Exhibit 10.1
RPM INTERNATIONAL INC.
2007 RESTRICTED STOCK PLAN
(As Adopted Effective June 1, 2007)
1. Name and Purpose.
The name of this Plan is the
RPM International Inc. 2007 Restricted Stock Plan. The Plan is
intended to replace the expiring 1997 Restricted Stock Plan in
order to continue: (a) to provide competitive incentives
that will enable the Company to attract, retain, motivate and
reward employees who render services that benefit the Company,
Subsidiaries or Allied Enterprises, and (b) to align the
interests of such employees with the interests of the
Company’s stockholders generally.
2. Eligibility.
Individuals who are Employees of the
Company, a Subsidiary or an Allied Enterprise may become
eligible for Awards under this Plan.
3. Definitions.
As used in this Plan, the following
terms shall be defined as follows:
(a)
Allied Enterprise.
“Allied Enterprise”
means a business enterprise, other than the Company or a
Subsidiary, in which the Company or a Subsidiary has an equity
interest.
(b)
Award.
“Award” means any award of
Restricted Stock which is granted pursuant to the terms of
Section 4.
(c)
Award Agreement.
“Award Agreement” has
the meaning set forth in Section 4(c).
(d)
Beneficiary.
“Beneficiary” means a
person or entity designated in writing by a Participant on such
forms and in accordance with such terms and conditions as the
Committee may prescribe, to whom such Participant’s rights
under the Plan shall pass in the event of the death of the
Participant. If the person or entity so designated is not living
or in existence at the time of the death of the Participant, or
if no such person or entity has been so designated, the
“Beneficiary” shall mean the person or persons in the
first of the following classes in which there are any survivors
of the Participant: (i) his or her spouse at the time of
death, (ii) his or her issue per stirpes, (iii) his or
her parents, and (iv) the executor or administrator of his
or her estate.
(e)
Board.
“Board” means the Board of
Directors of the Company.
(f)
Change in Control.
“Change in Control”
means the occurrence at any time of any of the following events:
(i) The Company is merged or consolidated or reorganized
into or with another corporation or other legal person or
entity, and as a result of such merger, consolidation or
reorganization less than a majority of the combined voting power
of the then-outstanding securities of such corporation, person
or entity immediately after such transaction are held in the
aggregate by the holders of the Voting Stock immediately prior
to such transaction;
(ii) The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation or
other legal person or entity, and less than a majority of the
combined voting power of the then-outstanding securities of such
corporation, person or entity immediately after such sale or
transfer is held in the aggregate by the holders of the Voting
Stock immediately prior to such sale or transfer;
(iii) There is a report filed on Schedule 13D or
Schedule TO (or any successor schedule, form or report),
each as promulgated pursuant to the Exchange Act, disclosing
that any person (as the term “person” is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act) has become the beneficial owner (as the term
“beneficial owner” is defined under Rule
l3d-3
or any successor
rule or regulation promulgated under the Exchange Act) of
securities representing 15% or more of the Voting Power;
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(iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to
Form
8-K
or
Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of the Company has or may
have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction;
(v) If during any period of two consecutive years,
individuals, who at the beginning of any such period, constitute
members of the Board cease for any reason to constitute at least
a majority thereof, unless the nomination for election by the
Company’s stockholders of each new member of the Board was
approved by a vote of at least two-thirds of the members of the
Board then in office who were members of the Board at the
beginning of any such period; or
(vi) The stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company.
Notwithstanding the foregoing provisions of
paragraphs (iii) and (iv) of this definition, a
“Change in Control” shall not be deemed to have
occurred for purposes of this Agreement:
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(1) solely because the Company, a Subsidiary, or any
Company-sponsored employee stock ownership plan or other
employee benefit plan of the Company or any Subsidiary, or any
entity holding shares of Voting Stock for or pursuant to the
terms of any such plan, either files or becomes obligated to
file a report or proxy statement under or in response to
Schedule 13D, Schedule TO,
Form
8-K
or
Schedule 14A (or any successor schedule, form or report or
item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of Voting Stock or because the Company
reports that a change in control of the Company has or may have
occurred or will or may occur in the future by reason of such
beneficial ownership,
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(2) solely because any other person or entity either files
or becomes obligated to file a report on Schedule 13D or
Schedule TO (or any successor schedule, form or report)
under the Exchange Act, disclosing beneficial ownership by it of
shares of Voting Stock, but only if both (A) the
transaction giving rise to such filing or obligation is approved
in advance of consummation thereof by the Board, and (B) at
least a majority of the Voting Power immediately after such
transaction is held in the aggregate by the holders of Voting
Stock immediately prior to such transaction, or
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(3) solely because of a change in control of any Subsidiary.
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As used in this definition of “Change in Control” the
term:
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(A)
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“Voting Power” means, at any time, the total votes
relating to the then-outstanding securities entitled to vote
generally in the election of the Board.
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(B)
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“Voting Stock” means, at any time, the
then-outstanding securities entitled to vote generally in the
election of the Board.
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(g)
Code.
“Code” means the Internal
Revenue Code of 1986, as amended from time to time, and related
Treasury Department regulations and pronouncements. References
to a particular section of the Code shall include references to
any related Treasury Department regulations and pronouncements
and to each of their successors.
(h)
Committee.
“Committee” means the
Compensation Committee of the Board, or the successor of such
Committee, which satisfies the requirements of Section 8(a)
hereof.
(i)
Company.
“Company” means RPM
International Inc., a Delaware corporation, and any corporation
or entity that is a successor to RPM International Inc. or
substantially all of the assets of RPM International Inc., that
assumes the obligations of RPM International Inc. under this
Plan by operation of law or otherwise.
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(j)
Deferred Compensation Plan.
“Deferred
Compensation Plan” means the RPM International Inc.
Deferred Compensation Plan and any related trust, each as
amended from time to time, and any similar deferred compensation
plan of the Company and any related trust.
(k)
Effective Date.
“Effective Date” means
the effective date of this Plan, as provided in Section 7.
(l)
Employee.
“Employee” means any person
who is a common-law employee of the Company, a Subsidiary or an
Allied Enterprise on a full-time or part-time basis.
(m)
Exchange Act.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
(n)
Fair Market Value.
“Fair Market Value”
means, as of any given date, with respect to any Awards granted
hereunder, (i) the closing sale price of a Share on such
date on the principal securities exchange on which the
Company’s equity securities are listed or traded,
(ii) the fair market value of a Share as determined in
accordance with a method prescribed in the Award Agreement, or
(iii) the fair market value of a Share as otherwise
determined by the Committee in the good faith exercise of its
discretion.
(o)
Participant.
“Participant” means an
Employee who has been granted an Award under this Plan and
executed a plan agreement as required under Section 4(c).
(p)
Plan.
“Plan” means this RPM
International Inc. 2007 Restricted Stock Plan, as amended from
time to time.
(q)
Plan Year.
“Plan Year” means the
period upon which the Plan shall be administered and operated.
The “Plan Year” is the Company’s annual
accounting period, which is presently the
12-month
period ending
on May 31. In the event that the Company changes its annual
accounting period, the Plan Year shall automatically change and
the Committee may make such adjustments to the operation of the
Plan as appropriate to reflect any short Plan Years.
(r)
Minimum Withholding Tax Liability.
“Minimum
Withholding Tax Liability” has the meaning set forth in
Section 10(d).
(s)
Restricted Stock.
“Restricted Stock”
means the Shares awarded under Section 4.
(i)
SEC
Rule
16b-3.
“SEC
Rule
16b-3”
means Rule
16b-3
of the Securities and Exchange Commission promulgated under the
Exchange Act and related pronouncements, as such rule or any
successor rule may be in effect from time to time.
(t)
Shares.
“Shares” means common shares,
par value of $0.01, of the Company.
(u)
Subsidiary.
“Subsidiary” means a
corporation or other form of business association of which
shares (or other ownership interests) having more than 50% of
the voting power are owned or controlled, directly or
indirectly, by the Company, but only during the period any such
corporation or business association would be so defined.
(v)
Termination of Employment.
“Termination of
Employment” means the cessation of a Participant’s
service as an Employee for any reason whatsoever, whether
voluntary or involuntary, including by reason of retirement,
death, or disability.
(w)
Total Disability.
“Total Disability”
means a determination of disability under any long-term
disability plan sponsored by the Company, Subsidiary or Allied
Enterprise in which the Participant participates.
4. Awards of Restricted Stock.
(a)
Nature of Award.
Restricted Stock Awards consist
of Shares which are issued by the Company to a Participant at no
cost or at a purchase price determined by the Committee but
which are subject to forfeiture and/ or restrictions on their
sale or other transfer by the Participant.
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(b)
Eligible Employees.
Subject to the terms and
conditions of the Plan, the Committee may grant Awards of
Restricted Stock to Employees at any time and from time to time,
in such amounts and with such terms and conditions as the
Committee shall determine. No member of the Board, unless he or
she is also an Employee, shall be eligible to receive Awards of
Restricted Stock under the Plan.
(c)
Award Agreements.
Awards are contingent on the
Employee’s execution of an agreement in the form prescribed
by the Committee and attached as Exhibit A (the “Award
Agreement”). All Award Agreements shall incorporate the
Plan by reference. The Committee may condition an Award upon an
Employee’s execution and delivery of one or more stock
powers in blank to the Company. Execution of an Award Agreement
by the Employee shall constitute the Employee’s agreement
to and acceptance of the terms and conditions of the Award as
set forth in such Award Agreement and of the terms and
conditions of the Plan applicable to such Award. Award
Agreements may differ from time to time and from Employee to
Employee. Upon the execution of an Award Agreement, the Employee
shall become a Participant in the Plan.
(d)
Terms and Conditions of Restricted Stock Awards.
Awards of Restricted Stock are subject to the following terms
and conditions, which, except as otherwise provided herein, need
not be the same for each Participant, and may contain such
additional terms, conditions, restrictions and contingencies not
inconsistent with the terms of this Plan and any operative
employment or other agreement, as the Committee deems desirable:
(i)
Purchase Price.
The Committee shall determine
the price, if any, at which Restricted Stock is to be awarded to
a Participant, which may vary from time to time and from
Participant to Participant and which may be below the Fair
Market Value of such Restricted Stock at the date of grant,
including, without limitation, a price of zero.
(ii)
Restrictions.
Restricted Stock awarded under
this Plan will be subject to such terms, conditions and
restrictions as the Committee may determine, which may include,
without limitation, the following:
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(1)
Transfer Restrictions
: a prohibition against the
sale, transfer, pledge or other encumbrance of the Restricted
Stock, and the terms upon which such prohibition shall lapse.
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(2)
Vesting Restrictions
: a requirement that the
Participant earn a vested right to the Shares, and the terms
upon which the Participant shall earn such vested right.
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(3)
Forfeiture Restrictions
: a requirement that the
Participant will forfeit the Restricted Stock upon the
occurrence of a stated event (e.g., Termination of Employment
prior to vesting, Termination of Employment for cause,
employment of the Participant by a competitor of the Company, or
other forfeiture provisions).
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(4)
Legal Restrictions
: restrictions arising under
applicable laws, including the Securities Act of 1933, the rules
and regulations of The New York Stock Exchange, state laws
including “blue sky” laws, and restrictions as may be
required to avoid the application of Section 409A of the
Code thereto or to avoid adverse tax consequences under the Code
or other taxing statutes and rules.
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The Committee may at any time waive such restrictions or
accelerate the date or dates on which the restrictions will
lapse.
(iii)
Forfeiture of Shares.
A Participant who fails
to satisfy the terms, conditions or restrictions relating to the
Restricted Stock prior to the lapse, satisfaction or waiver of
such restrictions and conditions, as set forth in the Award
Agreement, shall forfeit the Shares and transfer them back to
the Company in exchange for a refund of any consideration paid
by the Participant or of such other amount as may be
specifically set forth in the Award Agreement.
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(iv)
Implied Provisions.
Except as otherwise
provided in the Award Agreement, Restricted Stock Awards shall
be subject to the following terms and conditions:
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(1)
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Vesting and Forfeiture.
Restricted Stock Awards shall
become nonforfeitable upon the earliest of the following to
occur while the Participant remains an Employee:
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(A)
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the later of the attainment of age 55 or the fifth
anniversary of the May 31 immediately preceding the date on
which the Restricted Stock Award was granted,
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(B)
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Termination of Employment under terms constituting a retirement
on or after the attainment of age 65,
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(C)
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a Change in Control,
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(D)
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termination of the Plan,
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(E)
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Termination of Employment on account of death, or
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(F)
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Termination of Employment on account of Total Disability.
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A Participant’s Restricted Stock Awards shall be forfeited
and returned to the Company in the event the Participant incurs
a Termination of Employment prior to the date the Restricted
Stock becomes vested and nonforfeitable under the preceding
provisions.
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(2)
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Free of Restrictions and Transferable.
Restricted Stock
Awards shall become free of restrictions upon the earliest of
the following to occur:
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(A)
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the later of Termination of Employment or the date the
Restricted Stock becomes nonforfeitable,
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(B)
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a Change in Control prior to Termination of Employment,
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(C)
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termination of the Plan,
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(D)
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Termination of Employment on account of death, or
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(E)
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Termination of Employment on account of Total
Disability.
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(v)
Voting and Dividends.
Except as otherwise
provided in the Award Agreement, during any period in which
Restricted Stock is subject to the terms, conditions or
restrictions, the Participant holding such Restricted Stock
shall have all the rights of a stockholder with respect to such
Shares, including, without limitation, the right to vote such
Shares and the right to receive any dividends paid with respect
to such Shares. Any such dividend payment shall be made at the
same time as the dividends are paid to holders of unrestricted
Shares, and any right to receive such dividends shall cease and
be forfeited at such time, if any, as the Restricted Stock to
which the dividends relate is forfeited hereunder.
(vi)
Section 83(b) Election.
If a Participant
makes an election pursuant to Section 83(b) of the Code
with respect to a Restricted Stock Award, the Participant shall
file, within 30 days following the date of grant, a copy of
such election with the Company and with the Internal Revenue
Service, in accordance with the regulations under
Section 83(b) of the Code. The Committee may provide in an
Award Agreement that the Restricted Stock Award is conditioned
upon the Participant’s making or refraining from making an
election with respect to the Award under Section 83(b) of
the Code.
(vii)
Section 409A of the Code.
The Restricted
Stock Awards under this Plan, and all rights related thereto
(including dividend rights) are intended to meet the
requirements for exclusion from coverage under Section 409A
of the Code dealing with nonqualified deferred
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compensation (including without limitation the exemptions
thereunder for short-term deferrals and restricted property) and
all Restricted Stock Awards will be construed and administered
accordingly. Notwithstanding anything contained in this Plan or
any Restricted Stock Awards to the contrary, after the adoption
of final regulations under Code Section 409A, this Plan and
any Restricted Stock Award may be unilaterally amended by the
Company as it may determine, prospectively or retroactively, to
better secure exemption of Restricted Stock Awards and rights
related thereto from (or, if exemption is not reasonably
available, to better comply with) the requirements of Code
Section 409A (with, to the extent required by
Section 12, the consent of the holder of any Restricted
Stock Award, which consent shall not be unreasonably withheld).
5. Shares Available under the Plan.
(a)
Maximum Number of Shares.
The maximum aggregate
number of Shares reserved for grant or settlement of Awards
under the Plan shall be 1,000,000 Shares, subject to
adjustment as provided in Section 5(c).
(b)
Source of Shares.
Shares which may be issued
pursuant to Awards made under the Plan may be authorized but
unissued Shares, or Shares held in the treasury, whether
acquired by the Company specifically for use under this Plan or
otherwise.
(c)
Adjustment Provisions.
(i)
Corporate Change.
In the event of any merger,
reorganization, consolidation, recapitalization, or similar
transaction, or in the event of a stock dividend, stock split,
or distribution to stockholders (other than normal cash
dividends) or other change in corporate structure affecting the
Shares, an equitable substitution or proportionate adjustment
shall be made in (1) the aggregate maximum number of Shares
reserved for issuance under the Plan, and (2) the kind,
number and purchase price of Shares subject to outstanding
Awards granted under the Plan, in each case, as may be
determined by the Committee, in its sole discretion. Such other
substitutions or adjustments shall be made as may be determined
by the Committee, in its sole discretion. In connection with any
event described in this paragraph, the Committee may provide, in
its sole discretion, for the cancellation of any outstanding
Awards and payment in cash or other property therefor.
(ii)
Awards Terminated or Not Exercised.
If any
outstanding Award, or portion thereof, expires, or is
terminated, cancelled or forfeited, the Shares that would
otherwise be issuable with respect to the unexercised portion of
such expired, terminated, cancelled or forfeited Award shall be
available for subsequent Awards under this Plan.
6. Change in Control.
Except as otherwise provided
in the Award Agreement, immediately upon the occurrence of a
Change in Control all Restricted Share Awards automatically
become fully vested and free of restrictions. The Committee has
the sole authority to determine whether a Change in Control has
occurred. If the Committee shall determine that a Change in
Control has occurred, it shall cause a certificate or
certificates representing all Shares owned by the Participants
which shall have become vested and free of restrictions to be
delivered to the Participants in accordance with Section 9
as soon as practicable after the Change in Control.
7. Effective Date of Plan.
The Plan shall become
effective on June 1, 2007, subject to approval by the
stockholders of the Company.
8. Administration of the Plan
(a)
Administration.
Unless otherwise specified by
the Board, the Plan shall be administered by the Compensation
Committee of the Board. No person shall be appointed to or shall
serve as a member of such Committee unless he or she is an
“independent director” as defined in applicable rules
or listing standards of the New York Stock Exchange and a
“non-employee director” as defined in SEC
Rule
16b-3.
Unless
the Board determines otherwise, such Committee shall also be
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comprised solely of “outside directors” within the
meaning of Section 162(m)(4)(C)(i) of the Code and Treasury
Regulation Section 1.162-27(e)(3) or a successor
thereto.
(b)
Duties and Rights of Committee.
The Committee
may establish such rules, not inconsistent with the provisions
of the Plan, as it may deem necessary for the proper
administration of the Plan, and may amend or revoke any rule so
established. The Committee shall, subject to the provisions of
the Plan, have sole and exclusive power and discretion to
interpret, administer, implement and construe the Plan and full
authority to make all determinations and decisions thereunder
including, without limitation, the authority and discretion to:
(i) determine the persons who are eligible to receive
Awards under the Plan, (ii) determine when Awards shall be
granted, (iii) determine the number of Shares to be made
subject to each Award, (iv) determine the terms and
conditions of each Award, (v) make any adjustments pursuant
to Section 5(c), (vi) designate one or more persons or
agents to carry out any or all of its administrative duties
hereunder including, but not limited to, appointment of a
designated representative (provided that none of the duties
required to be performed by the Committee under SEC
Rule
16b-3
may be
delegated to any other person or agent), (vii) prescribe
any legends to be affixed to certificates representing Shares
granted or issued under the Plan, and (viii) correct any
defect, supply any omission and reconcile any inconsistency in
or between the Plan, an Award Agreement and any related
documents. The Company shall furnish the Committee with such
clerical and other assistance as is necessary for the
performance of the Committee’s duties under this Plan. The
Committee’s interpretation of the Plan, any Award
Agreement, and any related documents, its administration of the
Plan, and all action taken by the Committee, shall be final,
binding and conclusive on the Company, its stockholders,
subsidiaries, and all Participants, and upon their respective
Beneficiaries, successors and assigns, and upon all other
persons claiming under or through any of them.
(c)
Limitation of Liability.
Members of the Board,
members of the Committee, and Company employees who are their
designees acting under this Plan, shall be fully protected in
relying in good faith upon the advice of counsel and shall incur
no liability except for gross or willful misconduct in the
performance of their duties hereunder.
9. Delivery of Certificates.
(a)
Timing of Delivery.
The Company is not required
to issue or deliver any certificates for Shares issuable with
respect to Awards under this Plan prior to the fulfillment of
all of the following conditions, to the extent applicable:
(i) payment in full for the Shares and for any minimum tax
withholding;
(ii) completion of any registration or other qualification
of such Shares under any federal or state laws or under the
rulings or regulations of the Securities and Exchange Commission
or any other regulating body which the Committee in its
discretion deems necessary or advisable;
(iii) admission of such Shares to listing on The New York
Stock Exchange or any stock exchange on which the Shares are
listed;
(iv) obtaining of any approval or other clearance from any
Federal or state governmental agency which the Committee in its
discretion determines to be necessary or advisable;
(v) the Committee is fully satisfied that the issuance and
delivery of Shares under this Plan is in compliance with
applicable federal, state or local law, rule, regulation or
ordinance or any rule or regulation of any other regulating
body, for which the Committee may seek approval of counsel for
the Company; and
(vi) the person acquiring the Shares gives the Company any
assurances the Committee may deem necessary or desirable to
assure compliance with all applicable legal requirements.
(b)
Applicable Restrictions on Shares.
Shares issued
with respect to Awards may be subject to such stock transfer
orders and other restrictions as the Committee may determine
necessary or
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advisable under any applicable federal or state securities law,
or the requirements of the New York Stock Exchange, or any other
applicable Federal or state law, and shall bear any restrictive
legends the Committee may deem appropriate.
(c)
Book Entry.
In lieu of the issuance of stock
certificates evidencing Shares, the Company may use a “book
entry” system in which a computerized or manual entry is
made in the records of the Company to evidence the issuance of
such Shares. Such Company records shall, absent manifest error,
be binding on all parties.
10. Satisfaction of Minimum Withholding Tax
Liabilities.
(a)
In General.
The Committee shall cause the
Company to withhold the minimum amount of taxes which it
determines it is required by law or required by the terms of
this Plan to withhold in connection with any recognition of
income incident to this Plan. The Participant or other person in
recognition of such income shall provide the Committee with such
stock powers and additional information or documentation as may
be necessary for the Committee to discharge its obligations
under this Section.
(b)
Withholding from Share Distributions.
In the
event of a taxable event occurring with regard to Shares on or
after the date that the Shares become nonforfeitable, the
Committee shall cause the Company to sell the fewest number of
such Shares for the proceeds of such sale to equal (or exceed by
not more than that actual sale price of a single Share) the
Participant’s or other person’s Minimum Withholding
Tax Liability resulting from such recognition of income. The
Committee shall withhold the proceeds of such sale for purposes
of satisfying such tax liability. If a distribution or other
event does not result in any withholding tax liability as a
result of the Participant’s election to be taxed at an
earlier date or for any other reason, the Company shall not be
required to sell any Shares.
(c)
Delivery of Stock Certificates.
Subject to the
provisions of Section 9, as promptly as practicable
following the sale of a portion of the Participant’s Shares
in accordance with Section 10(b), the Committee shall cause
stock certificates for all Shares which have been held in escrow
or by the Company to be issued to the Participant, with any
legend making reference to the various restrictions imposed
hereunder removed.
(d)
Delivery of Withholding Proceeds.
The Committee
shall cause the Company to deliver withholding proceeds to the
Internal Revenue Service and/or other taxing authority in
satisfaction of a Participant’s or other recipient’s
tax liability arising from a recognition of income incident to
this Plan.
(e)
Minimum Withholding Tax Liability.
A
person’s “Minimum Withholding Tax Liability” is
the product of: (i) the aggregate minimum applicable
federal and applicable state and local income withholding tax
rates on the date of a recognition of income incident to the
Plan; and (ii) the Fair Market Value of the Shares
recognized as income to the Participant or other person
determined as of the date of recognition of income, or other
taxable amount under applicable statutes.
11. General Provisions.
(a)
Relationship to Deferred Compensation Plan.
This
Plan does not provide deferred compensation, and as such does
not provide for any deferral of income incident to a Restricted
Stock Award. However, to the extent the Committee determines it
to be consistent with Section 409A of the Code, and to the
extent permitted under the Award Agreement, a Participant shall
have the right, if any, as may be provided under the Deferred
Compensation Plan to defer the recognition of income incident to
a Restricted Stock Award. Any such election shall be made in
accordance with the terms of the Deferred Compensation Plan
(including provisions regarding the time and form of such
deferral election) and such procedures as may be established
thereunder.
(b)
Non-Transferability of Awards.
No Award shall be
transferable by a Participant other than by will, by the laws of
descent and distribution, to the Deferred Compensation Plan
consistent with
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Section 11(a), or to a Beneficiary in accordance with the
Plan’s terms. Notwithstanding any provision of the Plan to
the contrary, the Committee may permit a Participant to transfer
any Award during the Participant’s lifetime to such other
persons and such entities and on such terms and subject to such
conditions as the Committee may provide in the relevant Award
Agreement.
(c)
No Right to Continued Employment.
Nothing in
this Plan or any Award Agreement shall confer upon any person
any right to continue in the employment of the Company, a
Subsidiary or an Allied Enterprise, or affect the right of the
Company, a Subsidiary or any Allied Enterprise to terminate the
employment of any person at any time with or without cause.
(d)
Limitation on Rights Relating to Shares Subject to
Awards.
No person (individually or as a member of a group)
and no Beneficiary or other person claiming under or through him
or her, shall have any right, title or interest in or to any
Shares other than such Shares as have been issued to him or her.
The Committee may provide for the transfer of Shares to a trust
(which may but need not be a grantor trust), escrow arrangement
or other legal entity for the purpose of satisfying the
Company’s obligations under this Plan. Except as may
otherwise be required by applicable law, such shares shall be
considered authorized and issued shares with full dividend and
voting rights.
(e)
Compliance with Foreign Laws Governing Stock
Incentives.
If the laws of a foreign country in which the
Company, a Subsidiary or any Allied Enterprise has Employees
prescribe certain requirements for stock incentives to qualify
for advantageous tax treatment under the laws of that country,
the Board may restate this Plan for the purpose of qualifying
the restated plan and Awards granted thereunder under such laws
or otherwise administer this Plan in compliance with such laws;
provided, however, that: (i) the terms and conditions of an
Award granted under such restated plan may not be more favorable
to the recipient than would be permitted if such Award had been
granted under the Plan as herein set forth, (ii) all Shares
allocated to or utilized for the purposes of such restated plan
shall be subject to the limitations of Section 5, and
(iii) the provisions of the restated plan cannot increase
the Board’s discretion to amend or terminate such restated
plan beyond that provided under this Plan.
(f)
No Effect on Other Plans.
Nothing in this Plan
is intended to be a substitute for, or shall preclude or limit
the establishment or continuation of, any other plan, practice
or arrangement for the payment of compensation or fringe
benefits to Employees. A Participant may be granted an Award
whether or not he is eligible to receive similar or dissimilar
incentive compensation under any other plan, practice or
arrangement.
(g)
Acceptance of Plan Terms and Plan
Administration.
By accepting benefits under the Plan, each
Participant, Beneficiary or other person claiming under or
through him or her, shall be conclusively deemed to have
indicated his acceptance and ratification of, and consent to,
all provisions of the Plan and any action or decision under the
Plan by the Company, its agents and employees, and the Board and
the Committee.
(h)
Governing Law; Waiver of Jury Trial.
The
validity, construction, interpretation and administration of the
Plan and of any determinations or decisions made thereunder, and
the rights of all persons having or claiming to have any
interest therein or thereunder, shall be governed by, and
determined exclusively in accordance with, the laws of the State
of Delaware, but without giving effect to the principles of
conflicts of laws thereof. Without limiting the generality of
the foregoing, the period within which any action arising under
or in connection with the Plan must be commenced, shall be
governed by the laws of the State of Delaware, without giving
effect to the principles of conflicts of laws thereof,
irrespective of the place where the act or omission complained
of took place, the residence of any party to such action and any
place where the action may be brought. An Employee’s
acceptance of any Award shall constitute his irrevocable and
unconditional waiver of the right to a jury trial in any action
or proceeding concerning the Award, the Plan or any rights or
obligations of the Participant, the Company or any other party
under or with respect to the Award or the Plan.
9
(i)
SEC
Rule
16b-3
Compliance.
This Plan is intended to comply with all
applicable conditions of SEC
Rule
16b-3.
All
transactions involving any Participant subject to
Section 16(a) of the Exchange Act shall be subject to the
conditions set forth in SEC
Rule
16b-3,
regardless of whether such conditions are expressly set forth in
this Plan. Any provision of this Plan that is contrary to SEC
Rule
16b-3
does
not apply to such Participants.
(j)
Successors.
All obligations of the Company with
respect to Awards granted under this Plan are binding on any
successor to the Company, whether as a result of a direct or
indirect purchase, merger, consolidation or otherwise of all or
substantially all of the business and/or assets of the Company.
(k)
Severability.
In the event any provision of this
Plan, or the application thereof to any person or circumstances,
is held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of this Plan, or
other applications, and this Plan is to be construed and
enforced as if the illegal or invalid provision had not been
included.
(l)
Gender and Number.
The use of the masculine
gender shall also include within its meaning the feminine. The
use of the singular shall include within its meaning the plural
and vice versa.
12. Amendment and Termination.
Subject to applicable
stockholder approval requirements, the Plan may be amended by
the Board at any time and in any respect. Unless stockholder
approval is obtained, no amendment shall increase the aggregate
number of shares which may be issued under the Plan. The Plan
may also be terminated for any reason and at any time by the
Board. Subject to applicable stockholder approval requirements,
no amendment or termination of this Plan shall materially and
adversely affect any Award granted prior to the date of such
amendment or termination without the written consent of the
holder of such Award.
10
Exhibit 10.2
RPM INTERNATIONAL INC.
2007 INCENTIVE COMPENSATION PLAN
(As Adopted Effective June 1, 2007)
1.
Name and Purpose.
The name of this Plan is the
RPM International Inc. 2007 Incentive Compensation Plan. The
Plan is intended to replace the 1995 Incentive Compensation Plan
in order to continue to attract, retain, motivate and reward
Executive Officers of the Company by providing incentives for
superior performance, and to provide such incentives in the form
of payments intended to constitute qualified “performance
based compensation” for purposes of Section 162(m) of
the Code.
2.
Eligibility.
Individuals who are Executive
Officers of the Company may become eligible for Awards under
this Plan.
3.
Definitions.
Unless the context otherwise
indicates, the following words used herein shall have the
following meanings whenever used:
“Award”
means the payment earned by a
Participant as determined in accordance with Section 5.
“Board”
means the Board of Directors of the
Company.
“Code”
means the Internal Revenue Code of 1986,
as amended from time to time, and related Treasury Department
regulations and pronouncements, and their successors.
“Committee”
means the Compensation Committee of
the Board unless another committee is designated by the Board to
administer the Plan; provided however, that in any event the
Committee shall be comprised of two or more directors each of
whom shall be an “independent director” as defined in
applicable rules or listing standards of the New York Stock
Exchange, a “non-employee director” as defined in SEC
Rule
16b-3,
and an
“outside director” within the meaning of
Section 162(m)(4)(C)(i) of the Code and Treasury Regulation
Section
1.162-27(e)(3).
“Company”
means RPM International Inc., a
Delaware corporation, and any corporation or entity that is a
successor to RPM International Inc. or substantially all of the
assets of RPM International Inc., that assumes the obligations
of RPM International Inc. under this Plan by operation of law or
otherwise.
“Executive Officer”
means the Company’s
Chief Executive Officer, any employee (other than the Chief
Executive Officer) of the Company who is required to be reported
to shareholders under the Securities Exchange Act of 1934 by
reason of such employee being among the four highest compensated
officers for the taxable year, and any other designated
executive employee of the Company that in the Committee’s
judgment could, in the absence of the Plan, be paid compensation
the deductibility of which, to the Company, could be limited by
Section 162(m) of the Code.
“Fiscal Year”
means the fiscal year of the
Company.
“Participant”
means an Executive Officer
selected by the Committee for participation in the Plan under
Section 4.
“Performance-Based Compensation”
means
“remuneration payable solely on account of the attainment
of one or more performance goals” as described in
Section 162(m)(4)(C) of the Code.
“Performance Goal(s)”
has the meaning ascribed
to such term in Section 5.
“Plan”
means this RPM International Inc. 2007
Incentive Compensation Plan, as amended from time to time.
1
4.
Participation.
The Committee in its complete and
absolute discretion shall designate the Executive Officers as
defined in Section 3, if any, who shall participate in the
Plan. An Executive Officer shall be a Participant in the Plan
for any period in which he or she is designated to participate.
5.
Performance Goals.
(a)
Annual Establishment of Performance Goal(s)
. On
or before the 90th day of each Fiscal Year (and in any event
within the first 25% of any designated performance period), and
while the outcome is substantially uncertain, the Committee
shall establish in writing the Performance Goal(s) applicable to
each Participant and shall establish the levels of performance
at which an Award is to be earned in whole or in part with
respect to the Performance Goal(s). Once established, the
Committee may not modify the terms of a potential Award, except
to the extent that after such modification the Award would
continue to constitute Performance-Based Compensation.
(b)
Mid-Year Entry and Establishment of Performance
Goals
. In the event an Executive Officer commences
employment (or an employee is promoted to a position so as to
make the employee an Executive Officer) after the expiration of
the applicable 90-day period described in Section 5(a), the
Committee may, in its discretion, identify such individual as a
Participant for a remaining portion of such Fiscal Year and
modify the Performance Goal(s) in a manner that is reflective of
the individual’s period of participation within such Fiscal
Year, subject to the application of Code Section 162(m).
(c)
Nature of Performance Goal(s)
. The Performance
Goal(s) shall be based on targeted levels of, targeted levels of
return on, or targeted levels of growth for, any one or more of
the following (or substantially similar) performance measures on
a consolidated Company, consolidated group, business unit or
divisional level, as the Committee may specify: earnings,
earnings per share, capital adjusted pre-tax earnings (economic
profit), net income, operating income, performance profit
(operating income minus an allocated charge approximating the
Company’s cost of capital, before or after tax), gross
margin, revenue, working capital, total assets, net assets,
stockholders’ equity, and cash flow.
(d)
Adjustment of Performance Goal(s)
. To the extent
consistent with Section 162(m) of the Code, the Committee
may appropriately adjust any Performance Goal(s) or performance
evaluation under any Performance Goal(s) to exclude any of the
following events that may occur during the Fiscal Year:
(i) asset gains or losses; (ii) litigation, claims,
judgments or settlements; (iii) the effect of changes in
tax law, accounting principles or other such laws or provisions
affecting reported results; (iv) accruals for
reorganization and restructuring programs; and (v) any
extraordinary, unusual, non-recurring or non-cash items.
(e)
Limitations on Awards
. No Award to a Participant
for a Fiscal Year may exceed $1.5 million.
(f)
Discretion to Reduce Award
. Notwithstanding any
contrary provision of the Plan, the Committee reserves the
right, in its complete and absolute discretion, to reduce the
amount of any Award that would be payable to a Participant,
including the elimination of the Award.
6.
Payment of Awards.
(a)
Certification
. As soon as practicable after the
Company’s financial results for the Fiscal Year have been
approved by the Board or the Audit Committee of the Board, the
Committee shall certify in writing whether the Performance
Goal(s) established for the Fiscal Year and other material terms
of the Awards have been satisfied.
(b)
Payment of Award
. Awards shall be paid following
the Committee’s certification under Section 6(a) of
the attainment of the Performance Goal(s). Subject to a valid
election made by the Executive Officer to defer all or a portion
of any Award in accordance with Section 10(a), the Awards
shall be paid in cash as soon as administratively practicable
following the Committee’s
2
certification, and in any event no later than 90 days
following the close of the Fiscal Year for which the Performance
Goal(s) were satisfied.
(c)
Payment Conditioned on Deductibility
. Awards
under this Plan may be paid by the Company in any manner
appropriate to secure the deductibility thereof for federal
income tax purposes.
(d)
Withholding Taxes
. The Committee shall cause the
Company to withhold any taxes which it determines it is required
by law or required by the terms of this Plan to withhold in
connection with any payments or income recognized incident to
this Plan.
7.
Interpretation and Application of Plan.
(a)
Compliance with Section 162(m) of the Code
.
The Plan shall for all purposes be interpreted and construed in
order to assure compliance with the provisions of Code
Section 162(m). If any provision of this Plan would cause
an Award not to constitute Performance-Based Compensation, that
provision, insofar as it pertains to the affected Participant,
shall be severed from, and shall be deemed not to be a part of
this Plan, but the other provisions of the Plan shall remain in
full force and effect.
(b)
Related Entities
. Notwithstanding any provision
of this Plan to the contrary, the Committee may designate an
employee of a company related to the Company to be an Executive
Officer under the Plan provided the relationship of the other
company to the Company would result in both being part of an
affiliated group of corporations for purposes of
Section 162(m) of the Code.
(c)
Section 409A of the Code
. Awards under this
Plan are intended to meet the requirements for exclusion from
coverage under Section 409A of the Code dealing with
nonqualified deferred compensation (including without limitation
the exemption thereunder for short-term deferrals) and this Plan
and all Awards will be construed and administered accordingly.
In addition, Awards under this Plan are intended to meet the
requirements for performance-based compensation under
Section 409A of the Code and this Plan and all Awards will
be construed and administered accordingly. Notwithstanding
anything contained in this Plan to the contrary, after the
adoption of final regulations under Code Section 409A, this
Plan may be unilaterally amended by the Company as it may
determine, prospectively or retroactively, to better secure
exemption of Awards hereunder from (or, if an exemption is not
reasonably available for such Awards, to better comply with) the
requirements of Code Section 409A and to more fully cause
Awards under this Plan to satisfy the requirements for
performance-based compensation under Section 409A of the
Code.
8.
Effective Date.
Subject to the approval the
Company’s stockholders, this Plan shall become effective
for the Plan Year commencing June 1, 2007 and ending
May 31, 2008, subject to the right of the Board to
terminate the Plan at any time.
9.
Administration.
Unless otherwise specified by the
Board, the Plan shall be administered by the Committee.
(a)
Authority
. The Committee may establish such
rules, not inconsistent with the provisions of the Plan, as it
may deem necessary for the proper administration of the Plan,
and may amend or revoke any rule so established. The Committee
shall, subject to the provisions of the Plan, have sole and
exclusive power and discretion to interpret, administer,
implement and construe the Plan and full authority to make all
determinations and decisions thereunder including, without
limitation, the authority and discretion to: (i) determine
the persons who are Executive Officers and select the Executive
Officers who are to participate in the Plan, (ii) determine
when Awards shall be granted, (iii) determine the amount of
money to be made subject to each Award, (iv) determine the
terms and conditions of each Award, including the Performance
Goal(s), (v) make any adjustments pursuant to
Section 5(c), (vi) designate one or more persons or
agents to carry out any or all of its administrative duties
hereunder (provided that none of the duties required to be
performed by the Committee under SEC Rule 16b-3 may be
delegated to any other person or agent), and (vii) correct
3
any defect, supply any omission and reconcile any inconsistency
in or between the Plan, an Award and related documents. The
Company shall furnish the Committee with such clerical and other
assistance as may be necessary for the performance of the
Committee’s duties under this Plan. Without limiting the
generality of the foregoing, the Committee shall have the
authority to establish and administer Performance Goal(s)
applicable to Awards, and the authority to certify that such
Performance Goal(s) are attained, within the meaning of Treasury
Regulation Section 1.162-27(c)(4).
(b)
Decisions Are Final And Binding
. The
Committee’s interpretation of the Plan, any plan agreement,
related documents, its administration of the Plan, and all
action taken by the Committee, shall be final, binding and
conclusive on the Company, its stockholders, subsidiaries,
affiliates, all Participants and Executive Officers, and upon
their respective beneficiaries, successors and assigns, and upon
all other persons claiming under or through any of them.
(c)
Limitation of Liability
. Members of the Board,
members of the Committee, and Company employees who are their
designees acting under this Plan, shall be fully protected in
relying in good faith upon the advice of counsel and shall incur
no liability except for gross or willful misconduct in the
performance of their duties hereunder.
10.
Miscellaneous.
(a)
Relationship to Deferred Compensation Plan
. This
Plan does not provide deferred compensation, and as such does
not provide for any deferral of Award income. However, to the
extent the Committee determines it to be consistent with
Section 409A of the Code, Participant shall have the right,
if any, as may be provided under the Deferred Compensation Plan
to defer income under an Award. Any such election shall be made
in accordance with the terms of the Deferred Compensation Plan
(including provisions regarding the time and form of such
deferral election) and such procedures as may be established
thereunder.
(b)
Non-Transferability
. Awards are not transferable
by a Participant other than by will, the laws of descent and
distribution, or deferral pursuant to a valid election under
Section 6(b).
(c)
No Right to Continued Employment
. Nothing in
this Plan shall confer upon any person any right to continue in
the employment of the Company or affect the right of the Company
to terminate the employment of any person at any time with or
without cause.
(d)
No Effect on Other Plans
. Nothing in this Plan
is intended to be a substitute for, or shall preclude or limit
the establishment or continuation of, any other plan, practice
or arrangement for the payment of compensation or fringe
benefits to Executive Officers. An Executive Officer may be
granted an Award whether or not eligible to receive similar or
dissimilar incentive compensation under any other plan, practice
or arrangement.
(e)
Acceptance of Plan Terms and Administration
. By
accepting an Award or the right to an Award under the Plan, each
Participant, beneficiary or other person claiming under or
through him or her, shall be conclusively deemed to have
indicated acceptance and ratification of, and consent to, all
provisions of the Plan and all Awards thereunder, and any action
or decision under the Plan by the Company, its agents and
employees, and the Board and the Committee.
(f)
Governing Law and Waiver of Jury Trial
. The
validity, construction, interpretation and administration of the
Plan and of any determinations or decisions made thereunder, and
the rights of all persons having or claiming to have any
interest therein or thereunder, shall be governed by, and
determined exclusively in accordance with, the laws of the State
of Delaware, but without giving effect to the principles of
conflicts of laws thereof. Without limiting the generality of
the foregoing, the period within which any action arising under
or in connection with the Plan must be commenced, shall be
governed by the laws of the State of Delaware, without giving
effect to the principles of conflicts of laws thereof,
irrespective of the place where the act or omission complained
of took place, the residence of any party to such action and any
place where the action may be brought. An
4
employee’s acceptance of any Award shall constitute an
irrevocable and unconditional waiver by the employee of the
right to a jury trial in any action or proceeding concerning the
Award, the Plan or any rights or obligations of the employee,
the Company or any other party under or with respect to the
Award or the Plan.
(g)
Successors
. All obligations of the Company with
respect to Awards granted under this Plan are binding on any
successor to the Company, whether as a result of a direct or
indirect purchase, merger, consolidation or otherwise of all or
substantially all of the business and/or assets of the Company.
(h)
Severability
. In the event any provision of this
Plan, or the application thereof to any person or circumstances,
is held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of this Plan, or
other applications, and this Plan is to be construed and
enforced as if the illegal or invalid provision had not been
included.
(i)
Unfunded Status
. The Plan is intended to
constitute an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give
any such Participant any rights that are greater than those of a
general creditor of the Company.
(j)
Gender and Number
. The use of the masculine
gender shall also include within its meaning the feminine. The
use of the singular shall include within its meaning the plural
and vice versa.
11.
Amendment and Termination.
Subject to applicable
stockholder approval requirements, the Plan may be amended by
the Board at any time and in any respect. The Plan may also be
terminated for any reason and at any time by the Board. Subject
to applicable stockholder approval requirements, no amendment or
termination of this Plan shall materially and adversely affect
any Award granted prior to the date of such amendment or
termination without the written consent of the holder of such
Award.
5
EXHIBIT 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this “Agreement”)
dated as of the 5th day of October, 2006, between RPM International Inc., a
Delaware corporation (the “Company”), and
(“Executive”).
WHEREAS, Executive and the Company entered into the Amended and
Restated Employment Agreement, effective as of June 1, 2006 (the “Existing
Agreement”), to secure the continued dedication of the Executive in the event of any
threat or occurrence of a change in control of the Company; and
WHEREAS, Executive has been elected [Title] of the Company, as of the
date hereof; and
WHEREAS, the Company desires to amend and restate the Existing
Agreement to reflect Executive’s current title, duties and
salary compensation.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, the parties
hereto agree as follows:
1. Term of Employment. The Company hereby agrees to continue to employ
Executive, and Executive hereby agrees to continue to serve the Company, on the
terms and conditions set forth herein for the period commencing as of the date
hereof and expiring on May 31, 2007 (the “Employment Period”). The Employment
Period shall automatically be extended on May 31 of each year for a period of
one year from such date unless, not later than March 31 of such year, the
Company or Executive has given notice to the other party that it or he, as the
case may be, does not wish to have the Employment Period extended. In addition,
in the event of a Change in Control, the Employment Period shall automatically
be extended for a period of three years beginning on the date of the Change in
Control and ending on the third anniversary of the date of such Change in
Control (unless further extended under the immediately preceding sentence). In
any case, the Employment Period may be terminated earlier under the terms and
conditions set forth herein.
2. Position and Duties. Executive shall serve as [Title] reporting to
the Chief Executive Officer of the Company (or his designee) and shall
[description of responsibilities] and shall have such other powers and duties as
may from time to time be assigned by the Chief Executive Officer (or his
designee) or the Board of Directors of the Company; provided, however, that such
duties are consistent with his present duties and his position with the Company.
Executive shall devote substantially all his working time and efforts to the
continued success of the business and affairs of the Company.
3. Place of Employment. In connection with his employment by the
Company, Executive shall not be required to relocate or move from his existing
principal residence in [City], Ohio, and shall not be required to perform
services which would make the continuance of his principal residence in [City],
Ohio, unreasonably difficult or inconvenient for him. The Company shall give
Executive at least six months’ advance notice of any proposed relocation of its
Medina, Ohio offices to a location more than 50 miles from Medina, Ohio and, if
Executive in his sole discretion chooses to relocate his principal residence,
the Company shall promptly pay (or reimburse him for) all reasonable relocation
expenses (consistent with the Company’s past practice for similarly situated
senior executive officers) incurred by him relating to a change of his principal
residence in connection with any such relocation of the Company’s offices from
Medina, Ohio.
4. Compensation.
(a) Base Salary. During the Employment Period, Executive shall receive
a base salary at the rate of not less than [Base Salary ($
)] per annum
(“Base Salary”), payable in substantially equal monthly installments at the end
of each month during the Employment Period hereunder. It is contemplated that
annually in the first quarter of each fiscal year of the Company the
Compensation Committee of the Board of Directors (the “Compensation Committee”)
will review Executive’s Base Salary and other compensation during the Employment
Period and, at the discretion of the Compensation Committee, it may recommend to
the Board of Directors of the Company for its approval an increase in his Base
Salary and other compensation, effective as of June 1 of such fiscal year, based
upon his performance, then generally prevailing industry salary scales, the
Company’s results of operations, and other relevant factors. Any increase in
Base Salary or other compensation shall in no way limit or reduce any other
obligation of the Company hereunder and, once established at an increased
specified rate, Executive’s Base Salary hereunder shall not be reduced without
his written consent.
(b) Incentive Compensation. In addition to his Base Salary, Executive
shall be entitled to receive such annual cash incentive compensation (“Incentive
Compensation”) for each fiscal year of the Company during the Employment Period
as the Compensation Committee may determine in its sole discretion to recommend
to the Board of Directors of the Company for its approval based upon the
Company’s results of operation and other relevant factors. Such annual Incentive
Compensation shall be received by Executive as soon as possible, but no later
than 90 days after the close of the Company’s fiscal year for which such
Incentive Compensation is granted, provided however, that to the extent the
Director of Human Resources and Administration determines it to be consistent
with Section 409A of the Code, Executive shall have such right, if any, as may
be provided under the Deferred Compensation Plan to elect to defer annual
Incentive Compensation. Any such election shall be made in accordance with the
terms of the Deferred
Compensation Plan (including provisions regarding the time and form of such
deferral election) and such procedures as may be established thereunder.
(c) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred by him (in accordance with Company practice) in performing services
hereunder, provided that Executive properly accounts therefor in accordance with
either Company policies or guidelines established by the Internal Revenue
Service if such are less burdensome.
(d) Participation in Benefit Plans. During the Employment Period,
Executive shall be entitled to continue to participate in or receive benefits
under the Benefit Plans, subject to and on a basis consistent with the terms,
conditions and overall administration of the Benefit Plans. Except with respect
to any benefits related to salary reductions authorized by Executive, nothing
paid or awarded to Executive under any Benefit Plan presently in effect or made
available in the future shall reduce or be deemed to be in lieu of compensation
to Executive pursuant to any other provision of this Section 4. Executive’s
right to participate in any Benefit Plan shall be subject to the applicable
eligibility criteria for participation and Executive shall not be entitled to
any benefits under, or based on, any Benefit Plan for any purposes of this
Agreement if Executive does not during the Employment Period satisfy the
eligibility criteria for participation in such plan.
(e) Vacations. During the Employment Period, Executive shall be
entitled to the same number of paid vacation days in each fiscal year determined
by the Company from time to time for its other senior executive officers, but
not less than four weeks in any fiscal year, to be taken at such time or times
as is desired by Executive after consultation with the Chief Executive Officer
(or his designee) to avoid scheduling conflicts (prorated in any fiscal year
during which Executive is employed hereunder for less than the entire such year
in accordance with the number of days in such fiscal year during which he is so
employed). Executive also shall be entitled to all paid holidays given by the
Company to its other salaried employees.
(f) Other Benefits. During the Employment Period, Executive shall be
entitled to continue to receive the fringe benefits appertaining to his position
with the Company in accordance with present practice, including the use of the
most recent model of a full-sized automobile. During the Employment Period,
Executive shall be entitled to the full-time use of an office and furniture at
the Company’s offices in Medina, Ohio, and shall be entitled to the full-time
use of a secretary paid by the Company.
5. Termination Outside of Protected Period.
(a) Events of Termination. At any time other than during the Protected
Period, the Employment Period shall terminate immediately upon the occurrence of
any of the following events: (i) expiration of the Employment Period; (ii) the
death of Executive; (iii) the expiration of 30 days after the Company gives
Executive written notice of its election to terminate the Employment Period upon
the Disability of Executive, if before the expiration of such 30-day period
Executive has not returned to the performance of his duties hereunder on a
full-time basis; (iv) the resignation of Executive; (v) the Company’s
termination of the Employment Period for
3
Cause; or (vi) the Company’s termination of the Employment Period at any time,
without Cause, for any reason or no reason. For purposes of Subsections 5(b) and
5(c), expiration of the Employment Period upon a notice of the Company under
Section 1 that it does not wish to have the Employment Period extended shall be
deemed a termination without Cause pursuant to Subsection 5(a)(vi) and
expiration of the Employment Period upon a notice of Executive under Section 1
that he does not wish to have the Employment Period extended shall be deemed a
resignation of Executive pursuant to Subsection 5(a)(iv).
(b) Compensation Upon Termination. This Subsection 5(b) sets forth the
payments and benefits to which Executive is entitled under any termination of
employment pursuant to Subsection 5(a).
(i) Death; Disability. During any period in which Executive fails
to perform his duties hereunder as a result of incapacity due to physical or
mental illness, Executive shall continue to receive his full Base Salary until
his employment is terminated pursuant to Subsection 5(a)(ii) or (iii). Upon
termination of the Employment Period under Subsection 5(a)(ii) or (iii),
Executive shall no longer be entitled to participate in the Benefit Plans,
except as required by applicable law or as governed by the Benefit Plans
including the Group Long Term Disability Insurance in which Executive
participates immediately prior to such termination, but Executive shall be
entitled to receive his Earned Incentive Compensation, if any, promptly after
the Termination Date.
(ii) Resignation or Cause. If Executive’s employment is
terminated pursuant to Subsection 5(a)(iv) or (v), the Company shall pay
Executive his full Base Salary through the Termination Date at the rate in
effect at such time. The Company shall then have no further obligations to
Executive under this Agreement and Executive shall no longer be entitled to
participate in the Benefit Plans, except as required by applicable law.
(iii) Termination Without Cause. If Executive’s employment is
terminated without Cause pursuant to Subsection 5(a)(vi), then in lieu of any
further salary payments to Executive for periods subsequent to the Termination
Date, the Company shall pay to Executive no later than 30 calendar days
following such date, a lump sum amount equal to (A) the amount of Executive’s
Unpaid Incentive Compensation, if any, plus (B) 200% of the sum of (I) the
greater of Executive’s Base Salary currently in effect or the highest of
Executive’s Base Salary in effect at any time during the period commencing three
years prior to the Termination Date; and (II) the highest amount of Annual
Incentive Compensation Executive received from the Company during the full five
fiscal years of the Company immediately preceding the Termination Date.
Notwithstanding any other provision of this Subsection 5(b)(iii), Subsection
5(c) or this Agreement, the Company shall have no obligation to make the
lump-sum payment referred to in this Subsection 5(b)(iii) or provide any
continuing benefits or payment referred to in Subsection 5(c) unless (X)
Executive executes and delivers to the Company a Release and Waiver of Claims
and (Y) Executive refrains from revoking, rescinding or otherwise repudiating
such Release and Waiver of Claims for all applicable periods during which
Executive may revoke it.
(c) Additional Benefits Following Termination under Subsection
5(a)(vi). This Subsection 5(c) sets forth the benefits to which Executive shall
be entitled, in addition to
those set forth in Subsection 5(b)(iii), following a termination of the
Employment Period under Subsection 5(a)(vi). Executive shall not be entitled to
the benefit of any provision of this Subsection 5(c) following a termination of
the Employment Period under any other provision hereof.
(i) Continuing Benefit Plans. For a period of two years following
such a Termination Date, Executive shall also be entitled to continue to
participate, on the same terms and conditions as active employees, in the
Continuing Benefit Plans in which Executive participated immediately prior to
the Termination Date, except that (A) Executive shall be entitled to
Estate/Financial Planning Benefits for a period of six months following the
Termination Date and (B) if Executive’s continued participation is not possible
and Executive does not continue to participate under the terms of any such
Continuing Benefit Plan, the Company shall instead pay to Executive, promptly
upon presentation to the Company of an invoice or receipt for payment, the
amount Executive spends to receive comparable coverage under such a comparable
plan for such two-year period. Notwithstanding the foregoing sentence, the
Company’s obligations to Executive with respect to continued benefits under the
Continuing Benefit Plans shall be deemed satisfied to the extent of any such
comparable benefits which are provided to Executive by another employer. During
such continuation period, Executive shall be responsible for paying the normal
employee share of the applicable premiums for coverage under the Continuing
Benefit Plans. The Company shall have the right to modify, amend or terminate
the Continuing Benefit Plans (other than the Estate/Financial Planning Benefits)
following the Termination Date and Executive’s continued participation therein
shall be subject to such modification, amendment or termination if such
modification, amendment or termination applies generally to the then-current
participants in such plan. Upon completion of the two-year period following such
a Termination Date, the Company shall afford Executive the opportunity to
continue Executive’s coverage under the Continuing Benefit Plans (other than the
Estate/Financial Planning Benefits), at Executive’s expense, for an additional
period under COBRA Continuation Coverage, so long as Executive timely elects to
receive COBRA Continuation Coverage under the terms thereof and otherwise
complies with the conditions of continuation of benefits under COBRA
Continuation Coverage.
(ii) Limited Benefit Plans. After such a Termination Date,
Executive shall no longer be entitled to participate as an active employee in,
or receive any additional or new benefits under, the Limited Benefit Plans,
except as set forth in this Subsection 5(c)(ii) and except for such benefits, if
any, available under such plans to former employees. After such a Termination
Date, Executive shall be entitled to the following additional benefits:
(A) Continued coverage, for a period of two years after the
Termination Date, under the Split Dollar Life Insurance, with the Company paying
such expenses as it otherwise would have paid thereunder if Executive had
continued to be employed, all on the terms of the Split Dollar Life Insurance;
(B) A lump-sum payment to be paid under the Restricted Stock
Plan equal to the cash value of the benefits Executive would have received had
he continued to participate in and receive annual awards under the Restricted
Stock Plan on a basis consistent with his past practice for a period of two
years after the Termination Date, determined and
5
payable in accordance with the terms of the Restricted Stock Plan and the
Company’s past practice; and
(C) The lapse of all restrictions on transfer and forfeiture
provisions to which Executive’s awards under the Restricted Stock Plan are
subject, so that any restricted shares previously awarded to Executive under
such plan shall be nonforfeitable and freely transferable thereafter, all on the
terms of the Restricted Stock Plan or the agreements thereunder.
(d) Notice of Termination. Any termination by the Company pursuant to
Subsection 5(a)(iii), (v) or (vi) or by Executive pursuant to Subsection
5(a)(iv) shall be communicated to the other party hereto by written notice of
termination, which shall state in reasonable detail the facts upon which the
termination has occurred.
6. Termination During Protected Period.
(a) Events of Termination. During the Protected Period, the Employment
Period shall terminate immediately upon the occurrence of any of the following
events: (i) the death of Executive; (ii) the expiration of 30 days after the
Company gives Executive written notice of its election to terminate the
Employment Period upon the Disability of Executive, if before the expiration of
such 30-day period Executive has not returned to the performance of his duties
hereunder on a full-time basis; (iii) the resignation of Executive without
delivering Notice of Termination for Good Reason; (iv) the Company’s termination
of the Employment Period for Cause; (v) the Company’s termination of the
Employment Period at any time, without Cause, for any reason or no reason; or
(vi) Executive’s termination of the Employment Period for Good Reason by
delivery of Notice of Termination for Good Reason to the Company during the
Protected Period indicating that an event constituting Good Reason has occurred,
provided that Executive’s failure to object in writing to an event alleged to
constitute Good Reason within six months of the date of occurrence of such event
shall be deemed a waiver of such event by Executive and Executive thereafter may
not terminate the Employment Period under this Subsection 6(a)(vi) based on such
event.
(b) Compensation Upon Termination. This Subsection 6(b) sets forth the
payments and benefits to which Executive is entitled under any termination of
employment pursuant to Subsection 6(a).
(i) Death; Disability. During any period in which Executive fails
to perform his duties hereunder as a result of incapacity due to physical or
mental illness, Executive shall continue to receive his full Base Salary until
his employment is terminated pursuant to Subsection 6(a)(i) or (ii). Upon
termination of the Employment Period under Subsection 6(a)(i) or (ii), Executive
shall no longer be entitled to participate in the Benefit Plans, except as
required by applicable law or as governed by the Benefit Plans including the
Group Long Term Disability Insurance in which Executive participates immediately
prior to such termination, but Executive shall be entitled to receive his Earned
Incentive Compensation, if any, promptly after the Termination Date.
6
(ii) Resignation or Cause. If Executive’s employment is
terminated pursuant to Subsection 6(a)(iii) or (iv), the Company shall pay
Executive his full Base Salary through the Termination Date at the rate in
effect at such time. The Company shall then have no further obligations to
Executive under this Agreement and Executive shall no longer be entitled to
participate in the Benefit Plans, except as required by applicable law.
(iii) Termination Without Cause or for Good Reason. If
Executive’s employment is terminated by the Company without Cause pursuant to
Subsection 6(a)(v) or by Executive for Good Reason pursuant to Subsection
6(a)(vi), then in lieu of any further salary payments to Executive for periods
subsequent to the Termination Date, the Company shall pay to Executive no later
than 30 calendar days following such date, a lump sum amount equal to (A) the
amount of Executive’s Unpaid Incentive Compensation, if any, plus (B) 300% of
the sum of (I) the greater of Executive’s Base Salary currently in effect or the
highest of Executive’s Base Salary in effect at any time during the period
commencing three years prior to the date the Protected Period begins; and (II)
the highest amount of Annual Incentive Compensation Executive received from the
Company during the full five fiscal years of the Company immediately preceding
the Protected Period. Executive also shall be entitled to certain continuing
benefits under the terms of Subsection 6(c). Notwithstanding any other provision
of this Subsection 6(b)(iii), Subsection 6(c), Section 7 or this Agreement, the
Company shall have no obligation to make the lump-sum payment referred to in
this Subsection 6(b)(iii), to provide any continuing benefits or payment
referred to in Subsection 6(c), or to make any Gross-Up Payment unless (X)
Executive executes and delivers to the Company a Release and Waiver of Claims
and (Y) Executive refrains from revoking, rescinding or otherwise repudiating
such Release and Waiver of Claims for all applicable periods during which
Executive may revoke it.
(c) Additional Benefits Following Termination under Subsections
6(a)(v) or (vi). This Subsection 6(c) sets forth the benefits to which Executive
shall be entitled, in addition to those set forth in Subsection 6(b)(iii),
following a termination of the Employment Period under Subsection 6(a)(v) or
(vi). Executive shall not be entitled to the benefit of any provision of this
Subsection 6(c) following a termination of the Employment Period under any other
provision hereof.
(i) Continuing Benefit Plans. For a period of three years
following such a Termination Date, Executive shall also be entitled to continue
to participate, on the same terms and conditions as active employees, in the
Continuing Benefit Plans in which Executive participated immediately prior to
the Termination Date, except that (A) Executive shall be entitled to
Estate/Financial Planning Benefits for a period of one year following the
Termination Date and (B) if Executive’s continued participation is not possible
and Executive does not continue to participate under the terms of any such
Continuing Benefit Plan, the Company shall instead pay to Executive, promptly
upon presentation to the Company of an invoice or receipt for payment, the
amount Executive spends to receive comparable coverage under such a comparable
plan for such three-year period. Notwithstanding the foregoing sentence, the
Company’s obligations to Executive with respect to continued benefits under the
Continuing Benefit Plans shall be deemed satisfied to the extent of any such
comparable benefits which are provided to Executive by another employer. During
such continuation period, Executive shall be responsible for paying the normal
employee share of the applicable premiums for coverage under the
7
Continuing Benefit Plans. The Company shall have the right to modify, amend or
terminate the Continuing Benefit Plans (other than the Estate/Financial Planning
Benefits) following the Termination Date and Executive’s continued participation
therein shall be subject to such modification, amendment or termination if such
modification, amendment or termination applies generally to the then-current
participants in such plan. Upon completion of the three-year period following
such a Termination Date, the Company shall afford Executive the opportunity to
continue Executive’s coverage under the Continuing Benefit Plans (other than the
Estate/Financial Planning Benefits), at Executive’s expense, for an additional
period under COBRA Continuation Coverage, so long as Executive timely elects to
receive COBRA Continuation Coverage under the terms thereof and otherwise
complies with the conditions of continuation of benefits under COBRA
Continuation Coverage.
(ii) Limited Benefit Plans. After such a Termination Date,
Executive shall no longer be entitled to participate as an active employee in,
or receive any additional or new benefits under, the Limited Benefit Plans,
except as set forth in this Subsection 6(c)(ii) and except for such benefits, if
any, available under such plans to former employees. After such a Termination
Date, Executive shall be entitled to the following additional benefits:
(A) The Company shall make a lump sum three-year premium
payment to the carrier equal to the premiums that the Company would have paid
under the Split Dollar Life Insurance if Executive had continued to be employed
for three years following the Termination Date, all on the terms of the Split
Dollar Life Insurance. In addition, immediately following such premium payment,
the Company shall execute such documents as necessary to cause the full
ownership of the Split Dollar Life Insurance policy related to Executive and all
of its values to transfer to Executive. The Company shall be responsible for the
payment of all costs imposed by the carrier to carry out such transfer;
(B) A lump-sum payment to be paid under the Restricted Stock
Plan equal to the cash value of the benefits Executive would have received had
he continued to participate in and receive annual awards under the Restricted
Stock Plan on a basis consistent with his past practice for a period of three
years after the Termination Date, determined and payable in accordance with the
terms of the Restricted Stock Plan and the Company’s past practice; and
(C) The lapse of all restrictions on transfer and forfeiture
provisions to which Executive’s awards under the Restricted Stock Plan are
subject, so that any restricted shares previously awarded to Executive under
such plan shall be nonforfeitable and freely transferable thereafter, all on the
terms of the Restricted Stock Plan or the agreements thereunder.
(d) Notice of Termination. Any termination by the Company pursuant to
Subsection 6(a)(ii), (iv) or (v) or by Executive pursuant to Subsection
6(a)(iii) shall be communicated to the other party hereto by written notice of
termination, which shall state in reasonable detail the facts upon which the
termination has occurred. A termination pursuant to Subsection 6(a)(vi) shall be
communicated by Notice of Termination for Good Reason.
(e) Notice of Change in Control. The Company shall give Executive
written notice of the occurrence of any event constituting a Change in Control
as promptly as practical, and in no case later than 10 calendar days, after the
occurrence of such event.
(f) Deemed Termination After Change in Control. Any termination of the
employment of Executive by the Company without Cause or the removal of Executive
as an elected officer or Director of the Company or a Subsidiary following the
commencement of any discussion with or communication from a third party that
ultimately results in a Change in Control shall be deemed to be a termination or
removal, respectively, of Executive after a Change in Control for purposes of
this Agreement. In the event Executive is entitled to the benefits under this
Agreement as contemplated by the preceding sentence, then for purposes of
Subsections 6(b)(iii) and 6(c) and Section 7, the Termination Date shall be
deemed to be the date of the Change in Control if the employment of Executive
was terminated before such date.
(g) Set-Off. There shall be no right of set-off or counterclaim
against, or delay in, any payment by the Company to Executive of the Lump-Sum
Payment or any Gross-Up Payment in respect of any claim against or debt or
obligation of Executive, whether arising hereunder or otherwise.
(h) Interest on Overdue Payments. Without limiting the rights of
Executive at law or in equity, if the Company fails to make the Lump-Sum Payment
or any Gross-Up Payment on a timely basis, the Company shall pay interest on the
amount thereof at an annualized rate equal to the rate in effect, at the time
such payment should have been made, under the 401(k) Plan for loans to
participants in such plan.
(i) Outplacement Assistance. Promptly after a request in writing from
Executive following a termination of the Employment Period under Subsection
6(a)(v) or (vi), the Company shall retain a professional outplacement assistance
service firm reasonably acceptable to Executive, at the Company’s expense, to
provide outplacement assistance to Executive during the Protected Period. Such
services shall be appropriate to Executive’s position with the Company.
Executive shall not be entitled to such services, however, following a
termination of the Employment Period under Subsection 6(a)(i), (ii), (iii) or
(iv).
(j) PARS Plan. If Executive participates in the PARS Plan and a Change
in Control occurs as determined under the PARS Plan, then Executive shall be
entitled to the lapse of transfer restrictions imposed on any grant of
restricted stock to Executive under the PARS Plan, all as determined under and
subject to the terms of the PARS Plan.
(k) Omnibus Plan. If Executive receives Awards (as defined therein)
under the Omnibus Plan and a Change in Control occurs as determined under the
Omnibus Plan, then Executive shall be entitled to the lapse of transfer
restrictions imposed on any Award granted to Executive under the Omnibus Plan,
all as determined under and subject to the terms of the Omnibus Plan.
7. Certain Additional Payments by the Company.
9
(a) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined (as hereafter provided) that any payment or
distribution by the Company or any of its Affiliates to or for the benefit of
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, performance share, performance unit, restricted stock, 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
(individually and collectively, a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision thereto) by
reason of being considered “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 to
any interest or penalties with respect to such taxes (such tax or taxes,
together with any such interest and penalties, being hereafter collectively
referred to as the “Excise Tax”), then Executive shall be entitled to receive an
additional payment or payments (individually and collectively, a “Gross-Up
Payment”). The Gross-Up Payment shall be in an amount such that, after payment
by 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, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payment.
(b) Subject to the provisions of Subsection 7(f), all determinations
required to be made under this Section 7, including whether an Excise Tax is
payable by Executive and the amount of such Excise Tax and whether a Gross-Up
Payment is required to be paid by the Company to Executive and the amount of
such Gross-Up Payment, if any, shall be made (i) by PricewaterhouseCoopers (or
its successor) (the “Accounting Firm”), regardless of any services that
PricewaterhouseCoopers (or its successor) has performed or may be performing for
the Company, or (ii) if PricewaterhouseCoopers (or its successor) is serving as
accountant or auditor for the individual, entity or group effecting a Change in
Control, or cannot (because of limitations under applicable law or otherwise)
make the determinations required to be made under this Section 7, then by
another nationally recognized accounting firm selected by Executive and
reasonably acceptable to the Company (which accounting firm shall then be the
“Accounting Firm” hereunder). The Company, or Executive if he selects the
Accounting Firm, shall direct the Accounting Firm to submit its determination
and detailed supporting calculations to both the Company and Executive within 30
calendar days after the Termination Date, if applicable, and any such other time
or times as may be requested by the Company or Executive. If the Accounting Firm
determines that any Excise Tax is payable by Executive, the Company shall pay
the required Gross-Up Payment to Executive within five business days after the
Company’s receipt of such determination and calculations with respect to any
Payment to Executive. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it shall, at the same time as it makes such determination,
furnish the Company and Executive an opinion that Executive has substantial
authority not to report any Excise Tax on his federal, state or local income or
other tax return. 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 applicable state or local tax law at the time of
any determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (an
“Underpayment”), consistent with the calculations
10
required to be made hereunder. In the event that the Company exhausts or fails
to pursue its remedies pursuant to Subsection 7(f) and Executive thereafter is
required to make a payment of any Excise Tax, 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 Executive as promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, Executive as a Gross-Up
Payment within five business days after the Company’s receipt of such
determination and calculations.
(c) The Company and Executive shall each provide the Accounting Firm
access to and copies of any books, records and documents in the possession of
the Company or 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 determinations and calculations
contemplated by Subsection 7(b). Any determination by the Accounting Firm as to
the amount of any Gross-Up Payment or Underpayment shall be binding upon the
Company and Executive.
(d) The federal, state and local income or other tax returns filed by
Executive shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
Executive. 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 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 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, Executive shall within five business
days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by Subsection
7(b) shall be borne by the Company.
(f) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service or any other taxing authority that, if successful,
would require the payment by the Company of a Gross-Up Payment. Such
notification shall be given as promptly as practicable but no later than 10
business days after Executive actually receives notice of such claim and
Executive shall further apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid (in each case, to the extent
known by Executive). Executive shall not pay such claim prior to the earlier of
(x) the expiration of the 30-calendar-day period following the date on which he
gives such notice to the Company and (y) the date that any payment of an amount
with respect to such claim is due. If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall:
11
(i) provide the Company with any written records or documents in
his possession relating to such claim reasonably requested by the Company;
(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 competent in respect of the subject matter and reasonably selected
by the Company;
(iii) cooperate with the Company in good faith in order
effectively to 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 interest and penalties) incurred in connection with such
contest and shall indemnify and hold harmless Executive, on an after-tax basis,
for and against any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such representation and payment of
costs and expenses. Without limiting the foregoing provisions of this Subsection
7(f), the Company shall control all proceedings taken in connection with the
contest of any claim contemplated by this Subsection 7(f) and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim
(provided, however, that Executive may participate therein at his own cost and
expense) and may, at its option, either direct Executive to pay the tax claimed
and file for a refund or contest the claim in any permissible manner, and
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 Executive to pay the tax claimed and file for a refund, the
Company shall advance the amount of such payment to Executive on an
interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income or other tax, including interest
or penalties with respect thereto, imposed with respect to such advance; and
provided further, however, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of Executive with respect to
which the contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of any such contested claim
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and 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.
(g) If, after the receipt by Executive of an amount advanced by the
Company pursuant to Subsection 7(f), Executive receives any refund with respect
to such claim, Executive shall (subject to the Company’s complying with the
requirements of Subsection 7(f)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after any taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by
the Company pursuant to Subsection 7(f), a determination is made that Executive
shall not be entitled to any refund with respect to such claim and the Company
does not notify Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30
12
calendar days after the Company is notified of such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of any such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid by the Company to Executive pursuant to this Section
7.
8. Binding Agreement; Successors. This Agreement shall inure to the
benefit of and be binding upon Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die while any amounts would still be payable to
him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Executive’s devisee, legatee, or other designee or, if there be no such
designee, to Executive’s estate. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the Company, including,
without limitation, any person acquiring directly or indirectly all or
substantially all of the assets of the Company, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
the “Company” for the purposes of this Agreement). The Company shall require any
such successor to assume and agree to perform this Agreement. Failure by the
Company to obtain such succession shall be a breach of this Agreement and shall
entitle Executive to compensation from the Company in the same amount and on the
same terms as the Executive would be entitled to hereunder if the Executive were
to terminate the Executive’s employment for Good Reason during the Protected
Period, except that, for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Termination
Date.
9. Restrictive Covenants.
(a) Non-Competition. During the Employment Period and for a period of
two years following the Termination Date, Executive shall not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner or director with, or have any financial interest in, any business which
is in substantial competition with any business conducted by the Company or by
any group, division or Subsidiary of the Company, in any area where such
business is being conducted at the time of such termination. Ownership of 5% or
less of the voting stock of any corporation which is required to file periodic
reports with the Securities and Exchange Commission under the Exchange Act shall
not constitute a violation hereof.
(b) Non-Solicitation. Executive shall not directly or indirectly, at
any time during the Employment Period and for two years thereafter, solicit or
induce or attempt to solicit or induce any employee, sales representative or
other representative, agent or consultant of the Company or any group, division
or Subsidiary of the Company (collectively, the “RPM Group”) to terminate his,
her or its employment, representation or other relationship with the RPM Group
or in any way directly or indirectly interfere with such a relationship.
(c) Confidentiality.
(i) Executive shall keep in strict confidence, and shall not, directly
or indirectly, at any time during or after the Employment Period, disclose,
furnish, publish,
disseminate, make available or, except in the course of performing his duties of
employment hereunder, use any Confidential Information. Executive specifically
acknowledges that all Confidential Information, whether reduced to writing,
maintained on any form of electronic media, or maintained in the mind or memory
of Executive and whether compiled by the RPM Group, and/or Executive, derives
independent economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from its disclosure or use,
that reasonable efforts have been made by the RPM Group to maintain the secrecy
of such information, that such information is the sole property of the RPM Group
and that any disclosure or use of such information by Executive during the
Employment Period (except in the course of performing his duties and obligations
hereunder) or after the termination of the Employment Period shall constitute a
misappropriation of the RPM Group’s trade secrets.
(ii) Executive agrees that upon termination of the Employment
Period, for any reason, Executive shall return to the Company, in good
condition, all property of the RPM Group, including, without limitation, the
originals and all copies of any materials, whether in paper, electronic or other
media, that contain, reflect, summarize, describe, analyze or refer or relate to
any items of Confidential Information.
10. Notice. All notices, requests and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a)
when hand delivered, (b) when dispatched by electronic facsimile transmission
(with receipt electronically confirmed), (c) one business day after being sent
by recognized overnight delivery service, or (d) three business days after being
sent by registered or certified mail, return receipt requested, postage prepaid,
and in each case addressed as follows (or addressed as otherwise specified by
notice under this Section):
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If to Executive:
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If to the Company:
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RPM International Inc.
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2628 Pearl Road
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P.O. Box 777
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Medina, Ohio 44258
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Facsimile: 330-225-6574
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Attn: [Assistant] Secretary
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11. Withholding. The Company may withhold from any amounts payable
under or in connection with this Agreement all federal, state, local and other
taxes as may be
required to be withheld by the Company under applicable law or governmental
regulation or ruling.
12. Amendments; Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing, and is signed by Executive and by another executive
officer of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
13. Jurisdiction. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the conflict of law principles of such State.
Executive and the Company each agree that the state and federal courts located
in the State of Ohio shall have jurisdiction in any action, suit or proceeding
against Executive or the Company based on or arising out of this Agreement and
each of Executive and the Company hereby (a) submits to the personal
jurisdiction of such courts, (b) consents to service of process in connection
with any such action, suit or proceeding and (c) waives any other requirement
(whether imposed by statute, rule of court or otherwise) with respect to
personal jurisdiction, venue or service of process.
14. Equitable Relief. Executive and the Company acknowledge and agree
that the covenants contained in Section 9 are of a special nature and that any
breach, violation or evasion by Executive of the terms of Section 9 will result
in immediate and irreparable injury and harm to the Company, for which there is
no adequate remedy at law, and will cause damage to the Company in amounts
difficult to ascertain. Accordingly, the Company shall be entitled to the remedy
of injunction, as well as to all other legal or equitable remedies to which the
Company may be entitled (including, without limitation, the right to seek
monetary damages), for any breach, violation or evasion by Executive of the
terms of Section 9.
15. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. In the event that any provision of Section 9 is found by a court of
competent jurisdiction to be invalid or unenforceable as against public policy,
such court shall exercise its discretion in reforming such provision to the end
that Executive shall be subject to such restrictions and obligations as are
reasonable under the circumstances and enforceable by the Company.
16. Code Section 409A. The benefits under this Agreement are intended
to meet the requirements for exemption from Code Section 409A (including without
limitation the exemptions for restricted property, short-term deferrals,
separation payments and reimbursements, and welfare benefits) and shall be so
construed and administered. Notwithstanding anything contained in this Agreement
to the contrary, after the adoption of the final regulations under Code Section
409A, this Agreement shall be amended as the Company may determine, with the
consent of the Executive (which shall not be unreasonably withheld), to better
secure exemption of each benefit hereunder from (or, if exemption is not
reasonably available for such a benefit, to better comply with) the requirements
of Code Section 409A.
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17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
18. Headings; Definitions. The headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Certain capitalized terms used in this
Agreement are defined on Schedule A attached hereto.
19. No Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party, except as provided in
Section 8.
20. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the employment of Executive and supersedes
any and all other agreements (including the Existing Agreement), either oral or
in writing, with respect to the employment of Executive.
21. Enforcement Costs. The Company is aware that upon the occurrence
of a Change in Control the Board of Directors or a shareholder of the Company
may then cause or attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to cause the Company
to institute, or may institute, litigation seeking to have this Agreement
declared unenforceable, or may take, or attempt to take, other action to deny
Executive the benefits intended under this Agreement. In these circumstances,
the purpose of this Agreement could be frustrated. It is the intent of the
Company that Executive not be required to incur the expenses associated with the
enforcement of his rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to Executive hereunder, nor be bound to
negotiate any settlement of his rights hereunder under threat of incurring such
expenses. Accordingly, if, following a Change in Control, it should appear to
Executive that the Company has failed to comply with any of its obligations
under this Agreement or the Company or any other person takes any action to
declare this Agreement void or unenforceable, or institutes any litigation or
other legal action designed to deny, diminish or recover from Executive the
benefits intended to be provided to Executive hereunder, and Executive has
complied with all of his obligations under Section 9, then the Company
irrevocably authorizes Executive from time to time to retain counsel of his
choice at the expense of the Company as provided in this Section 21 to represent
Executive in connection with the initiation or defense of any litigation or
other legal action, whether by or against the Company or any Director, officer,
shareholder or other person affiliated with the Company, in any jurisdiction.
The Company’s obligations under this Section 21 shall not be conditioned on
Executive’s success in the prosecution or defense of any such litigation or
other legal action. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to Executive entering into an attorney-client relationship with such
counsel, and in that connection the Company and Executive agree that a
confidential relationship shall exist between Executive and such counsel. The
reasonable fees and expenses of counsel selected from time to time by Executive
as hereinabove provided shall be paid or reimbursed to Executive by the Company
on a regular, periodic basis upon presentation by Executive of a statement or
statements prepared by such counsel in accordance with its customary practices,
up to a maximum aggregate
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amount of $500,000. Notwithstanding the foregoing, this Section 21 shall not
apply at any time unless a Change in Control has occurred.
[Remainder of page intentionally blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
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IN THE PRESENCE OF:
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RPM INTERNATIONAL INC.
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By:
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Frank C. Sullivan, President and
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Chief Executive Officer
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And:
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P. Kelly Tompkins, Executive Vice
President, Chief Administrative
Officer and Secretary
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[Ronald A. Rice, Executive Vice
President, Chief Operating Officer
and Assistant Secretary]
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The “Company”
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[Executive]
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“Executive”
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Schedule A
Certain Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
“401(k) Plan” means the RPM International Inc. 401(k) Trust and Plan and
any successor plan or arrangement.
“Affiliate” of a specified entity means an entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, the entity specified.
“Annual Incentive Compensation” means an amount equal to the amount of
Incentive Compensation paid to Executive (without regard to any reduction
thereof elected by Executive pursuant to any qualified or non-qualified
compensation reduction arrangement maintained by the Company, including,
without limitation, the Deferred Compensation Plan) for a completed fiscal
year (or for such shorter period during which Executive has been employed
by the Company) preceding the Termination Date in which the Company paid
Incentive Compensation to executive officers of the Company or in which the
Company considered and declined to pay Incentive Compensation to executive
officers of the Company.
“Benefit Plans” means the Continuing Benefit Plans and the Limited Benefit
Plans.
“Cause” means a determination of the Board of Directors (without the
participation of Executive) of the Company pursuant to the exercise of its
business judgment, that either of the following events has occurred: (a)
Executive has engaged in willful and intentional acts of dishonesty or
gross neglect of duty or (b) Executive has breached Section 9.
“Change in Control” shall mean the occurrence at any time of any of the
following events:
(a) The Company is merged or consolidated or reorganized into or with
another corporation or other legal person or entity, and as a result of
such merger, consolidation or reorganization less than a majority of the
combined voting power of the then-outstanding securities of such
corporation, person or entity immediately after such transaction are held
in the aggregate by the holders of Voting Stock immediately prior to such
transaction;
(b) The Company sells or otherwise transfers all or substantially all
of its assets to any other corporation or other legal person or entity, and
less than a majority of the combined voting power of the then-outstanding
securities of such corporation, person or entity immediately after such
sale or transfer is held in the aggregate by the holders of Voting Stock
immediately prior to such sale or transfer;
A - 1
(c) There is a report filed on Schedule 13D or Schedule TO (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any person (as the term “person” is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term “beneficial owner” is defined under Rule
l3d-3 or any successor rule or regulation promulgated under the Exchange
Act) of securities representing 15% or more of the Voting Power;
(d) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in response
to Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction;
(e) If during any period of two consecutive years, individuals, who at
the beginning of any such period, constitute the Directors cease for any
reason to constitute at least a majority thereof, unless the nomination for
election by the Company’s shareholders of each new Director was approved by
a vote of at least two-thirds of the Directors then in office who were
Directors at the beginning of any such period; or
(f) The shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing provisions of paragraphs (c) and (d) of
this definition, a “Change in Control” shall not be deemed to have occurred
for purposes of this Agreement (i) solely because (A) the Company, (B) a
Subsidiary, or (C) any Company-sponsored employee stock ownership plan or
other employee benefit plan of the Company or any Subsidiary, or any entity
holding shares of Voting Stock for or pursuant to the terms of any such
plan, either files or becomes obligated to file a report or proxy statement
under or in response to Schedule 13D, Schedule TO, Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) under the
Exchange Act, disclosing beneficial ownership by it of shares of Voting
Stock or because the Company reports that a change in control of the
Company has or may have occurred or will or may occur in the future by
reason of such beneficial ownership, (ii) solely because any other person
or entity either files or becomes obligated to file a report on Schedule
13D or Schedule TO (or any successor schedule, form or report) under the
Exchange Act, disclosing beneficial ownership by it of shares of Voting
Stock, but only if both (A) the transaction giving rise to such filing or
obligation is approved in advance of consummation thereof by the Company’s
Board of Directors and (B) at least a majority of the Voting Power
immediately after such transaction is held in the aggregate by the holders
of Voting Stock immediately prior to such transaction, or (iii) solely
because of a change in control of any Subsidiary.
Notwithstanding the foregoing definition or anything contained in this
Agreement, a “Change in Control” shall not be deemed to have occurred as a
result of (i)
A - 2
RPM, Inc., an Ohio corporation, or the Company entering into the Merger
Agreement or the Reorganization Agreement or (ii) the consummation by RPM,
Inc., an Ohio corporation, or the Company of any of the transactions
contemplated by the Merger Agreement or the Reorganization Agreement. As
used herein, “Merger Agreement” shall mean the Agreement and Plan of
Merger, dated as of August 29, 2002, among RPM, Inc., an Ohio corporation,
the Company, and RPM Merger Company, an Ohio corporation and wholly-owned
subsidiary of the Company, and “Reorganization Agreement” shall mean the
Reorganization Agreement, dated as of October 15, 2002, by and between RPM,
Inc., an Ohio corporation, and the Company.
“COBRA Continuation Coverage” means the health care continuation
requirements under the federal Consolidated Omnibus Budget Reconciliation
Act, as amended, Part VI of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974, as amended, and Code Section
4980B(f), or any successor provisions thereto.
“Code” means the Internal Revenue Code of 1986, as amended from time to
time.
“Confidential Information” means trade secrets and confidential business
and technical information of the RPM Group and its customers and vendors,
without limitation as to when or how Executive may have acquired such
information. Such Confidential Information shall include, without
limitation, the RPM Group’s manufacturing, selling and servicing methods
and business techniques, training, service and business manuals,
promotional materials, vendor and product information, product development
plans, internal financial statements, sales and distribution information,
business plans, marketing strategies, pricing policies, corporate
alliances, business opportunities, the lists of actual and potential
customers as well as other customer information, technology, know-how,
processes, data, ideas, techniques, inventions (whether patentable or not),
formulas, terms of compensation and performance levels of RPM Group
employees, and other information concerning the RPM Group’s actual or
anticipated business, research or development, or which is received in
confidence by or for the RPM Group from any other person and all other
confidential information to the extent that such information is not
intended by the RPM Group for public dissemination.
“Continuing Benefit Plans” means only the following employee benefit plans
and arrangements of the Company in effect on the date hereof, or any
successor plan or arrangement in which Executive is eligible to participate
immediately before the Termination Date:
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(a)
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The RPM International Inc. Health and Welfare Plan (including
medical, dental and prescription drug benefits); and
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(b)
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Estate/Financial Planning Benefits.
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“Deferred Compensation Plan” means the RPM International Inc. Deferred
Compensation Plan, as amended from time to time, in which executive
officers of the Company are eligible to participate and any such successor
plan or arrangement.
A - 3
“Director” means a member of the Board of Directors of the Company.
“Disability,” when determined at any time other than during the Protected
Period, means the inability of Executive for a continuous period in excess
of 150 days to perform the essential functions of his position on an active
full-time basis with or without reasonable accommodations by reason of a
disability condition; a certificate from a physician acceptable to both the
Company and Executive to the effect that Executive is or has been disabled
and incapable of performing the essential functions of his position with or
without reasonable accommodations as previously performed shall be
conclusive of the fact that Executive is incapable of performing such
services and is, or has been, disabled for the purposes of this Agreement.
“Disability,” when determined at any time during the Protected Period,
means a “Total Disability” (as defined and determined under the Group Long
Term Disability Insurance) that entitles Executive to receive the “Total
Disability Benefit” under the Group Long Term Disability Insurance. Whether
determined during or outside of the Protected Period, the Company and
Executive acknowledge and agree that the essential functions of Executive’s
position are unique and critical to the Company and that a disability
condition that causes Executive to be unable to perform the essential
functions of his position under the circumstances described above will
constitute an undue hardship on the Company.
“Earned Incentive Compensation” means the sum of:
(a) The Unpaid Incentive Compensation; and
(b) An amount equal to the Annual Incentive Compensation for the most
recent completed fiscal year (or for such shorter period during which
Executive has been employed by the Company) preceding the Termination Date
multiplied by a fraction, the numerator of which is the number of days in
the current fiscal year of the Company that have expired before the
Termination Date and the denominator of which is 365.
“Estate/Financial Planning Benefits” means those estate and financial
planning services (a) in effect on the date hereof in which Executive is
eligible to participate or (b) that the Company makes available at any time
before the Termination Date to the executives and key management employees
of the Company and in which Executive is then eligible to participate.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, as such law, rules and regulations
may be amended from time to time.
“Good Reason” means a determination by Executive made in good faith that,
upon or after the occurrence of a Change in Control, any of the following
events has occurred without Executive’s express written consent: (a) a
significant reduction in the nature or scope of the title, authority or
responsibilities of Executive from those held by Executive
A - 4
immediately prior to the Change in Control; (b) a reduction in Executive’s
Base Salary from the amount in effect on the date of the Change in Control;
(c) a reduction in Executive’s Annual Incentive Compensation from the
amount of Executive’s Annual Incentive Compensation for the fiscal year
preceding the fiscal year in which the Termination Date occurs, unless such
reduction results solely from the Company’s results of operations; (d) the
failure by the Company to offer to Executive an economic value of benefits
reasonably comparable to the economic value of benefits under the Benefit
Plans in which Executive participates at the time of the Change in Control;
(e) the purported termination of the Executive’s employment which is not
effected pursuant to Sections 6(d) and 10 of this Agreement, which
purported termination shall not be effective for purposes of this
Agreement; (f) the failure by the Company to comply with and satisfy
Section 8 of this Agreement, relating to the assumption of the Agreement by
any successor entity; or (g) a material breach by the Company of the terms
of Section 3.
“Gross-Up Payment” shall have the meaning given such term in Section 7.
“Group Long Term Disability Insurance” means the Group Long Term Disability
Insurance sponsored by the Company, as currently in effect and as the same
may be amended from time to time, and any successor long-term disability
insurance sponsored by the Company in which the executives and key
management employees of the Company are eligible to participate.
“Life and Disability Welfare Plan” means the RPM International Inc. Life
and Disability Welfare Plan, which includes Group Life Insurance, Group
Long Term Disability Insurance and Group Accidental Death and Dismemberment
Insurance.
“Limited Benefit Plans” means all the Company’s employee benefit plans and
arrangements in effect at any time and in which the executives and key
management employees of the Company are eligible to participate, excluding
the Continuing Benefit Plans, but including, without limitation, the
following employee benefit plans and arrangements or any successor or new
plan or arrangement made available in the future to the executives and key
management employees of the Company and in which Executive is eligible to
participate before the Termination Date:
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(a)
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The 401(k) Plan;
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(b)
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The RPM International Inc. Retirement Plan;
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(c)
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Stock option plans and other equity-based incentive plans,
including the RPM International Inc. 1996 Stock Option Plan, the
Restricted Stock Plan and the Omnibus Plan;
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(d)
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The Split Dollar Life Insurance;
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(e)
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The RPM International Inc. Incentive Compensation Plan;
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(f)
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The Deferred Compensation Plan;
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(g)
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The RPM International Inc. Employee Stock Purchase Plan;
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(h)
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The Life and Disability Welfare Plan;
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The RPM International Inc. Group Variable Universal Life Plan
(also known as GRIP or GVUL);
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(j)
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The RPM International Inc. Business Travel Accident Plan;
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(k)
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The fringe benefits appertaining to Executive’s position with the
Company referred to in Subsection 4(f), including the use of an
automobile; and
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(l)
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RPM International Inc. Flexible Benefits Plan.
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“Lump-Sum Payment” means, collectively, the lump-sum payments that may be
payable to Executive pursuant to the first sentence of Subsection 6(b)(iii)
and pursuant to Subsection 6(c)(ii)(B).
“Notice of Termination for Good Reason” means a written notice delivered by
Executive in good faith to the Company under Subsection 6(a)(vi) setting
forth in reasonable detail the facts and circumstances that have occurred
and that Executive claims in good faith to be an event constituting Good
Reason.
“Omnibus Plan” means the RPM International Inc. 2004 Omnibus Equity and
Incentive Plan.
“PARS Plan” means the RPM International Inc. 2002 Performance Accelerated
Restricted Stock Plan and any successor plan or arrangement thereto.
“Protected Period” means that period of time commencing on the date of a
Change in Control and ending two years after such date.
“Release and Waiver of Claims” means a written release and waiver by
Executive, to the fullest extent allowable under applicable law and in form
reasonably acceptable to the Company, of all claims, demands, suits,
actions, causes of action, damages and rights against the Company and its
Affiliates whatsoever which he may have had on account of the termination
of his employment, including, without limitation, claims of discrimination,
including on the basis of sex, race, age, national origin, religion, or
handicapped status, and any and all claims, demands and causes of action
for severance or other termination pay. Such Release and Waiver of Claims
shall not, however, apply to the obligations of the Company arising under
this Agreement, any indemnification agreement between Executive and the
Company, any retirement plans, any stock option agreements, COBRA
Continuation Coverage or rights of indemnification Executive may
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have under the Company’s Certificate of Incorporation or By-laws (or
comparable charter document) or by statute.
“Restricted Stock Plan” means the RPM International Inc. 1997 Restricted
Stock Plan and any successor plan or arrangement thereto, but shall not be
deemed to mean or include the PARS Plan or the Omnibus Plan.
“Split Dollar Life Insurance” means the RPM International Inc. Split Dollar
Executive Life Insurance Plan in effect on the date hereof or any successor
arrangement that the Company makes available at any time before the
Termination Date to the executives and key management employees of the
Company and in which Executive is then eligible to participate.
“Subsidiary” means a corporation, company or other entity (a) more than 50
percent of whose outstanding shares or securities (representing the right
to vote for the election of directors or other managing authority) are, or
(b) which does not have outstanding shares or securities (as may be the
case in a partnership, joint venture or unincorporated association), but
more than 50 percent of whose ownership interest representing the right
generally to make decisions for such other entity is, now or hereafter,
owned or controlled, directly or indirectly, by the Company.
“Termination Date” means the effective date of the termination of the
Employment Period.
“Unpaid Incentive Compensation” means an amount equal to the amount of any
Incentive Compensation payable but not yet paid for the fiscal year
preceding the fiscal year in which the Termination Date occurs. If the
Compensation Committee has determined such amount prior to the Termination
Date, then such amount shall be the amount so determined by the
Compensation Committee. If the Compensation Committee has not determined
such amount prior to the Termination Date, then such amount shall equal the
amount of the Annual Incentive Compensation for the most recent fiscal year
preceding the fiscal year in which the Termination Date occurs for which
Incentive Compensation has been paid. For purposes of this definition, any
Incentive Compensation deferred by Executive pursuant to any qualified or
non-qualified compensation reduction arrangement maintained by the Company,
including, without limitation, the Deferred Compensation Plan, shall be
deemed to have been paid on the date of deferral.
“Voting Power” means, at any time, the total votes relating to the
then-outstanding securities entitled to vote generally in the election of
Directors.
“Voting Stock” means, at any time, the then-outstanding securities entitled
to vote generally in the election of Directors.
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