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EXHIBIT 10.11
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 notrade 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 not yet earned by
mutual agreement in writing between the Participant and the
Committee. Such termination if approved shall be effective
immediately.
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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 shall not be
less than the Prime Rate for the December 1 of the year
prior to the reallocation election.
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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 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.
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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 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.
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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
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.
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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 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.
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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 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.
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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
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.
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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
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.
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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
----------------------------
Thomas C. Sullivan, Chairman
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