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Exhibit 10.1
AMENDED EMPLOYMENT AGREEMENT
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THIS AGREEMENT made as of the 22nd day of July, 1981, between
RPM, INC., an Ohio corporation (the "Company"), and THOMAS C. SULLIVAN
("Sullivan").
WHEREAS, Sullivan has been employed by the Company for more than
twenty (20) years and is currently Chairman of the Board and Chief Executive
Officer of the Company; and
WHEREAS, Sullivan possesses an intimate knowledge
of the business and affairs of the Company, its policies,
methods and personnel; and
WHEREAS, the Board of Directors of the Company recognizes that
Sullivan's contribution as Chairman of the Board and Chief Executive Officer to
the growth and success of the Company has been substantial and desires to assure
the Company and its shareholders of Sullivan's continued employment in an
executive capacity and to compensate him therefor; and
WHEREAS, Sullivan is desirous of committing him-
self to serve the Company on the terms herein provided;
NOW, THEREFORE, in consideration of the foreoing and of the
respective covenants and agreements of the parties herein contained, the parties
hereto agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees
to continue to employ Sullivan, and Sullivan hereby agrees
to continue to serve the Company, on the terms and conditions
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set forth herein for the period commencing retroactive to June 1, 1981 (the
"Effective Date"), and expiring on the fifth anniversary of the Effective Date
(unless sooner terminated as hereinafter set forth).
2. POSITION AND DUTIES. Sullivan shall serve as Chairman of the
Board and Chief Executive Officer reporting to the Board of Directors of the
Company and shall have supervision and control over, and responsibility for, the
general management and operation of the Company, and shall have such other
powers and duties as may from time to time be assigned by the Board of Directors
of the Company, provided that such duties are consistent with his present duties
and with his position as Chairman of the Board and Chief Executive Officer of
the Company in charge of the general management of the Company. Sullivan shall
devote substantially all his working time and efforts to the business and
affairs of the Company.
3. PLACE OF EMPLOYMENT. In connection with his employment by
the Company, Sullivan shall not be required to relocate or move from his
existing principal residence in Fairview Park, Ohio, and shall not be required
to perform services which would make the continuance of his principal residence
in Fairview Park, Ohio, unreasonably difficult or inconvenient for him. The
Company will give Sullivan at least six months' advance notice of any proposed
relocation of its principal executive offices to a location more than
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twenty-five miles from Brunswick, Ohio, and, if Sullivan in his sole discretion
chooses to relocate his principal residence, the Company will promptly pay (or
reimburse him for) all reasonable relocation expenses incurred by him relating
to a change of his principal residence in connection with any such relocation of
the Company's principal executive offices.
4. COMPENSATION.
(a) BASE SALARY. Sullivan shall receive a base salary at the rate of not
less than One Hundred and Eighty Thousand Dollars ($180,000.00) per annum ("Base
Salary"), payable in substantially equal monthly installments at the end of each
month during the period of Sullivan's employment hereunder. It is contemplated
that annually in July of each year, the Compensation Committee of the Board of
Directors will review Sullivan's Base Salary and other compensation during the
period of his employment hereunder and, at the discretion of the Compensation
Committee, it may increase his Base Salary and other compensation based upon his
performance, then generally prevailing industry salary scales, the Company's
results of operation, and other relevant factors. Any increase in Base Salary
or other compensation shall in no way limit or reduce any other obligation of
the Company hereunder and, once established at an increased specified rate,
Sullivan's Base Salary hereunder shall not be reduced without his written
consent.
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(b) INCENTIVE COMPENSATION/BONUS. In addition to his Base
Salary, Sullivan shall be entitled to receive such annual incentive compensation
payment or bonus as the Compensation Committee of the Board of Directors of the
Company may determine in their discretion based upon the Company's results of
operation and other relevant factors. At the election of Sullivan, such annual
incentive compensation payment or bonus may be received by Sullivan as soon as
possible, but no later than ninety (90) days after the close of the Company's
fiscal year for which such payment or bonus is granted, or the payment may be
deferred provided Sullivan gives written notice to the Chairman of the
Compensation Committee of the Board of Directors that he elects to defer
payment, which notice shall also state the date(s) on which he desires to be
paid, but in no event later than May 31 of the current fiscal year.
In addition, Sullivan shall have the right in any year to
receive as an advance an amount equal to fifty percent (50%) of his prior year's
bonus award, if any. This right may be exercised by Sullivan after the six (6)
months results of operation for the period ending November 30 are known to
management and based upon such results a good faith determination is made by
Sullivan that he can reasonably expect the Compensation Committee to award him a
bonus at the July review referred to in paragraph 4(a) above in an
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amount at least equal to his prior year's bonus; provided, however, that in the
event any bonus subsequently awarded to Sullivan is less than the amount
received by Sullivan as an advance, then Sullivan shall immediately repay any
such difference to the Company.
(c) EXPENSES. During the term of his employment hereunder,
Sullivan shall be entitled to receive prompt reimbursement for all reasonable
business expenses incurred by him (in accordance with his past practice) in
performing services hereunder, provided that Sullivan properly accounts therefor
in accordance with either Company policies or guidelines established by the
Internal Revenue Service if such are less burdensome.
(d) PARTICIPATION IN BENEFIT PLANS. Sullivan shall be entitled
to continue to participate in or receive benefits under all the Company's
employee benefit plans and arrangements in effect on the date hereof or made
available in the future to the executives and key management employees of the
Company (including, but not limited to, stock option plans, pension or profit
sharing plans, group insurance plans, and medical and health insurance plans),
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Nothing paid or awarded to
Sullivan under any plan or arrangement presently in effect or made available in
the
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future shall reduce or be deemed to be in lieu of compensation to Sullivan
pursuant to any other provision of this Section 4.
(e) VACATIONS. Sullivan shall be entitled to the same number of
paid vacation days in each calendar year determined by the Company from time to
time for its other senior executive officers, but not less than four (4) weeks
in any calendar year to be taken at such time or times as is desired by Sullivan
(prorated in any calendar year during which Sullivan is employed hereunder for
less than the entire such year in accordance with the number of days in such
calendar year during which he is so employed). Sullivan shall also be entitled
to all paid holidays given by the Company to its other salaried employees.
(f) OTHER BENEFITS. Sullivan shall be entitled to continue to
receive the fringe benefits appertaining to the position of Chairman of the
Board and Chief Executive Officer of the Company in accordance with present
practice, including the use of the most recent model of a full-sized U.S. made
automobile. In the event of Sullivan's death during the period of his employment
hereunder, the Company hereby agrees to pay Sullivan's spouse, or if he has no
spouse surviving him, to his estate, the sum of Five Thousand Dollars ($5,000)
in addition to any other compensation provided Sullivan or his spouse by the
Company. Said payment shall be a death benefit under Section 101(b) of the
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Internal Revenue Code. At all times during the term of this Agreement, Sullivan
shall be entitled to the full-time use of his present office and furniture at
the Company's principal executive offices in Brunswick, Ohio, and shall be
entitled to the full-time use of a secretary of his choice paid by the Company.
5. TERMINATION.
(a) DISABILITY. If, as a result of his incapacity due to
physical or mental illness, Sullivan shall have been absent from his duties
hereunder on a full-time basis for one hundred and eighty (180) consecutive
days, and within thirty (30) days after written notice of termination is given
shall not have returned to the performance of his duties hereunder on a
full-time basis, the Company may terminate Sullivan's employment hereunder.
(b) CAUSE. The Company may terminate Sullivan's employment
hereunder for Cause. For the purposes of this Agreement, the Company shall have
"Cause" to terminate Sullivan's employment hereunder only (A) for willful and
intentional acts of dishonesty or gross neglect of duty by Sullivan, or (B) if
Sullivan shall have participated in a Competitive Operation (as defined in
Section 8).
(c) TERMINATION BY SULLIVAN. Sullivan may terminate his
employment hereunder (i) for Good Reason (as hereinafter defined), or (ii) if
his health should become impaired to an extent that makes the continued
performance of his
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duties hereunder hazardous to his physical or mental health or his life, or
(iii) in the event of a Change in Control of the Company (as hereinafter
defined).
For purposes of this Agreement, "Good Reason" shall mean (A) any
assignment to Sullivan of any duties other than those contemplated by, or any
limitation of the powers of Sullivan in any respect not contemplated by, Section
2 hereof, (B) any removal of Sullivan from or any failure to re-elect Sullivan
to the positions indicated in Section 2 hereof, except in connection with
termination of Sullivan's employment for Cause, (C) a reduction in Sullivan's
rate of compensation, or (D) failure by the Company to comply with Section 3
hereof.
For purposes of this Agreement, "Change in Control" shall
include any of the following events: (A) a filing under any federal or state law
in connection with any offer to purchase a controlling block of Common Shares of
the Company (which shall be defined as a block of shares sufficient in amount to
elect a majority of the Company's then existing Board of Directors pursuant to
the cummulative voting procedure under Ohio corporation law as if all Directors
were to be elected without classification at a single meeting of shareholders)
pursuant to a tender offer or otherwise (other than an offer by the Company or
any of its subsidiaries to purchase such Common Shares); (B) unless unanimously
approved by the Company' s Board of Directors,
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the execution of any agreement for the reorganization, merger or consolidation
of the Company into or with another corporation or for the sale of substantially
all the assets of the Company to another corporation, or an agreement which
provides that the Company will become a subsidiary of another corporation, any
of which agreements, if consummated, would result in a change in control of the
Company; (C) the filing under Regulation 14A of the rules and regulations of the
Securities and Exchange Commission of a proxy statement which solicits proxies
for the election of a slate of Directors for any class of Directors of the
Company in opposition to the slate of Directors nominated by the then existing
Board of Directors of the Company and which states that control of the Company's
Board of Directors and/or the Company is or may be the eventual objective of the
person or persons responsible for the proxy solicitation and which, if
successful, would result in a change of control of the Company of a nature that
would be required to be reported in response to Item 5(f) of Schedule 14A of
Regulation A promulgated under the Securities Exchange Act of 1934 (the "1934
Act"); or (D) the consummation of any of the transactions or events described in
(A), (B) and (C) above. Sullivan shall have sixty (60) days after the latest of
the events of Change in Control to elect to terminate his employment.
(d) Any termination by the Company pursuant to subsection (a) or
(b) above or by Sullivan pursuant to sub-
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section (c) above shall be communicated by written notice of termination to the
other party hereto, which shall state in reasonable detail the facts upon which
the termination has occurred.
6. COMPENSATION DURING DISABILITY OR UPON TERMINATION.
(a) DISABILITY. During any period that Sullivan fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, Sullivan shall continue to receive his full Base Salary until his
employment is terminated pursuant to Section 5(a) hereof, or until Sullivan
terminates his employment pursuant to Section 5(c)(ii) hereof, whichever first
occurs. After termination, Sullivan shall be paid 100% of his Base Salary at the
rate then in effect for one year and, thereafter, an annual amount equal to 50%
of his Base Salary at the rate then in effect until the fifth anniversary of the
Effective Date, plus any disability payments otherwise payable by or pursuant to
plans provided by the Company.
(b) CAUSE. If Sullivan's employment shall be terminated for
Cause pursuant to Section 5(b) hereof, the Company shall pay Sullivan his full
Base Salary through the date on which his employment is terminated at the rate
in effect at the time notice of termination is given. The Company shall then
have no further obligations to Sullivan under this Agreement.
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(c) GOOD REASON. If the Company shall terminate Sullivan's
employment other than pursuant to Sections 5(a) or 5(b) hereof or if Sullivan
shall terminate his employment for Good Reason, then in lieu of any further
salary payments to Sullivan for periods subsequent to the date on which
Sullivan's employment is terminated, the Company shall pay as liquidated damages
and/or severance pay to Sullivan (i) no later than the tenth day following such
date, a lump sum amount equal to the product of Sullivan's annual Base Salary in
effect as of such date multiplied by the number of years (including partial
years on a pro rata basis) remaining in the term of employment hereunder or (ii)
if Sullivan shall so elect, the Company shall continue to pay him his annual
Base Salary in effect on such date in the manner specified in Section 4(a)
hereof until the fifth anniversary of the Effective Date.
(d) CHANGE IN CONTROL. If Sullivan shall terminate his
employment in the event of a Change in Control of the Company, then in lieu of
any further salary payments to Sullivan for periods subsequent to the date on
which his employment is terminated, the Company shall pay to Sullivan as
liquidated damages and/or severance pay (i) no later than the tenth day
following such date, a lump sum amount equal to the product of Sullivan's annual
Base Salary in effect as
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of such date multiplied by five (5) or (ii) if Sullivan shall so elect, the
Company shall continue to pay him his annual Base Salary in effect on such date
in the manner specified in Section 4(a) hereof until the fifth anniversary of
the date on which his employment is terminated. If Sullivan elects to receive
payments pursuant to (ii) above, such period of time as he continues to receive
payments shall be considered service with the Company (and he shall be
considered an employee) for purposes of continued credits under any of the
Company's employee benefit plans he participates in as of the date on which his
employment is terminated.
7. BINDING AGREEMENT.
This Agreement and all obligations of the Company hereunder
shall be binding upon the successors and assigns of the Company. This Agreement
and all rights of Sullivan hereunder shall inure to the benefit of and be
enforceable by Sullivan's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Sullivan should die while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to Sullivan's
devisee, legatee, or other designee or, if there be no such designee, to
Sullivan's estate.
8. NON-COMPETITION. During the term of employment
provided for in Section 1 hereof, Sullivan will not, directly
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or indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner or director with, or have any financial interest in, any business which
is in substantial competition with any business conducted by the Company or by
any group, division or subsidiary of the Company, in any area where such
business is being conducted at the time of such termination (a "Competitive
Operation"). Ownership of five percent (5%) or less of the voting stock of any
corporation which is required to file periodic reports with the Securities and
Exchange Commission under the 1934 Act shall not constitute a violation hereof.
9. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been fully given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid
addressed as follows:
If to Sullivan:
Thomas C. Sullivan
18897 N. Valley Drive
Fairview Park, Ohio 44126
If to the Company:
RPM, Inc.
2628 Pearl Road
Medina, Ohio 44256
Attn: Secretary
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or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
10. TERMINATION OF PRIOR EMPLOYMENT AGREEMENT. It is hereby
agreed between the parties that this Agreement acts as a termination of and
replaces in its entirety the Employment Agreement dated October 9, 1980, between
the Company and Sullivan.
11. WITHHOLDING. All payments required to be made by the Company
hereunder to Sullivan or his estate or beneficiaries, shall be subject to the
withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation.
12. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing, and is signed by Sullivan and by another executive officer
of the Company. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with
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respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Ohio.
13. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. HEADINGS. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
IN THE PRESENCE OF: RPM, INC.
By: /s/ James A. Karman
_______________________ _______________________
James A. Karman, President
And: /s/ Richard E. Klar
_______________________ _______________________
Richard E. Klar, Secretary
The "Company"
/s/ Thomas C. Sullivan
________________________ _______________________
Thomas C. Sullivan
"Sullivan"
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