<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
A. SCHULMAN, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
A. SCHULMAN, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: Common
Stock, $1.00 par value
(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:
(4) Proposed maximum aggregate value of transaction:
/ / 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:
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<PAGE> 2
A. SCHULMAN LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of Stockholders of A.
Schulman, Inc. will be held at the Fairlawn Country Club, 200 North Wheaton
Road, Akron, Ohio, on Thursday, December 8, 1994 at 10:00 A.M., local time, for
the purpose of considering and acting upon:
1. The election of three (3) Directors for a three-year term expiring in
1997;
2. The ratification of the selection by the Board of Directors of Price
Waterhouse as independent accountants for the fiscal year ending August
31, 1995; and
3. The transaction of any other business which properly may come before the
meeting and any adjournments thereof.
Stockholders of A. Schulman, Inc. of record at the close of business on
October 24, 1994 are entitled to vote at the Annual Meeting and any adjournments
thereof.
By order of the Board of Directors
JAMES H. BERICK
Secretary
Akron, Ohio
November 11, 1994
***************************************************************************
* *
* YOUR VOTE IS IMPORTANT. STOCKHOLDERS ARE REQUESTED TO COMPLETE, DATE, *
* SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHICH *
* REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. *
* *
***************************************************************************
<PAGE> 3
A. SCHULMAN LOGO
3550 West Market Street
Akron, Ohio 44333
PROXY STATEMENT
November 11, 1994
The accompanying proxy is solicited by the Board of Directors of the
Corporation for use at the Annual Meeting of Stockholders to be held on December
8, 1994, and any adjournments thereof.
Stockholders of record at the close of business on October 24, 1994 (the
record date) will be entitled to vote at the Annual Meeting. At that date the
Corporation had issued and outstanding 37,467,120 shares of Common Stock, $1.00
par value. Each such share is entitled to one vote on all matters properly
coming before the Annual Meeting. At least 18,733,561 shares of Common Stock of
the Corporation must be represented at the meeting in person or by proxy in
order to constitute a quorum for the transaction of business.
This Proxy Statement and the accompanying form of proxy were first mailed
to stockholders on November 11, 1994.
ELECTION OF DIRECTORS
The Board of Directors of the Corporation presently is comprised of
thirteen Directors. On the date of the Annual Meeting, two of the Directors will
be retiring and the number of Directors of the Corporation will be reduced to
eleven. The Directors of the Corporation are divided into three classes; Classes
I and III each consist of four Directors and Class II consists of three
Directors. At the Annual Meeting, three Directors of Class II are to be elected
to serve for three-year terms expiring in 1997 and until their respective
successors are duly elected and qualified. Unless a stockholder requests that
voting of the proxy be withheld for any one or more of the nominees for Director
in accordance with the instructions set forth on the proxy, it presently is
intended that shares represented by proxies will be voted for the election as
Directors of the three Class II nominees named in the table below.
All nominees have consented to being named in this Proxy Statement and to
serve if elected. Should any nominee subsequently decline or be unable to accept
such nomination to serve as a Director, an event which the Board of Directors
does not now expect, the persons voting the shares represented by proxies
solicited hereby either may vote such shares for a slate of four
<PAGE> 4
persons which includes a substitute nominee or for a reduced number of nominees,
as they may deem advisable.
The following information concerning each nominee and each Director
continuing in office is based in part on information received from the
respective nominees and Directors and in part on the Corporation's records:
<TABLE>
<CAPTION>
PRINCIPAL
OCCUPATION DURING
PAST FIVE YEARS FIRST
NAME OF AND AGE AS OF BECAME
NOMINEE OR DIRECTOR OCTOBER 24, 1994 DIRECTOR
- - ------------------------- ------------------------------------------------- --------
<S> <C> <C>
NOMINEES TO SERVE UNTIL 1997 ANNUAL MEETING OF STOCKHOLDERS (CLASS II)
Gordon E. Heffern degree dagger double-dagger Professor, Kent State University since fall 1992 1983
and prior thereto, 1988-1990; formerly
President and Chief Executive Officer, Akron
Community Foundation and Consultant to Society
Corporation, 1990-1992; also formerly Chairman
and Chief Executive Officer, Society
Corporation and Chairman, Society National
Bank, 1983-1987; Age 70
Robert A. Stefanko* Chairman of the Board of the Corporation since 1980
1991; Executive Vice President -- Finance and
Administration of the Corporation since 1989;
Chief Financial Officer of the Corporation
since 1979; formerly Vice President -- Finance
of the Corporation; Age 51
Dr. Peggy Gordon Elliott President, The University of Akron since 1992; 1994
formerly Chancellor and Chief Executive
Officer, Indiana University Northwest, 1984-
1992; Age 57
CONTINUING DIRECTORS SERVING UNTIL 1995 ANNUAL MEETING OF STOCKHOLDERS (CLASS III)
James H. Berick degree dagger double-dagger Chairman, Berick, Pearlman & Mills Co., L.P.A., 1973
Cleveland, Ohio (attorneys) and Secretary of
the Corporation; President and Treasurer,
Realty ReFund Trust since 1990; Age 61
Terry L. Haines* President and Chief Executive Officer of the 1990
Corporation since 1991; formerly Chief
Operating Officer, 1990-1991; Vice President --
North American Sales, 1989-1990; prior thereto
General Manager of A. Schulman Canada, Ltd.;
Age 48
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
PRINCIPAL
OCCUPATION DURING
PAST FIVE YEARS FIRST
NAME OF AND AGE AS OF BECAME
NOMINEE OR DIRECTOR OCTOBER 24, 1994 DIRECTOR
- - ------------------------- ------------------------------------------------- --------
<S> <C> <C>
Dr. Paul Craig Roberts degree Distinguished Fellow, Cato Institute since 1993; 1992
Chairman of Institute for Political Economy
since 1985; Columnist for Business Week since
1983 and The Washington Times since 1988;
nationally syndicated Columnist for Scripps
Howard News Service since 1989; formerly
William E. Simon Chair in Political Economy at
Center for Strategic and International Studies,
1982-1993, and Assistant Secretary of Treasury
for Economic Policy, 1981-1982; Age 55
Rene C. Rombouts General Manager of the Corporation's European 1992
subsidiaries since 1993 and Director of
European Marketing -- Manufactured Products of
the Corporation since 1983; age 56
CONTINUING DIRECTORS SERVING UNTIL 1996 ANNUAL MEETING OF STOCKHOLDERS (CLASS I)
Larry A. Kushkin* Executive Vice President -- International 1989
Automotive Operations of the Corporation since
1989; formerly Vice President -- Automotive
Sales of the Corporation; Age 54
Franz A. Loehr Retired; formerly Associate General Manager of 1984
the Corporation's European subsidiaries and
Managing Director, A. Schulman GmbH; Age 65
Alan L. Ockene degree President and Chief Executive Officer of General 1992
Tire, Inc. since 1991; formerly Vice President
of Goodyear Tire & Rubber Company --
International, 1985-1991; Age 63
Robert G. Wallace dagger double-dagger Retired; formerly Executive Vice President, 1988
Phillips Petroleum Company and
President of Phillips 66 Company; Age 68
<FN>
- - ---------------
* Member of Executive Committee
degree Member of Audit Committee
dagger Member of Nominating Committee
double-dagger Member of Compensation Committee
</TABLE>
Mr. Haines is a Director of First Bancorporation of Ohio. Mr. Berick is a
Director of MBNA Corporation, Realty ReFund Trust, The Tranzonic Companies, and
The Town and Country Trust. Mr. Heffern is a Director of Pioneer Standard
Electronics, Inc. and Scripps Howard Broadcasting Company. Dr. Roberts is a
Director of each of the 13 Value Line Mutual Funds. Mr. Wallace is a Director of
CBI Industries, Inc. and Valmont Industries, Inc. Dr. Elliott is a Director of
The Lubrizol Corporation.
3
<PAGE> 6
The Board of Directors has established the following committees: Executive
Committee, Audit Committee, Compensation Committee and Nominating Committee.
The functions performed by the Audit Committee of the Board of Directors
include: (i) recommending to the Board of Directors the appointment of a firm of
independent accountants to examine the books and accounts of the Corporation and
its subsidiaries; (ii) reviewing with the independent accountants the scope of
their work, prior to their examination; (iii) reviewing with the independent
accountants the scope of their examination after it has been completed, as well
as any recommendations made by the independent accountants; (iv) reviewing with
the independent accountants the requirements of the Foreign Corrupt Practices
Act of 1977, as amended; (v) reviewing with the independent accountants and
approving each non-audit service performed or proposed to be performed by the
independent accountants, as well as the relationship of audit to non-audit fees;
and (vi) considering the possible effect of the non-audit services upon the
independence of the accountants. The Audit Committee held two meetings during
the year ended August 31, 1994.
The functions performed by the Compensation Committee of the Board of
Directors include making recommendations to the Board of Directors concerning
compensation policies, salaries, grants of stock options and other forms of
compensation for management and certain other employees of the Corporation. The
Compensation Committee held two meetings during the year ended August 31, 1994.
The functions performed by the Nominating Committee include identifying
potential directors and making recommendations as to the size, functions and
composition of the Board and its committees. The Nominating Committee has no
formal procedures for consideration of nominees recommended by stockholders. The
Nominating Committee held one meeting during the year ended August 31, 1994.
The Board of Directors held five meetings during the year ended August 31,
1994. All incumbent Directors attended at least 75% of the meetings of the Board
of Directors and any committees thereof on which they served during the year.
COMPENSATION OF DIRECTORS
Each Director of the Corporation who is not an employee of the Corporation
receives an annual Director's fee of $17,000 plus $700 for each Board or
committee meeting attended. In addition, on the first business day of February
of each year, each non-employee Director of the Corporation receives a grant of
an option to purchase 875 Shares of the Common Stock of the Corporation, at an
option price equal to the fair market value of such shares on the first business
day immediately preceding the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James H. Berick, Secretary, Director, and a member of the Corporation's
Compensation Committee is the Chairman of Berick, Pearlman & Mills Co., L.P.A.,
which is retained by the Corporation as legal counsel.
4
<PAGE> 7
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report describes the Corporation's executive compensation programs and
the basis on which fiscal year 1994 compensation determinations were made by the
Corporation's Compensation Committee in respect of the executive officers of the
Corporation, including the Chief Executive Officer and the other executive
officers named in the compensation tables in this proxy statement.
To ensure that the compensation program is administered in an objective
manner, the Compensation Committee is comprised entirely of independent
Directors. The duties of the Compensation Committee include recommending to the
Board of Directors the base salary level and bonus for the Chief Executive
Officer, setting the base salaries and bonuses for all other executive officers,
and approving the design and awards of all other elements of the executive pay
program. The Compensation Committee further evaluates executive performance and
addresses other matters related to executive compensation.
COMPENSATION POLICY AND OVERALL OBJECTIVES
In determining the amount and composition of executive compensation, the
Compensation Committee's goal is to provide a compensation package that will
enable the Corporation to attract and retain talented executives, reward
outstanding performance and link the interests of the Corporation's executives
to the interests of the Corporation's shareholders. In determining actual
compensation levels, the Compensation Committee considers all elements of the
program in total, rather than any one element in isolation.
The Compensation Committee members believe that each element of the
compensation program should target compensation levels at rates that are
reflective of current market practices. Offering market-comparable pay
opportunities allows the Corporation to maintain a stable, successful management
team.
Competitive market data is provided by an independent compensation
consultant. The data provided compares the Corporation's compensation practices
to those of a group of comparison companies. The Corporation's market for
compensation comparison purposes is comprised of a group of diversified
manufacturing companies that have national and international business
operations. The Compensation Committee reviews and approves the selection of
companies used for compensation comparison purposes.
In establishing a comparison group for compensation purposes, the
Compensation Committee neither bases its decisions on quantitative relative
weights of various factors, nor follows mathematical formulae. Rather, the
Compensation Committee exercises its discretion and makes its judgment after
considering the factors it deems relevant.
The key elements of the Corporation's executive compensation are base
salary, annual bonuses and long-term incentives. These key elements are
addressed separately below. In determining compensation, the Compensation
Committee considers all elements of an executive's total compensation package.
5
<PAGE> 8
BASE SALARIES
The Compensation Committee regularly reviews each executive's base salary.
Base salaries for executives initially are determined by evaluating executives'
levels of responsibility, prior experience, breadth of knowledge, internal
equity issues and external pay practices. Increases to base salaries are driven
primarily by individual performance. Individual performance is evaluated based
on sustained levels of individual contribution to the Corporation.
In determining Mr. Haines' base salary in 1994, the Compensation Committee
considered the Corporation's financial performance for the prior year, Mr.
Haines' individual performance and his long-term contributions to the success of
the Corporation. The Compensation Committee also compares Mr. Haines' base
salary to the base salaries of other chief executive officers.
ANNUAL BONUSES
The Corporation's bonus program promotes the Corporation's
pay-for-performance philosophy by providing executives with direct financial
incentives in the form of annual cash bonuses based on individual performance.
Annual bonus opportunities allow the Corporation to communicate specific goals
that are of primary importance during the coming year and motivate executives to
achieve these goals.
Although target bonus opportunities are not established at the beginning of
the year, the payouts are intended to represent a significant portion of each
executive's total compensation. This practice reinforces the Corporation's
pay-for-performance philosophy. The sizes of the payouts are determined at the
discretion of the Compensation Committee, based upon each executive's
performance during the prior fiscal year and on Corporation performance. Mr.
Haines' 1994 bonus award was determined using the same criteria as the other
executive officers and is reported in the Summary Compensation Table, below.
LONG-TERM INCENTIVES
Long-term incentives are provided pursuant to the Corporation's 1991 Stock
Incentive Plan (the "1991 Plan").
In keeping with the Corporation's commitment to provide a total
compensation package which includes at-risk components of pay, the Compensation
Committee makes annual decisions regarding appropriate stock-based grants for
each executive. When determining these awards, the Compensation Committee
considers the Corporation's financial performance in the prior year, executives'
levels of responsibility, prior experience, historical award data, and
compensation practices at the comparison companies.
Stock options were granted in 1994 at an option price equal to the fair
market value of the Corporation's common stock on the date of grant.
Accordingly, stock options granted in 1994 have value only if the stock price
appreciates following the date the options are granted. This design focuses
executives on the creation of shareholder value over the long term and
encourages equity ownership of the Corporation. These stock options become
exercisable at the rate of 25% per year commencing on the first anniversary of
the date of grant of the option, so long as the holder remains employed by the
Corporation or a subsidiary.
6
<PAGE> 9
In 1994, Mr. Haines received options to purchase 25,000 shares at the fair
market value ($26.25) of such shares on the date of grant. These grants were
established after comparison to the averages of long-term incentive grants at
the comparison companies. The Compensation Committee believes that this equity
interest provides a strong link to the interests of shareholders.
RESTRICTED STOCK
Shares of restricted stock were awarded to certain executives in 1994.
Restricted stock awarded to executives vests five years after the date awarded.
Because of its vesting requirements, restricted stock enhances the Corporation's
ability to maintain a stable executive team, focused on the Corporation's
long-term success. Restricted stock provides executives with an immediate link
to shareholder interests. Dividends are accrued until the lapse of restrictions
on the restricted stock and are paid out thereafter. In 1994, Mr. Haines
received an award of 6,000 shares of restricted stock.
The Compensation Committee:
Gordon E. Heffern, Chairman
James H. Berick
Dr. Lucille G. Ford
Robert G. Wallace
7
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation paid or to be paid by the
Corporation and its subsidiaries in respect of services rendered during the
Corporation's last three fiscal years to the Corporation's Chief Executive
Officer and each of the four most highly compensated executive officers (as
measured by salary and bonus) whose aggregate salary and bonus during the fiscal
year ended August 31, 1994, exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------
ANNUAL COMPENSATION (1) AWARDS
---------------------------------- ------------------------
OTHER RESTRICTED
ANNUAL STOCK ALL OTHER
FISCAL COMPENSA- AWARD(S) OPTIONS COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS TION(2) (3) (#) SATION
- - ------------------------------ ------ -------- -------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Terry L. Haines 1994 $270,833 $180,000 $ 12,075 $157,500 25,000 $42,328(4)
President & Chief 1993 $250,000 $150,000 $ 72,781 $0 30,000 $43,967
Executive Officer 1992 $232,500 $150,000 $ 49,281 $130,000 15,000 $44,796
Robert A. Stefanko 1994 $226,667 $180,000 $0 $131,250 20,000 $41,412(4)
Chairman of the Board 1993 $210,000 $150,000 $377,081 $0 25,000 $42,081
of Directors, Chief 1992 $195,417 $150,000 $ 28,717 $ 97,500 12,500 $42,115
Financial Officer and
Executive Vice President--
Finance and Administration
Larry A. Kushkin 1994 $185,000 $155,000 $0 $ 78,750 12,000 $20,288(4)
Executive Vice President-- 1993 $175,000 $135,000 $514,206 $0 10,000 $19,287
International Automotive 1992 $166,200 $135,000 $0 $ 65,000 10,000 $18,413
Operations
Alain C. Adam 1994 $110,000 $ 53,000 $ 2,165 $ 31,500 3,500 $12,787(4)
Vice President-- 1993 $105,000 $ 45,000 $ 34,271 $0 3,000 $12,287
Automotive Marketing 1992 $100,000 $ 45,000 $ 20,042 $ 29,250 3,000 $11,787
Leonard E. Emge 1994 $117,833 $ 40,000 $ 7,121 $ 39,375 5,000 $13,570(4)
Vice President-- 1993 $103,834 $ 30,000 $0 $0 4,500 $11,687
Manufacturing 1992 $ 96,334 $ 25,000 $ 98,635 $ 22,750 2,500 $10,987
<FN>
- - ---------------
(1) Includes amounts earned in fiscal year, whether or not deferred.
(2) Represents the net value (market value less exercise price) realized in respect of Common Shares purchased from the
Corporation pursuant to exercise of stock options.
(3) The total number of restricted shares and the aggregate market value at August 31, 1994: Mr. Haines held 11,000 shares valued
at $291,500; Mr. Stefanko held 8,750 shares valued at $231,875; Mr. Kushkin held 5,500 shares valued at $145,750; Mr. Adam held
2,325 shares valued at $61,613; and Mr. Emge held 2,375 shares valued at $62,938. Dividends accrue but are not paid on the
restricted shares until the restrictions thereon lapse. The aggregate market value is based on the fair market value at
August 31, 1994 of $26.50.
(4) Amounts shown include the following: Corporation contributions to Profit Sharing Plan -- $23,584 for Mr. Haines, $22,668 for
Mr. Stefanko, $18,501 for Mr. Kushkin, $11,000 for Mr. Adam and $11,783 for Mr. Emge; Corporation payments of term life
insurance premiums -- $1,787 for each named executive officer; and Director's fees received from the Corporation's Belgian
subsidiary -- $16,957 for each of Messrs. Haines and Stefanko.
</TABLE>
8
<PAGE> 11
STOCK OPTIONS
The following table contains information concerning the grant of stock
options during fiscal year 1994 to the named executive officers. The amounts
shown for each of the named executive officers as potential realizable values
are based on arbitrarily assumed annualized rates of stock appreciation of five
percent and ten percent over the full five-year term of the options, which would
result in stock prices of approximately $33.50 and $42.28, respectively. No gain
to the optionees is possible without an increase in stock price which will
benefit all stockholders proportionately. Actual gains, if any, on an option
exercise are dependent upon future performance of the Corporation's Common Stock
and overall market conditions. There can be no assurance that the potential
realizable values shown in this table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN 1994 POTENTIAL REALIZABLE
----------------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR
GRANTED TO EXERCISE 5-YEAR OPTION TERM
EMPLOYEES IN OR BASE ---------------------
OPTIONS FISCAL PRICE(3) EXPIRATION 5% ($) 10% ($)
NAME (#)GRANTED(1) YEAR(2) ($/SH) DATE (4) (4)
- - ---------------------- ------------- ------------ -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Terry L. Haines 25,000 28.90% $26.25 08/18/99 $181,250 $400,750
Robert A. Stefanko 20,000 23.12% $26.25 08/18/99 $145,000 $320,600
Larry A. Kushkin 12,000 13.87% $26.25 08/18/99 $ 87,000 $192,360
Alain C. Adam 3,500 4.05% $26.25 08/18/99 $ 25,375 $ 56,105
Leonard E. Emge 5,000 5.78% $26.25 08/18/99 $ 36,250 $ 80,150
<FN>
- - ---------------
(1) All options for common shares were granted pursuant to the 1991 Plan. Such options become exercisable at the rate of 25% per
year commencing on the first anniversary of the date of grant of the option, so long as the optionee remains employed by the
Corporation.
(2) Based on 86,500 options granted to all employees.
(3) Fair market value on the date of grant.
(4) The share price represents the price of the Common Stock if the assumed annual rates of stock price appreciation are achieved.
If the named executive officers realize these values, the Corporation's shareholders will realize aggregate appreciation in the
price of the 37,467,120 shares of Common Stock outstanding of $271.6 million or $600.6 million, respectively, over the
five-year term of the options.
</TABLE>
9
<PAGE> 12
The following table contains information concerning stock option exercises
during fiscal year 1994 by the named executive officers and the value of their
unexercised options at August 31, 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED,
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR END(#) AT FISCAL YEAR END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -------------------- ----------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Terry L. Haines 2,500 $12,075 31,523 66,758 $ 99,523 $93,177
Robert A. Stefanko 0 $ 0 30,825 56,318 $ 121,569 $87,712
Larry A. Kushkin 0 $ 0 24,576 32,692 $ 111,883 $58,211
Alain C. Adam 500 $ 2,165 19,218 17,407 $ 78,196 $34,278
Leonard E. Emge 1,125 $ 7,121 5,350 5,618 $ 23,800 $13,231
<FN>
- - ---------------
(1) Represents the net value (market value less exercise price).
(2) Represents the net value of all exercisable and unexercisable options which, on August 31, 1994, had an exercise price equal
to or less than the market value of the Corporation's shares of Common Stock on August 31, 1994 ($26.50).
</TABLE>
10
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of October 24, 1994 in
respect of beneficial ownership of shares of the Corporation's Common Stock by
each person known to the Corporation to own five percent or more of its Common
Stock, by each Director, by each named executive officer, and by all Directors
and executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OWNERSHIP(1)(2)(3) OUTSTANDING
- - ----------------------------------- ----------------- -----------
<S> <C> <C>
Nicholas Company, Inc. (4) 2,423,031 6.5%
700 North Water Street
Milwaukee, Wisconsin 53202
Gordon E. Heffern 1,609 *
Robert A. Stefanko 121,787 *
Dr. Peggy Gordon Elliott 0 *
James H. Berick 16,183 *
Terry L. Haines 61,826 *
Dr. Paul Craig Roberts 343 *
Rene C. Rombouts 51,950 *
Larry A. Kushkin 318,011(5) *
Franz A. Loehr 149,125 *
Alan L. Ockene 3,118 *
Robert G. Wallace 5,843 *
Alain C. Adam 24,041 *
Leonard E. Emge 23,051 *
All Directors and
Executive Officers as a
group (14 persons) 824,557 2.2%
<FN>
- - ---------------
* Less than 1% of the shares outstanding
(1) Includes the following number of shares which are not owned, but can be
purchased within 60 days upon the exercise of options granted under the
Corporation's 1981 Incentive Stock Option Plan and 1991 Stock Incentive
Plan: 12,076 and 18,750, respectively, by Terry L. Haines; 15,201 and 9,375,
respectively, by Larry A. Kushkin; 15,201 and 15,624, respectively, by
Robert A. Stefanko; 15,201 and 11,718, respectively, by Franz A. Loehr;
10,781 and 2,812, respectively, by Alain C. Adam; 3,163 and 2,187,
respectively, by Leonard E. Emge; 15,201 and 10,156, respectively, by Rene
C. Rombouts; and 93,074 and 72,027, respectively, by all Directors and
executive officers as a group.
(2) Includes 218 shares which are not owned but can be purchased within 60 days
upon the exercise of options granted under the Corporation's 1992
Non-Employee Directors' Stock Option Plan by each of Alan L. Ockene, Robert
G. Wallace, Gordon E. Heffern, James H.
</TABLE>
11
<PAGE> 14
Berick, and Dr. Paul Craig Roberts and 1,090 shares by all Directors and
executive officers as a group.
(3) Includes the following number of restricted shares of Common Stock awarded
under the Corporation's 1991 Stock Incentive Plan: 11,000 for Terry L.
Haines, 8,750 for Robert A. Stefanko, 5,500 each for Larry A. Kushkin and
Rene C. Rombouts, 3,750 for Franz A. Loehr, 2,325 for Alain C. Adam, 2,375
for Leonard E. Emge, and 40,525 for all Directors and executive officers as
a group.
(4) According to their report on Schedule 13G, as of February 8, 1994, Nicholas
Company, Inc., a registered investment advisor, and Albert O. Nicholas, a
director, majority shareholder and president of Nicholas Company, Inc., each
directly or indirectly beneficially owned 1,938,425 shares (2,423,031 shares
taking into effect the 25% stock dividend paid by the Corporation on April
15, 1994) of the Corporation's Common Stock held for investment advisory
clients of Nicholas Company, Inc. Nicholas Company, Inc. stated in the
Schedule 13G that it was deemed to beneficially own, and Albert O. Nicholas
may be deemed to beneficially own, the shares because of their discretionary
authority to dispose of the shares for Nicholas Company Inc.'s investment
advisory clients.
(5) Includes 5,450 shares held solely by Mr. Kushkin's wife and 54,725 shares
held in trust for Mr. Kushkin's children, the beneficial ownership of all of
which Mr. Kushkin disclaims.
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<PAGE> 15
PERFORMANCE GRAPH
The following graph compares total stockholder returns in respect of the
Corporation's Common Shares over the last five fiscal years (i.e. the cumulative
changes over the past five-year period of $100 invested) to the Standard &
Poor's 500 Stock Index ("S&P 500") and the Standard and Poor's Specialty
Chemical Group ("S&P Specialty Chemicals"). Total return values for the
Corporation's Common Shares, S&P 500 and S&P Specialty Chemicals were calculated
based upon market weighting at the beginning of the period and include
reinvestment of dividends on a quarterly basis. The stockholder returns shown on
the graph below are not necessarily indicative of future performance.
The following graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Corporation specifically incorporates this
information by reference and otherwise shall not be deemed filed under such
Acts.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period A. Schulman, S&P Specialty
(Fiscal Year Covered) Inc. S&P 500 Chemicals
- - ------------------------- ------------ ------- -------------
<S> <C> <C> <C>
8/89 $100.00 $100.00 $100.00
8/90 $111.08 $ 94.98 $ 91.53
8/91 $174.07 $120.35 $114.97
8/92 $233.73 $129.90 $122.96
8/93 $206.20 $149.56 $144.64
8/94 $236.16 $157.68 $139.87
</TABLE>
13
<PAGE> 16
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
In 1990, the Corporation entered into employment agreements with Messrs.
Haines, Stefanko, Kushkin and Adam and certain other senior personnel. The
employment agreements of Messrs. Haines, Stefanko and Kushkin provide for
remaining three-year terms at all times and the employment agreement of Mr. Adam
provides for a remaining one-year term at all times. The employment agreements
provide that in the event employment is terminated by the employer as a result
of a merger, consolidation or liquidation of the Corporation or by a change in
control of the Corporation, the employee shall receive a lump sum payment in an
amount equal to his salary for the term of his employment agreement, plus an
amount equal to three times (for a three-year employment agreement), or one time
(for a one-year employment agreement), the employee's average annual bonus
during the most recent five calendar years of employment; provided, however,
that the employer shall not be obligated to pay any amount which is in excess of
the maximum amount which it can deduct for federal income tax purposes. In
addition, if the employer terminates an employee's employment other than by
reason of the events described in the preceding sentence or by reason of death,
disability or cause, the employee shall receive his salary for the term of his
employment agreement, plus an annual bonus for the term of his agreement in an
amount equal to fifty percent of his average annual bonus during the most recent
five calendar years of employment. These employment agreements may tend to
discourage a takeover attempt of the Corporation due to the possible increased
expenses.
In addition, the Corporation has a Profit Sharing Plan (the "Profit Sharing
Plan") which provides that in any year the Corporation's Board of Directors, in
its discretion, may authorize the payment of contributions to the Corporation's
Profit-Sharing Trust, which contributions are allocated among participants. The
maximum amount which may be allocated to a participant generally is limited to
the lesser of (i) $30,000 or (ii) 25% of the participant's compensation.
Participation in the Profit Sharing Plan is available to all salaried employees
of the Corporation who are employed on the last day of the Profit Sharing Plan
Year. Benefits under the Profit Sharing Plan vest in accordance with a specified
formula which provides for partial vesting starting after three years of
employment with the Corporation and full vesting after seven years of employment
with the Corporation. The assets of the Profit-Sharing Trust are invested, and
each participant's account reflects the aggregate investment performance of the
Trust assets. For the fiscal year ended August 31, 1994, the amounts contributed
to the Profit Sharing Plan accounts of the persons listed in the Summary
Compensation Table were: Mr. Haines, $23,584; Mr. Stefanko, $22,668; Mr.
Kushkin, $18,501; Mr. Adam, $11,000; and Mr. Emge, $11,783.
The Corporation also has deferred compensation agreements with Messrs.
Stefanko, Haines and Kushkin, providing for the payment of benefits for ten
years following retirement, disability or death in the annual amount of $100,000
(two agreements each in the annual amount of $50,000), $100,000 and $75,000 (two
agreements in the annual amounts of $50,000 and $25,000), respectively, except
that any amounts payable at retirement will be reduced proportionately to the
extent that Messrs. Stefanko, Haines and Kushkin are employed by the Corporation
for less than ten years from the date of their agreements. The effective dates
of Mr. Stefanko's two agreements are 1985 and 1991, of Mr. Haines' agreement is
1991 and of Mr. Kushkin's two agreements are 1985 and 1992. No additional
benefits are payable under the agreements upon a change in control of the
Corporation; however, payment of all of the benefits of Messrs. Stefanko,
Haines, and Kushkin will be accelerated in the event of a termination of
14
<PAGE> 17
employment following certain changes in control. The Corporation owns and is the
beneficiary of life insurance policies upon the lives of Messrs. Stefanko,
Haines and Kushkin, in the amount of $1,000,000, $1,000,000 and $500,000,
respectively.
SELECTION OF ACCOUNTANTS
Upon the recommendation of its Audit Committee, the Board of Directors of
the Corporation has selected Price Waterhouse as independent accountants to
examine the books, records and accounts of the Corporation and its subsidiaries
for the fiscal year ending August 31, 1995. In accordance with past practice,
this selection is being presented to stockholders for ratification or rejection
at this Annual Meeting. The Board of Directors recommends that such selection be
ratified. Price Waterhouse is the independent accountant of the Corporation for
the fiscal year ended August 31, 1994, and is considered by the Board of
Directors to be well qualified. Representatives of Price Waterhouse will be
present at the Annual Meeting to make a statement if they desire to do so and
will be available to respond to appropriate questions.
For ratification, this proposal will require the affirmative vote of the
holders of a majority of the shares of Common Stock represented at the meeting
in person or by proxy. If the resolution is rejected, or if Price Waterhouse
declines to act or becomes incapable of action, or if its employment is
discontinued, the Board will appoint other public accountants whose continued
employment after the following Annual Meeting of Stockholders will be subject to
ratification by stockholders.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and Directors, and persons who own more than 10% of the
Corporation's Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Mr. Kushkin filed his
statement of beneficial ownership on Form 4 for the month of January, 1994,
subsequent to the due date for such filing. Bruce A. Petersen, a former
executive officer of the Corporation, reported his two December, 1993 changes in
beneficial ownership subsequent to the due date for such reporting.
OTHER MATTERS
The Board of Directors knows of no matters to be presented for action at
the Annual Meeting other than those described in this Proxy Statement. Should
other matters come before the meeting, the shares represented by proxies
solicited hereby will be voted in respect thereof in accordance with the best
judgment of the proxy holders.
GENERAL INFORMATION
VOTING OF PROXIES
Shares represented by properly executed proxies will be voted at the
meeting, and if a stockholder has specified how the shares represented thereby
are to be voted, they will be voted in accordance with such specification. It is
intended that shares represented by proxies on which
15
<PAGE> 18
no specification has been made will be voted (i) for the election of Directors
and (ii) for ratification of the selection of the independent accountants.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders, presently scheduled for December 1995, must be received
by the Corporation no later than July 15, 1995 for consideration for inclusion
in the proxy statement and form of proxy for that meeting.
REVOCATION OF PROXIES
A proxy may be revoked at any time before a vote is taken or the authority
granted is otherwise exercised. Revocation may be accomplished by the execution
of a later proxy with regard to the same shares or by giving notice in writing
or in open meeting.
SOLICITATION OF PROXIES
The cost of soliciting the accompanying proxies will be borne by the
Corporation. The Corporation does not expect to pay any compensation for the
solicitation of proxies but may pay brokers, nominees, fiduciaries and
custodians their reasonable expenses for sending proxy material to principals
and obtaining their instructions. In addition to solicitation by mail, proxies
may be solicited in person, by telephone or telegraph or by officers, Directors
and regular employees of the Corporation.
By order of the Board of Directors
JAMES H. BERICK
Secretary
November 11, 1994
16
<PAGE> 19
A. SCHULMAN, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
P
THE BOARD OF DIRECTORS
R The undersigned hereby appoints TERRY L. HAINES, ROBERT A.
STEFANKO, and JAMES H. BERICK and each of them as Proxies, each
with the full power to appoint his substitute, and hereby
O authorizes them to represent and to vote, as designated below, all
the shares of Common Stock of A. Schulman, Inc. held of record by
the undersigned on October 24, 1994 at the annual meeting of
X Stockholders to be held on December 8, 1994 and at any adjournments
thereof.
Y
Election of CLASS II Directors, Nominees:
Gordon E. Heffern, Robert A. Stefanko and Dr. Peggy Gordon Elliott
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES
IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 20
<TABLE>
<S> <C> <C>
/ X/ PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of FOR WITHHELD 2. To ratify the se- FOR AGAINST ABSTAIN 3. In their discretion,
CLASS II / / / / lection of Price / / / / / / the Proxies are au-
Directors Waterhouse as thorized to vote
(see reverse) independent ac- upon such other
countants for the business as may
For, except vote withheld from the following fiscal year ending properly come
nominee(s): August 31, 1995 before the meeting.
- - --------------------------------------------
</TABLE>
SIGNATURE(S)___________________________________________ DATE _________
SIGNATURE(S)___________________________________________ DATE _________
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
