AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
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
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.
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Compensation Plan (including provisions regarding the time and form of such
deferral election) and such procedures as may be established thereunder.
(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.
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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).
(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
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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
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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.
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(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
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(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.
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(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.
(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.
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(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
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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:
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(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
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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.
(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,
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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.
If to Executive: | ||||
If to the Company: | ||||
RPM International Inc. | ||||
0000 Xxxxx Xxxx | ||||
X.X. Xxx 000 | ||||
Xxxxxx, Xxxx 00000 | ||||
Facsimile: 000-000-0000 | ||||
Attn: [Assistant] Secretary |
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required to be withheld by the Company under applicable law or governmental
regulation or ruling.
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.
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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 THE PRESENCE OF:
|
RPM INTERNATIONAL INC. | |||||||
By: | ||||||||
Chief Executive Officer | ||||||||
And: | ||||||||
P. Xxxxx Xxxxxxxx, Executive Vice President, Chief Administrative Officer and Secretary | ||||||||
[Xxxxxx X. Xxxx, Executive Vice President, Chief Operating Officer and Assistant Secretary] | ||||||||
The “Company” | ||||||||
[Executive] | ||||||||
“Executive” |
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;
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(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)
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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:
(a) | The RPM International Inc. Health and Welfare Plan (including medical, dental and prescription drug benefits); and | ||
(b) | Estate/Financial Planning Benefits. |
“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.
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“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
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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:
(a) | The 401(k) Plan; | ||
(b) | The RPM International Inc. Retirement Plan; | ||
(c) | 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; | ||
(d) | The Split Dollar Life Insurance; | ||
(e) | The RPM International Inc. Incentive Compensation Plan; |
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(f) | The Deferred Compensation Plan; | ||
(g) | The RPM International Inc. Employee Stock Purchase Plan; | ||
(h) | The Life and Disability Welfare Plan; | ||
(i) | The RPM International Inc. Group Variable Universal Life Plan (also known as GRIP or GVUL); | ||
(j) | The RPM International Inc. Business Travel Accident Plan; | ||
(k) | The fringe benefits appertaining to Executive’s position with the Company referred to in Subsection 4(f), including the use of an automobile; and | ||
(l) | RPM International Inc. Flexible Benefits Plan. |
“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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