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Exhibit 10.4
EMPLOYMENT AGREEMENT
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THIS AGREEMENT made as of the 16th day of July, 1991, between
RPM, INC., an Ohio corporation (the "Company"), and
WHEREAS, has been employed by the Company since 19 and
is currently of the Company; and
WHEREAS, possesses valuable knowledge of the
of the Company; and
WHEREAS, the Board of Directors of the Company recognizes the
importance of 's continuing contribution as to the future
growth and success of the Company and desires to assure the Company and its
shareholders of 's continued employment in an executive capacity and
to compensate him therefor; and
WHEREAS, is desirous of committing himself to continue
to serve the Company on the terms herein provided;
NOW, THEREFORE, in consideration of the foregoing 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 , and hereby agrees to continue to serve the Company,
on the terms and conditions set forth herein for the period commencing
retroactive to June 1, 1991 (the "Effective Date"), and expiring on July 31,
1992 (unless sooner terminated as hereinafter set forth).
2. POSITION AND DUTIES. shall serve as reporting
to the President of the Company and shall have responsibility for the Company's
accounting and internal auditing
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functions, and shall have such other powers and duties as may from time to time
be assigned by the President, Chairman of the Board, or the Board of Directors
of the Company; provided, however, that such duties are consistent with his
present duties and his position as of the Company. shall devote
substantially all his working time and efforts to the continued success of the
business and affairs of the Company.
3. PLACE OF EMPLOYMENT. In connection with his employment by
the Company, shall not be required to relocate or move from his existing
principal residence in , Ohio, and shall not be required to perform services
which would make the continuance of his principal residence in , Ohio,
unreasonably difficult or inconvenient for him. The Company will give at
least six (6) months' advance notice of any proposed relocation of its Medina,
Ohio offices to a location more than twenty-five miles from Medina, Ohio and,
if 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 offices in Medina, Ohio.
4. COMPENSATION.
(a) BASE SALARY. shall receive a base salary at the rate
of not less than ($ ) per annum ("Base Salary"), payable in
substantially equal monthly installments at the end of each month during the
period of 's employment hereunder. It is contemplated that annually
in July of
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each year, the Compensation Committee of the Board of Directors will review
'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, 's
Base Salary hereunder shall not be reduced without his written consent.
(b) INCENTIVE COMPENSATION/BONUS. In addition to his Base
Salary, 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 sole discretion based upon the Company's results
of operation and other relevant factors. At the election of , such
annual incentive compensation payment or bonus may be received by 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 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, shall have the right in any
year to request as an advance an amount equal to fifty percent (50%) of his
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prior year's bonus award, if any. This request may be made by after the
six (6) months results of operation for the period ending November 30 are known
to management, and based upon such results a determination is made by the
Chairman of the Board or President that it can be reasonably expected that the
Compensation Committee will award him a bonus at the July review referred to in
paragraph 4(a) above in an amount at least equal to his prior year's bonus;
provided, however, that in the event any bonus subsequently awarded to is
less than the amount received by as an advance, then shall
immediately repay any such difference to the Company.
(c) EXPENSES. During the term of his employment hereunder,
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 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. 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
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arrangements. Nothing paid or awarded to under any plan or arrangement
presently in effect or made available in the future shall reduce or be deemed
to be in lieu of compensation to pursuant to any other provision of this
Section 4.
(e) VACATIONS. shall be entitled to the same number of
paid vacation days in each fiscal year determined by the Company from time to
time for its other senior executive officers, but not less than four (4) weeks
in any fiscal year, to be taken at such time or times as is desired by after
consultation with the President or Chairman of the Board to avoid scheduling
conflicts (prorated in any fiscal year during which is employed hereunder for
less than the entire such year in accordance with the number of days in such
fiscal year during which he is so employed). shall also be entitled to all
paid holidays given by the Company to its other salaried employees.
(f) OTHER BENEFITS. shall be entitled to continue to
receive the fringe benefits appertaining to the position of 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 's death during the
period of his employment hereunder, the Company hereby agrees to pay '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
or his spouse by the Company. Said payment shall be a death benefit under
Section 101(b) of the Internal Revenue Code. At all times during the term of
this Agreement, shall be entitled to the full-time use
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of his present office and furniture at the Company's offices in Medina, Ohio,
and shall be entitled to the full-time use of a secretary paid by the Company.
5. TERMINATION.
(a) DISABILITY. If, as a result of his incapacity due to
physical or mental illness, 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 's employment hereunder.
(b) CAUSE. The Company may terminate 's employment
hereunder for Cause. For the purposes of this Agreement, the Company shall
have "Cause" to terminate 's employment hereunder only (A) for willful
and intentional acts of dishonesty or gross neglect of duty by , or
(B) if shall have participated in a Competitive Operation (as defined
in Section 8).
(c) TERMINATION BY . may terminate his
employment hereunder in the event of a Change in Control of the Company (as
hereinafter defined).
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
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to the cumulative 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) which has
not been approved by the Company's Board of Directors; (B) unless approved by
the Company's Board of Directors, 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; or (C) the consummation of
any of the transactions or events described in (A) and (B) above. 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 pursuant to subsection (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 fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, shall continue to receive his full Base Salary until his
employment is terminated pursuant to Section 5(a) hereof.
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(b) CAUSE. If 's employment shall be terminated for Cause
pursuant to Section 5(b) hereof, the Company shall pay 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 under this Agreement except such as may be required by law.
(c) TERMINATION WITHOUT CAUSE. If the Company shall terminate
's employment other than pursuant to Section 5(a) or 5(b) hereof, then
in lieu of any further salary payments to for periods subsequent to the
date on which 's employment is terminated, the Company shall pay as
liquidated damages and/or severance pay to no later than the tenth
(10th) day following such date, a lump sum amount equal to 100% of 's Base
Salary in effect as of such date.
(d) CHANGE IN CONTROL. If shall terminate his employment
in the event of a Change in Control of the Company which has not been approved
by the Board of Directors, then in lieu of any further salary payments to
for periods subsequent to the date on which his employment is terminated, the
Company shall pay to as liquidated damages and/or severance pay (i) no
later than the tenth (10th) day following such date, a lump sum amount equal to
the product of 's Base Salary in effect as of such date multiplied by
three (3), or (ii) if shall so elect, the Company shall continue to pay
him his Base Salary in the manner specified in Section 4(a) hereof until the
third anniversary of the date on which his employment is terminated. If
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elects to receive payments pursuant to (ii) above, such period of time as he
continues to receive payments shall be considered services 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 hereunder shall inure to the
benefit of and be enforceable by 's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If 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 's devisee, legatee, or other designee or, if there be
no such designee, to 's estate.
8. NON-COMPETITION. During the term of employment provided for
in Section 1 hereof and during any further period provided for in Section 6
hereof while the Company is making payments to , will not, directly 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
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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
Securities Exchange Act of 1934 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 :
If to the Company:
RPM, Inc.
P.O. Box 777
2628 Pearl Road
Medina, Ohio 44256
Attn: Secretary
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. WITHHOLDING. All payments required to be made by the
Company hereunder to 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
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reasonably determine it should withhold pursuant to any applicable law or
regulation.
11. 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 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 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.
12. 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.
13. 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.
14. HEADINGS. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
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15. NO ASSIGNMENT. This Agreement may not be assigned by
either party without the prior written consent of the other party.
16. ENFORCEMENT COSTS. The Company is aware that upon the
occurrence of a change in control the Board of Directors 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 have this
Agreement declared unenforceable, or may take, or attempt to take, other action
to deny 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 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 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
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
benefits intended to be provided to hereunder, and that has
complied with all of his obligations under this
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Agreement, the Company irrevocably authorizes from time to time to
retain counsel of his choice at the expense of the Company as provided in this
Section 16, to represent 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 entering into an attorney-client relationship with such
counsel, and in that connection the Company and agree that a
confidential relationship shall exist between and such counsel. The
reasonable fees and expenses of counsel selected from time to time by
as hereinabove provided shall be paid or reimbursed to by the Company on a
regular, periodic basis upon presentation by of a statement or
statements prepared by such counsel in accordance with its customary practices,
up to a maximum aggregate amount of $500,000.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
IN THE PRESENCE OF: RPM, INC.
____________________________ By:_____________________________
Thomas C. Sullivan, Chairman
____________________________ And:____________________________
Paul A. Granzier, Secretary
The "Company"
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