<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
RPM, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PAUL A. GRANZIER, VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
Not Applicable
(2) Form, schedule or registration statement no.:
Not Applicable
(3) Filing party:
Not Applicable
(4) Date filed:
Not Applicable
<PAGE> 2
[INSERT RPM LOGO]
RPM, INC. - 2628 Pearl Road - P.O. Box 777 - Medina, Ohio 44258 - 216-273-5090
- - --------------------------------------------------------------------------------
THOMAS C. SULLIVAN
Chairman
August 30, 1994
TO RPM SHAREHOLDERS:
This year's Annual Meeting of RPM Shareholders will be held at 2:00 P.M.,
Eastern Daylight Time, Monday, October 10, 1994, Columbus Day (observed), at the
Holiday Inn located at Interstate 71 and Route 82 East, Strongsville, Ohio.
In addition to discussing the items of business outlined in this Proxy
Statement, we look forward to giving you a progress report on the first quarter
of our current fiscal year, which will end on August 31. As in the past, there
will be an informal discussion of the Company's activities, during which time
your questions and comments will be welcomed.
We hope that you are planning to attend the Annual Meeting personally, and
we look forward to seeing you. Whether or not you expect to attend in person,
the return of the enclosed Proxy as soon as possible would be greatly
appreciated and will ensure that your shares will be represented at the Annual
Meeting. If you do attend the Annual Meeting, you may, of course, withdraw your
Proxy should you wish to vote in person.
On behalf of the Directors and management of RPM, I would like to thank you
for your continued support and confidence.
Sincerely yours,
THOMAS C. SULLIVAN
<PAGE> 3
[INSERT RPM LOGO]
2628 PEARL ROAD - P.O. BOX 777
MEDINA, OHIO 44258
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of RPM, Inc.
will be held at the Holiday Inn Strongsville, 15471 Royalton Road, Strongsville,
Ohio, located at Interstate 71 and Route 82 East, on Monday, October 10, 1994,
at 2:00 P.M., Eastern Daylight Time, for the following purposes:
(1) To elect four Directors in Class II for a three-year term ending in
1997;
(2) To fix the number of Directors at 12 (which will create a vacancy which
can be filled by the Board of Directors); and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Holders of Common Shares of record at the close of business on August 19,
1994 are entitled to receive notice of and to vote at the Annual Meeting.
By Order of the Board of Directors.
PAUL A. GRANZIER
Secretary
August 30, 1994
Please fill in and sign the enclosed Proxy and return the Proxy
in the envelope enclosed herewith.
<PAGE> 4
[INSERT RPM LOGO]
2628 PEARL ROAD - P.O. BOX 777
MEDINA, OHIO 44258
PROXY STATEMENT
MAILED ON OR ABOUT AUGUST 30, 1994
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 10, 1994
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of RPM, Inc. (the "Company") to be used at the
Annual Meeting of Shareholders of the Company to be held on October 10, 1994,
and any adjournment or postponement thereof. The time, place and purposes of the
Annual Meeting are stated in the Notice of Annual Meeting of Shareholders which
accompanies this Proxy Statement.
The accompanying Proxy is solicited by the Board of Directors of the
Company. All validly executed Proxies received by the Board of Directors of the
Company pursuant to this solicitation will be voted at the Annual Meeting, and
the directions contained in such Proxies will be followed in each instance. If
no directions are given, the Proxy will be voted FOR the election of the four
nominees listed on the Proxy and FOR the proposal to fix the number of Directors
at 12.
Any person giving a Proxy pursuant to this solicitation may revoke it. A
shareholder, without affecting any vote previously taken, may revoke a Proxy by
giving notice to the Company in writing, in open meeting or by a duly executed
Proxy bearing a later date.
The expense of soliciting Proxies, including the cost of preparing,
assembling and mailing the Notice, Proxy Statement and Proxy, will be borne by
the Company. The Company may pay persons holding shares for others their
expenses for sending proxy materials to their principals. In addition to
solicitation of Proxies by mail, the Company's Directors, officers and
employees, without additional compensation, may solicit Proxies by telephone,
telegraph, and personal interview. The Company also may retain a third party to
aid in the solicitation of proxies.
VOTING RIGHTS
The record date for determination of shareholders entitled to vote at the
Annual Meeting was the close of business on August 19, 1994. On that date, the
Company had 56,772,256 Common Shares, without par value ("Common Shares"),
outstanding and entitled to vote at the Annual Meeting. Each Common Share is
entitled to one vote.
1
<PAGE> 5
At the Annual Meeting, in accordance with the General Corporation Law of
Ohio and the Company's Amended Code of Regulations, the inspectors of election
appointed by the Board of Directors for the Annual Meeting will determine the
presence of a quorum and will tabulate the results of shareholder voting. As
provided by the General Corporation Law of Ohio and the Company's Amended Code
of Regulations, holders of shares entitling them to exercise a majority of the
voting power of the Company, present in person or by proxy at the Annual
Meeting, will constitute a quorum for such meeting. The inspectors of election
intend to treat properly executed proxies marked "abstain" as "present" for
these purposes. Such inspectors will also treat as "present" shares held in
"street name" by brokers that are voted on at least one proposal to come before
the Annual Meeting.
Nominees for election as Directors receiving the greatest number of votes
will be elected Directors. Votes that are withheld or broker non-votes in
respect of the election of Directors will not be counted in determining the
outcome of the election. The General Corporation Law of Ohio provides that if
notice in writing is given by any shareholder to the President, a Vice President
or the Secretary of the Company not less than 48 hours before the time fixed for
holding the meeting that the shareholder desires the voting at the election to
be cumulative, each shareholder shall have cumulative voting rights in the
election of Directors. Cumulative voting enables shareholders to give one
nominee for Director as many votes as is equal to the number of Directors to be
elected multiplied by the number of shares in respect of which a shareholder is
voting, or to distribute votes on the same principle among two or more nominees,
as the shareholder sees fit.
Pursuant to the Company's Amended Code of Regulations, all other questions
and matters brought before the Annual Meeting will be, unless otherwise provided
by law or by the Articles of Incorporation of the Company, decided by the vote
of the holders of a majority of the outstanding shares entitled to vote thereon
present in person or by proxy at the Annual Meeting. In voting for such other
proposals, votes may be cast in favor, against or abstained. Abstentions will
count as present for purposes of the item on which the abstention is noted and
will have the effect of a vote against. Broker non-votes, however, are not
counted as present for purposes of determining whether a proposal has been
approved and will have no effect on the outcome of any such proposal.
SHARE OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Shares as
of August 19, 1994 by (i) each person or group known by the Company to own
beneficially more than 5% of the outstanding Common Shares, (ii) each Director
and nominee for election as a Director of the Company, (iii) each executive
officer named in the Executive Compensation tables below and (iv) all Directors
and executive officers as a group. All information with respect to beneficial
ownership has been furnished by the respective Director or executive officer, as
the case may be. Unless otherwise indicated below, each person named below has
sole voting and investment power with respect to the number of shares set forth
opposite his or her respective name.
2
<PAGE> 6
<TABLE>
<CAPTION>
NUMBER OF
COMMON SHARES
BENEFICIALLY PERCENTAGE OF
NAME OF BENEFICIAL OWNER OWNED(1) COMMON SHARES(1)
- - ------------------------------------- ------------- ---------------------
<S> <C> <C>
The Fifth Third Bancorp(2)........... 2,947,721 5.2%
Edward B. Brandon(3)................. 6,000 *
Paul A. Granzier(4).................. 41,947 *
Lorrie Gustin(5)..................... 750 *
Roy H. Holdt(6)...................... 3,055 *
E. Bradley Jones(7).................. 2,812 *
James A. Karman(8)................... 354,254 0.6
Richard E. Klar(9)................... 113,421 0.2
Donald K. Miller(10)................. 21,090 *
John H. Morris, Jr.(11).............. 108,404 0.2
Kevin O'Donnell(12).................. 7,460 *
William A. Papenbrock(13)............ 7,997 *
Stephen Stranahan(14)................ 523,647 0.9
Thomas C. Sullivan(15)............... 1,434,044 2.5
All Directors and executive officers
as a group (seventeen persons including
the individuals named above)(16)... 2,738,187 4.8
</TABLE>
- - ---------------
* Less than .1%.
(1) In accordance with Securities and Exchange Commission ("Commission") rules,
each beneficial owner's holdings have been calculated assuming full
exercise of outstanding options covering Common Shares, if any, exercisable
by such owner within 60 days after August 19, 1994, but no exercise of
outstanding options covering Common Shares held by any other person.
(2) The Fifth Third Bancorp ("Fifth Third") has sole voting power over
2,768,757 Common Shares, shared voting power over 119,752 Common Shares and
no voting power over 59,212 Common Shares shown in the table above. Fifth
Third has sole dispositive power over 2,630,865 Common Shares, shared
dispositive power over 218,350 Common Shares and no dispositive power over
98,506 Common Shares shown in the table above. This information is as of
December 31, 1993 and was obtained by the Company from Fifth Third's
Schedule 13G as filed with the Commission in February 1994. The address of
Fifth Third is 38 Fountain Square Plaza, Cincinnati, Ohio 45263.
(3) Mr. Brandon is a Director of the Company.
(4) Mr. Granzier is an executive officer of the Company. Mr. Granzier's
ownership is comprised of 6,043 Common Shares which he owns directly, 2,937
Common Shares which he owns jointly with his wife, 280 Common Shares which
are owned by his wife and 32,687 Common Shares which he has the right to
acquire within 60 days after August 19, 1994 through the exercise of stock
options. The ownership of the shares held jointly with his wife and those
shares solely held by his wife is attributed to Mr. Granzier pursuant to
Commission rules.
(5) Ms. Gustin is a Director of the Company.
(6) Mr. Holdt is a Director of the Company.
(7) Mr. Jones is a Director of the Company.
(8) Mr. Karman is a Director and an executive officer of the Company. Mr.
Karman's ownership is comprised of 133,147 Common Shares which he owns
directly, 30,438 Common Shares which are owned by his wife, 145,519 Common
Shares which are held by a family-owned corporation, of which Mr. Karman is
an officer and director, and 45,150 Common Shares which he has
3
<PAGE> 7
the right to acquire within 60 days after August 19, 1994 through the
exercise of stock options. The ownership of the shares held by his wife and
by the family-owned corporation is attributed to Mr. Karman pursuant to
Commission rules.
(9) Mr. Klar is an executive officer of the Company. Mr. Klar's ownership is
comprised of 38,538 Common Shares which he owns directly, 2,666 Common
Shares which are owned by his wife, 11,343 Common Shares held by a
family-owned corporation, of which Mr. Klar is an officer and director, and
60,874 Common Shares which he has the right to acquire within 60 days after
August 19, 1994 through the exercise of stock options. The ownership of the
shares held by his wife and by the family-owned corporation is attributed
to Mr. Klar pursuant to Commission rules.
(10) Mr. Miller is a Director of the Company. Mr. Miller's share ownership is
comprised of 7,030 Common Shares which he owns directly and 14,060 Common
Shares held by his sons. The ownership of the shares held by his sons is
attributed to Mr. Miller pursuant to Commission rules.
(11) Mr. Morris is a Director and an executive officer of the Company. Mr.
Morris' ownership is comprised of 39,904 Common Shares which he owns
directly and 68,500 Common Shares which he has the right to acquire within
60 days after August 19, 1994 through the exercise of stock options.
(12) Mr. O'Donnell is a Director of the Company. Mr. O'Donnell's ownership is
comprised of 5,420 Common Shares which he owns through his retirement plans
and 2,040 Common Shares which are owned by his wife through her retirement
plans. The ownership of the shares held by his wife is attributed to Mr.
O'Donnell pursuant to Commission rules.
(13) Mr. Papenbrock is a Director of the Company. All of Mr. Papenbrock's share
ownership is comprised of Common Shares which he owns through his
retirement plan.
(14) Mr. Stranahan is a Director of the Company. Mr. Stranahan's ownership is
comprised of 458,647 Common Shares which he owns directly, 35,000 Common
Shares which are owned by the Intelco Foundation, of which Mr. Stranahan is
a trustee, and 30,000 Common Shares which are owned by Intelco, Inc., of
which Mr. Stranahan is an officer and director. The ownership of the shares
held by the Intelco Foundation and Intelco, Inc. is attributed to Mr.
Stranahan pursuant to Commission rules.
(15) Mr. Sullivan is Chairman of the Board of Directors and an executive officer
of the Company. Mr. Sullivan's ownership is comprised of 494,018 Common
Shares which he owns directly, 75,760 Common Shares which are owned by his
wife, 27,624 Common Shares owned by the Thomas C. Sullivan Family
Foundation, Inc., of which Mr. Sullivan serves as Co-Trustee, 742,080
Common Shares held by National City Bank, Cleveland, Ohio, as Trustee under
a Trust Agreement, dated April 30, 1971 (the "Sullivan Trust"), between it
and the late Frank C. Sullivan, and 94,562 Common Shares which he has the
right to acquire within 60 days after August 19, 1994 through the exercise
of stock options. Mr. Sullivan is a Trust Advisor to the Sullivan Trust,
having the right to vote the Common Shares held by said Trust and to
approve the sale thereof. The ownership of the shares held by his wife, by
the Thomas C. Sullivan Family Foundation, Inc. and pursuant to the Sullivan
Trust is attributed to Mr. Sullivan pursuant to Commission rules.
(16) The number of Common Shares shown as beneficially owned by the Company's
Directors and executive officers as a group on August 19, 1994 includes
328,398 Common Shares which the Company's Directors and executive officers
as a group have the right to acquire within 60 days after said date through
the exercise of stock options granted to them under the Company's stock
option plans.
4
<PAGE> 8
ELECTION OF DIRECTORS
The authorized number of Directors of the Company presently is fixed at
eleven, with the Board of Directors divided into three Classes. The term of
office of one Class of Directors expires each year, and at each Annual Meeting
of Shareholders the successors to the Directors of the Class whose term is
expiring at that time are elected to hold office for a term of three years.
Class I and Class II of the Board are currently comprised of four Directors each
and Class III of the Board is currently comprised of three Directors, which is
in accordance with the Amended Code of Regulations of the Company.
The term of office of Class II of the Board of Directors expires at this
year's Annual Meeting of Shareholders. The term of office of the persons elected
Directors in Class II at this year's Annual Meeting will expire at the time of
the Annual Meeting held in 1997. Each Director in Class II will serve until the
expiration of that term or until his or her successor shall have been duly
elected. The Board of Directors' nominees for election as Directors in Class II
are Ms. Gustin and Messrs. Karman, Miller and O'Donnell who currently serve as
Directors in Class II.
The Proxy holders named in the accompanying Proxy or their substitutes will
vote such Proxy at the Annual Meeting or any adjournment or postponement thereof
for the election as Directors of the four nominees named below unless the
shareholder instructs, by marking the appropriate space on the Proxy, that
authority to vote is withheld. If cumulative voting is in effect, the Proxy
holders shall have full discretion and authority to vote for any one or more of
the nominees. In the event of cumulative voting, the Proxy holders will vote the
shares represented by each Proxy so as to maximize the number of Board of
Directors' nominees elected to the Board. Each of the nominees has indicated his
or her willingness to serve as a Director, if elected. If any nominee should
become unavailable for election (which contingency is not now contemplated or
foreseen), it is intended that the shares represented by the Proxy will be voted
for such substitute nominee as may be named by the Board of Directors. In no
event will the accompanying Proxy be voted for more than four nominees or for
persons other than those named below and any such substitute nominee for any of
them.
NOMINEES FOR ELECTION
LORRIE GUSTIN, age 69 -- Director since 1992.
Director of the National Association of Investors Clubs
Trust since 1982, and Secretary of the World Federation
of Investment Clubs since 1978. Ms. Gustin attended
Pasadena State College. She served as an officer and
director of the N.A.I.C. Corporation (investment
education) from 1966 to 1983, and as President thereof
from 1980 to 1983.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 750 NOMINEE FOR CLASS II
(TERM EXPIRING IN 1997)
</TABLE>
5
<PAGE> 9
JAMES A. KARMAN, age 57 -- Director since 1963.
President and Chief Operating Officer, RPM, Inc. Mr.
Karman holds a B.S. degree from Miami University (Ohio)
and an M.B.A. degree from the University of Wisconsin.
Mr. Karman taught corporate finance at the University
of Wisconsin and was an Investment Manager, The Union
Bank & Trust Company, Grand Rapids, Michigan, prior to
joining RPM, Inc. as Treasurer in 1963. Mr. Karman
became Vice President and Treasurer in 1969, Vice
President, Secretary and Treasurer in 1972, and was
elected Executive Vice President in 1973. In 1978, Mr.
Karman was elected President and Chief Operating
Officer of RPM, Inc. Mr. Karman also was Chief
Financial Officer of RPM, Inc. from 1982 until 1993.
Mr. Karman is a director of McDonald & Company
Investments, Inc., Sudbury, Inc., Man-Gill Chemical
(privately owned) and Metropolitan Savings Bank
(privately owned).
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 354,254 NOMINEE FOR CLASS II
(TERM EXPIRING IN 1997)
</TABLE>
DONALD K. MILLER, age 62 -- Director since 1972.
Vice Chairman since March 1993 of Thomson Advisory
Group L.P., a money management firm, and formerly
Chairman and Chief Executive Officer from November
1990. He has served as Chairman since January 1992 of
Greylock Financial Inc., an organization engaged in the
financing of management buyouts. Mr. Miller served as
Managing Partner of Greylock Financial Partnership from
December 1986 through December 1991 when Greylock
became incorporated. Mr. Miller has also served as
Chairman since January 1987 of Christensen
Boyles Corporation, a supplier of mining products and
services. Mr. Miller received his B.S. degree from
Cornell University and his M.B.A. degree from Harvard
University Graduate School of Business Administration.
Mr. Miller became Senior Vice President, Blyth Eastman
Dillon & Co., Incorporated, investment bankers, in 1978
and from 1980 through 1986 served as a Managing
Director of Blyth Eastman Paine Webber, Inc. (BEPWI).
He also served as the Managing Partner of 1221
Associates, a private investment partnership for
Managing Directors of BEPWI. Mr. Miller is a Director
of Huffy Corporation and a trustee of the Thomson Fund
Group.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 21,090 NOMINEE FOR CLASS II
(TERM EXPIRING IN 1997)
</TABLE>
6
<PAGE> 10
KEVIN O'DONNELL, age 69 -- Director since 1979.
Managing Director of O'Donnell & Associates, a
management consulting company since August 1994. Mr.
O'Donnell graduated from Kenyon College and received
his M.B.A. degree from Harvard University Graduate
School of Business Administration. He joined the Steel
Improvement & Forge Company, the predecessor of SIFCO
Industries, Inc., a diversified metalworking company,
in 1947 and served in numerous capacities until 1960.
From 1960 to 1972 he served as a management
consultant, as a General Manager of a specialty steel
distributor and with the Peace Corps in various
capacities. In 1971 he was named Associate Director
for international operations of ACTION (Head of the
Peace Corps). He rejoined SIFCO Industries, Inc. in
1972 Executive Vice President and was named President
and Chief Operating Officer in 1976 and Chief
Executive Officer in 1983. Mr. O'Donnell served as
President and Chief Executive Officer until his
retirement in June 1990 and then became Chairman of
the Executive Committee of the Board until July 1994.
Mr. O'Donnell is a Director of Ferro Corporation,
National Machinery Company and the Lamson & Sessions
Company.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 7,460 NOMINEE FOR CLASS II
(TERM EXPIRING IN 1997)
</TABLE>
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER ANNUAL MEETING
EDWARD B. BRANDON, age 62 -- Director since 1989.
Chairman and Chief Executive Officer, National City
Corporation. Mr. Brandon received his B.S. degree in
economics from Northwestern University and his M.B.A.
degree from Wharton School of Banking and Finance. He
joined National City Bank in 1956. Mr. Brandon served
as President of National City Corporation and President
and Chief Executive Officer of National City Bank prior
to his election as Chairman in September 1987, and
served as Chief Executive Officer of National City
Bank until April 1989. Mr. Brandon is a director of The
Standard Products Company and Premier Industrial
Corporation.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 6,000 DIRECTOR IN CLASS I
(TERM EXPIRES IN 1995)
</TABLE>
7
<PAGE> 11
WILLIAM A. PAPENBROCK, age 55 -- Director since 1972.
Partner, Calfee, Halter & Griswold, Attorneys-at-law.
Mr. Papenbrock received his B.S. degree in Business
Administration from Miami University (Ohio) and his
LL.B. degree from Case Western Reserve Law School.
After serving one year as the law clerk to the Chief
Justice of the Ohio Supreme Court, Mr. Papenbrock
joined Calfee, Halter & Griswold as an attorney in
1964. He became a partner of the firm in 1969 and is
Vice Chairman of the firm's Executive Committee.
Calfee, Halter & Griswold serves as counsel to the
Company.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 7,997 DIRECTOR IN CLASS I
(TERM EXPIRES IN 1995)
</TABLE>
STEPHEN STRANAHAN, age 60 -- Director since 1988.
Chairman and Chief Executive Officer of Intelco, Inc.,
an investment holding company. Mr. Stranahan received
his B.A. degree from Dartmouth College. He served as
Chairman of Craft House Corporation from 1978 until its
acquisition by RPM, Inc. in March 1988.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 523,647 DIRECTOR IN CLASS I
(TERM EXPIRES IN 1995)
</TABLE>
THOMAS C. SULLIVAN, age 57 -- Director since 1963.
Chairman and Chief Executive Officer, RPM, Inc. Mr.
Sullivan received his B.S. degree in Business
Administration from Miami University (Ohio). He joined
RPM, Inc. as a Divisional Sales Manager in 1961 and was
elected Vice President in 1967. He became Executive
Vice President in 1969, and in 1971 Mr. Sullivan was
elected Chairman of the Board, President and Chief
Executive Officer of RPM, Inc. Mr. Sullivan is a
director of Pioneer-Standard Electronics, Inc. and
National City Bank, Cleveland, Ohio.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 1,434,044 DIRECTOR IN CLASS I
(TERM EXPIRES IN 1995)
</TABLE>
8
<PAGE> 12
ROY H. HOLDT, age 73 -- Director since 1987.
Retired Chairman and Chief Executive Officer of White
Consolidated Industries, Inc. Mr. Holdt received his
B.S. degree from Dyke College. He joined the
predecessor of White Consolidated Industries, Inc. in
1941, and served as President and Chief Operating
Officer from 1972 to 1976 and as Chairman of the Board
and Chief Executive Officer from 1976 through 1986 of
White Consolidated Industries, Inc.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 3,055 DIRECTOR IN CLASS III
(TERM EXPIRES IN 1996)
</TABLE>
E. BRADLEY JONES, age 66 -- Director since 1990.
Retired Chairman and Chief Executive Officer of
Republic Steel Corporation, LTV Steel Company and Group
Vice President of The LTV Corporation. Mr. Jones
received his B.A. degree from Yale University. He began
his career with Republic Steel Corporation in 1954 in
sales and became President in 1979 and Chairman and
Chief Executive Officer in 1982. Following the merger
of Republic Steel Corporation and The LTV Corporation
in June 1984, Mr. Jones served as Chairman and Chief
Executive Officer of The LTV Steel Company and Group
Vice President of The LTV Corporation until his retirement
in December 1984. Mr. Jones also serves as a director of TRW Inc.,
Cleveland-Cliffs Inc., NACCO Industries, Inc.,
Hyster-Yale Materials Handling, Inc., Consolidated Rail
Corporation and Birmingham Steel Corporation, and is a
Trustee of First Union Real Estate Investments and
Fidelity Funds.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 2,812 DIRECTOR IN CLASS III
(TERM EXPIRES IN 1996)
</TABLE>
JOHN H. MORRIS, JR., age 52 -- Director since 1981.
Executive Vice President, RPM, Inc. Mr. Morris holds a
B.S. degree from the University of West Virginia and an
M.B.A. degree from Case Western Reserve University. Mr.
Morris held management positions with the Armstrong
Cork Company and the General Tire & Rubber Company
prior to joining RPM, Inc. as Director of Corporate
Marketing in 1977. He became Corporate Vice President
that same year and was elected Executive Vice President
of RPM, Inc. in 1981.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 108,404 DIRECTOR IN CLASS III
(TERM EXPIRES IN 1996)
</TABLE>
9
<PAGE> 13
PROPOSAL TO FIX NUMBER OF DIRECTORS AT 12
Article II, Section 2 of the Amended Code of Regulations of the Company
provides that the Board of Directors shall consist of not less than nine (9) or
not more than fifteen (15) members, as determined by the shareholders at an
annual meeting or any special meeting called for the election of directors. At
the 1980 Annual Meeting of Shareholders, the shareholders of the Company fixed
the number of Directors at its present number of eleven (11) members. During the
next twelve months the Company may seek an additional experienced individual to
become a Director of the Company. Therefore, the Board of Directors has proposed
that the size of the Company's Board be increased by one (1) member and
therefore be set at twelve (12). The twelfth position would be in Class III of
the Board of Directors. Pursuant to the Company's Amended Code of Regulations,
the twelfth position, which will be left vacant, will be filled by a majority of
the Board of Directors when an appropriate individual is found. Such individual,
if appointed, would serve until the Annual Meeting of Shareholders in 1996 at
which shareholders will elect Directors to Class III.
Adoption of this proposal requires the affirmative vote of a majority of
the Common Shares entitled to vote present in person or by proxy. Thus,
shareholders who vote to abstain will in effect be voting against the proposal.
Broker non-votes, however, are not counted as present and entitled to vote for
determining whether this proposal has been approved and have no effect on its
outcome.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
INFORMATION REGARDING MEETINGS AND COMMITTEES
OF THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee, a Compensation Committee
and an Audit Committee. The Executive Committee exercises the power and
authority of the Board in the interim period between Board meetings. The
Compensation Committee approves the grant of stock options and reviews and
determines the compensation of certain key executives. The Audit Committee
reviews the activities of the Company's independent auditors and various Company
policies and practices. The Board of Directors does not have a nominating
committee.
Set forth below is the current membership of each of the above-described
Committees, as established in October 1993, with the number of meetings held
during the fiscal year ended May 31, 1994, in parentheses:
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION AUDIT
COMMITTEE(1) COMMITTEE(2) COMMITTEE(2)
-------------- ------------- ---------------
<S> <C> <C>
Thomas C. Sullivan Roy H. Holdt Donald K. Miller
(Chairman) (Chairman) (Chairman)
James A. Karman Edward B. Brandon Stephen Stranahan
Kevin O'Donnell Kevin O'Donnell E. Bradley Jones
Roy H. Holdt Lorrie Gustin
Edward B. Brandon
</TABLE>
The Board of Directors held four meetings during the fiscal year ended May
31, 1994. During that fiscal year, no Director attended fewer than 75% of the
aggregate of (i) the total number of
10
<PAGE> 14
meetings of the Board of Directors held during the period he or she served as a
Director and (ii) the total number of meetings held by Committees of the Board
on which the Director served, during the periods that the Director served.
In fiscal 1993, Directors who are not also employees of the Company, with
the exception of William A. Papenbrock, received a quarterly fee of $6,000 and
an additional $1,000 for each Board and Committee meeting attended, except for
the Chairman of each Committee who received $1,500 for each Committee meeting
attended. Effective June 1, 1994, the quarterly fee was increased to $6,500. In
April 1986, the Board of Directors adopted a Deferred Compensation Plan
providing for the deferred payment of Directors' fees in either cash or stock
equivalents and the payment of such deferred fees in cash commencing six months
following the date of the participating Director's retirement, resignation or
death, or termination of such participating Director's Deferred Compensation
Agreement. Participation in the Deferred Compensation Plan is at the election of
each Director entitled to receive compensation for serving on the Board.
11
<PAGE> 15
<TABLE>
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended May 31, 1994, 1993 and 1992, of those persons who were, at May 31, 1994:
(i) the Chief Executive Officer; and (ii) the other four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
<CAPTION> LONG-TERM
ANNUAL COMPENSATION
COMPENSATION(1) AWARDS
------------------------------------------ -------------
OTHER
ANNUAL SECURITIES
NAME AND COMPEN- UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS SATION(2) OPTIONS
- - -------------------------- ----- -------- -------- ------- ------------
<S> <C> <C> <C> <C> <C>
Thomas C. Sullivan 1994 $600,000 $345,000 -- 40,000
Chairman of the Board 1993 $600,000 $275,000 -- 30,000
and Chief Executive 1992 $565,000 $245,000 -- 30,000(5)
Officer
James A. Karman 1994 $500,000 $285,000 -- 30,000
President and Chief 1993 $500,000 $225,000 -- 24,000
Operating Officer 1992 $470,000 $200,000 -- 24,000(5)
John H. Morris, Jr. 1994 $300,000 $197,000 -- 20,000
Executive Vice 1993 $300,000 $160,000 -- 15,000
President 1992 $280,000 $145,000 -- 15,000(5)
Richard E. Klar 1994 $200,000 $130,000 -- 20,000
Vice President and 1993 $200,000 $105,000 -- 15,000
Treasurer 1992 $190,000 $ 95,000 -- 12,000(5)
Paul A. Granzier 1994 $160,000 $ 67,000 $42,460(3) 10,000
Vice President, General 1993 $160,000 $ 50,000 $30,309(4) 6,000
Counsel and Secretary 1992 $150,000 $ 45,000 -- 6,000(5)
<FN>
- - ------------------
(1) In February, 1994, the Board of Directors adopted a Deferred Compensation
Plan providing for the deferred payment of salary and/or bonuses in either
cash or stock equivalents and the payment of such deferred compensation in
cash commencing three (3) months following the date of the participating
officer's retirement, resignation or death, or voluntary termination by such
participating officer. Any such deferred compensation is not taxed until
received by any such officer, at which time the Company is entitled to a tax
deduction, subject to the limitations of Section 162(m) of the Internal
Revenue Code.
(2) Unless otherwise indicated, no executive officer named in the Summary
Compensation Table received personal benefits or perquisites in excess of
the lesser of $50,000 or 10% of his aggregate salary and bonus. Pursuant to
Commission transition rules, only 1993 and 1994 information is required to
be shown.
(3) Annual compensation related to incidental costs to the Company of personal
benefits or perquisites, including primarily life insurance premiums of
$39,714.
(4) Annual compensation related to incidental costs to the Company of personal
benefits or perquisites, including primarily life insurance premiums of
$27,563.
(5) The number of option shares indicated under this column reflects the
three-for-two share split effected by the Company as a 50% share dividend on
December 4, 1992.
</TABLE>
12
<PAGE> 16
<TABLE>
OPTION GRANTS
Shown below is information on grants of stock options pursuant to the
Company's 1989 Stock Option Plan during the fiscal year ended May 31, 1994 to
the executive officers who are named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
- - --------------------------------------------------------------------------------------------------- VALUE AT ASSUMED
OF TOTAL ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION
GRANTED TO EXERCISE OR FOR
NUMBER OF EMPLOYEES BASE PRICE OPTION TERMS(4)(5)
SECURITIES IN FISCAL (PER EXPIRATION -------------------------
NAME UNDERLYING OPTIONS(1)(2) YEAR SHARE)(3) DATE 5% 10%
- - ------------------------- ------------------------ ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Sullivan 40,000 15.6% $ 17.75 7/21/2003 $ 446,515 $1,131,559
Chairman of the Board
and Chief Executive
Officer
James A. Karman 30,000 11.7% $ 17.75 7/21/2003 $ 334,886 $ 848,668
President and Chief
Operating Officer
John H. Morris, Jr. 20,000 7.8% $ 17.75 7/21/2003 $ 223,258 $ 565,779
Executive Vice
President
Richard E. Klar 20,000 7.8% $ 17.75 7/21/2003 $ 223,258 $ 565,779
Vice President and
Treasurer
Paul A. Granzier 10,000 3.9% $ 17.75 7/21/2003 $ 111,629 $ 282,889
Vice President, General
Counsel and Secretary
<FN>
- - ---------------
(1) These options were granted on July 21, 1993 pursuant to the Company's 1989 Stock Option Plan. Twenty-five
percent of the shares subject to the option become exercisable on each anniversary date thereof.
(2) The option agreements relating to the options granted under the Company's 1989 Stock Option Plan provide that
such options become fully vested upon certain "changes in control" of the Company described in such option
agreements.
(3) This price represents the fair market value at the date of grant pursuant to the terms of the Company's 1989
Stock Option Plan.
(4) The dollar amounts under these columns are the result of calculations at the 5% and 10% appreciation rates
dictated by the Commission and are not intended to be forecasts of the Company's stock price.
</TABLE>
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERMS
------------------------------
5% 10%
------------- --------------
<S> <C> <C> <C>
(5) Value created for all shareholders: $ 642,424,697 $1,628,030,771
Gain of named executive officers as a percent of value created for all 0.2% 0.2%
shareholders:
</TABLE>
13
<PAGE> 17
<TABLE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to the exercise of stock options
during the fiscal year ended May 31, 1994 to purchase the Company's Common
Shares by the executive officers named in the Summary Compensation Table and
with respect to the unexercised stock options at May 31, 1994 to purchase the
Company's Common Shares for the executive officers named in the Summary
Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND MAY 31, 1994 OPTION VALUE
<CAPTION>
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT MAY 31, 1994 AT MAY 31, 1994 (2)
ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - --------------------- ---------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Sullivan -- $ -- 90,233 86,875 $ 705,483 $ 194,425
Chairman of the
Board and Chief
Executive Officer
James A. Karman 14,850 $ 84,184 18,149 67,501 $ 83,400 $ 155,044
President and Chief
Operating Officer
John H. Morris, Jr. 2,000 $ 16,330 51,312 43,438 $ 359,563 $ 97,218
Executive Vice
President
Richard E. Klar 7,712 $ 83,435 45,365 41,009 $ 324,133 $ 86,142
Vice President and
Treasurer
Paul A. Granzier 3,000 $ 29,982 25,312 16,875 $ 192,722 $ 38,760
Vice President,
General Counsel and
Secretary
<FN>
- - ---------------
(1) Represents the difference between the option exercise price and the last
sales price of a Common Share on The Nasdaq National Market on the date of
exercise.
(2) Based on the last sales price of the Common Shares of $18.00 on The Nasdaq
National Market on May 31, 1994. The ultimate realization of profit on the
sale of the Common Shares underlying such options is dependent upon the
market price of such shares on the date of sale.
</TABLE>
14
<PAGE> 18
EMPLOYMENT AGREEMENTS
Under an Amended Employment Agreement, dated as of July 20, 1994, Thomas C.
Sullivan is employed as Chairman of the Board and Chief Executive Officer of the
Company for a five-year period ending June 1, 1999. Pursuant to the terms of the
Agreement, Mr. Sullivan's annual base salary, effective as of June 1, 1994, is
$675,000. Mr. Sullivan's annual base salary is subject to review on an annual
basis by the Compensation Committee of the Board of Directors, and such base
salary may be increased (but not decreased) based upon his performance, then
generally prevailing industry salary scales, the Company's results of operations
and other relevant factors. In addition to his base salary, Mr. Sullivan is
entitled to such annual incentive compensation or bonuses as the Compensation
Committee determines and the Board of Directors approves, and to participate in
the other benefit plans provided by the Company. Under the provisions of the
Agreement, the Company may terminate the employment of Mr. Sullivan for
Disability or Cause (as defined). Mr. Sullivan may terminate employment under
the Agreement for Good Reason (as defined, including removal or failure to
re-elect him Chairman of the Board and Chief Executive Officer) or in the event
of a Change of Control of the Company (as defined, including any offer to
purchase a controlling block of Common Shares of the Company pursuant to a
tender offer or otherwise). If Mr. Sullivan should elect to terminate his
employment for Good Reason, Change of Control or for other specified reasons, he
is entitled to receive an amount equal to the product of his annual base salary
then in effect multiplied by the number of years remaining in the term of
employment under the Agreement, a portion of which may not be deductible to the
Company as an ordinary and necessary business expense and may be subject to a
20% excise tax to Mr. Sullivan pursuant to the provisions of the Tax Reform Act
of 1984. In the event that Mr. Sullivan were to terminate his employment under
such circumstances, he would be entitled to receive payment of approximately
$3,200,000 as of August 31, 1994. The Agreement also provides for the payment by
the Company of legal fees incurred by Mr. Sullivan in the event that, following
a Change of Control, Mr. Sullivan may be caused to institute or defend legal
proceedings to enforce his rights under the Agreement.
Under an Amended Employment Agreement, dated as of July 20, 1994, James A.
Karman is employed as President and Chief Operating Officer of the Company for a
five-year period ending June 1, 1999. Pursuant to the terms of the Agreement,
Mr. Karman's annual base salary, effective as of June 1, 1994, is $530,000. Mr.
Karman's Agreement also contains the same provisions which are described above
in connection with Mr. Sullivan's Agreement. In the event that Mr. Karman were
to terminate his employment under such circumstances, he would be entitled to
receive payment of approximately $2,500,000 as of August 31, 1994.
Effective July 20, 1994, the Company amended Employment Agreements
previously entered into with each of John H. Morris, Jr., Richard E. Klar and
Paul A. Granzier. Pursuant to these Employment Agreements, Messrs. Morris, Klar
and Granzier are employed in their current positions as Executive Vice
President, Vice President and Treasurer, and Vice President, General Counsel and
Secretary, respectively, for a one-year period ending July 31, 1995. The
Employment Agreements provide for the following base salaries, effective June 1,
1994: Mr. Morris -- $320,000; Mr. Klar -- $215,000; and Mr. Granzier --
$170,000. The Employment Agreements also provide for severance payments in the
amount of one year's base salary in the event of termination of the officer's
employment and three years' base salary in the event of termination of
employment due to a Change of Control of the Company not approved by the
Company's Board of Directors. The
15
<PAGE> 19
<TABLE>
Employment Agreements contain the same provision for the recovery of legal fees
incurred to enforce the provisions of the Agreements following a Change of
Control as described above in connection with Mr. Sullivan's Agreement.
DEFINED BENEFIT PENSION PLAN
The table below sets forth the normal annual retirement benefits payable
upon retirement at age 65 (as of June 1, 1994) under the Company's tax qualified
defined benefit retirement plan (the "Retirement Plan") for employees in the
compensation ranges specified, under various assumptions with respect to average
annual compensation and years of benefit service, assuming that the employee
elected to receive his or her pension on a normal life annuity basis:
<CAPTION>
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
AVERAGE (AS OF JUNE 1, 1994) WITH YEARS OF SERVICE INDICATED (1)
ANNUAL ----------------------------------------------------------------------------------------------------
COMPENSATION (2) 5 YEARS 10 YEARS 20 YEARS 30 YEARS 35 YEARS
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 6,183 $ 12,366 $ 24,731 $ 37,097 $ 39,530
$ 150,000 9,665 19,330 38,660 57,990 62,030
$ 200,000 13,147 26,294 52,588 78,883 84,530
$ 250,000 16,629 33,259 66,517 99,776 107,030
$ 300,000 20,111 40,223 80,446 120,668 129,530
$ 350,000 23,594 47,187 94,374 141,561 152,030
$ 400,000 27,076 54,151 108,303 162,454 174,530
$ 450,000 30,558 61,116 122,231 183,347 197,030
$ 500,000 34,040 68,080 136,160 204,240 219,530
$ 550,000 37,522 75,044 150,088 225,133 242,030
$ 600,000 41,004 82,009 164,017 246,026 264,530
$ 650,000 44,486 88,973 177,946 266,918 287,030
$ 700,000 47,969 95,937 191,874 287,811 309,530
$ 750,000 51,451 102,901 205,803 308,704 332,030
$ 800,000 54,933 109,866 219,731 329,597 354,530
$ 850,000 58,415 116,830 233,660 350,490 377,030
$ 900,000 61,897 123,794 247,588 371,383 399,530
$ 950,000 65,379 130,759 261,517 392,276 422,030
$1,000,000 68,861 137,723 275,446 413,168 444,530
$1,050,000 72,344 144,687 289,374 434,061 467,030
$1,100,000 75,826 151,651 303,303 454,954 489,530
$1,150,000 79,308 158,616 317,231 475,847 512,030
$1,200,000 82,790 165,580 331,160 496,740 534,530
$1,250,000 86,272 172,544 345,088 517,633 557,030
<FN>
- - ---------------
(1) The amounts listed may be reduced in accordance with certain provisions of
the Internal Revenue Code of 1986 which limit the maximum amount of
compensation that may be taken into account under the Retirement Plan to
$150,000 and the maximum annual benefit payable under the Retirement Plan to
$118,800. The Company maintains a Benefit Restoration Plan for its executive
officers providing for the payment of supplemental retirement benefits
because of such Internal Revenue Code limits. See "Benefit Restoration Plan"
below.
(2) Includes base compensation as in effect on June 1, 1994, overtime paid and
bonuses paid or accrued. The compensation covered by the Retirement Plan for
the executive officers named in the Summary Compensation Table is the salary
and bonus listed in such table.
</TABLE>
16
<PAGE> 20
With respect to the executive officers listed in the Summary Compensation
Table: Mr. Sullivan has 32.4 years of service; Mr. Karman, 31.4 years of
service; Mr. Morris, 17.4 years of service; Mr. Klar, 25.6 years of service; and
Mr. Granzier, 9.1 years of service.
BENEFIT RESTORATION PLAN
Effective January 1, 1991, the Company established the RPM, Inc. Benefit
Restoration Plan (the "Benefit Restoration Plan") for the purpose of providing
for the payment of supplemental retirement and death benefits to officers of the
Company designated by the Board of Directors whose Retirement Plan benefits may
be limited under the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA") and the Internal Revenue Code. In April 1991, the Board of
Directors designated Messrs. Sullivan, Karman and Morris as participants in the
Benefit Restoration Plan. In July 1993, the Board of Directors also designated
Messrs. Klar, Granzier and certain other officers as participants in the Benefit
Restoration Plan. The Benefit Restoration Plan replaced the prior Supplemental
Executive Retirement Plan which provided similar supplemental retirement
benefits. The Benefit Restoration Plan is an unfunded excess benefit plan which
is administered by the Company. The Benefit Restoration Plan provides that any
payment under the Plan is to be made in an amount equal to the amount by which a
participant's benefits otherwise payable under the Company's Retirement Plan are
reduced as a result of limitations under ERISA and the Internal Revenue Code.
The supplemental retirement benefits are forfeited if the officer terminates
employment before attaining five years of vesting service and age 55.
Supplemental death benefits are paid to the surviving spouse or designated
beneficiary of the officer. The Company is entitled to a federal tax deduction
in an amount and at the time that benefits are paid to a participant. The
Company is not entitled to any deduction prior to payment of benefits to a
participant.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors administers the cash
salary, bonus, and other compensation and stock option programs for the
executive officers of the Company pursuant to (i) the Code of Regulations of the
Company, which was adopted by the shareholders on October 14, 1987, and (ii) a
Compensation Committee Charter which was first adopted by the Board of Directors
on January 24, 1992. The Compensation Committee Charter, as amended, provides
for the Compensation Committee (i) to review and recommend to the Board of
Directors the amount of compensation for services rendered to the Company to be
paid to the executive officers of the Company, (ii) to review and approve the
terms and conditions of written Employment Agreements for executive officers of
the Company, (iii) to administer the Company's Stock Option Plans, (iv) to
review and recommend to the Board of Directors the amount of reasonable
compensation and payment of expenses and other benefits to be paid to members of
the Board of Directors for serving as a Director of the Company, (v) to review
and approve the Compensation Committee Report to be included in the Company's
Proxy Statement for its Annual Shareholders Meeting, and (vi) to review,
approve, and administer any other matters or plans specifically delegated to the
Committee by the Board of Directors. The Compensation Committee presently
consists of three independent Directors who are appointed to the Committee by
and report to the entire Board of Directors. The members of the Compensation
Committee qualify as "disinterested" Directors within the definition of Rule
16b-3 under the Securities Exchange Act of 1934.
17
<PAGE> 21
The Compensation Committee determines the cash salary and bonus to be
awarded to Thomas C. Sullivan, Chairman of the Board and Chief Executive
Officer, annually in July of each year based upon a number of factors, but does
not utilize pre-established, specific performance goals in making compensation
decisions. Historically, Mr. Sullivan has prepared a recommendation to the
Compensation Committee for cash salary and bonus increases and stock option
awards for himself and the other executive officers which the Committee then
reviews and considers in light of a number of factors, including (i) increases
in sales, net income and earnings per share, (ii) performance of the Company's
Common Shares in the open market, (iii) increases in cash dividends paid to
shareholders, (iv) return on shareholders' equity, and (v) acquisitions,
corporate financings, and other general corporate objectives which were achieved
during the May 31 fiscal year. For the Company's fiscal year ended May 31, 1994,
sales increased 6%, net income increased 33%, and earnings per share increased
26% as compared to the prior fiscal year as restated to reflect the acquisitions
of Dynatron/Bondo Corporation in June, 1993 and Stonhard, Inc. in October, 1993,
both of which were accounted for on a "pooling of interest" basis. In addition,
the Company's return on sales increased to 6.5% from 5.1% in the prior fiscal
year, cash dividends increased 9%, shareholders' equity increased 29%, return on
shareholders' equity increased to 18.9% from 16.6% in 1993, and the market value
of the Company's Common Shares was basically unchanged on a comparative fiscal
year basis. Finally, the Company successfully completed the two acquisitions
referred to above, as well as several other smaller acquisitions, and on June
28, 1994, the Company completed the acquisition of Rust-Oleum Corporation, which
had commenced in January, 1994.
From time-to-time the Committee also has reviewed reports prepared for it
by professional compensation consultants and, in addition, has reviewed
compensation paid to chief executive officers of various competitors of the
Company, some of which are included in the Company's Peer Group Performance
Graph. Any increases in cash salaries for Mr. Sullivan and the other executive
officers are made retroactive to June 1 of each fiscal year and are included in
an Amendment to the officer's Employment Agreement. Once awarded, an increase in
salary cannot be reduced without the officer's consent. Cash bonuses are awarded
for the prior May 31 fiscal year based upon Mr. Sullivan's recommendations and
the Committee's review and analysis of the factors discussed above.
The Company believes that it is in the best interest of shareholders to
retain as much flexibility as possible, now and in the future, with respect to
the design and payment of compensation to its executive officers. RPM does,
however, recognize the constraints imposed on this flexibility by Section 162(m)
of the Internal Revenue Code which disallows a tax deduction for certain
compensation paid in excess of $1,000,000 to certain key executives. The
regulations under Section 162(m), however, except from this $1,000,000 limit
various forms of compensation, including "performance-based" compensation.
Presently, only the Company's 1989 Stock Option Plan satisfies the requirements
of Section 162(m) regulation to be "performance-based" compensation and
therefore deductible by the Company. The Company plans to retain a professional
compensation consultant to review the Company's executive compensation programs
in light of Section 162(m) and to recommend to the Compensation Committee, if
appropriate, a performance-based compensation plan which would satisfy the
requirements of Section 162(m) and which could be submitted to the Company's
shareholders for approval in 1995.
The Company's Stock Option Plan for its executive officers and other key
employees is intended to provide long-term equity incentive to the officers and
employees and, in the long-term,
18
<PAGE> 22
relates to shareholder value. Options to executive officers are awarded by the
Committee based upon the recommendation of Mr. Sullivan, and the various
presidents of the Company's operating subsidiaries submit recommendations with
respect to option grants to subsidiary employees. Options are granted at the
last NASDAQ sales price on the date of grant, have a term of ten (10) years, and
generally vest at the rate of 25% per year. The Company does not have any
restricted or other "cheap stock" plans. In February 1994, the Company adopted a
deferred compensation plan for executive officers pursuant to which officers can
defer receipt of a portion of their salary and/or cash bonus until a future date
during which period of time the deferred compensation will receive tax deferred
interest or appreciation based upon the value of Company Common Shares and
dividends paid thereon. Any compensation deferred under the plan would not be
included in the $1,000,000 limit provided for under Section 162(m) until the
year in which the compensation actually is received.
Roy H. Holdt, Chairman
Kevin O'Donnell
Edward B. Brandon
19
<PAGE> 23
PERFORMANCE GRAPHS
Set forth below are line graphs comparing the yearly cumulative total
shareholders' return on the Company's Common Shares against the yearly
cumulative total return of the S&P Composite -- 500 Stock Index and an index of
certain companies selected by the Company as comparative to the Company (the
"Peer Group Index"). The companies selected to form the Peer Group Index are:
Detrex Corporation, Ferro Corporation, Grow Group, Inc., Guardsman Products,
Inc., H. B. Fuller Company, Lawter International, Inc., Lilly Industries, Inc.,
NL Industries, Inc., PPG Industries Inc., Pratt & Lambert, Inc., Rohm and Haas
Company, Standard Brands Paint Company, The Sherwin-Williams Company and Valspar
Corporation.
The graphs assume that the value of the investment in the Company's Common
Shares, the S&P Composite -- 500 Stock Index and the Peer Group Index was $100
on May 31, 1989 and May 31, 1984, respectively, and that all dividends, if any,
were reinvested. The charts below the line graphs give the value of each
investment at the corresponding fiscal year end date.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG RPM, INC.,
S&P 500 INDEX AND THE PEER GROUP INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) RPOW S&P 500 PEER GROUP
<S> <C> <C> <C>
5/31/89 $ 100.00 $ 100.00 $ 100.00
5/31/90 $ 127.00 $ 103.00 $ 117.00
5/31/91 $ 166.00 $ 123.00 $ 130.00
5/31/92 $ 175.00 $ 143.00 $ 154.00
5/31/93 $ 218.00 $ 160.00 $ 166.00
5/31/94 $ 220.00 $ 167.00 $ 175.00
</TABLE>
20
<PAGE> 24
COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN AMONG RPM, INC.,
S&P 500 INDEX AND THE PEER GROUP INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) RPOW S&P 500 PEER GROUP
<S> <C> <C> <C>
5/31/84 $100 $100 $100
5/31/85 $163 $132 $ 87
5/31/86 $212 $179 $106
5/31/87 $235 $217 $223
5/31/88 $252 $202 $202
5/31/89 $317 $257 $176
5/31/90 $403 $299 $182
5/31/91 $525 $335 $217
5/31/92 $554 $368 $271
5/31/93 $690 $410 $291
5/31/94 $696 $428 $307
</TABLE>
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected the firm of Ciulla
Stephens & Co., independent certified public accountants, to examine and audit
the financial statements of the Company and its subsidiaries for the fiscal year
ending May 31, 1995. This firm has served as independent auditors for the
Company since 1964. A representative of Ciulla Stephens & Co. will be present at
the Annual Meeting and will have an opportunity to make a statement should he so
desire. The representative also will be available to respond to appropriate
questions from shareholders.
OTHER MATTERS
The Board of Directors of the Company is not aware of any matter to come
before the meeting other than those mentioned in the accompanying Notice.
However, if other matters shall properly come before the meeting, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their best judgment on such matters.
Any shareholder proposal intended to be presented at the 1995 Annual
Meeting of Shareholders must be received by the Company's Secretary at its
principal executive offices not later than April 28, 1995 for inclusion in the
Board of Directors' Proxy Statement and form of Proxy relating to
21
<PAGE> 25
that meeting. Each proposal submitted should be accompanied by the name and
address of the shareholder submitting the proposal and the number of Common
Shares owned. If the proponent is not a shareholder of record, proof of
beneficial ownership also should be submitted. All proposals must be a proper
subject for action and comply with the Proxy Rules of the Commission.
UPON THE RECEIPT OF A WRITTEN REQUEST FROM ANY SHAREHOLDER ENTITLED TO VOTE
AT THE FORTHCOMING ANNUAL MEETING, THE COMPANY WILL MAIL, AT NO CHARGE TO THE
SHAREHOLDER, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES REQUIRED TO BE FILED WITH THE COMMISSION
PURSUANT TO RULE 13a-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
FOR THE COMPANY'S MOST RECENT FISCAL YEAR. REQUESTS FROM BENEFICIAL OWNERS OF
THE COMPANY'S VOTING SECURITIES MUST SET FORTH A GOOD-FAITH REPRESENTATION THAT
AS OF THE RECORD DATE FOR THE ANNUAL MEETING, THE PERSON MAKING THE REQUEST WAS
THE BENEFICIAL OWNER OF SECURITIES ENTITLED TO VOTE AT SUCH ANNUAL MEETING.
WRITTEN REQUESTS FOR THE ANNUAL REPORT ON FORM 10-K SHOULD BE DIRECTED TO:
PAUL A. GRANZIER, SECRETARY
RPM, INC.
P.O. BOX 777
MEDINA, OHIO 44258
You are urged to sign and return your Proxy promptly in order to make
certain your shares will be voted at the Annual Meeting. For your convenience a
return envelope is enclosed requiring no additional postage if mailed in the
United States.
By Order of the Board of Directors.
PAUL A. GRANZIER
SECRETARY
August 30, 1994
22
<PAGE> 26
RPM, INC.
ANNUAL MEETING OF SHAREHOLDERS -- OCTOBER 10, 1994
P
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (i) appoints THOMAS C. SULLIVAN and RICHARD E.
R KLAR, and each of them, as Proxy holders and attorneys, with full
power of substitution, to appear and vote all of the Common Shares of
RPM, Inc., which the undersigned shall be entitled to vote at the
Annual Meeting of Shareholders of the Company to be held at the
O Holiday Inn Strongsville, 15471 Royalton Road, Strongsville, Ohio,
on Monday, October 10, 1994 at 2:00 P.M. Eastern Daylight Time, and
at any adjournment or postponement thereof, hereby revoking any and all
proxies heretofore given, and (ii) authorizes and directs said Proxy
X holders to vote all of the Common Shares of the Company represented
by this Proxy as follows, WITH THE UNDERSTANDING THAT IF NO DIRECTIONS
ARE GIVEN ON REVERSE SIDE, SAID SHARES WILL BE VOTED "FOR" THE
ELECTION OF THE FOUR DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND
Y "FOR" THE PROPOSAL TO FIX THE NUMBER OF DIRECTORS AT TWELVE (12)
(WHICH WILL CREATE ONE VACANCY WHICH CAN BE FILLED BY THE BOARD OF
DIRECTORS).
Election of Directors, Nominees:
Lorrie Gustin,
James A. Karman,
Donald K. Miller,
Kevin O'Donnell
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
________________________
| |
| VOTE ON REVERSE SIDE |
|________________________|
<PAGE> 27
<TABLE>
<C> <S> <C> <C>
/ X / PLEASE MARK YOUR SHARES HELD SHARES IN DIVIDEND
VOTES AS IN THIS DIRECTLY BY YOU REINVESTMENT PLAN
EXAMPLE.
</TABLE>
[CAPTION]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHELD 2. Approve and FOR AGAINST ABSTAIN 3. In their discretion to act on any other
1. Election of / / / / adopt proposal / / / / / / matter or matters which may properly
Directors to fix number of come before the meeting.
Directors at
For, except vote withheld twelve (12).
from the following nominee(s):
PLEASE DATE, SIGN AND RETURN PROMPTLY IN
THE ACCOMPANYING ENVELOPE.
______________________________________
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE ABOVE PROPOSALS.
Change
of / / (Indicate change of address
Address in the space below and
mark the box to the left.)
Will
Attend / / ________________________________________
Annual
Meeting ________________________________________
SIGNATURE(S) ___________________________________________________ DATE ____________ ________________________________________
SIGNATURE(S) ___________________________________________________ DATE ____________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
</TABLE>
