RPM » Topics » Payments upon Involuntary Termination Without Cause and not within Two Years of a Change in Control

This excerpt taken from the RPM DEF 14A filed Aug 27, 2009.
Payments upon Involuntary Termination Without Cause and not within Two Years of a Change in Control
 
Under the terms of each named executive officer’s employment agreement, in the event that the executive is terminated without cause and the termination does not occur during a two-year period following a change in control, the executive would be entitled to the following:
 
  •  a lump sum amount equal to the executive’s incentive compensation for the preceding fiscal year (if not yet paid) plus, for Mr. Frank C. Sullivan, three times the sum of, and for the other named executive officers, two times the sum of: (i) the greater of the executive’s annual base salary in effect on the date of termination or the highest base salary in effect at any time during the three years immediately preceding the termination date, and (ii) the highest annual incentive compensation received by the executive in the five years prior to the termination date;
 
  •  continuation of health and welfare benefits for three years for Mr. Frank C. Sullivan, and for two years for the other named executive officers;
 
  •  estate and financial planning services for a period of six months;
 
  •  for periods before December 31, 2008, continuation of executive life insurance coverage for a period of three years for Mr. Frank C. Sullivan, and two years for the other named executive officers, and for periods on or after December 31, 2008, a lump sum payment equal to three times, for Mr. Frank C. Sullivan, and two times, for the other named executive officers, the most recent annual premium or other cost for the executive life insurance coverage in effect on the date of termination;
 
  •  a lump sum amount equal to the cash value of three years for Mr. Frank C. Sullivan, and two years for the other named executive officers, of benefits that the executive would have received under the Restricted Stock Plan (as determined in accordance with the Restricted Stock Plan and the Company’s past practice and to be paid under the Restricted Stock Plan); and
 
  •  the lapse of all transfer restrictions and forfeiture provisions on restricted stock awarded under the 1997 and 2007 Restricted Stock Plans.
 
The employment agreements provide that the Company will not be obligated to make the lump sum payments or provide the additional benefits described above unless the executive signs a release and waiver of claims and refrains from revoking, rescinding or otherwise repudiating the release of claims during certain time periods.
 
This excerpt taken from the RPM DEF 14A filed Aug 25, 2008.
Payments upon Involuntary Termination Without Cause and not within Two Years of a Change in Control
 
Under the terms of each named executive officer’s employment agreement, in the event that the executive is terminated without cause and the termination does not occur during a two-year period following a change in control, the executive would be entitled to the following:
 
  •  a lump sum amount equal to the executive’s incentive compensation for the preceding fiscal year (if not yet paid) plus, for Mr. Frank C. Sullivan, three times the sum of, and for the other named executive officers, two times the sum of: (i) the greater of the executive’s annual base salary in effect


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  on the date of termination or the highest base salary in effect at any time during the three years immediately preceding the termination date, and (ii) the highest annual incentive compensation received by the executive in the five years prior to the termination date;
 
  •  continuation of health and welfare benefits for three years for Mr. Frank C. Sullivan, and for two years for the other named executive officers;
 
  •  estate and financial planning services for a period of six months;
 
  •  continuation of split-dollar life insurance coverage for a period of three years for Mr. Frank C. Sullivan, and two years for the other named executive officers;
 
  •  a lump sum amount equal to the cash value of three years for Mr. Frank C. Sullivan, and two years for the other named executive officers, of benefits that the executive would have received under the Restricted Stock Plan (as determined in accordance with the Restricted Stock Plan and the Company’s past practice and to be paid under the Restricted Stock Plan); and
 
  •  the lapse of all transfer restrictions and forfeiture provisions on restricted stock awarded under the 1997 and 2007 Restricted Stock Plans.
 
The employment agreements provide that the Company will not be obligated to make the lump sum payments or provide the additional benefits described above unless the executive signs a release and waiver of claims and refrains from revoking, rescinding or otherwise repudiating the release of claims during certain time periods.
 
This excerpt taken from the RPM DEF 14A filed Aug 20, 2007.
Payments upon Involuntary Termination Without Cause and not within Two Years of a Change in Control
 
Under the terms of the each named executive officer’s employment agreement, in the event that the executive is terminated without cause and the termination does not occur during a two-year period following a change in control, the executive would be entitled to the following:
 
  •  a lump sum amount equal to the executive’s incentive compensation for the preceding fiscal year (if not yet paid) plus, for Mr. Frank Sullivan, three times the sum of, and for the other named executive officers, two times the sum of: (i) the greater of the executive’s annual base salary in effect on the date of termination or the highest base salary in effect at any time during the three years immediately preceding the termination date, and (ii) the highest annual incentive compensation received by the executive in the five years prior to the termination date;
 
  •  continuation of health and welfare benefits for three years for Mr. Frank Sullivan, and for two years for the other named executive officers;
 
  •  estate and financial planning services for a period of six months;
 
  •  continuation of split-dollar life insurance coverage for a period of three years for Mr. Frank Sullivan, and two years for the other named executive officers;
 
  •  a lump sum amount equal to the cash value of three years for Mr. Frank Sullivan, and two years for the other named executive officers, of benefits that the executive would have received under the Restricted Stock Plan (as determined in accordance with the Restricted Stock Plan and the Company’s past practice and to be paid under the Restricted Stock Plan); and
 
  •  the lapse of all transfer restrictions and forfeiture provisions on restricted stock awarded under the 1997 Restricted Stock Plan.
 
The employment agreements provide that the Company will not be obligated to make the lump sum payments or provide the additional benefits described above unless the executive signs a release and waiver of claims and refrains from revoking, rescinding or otherwise repudiating the release of claims during certain time periods.


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Table of Contents

Payments upon Involuntary Termination Without Cause or Resignation for Good Reason within Two Years of a Change in Control
 
Under the terms of each named executive officer’s employment agreement, in the event that the executive is terminated without cause or resigns for good reason within two years following a change in control the executive would be entitled to the following:
 
  •  a lump sum amount equal to the executive’s incentive compensation for the preceding fiscal year (if not yet paid) plus three times the sum of (i) the greater of the executive’s annual base salary in effect on the date of termination or the highest base salary in effect at any time during the three years immediately preceding the termination date, and (ii) the highest annual incentive compensation received by the executive in the five years prior to the termination date;
 
  •  continuation for a period of three years of health and welfare benefits;
 
  •  estate and financial planning services for a period of one year;
 
  •  a lump sum three year premium payment by the Company to the carrier on the split-dollar life insurance policy, with ownership of such policy also to be transferred to the executive at the cost of the Company;
 
  •  a lump sum amount equal to the cash value of three years of benefits that the executive would have received under the Restricted Stock Plan (as determined in accordance with the Restricted Stock Plan and the Company’s past practice and to be paid under the Restricted Stock Plan);
 
  •  the lapse of all transfer restrictions and forfeiture provisions on restricted stock awarded under the Restricted Stock Plan;
 
  •  the lapse of transfer restrictions on any restricted stock awarded under the PARS Plan and on any awards under the Omnibus Plan;
 
  •  outplacement assistance for two years following the change in control;
 
  •  a lump sum payment, or gross-up, equal to the amount of any excise tax imposed on the executive under Section 4999 of the Internal Revenue Code, or any similar state or local tax law, and any taxes, interest or penalties incurred with respect thereto;
 
  •  interest on certain of the above payments if not made in a timely manner in accordance with the employment agreement; and
 
  •  up to $500,000 in legal fees incurred by the executive in the event that, following a change in control, he may be caused to institute or defend legal proceedings to enforce his rights under the employment agreement.
 
The employment agreements provide that the Company will not be obligated to make the lump sum payments or provide the additional benefits described above unless the executive signs a release and waiver of claims and refrains from revoking, rescinding or otherwise repudiating the release of claims during certain time periods. In the table above, we have assumed that the Company timely made all payments and the executive did not incur legal fees.
 
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