Exhibit 10.2

 
      SEPARATION AGREEMENT (this “Agreement”), dated as of May 10, 2004 (the
“Execution Date”), among RESOLUTION PERFORMANCE PRODUCTS INC., a Delaware
corporation (the “RPP Inc.”), RESOLUTION PERFORMANCE PRODUCTS LLC, a Delaware
limited liability company (“RPP LLC,” and together with RPP Inc., each a
“Company” and collectively, the “Companies”), and J. TRAVIS SPOEDE (the
“Executive”).

     WHEREAS, pursuant to a Non-Qualified Stock Option Agreement dated as of
March 7, 2001 (the “Option Agreement”), between RPP Inc. and the J. Travis
Spoede Trust (Dated 03/26/99) (the “Trust”), Executive acquired, through his
Trust, 700 Tranche A Options (as defined therein) and 1,400 Tranche B Options
(as defined therein and collectively with the Tranche A Options, the “Options”)
to purchase shares of RPP Inc.’s Common Stock (as defined therein);

     WHEREAS, pursuant to a Participation Agreement dated as of March 7, 2001
(the “Participation Agreement”), Executive acquired, through his Trust, (x) 600
shares of RPP Inc.’s Common Stock and (y) $140,000 principal amount of Notes (as
defined in the Participation Agreement).

     WHEREAS, the Trust is a party to an Investor Rights Agreement dated as of
November 14, 2000 (the “Investor Rights Agreement”), among RPP Inc. and holders
of its Common Stock;

     WHEREAS, the Trust is a party to a Notes Registration Rights Agreement
dated as of November 14, 2000 (the “Notes Registration Rights Agreement”), among
RPP Inc. and holders of its Notes.

     WHEREAS, the Trust has issued to RPP LLC a Secured Promissory Note dated
March 7, 2001 (the “Executive’s Note,” and collectively with the Option
Agreement, the Participation Agreement, the Investor Rights Agreement and the
Notes Registration Rights Agreement, the “Continuing Agreements”).

     WHEREAS, each Company, on the one hand, and the Executive, on the other
hand, each desire to terminate Executive’s employment with RPP LLC on the terms
and conditions set forth herein.

 

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

 

     NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby expressly acknowledged, the parties hereto agree as follows:

1. Resignation.

     1.1 Effectiveness. This Agreement will be effective as of May 10, 2004 (the
“Effective Date”).

     1.2 Resignation. Executive hereby resigns as an officer and/or employee of
each Company and each of its direct and indirect subsidiaries, and each Company
hereby accepts such resignations on behalf of itself and such subsidiaries, in
each case, effective as of the date hereof. Other than as expressly set forth
herein, Executive hereby waives any and all rights and benefits to receive any
payments, compensation or benefits or to serve as an officer or employee or
director of each Company or any of its direct or indirect subsidiaries under any
agreement, policy or arrangement.

2. Consideration.

     2.1 Severance Payments.

               (A) Executive shall be entitled to (i) receive all salary and
benefits to which he is entitled up to and including May 31, 2004, including
without limitation, compensation payments deferred by Executive, incentive
compensation payments earned but not paid in respect of the calendar year ending
December 31, 2003 in accordance with RPP LLC’s plans and policies and payment
for accrued vacation days in accordance with RPP LLC’s plans and policies, (ii)
continue to receive medical coverage under RPP LLC’s medical insurance plans and
Employer shall continue to pay its portion of the premiums, in each case, for a
period commencing on May 31, 2004 and ending on September 30, 2004, (iii)
receive outplacement assistance in accordance with Employer’s arrangements with
its outside placement services provider and (iv) continue coverage as required
under the Consolidated Omnibus Reconciliation Act of 1985, as amended.

               (B) In consideration of the mutual covenants and agreements set
forth herein, RPP LLC shall pay $125,000 in cash (the “Severance Payment”) to
Executive on the Effective Date; provided, however, that (i) if Executive
voluntarily resigns his employment with RPP LLC prior to the Effective Date,
then the Severance Payment will not be due or payable and Executive will forfeit
all rights to receive the Severance Payment and (ii) if RPP LLC terminates
Executive’s employment with RPP LLC prior to the Effective Date, then the
Severance Payment shall become due and payable as of such date of termination.
Executive hereby acknowledges that the Severance Payment represents full
satisfaction of all amounts owed to Executive by the Companies.

               (C) Executive hereby acknowledges that the Common Stock, Notes
and Options held by Executive (whether through his Trust or otherwise) shall
continue to be governed by the terms and provisions of the Continuing
Agreements, including without limitation with respect to the repurchase, vesting
and/or forfeiture thereof. Without limiting the foregoing, Executive hereby
acknowledges that each Option held by Executive (whether through his Trust or
otherwise) shall cease vesting as of the Effective Date and no Option which is
not a

 

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

 

Vested Option (as defined in the Option Agreement) shall become a Vested Option
thereafter.

               (D) All of the payments to be made to Executive above shall be
made in accordance with Section 10.1.

3. Releases. Executive and each of his successors, assigns, heirs, executors and
administrators (each an “Individual Releasor” and, collectively, the “Individual
Releasors”), in consideration of the premises contained herein, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, have remised, released and forever discharged, and by
this Agreement do remise, release and forever discharge each Company and its
direct and indirect subsidiaries and affiliates and each of their respective
directors, managers, officers, stockholders, employees, subsidiaries,
affiliates, divisions and predecessors and each of their respective past and
present directors, managers, officers, employees and agents and each of their
respective successors, assigns, heirs, executors and administrators (each a
“Company Releasee” and, collectively, the “Company Releasees”), of and from all
manner of action and actions, cause and causes of action, suits, debts, dues,
sums of money, accounts, bonds, bills, covenants, contracts, controversies,
omissions, agreements, promises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever which relate to or arise out of any
dealings, relationships or transactions by and between the Individual Releasors
and the Company Releasees, in law (including but not limited to the Civil Rights
Act of 1866, as amended, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967, as amended, Title VII of the United States Civil Rights
Act of 1964, as amended, 42 U.S.C. Section 1981 and the Worker Adjustment and
Retraining Notification Act), admiralty or equity (including, but not limited
to, any and all claims arising out of or in any way connected to the employment
relationship, or the termination thereof, between Executive and the Companies
and/or any of their affiliates (excluding any obligations of the Company
Releasees arising under this Agreement and each Continuing Agreement), and which
any Individual Releasor has ever had, now has or which it hereafter can, will or
may have, whether or not now known, for upon or by any reason of any matter,
cause, causes or thing whatsoever from the beginning of the world to the
Execution Date. By way of example only, and not by limitation, this release
includes any claim, lawsuit or cause of action with respect to (1) any Federal,
state, local, foreign or other law covering discrimination, including, without
limitation, those based upon race, sex, color, religion, national origin,
citizenship, age, disability status, handicapped status or veteran status,
alleging discrimination against Executive during Executive’s employment or
because of Executive’s termination, (2) any Federal, state, local, foreign or
other law relating to notification of any plant or business closing or employee
layoff, (3) any breach of any express or implied obligation, duty or contract
not to discharge except for good cause, breach of any implied covenant of good
faith and fair dealing or breach of any express or implied obligation, duty or
contract concerning the application of any personnel policies or procedures,
(4) torts, including, without limitation, intentional or negligent infliction of
emotional distress, mental anguish or mental suffering, negligence, defamation,
invasion of privacy, fraud, deceit, promissory estoppel or personal injury,
(5) alleged retaliation relating to being offered the consideration set forth in
this Agreement on the terms set forth herein and/or (6) any other theory of
recovery. This Agreement will not affect Executive’s rights under the Older
Workers Benefit Protection Act to have a judicial determination of the validity
of this release and waiver. This section is also not intended to and will not
limit the right of a cour t to determine, in its discretion, that either Company
is entitled to restitution, recoupment, or setoff of any payments made to
Executive by such Company should this Agreement be found to be invalid

 

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

 

as to the release of claims under the Age Discrimination in Employment Act.

4. Knowing and Voluntary Waiver; Right to Consider and Revoke.

     4.1 Execution of this Agreement. Executive acknowledges that he has been
given a period of up to twenty-one (21) days to review and consider whether to
sign and return an acknowledgment copy of this Agreement to acknowledge his
understanding of and agreement with the foregoing. After such opportunity,
Executive has executed and delivered this Agreement on or prior to the date
indicated in the first paragraph of this Agreement, which is at least seven days
prior to the time that the sections referred to in Section 1.1 shall have become
effective.

     4.2 Revocation. During the seven-day period immediately following the time
that Executive executes and delivers this Agreement, Executive may revoke his
agreement to accept the terms hereof by indicating in writing to each Company
his intention to revoke. If Executive revokes this Agreement pursuant to this
Section 4, then Sections 1.2, 2, 3, 5 and 6 will be ineffective and null and
void. In such case, Executive will not be entitled to receive any of the
payments or benefits offered to him under such sections.

     4.3 Consultation with Counsel. Executive acknowledges that he has consulted
with an attorney prior to signing this Agreement.

5. Consulting Agreement.

     5.1 Services. Executive shall have the opportunity but not the obligation
to provide consulting services to the Companies as set forth on Schedule I
hereto, and other consulting services reasonably related to the foregoing,
during the period beginning on June 1, 2004 and ending on June 30, 2005 (the
“Consulting End Date”) as may be requested by the Companies. Executive may
provide consulting services, to the extent requested by the Companies in their
sole discretion, without regard for any minimum obligation on the part of either
party. Executive shall, to the extent Executive agrees to perform consulting
services, perform all services requested under this section as an independent
contractor to the Companies and not as an employee, agent or representative of
the Companies.

     5.2 Fees. The Companies shall pay to Executive a consulting fee which will
be mutually agreed to for each day of consulting services performed by Executive
at the request of the Companies, which fee shall be payable in accordance with
the Companies’ regular practices for the payment of fees to outside consultants.
In conformity with Executive’s independent contractor status and without
limiting any of the foregoing, Executive understands that no deduction or
withholding for taxes or contributions of any kind shall be made by the
Companies. Executive agrees to accept exclusive liability for the payment of all
taxes or contributions for unemployment insurance or pensions or annuities or
social security payments which are measured by the wages, salaries or other
remuneration paid to Executive, if any, and to reimburse and indemnify the
Companies for any such taxes or contributions or penalties which the Companies
may be compelled to pay. Executive also agrees to take all action and comply
with all applicable administrative regulations necessary for the payment by
Executive of such taxes and contributions.

 

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

 

6. Noncompetition, Nonsolicitation, Noninterference, Nondisparagement; No
Injurious Acts.

     6.1 Non-Compete. In consideration for the payments to be made to Executive
pursuant to Section 2 and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Executive agrees that during the
Non-Compete Period (as defined below) he will not, without each Company’s prior
written consent, directly or indirectly, own, manage, control, participate in,
consult with, render services for, whether as an agent, consultant, advisor,
representative, stockholder, partner or joint venturer, or in any manner engage
in the Business within any Restricted Territory (as defined below). As used in
this Agreement, the term “Restricted Territory” means any city, town, county,
parish or other municipality in any state of the United States (the names of
each such city, town, parish, or other municipality being expressly incorporated
by reference herein), or any other place in the world where either Company, or
its direct or indirect subsidiaries, affiliates, successors, or assigns engages
in the business of producing, manufacturing, marketing, selling, or distributing
chemicals similar to those manufactured by the Company as defined in the Form
10-K filed on March 16, 2004 (the “Business”) or purchased in significant
quantities by the Company as of that date, including, but limited to, the
following Companies: Pacific Epoxy Polymers, ExxonMobil, Bakelite, DSM and
Eastman. As used in this Agreement, the term “Non-Compete Period” means the
period beginning on the date hereof and ending on the anniversary of the
Effective Date.

     6.2 Non-Solicitation. During the Non-Compete Period, Executive will not,
directly or indirectly through another person, (i) solicit any employee of the
Companies or any of their direct or indirect subsidiaries to leave the employ of
the Companies or such subsidiary, or in any way interfere with the relationship
between the Companies and such subsidiary, on the one hand, and any employee
thereof, on the other hand, (ii) hire any individual who was an employee of the
Companies or any of their direct or indirect subsidiaries at any time from and
after the date hereof, or (iii) solicit any brokers that are registered with the
Companies or any of their direct or indirect subsidiaries.

     6.3 Non-Interference. During the Non-Compete Period, the Executive will
not, directly, or indirectly through another person, induce or attempt to induce
any broker, representative, customer, supplier, consultant, lender, licensee or
other business relation of either Company or any of its direct or indirect
subsidiaries to cease doing business with either Company or any such subsidiary,
or in any way interfere with the relationship between any such person, on the
one hand, and either Company or any such subsidiary, on the other hand.

     6.4 Non-Disparagement; No Injurious Acts.

               (A) From and after the date hereof, Executive will not, directly,
or indirectly through another person, make any statement that in any way
disparages any Company Releasee (as defined herein).

               (B) From and after the date hereof, neither Company will,
directly, or indirectly through another person (including any of its direct or
indirect subsidiaries), make any statement that in any way disparages any
Executive Releasee.

 

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

 

               (C) From and after the date hereof, Executive will not, directly,
or indirectly through another person, take any action that is reasonably likely
to cause injury to the relationship between either Company and any of its direct
or indirect subsidiaries or affiliates, on the one hand, and any lessor, lessee,
source of financing, vendor, supplier, customer, distributor, director, officer,
employee, consultant, lawyer, accountant, advisor, agent, shareholder, member or
partner or any other business relation or potential business relation of either
Company or such subsidiaries, on the other hand.

     6.5 Severability. Executive acknowledges and agrees that the provisions of
Sections 6.1, 6.2, 6.3 and 6.4 (collectively, the “Restrictive Covenants”) are
reasonable and valid in geographic and temporal scope and in all other respects.
If any court determines that any of the Restrictive Covenants, or any part
thereof, is invalid or unenforceable, the remainder of such Restrictive Covenant
will not thereby be affected and will be given full force and effect without
regard to the invalid portions.

     6.6 Modification by Court. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court will have the power
to reduce the duration or scope of such provision, as the case may be (it being
the intent of the parties hereto that any such reduction be limited to the
minimum extent necessary to render such provision enforceable), and, in its
reduced form, such provision will then be enforceable.

7. Cooperation. Notwithstanding Section 5 hereof, Executive agrees to cooperate
with and make himself readily available to each Company and its subsidiaries
and/or their officers, directors, managers and general counsel, as either
Company may reasonably request, to provide consulting or other assistance in any
matter, including giving truthful testimony in any litigation or potential
litigation and assisting in preparing any report required to be filed by either
Company or any of their subsidiaries with the Securities Exchange Commission,
over which Executive may have knowledge, information or expertise as a result of
Executive’s previous employment or consulting services. The Companies agree to
reimburse Executive for any reasonable and necessary out-of-pocket expenses
incurred by him in connection with this Section 7.

8. Covenants.

     8.1 Companies. The Companies agree to use their commercially reasonable
efforts to have Executive removed as an identified responsible individual on
each of the Company’s applicable governmental licenses at the time such license
is renewed by such Company.

     8.2 Executive. Executive agrees to pay all taxes arising from or relating
to the transactions contemplated by this Agreement when due and payable.

9. Confidential Information.

     9.1 Definitions. As used in this Agreement, the following terms shall have
the following respective meanings:

               (A) “Confidential Information” shall mean any and all
information, whether written or oral, which is furnished, whether before or
after the date hereof, by either Company or any of their direct and indirect
subsidiaries and affiliates to the Executive or by any third party

 

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

 

who provides such information to the Executive in his capacity as a
Representative of the Companies or any of their direct and indirect subsidiaries
and affiliates, including, without limitation, Intellectual Property Rights (as
hereinafter defined), ideas (whether or not protectable under trade secret
laws), trade secrets or proprietary or confidential information respecting
inventions, products, product plans, designs, drawings, sketches, methods,
research, technology, systems, models, samples, source codes, object code,
methodologies, contractual arrangements, characters, processes, works of
authorship, systems, data, computer programs, know-how, techniques, marketing
and advertising methods, financial information, accounting procedures,
projections, forecasts, strategies, budgets, plans, projections, notes,
memoranda, reports, lists, records specifications, data, documentation,
proposals in whatever form, personnel histories, lists of actual or potential
investors, lists of business development contacts, tangible or intangible or
other materials or information of any nature relating to any matter within the
scope of the Companies’ or their direct and indirect subsidiaries’ and
affiliates’ business, including improvements, developments, and changes thereto,
as well as any extracts, analyses, compilations, databases, studies, summaries,
reviews, correspondence or other materials prepared by or on behalf of the
Companies or any of their direct and indirect subsidiaries and affiliates or
prepared by the Executive or any Representative of the Companies or any of their
direct and indirect subsidiaries and affiliates which contain, are based on or
are derived in any way from any such information; provided, however, that
Confidential Information shall not include any information which (A) is or
becomes generally available to the public other than as a result of a disclosure
by the Executive in violation of this Agreement or (B) was known to the
Executive on a nonconfidential basis prior to the disclosure or development of
such information by the Companies or their direct and indirect subsidiaries and
affiliates, or their respective Representatives, provided that the Executive can
evidence his prior knowledge by appropriate documentation.

               (B) “Intellectual Property Rights” shall mean all industrial and
intellectual property rights (whether patentable or unpatentable), including,
without limitation, patents, patent applications, patent rights, trademarks,
trademark applications, trade names, service marks, service mark applications,
copyrights, copyright applications or registrations, databases, algorithms,
computer programs and other software, know-how, trade secrets, proprietary
processes and formulae, confidential information, franchises, licenses, world
wide web/internet domain names or world wide web/internet uniform resource
locators, inventions, trade dress, logos, design and all documentation and media
constituting, describing or relating to the above.

               (C) “Person” shall be construed broadly and shall include any
individual, corporation, partnership, limited liability company, organization,
association or other entity, including, without limitation, any foreign or
domestic government (whether federal, regional, state or local) or any agency,
authority, department, subdivision or instrumentality thereof.

               (D) “Representative” shall mean, with respect to any Person, the
employees, officers, directors, stockholders, partners, affiliates, controlling
persons, advisors, consultants, counsel, accountants and other agents of such
Person.

     9.2 Disclosure of Confidential Information. The Executive will not, without
the prior written consent of the Companies (except to the extent required by
applicable law, regulation or legal process, and then only after compliance with
the provisions of Section 9.4 below), release, publish, reveal or disclose in
any manner, whether directly or indirectly, to any Person (i) any

 

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

 

Confidential Information of the Companies or any of their direct and indirect
subsidiaries and affiliates or (ii) the fact that such Confidential Information
exists or has been made available to the Executive, other than as may be
required in the ordinary course of performing Executive’s duties to the
Companies or any of their direct and indirect subsidiaries and affiliates in a
manner which the Executive reasonably believes is in the best interest of the
Companies.

     9.3 Use of Confidential Information.

               (A) The Executive agrees that he will use all Confidential
Information solely for the purpose of fulfilling his obligations and
responsibilities to the Companies hereunder and will not use any such
Confidential Information for any other purpose whatsoever, whether or not for
the Executive’s own benefit or to the detriment of or in competition with the
Companies or any of their direct and indirect subsidiaries and affiliates. The
Executive shall not use, or permit any other Person (other than the Companies or
their Representatives) to use any Confidential Information.

               (B) The Executive further agrees not to compete with or induce or
assist other Persons in competing with the interests and objectives of the
Companies and their direct and indirect subsidiaries and affiliates in respect
of any matters arising out of or connected, whether directly or indirectly, to
the Confidential Information.

     9.4 Legal Requirement to Disclose Confidential Information. In the event
that the Executive is required by applicable law, regulation or legal process to
disclose any Confidential Information, the Executive will, prior to such
disclosure, promptly notify the Companies in writing to enable the Companies to
seek a protective order or other appropriate remedy, and will use his best
efforts to assist the Companies in obtaining such protective order or other
appropriate remedy. In the event that no protective order or other appropriate
remedy can be obtained, the Executive will furnish only that portion of the
Confidential Information which is required to be disclosed and will use his best
efforts to obtain reasonable assurance that the Confidential Information so
disclosed will be accorded confidential treatment.

     9.5 Ownership. Any Confidential Information received by the Executive will
remain the property of the Companies or their direct or indirect subsidiary or
affiliate (as applicable). Upon written request, the Executive shall return to
the Companies all Confidential Information provided to the Executive, including
all extracts, analyses, compilations, databases, studies, summaries, reviews,
correspondence and other materials prepared by the Executive based upon the
Confidential Information. The parties acknowledge and agree all work done or
prepared by the Executive relating in any way to the services provided hereunder
is property of the Companies and the Executive hereby assigns any and all rights
therein to the Companies.

     9.6 Computer Systems. The Executive acknowledges that the Companies have a
critical business interest in maintaining complete control and access to its
various computer systems. In view of this interest, the Executive understands
that he will have no right to privacy as to any personal information which he
inputs or otherwise causes to become part of the computer system. The Companies
shall be entitled (in the exercise of their sole discretion) to delete, erase
and/or destroy any and all such information which may be so input or cause to
become part of the Companies’ various computer systems.

 

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

 

     9.7 Third Party Information. To the extent the Executive receives any
confidential information or trade secrets of any third party which is provided
to either Company on the condition that such Company shall treat such
information confidentially, then the Executive shall safeguard such confidential
information and trade secrets in a manner consistent with such Company’s
obligations to such third party, but in any event shall safeguard the
confidentiality of such information in a manner no less favorable than he is
obligated to protect such Company’s Confidential Information.

     9.8 Termination of Executive. In the event of the termination of the
Executive’s relationship with the Companies for any reason, the Executive agrees
not to take with him any documents or data of any description or any
reproduction of any description containing or pertaining to any Confidential
Information. Nothing in this Section 9 is intended to create an obligation for
the Companies or any other Person to continue this contractual relationship with
the Executive. This Section 9 shall survive the termination of the Executive’s
relationship with the Companies, regardless of the reason for such termination.

     9.9 Intellectual Property Rights.

               (A) The Executive agrees that all Intellectual Property Rights
which are conceived, discovered, developed, reduced to practice, or made by the
Executive (whether or not during usual business hours, whether or not alone or
in conjunction with any other person, whether or not resulting from the use of
premises or personal property (whether tangible or intangible) owned, leased or
contracted for by the Companies or whether or not patentable or registrable
under copyright or similar statutes or subject to analogous protection) during
the Term which (A) relate to the Companies’ actual or anticipated business,
research and development or existing or future products or services, (B) result
from any work performed for the Companies or (C) result from any use of the
premises, property or Confidential Information of the Companies (including those
conceived, developed or made prior to the date of this Agreement), together with
all patent applications, letters patent, trademark, trade name and service mark
applications or registrations, copyrights and reissues thereof that may be
granted for or upon any of the foregoing (all of which are collectively referred
to herein as, the “Work Product”) and the benefits thereof shall immediately
become the sole and absolute property of the Companies or their assigns. The
Executive will promptly disclose such Work Product to the Companies (or any
persons designated by them) and hereby assigns any rights he may have or acquire
in the Work Product and benefits and/or rights resulting therefrom to the
Companies and their assigns without further compensation and shall communicate,
without cost or delay, and without publishing the same, all available
information relating thereto (with all necessary plans and models) to the
Companies. The Executive recognizes and agrees that the Work Product, to the
extent copyrightable, constitutes works for hire under the copyright laws of the
United States.

               (B) To the extent any of the rights, title and interest in and to
the Work Product cannot be assigned by the Executive to the Companies, the
Executive hereby grants to the Companies an exclusive, royalty-free,
transferable, irrevocable, worldwide license (with rights to sublicense through
multiple tiers of sublicenses) to practice such non-assignable rights, title and
interest. To the extent any of the rights, title and interest in and to the Work
Product can be neither assigned nor licensed by the Executive to the Companies,
the Executive hereby irrevocably waives and agrees never to assert such
non-assignable

 

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

 

and non-licensable rights, title and interest against the Companies or any of
their successors in interest to such non-assignable and non-licensable rights.
The Executive hereby grants to the Companies or their designee a royalty free,
irrevocable, worldwide license with rights to sublicense through multiple tiers
of sublicenses) to practice all applicable patent, copyright, moral right, mask
work, trade secret and other Intellectual Property Rights relating to any
Intellectual Property Rights developed by the Executive prior to the date of
this Agreement, or to which the Executive has legal right to use, which he
incorporates, or permits to be incorporated, in any Work Product.
Notwithstanding the foregoing, the Executive agrees that he will not
incorporate, or permit to be incorporated, any Intellectual Property developed
by the Executive or to which the Executive developed prior to the date of this
Agreement, or to which the Executive has legal right to use, without the
Companies’ prior written consent.

               (C) The Executive agrees to perform, on after the Effective Date,
all acts deemed necessary or desirable by the Companies to permit and assist the
Companies, at the expense of the Companies, in obtaining and enforcing the full
benefits, enjoyment, rights and title throughout the world in the Work Product
assigned or licensed to, or whose rights are irrevocably waived and shall not be
asserted against, the Companies or under this Agreement. Such acts may include,
but are not limited to, execution of documents and assistance or cooperation
(i) in the filing, prosecution, registration, and memorialization of assignment
of any applicable patents, copyrights, mask work, or other applications, (ii) in
the enforcement of any applicable patents, copyrights, mask work, moral rights,
trade secrets, or other proprietary rights, and (iii) in other legal proceedings
related to the Work Product.

     9.10 In the event the Companies are unable, after reasonable effort, to
secure the Executive’s signature on any letters patent, copyright or other
analogous protection relating to a Work Product, whether because of the
Executive’s physical or mental incapacity or for any other reason whatsoever,
the Executive hereby irrevocably designates and appoints the Companies and their
duly authorized officers and agents as his agent and attorney-in-fact, to act
for and on his behalf and stead to execute and file any such application or
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of any such letters, patent, copyright and other
analogous protection thereon with the same legal force and effect as if executed
by the Executive.

10. Miscellaneous.

     10.1 Payments. Any payments pursuant to this Agreement will be reduced by
all amounts required by law, rule or regulation to be withheld in respect of
federal, state, local and other taxes and, to the extent not so withheld,
Executive agrees to pay to the Companies an amount equal to any such withholding
amount plus any related interest and/or penalties.

     10.2 Notices. All notices, demands or consents required or permitted under
this Agreement will be in writing and will be delivered personally, sent by
nationally recognized air courier, telecopy, electronic mail (if an electronic
mail address is set forth below), mail (postage prepaid), registered or
certified mail, to the respective parties at:

 
in the case of Executive,
     J. Travis Spoede
     P.O. Box 69
     Montgomery, Texas 77356

 

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

 

     

in the case of either RPP Inc. or RPP LLC, to it at: 

  1600 Smith Street

  24th Floor

  Houston, Texas 77002

  Facsimile: (817) 375-2304

  Attention: General Counsel

  Electronic Mail: mark.antonvich@resins.com
 
   

  with a copy to:
 
   

  O’Melveny & Myers LLP

  Times Square Tower

  7 Times Square

  New York, New York 10036

  Facsimile: (212) 408-2420

  Attention: Adam Weinstein, Esq.

  Electronic Mail: aweinstein@omm.com

      or to such other address as a party will have given to the other parties.
Any such notice or other communication will be deemed effective upon the
earliest to occur of (i) actual delivery, (ii) transmission by electronic mail
or facsimile if such transmission is on a business day and, if such transmission
is not on a business day, the first business day following such transmission,
(iii) one business day after shipment by air courier as aforesaid, or (iv) three
business days after mailing as aforesaid; provided, however, that notice by
electronic mail or facsimile shall only be valid if, in addition to such notice,
notice is also sent on the same day via air courier or mail in accordance with
the provisions above.

     10.3 Governing Law; Jurisdiction. This Agreement will be governed by and
construed and enforced in accordance with the laws of the State of New York,
without giving effect to conflicts of law principles thereof which might refer
such interpretations to the laws of a different state or jurisdiction. Process
in any action or proceeding referred to in the proceeding sense may be served
upon any party anywhere in the world. In the event of any dispute relating to
the terms of this Agreement, a court will be entitled to award reasonable
attorneys’ fees to the party in whose favor a judgment is rendered. Such
attorneys’ fees will be payable if and when such judgment becomes final and
non-appealable.

     10.4 No Claim Filed And No Assignment Of Claims. Each party represents and
warrants that neither it nor any of its representatives has filed, or will file,
any complaints, charges or lawsuits with any court or government agency (or
arbitration forum) arising out of or relating to any claims being released by
such party in this Agreement. Executive further represents and warrants that
neither he nor any of his representatives has assigned or transferred, or will
assign or transfer, to any other person other than the Companies any of the
released matters set forth in this Agreement, and that it will defend, indemnify
and hold harmless the Company Releasees from and against any claim (including,
without limitation, the payment of attorneys’ fees and costs actually incurred
whether or not litigation is commenced) based on or in connection with or
arising out of any such assignment or transfer.

 

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

 

     10.5 Assignment. This Agreement will be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of each Company, but neither this Agreement nor any rights or
benefits hereunder will be assignable or otherwise subject to hypothecation by
Executive.

     10.6 Binding Agreement. This Agreement will be binding upon and will inure
to the benefit of the affiliates, officers, employees, agents, successors and
assigns of the parties hereto.

     10.7 Separability; Enforcement. If any provision of this Agreement will be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability will not affect the remaining provisions hereof, which will
remain in full-force and effect. Executive and the Companies agree that the
covenants contained in this Agreement are reasonable covenants under the
circumstances, and further agree that if in the opinion of any court of
competent jurisdiction any provision of such covenant is not reasonable in any
respect, such court will have the right, power and authority to excise or modify
such provision or provisions of such covenant and to enforce the remainder of
the covenant as so amended. Executive agrees that any breach of the covenants
contained in this Agreement would irreparably injure the Companies. Accordingly,
each Company or any of its affiliates may, in addition to pursuing any other
remedies they may have in law (including, without limitation, collecting
damages) or in equity, obtain an injunction against Executive from any court
having jurisdiction over the matter, restraining any further violation of this
Agreement by Executive.

     10.8 Survival. The respective rights and obligations of the parties
hereunder will survive any termination of this Agreement to the extent necessary
to the intended preservation of such rights and obligations. The provisions of
this Section 10.8 are in addition to the survivorship provisions of any other
section of this Agreement.

     10.9 Counterparts. This Agreement may be executed in any number of original
or facsimile counterparts, each of which such counterpart will be deemed to be
an original instrument, but all of which together will constitute one agreement.

     10.10 Entire Agreement. This Agreement reflects the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and thereof and replace and supercede any prior agreements relating to the
subject matter hereof and thereof.

* * * * *

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to become
effective as of the date indicated above.

              RESOLUTION PERFORMANCE PRODUCTS INC.
 
       

  By:   /s/ Marvin O. Schlanger

     

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

 

      Name: Marvin O. Schlanger

      Title: Chief Executive Officer

 

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

 

              RESOLUTION PERFORMANCE PRODUCTS LLC
 
       

  By:   /s/ Marvin O. Schlanger

     

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

 

      Name: Marvin O. Schlanger

      Title: Chief Executive Officer

     
/s/ J. Travis Spoede
 

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

 
 
J. TRAVIS SPOEDE
 
Date: May 10, 2004

ACKNOWLEDGEMENT

     I acknowledge and represent to each of RESOLUTION PERFORMANCE PRODUCTS INC.
and RESOLUTION PERFORMANCE PRODUCTS LLC and each of their affiliates that I have
had an opportunity to consult with attorneys and other advisers of my choosing
regarding this Separation Agreement, that I have reviewed all of the terms of
this Separation Agreement and that I fully understand all of its provisions,
including, without limitation, the general release and waiver set forth in the
Separation Agreement. As my free and voluntary act, by signing below, I am
agreeing to all of the terms of this Separation Agreement and I intend to be
legally bound thereby.

     
/s/ J. Travis Spoede
 

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

 
 
J. TRAVIS SPOEDE
 
Date: May 10, 2004