CHANGE IN CONTROL
AGREEMENT
THIS CHANGE IN
CONTROL AGREEMENT, dated as of February 20, 2009, is entered into
between Gibraltar Industries, Inc., a Delaware corporation (the
“Company”) and Paul M. Murray (the
“Executive”).
The Company
believes that it is in the best interests of the Company and its
shareholders to provide the Executive with an incentive to continue
his employment and to motivate the Executive to maximize the value
of the Company.
It is possible
that from time to time the Company will consider the possibility of
a change in control. The Company recognizes that such consideration
can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities. The Company has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication and objectivity of the Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as
defined below) of the Company.
The Company
believes that it is imperative to provide the Executive with
certain benefits upon termination of employment upon a Change in
Control, which benefits are intended to provide the Executive with
financial security and provide sufficient incentive and
encouragement to the Executive to remain with the Company
notwithstanding the possibility of a Change in Control.
NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as
follow:
1.
Definitions . When used in this Agreement, the following
terms shall have the following meanings:
(a) “Act”
means the Securities and Exchange Act of 1934, as
amended.
(b) “Affiliate”
means, with respect to any person or entity, any other person or
entity controlling, controlled by or under common control with such
person or entity, where “control” means the possession,
directly or indirectly, of the power to direct the management and
policies of a person or entity, whether through the ownership of
voting securities, contract or otherwise.
(c) “Annual
Compensation” means the sum of: (i) the amount of the
annual base salary of the Executive which is in effect during the
calendar year preceding the calendar year in which a Change in
Control occurs; and (ii) the highest annual bonus paid to the
Executive by the Company during the three (3) calendar year
period preceding the calendar year in which a Change in Control
occurs. Annual Compensation shall include the amount of any
compensation which is not paid to the Executive as a result of an
affirmative election made by the Executive to defer his receipt of
any compensation,
including
without limitation, compensation and/or bonuses deferred pursuant
to the Company’s Management Stock Purchase Plan, compensation
deferred under the Company’s 401(k) Restoration Plan and
compensation deferred pursuant to any applicable 401(k) plan,
Section 125 plan, cafeteria plan or other plan maintained by
the Company under which the Executive, by making an affirmative
election, is permitted to defer his receipt of such compensation.
Annual Compensation shall not include the grant of stock options,
restricted stock, restricted units, performance shares, performance
units and rights or other equity or equity based grants.
(d) “Board”
means the Board of Directors of Gibraltar Industries,
Inc.
(e) “Cause”
means that the Company has determined (and provided the Executive a
written statement of its determination) that the Executive has
engaged in egregious acts or omissions which have resulted in
material injury to the Company and its business.
(f) “Code”
means the Internal Revenue Code of 1986, as amended.
(g) “Competitive
Business” means any business engaged in the design,
development, manufacture, merchandising, distribution or sale of
any products or services designed, developed, merchandised,
distributed, sold or provided by the Company or its Affiliates or
its successor or its Affiliates during the one (1) year period
preceding and the one (1) year period following a Change in
Control.
(h) “Change
in Control” shall be deemed to have occurred if:
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(i)
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During any consecutive twelve-month
period, any “person” or group of persons (within the
meaning of Section 13(d) of the Act) other than the Company, an
Affiliate of the Company, an employee benefit plan sponsored by the
Company or any of its Affiliates, or any one or more members of the
Lipke family becomes the “beneficial owner” (as defined
in section 13(d) of the Exchange Act) of thirty-five percent (35%)
or more of the then outstanding Voting Stock through a transaction
or series of transactions which have not been arranged by or
consummated with the prior approval of the Board of
Directors;
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(ii)
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a
majority of the members of the Board of Directors is replaced
during any consecutive twelve-month period by Directors whose
appointment or election is not endorsed by a majority of the
members of the Board of Directors prior to the date of appointment
or election;
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(iii)
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the
Company enters into a Merger Sale Agreement; provided however, that
the entry into a Merger Sale Agreement shall only be deemed a
“Change in Control” if the Executive’s employment
with the Company and all of its Affiliates is terminated without
Cause or he resigns for Good Reason during the period beginning on
the date the Merger Sale
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Agreement is
executed and ending on the date the Merger Sale is consummated or
the Merger Sale Agreement is terminated; or
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(iv)
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the
consummation of a Merger Sale.
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(i) “Excise
Tax” means the excise tax imposed by Section 4999 of the
Code and any interest or penalties with respect to such
tax.
(j) “Good
Reason” means that: (i) one or more of the events
described in the following sentence has occurred; (ii) the
Executive has, no later than ninety (90) days following the
occurrence of any such event, provided written notice to the
Company that the event has occurred and that the Executive intends
to terminate his employment with the Company unless the Company,
within thirty (30) days following the receipt of such notice,
the Company (or its successor) fully and completely restores the
Executive to the position which he would have been in had such
event not occurred; and (iii) the Company, or if applicable,
its successor, such does not, within thirty (30) days
following the receipt of the written notice described in the
foregoing clause, fully and completely restore the Executive to the
position he would have been in had such event not occurred. The
events referred to in the foregoing definition of Good Reason are
as follows:
(A) the
Executive’s annual base salary and/or annual bonus is reduced
or any other material compensation or benefits arrangement for the
Executive is materially reduced (and such reduction is unrelated to
the Company’s, a Company’s Affiliate’s or the
Executive’s performance);
(B) the
Executive’s duties or responsibilities are negatively, and
materially changed in a manner inconsistent with the
Executive’s position (including status, offices, titles, and
reporting requirements) or authority;
(C) the
Company or its successor requires the Executive’s work
location or residence to be relocated more than 50 miles from its
location as of the date the Merger Sale Agreement is
executed;
(D) the
Company or its successor fails to offer the Executive a position
after the Change in Control comparable to that held by the
Executive immediately prior to the Change in Control.
(k) “Gross-Up
Payment” has the meaning given to such term in Section 5
below.
(l) “Incapacity”
means: (i) any physical or mental illness or disability of the
Executive that prevents him from performing his essential job
functions in substantially the manner and to the extent required
prior to the commencement of such Incapacity for a
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period of six
(6) consecutive months or an aggregate of six (6) months
in any consecutive twelve-month period; or (ii) the death of
the Executive.
(m) “Merger
Sale” means the consolidation, merger, or other
reorganization of the Company, other than: (i) a
consolidation, merger or reorganization of the Company in which
holders of Common Stock immediately prior to the earlier of:
(A) the Board of Director’s approval of such
consolidation, merger or other reorganization; or (B) the date
of the stockholders meeting in which such consolidation, merger or
other reorganization is approved, continue to hold seventy percent
(70%) or more of the outstanding voting securities of the surviving
entity immediately after the consolidation, merger, or other
reorganization; and (ii) a consolidation, merger or other
reorganization which is effected pursuant to the terms of a Merger
Sale Agreement which provides that the consolidation, merger or
other reorganization contemplated by the Merger Sale Agreement will
not constitute a Change in Control for purposes of this
Agreement.
(n) “Merger
Sale Agreement” means an agreement in which the Company
agrees to a Merger Sale.
(o) “Payment”
has the meaning given such term in Section 5 below.
(p) “Underpayment”
has the meaning given to such term in Section 5(d)
below.
(q) “Voting
Stock” means securities of the Company entitled to vote in
the elections of directors.
2. Term Of
Agreement . This Agreement shall commence on the date first set
forth above and, subject to the provisions of Section 14
below, shall remain in effect until the earlier of: (a) the
first anniversary of a Change in Control; (b) the termination
of the Executive’s employment by reason of the
Executive’s Incapacity; or (c) the termination of the
Executive’s employment for any reason prior to a Change in
Control.
3.
Obligations Of The Company Upon A Change In Control .
(a) Upon the occurrence, prior to the termination of this
Agreement as provided for by Section 2 above, of any Change in
Control other than a Change in Control described in
Section 1(h)(iii), the Executive shall be entitled to receive
the following payments and benefits from the Company:
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(i)
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the
restrictions imposed upon the sale, transfer or other conveyance of
any restricted stock held by the Executive pursuant to the terms of
any restricted stock agreement or any other plan or agreement shall
terminate;
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(ii)
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any
and all compensation which is payable at a time and in a manner
which constitutes a “deferral of compensation” within
the meaning of U.S. Treasury Regulation §1.409A-1(b)(1) shall
be paid to the
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Executive in one lump sum payment
within thirty (30) days following the occurrence of a Change
in Control;
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(iii)
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as
currently provided for by the Gibraltar Industries, Inc. Management
Stock Purchase Plan, the amount required to be paid to the
Executive with respect to restricted stock unit awards credited to
the Executive’s Account under the terms of the Management
Stock Purchase Plan shall be paid to the Executive in one lump sum
payment on the date the Change in Control occurs;
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(iv)
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any
options and stock appreciation rights held by the Executive shall
vest and become fully exercisable and any other equity based
incentive compensation awards held by the Executive, including but
not limited to performance unit awards, shall become payable as
provided for by the terms of such awards; and
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(v)
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any
common stock of the Company which has not been issued to the
Executive under the terms of any long term equity based incentive
compensation plan which was adopted by the Board of Directors prior
to the date the Change in Control occurs, but which common stock
would have been issued to the Executive under the terms of such
long term equity based incentive compensation plan if the Change in
Control had not occurred and the Executive had met all the
applicable performance goals established by the Board of Directors
in order to receive such common stock under such long term equity
based incentive compensation plan shall, effective as of the date
the Change in Control occurs, be issued to the Executive, free and
clear of all restrictions on the sale, transfer or conveyance of
such common stock.
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(b) Upon the
occurrence of a Change in Control described in Section 1(h)(iii),
the Executive (or, if applicable, his beneficiary or his estate)
shall be entitled to receive the payments and benefits described in
Section 3(a) above; provided that: (i) the date on which such
payments and benefits are provided to the Executive shall not be
later than the end of the thirty (30) day period beginning on the
date on which the Change in Control described in Section 1(h)(iii)
occurs; and (ii) each payment and/or provision to the Executive of
each of the payments and benefits described in Section 3(a) above
shall be
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