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Exhibit 10.1
RPM, INC. 1997 RESTRICTED STOCK PLAN
1. NAME AND PURPOSE.
The name of this plan is the RPM, Inc. 1997 Restricted Stock
Plan. The Plan will be maintained by RPM, Inc. (herein referred to as the
"Company") to further the growth, success and interest of the Company and its
subsidiaries and the Shareholders of the Company by requiring certain employees
of the Company and its subsidiaries to own Common Shares, without par value, of
the Company ("Shares") under the terms and conditions of and in accordance with
this Plan, thereby increasing their direct involvement in the success of the
Company.
2. ADMINISTRATION OF THE PLAN.
2.1 This Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of Directors of the Company ("Board of
Directors") which shall consist of at least three Directors, each of whom shall
be a "non-employee director" within the meaning of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934 and any successor to such rule ("Rule
16b-3"). The Committee may, from time to time, designate one or more persons or
agents to carry out any or all of its administrative duties hereunder; provided
that none of the duties required to be performed by the Committee under Rule
16b-3 or Section 2.3 of the Plan may be delegated to any other person.
2.2 The Plan shall be administered and operated on the same
annual accounting period as the Company (herein referred to as the "Plan Year"),
which presently is the twelve (12) month period ending on May 31. The first Plan
Year will be deemed to have commenced June 1, 1997 and will end May 31, 1998. In
the event that the Company changes its annual accounting period, the Plan Year
shall automatically change and the Committee may
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make such adjustments to the operation of the Plan as appropriate to reflect any
short Plan Years, adjustments to the dates that Shares are awarded or that
restrictions lapse hereunder or any other adjustments that may be appropriate to
reflect the change in the Plan Year.
2.3 The Committee shall interpret the Plan, and to the extent
and in the manner contemplated herein, it shall exercise the discretion granted
to it. The Committee may issue from time to time such rules and interpretations
as in its judgment are necessary in order to administer the Plan effectively.
The Committee shall have the exclusive right in its sole discretion to determine
the number of Shares awarded to each participant, to determine the price or
prices at which Shares shall be awarded to each participant, to determine the
time or times when Shares may be awarded and to prescribe the form, which shall
be consistent with this Plan, of the instruments evidencing any award and
issuance under this Plan and the legend, if any, to be affixed to the
certificates representing Shares issued under this Plan.
3. ELIGIBLE EMPLOYEES AND PARTICIPATION.
3.1 The Committee shall, from time to time, determine those
employees of the Company and its subsidiaries who are eligible to receive awards
of Shares hereunder.
3.2 No member of the Board of Directors, unless he is also an
employee of the Company, and no member of the Committee, shall be eligible to
participate in the Plan.
4. AWARDS OF SHARES.
4.1 The Committee shall, from time to time, determine the
number of Shares that shall be awarded to an eligible employee hereunder. The
Committee shall use the closing price of one (1) Share on the day of the Board
of Directors meeting held next preceding each May 31 fiscal year end in
determining the number of Shares awarded to an eligible employee for a Plan
Year.
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4.2 The Shares which may be awarded and issued to employees
under this Plan shall be made available from authorized and unissued Shares of
the Company.
4.3 Subject to the provisions of the succeeding paragraphs of
this Section 4, the aggregate number of Shares which may be issued under this
Plan shall not exceed one million two hundred fifty thousand (1,250,000) Shares.
4.4 In the event that the outstanding Shares shall be changed
by reason of share splits or combinations, recapitalization or reorganizations,
or share dividends, the number of Shares and the class or classes of securities
which may thereafter be issued under this Plan may be appropriately adjusted as
determined by the Committee so as to reflect such change.
5. TRANSFER RESTRICTIONS.
5.1 The Shares shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated (and any such
sale, transfer or other disposition, pledge or other hypothecation being
hereinafter referred to as "to dispose of" or a "disposition") until the
earliest of (a) the later of either the employee's termination of employment
with the Company and any of its subsidiaries or the lapse of the right of the
Company to a return of such Shares pursuant to Section 5.2 below; (b) a change
in control that occurs with respect to the Company; or (c) the termination of
the Plan. Notwithstanding the foregoing, the Company may direct that a specified
number of Shares may be sold by an employee after the date that any Shares
become nonforfeitable under Section 5.2 below to enable such employee to pay any
applicable taxes incurred as a result of such Shares becoming nonforfeitable.
5.2 Any Shares awarded hereunder shall be subject to complete
forfeiture and return to the Company of such Shares if the employee terminates
employment for any reason with the Company and any of its subsidiaries before
the earliest to occur of the following: (a) the
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later of either the attainment of age fifty-five (55) by the employee or the
fifth (5th) anniversary of the May 31 immediately preceding the date on which
such Shares are awarded; (b) the retirement of the participant from employment
with the Company and any of its subsidiaries on or after attainment of age 65;
and (c) a change in control that occurs with respect to the Company.
5.3 In the event that an employee's employment with the
Company and any of its subsidiaries shall terminate by reason of death or total
disability prior to the earliest of (a) the lapse of the right of the Company to
a return of such Shares pursuant to Section 5.2 above; (b) a change in control
that occurs with respect to the Company; or (c) the termination of the Plan,
then the restrictions imposed on such Shares by this Section 5 shall lapse and
be of no further force and effect.
5.4 The Board of Directors, in its sole discretion, shall
decide whether a change in control has occurred. If the Board of Directors shall
decide that a change in control has occurred it shall cause to be issued a
written notice to the participants of such fact and shall issue all Shares which
have become unrestricted to participants as soon as possible after such notice.
In determining whether a change in control has occurred, the Board of Directors
shall consider, but shall not be limited to, the occurrence of the following
events: (i) the first purchase of Shares pursuant to a tender offer or exchange
(other than a tender offer or exchange by the Company) for all or part of the
Company's Common Shares or any class or any securities convertible into such
Common Shares; (ii) the receipt by the Company of a Schedule 13D or other advice
indicating that a person is the "beneficial owner" (as that term is defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of twenty percent (20%) or
more of the Company's Common Shares calculated as provided in paragraph (d) of
said Rule 13d-3; (iii) the
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date of approval by Shareholders of the Company of an agreement providing for
any consolidation or merger of the Company in which the Company will not be the
continuing or surviving corporation or pursuant to which Common Shares of the
Company, or any class or any securities convertible into such Common Shares of
the Company, would be converted into cash, securities, or other property, other
than a merger of the Company in which the holders of shares of all classes of
the Company's capital stock immediately prior to the merger would have the same
proportion of ownership of capital stock of the surviving corporation
immediately after the merger; (iv) the date of the approval by Shareholders of
the Company of any sale, lease, exchange, or other transfer (in one transaction
or a series of related transactions) of all or substantially all the assets of
the Company; or (v) the adoption of any plan or proposal for the liquidation
(but not a partial liquidation) or dissolution of the Company.
5.5 The Committee may require any participant to execute and
deliver to the Company a stock power in blank with respect to the Shares issued
subject to the restrictions in Section 5.2 above and may require that the
Company retain possession of the certificates for Shares with respect to which
all of the restrictions have not lapsed. Notwithstanding retention of
certificates by the Company or an escrow agent, the participant in whose name
certificates are issued shall have all rights (including dividend and voting
rights) with respect to the Shares represented by such certificates, subject to
the terms, conditions and restrictions specified under this Plan, and the Shares
represented by such certificates shall be considered as issued and outstanding
and fully paid and non-assessable for all purposes.
6. OTHER RESTRICTIONS.
Notwithstanding anything in this Plan to the contrary, in lieu
of the restrictions set forth in Article 5 above, the Committee may impose other
restrictions as it deems appropriate on
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any Shares awarded hereunder which lapse at an earlier date than set forth
herein or accelerate the lapse of restrictions imposed on a prior award of
Shares hereunder. Awards of Shares under the Plan are not required to be made on
the same terms and conditions even though the Shares are awarded at the same
time. The terms of awards of Shares hereunder may vary from time to time and
from employee to employee.
7. ESCROW AGREEMENT AND LEGENDS.
In order to enforce the restrictions imposed upon Shares
issued hereunder, the Committee also may require any participant to enter into
an Escrow Agreement providing that the certificates representing Shares issued
pursuant to this Plan shall remain in the physical custody of an escrow agent
until any or all of the restrictions imposed pursuant to this Plan have
terminated. The Committee may impose such additional restrictions on any Shares
awarded pursuant to the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act of 1933, as amended, under the
requirements of NASDAQ or any other stock exchange upon which such Shares are
then listed and under any state blue sky or securities laws applicable to such
Shares. In addition, the Committee may cause a legend or legends to be placed on
any certificates representing Shares issued pursuant to this Plan, which legend
or legends shall make appropriate reference to the various restrictions imposed
hereunder.
8. AMENDMENTS.
This Plan may be amended at any time by the Board of
Directors, provided, that if this Plan shall have been approved by the
Shareholders of the Company no such amendment shall increase the maximum number
of Shares that may be issued pursuant to this Plan, except pursuant to Section 4
hereof, without the further approval of such Shareholders; and provided further,
that no amendment to this Plan shall modify or impair the rights of participants
who have
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been awarded Shares, or who have been granted the right to an award of Shares
hereunder prior to any such amendment.
9. DURATION.
This Plan became effective upon its adoption by the Board of
Directors for the Plan Year ending May 31, 1998 and shall terminate on May 31,
2007 or such earlier date as may be determined by the Board of Directors;
provided, however, that the Plan shall terminate and all awards of Shares under
the Plan shall be revoked if, within 12 months of the date of its adoption by
the Board of Directors, the Plan does not receive the approval of a majority of
the outstanding Shares present in person or by proxy and entitled to vote at a
meeting of Shareholders of the Company.
10. BENEFICIARY DESIGNATION.
Unless a participant has designated a beneficiary in
accordance with the provisions of the following sentence, any Shares that become
unrestricted and payable on account of the death of an employee shall be paid to
the person or persons in the first of the following classes in which there are
any survivors of such participant:
(a) his or her spouse at the time of death;
(b) his or her issue per stirpes;
(c) his or her parents; and
(d) the executor or administrator of his or her estate.
Instead of having any Shares that become payable on account of a participant's
death paid to a beneficiary as determined above, a participant may sign a
document designating a beneficiary or beneficiaries to receive such Shares and
filing such designation with the Company.
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11. COORDINATION WITH DEFERRED COMPENSATION PLAN.
In the event that an employee has previously received an award
of Shares that are subject to the restrictions set forth in Section 5.2 above,
such an employee has not made an election under Section 83(b) of the Internal
Revenue Code, and the lapse of such restrictions will result in the receipt of
an amount of compensation in excess of the amount that may be deducted under
Section 162(m) of the Internal Revenue Code, the Committee shall have the right
and authority to cancel such number of Shares as is necessary so that the
compensation amount attributable to the remaining Shares that will become
unrestricted on the next immediate May 31 will be deductible by the Company
after taking into account Section 162(m) of the Internal Revenue Code, and the
employee shall automatically receive as a credit to his account under the RPM,
Inc. Deferred Compensation Plan an amount equal to (i) multiplied by (ii) where:
(i) equals the average closing price of one Share for the
five (5) trading day period ending on such May 31; and
(ii) equals the number of Shares that the employee has
elected to forfeit as set forth above in this Article
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The Committee may determine to make such a cancellation only during the period
commencing May 1 and ending May 21 which immediately precedes the May 31 on
which the restrictions for such Shares lapse pursuant to Section 5.2 above. The
Employee shall be notified of any such cancellation which shall be in writing
and shall be subject to such further requirements as determined by the Committee
in its sole discretion.
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IN WITNESS WHEREOF, RPM, Inc., by its Chairman of the Board
duly authorized, has caused this Plan to be executed as of this 16th day of
July, 1997.
RPM, Inc.
By: /s/ Thomas C. Sullivan
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Thomas C. Sullivan, Chairman
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ACCEPTANCE OF RESTRICTED SHARES
AND
ESCROW AGREEMENT
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RPM, Inc.
P.O. Box 777
2628 Pearl Road
Medina, Ohio 44258
Attention:
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Gentlemen:
I acknowledge that I have been awarded _____ restricted Common Shares, without
par value, ("Shares") of RPM, Inc. ("Company") under and pursuant to the RPM,
Inc. 1997 Restricted Stock Plan ("Plan").
I agree that the Shares are being acquired by me in accordance with and subject
to all the terms, provisions and conditions of the Plan. Without limiting the
generality of the forgoing, I hereby acknowledge and agree as follows, in
consideration of the award of Shares to me:
1. I hereby agree that the certificate or certificates representing the
Shares will remain in the possession of Harris Trust and Savings Bank ("Escrow
Agent") to be held by it in escrow until the date upon which the restrictions
imposed upon the Shares by Sections 5 and 6 of the Plan will have lapsed in
accordance with the terms and conditions thereof, whereupon the Escrow Agent
will deliver such certificate or certificates to me free and clear of such
restrictions. To facilitate the escrow of the Shares with the Escrow Agent and
to facilitate any reconveyance of the Shares to the Company upon their
forfeiture pursuant to Section 5.2 of the Plan, I have delivered herewith the
attached stock power with respect to the Shares executed by me in blank as of
the date hereof.
2. I acknowledge and understand that during the period the Shares are
held in escrow by the Escrow Agent, I will be entitled to vote the Shares and to
receive all dividends thereon declared and paid by the Company. I further
understand and agree that during the period the Shares are held in escrow by the
Escrow Agent, I will be unable to transfer, assign, sell, or otherwise dispose
of the Shares or pledge them as collateral for a loan.
3. I understand and agree that I will forfeit and be required to return
all of the Shares covered by this Agreement in the event of my termination of
employment (except for a termination due to my death or total disability) prior
to the lapse of the restrictions described in and imposed upon the Shares by
Section 5 of the Plan.
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4. I understand and agree that the specific purpose of the award of
these Shares is to directly reduce the amount of supplemental retirement
restoration benefit and supplemental death restoration benefit owed to me under
the RPM, Inc. Benefit Restoration Plan ("Benefit Restoration Plan"). The
reduction is effective upon the award of these Shares and applies whether or not
the restrictions on the Shares lapse under the terms of the Plan and this
Agreement. The amount of the reduction to the annual accrued cash benefit under
the Benefit Restoration Plan attributable to the Shares under this Agreement is
$____________. I expressly waive any right that I have to said amount and
release the Company and all its subsidiaries and other affiliates from any and
all obligations to pay said amount to me or my beneficiaries, heirs, legal
representatives of my estate or other successors under the Benefit Restoration
Plan.
5. I understand and agree that I will NOT make an election under
Section 83(b) of the Internal Revenue Code to recognize taxable ordinary income
in the year the Shares are awarded to me. I understand that by not making such
an election I will recognize taxable ordinary income at the time the
restrictions under Section 5.2 of the Plan lapse in an amount equal to the fair
market value of the Shares at that time.
The provisions of this Agreement will be applicable to the Shares and to any
shares or other securities of the Company which may be acquired by me as a
result of a stock split or combination of shares or any other change, or
exchange for other securities, by reclassification, reorganization, merger,
consolidation, recapitalizing or otherwise, affecting the Shares. As used in
this Agreement, the term "Shares" will be deemed to include any such securities
issued in respect of the Shares.
This Agreement will be binding upon and inure to the benefit of the Company, and
myself, and its and my respective successors and legal representatives.
This Agreement, together with the Plan and all amendments thereof, constitutes
the entire agreement among the parties with respect to the subject matter
hereof, and may not be modified, amended, renewed or terminated, nor may any
term, condition or breach of any term or condition be waived, except pursuant to
the terms of the Plan or by a writing signed by the person or persons sought to
be bound by such modification, amendment, renewal, termination or waiver. Any
waiver of any term, condition or breach thereof shall not be a waiver of any
other term or condition or of the same term or condition for the future, or of
any subsequent breach.
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In the event of the invalidity of any party or provision of this Agreement, such
invalidity shall not affect the enforceability of any other part or provision of
this Agreement.
Very truly yours,
Name:
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Address:
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Social Security No.:
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ACKNOWLEDGMENT AND RECEIPT
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RPM, Inc. hereby accepts and agrees to be bound by the terms of the foregoing
Acceptance of Restricted Shares and Escrow Agreement.
RPM, Inc.
Date: By:
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