Gorman-Rupp signs change of control severance agreements with top executives

The Gorman-Rupp Company entered into new Change of Control Severance Agreements with its chief executive officer and other senior officers on October 1, 2026, according to a Form 8-K filed with the U.S. Securities and Exchange Commission. The agreements cover Scott A. King, the company's CEO and President; Brigette A. Burnell, Executive Vice President, General Counsel and Corporate Secretary; and Ronald F. Stoops, Chief Financial Officer.

The new contracts establish a one-year initial term with an automatic one-year renewal unless either party provides timely notice of non-renewal. Under these terms, severance benefits are triggered if an executive's employment is terminated without Cause, Disability or death within two years after a Change of Control, or if the executive resigns for Good Reason during that period. Benefits also apply if termination occurs within six months prior to a Change of Control and is primarily in anticipation of that event.

For the CEO and President, the severance package includes a lump-sum payment equal to three times the sum of the annual base salary and the Prior Bonus Amount, plus the Prorated Annual Bonus. Other executive officers are eligible for a lump-sum payment equal to two times the sum of their annual base salary and Prior Bonus Amount, plus their Prorated Annual Bonus. All covered executives also receive a lump-sum payment for eighteen months of COBRA medical coverage premiums based on the coverage level in effect immediately before termination.

The agreements also provide for a lump-sum payment reflecting the benefit increase associated with twenty-four additional months of service credit in the firm's qualified and supplemental retirement plans. This amount is subject to offsets for any change-in-control benefits otherwise payable under those plans. Additionally, outstanding equity awards may accelerate vesting in specified circumstances following a Change of Control, including full vesting of time-based awards and payout of performance-based awards based on actual or target performance.

Receipt of these severance benefits is generally conditioned on the executive's execution and non-revocation of a release of claims in favor of The Gorman-Rupp Company. The agreements include a "best pay" provision designed to reduce payments if doing so would result in a greater after-tax payment amount to the executive, taking into account all applicable taxes, including any excise tax imposed under Sections 280G and 4999 of the Internal Revenue Code. The company stated that the Severance Agreements do not provide a tax gross-up.

The Form 8-K filing, dated October 2, 2026, incorporates the form of the Severance Agreement for other executive officers and the specific agreement for the CEO as Exhibits 10.1 and 10.2, respectively. The summary in the filing is qualified by reference to these full documents.