UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended: December 31, 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from _______________ to _______________
Commission file number 1-14187
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
RPM International Inc. 401(k) Trust and Plan, as amended
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B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
RPM International Inc. 2628 Pearl Road, P.O. Box 777, Medina, Ohio 44258
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RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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FINANCIAL STATEMENTS
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DECEMBER 31, 2002
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CSD CIULLA, SMITH & DALE, LLP - CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditor's Report
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To The Plan Administrator of the
RPM International Inc. 401(k) Trust and Plan
We were engaged to audit the accompanying statement of net assets available for
benefits of the RPM International Inc. 401(k) Trust and Plan, as of December 31,
2002 and 2001, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2002 and the supplemental schedule of
assets held for investment purposes at December 31, 2002. These financial
statements and supplemental schedule are the responsibility of the Plan's
management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, as amended, the plan administrator instructed us not to
perform, and we did not perform, any auditing procedures with respect to the
information summarized in Note C, which was certified by Key Trust Company of
Ohio, N.A., the custodian of the Plan, except for comparing the information with
the related information included in the financial statements and supplemental
schedule. We have been informed by the plan administrator that the custodian
holds the Plan's investment assets and executes investment transactions. The
plan administrator has obtained a certification from the custodian as of
December 31, 2002 and 2001, and for the year ended December 31, 2002, that the
information provided to the plan administrator by the trustee is complete and
accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedule taken as a whole. The form and content of the
information included in the financial statements and schedule other than that
derived from the information certified by the custodian, have been audited by us
in accordance with auditing standards generally accepted in the United States of
America and, in our opinion, are presented in compliance with the Department of
Labor's Rules and Regulations for the Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974, as amended.
/S/ Ciulla, Smith & Dale, LLP
July 10, 2003
Offices in Cleveland, Boston, Detroit and Grand Rapids
6364 Pearl Road - Cleveland, Ohio 44130-3052
Tel. (440) 884-2036 - Fax (440) 884-2048
E-mail: csdohio@covad.net
2
RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
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DECEMBER 31, 2002 AND 2001
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ASSETS 2002 2001
------ ------------ ------------
Investments, at Fair Value $172,209,793 $180,388,277
Receivables
Employer contribution 341,861 328,136
Employee contribution 877,459 844,853
Interest and dividends 295 484
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1,219,615 1,173,473
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Net Assets Available for Benefits $173,429,408 $181,561,750
============ ============
(See notes to financial statements.)
3
RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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FOR THE YEAR ENDED DECEMBER 31, 2002
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Additions to Net Assets Attributable to:
Employer contributions $ 5,203,894
Employee contributions 13,691,310 $ 18,895,204
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Interest and dividend income 2,879,122
Other income 3,862
Realized (loss) on sales of investments (2,590,351)
Unrealized (depreciation) in aggregate
fair value of investments (12,738,486)
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6,449,351
Deductions from Net Assets Attributable to:
Benefit payments to participants (14,042,475)
Administrative expenses (165,537) (14,208,012)
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Net Deductions (7,758,661)
Net Assets Available for Benefits at
Beginning of Year 181,561,750
Assets Transferred to Trustees of
Successor Plans (373,681)
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Net Assets Available for Benefits at
End of Year $173,429,408
============
(See notes to financial statements.)
4
RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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NOTES TO FINANCIAL STATEMENTS
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DECEMBER 31, 2002
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NOTE A - SIGNIFICANT ACCOUNTING POLICIES
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The assets of the Plan, as reflected in the accompanying statements, are
stated at current market value as of the statement date. The Plan has no
investments in assets not having a readily determinable market value.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
NOTE B - DESCRIPTION OF THE PLAN
--------------------------------
The Plan is a defined contribution savings Plan covering substantially all
non-union employees of participating subsidiaries of RPM International Inc.
(the Parent). The Plan is subject to the Employee Retirement Income Security
Act of 1974 (ERISA).
Participating employees may make voluntary contributions up to 20% of
pre-tax annual compensation as defined in the Plan. Prior to June 1, 2002,
participating employees could contribute up to 15% of compensation. The Plan
currently offers eleven investment funds and the employer stock as
investment options for participants. The Company contributes 50% of the
first 6% of compensation that a participant contributes to the Plan. The
matching Company contribution is invested in the same manner that the
participants invest their own contributions. Prior to October 1, 2002, the
matching contribution was invested in RPM International Inc. common stock.
Contributions are subject to certain limitations. Vesting is immediate for
contributions, both employee and employer, and earnings thereon.
Further information may be obtained from the Plan administrator.
NOTE C - CERTIFIED INFORMATION
------------------------------
The Plan's investments are maintained by Key Trust Company of Ohio, N.A. The
Plan administrator has instructed the independent public accountants not to
examine the information certified as complete and accurate by the
trustee/custodian. The trustee/custodian's certification applies to all Plan
assets and transactions for the dates presented.
5
RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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NOTES TO FINANCIAL STATEMENTS
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DECEMBER 31, 2002 Continued
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NOTE D - INVESTMENTS
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The following presents investments at December 31, 2002 and 2001, that
represent 5% or more of the Plan's net assets:
2002 2001
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Victory DCS Money Market Fund $18,185,430 $19,413,583
Victory DCS Magic Fund 10,117,869 **
American Government Securities Fund 11,881,746 **
American Washington Mutual Fund 15,170,170 17,836,730
Fidelity Magellan Fund 21,168,960 29,233,687
Fidelity Contra Fund 19,148,893 22,327,581
Templeton Foreign Fund ** 9,047,888
Janus Balances Fund 16,739,591 18,262,832
Employer Stock Fund 32,263,628 28,714,374*
*Nonparticipant-directed
**Fund balance did not represent 5% of the Plan's net assets.
During 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated in
value by $15,328,837.
Gains(Losses) Gains(Losses) Gains(Losses)
Realized Unrealized Total
------------ ------------ ------------
Common/Collective Trust $ 889,789 $ (184,599) $ 705,190
Mutual Funds (3,678,390) (13,925,891) (17,604,281)
Common Stock 198,250 1,372,004 1,570,254
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$ (2,590,351) $(12,738,486) $(15,328,837)
============ ============ ============
NOTE E - NONPARTICIPANT-DIRECTED INVESTMENTS
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Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed
investments is as follows:
December 31
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2002 2001
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Net Assets:
RPM Int'l Inc. common stock $ $28,714,374
Life insurance 169,731 165,869
Loan fund 4,064,405 4,274,943
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$ 4,234,136 $33,155,186
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Year Ended
December 31,
2002
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Changes in Net Assets:
Contributions $ 3,763,262
Interest and dividends 1,015,531
Other income 3,862
Net appreciation (734,564)
Benefits paid to participants (891,773)
Administrative expenses (29,049)
Transfers to participant-directed
investments (32,048,319)
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$(28,921,050)
(See notes to financial statements)
6
RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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NOTES TO FINANCIAL STATEMENTS
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DECEMBER 31, 2002 Continued
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NOTE F - ASSETS TRANSFERRED TO OTHER PLANS
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During the year ended December 31, 2002 the Plan had transfers to
trustees of successor plans totalling $373,681.
NOTE G - PLAN TERMINATION
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Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA.
NOTE H - INCOME TAX STATUS
--------------------------
The Plan obtained its latest determination letter on September 5, 2002,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the plan administrator and the Plan's
tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal
Revenue code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
NOTE I - DERIVATIVE FINANCIAL INSTRUMENTS
-----------------------------------------
The Plan has no instrument that, in whole or in part, is accounted for
as a derivative instrument under FASB statement No. 133, Accounting for
Derivative Instruments and Hedging Activities during the current Plan
year.
NOTE J - PLAN AMENDMENTS
------------------------
(1) Effective October 1, 2002; matching contributions will be made
in cash rather than Company stock; participants will be able
to direct up to 20% of employee and matching contributions in
Company stock; and participants will be permitted to sell
Company stock at any time.
(2) Effective 9:00 a.m. on October 15, 2002, the name of the trust
and plan was changed to the "RPM International Inc. 401(k)
Trust and Plan".
7
RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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NOTES TO FINANCIAL STATEMENTS
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DECEMBER 31, 2002 Continued
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NOTE J - PLAN AMENDMENTS - Continued
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(3) Effective January 1, 2002, the trust and plan was amended to
bring it into compliance with the Economic Growth and Tax
Relief Reconciliation Act of 2001 and to bring the trust and
plan into compliance with regulations issued by the Department
of Labor regarding claims procedures.
(4) Effective January 1, 2003, the Company will make safe harbor
matching contributions. The matching contribution will be 100%
of the first 3% and 50% of the next 2% of compensation that a
participant contributes to the Plan. Also, age 50 catch-up
contributions will be permitted by the Plan.
NOTE K - SUBSEQUENT EVENTS
--------------------------
Effective March 1, 2003, the Plan's investments will be maintained by
Wachovia Bank, N.A.
8
RPM INTERNATIONAL INC. 401(k) TRUST AND PLAN
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SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
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DECEMBER 31, 2002
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FEDERAL ID #34-6550857 PLAN 011
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Schedule H - Line 4i - Schedule of Assets Held for Investment Purposes
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(a) (b) & (c) (d) (e)
--- --------- --- ---
Current
Identity of Issue & Description Cost Value
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Victory DCS Money Market Fund $ 16,630,887 $ 18,185,430
(Common/Collective Trust)
Victory DCS Magic Fund 9,069,258 10,117,869
(Common/Collective Trust)
E B Money Market Fund 219,910 219,910
(Common/Collective Trust)
American Government Securities Fund 11,378,610 11,881,746
(Mutual Fund)
American Washington Fund 18,072,231 15,170,170
(Mutual Fund)
Fidelity Magellan Fund 28,764,968 21,168,960
(Mutual Fund)
Fidelity Contra Fund 24,050,005 19,148,893
(Mutual Fund)
Franklin Small Cap Fund 7,082,799 4,434,855
(Mutual Fund)
Templeton Foreign Fund 9,719,867 8,317,761
(Mutual Fund)
Victory Stock Index Fund 7,202,906 4,669,309
(Mutual Fund)
Neuberger Berman Genesis Assets Fund 5,671,863 5,657,535
(Mutual Fund)
Janus Balanced Fund 18,783,242 16,739,591
(Mutual Fund)
Employer Stock Fund 24,773,543 32,263,628
(Common Stock)
Northwestern Mutual Life Insurance 169,731 169,731
Participant Loans (5.75% to 10.50%) -0- 4,064,405
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Total $172,209,793
============
See Accountant's Report.
See Notes to Financial Statements.
9
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
RPM INTERNATIONAL INC. 401(K) TRUST AND
PLAN
By: RPM International Inc. (Plan Administrator)
/s/ Ronald A. Rice
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Ronald A. Rice, Senior Vice President -
Administration
Date: July 15, 2003
EXHIBIT INDEX
23.1 Consent of Ciulla, Smith & Dale, LLP