<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:
<TABLE>
<S> <C>
[ ] Preliminary proxy statement [ ] Confidential, For Use of the
[X] Definitive proxy statement Commission Only (as permitted
[ ] Definitive additional materials by Rule 14a-6(e)(2))
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
</TABLE>
RPM, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the Filing Fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] 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:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
RPM, INC. - 2628 Pearl Road - P.O. Box 777 - Medina, Ohio 44258 - 330-273-5090
[RPM LOGO]
THOMAS C. SULLIVAN
Chairman
August 31, 1999
TO RPM SHAREHOLDERS:
This year's Annual Meeting of RPM Shareholders will be held at 2:00 p.m.,
Eastern Daylight Time, Friday, October 8, 1999, at the Holiday Inn Select
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 today, 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 Select Strongsville, 15471 Royalton Road,
Strongsville, Ohio, located at Interstate 71 and Route 82 East, on Friday,
October 8, 1999, at 2:00 P.M., Eastern Daylight Time, for the following
purposes:
(1) To elect four Directors in Class III for a three-year term ending in
2002; and
(2) 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 20,
1999 are entitled to receive notice of and to vote at the Annual Meeting.
By Order of the Board of Directors.
P. KELLY TOMPKINS
Secretary
August 31, 1999
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 31, 1999
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 8, 1999
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 8, 1999, 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.
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 20, 1999. On that date, the
Company had 109,485,957 Common Shares, without par value ("Common Shares"),
outstanding and entitled to vote at the Annual Meeting. Each Common Share is
entitled to one vote.
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
1
<PAGE> 5
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.
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 decided, unless otherwise
provided by law or by the Articles of Incorporation of the Company, by the vote
of the holders of a majority of the 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 May 31, 1999, unless otherwise indicated, 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, nominee for election as a 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>
Max D. Amstutz(2)........................................... 24,843 *
Edward B. Brandon(3)........................................ 17,187 *
Kenneth M. Evans(4)......................................... 8,198 *
Lorrie Gustin(5)............................................ 1,639 *
E. Bradley Jones(6)......................................... 11,893 *
James A. Karman(7).......................................... 922,554 0.8
Donald K. Miller(8)......................................... 32,949 *
John H. Morris, Jr.(9)...................................... 276,361 0.3
Kevin O'Donnell(10)......................................... 16,028 *
William A. Papenbrock(11)................................... 16,650 *
Albert B. Ratner(12)........................................ 6,250 *
Frank C. Sullivan(13)....................................... 264,519 0.2
Thomas C. Sullivan(14)...................................... 1,580,959 1.4
Jerry Sue Thornton(15)...................................... 0 *
All Directors and executive officers as a group (twenty
persons including the directors and executive officers
named above)(16).......................................... 3,445,797 3.1
</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 May 31, 1999, but no exercise of
outstanding options covering Common Shares held by any other person.
(2) Dr. Amstutz is a Director of the Company.
(3) Mr. Brandon is a Director of the Company.
(4) Mr. Evans' ownership is comprised of 375 Common Shares owned by the Evans
Family Trust, of which Mr. Evans serves as Trustee, 7,500 Common Shares
which he has the right to acquire within 60 days after May 31, 1999 through
the exercise of stock options and approximately 323 Common Shares held by
Key Trust Company of Ohio, N.A., as trustee of the RPM, Inc. 401(k) Plan,
which represents Mr. Evans' approximate percentage ownership of the total
Common Shares held in the RPM, Inc. 401(k) Plan as of May 31, 1999.
(5) Ms. Gustin is a Director of the Company.
(6) Mr. Jones is a Director of the Company.
(7) Mr. Karman is a Director and an executive officer of the Company. Mr.
Karman's ownership is comprised of 121,095 Common Shares which he owns
directly, 41,902 Common Shares which are owned by his wife, 227,372 Common
Shares which are held by a family-owned corporation, of which Mr. Karman is
an officer and director, 100,000 Common Shares owned by the James A. Karman
Grantor Retained Annuity Trust, of which Mr. Karman serves as Co-Trustee,
431,016 Common Shares which he has the right to acquire within 60 days
after May 31, 1999 through the exercise of stock options, and approximately
1,169 Common Shares held by Key Trust Company of Ohio, N.A., as trustee of
the RPM, Inc. 401(k) Plan, which represents Mr. Karman's approximate
percentage ownership of the total Common Shares held in the RPM, Inc.
401(k) Plan as of May 31, 1999. The ownership of the shares held by the
James A. Karman Grantor Retained Annuity Trust, by his wife and by the
family-owned corporation is attributed to Mr. Karman pursuant to Commission
rules.
3
<PAGE> 7
(8) Mr. Miller is a Director of the Company. Mr. Miller's share ownership is
comprised of 10,983 Common Shares which he owns directly and 21,966 Common
Shares held by his sons. The ownership of the shares held by his sons is
attributed to Mr. Miller pursuant to Commission rules.
(9) Mr. Morris is a Director and an executive officer of the Company. Mr.
Morris' ownership is comprised of 86,356 Common Shares which he owns
directly, 188,923 Common Shares which he has the right to acquire within 60
days after May 31, 1999 through the exercise of stock options, and
approximately 1,082 Common Shares held by Key Trust Company of Ohio, N.A.,
as trustee of the RPM, Inc. 401(k) Plan, which represents Mr. Morris'
approximate percentage ownership of the total Common Shares held in the
RPM, Inc. 401(k) Plan as of May 31, 1999.
(10) Mr. O'Donnell is a Director of the Company. Mr. O'Donnell's ownership is
comprised of 10,342 Common Shares which he owns through his retirement
plans, 3,186 Common Shares which are owned by his wife through her
retirement plans and 2,500 Common Shares owned jointly with his wife. The
ownership of the shares held by his wife is attributed to Mr. O'Donnell
pursuant to Commission rules.
(11) Mr. Papenbrock is a Director of the Company. All of Mr. Papenbrock's Common
Shares are owned through his retirement plan for which National City Bank
is Trustee.
(12) Mr. Ratner is a Director of the Company.
(13) Mr. Frank C. Sullivan is a Director and an executive officer of the
Company. Mr. Sullivan's ownership is comprised of 73,080 Common Shares
which he owns directly, 30,000 Common Shares owned by the Frank C. Sullivan
Irrevocable Trust, 7,266 Common Shares which he holds as Custodian for his
sons, 153,126 Common Shares which he has the right to acquire within 60
days after May 31, 1999 through the exercise of stock options, and
approximately 1,047 Common Shares held by Key Trust Company of Ohio, N.A.,
as trustee of the RPM, Inc. 401(k) Plan, which represents Mr. Sullivan's
approximate percentage ownership of the total Common Shares held in the
RPM, Inc. 401(k) Plan as of May 31, 1999. The ownership of the shares held
as Custodian for his sons and by the Frank C. Sullivan Irrevocable Trust is
attributed to Mr. Sullivan pursuant to Commission rules.
(14) 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
758,325 Common Shares which he owns directly, 118,375 Common Shares which
are owned by his wife, 82,500 Common Shares owned by the Thomas C. Sullivan
Family Foundation, Inc., of which Mr. Sullivan serves as Co-Trustee,
620,586 Common Shares which he has the right to acquire within 60 days
after May 31, 1999 through the exercise of stock options, and approximately
1,173 Common Shares held by Key Trust Company of Ohio, N.A., as trustee of
the RPM, Inc. 401(k) Plan, which represents Mr. Sullivan's approximate
percentage ownership of the total Common Shares held in the RPM, Inc.
401(k) Plan as of May 31, 1999. The ownership of the shares held by his
wife and by the Thomas C. Sullivan Family Foundation, Inc. is attributed to
Mr. Sullivan pursuant to Commission rules.
(15) Dr. Thornton is a nominee for election to the Board of Directors at this
year's Annual Meeting to fill the vacancy created by the decision of Mr.
John H. Morris, Jr. not to stand for reelection as a Director.
(16) The number of Common Shares shown as beneficially owned by the Company's
Directors and executive officers as a group on May 31, 1999 includes
1,633,651 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, and approximately 9,785 Common Shares held by
Key Trust Company of Ohio, N.A., as trustee of the RPM, Inc. 401(k) Plan,
which represents the group's approximate percentage ownership of the total
Common Shares held in the RPM, Inc. 401(k) Plan as of May 31, 1999.
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 III 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 III at this year's Annual Meeting will expire at the time of
the Annual Meeting held in 2002. Each Director in Class III 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 III
are Dr. Jerry Sue Thornton and Messrs. Max D. Amstutz, E. Bradley Jones and
Albert B. Ratner. Messrs. Amstutz, Jones and Ratner currently serve as Directors
in Class III. Mr. John H. Morris, Jr., who currently serves as a Director in
Class III, has decided not to seek reelection to the Board in connection with
his retirement from RPM on November 30, 1999. Dr. Thornton is nominated for
election as a Director in Class III to fill the position on the Board currently
held by Mr. Morris.
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 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.
5
<PAGE> 9
<TABLE>
<S> <C> <C>
NOMINEES FOR ELECTION
Dr. Max D. Amstutz photo
DR. MAX D. AMSTUTZ, age 70 -- Director since February 1995.
Chairman and Chief Executive Officer since 1994 of Von Roll Holding
Ltd., a designer and manufacturer of environmental technology prod-
ucts, electrotechnical and industrial insulation systems and industrial
metal specialities, and Vice Chairman of Alusuisse--Lonza Holding Ltd.
since 1988. Dr. Amstutz received his degree in Business Adminis-
tration and a Doctorate of Economics from the University of Berne,
Switzerland. Dr. Amstutz is a Director of Holderbank Financiere Glaris
Ltd., a world leader in cement, concrete and aggregates and formerly
RPM, Inc.'s 50-50 joint venture partner in The Euclid Chemical Company.
COMMON SHARES BENEFICIALLY OWNED: 24,843 NOMINEE FOR CLASS III
(TERM EXPIRING IN 2002)
E. BRADLEY JONES PHOTO
E. BRADLEY JONES, age 71 -- Director since 1990.
Retired Chairman and Chief Executive Officer of Republic Steel Corpo-
ration, 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., CSX Corporation, and Birmingham
Steel Corporation, and is a Trustee of Fidelity Funds.
COMMON SHARES BENEFICIALLY OWNED: 11,893 NOMINEE FOR CLASS III
(TERM EXPIRING IN 2002)
</TABLE>
6
<PAGE> 10
<TABLE>
<S> <C> <C>
ALBERT B. RATNER PHOTO
ALBERT B. RATNER, age 71 -- Director since 1996.
Co-Chairman of the Board of Forest City Enterprises, Inc., a conglom-
erate corporation engaged in real estate development, sales, invest-
ment, construction and lumber wholesale. Mr. Ratner received his B.S.
degree from Michigan State University. Mr. Ratner is also a Director of
American Greetings Corporation.
COMMON SHARES BENEFICIALLY OWNED: 6,250 NOMINEE FOR CLASS III
(TERM EXPIRING IN 2002)
JERRY SUE THORNTON PHOTO
JERRY SUE THORNTON, age 52 -- Nominee for Director.
President of Cuyahoga Community College since 1992. From 1985 to 1992,
Dr. Thornton served as President of Lakewood Community College in White
Bear Lake, Minnesota. She received her Ph.D. from the University of
Texas at Austin and her M.A. and B.A. from Murray State University. Dr.
Thornton is also a Director of National City Bank, BridgeStreet
Accommodations, Inc. and Applied Industrial Technologies, Inc.
COMMON SHARES BENEFICIALLY OWNED: 0 NOMINEE FOR CLASS III
(TERM EXPIRING IN 2002)
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER ANNUAL MEETING
Lorrie Gustin photo
LORRIE GUSTIN, age 72 -- 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.
COMMON SHARES BENEFICIALLY OWNED: 1,639 DIRECTOR IN CLASS II
(TERM EXPIRES IN 2000)
</TABLE>
7
<PAGE> 11
<TABLE>
<S> <C> <C>
JAMES A. KARMAN PHOTO
JAMES A. KARMAN, age 62 -- Director since 1963.
Vice Chairman, RPM, Inc. Mr. Karman holds a B.S. degree from Miami
University (Ohio) and an M.B.A. degree from the University of Wiscon-
sin. Mr. Karman taught corporate finance at the University of Wiscon-
sin 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. Mr. Karman served as President and Chief
Operating Officer of RPM, Inc. from 1978 to 1999. Mr. Karman was
elected Vice Chairman in August 1999. Mr. Karman also was Chief
Financial Officer of RPM, Inc. from 1982 until 1993. Mr. Karman is a
Director of A. Schulman, Inc., Metropolitan Financial Corp., and Shiloh
Industries, Inc.
COMMON SHARES BENEFICIALLY OWNED: 922,554 DIRECTOR IN CLASS II
(TERM EXPIRES IN 2000)
DONALD K. MILLER PHOTO
DONALD K. MILLER, age 67 -- Director since 1972.
Chairman of Axiom International Investor LLC, an international equity
asset management firm, since July 1999. From January 1992 to December
1997, Mr. Miller was Chairman of Greylock Financial Inc., a venture
capital firm. 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 served as a Director of PIMCO Advisors, L.P. from November 1994
to December 1997. Mr. Miller is a Director of Layne Christensen
Company, a successor corporation to Christensen Boyles Corporation, a
supplier of mining products and services, where Mr. Miller served as
Chairman from January 1987 through December 1995. 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 is also a Director of Huffy Corporation.
COMMON SHARES BENEFICIALLY OWNED: 32,949 DIRECTOR IN CLASS II
(TERM EXPIRES IN 2000)
</TABLE>
8
<PAGE> 12
<TABLE>
<S> <C> <C>
KEVIN O'DONNELL PHOTO
KEVIN O'DONNELL, age 74 -- Director since 1979.
Managing Director since August 1994 of O'Donnell & Associates, a
management consulting company. 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.
COMMON SHARES BENEFICIALLY OWNED: 16,028 DIRECTOR IN CLASS II
(TERM EXPIRES IN 2000)
EDWARD B. BRANDON PHOTO
EDWARD B. BRANDON, age 67 -- Director since 1989.
Retired 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 retired
from National City Corporation in October 1995, however, he remains on
the Corporation's Board of Directors. Mr. Brandon is also a Director of
The Standard Products Company.
COMMON SHARES BENEFICIALLY OWNED: 17,187 DIRECTOR IN CLASS I
(TERM EXPIRES IN 2001)
</TABLE>
9
<PAGE> 13
<TABLE>
<S> <C> <C>
WILLIAM A. PAPENBROCK PHOTO
WILLIAM A. PAPENBROCK, age 60 -- Director since 1972.
Partner, Calfee, Halter & Griswold LLP, Attorneys-at-law. Mr. Papen-
brock 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 Chief Justice Taft
of the Ohio Supreme Court, Mr. Papenbrock joined Calfee, Halter &
Griswold LLP as an attorney in 1964. He became a partner of the firm in
1969 and is the past Vice Chairman of the firm's Executive Committee.
Calfee, Halter & Griswold LLP serves as counsel to the Company.
COMMON SHARES BENEFICIALLY OWNED: 16,650 DIRECTOR IN CLASS I
(TERM EXPIRES IN 2001)
THOMAS C. SULLIVAN PHOTO
THOMAS C. SULLIVAN, age 62 -- 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, Huffy Corporation and Kaydon Corporation.
COMMON SHARES BENEFICIALLY OWNED: 1,580,959 DIRECTOR IN CLASS I
(TERM EXPIRES IN 2001)
FRANK C. SULLIVAN PHOTO
FRANK C. SULLIVAN, age 38 -- Director since 1995.
President, 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 Na-
tional 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, Chief Financial Officer in 1993, was elected Executive Vice
President in 1995 and was elected President in August 1999.
COMMON SHARES BENEFICIALLY OWNED: 264,519 DIRECTOR IN CLASS I
(TERM EXPIRES IN 2001)
</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 administers the Company's Stock Option Plans, Incentive
Compensation Plan, and Restricted Stock Plan, and reviews and determines the
salary and bonus 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, 1999 in parentheses:
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION AUDIT
COMMITTEE(2) COMMITTEE(3) COMMITTEE(2)
------------ ------------ ------------
<S> <C> <C>
Thomas C. Sullivan Edward B. Brandon Donald K. Miller
(Chairman) (Chairman) (Chairman)
James A. Karman Kevin O'Donnell E. Bradley Jones
Kevin O'Donnell Albert B. Ratner Lorrie Gustin
Edward B. Brandon Max D. Amstutz
E. Bradley Jones
</TABLE>
The Board of Directors held five (5) meetings during the fiscal year ended
May 31, 1999. Except for Dr. Amstutz, 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.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
On December 30, 1998, with the approval of the Board of Directors, the
Company purchased a parcel of land (38.7 acres) adjacent to the Company's
headquarters in Medina, Ohio from the Estate of Margaret M. Sullivan, who passed
away August 23, 1997. Mrs. Sullivan was the wife of RPM's founder Frank C.
Sullivan (deceased 1971), and the mother of Thomas C. Sullivan,
11
<PAGE> 15
Chairman and Chief Executive Officer of the Company. The purchase price for the
land was $160,000. An appraiser was appointed by the Cuyahoga County Probate
Court to provide an independent appraisal of the value of the land. This
appraisal served as the basis for the purchase price. Thomas C. Sullivan is a
Co-Executor of the Estate along with National City Bank and Mr. Sullivan had an
interest in the land as a beneficiary of the Estate.
EXECUTIVE COMPENSATION
Set forth below is information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended May 31, 1999, 1998 and 1997, of those persons who were, at May 31, 1999:
(i) the Chief Executive Officer; and (ii) the other four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------ RESTRICTED
COMPENSATION SECURITIES STOCK PLAN ALL OTHER
NAME AND ---------------------------- UNDERLYING GRANTS/ COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(1) DOLLAR VALUE(2) (3)(4)
------------------ ---- ------ ----- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Sullivan 1999 $825,000 $508,000 0 $473,263 $21,708
Chairman of the Board 1998 $785,000 $508,000 500,000(5) $651,813 $22,084
and Chief Executive 1997 $745,000 $462,000 78,750 0 $16,077
Officer
James A. Karman 1999 $650,000 $420,000 0 $376,724 $33,057
President and Chief 1998 $620,000 $420,000 343,750(5) $523,364 $32,044
Operating Officer(6) 1997 $590,000 $382,000 62,500 0 $28,862
Frank C. Sullivan 1999 $330,000 $220,000 40,000 $ 33,603 $ 6,835
Executive Vice President 1998 $300,000 $220,000 43,750 $ 38,504 $ 9,667
and Chief Financial 1997 $265,000 $200,000 38,750 0 $ 3,677
Officer(7)
John H. Morris, Jr. 1999 $380,000 $290,000 40,000 $121,960 $15,571
Executive Vice 1998 $365,000 $290,000 43,750 $168,282 $16,373
President(8) 1997 $350,000 $264,000 38,750 0 $ 8,259
Kenneth M. Evans 1999 $300,000 $220,000 0 0 $ 6,262
Executive 1998 $ 25,000 $ 0 30,000 0 0
Vice President(9) 1997 -- -- -- -- --
</TABLE>
- ------------------
(1) Figures reported for fiscal years 1997 have been adjusted to reflect the
5-for-4 stock dividend in December 1997.
(2) Dollar value for the fiscal year ended May 31, 1999 calculated by
multiplying the number of restricted shares granted pursuant to the
Company's 1997 Restricted Stock Plan (Mr. Thomas C. Sullivan -- 31,816
Common Shares, Mr. Karman -- 25,326 Common Shares, Mr. Morris -- 8,199
Common Shares, and Mr. Frank C. Sullivan -- 2,259 Common Shares) by the
closing price of $14.875 on October 9, 1998, the effective date of grant.
The dollar value for the fiscal year ended May 31, 1998 was calculated by
multiplying the restated number of restricted shares granted pursuant to the
Company's 1997 Restated Stock Plan (Mr. Thomas C. Sullivan -- 39,866 Common
Shares, Mr. Karman -- 32,010 Common Shares, Mr. Morris -- 10,292 Common
Shares, and Mr. Frank C. Sullivan -- 2,355 Common Shares) by the restated
closing price of $16.35 on October 17, 1997, the effective date of grant. At
the end of fiscal year ended May 31, 1999, the number and value (based upon
the closing price of May 28, 1999 of $13.875) of the aggregate restricted
stock holdings were as follows: Mr. Thomas C. Sullivan -- 71,682 Common
Shares -- $994,588; Mr. Karman -- 57,336 Common Shares -- $795,537; Mr.
Morris -- 18,491 Common Shares -- $256,563; and Mr. Frank C.
Sullivan -- 4,614 Common Shares -- $64,019. Dividends are paid
12
<PAGE> 16
on restricted stock as and when dividends are paid on Common Shares. None of
the restricted stock awards reported on the Summary Compensation Table are
scheduled to vest within three years from the respective date of grant. With
respect to Mr. Morris, see "Compensation Committee Report on Executive
Compensation" below.
(3) All Other Compensation consists of (i) insurance premiums paid by the
Company in connection with split dollar and other executive life insurance
policies and (ii) in fiscal 1999, the value (Mr. Thomas C. Sullivan $4,800,
Mr. Karman $4,800, Mr. Morris $4,988, Mr. Frank C. Sullivan $5,175, and Mr.
Evans $5,250) of the Company's matching contributions, in the form of Common
Shares, to the RPM, Inc. 401(k) Plan relating to before-tax contributions
made by the Named Executive Officers. In fiscal 1998 and 1997, the value of
the Company's matching contributions, in the form of Common Shares, to the
RPM, Inc. 401(k) Plan for each of the Named Executive Officers were as
follows: Mr. Thomas C. Sullivan $9,750 (1998) and $2,375 (1997); Mr. Karman
$9,750 (1998) and $2,375 (1997); Mr. Morris $9,313 (1998) and $2,375 (1997);
and Mr. Frank C. Sullivan $8,500 (1998) and $2,375 (1997).
(4) All Other Compensation includes the following amounts equal to the full
dollar economic value of the premiums paid by the Company in connection with
life insurance policies issued pursuant to the Split Dollar Life Insurance
Agreements between the Company and the following named Executive Officers
during 1999, 1998 and 1997, respectively: Mr. Thomas C. Sullivan $11,316
(1999), $10,852 (1998) and $9,420 (1997); Mr. Karman $20,191 (1999), $20,710
(1998) and $7,530 (1997); Mr. Morris $6,800 (1999), $6,029 (1998) and $3,488
(1997); Mr. Frank C. Sullivan $906 (1999), $871 (1998) and $710 (1997); and
Mr. Evans $1,012 (1999). The premiums paid by the Company in connection with
the life insurance policies issued pursuant to such Split Dollar Life
Insurance Agreements set forth in the preceding sentence will be recovered
in full by the Company upon the payment of any death benefits under any such
life insurance policy.
(5) One time final option grants awarded in July, 1997, as adjusted for the
5-for-4 stock dividend in December 1997, to Mr. Sullivan and Mr. Karman in
anticipation of their expected retirement on May 31, 2002. The options vest
25% per year starting in July 1998 through 2001.
(6) Mr. Karman was elected Vice Chairman of the Company in August 1999.
(7) Mr. Sullivan was elected President of the Company in August 1999.
(8) Mr. Morris will retire on November 30, 1999 and will no longer be Executive
Vice President.
(9) Mr. Evans' employment with the Company commenced in May 1998. Mr. Evans is
no longer a Board elected Executive Officer as of August 1999.
13
<PAGE> 17
OPTION GRANTS
Shown below is information on grants of stock options pursuant to the
Company's 1996 Stock Option Plan during the fiscal year ended May 31, 1999 to
the executive officers who are named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
- --------------------------------------------------------------------------------------- VALUE AT ASSUMED
PERCENTAGE ANNUAL RATES OF
OF TOTAL STOCK PRICE
OPTIONS APPRECIATION
NUMBER OF GRANTED TO FOR OPTION
SECURITIES EMPLOYEES EXERCISE OR TERMS(3)(4)
UNDERLYING IN FISCAL BASE PRICE EXPIRATION -----------------------
NAME OPTIONS(1) YEAR (PER SHARE)(2) DATE 5% 10%
---- ---------- ---------- -------------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Sullivan 0 -- N/A N/A N/A N/A
Chairman of the Board
and Chief Executive Officer
James A. Karman 0 -- N/A N/A N/A N/A
President and Chief Operating
Officer(5)
Frank C. Sullivan 40,000 5.5% $16.125 7/15/2008 $405,637 $1,027,964
Executive Vice President and
Chief Financial Officer(6)
John H. Morris, Jr.(7) 40,000 5.5% $16.125 7/15/2008 $405,637 $1,027,964
Executive Vice President
Kenneth M. Evans 0 -- N/A N/A N/A N/A
Executive Vice President(8)
</TABLE>
- ---------------
(1) The option agreements relating to the options granted under the Company's
1996 Stock Option Plan provide that such options become fully vested upon
certain "changes in control" of the Company described in such option
agreements. Twenty-five percent of the shares subject to the option become
exercisable on each anniversary date thereof.
(2) This price represents the fair market value at the date of grant pursuant to
the terms of the Company's 1996 Stock Option Plan.
(3) 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>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERMS
-------------------------------
5% 10%
-------------- --------------
<S> <C> <C> <C>
(4) Value created for all shareholders: $ 954,986,705 $2,420,123,810
Gain of named executive officers as a percent of value
created for all shareholders: 0.08% 0.08%
</TABLE>
(5) Mr. Karman was elected Vice Chairman in August 1999.
(6) Mr. Sullivan was elected President in August 1999.
(7) As part of Mr. Morris' retirement program approved in August 1999, all of
his outstanding Stock Options will become vested. See "Compensation
Committee Report on Executive Compensation" below.
(8) Mr. Evans is no longer a Board elected Executive Officer as of August 1999.
14
<PAGE> 18
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, 1999 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, 1999 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, 1999 OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT MAY 31, 1999 AT MAY 31, 1999(2)
NUMBER OF --------------------------- ---------------------------
SHARES
ACQUIRED VALUE
ON REALIZED
NAME EXERCISE (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Sullivan -- -- 456,367 433,908 $1,016,100 $ 97,950
Chairman of the Board and
Chief Executive Officer
James A. Karman -- -- 313,827 304,690 $ 679,576 $ 77,894
President and Chief
Operating Officer(3)
Frank C. Sullivan 5,860 $ 42,198 112,733 101,956 $ 248,645 $ 48,392
Executive Vice President and
Chief Financial Officer(4)
John H. Morris, Jr.(5) 10,180 $ 79,391 148,530 101,956 $ 367,215 $ 48,392
Executive Vice President
Kenneth M. Evans(6) -- -- 7,500 22,500 $ 0 $ 0
Executive Vice President
</TABLE>
- ---------------
(1) Represents the difference between the option exercise price and the last
sales price of a Common Share on the New York Stock Exchange on the date of
exercise.
(2) Based on the last sales price of the Common Shares of $13.875 on the New
York Stock Exchange on May 28, 1999 (the last trading day of the Company's
fiscal year ended May 31, 1999). 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.
(3) Mr. Karman was elected Vice Chairman in August 1999.
(4) Mr. Sullivan was elected President in August 1999.
(5) As part of Mr. Morris' retirement program approved in August 1999, all of
his outstanding stock options will become vested. See "Compensation
Committee Report on Executive Compensation" below.
(6) Mr. Evans is no longer a Board elected Executive Officer as of August 1999.
15
<PAGE> 19
EMPLOYMENT AGREEMENTS
Under an Amended Employment Agreement, dated as of August 5, 1999, Thomas
C. Sullivan is employed as Chairman of the Board and Chief Executive Officer of
the Company for a three-year period ending May 31, 2002. Mr. Sullivan has
advised the Compensation Committee that both he and Mr. James A. Karman, Vice
Chairman, presently intend to retire as executive officers of the Company when
their Agreements terminate on May 31, 2002. Pursuant to the terms of the
Agreement, Mr. Sullivan's annual base salary, effective as of June 1, 1999, is
$870,000. 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 under the 1995 Incentive
Compensation Plan 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 five, 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 $4,350,000. 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 August 5, 1999, James A.
Karman is employed as Vice Chairman of the Company for a three-year period
ending May 31, 2002. Pursuant to the terms of the Agreement, Mr. Karman's annual
base salary, effective as of June 1, 1999, is $685,000. 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 $3,425,000.
Effective August 5, 1999, the Company amended an Employment Agreement
previously entered into with Frank C. Sullivan. Pursuant to this Employment
Agreement, Mr. Sullivan is employed as President for a one-year period ending
July 31, 2000. Mr. Sullivan's Employment Agreement provides a base salary of
$430,000 effective June 1, 1999. Mr. Sullivan's Employment Agreement also
provides for severance payments in the amount of one year's base salary in the
event of termination of his employment and three years' base salary in the event
of termination of his employment due to a Change of Control of the Company not
approved by the Company's Board of Directors. The Employment Agreement contains
the same provision for the recovery of legal fees incurred to enforce the
provisions of the Agreement following a Change of Control as described above in
connection with Mr. Thomas C. Sullivan's Agreement.
16
<PAGE> 20
In fiscal 1999, Mr. Kenneth M. Evans and Mr. John H. Morris, Jr. were
employed by the Company under Employment Agreements dated June 16, 1998 and July
15, 1998, respectively. Pursuant to these Employment Agreements, Messrs. Evans
and Morris were employed as Executive Vice Presidents of the Company for a
period ending July 31, 1999 and provided for the following base salaries, Mr.
Evans -- $300,000 and Mr. Morris -- $380,000. The Employment Agreements provided
for severance payments similar to those as described in connection with Mr.
Frank C. Sullivan's Agreement, and contained the same provisions for the
recovery of legal fees incurred to enforce the provisions of the Agreement
following a Change of Control as described above in connection with Mr. Thomas
C. Sullivan's Agreement. As of August 5, 1999, Mr. Evans is no longer a Board
elected Executive Officer of the Company. Mr. Morris has elected to take early
retirement effective November 30, 1999.
DEFINED BENEFIT PENSION PLAN
The table below sets forth the normal annual retirement benefits payable
upon retirement at age 65 (as of June 1, 1999) 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, 1999) 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> <C>
$ 100,000 $ 5,902 $ 11,803 $ 23,607 $ 35,410 $ 37,562
150,000 9,384 18,768 37,535 56,303 60,062
200,000 12,866 25,732 51,464 77,196 82,562
250,000 16,348 32,696 65,392 98,088 105,062
300,000 19,830 39,660 79,321 118,981 127,562
350,000 23,312 46,625 93,249 139,874 150,062
400,000 26,795 53,589 107,178 160,767 172,562
450,000 30,277 60,553 121,107 181,660 195,062
500,000 33,759 67,518 135,035 202,553 217,562
550,000 37,241 74,482 148,964 223,446 240,062
600,000 40,723 81,446 162,892 244,338 262,562
650,000 44,205 88,410 176,821 265,231 285,062
700,000 47,687 95,375 190,749 286,124 307,562
750,000 51,170 102,339 204,678 307,017 330,062
800,000 54,652 109,303 218,607 327,910 352,562
850,000 58,134 116,268 232,535 348,803 375,062
900,000 61,616 123,232 246,464 369,696 397,562
950,000 65,098 130,196 260,392 390,588 420,062
1,000,000 68,580 137,160 274,321 411,481 442,562
1,050,000 72,062 144,125 288,249 432,374 465,062
1,100,000 75,545 151,089 302,178 453,267 487,562
1,150,000 79,027 158,053 316,107 474,160 510,062
1,200,000 82,509 165,018 330,035 495,053 532,562
1,250,000 85,991 171,982 343,964 515,946 555,062
</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
$160,000 and the maximum annual benefit payable under the Retirement Plan to
$130,000. Prior to June 1, 1997, the Company maintained a cash Benefit
Restoration Plan for its executive officers and certain subsidiary
presidents providing for the payment of supplemental retirement benefits
17
<PAGE> 21
because of such Internal Revenue Code limits. See "Benefit Restoration Plan"
below. At the October 1997 Annual Shareholders Meeting, the shareholders
approved the adoption of the RPM, Inc. 1997 Restricted Stock Plan. The
Benefit Restoration Plan was frozen as of June 1, 1998 and will be
eliminated over time.
(2) Includes base compensation as in effect on June 1, 1999, overtime and
commissions 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.
With respect to the executive officers listed in the Summary Compensation
Table: Mr. Thomas C. Sullivan has 37.4 years of benefit service; Mr. Karman,
36.4 years of service; Mr. Morris, 22.4 years of service; Mr. Frank C. Sullivan,
10.3 years of service; and Mr. Evans, 1.1 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. Thomas C. Sullivan, James A. Karman and John H.
Morris, Jr. as participants in the Benefit Restoration Plan. In July 1993, the
Board of Directors also designated Mr. 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 cash 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 equal to the cash
benefits at the time such cash benefits are paid to a participant.
RESTRICTED STOCK PLAN
At the October 1997 Annual Shareholders Meeting, the shareholders approved
the adoption of the 1997 Restricted Stock Plan (the "Restricted Stock Plan").
The purpose of the Restricted Stock Plan is to replace, over a period of time,
the cash based Benefit Restoration Plan with a stock based plan. Shares granted
under the Restricted Stock Plan (the "Restricted Shares") directly reduce and
replace the cash amount of supplemental retirement restoration benefits and
supplemental death restoration benefits owed to participants under the Benefit
Restoration Plan. The Restricted Stock Plan is administered by the Compensation
Committee of the Board of Directors, which has the exclusive right and sole
discretion to authorize the granting of Restricted Shares. Only employees of the
Company, including employee Directors who are not members of the Compensation
Committee, are eligible to participate in the Restricted Stock Plan. The Company
is permitted to take a tax deduction for the value of the Restricted Shares upon
the vesting of such shares. The Restricted Stock Plan will expire on May 31,
2007 or such earlier date as may be determined by the Board of Directors.
18
<PAGE> 22
The Restricted Shares are Common Shares of the Company which are
forfeitable and nontransferable for a specified period of time. The transfer
restrictions remain in place until the earliest of (a) the later of either the
employee's termination of employment or the lapse of forfeiture restrictions,
(b) a "change of control" with respect to the Company, as such term is defined
in the Restricted Stock Plan, or (c) the termination of the Restricted Stock
Plan. The Restricted Shares are subject to complete forfeiture until the
earliest to occur of (a) the later of either the employee's attainment at age 55
or the fifth anniversary of the May 31st immediately preceding the date on which
the Restricted Shares were awarded, (b) the retirement of the employee on or
after the attainment of age 65, or (c) a "change in control" with respect to the
Company, as such is defined in the Restricted Stock Plan. Notwithstanding the
above, if the employee's service to the Company is terminated on account of the
death or total disability prior to the lapsing of restrictions, such
restrictions shall lapse.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors administers the cash
salary, bonus, and other incentive 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. Each member of the Compensation
Committee qualifies as a "non-employee director" within the definition of Rule
16b-3 under the Securities Exchange Act of 1934 and as an "outside director"
within the meaning of Section 162(m) of the Internal Revenue Code.
The Compensation Committee reviews and recommends the cash salaries,
incentive compensation, and bonuses to be awarded to Thomas C. Sullivan,
Chairman of the Board and Chief Executive Officer, and certain other executive
officers, annually in July or August of each year based upon a number of
factors, but the Committee does not utilize pre-established, specific
performance goals in making cash salary 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.
Any increases in cash salaries for Mr. Sullivan and the other executive officers
are made retroactive to
19
<PAGE> 23
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.
In 1995, the Company retained a professional compensation consulting firm
to review the Company's executive compensation programs in light of 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. The
consulting firm eventually recommended to the Compensation Committee a
performance-based Incentive Compensation Plan (the "Plan") which would satisfy
the requirements of Section 162(m). The Plan was approved by the Committee and
the Board of Directors in July 1995 and was approved by the Company's
shareholders at the October 1995 Annual Shareholders Meeting.
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, 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.
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) of the Internal Revenue Code as
"performance-based" compensation and therefore be fully tax deductible to the
Company.
In August 1998, the Compensation Committee determined 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, 1999 as follows: Thomas C. Sullivan, 30%; James A. Karman, 25%; John H.
Morris, Jr., 15%; Frank C. Sullivan, 15%; and Kenneth M. Evans, 15%. The
Compensation Committee will follow the same procedure in 1999 as in 1998.
However, for the fiscal year ending May 31, 2000, neither Mr. Morris, Jr. nor
Mr. Evans will
20
<PAGE> 24
participate in the Bonus Award pool under the Plan since Mr. Morris, Jr. has
elected to take early retirement effective November 30, 1999 and Mr. Evans is no
longer a Board elected Executive Officer as of August 5, 1999.
For fiscal year May 31, 1999, the Company's pre-tax income was $159.6
million, and consequently the Bonus Award pool for the five highest paid
executive officers totaled $2,074,000. However, upon the recommendation of Mr.
Thomas C. Sullivan, the Compensation Committee awarded bonuses totaling only
$1,638,000 to such officers, and in each case the bonus awarded to each officer
was less than the bonus which would have been obtained by multiplying each
officer's percentage times the total allowable Bonus Award pool provided for
under the Plan. See "Executive Compensation -- Summary Compensation Table."
The Company's 1996 Key Employees 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 subsidiaries submit recommendations with respect to option
grants to subsidiary employees. Options are granted at the last sales price on
the date of grant, have a term of ten years, and vest at the rate of 25% per
year after one year.
As of May 31, 1999, 2,134,000 shares were available for future grant under
the 1996 Key Employees Stock Option Plan. The Compensation Committee at its
August 3, 1999 meeting granted options totaling 425,000 shares to executive
officers and other key employees of the Company and two subsidiaries (Tremco
Ltd. in Canada and DAP Products Inc.) and, in addition, it is contemplated that
approximately an additional 425,000 shares will be granted in October 1999 to
subsidiary presidents and key subsidiary employees.
In August 1999, the Compensation Committee and Board of Directors approved
the terms of a retirement program for Mr. John H. Morris, Jr., Executive Vice
President of the Company, who will retire effective November 30, 1999. As part
of this program, Mr. Morris will receive a payment of two (2) times a base
salary of $390,000, vesting of all of his outstanding stock options (Mr. Morris
did not receive any of the stock options awarded on August 3, 1999), medical
benefits until age 65 under certain circumstances, and credit to age 62 under
the Company's cash Benefit Restoration Plan and Pension Plan which will result
in a lump sum payment of no less than $2,241,500. Mr. Morris has agreed to
forfeit all previous stock awards to him totaling 18,491 shares under the
Company's Restricted Stock Plan.
The Company does not have any "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 the Company's 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.
Edward B. Brandon, Chairman
Kevin O'Donnell
Albert B. Ratner
21
<PAGE> 25
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, H. B. Fuller Company, Imperial Chemical
Industries PLC, Lawter International, Inc., Lilly Industries, Inc., NL
Industries, Inc., PPG Industries Inc., Rohm and Haas 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 respective peer group index
was $100 on May 31, 1994 and May 31, 1989, respectively, and that all dividends,
if any, were reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG RPM, INC., THE S&P 500 INDEX AND
A PEER GROUP
<TABLE>
<CAPTION>
RPM, INC. PEER GROUP S & P 500
--------- ---------- ---------
<S> <C> <C> <C>
'5/94' 100.00 100.00 100.00
'5/95' 114.00 110.00 120.00
'5/96' 122.00 128.00 154.00
'5/97' 144.00 153.00 200.00
'5/98' 166.00 197.00 261.00
'5/99' 140.00 166.00 316.00
</TABLE>
* $100 INVESTED ON 05/31/94 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING MAY 31.
22
<PAGE> 26
COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN*
AMONG RPM, INC., THE S&P 500 INDEX AND
A PEER GROUP
<TABLE>
<CAPTION>
RPM, INC. PEER GROUP S & P 500
--------- ---------- ---------
<S> <C> <C> <C>
'5/89' 100.00 100.00 100.00
'5/90' 129.00 105.00 117.00
'5/91' 168.00 126.00 130.00
'5/92' 177.00 159.00 143.00
'5/93' 221.00 171.00 160.00
'5/94' 223.00 182.00 167.00
'5/95' 254.00 201.00 200.00
'5/96' 273.00 233.00 257.00
'5/97' 322.00 277.00 333.00
'5/98' 370.00 358.00 435.00
'5/99' 312.00 300.00 527.00
</TABLE>
* $100 INVESTED ON 05/31/89 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING MAY 31.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
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, 1999, except for the inadvertent late
filing of a Form 3 with respect to the election of Gordon M. Hyde as an
Executive Officer of the Company on April 28, 1999. On June 4, 1999, Mr. Hyde
filed a Form 3 reporting that he did not beneficially own any securities of the
Company.
23
<PAGE> 27
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected the firm of Ciulla,
Smith & Dale, LLP, independent certified public accountants, to examine and
audit the financial statements of the Company and its subsidiaries for the
fiscal year ending May 31, 2000. This firm has served as independent auditors
for the Company since 1964. A representative of Ciulla, Smith & Dale, LLP 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.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any shareholder proposal intended to be presented at the 2000 Annual
Meeting of Shareholders must be received by the Company's Secretary at its
principal executive offices not later than May 3, 2000 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.
The Company may use its discretion in voting Proxies with respect to
Shareholder proposals not included in the Proxy Statement for the Fiscal Year
ended May 31, 2000, unless the Company receives notice of such proposals prior
to July 14, 2000.
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.
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:
P. Kelly Tompkins, 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.
P. KELLY TOMPKINS
Secretary
August 31, 1999
24
<PAGE> 28
PROXY PROXY
RPM, INC.
ANNUAL MEETING OF SHAREHOLDERS -- OCTOBER 8, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (i) appoints JAMES A. KARMAN and FRANK C. SULLIVAN, 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 Holiday Inn Select located at Interstate 71 and Route 82 East,
Strongsville, Ohio, on Friday, October 8, 1999 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 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.
Election of Directors, Nominees:
Dr. Max D. Amstutz,
E. Bradley Jones,
Albert B. Ratner,
Dr. Jerry Sue Thornton
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN
THIS CARD.
................................................................................
DETACH CARD
DIRECTIONS TO THE HOLIDAY INN SELECT 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.
DIRECTION MAP
<PAGE> 29
RPM, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING
DARK INK ONLY. [X]
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT
<S> <C> <C> <C> <C>
[ ] [ ] [ ]
1. Election of Directors In their discretion to act on any other
(see reverse) matter or matters which may properly come before
the meeting.
For, except vote withheld from the following
nominee(s): Change of Address (mark box and revise [ ]
pre-printed address as necessary)
---------------------------------------- Will Attend Annual Meeting [ ]
</TABLE>
Date: , 1999
-----------------------
------------------------------
Signature(s)
------------------------------
Signature(s)
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.
................................................................................
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 30
PROXY PROXY
DIRECTION CARD
RPM, INC. 401(K) PLAN (FORMERLY 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. 401(k)
Plan (formerly Retirement Savings Trust and Plan) Trustee to vote Common Shares
held for the undersigned's 401(k) Plan account at the Annual Meeting of
Shareholders of the Company to be held at the Holiday Inn Select located at
Interstate 71 and Route 82 East, Strongsville, Ohio, on Friday, October 8, 1999
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 AND
TO VOTE IN ACCORDANCE WITH ITS DISCRETION ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING. ANY CONFIDENTIAL DIRECTION CARDS WHICH ARE NOT RETURNED
WILL BE VOTED BY THE TRUSTEE OF THE PLAN IN ITS DISCRETION.
<TABLE>
<S> <C>
Election of Directors, Nominees:
Dr. Max D. Amstutz,
E. Bradley Jones,
Albert B. Ratner,
Dr. Jerry Sue Thornton
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE.
................................................................................
FOLD AND DETACH HERE
<PAGE> 31
RPM, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT
<S> <C> <C> <C> <C>
[ ] [ ] [ ]
1. Election of Directors In their discretion to act on any other
(see reverse) matter or matters which may properly come before
the meeting.
For, except vote withheld from the following
nominee(s):
----------------------------------------
PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE
ACCOMPANYING ENVELOPE.
</TABLE>
Date: , 1999
--------------------
------------------------------
Signature(s)
------------------------------
Signature(s)
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.
................................................................................
FOLD AND DETACH HERE
