A. SCHULMAN, INC. |
Delaware | 0-7459 | 34-0514850 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
3637 Ridgewood Road, Fairlawn, Ohio | 44333 | ||||
(Address of principal executive offices) | (Zip Code) |
(330) 666-3751 |
• | The term commences October 1, 2016 and ends on October 31, 2018, provided, however, that Mr. Richardson may, upon providing written notice to the Company at least ninety (90) days prior to October 31, 2018, extend the term for one additional year until October 31, 2019. |
• | Mr. Richardson’s initial annual base salary is $500,000, which may be increased from time to time by the Compensation Committee of the Board of Directors as it deems appropriate in its reasonable business judgment based upon recommendations of the Chief Executive Officer from evaluations of Mr. Richardson’s performance, but the base salary may not be decreased except as a result of Disability, as such term is defined in the Agreement. |
• | Mr. Richardson will be granted 50,000 restricted stock units under the Amended and Restated 2006 Incentive Plan on or about October 1, 2016. These restricted stock units will be subject to vesting on a pro rata basis on each of the three anniversaries of the grant date. If Mr. Richardson’s employment terminates due to death, Disability, Retirement, Resignation for Cause, termination by the Company without Cause, or upon a Change in Control, his unvested restricted stock units will fully vest on the date of his death, Disability, Retirement, Resignation for Cause, termination by the Company without Cause, or upon a Change in Control. |
• | Mr. Richardson will be eligible to participate in the Company’s bonus program for senior executives, with a target level of 70% of base salary and leverage ranging from zero to 200% based upon the achievement of various financial goals and operating metrics, as well as an assessment of Mr. |
• | Mr. Richardson will be eligible for restricted stock and performance stock grants, stock options/grants and other discretionary awards and/or cash equivalents as approved by the Board of Directors consistent with the Company's long-term equity incentive plans, compensation philosophy and annual benchmarking, commencing with the annual grant cycle for the 2017 fiscal year, at a target level of 160% of the base salary and leverage ranging from 0% to 200% based upon performance metrics determined by the Compensation Committee. Consistent with the terms of the Company’s standard form of award agreement, Mr. Richardson will immediately vest in the number of performance-based long-term incentive awards at the “target” level of performance in the event a Change in Control occurs during a performance period. |
• | Mr. Richardson will be eligible to receive benefits made generally available to the Company’s executives in accordance with Company policies and will be eligible to participate in all other employee compensation and benefit plans generally available to executives at a level appropriate for his position. |
• | Upon termination of Mr. Richardson’s employment during the term of the Agreement, he may be entitled to receive certain post-termination benefits depending upon whether such termination is by the Company without Cause, in relation to a Change-in-Control, a Resignation for Cause by Mr. Richardson or by reason of Mr. Richardson’s death or Disability (as such terms are defined in the Agreement). In the event the Company terminates Mr. Richardson’s employment without Cause or Mr. Richardson elects a Resignation for Cause prior to the expiration of the Agreement and prior to a Change-in-Control, Mr. Richardson shall receive: (i) the greater of his salary for the remaining term of the Agreement or for a period of 12 months; (ii) a bonus on each October 31 during the remaining term of the Agreement in an amount equal to his target bonus then in effect; (iii) vesting of any outstanding equity award which has time-based vesting; and (iv) vesting of any outstanding equity award which has performance-based vesting, if, and only if, at the end of the applicable performance period the performance criteria for each performance-based award is achieved. In the event Mr. Richardson is terminated by reason of death, the Company shall pay a lump sum amount equal to 60% of Mr. Richardson’s salary for 24 months to a designated beneficiary. In the event that Mr. Richardson becomes Disabled, the Company shall pay Mr. Richardson 60% of his base salary plus medical benefits for Mr. Richardson and his family during the period of his Disability (not to exceed 24 months). After six months of Disability, the Company shall have the right to terminate Mr. Richardson; provided, however, that the 60% payments and medical benefits shall continue for the remainder of the 24-month period. |
• | In the event Mr. Richardson is terminated by the Company or he voluntarily terminates his employment following a Change-in-Control event and prior to the end of a Change-in-Control Protection Period for any reason, except (i) termination by the Company for Cause, (ii) termination by reason of death or Disability, or (iii) termination by Mr. Richardson without Good Reason (as such terms are defined in the Agreement), Mr. Richardson shall be paid a lump sum amount equal to two times the sum of: (1) the greater of (a) Mr. Richardson’s base salary in effect immediately prior to the Change-in-Control event or (b) in effect on the date of notice of his termination; and (2) the greater of (x) the annual bonus earned by Mr. Richardson in respect of the Company’s fiscal year immediately preceding that in which the date of termination occurs, (y) the average annual bonus earned in respect of the two fiscal years immediately preceding that in which the Change in Control occurs, or (z) $350,000. Of |
• | Pursuant to the confidentiality, non-competition and non-solicitation provisions of the Agreement, for a period of one year following any termination of Mr. Richardson’s employment, he shall not, directly or indirectly, either as an individual for his own account or as an investor, or other participant in, or as an employee, agent, or representative of, any other business enterprise: (i) solicit, employ, entice, take away or interfere with, or attempt to solicit, employ, entice, take away or interfere with, any employee of the Company; or (ii) engage, participate in, finance, aid or be connected with any enterprise that competes with the business of the Company. |
• | Under the terms of the Agreement, Mr. Richardson is not entitled to receive a tax gross up from the Company for any excise tax imposed upon him under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or the Treasury Regulations promulgated thereunder. In the event that any payments or benefits paid or payable to Mr. Richardson pursuant to the Agreement would constitute a “parachute payment” within the meaning of Section 280G of the Code, then Mr. Richardson shall receive the greater of the net best effects of the following: (i) one dollar less than the amount which would cause the payments and benefits to constitute a “parachute payment;” or (ii) the amount of such payments and benefits, after taking into account all federal, state and local taxes, including the excise tax imposed under Section 4999 of the Code payable by the covered executive on such payments and benefits, if such amount would be greater than the cut-back amount, after taking into account all federal, state and local taxes. |
(d) | Exhibits. |
Exhibit Number | Description |
10.1 | Employment Agreement dated September 30, 2016. |
99.1 | Press Release, dated October 3, 2016. |