substantially influence the policy or
operational decisions of such corporation), or otherwise become associated with
in any capacity, any company, partnership, organization, proprietorship or other
entity which develops, manufactures, prepares, sells or distributes products or
performs services then in competition with the products developed, manufactured,
prepared, sold or distributed or services rendered by the Company anywhere in
the markets in which the Company competes at any time during such period. In the
event that Executive terminates this Agreement pursuant to Section 11(b) below,
the one year restriction contained in this Section 7 shall bind Executive only
if the Company continues to pay Executive a base salary during such period at
the rate in effect immediately prior to such termination.

 

8.    Noninterference. Executive shall not, at any time during the Employment
Period, or, within one (1) year after the termination of his employment with the
Company, whichever is later, without the prior written consent of the Company,
directly or indirectly, induce or attempt to induce any employee, agent or other
representative or associate of the Company to terminate its relationship with
the Company, or in any way directly or indirectly interfere with such a
relationship or any relationship between the Company and any of its suppliers or
customers.

 

9.    Disclosure of Proprietary Information. Executive will promptly disclose in
writing to the Board each improvement, discovery, idea and invention relating to
the business of the Company made or conceived by Executive, either alone or in
conjunction with others, while

 

3

--------------------------------------------------------------------------------

(a) employed by the Company or, (b) if Executive is receiving the applicable
severance payments, (i) during the Employment Period, or (ii) one (1) year after
the termination of his employment with the Company, whichever is later, if such
improvement, discovery, idea or invention results from or was suggested by such
employment. Executive will not disclose any such improvement, discovery, idea or
invention to any person, except the Company. Each such improvement, discovery,
idea or invention shall be the sole and exclusive property of, and is hereby
assigned to, the Company and at the request of the Company, Executive will
assist and cooperate with the Company and any person or persons from time to
time designated by the Company to obtain for the Company the grant of any
letters patent in the United States and/or any foreign country, covering any
such improvement, discovery, idea or invention, and will in conjunction
therewith execute such applications, statements, assignments or other documents,
furnish such information and data and take all such other action (including
without limitation the giving of testimony) as the Company may from time to time
reasonably request. Should Executive not be an employee of the Company at the
time such cooperation and assistance is rendered, he shall be reimbursed for all
reasonable and related out-of-pocket expenses incurred by him.

 

10.    Remedies. Executive acknowledges that Sections 6, 7, 8 and 9 hereof were
negotiated at arms’ length, with the advice of counsel and are required for the
fair and reasonable protection of the Company. In the event of an alleged breach
by Executive of his obligations under Sections 6, 7, 8 and 9, the Company shall
give Executive written notice thereof, and Executive shall have thirty (30) days
to cease such activities to the satisfaction of the Company before the Company
may file any legal action pursuant to this Section 10. Executive and the Company
further acknowledge and agree that a continued breach of any of those
obligations and agreements will result in irreparable and continuing damage to
the Company for which there will be no adequate remedy at law, and therefore,
Executive and the Company agree that, in the event of any breach of said
obligations and agreements, the Company and its successors and assigns shall be
entitled to injunctive relief and such other and further relief, including
monetary damages, as is proper in the circumstances. It is further agreed that
the running of the periods provided above in Sections 7, 8 and 9, respectively,
shall be tolled during any period during which Executive shall be adjudged to
have been in violation of any of his obligations under such Sections.

 

11.    Termination. This Agreement shall terminate and, except for the
obligations of the Company set forth in Sections 2 and 4 hereof and the
obligations of Executive set forth in Sections 6, 7, 8 and 9, which shall
survive such termination, all rights and obligations of the Company and
Executive hereunder shall be completely void upon the earliest to occur of the
following:

 

(a) expiration of the Employment Period;

 

(b) voluntary termination by Executive of his employment with the Company, a
right reserved to Executive hereunder;

 

(c) discharge of Executive with or without good cause;

 

(d) the death of Executive; and

 

4

--------------------------------------------------------------------------------

(e) at the election of the Company, the disability of Executive, which, for
purposes hereof, shall mean the inability of Executive for a continuous period
of six (6) months to perform the essential functions of his position hereunder
on an active full time basis, with or without reasonable accommodations, by
reason of disability or impairment of health. A certificate from a physician
acceptable to both the Company and Executive to the effect that Executive is or
has been disabled and incapable of performing the essential functions of his
position with or without reasonable accommodations for the Company as previously
performed shall be conclusive of the fact that Executive is incapable of
performing such reasonable services and is or has been disabled for the purposes
of this Agreement.

 

12.    Reformation of Agreement; Severability. In the event that any of Sections
6, 7, 8 or 9 shall be found by a court of competent jurisdiction to be invalid
or unenforceable as against public policy, such court shall exercise its
discretion in reforming such provision to the end that Executive shall be
subject to such restrictions and obligations as are reasonable under the
circumstances and enforceable by the Company. In the event that any other
provision or term of this Agreement is found to be void or unenforceable to any
extent for any reason, it is the agreed upon intent of the parties hereto that
all remaining provisions or terms of the Agreement shall remain in full force
and effect to the maximum extent permitted and that the Agreement shall be
enforceable as if such void or unenforceable provision or term had never been a
part hereof.

 

13.    Assignment. This Agreement shall inure to the benefit of, and shall be
binding upon, the Company, its successors and assigns. Executive shall not
assign this Agreement without the written consent of the Company, but this
Agreement shall be binding upon Executive and his heirs, estate and personal
representatives.

 

14.    Arbitration. In the event a dispute concerning the terms and operation of
this Agreement arises, and if the Company and Executive do not come to an
agreement with respect to such dispute within thirty (30) days after the notice
of said dispute is provided by either party under Section 15 hereof, the Company
and Executive shall submit the dispute to arbitration in Cleveland, Ohio, under
the commercial rules of the American Arbitration Association then in effect.
Such arbitration shall be final and binding upon the parties and enforceable in
a court of competent jurisdiction. Judgment on such arbitration award, from
which no appeal or review may be taken, may be entered in any court having
jurisdiction and enforced accordingly.

 

15.    Notice. Any notice required to be given under the terms of this Agreement
shall be in writing, and mailed to the recipient’s last known address or
delivered in person. If sent by registered or certified mail, such notice shall
be effective when mailed; otherwise, it shall be effective upon delivery.

 

(i) If to the Company, to:

 

GEO Specialty Chemicals, Inc.

c/o Charter Oak Partners

10 Wright Street

Building B

Westport, Connecticut 06880

Attn:  Anthony J. Dowd

Telecopier: (203) 222-2720

 

5

--------------------------------------------------------------------------------

(ii)  If to Executive, to:

 

George P. Ahearn

8387 Whispering Pines Drive

Novelty, Ohio 44072

 

16.    Entire Agreement; Amendments; Waivers. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof. It may
not be changed orally but only by a written agreement signed by Executive and an
officer of the Company specifically designated by the Board of Directors of the
Company to execute such amendment. The terms or covenants of this Agreement may
be waived only by a written instrument specifically referring to this Agreement
and executed by the party waiving compliance. The failure of the Company at any
time or from time to time to require performance of any of Executive’s
obligations under this Agreement shall in no manner affect the Company’s right
to enforce any provisions of this Agreement at a subsequent time; and the waiver
by the Company of any right arising out of any breach shall not be construed as
a waiver of any right arising out of any subsequent breach.

 

17.    Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

       

GEO SPECIALTY CHEMICALS, INC.

--------------------------------------------------------------------------------

      By:  

--------------------------------------------------------------------------------

GEORGE P. AHEARN           Name:             Title:

 

6

--------------------------------------------------------------------------------

Exhibit A

 

Executive Goals For Calendar Year 2003

Financial and Non-Financial

 

1.    General Terms

 

Bonus shall range from 0-100% of basic salary in effect. Bonus to be based upon
achievement of both financial and non-financial goals.

 

2.    Non-Financial Goals

 

Achievement of non-financial goals will be determined by the Board of Directors,
in its discretion, and may represent up to 50% of the total bonus amount. The
non-financial goals for Executive will be:

 

  •   To provide strategic direction to the Company with the objective of
continuing profitability in order to meet all financial obligations.

 

  •   To provide visionary and effective leadership for all of the Company’s
employees so they can understand and endorse the Company’s business plans and
execute them in an enthusiastic and efficient manner.

 

  •   To take the initiative to institute prudent actions to control costs,
conserve capital, and optimize the working capital or cash required to run the
Company’s business.

 

  •   To set the highest standards for ethical business practices and conduct
the Company’s business in compliance with all laws, particularly in the area of
safety, environmental, and community awareness.

 

  •   To provide the organizational tools to execute the Company’s business
plans by instituting an effective planning process, responsible stewardship
programs, employee training and development techniques and appropriate incentive
awards.

 

3.    Financial Goals

 

The remaining 50% of the total bonus amount may be determined by the Board of
Directors, in its discretion, based upon the achievement of financial goals
related to:

 

  •   Improving the cash position of the Company relative to 2002

 

  •   Improving the EBITDA of the Company relative to 2002

 

  •   Compliance with senior loan agreement leverage ratios throughout 2003

 

7