Exhibit 99.1
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FIRST AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
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This is the First Amendment to the Amended and Restated Employment
Agreement which was effective as of January 22, 2003 ("Agreement"), between
Ameron International Corporation, a Delaware corporation (the "Company"), and
James S. Marlen (the "Employee").
I.
1. Paragraph 1.1 of the Agreement is hereby amended in its entirety to
read as follows:
1.1 The term of this Agreement commenced on January 22,
2003, and is hereby extended by approximately 18
months to continue until March 31, 2010 (the "Term"),
subject to earlier termination in accordance with the
provisions of section 10 hereinbelow. In no event
shall the Term of this Agreement extend beyond March
31, 2010, unless the Company and Employee hereafter
expressly agree in writing to extend the Term of this
Agreement beyond such date; provided, however, that
the Company, in the sole discretion of its Board of
Directors, may extend the Term of this Agreement for
up to eight months to end not later than November 30,
2010. The Company will notify Employee in writing if
the Board of Directors determines to extend the Term
of this Agreement. The Board of Directors will
commence discussions with Employee regarding whether
it intends to extend the Term of this Agreement not
later than December 31, 2009.
II.
1. Paragraph 2.1 of the Agreement is hereby amended in its entirety to
read as follows:
2.1 The Company hereby employs Employee as its Chairman
of the Board, President and Chief Executive Officer,
and Employee hereby accepts such employment.
Notwithstanding the foregoing, Employee agrees that
the Company may appoint another person as President
with the customary duties of a chief operating
officer at any time after September 30, 2007,
provided Employee remains Chairman of the Board and
Chief Executive Officer; and the Company may commence
a search for a new Chief Executive Officer at any
time and may appoint another person as Chief
Executive Officer at any time after July 1, 2009,
provided Employee remains Chairman of the Board. Any
such appointments shall not result in any changes in
the compensation or benefits which Employee is
entitled to receive under the Agreement. The Company
shall provide Employee with an opportunity to review
and comment on a draft press release concerning each
change in officerships contemplated by this paragraph
before such change is announced.
2. Paragraph 2.3 of the Agreement is hereby amended in its entirety to
read as follows:
2.3 Employee shall at all times faithfully,
industriously, and to the best of his ability,
experience and talents, perform all of the duties of
the offices of Chairman of the Board, President and
Chief Executive Officer of the Company, while he
holds such offices during the Term in accordance with
paragraph 2.1.
3. Paragraph 2.4 of the Agreement is hereby amended to read in its
entirety as follows:
2.4 As President and Chief Executive Officer, Employee
shall be responsible to the Board of Directors for
all actions and activities of the Company. If another
person is appointed President with the duties of a
chief operating officer in accordance with paragraph
2.1, Employee while he serves as Chief Executive
Officer shall have the customary duties of a chief
executive officer.
III.
1. Paragraph 6.3 of the Agreement is hereby amended in its entirety to
read as follows:
6.3
(1) The Company shall grant to Employee under the
Company's 2004 Stock Incentive Plan or a successor
plan 18,000 fully vested shares of its Common Stock
(subject to adjustments as provided in Paragraph 1.3
(c) of the 2004 Stock Incentive Plan) in the month of
February in each of 2008, 2009 and 2010, provided
that a Change of Control (as defined in paragraph
10.5) has not occurred prior to the applicable grant
date, and that Employee continues to be employed by
the Company as its Chairman of the Board, President
or Chief Executive Officer on the applicable grant
date. The Company shall withhold from the shares of
Common Stock otherwise issuable pursuant to such
grants shares with an aggregate fair market value
sufficient to satisfy all applicable Federal, state
and local income and employment tax withholding
requirements in connection with such grants. Employee
shall not be entitled to receive any grants under
this subparagraph (1) after a Change of Control or
after his employment with the Company terminates for
any reason (including termination with or without
cause or due to retirement, resignation, death or
disability), and Employee shall not be entitled to
any damages or additional severance payments due to
his failure to receive these grants after a Change of
Control or termination of his employment.
(2) Within ten days after this Amendment to the Agreement
is executed by the Company and Employee, the Company
shall grant to Employee under the Company's 2004
Stock Incentive Plan performance stock units pursuant
to the form of Performance Stock Unit Agreement which
is attached hereto as Appendix A on the terms and
conditions set forth therein.
(3) Employee shall not be entitled to receive any other
stock options, restricted or fully vested stock,
performance stock units or other equity grants during
the remainder of the Term of this Agreement,
including any extension of the Term pursuant to
paragraph 1.1 through November 30, 2010.
IV.
1. Paragraph 8.1 of the Agreement is hereby amended to delete the words
"and its Supplemental Executive Retirement Plan as in effect as of March 20,
2002." Paragraphs 8.2, 8.3 and 8.4 of the Agreement are hereby deleted.
V.
1. Paragraph 9.9 is hereby amended to add the following additional
sentence at the end thereof:
In addition, if Employee retires on or after March
31, 2010, or prior to such date is terminated by the
Company without cause (as defined in paragraph 10.2)
or terminates employment due to death or disability,
then the Company shall continue to reimburse Employee
for the cost of AYCO financial/tax consulting
services up to $8,000 in any calendar year for three
(3) calendar years following such retirement or
termination of employment.
VI.
1. Paragraph 10.2 of the Agreement is hereby amended in its entirety to
read as follows:
10.2 In the event that the Company terminates Employee's
employment for any cause other than the causes set
forth in paragraph 10.1 hereinabove, such shall be
considered to be termination "without cause." Except
when and as set forth in paragraph 2.1, removal from
Employee of the titles of President, Chief Executive
Officer or Chairman of the Board during the Term,
without Employee's consent, is unauthorized hereunder
("Change in Title"). Any termination by Employee of
his employment within six (6) months of such an
unauthorized Change in Title shall be considered to
be a termination following a material diminution in
Employee's authority, duties or responsibilities
without his consent and shall be deemed to be a
termination by the Company without cause; provided
that Employee provides written notice to the Company
within 60 days of such event and the Company does not
remedy such event within 30 days of receipt of such
notice.
2. Paragraph 10.3 of the Agreement is hereby amended to revise
subparagraphs (1), (2) and (3) thereof to read in their entirety as follows:
(1) the Company shall pay Employee a lump-sum severance
amount within thirty (30) days following termination
equal to 1.5 times the sum of (i) Employee's annual
base salary in effect as of the date of termination,
and (ii) the highest management incentive bonus paid
to Employee during the five years preceding
termination (but not less than one hundred percent
(100%) times Employee's annual base salary determined
as of the date of termination), provided that
Employee shall not be entitled to receive any
lump-sum severance amount if Employee's employment is
terminated for any reason at any time on or after
March 31, 2010;
(2) all unvested restricted stock grants and stock
options granted to Employee shall automatically vest
in full, and the performance stock units granted to
Employee under paragraph 6.3(2) shall vest in
accordance with their terms; and
(3) Employee shall be entitled to the benefits described
in paragraph 9.3 hereinabove. To the extent benefits
provided to Employee under paragraph 9.3 are taxable
to Employee, any reimbursement payments for such
benefits to which Employee is entitled shall be paid
to Employee on or before the last day of Employee's
taxable year following the taxable year in which the
expense was incurred. The benefits described herein
are not subject to liquidation or exchange for
another benefit.
3. Paragraph 10.4 of the Agreement is hereby deleted.
4. Paragraph 10.5 of the Agreement is hereby amended to add the
following additional sentence at the end of subparagraph (1):
The performance stock units granted to Employee under
paragraph 6.3(2) shall vest in accordance with their
terms.
5. Paragraph 10.5 of the Agreement is hereby amended to add the
following additional sentence at the end of subparagraph (2):
The present value reduction under clause (i) above
shall only apply if such reduction is necessary in
order for the Company to avoid making a gross-up
payment to Employee for taxes imposed under IRC
Section 4999 pursuant to this paragraph 10.5.
6. Paragraph 10.5 of the Agreement is hereby amended to revise the last
paragraph thereof to read in its entirety as follows:
For purposes of this Agreement, a "Change of Control" shall
mean one or more of the following:
(a) The acquisition, directly or indirectly by any person
or related group of persons (as such term is used in
Sections 13(d) and 14(d) of the 1934 Act), but other
than the Company or a person that directly or
indirectly controls, is controlled by, or is under
control with the Company, of beneficial ownership (as
defined in Rule 13d-3 of the 1934 Act) of securities
of the Company that results in such person or related
group of persons beneficially owning securities
representing 40% or more of the combined voting power
of the Company's then-outstanding securities;
(b) A merger or consolidation to which the Company is a
party, if (i) the beneficial owners of the Company's
securities immediately before the transaction, do
not, immediately after the transaction, have
beneficial ownership of securities of the surviving
entity or parent thereof representing at least 50% of
the combined voting power of the then-outstanding
securities of the surviving entity or parent, and
(ii) the directors of the Company immediately prior
to consummation of the transaction do not constitute
at least a majority of the board of directors of the
surviving entity or parent upon consummation of the
transaction;
(c) A change in the composition of the Board of Directors
of the Company (the "Board") over a period of
thirty-six (36) consecutive months or less such that
a majority of the Board members ceases by reason of
one or more contested elections for Board membership,
to be comprised of individuals who either (i) have
been Board members since the beginning of such period
or (ii) have been elected or nominated for election
as Board members during such period by at least a
majority of the Board members described in clause (i)
who were still in office at the time the Board
approved such election or nomination; or
(d) The sale, transfer or other disposition of all or
substantially all of the Company's assets in complete
liquidation or dissolution of the Company unless (i)
the beneficial owners of the Company's securities
immediately before the transaction have, immediately
after the transaction, beneficial ownership of
securities representing at least 50% of the combined
voting power of the then-outstanding securities of
the entity acquiring the Company's assets, and (ii)
the directors of the Company immediately prior to
consummation of the transaction constitute a majority
of the board of directors of the entity acquiring the
Company's assets upon consummation of the
transaction.
7. Paragraph 10.7 of the Agreement is hereby amended to add the
following additional sentence at the end thereof:
The performance stock units granted to Employee under
paragraph 6.3(2) shall vest in accordance with their terms.
8. Paragraph 10.8 is hereby added to the Agreement to read in its
entirety as follows:
Notwithstanding any other provisions of this Agreement, any
payment or benefit otherwise required to be made after
Employee's termination of employment that is subject to IRC
Section 409A(a)(2)(B)(i) shall not be paid, provided or
commenced until the later of (i) six months after the date of
Employee's "separation from service" (within the meaning of
IRC Section 409A) and (ii) the payment date or commencement
date specified in the Agreement for such payment(s) or
benefit(s). On the earliest date on which such payments or
benefits can be made, provided or commenced without violating
the requirements of IRC Section 409A(a)(2)(B)(i), Employee
shall be paid, in a single cash lump sum, an amount equal to
the aggregate amount of all payments and benefits delayed
pursuant to the preceding sentence. The provisions of this
paragraph shall only apply to the minimum extent required to
avoid Employee's incurrence of any additional tax or interest
under IRC Section 409A or any regulations or other Internal
Revenue Service guidance promulgated thereunder.
VII.
All other terms and conditions of the Agreement are hereby ratified and
confirmed.
IN WITNESS WHEREOF, the parties have executed this First Amendment to Amended
and Restated Employment Agreement effective as of September 19, 2007.
AMERON INTERNATIONAL CORPORATION
By: /s/ John E. Peppercorn
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John E. Peppercorn
Chairman, Compensation Committee
of the Board of Directors
EMPLOYEE
/s/ James S. Marlen
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James S. Marlen