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Exhibit 10.3
EMPLOYMENT AGREEMENT
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THIS AGREEMENT made as of the 15th day of July, 1992, between
RPM, INC., an Ohio corporation (the "Company"), and XXXXX X. XXXXXXXX
("Xxxxxxxx").
WHEREAS, Xxxxxxxx has been employed by the Company since 1989
and is currently Vice President - Corporate Development of the Company; and
WHEREAS, Xxxxxxxx possesses valuable knowledge of the
corporate growth strategy of the Company; and
WHEREAS, the Board of Directors of the Company recognizes the
importance of Xxxxxxxx'x continuing contribution as Vice President - Corporate
Development to the future growth and success of the Company and desires to
assure the Company and its shareholders of Xxxxxxxx'x continued employment in an
executive capacity and to compensate him therefor; and
WHEREAS, Xxxxxxxx is desirous of committing himself to
continue to serve the Company on the terms herein provided;
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 Xxxxxxxx, and Xxxxxxxx hereby agrees to continue to serve the Company,
on the terms and conditions set forth herein for the period commencing
retroactive to June 1, 1992 (the "Effective Date"), and expiring on July 31,
1993 (unless
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sooner terminated as hereinafter set forth).
2. POSITION AND DUTIES. Xxxxxxxx shall serve as Vice President
- Corporate Development reporting to the Chairman of the Company and shall have
responsibility for projects relating to the Company's growth and development,
including corporate acquisitions and financings, and shall have such other
powers and duties as may from time to time be assigned by the President,
Chairman of the Board, or the Board of Directors of the Company; provided,
however, that such duties are consistent with his present duties and his
position as Vice President - Corporate Development of the Company. Xxxxxxxx
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, Xxxxxxxx shall not be required to relocate or move from his
existing principal residence in Bay Village, Ohio, and shall not be required to
perform services which would make the continuance of his principal residence in
Bay Village, Ohio, unreasonably difficult or inconvenient for him. The Company
will give Xxxxxxxx at least six (6) months' advance notice of any proposed
relocation of its Medina, Ohio offices to a location more than twenty-five miles
from Medina, Ohio and, if Xxxxxxxx in his sole discretion chooses to relocate
his principal residence, the Company will promptly pay (or reimburse him for)
all reasonable relocation expenses incurred by him relating to a
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change of his principal residence in connection with any such relocation of the
Company's offices in Medina, Ohio.
4. Compensation.
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(a) BASE SALARY. Xxxxxxxx shall receive a base salary at the
rate of not less than One Hundred Ten Thousand Dollars ($110,000) per annum
("Base Salary"), payable in substantially equal monthly installments at the end
of each month during the period of Xxxxxxxx'x employment hereunder. It is
contemplated that annually in July of each year, the Compensation Committee of
the Board of Directors will review Xxxxxxxx'x Base Salary and other compensation
during the period of his employment hereunder and, at the discretion of the
Compensation Committee, it may increase his Base Salary and other compensation
based upon his performance, then generally prevailing industry salary scales,
the Company's results of operation, 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, Xxxxxxxx'x Base Salary hereunder shall not be reduced without
his written consent.
(b) INCENTIVE COMPENSATION/BONUS. In addition to his Base
Salary, Xxxxxxxx shall be entitled to receive such annual incentive compensation
payment or bonus as the Compensation Committee of the Board of Directors of the
Company may determine in their sole discretion based upon the Company's results
of operation and other relevant factors. At the election of
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Xxxxxxxx, such annual incentive compensation payment or bonus may be received by
Xxxxxxxx as soon as possible, but no later than ninety (90) days after the close
of the Company's fiscal year for which such payment or bonus is granted, or the
payment may be deferred provided Xxxxxxxx gives written notice to the Chairman
of the Compensation Committee of the Board of Directors that he elects to defer
payment, which notice shall also state the date(s) on which he desires to be
paid, but in no event later than May 31 of the current fiscal year.
(c) EXPENSES. During the term of his employment hereunder,
Xxxxxxxx shall be entitled to receive prompt reimbursement for all reasonable
business expenses incurred by him (in accordance with his past practice) in
performing services hereunder, provided that Xxxxxxxx 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. Xxxxxxxx shall be entitled
to continue to participate in or receive benefits under all the Company's
employee benefit plans and arrangements in effect on the date hereof or made
available in the future to the executives and key management employees of the
Company (including, but not limited to, stock option plans, pension or profit
sharing plans, group insurance plans, and medical and health insurance plans),
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and
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arrangements. Nothing paid or awarded to Xxxxxxxx under any plan or arrangement
presently in effect or made available in the future shall reduce or be deemed to
be in lieu of compensation to Xxxxxxxx pursuant to any other provision of this
Section 4.
(e) VACATIONS. Xxxxxxxx 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 (4) weeks
in any fiscal year, to be taken at such time or times as is desired by Xxxxxxxx
after consultation with the President or Chairman of the Board to avoid
scheduling conflicts (prorated in any fiscal year during which Xxxxxxxx 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). Xxxxxxxx
shall also be entitled to all paid holidays given by the Company to its other
salaried employees.
(f) OTHER BENEFITS. Xxxxxxxx shall be entitled to continue to
receive the fringe benefits appertaining to the position of Vice President -
Corporate Development of the Company in accordance with present practice,
including the use of the most recent model of a full-sized U.S. made automobile.
In the event of Xxxxxxxx'x death during the period of his employment hereunder,
the Company hereby agrees to pay Xxxxxxxx'x spouse, or if he has no spouse
surviving him, to his estate, the sum of Five Thousand Dollars ($5,000) in
addition to any other compensation provided
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Xxxxxxxx or his spouse by the Company. Said payment shall be a death benefit
under Section 101(b) of the Internal Revenue Code. At all times during the term
of this Agreement, Xxxxxxxx shall be entitled to the full-time use of his
present 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.
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(a) DISABILITY. If, as a result of his incapacity due to
physical or mental illness, Xxxxxxxx shall have been absent from his duties
hereunder on a full-time basis for one hundred and eighty (180) consecutive
days, and within thirty (30) days after written notice of termination is given
shall not have returned to the performance of his duties hereunder on a
full-time basis, the Company may terminate Xxxxxxxx'x employment hereunder.
(b) CAUSE. The Company may terminate Xxxxxxxx'x employment
hereunder for Cause. For the purposes of this Agreement, the Company shall have
"Cause" to terminate Xxxxxxxx'x employment hereunder only (A) for willful and
intentional acts of dishonesty or gross neglect of duty by Xxxxxxxx, or (B) if
Xxxxxxxx shall have participated in a Competitive Operation (as defined in
Section 8).
(c) TERMINATION BY XXXXXXXX. Xxxxxxxx may terminate his
employment hereunder in the event of a Change in Control of the Company (as
hereinafter defined).
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For purposes of this Agreement, "Change in Control" shall
include any of the following events: (A) a filing under any federal or state law
in connection with any offer to purchase a controlling block of Common Shares of
the Company (which shall be defined as a block of shares sufficient in amount to
elect a majority of the Company's then existing Board of Directors pursuant to
the cumulative voting procedure under Ohio corporation law as if all Directors
were to be elected without classification at a single meeting of shareholders)
pursuant to a tender offer or otherwise (other than an offer by the Company or
any of its subsidiaries to purchase such Common Shares) which has not been
approved by the Company's Board of Directors; (B) unless approved by the
Company's Board of Directors, the execution of any agreement for the
reorganization, merger or consolidation of the Company into or with another
corporation or for the sale of substantially all the assets of the Company to
another corporation, or an agreement which provides that the Company will become
a subsidiary of another corporation, any of which agreements, if consummated,
would result in a change in control of the Company; or (C) the consummation of
any of the transactions or events described in (A) and (B) above. Xxxxxxxx shall
have sixty (60) days after the latest of the events of Change in Control to
elect to terminate his employment.
(d) Any termination by the Company pursuant to subsection (a)
or (b) above or by Xxxxxxxx pursuant to subsection
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(c) above shall be communicated by written notice of termination to the other
party hereto, which shall state in reasonable detail the facts upon which the
termination has occurred.
6. Compensation During Disability or Upon Termination.
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(a) DISABILITY. During any period that Xxxxxxxx fails to
perform his duties hereunder as a result of incapacity due to physical or mental
illness, Xxxxxxxx shall continue to receive his full Base Salary until his
employment is terminated pursuant to Section 5(a) hereof.
(b) CAUSE. If Xxxxxxxx'x employment shall be terminated for
Cause pursuant to Section 5(b) hereof, the Company shall pay Xxxxxxxx his full
Base Salary through the date on which his employment is terminated at the rate
in effect at the time notice of termination is given. The Company shall then
have no further obligations to Xxxxxxxx under this Agreement except such as may
be required by law.
(c) TERMINATION WITHOUT CAUSE. If the Company shall terminate
Xxxxxxxx'x employment other than pursuant to Section 5(a) or 5(b) hereof, then
in lieu of any further salary payments to Xxxxxxxx for periods subsequent to the
date on which Xxxxxxxx'x employment is terminated, the Company shall pay as
liquidated damages and/or severance pay to Xxxxxxxx no later than the tenth
(10th) day following such date, a lump sum amount equal to 100% of Xxxxxxxx'x
Base Salary in effect as of such date.
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(d) CHANGE IN CONTROL. If Xxxxxxxx shall terminate his
employment in the event of a Change in Control of the Company which has not been
approved by the Board of Directors, then in lieu of any further salary payments
to Xxxxxxxx for periods subsequent to the date on which his employment is
terminated, the Company shall pay to Xxxxxxxx as liquidated damages and/or
severance pay (i) no later than the tenth (10th) day following such date, a lump
sum amount equal to the product of Xxxxxxxx'x Base Salary in effect as of such
date multiplied by three (3), or (ii) if Xxxxxxxx shall so elect, the Company
shall continue to pay him his Base Salary in the manner specified in Section
4(a) hereof until the third anniversary of the date on which his employment is
terminated. If Xxxxxxxx elects to receive payments pursuant to (ii) above, such
period of time as he continues to receive payments shall be considered services
with the Company, and he shall be considered an employee for purposes of
continued credits under any of the Company's employee benefit plans he
participates in as of the date on which his employment is terminated.
7. BINDING AGREEMENT. This Agreement and all obligations of
the Company hereunder shall be binding upon the successors and assigns of the
Company. This Agreement and all rights of Xxxxxxxx hereunder shall inure to the
benefit of and be enforceable by Xxxxxxxx'x personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Xxxxxxxx should die while any amounts
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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 Xxxxxxxx'x devisee, legatee, or other designee or, if
there be no such designee, to Xxxxxxxx'x estate.
8. NON-COMPETITION. During the term of employment provided for
in Section 1 hereof and during any further period provided for in Section 6
hereof while the Company is making payments to Xxxxxxxx, Xxxxxxxx will 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 (a
"Competitive Operation"). Ownership of five percent (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 Securities Exchange Act of 1934
shall not constitute a violation hereof.
9. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been fully given when delivered or mailed by United States
certified or registered
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mail, return receipt requested, postage prepaid addressed as follows:
If to Xxxxxxxx:
Xxxxx X. Xxxxxxxx
00000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxx 00000
If to the Company:
RPM, Inc.
X.X. Xxx 000
0000 Xxxxx Xxxx
Xxxxxx, Xxxx 00000
Attn: Secretary
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
10. WITHHOLDING. All payments required to be made by the
Company hereunder to Xxxxxxxx or his estate or beneficiaries, shall be subject
to the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation.
11. MISCELLANEOUS. 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 Xxxxxxxx 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
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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. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Ohio.
12. 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.
13. 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 will constitute one and the same instrument.
14. HEADINGS. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
15. NO ASSIGNMENT. This Agreement may not be assigned by
either party without the prior written consent of the other party.
16. 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
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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 Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx that the Company has failed to
comply with any of its obligations under this Agreement or in the event that
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 to recover from, Xxxxxxxx the benefits intended to be
provided to Xxxxxxxx hereunder, and that Xxxxxxxx has complied with all of his
obligations under this Agreement, the Company irrevocably authorizes Xxxxxxxx
from time to time to retain counsel of his choice at the expense of the Company
as provided in this Section 16, to represent Xxxxxxxx in connection with the
initiation or defense of any litigation or
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other legal action, whether by or against the Company or any Director, officer,
shareholder or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to Xxxxxxxx entering
into an attorney-client relationship with such counsel, and in that connection
the Company and Xxxxxxxx agree that a confidential relationship shall exist
between Xxxxxxxx and such counsel. The reasonable fees and expenses of counsel
selected from time to time by Xxxxxxxx as hereinabove provided shall be paid or
reimbursed to Xxxxxxxx by the Company on a regular, periodic basis upon
presentation by Xxxxxxxx of a statement or statements prepared by such counsel
in accordance with its customary practices, up to a maximum aggregate amount of
$500,000.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
IN THE PRESENCE OF: RPM, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
And: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, Secretary
The "Company"
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
"Xxxxxxxx"
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