SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 11, 1996
(Date of earliest event reported)
A. Schulman, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 0-7459 34-0514850
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
3550 West Market Street
Akron, Ohio
(Address of principal executive offices)
44333
(zip code)
(216) 666-3751
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On January 11, 1996, the Board of Directors
(the "Board") of A. Schulman, Inc. (the "Company")
adopted a stockholder rights plan which contemplates the
issuance of special stock purchase rights to the
Company's common stockholders of record as of January 25,
1996, as set forth in the Rights Agreement between the
Company and Society National Bank, as Rights Agent,
incorporated herein by reference as Exhibit 4.1.
Also on January 11, 1996, the Board adopted
amendments to the Company's By-laws which require a
stockholder to provide notice to the Company of such
stockholder's intent to nominate a director or raise
business at an annual meeting. Such notice must be
provided to the Company not less than 60 nor more than 90
days prior to the anniversary of the previous year's
annual meeting and must contain certain specified
information concerning the proposed director nominee or
the matters to be brought before the annual meeting and
concerning the stockholder submitting the proposal.
Copies of the Company's By-laws, as amended to date, are
incorporated herein by reference as Exhibit 3.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
3.1 By-Laws dated December 8, 1983 (incorporated
by reference to Exhibit 3(c) of the
Company's Form 10-K for fiscal year ended
August 31, 1990).
3.2 Amendment to the By-Laws dated October 20,
1986 (incorporated by reference to Exhibit
3(f) of the Company's Form 10-K for fiscal
year ended August 31, 1991).
3.3 Amendment to the By-Laws dated January 11, 1996.
4.1 Rights Agreement, dated as of January 12,
1996, between the Company and Society
National Bank, as Rights Agent, which
includes as Exhibit B thereto the Form of
Rights Certificate (incorporated herein by
reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A, dated
January 15, 1996).
20.1 Form of Letter to the Company's stockholders
describing the Rights, dated January __,
1996.
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
A. SCHULMAN, INC.
By: /s/ Robert A. Stefanko
Name: Robert A. Stefanko
Title: Chairman of the Board and
Chief Financial Officer
Date: January 15, 1996
EXHIBIT INDEX
Exhibit Description Page
3.1 By-Laws dated December 8, 1983
(incorporated by reference to
Exhibit 3(c) of the Company's Form
10-K for fiscal year ended August
31, 1990).
3.2 Amendment to the By-Laws dated
October 20, 1986 (incorporated by
reference to Exhibit 3(f) of the
Company's Form 10-K for fiscal
year ended August 31, 1991).
3.3 Amendment to the By-Laws dated
January 11, 1996.
4.1 Rights Agreement, dated as of
January 12, 1996, between the
Company and Society National Bank,
as Rights Agent, which includes as
Exhibit B thereto the Form of
Rights Certificate (incorporated
herein by reference to Exhibit 1
to the Company's Registration
Statement on Form 8-A dated
January 15, 1996).
20.1 Form of letter to the Company's
stockholders describing the
Rights, dated January __, 1996.
EXHIBIT 3.3
RESOLUTIONS OF THE
BOARD OF DIRECTORS
A. SCHULMAN, INC.
January 11, 1996
WHEREAS, in order to provide a more orderly
procedure for the conduct of annual meetings of
stockholders and to afford the Board of Directors of this
Corporation (the "Board") a more meaningful opportunity
to consider the qualifications of proposed director
nominees, this Board of Directors deems it desirable and
in the best interests of this Corporation and its
stockholders that this Corporation's By-laws be amended
as hereinafter provided to include certain advance-notice
requirements for stockholder business to be conducted at
annual meetings and stockholder nominations to the Board;
NOW THEREFORE BE IT RESOLVED, that Section 2 of
Article II of the By-laws shall be amended by adding to
the end of such section the text attached to these
resolutions as Exhibit A.
RESOLVED, that Section 3 of Article III of the
By-laws shall be amended by adding to the end of such
section the text attached to these resolutions as Exhibit
B.
RESOLVED, that the officers of this Corporation
be, and they hereby are, authorized and directed, jointly
and severally, for and in the name and on behalf of this
Corporation, to execute and deliver any and all
certificates, agreements and other documents, take any
and all steps and do any and all things which they may
deem necessary or advisable in order to effectuate the
purposes of each and all of the foregoing resolutions.
RESOLVED, that any actions taken by such
officers on or prior to the date of the foregoing
resolutions adopted at this meeting that are within the
authority conferred by the foregoing resolutions are
hereby ratified, confirmed and approved as the act and
deed of this Corporation.
Exhibit A
To be properly brought before the meeting,
business must be either (a) specified in the notice
of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c)
otherwise properly brought before the meeting by a
stockholder. In addition to any other applicable
requirements, for business to be properly brought
before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in
writing to the secretary of the corporation. To be
timely, a stockholder's notice must be delivered to
or mailed and received at the principal executive
offices of the corporation, not less than 60 days
nor more than 90 days prior to the one year
anniversary date of the immediately preceding annual
meeting of stockholders; provided, however, that in
the event that the annual meeting is called for a
date that is not within the 30 days before or after
such anniversary date, notice by the stockholder in
order to be timely must be so received not later
than the close of business on the 10th day following
the day on which notice of the date of the annual
meeting was mailed or public disclosure of the date
of the meeting was made, whichever first occurs. A
stockholder's notice to the secretary shall set
forth as to each matter the stockholder proposes to
bring before the annual meeting (i) a brief
description of the business desired to be brought
before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii)
the name and record address of the stockholder
proposing such business, (iii) the class and number
of shares of the corporation which are beneficially
owned by the stockholder, and (iv) any material
interest of the stockholder in such business.
Notwithstanding anything in these by-laws
to the contrary, no business shall be conducted at
the annual meeting except in accordance with the
procedures set forth in this Section 2, provided,
however, that nothing in this Section 2 shall be
deemed to preclude discussion by any stockholder of
any business properly brought before the annual
meeting.
The presiding officer of the annual
meeting shall, if the facts warrant, determine and
declare to the meeting that business was not
properly brought before the meeting in accordance
with the provisions of this Section 2, and if he
should so determine, he shall so declare to the
meeting and any such business not properly brought
before the meeting shall not be transacted.
Exhibit B
Only persons who are nominated in
accordance with the following procedures shall be
eligible for election as Directors. Nominations of
persons for election to the Board of Directors at
the annual meeting or at any special meeting of
stockholders called for the election of directors
may be made at a meeting of stockholders by or at
the direction of the Board of Directors, including
by any nominating committee or person appointed by
the Board of Directors, or by any stockholder of the
corporation entitled to vote for the election of
Directors at the meeting who complies with the
notice procedures set forth in this Section 3. Such
nominations, other than those made by or at the
direction of the Board of Directors, shall be made
pursuant to timely notice in writing to the
secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed
and received at the principal executive offices of
the corporation (a) in the case of an annual
meeting, not less than 60 days nor more than 90 days
prior to the one year anniversary date of the
immediately preceding annual meeting of
stockholders; provided, however, that in the event
that the annual meeting is called for a date that is
not within the 30 days before or after such
anniversary date, notice by the stockholder in order
to be timely must be so received not later than the
close of business on the 10th day following the day
on which notice of the date of the annual meeting
was mailed or public disclosure of the date of the
annual meeting was made, whichever first occurs; and
(b) in the case of a special meeting of stockholders
called for the purpose of electing directors, not
later than the close of business on the 10th day
following the day on which notice of the special
meeting was mailed or public disclosure of the date
of the special meeting was made. Such stockholder's
notice to the secretary shall set forth (a) as to
each person whom the stockholder proposes to
nominate for election or re-election as a Director,
(i) that person's consent to such nomination, (ii)
the name, age, business address and residence
address of the person, (iii) the principal
occupation or employment of the person, (iv) the
class and number of shares of capital stock of the
corporation which are beneficially owned by the
person and (v) any other information relating to the
person that is required to be disclosed in
solicitations for proxies for election of Directors
pursuant to Section 14 under the Securities Exchange
Act of 1934, as amended the "Exchange Act"), and the
rules and regulations promulgated thereunder; and
(b) as to the stockholder giving the notice (i) the
name and record address of such stockholder, (ii)
the class and number of shares of capital stock of
the corporation which are beneficially owned by the
stockholder, (iii) a description of all arrangements
and understandings between such stockholder and each
proposed nominee and any other person (including his
name and address) pursuant to which the
nomination(s) are to be made by such stockholder,
(iv) a representation that such stockholder intends
to appear in person or by proxy at the meeting to
nominate the persons named in its notice and (v) any
other information relating to such stockholder that
would be required to be disclosed in a proxy
statement or other filing required to be made in
connection with solicitations of proxies for
election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations
promulgated thereunder. The corporation may require
any proposed nominee to furnish such other
information as may reasonably be required by the
corporation to determine the eligibility of such
proposed nominee to serve as Director of the
corporation. No person shall be eligible for
election as a Director of the corporation unless
nominated in accordance with the procedures set
forth herein.
The presiding officer of the meeting
shall, if the facts warrant, determine and declare
to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he
should so determine, he shall so declare to the
meeting and the defective nomination shall be
disregarded.
EXHIBIT 20.1
January __, 1996
Dear A. Schulman, Inc. Stockholder:
The Board of Directors has announced the
adoption of a Stockholder Rights Plan. This letter
describes the Plan and explains our reasons for adopting
it. Also, we are enclosing a document entitled "Detailed
Summary of Rights to Purchase Series A Junior
Participating Special Stock" which provides more detailed
information about the Rights Plan, and we urge you to
read it carefully.
The Plan is intended to protect your interests
in the event A. Schulman, Inc. is confronted with
coercive or unfair takeover tactics. The Plan contains
provisions to safeguard you in the event of an
unsolicited offer to acquire the Company, whether through
a gradual accumulation of shares in the open market, a
partial or two-tiered tender offer that does not treat
all stockholders equally, the acquisition in the open
market or otherwise of shares constituting control
without offering fair value to all stockholders, or other
abusive takeover tactics which the Board believes are not
in the best interests of the Company's stockholders.
These tactics unfairly pressure stockholders, squeeze
them out of their investment without giving them any real
choice, and deprive them of the full value of their
shares. In adopting the Rights Plan, the Board of
Directors was concerned that a person or company could
acquire control of the Company without paying a fair
premium for control and without offering a fair price to
all stockholders.
A large number of other companies have Rights
Plans similar to the one we have adopted. We consider
the Rights Plan to be the best available means of
protecting your right to retain your equity investment in
A. Schulman, Inc. and the full value of that investment,
while not foreclosing a fair acquisition bid for the
Company.
The Plan is not intended to prevent a takeover
of the Company and will not do so. The mere declaration
of the rights dividend will not interfere with a merger
or other business combination transaction approved by
your Board of Directors. Also, because the Rights may be
redeemed by the Company at $0.01 per Right up to 10 days
(subject to extension) after the time any person or group
has acquired 15% or more of the Company's shares, the
Rights should not interfere with any merger or other
business combination approved by the current Board of
Directors.
Issuance of the Rights does not in any way
weaken the financial strength of the Company or interfere
with its business plan. The issuance of the Rights has
no dilutive effect, will not affect reported earnings per
share, is not taxable to the Company or to you, and will
not change the way in which you can currently trade the
Company's shares. As explained in detail below, the
Rights will only be exercisable if and when an event
occurs which triggers their effectiveness. They will
then operate to protect you against being deprived of
your right to share in the full measure of the Company s
long-term potential.
The Board was aware when it acted that some
people have advanced arguments that securities of the
type we are issuing deter legitimate acquisition
proposals. We carefully considered these views and
concluded that the arguments are speculative and do not
justify leaving stockholders without this protection
against unfair treatment by an acquiror -- who, after
all, is seeking his own company's advantage, not yours.
The Board believes that the Rights represent a sound and
reasonable means of addressing the complex issues of
corporate policy created by the current takeover
environment.
The Rights will be issued to stockholders of
record on January 25, 1996 and will expire in ten years,
as set forth in the Rights Plan. Initially, the Rights
will not be exercisable, certificates will not be sent to
you, and the Rights will automatically trade with the
Common Stock. However, ten days after a person or group
either acquires 15% or more of the Company's Common Stock
or ten business days after a person or group commences a
tender or exchange offer that would result in such person
or group owning 15% or more of the outstanding shares
(even if no purchases actually occur), whichever is
earlier, the Rights will become exercisable and separate
certificates representing the Rights will be distributed.
We expect that the Rights will begin to trade
independently from the Common Stock at that time. At no
time will the Rights have any voting power.
When the Rights first become exercisable, each
Right will entitle the holder thereof to buy from the
Company one unit of a share of special stock for $85.00.
If any person acquires 15% or more of the Company's
Common Stock, each Right not owned by a 15%-or-more
stockholder would become exercisable for the number of
shares of Common Stock of the Company having at that time
a market value of two times the then current exercise
price of the Right. If the Company is involved in a
merger or other business combination with or into another
person or in which the Company's Common Stock is changed
or exchanged, or sells 50% or more of its assets or
earning power to another person, at any time after the
Rights become exercisable, the Rights will entitle the
holder thereof to buy a number of shares of common stock
of such other person having a market value of twice the
then current exercise price of each Right.
While, as noted above, the distribution of the
Rights will not be taxable to you or the Company,
stockholders may, depending upon the circumstances,
recognize taxable income if and when the Rights become
exercisable.
Continuing our growth and maximizing long-term
stockholder value are the major goals of A. Schulman,
Inc.'s management and Board of Directors.
Sincerely,
Chairman of the Board and
Chief Financial Officer
