<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
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Section 240.14a-11(c) or Section 240.14a-12
A. SCHULMAN, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
A. SCHULMAN, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] 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: 33,112,505
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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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[LOGO] A. SCHULMAN INC.
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 10, 1998 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
2001;
2. The ratification of the selection by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants for the fiscal
year ending August 31, 1999;
3. A stockholder proposal to declassify the Board of Directors;
4. A stockholder proposal that the Board of Directors consider the prompt
sale of the Corporation; and
5. 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 16, 1998 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 9, 1998
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
[LOGO] A. SCHULMAN INC.
3550 West Market Street
Akron, Ohio 44333
PROXY STATEMENT
November 9, 1998
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
10, 1998, and any adjournments thereof.
Stockholders of record at the close of business on October 16, 1998 (the
record date) will be entitled to vote at the Annual Meeting. At that date the
Corporation had issued and outstanding 33,112,505 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 16,556,253 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 9, 1998.
ELECTION OF DIRECTORS
The Board of Directors of the Corporation presently is comprised of ten
Directors. The Directors of the Corporation are divided into three classes;
presently, Classes I and III each consist of three Directors and Class II
consists of four Directors. At the Annual Meeting, three Directors of Class III
are to be elected to serve for three-year terms expiring in 2001 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 III nominees
named in the table below.
<PAGE> 4
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 may vote such shares for a reduced number of nominees. For
election as a Director, a nominee must receive the affirmative vote of the
holders of a majority of shares of Common Stock represented at the meeting in
person or by proxy. Neither abstentions nor broker non-votes will be counted as
votes cast, although both will count toward the determination of the presence of
a quorum and both will have the same effect as a vote cast against the nominee.
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 16, 1998 DIRECTOR
------------------- ----------------- --------
<S> <C> <C>
NOMINEES TO SERVE UNTIL 2001 ANNUAL MEETING OF STOCKHOLDERS (CLASS III)
Terry L. Haines(1) President and Chief Executive Officer of the 1990
Corporation since 1991; formerly, Chief Operating
Officer, 1990-1991; Age 52
Dr. Paul Craig Roberts(2) Columnist for The Washington Times since 1988 and for 1992
Investor's Business Daily since 1998; Chairman of
Institute for Political Economy since 1985;
nationally syndicated Columnist for Creators
Syndicate since March 1997; formerly, Distinguished
Fellow, Cato Institute, 1993-1996; Columnist for
Business Week, 1982-1998; 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 59
James A. Karman(2) President and Chief Operating Officer, RPM, Inc. 1995
(coatings, sealants and specialty chemicals) since
1978; formerly, Chief Financial Officer, RPM, Inc.
1982-1993; Age 61
</TABLE> 2
<PAGE> 5
<TABLE>
<CAPTION>
PRINCIPAL
OCCUPATION DURING
PAST FIVE YEARS FIRST
NAME OF AND AGE AS OF BECAME
NOMINEE OR DIRECTOR OCTOBER 16, 1998 DIRECTOR
------------------- ----------------- --------
<S> <C> <C>
CONTINUING DIRECTORS SERVING UNTIL 1999 ANNUAL MEETING OF STOCKHOLDERS (CLASS I)
Alan L. Ockene(3)(4) Member, Executive Committee of Akron Regional 1992
Development Board; prior thereto, Chairman, Akron
Regional Development Board, 1995-1997; formerly,
President and Chief Executive Officer of General
Tire, Inc. 1991-1994; and Vice President of
Goodyear Tire & Rubber Company -- International,
1985-1991; Age 67
Robert G. Wallace(2)(3)(4) Retired; formerly Executive Vice President, Phillips 1988
Petroleum Company and
President of Phillips 66 Company; Age 72
Willard R. Holland(4) Chairman of the Board of FirstEnergy Corp. (electric 1995
utility) since November 1, 1996; President and
Chief Executive Officer, FirstEnergy Corp. since
1993; Chairman of the Board and Chief Executive
Officer of FirstEnergy Corp.'s 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
62
CONTINUING DIRECTORS SERVING UNTIL 2000 ANNUAL MEETING OF STOCKHOLDERS (CLASS II)
Robert A. Stefanko(1) Chairman of the Board of the Corporation since 1991; 1980
Executive Vice President -- Finance and
Administration of the Corporation since 1989; 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 60
Dr. Peggy Gordon Elliott(2)(4) President, South Dakota State University since 1994
January 1998; prior thereto, Senior Fellow,
National Center for Higher Education 1996-1998;
President, The University of Akron 1992-1996, and
Chancellor and Chief Executive Officer, Indiana
University Northwest, 1984-1992; Age 61
</TABLE>
3
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<TABLE>
<CAPTION>
PRINCIPAL
OCCUPATION DURING
PAST FIVE YEARS FIRST
NAME OF AND AGE AS OF BECAME
NOMINEE OR DIRECTOR OCTOBER 16, 1998 DIRECTOR
------------------- ----------------- --------
<S> <C> <C>
James S. Marlen(2) Chairman of the Board of Ameron International 1995
Corporation (construction and industrial
manufacturing) since January, 1995; President and
Chief Executive Officer of Ameron International
Corporation 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 57
- ---------------
(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Nominating Committee
(4) Member of Compensation Committee
</TABLE>
Mr. Haines is a Director of FirstMerit Corporation and Ameron International
Corporation. Dr. Roberts is a Director of 12 of the Value Line Mutual Funds. Mr.
Wallace is a Director of Valmont Industries, Inc. Dr. Elliott is a Director of
The Lubrizol Corporation. Mr. Marlen is a Director of Ameron International
Corporation. Mr. Karman is a Director of RPM, Inc., Shiloh Industries, Inc. and
Metropolitan Financial Corporation. Mr. Holland is a Director of FirstEnergy
Corp. Mr. Ockene is a Director of Ameron International Corporation.
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 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 (v) 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, 1998.
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 one meeting during the year ended August 31, 1998.
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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 did not meet during the year ended August 31, 1998.
The Board of Directors held ten meetings during the year ended August 31,
1998. 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,
except Dr. Peggy Gordon Elliott.
COMPENSATION OF DIRECTORS
Each Director of the Corporation who is not an employee of the Corporation
receives an annual Director's fee of $25,000 plus $1,000 for each Board or
committee meeting attended. Further, any Director serving as a Chairman of a
committee receives an additional annual fee of $2,000. Each Director has the
option to defer payment of all or a specified portion of his or her Director's
fees and to receive, in lieu thereof, a number of units equivalent to the amount
to be paid, divided by the closing price of the Corporation's Common Stock on
the last business day of the year next preceding the year in question. Upon
surrender of the units, the Director will receive a cash payment in an amount
determined by multiplying the number of units times the market price of the
Common Stock on the date immediately preceding the surrender date. 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 1,000 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.
CERTAIN RELATED TRANSACTIONS; COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
James H. Berick, Secretary and a former Director and 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.
Gordon L. Trimmer, Vice President-North American Sales and Marketing,
received a non-interest bearing bridge loan from the Corporation in connection
with his transfer from Canada to the United States. The largest amount of such
indebtedness to the Corporation outstanding during the fiscal year was $88,000.
Mr. Trimmer has repaid this loan in full.
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<PAGE> 8
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report describes the Corporation's executive compensation programs and
the basis on which fiscal year 1998 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 determining the base
salary level and bonus for the Chief Executive Officer and 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 periodically 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
6
<PAGE> 9
experience, breadth of knowledge, internal equity issues and external pay
practices. Increases to base salaries are driven by individual performance and
Corporation profitability. Individual performance is evaluated based on
sustained levels of individual contribution to the Corporation.
In determining Mr. Haines' base salary in 1998, 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.
Effective September 1, 1997, the Corporation instituted a new bonus program
for the determination of executive officer bonus payouts. Under the new program,
the Corporation established a total target award for each officer approximately
equal to the average award provided to persons holding similar positions at
comparable companies. The award was measured by stated threshold, target, and
maximum percentages of salary. The officer's actual award was increased or
decreased from the total target award based upon both Corporation and individual
performance. Approximately one-half of the total target award potential was
determined by the financial performance of the Corporation. This financial
performance portion of the bonus was based upon (i) the world-wide performance
of the Corporation for Mr. Haines, the President and Chief Executive Officer,
and for the Chairman and Chief Financial Officer and (ii) the Corporation's
performance in North America for all other officers. The remaining one-half of
the total target award level was based upon each officer's individual
performance. Mr. Haines' 1998 bonus award 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 1998 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 1998 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
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<PAGE> 10
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 1998, Mr. Haines received options to purchase 40,000 shares at the fair
market value ($18.90625) 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 1998.
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 1998, Mr. Haines
received an award of 10,000 shares of restricted stock.
The Compensation Committee:
Willard R. Holland, Chairman
Robert G. Wallace
Alan L. Ockene
Dr. Peggy Gordon Elliott
8
<PAGE> 11
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, 1998, 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 1998 $380,000 $228,000 $ 0 $189,063 40,000 $132,011(5)
President & Chief 1997 $360,000 $165,000 $ 0 $ 0 37,000 $139,328
Executive Officer 1996 $360,000 $145,000 $29,491 $184,000 30,000 $137,049
Robert A. Stefanko 1998 $315,000 $189,000 $ 0 $151,250 35,000 $ 87,981(5)
Chairman of the Board 1997 $300,000 $165,000 $ 0 $ 0 31,000 $ 93,950
of Directors, Chief 1996 $300,000 $145,000 $ 7,976 $149,500 25,000 $ 92,904
Financial Officer and
Executive Vice President--
Finance and Administration
Larry A. Kushkin 1998 $225,000 $117,000 $ 0 $ 0 0 $ 42,375(5)
Executive Vice President-- 1997 $215,000 $145,000 $ 0 $ 0 22,000 $ 43,215
International Automotive 1996 $215,000 $130,000 $29,206 $ 75,900 18,000 $ 41,942
Operations
Leonard E. Emge 1998 $157,500 $ 81,000 $ 0 $ 0 0 $ 16,860(5)
Vice President-- 1997 $150,000 $ 55,000 $ 0 $ 0 9,000 $ 16,110
Manufacturing 1996 $150,000 $ 50,000 $ 3,399 $ 41,400 7,000 $ 16,110
Gordon L. Trimmer 1998 $135,000 $ 70,000 $ 0 $ 47,266 10,000 $ 63,642(5)
Vice President-- 1997 $ 88,537(6) $ 52,000 $ 0 $ 0 8,000 $ 11,006
North American 1996 $ 66,183(6) $ 40,728(6) $ 7,065 $ 50,600 6,000 $ 5,692
Sales and Marketing
</TABLE>
- ---------------
(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, 1998 (based upon the fair market value at August 31, 1998 of
$15.875): Mr. Haines held 24,000 shares valued at $381,000; Mr. Stefanko
held 19,500 shares valued at $309,563; Mr. Kushkin held 6,300 shares valued
at $100,013; Mr. Emge held 3,300 shares valued at $52,388; and Mr. Trimmer
held 4,300 shares valued at $68,263. Dividends accrue but are not paid on
the restricted shares until the restrictions thereon lapse.
(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; Corporation payments of term life
insurance premiums; amounts accrued by the Corporation for the fiscal year
under deferred compensation agreements; reimbursement of moving expenses;
and Director's fees received from the Corporation's Belgian subsidiary.
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(5) Amounts shown include the following: Corporation contributions to Profit
Sharing Plan -- $16,000 for each of Messrs. Haines, Stefanko, and Kushkin,
$15,750 for Mr. Emge, and $13,500 for Mr. Trimmer; amounts accrued by the
Corporation for the fiscal year ended August 31, 1998 under non-qualified
profit sharing plan -- $22,000 for Mr. Haines, $15,500 for Mr. Stefanko, and
$6,500 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, 1998 -- $75,061 for Mr. Haines ($22,518 of which was not vested),
$37,531 for Mr. Stefanko ($11,259 of which was not vested), and $18,765 for
Mr. Kushkin ($9,383 of which was not vested); moving expenses reimbursement
-- $49,032 for Mr. Trimmer; and Director's fees received from the
Corporation's Belgian subsidiary -- $17,840 for each of Messrs. Haines and
Stefanko.
(6) All of Mr. Trimmer's compensation in respect of 1996, and a portion of his
compensation in respect of 1997, was paid in Canadian dollars. The amounts
shown reflect the currency exchange ratios at August 31, 1996 and August 31,
1997, which were $1 CN to $.6788 US and $1 CN to $.6038 US, respectively.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options during fiscal year 1998 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 $24.13 and $30.49, respectively. No gain
to the optionees is possible without an increase in stock price which will
benefit all stockholders proportionately. Actual gains, if any, on an option
exercise are dependent upon future performance of the Corporation's Common Stock
and overall market conditions. There can be no assurance that the potential
realizable values shown in this table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS IN 1998 VALUE AT ASSUMED
-------------------------------------------------------- ANNUAL RATES OF STOCK
% OF TOTAL PRICE APPRECIATION FOR
OPTIONS EXERCISE 5-YEAR OPTION TERM
GRANTED TO OR BASE ----------------------
OPTIONS EMPLOYEES IN PRICE(3) EXPIRATION 5% ($) 10% ($)
NAME (#)GRANTED(1) FISCAL YEAR(2) ($/SH) DATE (4) (4)
---- ------------- -------------- ------ ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
Terry L. Haines 40,000 13.40% $18.90625 7/7/03 $208,950 $461,750
Robert A. Stefanko 35,000 11.72% $18.90625 7/7/03 $182,831 $404,031
Larry A. Kushkin 0 0% N/A N/A N/A N/A
Leonard E. Emge 0 0% N/A N/A N/A N/A
Gordon L. Trimmer 10,000 3.35% $18.90625 7/7/03 $ 52,238 $115,438
</TABLE>
- ---------------
(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 298,600 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 33,112,505 shares of
Common Stock outstanding of $173.0 million or $382.2 million, respectively,
over the five-year term of the options.
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<PAGE> 13
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of October 16, 1998 in
respect of beneficial ownership of shares of the Corporation's 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>
Robert A. Stefanko 163,662 *
Dr. Peggy Gordon Elliott 2,311 *
Terry L. Haines 129,575 *
Dr. Paul Craig Roberts 4,591(4) *
Rene C. Rombouts 121,490 *
Larry A. Kushkin 46,923 *
Alan L. Ockene 6,761 *
Robert G. Wallace 9,811 *
James S. Marlen 4,655 *
Willard R. Holland 3,655 *
James A. Karman 1,655 *
Leonard E. Emge 44,219 *
Gordon L. Trimmer 16,950 *
All Directors and
Executive Officers as a
group (16 persons) 624,771 1.9%
</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 1991 Stock Incentive Plan: 69,875 by Terry L. Haines; 37,000
by Larry A. Kushkin; 57,500 by Robert A. Stefanko; 16,000 by Leonard E.
Emge; 46,500 by Rene C. Rombouts; 12,750 by Gordon L. Trimmer and 256,675 by
all Directors and executive officers as a group.
(2) 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 1992 Non-Employee Directors' Stock Option Plan: 2,186 by each
of Alan L. Ockene, Robert G. Wallace, and Dr. Paul Craig Roberts; 1,311 by
Dr. Peggy Gordon Elliott; 655 by each of Willard R. Holland, James A.
Karman, and James S. Marlen; and 9,834 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: 24,000 for Terry L.
Haines, 19,500 for Robert A. Stefanko, 6,300 for Larry A. Kushkin, 13,000
for Rene C. Rombouts, 3,300 for Leonard E. Emge, 4,200 for Gordon L. Trimmer
and 79,000 for all Directors and executive officers as a group.
(4) Includes 100 shares held by Dr. Roberts as trustee for his son, the
beneficial ownership of which Dr. Roberts disclaims.
11
<PAGE> 14
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>
'A. Schulman, S&P Specialty
Inc.' S&P 500 Chemicals
<S> <C> <C> <C>
Aug-93 100.00 100.00 100.00
Aug-94 114.53 105.45 96.77
Aug-95 115.89 127.97 121.75
Aug-96 96.72 151.89 120.92
Aug-97 99.13 213.45 143.78
Aug-98 73.55 230.78 115.72
</TABLE>
12
<PAGE> 15
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
The Corporation has employment agreements with Messrs. Haines, Stefanko,
Kushkin, Trimmer, and certain other senior personnel. The employment agreements
of Messrs. Haines, Stefanko, Kushkin and Trimmer have an initial three-year
term. Such agreements automatically will be extended at the end of each month
for an additional month unless prior notice of termination is given, to
constitute at all times a three-year agreement; provided, however, that no such
monthly extension shall occur after August 31, 2008, January 31, 2005, or July
31, 2002, or June 23, 2006, respectively. The employment agreements provide that
in the event employment is terminated as a result of a merger, consolidation,
liquidation, or change in control (collectively, "Change in Control") of the
Corporation, or for any other reason except for death, disability or for cause,
the employee shall be paid a lump sum amount equal to a multiple (equal to the
initial term of such agreement) of the sum of (i) the higher of his annual
salary payable prior to the event causing the termination or salary payable
prior to the Change in Control, plus (ii) an amount equal to the higher of his
bonus earned in the preceding fiscal year or the average bonus earned in the
most recent three fiscal years. In addition, upon a Change in Control, each of
the employment agreements provides that the employee also will continue to
receive certain insurance benefits not provided to the employee by another
source after termination, for a period of time equal to the original term of
such employee's employment agreement, and the employee will be paid a lump sum
amount equal to the sum of (i) any unpaid annual incentive compensation
previously awarded to the employee, the payment of which was contingent only
upon continued employment, and (ii) a pro rata portion of his bonus for the
fiscal year in which the termination occurred. If the Corporation terminates an
employee's employment without cause prior to the expiration of the term of the
employment agreement or prior to a Change in Control, the employee shall receive
his salary for the remaining term of his employment agreement, plus a bonus each
year for the remaining 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. If the employee's employment is terminated by reason of death, the
Corporation shall pay a lump sum amount equal to sixty percent of the employee's
salary for twenty-four months. In addition, the amounts described above payable
under the employment agreements for Messrs. Haines, Stefanko and Kushkin shall
be "grossed up" to cover certain taxes payable by the employee on certain of the
amounts paid to such employee in respect of a Change in Control of the
Corporation. Notwithstanding the foregoing, in respect of the employment
agreement of Mr. Trimmer, the Corporation is not obligated to pay any amount
which is in excess of the maximum amount which it can deduct for federal income
tax purposes. These employment agreements may tend to discourage a takeover
attempt of the Corporation inasmuch as a Change in Control of the Corporation
could result in increased compensation expense.
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 (and participating subsidiaries) 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
13
<PAGE> 16
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, 1998, the amounts contributed to the Profit Sharing Plan
accounts of the persons listed in the Summary Compensation Table were: $16,000
for each of Messrs. Haines, Stefanko, and Kushkin, $15,750 for Mr. Emge and
$13,500 for Mr. Trimmer.
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. In addition, upon a Change in Control of the Corporation, benefits
become fully vested. 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 during such year in the Profit Sharing Trust
pursuant to the Profit Sharing Plan. For the fiscal year ended August 31, 1998,
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, $22,000; Mr. Stefanko, $15,500; and Mr. Kushkin $6,500.
The Corporation also has deferred compensation agreements with Messrs.
Haines, Stefanko and Kushkin, providing for the payment of benefits for ten
years following retirement, disability or death in the annual amount of $100,000
for Mr. Haines, $100,000 (under two agreements for $50,000 each) for Mr.
Stefanko and $75,000 (under two agreements for $50,000 and $25,000,
respectively) for Mr. Kushkin, except that any amounts payable at retirement
will be reduced proportionately to the extent that Messrs. Haines, Stefanko and
Kushkin are employed by the Corporation for less than ten years from the date of
their agreements. The effective dates of Mr. Haines' Agreement is 1991, of Mr.
Stefanko's two agreements are 1985 and 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. Haines, Stefanko 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.
Haines, Stefanko 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 PricewaterhouseCoopers LLP as independent
accountants to examine the books, records and accounts of the Corporation and
its subsidiaries for the fiscal year ending August 31, 1999. 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. PricewaterhouseCoopers LLP was the
independent accountant of the Corporation for the fiscal year ended August 31,
1998, and is considered by the Board of
14
<PAGE> 17
Directors to be well qualified. Representatives of PricewaterhouseCoopers 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
PricewaterhouseCoopers 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.
STOCKHOLDER PROPOSAL NO. 1
The following proposal was submitted by William Steiner, a stockholder of
the Corporation. Mr. Steiner has informed the Corporation that his address is 4
Radcliff Drive, Great Neck, New York 11024 and that he is the owner of 1,300
shares of the Corporation's Common Stock.
"RESOLVED, that the stockholders of the Company request that the Board
of Directors take the necessary steps, in accordance with state law, to
declassify the Board of Directors so that all directors are elected
annually, such declassification to be effected in a manner that does not
affect the unexpired terms of directors previously elected."
SUPPORTING STATEMENT SUBMITTED BY MR. STEINER:
"The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable
for it's implementation of those policies. I believe that the
classification of the Board of Directors, which results in only a portion
of the Board being elected annually, is not in the best interests of the
Company and it's stockholders.
I believe that the Company's classified Board of Directors maintains
the incumbency of the current Board and therefore of current management,
which in turn limits management's accountability to stockholders.
The elimination of the Company's classified Board would require each
new director to stand for election annually and allow stockholders an
opportunity to register their views on the performance of the Board
collectively and each director individually. I believe this is one of the
best methods available to stockholders to insure that the Company will be
managed in a manner that is in the best interests of the stockholders.
I believe that concerns expressed by Companies with classified boards
that the annual election of all directors could leave companies without
experienced directors in the event that all incumbents are voted out by
stockholders, are unfounded. In my view, in the unlikely event that
stockholders vote to replace all directors, this decision would express
stockholder dissatisfaction with the incumbent directors and reflect the
need for change.
I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION"
15
<PAGE> 18
STATEMENT OF THE BOARD OF DIRECTORS RECOMMENDING A VOTE AGAINST STOCKHOLDER
PROPOSAL NO. 1:
The Board of Directors believes that the present system of electing
Directors of the Corporation in three classes is in the best interests of the
Corporation and its stockholders and should not be changed.
Mr. Steiner points out that the election of Directors is the primary avenue
for stockholders to influence corporate governance policy and to hold management
accountable for its implementation of those policies. However, corporate
accountability depends upon responsible and experienced individuals diligently
fulfilling their obligations to the stockholders, not upon whether Directors
serve terms of one year or three years. A classified board in no way diminishes
or affects the fiduciary and legal obligations owed to stockholders by
Directors. The Corporation's classified board structure permits stockholders
annually to review corporate decision-making and affords them the opportunity to
change approximately one-third of the Directors each year. Thus, the
stockholders have the power, in any given year, to change substantially the
Board of Directors' composition and character. This system permits significant
annual changes in the Board of Directors, if desired by the stockholders, while
avoiding the risk of sudden and disruptive changes in corporate business
strategy and policies that could arise if even a majority of new Directors were
elected in a single year.
In addition, a classified board protects stockholders against potentially
coercive takeover tactics by which a party might attempt to acquire control on
terms that do not offer the greatest value to all stockholders. For example,
throughout the 1980s, there were a number of attempts by individuals and
entities to acquire significant minority positions in companies with the intent
of obtaining actual control by electing their own slate of directors, or of
achieving some other goal, such as the repurchase of their shares at a premium,
by threatening to obtain control. Such attempts can seriously disrupt the
conduct of business of a company and cause it to incur substantial expense to
the detriment of its stockholders. A classified board discourages such actions
because it prevents the immediate removal of all directors. A classified board
is intended to encourage a person seeking to obtain control of the Corporation
to negotiate with the Directors. In general, at least two stockholders' meetings
would be necessary to effect a change in control of the Board of Directors. The
classified system thus ensures that the Board of Directors will have sufficient
time to review any takeover proposal and to develop an appropriate response
without operating under the threat of its complete removal, thereby enhancing
the Board of Directors' ability to negotiate the best result for all of the
Corporation's stockholders.
Further, the adoption of this stockholder proposal would not in itself
declassify the Board of Directors and result in the annual election of
Directors. If approved by the stockholders, Mr. Steiner's proposal would only
require the Board of Directors to consider taking the necessary steps to
declassify the Board of Directors. To effect the declassification of the Board
of Directors, the relevant provisions of the Corporation's Restated Certificate
of Incorporation would be required to be amended. Such an amendment would
require the approval of the Board of Directors and the affirmative vote of
holders of 80% of the outstanding shares of Common Stock of the Corporation.
16
<PAGE> 19
REQUIRED VOTE
The approval of Mr. Steiner's proposal requires the affirmative vote of a
majority of the shares of Common Stock of the Corporation represented at the
meeting in person or by proxy. Neither abstentions nor broker non-votes will be
counted as votes cast, although both will count toward the determination of the
presence of a quorum and both will have the same effect as a vote cast against
the proposal.
THE BOARD OF DIRECTORS HAS CONCLUDED THAT A CLASSIFIED BOARD IS IN THE
BEST INTERESTS OF THE CORPORATION AND ITS STOCKHOLDERS AND RECOMMENDS A
VOTE AGAINST THE ADOPTION OF STOCKHOLDER PROPOSAL NO. 1. PROXIES SOLICITED
BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS OTHERWISE
SPECIFY IN THEIR PROXIES.
STOCKHOLDER PROPOSAL NO. 2
The following proposal was submitted by Charles Miller, a stockholder of
the Corporation. Mr. Miller has informed the Corporation that his address is 23
Park Circle, Great Neck, New York 11021 and that he is the owner of 400 shares
of the Corporation's Common Stock.
"Resolved that the shareholders of A. Schulman Inc. Corporation urge
the A. Schulman Inc. Board of Directors to arrange for the prompt sale of
A. Schulman Inc. to the highest bidder."
SUPPORTING STATEMENT SUBMITTED BY MR. MILLER
"The purpose of the Maximize Value Resolution is to give all A.
Schulman Inc. shareholders the opportunity to send a message to the A.
Schulman Inc. Board that they support the prompt sale of A. Schulman Inc.
to the highest bidder. A strong and or majority vote by the shareholders
would indicate to the board the displeasure felt by the shareholders of the
shareholder returns over many years and the drastic action that should be
taken. Even if it is approved by the majority of the A. Schulman Inc.
shares represented and entitled to vote at the annual meeting, the Maximize
Value Resolution will not be binding on the A. Schulman Inc. Board. The
proponent however believes that if this resolution receives substantial
support from the shareholders, the board may choose to carry out the
request set forth in the resolution:
The prompt auction of A. Schulman Inc. should be accomplished by any
appropriate process the board chooses to adopt including a sale to the
highest bidder whether in cash, stock, or a combination of both. It is
expected that the board will uphold its fiduciary duties to the utmost
during the process.
The proponent further believes that if the resolution is adopted, the
management and the board will interpret such adoption as a message from the
company's stockholders that it is no longer acceptable for the board to
continue with its current management plan and strategies.
I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION"
17
<PAGE> 20
STATEMENT OF THE BOARD OF DIRECTORS RECOMMENDING A VOTE AGAINST STOCKHOLDER
PROPOSAL NO. 2
The Board of Directors and management of the Corporation are committed to
increasing stockholder value and at all times are willing to consider
alternative strategies to accomplish this goal. The Board of Directors, together
with management and outside advisors, regularly evaluate the Corporation's
strategies for maximizing stockholder value and continue to concentrate on
improving the Corporation's earnings on a long-term, sustained basis.
The Board of Directors consists of experienced individuals who are familiar
with the Corporation's businesses and the markets in which the Corporation
operates. The Board of Directors believes that, at present, the interests of the
stockholders are best served by the Corporation focusing primarily on increasing
operating earnings. Therefore, the Corporation will attempt to improve its
long-term prospects by continuing its efforts to increase growth, expand its
global markets and increase market penetration, explore acquisitions and
alliances which will complement the Corporation's businesses, and continue
improvement in operating efficiencies. Further, the Board of Directors believes
that, at present, public market valuations of specialty chemical companies in
general, including the Corporation, are extremely low compared to other periods.
Accordingly, the Board of Directors believes it is not in the best interests of
the Corporation's stockholders to arrange for a sale of the Corporation in the
present market environment.
The Board of Directors believes that continued focus on the Corporation's
increased growth, global market expansion, acquisition strategies and improved
operating efficiencies will enhance stockholder value over the long term. The
Board of Directors believes that this proposal could seriously prejudice and
jeopardize the financial interests of the Corporation's stockholders. Although
the proposal only requests and does not obligate the Board of Directors to take
the recommended action, the Board of Directors believes that an announcement
that such proposal has been adopted could severely damage the Corporation's
relationships with its customers, joint venture partners, independent sales
agents and employees. Such results could have an adverse impact on the
Corporation's ability to compete effectively in the short and long term, leading
to a potential decline in revenues, profits, and stockholder value.
Regardless of the outcome of the vote on this proposal, the Board of
Directors has and will continue to consider all reasonable avenues to increase
stockholder value. However, the Board of Directors believes it is in the best
interests of the stockholders to allow the Board of Directors to maintain the
flexibility of determining the appropriate courses of action. Therefore, for all
of the reasons stated above, the Board of Directors urges stockholders to reject
this proposal.
REQUIRED VOTE
The approval of Mr. Miller's proposal requires the affirmative vote of a
majority of the shares of Common Stock of the Corporation represented at the
meeting in person or by proxy. Neither abstentions nor broker non-votes will be
counted as votes cast, although both will count toward the determination of the
presence of a quorum and both will have the same effect as a vote cast against
the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF
STOCKHOLDER PROPOSAL NO. 2. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE SO VOTED UNLESS STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
18
<PAGE> 21
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. John M. Myles, an officer
of the Corporation, filed his initial statement of beneficial ownership on Form
3 subsequent to the due date for such filing. Peggy Gordon Elliott, James A.
Karman and Willard R. Holland, each a Director of the Corporation, and James H.
Berick, a former Director of the Corporation, each filed his or her annual
report of beneficial ownership on Form 5 subsequent to the due date for such
filing. Such Forms 5 reported six, five, six and four transactions,
respectively, in connection with units received pursuant to the Corporation's
Directors' Deferred Compensation Plan.
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 no specification has been
made will be voted for the election of Directors and the ratification of the
selection of the independent accountants and against stockholder proposal No. 1
and stockholder proposal No. 2.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders, presently scheduled for December 1999, must be received
by the Corporation no later than July 13, 1999 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.
19
<PAGE> 22
SOLICITATION OF PROXIES
The cost of soliciting the accompanying proxies will be borne by the
Corporation. The Corporation may reimburse 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. Further, the Corporation has retained
Corporate Investor Communications to perform solicitation services in connection
with this proxy statement. For such services, Corporate Investor Communications
will receive a fee of approximately $6,000 and will be reimbursed for certain
out-of-pocket expenses and indemnified against certain liabilities incurred in
connection with this proxy solicitation.
By order of the Board of Directors
JAMES H. BERICK
Secretary
November 9, 1998
20
<PAGE> 23
PROXY
A. SCHULMAN, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
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 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
16, 1998 at the annual meeting of Stockholders to be held on December
10, 1998 and at any adjournments thereof.
Election of Class III Directors, Nominees:
Terry L. Haines, Dr. Paul Craig Roberts 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
--------------
- --------------------------------------------------------------------------------
* DETACH CARD *
<PAGE> 24
PLEASE MARK YOUR
[X] VOTES AS IN THIS 2066
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND
AGAINST PROPOSALS 3 AND 4.
<TABLE>
<S> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. To ratify the selection of [ ] [ ] [ ] 3. To approve the Stockholder [ ] [ ] [ ]
Class III PricewaterhouseCoopers proposal to declassify the
Directors LLP as independent Board of Directors.
accountants for the
fiscal year ending 4. To approve the Stockholder [ ] [ ] [ ]
August 31, 1999. proposal that the Board of
For, except vote Directors consider the
withheld from the prompt sale of the
following nominee(s): Corporation.
5. In their discretion, the Proxies are authorized
------------------- to vote upon such other business as may properly
come before the meeting.
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.
------------------------------------------------
------------------------------------------------
SIGNATURE(S) DATE
</TABLE>
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* DETACH CARD *
