Document:

EXHIBIT 10.1

 

 

SUMMARY OF FISCAL 2017
EXECUTIVE SHORT TERM INCENTIVE PLAN

AND FISCAL 2017 EXECUTIVE
LONG TERM INCENTIVE PLAN

Fiscal 2017 Executive Short Term Incentive Plan

 

Under the Fiscal 2017 Executive Short Term Incentive
Plan (the “Executive Short Term Incentive Plan”), the Company’s officers, including the named executive officers,
other than W. Richard Marz, can earn annual incentive cash compensation based upon the Company’s achievement of specified
results with respect to corporate revenue and operating income targets for fiscal 2017.

 

The targets and weightings relevant to the cash
incentive determination for fiscal 2017 under the Executive Short Term Incentive Plan will be as follows:

 

	Fiscal 2017 Financial Targets	 	Weighting
	Company Revenue	 	50%
	Company Operating Income Before Incentive Compensation	 	50%

 

The Company’s Operating Income Before
Incentive Compensation must be at least 75% of the target level under the Company’s Fiscal 2017 Operating Budget for any
annual incentive cash compensation payout to be made under the Executive Short Term Incentive Plan.

 

The financial targets include progressive threshold
(90% of target for Company Revenue and 75% of target for Company Operating Income), target and maximum (110% of target for Company
Revenue and 125% of target for Company Operating Income) level incentive performance objectives. If the threshold, target or maximum
financial performance objectives are met, participants will receive a cash incentive payment under the Executive Short Term Incentive
Plan, with the specific amount that such participant receives dependent on Company financial performance, their base salary and
their predetermined participation level (60% for our President and Chief Executive Officer and 40% for the other officers) stated
as a percentage of base salary.

 

An annual incentive cash compensation payout
can be made under the Executive Short Term Incentive Plan if Company Revenue equals or exceeds 90% of the target performance standard
or if Company Operating Income equals or exceeds 75% of the target performance standard.

 

Under the Executive Short Term Incentive Plan,
the possible outcomes of the percentage of base salary that could be received by the Company’s President and Chief Executive
Officer is 0% of base salary for performance below the threshold performance standards, and an amount between 22.5% and 90% of
base salary for performance at or above the threshold performance standards, with 60% payable if both of the target financial performance
objectives are met. Under the Executive Short Term Incentive Plan, the possible outcomes of the percentage of base salary that
could be received by other officers of the Company is 0% of base salary for performance below the threshold performance standards,
and an amount between 15% to 60% of base salary for performance at or above the threshold performance standards, with 40% payable
if both of the target financial performance objectives are met.

 

     

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After completion of fiscal 2017, the Management
Development, Compensation and Stock Option Committee (the “Committee”) will determine the extent to which the specified
goals relating to the financial performance targets and the actual cash amounts to be paid under the Executive Short Term Incentive
Plan. Participants must be assessed by the Management Development Committee at the time of the payout to have performed competently
in order to be eligible for a payout.

 

The Committee reserves the right, in its sole
and absolute discretion, to change the eligibility for participation under the Executive Short Term Incentive Plan, to revise,
eliminate or otherwise modify any performance targets, to modify any participant’s target cash incentive, or otherwise to
increase, decrease or eliminate any incentive payouts to any participant under the Executive Short Term Incentive Plan, regardless
of the level of performance targets that have been achieved, including to provide for no cash incentive payout to a participant
even though one or more performance targets have been achieved.

 

Participants under the Executive Short Term
Incentive Plan must be employed on or before December 31, 2016 in order to be eligible. Those hired between July 1, 2016 and December
31, 2016 will receive a pro-rata portion of their individual participation level. Participants must be employed by the Company
at the date of the payment in fiscal 2018, except to the extent otherwise provided by separate agreement.

 

Fiscal 2017 Executive Long Term Incentive Plan

 

Under the Fiscal 2017 Executive Long Term Incentive
Plan (the “Executive Long Term Incentive Plan”), the Company’s officers, including the named executive officers,
other than W. Richard Marz, can earn annual incentive restricted stock awards under the 2004 Stock Incentive Plan based upon the
Company’s performance against pre-established Company financial targets. The equity awards will be in the form of restricted
stock awards. The number of shares of restricted stock awarded under the Executive Long Term Incentive Plan for fiscal 2017 performance
will be based on the Company’s achievement of specified results with respect to corporate revenue and operating income targets
for fiscal 2017.

 

The financial targets and weightings relevant
to the equity incentive award determination for fiscal 2017 for each of the executive officers will be as follows:

 

	Fiscal 2017 Financial Targets	 	Weighting
	Company Revenue	 	50%
	Company Operating Income Before Incentive Compensation	 	50%

 

The Company’s Operating Income Before
Incentive Compensation must be at least 75% of the target level under the Company’s Fiscal 2017 Operating Budget for any
annual incentive cash compensation payout to be made under the Executive Long Term Incentive Plan.

 

The financial targets include progressive threshold
(90% of target for Company Revenue and 75% of target for Company Operating Income), target and maximum (110% of target for Company
Revenue and 125% of target for Company Operating Income) level incentive performance objectives. If the threshold, target or maximum
financial performance objectives are met, participants will receive an equity incentive award under the Executive Long Term Incentive
Plan. The specific number of shares of restricted stock that such participant receives will be determined by dividing an award
amount denominated in dollars by the closing price of the Company’s Common Stock on the NASDAQ Stock Market’s Global
Market on the date the restricted stock is awarded. The amount of the award is dependent on Company financial performance, the
participant’s base salary and their predetermined participation level (30% for our President and Chief Executive Officer
and 20% for the other officers) stated as a percentage of base salary.

 

     

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An annual incentive equity compensation
payout can be made under the Executive Long Term Incentive Plan if the Company Revenue target equals or exceeds 90% of the target
performance standard or if the Company Operating Income Target equals or exceeds 75% of the target performance standard.

 

Under the Executive Long Term Incentive Plan,
the grant date value of equity awards that could be received by the Company’s President and Chief Executive Officer will
be 0% of base salary for performance below the threshold performance standards, and an amount between 11.25% and 45% of base salary
for performance at or above the threshold performance standards, with a grant date value of 30% of base salary earned if both of
the target financial performance objectives are met. Under the Executive Long Term Incentive Plan, the grant date value of equity
awards that could be received by the Company’s other officers will be 0% of base salary for performance below the threshold
performance standards, and an amount between 7.5% and 30% of base salary for performance at or above the threshold performance
standards, with 20% of base salary earned if both of the target financial performance objectives are met.

 

After completion of fiscal 2017, the Committee
will determine the extent to which the specified goals relating to the financial targets have been achieved and the actual number
of restricted shares to be granted under the 2004 Stock Incentive Plan. The restricted stock awards will vest 25% on the grant
date, 25% on the first anniversary of the grant date, 25% on the second anniversary of the grant date and 25% on the third anniversary
of the grant date, provided the participant remains employed with the Company on each of the relevant vesting dates. Participants
must be assessed by the Management Development Committee at the time of the award to have performed competently in order to be
eligible for an award.

 

The Committee reserves the right, in its sole
and absolute discretion, to change the eligibility for participation under the Executive Long Term Incentive Plan, to revise, eliminate
or otherwise modify any performance targets, to modify any participant’s target award potential, or otherwise to increase,
decrease or eliminate any equity awards to any participant under the Executive Long Term Incentive Plan, regardless of the level
of performance targets that have been achieved, including to provide for no equity awards to a participant even though one or more
performance targets have been achieved.

 

Participants under the Executive Long Term Incentive
Plan must be employed on or before December 31, 2016 in order to be eligible. Those hired between July 1, 2016 and December 31,
2016 will receive a pro-rata portion of their equity award. Participants must be employed by the Company at the date of the equity
award of in fiscal 2018, except to the extent otherwise provided by separate agreement.Exhibit 10(a)

		
			Exhibit 10(a)
		

		
			FOURTH AMENDMENT TO CREDIT AGREEMENT
		

		
			THIS FOURTH AMENDMENT TO CREDIT AGREEMENT dated as of September 1, 2016 (this “Amendment”), is entered into among WD-40 COMPANY, a Delaware corporation (the “Borrower”), the Guarantors identified on the signature pages hereto (together with the Borrower, each a “Loan Party” and collectively the “Loan Parties”) and BANK OF AMERICA, N.A. (the “Lender”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement (defined below).
		

		
			RECITALS
		

		
			A.The Loan Parties and the Lender entered into that certain Credit Agreement dated as of June 17, 2011 (as amended and modified from time to time, the “Credit Agreement”).
		

		
			B.The parties hereto have agreed to amend the Credit Agreement as provided herein.
		

		
			C.In consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows.
		

		
			AGREEMENT
		

		
			1.Amendments.
		

			
	
			
				 (a)
			Subclause (b) of the definition of “Change of Control” contained in Section 1.01 of the Credit Agreement is amended and restated to read as follows:

		
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			(b)during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Company cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body;  or
		

		
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				 (b)
			Section 8.01(o) of the Credit Agreement is amended and restated to read as follows:

		
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			(o)other Liens in favor of the Lender.
		

		
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				 (c)
			Section 8.03(h) of the Credit Agreement is amended and restated to read as follows:

		
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			(h)other Indebtedness owing to the Lender.
		

		
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				 (d)
			Subclause (a)(5) of Section 8.09 of the Credit Agreement is hereby amended and restated to read as follows:

		
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			(5) other agreements entered into with the Lender
		

		
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				 (e)
			Section 8.12 of the Credit Agreement is hereby amended and restated to read as follows:

		
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			8.12Prepayment of Other Indebtedness, Etc.
		

		
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			(a)Amend or modify any of the terms of any Indebtedness of the Company or any Subsidiary (other than Indebtedness owing to the Lender) if such amendment or modification would add or change any terms in a manner adverse to the Company or any Subsidiary, or shorten the final maturity or average life to maturity or require any payment to be made sooner than originally scheduled or increase the interest rate applicable thereto.
		

		

		

		 

 

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			(b)Make (or give any notice with respect thereto) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange of any Indebtedness of the Company or any Subsidiary (other than Indebtedness owing to the Lender).
		

		
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				 (f)
			Section 8.15 of the Credit Agreement is hereby amended and restated to read as follows:

		
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			8.15Capital Expenditures.
		

		
			Permit Consolidated Capital Expenditures to exceed $7,500,000 for any fiscal year.
		

		
			Notwithstanding anything to the contrary contained in Section 8.15:  
		

		
			(a)to the extent that the aggregate amount of Consolidated Capital Expenditures made by any Loan Party in any fiscal year of the Company is less than the maximum base amount of Consolidated Capital Expenditures permitted by Section 8.15 with respect to such fiscal year, the amount of such difference (the “Rollover Amount”) may be carried forward and used to make additional Consolidated Capital Expenditures in subsequent fiscal years of the Company; provided that the Rollover Amount added to the amount of Consolidated Capital Expenditures permitted in any fiscal year of the Company shall not exceed $2,500,000; and
		

		
			(b)no portion of the purchase price for acquiring the real property located at 9715 Business Park Avenue, San Diego, California (together with tenant improvements thereon made on or prior to November 30, 2017) in an aggregate amount not to exceed $18,000,000 will be applied to reduce the annual amount of permitted Consolidated Capital Expenditures pursuant to this Section 8.15.
		

		
			2.Effectiveness; Conditions Precedent.  This Amendment shall be effective, as of the date hereof, upon satisfaction of the following conditions precedent:
		

		
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			(a)The Lender shall have received copies of this Amendment duly executed by the Loan Parties.
		

		
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			(b)The Borrower shall have paid all reasonable fees, charges and disbursements of counsel to the Lender in connection with this Amendment (directly to such counsel if requested by the Lender).
		

		
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			4.Ratification of Loan Documents.  Each Loan Party acknowledges and consents to the terms set forth herein and agrees that this Amendment does not impair, reduce or limit any of its obligations under the Loan Documents.  This Amendment is a Loan Document.
		

		
			5.Authority/Enforceability.  Each Loan Party represents and warrants as follows:
		

		
			(a)It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.
		

		
			(b)This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligations, enforceable in accordance with its terms.
		

		
			(c)No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment, or, if such consent is required, it has been obtained.
		

		
			(d)The execution and delivery of this Amendment does not (i) violate, contravene or conflict with any provision of its Organization Documents or (ii) materially violate, contravene or conflict with any Laws applicable to it or any of its Subsidiaries.
		

		

		

		 

 

		
		

		
			6.Representations and Warranties of the Loan Parties.  Each Loan Party represents and warrants that after giving effect to this Amendment (a) the representations and warranties of the Loan Party set forth in Article VI of the Credit Agreement are true and correct in all material respects as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and (b) no event has occurred and is continuing which constitutes a Default.
		

		
			7.Counterparts/Telecopy-pdf.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of executed counterparts of this Amendment by telecopy or pdf shall be effective as an original.
		

		
			8.Governing Law.  This Amendment and the rights and obligations of the parties hereunder shall be governed by and construed and interpreted in accordance with the laws of the state of California.
		

		
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			IN WITNESS WHEREOF,  the parties hereto have caused this Amendment to be duly executed as of the date first above written.
		

		
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						BORROWER:

					
					
						 

					
					
						WD-40 COMPANY,

					
						a Delaware corporation

				
	
					
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						By: /s/ JAY W. REMBOLT

				
	
					
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						Name: Jay W. Rembolt

					
						Title:  Treasurer and Chief Financial Officer

				

		
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						GUARANTORS:

					
					
						 

					
					
						WD-40 Manufacturing Company,

					
						a California corporation

					
						 

				
	
					
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						By: /s/ JAY W. REMBOLT

				
	
					
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						Name: Jay W. Rembolt

					
						Title:  Treasurer and Chief Financial Officer

					
						 

				
	
					
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						HPD LABORATORIES, INC.,

					
						a Delaware corporation

					
						 

				
	
					
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						By: /s/ JAY W. REMBOLT

				
	
					
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						Name: Jay W. Rembolt

					
						Title:  Treasurer and Chief Financial Officer

					
						 

				
	
					
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						HEARTLAND CORPORATION,

					
						a Kansas corporation

					
						 

				
	
					
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						By: /s/ JAY W. REMBOLT

				
	
					
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						Name: Jay W. Rembolt

					
						Title:  Treasurer and Chief Financial Officer

					
						 

				

		
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						LENDER:

					
					
						 

					
					
						bank of america, n.a.,

					
						as a Lender

					
						 

				
	
					
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						By: /s/ CHRISTOPHER  D. PANNACCIULLI

				
	
					
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						Name: Christopher D. Pannacciulli

					
						Title:  Senior Vice President

				

		
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