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TRECORA RESOURCES

Restricted Stock Unit Agreement
(Performance-Based)

This Restricted Stock Unit Agreement (this “Agreement”), dated as of the [___________] [__], 20[__] (the “Grant Date”) is entered into by and between TRECORA RESOURCES, a Delaware corporation (the “Company”) and _______________________ (the “Participant”).  The Company and the Participant may also be referred to individually as a “Party,” or collectively as the “Parties.”

Background

A.In order to encourage the Participant’s contribution to the successful performance of the Company, the Company agrees to grant the Participant this restricted stock unit award.

B.The Board of Directors of the Company (the “Board”) adopted the Trecora Resources Stock and Incentive Plan (as it may be amended, supplemented, restated and/or replaced from time to time, the “Plan”), pursuant to which the Company is authorized to grant restricted stock units to certain employees, directors and other service providers of the Company.

C.The Participant desires to accept the restricted stock unit award made pursuant to this Agreement (the “Restricted Stock Units”).

Terms and Conditions

NOW THEREFORE, for good and valuable consideration and mutual covenants set forth in this Agreement, and intending to be legally bound, each Party hereby agrees to the following:

1.The Grant:  Subject to the conditions set forth below, the Company hereby grants the Participant, effective as of the Grant Date, an award consisting of: (a) the number of [___________] Restricted Stock Units (the “TSR Target Award”) and (b) the number of [___________] Restricted Stock Units (the “FCF Target Award”), whereby each Restricted Stock Unit represents the right to receive one share of common stock, par value $0.10 per share, of the Company (“Stock”), under the terms and conditions set forth this Agreement and in the Plan (collectively, the “Award”).

2.Vesting: Subject to Sections 5 and 7, the following portion of Restricted Stock Units shall vest on the corresponding vesting date (each individually, a “Vesting Date”) set forth in the table below:

						
	Restricted Stock Units to Vest	Vesting Date
	100% of the total Award	Upon the occurrence of the later of: (a) the third anniversary of the Grant Date, or (b) the determination by the Committee of the Cumulative FCF and the TSR Ranking for the applicable Performance Period.

3.The Plan:  This Agreement is subject to all the terms, conditions, limitations and restrictions contained in the Plan which shall be deemed incorporated into, and a part of, this Agreement.  Capitalized terms used by not defined in this Agreement shall have the meanings given to such terms in, or by reference in, the Plan, a copy of which has been made available to the Participant.  To the extent that any provision of this Agreement conflicts with the expressly applicable terms of the Plan, the Participant acknowledge and agree that those terms of the Plan shall control and, if necessary, the applicable terms of this Agreement shall be deemed amended so as to carry out the purpose and intent of the Plan.
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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

4.No Shareholder Rights:  The Restricted Stock Units do not and shall not entitle the Participant to any rights of a holder of Stock prior to the date that shares of Stock are issued to the Participant in settlement of the Award under the terms of this Agreement.

5.Restrictions and Risk of Forfeiture:

(a)The Restricted Stock Units are restricted in that they may not be sold, transferred or otherwise alienated or hypothecated until these restrictions are removed or otherwise expire under this Agreement, and Stock is issued to the Participant under this Agreement.

(b)The Restricted Stock Units are also forfeitable at all times under Section 7 (the “Forfeiture Restrictions”) prior to the Vesting Date for such applicable Restricted Stock Units vest and the restrictions with respect to such Restricted Stock Units are removed or otherwise expire under this Agreement.

(c)No shares of Stock shall be issued to the Participant prior to the Vesting Date for such applicable Restricted Stock Units vest and the restrictions with respect to such Restricted Stock Units (including the Forfeiture Restrictions) are removed or otherwise expire under this Agreement.

(d)Subject to Section 7, the restrictions on the Restricted Stock Units (including the Forfeiture Restrictions) shall expire on the applicable Vesting Date for such Restricted Stock Units.

6.Issuance of Stock:

(a)Subject to Sections 5 and 7, upon the vesting of any Restricted Stock Units on an applicable Vesting Date, the Company shall as soon as practicable after the applicable Vesting Date (but no later than the earlier of: (i) ninety (90) days following the Vesting Date, or (ii) December 31st of the calendar year that includes the Vesting Date), cause to be issued shares of Stock that are registered in the Participant’s name, and nonforfeitable and transferable, in complete settlement of such vested Restricted Stock Units upon receipt by the Company of any required tax withholding.

(b)The Company shall evidence the Stock to be issued under this Section in payment of such vested Restricted Stock Units in the manner it deems appropriate.  The value of any fractional Restricted Stock Units shall be rounded down at the time Stock is issued to the Participant in connection with the Restricted Stock Units.  No fractional shares of Stock, nor the cash value of any fractional shares of Stock, shall be issuable or payable to the Participant under the terms of this Agreement.  The value of such shares of Stock shall not bear any interest owing to the passage of time.

(c)Neither this Section nor any action taken under this Section shall be construed to create a trust or a funded or secured obligation of any kind.

7.Effects of Certain Events Prior to Vesting:

(a)Termination Generally:  Subject to Section 7(c), if the Participant’s service relationship with the Company or any of its Subsidiaries is terminated for any reason, then all Restricted Stock Units for which the restrictions, as of the date of termination, have not are removed or otherwise expire under this Agreement, shall become null and void and those Restricted Stock Units shall be forfeited to the Company as of the date of termination; provided that the Restricted Stock Units for which the restrictions have expired as of the date of such termination, including Restricted Stock Units for which the restrictions expire in connection with such termination, shall not be forfeited to the Company and shall be settled under Section 6.  Notwithstanding the foregoing, the Committee may, in its discretion, provide for accelerated vesting or otherwise permit continued vesting of all, or any portion of, the Restricted Stock Units upon the Participant’s termination of employment with the Company to the extent it deems it in the best interests of the Company and such acceleration or extension of vesting does not violate the Nonqualified Deferred Compensation Rules defined below.
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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

(b)Corporate Change:  As permitted under Section 13.5 of the Plan, in the event that a Corporate Change occurs prior to the Restricted Stock Units becoming fully vested, the accelerated vesting provided in Section 13.5 of the Plan shall not apply to the Restricted Stock Units and such Restricted Stock Units shall continue to vest under the terms of the Plan and this Agreement, subject to Section 13.6 of the Plan, the Trecora Resources Change in Control Severance Plan or any employment agreement between the Participant and the Company which specifically addresses the vesting of equity awards held by the Participant in the event of a Corporate Change.

(c)Effect of Employment Agreement:  Notwithstanding any provision in this Agreement to the contrary, in the event of any inconsistency between this Agreement, on the one hand, and any employment agreement entered into by and between the Participant and the Company or its Subsidiaries, whether entered into before or after the date of this Agreement, on the other hand, the terms of the employment agreement shall control.

8.Leave of Absence:  With respect to the Award, the Company may, in its sole discretion, determine that, if the Participant are on leave of absence for any reason, the Participant shall be considered to still be in the employment of, or providing services for, the Company, provided that rights to the Restricted Stock Units during a leave of absence shall be limited to the extent to which those rights were earned or vested when the leave of absence began.

9.Payment of Taxes:  The Company may require the Participant to pay to the Company (or the Subsidiary of the Company if the Participant are an employee of such Subsidiary), an amount the Company deems necessary to satisfy current or future obligation of the Company (or such applicable Subsidiary) to withhold federal, state or local income or other taxes that the Participant incur as a result of the Award.  Unless the Participant make other arrangements with the Company prior to the applicable withholding date, the Restricted Stock Units shall be net settled to withhold applicable taxes.

10.Compliance with Securities Law:  Notwithstanding any provision of this Agreement to the contrary, the issuance of Stock shall be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed.  No Stock shall be issued under this Agreement if such issuance would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed.  In addition, Stock shall not be issued under this Agreement unless: (a) a registration statement under the Securities Act is, at the time of issuance, in effect with respect to the shares issued, or (b) in the opinion of legal counsel to the Company, the shares issued may be issued under the terms of an applicable exemption from the registration requirements of the Securities Act.  YOU ARE CAUTIONED THAT ISSUANCE OF STOCK UPON THE VESTING OF RESTRICTED STOCK UNITS GRANTED PURSUANT TO THIS AGREEMENT MAY NOT OCCUR UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained.  As a condition to any issuance under this Agreement, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Company.  From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessary and appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons to make shares of Stock available for issuance.

11.Section 409A of the Code:  It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the Section 409A of the Code and the regulations promulgated thereunder (the “Nonqualified Deferred Compensation Rules”), and Awards shall be operated and construed accordingly. This Section 11 does not contain a representation to the Participant regarding the tax consequences of the grant, vesting, exercise, settlement, or sale of the Award (or the Stock underlying such Award) granted under this 
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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

Agreement, and should not be interpreted as such.  In no event shall the Company or any of its affiliates or their respective employees or directors be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant (or anyone claiming a benefit through the Participant) on account of non-compliance with the Nonqualified Deferred Compensation Rules.  Notwithstanding any provision in the Plan or this Agreement to the contrary, in the event that the Participant are a “specified employee” (as defined under the Nonqualified Deferred Compensation Rules) and the Participant become entitled to a payment under an Award that would be subject to additional taxes and interest under the Nonqualified Deferred Compensation Rules if the Participant’s receipt of such payment or benefits is not delayed until the earlier of (a) the date of the Participant’s death, or (b) the date that is six months after the Participant’s “separation from service,” as defined under the Nonqualified Deferred Compensation Rules (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date.  Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date shall be aggregated and paid in a lump sum without interest on the Section 409A Payment Date.  The applicable provisions of the Nonqualified Deferred Compensation Rules are hereby incorporated by reference and shall control over any provision in the Plan or this Agreement that are in conflict therewith. Each payment made under this Award, if any, shall be treated as a separate payment under the Nonqualified Deferred Compensation Rules.

12.Clawback:  The Restricted Stock Units are subject to any written clawback policies that the Company, with the approval of the Board or an authorized Committee of the Board, may adopt either prior to or following the Grant Date, including any policy adopted to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the SEC and that the Company determines should apply to the Award.  Any such policy may subject the Participant’s Award and amounts paid or realized with respect to the Award to reduction, cancelation, forfeiture or recoupment if certain specified events or wrongful conduct occur as specified in any such clawback policy.

13.Legends:  The Company may at any time place legends referencing any restrictions imposed on the shares of Stock issued under this Agreement on all certificates representing shares issued with respect to this Award.

14.Right of the Company and Subsidiaries to Terminate Services:  Nothing in this Agreement confers upon the Participant the right to continue in the employ of or performing services for the Company or any Subsidiary, or interfere in any way with the rights of the Company or any Subsidiary to terminate the Participant’s employment or service relationship at any time.  Nothing contained in this Agreement shall be construed or interpreted as requiring the Company to enter into any further agreement regarding the Award.

15.No Guarantee and Liability:  The Company and the Board do not guarantee the Stock from loss or depreciation.  The Company and the members of the Board shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement, the Award, and/or the Restricted Stock Units.

16.Execution of Receipts and Releases:  Any payment of cash or any issuance or transfer of shares of Stock or other property to the Participant, or to the Participant’s legal representative, heir, legatee or distributee, under the provisions of this Agreement, shall, to the extent thereof, be in full satisfaction of all claims of such Persons under this Agreement. The Company may require the Participant or the Participant’s legal representative, heir, legatee or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall determine.

17.Furnish Information:  The Participant agree to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or regulation.

18.Company Records:  Records of the Company or its Subsidiaries regarding the Participant’s period of service, termination of service and the reason(s) therefor, and other matters shall be conclusive for all purposes under this Agreement, unless determined by the Company to be incorrect.
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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

19.Information Confidential:  As partial consideration for the granting of the Award under this Agreement, the Participant hereby agree to keep confidential all information and knowledge, except that which has been disclosed in any public filings required by law, that the Participant have relating to the terms and conditions of this Agreement; provided, however, that such information may be disclosed as required by law and may be given in confidence to the Participant’s spouse and tax and financial advisors.  In the event any breach of this promise comes to the attention of the Company, it shall take into consideration that breach in determining whether to recommend the grant of any future similar award to the Participant, as a factor weighing against the advisability of granting any such future award to the Participant.

20.Company Action:  Any action required of the Company shall be by resolution of the Board or by a person or entity authorized to act by resolution of the Board.

21.Notice:  All notices, requests, demands, claims, and other communications made under this Agreement shall be in writing and be deemed duly given (i) when delivered personally to the recipient, (ii) one (1) business day after being sent to the recipient by reputable overnight courier service to the address first listed above, or (iii) immediately after being sent to the recipient by electronic mail.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan (including grants) by electronic means.  The Participant hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.  Any person entitled to notice under this Agreement may waive such notice in writing.

22.Definitions and Headings:  Unless otherwise expressly noted, all references to: (a) “Section” shall mean, with respect to such reference, each such section or subsection of this Agreement unless otherwise noted, and (b) “Attachment” shall mean, with respect to any such reference, each such schedule or exhibit attached to this Agreement.  The headings of any section or paragraph of this Agreement are for convenience of reference only and shall not be used to interpret any provision of this Agreement.

23.Non-Waiver:  No failure or delay by the Company in exercising any right, power or privilege under this Agreement shall constitute a waiver of such right, power or privilege, nor shall any single or partial exercise by the Company of such right, power or privilege preclude any other or further exercise of such right, power or privilege or the exercise of any right, power or privilege under this Agreement.

24.Assignment:  Any assignment of this Agreement by the Participant without the prior written consent of the Company shall not be permitted.

25.Successors:  This Agreement shall be binding upon the Participant, the Participant’s legal representatives, heirs, legatees and distributees, and upon the Company, its successors and assigns.

26.Severability:  The provisions of this Agreement are to be deemed severable and the invalidity, illegality or unenforceability of one or more of such provisions shall not affect the validity, legality or enforceability of the remaining provisions.

27.Governing Law:  This Agreement shall be governed by, and construed and enforced under, the laws of the State of Texas, U.S.A., without regard to its otherwise applicable conflicts of laws rules, except to the extent that it implicates mandatory provisions of the General Corporation Law of the State of Delaware, which matters shall be governed by such Delaware law.  The obligation of the Company to sell and deliver Stock under this Agreement is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.

28.Governing Jurisdiction:  Subject to the terms of this Agreement, any civil action relating to or arising from this Agreement, including any dispute as to the validity or existence of this Agreement and/or this clause, shall be brought in the state or federal courts located in Houston, Texas, and the parties hereto consent to the exclusive jurisdiction of such courts in respect of such civil action.
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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

29.Remedies:  The Parties shall be entitled to recover from each other reasonable attorneys’ fees incurred in connection with the successful enforcement of the terms and provisions of this Agreement whether by an action to enforce specific performance or for damages for its breach or otherwise.

30.Entire Agreement:  This Agreement constitutes the entire agreement of the Parties, and supersedes any prior or contemporaneous written or oral agreements between the Parties regarding the subject matter contained in this Agreement.

31.Amendment:  This Agreement may be amended solely the Board or by the Committee at any time (a) if the Board or the Committee determines, in its sole discretion, that amendment is necessary or advisable in light of any addition to or change in any federal or state, tax or securities law or other law or regulation, which change occurs after the Grant Date and by its terms applies to the Award; or (b) other than in the circumstances described in clause (a) or provided in the Plan, with the Participant’s consent.

32.Execution by Counterparts and Portable Document Format:  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signatures of any Party exchanged by electronic email in portable document format (pdf.) shall be binding on each Party.

[remainder of page intentionally left blank]

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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

IN WITNESS WHEREOF, each of the undersigned, intending to be legally bound, hereby executes this Agreement as of the Grant Date.

Trecora Resources

By: _________________________
Name:
Title:

The undersigned Participant acknowledges receipt of this Agreement and the Plan, and, as an express condition to the Award, agrees to be bound by the terms of this Agreement and the Plan.

_________________________
[Name of Participant]

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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

ATTACHMENT A

1.    Definitions:  For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

(a)“Beginning Price” shall mean the average Price for the period of twenty (20) trading days immediately preceding the first day of the Performance Period.

(b)"Cumulative FCF" shall mean the cumulative FCF achieved during the Performance Period.

(c)“Ending Price” shall mean the average Price for the period of twenty (20) trading days immediately preceding and including the final day of the Performance Period.

(d)"FCF" shall mean the annual free cash flow of the Company and its Subsidiaries, calculated as the net cash provided by operating activities (operating cash flow) of the Company and its Subsidiaries with the following adjustments:

(i)working capital adjustment reflecting normalized natural gasoline feedstock price;

(ii)less annual capital expenditures of the Company;

(iii)less mandatory debt service of the Company including cash interest expense and mandatory debt amortization; and

(iv)any other adjustment(s) that, solely in the Committee’s discretion, is necessary to reflect management performance consistent with maximizing shareholder value.

(e)"Peer Group" shall mean the group of companies identified in the following table:

									
			
			
			
			

provided that (i) the Peer Group shall not include any company that is not publicly traded (i.e., has no ticker symbol) at the end of the Performance Period; (ii) the performance of the surviving entities shall be used in the event there is a combination of any of the Peer Group companies during the Performance Period; and (iii) no new companies shall be added to the Peer Group during the Performance Period (including a company that is not a Peer Group member which acquires a member of the Peer Group).  Notwithstanding the foregoing, the Committee may disregard any of these guidelines when evaluating changes in the membership of the Peer Group during the Performance Period in any particular situation, as it deems reasonable in the exercise of its discretion.

(f)"Performance Period" shall mean the three (3) year period commencing as of the first day of the calendar year in which the Grant Date occurs, and ending on December 31st of the third calendar year.

(g)“Price” shall mean the per share closing price, as reported by the Bloomberg L.P. (or any other publicly available reporting service that the Committee may designate from time to time) of a share or share equivalent on the applicable stock exchange.

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Restricted Stock Unit Agreement (Performance-Based)                    [___________] [__], 20[__]

(h)"TSR Ranking" shall mean the percentage of companies in the Peer Group that have a lower TSR for the Performance Period than the Company.

(i)"TSR" shall mean the total shareholder return achieved during the Performance Period, calculated by dividing (i) the sum of the cumulative value of the subject company’s dividends for the Performance Period, plus the entity’s Ending Price, minus the Beginning Price, by (ii) the Beginning Price. For purposes of determining the cumulative value of the subject company’s dividends during the Performance Period, it shall be assumed that all dividends declared and paid with respect to a particular subject company during the Performance Period were reinvested in such company at the ex-dividend date, using the closing price on such date. The aggregate shares, or fractional shares thereof, that shall be assumed to be purchased as part of the reinvestment calculation shall be multiplied by the Ending Price to determine the cumulative value of an entity’s dividends for the Performance Period.

2.    Determination of Vested Restricted Stock Units:  Following the end of the Performance Period, the Committee shall determine the Cumulative FCF and the TSR Ranking for the Performance Period.

(a)Cumulative FCF:  The number of Restricted Stock Units which are considered vested as a percentage of the FCF Target Award shall be based on the Cumulative FCF for the Performance Period as follows:

						
	FCF Target	Percentage of Target Award
		0%
		50%
		100%
		200%

If the Cumulative FCF for the Performance Period is above [______________] but between two of the levels set forth in the table above, the payout percentage shall be determined using linear interpolation.

(b)TSR Ranking:  The number of Restricted Stock Units which are considered vested as a percentage of the TSR Target Award shall be based on the TSR Ranking for the Performance Period as follows:

						
	Ranking for Performance Period	Percentage of Target Award
	<25th Percentile	0%
	25th Percentile	50%
	50th Percentile	100%
	100th Percentile	200%

If the TSR Ranking for the Performance Period is above the 25th percentile but between two of the levels set forth in the table above, the payout percentage shall be determined using linear interpolation.

Subject to the continued employment requirements of Section 7, Restricted Stock Units that vest under this Section 2 shall be settled in shares of Stock as described in Section 5.

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    April 19, 2021
via email
John (Dick) R. Townsend
[_____________________]
[_____________________]

RE:    Retirement Agreement
    
Dear Dick:

This letter agreement (this “Agreement”) confirms the arrangements relating to your retirement from Trecora Resources, a Delaware corporation (“Trecora” and, together with its subsidiaries, divisions, affiliates, predecessors and successors, the “Company”). The material terms and conditions of this Agreement have been approved by the Compensation Committee of the Board of Directors of Trecora and by signing this Agreement, you acknowledge the adequacy and sufficiency of the consideration you will receive by executing and not revoking this Agreement.

After May 14, 2021 (your “Retirement Date”), you will not be entitled to receive any further payments or benefits from the Company, except as specifically set forth in this Agreement or except as provided under the indemnity provisions of Trecora’s By-Laws and director and officer and professional liability insurance policies and compensation policies.

1.Status and Responsibilities:

i.Status: Your employment with the Company will continue through, and will cease on the Retirement Date. Effective as of your Retirement Date, you will relinquish your position as Executive Vice President and Chief Manufacturing Officer of Trecora and all other appointments and offices you hold with the Company. Contingent upon your timely signing and not revoking this Agreement, you will be eligible for the payments and benefits continuation described in Section 2. Your employment with the Company will terminate on your Retirement Date.

ii.Responsibilities: Through your Retirement Date, you must remain available to perform services for the Company as Executive Vice President and Chief Manufacturing Officer and must do so in a diligent and professional manner.

iii.Transition Services Period: For a period of beginning on your Retirement Date until February 13, 2023 (the “Transition Services Period”), you will serve as a consultant and independent contractor to the Company pursuant to which you will provide transition and consulting services to the Company as may be reasonably requested by it from time to time, including by: (i) assisting management with respect to transitioning your role and responsibilities, (ii) assisting with respect to any resolved, pending or future regulatory matters, and (iii) assisting with respect to stakeholder communications and its relationships with its partners. During the Transition Services Period, you will be providing any services as an independent contractor.  You will not be treated as an employee for federal tax purposes with respect to any services performed for the Company under this Agreement; provided, however, that any compensation, including but not limited to any annual bonus and equity compensation, provided under Section 2 below that is considered a Form W-2 wage under applicable law will be treated as such and will be subject to all required reporting, withholdings and deductions.

2.Payments and Benefits:

i.Base Salary and Employee Benefits: Your base salary will continue at the current rate, and be paid according to normal payroll procedures, through your Retirement Date and you continue to be eligible for any employee benefits through your Retirement Date.  On and after your Retirement 
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Retirement Agreement                                       April 19, 2021

you will no longer receive base salary payments and you will no longer be eligible for any employee benefits, except as required by applicable law.

ii.Equity Awards: You are entitled to retain all of your rights and interests in unvested time-vesting equity awards previously awarded to you in 2019 and 2020 under the Trecora Stock and Incentive Plan as set forth on Attachment A after your Retirement Date, contingent upon your compliance with this Agreement as determined by the Compensation Committee of the Board of Directors of Trecora in its sole discretion.  Such awards will be administered in accordance with their respective plan and award documents, provided that subject to your timely execution and non-revocation and compliance with this Agreement, for the purchases of such awards, you will be deemed to not have experienced a termination of employment any time before the last day of the Transition Services Period, such that you will vest in all awards that are scheduled to vest prior to such date. The timing of settlement of all awards subject to continued vesting under this paragraph will be unchanged and will continue to be governed by the applicable award agreements.  For avoidance of doubt, you will not be entitled to retain or otherwise receive any other unvested equity or equity-based awards (including any performance-based equity awards) previously granted to you under the Trecora Resources Stock and Incentive Plan.

3.Return of Company Property: You will, upon request by the Company but in any event not later than the Resignation Date, immediately return to the Company all of the Company’s property, including, but not limited to, computers, computer equipment, office equipment, mobile phone, keys, passcards, credit cards, confidential or proprietary lists (including, but not limited to, customer, supplier, licensor, and client lists), tapes, laptop computer, electronic storage device, software, computer files, marketing and sales materials, and any other property, record, document, or piece of equipment belonging to the Company. You will not (a) retain any copies of the Company’s property, including any copies existing in electronic form, which are in your possession, custody, or control, or (b) destroy, delete, or alter any Company property, including, but not limited to, any files stored electronically, without the Company’s prior written consent. The obligations contained in this Section will also apply to any property which belongs to a third party, including, but not limited to, (i) any entity which is affiliated with or related to the Company, or (ii) the Company’s customers, licensors, or suppliers.

4.Restrictive Covenants:

i.Trade Secrets and Confidential Information: You will not: (i) use, disclose, reverse engineer, divulge, sell, exchange, furnish, give away, or transfer in any way the Trade Secrets or the Confidential Information for any purpose other than the Company’s Business, except as authorized in writing by the Company; (ii) retain any Trade Secrets or Confidential Information, including any copies existing in any form (including electronic form) that are in your possession or control, or (iii) destroy, delete, or alter the Trade Secrets or Confidential Information without the Company’s prior written consent. The obligations under this subsection will: (a) with regard to the Trade Secrets, remain in effect as long as the information constitutes a trade secret under applicable law; and (b) with regard to the Confidential Information, remain in effect for so long as such information constitutes Confidential Information as defined in this Agreement. The confidentiality, property, and proprietary rights protections set forth in this Agreement are in addition to, and not exclusive of, any and all other rights to which the Company is entitled under federal and state law, including, but not limited to, rights provided under copyright laws, trade secret and confidential information laws, and laws concerning fiduciary duties. Notwithstanding anything to the contrary set forth in this Agreement, pursuant to the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)(1)), no individual will be held criminally or civilly liable under federal or state law for the disclosure of a trade secret that: (1) is made (x) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

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Retirement Agreement                                       April 19, 2021

ii.Non-Solicitation of Employees: During the Restricted Period, you will not, directly or indirectly, solicit, recruit, or induce any Employee to (i) terminate his or her employment relationship with the Company, or (ii) work for any other person or entity engaged in the Business. For the avoidance of doubt, the foregoing restriction will prohibit you from disclosing to any third party the names, background information, or qualifications of any Employee, or otherwise identifying any Employee as a potential candidate for employment.

iii.Non-Competition: During the Restricted Period, you will not, on your own behalf or on behalf of any person or entity, engage in the Business within the Territory; provided, however, that you may work for a competitor within the Territory and during the Restricted Period if you first obtain express written permission from the Company’s Chief Executive Officer. For purposes of this subsection, the term “engage in” will include: (a) performing or participating in any activities which are the same as, or substantially similar to, activities which you performed or in which you participated, in whole or in part, for or on behalf of the Company; (b) performing activities or services about which you obtained Confidential Information or Trade Secrets as a result of your association with the Company; and/or (c) interfering with or negatively impacting the business relationship between the Company and a Customer or any other third party about whom you obtained Confidential Information or Trade Secrets as a result of your association with the Company.

iv.Definitions: For purposes of this Section 5 only, the capitalized terms will be defined as follows:

1.“Business” shall mean those activities, products, and services that are the same as or similar to the activities conducted and products and services offered and/or provided by the Company or any of its subsidiaries, affiliates, or predecessors within two (2) years prior to the Retirement Date.

2.“Confidential Information” shall mean: (A) information of the Company, to the extent not considered a Trade Secret under applicable law, that: (1) relates to the business of the Company or any of its subsidiaries, affiliates, or predecessors, (2) was disclosed to you or of which you became aware of as a consequence of your relationship with the Company or any of its subsidiaries, affiliates, or predecessors, (3) possesses an element of value to the Company or any of its subsidiaries, affiliates, or predecessors, and (4) is not generally known to the Company’s competitors (or those of any of the Company’s subsidiaries, affiliates, or predecessors), and (B) information of any third party provided to the Company or any of its subsidiaries, affiliates, or predecessors which any of the foregoing is obligated to treat as confidential. Confidential Information includes, but is not limited to: (1) methods of operation, (2) price lists, (3) financial information and projections, (4) personnel data, (5) future business plans, (6) the composition, description, schematic or design of products, future products or equipment of the Company or any third party, (7) advertising or marketing plans, and (8) information regarding independent contractors, employees, clients, licensors, suppliers, Customers, Prospective Customers or any other third party, including, but not limited to, the names of Customers and Prospective Customers, Customer and Prospective Customer lists compiled by the Company, and Customer and Prospective Customer information compiled by the Company. Confidential Information will not include any information that: (x) is or becomes generally available to the public other than as a result of an unauthorized disclosure, (y) has been independently developed and disclosed by others without violating this Agreement or the legal rights of any party, or (z) otherwise enters the public domain through lawful means.

3."Customer" shall mean any person or entity in which the Company or any of its subsidiaries, affiliates, or predecessors has engaged or solicited in the conduct of the Business.

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Retirement Agreement                                       April 19, 2021

4.“Employee” shall mean any person who (i) is employed by the Company as of the Retirement Date, or (ii) was employed by the Company or any of its subsidiaries, affiliates, or predecessors during the 12-months immediately preceding the Retirement Date.

5.“Restricted Period” shall mean during the Transition Services Period.
    
6."Territory" shall mean anywhere in the United States or in any other country in where the Company conducts business.

7.“Trade Secrets” shall mean information of the Company or any of its subsidiaries, affiliates, or predecessors, and its licensors, suppliers, clients, and customers, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, a list of actual customers, clients, licensors, or suppliers, or a list of potential customers, clients, licensors, or suppliers which is not commonly known by or available to the public and which information (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

5.Non-Disparagement:  You agree not to make any derogatory or disparaging remarks, written or verbal, regarding the Company or any of its officers, directors, employees, stockholders, representatives, vendors, suppliers, customers, clients products, services to any third person or otherwise make any comment or communication for the purpose of causing, or reasonably expected to cause, any material harm to the Company’s business, business relationships, operations, goodwill, or reputation; provided, however that nothing in this paragraph is intended to bar you from giving testimony pursuant to a compulsory legal process or as otherwise required by law.  The Company agrees to advise those individuals who serve as its executive officers as of the Retirement Date not to make any derogatory or disparaging remarks, written or verbal, regarding you to any third person, or otherwise make any comment or communication for the purpose of causing, or reasonably expected to cause, any material harm to you; provided, however that nothing in this paragraph is intended to bar any such person, or the Company, from giving testimony pursuant to a compulsory legal process or as otherwise required by law.

6.Irreparable Harm, Reasonableness, Other Agreements:  You acknowledge that a breach or threatened breach by you of the terms of Sections 3, 4 or 5 of this Agreement would result in material and irreparable injury to the Company, and that it would be difficult or impossible to establish the full monetary value of such damage. Therefore, the Company shall be entitled to injunctive relief in the event of any such breach or threatened breach. The undertakings and obligations contained in Sections 3, 4 or 5 shall survive the termination of this Agreement.  You agree that the covenants you have made in Sections 3, 4 and 5 are reasonable with respect to their duration and description.  You acknowledge that Sections 3, 4 and 5 are not intended to supersede or limit your obligations under other agreements, which may be different from those contained in such sections. Other such agreements may include confidentiality, non-disclosure, trade secret or assignment-of-invention agreements previously executed by you in favor of the Company. Any such agreement(s) shall remain in full force and effect.

7.Future Cooperation:  You agree that you will provide accurate information or testimony or both in connection with any legal matters, if so requested by the Company. You further agree to make yourself available upon request to provide information and/or testimony, in a formal and/or informal setting in accordance with the Company’s request, subject to reasonable accommodation of your schedule and reimbursement of reasonable documented expenses incurred by you, including reasonable and necessary attorney fees (if independent legal counsel is reasonably necessary). Notwithstanding the foregoing, the 
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Retirement Agreement                                       April 19, 2021

Company’s agreement and obligations pursuant to the foregoing sentence shall be subject to the provisions and limitations set forth in Section 9 of this Agreement.

8.Waiver and Release:  In exchange for the consideration set forth above, you agree to release and discharge the Company, and all of its respective past, present and future officers, directors, employees, agents, plans, trusts, administrators, stockholders and trustees (collectively, the “Released Parties”) from any and all claims, losses or expenses you may have or have had or may later claim to have had against them, whether known or unknown, arising out of anything that has occurred up through the date you sign this Agreement (both initially and on the Retirement Date), including without limitation, any claims, losses or expenses arising out of your employment with or separation from the Company; provided, however, that you expressly do not release or discharge the Company from any claims, losses or expenses you may have for (i) workers’ compensation benefits, (ii) all amounts or payments owed to you as contemplated by Section 2 of this Agreement, (iii) the indemnification or insurance described in Section 9 below or (iv) all of your accrued and vested pension benefits, health care, life insurance, or disability benefits as determined through the Retirement Date under the Company’s applicable and governing plans and programs.

You understand and agree that, except for the claims expressly excluded from this release, you will not be entitled hereafter to pursue any claims arising out of any alleged violation of your rights while employed by the Company, including, but not limited to, claims for reinstatement, back pay, losses or other damages to you or your property resulting from any alleged violations of state or federal law, such as (but not limited to) claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended; (prohibiting discrimination on account of race, sex, national origin or religion); the Worker Adjustment and Retraining Notification Act (requiring that advance notice be given for certain workforce reductions); the Americans With Disabilities Act of 1990, 42 U.S.C. §12101 et seq. (prohibiting discrimination on account of disability); the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.; the Equal Pay Act, 29 U.S.C. § 206(d); the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (protecting employee benefits); as these laws may be amended from time to time; and any other federal, state or local law, rule, regulation, administrative guidance or common law doctrine claim relating to your employment.

Also included among the claims knowingly and voluntarily waived and released by you pursuant to this Agreement are any and all age discrimination, retaliation, harassment, or related claims under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), the Texas Commission on Human Rights Act, the Older Workers Benefit Protection Act (“OWBPA”), or any other federal, state, or local law. You and the Company acknowledge and agree that nothing in this Agreement shall apply to any claims under the ADEA or OWBPA that may arise after the date that you sign this Agreement. You acknowledge that the Company provided you with a copy of the Agreement in advance of your execution of the Agreement and advised you by means of this written Agreement as follows:

(a)that you are advised to consult with an attorney of your choosing prior to executing the Agreement;

(b)that you have a period of 21 calendar days to review and consider the Agreement before executing it, and that if you sign this Agreement in less than 21 calendar days, then by doing so you voluntarily agreed to waive your right to the full 21 day review period;

(c)that changes to this Agreement, whether material or immaterial, will not restart the running of the 21 day review period;

(d)that for a period of seven (7) days following your execution of this Agreement, you may revoke the Agreement, and the Agreement shall not become effective or enforceable until this seven-day revocation period expires without you revocation;

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Retirement Agreement                                       April 19, 2021

(e)that during the seven (7) day revocation period, you may revoke the Agreement by providing written notice of revocation sent by personal or courier delivery to the office of the Company’s Chief Executive Officer, so that it is received before the seven-day revocation period expires; and

(f)that if you fail to sign the Agreement on or before the date that the 21 day review period expires, or if you revoke the Agreement before the expiration of seven-day revocation period, this Agreement shall not become effective or enforceable and you will not be entitled to receive the consideration described in Section 2(b).

By signing this Agreement and accepting the benefits provided, you agree that, except for any claims expressly excluded from this release and except as provided below, you will not hereafter pursue any claims against the Released Parties for or on account of anything, whether known or unknown, foreseen or unforeseen, which has occurred up to the date you sign this Agreement (both initially and on the Retirement Date) and which relates to your employment with the Company. You understand no section in this Agreement is intended to or shall limit, prevent, impede or interfere with your non-waivable right, without prior notice to the Company, to provide information to the government, participate in investigations, testify in proceedings regarding the Company’s past or future conduct, or engage in any activities protected under whistleblower statutes, or to receive and fully retain a monetary award from a government-administered whistleblower award program for providing information directly to a government agency. Notwithstanding the above, unless otherwise prohibited by law, by signing this Agreement, you release and waive your right to claim or recover monetary damages directly from the Company in any charge, complaint, or lawsuit filed by you or by anyone else on your behalf, for any released claims. This release does not include any claims for breach of this Agreement or any claims that may arise after the date you sign this Agreement (both initially and on the Retirement Date). You further represent and warrant that you are not aware of any facts or circumstances which might constitute either a violation of law or a violation of Trecora’s Code of Conduct, its corporate policies or justify a claim against the Company for a violation of the Sarbanes-Oxley Act of 2002 and/or the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and/or any rules, regulations or binding guidance thereunder.

You agree that you and/or your dependents (as applicable) shall no longer be eligible for the consideration described in Section 2(b) in the event: (i) the Company terminates your employment for Cause (as defined below) prior to your Retirement Date, (ii) you materially breach the terms of this Agreement and fail to cure said breach within sixty (60) days after receipt of written notice from the Company, or (iii) you file or assert any claim related to your employment with, or separation from, the Company against the Released Parties for any reason other than claims for workers compensation benefits, or accrued and vested retirement benefits, health care benefits, life, or disability benefits as determined through the Retirement Date under the Company’s applicable and governing plans and programs or for violation of the terms of this Agreement. In addition, you agree to indemnify and hold harmless the Released Parties from any claim, loss or expense (including attorneys’ fees) incurred by them arising out of your breach of any portion of this Agreement.

Nothing contained in Section 4, Section 5 or this Section 8 is intended to restrict you in any way from (i) making any disclosure of information required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by any federal regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s legal, compliance or human resources officers; (iii) filing, testifying or participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization; or (iv) filing any claims that are not permitted to be waived or released under the Fair Labor Standards Act or other applicable law.

For purposes of this Agreement, “Cause” shall mean any of the following: (i) breaching any obligation to the Company or violating the Company’s Code of Conduct, Insider Trading Policy or any other written policies of the Company; (ii) unlawfully trading in the securities of Trecora or of any other company based on information gained as a result of your employment with the Company; (iii) committing a felony or other 
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Retirement Agreement                                       April 19, 2021

serious crime; (iv) engaging in any activity that constitutes gross misconduct in the performance of your employment duties; or (v) engaging in any action that constitutes gross negligence or misconduct and that causes or contributes to the need for an accounting adjustment to Trecora’s financial results.

9.Indemnification and Insurance:  The Company shall indemnify you and provide for the advance of expenses in connection therewith, subject to and in accordance with Trecora’s By-Laws.

10.Right to Withhold or Deduct:  Notwithstanding anything to the contrary in this Agreement, the Company shall, and is hereby authorized to, withhold or deduct from any amounts payable by the Company to you, your beneficiary or your legal representative under this Agreement, any federal, state or municipal taxes, social security contributions or other amounts required to be withheld by law, and to remit such amounts to the proper authorities. The Company is also hereby authorized to withhold or deduct appropriate amounts with respect to any benefit plans or programs or other elections made by you.

11.Tax Advice: You are encouraged to obtain your own tax advice regarding your compensation from the Company. You acknowledge and agree that the Company does not guarantee any particular tax treatment and that you are solely responsible for any taxes that you owe as a result of this Agreement.

12.Definitions and Headings:  Unless otherwise expressly noted, all references to: (a) “Section” shall mean, with respect to such reference, each such section or subsection of this Agreement, and (b) “Attachment” shall mean, with respect to any such reference, each such schedule or exhibit attached to this Agreement.  The headings of any section or paragraph of this Agreement are for convenience of reference only and shall not be used to interpret any provision of this Agreement.

13.Non-Waiver:  No failure or delay by the Company in exercising any right, power or privilege under this Agreement shall constitute a waiver of such right, power or privilege, nor shall any single or partial exercise of such right, power or privilege preclude any other or further exercise of such right, power or privilege or the exercise of any right, power or privilege hereunder.

14.Assignment and Beneficiaries:  Any assignment of this Agreement by you without the Company’s prior written consent, shall not be permitted.  This Agreement shall be binding upon and shall be for the benefit of the Company, its successors and assigns and you and, in the event of your death, your estate or legal representative.

15.Severability:  The provisions of this Agreement are to be deemed severable and the invalidity, illegality or unenforceability of one or more of such provisions shall not affect the validity, legality or enforceability of the remaining provisions.

16.Governing Law:  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Texas, U.S.A., without regard to its otherwise applicable conflicts of laws rules.

17.Governing Jurisdiction:  Subject to the terms of this Agreement, any civil action relating to or arising from this Agreement, including any dispute as to the validity or existence of this Agreement and/or this clause, shall be brought in the state or federal courts located in Houston, Texas, and you hereby consent to the exclusive jurisdiction of such courts in respect of such civil action.

18.Entire Agreement: This letter constitutes the entire agreement of you and the Company, and supersedes any prior or contemporaneous written or oral agreements between the parties regarding the subject matter contained in this letter, and this letter may only be modified by a written document signed by you and a duly authorized representative of the Company.

19.Execution by Counterparts and Facsimile:  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken 
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Retirement Agreement                                       April 19, 2021

together shall constitute one and the same agreement.  Signatures of the Company and you exchanged by electronic email in portable document format (pdf.) or facsimile shall be binding on each party.

[remainder of page intentionally left blank]

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Retirement Agreement                                       April 19, 2021

Thank you for your many years leading Trecora.  We wish you and your family all the best.

Sincerely,

Trecora Resources

By: /s/ Patrick D. Quarles    
    Patrick D. Quarles
    President and Chief Executive Officer

By signing below, you acknowledge that you understand and voluntarily accept the arrangements described herein. You acknowledge and agree that you have had the opportunity to review this Agreement with an attorney, that you fully understand this Agreement, that you were not coerced into signing it, and that you signed it knowingly and voluntarily. You also acknowledge that you have not received any promise or inducement to sign this Agreement except as expressly set forth herein.

Accepted and agreed to
as of April 19, 2021

/s/ John (Dick) R. Townsend    
John (Dick) R. Townsend

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Retirement Agreement                                       April 19, 2021

ATTACHMENT A
Equity Awards Summary

Time-Based Restricted Stock Unit Awards

									
	Equity Award Year	Vesting Schedule
	Vesting Date	Restricted Stock Units
(Time-Based)

	2019	02/15/2022	3,075
	2020	02/13/2022	4,519
	02/13/2023	4,519
	Total		12,113

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