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Notes to Consolidated Financial Statements
May 31, 2003, 2002, 2001 - Page 3
Note D - Common Stock
There are 300,000,000 shares of common stock authorized at May 31, 2003 (200,000,000 at May 31, 2002) with a par value of $0.01 per share (stated value of $.015 per share at May 31, 2002). At May 31, 2003 and 2002, there were 115,496,000 and 114,696,000 shares outstanding, respectively, each of which is entitled to one vote.

Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during each year. To compute diluted earnings per share, the weighted average number of shares of common stock outstanding during each year was increased by common stock options with exercisable prices lower than the average market prices of common stock during each year and reduced by the number of shares assumed to have been purchased with proceeds from the exercised options. The Company’s convertible notes, while potentially dilutive, are not common stock equivalents.

The Company has shares outstanding under two restricted stock plans. Under the terms of the plans, up to 2,563,000 shares may be awarded to certain employees, generally subject to forfeiture until the completion of five or 10 years of service. For the year ended May 31, 2003, 600,000 shares were awarded under these plans, net of forfeitures (138,000 in 2002) and restrictions lapsed on 508,000 shares (3,000 in 2002). At May 31, 2003, 26,000 vested shares remained in these plans (86,000 at May 31, 2002). Unamortized deferred compensation expense with respect to restricted stock grants was $5,231,000 at May 31, 2003 and is being amortized over the 10-year vesting period. For the years ended May 31, 2003, 2002 and 2001, deferred compensation expense aggregated $2,143,000, $1,224,000 and $1,459,000, respectively.

In February 2003, the Company authorized the repurchase of up to 10,000,000 shares of its common stock, 100,000 of which had been repurchased at May 31, 2003. Shares repurchased under this program will be held at cost and included in Stockholders’ Equity as treasury stock.

The Company’s Stockholder Rights Plan provides existing stockholders the right to purchase stock of the Company at a discount in certain circumstances as defined by the Plan. The rights were not exercisable at May 31, 2003 and expire in May 2009.

The Company has options outstanding under two stock option plans, the 1989 Stock Option Plan and the 1996 Key Employees Stock Option Plan, the latter of which provides for the granting of options for up to 9,000,000 shares. These options are generally exercisable cumulatively in equal annual installments commencing one year from the grant date, and have expiration dates ranging from July 2003 to October 2012. At May 31, 2003, 1,902,000 shares (3,093,000 at May 31, 2002) were available for future grant. Transactions during the last two years are summarized as follows:

Financials

The Company has elected to follow APBO No. 25 and related interpretations in accounting for its employee stock options. Under APBO No. 25, because the exercise price of the Company’s employee stock options is not less than the market price of the shares at the date of grant, no compensation expense is recognized in the financial statements. See Note A for pro forma information and the alternative fair value accounting provided for under SFAS No. 123.

Note E - Leases
At May 31, 2003, certain property, plant and equipment were leased by the Company under long-term leases. Certain of these leases provide for increased rental based upon an increase in the cost-of-living index. Future minimum lease commitments as of May 31, 2003 for all non-cancelable leases are detailed in the table on the right:

Rental expenses for all operating leases totaled $24,300,000 in 2003, $23,100,000 in 2002 and $20,500,000 in 2001. Capitalized leases were insignificant for the three years ended May 31, 2003.

Financials
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