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EXHIBIT 10.10
RPM, INC.
DEFERRED COMPENSATION PLAN
Effective Date: February 3, 1994
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THE RPM, INC.
DEFERRED COMPENSATION PLAN
1. STATEMENT OF PURPOSE
The purpose of The RPM, Inc. Deferred Compensation Plan (the
"Plan") is to aid RPM, Inc. (the "Company") in attracting and
retaining key employees by providing a non-qualified
compensation deferral vehicle.
2. DEFINITIONS
2.1 BENEFICIARY - "Beneficiary" means the person or persons
designated as such in accordance with Section 8.
2.2 CLOSING PRICE - "Closing Price" means the last sales
price per share of the Company's Common Stock on the NASDAQ
exchange as reported in THE WALL STREET JOURNAL, for the
day at issue or the nearest previous trading day if no
trade is reported for the day at issue.
2.3 COMMITTEE - "Committee" means the Compensation Committee
of the Board of Directors of the Company which will
administer the Plan pursuant to the provisions of Section 3
of the Plan.
2.4 COMMON STOCK - "Common Stock" means the authorized Common
Shares (without par value) of the Company.
2.5 COMPENSATION - "Compensation" means the Participant's
base salary and annual cash bonus.
2.6 CYCLE - "Cycle" means the twelve month pay-in period for
each deferral. The initial Cycle shall commence on June 1,
1994 and end on May 31, 1995. A new Cycle shall commence
each June 1 thereafter.
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2.7 DEFERRAL AMOUNT - "Deferral Amount" means the amount of
Elective Deferred Compensation actually deferred by the
Participant.
2.8 DEFERRED COMPENSATION ACCOUNT - "Deferred Compensation
Account" means the account maintained on the books of
account of the Company for each Participant pursuant to
Section 6.
2.9 DISABILITY - "Disability" means the Participant is
eligible to receive benefits under a long term disability
plan maintained by the Company.
2.10 DISTRIBUTION DATE - "Distribution Date" means the date on
which the Company makes distributions from the
Participant's Deferred Compensation Account.
2.11 DIVIDEND EQUIVALENT CREDIT - "Dividend Equivalent Credit"
means a credit that is equivalent in value to what a
Participant would have received had the Participant owned
an equal number of shares of Company Common Stock as of the
date any cash or stock dividend is payable to holders of
Common Stock.
2.12 ELECTION FORM - "Election Form" means the form or forms
attached to this Plan and filed with the Committee by the
Participant in order to participate in the Plan. The terms
and conditions specified in the Election Form(s) are
incorporated by reference herein and form a part of the
Plan.
2.13 ELECTIVE DEFERRED COMPENSATION - "Elective Deferred
Compensation" means the amount elected to be deferred by an
Eligible Employee in his Election Form, subject to approval
by the Committee.
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2.14 ELIGIBLE EMPLOYEE - "Eligible Employee" means those
employees of the Company who have been selected by the
Committee.
2.15 INSIDER - "Insider" means those employees of the Company
who have been determined by the Board of Directors of the
Company to be an "officer" of the Company within the
meaning of Rule 16a-1(f) under Section 16 of the Securities
and Exchange Act of 1934 or any successor to such rule.
2.16 PARTICIPANT - "Participant" means an Eligible Employee
participating in the Plan in accordance with the provisions
of Section 4.
2.17 PLAN YEAR - "Plan Year" means the twelve month period
beginning on the first day of the first Cycle in which the
Eligible Employee elects to participate in the Plan. The
initial Plan Year shall commence on June 1, 1994 and end on
May 31, 1995.
2.18 PRIME RATE - "Prime Rate" means the Prime Rate as quoted
and published by the National City Corporation, or its
successors, or, if such corporation ceases to exist or does
not publish a prime rate, then the average Prime Rate as
quoted and published by the Wall Street Journal.
2.19 RELATED EMPLOYMENT - "Related Employment" means the
employment of a Participant by an employer which is not the
Company provided (i) such employment is undertaken by the
Participant at the request of the Company; (ii) immediately
prior to undertaking such employment the Participant was an
officer or employee of the Company, or was engaged in
Related Employment as herein defined; and (iii) such
employment is recognized by the Committee, in its sole
discretion, as Related Employment.
2.20 STOCK CREDIT - "Stock Credit" means a credit that is
equivalent to one share of Company Common Stock.
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2.21 SUBSTANTIALLY EQUAL INSTALLMENTS - "Substantially Equal
Installments" means a series of annual payments, such that
equal payments over the remaining payment period would
exactly amortize the Deferred Compensation Account balance
as of the Distribution Date if the credited interest rate
remained constant at the level credited as of the Valuation
Date immediately preceding the Distribution Date for the
remainder of the payment period.
2.22 TERMINATED FOR CAUSE - "Terminated for Cause" means, with
respect to a Participant, the definition give to that term
in any written employment agreement existing between the
Company and the Participant; absent any such agreement, or
absent a definition of the term in the agreement, the term
shall mean the termination of the Participant's employment
with the Company due to: (i) fraud, misappropriation or
intentional material damage to the property or business of
the Company; (ii) commission of a felony; or (iii)
continuance of either willful and repeated failure or
grossly negligent and repeated failure by the Participant
to perform his duties.
2.23 TERMINATION OF EMPLOYMENT - "Termination of Employment"
means the termination of a Participant's employment with
the Company for any reason other than Related Employment,
or the termination of a Participant's Related Employment.
2.24 VALUATION DATE - "Valuation Date" means the date on which
the value of a Participant's Deferred Compensation Account
for each Cycle is determined as provided in Section 6
hereof. Unless and until changed by the Committee, the
Valuation Date for each Cycle shall be the last day of the
Cycle.
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3. ADMINISTRATION OF THE PLAN
The Committee shall be the sole administrator of the Plan and
will administer the Plan. The Committee shall have full power
to formulate additional details and regulations for carrying out
this Plan. The Committee shall also be empowered to make any
and all of the determinations not herein specifically authorized
which may be necessary or desirable for the effective
administration of the Plan. Any decision or interpretation of
any provision of this Plan adopted by the Committee shall be
final and conclusive.
4. PARTICIPATION
4.1 ELECTIVE PARTICIPATION
a. Any Eligible Employee may elect to participate in
the Plan for a given Cycle by filing a completed
Election Form for the Cycle with the Committee.
With regard to an election to participate:
i. The Election Form must be filed with the Committee
prior to the commencement of the Cycle to which
the Election Form pertains. Notwithstanding the
foregoing, an employee who first becomes an
Eligible Employee during any Cycle may elect to
participate in the Plan for such Cycle by filing
an Election Form within thirty (30) days of
becoming an Eligible employee; and
ii. The minimum deferral for a Cycle shall be $1,000.
iii. The maximum deferral for a Cycle shall be the
amount specified by the Committee.
b. A Participant's election to defer future Compensation is
irrevocable upon the filing of his Election Form with the
Committee, provided, however, that the election may be terminated
with respect to Compensation
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not yet earned by mutual agreement in writing between the
Participant and the Committee. Such termination if
approved shall be effective immediately.
5. VESTING OF DEFERRED COMPENSATION ACCOUNT
A Participant's interest in his Deferred Compensation Account
shall be fully vested and non-forfeitable at all times.
6. ACCOUNTS AND VALUATIONS
6.1 DEFERRED COMPENSATION ACCOUNTS. The Committee shall
establish and maintain a separate Deferred Compensation
Account for each Participant for each Cycle. Any Elective
Deferred Compensation shall be credited to the
Participant's Deferred Compensation Account when deferred.
6.2 RATE OF RETURN CREDITED.
a. Except as provided in Sections 6.3 and 6.4, each
Participant's Deferred Compensation Account shall be
credited with interest annually under the Interest Rate
Option or the RPM Stock Account Option, as elected by
the Participant on his completed Election Form for each
cycle.
b. Compensation deferred hereunder and allocated to the
Interest Rate Option shall be credited with interest at
a rate fixed from time to time by the Committee;
provided that such rate shall not be less than the
Prime Rate as of December 1 of the year prior to when
deferrals will occur.
c. Notwithstanding Section 6.2(b), if a reallocation into
an Interest Rate Option Account is made by a
Participant pursuant to Section 6.3, the crediting rate
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shall not be less than the Prime Rate for the December
1 of the year prior to the reallocation election.
d. Compensation deferred hereunder and allocated to the
RPM Stock account Option shall be periodically adjusted
(upward or downward, as the case may be) by the
Committee to reflect the value that such compensation
would have if it were invested in RPM, Inc. Common
Stock and if any dividends payable with respect to the
Common Stock were reinvested in Common Stock.
As of the date any dividend is paid to holders of Common
Stock, the Participant's RPM Stock Account shall also be
credited with a Dividend Equivalent Credit equal to the
number of shares of Common Stock (including fractions of a
share to the nearest ten thousandth) that could have been
purchased at the Closing Price of Common Stock on such date
with the dividend paid on the number of shares of Common
Stock to which the Participant's RPM Stock Account is then
credited. In case of dividends paid in property, the
dividend shall be deemed to be the fair market value of the
property at the date of distribution of the dividend, as
determined by the Committee. The amount of RPM Stock
Credits credited to each Participant's RPM Stock Account
shall be appropriately adjusted upon the occurrence of any
stock split or reverse stock split.
6.3 ALLOCATION OF ACCOUNTS. Each participant shall specify
in writing, on his Election Form, how the amounts the
Participant has deferred hereunder shall be allocated
between the Interest Rate Option and the RPM Stock Account
Option.
The Committee may, in its discretion and from time to time,
but not more frequently than once in any twelve (12) month
period, permit a Participant to elect to reallocate amounts
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from the Interest Rate Option to the RPM Stock Account
Option or from the RPM Stock Account Option to the Interest
Rate Option, subject to such conditions and such
limitations as the Committee may prescribe. Any such
reallocation election shall be in writing and in a form
acceptable to the Committee. Subject to the foregoing, the
Committee may permit a Participant who is an Insider to
elect to reallocate into or out of the RPM Stock Account
pursuant to this Section 6.3 within a quarterly ten (10)
day window period which begins on the third business day
after the release of the Company's quarterly financial
information.
The Committee may require that any reallocation election
under this Section 6.3 apply to the entire amount credited
to a Participant's Interest Rate Option Account or RPM
Stock Account or to such percentage or percentages of that
amount as the Committee may specify (e.g., increments of
25%).
If a Participant fails to specify a rate of return option
with respect to the Participant's Elective Deferred
Compensation, the Participant shall be presumed to have
specified the Interest Rate Option.
6.4 TIMING OF CREDITING OF INTEREST. Each Deferred
Compensation Account of each Participant shall be revalued
and credited with interest and dividend equivalents, as
applicable, as of each Valuation Date. As of each
Valuation Date, the value of each Deferred Compensation
Account shall consist of the balance of such Deferred
Compensation Account as of the immediately preceding
Valuation Date, plus the amount of any Elective Deferred
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Compensation credited to the Participant's Deferred
Compensation Account since the preceding Valuation Date,
minus the amount of all distributions, if any, made from
such Deferred Compensation Account since the preceding
Valuation Date. As of each Valuation Date, interest shall
be credited on the average daily balance of the
Participant's Deferred Compensation Account since the
immediately preceding Valuation Date after adjustment for
any additions thereto (including interest and dividend
equivalents) or distributions therefrom. Benefit
distributions (under Section 7) made on or before February
15 of the year of payment will be considered to have been
made from the account and deducted from the account balance
as of January 1 of such year for the purpose of crediting
interest under this Section 6.4.
7. BENEFITS
7.1 NORMAL BENEFIT
a. A Participant's Deferred Compensation Account shall be
paid to the Participant in accordance with the terms of
the Participant's Election Form, subject to the terms
and conditions specified in the Election Form. If a
Participant elects to receive payment of his Deferred
Compensation Account in installments, payments shall be
made in Substantially Equal Installments. Unless the
Committee determines otherwise, and subject to the
provisions of Section 7.6 as to when payments shall
commence, installments shall be paid on the first day
of February of each year.
b. Distribution of a Participant's RPM Stock Account
balance shall be made in cash with the amount of the
distribution determined by multiplying the number of
Stock Credits attributable to the installment by the
Closing Price of Common Stock on the last business day
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in December immediately prior to the Plan Year in which
the installment is to be paid; provided, however, that
if an alternative distribution date is determined by
the Committee pursuant to Section 7.6 or if
distribution is payable pursuant to Section 7.1(c) or
Section 7.1(d), the Closing Price to be used shall be
the Closing Price of Common Stock on the last business
day immediately prior to the date of Participant's
termination of employment.
c. Notwithstanding the provisions of Section 7.1a, and
notwithstanding any contrary election made by the
Participant on his Election Form, if a Participant
terminates his employment for any reason other than
death or Disability, the Participant's Deferred
Compensation Account balance will be paid to the
Participant in a lump sum within ninety (90) days
following the Participant's Termination of Employment.
However, upon the written request of the Participant,
the Committee, in its sole discretion, may allow
payments to be made to the Participant in up to five
(5) annual installments.
d. If a Participant dies before receiving his or her total
account balance for a Cycle, his Beneficiary shall be
entitled to the remaining account balance. The
Participant may specify that any amounts payable to any
Beneficiary under this provision shall be paid either
in a lump sum within ninety (90) days after the
Participant's death, or in up to ten equal annual
installments beginning in the February after the
Participant's death. If the Participant has not
designated a Beneficiary, or if the Participant fails
to specify the manner of payment to his Beneficiary,
the Participant's Deferred Compensation Account value
will be paid to the Participant's estate, in a lump
sum, within ninety (90) days after the Participant's
death.
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7.2 HARDSHIP BENEFIT. In the event that the Committee, upon
written petition of the Participant, determines in its sole
discretion, that the Participant has suffered an
unforeseeable financial emergency, the Company may pay to
the Participant, as soon as practicable following such
determination, an amount necessary to meet the emergency,
not in excess of the Deferred Compensation Account credited
to the Participant. The Deferred Compensation Account of
the Participant shall thereafter be reduced to reflect the
payment of a Hardship Benefit.
7.3 TERMINATED FOR CAUSE. Notwithstanding any contrary
provisions of this Section 7, if a Participant's employment
with the Company is Terminated for Cause, the Participant's
Deferred Compensation Account balance will be paid to the
Participant in a lump sum within ninety (90) days following
the Participant's Termination of Employment.
7.4 REQUEST TO COMMITTEE FOR DELAY IN PAYMENT. A Participant
shall have no right to modify in any way the schedule for
the distribution of amounts from his Deferred Compensation
Account which he has specified in his Election Form.
However, upon a written request submitted by the
Participant to the Committee, the Committee may, in its
sole discretion:
a. Postpone one time the date on which payment shall
commence; and
b. Increase one time the number of installments to a
number not to exceed ten (10).
Any such request(s) must be made at least ninety (90) days
prior to the earlier of (1) the beginning of the year which
the Participant has elected for distributions to commence,
or (2) the Participant's Termination of Employment.
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7.5 TAXES; WITHHOLDING. To the extent required by law, the
Company shall withhold from payments made hereunder an
amount equal to at least the minimum taxes required to be
withheld by the federal or any state or local government.
7.6 DATE OF PAYMENTS. Except as otherwise provided in this
Plan, payments under this Plan shall begin on or before the
fifteenth (l5th) day of July of the calendar year following
receipt of notice by the Committee of an event which
entitles a Participant (or Beneficiary) to payments under
the Plan, or at such earlier date as may be determined by
the Committee.
8. BENEFICIARY DESIGNATION
A Participant shall have the right at any time, and from time to
time, to designate and/or change or cancel any person, persons,
or entity as his Beneficiary or Beneficiaries (both principal
and contingent) to whom payment under this Plan shall be paid in
the event of his death prior to complete distribution to
Participant of the benefits due him under the Plan. Each
beneficiary designation shall become effective only when filed
in writing with the Committee during the Participant's lifetime
on a form provided by the Committee. The filing of a new
beneficiary designation form will cancel all beneficiary
designations previously filed.
Any finalized divorce of a Participant subsequent to the date of
filing of a beneficiary designation form in favor of the
Participant's spouse shall revoke such designation. The spouse
of a married Participant domiciled in a community property
jurisdiction shall join in any designation of Beneficiary or
Beneficiaries other than the spouse.
If a Participant fails to designate a Beneficiary as provided
above, or if his beneficiary designation is revoked by divorce,
or otherwise, without execution of a new designation, or if all
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designated Beneficiaries predecease the Participant or die prior
to complete distribution of the Participant's benefits, then the
distribution of such benefits shall be made to the Participant's
estate.
If any distribution to a Beneficiary is to be made in
installments, and the primary Beneficiary dies before receiving
all installments, the remaining installments, if any, shall be
paid to the estate of the primary Beneficiary.
9. AMENDMENT AND TERMINATION OF PLAN
9.1 AMENDMENT. The Board of Directors may at any time amend
the Plan in whole or in part, provided, however, that
except as provided in 9.2, no amendment shall be effective
to decrease the benefits under the Plan payable to any
Participant or Beneficiary with respect to any Elective
Deferred Compensation deferred prior to the date of the
amendment. Written notice of any amendments shall be given
to each individual then participating in the Plan.
9.2 TERMINATION OF PLAN
a. COMPANY'S RIGHT TO TERMINATE. The Board of Directors
of the Company may at any time terminate the Plan, in
its sole discretion for any reason whatsoever.
b. PAYMENTS UPON TERMINATION. Upon any termination of
the Plan under this section, Compensation shall
prospectively cease to be deferred and, with respect to
Compensation previously deferred, the Company will pay
to the Participant, in a lump sum, the value of his
Deferred Compensation Account.
10. MISCELLANEOUS
10.1 UNSECURED GENERAL CREDITOR. Participants and their
beneficiaries, heirs, successors and assignees shall have
no legal or equitable rights, interests, or other claims in
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any property or assets of the Company, nor shall they be
beneficiaries of, or have any rights, claims, or interests
in any life insurance policies, annuity contracts, or the
policies therefrom owned or which may be acquired by
Company ("policies"). Such policies or other assets of the
Company shall not be held under any trust for the benefit
of Participants, their beneficiaries, heirs, successors, or
assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this
Plan. Any and all of the Company's assets and policies
shall be and remain general, unpledged, unrestricted assets
of the Company. The Company's obligation under the Plan
shall be that of an unfunded and unsecured promise of the
Company to pay money in the future.
10.2 SUCCESSORS AND MERGERS, CONSOLIDATIONS OR CHANGE IN
CONTROL. The terms and conditions of this Plan shall
inure to the benefit of and bind the Company, the
Participants, their successors, assignees, and personal
representatives. If substantially all of the stock or
assets of the Company are acquired by another corporation
or entity or if the Company is merged into, or consolidated
with, another corporation or entity, then the obligations
created hereunder shall be obligations of the acquiror or
successor corporation or entity.
10.3 NON-ASSIGNABILITY. Neither a Participant nor any other
person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage, or otherwise
encumber, transfer, hypothecate, or convey in advance of
actual receipt the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are,
expressly declared to be unassignable and nontransferable.
No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the
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payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or
insolvency.
10.4 EMPLOYMENT OR FUTURE ELIGIBILITY TO PARTICIPATE NOT
GUARANTEED. Nothing contained in this Plan nor any action
taken hereunder shall be construed as a contract of
employment or as giving any Eligible Employee any right to
be retained in the employ of the Company. Designation as
an Eligible Employee may be revoked at anytime by the
Committee with respect to any Compensation not yet
deferred.
10.5 GENDER, SINGULAR AND PLURAL. All pronouns and any
variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, as the identity of the
person or persons may require. As the context may require,
the singular may be read as the plural and the plural as
the singular.
10.6 CAPTIONS. The captions to the articles, sections, and
paragraphs of this Plan are for convenience only and shall
not control or affect the meaning or construction of any of
its provisions.
10.7 APPLICABLE LAW. This Plan shall be governed and
construed in accordance with the laws of the State of Ohio.
10.8 VALIDITY. In the event any provision of this Plan is
held invalid, void, or unenforceable, the same shall not
affect, in any respect whatsoever, the validity of any
other provision of this Plan.
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10.9 NOTICE. Any notice or filing required or permitted to be
given to the Committee shall be sufficient if in writing
and hand delivered, or sent by registered or certified
mail, to the principal office of the Company at 2628 Pearl
Road, Medina, OH 44258, directed to the attention of the
Chief Executive Officer. Such notice shall be deemed given
as of the date of delivery or, if delivery is made by mail,
as of the date shown on the postmark on the receipt for
registration or certification. Any notice to the
Participant shall be addressed to the Participant at the
Participant's residence address as maintained in the
Company's records. Any party may change the address for
such party here set forth by giving notice of such change
to the other parties pursuant to this Section.
11. CLAIMS PROCEDURE
11.1 NAMED FIDUCIARY. The Committee is hereby designated as
the named fiduciary under this Plan. The named fiduciary
shall have authority to control and manage the operation
and administration of the Plan.
11.2 CLAIMS PROCEDURE. Any controversy or claim arising out
of or relating to this Plan shall be filed with the
Committee which shall make all determinations concerning
such claim. Any decision by the Committee denying such
claim shall be in writing and shall be delivered to all
parties in interest in accordance with the notice
provisions of Section 10.9 hereof. Such decision shall set
forth the reasons for denial in plain language. Pertinent
provisions of the Plan shall be cited and, where
appropriate, an explanation as to how the Participant can
perfect the claim will be provided. This notice of denial
of benefits will be provided within 90 days of the
Committee's receipt of the Participant's claim for
benefits. If the Committee fails to notify the Participant
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of its decision regarding the claim, the claim shall be
considered denied, and the Participant shall then be
permitted to proceed with the appeal as provided in this
Section.
A Participant who has been completely or partially denied a
benefit shall be entitled to appeal this denial of his
claim by filing a written statement of his position with
the Committee no later than sixty (60) days after receipt
of the written notification of such claim denial. The
Committee shall schedule an opportunity for a full and fair
review of the issue within thirty (30) days of receipt of
the appeal. The decision on review shall set forth
specific reasons for the decision, and shall cite specific
references to the pertinent Plan provisions on which the
decision is based.
Following the review of any additional information
submitted by the Participant, either through the hearing
process or otherwise, the Committee shall render a
decisions on the review of the denied claim in the
following manner:
a. The Committee shall make its decision regarding the
merits of the denied claim within 60 days following
receipt of the request for review (or within 120 days
after such receipt, in a case where there are special
circumstances requiring extension of time for reviewing
the appealed claim). The Committee shall deliver the
decision to the claimant in writing. If an extension
of time for reviewing the appealed claim is required
because of special circumstances, written notice of the
extension shall be furnished to the Participant prior
to the commencement of the extension. If the decision
on review is not furnished within the prescribed time,
the claim shall be deemed denied on review.
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b. The decision on review shall set forth specific reasons
for the decision, and shall cite specific references to
the pertinent Plan provisions on which the decision is
based.
IN WITNESS WHEREOF, RPM, INC., by its Chairman of the Board duly
authorized, has caused this Plan to be signed this 3rd day of
February, 1994.
RPM, INC.
By: /S/ Thomas C. Sullivan
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Thomas C. Sullivan, Chairman
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