EXHIBIT 10
CHANGE OF CONTROL AGREEMENT
This change of control agreement (the "Agreement") is made effective
as of June 20, 2000, by and between Ameron International Corporation, a
Delaware corporation (the "Company") and Xxxxx X. XxXxxxxxxx ("Employee").
WITNESSETH
WHEREAS, if certain corporate transactions were proposed or pending,
such potential transactions could result in distractions to Employee's
performance at a critical period; and
WHEREAS, Employee and Company wish to enter into this Agreement in
order to provide security to Employee as a means of maintaining performance
under such circumstances;
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the Company and Employee agree as follows:
1. TERM.
1.1 The term of this Agreement (the "Term") shall commence on June 20,
2000 and shall be for two years, subject to earlier termination in accordance
with the provisions of Section 4 hereinbelow. Beginning on June 21, 2000 and on
each day thereafter, the Term shall automatically be extended for an additional
day, unless the Company notifies Employee in writing that it does not wish to
further extend the Term.
2. POSITION AND TITLE.
2.1 The Company, on behalf of itself and its affiliates and
subsidiaries, currently employs Employee as Vice President & Treasurer.
2.2 Employee shall devote substantially all of his efforts on a
full-time basis to the business and affairs of the Company and shall not engage
in any business or perform any services in any capacity whatsoever adverse to
the interests of the Company.
2.3 Employee shall at all times faithfully, industriously, and to the
best of his ability, experience, and talents perform all of the duties of his
position.
3. COMPENSATION.
3.1 As of the date of this Agreement, Employee's annual base salary is
$135,000. Employee's base salary and performance shall be reviewed periodically
at intervals determined by the Board of Directors of the Company (the "Board"),
and Employee's base salary may be
increased from time to time based on merit or such other considerations as
the Board may deem appropriate.
4. TERMINATION OF EMPLOYMENT.
For purposes of this Agreement only, a Termination Without Cause shall
exist if Employee is terminated by the Company for any reason except:
(1) Willful breach of duty by Employee in the course of his
employment or habitual neglect of his duty or continued incapacity to
perform it, as contemplated by Section 2924 of the California Labor
Code;
(2) Willful malfeasance or gross negligence by Employee in
the performance of his duties;
(3) Any act of fraud, insubordination or other conduct by
Employee which demonstrates gross unfitness for service; or
(4) Employee's conviction (or entry of a plea of guilty, nolo
contendere or the equivalent) for any crime involving moral turpitude,
dishonesty or breach of trust or any felony which is punishable by
imprisonment in the jurisdiction involved.
Additionally, if Employee terminates employment with the Company
because (a) Employee's annual base salary is reduced below the amount stated
in Paragraph 3.1 hereinabove (unless such reduction is part of an across the
board reduction affecting all Company executives with a comparable level of
responsibility, title or stature), or (b) Employee is removed from or denied
participation in incentive plans, benefit plans, or perquisites generally
provided by the Company to other executives with a comparable level of
responsibility, title or stature, or (c) Employee's target incentive
opportunity, benefits or perquisites are reduced relative to other executives
with comparable responsibility, title or stature, or (d) Employee's title,
duties or responsibilities with the Company are significantly reduced, or (e)
Employee is required to relocate to an area outside the Metropolitan Los
Angeles area, such event shall be considered a Termination Without Cause;
provided that Employee must furnish written notice to the Company setting
forth the reasons for Employee's intention to terminate employment under this
paragraph, and the Company shall have an opportunity to cure the actions or
omissions forming the basis for such intended termination, if possible,
within thirty (30) days after receipt of such written notice.
5. CHANGE OF CONTROL.
5.1 In the event of a Change of Control of the Company at any time
during the Term of this Agreement, and Employee's Termination Without Cause
within a period of twelve (12) months following the date of such Change of
Control, Employee shall be entitled to the following benefits:
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(1) The Company shall pay Employee a lump-sum severance amount
within thirty (30) days following Termination Without Cause equal to two (2)
times the sum of (a) the higher of the Employee's annual base salary at the time
of Termination Without Cause or the annual base salary stated in Paragraph 3.1
above, and (b) the average annual bonus earned by Employee (whether paid in cash
or deferred) under the Company's annual bonus plan (currently known as the
"Management Incentive Compensation Plan") for the two completed fiscal years
immediately prior to Termination Without Cause.
(2) The Company shall provide for Employee to receive medical,
dental, life, and disability insurance coverage for two (2) years following
Termination Without Cause at levels and a net cost to Employee comparable to
that provided to Employee immediately prior to Employee's Termination Without
Cause.
(3) The Company shall pay Employee an additional lump-sum
amount within thirty (30) days following Employee's Termination Without Cause
equal to a pro-rata portion of Employee's target incentive bonuses (based on the
period prior to Termination Without Cause in proportion to the entire period for
which such bonuses are payable) under the Company's annual management incentive
plan, which is currently known as the "Management Incentive Compensation Plan."
5.2 In the event of a Change of Control at any time during the term of
this Agreement, all unvested restricted stock grants and stock options granted
to Employee shall automatically vest in full upon the Change of Control.
5.3 Notwithstanding any other provisions in this Agreement or any other
agreement, plan or arrangement, if any payment or benefit received or to be
received by Employee, whether under terms of this Agreement or any other
agreement, plan or arrangement with the Company or an affiliate of the Company
(all such payments and benefits being hereinafter referred to as "Total
Payments"), would be subject, in whole or in part, to taxes imposed by Internal
Revenue Code ("IRC") Section 4999, then the Total Payments shall be reduced to
the extent necessary so that no portion of the Total Payments shall be subject
to the parachute excise tax (the "Excise Tax") imposed by IRC Section 4999
(after taking into account any reduction in the Total Payments provided by
reason of IRC Section 280G in any other plan, arrangement or agreement). Total
Payments shall not include any amounts which are not considered as "parachute
payments" under IRC Section 280G in the opinion of suitable experts selected by
the Company's Board of Directors. The Company shall provide Employee with the
calculation of the foregoing amounts and any supporting materials reasonably
necessary for Employee to evaluate the calculations. Any reduction in the Total
Payments in accordance with this Paragraph 5.3 shall be made in such order as
may be determined by Employee.
5.4 As used herein, the term "Change of Control" means either (a) the
dissolution or liquidation of the Company, (b) a reorganization, merger or
consolidation of the Company with one or more entities as a result of which the
Company is not the surviving entity, ( c) approval by the stockholders of the
Company of any sale, lease exchange or other transfer (in one or a series of
transactions) of all or substantially all of the assets of the Company, ( d)
approval by the
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stockholder of the Company of any merger or consolidation of the Company in
which the holders of voting stock of the Company immediately before the merger
or consolidation will not own fifty percent (50%) or more of the outstanding
voting shares of the continuing or surviving entity immediately after such
merger or consolidation, or (e) a change of25% or more (rounded to the next
whole person) in the membership of the Board of Directors of the Company within
a 12- month period, unless the election or nomination for election by
stockholders of each new director within such period was approved by the vote of
at least 85% (rounded to the next whole person) of the directors then still in
office who were in office at the beginning of the 12-month period.
5.5 Employee shall not be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to Employee under
any provisions of this Agreement, and the amounts payable to Employee hereunder
shall not be reduced or offset by any payments received by Employee on account
of other employment.
6. COVENANTS.
6.1 Employee acknowledges that he has entered into an "Employee
Patent Assignment and Non-Disclosure Agreement" with the Company.
6.2 Employee agrees to provide a release of any claims with respect
to termination of his employment on such form as reasonably requested by the
Company upon payment of the sums provided in Paragraph 5.1 hereinabove and
the Company's agreement to perform its other obligations under this Agreement
and any other agreement(s) between the Company and Employee.
7. MISCELLANEOUS PROVISIONS.
7.1 All terms and conditions of this Agreement are set forth herein,
and there are no warranties, agreements or understandings, express or implied,
except those expressly set forth herein.
7.2 Any modifications to this Agreement shall be binding only if
evidenced in writing signed by all parties hereto.
7.3 Any notice or other communication required or permitted to be given
hereunder shall be deemed properly given if personally delivered or deposited in
the United States Mail, registered or certified and postage prepaid, addressed
to the Company at 000 X. Xxx Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000 or to Employee at
his most recent home address on file with the Company, or at such other
addresses as may from time to time be designated in writing by the respective
parties.
7.4 The laws of the State of California shall govern the validity of
this Agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties involved.
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7.5 In the event that any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable, the same shall not affect any other provision of this Agreement,
but this Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein.
7.6 This Agreement shall be binding upon, and inure to the benefit of,
the successors and assigns of the Company and the personal representatives,
heirs and legatees of Employee.
7.7 The term "Company" shall include, with respect to employment
hereunder, any subsidiary or affiliate of the Company, as well as any successor
employer following a Change of Control.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.
BY:
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Xxxxx X. Xxxxxx, Chairman of the Board,
President and Chief Executive Officer
BY:
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Xxxxx X. XxXxxxxxxx
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