<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
[RPM Logo] RPM, INC. / 2628 Pearl Road / P.O. Box 777
Medina, Ohio 44258 / 216-273-5090
THOMAS C. SULLIVAN
Chairman
August 23, 1995
TO RPM SHAREHOLDERS:
This year's Annual Meeting of RPM Shareholders will be held at 2:00 P.M.,
Eastern Daylight Time, Thursday, October 12, 1995, 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,
/s/ Thomas C. Sullivan
THOMAS C. SULLIVAN
<PAGE> 3
[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 Thursday, October 12, 1995,
at 2:00 P.M., Eastern Daylight Time, for the following purposes:
(1) To elect four Directors in Class I for a three-year term ending in
1998;
(2) To approve and adopt the RPM, Inc. Incentive Compensation Plan; 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 15,
1995 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 23, 1995
Please fill in and sign the enclosed Proxy and return the Proxy
in the envelope enclosed herewith.
<PAGE> 4
[RPM Logo]
2628 PEARL ROAD - P.O. BOX 777
MEDINA, OHIO 44258
PROXY STATEMENT
MAILED ON OR ABOUT AUGUST 23, 1995
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 12, 1995
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 12, 1995,
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 approve and adopt the
Company's Incentive Compensation Plan.
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 15, 1995. On that date, the
Company had 56,967,191 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 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 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 also will 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 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 PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Shares as
of August 15, 1995 by (i) each person or group known by the Company to own
beneficially more than 5% of the outstanding Common Shares, (ii) each continuing
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%
Max D. Amstutz(3).................... 5,500 *
Edward B. Brandon(4)................. 6,200 *
Lorrie Gustin(5)..................... 778 *
Roy H. Holdt(6)...................... 3,055 *
E. Bradley Jones(7).................. 2,812 *
James A. Karman(8)................... 383,753 0.7
Richard E. Klar(9)................... 111,257 0.2
Donald K. Miller(10)................. 21,090 *
John H. Morris, Jr.(11).............. 112,528 0.2
Kevin O'Donnell(12).................. 7,460 *
William A. Papenbrock(13)............ 8,907 *
Frank C. Sullivan(14)................ 62,801 0.1
Thomas C. Sullivan(15)............... 1,454,301 2.5
All Directors and executive officers
as a group (seventeen persons
including the individuals named
above)(16)......................... 2,251,123 3.9
</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 15, 1995, 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, 1994 and was obtained by the Company from Fifth Third's
Schedule 13G as filed with the Commission in February 1995. The address of
Fifth Third is 38 Fountain Square Plaza, Cincinnati, Ohio 45263.
(3) Dr. Amstutz is a Director of the Company.
(4) Mr. Brandon is a Director of the Company.
(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 135,647 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 72,149 Common Shares which he has the right to
acquire within 60 days after August 15, 1995 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 34,154 Common Shares which he owns directly, 2,666 Common
Shares which are owned by his wife
3
<PAGE> 7
and 74,437 Common Shares which he has the right to acquire within 60 days
after August 15, 1995 through the exercise of stock options. The ownership
of the shares held by his wife 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 37,778 Common Shares which he owns
directly and 74,750 Common Shares which he has the right to acquire within
60 days after August 15, 1995 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 Common
Shares are owned through his retirement plan.
(14) Mr. Frank C. Sullivan is a nominee for Director of the Company and is an
executive officer of the Company. Mr. Sullivan's ownership is comprised of
35,949 Common Shares which he owns directly, 3,102 Common Shares which he
holds as Custodian for his sons and 23,750 Common Shares which he has the
right to acquire within 60 days after August 15, 1995 through the exercise
of stock options. The ownership of the shares held as Custodian for his
sons is attributed to Mr. Sullivan pursuant to Commission rules.
(15) Mr. Thomas C. Sullivan is Chairman of the Board of Directors and Chief
Executive Officer of the Company. Mr. Sullivan's ownership is comprised of
451,400 Common Shares which he owns directly, 75,760 Common Shares which
are owned by his wife, 71,624 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 113,437 Common
Shares which he has the right to acquire within 60 days after August 15,
1995 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 15, 1995 includes
411,985 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
twelve, with the Board of Directors divided into three Classes of four Directors
each. 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.
The term of office of Class I 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 I at this year's Annual Meeting will expire at the time of
the Annual Meeting held in 1998. Each Director in Class I will serve until the
expiration of that term or until his successor shall have been duly elected. The
Board of Directors' nominees for election as Directors in Class I are Messrs.
Edward B. Brandon, William A. Papenbrock, Thomas C. Sullivan and Frank C.
Sullivan. Messrs. Brandon, Papenbrock and Thomas C. Sullivan currently serve as
Directors in Class I. Mr. Frank C. Sullivan is the Company's Vice President and
Chief Financial Officer. Mr. Frank C. Sullivan is nominated for the directorship
in Class I currently held by Mr. Stephen Stranahan. Last fall, Mr. Stranahan
indicated to the Company that he would not be standing for re-election as he
would be significantly reducing his outside business and civic activities over
the next several years in order to spend more time on family business and
charitable interests.
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 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
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
EDWARD B. BRANDON, age 63 -- Director since 1989.
Chairman, 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 also served as Chief Executive Officer of
National City Corporation from September 1987 until
July 1995. Mr. Brandon is a director of The Standard
Products Company and Premier Industrial Corporation.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 6,200 NOMINEE FOR CLASS I
(TERM EXPIRING IN 1998)
</TABLE>
5
<PAGE> 9
WILLIAM A. PAPENBROCK, age 56 -- 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: 8,907 NOMINEE FOR CLASS I
(TERM EXPIRING IN 1998)
</TABLE>
THOMAS C. SULLIVAN, age 58 -- Director since 1963.
Chairman and Chief Executive Officer, RPM, Inc. Mr.
Thomas C. 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.,
National City Bank, and Huffy Corporation.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 1,454,301 NOMINEE FOR CLASS I
(TERM EXPIRING IN 1998)
</TABLE>
FRANK C. SULLIVAN, age 34 -- Nominee for Director.
Vice President and Chief Financial Officer, RPM,
Inc. Mr. Frank C. Sullivan entered the University of
North Carolina as a Morehead Scholar and received his
B.A. degree in 1983. From 1983 to 1987 Mr. Sullivan
held various commercial lending and corporate finance
positions at Harris Bank and First Union National Bank
prior to joining RPM as a Regional Sales Manager at its
AGR Company joint venture. In 1989 he became the
Company's Director of Corporate Development. He became
a Vice President of the Company in 1991 and was elected
Chief Financial Officer in 1993.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 62,801 NOMINEE FOR CLASS I
(TERM EXPIRING IN 1998)
</TABLE>
6
<PAGE> 10
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER ANNUAL MEETING
LORRIE GUSTIN, age 70 -- 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: 778 DIRECTOR IN CLASS II
(TERM EXPIRES IN 1997)
</TABLE>
JAMES A. KARMAN, age 58 -- 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., Shiloh Industries, Inc., and
Sudbury, Inc.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 383,753 DIRECTOR IN CLASS II
(TERM EXPIRES IN 1997)
</TABLE>
7
<PAGE> 11
DONALD K. MILLER, age 63 -- Director since 1972.
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. Formerly, Mr. Miller served as
Chairman and CEO of Thomson Advisory Group L.P.
("Thomson"), a money management firm, from November
1990 to March 1993 and Vice Chairman from April 1993
to November 1994 when Thomson became PIMCO Advisors
L.P. Mr. Miller serves as President and Chief
Executive Officer of PIMCO Inc., a holding company,
and as a Director of PIMCO Advisors, L.P. Mr. Miller
also has 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 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.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 21,090 DIRECTOR IN CLASS II
(TERM EXPIRES IN 1997)
</TABLE>
KEVIN O'DONNELL, age 70 -- 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 as 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 National Machinery
Company and the Lamson & Sessions Company.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 7,460 DIRECTOR IN CLASS II
(TERM EXPIRES IN 1997)
</TABLE>
8
<PAGE> 12
DR. MAX D. AMSTUTZ, age 66 -- Director since February
1995.
Chairman and Chief Executive Officer of Von Roll AG
Switzerland since 1994 and Vice Chairman of
Alusuisse--Lonza Holding Ltd. since 1988. Dr. Amstutz
received his degree in Business Administration and a
Doctorate of Economics from the Universtiy of Berne,
Switzerland. Dr. Amstutz is the past Managing Director
of Holderbank Financier Glaris Ltd., a world leader in
cement, concrete and aggregates and RPM Inc.'s 50-50
joint venture partner in The Euclid Chemical Company.
<TABLE>
<S> <C>
COMMON SHARES BENEFICIALLY OWNED: 5,500 DIRECTOR IN CLASS III
(TERM EXPIRES IN 1996)
</TABLE>
ROY H. HOLDT, age 74 -- 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 67 -- 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., 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>
9
<PAGE> 13
JOHN H. MORRIS, JR., age 53 -- 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: 112,528 DIRECTOR IN CLASS III
(TERM EXPIRES IN 1996)
</TABLE>
10
<PAGE> 14
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, with the number of meetings held during the fiscal year ended May
31, 1995 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 Max D. Amstutz
</TABLE>
The Board of Directors held four meetings during the fiscal year ended May
31, 1995. During that fiscal year, no Director attended fewer than 75% of the
aggregate of (i) the total number of 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.
Directors who are not also employees of the Company, with the exception of
William A. Papenbrock, received a quarterly fee of $6,500 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. 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
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, 1995, 1994 and 1993, of those persons who were, at May 31, 1995:
(i) the Chief Executive Officer; and (ii) the other four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(1) COMPENSATION
------------------------------------------ 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 1995 $675,000 $380,000 $81,625(3) 40,000
Chairman of the Board 1994 $600,000 $345,000 -- 40,000
and Chief Executive 1993 $600,000 $275,000 -- 30,000
Officer
James A. Karman 1995 $530,000 $315,000 $62,792(4) 30,000
President and Chief 1994 $500,000 $285,000 -- 30,000
Operating Officer 1993 $500,000 $225,000 -- 24,000
John H. Morris, Jr. 1995 $320,000 $217,000 -- 20,000
Executive Vice 1994 $300,000 $197,000 -- 20,000
President 1993 $300,000 $160,000 -- 15,000
Richard E. Klar 1995 $215,000 $145,000 $37,538(5) 20,000
Vice President and 1994 $200,000 $130,000 -- 20,000
Treasurer 1993 $200,000 $105,000 -- 15,000
Frank C. Sullivan 1995 $160,000 $120,000 -- 15,000
Vice President and Chief 1994 $125,000 $ 60,000 -- 10,000
Financial Officer 1993 $110,000 $ 45,000 -- 6,000
</TABLE>
------------------
(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 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.
(3) Annual compensation related to incremental costs to the Company of,
including among other things: (i) group term life insurance ($56,131); (ii)
financial and estate planning services; (iii) use of a Company car; and (iv)
reimbursement of club dues.
(4) Annual compensation related to incremental costs to the Company of,
including among other things: (i) group term life insurance ($40,091); (ii)
financial and estate planning services; (iii) use of a Company car; and (iv)
reimbursement of club dues.
(5) Annual compensation related to incremental costs to the Company of,
including among other things: (i) group term life insurance ($26,289); (ii)
financial and estate planning services; (iii) use of a Company car; and (iv)
reimbursement of club dues.
12
<PAGE> 16
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, 1995 to
the executive officers who are named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------------------------------------
PERCENTAGE POTENTIAL REALIZABLE
OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF
GRANTED TO EXERCISE OR STOCK PRICE APPRECIATION
NUMBER OF EMPLOYEES BASE PRICE FOR 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 11.1% $16.75 7/20/2004 $421,359 $1,067,807
Chairman of the Board
and Chief Executive
Officer
James A. Karman 30,000 8.3% $16.75 7/20/2004 $316,020 $ 800,856
President and Chief
Operating Officer
John H. Morris, Jr. 20,000 5.5% $16.75 7/20/2004 $210,680 $ 533,904
Executive Vice
President
Richard E. Klar 20,000 5.5% $16.75 7/20/2004 $210,680 $ 533,904
Vice President and
Treasurer
Frank C. Sullivan 15,000 4.1% $16.75 7/20/2004 $158,010 $ 400,428
Vice President and
Chief Financial Officer
</TABLE>
---------------
(1) These options were granted on July 20, 1994 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>
<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: $ 749,975,962 $1,900,586,387
Gain of named executive officers as a percent of value created for all 0.18% 0.18%
shareholders:
</TABLE>
13
<PAGE> 17
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, 1995 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, 1995 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, 1995 OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT MAY 31, 1995 AT MAY 31, 1995 (2)
ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------- ---------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Sullivan 46,171 $436,432 78,437 92,500 $621,863 $403,619
Chairman of the
Board and Chief
Executive Officer
James A. Karman -- -- 45,150 70,500 $305,949 $309,774
President and Chief
Operating Officer
John H. Morris, Jr. 11,250 $118,711 57,249 46,251 $484,718 $201,840
Executive Vice
President
Richard E. Klar 3,187 $ 23,584 57,686 45,501 $520,967 $197,070
Vice President and
Treasurer
Frank C. Sullivan -- -- 15,250 26,250 $119,388 $110,063
Vice President and
Chief Financial
Officer
</TABLE>
---------------
(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 $19.9375 on The Nasdaq
National Market on May 31, 1995. 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.
14
<PAGE> 18
EMPLOYMENT AGREEMENTS
Under an Amended Employment Agreement, dated as of July 18, 1995, 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, 2000. Pursuant to the terms of the
Agreement, Mr. Sullivan's annual base salary, effective as of June 1, 1995, is
$710,000. 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
$3,431,664 as of July 31, 1995. 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 18, 1995, James A.
Karman is employed as President and Chief Operating Officer of the Company for a
five-year period ending June 1, 2000. Pursuant to the terms of the Agreement,
Mr. Karman's annual base salary, effective as of June 1, 1995, is $560,000. 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 $2,706,648 as of July 31, 1995.
Effective July 18, 1995, the Company amended Employment Agreements
previously entered into with each of John H. Morris, Jr., Richard E. Klar and
Frank C. Sullivan. Pursuant to these Employment Agreements, Messrs. Morris, Klar
and Sullivan are employed in their current positions as Executive Vice
President, Vice President and Treasurer, and Vice President and Chief Financial
Officer, respectively, for a one-year period ending July 31, 1996. The
Employment Agreements provide for the following base salaries, effective June 1,
1995: Mr. Morris -- $335,000; Mr. Klar -- $225,000; and Mr. Sullivan --
$250,000. 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 Employment
15
<PAGE> 19
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, 1995) 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:
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
AVERAGE (AS OF JUNE 1, 1995) 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 $ 6,131 $ 12,262 $ 24,525 $ 36,787 $ 39,168
$ 150,000 9,613 19,227 38,453 57,680 61,668
$ 200,000 13,095 26,191 52,382 78,573 84,168
$ 250,000 16,578 33,155 66,310 99,465 106,668
$ 300,000 20,060 40,119 80,239 120,358 129,168
$ 350,000 23,542 47,084 94,167 141,251 151,668
$ 400,000 27,024 54,048 108,096 162,144 174,168
$ 450,000 30,506 61,012 122,025 183,037 196,668
$ 500,000 33,988 67,977 135,953 203,930 219,168
$ 550,000 37,470 74,941 149,882 224,823 241,668
$ 600,000 40,953 81,905 163,810 245,715 264,168
$ 650,000 44,435 88,869 177,739 266,608 286,668
$ 700,000 47,917 95,834 191,667 287,501 309,168
$ 750,000 51,399 102,798 205,596 308,394 331,668
$ 800,000 54,881 109,762 219,525 329,287 354,168
$ 850,000 58,363 116,727 233,453 350,180 376,668
$ 900,000 61,845 123,691 247,382 371,073 399,168
$ 950,000 65,328 130,655 261,310 391,965 421,668
$1,000,000 68,810 137,619 275,239 412,858 444,168
$1,050,000 72,292 144,584 289,167 433,751 466,668
$1,100,000 75,774 151,548 303,096 454,644 489,168
$1,150,000 79,256 158,512 317,025 475,537 511,668
$1,200,000 82,738 165,477 330,953 496,430 534,168
$1,250,000 86,220 172,441 344,882 517,323 556,668
</TABLE>
---------------
(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
$120,000. 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, 1995, 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.
16
<PAGE> 20
With respect to the executive officers listed in the Summary Compensation
Table: Mr. Thomas C. Sullivan has 33.4 years of service; Mr. Karman, 32.4 years
of service; Mr. Morris, 18.4 years of service; Mr. Klar, 26.6 years of service;
and Mr. Frank C. Sullivan, 6.3 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. Thomas C. Sullivan, Karman and Morris as
participants in the Benefit Restoration Plan. In July 1993, the Board of
Directors also designated Messrs. Klar, Frank C. Sullivan 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 tax
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 reviews and recommends 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, 1995,
sales increased 25%, net income increased 16%, and earnings per share increased
15% as compared to the prior fiscal year. In addition, while the Company's
return on sales decreased to 6.0% from 6.5% in the prior fiscal year, cash
dividends increased 8%, shareholders' equity increased 11%, return on
shareholders' equity remained essentially the same at 18.5% in 1995 compared to
18.9% in 1994, and the market value of the Company's Common Shares increased 17%
on a comparative fiscal year basis. Finally, on June 28, 1994, the Company
completed the acquisition of Rust-Oleum Corporation.
At the July 1995 Compensation Committee meeting, the Committee also
reviewed a report prepared for it by a professional compensation consulting firm
and, in addition, 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. Thus, the Company retained a professional
compensation consulting firm to review the Company's executive compensation
programs in light of Section 162(m). The consulting firm eventually recommended
to the Compensation Committee 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 at this year's annual meeting. See ADOPTION
OF RPM, INC. INCENTIVE COMPENSATION PLAN hereinafter.
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, 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
18
<PAGE> 22
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 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, 1990 and May 31, 1985, 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>
5/31/90 100.00 100.00 100.00
5/31/91 130.00 112.00 119.00
5/31/92 137.00 123.00 149.00
5/31/93 171.00 137.00 160.00
5/31/94 173.00 143.00 171.00
5/31/95 197.00 172.00 191.00
</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>
5/31/85 100 100 100
5/31/86 130 136 121
5/31/87 145 164 234
5/31/88 155 154 197
5/31/89 195 195 175
5/31/90 248 227 177
5/31/91 323 254 206
5/31/92 340 279 251
5/31/93 424 311 271
5/31/94 428 325 288
5/31/95 488 390 322
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and Directors and persons who own 10% or more of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Commission and
the NASDAQ National Market. Officers, Directors and 10% or greater shareholders
are required by Commission regulations to furnish the Company with copies of all
Forms 3, 4 and 5 they file.
Based solely on the Company's review of the copies of such forms it has
received, the Company believes that all of its officers and Directors complied
with all filing requirements applicable to them with respect to transactions
during the fiscal year ended May 31, 1995, except for Thomas C. Sullivan who
inadvertently omitted to report one transaction involving a gift to a charitable
organization in fiscal 1994. Mr. Sullivan, however, did promptly report the
inadvertent omission when it was brought to his attention.
21
<PAGE> 25
ADOPTION OF RPM, INC. INCENTIVE COMPENSATION PLAN
BACKGROUND
The shareholders will be asked at the meeting to vote on a proposal to
approve the adoption of the RPM, Inc. Incentive Compensation Plan (the
"Incentive Plan" or the "Plan"). The Incentive Plan was adopted by the
Compensation Committee (the "Compensation Committee") of the Board of Directors
in August 1995, subject to shareholder approval. The Plan provides for the
granting of annual cash bonus awards (the "Bonus Awards") to those employees of
the Company who in any respective fiscal year are the Chief Executive Officer
and the other four most highly compensated officers of the Company (the "Covered
Employees").
The Plan is designed to promote the interests of the Company and its
shareholders by attracting and retaining officers who are key employees of the
Company; motivating such officers by reason of performance-related incentives to
achieve the Company's performance goals; enabling such officers to participate
in the growth and financial success of the Company; and, by qualifying the Bonus
Awards as "performance-based" compensation under Section 162(m) of the Internal
Revenue Code (the "Code"), assuring that the Company will continue to be able to
deduct cash bonuses paid to the Covered Employees. The Plan is intended to be
utilized as the primary annual cash bonus program for the Company's Covered
Employees. Accordingly, the Board of Directors and management believe that
approval of the Incentive Plan is in the best interests of the Company and
recommend that shareholders vote in favor of the proposal.
The affirmative vote of the holders of a majority of the outstanding Common
Shares entitled to vote at the meeting, either present in person or by proxy, is
required for the adoption of the Incentive Plan. Thus, shareholders who vote to
abstain will in effect be voting against the proposal. Broker non-votes,
however, are not counted as present for determining whether this proposal has
been approved and have no effect on its outcome.
The following is a summary of the material features of the Incentive Plan
and is qualified in its entirety by reference to it. A copy of the Plan is
attached hereto as Exhibit A.
THE BOARD RECOMMENDS A VOTE FOR THE ADOPTION OF THE RPM, INC. INCENTIVE
COMPENSATION PLAN.
GENERAL
The Plan calls for providing an aggregate Bonus Award pool of 1.3% of the
Company's Income Before Income Taxes ("pre-tax income") in each applicable
fiscal year for the Covered Employees. Within the first three months of each
fiscal year the Compensation Committee, which administers the Plan, is required
to determine in writing the portion of such aggregate Bonus Award pool that each
Covered Employee may receive in respect of such fiscal year. At the end of each
fiscal year, the Compensation Committee shall calculate the aggregate Bonus
Award pool based on the Company's audited pre-tax income and each individual's
Bonus Award payout amount.
The Compensation Committee may reduce or eliminate a Covered Employee's
Bonus Award, at the Compensation Committee's sole discretion, based solely on
individual performance. The total of all Bonus Award payments made under the
Plan in any given fiscal year shall not exceed 1.3% of the Company's pre-tax
income. Furthermore, the total of all payments to any one individual Covered
Employee under the Plan in any fiscal year shall not exceed $1,500,000. Payments
under the Plan, pursuant to the terms herein described, are intended to satisfy
the requirements of Section 162(m)
22
<PAGE> 26
of the Code as "performance-based" compensation and therefore be fully tax
deductible to the Company.
It is anticipated that in late August 1995 the Compensation Committee will
determine, on a percentage basis, the portion of the aggregate Bonus Award pool
to be awarded to each Covered Employee in respect of the Company's performance
for the fiscal year ending May 31, 1996. The five (5) individuals set forth in
the Summary Compensation Table shall participate in the Incentive Plan for
fiscal 1996.
DURATION AND ADMINISTRATION OF THE INCENTIVE PLAN
The Board of Directors may at any time terminate the Plan, in whole or in
part. Initially, the Plan will be administered by the Compensation Committee.
The Compensation Committee must consist of at least two members who are
non-employee Directors and who are "outside directors" under the provisions of
Section 162(m) of the Code, and the present members of the Compensation
Committee are Roy H. Holdt, Edward B. Brandon and Kevin O'Donnell, each of whom
is a non-employee Director of the Company and qualifies as an "outside director"
pursuant to Section 162(m) of the Code. The members of the Compensation
Committee are appointed by the Board of Directors and serve at its discretion. A
majority of the Compensation Committee constitutes a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by all of its members, are acts of the Compensation
Committee. Subject to the terms and conditions of the Plan, the Compensation
Committee has full and final authority in its absolute discretion to implement
the Plan, interpret the Plan and to adopt such rules and regulations for
carrying out the Plan as it may deem best. Any decision made or action taken by
the Compensation Committee in connection with the administration, interpretation
and implementation of the Incentive Plan and of its rules and regulations will
be, to the extent permitted by law, conclusive and binding upon the Covered
Employees and upon any person claiming under or through the Covered Employees.
Neither the Compensation Committee nor any of its members is liable for any act
taken by the Compensation Committee pursuant to the Incentive Plan, except in
circumstances involving bad faith on the part of such member(s).
INCOME TAX TREATMENT
The Company has been advised that under current law certain of the income
tax consequences under the laws of the United States to Covered Employees and
the Company of Bonus Awards granted under the Incentive Plan should generally be
as set forth in the following summary. The summary only addresses income tax
consequences for Covered Employees and the Company.
A Covered Employee to whom a Bonus Award is granted will not recognize
income at the time of grant of such Bonus Award. When such Covered Employee
receives the Bonus Award, the Covered Employee will recognize ordinary
compensation income equal to the Bonus Award received. Subject to applicable
provisions of the Code and regulations thereunder, the Company will generally be
entitled to a federal income tax deduction in respect of Bonus Award payouts for
the fiscal year in which the Bonus Award is received in an amount equal to the
ordinary compensation income recognized by the Covered Employee. Any
compensation includable in the gross income of a Covered Employee in respect to
a Bonus Award payout will be subject to appropriate withholding for federal
income and employment taxes.
The discussion set forth above does not purport to be a complete analysis
of all potential tax consequences relevant to recipients of Bonus Awards or the
Company or to describe tax conse-
23
<PAGE> 27
quences based on particular circumstances. It is based on United States federal
income tax law and interpretational authorities as of the date of this Proxy
Statement, which are subject to change at any time. The discussion does not
address state or local income tax consequences or income tax consequences for
taxpayers who are not subject to taxation in the United States.
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, 1996. 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 1996 Annual
Meeting of Shareholders must be received by the Company's Secretary at its
principal executive offices not later than April 26, 1996 for inclusion in the
Board of Directors' Proxy Statement and form of Proxy relating to 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 23, 1995
24
<PAGE> 28
EXHIBIT A
RPM, INC. INCENTIVE COMPENSATION PLAN
SECTION 1. PURPOSE. The purpose of the RPM, Inc. Incentive Compensation
Plan (the "Plan") is to provide incentives for specified key employees whose
performance in fulfilling the responsibilities of their positions as Executive
Officers can have a major impact on the profitability and future growth of RPM,
Inc. (the "Company") and its subsidiaries.
SECTION 2. DEFINITIONS. For the purposes of the Plan, the following terms
shall have the meanings indicated:
(a) "Aggregate Bonus Pool" shall mean with respect to any Fiscal Year
an amount equal to one and three-tenths percent (1.3%) of the Income Before
Income Taxes.
(b) "Applicable Law" shall mean 26 U.S.C. Section 162(m) and
regulations and rulings lawfully promulgated thereunder by an agency of the
federal government.
(c) "Base Salary" shall mean for any Covered Employee in respect of
any Fiscal Year his or her annual base salary effective on the first day of
such Fiscal Year, as determined by the Committee no later than the
ninetieth day of such Fiscal Year.
(d) "Board of Directors" shall mean the Board of Directors of the
Company.
(e) "Bonus Award" shall mean the amount payable to a Covered Employee
under the Plan in respect of any Fiscal Year.
(f) "Committee" shall mean the Compensation Committee of the Board of
Directors, which shall be comprised solely of two or more Outside
Directors.
(g) "Covered Employee" shall mean in respect of any Fiscal Year one of
the five individuals who is a covered employee under the Applicable Law.
(h) "Fiscal Year" shall mean any fiscal year of the Company,
commencing with the Fiscal Year which began on June 1, 1995.
(i) "Income Before Income Taxes" shall mean, for any Fiscal Year,
income before income taxes as shown on the Company's financial statement as
certified by the Company's independent certified public accountants.
(j) "Outside Director" shall mean an outside director under the
Applicable Law.
(k) "Plan" shall mean the RPM, Inc. Incentive Compensation Plan as set
forth in this document and as later amended in accordance with the terms
hereof.
SECTION 3. ADMINISTRATION.
(a) Committee. The Plan shall be administered by the Committee. The
Committee shall have full authority to interpret the Plan and from time to time
to adopt such rules and regulations for carrying out the Plan as it may deem
best.
A-1
<PAGE> 29
(b) Committee Determinations. All determinations by the Committee shall be
made by the affirmative vote of a majority of its members, but any determination
reduced to writing and signed by all of its members shall be fully as effective
as if it had been made by a majority vote at a meeting duly called and held. All
decisions by the Committee pursuant to the provisions of the Plan and all orders
or resolutions of the Committee pursuant thereto shall be final, conclusive and
binding on all persons, including the Covered Employees (and their heirs,
personal representatives, successors or permitted assigns), the Company, its
subsidiaries, and its shareholders.
SECTION 4. BONUS AWARDS.
(a) Determination of Bonus Awards. Subject to the next sentence, the Bonus
Award of any Covered Employee for any Fiscal Year shall be such percentage share
of the Aggregate Bonus Pool as determined by resolution of the Committee adopted
no later than the ninetieth day of such Fiscal Year. Notwithstanding the
preceding sentence:
(i) the sum of the Bonus Awards of all Covered Employees for any
Fiscal Year shall not exceed the Aggregate Bonus Pool for the Fiscal Year;
(ii) the Bonus Award of any Covered Employee may be less than the
amount otherwise determined pursuant to the preceding sentence if, at any
time prior to informing the Covered Employee of his Bonus Award, the
Committee in its sole and absolute discretion so determines; and
(iii) in no event shall a Bonus Award exceed $1,500,000.
(b) Announcement of Bonus Awards. No later than ninety (90) days after the
close of a Fiscal Year, the Committee shall promptly inform each Covered
Employee of his or her respective Bonus Award for the Fiscal Year.
(c) Payment of Bonus Awards. Bonus Awards shall be paid to the Covered
Employees at such times as are determined by the Committee.
(d) Certification of Bonus Awards. Prior to paying any Bonus Award in
respect of any Fiscal Year, the Committee shall certify in writing to the Board
of Directors the amount of such Bonus Award and that such Bonus Award was
determined in accordance with the terms of the Plan. For this purpose, approved
minutes of the Committee meeting in which the certification is made shall be
treated as a written certification.
SECTION 5. EFFECTIVE DATE AND SHAREHOLDER APPROVAL. The Plan shall become
effective for the Fiscal Year commencing on June 1, 1995; provided, however,
that the Plan shall be of no force and effect unless it is approved by the
Company's shareholders as provided in the Applicable Law at the Company's 1995
annual meeting of shareholders.
SECTION 6. GENERAL PROVISIONS.
(a) No Assignment. No portion of any Bonus Award may be assigned or
transferred otherwise than by will or by the laws of descent and distribution
prior to the payment thereof.
A-2
<PAGE> 30
(b) Tax Requirements. All payments of Bonus Awards shall be subject to
withholding in respect of income and other taxes required by law to be withheld,
in accordance with the Company's customary procedures.
(c) No Additional Rights. A Covered Employee shall not have any right to
be retained in the employ of the Company or any of its subsidiaries, and the
right of the Company or any such subsidiary to dismiss or discharge any such
Covered Employee or to terminate any arrangement pursuant to which any such
Covered Employee provides services to the Company or a subsidiary is
specifically reserved and retained.
(d) Liability. The Board of Directors and the Committee shall be entitled
to rely on the advice of counsel and other experts, including the independent
certified public accountants for the Company. No member of the Board of
Directors or of the Committee or any officers of the Company or its subsidiaries
shall be liable for any act or failure to act under the Plan, except in
circumstances involving bad faith on the part of such member or officer.
(e) Other Compensation Arrangements. Nothing contained in the Plan shall
prevent the Company or any subsidiary or affiliate of the Company from adopting
or continuing in effect other compensation arrangements, which arrangements may
be either generally applicable or applicable only to designated individuals
including the Covered Employees.
SECTION 7. AMENDMENT AND TERMINATION OF THE PLAN. The Board of Directors
may at any time terminate, in whole or in part, or from time to time amend the
Plan; provided, that no such amendment or termination shall adversely affect the
rights of any Covered Employee with respect to Bonus Awards announced by the
Committee. The Board of Directors may at any time and from time to time delegate
to the Committee any or all of its authority under this Section 7. Any amendment
to the Plan shall be approved by the Company's shareholders if required under
the Applicable Law.
A-3
<PAGE> 31
RPM, INC.
ANNUAL MEETING OF SHAREHOLDERS -- OCTOBER 12, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (i) appoints JAMES A. KARMAN and RICHARD E.
KLAR, and each of them, as Proxy holders and attorneys, with full
P 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
R Annual Meeting of Shareholders of the Company to be held at the
Holiday Inn Strongsville, 15471 Royalton Road, Strongsville, Ohio, on
O Thursday, October 12, 1995 at 2:00 P.M. Eastern Daylight Time, and at
any adjournment or postponement thereof, hereby revoking any and all
X proxies heretofore given, and (ii) authorizes and directs said Proxy
holders to vote all of the Common Shares of the Company represented by
Y 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 "FOR" THE PROPOSAL TO APPROVE AND ADOPT THE RPM, INC. INCENTIVE
COMPENSATION PLAN.
Election of Directors, Nominees:
Edward B. Brandon,
William A. Papenbrock,
Thomas C. Sullivan,
Frank C. Sullivan
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.
SEE REVERSE
SIDE
--------------------------------------------------------------------------------
DETACH CARD
DIRECTIONS TO THE HOLIDAY INN STRONGSVILLE*
FROM CLEVELAND AND POINTS NORTH (INCLUDING HOPKINS AIRPORT)
I-71 South to the North Royalton exit (#231A). Cross over bridge and the
hotel is on the right hand side.
FROM THE OHIO TURNPIKE EAST AND WEST
Ohio Turnpike (I-80) to I-71 South (exit 10). Exit at the North Royalton
exit (#231A). Cross over bridge and the hotel is on the right hand side.
FROM THE EAST
I-480 West to I-71 South. Exit at the North Royalton exit (#231A).
Cross over bridge and the hotel is on the right hand side.
FROM THE SOUTH
I-71 North to the Strongsville exit (#231).
Turn right at end of exit ramp and hotel is on the right hand side.
*PLEASE NOTE THAT ROUTE 82
EAST (ROYALTON ROAD) IS
UNDER CONSTRUCTION NEAR
INTERSTATE 71 EXITS #231 [MAP]
AND #231A AND, THEREFORE,
EXTRA TIME SHOULD BE
ALLOTTED FOR TRAVEL TO THE
RPM ANNUAL MEETING.
<PAGE> 32
<TABLE>
<C> <S> <C> <C> <C> <C> <C> <C>
/X/ PLEASE MARK YOUR SHARES HELD SHARES IN DIVIDEND
VOTES AS IN THIS DIRECTLY BY YOU REINVESTMENT PLAN
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approve and / / / / / / 3. In their discretion to act on any
Directors adopt RPM, Inc. other matter or matters which may
(see reverse) Incentive properly come before the meeting.
Compensation
Plan.
For, except vote withheld 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.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH CARD
</TABLE>
<PAGE> 33
DIRECTION CARD
RPM, INC. RETIREMENT SAVINGS TRUST AND PLAN
TO: KEY TRUST COMPANY OF OHIO, N.A., TRUSTEE
The undersigned hereby directs Key Trust Company of Ohio, N.A., RPM,
Inc. Retirement Savings Trust and Plan Trustee to vote Common Shares
held for the undersigned's Retirement Savings Trust and Plan account at
the Annual Meeting of Shareholders of the Company to be held at the
Holiday Inn Strongsville, 15471 Royalton Road, Strongsville, Ohio, on
Thursday, October 12, 1995 at 2:00 P.M. Eastern Daylight Time, and at
any adjournment or postponement thereof, as specified, WITH THE
UNDERSTANDING THAT IF A SIGNED DIRECTION CARD IS RETURNED WITH NO
DIRECTIONS GIVEN ON REVERSE SIDE, SAID SHARES WILL BE VOTED "FOR" THE
ELECTION OF THE FOUR DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS,
"FOR" THE PROPOSAL TO APPROVE AND ADOPT THE COMPANY'S INCENTIVE
COMPENSATION PLAN AND TO VOTE IN ACCORDANCE WITH ITS DISCRETION ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Election of Directors, Nominees:
Edward B. Brandon,
William A. Papenbrock,
Thomas C. Sullivan,
Frank C. Sullivan
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.
SEE REVERSE
SIDE
--------------------------------------------------------------------------------
DETACH CARD
<PAGE> 34
<TABLE>
<S> <C> <C> <C>
X PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Approve and [ ] [ ] [ ] 3. In its discretion to act
Directors adopt RPM, Inc. on any other matter or
(see reverse) Incentive matters which may properly
Compensation Plan. come before the meeting.
For, except vote withheld
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.
SIGNATURE(S) _____________________________________________________________ DATE _________________
SIGNATURE(S) _____________________________________________________________ DATE _________________
NOTE: Your signature to this Direction Card form should be exactly the same as the name
imprinted hereon. Persons signing as executors, administrators, trustees, or in similar
capacities should so indicate.
-----------------------------------------------------------------------------------------------------------------------------------
DETACH CARD
</TABLE>
