EXHIBIT 10.3
FORM
RPM, INC.
2628 PEARL ROAD, P.O. BOX 777
MEDINA, OHIO 44258
October 14, 2002
[EXECUTIVE'S NAME]
RPM, Inc.
P.O. Box 777
Medina, Ohio 44258
RE: AMENDMENT TO EMPLOYMENT AGREEMENT AND ASSUMPTION
BY RPM INTERNATIONAL INC., A DELAWARE CORPORATION
("NEW PARENT")
Dear _________________:
The purpose of this letter (the "Amendment") is to amend your existing
Amended and Restated Employment Agreement, dated as of February 1, 2001 (the
"Agreement"), with RPM, Inc., an Ohio corporation (the "Company"), and to
provide for the assumption of the Agreement by New Parent.
BACKGROUND. As you know, the Company will be reincorporating in Delaware
pursuant to an Agreement and Plan of Merger, dated as of August 29, 2002, among
the Company, New Parent and RPM Merger Company, an Ohio corporation (the "Merger
Subsidiary"), pursuant to which, effective as of 9:00 a.m. Eastern Time on
October 15, 2002 (the "Effective Time"), (i) the Merger Subsidiary will merge
with and into the Company, (ii) each common share, without par value, of the
Company issued and outstanding immediately prior to the Effective Time will be
converted into one share of Common Stock, par value $.01 per share, of New
Parent, and (iii) New Parent will become the ultimate parent company of the
Company and of all of the Company's direct and indirect subsidiaries existing as
of immediately prior to the Effective Time (the "Reincorporation"). As part of
such Reincorporation, the Company will be assigning, and New Parent will be
assuming, certain contracts, rights, obligations and responsibilities of the
Company existing immediately prior to the Effective Time, including the
Agreement, as amended by this Amendment.
In addition, immediately following the Effective Time, the Company and
New Parent will enter into a Reorganization Agreement, pursuant to which the
Company will transfer the stock ownership of certain of its subsidiary operating
companies to New Parent and New Parent, in turn, will transfer the stock
ownership of certain of these operating companies to intermediate holding
companies that are subsidiaries of New Parent, and will retain the stock
ownership of certain other of these operating companies.
AMENDMENTS AND CHANGES. The following amendments and changes are hereby
made to the Agreement, each of which shall become effective as of the date
hereof:
(1) Successors; Novation. Section 8 is hereby amended by adding the
following at the end thereof:
"As used in this Agreement (including Schedule A attached hereto), from
and after 9:00 a.m. Eastern Time on October 15, 2002 (the "Effective
Time"), (a) the term "Company" shall be deemed to mean RPM International
Inc., a Delaware corporation ("New Parent"), and shall no longer mean
RPM, Inc., an Ohio corporation, and (b) each reference to "RPM, Inc."
(other than references to "RPM, Inc., an Ohio corporation") shall be
changed to and mean "RPM International Inc." Executive, RPM, Inc., an
Ohio corporation, and New Parent expressly agree that from and after the
Effective Time, (x) New Parent shall be substituted as the "Company"
under this Agreement and shall be entitled to all rights and interests
of the Company under this Agreement as if New Parent were the original
party to this Agreement, (y) New Parent shall assume and perform all the
duties and obligations of the Company under this Agreement as if New
Parent were the original party to this Agreement, and (z) RPM, Inc., an
Ohio corporation, shall be released from all duties and obligations and
have no further rights, duties or obligations under this Agreement, and
the parties to this Agreement shall consist solely of Executive and New
Parent, but this Agreement shall otherwise continue in full force and
effect without modification as a result thereof."
(2) Definition of Change in Control. The definition of "Change in
Control" in Schedule A to the Agreement is hereby amended by adding the
following new paragraph at the end thereof:
"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) RPM, Inc., an Ohio corporation, or New Parent entering
into the Merger Agreement or the Reorganization Agreement or (ii) the
consummation by RPM, Inc., an Ohio corporation, or New Parent 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, New Parent, and RPM Merger Company, an
Ohio corporation and wholly-owned subsidiary of New Parent, and
"Reorganization Agreement" shall mean the Reorganization Agreement,
dated as of October 15, 2002, by and between RPM, Inc., an Ohio
corporation, and New Parent."
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(3) Other Amendments.
(a) The first sentence of Section 2 is hereby deleted and the following
sentence is substituted in its place:
"Executive shall serve as ___________________________________ reporting
to the Chief Executive Officer of the Company (or his designee) and
shall have responsibility for matters relating to the legal affairs,
regulatory affairs and external communications of the Company and shall
have such other titles, 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."
(b) The following sentence is hereby added at the end of Subsection
4(d):
"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."
(c) The phrase "after consultation with the _____________________ (or
their designees)" appearing in Subsection 4(e) is hereby deleted and replaced by
the phrase "after consultation with Executive's direct report (or the designated
vacation coordinator)".
(d) The following new Subsection 6(j) is hereby added immediately after
Subsection 6(i):
"(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."
(e) Subsection 7(b) is hereby amended by deleting all the text in the
first sentence of such Subsection from the phrase "(ii) if
PricewaterhouseCoopers (or its successor) is serving" until the end of such
sentence and replacing such deleted text with the following:
"(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
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another nationally recognized accounting firm selected by Executive and
reasonably acceptable to the Company (which accounting firm shall then
be the "Accounting Firm" hereunder)."
(f) The following sentence is hereby added at the end of Section 20:
"Notwithstanding the foregoing, this Section 20 shall not apply at any
time unless a Change in Control has occurred."
(g) The definition of "Average Incentive Compensation" appearing in
Schedule A is hereby amended by deleting the phrase "salary reduction
arrangement" appearing in such definition and replacing such deleted phrase with
the phrase "compensation reduction arrangement".
(h) The definition of "Deferred Compensation Plan" appearing in Schedule
A is hereby amended by deleting such definition in its entirety and replacing it
with the following:
""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."
(i) The definition of "Earned Incentive Compensation" appearing in
Schedule A is hereby amended by adding the following immediately before the
semicolon appearing at the end of paragraph (a) of such definition:
". For purposes of this paragraph (a), 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"
(j) The following new definition is added to Schedule A immediately
after the definition of "Notice of Termination for Good Reason" appearing in
such schedule:
""PARS Plan" means the RPM International Inc. 2002 Performance
Accelerated Restricted Stock Plan and any successor plan or arrangement
thereto."
(k) The definition of "Release and Waiver of Claims" appearing in
Schedule A is hereby amended by deleting the phase "Articles of Incorporation,
Code of Regulations or by statute" appearing in such definition and replacing
such deleted phrase with the phrase "Certificate of Incorporation or By-laws (or
comparable charter document) or by statute".
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(l) The definition of "Restricted Stock Plan" appearing in Schedule A is
hereby amended by deleting such definition in its entirety and replacing it with
the following:
""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."
GENERAL. Except as expressly provided herein, the Agreement shall remain
in full force and effect and be unaffected hereby. This Amendment constitutes
the entire agreement and understanding of the parties with respect to the
subject matter of this Amendment and supersedes all prior agreements and
understandings with respect to such subject matter. This Amendment shall be
governed by the laws of the State of Ohio, without giving effect to the conflict
of law principles of such State. This Amendment 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 document.
Please acknowledge your acceptance of this Amendment and the assumption
of the Agreement by New Parent on the terms set forth herein by signing below.
Very truly yours,
RPM, INC., AN OHIO CORPORATION
By:
-----------------------------------
Frank C. Sullivan, President
and Chief Executive Officer
Agreed and accepted as of this 14th day of October, 2002 by Executive.
EXECUTIVE
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Name:
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New Parent agrees to all of the terms and conditions of this Amendment and
agrees to assume and perform the Agreement on the terms and conditions set forth
herein, all effective as of the Effective Time.
RPM INTERNATIONAL INC.
By:
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Ronald A. Rice,
Senior Vice President - Administration
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