an initial annual base salary of $600,000, subject to adjustment on an annual basis by the Board. Under the employment agreement, annual cash and LTI equity award targets were initially set at
100% and 130% of Mr. Quarles base salary, respectively. In addition, Mr. Quarles received a one-time award of 75,000 RSUs (which vested in equal installments over a three-year period) and received a
monthly housing allowance of $5,000 which terminated on the one-year anniversary from the effective date of Mr. Quarles appointment. Subsequent to his employment agreement, the Board authorized an
increase in Mr. Quarles LTI equity award target to 135% for 2020 and 155% for 2021.
Dr. Loggenberg
Contemporaneously with the acquisition of Trecora Chemical in October 2014, the Company entered into an employment contract and severance agreement and covenant not to
compete, solicit and disclose with Dr. Loggenberg. Effective March 7, 2018, Dr. Loggenbergs employment contract was amended to reflect his change in appointment from President of Trecora Chemical to Chief Sustainability Officer
of the Company. In February 2019, Dr. Loggenbergs employment contract was further modified to provide for payment of a base salary of $323,420, subject to adjustment on an annual basis by the Board. He also received a $35,000 signing
bonus and grant of 7,000 restricted shares of the Companys common stock, both in 2014, and a grant of 4,400 RSUs of the Companys common stock in February 2019.
Mr. Pons
In connection with his appointment in May 2021 as Chief
Manufacturing Officer, Mr. Pons executed an offer letter with the Company. Pursuant to his offer letter, Mr. Pons is entitled to an annual base salary of $300,000, subject to adjustment at the discretion of the Company from time to time.
Under the offer letter, Mr. Pons annual cash bonus target was set at 55% and prorated for the periods of service prior to and after May 15, 2021 as follows: (i) for the period from January 1, 2021 to May 15, 2021,
prorated annual cash bonus target set at 40% of the cumulative base salary for the same period; (ii) for the period from May 15, 2021 to December 31, 2021, prorated annual cash bonus target set at 55% of the new base salary for the
same period; and (ii) for future calendar years, an annual cash bonus target set at 55% of the cumulative base salary earned in such applicable calendar year. In addition, Mr. Pons annual LTI equity award target was set at 55% and
prorated for the periods of service prior to and after May 15, 2021 as follows: (i) on February 25, 2021, Mr. Pons was granted 12,640 RSUs based on his then-current annual LTI equity award target of his then current salary (40%
of $225,000); on May 15, 2021, Mr. Pons LTI equity award was prorated and increased by an additional number of RSUs for the period from May 15, 2021 to December 31, 2021 based upon his new annual LTI equity award target of the
new base salary (55% of $300,000); and (iii) for future calendar years, Mr. Pons annual LTI equity award target will be 55% of his base salary in effect at the time of such grant in such applicable calendar year, all such annual LTI
equity award targets being subject to adjustment at the discretion of the Company from time to time.
Mr. Silberman
In connection with his appointment in June 2020 as General Counsel and Secretary, Mr. Silberman executed an offer letter with the Company. Pursuant to his offer
letter Mr. Silberman is entitled to an annual base salary of $325,000 per year, subject to adjustment in the discretion of the Company from time to time. Under the offer letter, Mr. Silbermans annual cash bonus and LTI award targets
were each set at 55% of Mr. Silbermans base salary. In addition, Mr. Silberman received a one-time award of the equivalent of $240,000 in RSUs, which vest in annual 1/3 increments over a
three-year period subject to continued employment. Mr. Silberman also received a housing and relocation package of (i) $5,000 per month for the first 12 months of his employment, and (ii) a lump sum of $35,000 upon relocation to Houston,
Texas. In light of the ongoing COVID-19 pandemic, Mr. Silbermans monthly housing allowance was extended at a lower amount of $3,500 per month until end of June 2022.
Mr. Quarles employment agreement, Dr. Loggenbergs severance agreement and Mr. Silbermans offer letter also include provisions providing
for certain payments upon termination and/or a change in control. For a discussion of these provisions, please see Potential Payments upon Termination or Change in ControlEmployment Agreements and Offer Letters below. In addition,
our NEOs are entitled to certain severance benefits in the event of a change in control. Please see Potential Payments upon Termination or Change in ControlOther Change in Control Severance Arrangements below for information about
these arrangements.
Regulatory Considerations
We account for
the equity compensation expense for our executives under Financial Accounting Standards Board Accounting Standards Codification 718 (ASC 718), which requires us to estimate and record an expense for each award of equity compensation over
the vesting period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is accrued.
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