Exhibit 10.23

 

EXECUTION COPY

SEPARATION AGREEMENT AND RELEASE AND WAIVER OF CLAIMS

 

THIS SEPARATION AGREEMENT AND RELEASE AND WAIVER OF CLAIMS (“Agreement”) is made
and entered into by and between RPM International Inc., a Delaware corporation
(the "Company") and Ronald A. Rice ("Executive"), with an Effective Date as
defined herein.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to an Amended and Restated Employment Agreement between the
Company and Executive dated December 31, 2008, as amended by that certain
Amendment to Amended and Restated Employment Agreement dated December 20, 2012
(the “Employment Agreement”), Executive has been serving as President and Chief
Operating Officer of the Company; and

 

WHEREAS, the Company has decided to terminate Executive’s employment, in the
manner provided by and consistent with the Employment Agreement, effective July
6, 2018, on the terms set forth herein; and

 

WHEREAS, the Company and Executive wish to resolve all matters and issues
between them arising from or relating to Executive's employment by the Company.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, Executive and the Company hereby agree as follows:

 

ARTICLE I -- CONSIDERATION

 

Section 1.1.Termination of Employment.  The Company hereby terminates
Executive’s employment effective as of July 6, 2018 (the “Termination
Date”).  The parties acknowledge and agree that Executive’s Termination of
Employment is a termination without Cause pursuant to §5(a)(vi) of the
Employment Agreement.  Executive, by his signature below, hereby waives any
written notice of Termination of Employment under the Employment
Agreement.  Executive  voluntarily resigns as an employee, director, officer,
manager, or from other service in any role for each Affiliate of the Company by
executing the document attached as Schedule 1, effective as of the Termination
Date.  

Section 1.2.Lump-Sum Payment.  No later than 30 calendar days following the
Termination Date, and after the Effective Date of this Agreement as defined in
Section 4.12 hereof, Executive will be entitled to receive a lump-sum payment
(the “Payment”) in an amount equal to $4,000,000, calculated in the manner
provided by §5(b)(iii) of the Employment Agreement, and representing 200% times
the sum of $730,000 (Executive’s Base Salary) plus $995,000 (Executive’s Annual
Incentive Compensation for Fiscal Year 2014), plus Fiscal Year 2018 unpaid cash
incentive compensation equal to $550,000, less any applicable payroll taxes and
withholdings.

 

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Section 1.3.Continuing Benefit Plans.  Upon the Effective Date of this
Agreement, and for the time periods described below, Executive will be entitled
to continue to participate in the Continuing Benefit Plans, as described in, and
defined by, §5(c)(i) and Exhibit A of the Employment Agreement:

 

1.

The RPM International Inc. Welfare Plan.  For a period of 53 months following
the Termination Date, Executive will be entitled to continue to participate in
the RPM International Inc. Welfare Plan, on the same basis and at the same level
of benefits as he participated immediately prior to the Termination
Date.  Executive’s participation in said plan shall be on the terms and
conditions described in  §5(c)(i) of the Employment Agreement, and as otherwise
dictated by the governing plan documents of the RPM International Inc. Welfare
Plan, except that the Company will have the right to suspend such benefits if
Executive becomes covered by another employer providing any health and welfare
benefits, without regard to whether such benefits are comparable to the benefits
provided under the RPM International Inc. Welfare Plan; and

 

2.

Estate/Financial Planning Benefits.Executive will be entitled to the
Estate/Financial Planning Benefits described in §5(c)(i) of the Employment
Agreement for a period of 18 months following the Termination Date, with
Executive to forward bills received for such services to Janeen B. Kastner, Vice
President – Corporate Benefits and Risk Management, RPM International Inc., 2628
Pearl Road, P. O Box 777, Medina, Ohio 44258.

Section 1.4.Limited Benefit Plans.   Upon the Effective Date of this Agreement,
Executive will be entitled only to the following Limited Benefit Plans as
described in §5(c)(ii) of the Employment Agreement:

 

1.

Executive Life Insurance.  A lump sum payment in the amount of $193,254
representing the next two scheduled annual premium payments with respect to
Executive for the executive life insurance program maintained by the Company as
of the Termination Date;

 

2.

SERP Restricted Stock Plan.  A lump sum payment in the amount of $773,592.12
representing the cash value of the benefits Executive would have received had he
continued to participate in and receive annual awards under the SERP Restricted
Stock Plan on a basis consistent with his past practice for a period of two
years after the Termination Date, with such payment to be paid no later than 2 ½
months following the later of the end of Executive’s taxable year or the end of
the Company’s taxable year in which the Termination Date occurs, which payment
includes the 2018 award which would have been made to Executive on July 16,
2018; and

 

3.

Lapse of Restrictions.  The lapse of all restrictions on transfer and forfeiture
provisions to which Executive’s awards under the SERP

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Restricted Stock Plan are subject, so that any restricted shares previously
awarded to Executive under such plan shall be nonforfeitable and freely
transferable thereafter, all on the terms of the SERP Restricted Stock Plan or
the agreements thereunder.

 

4.

Vesting.  The parties acknowledge and agree that upon the Effective Date of this
Agreement, Executive will be fully vested in the Performance Earned Restricted
Stock and Stock Appreciation Rights grants made under the Company’s 2004 and
2014 Omnibus Equity and Incentive Plans, and that for purposes of any
Performance Earned Restricted Stock and Stock Appreciation Rights grants only,
Executive will be deemed to have retired as of the Effective Date of this
Agreement.

Section 1.5.Outplacement Assistance.  In addition to the payments and benefits
described in the Employment Agreement, and as further consideration for
Executive’s execution of this Agreement, upon the Effective Date of this
Agreement and continuing for a period of twelve (12) months thereafter, the
Company shall provide to Executive outplacement assistance through the firm with
which the Company customarily contracts for such services, in an amount not to
exceed $8,250.

Section 1.6.Automobile.In addition to the payments and benefits described in the
Employment Agreement, and as further consideration for Executive’s execution of
this Agreement, following the Effective Date of this Agreement, the Company will
pay-off the residual value of the automobile leased by the Company for
Executive’s benefit, and the Company will transfer the title for said automobile
to Executive, and Executive will thereafter be responsible for all insurance
related to such automobile.  Executive will be responsible for all other
operating expenses as of the Effective Date of this Agreement.

Section 1.7.Adequacy of Consideration.  Executive hereby agrees and acknowledges
that the payments and benefits described in Article I of this Agreement are over
and above any entitlements, severance or otherwise, that he may have by reason
of his termination from employment with the Company, and that such payments and
amounts constitute adequate consideration for all of Executive’s covenants and
obligations set forth herein, including, but not limited to, the General Release
of Claims set forth in Article II of this Agreement and the other obligations of
Executive set forth in Article III of this Agreement.  

ARTICLE II -- GENERAL RELEASE OF CLAIMS

 

Section 2.1.Executive’s Release.  For consideration in the form of the payments
and benefits set forth herein, Executive does hereby for himself and for his
heirs, executors, successors and assigns, release and forever discharge the
Company, its subsidiaries, divisions, Affiliates, and affiliated businesses,
direct or indirect, if any, together with its and their respective officers,
directors, shareholders, management, representatives, agents, employees,
successors, assigns, and attorneys, both known and unknown, in both their
personal and agency capacities (collectively, “the Company Entities”) of and
from any and all claims, demands, damages, actions or causes of action, suits,
claims, charges, complaints, contracts, whether oral or written, express or
implied and promises, at law or in equity, of whatsoever kind or nature,

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including but not limited to any alleged violation of any state or federal
anti-discrimination or anti-retaliation statutes or regulations, including but
not limited to Title VII of the Civil Rights Act of 1964 as amended, ERISA, the
Americans With Disabilities Act, the Age Discrimination in Employment Act, the
Family and Medical Leave Act (“FMLA”), Section 806 of the Corporate and Criminal
Fraud Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act of 2002,
the Dodd-Frank Wall Street Reform and Consumer Protection Act, the False Claims
Act, breach of any express or implied contract or promise, wrongful discharge,
violation of public policy, or tort, all demands for attorney's fees, back pay,
holiday pay, vacation pay, bonus, group insurance, any claims for reinstatement,
all employee benefits and claims for money, out of pocket expenses, any claims
for emotional distress, degradation or humiliation, that Executive might now
have or may subsequently have, whether known or unknown, suspected or
unsuspected, by reason of any matter or thing, arising out of or in any way
connected with, directly or indirectly, any acts or omissions of the Company or
any of its directors, officers, shareholders, employees and/or agents arising
out of Executive's employment and separation from employment which have occurred
prior to the Effective Date of this Agreement as defined in Section 4.12 hereof,
except those matters specifically set forth herein, and except for any health,
welfare, pension or retirement benefits, if any, which may have vested on
Executive's behalf prior to his termination under the generally applicable terms
of such programs, and except for any claims arising solely out of Executive’s
status as a shareholder of the Company, and except for any rights Executive has
under any applicable policies of Directors and Officers liability insurance, and
except for any rights Executive has under the Indemnity Agreement.  

Employee may file a charge with, testify, assist, or participate in an
investigation, hearing or proceeding conducted by the Equal Employment
Opportunity Commission or state fair employment practices agency as to the
employment laws enforced by such agencies; provided, however, that Employee
understands and agrees that he is waiving and releasing his rights to monetary
damages under such laws by reason of his agreement to the general release
language stated above.

 

Section 2.2.Older Workers Benefit Protection Act (“OWBPA”).  Executive
recognizes and understands that, by executing this Agreement, he shall be
releasing the Company Entities from any claims that he now has, may have, or
subsequently may have under the Age Discrimination in Employment Act of 1967, 29
U.S.C. §§621, et seq., as amended, by reason of any matter or thing arising out
of, or in any way connected with, directly or indirectly, any acts or omissions
which have occurred prior to and including the Effective Date of this
Agreement.  In other words, Executive will have none of the legal rights against
the aforementioned that he would otherwise have under the Age Discrimination in
Employment Act of 1967, 29 U.S.C. §§621, et seq., as amended, by his signing
this Agreement.

Section 2.3.Consideration Period.  The Company hereby notifies Executive of his
right to consult with his chosen legal counsel before signing this
Agreement.  Through his signature below, Executive represents that he has
consulted with, and been represented by, competent legal counsel in the
negotiation of this Agreement.  The Company shall afford, and Executive
acknowledges receiving, not less than twenty-one (21) calendar days in which to
consider this Agreement to ensure that Executive’s execution of it is knowing
and voluntary.  In signing below, Executive expressly acknowledges that he has
been afforded the opportunity to

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take at least twenty-one (21) days to consider this Agreement and that his
execution of same is with full knowledge of the consequences thereof and is of
his own free will.  

Notwithstanding the fact that the Company has allowed Executive twenty-one (21)
days to consider this Agreement, Executive may elect to execute this Agreement
prior to the end of such 21-day period.  If Executive elects to execute this
Agreement prior to the end of such 21-day period, then by his signature below,
Executive represents that he has consulted with, and been represented by, his
chosen legal counsel, and his decision to accept this shortening of the time was
knowing and voluntary, and was not induced by fraud, misrepresentation, or any
threat to withdraw or alter the benefits provided by the Company herein, or by
the Company providing different terms to any similarly-situated Executive
executing this Agreement prior to end of such 21-day consideration period.  The
parties agree that changes, whether material or immaterial, to this Agreement
shall not restart the running of the twenty-one (21) day time period.

Section 2.4.Revocation Period.  Both the Company and Executive agree and
recognize that, for a period of seven (7) calendar days following Executive’s
execution of this Agreement, Executive may revoke this Agreement by providing
written notice revoking the same, within this seven (7) day period, delivered by
hand or by certified mail, addressed to Janeen B. Kastner, Vice President –
Corporate Benefits and Risk Management, RPM International Inc., 2628 Pearl Road,
P. O Box 777, Medina, Ohio 44258, delivered or postmarked within such seven (7)
day period.  In the event Executive so revokes this Agreement, each party will
receive only those entitlements and/or benefits that he/it would have received
regardless of this Agreement.  

Section 2.5.Release by Company Entities.  The Company Entities do hereby release
and forever discharge Executive, his heirs, executors, successors, and assigns,
from any and all claims, demands, actions or causes of action, damages or suits
at law or equity, of whatsoever kind or nature, both known or unknown, that the
Company Entities have or may have by reason of any matter or thing arising out
of, or in any way connected with, directly or indirectly, any act or omission
that has occurred prior to the Effective Date of this Agreement.  This Release
does not apply to the Company’s rights and entitlements under this Agreement.

 

ARTICLE III  OTHER OBLIGATIONS OF EXECUTIVE

 

Section 3.1.Restrictive Covenants.  Executive hereby acknowledges and reaffirms
all of Executive’s obligations and the Company’s rights under the Restrictive
Covenants of Non-Competition, Non-Solicitation, and Confidentiality set forth in
§9 of the Employment Agreement, all of which obligations shall survive the
termination of Executive’s employment and are incorporated in this Agreement by
reference.

 

Section 3.2.Return of Company Property.  Executive agrees that prior to
receiving any benefits under this Agreement, he will return to the Company any
and all Company property, equipment or information (including but not limited to
keys, security or access cards, computers, Company issued credit cards, files,
computer stored data, catalogs, samples, documents or other such Company
property which came into Executive’s possession, or which Executive prepared or
helped prepare, in connection with or during Executive’s employment with the
Company.  Executive agrees not to retain any copies of such property or
information and will not use any such property or information to the detriment
of the Company.  

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Section 3.3.Assistance to Company.  Executive agrees to make himself available
to answer questions concerning business concerns, operations, pending legal
concerns and/or litigation, and other special assistance as reasonably may be
requested by the Company during the two calendar years following the Termination
Date; provided that Executive shall be entitled to reimbursement of expenses
reasonably incurred by him in his performance of his obligations under this
§3.3.

Section 3.4.Nondisparagement.  Executive agrees not to make any disparaging or
generally negative comments regarding the Company Entities or otherwise to
communicate with any person in a manner tending to damage the reputation of the
Company Entities.  Neither the Company, nor any of those employees of the
Company who constitute its “named executive officers” (under SEC regulations)
for purposes of the Company’s 2018 proxy statement, will make or issue any
public release or other public statement containing disparaging or generally
negative comments regarding Executive.  Nothing contained in this Agreement will
preclude any party or other person from (a) providing truthful information in
any court, regulatory, or governmental proceeding, investigation, or inquiry, or
(b) reporting possible violations of federal law or regulation to any
governmental agency or entity, or (c) making other disclosures that are
protected under the whistleblower provisions of federal or state regulation.

Section 3.5.Permitted Disclosure.  Notwithstanding the provisions of §9(c) of
the Employment Agreement, as affirmed and acknowledged in §3.1 of this
Agreement, Executive may disclose to such persons, without limitation of any
kind, who have a need to know, the tax treatment and any facts that may be
relevant to the tax structure of his termination from employment or other
transactions contemplated by this Agreement, other than any information for
which nondisclosure is reasonably necessary in order to comply with applicable
federal or state securities laws, and except that, with respect to any document
or other information that in either case contains information concerning the tax
treatment or tax structure of such transactions as well as other information,
this §3.5 shall apply only to such portions of the document or similar item that
is relevant to an understanding of such tax treatment or tax structure.  The
Company will be permitted to disclose a summary of, and copy of, this Agreement
in a Form 8-K and other public disclosures to be filed with the U.S. Securities
Exchange Commission.

Section 3.6.Remedy for Breach of Article III.  Executive agrees that each of his
obligations set forth in Article III of this Agreement are material provisions
of this Agreement, without which the Company would not enter into this
Agreement, the violation of which by Executive will cause substantial harm to
the Company, and that the actual damages resulting from a violation of any
section of this Article III by Executive will be difficult or impossible to
ascertain.  Accordingly, in the event of any violation by Executive of any
section of this Article III, and in addition to all legal or equitable remedies
available to the Company to remedy such violation, Executive agrees that (i) the
Company may terminate all payments and benefits owed to Executive under this
Agreement and retain any remaining payments and benefits not as of then paid to
Executive as liquidated damages; and (ii) Executive will repay to the Company,
upon demand, all amounts paid to him pursuant to Article I of this Agreement
prior to the date the Company learns of such violation by Executive, along with
any other relief the Court deems to be appropriate and just; provided, however,
it is agreed that the payments and benefits made or owed to

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Executive under any of the plans, programs or agreements referred to Sections
1.9 and 1.10 are not subject to termination or repayment by reason of clauses
(i) or (ii) of this sentence.

ARTICLE IV -- MISCELLANEOUS PROVISIONS

 

Section 4.1.Entire Agreement.  Except as provided in §3.1 and 4.2 of this
Agreement, and except for Executive’s continuing rights under the plans,
programs and agreements as specified in Article I, this Agreement contains the
entire agreement between the parties hereto and replaces any prior agreements,
contracts and/or promises, whether written or oral, with respect to the subject
matters included herein, including any offer or other letter agreements, any
proxy statement description, or any other such agreement or document.  This
Agreement may not be changed orally, but only in writing, signed by each of the
parties hereto.

Section 4.2.Survival of Agreements.  Notwithstanding anything to the contrary in
this Agreement, the parties agree that (i) §§ 5(b), 5(c), 7, 14, 15, and Exhibit
A of the Employment Agreement, and (ii) the Indemnification Agreement between
the Company and Executive dated January 13, 2003 (the “Indemnification
Agreement”), shall survive Executive’s termination and his execution of this
Agreement.  The parties further agree that nothing in this Agreement is intended
to modify their respective rights and obligations under the Employment
Agreement.  

Section 4.3.Acknowledgments.  Executive acknowledges that Executive has
carefully read and fully understands all of the provisions of this Agreement,
that Executive has not relied on any representations of the Company or any of
its representatives, directors, officers, executives and/or agents to induce
Executive to enter into this Agreement, other than as specifically set forth
herein, and that Executive is fully competent to enter into this Agreement and
has not been pressured, coerced or otherwise unduly influenced to enter into
this Agreement and that Executive has voluntarily entered into this Agreement of
Executive's own free will.  Executive further acknowledges that he has consulted
with, and been represented by, competent legal counsel in the negotiation of
this Agreement.  The parties agree that any capitalized terms not otherwise
defined herein shall have the meaning given to them in the Employment Agreement.

Section 4.4.Warranty/Representation.  Executive and the Company each warrant and
represent that, prior to and including the Effective Date of this Agreement as
defined in Section 4.12, no claim, demand, cause of action, or obligation which
is subject to this Agreement has been assigned or transferred to any other
person or entity, and no other person or entity has or has had any interest in
any such claims, demands, causes of action or obligations, and that each has the
sole right to execute this Agreement.

 

Section 4.5.Invalidity.  The parties to this Agreement agree that the invalidity
or unenforceability of any one (1) provision or part of this Agreement shall not
render any other provision(s) or part(s) hereof invalid or unenforceable and
that such other provision(s) or part(s) shall remain in full force and effect.

 

Section 4.6.No Assignment.  This Agreement is personal in nature and shall not
be assigned by Executive.  All payments and benefits provided Executive herein
shall be made to his estate in the event of his death prior to his receipt
thereof.

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Section 4.7.Originals.  Two (2) copies of this Agreement shall be executed as
“originals” so that both Executive and the Company may possess an “original”
fully executed document.  The parties hereto expressly agree and recognize that
each of these fully executed “originals,” which may be signed in counterparts,
shall be binding and enforceable as an original document representing the
agreements set forth herein.

 

Section 4.8.Governing Law; Jurisdiction; Venue.  This Agreement shall be
governed under the laws of the State of Ohio.  The Company and Executive each
consent to venue and personal jurisdiction over them in any state or federal
court with jurisdiction over the State of Ohio, for the purpose of construction
and enforcement of this Agreement.

 

Section 4.9.Withholding.  The Company shall have the right to withhold from any
payments and benefits under this Agreement any and all amounts necessary for
payroll taxes and other withholdings.  

Section 4.10.Further Assurances.  In case at any time after the Effective Date
of this Agreement as defined in Section 4.12, any further actions are necessary
or desirable to carry out the purposes of any of the provisions of this
Agreement, each party shall, as promptly as reasonably practicable, execute and
deliver all such documents, and take all such other actions, in order to give
full effect to the provisions of this Agreement.

Section 4.11.Compliance with Section 409A; Taxes.  It is the intention and
purpose of the Company that this Agreement and all benefits provided hereunder
or in connection herewith shall be, at all relevant times, in compliance with
(or exempt from) Section 409A of the Internal Revenue Code of 1986, as amended
and related regulations (the “Code”), and this Agreement and such benefits shall
be so interpreted and administered. Notwithstanding anything herein to the
contrary, (i) if at the Termination Date Executive is a “specified employee” as
defined in Section 409A of the Code, and the deferral of the commencement of any
payments or benefits otherwise payable hereunder as a result of Executive’s
termination of employment is necessary in order to prevent the imposition of any
accelerated or additional tax under Section 409A of the Code, then the Company
will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to Executive) until the date that is six months following the
Termination Date (or the earliest date as is permitted under Section 409A of the
Code), (ii) any reimbursements provided under this Agreement shall be made no
later than the end of Executive’s taxable year following Executive’s taxable
year in which such expense was incurred; in addition, the amounts eligible for
reimbursement during any one taxable year under this Agreement may not affect
the expenses eligible for reimbursement in any other taxable year under this
Agreement, (iii) if any other payments of money or other benefits due to
Executive hereunder could cause the application of an accelerated or additional
tax under Section 409A of the Code, such payments or other benefits shall be
deferred if deferral will make such payment or other benefits compliant under
Section 409A of the Code, or otherwise such payment or other benefits shall be
restructured, to the extent possible, in a manner, determined by the Company,
that does not cause such an accelerated or additional tax or result in an
additional cost to the Company, and (iv) each payment hereunder (including
without limitation each monthly payment or payment made on a payroll period
basis, even if it might otherwise be part of a series of installment payments)
shall

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constitute a separate payment hereunder for purposes of Section 409A of the
Code.  The Company shall consult with Executive in good faith regarding the
implementation of the provisions of this §4.11; provided that notwithstanding
any other provision in this Agreement or otherwise, neither the Company nor any
of its employees or representatives shall have any liability to Executive or any
beneficiary or dependent with respect thereto or with respect to the tax
consequences or effects to them of any of the provisions of, or benefits or
payments provided under, pursuant to or in connection with, this Agreement
(including under the plans and programs referred to herein).

Section 4.12.Effective Date of this Agreement.  This Agreement shall become
effective only upon (a) execution of this Agreement by Executive after the
expiration of the twenty-one (21) day consideration period described in §2.3 of
this Agreement, unless such consideration period is voluntarily shortened as
provided by law; and (b) the expiration of the seven (7) day period for
revocation of this Agreement by Employee described in §2.4 of this Agreement.

 

IN WITNESS WHEREOF, Executive and the Company agree as set forth above:

 

DATE OF EXECUTION BY EXECUTIVE:

 

AGREED TO AND ACCEPTED BY:

 

 

 

7-6-18

 

/s/ Ronald A. Rice

 

 

RONALD A. RICE

 

 

 

 

 

EXECUTION WITNESSED BY:

 

 

 

 

 

/s/ W. Rice

 

 

 

 

 

 

DATE OF EXECUTION BY COMPANY:

 

AGREED TO AND ACCEPTED BY

 

 

RPM INTERNATIONAL INC.

 

 

 

July 6, 2018

 

BY:

 

/s/ Frank C. Sullivan

 

 

 

 

 

 

 

TITLE:

 

Chairman and CEO

 

 

 

 

 

 

 

EXECUTION WITNESSED BY:

 

 

 

 

 

 

 

/s/ Edward W. Moore

 

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