Company Name: RPM International, Inc.
Public Availability Date: October 26, 2007
Document Sections:
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
September 27, 2007
VIA FEDERAL EXPRESS
Securities and Exchange Commission
Division of Corporation Finance
100 F. Street, N.E.
Washington, D.C. 20549-3010
Attention: Office of Chief Counsel
Re: RPM International, Inc. (File No. 1-14187) Intention to Omit Shareholder
Proposal of Gerald R. Armstrong under Rule 14a-8(e)
Ladies and Gentlemen:
We represent RPM International, Inc., a Delaware corporation (the "Company").
The purpose of this letter is to notify the Securities and Exchange Commission
(the "Commission") of the Company's decision to exclude from its proxy materials
for the 2007 Annual Meeting of Stockholders (the "2007 Annual Meeting") the
shareholder proposal (the "Shareholder Proposal") submitted by Mr. Gerald R.
Armstrong (the "Proponent"). The Shareholder Proposal is being excluded from the
proxy materials because it was not submitted within the time periods specified
by the Company in accordance with Rule 14a-8(e) under the Securities Exchange
Act of 1934.
A copy of the Shareholder Proposal is attached as Exhibit A to this
correspondence. It should be noted that it is unclear whether the Proponent
intended the Shareholder Proposal to be regarded as a proposal made under Rule
14a-8. Nevertheless, to the extent that the submission involves a Rule 14a-8
issue, the Company requests the assurance from the staff of the Division of
Corporation Finance that it would not recommend an enforcement proceeding with
respect to the Company's exclusion of the Shareholder Proposal from its proxy
materials.
The Shareholder Proposal was sent by the Proponent on September 20, 2007. The
Company filed its definitive Proxy Materials with the Commission on August 20,
2007, and its 2007 Annual Meeting will be held on October 4, 2007.
The deadline for submission of shareholder proposals for the 2007 Annual Meeting
was included in the Company's proxy statement for its 2006 Annual Meeting of
Stockholders. That proxy statement, which was dated August 24, 2006, included
the following statement under the heading "Stockholder Proposals for 2007 Annual
Meeting":
Any stockholder proposal intended to be presented at the 2007 Annual Meeting of
Stockholders must be received by the Company's Secretary at its principal
executive offices not later than April 26, 2007 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
stockholder submitting the proposal and the number of shares of Common Stock
owned. If the proponent is not a stockholder 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 Securities and Exchange
Commission.
Consistent with the requirements of Rule 14a-8(e), the April 26, 2007 date
referenced in the proxy materials is 120 calendar days before the date of the
Company's proxy statement released to stockholders in connection with the
previous year's annual meeting.
The Proponent's shareholder proposal was not received by the Company until
September 24, 2007, or almost five full months past the deadline. It was also
received more than a month after the Company mailed its proxy materials and less
than ten days before the date of the 2007 Annual Meeting.
In a series of no-action letters, the Commission staff has strictly construed
the deadline for receipt of shareholder proposals under Rule 14a-8, and has
consistently permittied companies to omit from proxy materials those proposals
received after the deadline. See, e.g., Internap Network Services Corporation
(July 9, 2007); New York Community Bancorp (August 8, 2007); Datastream Systems,
Inc.(March 9, 2005); American Express Company (December 21, 2004); International
Business Machines Corporation (December 19, 2004); Thomas Industries
Inc.(December 18, 2002).
Rule 14a-8(f) requires that a company notify the proposing shareholder of any
deficiencies in the proposal within 14 days of receipt. However, this
requirement does not apply to a deficiency that cannot be remedied, such as when
the proponent fails "to submit a proposal by the company's properly determined
deadline." As required by Rule 14a-8(j), a copy of this submission is being
simultaneously provided to Mr. Armstrong.
For the reasons outlined above, the Company believes that the Shareholder
Proposal does not meet the timeliness requirements of Rule 14a-8(e)(1), and has
omitted the Shareholder Proposal from its proxy materials for the 2007 Annual
Meeting. We request the assurance of the Commission staff that it would not
recommend enforcement action with respect to the Company's omission of the
Proponent's Shareholder Proposal.
Rule 14a-8(j)(1) requires a registrant to file its statement of objections to
including a shareholder proposal in its proxy materials at least 80 days before
the date on which it filed definitive proxy materials. In light of the fact that
the Company did not receive the Shareholder Proposal until well after that
deadline had past, the Company also requests the staff to waive the 80-day
requirement.
In accordance with the requirements of Rule 14a-8(j), we are enclosing six
copies of this letter and the Shareholder Proposal. If the staff requires any
additional information, please contact John Jenkins at (216) 622-8507 or Thomas
McKee at (216) 622-8420. In the event that the staff disagrees with the
Company's course of action, we would appreciate the opportunity to confer with
the staff before it issues a response to this letter.
Very truly yours,
/s/
CALFEE, HALTER & GRISWOLD LLP
cc: Mr. Gerald R. Armstrong
Edward W. Moore, Esq.
Thomas F. McKee, Esq.
[APPENDIX]
EXHIBIT A
820 Sixteenth Street, No. 705
Denver, Colorado 80202-3227
September 20, 2007
Governance Committee of the Board of Directors
RPM INTERNATIONAL, INC.
Post Office Box 777
Medina, Ohio 44258
Greetings
As a shareholder, I am requesting the attention of the Board of Directors and
its Governance Committee to an issue of governance I deem to be important.
Specifically. I believe that all directors should be elected annually rather
than being elected for three-year terms.
I have taken this position in other corporations where I am a shareholder and
have presented a resolution in their proxy statement to be voted upon by all
shareholders in the annual meeting. Sometimes, it has been voluntarlly adopted
by the board of directors and other times it is presented at the meeting and
voted upon favorably by shareholders. U. S. Bancorp, Associated Banc-Corp, Piper
Jaffray Companies, Fifth-Third Bancorp, Pan Pacific Retail Properties, Qwest
Communications International, Xcel Energy, Greater Bay Bancorp, North Valley
Bancorp, Pacific Continental Corporation, Regions Financial Corporation, CoBiz
Financial Inc., Marshall & Illsley Corporation, and Wintrust Financial, Inc. are
among the corporations which now elect all directors annually because of my
efforts.
During 2007, my proposals for this at KeyCorp passed with 63% of the vote and at
UCBH Holdings, Inc., it had a remarkable 89% of the vote! There is strong
support of the proposal from institutional owners and organizations like
Institutional Shareholder Services.
I believe the election of directors is the strongest way that shareholders can
influence the directors of any corporation. Currently, our board is divided into
three classes with each class serving staggered three-year terms. Because of
this structure, shareholders may only vote for one-third of the directors each
year. This is not in the best interests of shareholders because it reduces
accountability and is an unnecessary take-over defense.
A study by researchers at Harvard Business School and the University of
Pennsylvania's Wharton School titled "Corporate Governance and Equity Prices"
(Quarterly Journal of Economics, February, 2003), reviewed the relationship
between corporate governance practices (including classified boards) and firm
performance. The study found a significant positive link between governance
practices favoring shareholders (such as annual directors elections) and firm
value. This is also documented in many other sources which studied the issue.
I regard as unfounded the concern expressed by some that annual elections for
all directors could leave companies without experienced directors in the event
that all incumbents are voted out by shareholders. In the unlikely event that
shareholders do vote to replace all directors, such a decision would express
dissatisfaction with the incumbent directors and reflect the need for change.
Please let me know your decision on this so that, if necessary, I may present
the shareholder proposal at the proper time.
Thank you for your consideration.
Yours for "Dividends and Democracy,"
/s/
Geraid R. Armstrong, Shareholder
[STAFF REPLY LETTER]
October 26, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: RPM International, Inc. Incoming letter dated September 27, 2007
The submission relates to the annual election of directors.
To the extent the submission involves a rule 14a-8 issue, there appears to be
some basis for your view that RPM may exclude the proposal under rule
14a-8(e)(2) because RPM received it after the deadline for submitting proposals.
Accordingly, we will not recommend enforcement action to the Commission if RPM
omits the proposal from its proxy materials in reliance on rule 14a-8(e)(2).
We note that RPM did not file its statement of objections to including the
submission in its proxy materials at least 80 calendar days before the date on
which it filed definitive proxy materials as required by rule 14a-8(j)(1).
Noting the circumstances of the delay, we grant RPM's request that the 80-day
requirement be waived.
Sincerely,
/s/
Ted Yu
Special Counsel
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