Exhibit 10K
EMPLOYMENT AGREEMENT
BETWEEN
MYERS INDUSTRIES, INC.
AND
DONALD A. MERRIL
Effective Date: January 24, 2006
Table of Contents
Page
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DEFINITIONS.............................................................. 1
AMENDMENT AND RESTATEMENT OF PRIOR AGREEMENT............................. 4
EMPLOYMENT TERM.......................................................... 5
POSITION, DUTIES, AND RESPONSIBILITIES................................... 5
SALARY, BONUS AND BENEFITS............................................... 6
TERMINATION OF EMPLOYMENT................................................ 8
SEVERANCE COMPENSATION................................................... 9
CHANGE OF CONTROL........................................................ 11
SEVERANCE PLAN........................................................... 15
PLAN AMENDMENTS.......................................................... 13
CONFIDENTIAL INFORMATION................................................. 16
ARBITRATION.............................................................. 13
NOTICES.................................................................. 14
ASSIGNMENT; BINDING EFFECT............................................... 15
INVALID PROVISIONS....................................................... 15
ALTERNATIVE SATISFACTION OF COMPANY'S OBLIGATIONS........................ 15
ENTIRE AGREEMENT, MODIFICATION........................................... 16
NON-EXCLUSIVITY OF RIGHTS................................................ 16
WAIVER OF BREACH......................................................... 16
GOVERNING LAW............................................................ 16
TAX WITHHOLDING.......................................................... 16
EXPENSES OF ENFORCEMENT.................................................. 16
REPRESENTATION........................................................... 17
SUBSIDIARIES AND AFFILIATES.............................................. 18
NO MITIGATION OR OFFSET.................................................. 18
SOLE REMEDY.............................................................. 18
(ii)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the 24th day of January,
2006, by and between MYERS INDUSTRIES, INC., an Ohio corporation (the
"Company"), and DONALD A. MERRIL (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive (collectively "the Parties") desire
to enter into this Employment Agreement (the "Agreement") as hereinafter set
forth;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms shall
have the meanings set forth in this Section 1 when used in this Agreement.
Certain other terms are defined in the body of this Agreement.
(a) Agreement. The term "Agreement" shall mean this Employment
Agreement, as it may be amended from time to time.
(b) Annual Bonus. The term "Annual Bonus" shall mean the bonus paid
to executives or other employees of the Company pursuant to a
formal or informal bonus plan or individual annual bonus
arrangement.
(c) Base Salary. The term "Base Salary" shall mean the salary
provided for in Section 5 or any increased salary granted to the
Executive in accordance with Section 5.
(d) Board. The term "Board" shall mean the Board of Directors of the
Company.
(e) Cause. The term "Cause" shall mean:
(i) Commission by the Executive (evidenced by a conviction or
written, voluntary and freely given confession) of a
criminal act constituting a felony involving fraud or moral
turpitude;
(ii) Commission by the Executive of a material breach or material
default of any of the Executive's agreements or obligations
under any provision of this Agreement, including, without
limitation, the Executive's agreements and obligations under
Subsections 4(a) through 4(e), Section 11 or Section 12 of
this Agreement, which is not substantially cured in all
material respects within thirty (30) days after the Board
gives written notice thereof to the Executive; or
(iii) Commission by the Executive, when carrying out the
Executive's duties under this Agreement, of acts or the
omission of any act, which both (A) constitutes gross
negligence or willful misconduct and (B) results in material
economic harm to the Company or has a materially adverse
effect on the Company's operations, properties or business
relationships.
(f) Change in Control. The term "Change in Control" shall mean a
change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended, as in effect on the date of this Agreement
(the "Exchange Act"), whether or not the Company is then subject
to such reporting requirement; provided that, without limitation,
a Change in Control shall be deemed to have occurred if:
(i) Any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act), other than Stephen E. Myers or Mary Myers,
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty percent (20%)
or more of the combined voting power of the Company's then
outstanding securities; provided that a Change in Control
shall not be deemed to occur under this clause (i) by reason
of the acquisition of securities by the Company or an
employee benefit plan (or any trust funding such a plan)
maintained by the Company;
(ii) During any period of one (1) year there shall cease to be a
majority of the Board comprised of "Continuing Directors" as
hereinafter defined; or
(iii) There occurs (A) a merger or consolidation of the Company
with any other corporation, other than a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
more than eighty percent (80%) of the combined voting power
of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or
consolidation, or (B) the approval by the stockholders of
the Company of a plan of complete liquidation of the
Company, or (C) the sale or disposition by the Company of
more than fifty percent (50%) of the Company's assets. For
purposes of this Subsection 1(f)(iii), a sale of more than
fifty percent (50%) of the Company's assets includes a sale
of more than fifty percent (50%) of the aggregate value of
the assets of the Company and its subsidiaries or the sale
of stock of one or more of the Company's subsidiaries with
an aggregate value in excess of fifty percent
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(50%) of the aggregate value of the Company and its
subsidiaries or any combination of methods by which more
than fifty percent (50%) of the aggregate value of the
Company and its subsidiaries is sold.
(iv) For purposes of this Agreement, a "Change of Control" will
be deemed to occur:
(A) on the day on which a twenty percent (20%) or greater
ownership interest described in Subsection 1(f)(i) is
acquired, provided that a subsequent increase in such
ownership interest after it first equals or exceeds
twenty percent (20%) shall not be deemed a separate
Change of Control;
(B) on the day on which "Continuing Directors," as
hereinafter defined, cease to be a majority of the
Board as described in Subsection 1(f)(ii);
(C) on the day of a merger, consolidation or sale of assets
as described in Subsection 1(f)(iii); or
(D) on the day of the approval of a plan of complete
liquidation as described in Subsection 1(f)(iii).
(v) For purposes of this Subsection 1(f), the words "Continuing
Directors" mean individuals who at the beginning of any
period (not including any period prior to the date of this
Agreement) of one (1) year constitute the Board and any new
Director(s) whose election by the Board or nomination for
election by the Company's stockholders was approved by a
vote of at least a majority of the Directors then still in
office who either were Directors at the beginning of the
period or whose election or nomination for election was
previously so approved.
(g) Company. The term "Company" shall mean Myers Industries, Inc., an
Ohio corporation, and its successors and assigns to the extent
permitted under this Agreement.
(h) Compensation Committee. The term "Compensation Committee" shall
mean the Compensation Committee of the Board or its successor.
(i) Director. The term "Director" shall mean a member of the Board.
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(j) Disability. The term "Disability" shall mean a physical or mental
incapacity that prevents the Executive from performing his duties
hereunder for a period of one hundred eighty (180) consecutive
days in any period of two consecutive fiscal years of the
Company.
(k) Effective Date. The term "Effective Date" shall mean the
effective date of this Agreement, which shall be January 24,
2006.
(l) Employment Term. The term "Employment Term" shall have the
meaning set forth in Subsection 3(b) of this Agreement.
(m) Good Reason. The term "Good Reason" shall mean the occurrence of
(i) any reduction in the annual base salary of the Executive of
less than Three Hundred Thousand Dollars ($300,000) per year,
(ii) any reduction in the position, authority or office of the
Executive, (iii) any material reduction in the Executive's
responsibilities or duties for the Company, (iv) any material
adverse change or reduction in the aggregate "Minimum Benefits,"
as hereinafter defined, provided to the Executive as of the
Effective Date (provided that any material reduction in such
aggregate Minimum Benefits that is required by law or applies
generally to all employees of the Company shall not constitute
"Good Reason" as defined hereunder), (v) any change in the
Executive's reporting relationship, (vi) any relocation of the
Executive's principal place of work with the Company to a place
more than twenty-five (25) miles from the geographical center of
Akron, Ohio, or (vii) the material breach or material default by
the Company of any of its agreements or obligations under any
provision of this Agreement. As used in this Subsection 1(m), an
"adverse change or material reduction" in the aggregate Minimum
Benefits shall be deemed to result from any reduction or any
series of reductions which, in the aggregate, exceeds five
percent (5%) of the value of such aggregate Minimum Benefits
determined as of the Effective Date. As used in this Subsection
1(m), Minimum Benefits are life insurance, accidental death, long
term disability, short term disability, medical, dental, and
vision benefits and the Company's expense reimbursement policy.
The Executive shall give written notice to the Company on or
before the date of termination of employment for Good Reason
stating that the Executive is terminating employment with the
Company and specifying in detail the reasons for such
termination. If the Company does not object to such notice by
notifying the Executive in writing within five (5) days following
the date of the Company's receipt of the Executive's notice of
termination, the Company shall be deemed to have agreed that such
termination was for Good Reason. The parties agree that "Good
Reason" will not be deemed to have occurred merely because the
Company becomes a subsidiary or division of another entity
following a "Change in Control," as defined herein, provided the
Executive continues to serve as the Vice President and, if after
April 25, 2006, as the Chief Financial Officer of the new parent
company and its subsidiaries. The parties further agree that
"Good Reason" will be deemed to have occurred
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if the purchaser, in a Change in Control transaction, does not
assume this Agreement in accordance with Section 15 hereof.
(n) Parties. The term "Parties" shall mean the Company and the
Executive.
(o) Retirement. The term "Retirement" shall have the definition
ascribed to such term in the Company's Executive Supplemental
Retirement Plan as in effect on the Effective Date.
(p) Severance Benefit Plan. The term "Severance Benefit Plan" shall
mean any plan, policy or arrangement providing severance benefits
for executive officers (and any other employees) of the Company.
2. PRIOR AGREEMENT. [Reserved]
3. EMPLOYMENT TERM.
(a) During the Employment Term, the Company shall employ the
Executive, and the Executive shall serve the Company, as its Vice
President - Business Development, and effective on or before, but
not later than April 25, 2006, Vice President - Finance and Chief
Financial Officer, based on the terms and subject to the
conditions set forth herein.
(b) The Employment Term shall commence on the Effective Date and
shall continue indefinitely, provided that the Employment Term
may terminate as provided in Section 6 hereof.
4. POSITION, DUTIES, AND RESPONSIBILITIES. At all times during the
Employment Term, the Executive shall:
(a) Hold the position of the Company's Vice President - Business
Development, and effective on or before, but not later than April
25, 2006, Vice President - Finance and Chief Financial Officer,
an executive officer, reporting to the Chief Executive Officer;
(b) Have those duties and responsibilities, and the authority,
customarily possessed by a Vice President - Business Development,
and effective on or before, but not later than April 25, 2006,
Vice President - Finance and Chief Financial Officer, of a major
corporation and such additional duties as may be assigned to the
Executive from time to time by the Chief Executive Officer, as
applicable, which are consistent with the positions stated
herein, of a major corporation;
(c) [Reserved]
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(d) Adhere to such reasonable written policies and such reasonable
unwritten policies and directives as are of common knowledge to
executive officers of the Company, as may be promulgated from
time to time by the Board and which are applicable to executive
officers of the Company; and
(e) Devote the Executive's entire business time, energy, and talent
(subject to vacation time in accordance with the Company's policy
applicable to executive officers, illness or injury) to the
business, and to the furtherance of the purposes and objectives,
of the Company, and neither directly nor indirectly act as an
executive of or render any business, commercial, or professional
services to any other person, firm or organization for
compensation, without the prior written approval of the Board.
Nothing in this Agreement shall preclude the Executive from devoting
reasonable periods of time to charitable and community activities or the
management of the Executive's investment assets, provided such activities do not
unreasonably interfere with the performance by the Executive of the Executive's
duties hereunder. Furthermore, service by the Executive on the boards of
directors of up to two (2) noncompeting companies (in addition to affiliates of
the Company) shall not be deemed to be a violation of this Agreement, provided
such service does not unreasonably interfere with the performance of the
Executive's duties hereunder.
5. SALARY, BONUS AND BENEFITS. For services rendered by the Executive on
behalf of the Company during the Employment Term, the following salary, bonus
and benefits shall be provided to the Executive by the Company:
(a) The Company shall pay to the Executive, in equal installments,
according to the Company's then current practice for paying its
executive officers in effect from time to time during the
Employment Term, an annual Base Salary at the initial rate of
Three Hundred Thousand Dollars ($300,000.00). This salary may be
increased, but not decreased, to the extent, if any, that the
Compensation Committee may determine.
(b) For the Annual Bonus for the fiscal year ended December 31, 2006,
an Annual Bonus of $150,000 shall be awarded and paid. For
subsequent periods, at the discretion of the Compensation
Committee, the Executive shall receive an Annual Bonus. Such
Annual Bonus shall be paid at such time as Annual Bonuses are
paid to executive officers of the Company as determined by the
Compensation Committee. If any portion of an Annual Bonus shall
be payable in a year after the year in which it is earned, and in
the event the Executive's employment is terminated prior to
payment of the full Annual Bonus amount to which he is entitled
for any prior year, any remaining payments shall be made within
thirty (30) days of his termination date.
(c) The Executive shall be eligible for participation in such other
benefit plans, including, but not limited to, the Company's
profit sharing plan, Executive Supplemental Retirement Plan,
short-term and long term disability plans, group term life
insurance plan, medical plan or PPO,
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dental plan, and the 1999 Incentive Stock Plan, as the Company
may adopt from time to time and in which the Company's executive
officers, or employees in general, are eligible to participate.
This Subsection 5(c) shall not be deemed to prevent participation
in any special plan or arrangement providing special benefits to
the Executive which are not available to other employees. Such
participation shall be subject to the terms and conditions set
forth in the applicable plan documents. As is more fully set
forth in Section 9 hereof, the Executive shall not be entitled to
duplicative payments under this Agreement and any Severance
Benefit Plan.
(d) Without limiting the generality of Subsection 5(c) above, with
respect to life insurance, the Executive shall:
(i) be entitled to participate in the Company's group term life
insurance plan with a death benefit to be provided at a
level of not less than one (1) times annual Base Salary at
the Company's expense.
(ii) [Reserved]
(e) Without limiting the generality of Subsection 5(c) above, the
Executive shall be entitled to an automobile of the Executive's
choice but subject to the approval of the Chief Executive
Officer, and reimbursement for all expenses in connection
therewith, including, but not limited to, the cost of
acquisition, maintenance, fuel and liability insurance.
(f) The Executive shall be entitled to take, during each one-year
period commencing with January 1, 2006, during the Employment
Term, vacation time equal to not fewer than four (4) weeks.
(g) [Reserved]
(h) [Reserved]
(i) [Reserved]
(j) [Reserved]
(k) Notwithstanding any contrary provision of this Agreement, the
Executive will at all times be entitled to benefits which are at
least as favorable to the Executive and his family as are
generally provided to all executives of the Company or the family
thereof, with the exception of Mary Myers and Stephen E. Myers.
(l) [Reserved]
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(m) Upon the Effective Date, Executive shall be granted incentive
stock options to acquire 15,000 shares of the Company's common
stock, per the Company's 1999 Incentive Stock Plan and the normal
terms provided to executives of the Company. At the customary
time for granting stock options under the Company's 1999
Incentive Stock Plan or its successor, the Executive will be
granted the option to purchase an amount of the Company's common
stock commensurate and in recognition of his position as the Vice
President - Finance and Chief Financial Officer of the Company,
with terms and provisions similar to those in effect under such
plan as of the Effective Date, or such other grant of stock based
benefits as determined by the Compensation Committee of the Board
of Directors, on like terms as granted to all executives of the
Company.
(n) The Executive shall receive years of service credit on a pro rata
basis so that he will be fully vested and entitled to receive a
supplemental retirement benefit in the amount of at least Fifty
Thousand Dollars ($50,000.00) per annum for a period of ten (10)
years, commencing the first day of the month following the later
of his Retirement or his attainment of age sixty-five (65). This
benefit shall be provided under the Company's Executive
Supplemental Retirement Plan or otherwise as the Parties shall
agree. In the event that the Executive shall die before all ten
(10) years of payments shall have been received, the Executive's
spouse shall be entitled to the remainder of such payments.
(o) During the Employment Term, the Company shall reimburse the
Executive not less than One Thousand Five Hundred Dollars
($1,500.00) per year toward the cost of an annual executive
physical examination at The Cleveland Clinic Foundation or other
acceptable facility.
(p) The Executive shall be provided, at the Company's expense, with
director's and officer's liability insurance coverage with
respect to claims against the Executive arising in connection
with his activities performed on behalf of or in connection with
his service as an officer or Director of the Company or any
affiliate.
(q) The Executive shall be entitled to use the Company's corporate
membership at Firestone Country Club, as per the policy for such
use.
6. TERMINATION OF EMPLOYMENT. As indicated in Subsection 3(b), the
Employment Term may terminate prior to the date specified therein as follows:
(a) The Executive's employment hereunder will terminate without
further notice upon the death of the Executive.
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(b) The Company may terminate the Executive's employment hereunder
upon the Executive's Disability, if the Executive is prevented
from performing his duties hereunder by reason of physical or
mental incapacity for a period of one hundred eighty (180)
consecutive days in any period of two consecutive fiscal years of
the Company, but in any such event the Executive shall be
entitled to full compensation and benefits hereunder until the
close of such one hundred and eighty (180) day period.
(c) The Executive may terminate his employment due to his Retirement.
(d) The Company may terminate the Executive's employment hereunder
effective immediately upon giving written notice of such
termination for "Cause."
(e) The Company may terminate the Executive's employment hereunder
without Cause at any time upon thirty (30) days written notice.
(f) The Executive may terminate his employment hereunder effective
immediately upon giving written notice of such termination for
"Good Reason."
(g) The Executive may terminate his employment hereunder without Good
Reason at any time upon thirty (30) days written notice.
7. SEVERANCE COMPENSATION. If the Executive's employment terminates, the
following severance provisions will apply:
(a) If the Executive's employment is terminated by the Company other
than for Cause or is terminated by the Executive for Good Reason,
then for a period of one (1) year commencing on the Executive's
termination date ("Payment Term"), the Company shall:
(i) pay to the Executive within thirty (30) days following his
termination of employment a single sum payment equal to one
(1) times his annual Base Salary in effect on the date of
such termination of employment (or if such annual Base
Salary has decreased during the one year period ending on
the date of the Executive's termination of employment, at
the highest rate in effect during such period);
(ii) pay to the Executive within thirty (30) days following his
termination of employment a single sum payment equal to one
(1) times his Annual Bonus at the highest rate in effect
during the prior three year period, plus the sum of any
Annual Bonus earned but unpaid at the date of such
termination of employment;
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(iii) continue in effect the medical and dental coverage, long
and short-term disability protection, and any life insurance
protection (including life and long-term disability
insurance protection under policies obtained by the
Executive), being provided to the Executive immediately
prior to the Executive's termination of employment, or if
any of such benefits have decreased during the one year
period ending on the Executive's termination of employment,
at the highest level in effect during such one year period;
(iv) continue to pay the automobile allowances as provided in
Subsections 5(e) hereof; and
(v) pay for executive outplacement services for the Executive
from a nationally recognized executive outplacement firm at
the level provided for the most senior executives, provided
that such outplacement services will be provided for a one
year period commencing on the date of termination of
employment regardless of the Payment Term.
(b) If the Executive's employment with the Company is terminated by
reason of the Executive's death or Disability during the
Employment Term, the Executive or his surviving spouse shall be
entitled to receive (i) the Base Salary and Annual Bonus accrued
and unpaid to the date of death or Disability, (ii) any amounts
payable under any employee benefit plan of the Company in
accordance with the terms of such plan, and (iii) if the
Executive and/or his surviving spouse and dependents properly
elect continued medical coverage in accordance with Code Section
4980B ("COBRA"), the Company shall pay the entire cost of the
premiums for such continued medical coverage for the longer of
(A) the maximum required period of coverage under Code Section
4980B(f) or (B) thirty-six (36) months.
(c) If the Executive's employment hereunder is terminated by the
Company for Cause or terminated by the Executive other than for
Good Reason, then no further compensation or benefits will be
provided to the Executive by the Company under this Agreement
following the date of such termination of employment other than
payment of compensation earned to the date of termination of
employment but not yet paid. As more fully and generally provided
in Section 19 hereof, this Subsection 7(c) shall not be
interpreted to deny the Executive any benefits to which he may be
entitled under any plan or arrangement of the Company applicable
to the Executive.
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(d) The Company's payments pursuant to this Section 7 that result in
additional taxable income to the Executive shall be increased by
a forty percent (40%) tax gross-up payment to the Executive for
the purposes of covering federal, state and local income taxes on
the amount of such payments.
(e) Notwithstanding anything contained in this Agreement to the
contrary, other than Section 19 hereof, if the Executive breaches
any of the Executive's obligations under Section 11 or 12 hereof,
and such breach is not substantially cured in all material
respects within thirty (30) days after the Board gives written
notice thereof to the Executive, no further severance payments or
other benefits will be payable to the Executive under this
Section 7.
8. CHANGE IN CONTROL.
(a) In General. In the event of a Change in Control, the Executive
shall have certain special protections so that he may more fully
focus on the issues related to such a Change in Control, and to
reward the Executive for the substantial additional effort
involved in a Change in Control. The protections and rights are
set forth in this Section 8.
(i) In the event of a Change in Control, the Executive may
terminate his employment with the Company at any time within
the following eighteen (18) months and it will be considered
a termination for Good Reason under this Agreement.
(ii) In the event of a Change in Control, the Executive may elect
to extend this Agreement for a period of eighteen (18)
months.
(iii) In the event of a Change in Control, the Company will pay
the Executive, within thirty (30) days following the date of
such Change in Control, the amount of any Annual Bonus
earned but unpaid as of that date.
(iv) In the event of a Change in Control, the Executive will
become fully vested in all outstanding stock options,
restricted stock or similar awards and any option shall
become fully exercisable. The Executive shall have at least
ninety (90) days following the date of the Change in Control
to exercise any option or right with respect to any such
award.
(v) In the event of a Change in Control, the Executive will have
available the expenses of enforcement provided in Section 23
hereof.
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(b) Section 280G Protection. The Executive shall be entitled to a
cash payment (the "Excise Tax Gross-Up Payment") equal to the
amount of excise taxes which the Executive is required to pay
pursuant to Section 4999 of the Internal Revenue Code of 1986, as
amended ("Code"), as a result of any "parachute payments" as
defined in Section 280G(b)(2) of the Code made by or on behalf of
the Company or any successor thereto, under this Agreement or
otherwise, resulting in an "excess parachute payment" as defined
in Section 280G(b)(1) of the Code. In addition to the foregoing,
the Excise Tax Gross-Up Payment due to the Executive under this
Section 8 shall be increased by the aggregate of the amount of
federal, state and local income, excise and penalty taxes, and
any interest on any of the foregoing, for which the Executive
will be liable on account of the Excise Tax Gross-Up Payment to
be made under this Section 8, such that the Executive will
receive the Excise Tax Gross-Up Payment net of all income, excise
and penalty taxes, and any interest on any of the foregoing,
imposed on the Executive on account of the receipt of the Excise
Tax Gross-Up Payment. The computation of the Excise Tax Gross-Up
Payment shall be determined, at the expense of the Company or its
successor, by an independent accounting, actuarial or consulting
firm selected by the Company or its successor. Such Excise Tax
Gross-Up Payment shall be made by the Company or its successor at
such time as the Company or its successor shall determine, in its
sole discretion, but in no event later than the date five (5)
business days before the due date, without regard to any
extension, for filing the Executive's federal income tax return
for the calendar year for which it is determined that excise
taxes are payable under Section 4999 of the Code. Notwithstanding
the foregoing, there shall be no duplication of payments by the
Company or its successor under this Section 8 in respect of
excise taxes under Section 4999 of the Code to the extent the
Company or its successor is making payments in respect of such
excise taxes under any other arrangement with the Executive. In
the event that the Executive is ultimately assessed with excise
taxes under Section 4999 of the Code which exceed the amount of
excise taxes used in computing the Executive's payment under this
Section 8, the Company or its successor shall indemnify the
Executive for such additional excise taxes plus any additional
excise taxes, income taxes, interest and penalties resulting from
the additional excise taxes and the indemnity hereunder.
9. SEVERANCE PLAN. It is the intention of the Parties that this Agreement
provide special benefits to the Executive. If at any time the Company maintains
a Severance Benefit Plan that would provide better cash severance benefits to
the Executive than this Agreement, the Executive may elect to receive such
better cash severance benefits in lieu of the cash severance benefits provided
under Subsections 7(a)(i) and 7(a)(ii) of this Agreement while continuing to
receive any other benefits or coverages available under this Agreement. If this
Agreement would provide better cash severance benefits to the Executive than a
Severance Benefit Plan maintained by the Company, the Executive shall receive
the cash severance benefits under this Agreement, as well as any other benefits
or coverages available under this Agreement.
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In such case, the cash severance benefits under this Agreement shall be in lieu
of the cash severance benefits payable under a Severance Benefit Plan.
10. PLAN AMENDMENTS. To the extent any provisions of this Agreement modify
the terms of any existing plan, policy or arrangement affecting the compensation
or benefits of the Executive, as appropriate, (a) such modification as set forth
herein shall be deemed an amendment to such plan, policy or arrangement as to
the Executive, and both the Company and the Executive hereby consent to such
amendment, (b) the Company will appropriately modify such plan, policy or
arrangement to correspond to this Agreement with respect to the Executive, or
(c) the Company will provide an "Alternative Benefit," as defined in Section 17
hereof, to or on behalf of the Executive in accordance with the provisions of
such Section 17.
11. CONFIDENTIAL INFORMATION. The Executive agrees that the Executive will
not, during the Employment Term or at any time thereafter, either directly or
indirectly, disclose or make known to any other person, firm, or corporation any
confidential information, trade secret or proprietary information of the Company
in violation of the Company's policies and procedures.
12. [Reserved]
13. ARBITRATION. The following arbitration rules shall apply to this
Agreement:
(a) In the event that the Executive's employment shall be terminated
by the Company during the Employment Term or the Company shall
withhold payments or provision of benefits because the Executive
is alleged to be engaged in activities prohibited by Section 11
or 12 hereof or for any other reason, the Executive shall have
the right, in addition to all other rights and remedies provided
by law, at his election either to seek arbitration in the
metropolitan area of Akron, Ohio, under the Commercial
Arbitration Rules of the American Arbitration Association by
serving a notice to arbitrate upon the Company or to institute a
judicial proceeding, in either case within one hundred and twenty
(120) days after having received notice of termination of his
employment.
(b) Without limiting the generality of Subsection 13(a), this
Subsection 13(b) shall apply to termination asserted to be for
"Cause" or for "Good Reason." In the event that (i) the Company
terminates the Executive's employment for Cause, or (ii) the
Executive resigns his employment for Good Reason, the Company and
the Executive each shall have thirty (30) days to demand of the
American Arbitration Association in writing (with a copy to the
other Party) that arbitration be commenced to determine whether
Cause or Good Reason, as the case may be, existed with respect to
such termination or resignation. The Parties shall have thirty
(30) days from the date of such written request to select such
third party arbitrator. Upon the expiration of such thirty (30)
day period, the Parties shall have an additional thirty (30) days
in which to present to such third party arbitrator such
arguments, evidence or other material (oral or written) as may be
permitted and in accordance with such procedures as may be
13
established by such third party arbitrator. The third party
arbitrator shall furnish a written summary of his findings to the
Parties not later than thirty (30) days following the last day on
which the parties were entitled to present arguments, evidence or
other material to the third party arbitrator.
During the period of resolution of a dispute under this Subsection 13(b),
the Executive shall receive no compensation by the Company (other than payment
by the Company of premiums due before or during such period on any insurance
coverage applicable to the Executive hereunder) and the Executive shall have no
duties for the Company. If the arbitrator determines that the Company did not
have Cause to terminate the Executive's employment or that the Executive had
Good Reason to resign his employment, as the case may be, the Company shall
promptly pay the Executive in a lump sum any compensation to which the Executive
would have been entitled, for the period commencing with the date of the
Executive's termination or resignation and ending on the date of such
determination, had his employment not been terminated or had he not resigned.
14. NOTICES. For purposes of this Agreement, all communications provided
for herein shall be in writing and shall be deemed to have been duly given when
hand delivered or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If the notice is to the Company:
Myers Industries, Inc.
1293 South Main Street
Akron, OH 44301
Attn: President
With a copy to:
Myers Industries, Inc.
1293 South Main Street
Akron, OH 44301
Attn: General Counsel
(b) If the notice is to the Executive:
Mr. Donald A. Merril
4513 Bridle Trail
Akron, OH 44333
With a copy to:
Vincent E. Fisher
Roth Bierman LLP
5196 Richmond Road
Bedford Heights, OH 44146
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or to such other address as either Party may have furnished to the other in
writing and in accordance herewith; except that notices of change of address
shall be effective only upon receipt.
15. ASSIGNMENT; BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors, heirs (in the case of the Executive) and permitted assigns. No
rights or obligations of the Company under this Agreement may be assigned or
transferred by the Company except that such rights or obligations may be
assigned or transferred in connection with the sale or transfer of all or
substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee expressly assumes the liabilities,
obligations and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law. The Company further agrees that, in the
event of a sale or transfer of assets as described in the preceding sentence, it
shall be a condition precedent to the consummation of any such transaction that
the assignee or transferee expressly assumes the liabilities, obligations and
duties of the Company hereunder. No rights or obligations of the Executive under
this Agreement may be assigned or transferred by the Executive other than the
Executive's rights to compensation and benefits, which may be transferred only
by will or operation of law, except as provided in this Section 15.
The Executive shall be entitled, to the extent permitted under any
applicable law, to select and change a beneficiary or beneficiaries to receive
any compensation or benefits payable hereunder following the Executive's death
by giving the Company written notice thereof. In the absence of such a
selection, any compensation or benefit payable under this Agreement following
the death of the Executive shall be payable to the Executive's spouse, or if
such spouse shall not survive the Executive, to the Executive's estate. In the
event of the Executive's death or a judicial determination of the Executive's
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to the Executive's beneficiary, estate or other
legal representative.
16. INVALID PROVISIONS. Any provision of this Agreement that is prohibited
or unenforceable shall be ineffective to the extent, but only to the extent, of
such prohibition or unenforceability without invalidating the remaining portions
hereof and such remaining portions of this Agreement shall continue to be in
full force and effect. In the event that any provision of this Agreement shall
be determined to be invalid or unenforceable, the Parties will negotiate in good
faith to replace such provision with another provision that will be valid or
enforceable and that is as close as practicable to the provisions held invalid
or unenforceable.
17. ALTERNATIVE SATISFACTION OF COMPANY'S OBLIGATIONS. In the event this
Agreement provides for payments or benefits to or on behalf of the Executive
which cannot be provided under the Company's benefit plans, policies or
arrangements either because such plans, policies or arrangements no longer exist
or no longer provide such benefits or because provision of such benefits to the
Executive would adversely affect the tax qualified or tax advantaged status of
such plans, policies or arrangements for the Executive or other participants
therein, the Company may provide the Executive with an "Alternative Benefit," as
defined in this Section 17, in lieu thereof. The Alternative Benefit is a
benefit or payment which places the Executive and the Executive's dependents or
beneficiaries, as the case may be, in at least as good of an economic position
as if the benefit promised by this Agreement (a) were
15
provided exactly as called for by this Agreement, and (b) had the favorable
economic, tax and legal characteristics customary for plans, policies or
arrangements of that type. Furthermore, if such adverse consequence would affect
the Executive or the Executive's dependents, the Executive shall have the right
to require that the Company provide such an Alternative Benefit.
18. ENTIRE AGREEMENT, MODIFICATION. Subject to the provisions of Section 19
hereof, this Agreement contains the entire agreement between the Parties with
respect to the employment of the Executive by the Company and supersedes all
prior and contemporaneous agreements, representations, and understandings of the
Parties, whether oral or written. No modification, amendment, or waiver of any
of the provisions of this Agreement shall be effective unless in writing,
specifically referring hereto, and signed by both Parties.
19. NON-EXCLUSIVITY OF RIGHTS. Notwithstanding the foregoing provisions of
Section 18, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan, program, policy or practice provided by the Company for its executive
officers, nor shall anything herein limit or otherwise affect such rights as the
Executive has or may have under any stock option, restricted stock or other
agreements with the Company or any of its subsidiaries. Amounts which the
Executive or the Executive's dependents or beneficiaries, as the case may be,
are otherwise entitled to receive under any such plan, policy, practice or
program shall not be reduced by this Agreement except as provided in Section 9
hereof with respect to payments under a Company sponsored Severance Benefit Plan
if cash payments are made hereunder.
20. WAIVER OF BREACH. The failure at any time to enforce any of the
provisions of this Agreement or to require performance by the other Party of any
of the provisions of this Agreement shall in no way be construed to be a waiver
of such provisions or to affect either the validity of this Agreement or any
part of this Agreement or the right of either Party thereafter to enforce each
and every provision of this Agreement in accordance with the terms of this
Agreement.
21. GOVERNING LAW. This Agreement has been made in, and shall be governed
and construed in accordance with the laws of, the State of Ohio. The Parties
agree that this Agreement is not an "employee benefit plan" or part of an
"employee benefit plan" which is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
22. TAX WITHHOLDING. The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes or other amounts as
shall be required to be withheld pursuant to any applicable law or regulation.
Where withholding applies to shares of the Company's common stock, the Company
shall make cashless withholding available to the Executive if permissible by
law.
23. EXPENSES OF ENFORCEMENT.
(a) Following a Change in Control. The Company is aware that upon the
occurrence of a Change in Control the Board 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
16
have this Agreement declared unenforceable, or may take, or
attempt to take, other action to deny the 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 the 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 the 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 the Executive 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, the Executive, the benefits intended
to be provided to the Executive hereunder, and that the Executive
has complied with all of his obligations under this Agreement,
the Company irrevocably authorizes the Executive from time to
time to retain counsel of his choice at the expense of the
Company as provided in this Section 23, to represent the
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. Notwithstanding
any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to the
Executive entering into an attorney-client relationship with such
counsel, and in that connection the Company and the Executive
agree that a confidential relationship shall exist between the
Executive and such counsel. The reasonable fees and expenses of
counsel selected from time to time by the Executive as herein
provided shall be paid or reimbursed to the Executive by the
Company on a regular, periodic basis upon presentation by the
Executive of a statement or statements prepared by such counsel
in accordance with its customary practices, up to a maximum
aggregate amount of Five Hundred Thousand Dollars ($500,000.00).
(b) In General. The Company shall reimburse reasonable attorney fees
and expenses incurred by the Executive to enforce the provisions
of this Agreement, even if his claims are not successful,
provided they are not ultimately determined by the court or
arbitrator, as the case may be, to be frivolous, up to a maximum
aggregate amount of One Hundred Thousand Dollars ($100,000.00).
24. REPRESENTATION. The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
it and any other person, firm or organization.
17
25. SUBSIDIARIES AND AFFILIATES. Notwithstanding any contrary provision of
this Agreement, to the extent it does not adversely affect the Executive, the
Company may provide the compensation and benefits to which the Executive is
entitled hereunder through one or more subsidiaries or affiliates.
26. NO MITIGATION OR OFFSET. In the event of any termination of employment,
the Executive shall be under no obligation to seek other employment. Amounts due
the Executive under this Agreement shall not be offset by any remuneration
attributable to any subsequent employment he may obtain.
27. SOLE REMEDY. The Parties agree that the remedies of each against the
other for breach of this Agreement shall be limited to enforcement of this
Agreement and recovery of the amounts and remedies provided for herein. The
Parties, however, further agree that such limitation shall not prevent either
Party from proceeding against the other to recover for a claim other than under
this Agreement.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the day and year first above written.
MYERS INDUSTRIES, INC.
(the "Company")
By: /s/ John C. Orr
------------------------------------
John C. Orr, President and
Chief Executive Officer
EXECUTIVE
/s/ Donald A. Merril
----------------------------------------
Donald A. Merril
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