Exhibit 10.16.3
RPM INTERNATIONAL INC.
RPM INTERNATIONAL INC. 2004 OMNIBUS EQUITY AND INCENTIVE PLAN
PERFORMANCE-CONTINGENT RESTRICTED STOCK (PCRS)
AND ESCROW AGREEMENT
     THIS PERFORMANCE-CONTINGENT RESTRICTED STOCK AND ESCROW AGREEMENT (the
“Agreement”), is entered into as of this 16th day of July, 2007 (the “Effective
Date”), by and between RPM International Inc., a Delaware corporation (the
“Company”), and «NAME» (the “Grantee”).
WITNESSETH:
     WHEREAS, the Compensation Committee of the Board of Directors (the
“Compensation Committee”) administers the RPM International Inc. 2004 Omnibus
Equity and Incentive Plan (the “Plan”); and
     WHEREAS, the Committee has determined to award the Grantee Shares of PCRS,
the vesting of which is contingent upon attainment of performance goals set
forth in Exhibit A hereto; and
     WHEREAS, the Compensation Committee has determined that the award of PCRS
will be subject to the terms and conditions set forth in this Agreement;
     NOW, THEREFORE, the Company and the Grantee agree as follows:
     1. Definitions. Unless otherwise specified in this Agreement, capitalized
terms shall have the meanings attributed to them under the Plan.
     2. Grant of Restricted Stock. As of the Effective Date, the Company grants
to the Grantee, upon the terms and conditions set forth in this Agreement and
subject to the restrictions in Section 3, «SHARES» («NO») shares of Common
Stock, par value $.01 per share, of RPM International Inc. (“Restricted Stock”).
The Restricted Stock is granted in accordance with, and subject to, all the
terms, conditions and restrictions of the Plan, which is hereby incorporated by
reference in its entirety. The Grantee irrevocably agrees to, and accepts, the
terms, conditions and restrictions of the Plan and this Agreement on his own
behalf and on behalf of any heirs, successors and assigns.
     3. Restrictions on Stock. Except as otherwise provided in Sections 4 and
14, the Grantee cannot sell, transfer, assign, hypothecate or otherwise dispose
of the Restricted Stock or pledge it as collateral for a loan. In addition, the
Restricted Stock will be subject to such other restrictions as the Compensation
Committee deems necessary or appropriate.
     4. Lapse of Restrictions on Stock. The restrictions described in Section 3
shall lapse and be of no further force or effect with respect to that percentage
of shares that is equal to the

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Grantee’s Vested Interest percentage as determined by the Compensation Committee
in its sole and exclusive discretion, pursuant to Section 8. The number of
shares to which the restrictions shall lapse shall be rounded up to the nearest
whole number of shares.
     5. Forfeiture. Except as otherwise provided in Sections 6 and 7, the
Grantee will forfeit any interests in the Restricted Stock (i) if his or her
employment with the Company, a Subsidiary or Allied Enterprise terminates before
the third anniversary of the Effective Date or (ii) with respect to that
percentage of the Restricted Stock that is determined not to be vested by the
Compensation Committee in its sole and exclusive discretion, pursuant to
Section 8.
     6. Termination of Employment.
     (a) Death or Total Disability. If the Grantee dies or becomes totally
disabled (within the meaning of the Company’s group long-term disability plan)
while an employee of the Company, its Subsidiaries or Allied Enterprises or
within thirty (30) days of the Grantee’s having ceased to be such an employee by
reason of discharge and prior to the third anniversary of the Effective Date,
the Compensation Committee may provide in its sole and exclusive discretion that
the Grantee (or his or her Beneficiary or Beneficiaries) shall have a Vested
Interest in all or a portion of the Restricted Stock. The Compensation Committee
shall determine in its sole and exclusive discretion whether the Grantee’s
employment with the Company, its Subsidiaries and Allied Enterprises has
terminated because of his or her total disability (as defined in the Company’s
group long-term disability plan).
     (b) Reasons Other Than Death or Total Disability. If the Compensation
Committee determines in its sole and exclusive discretion that the Grantee’s
employment with the Company, its Subsidiaries and Allied Enterprises has
terminated prior to the third anniversary of the Effective Date for reasons
other than those described in subsection (a) above, the Grantee will forfeit and
shall return to the Company or a third party designated by the Company all
Restricted Stock subject to this Agreement. The Grantee will have no further
interests under this Agreement after such a termination of employment.
     7. Change in Control. If a Change in Control as defined in the Plan has
occurred or an event has occurred that the Board of Directors, in the good faith
exercise of its discretion, determines to be a Change in Control prior to the
third anniversary of the Effective Date, the Grantee’s Vested Interest in the
Restricted Stock will immediately become 100%, the restrictions described in
Section 3 will immediately lapse and the shares of stock will become payable as
soon as practicable thereafter, subject to the requirements of Section 10.
Notwithstanding the foregoing, in the event of a Change in Control, the
Compensation Committee may provide for payment of the Grantee’s interests in the
Plan in cash rather than shares of stock.
     8. Vested Interest. If the Grantee continues to be an employee of the
Company, its Subsidiaries or Allied Enterprises from the Effective Date until
the third anniversary of the Effective Date and the performance goals set forth
on Exhibit A are met, his or her Vested Interest percentage will be determined
as set forth on Exhibit A. Except as provided for in

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Sections 6 and 7 above, if the Grantee does not continue to be an employee of
the Company, its Subsidiaries or Allied Enterprises until the third anniversary
of the Effective Date, his or her Vested Interest will be 0% and he will
immediately forfeit the Restricted Stock as provided in Section 5. So long as
the Grantee shall continue to be an employee of the Company, a Subsidiary or
Allied Enterprise, he or she shall not be considered to have experienced a break
in continuous employment because of: (i) any temporary leave of absence approved
in writing by the Company, a Subsidiary or Allied Enterprise; or (ii) any change
of duties or position (including transfer to or from a Subsidiary).
     9. Issuance of Stock. As soon as practicable after lapse of the
restrictions, the Company will deliver to the Grantee (or his or her Beneficiary
or Beneficiaries) the shares of stock to which the Grantee is entitled free and
clear of any restrictions (except any applicable securities law restrictions).
     10. Sale of Shares of Stock to Satisfy Tax Obligations. Prior to issuing
shares of stock pursuant to Section 9, the Compensation Committee will cause the
Company to retain a portion of the stock sufficient to satisfy the Grantee’s
projected tax liability (as described in Section 14 of the Plan) resulting from
the vesting of the Restricted Stock. The Grantee will provide such irrevocable
Stock Powers or additional information and documentation as the Company deems
necessary to satisfy the Grantee’s projected tax liability. The Compensation
Committee will cause the Company to deliver the funds to the appropriate taxing
authorities in satisfaction of such tax liabilities. The Compensation Committee
may, in its sole and exclusive discretion, require that any distributions to the
Grantee’s Beneficiary or Beneficiaries be subject to this tax requirement.
     11. Escrow Agreement. During the term of this Agreement, the Restricted
Stock will remain in the possession of the Company to be held by it in escrow.
Alternatively, the Company may enter into an agreement with a third party
whereby such third party will hold the Restricted Stock in escrow, subject to
the terms of the Plan and this Agreement. To facilitate the escrow of the
Restricted Stock and any reconveyance of the Restricted Stock to the Company or
a third party upon forfeiture, the Grantee will execute in blank such
irrevocable Stock Powers with respect to the Restricted Stock as the Company may
require.
     12. Stockholder Rights While Restricted Stock is Held in Escrow. During the
period the Restricted Stock is held in escrow and this Agreement has not
terminated, and subject to the Grantee’s execution of irrevocable Stock Powers
in accordance with Section 11, the Grantee will be entitled to vote the
Restricted Stock and to receive dividends declared and paid by the Company on
such Restricted Stock.
     13. Section 83(b) Elections. The Grantee will not make an election under
Section 83(b) of the Internal Revenue Code to recognize taxable ordinary income
in the year the Restricted Stock is granted. The Grantee understands that by not
making such an election, he or she will recognize taxable ordinary income at the
time the restrictions lapse in an amount equal to the fair market value of the
stock at that time.

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     14. Designation of Beneficiary. By properly executing and delivering a
Designation of Beneficiary Form to the Designated Representative at the address
listed in Section 17(j), the Grantee may designate an individual or individuals
as his or her Beneficiary or Beneficiaries under the Plan. In the event that the
Grantee fails to properly designate a Beneficiary, his or her interests under
the Plan will pass to the person or persons in the first of the following
classes in which there are any survivors: (i) spouse at the time of death;
(ii) issue, per stirpes; (iii) parents; and (iv) the executor or administrator
of estate. Except as the Compensation Committee may determine in its sole and
exclusive discretion, a properly completed Designation of Beneficiary Form shall
be deemed to revoke all prior designations upon its receipt and approval by the
Designated Representative.
     15. Non-Transferability and Legends. The Restricted Stock has not been
registered for resale under the Securities Act of 1933, as amended (the “Act”),
and may not be sold, transferred or otherwise disposed of unless a registration
statement under the Act with respect to the Restricted Stock has become
effective or unless the Grantee establishes to the satisfaction of the Company
that an exemption from such registration is available. The Restricted Stock will
bear a legend stating the substance of such restrictions, as well as any other
restrictions the Compensation Committee deems necessary or appropriate.
     16. Termination of Agreement. This Agreement will terminate on the earliest
of: (i) the date of the Grantee’s termination of employment with the Company,
its Subsidiaries and Allied Enterprises prior to the third anniversary of the
Effective Date; (ii) the date the restrictions described in Section 3 lapse in
accordance with Section 4; or (iii) such date as may be designated by the
Company’s Board of Directors or Compensation Committee. Any terms or conditions
of this Agreement that the Company determines are reasonably necessary to
effectuate its purposes will survive the termination of this Agreement.
     17. Miscellaneous Provisions.

  a.   Effect of Corporate Reorganization or Other Changes Affecting Number or
Kind of Restricted Stock. The provisions of this Agreement will be applicable to
the Restricted Stock and to any Restricted Stock or other securities which may
be acquired by the Grantee as a result of a liquidation, recapitalization,
reorganization, redesignation or reclassification, split-up, reverse split,
merger, consolidation, stock dividend, combination or exchange of Restricted
Stock, exchange for other securities, a sale of all or substantially all assets
or the like. The Committee shall appropriately adjust the number and kind of
shares of Restricted Stock under this Agreement to reflect such a change. As
used in this Agreement, the term “Restricted Stock” will be deemed to include
any such Restricted Stock or other securities.     b.   Successors and Legal
Representatives. This Agreement will bind and inure to the benefit of the
Company and the Grantee, and their respective successors, assigns and legal
representatives.

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  c.   Integration. This Agreement, together with the Plan, constitutes the
entire agreement between the Grantee and the Company 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 will 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.     d.   Stockholder Approval. All benefits
hereunder will be canceled and all terms of this Agreement will be null and void
ab initio if the Plan is not approved by the Company’s stockholders, as provided
in the Plan.     e.   Notice. Any notice relating to this grant must be in
writing.     f.   No Employment Right Created. Nothing in this Agreement will be
construed to confer upon the Grantee the right to continue in the employment or
service of the Company, its Subsidiaries or Allied Enterprises, or to be
employed or serve in any particular position therewith, or affect any right
which the Company, its Subsidiaries or an Allied Enterprise may have to
terminate the Grantee’s employment or service with or without cause.     g.  
Separability. In the event of the invalidity of any part or provision of this
Agreement, such invalidity will not affect the enforceability of any other part
or provision of this Agreement.     h.   Section Headings. The section headings
of this Agreement are for convenience and reference only and are not intended to
define, extend or limit the contents of the sections.     i.   Amendment, Waiver
and Revocation of Terms. The Compensation Committee may waive any term or
condition in this Agreement that could have been excluded on the date of grant.
No such waiver will be deemed to be a waiver of similar terms under other
agreements. The Compensation Committee may amend this Agreement to include or
exclude any provision which could have been included in, or excluded from, this
Agreement on the date of grant, but only with the Grantee’s written consent.
Similarly, the Compensation Committee may revoke this Agreement at any time
except that, after execution of the Agreement and its delivery to the Designated
Representative, revocation may only be accomplished with the Grantee’s written
consent.

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  j.   Plan Administration. The Plan is administered by the Compensation
Committee, which has sole and exclusive power and discretion to interpret,
administer, implement and construe the Plan and this Agreement. All elections,
notices and correspondence relating to the Plan should be directed to the
Designated Representative at:

RPM International Inc.
P.O. Box 777
2628 Pearl Road
Medina, OH 44258
Attn: Director of Human Resources and Administration

  k.   Governing Law. Except as may otherwise be provided in the Plan, this
Agreement will be governed by, construed and enforced in accordance with the
internal laws of the State of Delaware, without giving effect to its principles
of conflict of laws.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer, and the Grantee has hereunto set his
hand, all as of the day and year first above written.

                  GRANTEE       RPM INTERNATIONAL INC.    
 
               
 
      By:        
 
«NAME»
         
 
Frank C. Sullivan
Its: President and Chief Executive Officer    

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