Retention Incentive Agreement between GCP Applied Technologies Inc. and Craig Merrill, effective as of January 24, 2022
RETENTION INCENTIVE AGREEMENT
This RETENTION INCENTIVE AGREEMENT (this Agreement) is made and entered into this 24th day of January, 2022 (Effective Date) by and between GCP Applied Technologies, Inc. (the Company) and Craig Merrill, (the Employee). The Company is a party to that Agreement and Plan of Merger entered into as of December 5, 2021 pursuant to which the Company will be acquired by certain other parties to that agreement (the Purchase Agreement).
The parties desire to enter into this Agreement to provide the Employee with an incentive to continue Employees employment with the Company for a period of time through and following the date of the consummation of the transactions contemplated under the Purchase Agreement (the Closing Date).
Accordingly, in consideration of the mutual covenants set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Company and the Employee agree as follows:
I. Retention Bonus. The Employee shall have an opportunity to earn a certain retention bonus (Retention Bonus) in accordance with the following provisions:
A. Retention Bonus Calculation. The amount of the Retention Bonus shall equal Six-Hundred Thousand US Dollars ($600,000). All payments made to or on behalf of the Employee under the terms of this Agreement shall be subject to all withholdings required or permitted by law (such as income and payroll taxes) and such additional withholdings as may be agreed upon by the Employee.
B. Retention Bonus Payment Schedule
1. The Retention Bonus shall be payable in two (2) equal installments.
a) The first installment will be paid within sixty (60) days following the Closing Date provided the employee remains continuously actively employed by the Company from the date of this Agreement through the Closing Date.
b) The second installment will be paid within sixty (60) days following the date that is ninety (90) days following the Closing Date provided the employee remains continuously actively employed by the Company from the date of this Agreement through such date.
2. To be eligible to receive each installment of the Retention Bonus, the Employee:
a) must remain compliant with all Company policies and practices;
b) must remain compliant with all of Employees contractual obligations to the Company.
3. As a condition of payment of either installment of the Retention Bonus, the Employ will be required to execute and not revoke a release of claims in a form to be provided by the Company relating to all employment-related matters, excluding any claims relating to payment under this Agreement or any severance obligations.
4. In the event that the employee has not previously entered into a restrictive covenant agreement, the Employee may be required, as a condition of payment of either installment of the Retention Bonus, to execute an agreement with the Company containing post-employment restrictive covenants including, without limitation a non-compete, a non-solicitation of employees and a non-solicitation of customers for a period not to exceed 12 months post-termination.
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5. If the Company terminates the Employees employment without Cause prior to the payment of any portion of the Retention Bonus, the Employee will be immediately entitled to payment of any unpaid portion of the Retention Bonus. Payment of the Retention Bonus upon such termination will be conditioned upon execution of a release and/or a restrictive covenant agreement as otherwise provided herein.
a) The term Cause used in this Agreement shall mean: (i) fraud against the Company or its affiliates; (ii) failure or any refusal to implement or undertake the lawful directives of the Chief Executive Officer, the Employees direct supervisor or the Companys Board of Directors; (iii) engaging in conduct that causes injury, monetary or otherwise, to the Company or its affiliates, or that reflects adversely on the Company or its affiliates, or materially affects the Employees ability to perform his duties; (iv) arrest for, indictment for, or being formally charged with, the commission of a felony or commission of a crime, whether or not a felony, involving the Employees duties for the Company or that may reflect unfavorably on the Company or its affiliates, or bring the Employee into public disrepute or scandal; (v) theft, misappropriation, embezzlement or conversion of the assets or opportunities of the Company or its affiliates; (vi) a material breach of the terms, covenants or representations of this Agreement, and/or (vii) a material violation of Company policies.
b) Notwithstanding the foregoing, in the event the Employee has a separate written agreement with the Company that defines Cause, the definition in that separate agreement shall apply for purposes of this Agreement.
6. If the Employee terminates his or her employment with Good Reason prior to the payment of any portion of the Retention Bonus, the Employee will be immediately entitled to payment of any unpaid portion of the Retention Bonus. Payment of the Retention Bonus upon such termination will be conditioned upon execution of a release and/or a restrictive covenant agreement as otherwise provided herein.
a) The term Good Reason used in this Agreement shall mean the occurrence of any of the following events without the written consent of the Employee: (i) a material reduction by the Company in the Employees Base Salary (other than an inadvertent reduction in Base Salary not occurring in bad faith and that is remedied by the Company within 45 days after receipt of notice thereof given by the Employee); (ii) relocation, beyond thirty five (35) miles from the office used by the Employee as the Employees principal business location in connection with the provision of services to the Company; (iii) a material reduction in the Employees duties; or (iv) the material breach by the Company of any provision of this Agreement.
b) Notwithstanding the foregoing, in the event the Employee has a separate written agreement with the Company that defines Good Reason, the definition in that separate agreement shall apply for the purposes of this Agreement.
II. Term of Agreement. In the event that the transaction is not consummated or the Closing Date does not occur prior to December 5, 2022, this Agreement will terminate, and no retention payments will be due. Notwithstanding the foregoing, the Company in its discretion may extend this Agreement through March 5, 2023 in the Companys sole discretion and such extension may be evidenced by notice to the employee by any reasonable means determined by the Company.
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III. Non-Disclosure. Except as may be required by law, neither the Employee nor the Company shall disclose the financial terms of this Agreement to persons not involved in the operation of the Company and the parties shall disclose the financial terms of the Agreement to those involved in the operation of the Company only as needed to implement the terms of the Agreement or carry out the operations of the Company. The above notwithstanding, the Agreement may be disclosed to: (i) the parties attorneys, accountants, financial or tax advisors, and any potential lenders, investors in or purchasers of the Company, provided such persons agree not to disclose such terms of the Agreement further; and (ii) members of the Employees immediate family, provided such family members agree not to reveal the terms of the Agreement further.
IV. Successors and Assigns, No Third Party Beneficiaries. The rights and obligations of the Company under this Agreement shall be binding on and inure to the benefit of the Company, its successors and permitted assigns. The rights and obligations of the Employee under this Agreement shall be binding on and inure to the benefit of the heirs and legal representatives of the Employee. Neither party may assign this Agreement without the prior written consent of the other, except that the Company may assign the Agreement to an affiliate of the Company, or to any entity acquiring all or substantially all of the assets or the business of the Company without obtaining the Employees prior consent. This Agreement does not create, and shall not be construed as creating any rights enforceable by any person not a party to this Agreement.
V. Waiver or Modification. Any waiver by either party of a breach of any provision of this Agreement shall not operate as, or be construed to be, a waiver of any other breach of such provision of this Agreement. The failure of either party to insist on strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive either party of the right thereafter to insist on strict adherence to that term or any other term of this Agreement. Neither this Agreement nor any part of it may be waived, changed or terminated orally, and any waiver, amendment or modification must be in writing signed by the Employee and the Company.
VI. Choice of Law. This Agreement will be governed and construed and enforced in accordance with the laws of the State of Georgia without regard to its conflicts of law rules. The parties hereby submit to the jurisdiction and venue of any local, state or federal court located within the State of Georgia for resolution of any and all claims, causes of action or disputes arising out of, related to or concerning this Agreement and the parties agree to waive any claim relating to forum non conveniens. Both parties further acknowledge and agree that any suit, action or proceeding, whether claim or counterclaim, of any kind or nature brought by either party arising out of the interpretation, enforcement or breach of this Agreement shall be resolved by a judge alone, and both parties hereby waive and forever renounce the right to a trial before a civil jury of any such suit, action or proceeding.
VII. Entire Agreement; Construction. This Agreement contains the entire understanding of the parties relating to the subject matter of this Agreement and supersedes all other prior written or oral agreements, understandings or arrangements between the parties relating to the subject matter hereof. The Employee acknowledges and agrees that the compensation paid under the terms of this Agreement shall be in full satisfaction of any amounts due in connection with the closing under the Purchase Agreement or otherwise due from the Company in connection with such transaction, except as otherwise expressly agreed to in writing. The Employee acknowledges that, in entering into this Agreement, Employee did not rely and has not relied on any statements or representations not contained in this Agreement. The parties acknowledge and agree that they have been represented by counsel and that each of the parties has participated in the drafting of this Agreement. Accordingly, it is the intention and agreement of the parties that the language, terms and conditions of this Agreement are not to be construed in any way against or in favor of any party hereto by reason of the responsibilities in connection with the preparation of this Agreement.
VIII. Severability. Any term or provision of this Agreement that is determined to be invalid or unenforceable by any court of competent jurisdiction in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction and such invalid or unenforceable provision shall be modified by such court so that it is enforceable to the extent permitted by applicable law.
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IX. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section IX):
If to Company:
GCP Applied Technologies, Inc.
2325 Lakeview Parkway
Alpharetta, Georgia 30009
Attn: General Counsel
If to Employee:
X. Affiliates. Whenever used in the Agreement, the term affiliates shall refer to any parent, subsidiary, or other entity (including but not limited to any parent or subsidiary of any such parent, subsidiary or other entity) connected to the Company by common ownership and control, regardless of corporate form.
XI. Section 409A Compliance. Except as otherwise expressly provided in this Agreement, any payment that would otherwise constitute deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (Section 409A), shall be paid within 2 1⁄2 months following the end of the year in which such amount has been earned, but in no case later than the December 31st following the calendar year in which such compensation is otherwise earned. Although the Company makes no guarantee with respect to the tax or other treatment of payments or benefits under this Agreement and shall not be responsible in any event with regard to this Agreements compliance with Section 409A, payments under this Agreement are intended to be exempt from or comply with the applicable requirements of Section 409A and will be limited, construed and interpreted in a manner so as to comply therewith. In furtherance of the foregoing:
A. notwithstanding any provision of this Agreement to the contrary, if the Employee is a specified employee as defined for purposes of Section 409A, then all payments to be made to the Employee hereunder due to the termination of employment will be paid, or commence to be paid, on the earlier of the date which is six (6) months after (x) the date that the Employee employment with the Company is terminated; or (y) the date of death;
B. notwithstanding any provision of this Agreement to the contrary, the Employees employment with the Company will not be deemed to have been terminated unless and until the Employee has had a separation from service, as determined under Section 409A; and
C. each payment that is part of a series of payment will be a single payment for purposes of Section 409A.
XII. Survival. The covenants, agreements, representations and warranties contained in this Agreement shall survive the termination of the Employees employment with the Company or its affiliates at any time and for any reason.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties as of the first date written above.
|By: /s/ Simon Bates|
|/s/ Craig Merrill||Name: Simon Bates|
|Title: President and Chief Executive Officer|
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