<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: 37,584,318
(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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(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 INC. 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 7, 1995 at 10:00 A.M., local time, for
the purpose of considering and acting upon:
1. The election of five (5) Directors for a three-year term expiring in
1998;
2. The ratification of the selection by the Board of Directors of Price
Waterhouse LLP as independent accountants for the fiscal year ending
August 31, 1996; 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 23, 1995 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 13, 1995
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 INC. LOGO]
3550 West Market Street
Akron, Ohio 44333
PROXY STATEMENT
November 13, 1995
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
7, 1995, and any adjournments thereof.
Stockholders of record at the close of business on October 23, 1995 (the
record date) will be entitled to vote at the Annual Meeting. At that date the
Corporation had issued and outstanding 37,584,318 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 18,792,160 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 13, 1995.
ELECTION OF DIRECTORS
The Board of Directors of the Corporation presently is comprised of
fourteen Directors. The Directors of the Corporation are divided into three
classes; Classes I and III each consist of five Directors and Class II consists
of four Directors. At the Annual Meeting, five Directors of Class III are to be
elected to serve for three-year terms expiring in 1998 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 five Class III 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
<PAGE> 4
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 five 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 23, 1995 DIRECTOR
- ------------------------------- ------------------------------------------------- --------
<S> <C> <C>
NOMINEES TO SERVE UNTIL 1998 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 62
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 49
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 56
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 57
James A. Karman President and Chief Operating Officer, RPM, Inc. 1995
(coatings, sealants and specialty chemicals)
since 1978; formerly, Chief Financial Officer,
RPM, Inc. 1982-1993; Age 58
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
PRINCIPAL
OCCUPATION DURING
PAST FIVE YEARS FIRST
NAME OF AND AGE AS OF BECAME
NOMINEE OR DIRECTOR OCTOBER 23, 1995 DIRECTOR
- ------------------------------- -------------------------------------------------- --------
<S> <C> <C>
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 55
Franz A. Loehr Retired; formerly Associate General Manager of 1984
the Corporation's European subsidiaries and
Managing Director, A. Schulman GmbH; Age 66
Alan L. Ockene degree dagger double dagger Chairman, Akron Regional Development Board, since 1992
January, 1995; formerly, President and Chief
Executive Officer of General Tire, Inc.
1991-1994; and Vice President of Goodyear Tire
& Rubber Company -- International, 1985-1991;
Age 64
Robert G. Wallace dagger double dagger Retired; formerly Executive Vice President, 1988
Phillips Petroleum Company and
President of Phillips 66 Company; Age 69
Willard R. Holland President and Chief Executive Officer, Ohio 1995
Edison Company (electric utility) and Chairman
of the Board and Chief Executive Officer of its
subsidiary, Pennsylvania Power Company, since
1993; formerly, Chief Operating Officer, Ohio
Edison Company, 1991-1993; prior thereto Senior
Vice President, Detroit Edison Company
(electric utility), 1988-1991; Age 59
CONTINUING DIRECTORS SERVING UNTIL 1997 ANNUAL MEETING OF STOCKHOLDERS (CLASS II)
Gordon E. Heffern degree dagger double dagger Consultant to KeyCorp (formerly Society 1983
Corporation) since 1990; formerly Professor,
Kent State University, fall 1992 and prior
thereto 1988-1990; formerly President and
Chief Executive Officer, Akron Community
Foundation, 1990-1992; also formerly Chairman
and Chief Executive Officer, Society
Corporation and Chairman, Society National
Bank, 1983-1987; Age 71
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 52
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL
OCCUPATION DURING
PAST FIVE YEARS FIRST
NAME OF AND AGE AS OF BECAME
NOMINEE OR DIRECTOR OCTOBER 23, 1995 DIRECTOR
- ------------------------------- ------------------------------------------------- --------
<S> <C> <C>
Dr. Peggy Gordon Elliott degree President, The University of Akron since 1992; 1994
formerly Chancellor and Chief Executive
Officer, Indiana University Northwest, 1984-
1992; Age 58
James S. Marlen Chairman of the Board of Ameron, Inc. 1995
(construction and industrial manufacturing)
since January, 1995; President and Chief
Executive Officer of Ameron, Inc. since June,
1993; formerly, Vice President, GenCorp., Inc.
(aerospace, automotive, chemical and plastics)
and President, GenCorp. Polymer Products, a
subsidiary of GenCorp., Inc., 1988-1993; Age 54
<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. Dr. Roberts is a Director of 12 of the 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. Mr. Marlen is a
Director of Ameron, Inc. Mr. Karman is a Director of RPM, Inc., McDonald & Co.
Investments, Inc., Shiloh Industries, Inc. and Sudbury, Inc. Mr. Holland is a
Director of Ohio Edison Company.
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, 1995.
The functions performed by the Compensation Committee of the Board of
Directors include making recommendations to the Board of Directors concerning
compensation policies, salaries,
4
<PAGE> 7
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, 1995.
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, 1995.
The Board of Directors held five meetings during the year ended August 31,
1995. 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 $20,000 plus $800 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. Mr. Loehr has a Consulting
Agreement with the Corporation providing for annual compensation of $75,000 for
each of the years ended August 31, 1995 and 1996.
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.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report describes the Corporation's executive compensation programs and
the basis on which fiscal year 1995 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
5
<PAGE> 8
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 data 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.
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 1995, 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
6
<PAGE> 9
executive's performance during the prior fiscal year and on Corporation
performance. Mr. Haines' 1995 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 1995 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 1995 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.
In 1995, Mr. Haines received options to purchase 27,500 shares at the fair
market value ($25.50) 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 are awarded to certain executives bi-annually.
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 1995, no executives
received awards of shares of restricted stock.
The Compensation Committee:
Gordon E. Heffern, Chairman
James H. Berick
Robert G. Wallace
Alan L. Ockene
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, 1995, 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(4)
- ------------------------------ ------ -------- -------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Terry L. Haines 1995 $325,000 $180,000 $ 21,910 $ 0 27,500 $130,819 (5)
President & Chief 1994 $270,833 $180,000 $ 12,075 $157,500 25,000 $117,309
Executive Officer 1993 $250,000 $150,000 $ 72,781 $0 30,000 $123,688
Robert A. Stefanko 1995 $270,833 $180,000 $118,335 $0 23,000 $122,274 (5)
Chairman of the Board 1994 $226,667 $180,000 $0 $131,250 20,000 $116,474
of Directors, Chief 1993 $210,000 $150,000 $377,081 $0 25,000 $131,154
Financial Officer and
Executive Vice President--
Finance and Administration
Larry A. Kushkin 1995 $200,000 $160,000 $139,899 $0 14,000 $ 69,278 (5)
Executive Vice President-- 1994 $185,000 $155,000 $0 $ 78,750 12,000 $ 76,585
International Automotive 1993 $175,000 $135,000 $514,206 $0 10,000 $ 87,231
Operations
Leonard E. Emge 1995 $135,000 $ 60,000 $ 11,646 $0 7,000 $ 14,610 (5)
Vice President-- 1994 $117,833 $ 40,000 $ 7,121 $ 39,375 5,000 $ 13,570
Manufacturing 1993 $103,834 $ 30,000 $0 $0 4,500 $ 11,687
Alain C. Adam 1995 $116,000 $ 55,000 $0 $0 3,500 $ 12,710 (5)
Vice President-- 1994 $110,000 $ 53,000 $ 2,165 $ 31,500 3,500 $ 12,787
Automotive Marketing 1993 $105,000 $ 45,000 $ 34,271 $0 3,000 $ 12,287
<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, 1995: 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, 1995 of $26.50.
(4) Represents the following compensation: Corporation contributions to Profit
Sharing Plan; amounts accrued by the Corporation for the fiscal year under
non-qualified profit sharing plan (which was effected in fiscal year 1995);
Corporation payments of term life insurance premiums; amounts accrued by the
Corporation for the fiscal year under deferred compensation agreements; and
Director's fees received from the Corporation's Belgian subsidiary.
</TABLE>
8
<PAGE> 11
(5) Amounts shown include the following: Corporation contributions to Profit
Sharing Plan -- $15,000 for each of Messrs. Haines, Stefanko, and Kushkin,
$11,600 for Mr. Adam and $13,500 for Mr. Emge; amounts accrued by the
Corporation for the fiscal year ended August 31, 1995 under non-qualified
profit sharing plan -- $17,500 for Mr. Haines, $12,083 for Mr. Stefanko, and
$5,000 for Mr. Kushkin; Corporation payments of term life insurance premiums
-- $1,110 for each named executive officer; amounts accrued by the
Corporation under deferred compensation agreements for the fiscal year ended
August 31, 1995 -- $75,061 for Mr. Haines ($45,037 of which was not vested),
$71,933 for Mr. Stefanko ($22,518 of which was not vested), and $53,168 for
Mr. Kushkin ($14,990 of which was not vested); and Director's fees received
from the Corporation's Belgian subsidiary -- $22,148 for each of Messrs.
Haines and Stefanko.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options during fiscal year 1995 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 $31.00 and $37.33, respectively. No gain
to the optionees is possible without an increase in stock price which will
benefit all stockholders proportionately. Actual gains, if any, on an option
exercise are dependent upon future performance of the Corporation's Common Stock
and overall market conditions. There can be no assurance that the potential
realizable values shown in this table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN 1995 POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF STOCK
GRANTED TO EXERCISE PRICE APPRECIATION FOR
EMPLOYEES IN OR BASE 5-YEAR OPTION TERM
OPTIONS FISCAL PRICE(3) EXPIRATION 5% ($) 10% ($)
NAME (#)GRANTED(1) YEAR(2) ($/SH) DATE (4) (4)
- ---------------------- ------------- ------------ -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Terry L. Haines 27,500 10.24% $25.50 08/17/00 $151,250 $325,325
Robert A. Stefanko 23,000 8.57% $25.50 08/17/00 $126,500 $272,090
Larry A. Kushkin 14,000 5.22% $25.50 08/17/00 $ 77,000 $165,620
Leonard E. Emge 7,000 2.61% $25.50 08/17/00 $ 38,500 $ 82,810
Alain C. Adam 3,500 1.30% $25.50 08/17/00 $ 19,250 $ 41,405
<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 268,450 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 37,584,318 shares of
Common Stock outstanding of $206.7 million or $444.6 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 1995 by the named executive officers and the value of their
unexercised options at August 31, 1995.
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 $ 21,910 53,705 69,688 $ 143,264 $ 70,157
Robert A. Stefanko 15,000 $ 118,335 37,611 57,532 $ 72,429 $ 58,391
Larry A. Kushkin 15,201 $ 139,899 23,692 32,375 $ 51,586 $ 29,688
Leonard E. Emge 1,500 $ 111,646 7,718 13,250 $ 23,197 $ 11,813
Alain C. Adam 0 $ 0 19,937 8,938 $ 102,420 $ 8,188
- ---------------
<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, 1995, had an exercise price equal to or less than the market
value of the Corporation's shares of Common Stock on August 31, 1995
($26.50).
</TABLE>
10
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of October 23, 1995 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) 2,353,906 6.26%
700 North Water Street
Milwaukee, Wisconsin 53202
Gordon E. Heffern 2,046 *
Robert A. Stefanko 133,573(5) *
Dr. Peggy Gordon Elliott 1,000 *
James H. Berick 15,655 *
Terry L. Haines 92,205 *
Dr. Paul Craig Roberts 1,880 *
Rene C. Rombouts 67,798 *
Larry A. Kushkin 308,230(6) *
Franz A. Loehr 173,724 *
Alan L. Ockene 4,355 *
Robert G. Wallace 5,843 *
James S. Marlen 1,000 *
Willard R. Holland 500 *
James A. Karman 0 *
Alain C. Adam 30,385 *
Leonard E. Emge 26,919 *
All Directors and
Executive Officers as a
group (17 persons) 913,308 2.4%
</TABLE>
- ---------------
* 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: 14,643 and 39,062, respectively, by Terry L. Haines; 5,067 and 18,895,
respectively, by Larry A. Kushkin; 5,268 and 32,343, respectively, by Robert
A. Stefanko; 0 and 31,250, respectively, by Franz A. Loehr; 14,375 and
5,562, respectively, by Alain C. Adam; 2,718 and 5,000, respectively, by
Leonard E. Emge;
11
<PAGE> 14
20,268 and 20,937, respectively, by Rene C. Rombouts; and 72,339 and
155,792, respectively, by all Directors and executive officers as a group.
(2) Includes 655 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. Berick, and Dr. Paul Craig Roberts
and 3,275 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 6, 1995, 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 2,353,906 shares 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 2,500 shares held solely by Mr. Stefanko's wife, the beneficial
ownership of which Mr. Stefanko disclaims.
(6) Includes 5,815 shares held solely by Mr. Kushkin's wife and 55,820 shares
held in trust for Mr. Kushkin's children, the beneficial ownership of all of
which Mr. Kushkin disclaims.
12
<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.
<TABLE>
<CAPTION>
Measurement Period A. Schulman, S&P Specialty
(Fiscal Year Covered) Inc. S&P 500 Chemicals
<S> <C> <C> <C>
8/90 100.00 100.00 100.00
8/91 156.70 126.71 125.61
8/92 210.41 136.77 134.33
8/93 185.63 158.02 157.46
8/94 212.60 166.02 152.82
8/95 215.13 201.41 192.26
</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 a bonus each year 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 qualified 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, 1995, the amounts contributed to the Profit Sharing Plan accounts of
the persons listed in the Summary Compensation Table were: Mr. Haines, $15,000;
Mr. Stefanko, $15,000; Mr. Kushkin, $15,000; Mr. Adam, $11,600; and Mr. Emge,
$13,500.
The Corporation also has a non-qualified Profit Sharing Plan (the
"Non-Qualified Plan") which provides that in any year the Corporation's Board of
Directors, in its discretion, may authorize the accrual by the Corporation of
certain amounts for the benefit of the Non-Qualified Plan's participants, in
order to restore to such participants amounts not available to them under the
Profit Sharing Plan due to certain limitations thereunder. Benefits under the
Non-Qualified 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. Amounts accrued by the Corporation under the Non-Qualified Plan for
the benefit of each participant reflect the investment performance which would
have been realized had a corresponding amount been invested for the benefit of
such participant
14
<PAGE> 17
during such year in the Profit Sharing Trust pursuant to the Profit Sharing
Plan. For the fiscal year ended August 31, 1995, the amounts accrued by the
Corporation pursuant to the Non-Qualified Plan for the benefit of the persons
listed in the Summary Compensation Table were: Mr. Haines, $17,500; Mr.
Stefanko, $12,083; and Mr. Kushkin $5,000.
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
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 LLP as independent accountants to
examine the books, records and accounts of the Corporation and its subsidiaries
for the fiscal year ending August 31, 1996. 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 LLP is the independent accountant of the Corporation
for the fiscal year ended August 31, 1995, and is considered by the Board of
Directors to be well qualified. Representatives of Price Waterhouse LLP 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 LLP
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.
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.
15
<PAGE> 18
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 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 1996, must be received
by the Corporation no later than July 15, 1996 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 13, 1995
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 23, 1995 at the annual meeting of
X Stockholders to be held on December 7, 1995 and at any adjournments
thereof.
Y
Election of CLASS III Directors, Nominees:
James H. Berick, Terry L. Haines, Dr. Paul Craig Roberts,
Rene C. Rombouts and James A. Karman
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 III / / / / 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, 1996 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.
