RPM 2020 Proxy Statement

EXECUTIVE COMPENSATION (CONTINUED) benefits under our Retirement Plan from May 31, 2018 to May 31, 2019 was based upon the RP2014 retiree generational mortality table for males and females with mortality improvements backed off to 2006 using scale MP2014, projected using scale MP2018, blended 50% blue collar and 50% white collar. The change in the present value of each of our named executive officer’s accrued pension benefits under our Retirement Plan from May 31, 2017 to May 31, 2018 was based upon the RP2014 retiree generational mortality table for males and females with mortality improvements backed off to 2006 using scale MP2014, projected using scale MP2017, blended 50% blue collar and 50% white collar. The interest rate used to determine the present values was 4.12% as of May 31, 2018, 3.64% as of May 31, 2019, and 2.77% as of May 31, 2020. The present values were determined assuming that such amounts were payable to each of our named executive officers at their earliest unreduced retirement age in our Retirement Plan – 65 years with five years of participation in our Retirement Plan. The present values for 2018 and 2019 assumed that 15% of our named executive officers will be paid a life annuity and 85% will be paid a lump sum, and for 2020 assumed that 5% will be paid a life annuity, 10% will be paid a 100% joint and survivor annuity and 85% will be paid a lump sum. The interest rates used for determining lump sums for May 31, 2018 and May 31, 2019 were 4.20% for the first five years, 4.77% for the next 15 years and 5.07% thereafter. The lump sum present value was discounted back to May 31, 2018 using 4.12% for the May 31, 2018 calculation, and discounted back to May 31, 2019 using 3.64% for the May 31, 2019 calculation. The lump sums were determined using the applicable mortality table outlined in IRC Section 417(e). The table was projected to 2027 using Scale AA for the 2017 calculations. For the 2018 calculations, the table was projected to 2028 using Scale MP2017. For the 2019 calculations, the table was projected to 2029 using Scale MP2018. As of May 31, 2020, the mortality table used was the applicable mortality table outlined in Internal Revenue Code Section 417(e) projected to 2029 using scale MP2019 (the most recent mortality improvement scale in effect for Section 417(e) mortality). The interest rates used to determine the present values at normal retirement date were the April 2020 segment rates (1.58% for the first five years, 2.88% for the next 15 years, and 3.24% thereafter) phased in over five years to the long term expected lump sum segment rates (3.85% for the first five years, 4.37% for the next 15 years, and 4.67% thereafter). The lump sum present value was then discounted back to May 31, 2020 using 2.77%. No pre-retirement decrements, including mortality, were assumed in these calculations. All Other Compensation. All other compensation of our named executive officers is set forth in the Summary Compensation Table and described in detail in footnote (6) of the table. These benefits include those discussed in further detail under the heading “Compensation Discussion and Analysis – Perks and Other Benefits.” Employment Agreements and Related Arrangements. Each named executive officer is employed under an employment agreement. The terms of the employment agreements are described under the headings “Compensation Discussion and Analysis –Employment Agreements and Related Arrangements” and “Other Potential Post-Employment Compensation.” Additional Information. We have provided additional information regarding the compensation we pay to our named executive officers under the headings “Compensation Discussion and Analysis” and “Other Potential Post- Employment Compensation.” The Company offers both an active defined benefit pension plan and a matching 401(k) plan for U.S. employees. The Company’s worldwide employees have comprehensive health coverage and other competitive benefit packages, in keeping with local laws and customs. 40