A. SCHULMAN, INC. |
Delaware | 0-7459 | 34-0514850 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
3637 Ridgewood Rd, Fairlawn, Ohio | 44333 | ||||
(Address of principal executive offices) | (Zip Code) |
(330) 666-3751 |
• | The term commences January 1, 2015 and ends on December 31, 2017. |
• | Mr. Rzepka’s initial annual base salary is $736,000, 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, but which may not be decreased except as a result of Disability, as such term is defined in the Agreement. |
• | Mr. Rzepka will be eligible to participate in the Company’s bonus program for senior executives, with a target level of 100% of base salary and leverage ranging from zero to 200% based upon the achievement of performance metrics determined by the Compensation Committee. |
• | Mr. Rzepka will also 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. Rzepka’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 by Mr. Rzepka for Cause, or by reason of Mr. Rzepka’s death or Disability (as such terms are defined in the Agreement). In the event the Company terminates Mr. Rzepka’s employment without Cause or Mr. Rzepka elects a Resignation for Cause prior to the expiration of the Agreement and prior to a Change-in-Control, Mr. Rzepka shall receive: (i) the greater of his salary for the remaining term of the Agreement or for a period of 24 months; (ii) a bonus on each October 31 during the remaining term of the Agreement in an amount equal to 100% of his then effective base salary; (iii) pro rata vesting of any outstanding equity award which has time-based vesting; and (iv) pro rata 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. Rzepka is terminated by reason of death, the Company shall pay a lump sum amount equal to 60% of his salary for 24 months to a designated beneficiary. In the event that Mr. Rzepka becomes Disabled, the Company shall pay 60% of his base salary plus medical benefits for Mr. Rzepka 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. Rzepka; provided, however, that the 60% payments and medical benefits shall continue for the remainder of the 24-month period. |
• | In the event Mr. Rzepka 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. Rzepka without Good Reason (as such terms are defined in the Agreement), Mr. Rzepka shall be paid a lump sum amount equal to three times the sum of: (1) the greater of (a) Mr. Rzepka’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. Rzepka 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 three fiscal years immediately preceding that in which the Change in Control occurs, or (z) $736,000. Of the foregoing amounts, an amount equal to one year’s base salary plus one year’s annual bonus shall be in consideration of certain restrictive covenants. Additionally, Mr. Rzepka shall receive certain insurance benefits for 18 months from the date of termination. |
• | Mr. Rzepka is entitled to a severance equal to his base salary then in effect if his agreement expires and his employment as Chief Executive Officer terminates or such employment continues but he is not afforded similar severance protection. |
• | Pursuant to the confidentiality, non-competition and non-solicitation provisions of the Agreement, for a period of one year following any termination of Mr. Rzepka’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. Rzepka 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. Rzepka pursuant to the Agreement would constitute a “parachute payment” within the meaning of Section 280G of the Code, then Mr. Rzepka |
• | The term commences January 1, 2015 and ends on December 31, 2017. |
• | Mr. Levanduski’s initial annual base salary is $460,000 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, but which may not be decreased except as a result of Disability, as such term is defined in the Agreement. |
• | Mr. Levanduski 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. Levanduski’s individual performance. |
• | Mr. Levanduski will also 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. Levanduski’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. Levanduski or by reason of Mr. Levanduski’s death or Disability (as such terms are defined in the Agreement). In the event the Company terminates Mr. Levanduski’s employment without Cause or Mr. Levanduski elects a Resignation for Cause prior to the expiration of the Agreement and prior to a Change-in-Control, Mr. Levanduski 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) pro rata vesting of any outstanding equity award which has time-based vesting; and (iv) pro rata 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. Levanduski is terminated by reason of death, the Company shall pay a lump sum amount equal to 60% of Mr. Levanduski’s salary for 24 months to a designated beneficiary. In the event that Mr. Levanduski becomes Disabled, the Company shall pay Mr. Levanduski 60% of his base salary plus medical benefits for Mr. Levanduski 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. Levanduski; provided, however, that the 60% payments and medical benefits shall continue for the remainder of the 24-month period. |
• | In the event Mr. Levanduski 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. Levanduski without Good Reason (as |
• | Mr. Levanduski is entitled to a severance equal to his base salary then in effect if his agreement expires and his employment as Chief Financial Officer terminates or such employment continues but he is not afforded similar severance protection. |
• | Pursuant to the confidentiality, non-competition and non-solicitation provisions of the Agreement, for a period of one year following any termination of Mr. Levanduski’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. Levanduski 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. Levanduski pursuant to the Agreement would constitute a “parachute payment” within the meaning of Section 280G of the Code, then Mr. Levanduski 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. |
• | The term of the Change-in-Control Agreements commences on December 15, 2014 and ends on December 31, 2017. |
• | The Change-in-Control Agreements provide that in the event (i) a covered executive is terminated by the Company during a Change-in-Control Protection Period without Cause, or (ii) a covered executive resigns from the Company during a Change-in-Control Protection Period for Good Reason (as such terms are defined in the Change-in-Control Agreements), such covered executive shall be entitled to the following: (1) continued payment of compensation and the provision of benefits through the date of termination; (2) an amount equal to any accrued, but unused vacation days; (3) a lump sum cash payment equal to the sum of (a) 200% of the covered executive’s base salary for the calendar year immediately preceding the year in which the date of termination occurs, plus (b) 200% of the covered executive’s annual target bonus for the fiscal year in which termination occurs; and (4) the continuation of certain insurance benefits for a period of 18 months after the date of termination. |
• | Pursuant to the confidentiality, non-competition and non-solicitation provisions of the Change-in-Control Agreements, in the event that a covered executive becomes entitled to receive compensation under their respective Change-in-Control Agreement, then for a period of one year such covered executive 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 Change-in-Control Agreements, covered executives are not entitled to receive a tax gross up from the Company for any excise tax imposed upon them under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended. |
1. | Election of ten directors: |
Name | Votes For | Votes Against | Abstentions | Broker Non-Votes |
Eugene R. Allspach | 23,838,953 | 272,190 | 471,614 | 2,368,724 |
Gregory T. Barmore | 24,608,129 | 277,243 | 502,415 | 2,368,724 |
David G. Birney | 24,608,129 | 277,243 | 502,415 | 2,368,724 |
Joseph M. Gingo | 24,568,778 | 21,740 | 797,269 | 2,368,724 |
Michael A. McManus, Jr. | 24,286,122 | 477,972 | 623,693 | 2,368,724 |
Lee D. Meyer | 25,022,453 | 15,581 | 349,753 | 2,368,724 |
James A. Mitarotonda | 24,991,184 | 22,439 | 374,164 | 2,368,724 |
Ernest J. Novak, Jr. | 24,938,548 | 20,868 | 428,371 | 2,368,724 |
Dr. Irvin D. Reid | 24,607,124 | 278,638 | 502,025 | 2,368,724 |
Bernard Rzepka | 25,026,397 | 11,838 | 349,552 | 2,368,724 |
2. | Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 31, 2015: |
Votes For | Votes Against | Abstentions | Broker Non-Votes |
27,537,205 | 202,156 | 17,150 | 0 |
3. | Approval, on an advisory basis, of the compensation of the Company’s named executive officers: |
Votes For | Votes Against | Abstentions | Broker Non-Votes |
24,876,773 | 444,608 | 66,406 | 2,368,724 |
4. | Approval of the Company’s 2014 Equity Incentive Plan: |
Votes For | Votes Against | Abstentions | Broker Non-Votes |
22,445,994 | 2,699,663 | 242,130 | 2,368,724 |
(d) | Exhibits. |
Exhibit Number | Description |
10.1 | A. Schulman, Inc. 2014 Equity Incentive Plan (filed herewith). |
10.2 | Employment Agreement, by and between A. Schulman, Inc. and Bernard Rzepka, effective December 31, 2014 (filed herewith). |
10.3 | Amended and Restated Employment Agreement, by and between A. Schulman, Inc. and Joseph J. Levanduski, effective December 31, 2014 (filed herewith). |
10.4 | Amendment to Amended and Restated Employment Agreement, by and between A. Schulman, Inc. and Joseph M. Gingo, effective December 31, 2014 (filed herewith). |
10.5 | Form of Executive Officer Change-in-Control Agreement (filed herewith). |
99.1 | Press Release, dated December 15, 2014 (filed herewith). |