RPM 2020 Proxy Statement

EXECUTIVE COMPENSATION (CONTINUED) The Compensation Committee set the performance goals related to the PSU awards at levels it believed to be achievable but would require the Company to meaningfully grow earnings and revenues. PSU awards are expected to be granted annually for successive three-year performance periods. Timing of Equity Grants Equity grants to the named executive officers are generally made in July at regularly scheduled meetings of the Compensation Committee. Board and Compensation Committee meetings are generally scheduled at least a year in advance. Scheduling decisions are made without regard to anticipated earnings or other major announcements by the Company. Minimum Stock Ownership Guidelines The Company adopted minimum stock ownership guidelines for its executive officers and Directors in July 2012. Under the stock ownership guidelines certain executive officers are required to maintain the following minimum equity stakes in the Company: • for the Company’s Chief Executive Officer, Common Stock equivalent to five times annual base salary; and • for other executive officers of the Company, Common Stock equivalent to three times annual base salary. Executives are expected to achieve targets within five years of the later of the date of the adoption of the minimum stock ownership guidelines or the date of assuming their positions. Each of the Company’s executive officers met the minimum stock ownership guidelines as of May 31, 2020 or is within the grace period provided by the stock ownership guidelines to achieve compliance. Employment Agreements and Related Arrangements We are a party to the following employment agreements with our named executive officers: • Frank C. Sullivan . Pursuant to an employment agreement whereby Frank C. Sullivan serves as our Chairman, President and Chief Executive Officer, Frank C. Sullivan is entitled to an annual base salary of not less than $995,000 effective as of June 1, 2020. • Russell L. Gordon . Pursuant to an employment agreement that the Company had entered into with Mr. Gordon prior to his promotion to Chief Financial Officer, Mr. Gordon is entitled to an annual base salary of not less than $497,000 effective as of June 1, 2020. • Edward W. Moore. Pursuant to an employment agreement whereby Mr. Moore serves as our Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, Mr. Moore is entitled to an annual base salary of not less than $390,000 effective as of June 1, 2020. • Janeen B. Kastner. Pursuant to an employment agreement whereby Ms. Kastner serves as our Vice President– Corporate Benefits and Risk Management, Ms. Kastner is entitled to an annual base salary of not less than $370,000 effective as of June 1, 2020. • Michael H. Sullivan. Pursuant to an employment agreement whereby Michael H. Sullivan serves as our Vice President–Operations and Chief Restructuring Officer, Michael H. Sullivan is entitled to an annual base salary of not less than $350,000 effective as of June 1, 2020. Each of our named executive officers agreed to a temporary decrease in salary effective May 1, 2020 in anticipation of the potential effects of the Covid-19 outbreak on the Company. Our named executive officers’ base salary rates will be reinstated on September 1, 2020. Pursuant to the employment agreements, each of our named executive officers serves for a term ending on May 31, 2020, which is automatically extended for additional one-year periods unless either party gives the other party notice of nonrenewal two months in advance of the annual renewal date. In accordance with these automatic extension provisions, the employment agreement with each of our named executive officers has been extended to May 31, 2021. Each of our named executive officers is also eligible to receive such annual cash incentive compensation or bonuses as our Compensation Committee may determine based upon our results of operations and other relevant factors. Our named executive officers also generally entitled to participate in our employee benefit plans. Under the employment agreements, each of our named executive officers is entitled to receive fringe benefits in line with our present practice relating to the officer’s position, including the use of the most recent model of a full-sized automobile. 34