exv10w13






			
	
	 	STRICTLY
CONFIDENTIAL          

Exhibit 10.13





August 28, 2009




Frederic Jung

Chief Financial Officer – Arizona Chemical





			
	Re:	 	Letter of Understanding for Frederic Jung

International Assignment in Almere, The Netherlands




Dear Frederic:



This letter confirms our mutual understanding of the terms and conditions that will apply to your
assignment with Arizona Chemical LLC (the “Company”) as Chief Financial Officer based in Almere,
The Netherlands (the “Host Country”).



Such assignment is subject, of course, to foreign government entry documents and/or visas, and your
acceptance of the terms and conditions outlined in this letter. The effective date of your
international assignment is August 1, 2009. Your point of origin has been designated as Chicago,
IL.



The terms and conditions outlined in this letter are applicable only for the period of this
international assignment, which is expected to be three to five years. When you return to the
United States at the end of this assignment, you will return at a location mutually agreed upon by
you and the Company and your base salary in effect at that time, and all premiums, allowances, and
differentials provided under the Company’s international assignment policy will cease (with the
exception of certain tax preparation services and payments in both the U.S. and the Host Country
applicable to the year of your repatriation or beyond should the Company request to do so)
according to the provisions of the policy.



For the period of this international assignment, you will remain on the US payroll for the purpose
of delivery of your periodic salary component. You will continue to be covered by, or be
eligible for, all policies, procedures and programs of Arizona Chemical. Your previous employment
agreement and benefits addendum will remain valid. Your human resources representatives will be
David B. Cowfer, Vice President – Human Resources, and Sieta Vermeulen, HR Manager, The
Netherlands.



Total Overseas Compensation



To establish your total compensation, a “balance sheet” approach is used to ensure that your
standard of living in the Host Country will be reasonably comparable to that which you would have
enjoyed in the United States, given your family status and income level. A copy of your balance
sheet will be provided at the time of your departure to the Host Country, and thereafter whenever
adjustments are made. Your compensation will be provided in Euros and/or U.S. Dollars. For record
keeping purposes in the United States, your compensation will be delineated totally in U.S.
Dollars.



Base Salary



At the commencement of this assignment, your base salary will be $285,000 per year, or $23,750 per
month paid in 12 equal monthly installments net of hypothetical tax, employee contributions to
benefit plans including, but not limited to, Medical Insurance, 401(k) plan contributions, etc.



Salary reviews will continue to be held according to Company guidelines in effect.




 









 







Benefits



You will continue to receive coverages under the current Arizona Chemical benefit programs for
salaried employees, however, effective August 1, 2009 your medical and dental coverage for you and
your family will be provided by Aetna Global Benefits.



Work Schedule



You agree that you will observe the work schedule in effect at your place of assignment and that
you will not be entitled to overtime pay should the responsibilities of your position require, from
time to time, that your work exceeds this schedule.



Paid Time Off Policies



Per your Benefits Addendum to Employment Agreement, November 7, 2008, you will be entitled to
annual vacation time of 28 days. In addition, you will observe the customary holidays in the Host
Country.



Housing in the Host Country



The Company will pay a housing allowance to help cover the expense of housing in the Host Country.
Your monthly housing allowance will be 2,800 Euro a month. It is intended that this allowance will
be paid to you in the Host Country.



You will be responsible to pay the actual amount of the monthly rent in the Host Country as well as
all utilities, including telephone costs.



Selection of housing in the Host Country has been previously approved by your manager, Kees
Verhaar, President and Chief Executive Officer. No assistance with housing will be provided by the
Company should you decide to purchase housing in the Host Country. In addition, no financial
assistance will be provided at the time of any purchase or future sale of the property.



Goods and Services Differential Allowance (COLA)



A goods and services differential allowance will be paid to compensate you for the higher costs of
goods and services in the Host Country as compared to those in the United States. The differential
is calculated by multiplying a goods and services index, provided by ORC, by the portion of base
salary that someone at your income level and family size would spend on goods and services in the
United States. At this time, your family size has been designated as five “5”. At present, based
on ORC data, the amount that an individual at your salary level and family size would normally
spend on goods and services in the United States, called “spendable income,” would be $7,604.75 per
month.



Thus, your goods and services differential allowance, if this index is still in effect when your
allowance commences, will be:




	 	 	 	 	 
	U.S. Spendable Income
	 	$	7,604.75	 
	Goods and Services Index
	 	x	  0.57754	 
	 
	 	 	 
	Monthly Allowance TOTAL
	 	$	4,392.00	 






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Since you will have the use of a company car, your U.S. spendable income and goods and services
index will be derived from ORC’s modified tables.



The allowance, affected by costs and inflation both in the Host Country and in the United States,
and by exchange rates, will be adjusted whenever there is a + 5% change in the goods and
services
index or a change in your U.S. spendable income. Payment of the allowance will begin when you move
into permanent/rental housing in the Host Country and will cease on the date of the payroll period
following the date you move out of permanent/rental housing. You are responsible for notifying (HR
Rep) of the date you move into or vacate permanent/rental housing and of any change in the number
of family members residing with you in the Host Country on a full-time basis during your
international assignment.



Automobile(s) in the U.S.



You have been approved to ship one personal automobile to the Host Country. In certain
circumstances, the Company will protect you on the forced sale of up to two automobiles before
being transferred. In order for any loss to be eligible for reimbursement, you will be required to
make a good faith effort to sell the automobile(s) in an arm’s length transaction and to document
the sale to a buyer other than a relative by blood or marriage.



If you find it necessary to sell the automobile(s) for less than the average of the trade-in and
retail
price as quoted in the current National Automobile Dealers Association Used Car Guide, you
may be reimbursed for the loss, up to $3,500 per automobile on the difference between the N.A.D.A.
support price and the selling price, provided that the above conditions have been met.



Automobile in the Host Country



You will be provided with an automobile for business use while you are on assignment in the Host
Country With respect to tax matters related to the automobile you will be treated in the same
manner as similarly situated employees in the Host Country and may be responsible for payment of
tax on imputed income associated with any personal use of the automobile.



Cultural Training



The Company will arrange for cultural training for you and your spouse if needed.



Language Training



See Benefits Addendum to employment agreement, November 7, 2008 (attached).



Physical Examinations 



On an annual basis, you and your family will be required to take basic physical examinations at
Company expense. Once you are overseas, the Company strongly encourages you to establish a
relationship with a local English-speaking doctor and identify a local hospital to assist with any
medical needs or emergencies that may arise. It is also important to have readily available
information on blood types, allergic reactions to medications, etc.





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Expense Reimbursements



The Company will provide you with economy airfare from Chicago, IL to The Netherlands and will
reimburse you for limited but necessary travel expenses en route. If your housing arrangements are
not completed by the time of your transfer, the Company will reimburse reasonable interim living
costs
(excluding employee lunches during the workweek) for you. Reimbursement for reasonable interim
living costs will cease when you move into permanent/rental housing.



All arrangements for your transfer to the Host Country should be coordinated with receipt of your
foreign visa that will qualify you for permanent residence in the Host Country while you are on
assignment.



Relocation



You will be eligible for provisions of the Company’s relocation policy unless they are superseded
by the provisions of the international assignment policy or your personal benefits addendum to your
current employment agreement.



Relocation Allowance



In accordance with your Benefits Addendum, a relocation allowance of one month’s salary will be
paid to you upon your transfer to the Host Country. This allowance will be considered taxable
income to you and you will be responsible for any resulting income/social taxes. A
hypothetical tax will be calculated and deducted from this allowance at the time of payment, and
will be subject to reconciliation through the tax equalization process described below. The
allowance is designed to aid in the payment of relocation expenses related to your move.



Payment of a relocation allowance upon your repatriation to the United States to another assignment
with Arizona Chemical will be subject to the provisions of the relocation policy in effect at the
time of your repatriation. This allowance will be subject to withholding for FICA and
Federal/State/Local tax purposes at the time it is paid to you.



Provision of Appliances



If necessary, the Company will provide major appliances up to a maximum of $3,500 for your use in
the Host Country. These include a middle of the range refrigerator, stove, microwave oven,
washer-dryer, and dishwasher, as well as one VCR/DVD and one television. When more cost-effective,
appliances should be purchased in the United States. The purchase of electrical appliances other
than those listed, as well as adapters and transformers, will be your responsibility.



Shipment/Storage of Personal Effects



The costs in connection with the shipment of reasonable household and personal effects from
Chicago, IL to The Netherlands, including reasonable insurance, packing and unpacking, will be paid
by the Company. The Company will also pay for any import duties and other expenses necessary for
the actual delivery of these goods, except in those cases where the Company believes these expenses
are excessively high due to circumstances within your control. In order to settle you into
permanent/rental housing more promptly, the Company will reimburse shipment by air of a limited
amount of personal effects needed for immediate use. The Company will also pay for the climate
controlled storage of


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household goods and/or personal effects while you are assigned overseas. The
Company will reimburse up to $2,500 for shipping two household pets, if permitted by law. A
representative from Hewitt will make all arrangements for shipment and storage on your behalf.



Treatment of U.S. Residence



Since you have decided to sell your former residence in Chicago, IL, the provisions of the US
relocation policy relating to home sale will apply. For Federal income tax purposes, you will be
entitled to exclude from income such amount of gain on the sale of your principal residence as is
permitted by Section 121 of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.



Since you are currently a homeowner, you will be considered a homeowner under the relocation policy
at the time of your transfer back to a location in the United States.



Home Leave, Local Vacation and Business Trips



For each 12 months of your overseas assignment, you will be entitled to four weeks annual home
leave. Home leave accrual will commence on the date of your transfer to the Host Country and will
continue to the date of transfer from that location. In the year of repatriation, home leave will
be prorated for periods of less than one year at the rate of two and one-third days for each month
of international assignment. During this assignment, the Company will provide you and your family
with direct route, economy, round-trip airfare between the Host Country and your point of origin
for each home leave.



Limited but necessary and reasonable travel expenses en route will also be covered. In addition,
the Company will reimburse car rental for up to four weeks. Lodging, meals and gasoline for the
rental car during periods of home leave will be your responsibility and will not be reimbursed by
the Company.



Home leave will be used to offset the number of weeks of vacation you are eligible to receive under
the Company’s vacation policy.



Expenses for you, incurred while on business trips, will be reimbursed by the Company according to
regular Company policy.



Emergency/Medical Leave 



In the event that serious illness or death in the immediate family requires you and your family to
return to the Home Country, the Company will pay the round-trip economy class airfare to your point
of origin. “Immediate family” for purposes of letter is defined as your or your spouse’s parents
and, brothers/sisters.



You will be allowed reasonable paid time off at the discretion of the Company, normally not to
exceed 5 business days, to attend to the personal emergency. You will not be reimbursed for
temporary living expenses, such as hotel, food, taxi, or car rental during the emergency leave.



If such an event occurs close enough to the assignment completion date, the Company may elect not
to return you and/or family to the Host Country and terminate the assignment early.





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Tax Equalization



During the duration of the international assignment, you will be subject to the Arizona Chemical
Tax Equalization Policy (“Tax Policy”). The Company will equalize your tax liability, including the
one derived from your investment and grants in AZ CHEM MIVII, L.P, to your point of origin. You
will be held responsible for hypothetical U.S. income, Illinois State income, and U.S. Social
Security taxes
on your base salary, incentive bonus and any gains derived from your investment and grants AZ CHEM
MIVII, L.P. Worldwide taxes on your personal income will be your responsibility.



The Company has engaged a tax consultant to meet with you to review the concepts of Tax
Equalization and to answer any questions you may have about this benefit.



It is anticipated that tax equalization for you will be administered by withholding a hypothetical
obligation (hypothetical U.S. and State) from your base, bonus and other incentive compensation.
You will be responsible for U.S. Social Security taxes on your entire compensation and the Company
will provide a gross-up for the additional social tax on international allowances.



Having taken the hypothetical withholding and actual social tax from your periodic pay, the Company
will be responsible for the payment/remittance of actual U.S./Host Country income and social taxes
on your base, bonus, other incentive compensation and international assignment allowances.



You will be responsible for remitting payment of tax on your personal income as required by U.S.
and Host Country tax law as detailed in the Tax Policy. This may take the form of required
estimated tax payments.



You will receive a Tax Equalization calculation for each calendar year of your assignment and
possibly for years following repatriation where it is necessary to reconcile the Company’s versus
your obligation due to the presence of “trailing” allowances, payments and credits. A tax
settlement amount may be due to/from the Company as a result. It is expected that any tax
settlement amount be made within 30 days of receipt of the settlement calculation whether due to,
or from, the Company.



Tax Return Preparation



A tax consultant has been engaged to assist you in the preparation of your U.S. tax return and your
Host Country tax returns for the years of your assignment. The same tax consultant has also been
engaged to prepare an annual tax equalization settlement and may assist you with any dealings with
the IRS (to the extent such audits are related to Company-paid income or reimbursed expenses).



You must cooperate with the tax consultant to complete the preparation of all returns and to take
advantage of the most advantageous tax filing positions for the Company. All information related
to your income tax return, other than that which is necessary for the Company to conclude the tax
equalization settlement, is kept confidential between you and the tax consultant.



Employee Responsibility for Timely Submission of Information



You are responsible for providing accurate and timely information to the tax consultant. Penalties,
interest or additional taxes that are imposed due to any action or inaction will be your
responsibility and will not be reimbursed by the Company.




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Termination and Severance



If your employment is terminated while you are abroad, either at your own or the Company’s option,
the Company will reimburse moving expenses in accordance with the Company’s relocation policy and
the international assignment policy for you and your household goods and personal effects to your
point of origin, provided you return to that point within 180 days of termination. However, you
will not be eligible for a relocation allowance. The Company will pay for airfare for you and your
family ,
and for the shipment of your household goods from the Host Country to your point of origin, or to
a mutually agreed upon location (provided the costs involved are no higher than those to the point
of origin). Any international allowances you are receiving will end according to the provisions of
the international assignment policy.



If a Company-initiated termination occurs, you will receive adequate advance notice subject to the
provisions of the Company’s severance policy in effect at that time. Similarly, if you voluntarily
terminate, you are expected to give notice subject to the provisions of the severance policy. If
the Company provides all or part of your housing, you will be required to vacate the housing within
60 days of termination. The Company will reimburse any penalty charges for early termination of
the rental agreement.



Any payments received in accordance with the laws or customs of the Host Country, including
severance compensation and/or special termination bonuses, will be fully offset against
compensation payable to you under the terms of the Company’s severance policy. This provision is
applicable to either voluntary or involuntary termination.



Termination will require immediate settlement of all outstanding advances, including travel, and
any other financial arrangements you may have with the Company.



Agreement Letter



This agreement is made in the state of Florida, United States of America, and shall be subject to
the laws of the state of Florida and applicable federal laws. In the event any provision of this
letter
of understanding shall be held invalid or unenforceable by reason of law, such invalidity of
unenforceability shall attach only to such provisions and shall not affect or render invalid or
unenforceable any other provisions of this letter.



By signing this letter of understanding, you agree and accept this assignment as outlined above
with the full understanding that policies relating to your international assignment may change from
time to time and will be discussed with you in detail. It is agreed and understood that material
changes in policies relating to your international assignment will not be implemented without your
express written consent.



The current employment agreement made between you and the Company, to include the Benefits Addendum
and Termination Agreement, will not be superseded by any of the above provisions, and where there
is conflict between this agreement and the current employment agreement of November 7, 2008, the
latter shall prevail.







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	/s/ Frederic Jung

	 	8/28/09     
	 	 	 	/s/ David B. Cowfer
	 	8/28/09     	 	 
	 	 	 	 	 	 	 
	Frederic Jung
	 	Date	 	 	 	David B. Cowfer	 	Date	 	 
	Chief Financial Officer

	 	 	 	 	 	Vice President – Human Resources	 	 	 	 
	 

	 	 	 	 	 	Arizona Chemical	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Kees Verhaar
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Kees Verhaar

	 	Date	 	 	 	 	 	 	 	 
	President and CEO
	 	 	 	 	 	 	 	 	 	 
	Arizona Chemical
	 	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 





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