Document:

Exhibit 10.7

 

CONTINUITY AGREEMENT

 

This Agreement (the “Agreement”)
is dated as of November 28, 2005 by and between Tronox Incorporated, a
Delaware corporation (the “Company”), and Gregory E. Thomas (the “Executive”).

 

WHEREAS, the Company’s
Board of Directors considers the continued services of key executives of the
Company to be in the best interests of the Company and its stockholders; and

 

WHEREAS, the Company’s
Board of Directors desires to assure, and has determined that it is appropriate
and in the best interests of the Company and its stockholders to reinforce and
encourage the continued attention and dedication of key executives of the
Company to their duties of employment without personal distraction or conflict
of interest in circumstances which could arise from the occurrence of a change
in control of the Company; and

 

WHEREAS, the Company’s
Board of Directors has authorized the Company to enter into continuity
agreements with those key executives of the Company and any of its respective
subsidiaries (all of such entities, together with the Company, are hereinafter
referred to as an “Employer”), such agreements to set forth the severance
compensation which the Company agrees under certain circumstances to pay such
executives; and

 

WHEREAS, the Executive is
a key executive of an Employer and has been designated as an executive to be
offered such a continuity compensation agreement with the Company.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements contained
herein and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company and the Executive agree as
follows:

 

1.             Term.  This
Agreement shall become effective on the date the Company first offers shares of
its Class A common stock in an initial public offering (the “Effective
Date”) and remain in effect until the third anniversary thereof; provided,
however, that this Agreement shall automatically renew for an additional
year on each successive anniversary of the Effective Date, unless an Employer
informs the Executive, in writing, at least 180 days prior to the renewal date,
that this Agreement shall not be renewed. 
The foregoing shall constitute the “Term” of this Agreement for purposes
hereof.

 

2.             Change in Control.  No compensation or other benefit pursuant to Section 4
hereof shall be payable under this Agreement unless and until either (i) a
Change in Control of the Company (as hereinafter defined) shall have occurred
while the Executive is employed by an Employer and the Executive’s employment
by an Employer thereafter shall have terminated in accordance with Section 3
hereof or (ii) the Executive’s employment by an Employer shall have
terminated in accordance with Section 3(a)(ii) hereof prior to the
occurrence of the Change in Control. 
Except as provided in Section 2(e) hereof, for purposes of
this Agreement, a “Change 

 

 

in Control” shall be
deemed to have occurred if, beginning on the Effective Date and before the end
of the Term of this Agreement:

 

(a)           any person (“Person”)
as defined in Section 3(a)(9) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and as used in Section 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d) of the Exchange Act
but excluding the Company and any subsidiary and any employee benefit plan
sponsored or maintained by the Company or any subsidiary (including any trustee
of such plan acting as trustee), directly or indirectly, becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of
the Company representing 25% or more of the combined voting power of the
Company’s then outstanding securities (other than indirectly as a result of the
Company’s redemption of its securities); or

 

(b)           the consummation
of any merger or other business combination of the Company, sale of 50% or more
of the Company’s assets, liquidation or dissolution of the Company or
combination of the foregoing transactions (the “Transactions”) other than a
Transaction immediately following which the shareholders of the Company and any
trustee or fiduciary of any Company employee benefit plan immediately prior to
the Transaction own at least 60% of the voting power, directly or indirectly,
of (A) the surviving corporation in any such merger or other business
combination; (B) the purchaser of or successor to the Company’s assets; (C) both
the surviving corporation and the purchaser in the event of any combination of
Transactions; or (D) the parent company owning 100% of such surviving
corporation, purchaser or both the surviving corporation and the purchaser, as
the case may be; or

 

(c)           within any
twenty-four month period, the persons who were directors immediately before the
beginning of such period (the “Incumbent Directors”) shall cease (for any
reason other than death) to constitute at least a majority of the Board or the
board of directors of a successor to the Company.  For this purpose, any director who was not a
director at the beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not nominated by
a person who commenced or threatened to commence an election contest or proxy
solicitation by or on behalf of a Person (other than the Board) or who has
entered into an agreement to effect a Change in Control or expressed an
intention to cause such a Change in Control); or

 

(d)           a majority of the members of the
Board of Directors in office immediately prior to a proposed transaction
determine by a written resolution that such proposed transaction, if taken,
will be deemed a Change in Control and such proposed transaction is
consummated.

 

(e)           The following events shall not
constitute a Change in Control under this Agreement and shall not be considered
in determining whether a Change in Control has occurred:

 

(i)            the sale or purchase of the
Company’s Class A common stock in connection with the initial public
offering of such stock;

 

(ii)           the distribution to Kerr-McGee
shareholders of the shares of the Company’s Class B common stock that
Kerr-McGee owns subsequent to the Effective Date;

 

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(iii)          Kerr-McGee Corporation exchanging
shares of the Company’s Class B common stock that it owns subsequent to
the completion of the initial public offering of such stock with its
shareholders in return for shares of Kerr-McGee Corporation;

 

(iv)          any event that qualifies as a “change
in control” under the terms of any agreement providing for continuity
compensation under similar terms and conditions as this Agreement if such
agreement was entered into by the Executive and Kerr-McGee Corporation before
the Effective Date of this Agreement and remains in effect on the date of the
qualifying event; or

 

(v)           if the Executive is not a party to an
agreement described in Section 2(e)(iv), above, any event that would
qualify as a “change in control” under the terms of this Agreement if the term “Kerr-McGee
Corporation” were substituted for the term “Company” in Section 2 hereof
and this Section 2(e) were disregarded.

 

3.             Termination of Employment; Definitions.

 

(a)           Termination without Cause by the
Company or for Good Reason by the Executive.

 

(i)  The Executive
shall be entitled to the compensation provided for in Section 4 hereof, if
within two years after a Change in Control, the Executive’s employment by an
Employer shall be terminated (A) by an Employer for any reason other than
(I) the Executive’s Disability or Retirement, (II) the Executive’s death or
(III) for Cause, or (B) by the Executive with Good Reason (all terms are
as hereinafter defined), unless such termination occurs with the Executive’s
prior written consent expressly waiving the rights provided hereunder.

 

(ii)  In addition,
the Executive shall be entitled to the compensation provided for in Section 4
hereof if, (A) in the event that an agreement is signed which, if
consummated, would result in a Change of Control and, within 12 months
thereafter, the Executive is terminated without Cause by the Company (other
than on account of Executive’s Death or Disability) or terminates employment
with Good Reason prior to the Change in Control, (B) such termination is
at the request or instigation of the acquiror or merger partner or otherwise in
connection with the anticipated Change in Control, and (C) within said 12
month period, such Change in Control actually occurs.

 

(b)           Disability.  For purposes of this Agreement, “Disability”
shall mean the Executive’s absence from the full-time performance of the
Executive’s duties (as such duties existed immediately prior to such absence)
for 180 consecutive business days, when the Executive is disabled as a result
of incapacity due to physical or mental illness.

 

(c)           Retirement.  For purposes of this Agreement, “Retirement”
shall mean the Executive’s voluntary termination of employment pursuant to
late, normal or early retirement under a pension plan sponsored by an Employer,
as defined in such plan, but only if such retirement occurs prior to a
termination by an Employer without Cause or by the Executive for Good Reason.

 

(d)           Cause.  For purposes of this Agreement, “Cause” shall
mean:

 

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(i)            the
willful and continued failure of the Executive to perform substantially all of
his or her duties with an Employer (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to such Executive by the Board of
Directors (the “Board”) of the Company which specifically identifies the manner
in which the Board believes that the Executive has not substantially performed
his or her duties;

 

(ii)           the
willful engaging by the Executive in gross misconduct which is materially and
demonstrably injurious to the Company or any Employer; or

 

(iii)          the conviction of, or plea of guilty
or nolo  contendere to, a felony.

 

Termination of the Executive
for Cause shall be made by delivery to the Executive of a copy of a resolution
duly adopted by the affirmative vote of not less than a three-fourths majority
of the non-employee Directors of the Company or of the ultimate parent of the
entity which caused the Change in Control (if the Company has become a
subsidiary) at a meeting of such Directors called and held for such purpose,
after 30 days prior written notice to the Executive specifying the basis for
such termination and the particulars thereof and a reasonable opportunity for
the Executive to cure or otherwise resolve the behavior in question prior to
such meeting, finding that in the reasonable judgment of such Directors, the
conduct or event set forth in any of clauses (i) through (iii) above has
occurred and that such occurrence warrants the Executive’s termination.

 

(e)           Good Reason.  For purposes of this Agreement, “Good Reason”
shall mean the occurrence, within the Term of this Agreement, of any of the
following without the Executive’s written consent expressly waiving the rights
provided hereunder:

 

(i)            any material and adverse diminution
in the Executive’s duties or responsibilities with the Company (or any
affiliate thereof) from those in effect immediately prior to the Change in
Control;

 

(ii)           any reduction in the Executive’s
annual base salary or any adverse change in bonus opportunity or participation
in cash bonus programs in effect immediately prior to the Change in Control;

 

(iii)          any requirement
that Executive be based at a location more than 35 miles from the location at
which the Executive was based immediately prior to the Change in Control (or a
substantial increase in the amount of travel Executive is required to do
because of a relocation of the executive offices);

 

(iv)          any failure by
the Company to obtain from any successor to the Company an agreement reasonably
satisfactory to the Executive to assume and perform this Agreement, as
contemplated by Section 10(a) hereof; or

 

(v)           any amendment, reduction or
termination of any benefit plan, program or arrangement, which has the effect
of causing the Executive to have benefits which are not substantially similar,
in the aggregate, to those benefits provided to the Executive immediately prior
to the Change in Control.

 

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Notwithstanding the
foregoing, in the event Executive provides the Company with a Notice of
Termination (as defined below) referencing this Section 3(e), the Company
shall have 30 days thereafter in which to cure or resolve the behavior
otherwise constituting Good Reason.  Any
good faith determination by Executive that Good Reason exists shall be presumed
correct and shall be binding upon the Company.

 

(f)            Notice of Termination.  Any purported termination of the Executive’s
employment (other than on account of Executive’s death) with an Employer, if
such termination occurs after the occurrence of a Change in Control or under
circumstances specified under Section 3(a)(ii) above, shall be
communicated by a Notice of Termination to the Executive, if such termination
is by an Employer, or to an Employer, if such termination is by the
Executive.  For purposes of this
Agreement, “Notice of Termination” shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment under the
provisions so indicated.  For purposes of this Agreement, no
purported termination of Executive’s employment with an Employer shall be
effective without such a Notice of Termination having been given.

 

4.             Compensation Upon Termination After a Change in
Control.

 

Subject to Section 9
hereof, if within two years of a Change in Control, the Executive’s employment
by an Employer shall be terminated in accordance with Section 3(a) (the
“Termination”), the Executive shall be entitled to the following payments and
benefits:

 

(a)           Severance.  The Company shall pay or cause to be paid to
the Executive a cash severance amount equal to (i) three (3) times
the sum of (A) the Executive’s annual base salary on the date of the
Change in Control (or, if higher, the annual base salary in effect immediately
prior to the giving of the Notice of Termination) and (B) the higher
of:  (x) the average of the actual
bonuses earned by the Executive in respect of the three years prior to the year
in which the Change in Control occurs under the Company’s incentive award
program, or (y) the Executive’s target bonus for the year of Termination, plus (ii) in
lieu of continuation of any of the Executive’s perquisites as provided to the
Executive prior to the Change in Control (or, if greater, at the time of
Termination), a cash payment equal to 7 percent of the Executive’s annual base
salary as in effect on the date of the Change in Control for each of the three (3) years
following the date of Termination.  This
cash severance amount shall be payable in a lump sum.

 

(b)           Additional Payments and Benefits.  The Executive shall also be entitled to:

 

(i)            a lump sum cash payment equal to the
sum of (A) the Executive’s accrued but unpaid annual base salary through
the date of Termination, (B) the unpaid portion, if any, of bonuses
previously earned by the Executive pursuant to the Company’s Executive
incentive award program, plus the pro rata portion of the bonus to be paid for
the year in which the date of Termination occurs (calculated through the date
of Termination), (C) an amount, if any, equal to compensation previously
deferred (excluding any qualified plan deferral) and any accrued vacation pay,
in each case, in full satisfaction of Executive’s rights thereto, and (D) an
amount, if any, equal to the value of the number of performance units that the
Executive would have earned if the performance period for such performance
units had ended on the date of the Change in Control or, if greater, the target
number of performance units under the award.

 

5

 

(ii)           a lump sum cash payment equal to the
aggregate sum of (A) additional pension contributions in an amount equal
to the Company’s contributions under the Company’s 401(k) plan, profit sharing
or other savings pension plans (or such other qualified and nonqualified defined
contribution pension plans as then in effect) for the three (3) year
period following the date of Termination (the “Separation Period”) (based on
assumed rates of Executive’s contributions at the level of participation in
effect as of the last date Executive was permitted to participate); and (B) the
difference between the discounted present value (i.e., lump sum value) of the
annuity benefit the Executive is entitled to receive under the Company’s
qualified and nonqualified defined benefit retirement programs in which the
Executive is a participant calculated through the date of Termination and the
discounted present value (i.e., lump sum value) of the annuity benefit the
Executive would be entitled to receive under such retirement programs
calculated after adding an additional five years of credit to age and service
up to a maximum of age 65 as if the executive had been paid at the rate used to
calculate the payments under Section 4(a), provided that the additional
credits added with respect to each retirement program shall not exceed five
years when added to any additional credits already provided by the terms of the
such programs in respect of the Termination covered hereby.

 

(iii)          continued medical, dental, vision, and
life insurance coverage (excluding accident, death, and disability insurance)
for the Executive and the Executive’s eligible dependents or, to the extent
such coverage is not commercially available, such other arrangements reasonably
acceptable to the Executive, on the same basis as in effect prior to the Change
in Control or the Executive’s Termination, whichever is deemed to provide for
more substantial benefits, for a period ending on the earlier of (A) the
end of the Separation Period or (B) the commencement of comparable
coverage by the Executive with a subsequent employer;

 

(iv)          unless it would adversely affect the
Company’s ability to use pooling of interest accounting in a Change in Control
transaction in which such accounting is intended to be used, immediate 100%
vesting of all outstanding stock options, stock appreciation rights and
restricted stock granted or issued by any Employer to the extent not previously
vested on or following the Change of Control; and

 

(v)           all other accrued or vested benefits
in accordance with the terms of the applicable plan (with an offset for any
amounts paid under Section 4(b)(i)(C), above).

 

All lump sum payments
under this Section 4 shall be paid within 15 business days after Executive’s
date of Termination, provided, however, that such payment shall
be made 30 days after Termination in the event that the Company requires the
Executive to sign a release at the time of Termination.  Discounted present value (i.e., lump sum
value) for purposes of subsection (ii) above shall be calculated
using a discount factor equal to one percentage point below the rate of
interest, per annum, publicly announced by The Chase Manhattan Bank, N.A. as
its prime rate in effect at its principal office in New York City, and using
the actuarial factors set forth in the defined benefit retirement program.

 

(c)           Outplacement.  If so requested by the Executive,
outplacement services shall be provided by a professional outplacement provider
selected by Executive; provided, however, that such outplacement
services shall be provided the Executive at an aggregate total cost to the
Company of not more than ten (10) percent of such Executive’s annual base
salary.

 

(d)           Withholding.  Payments and benefits provided pursuant to
this Section 4 shall be subject to any applicable payroll and other taxes
required to be withheld.

 

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5.             Compensation Upon Termination for Death, Disability
or Retirement.

 

If an Executive’s
employment is terminated by reason of Death, Disability or Retirement prior to
any other termination, Executive will receive:

 

(a)           the sum of (i) Executive’s
accrued but unpaid salary through the date of Termination, (ii) the pro
rata portion of the Executive’s target bonus for the year of Executive’s Death
or Disability (calculated through the date of Termination), and (iii) an
amount equal to any compensation previously deferred and any accrued vacation
pay; and

 

(b)           other accrued or vested benefits in
accordance with the terms of the applicable plan (with an offset for any
amounts paid under item (a)(iii), above).

 

6.             Excess Parachute Payments.

 

(a) (i) If it is determined (as hereafter
provided) that any payment or distribution by the Company or any Employer to or
for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any restriction on or the vesting
or exercisability of any of the foregoing (a “Severance Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code (or any
successor provision thereto) by reason of being “contingent on a change in
ownership or control” of the Company, within the meaning of Section 280G
of the Code (or any successor provision thereto) or to any similar tax imposed
by state or local law, or any interest or penalties with respect to such excise
tax (such tax or taxes, together with any such interest and penalties, are
hereafter collectively referred to as the “Excise Tax”), then the Executive
shall be entitled to receive an additional payment or payments (a “Gross-Up
Payment”) in an amount such that, after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Severance Payments.

 

(ii)           Subject to the provisions of Section 6(a)(i) hereof,
all determinations required to be made under this Section 6, including
whether an Excise Tax is payable by the Executive and the amount of such Excise
Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by the nationally recognized firm of certified public
accountants (the “Accounting Firm”) used by the Company prior to the Change in
Control (or, if such Accounting Firm declines to serve, the Accounting Firm
shall be a nationally recognized firm of certified public accountants selected
by the Executive).  The Accounting Firm
shall be directed by the Company or the Executive to submit its preliminary
determination and detailed supporting calculations to both the Company and the
Executive within 15 calendar days after the Termination Date, if applicable,
and any other such time or times as may be requested by the Company or the
Executive.  If the Accounting Firm
determines that any Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to, or for the benefit of, the Executive
within five business days after receipt of such determination and
calculations.  If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the Executive with an opinion
that he has substantial authority not to report any Excise Tax on 

 

7

 

his/her federal, state,
local income or other tax return.  Any
determination by the Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive absent a contrary
determination by the Internal Revenue Services or a court of competent
jurisdiction; provided, however, that no such determination shall
eliminate or reduce the Company’s obligation to provide any Gross-Up Payment
that shall be due as a result of such contrary determination.  As a result of the uncertainty in the
application of Section 4999 of the Code (or any successor provision
thereto) and the possibility of similar uncertainty regarding state or local
tax law at the time of any determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments that will not have been made by the Company
should have been made (an “Underpayment”), consistent with the calculations
required to be made hereunder.  In the
event that the Company exhausts or fails to pursue its remedies pursuant to Section 6(a) hereof
and the Executive thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and the Executive as promptly as
possible.  Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the Executive within
five business days after receipt of such determination and calculations.

 

(iii)          The federal, state and local income or
other tax returns filed by the Executive (or any filing made by a consolidated
tax group which includes the Company) shall be prepared and filed on a
consistent basis with the determination of the Accounting Firm with respect to
the Excise Tax payable by the Executive. 
The Executive shall make proper payment of the amount of any Excise Tax,
and at the request of the Company, provide to the Company true and correct
copies (with any amendments) of his/her federal income tax return as filed with
the Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment.  If prior to the filing of the Executive’s
federal income tax return, or corresponding state or local tax return, if
relevant, the Accounting Firm determines that the amount of the Gross-Up
Payment should be reduced, the Executive shall within five business days pay to
the Company the amount of such reduction.

 

(iv)          The Company and the Executive shall
each provide the Accounting Firm access to and copies of any books, records and
documents in the possession of the Company or the Executive, as the case may
be, reasonably requested by the Accounting Firm, and otherwise cooperate with
the Accounting Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(a) hereof.

 

(v)           The fees and expenses of the
Accounting Firm for its services in connection with the determinations and
calculations contemplated by Sections 6(a)(ii) and (iv) hereof shall
be borne by the Company.  If such fees
and expenses are initially advanced by the Executive, the Company shall
reimburse the Executive the full amount of such fees and expenses within five
business days after receipt from the Executive of a statement therefor and
reasonable evidence of his/her payment thereof.

 

(b)           In the event that the Internal
Revenue Service claims that any payment or benefit received under this
Agreement constitutes an “excess parachute payment,” within the meaning of Section 280G(b)(1) of
the Code, the Executive shall notify the Company in writing of such claim.  Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.

 

8

 

The Executive shall not
pay such claim prior to the expiration of the 30 day period following the date
on which the Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due).  If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall (i) give the Company any
information reasonably requested by the Company relating to such claim; (ii) take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company and reasonably satisfactory to the
Executive; (iii) cooperate with the Company in good faith in order to
effectively contest such claim; and (iv) permit the Company to participate
in any proceedings relating to such claim; provided, however,
that the Company shall bear and pay directly all costs and expenses (including,
but not limited to, additional interest and penalties and related legal,
consulting or other similar fees) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for and
against any Excise Tax or other tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of
costs and expenses.

 

(c)  The Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the Executive
on an interest-free basis, and shall indemnify and hold the Executive harmless,
on an after-tax basis, from any Excise Tax or other tax (including interest and
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided,
further, that if the Executive is required to extend the statute of
limitations to enable the Company to contest such claim, the Executive may
limit this extension solely to such contested amount.  The Company’s control of the contest shall be
limited to issues with respect to which a corporate deduction would be
disallowed pursuant to Section 280G of the Code and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.  In addition, no position may be taken nor any
final resolution be agreed to by the Company without the Executive’s consent if
such position or resolution could reasonably be expected to adversely affect
the Executive (including any other tax position of the Executive unrelated to
matters covered hereby).

 

(d)  If, after the
receipt by the Executive of an amount advanced by the Company in connection
with the contest of the Excise Tax claim, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto); provided, however,
if the amount of that refund exceeds the amount advanced by the Company or it
is otherwise determined for any reason that additional amounts could be paid to
the Named Executive without incurring any Excise Tax, any such amount will be
promptly paid by the Company to the named Executive (or shall be applied to
reduce any amount that Executive would otherwise be required to pay the
Company).  If, after the receipt by the
Executive of an amount advanced by the Company in connection with an Excise Tax
claim, a determination is made that the Executive shall not be entitled to any
refund with respect to such 

 

9

 

claim and the Company
does not notify the Executive in writing of its intent to contest the denial of
such refund prior to the expiration of 30 days after such determination, such
advance shall be forgiven and shall not be required to be repaid and shall be
deemed to be in consideration for services rendered after the date of the
Termination.

 

7.             Expenses. 
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for reasonable
legal fees (including without limitation, any and all court costs and
reasonable attorneys’ fees and expenses) incurred by the Executive in
connection with or as a result of any claim, action or proceeding brought by
the Company or the Executive with respect to or arising out of this Agreement
or any provision hereof; provided, however, that the Company
shall have no obligation to pay any such legal fees, if (i) in the case of
an action brought by the Executive, the Company is successful in establishing
with the court that the Executive’s action was frivolous or otherwise without
any reasonable legal or factual basis; or (ii) in connection with any such
claim, action or proceeding arising out of Section 12 of this Agreement.

 

8.             Obligations Absolute; Non-Exclusivity of Rights;
Joint Several Liability.

 

(a)           The obligations of the Company to
make the payments to the Executive, and to make the arrangements, provided for
herein shall be absolute and unconditional and shall not be reduced by any
circumstances, including without limitation any set-off, counterclaim,
recoupment, defense or other right which the Company may have against the
Executive or any third party at any time.

 

(b)           Nothing in this Agreement shall
prevent or limit the Executive’s continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any other Employer and for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any
agreements with the Company or any other Employer.

 

(c)           Each entity included in the definition
of “Employer” and any successors or assigns shall be joint and severally liable
with the Company under this Agreement.

 

9.             Not an Employment Agreement; Effect On Other Rights.

 

(a)           This Agreement is not, and nothing
herein shall be deemed to create, a contract of employment between the
Executive and the Company. The Company may terminate the employment of the
Executive by the Company at any time, subject to the terms of this Agreement
and/or any employment agreement or arrangement between the Company and the
Executive that may then be in effect.

 

(b)           This Agreement supersedes all prior
agreements covering change in control or any other subject matter covered by
this Agreement and Executive hereby represents that the Executive has no other
oral or written representations, understandings or agreements with the Company
or any of its officers, directors or representatives covering any such subject
matter and agrees that any and all prior written agreements relating to such
subject matter shall be terminated effective as of the date of execution of
this Agreement and shall be of no further force or effect.

 

10

 

10.           Successors; Binding Agreement,
Assignment.

 

(a)           The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business of the Company, by
agreement to expressly, absolutely and unconditionally assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a material breach of this Agreement and shall
entitle the Executive to terminate the Executive’s employment with the Company
or such successor for Good Reason immediately prior to or at any time after
such succession. As used in this Agreement, “Company” shall mean (i) the
Company as hereinbefore defined, and (ii) any successor to all the stock
of the Company or to all or substantially all of the Company’s business or
assets which executes and delivers an agreement provided for in this Section 10(a) or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law, including any parent or subsidiary of such a successor.

 

(b)           This Agreement shall inure to the
benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amount would be
payable to the Executive hereunder if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive’s estate or designated
beneficiary.  Neither this Agreement nor
any right arising hereunder may be assigned or pledged by the Executive.

 

11.           Notice.  For purpose of this Agreement, notices and
all other communications provided for in this Agreement or contemplated hereby
shall be in writing and shall be deemed to have been duly given when personally
delivered, delivered by a nationally recognized overnight delivery service or
when mailed United States certified or registered mail, return receipt
requested, postage prepaid, and addressed, in the case of the Company, to the
Company at:

 

Tronox Incorporated

123 Robert S. Kerr Avenue

P.O. Box 268859

Oklahoma City, Oklahoma
73126-8859

Attention:  Chief Executive Officer

(with a copy to General
Counsel)

 

and in the case of the
Executive, to the Executive at the address set forth on the execution page at
the end hereof.

 

Either party may
designate a different address by giving notice of change of address in the
manner provided above, except that notices of change of address shall be
effective only upon receipt.

 

12.  Confidentiality.

 

(a)           The Executive shall retain in
confidence any and all confidential information concerning the Company and its
respective business which is now known or hereafter becomes known to the
Executive, except as otherwise required by law and except information (i) ascertainable
or obtained from public information, (ii) received by the Executive 

 

11

 

at any time after the Executive’s employment by the Company shall have
terminated, from a third party not employed by or otherwise affiliated with the
Company or (iii) which is or becomes known to the public by any means
other than a breach of this Section 12. 
Upon the Termination of employment, the Executive will not take or keep
any proprietary or confidential information or documentation belonging to the
Company.

 

(b)           The Executive acknowledges and agrees
that the Company’s remedies at law for a breach or threatened breach of any of
the provisions of this Section 12 would be inadequate and, in recognition
of this fact, Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to cease making any payments or providing
any benefit otherwise required by this Agreement during the pendency of any
dispute involving such Section and to obtain equitable relief in the form
of specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.  Upon the resolution of such dispute, any
payments or benefits required by this Agreement which were suspended during the
pendency of the dispute shall be paid or provided to the Executive if it is
determined that no breach of this Section 12 occurred.

 

This paragraph 12 shall
survive this Agreement.

 

13.           Release. In the event that the
Company requests a release from the Executive, in the form attached hereto as Exhibit A,
then as a condition to providing any payments or benefits under this Agreement,
the Executive shall deliver such release.

 

14.           Miscellaneous.  No provision of this Agreement may be
amended, altered, modified, waived or discharged unless such amendment,
alteration, modification, waiver or discharge is agreed to in writing signed by
the Executive and such officer of the Company as shall be specifically
designated by the Committee or by the Board of Directors of the Company.  No waiver by either party, at any time, of
any breach by the other party of, or of compliance by the other party with, any
condition or provision of this Agreement to be performed or complied with by such
other party shall be deemed a waiver of any similar or dissimilar provision or
condition of this Agreement or any other breach of or failure to comply with
the same condition or provision at the same time or at any prior or subsequent
time.  No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in this
Agreement.

 

15.           Severability.  If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be affected thereby. To the extent permitted by applicable law, each party
hereto waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.

 

16.           Governing Law; Venue.  The validity, interpretation, construction
and performance of this Agreement shall be governed exclusively by the laws of
the State of Delaware without giving effect to
its conflict of laws rules.  For purposes
of jurisdiction and venue, the Company and each Employer hereby consents to
jurisdiction and venue in any suit, action or proceeding with respect to this
Agreement in any court of competent jurisdiction in the state in which
Executive resides at the commencement of such suit, action or proceeding and
waives any objection, challenge or dispute as to such jurisdiction or venue
being proper.

 

12

 

17.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.

 

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

 

	
   

  	
  TRONOX INCORPORATED.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert M. Wohleber

  	
   

  
	
   

  	
   

  	
  Robert M. Wohleber

  
	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory E. Thomas

  	
   

  
	
   

  	
   

  	
  Gregory E. Thomas

  

 

13

 

Exhibit A

 

RELEASE

 

[                    ] (“Executive”), for and in
consideration of the payments and benefits that Executive shall receive under
this Agreement, hereby executes the following General Release (“Release”) and
agrees as follows:

 

1.             Executive, on behalf of Executive, Executive’s agents,
assignees, attorneys, successors, assigns, heirs and executors, to, and
Executive does hereby fully and completely forever release the Company and its
affiliates, predecessors and successors and all of their respective past and/or
present officers, directors, partners, members, managing members, managers,
Executives, agents, representatives, administrators, attorneys, insurers and
fiduciaries in their individual and/or representative capacities (hereinafter
collectively referred to as the “Releasees”), from any and all causes of
action, suits, agreements, promises, damages, disputes, controversies,
contentions, differences, judgments, claims, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
variances, trespasses, extents, executions and demands of any kind whatsoever,
which Executive or Executive’s heirs, executors, administrators, successors and
assigns ever had, now have or may have against the Releasees or any of them, in
law, admiralty or equity, whether known or unknown to Executive, for, upon, or
by reason of, any matter, action, omission, course or thing whatsoever
occurring up to the date this Release is signed by Executive, including,
without limitation, in connection with or in relationship to Executive’s
employment or other service relationship with the Company or its affiliates,
the termination of any such employment or service relationship and any
applicable employment, compensatory or equity arrangement with the Company or
its respective affiliates; provided that such released claims shall not include
any claims to enforce Executive’s rights under, or with respect to, this
Release (such released claims are collectively referred to herein as the “Released
Claims”).

 

2.             Notwithstanding the generality of clause (1) above,
the Released Claims include, without limitation, (a) any and all claims
under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Civil Rights Act of 1971, the Civil Rights Act of
1991, the Fair Labor Standards Act, the Executive Retirement Income Security
Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave
Act of 1993, and any and all other federal, state or local laws, statutes, rules and
regulations pertaining to employment or otherwise, and (b) any claims for
wrongful discharge, breach of contract, fraud, misrepresentation or any
compensation claims, or any other claims under any statute, rule, regulation or
under the common law, including compensatory damages, punitive damages,
attorney’s fees, costs, expenses and all claims for any other type of damage or
relief.

 

3.             This means that, by signing this Release, the Executive
shall have waived any right to which the Executive may have had to bring a
lawsuit or make any claim against the Releasees based on any acts or omissions
of the releasees up to the date of the signing of this Release.

 

4.             Executive represents that he has read carefully and
fully understands the terms of this Release, and that Executive has been
advised to consult with an attorney and have had the opportunity to consult
with an attorney prior to signing this Release. 
Executive acknowledges that he is executing this Release voluntarily and
knowingly and that he has not relied on any representations, promises or
agreements of any kind made to Executive in connection with 

 

14

 

Executive’s decision to
accept the terms of this Release, other than those set forth in this
Release.  Executive acknowledges that
Executive has been given at least twenty-one (21) days to consider whether
Executive wants to sign this Release and that the Age Discrimination in
Employment Act gives Executive the right to revoke this Release within seven (7) days
after it is signed, and Executive understands that he will not receive any
payments due him under this Release until such seven (7) day revocation
period (the “Revocation Period”) has passed and then, only if Executive has not
revoked this Release.  To the extent
Executive has executed this Release within less than twenty-one (21) days after
its delivery to Executive, Executive hereby acknowledges that his decision to
execute this Release prior to the expiration of such twenty-one (21) day period
was entirely voluntary.

 

 

	
   

  	
   

  	
  TRONOX INCORPORATED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Name:

  

 

15EXHIBIT 10.1

 

FIRST
AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE (the “First
Amendment”) is entered into the 23rd day of November, 2005, by and between BOIN
Properties, LLC, successor-in-interest to William P. McCormick (“Lessor”) and
McCormick & Schmick Restaurant Corp., successor-in-interest to Jake’s
Restaurant, Inc. (“Lessee”).

 

RECITALS

 

A.                                   Lessor and Lessee
entered into that certain Lease dated October 13, 1994 (“Lease”) for the
lease of certain lands of Lessor located at 401 SW 12th Avenue, Portland,
Oregon (the “Premises”).

 

B.                                     The Original Term
of the Lease expires at midnight on October 12, 2009. At the option of
Lessee, the Lease may be renewed at the end of the Original Term for an
additional five (5) year period (the “First Renewal Term”), and may be
renewed again at the end of the First Renewal Term for an additional five (5) year
period (the “Second Renewal Term”), on the same terms and conditions, except
that the minimum rental for the First and Second Renewal Terms is as provided
in Sections 3.3 and 3.4 of the Lease.

 

C.                                     Lessor and Lessee
have agreed to revise the Base Rent and Renewal Terms of the Lease for the
mutual benefit of the parties.

 

NOW, THEREFORE, based upon the covenants and
promises contained herein and other good and valuable consideration, and
notwithstanding any provision to the contrary contained in the Lease, and
subject to the terms and conditions contained herein, Lessor and Lessee
mutually agree as follows:

 

1.                                       Lessee hereby
exercises the First and Second Renewal Terms, thereby resulting in a Lease
expiration date of midnight on October 12, 2019, and Lessor hereby accepts
Lessee’s exercise of the Renewal Terms.

 

2.                                       Base Rent for
the extended term through October 12, 2019, shall be in the amount of
$17,500 for each and every month during the term of the Lease on or before the
first day of each month.

 

3.                                       At the option of
the Lessee, the Lease may be renewed at the end of the Second Renewal Term for
an additional five (5) year period (the “Third Renewal Term”), and may be
renewed again at the end of the Third Renewal Term for an additional five (5) year
period (the “Fourth Renewal Term”), on the same terms and conditions as
contained in the Lease, except that the Base Rent for said Third and Fourth
Renewal Terms shall be as provided in Sections 3.3 and 3.4 of the Lease,
respectively.

 

4.                                       All capitalized
terms not defined herein shall have the same meaning as defined in the Lease.
Any inconsistencies between the provisions of this Amendment and the provisions
of the Lease shall be resolved in favor of the provisions of this Amendment
which provisions shall control. In each and every other respect, the provisions
of the Lease shall remain in full force and effect and the Lease is ratified
and reaffirmed as modified hereby.

 

 

IN WITNESS WHEREOF, this First Amendment to
Lease has been executed on the day and year above written.

 

	
   

  	
  LESSOR:

  
	
   

  	
  BOIN PROPERTIES, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ WILLIAM P. MCCORMICK

  	
   

  
	
   

  	
   

  	
  William P. McCormick

  
	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
  McCORMICK & SCHMICK

  
	
   

  	
  RESTAURANT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ SAED MOHSENI

  	
   

  
	
   

  	
   

  	
  Saed Mohseni

  
	
   

  	
   

  	
  Chief Executive Officer

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