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EXHIBIT 10.9
DEFERRED COMPENSATION AGREEMENT
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As of ______________, 19__, RPM, INC., an Ohio corporation
(the "Company") and ____________________, a Director of the Company (the
"Director"), hereby agree as follows:
I. PURPOSE - The purpose of this Agreement is to establish a
Deferred Compensation Plan (the "Plan") for the Director,
pursuant to which the Director's cash compensation for
services to the Company shall be credited to the Director,
either as a cash allotment or a stock allotment, as provided
in Section VI hereof, and payment thereof shall be deferred
until distribution as provided in Section IX hereof.
II. PARTICIPATION - The Director may elect to participate in the
Plan effective only as of the beginning of the Company's
fiscal year next following the date of notice of such
election. Such notice shall be in writing and delivered to
the Secretary of the Company not later than fifteen (15) days
prior to the first day of such fiscal year. Such notice shall
include the Director's election to establish either a cash
allotment or a stock allotment, which election shall be
irrevocable with respect to any given fiscal year. The
Director shall have the right during the term of this
Agreement to change such election from a cash allotment to a
stock allotment, or from a stock allotment to a cash
allotment, as the case may be, effective, however, only with
respect to the Director's cash compensation for services to
the Company for the fiscal year next following the date of
notice of such change. Such notice shall be in writing and
delivered to the Secretary of the Company not later than six
(6) months prior to the first day of such fiscal year.
III. DUTIES AND TERMINATION DATE - The Director will serve as a
member of the Company's Board of Directors, and perform
faithfully the duties of a member of the Board, including
service on Committees of the Board and service in an advisory
and consultative capacity to the Chairman and Officers of the
Company at such times as may be reasonably requested. This
Agreement will terminate upon the date of occurrence of any of
the following events (the "Termination Date"):
A. The date the Director ceases to hold office as a
member of the Company's Board of Directors, or
B. The date of death of the Director, or
C. The date the Director elects in writing to terminate
this Agreement.
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IV. COMPENSATION - The Director shall be compensated for serving
as a member of the Board, for attendance at special meetings
of the Board, and meetings of Committees of the Board, and,
where applicable, for serving as Chairman of a Committee of
the Board, pursuant to fees established from time to time by
the Board of Directors for such services; provided, however,
that such compensation shall not be paid, set aside or
distributed until at least six (6) months after the
Termination Date, in accordance with Section IX hereof.
V. EXPENSE REIMBURSEMENT - The Director shall be reimbursed in
cash, on a current basis, for all travel and incidental
expenses incurred for the benefit of the Company, whether in
connection with attendance at meetings of the Company's Board
of Directors or otherwise.
VI. DEFERRED COMPENSATION ACCOUNT - The Company shall establish a
Deferred Compensation Account (the "Account") for the
Director. As of the last day of the Company's fiscal quarter
during which this Agreement is effective, and as of the last
day of each applicable succeeding fiscal quarter during the
term of this Agreement, the Company shall credit to the
Account the amount, in cash or stock equivalents, as
hereinafter described, of the Director's compensation payable
for services during such fiscal quarter.
VII. CASH OR STOCK ELECTION
A. The entire amount credited to the Account for each
fiscal quarter shall be credited either as a cash
allotment or as a stock allotment in accordance with
the Director's written election.
B. If a cash allotment is elected, the Account shall be
credited with the dollar amount of the allotment, and
the Account shall be credited, at the end of each
fiscal quarter during the term of this Agreement,
with interest at the rate equal to the prime interest
rate of National City Bank (Cleveland) in effect on
the last day of the quarter.
C. If a stock allotment is elected, the Account shall be
credited with a stock equivalent which shall be equal
to the number of shares (computed to the nearest
one-hundredth of a share) of the Company's Common
Shares (the "Common Shares") that could be purchased
with the dollar amount of the allotment at the last
sales price of the Common Shares on the
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NASDAQ National Market System, or the closing price
of such shares on the principal exchange on which
such shares are listed, as the case may be, on the
last trading day of the applicable quarter of the
Company.
D. On the last day of each fiscal quarter during the
term of this Agreement, the Account shall be credited
with an additional stock equivalent which shall be
equal to the number of Common Shares (computed to the
nearest one-hundredth of a share) that could be
purchased with the dollar amount determined by
multiplying the dividends paid per Common Share to
shareholders of record during such fiscal quarter, by
the number of shares, including fractional shares, in
the Account at the beginning of such fiscal quarter,
with appropriate adjustment to reflect any increase
or decrease during the period in the number of shares
in the Account as a result of the application of
paragraph E of this Section VII.
E. In the event of any change in the Common Shares upon
which the stock equivalency hereunder is based, by
reason of a merger, consolidation, reorganization,
recapitalization, stock dividend, stock split,
combination or exchange of shares, or other change in
the corporate structure, the number of shares
credited to the Director shall be appropriately
adjusted.
F. THIS IS A CASH DEFERRED COMPENSATION PLAN, AND UNDER
NO CIRCUMSTANCES SHALL THE DIRECTOR'S DEFERRED
COMPENSATION BE PAID IN ACTUAL COMMON SHARES OF THE
COMPANY.
VIII. FINAL ACCOUNT BALANCE - The balance in the Account on the Termination
Date (the "Final Account Balance") shall be (i) in the case of cash
allotment, the cash balance on the Termination Date, and (ii) in the
case of stock allotment, the amount of cash equal to the aggregate
stock equivalents in the Account on the Termination Date multiplied by
the last sales price of the Common Shares on the NASDAQ National
Market System or the closing price of such shares on the principal
exchange on which such shares are listed, as the case may be, on the
nearest trading day preceding the Termination Date. No further
interest (in the case of cash allotment) or dividend equivalent (in
the case of stock allotment) shall accrue or be credited to the
Account after the Termination Date.
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IX. DISTRIBUTION
A. Distribution of the Final Account Balance shall be
made in cash in five (5) approximately equal annual
installments, without interest, commencing six (6)
months after the Termination Date. Notwithstanding
the foregoing, at any time after the Termination
Date, the Director may, by written notice to the
Company, elect to receive distribution of the Final
Account Balance in a single lump sum payment, at any
time six (6) months after the Termination Date.
B. In the event the Final Account Balance or any portion
thereof shall be distributable after the Director's
death, the same shall be distributed, as provided in
paragraph A of this Section IX, to such person or
persons, or the survivors thereof, including
corporations, unincorporated associations or trusts,
as the Director may have designated in writing and
delivered to the Secretary of the Company. The
Director may from time to time revoke or change any
such designation by written notice delivered to the
Secretary of the Company. If there is no unrevoked
designation on file with the Company at any time of
the Director's death, such distribution shall be made
to the Director's estate in one lump sum payment to
be made at the later of (i) six (6) months after date
of death or (ii) thirty (30) days of the appointment
of the Executor of the estate.
X. MISCELLANEOUS
A. Neither the Director nor any other person shall have
any interest in any fund or in any specific asset or
assets of the Company by reason of any cash or stock
equivalents credited to the Account of a Director
hereunder, nor the right to exercise any of the
rights or privileges of a shareholder with respect to
any stock equivalents credited to his Account, nor
any right to receive any distribution under this
Agreement except as and to the extent expressly
provided in this Agreement. Any allotment or credit
to the Account shall be reflected as a general asset
on the books of the Company, subject to the claims
and obligations of creditors and others and any
liability created hereunder to the Director shall be
in the nature of a general claim without any priority
or right being created in the Director.
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B. The Director shall not have the right to assign,
pledge or otherwise dispose of (except as provided in
Section IX hereof) any cash or stock equivalents in
the Account, nor shall his interest therein be
subject to garnishment, attachment, transfer by
operation of law, or any legal process. If the
Director should attempt to assign, pledge or
otherwise dispose of (except as provided in Section
IX thereof) any cash and/or stock equivalents in the
Account or if any attempt shall be made to garnish,
attach, transfer by operation of law or by any legal
process his interest in the Account, all cash and
stock equivalents in the Account and all interests of
the Director therein, shall, at the discretion of the
Company, cease and determine, and in such event the
Company may hold or apply same or any part thereof
for the benefit of the Director, the Director's
spouse, children or other dependents, or any of them,
in such manner and in such proportion as the Company
may deem proper.
C. This Agreement shall not be assignable by the Company
without the written consent of the Director, except
that, if the Company shall merge or consolidate with
or into, or transfer substantially all of its assets
including good will to, another organization or other
form of business organization, this Agreement shall
bind and run to the benefit of the successor of the
Company resulting from such merger, consolidation or
transfer.
D. This Agreement comprises the entire agreement between
the parties hereto and supersedes, cancels and annuls
any and all prior agreements between the parties
hereto with respect to payments to the Director for
services to the Company. This Agreement may not be
modified or amended more than once every six (6)
months, other than to compart with changes in the
Internal Revenue Code, ERISA, or the rules
thereunder, which shall be in a writing duly executed
and delivered by the parties hereto.
E. This Agreement may be executed in duplicate and each
counterpart shall be deemed to be an original, and
both of which together shall constitute one and the
same instrument.
F. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date hereof.
RPM, INC.
By____________________________
Thomas C. Sullivan, Chairman
DIRECTOR
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