to his promotion to Chief Financial Officer, Mr. Gordon is entitled to an annual base salary of not less than $475,000 effective as of June 1, 2017.
Pursuant to the employment agreements, each of Messrs. Sullivan, Rice, Gordon,
Moore and Ms. Kastner serves for a term ending on May 31, 2017, 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 these named executive officers has been extended to May 31, 2018. Each of Messrs. Sullivan, Rice,
Gordon, Moore and Ms. Kastner 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. Messrs. Sullivan,
Rice, Gordon, Moore and Ms. Kastner are also generally entitled to participate in our employee benefit plans. Under the employment agreements, each of these named executive officers is entitled to receive fringe benefits in line with our
present practice relating to the officers position, including the use of the most recent model of a full-sized automobile.
See Other Potential Post-Employment Compensation for a discussion of additional terms of the employment agreements related to restrictive covenants and
potential post-employment compensation.
New Form of Employment Agreement
In April 2016, the Compensation Committee approved a new form of employment agreement that will be used for any new employment agreements with our executives in the
future. The new form of employment agreement generally follows the current employment agreements with our named executive officers, except that the new form of employment agreement removes a provision that accelerates equity awards upon a
termination of employment following a change in control. Instead, any outstanding equity awards will be subject to the terms of their respective plans and award agreements (for
example, equity awards granted under the 2014 Omnibus Plan will follow the double-trigger vesting provisions set forth in the 2014 Omnibus Plan). Further, the new form of employment agreement
does not provide for a tax gross-up for excise taxes triggered under Section 280G of the Internal Revenue Code, but instead includes a best-net
alternative provision, under which the executive would receive the greater of the total parachute payments, after taxes (including the excise tax) have been paid, or reduced parachute payments equal to the highest amount that may be paid
without triggering the excise tax under Section 280G. The definitions of change in control and good reason were also revised to match the definitions for such terms in the 2014 Omnibus Plan.
Policy on Clawback of Executive Compensation
In July 2012, the Board of
Directors adopted a policy regarding the clawback of executive compensation. If, as the result of the gross negligence or willful misconduct of any executive officer of the Company, the Company is required to restate all or a portion of its
financial statements, the Board of Directors will, to the extent permitted by governing law, require reimbursement of any bonus or incentive compensation awarded to such executive officer or effect the cancellation of unvested restricted or deferred
stock awards or stock options previously granted to the executive officer if:
Post-Employment Compensation and Change in Control
Each of the employment
agreements with Messrs. Sullivan, Rice, Gordon, Moore and Ms. Kastner provides for payments and other benefits if the named executive officers employment terminates under certain circumstances, such as being terminated without cause
within two years of a change in control, which is often referred to as a double-trigger. We believe that these payments and other benefits are important to recruiting and retaining our named executive officers, as many of the companies
with which we compete for executive talent provide for similar payments to their senior employees. Additional information regarding these payments and other benefits is found under the heading Other Potential
RPM International Inc. (NYSE: RPM) owns subsidiaries that are world leaders in coatings, sealants, building materials and related services. From homes to precious landmarks worldwide, their brands are trusted by consumers and professionals alike to protect, improve and beautify. Among its leading consumer brands are Rust-Oleum, DAP and Zinsser. Learn more about RPM brands >>
RPM is a compelling long-term investment.
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