Exhibit 10.31

 

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NATIONAL STARCH LLC

 

AND JAMES ZALLIE

 

EMPLOYMENT AGREEMENT

 

 

JULY 31, 2009

 

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TABLE OF CONTENTS

 

CLAUSE

 

PAGE

 

 

 

1.

DEFINITIONS

1

2.

TERM, JOB DESCRIPTION, DUTIES AND WORKING HOURS

3

3.

PLACE OF WORK/TRAVEL

3

4.

SALARY

3

5.

INCENTIVE PLANS

4

6.

RETIREMENT BENEFITS

5

7.

WELFARE BENEFIT PLANS

7

8.

COMPANY CAR

7

9.

VACATION

7

10.

EXPENSES

8

11.

OTHER INTERESTS

8

12.

SHARE DEALING AND OTHER CODES OF CONDUCT

8

13.

TERMINATION AND SEVERANCE

8

14.

CONFIDENTIALITY

11

15.

POST-TERMINATION COVENANTS

13

16.

INTELLECTUAL PROPERTY

13

17.

HEALTH AND SAFETY

14

18.

DATA PROTECTION

14

19.

ENTIRE AGREEMENT

14

20.

NOTICES

14

21.

GOVERNING LAW

14

22.

JURISDICTION AND MEDIATION

14

23.

CONFIRMATION OF AGREEMENT

15

24.

SPECIFIC PERFORMANCE AND SURVIVAL

15

25.

INDEMNIFICATION

15

26.

SECTION 409A

15

27.

HEADINGS

16

28.

WAIVER

16

29.

SEVERABILITY

16

 

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THIS AGREEMENT is made on July 16, 2009

 

BETWEEN

 

(1)                             National Starch LLC a company which has its
principal office at 10 Finderne Avenue, Bridgewater, NJ 08807 (the Company)

 

(2)                             James Zallie of 5 Sea Island Court , Skillman,
NJ 08558

 

WHEREAS this Agreement sets out the terms and conditions that apply to your
employment by the Company.

 

It is Agreed as follows:

 

1.                                 DEFINITIONS

 

In this Agreement the following terms shall have the following meanings:

 

AkeoNobel means Akzo Nobel NV a company which has its registered office at
Strawlnskylaan 2555, 1070 AS Amsterdam, the Netherlands, its successors and
assigns.

 

AkioNobel Group means AkzoNobel and any entity in which it owns, directly or
indirectly, fifty percent (50%) or more of the value or voting rights.

 

Annual Incentive Plan or AIP means the National Starch Short Term Incentive
Plan, as amended from time to time.

 

Award shall have the meaning set forth in the LTIP.

 

Business means the National Starch worldwide business (formerly known as the
Natural Polymers Group of the National Starch and Chemical Company) carried on
by the Company and other members of the AkzoNobel Group for which You have
management responsibility and as identified on Schedule 1; subject to any future
additions to, deletions from, or restructuring of the Business by AkzoNobel.

 

Cause means Executive’s a) gross negligence in the performance of his duties and
responsibilities under Section 2; b) dishonesty or fraud with respect to the
business, reputation or affairs of the Company; c) conviction of or entry of a
plea of nolo contendere to a felony or crime involving moral turpitude; d)
intentional or reckless failure to abide by the lawful rules and policies of the
Company; or e) material breach of this Agreement, which, if curable, remains
uncured following thirty (30) days written notice specifying the nature of the
breach

 

Change of Control means either:

 

(i)             a change in ownership of more than 50% of the shares of the
Company determined in accordance with the principles of Treasury Regulations
1.409A- 3(5)(v); or

 

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(ii)           a change in the ownership of more than seventy percent (70%) of
the assets of the Business, otherwise determined in accordance with the
principles of Treasury Regulations 1.409A-3(5)(vii). The legal entities that own
the assets of the Business are listed on Schedule 1.

 

Company means National Starch LLC, its successors and assigns.

 

Disabled means that you are unable to perform your duties under this Agreement
by reason of physical or mental illness or disability extending over a period of
twenty six (26) consecutive weeks or more, or 26 weeks in total within a 365-day
period as determined in the reasonable judgment of a medical doctor selected by
Company and the insurance carrier administering the long term disability plan of
Company determines that you are disabled and eligible for long term disability
benefits under such plan.

 

Good Reason means your voluntary separation from service within one hundred and
twenty (120) days of the initial existence of one more of the following
conditions arising without your consent; (a) the Company moves your Principal
Work Location more than 50 miles from Bridgewater, New Jersey; (b) the Company
materially diminishes your duties or responsibilities as President and CEO
(c) the Company assigns its rights and obligations under this Agreement to a
purchaser of the Business or the Company, and the purchaser does not assume the
obligations of the Company under this Agreement or (d) a material breach of this
Agreement by the Company which is not cured within thirty (30) days following
receipt of notice specifying the nature of the breach. In order for a voluntary
separation from service to be treated as termination of employment for Good
Reason, you must provide notice to the Company and AkzoNobel within ninety (90)
days of the initial existence of the condition that you do not consent to the
condition and the Company fails to remedy the condition within thirty (30) days
of receipt of such notice.

 

Interest means the holding or control, in either case directly or indirectly, of
securities or debentures whether as legal or beneficial owner or in any other
capacity.

 

LTIP means the National Starch Long Term Incentive Plan] as amended from time to
time.

 

Par shall have the meaning set forth in the LTIP.

 

Performance Period shall have the meaning set forth in the LTIP.

 

Principal Work Location means the offices of National Starch at 10 Finderne
Avenue, Bridgewater, New Jersey 08807 or such other location as you may be based
at from time to time in accordance with clause 3.1, but in no event further than
50 miles from Bridgewater, New Jersey;

 

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You or Your refers to James Zallie.

 

2.             TERM, JOB DESCRIPTION, DUTIES AND WORKING HOURS

 

2.1           This Agreement shall commence on the date hereof and terminate the
earlier of two years following a Change of Control or December 31, 2014.

 

2.2           As at the date of this Agreement (the Effective Date), you agree
to continue to be employed as President and CEO of National Starch LLC and the
National Starch business on the terms and conditions set forth herein.

 

2.3           You will diligently perform the duties and exercise the powers
consistent with your position that are assigned to you from time to time by the
Company, and unless prevented by sickness, injury or other incapacity, will
devote the whole of your time, attention and abilities during your working hours
to the business of the Company. You will report to Werner Fuhrmann, in his
capacity as a Manager of the Company..

 

2.4           Your working hours shall be the normal business hours as specified
at your Principal Work Location, together with such additional hours necessary
for the proper performance of your duties (for which no additional payment shall
be made or time off in lieu afforded).

 

3.             PLACE OF WORK/TRAVEL

 

3.1           Your normal place of work shall be the Principal Work Location.

 

3.2           You will be required to undertake travel both domestically and
internationally as necessary for the proper performance of your duties.

 

4.             SALARY

 

4.1           Your base salary rate at the Effective Date will not be less than
US$360,000 per annum (less applicable taxes and any required deductions); except
that effective as of the date on which a Change of Control occurs, your base
salary rate for all purposes under this Agreement and the plans referenced
herein shall be not less than US$ $ 400,000. To the extent your base salary rate
is increased to $400,000, such increase shall be deemed to have occurred on the
day before the Change of Control for purposes of applying the rules of any plan
referenced herein. Salary will accrue on a daily basis and will be paid
bi-monthly by direct deposit into your nominated bank account.

 

4.2           Your salary will be reviewed on an annual basis during your
employment, with the effective date of any increase being 1 April. The Company
may elect to change this date provided the change applies to all salaried
employees. The Company is under no obligation to increase your salary following
a salary review, but shall, under no circumstances decrease your salary. No
salary review will take place after notice has been given by either party to
terminate your employment.

 

4.3           You will not be entitled to additional remuneration for service as
an officer or director of the Company or of any other member of the AkzoNobel
Group.

 

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5.             INCENTIVE PLANS

 

You will be eligible to participate in the senior executive incentive plans
described below or any applicable additional or replacement plans (subject
always to the terms, conditions and rules of such plans as amended from time to
time).

 

(a)           Annual Incentive Plan

 

The terms of the Annual Incentive Plan will be set on an annual basis by
AkzoNobel. Details of the performance measures which apply, their weightings and
the appropriate financial targets for the relevant financial year will be
supplied to you separately. Your target bonus for the 2009 and subsequent
performance years will be 50% of the base salary rate in effect on the last day
of the performance period. The performance period is the calendar year. The
bonus payable under the Annual Incentive Plan will range from zero to 100% of
your base salary rate.

 

(b)           Long Term Incentive Plan

 

You will be a participant in the LTIP, Grants are made annually under the LTIP
for the 3-year performance cycle commencing on 1 January each year. The number
of units granted in any given year may vary. The amount, if any, paid per unit
at the end of the performance cycle is a function of performance during the
period. LTIP payments will not be treated as pensionable compensation under the
National Starch LLC Pension Plan, the National Starch LLC Excess Benefit Plan or
any other defined contribution plan. Further, LTIP payments will not be used to
determine the amount of benefits under any other employee benefit plan, unless
such plan expressly provides otherwise. The rules of the LTIP and the details of
your grant for the January 1, 2009 to December 31, 2011 performance period will
be provided to you under separate cover. The Par percentage of your LTIP
grant(s) to be made in 2009, including any Bridging Awards as defined in the
LTIP, will be 115% of base salary. Grants in future year may be at the same or a
higher or lower percentage and will be determined by AkzoNobel at its sole
discretion depending on a range of factors such as seniority, role and
contribution and performance.

 

(c)           Executive Incentive Plan (EIP)

 

You will be a participant in the EIP, a special “single grant” plan for the top
executive team of the Business. The rules of the EIP and the details of your
grant will be provided to you under separate cover. EIP payments will not be
(i) treated as pensionable compensation under the National Starch LLC Pension
Plan, the National Starch LLC Excess Benefit Plan or other defined benefit
pension plan; (ii) treated as eligible compensation under the Retirement Savings
Plan of the ICI Group, the Executive Retirement Plan For Key Employees of the
ICI Group or any other defined contribution plan; or (iii) otherwise used to
determine the eligibility for or the amount of any benefit under any employee
benefit plan sponsored or maintained by the Company or the AkzoNobel Group.

 

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6.             RETIREMENT BENEFITS

 

6.1          Defined Benefit Pension Plan

 

(a)           General

 

You will remain a participant in the National Starch LLC Pension Plan and the
National Starch LLC Excess Benefit Plan, as those plans are amended from time to
time. The National Starch LLC Pension Plan is a tax qualified defined benefit
plan. The National Starch LLC Excess Benefit Plan is an unfunded, nonqualified
deferred compensation plan that replaces benefits that would have been paid
under the National Starch LLC Excess Benefit Plan but for (i) limitations on the
amount of pension payments imposed by Internal Revenue Code § 415,
(ii) limitations on pensionable compensation imposed by Internal Revenue Code §
401(a)(17), and (iii) treatment of compensation deferred into the Executive
Retirement Plan as non-pensionable. The National Starch LLC Excess Benefit Plan
is subject to the claims of the Company and its general creditors.

 

(b)           Transfer From National Starch LLC To A Non-National Starch
Business Akzo Nobel Entity

 

In the event that:

 

·                  Akzo Nobel sells the shares of National Starch LLC, where
upon the completion of the sale National Starch LLC ceases to be a member of the
Akzo Nobel Group; and

 

·                  You are actively employed by Akzo Nobel or a member of the
Akzo Nobel Group immediately following the completion of such sale;

 

Then the following will occur:

 

(i)             Your benefit will be frozen under the National Starch LLC
Pension Plan and National Starch LLC Excess Benefit Plan as of the date of the
sale;

 

(ii)          Assets and liabilities equal to your frozen accrued benefit under
the National Starch LLC Pension Plan will be transferred to an Akzo Nobel tax
qualified defined benefit plan;

 

(iii)       The liability to pay your frozen accrued benefit under the National
Starch LLC Excess Benefit Plan would be assumed by the relevant Akzo Nobel
entity;

 

(iv)      Subsequent service with Akzo Nobel will not be counted for purposes of
benefit accrual but will be counted as vesting service for purposes of
determining eligibility for an unreduced pension under the Rule of 85 with
respect to the National Starch LLC Pension Plan and National Starch LLC Excess
Benefit Plan frozen accrued benefits; and

 

(v)         You will be eligible to participate on a prospective basis in the
defined contribution plan of Akzo Nobel available to U.S. employees with the
same job

 

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level. Prior service recognized by National Starch LLC for vesting under the
National Starch LLC Pension Plan would be recognized for vesting purposes under
the relevant Akzo Nobel defined contribution plans.

 

6.2          Defined Contribution Plan.

 

You will continue to be eligible to participate in the Retirement Savings Plan
of the ICI Group (the “RSP”), as amended from to time. The RSP is a defined
contribution 401(k) plan. It is anticipated that the RSP will be terminated at
the end of 2009 and that assets and liabilities of RSP participants employed by
the Company will be transferred to an Akzo Nobel or National Starch LLC defined
contribution plan. In that event, your account in the RSP will be transferred to
and become subject to the rules of the same defined contribution plan as the
other non-union employees of National Starch LLC.

 

6.3          Executive Retirement Plan.

 

You will continue to be eligible to participate in the Executive Retirement Plan
For Key Employees of the ICI Group For Post 2004 Deferrals (the “Post 2004 ERP”
), as amended from to time. Your account in the Executive Retirement Plan For
Key Employees of the ICI Group For Pre-2005 Deferrals (“Pre-2005 ERP”) will
continue to be administered in accordance with the rules of the Pre-2005 ERP, as
amended from time to time. Post 2004 and Pre-2005 ERP (collectively “ERP”)
accounts are hypothetically invested at the direction of the participant in
identified mutual funds. The hypothetical investment is hedged through a grantor
trust. The ERP and the grantor trust are subject to the claims of the Company
and its general creditors.(1)

 

6.4          National Starch LLC Deferred Compensation and Survior Benefits
Plans (the “DCSBP”)

 

You will continue to be eligible to participate in the DCSBP. The DCSBP is a
nonqualified deferred compensation plan. The DCSBP is subject to the claims of
the Company and its general creditors. The DCSBP permits a small group of
National Starch LLC executives to defer up to $100,000 per year of salary and/or
Annual Incentive Plan bonus. The DCSBP is substantially similar to the former
National Starch and Chemical Company Deferred Compensation and Survivor Benefits
Plan (“NSC DCSBP”). Currently, amounts deferred into the DCSBP accrue interest
on the books of the Company at 2 percentage points above Moody’s composite
corporate bond rate until termination of employment. After termination of
employment, interest currently accrues at the Moody’s corporate bond rate. As of
the Effective Date, you have not deferred any compensation into the DCSBP. It is
anticipated that the DCSBP will be closed to new deferrals in 2010.

 

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(1)          The ERP accounts of non-National Starch LLC employees and former
employees will probably be transferred to an Akzo Nobel plan in 2010. It is not
known at this time whether the ERP will remain in place for National Starch LLC
or if it will become a participating employer in the Akzo Nobel plan.

 

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6.5          Post-Retirement Welfare Benefits

 

You will be eligible for post retirement medical, dental, and prescription drug
benefits to the same extent as other employees of National Starch LLC who retire
on the same date as you with the same age and service. For purposes of the
preceding sentence, your service will be the aggregate of your post March 31,
2008 service with the Company and your service prior to April 1, 2008 with
Indopeo, Inc. d/b/a National Starch and Chemical Company.

 

6.6          No Other Retirement Plans

 

For the avoidance of doubt, you are not eligible to participate in any other
plan providing pension, deferred compensation, post retirement welfare, or other
retirement benefits that is sponsored or maintained by any entity in the
AkzoNobel Group other than National Starch or its successor.

 

7.             WELFARE BENEFIT PLANS

 

As of the Effective Date, you will be eligible to participate in the HealthPlus
Program made available by the Company to its active salaried employees
generally, and any applicable additional or replacement welfare benefit plan
(subject always to the terms, conditions and rules of such plans, as amended
from time to time). The HealthPlus Program will terminate effective December 31,
2009. Effective January 1, 2010, you will be eligible to participate in the same
active welfare benefit plans available, generally, to the non-union employees of
the Company.

 

8.              COMPANY CAR

 

You will be eligible for a company car in accordance with former National
Starch & Chemical’s car policy, or any National Starch successor policy,
applicable at your job level.

 

9.              VACATION

 

9.1           You will be eligible for vacation as determined under the National
Starch LLC Vacation Policy (the “National Vacation Policy”) based on your job
level and the aggregate of your post March 31, 2008 service with the Company and
your service prior to April 1, 2008 with Indopco, Inc. d/b/a National Starch and
Chemical Company. You will also be entitled to the applicable statutory or
public holidays offered at your Principal Work Location.

 

9.2           Your vacation will accrue in accordance with the rules of the
National Vacation Policy. There is no entitlement to pay in lieu of vacation not
taken in any vacation year (other than as may arise upon termination of
employment as specified in clause 9.3 below). Unused vacation will not carry
over to the next year, except as otherwise permitted under the National Vacation
Policy.

 

9.3           You are entitled to five (5) weeks of base salary in lieu of
vacation (the “Special Vacation Payment”) upon your separation from service (as
defined under Section 409A of the IRC, as amended). The Special Vacation Payment
replaces the former National Starch and Chemical Company Senior Executive
Vacation Plan. The Special Vacation Payment is not pensionable. You will not be
entitled to any other payment for unused, accrued vacation. If applicable law

 

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requires payment of any unused accrued vacation, the Special Vacation Payment
shall be reduced by the amount of such payment.

 

10.          EXPENSES

 

The Company will reimburse you for reasonable out-of-pocket expenses incurred in
the course of your employment in accordance with the Company’s expense
reimbursement policy and subject to satisfactory evidence of payment.

 

11.          OTHER INTERESTS

 

Without the prior written consent of AkzoNobel, during the Term, you will not be
directly or indirectly engaged, concerned or interested in any other business
activity, trade or occupation nor hold directorships or other offices in or
otherwise provide services to any corporation, partnership or other entity that
is not a member of the AkzoNobel Group. Such consent shall not be unreasonably
withheld.

 

12.          SHARE DEALING AND OTHER CODES OF CONDUCT

 

12.1         You will comply with the Akzo Nobel Code of Conduct or any
additional or replacement code of conduct adopted by the Board of Directors of
Akzo Nobel which may be applicable from time to time.

 

12.2         You will comply with all applicable rules and regulations of the
Amsterdam Stock Exchange and any other relevant regulatory bodies, including all
applicable regulatory codes on dealings in securities of Akzo Nobel.

 

13.          TERMINATION AND SEVERANCE

 

13.1         Any payments made pursuant to this Article 13 are subject to
applicable tax and withholding and shall be conditioned on the delivery by you
of a general release in the form attached hereto as Schedule 2. To the extent
this Article 13 conflicts with the terms of the National Severance Plan (as
hereafter defined), the AlP, or the LT1P this Article 13 shall control. You
acknowledge and agree that all amounts paid to you under the National Severance
Plan, the AIP or the LTIP shall constitute satisfaction of the Company’s
obligation to pay such amounts under this Section 13

 

13.2         Except as provided in clause 13.10, you may terminate your
employment by giving the Company not less than two weeks’ notice in writing.

 

13.3         Your employment and this Agreement will terminate automatically if
you die or become Disabled , and you will not be entitled to any severance
benefits under Section 13, except you shall receive (1) any accrued but unpaid
Base Salary; (2) your bonus under AlP payable at target prorated according to
the number of whole months worked during the year of termination and (3) your
open Awards under LTIP determined and paid in accordance with the terms and
conditions of the LTIP, prorated.

 

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13.4       Absent Good Reason, if your employment should terminate by reason of
your resignation prior to the end of the period to which any incentive plan (to
include the Annual Incentive Plan, LTIP or EIP) or any replacement or equivalent
arrangement in which you participate relates (the Incentive Period), you agree
that you will not be entitled to any compensation for any loss of bonus/award or
prospective bonus/award in respect of the Incentive Period, except to the extent
required by law.

 

13.5       Without prejudice to any other rights the Company may have against
you the Company may terminate your employment immediately for Cause and with no
liability to make any further payment to you (other than in respect of salary
accrued but not paid at the date of termination). For the avoidance of doubt,
you will forfeit any right to any accrued but unpaid bonus under the Annual
Incentive Plan and any outstanding awards (whether vested or not) under the LTIP
or EIP or other incentive plan or any replacement or equivalent arrangement.
This clause shall not restrict any other right the Company may have (whether at
common law or otherwise) to terminate your employment summarily subject to the
terms and conditions set forth herein.

 

13.6       If the Company terminates your employment without Cause or if you
terminate your employment for Good Reason, you will be eligible for a lump sum
severance payment calculated in accordance with the formula set forth in the
National Starch LLC Severance Plan For Full and Part Time Salaried Employees
(the “National Severance Plan”) annexed as Schedule 3. Aside from the
calculation, this severance payment shall otherwise be subject to the terms,
conditions and rules of the National Severance Plan as amended from time to
time. The beginning of the calculation period will be July 23, 1983, when you
commenced employment with the Company’s predecessor, Indopco, Inc. You shall
also receive (a) your bonus under AlP payable at target prorated according to
the number of whole months worked during the year of termination and (b) your
outstanding Awards under LTIP determined and paid at no less than Par without
proration in a single payment made within sixty (60) days after termination but
otherwise in accordance with the terms and conditions of the applicable plan. If
an Award has not yet been made for the Performance Period that begins in the
year of termination, you will be deemed to have been granted an Award for that
Performance Period with a Par percentage equal to the Par percentage of the
Award for the immediately preceding Performance Period.

 

13.7       On termination of your employment you will:

 

(i)                                immediately deliver to the Company all books,
documents, papers, computer hardware (including any desktop, laptop, and/or
blackberry, cell phones, computer software, computer records, computer data,
credit cards, your company car together with its keys, and any other property
relating to the business of or belonging to the Company or any other member of
the AkzoNobel Group which is in your possession or under your control. You are
not entitled to retain copies or reproductions of any documents, papers, files
or computer or other electronic records relating to the business of or belonging
to the Company or any other member of the Akzo Nobel Group; and

 

(ii)                             Immediately resign from any office you hold
with the Company or any other member of the AkzoNobel Group (and from any
related trusteeships) without any compensation for loss of office.

 

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13.8                           You will not at any time after termination of
your employment misrepresent yourself as being in any way concerned with or
interested in the business of, or employed by, the Company or the AkzoNobel
Group.

 

13.9                           The Company may suspend you during any period in
which the Company is carrying out a disciplinary investigation into any alleged
act of Cause relating to you. During such suspension you shall be paid your base
salary.

 

13.10                     In the event of Change of Control prior to January 1,
2013, where you have not otherwise given notice of voluntary resignation and are
employed by the Company immediately following the Change of Control, and the
Company is not a member of the AkzoNobel Group following a Change of Control,
the following terms and conditions will apply:

 

(i)                                     You will provide at least three months
prior written notice during the two years following the Change of Control before
terminating your employment with the Company;

 

(ii)                                  If the Company terminates your employment
for any reason other than Cause prior to the second anniversary of the Change of
Control, the Company will provide you with:

 

(a)  the lump sum severance payment calculated in accordance with the National
Starch Plan as described in Section 13.6;

 

(b)  An additional severance payment of up to 78 weeks of base salary. If
termination occurs after the 26th week following the Change of Control (“CIC”),
the payment will be reduced by one week of base salary for each full week you
are employed after the 26th week. For example:

 

Termination of Service

 

Weeks of Base Salary

 

0 to 26 weeks after CIC

 

78

 

32 weeks after CIC

 

74

 

52 weeks after CIC

 

52

 

78 weeks after CIC

 

26

 

104 weeks after CIC

 

0

 

 

A week of base salary is your annual salary divided by 52.

 

(c)  your bonus under AIP at target prorated according to the number of whole
months worked during the year of termination. ) ; and

 

(d)  LTIP: if the purchaser of the Company or Business continues the LTIP or
establishes a substantially similar plan and assumes any outstanding Awards, you
will receive your outstanding Awards determined and paid at no less than Par
without proration in a single payment made within sixty (60) days after
termination but otherwise in accordance with the terms and conditions of the
applicable plan. If an Award has not yet been made for the Performance Period
that begins in the year of termination, the Award will be deemed to have a Par
percentage equal to the Par percentage of the Award for the immediately

 

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preceding Performance Period. If the purchaser of the Company or Business does
not continue the LTIP or establish a substantially similar plan and assume any
outstanding Awards, your outstanding Awards will be determined and paid pursuant
to the terms of the LTIP and no further LTIP payment will be made.

 

13.11                     In the event of a Change of Control prior to
January 1, 2013, where you have not otherwise given notice of voluntary
termination and are employed within the AkzoNobel Group immediately following
the Change of Control. The following terms and conditions will apply:

 

(i)                                     Absent Cause, AkzoNobel will not
terminate your employment during the sixty (60) day period commencing from the
Change of Control.

 

(ii)                                  During this sixty-day period AkzoNobel
will actively seek suitable alternative employment at a comparable level of
seniority and remuneration for you within the Akzo Nobel Group (e.g. Business
Unit Managing Director).

 

(iii)                               Should a position at a comparable level not
be offered within this sixty day period or if you and AkzoNobel cannot reach an
agreement on the new position then your employment with the Akzo Nobel Group
will terminate on the last day of the sixty (60) day period and then you will
receive (a) a lump sum severance payment calculated in accordance with §13.6;
(b) an additional lump sum severance payment of 70 weeks of base salary (c) your
bonus under AIP at target prorated according to the number of whole months
worked during the year of termination; and (d) LTIP; your outstanding Awards
will be determined and paid within sixty days after termination but otherwise
pursuant to the terms and conditions of the LTIP at no less than Par without
proration and no further LTIP payment will be made.

 

In the event your employment with the AkzoNobel Group is terminated under the
provisions of this Section 13.11 you will not be eligible to participate in the
short team, long term or other incentive plans of the AkzoNobel Group, except as
expressly provided in this Section 13.11.

 

14.                               CONFIDENTIALITY

 

14.1                           Except insofar as such information is already in
the public domain, you will keep secret and will not at any time (whether during
your employment or thereafter) use for your own or another’s advantage, or
reveal to any person, firm, company or organisation and shall use all reasonable
endeavours to prevent the publication or disclosure of any information which you
know or ought reasonably to have known to be confidential, concerning the
Business, the Company, any member of the Akzo Nobel Group or any of its or their
customers, potential customers or business partners, including without
limitation:

 

(i)                                     trade secrets, formulas and other
information of a sufficiently high degree of confidentiality as to amount to a
trade secret;

 

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(ii)                                  information concerning the way the Company
or member of the Akzo Nobel Group is run, the manner in which it does business,
and who it does business with and on what terms; and

 

(iii)                               information or items which have been marked
to indicate that they are confidential or information which you were told was
confidential at the time you acquired it or which you should have known was
confidential.

 

The information described in (i), (ii) and (iii), above, includes but is not
limited to:

 

(A)                              information relating to the salaries,
remuneration packages, or other terms of employment of employees of the Company
or member oldie Akzo Nobel Group;

 

(B)                                the business methods and information
(including prices charged, discounts given to customers or obtained from
suppliers, product development, marketing and advertising programs, costs,
budgets, turnover, sales targets or other financial information);

 

(C)                                lists and particulars of suppliers and
customers and the individual contacts at such suppliers and customers;

 

(D)                               details and terms of agreements with suppliers
and customers;

 

(E)                                 manufacturing or production processes or
know-how;

 

(F)                                 details as to the design of products and
inventions or developments relating to future products;

 

(G)                                details of any promotions or future
promotions or marketing or publicity exercises;

 

(H)                               details of any business plans or strategy; and

 

(I)                                    any information which may affect the
value of the Business, the Company or any member of the Akzo Nobel Group,

 

unless such information was (i) disclosed by a third party without breach of any
obligation of confidentiality; or (ii) become known or available to the public
generally through no wrongful act.

 

14.2                           The restrictions in this clause 14 shall not
apply to any disclosure or use authorized by the Company or required by law or
by your employment.

 

14.3                           Nothing in this clause 14 is intended to waive
the rights of the Company under any other confidentiality or secrecy agreement
between you end the Company.

 

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15.                               POST-TERMINATION COVENANTS

 

15.1                           For a period of fifteen (15) months after your
termination of employment for any reason from the Company, you shall not,
without the consent of AkzoNobel (or after a Change of Control, the Company or
its parent,) for yourself, or as agent, partner, investor, consultant or
employee of any person, firm or corporation, engage in any activity in
connection with the development, manufacture, use or sale of a competitive
product (as hereinafter defined) in any geographic location where the Company or
the Business conducts business. A competitive product shall mean any product of
a type sold or usable for substantially the same purposes as a product
manufactured, developed or sold for or by the Business. In addition, you shall
not solicit, any customer or potential customer of the Company or the Business
during this period.

 

15.2                           During the first fifteen (15) months following
your termination of employment from the Company, you shall keep the Company
advised in writing of the name and address of each business organization for
which you act as agent, partner, representative, investor, consultant or
employee.

 

15.3                           During the first twelve (12) months following
your termination of employment from the Company, you shall not directly or
indirectly induce or assist in the inducement of any employee of the Company
away from his or her employment with the Company or from the faithful discharge
of his or her contractual and fiduciary obligations to serve the Company’s
interests with undivided loyalty.

 

16.                               INTELLECTUAL PROPERTY

 

16.1                           Any invention or improvement made or conceived by
you during your employment (whether during or after working hours) with the
Company or its predecessor Indopco, Inc. d/b/a National Starch and Chemical
Company relating in any way to the Company’s or Business’ products or any
products in the process of development by the Company or the Business, or any
similar or competitive products, or to the method of making or using any such
products, or relating in any other manner to the Company or the Business shall
be promptly disclosed in writing to the Company and shall be the sole property
of the Company or the relevant Group- Company. Upon the Company’s or AkzoNobel’s
request (whenever made) you shall execute and assign without further payment to
the Company applications for letters patent for the United States and such
foreign countries as the Company may designate and shall execute and deliver to
the Company such other instruments as the Company deems necessary for it to
obtain such letters patent and all rights therein. Any invention or improvement
made or disclosed within twelve (12) months after termination of employment with
the Company shall be rebuttably presumed to have been made or conceived during
your employment.

 

16.2                           You are not obligated to assign to the Company
your right to an invention for which no equipment, supplies, facility, or
confidential information of the Company or the Business was used and which was
developed entirely on your own time and which (i) does not relate to the
Business, or (ii) does not result from any work performed by you for the Company
or AkzoNobel Group.

 

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17.                               HEALTH AND SAFETY

 

The health and safety of individuals and the safe operation of all activities
are of fundamental importance within the Company’s operations. As an employee
you are responsible to the Company and to your colleagues to work safely and you
are required to keep yourself informed of current safety procedures and policy
and of the Company’s rules in respect of safety and good practice.

 

18.                               DATA PROTECTION

 

As part of your employment you agree that the Company may retain and process
data relevant to or connected with your employment with the Company including
but not limited to payroll information, personnel records, attendance records,
health records, disciplinary records and training records. It is agreed that the
processing of such data is necessary for the efficient management of your
employment by the Company.

 

19.                               ENTIRE AGREEMENT, AMENDMENT, COUNTERPARTS

 

This Agreement constitutes the entire agreement and understanding between the
parties, and supersedes all other agreements both verbal and in writing between
you and the Company.. This Agreement cannot be amended or modified except by a
written instrument signed by both parties. This Agreement may be executed in
counterparts, each of which shall be deemed an original and each of which shall
constitute one and the same Agreement.

 

20.                               Notices

 

Any notice to be given to you under this Agreement may be served by hand,
registered or certified U.S. Mail, or by private delivery service to you at your
usual or last known address, with a copy to Hollis Gonorka Bad, Esq., Withers
Bergman LLP, 430 Park Avenue, New York, NY 10022. Any notice to be given to the
Company may be served by hand, registered or certified U.S. Mail or private
delivery service to the Vice President of Human Resources of the Company at 10
Finderne Avenue Bridgewater, NJ 08807. Any notice served by registered or
certified U.S. Mail or by private delivery service shall be deemed to have been
served on the seventh working day following the date of posting.

 

21.                               GOVERNING LAW

 

This Agreement is governed by the internal laws of the State of New Jersey,
United States of America, without regard to conflicts of law principles.

 

22.                               JURISDICTION AND MEDIATION

 

Except for an alleged breach by you of §§14, 15 or 16, you and the Company (“the
Parties”) agree to mediate any dispute arising under this Agreement. In the
event of any such dispute, the Parties, within thirty (30) days of a written
request for mediation, shall attend a mediation to be conducted in Somerset
County, New Jersey in order to make a good faith reasonable effort to resolve
such dispute. The Parties shall attempt, in good faith, to agree to a mediator.
If the Parties are unable to agree to a mediator, the Parties shall submit the
matter to an alternative

 

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dispute resolution provider located in Somerset County, New Jersey to appoint a
mediator and conduct the mediation. If this good faith mediation effort fails to
resolve the dispute arising under this Agreement, than either Party may commence
an action to resolve such dispute; provided however, that any such action shall
be brought in federal court to the extent such court has jurisdiction, or state
court having situs in Somerset County, New Jersey and the Parties consent to the
jurisdiction of such court and agree that such courts are a convenient forum for
the resolution of the dispute. The Parties each waive personal service of
process and consent that service of process upon either Party may be made by
certified mail or registered mail, return receipt required, directed to the
Party’s address set forth in the introductory paragraph hereof, and service so
made shall be deemed completed five (5) days after the same shall have been so
mailed.

 

23.                               CONFIRMATION OF AGREEMENT

 

This agreement shall cease to be without prejudice and subject to contract when
it has been signed and dated by the Company.

 

24.                               SPECIFIC PERFORMANCE AND SURVIVAL

 

24.1                           You agree that (i) the Company, or any member of
the Akzo Nobel Group have the right to specifically enforce your obligations
under clauses 11, 14, 15, and 16 to the extent permitted by applicable law,
(ii) monetary damages for breach of those provisions would be an inadequate
remedy and (iii) the Company, and the Akzo Nobel Group shall also have such
other rights and remedies for breach of those provisions as are permitted by
applicable law.

 

24.2                           For the avoidance of doubt, clauses 13.7, 13.8,
14, 15, 16, 22, and 24 shall survive the termination of this Agreement.

 

25.                               INDEMNIFICATION

 

The Company shall indemnify you, hold you harmless and advance your costs and
expenses that are subject to indemnification to the maximum extent permitted
under Article XVII(b) of the Company’s Operating Agreement attached as Schedule
4 and applicable law, and shall provide for directors and officers liability
insurance to insure you against claims in your capacity as an Officer or
Manager. In the event that the Company amends the LLC Operating Agreement in a
way that reduces or diminishes your right to indemnification, this Section 25
shall be construed to incorporate in its entirety the provisions of
Article XVII(b) of the Company’s Operating Agreement as in effect as of the date
hereof.

 

26.                               SECTION 409A

 

A termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of amounts or benefits
upon or following a termination of employment unless such termination is also a
“Separation from Service” within the meaning of Code Section 409A and, for
purposes of any such provision of this Agreement references to a “resignation,”
“termination,” “termination of employment” or like terms shall mean Separation
from Service.

 

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This Agreement is intended to comply with the applicable requirements of
Internal Revenue Code § 409A (hereafter “409A”) and shall be limited, construed
and interpreted in accordance with such intent, If any provision of this
Agreement would cause you to incur any additional tax or interest under 409A,
including final regulations or any other guidence issued by the Secretary of the
Treasury and/or the Internal Revenue Service with respect thereto, the Company
shall, after consulting with you, reform such provision but only to the extent
such reformation can be done without any additional cost to the Company or any
AkzoNobol Group. Neither the Company nor any member of the AkzoNobel Group shall
have any liability to you for any taxes that may be due by you under Internal
Revenue Code § 1409A.

 

By signing this Agreement, you are acknowledging and agreeing that if you are
determined to be a “specified employee” (as defined under 409A), that any
payments of nonqualified deferred compensation including any severance payments
subject to Section 409A due you from the Company under this Agreement or
otherwise during the first six (6) months following your “separation from
service” (as defined under 409A) will be delayed until the seventh (7th) month
following your separation from service.

 

27.                               HEADINGS

 

The headings or titles of clauses, or sub clauses are given solely for
convenience of reference and shall not be deemed to modify or affect in any way
the text or meaning of a clause or sub clause.

 

28.                               WAIVER

 

By an instrument in writing similarly executed, you or a duly authorized officer
of the Company may waive compliance by the other party with any specifically
identified provision of this Agreement that such other party was or is obligated
to comply with or perform; provided, however, that such waiver shall not operate
as a waiver of, or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy, or power
hereunder preclude any other or further exercise of any other right, remedy, or
power provided herein or at law or in equity.

 

29.                               SEVERABILITY

 

A.           If any provision of this Agreement is found by a proper court to be
unreasonable and/or unenforceable, then such provision shall be considered
amended to that considered reasonable and enforceable by the court, and as
amended, shall be enforced; all remaining terms and conditions shall continue in
full force and effect.

 

B.             If any provision of this Agreement is hold to be illegal, invalid
or unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement.

 

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30.                               ASSIGNMENT

 

The Company may assign, without your consent, all its rights, duties and
obligations under this Agreement to another member of the AkzoNobel Group, to
the purchaser of fifty percent (50%) or more of the assets of the Business or to
any affiliate of such purchaser.

 

 

NATIONAL STARCH LLC

 

BY:

/s/ [ILLEGIBLE]

 

/s/ H. Hutmacher

 

 

 

H. HUTMACHER

DATED:

Aug 26, 2009

 

Aug 31, 2009

 

 

/s/ James Zallie

 

JAMES ZALLIE

 

 

 

DATED:

July 31, 2009

 

 

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Attachment 1

 

National Severance Plan

 

 

(Former NSC plan document to be attached)

 

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