<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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.
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(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
[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 Hilton Inn West, 3180 West Market Street,
Akron, Ohio, on Thursday, December 7, 2000 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
2003;
2. A proposal to amend the A. Schulman, Inc. 1992 Non-Employee Directors'
Stock Option Plan;
3. The ratification of the selection by the Board of Directors of
PricewaterhouseCoopers LLP as independent accountants for the fiscal
year ending August 31, 2001;
4. A stockholder proposal, opposed by the Board of Directors, which is
described in the accompanying proxy statement; 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 18, 2000 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 10, 2000
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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.
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<PAGE>
[LOGO]
3550 WEST MARKET STREET
AKRON, OHIO 44333
------------------------
PROXY STATEMENT
---------------------
November 10, 2000
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, 2000, and any adjournments thereof.
Stockholders of record at the close of business on October 18, 2000 (the
record date) will be entitled to vote at the Annual Meeting. At that date the
Corporation had issued and outstanding 29,239,922 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 14,619,962 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 10, 2000.
ELECTION OF DIRECTORS
The Board of Directors of the Corporation presently is comprised of eleven
Directors. The Directors of the Corporation are divided into three classes;
presently, Classes I and III each consist of four Directors and Class II
consists of three Directors. At the Annual Meeting, three Directors of Class II
are to be elected to serve for three-year terms expiring in 2003 and until their
respective successors are duly elected and qualified.
Unless a stockholder requests that voting of the proxy be withheld for any
one or more of the nominees for Director in accordance with the instructions set
forth on the proxy, it presently is intended that shares represented by proxies
will be voted for the election as Directors of the three Class II nominees named
in the table below.
All nominees have consented to being named in this Proxy Statement and to
serve if elected. Should any nominee subsequently decline or be unable to accept
such nomination to serve as a Director, an event which the Board of Directors
does not now expect, the persons voting the shares represented by proxies
<PAGE>
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 represented at the meeting in person or by
proxy. Abstentions will be counted as votes cast and will count toward the
determination of the presence of a quorum, but will have the same effect as a
vote cast against the nominee. Broker non-votes will not be counted as votes
cast, but will count toward the determination of the presence of a quorum.
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>
FIRST
PRINCIPAL OCCUPATION DURING PAST FIVE YEARS BECAME
NAME OF NOMINEE OR DIRECTOR AND AGE AS OF OCTOBER 18, 2000 DIRECTOR
--------------------------- ----------------------------------------------------------- --------
<S> <C> <C>
NOMINEES TO SERVE UNTIL 2003 ANNUAL MEETING OF STOCKHOLDERS (CLASS II)
James S. Marlen(2)........................ Chairman of the Board of Ameron International Corporation 1995
(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 59
Rene C. Rombouts.......................... General Manager of the Corporation's European subsidiaries 1992
since 1993 and Director of European
Marketing--Manufactured Products of the Corporation since
1983; Age 62
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 57
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
FIRST
PRINCIPAL OCCUPATION DURING PAST FIVE YEARS BECAME
NAME OF NOMINEE OR DIRECTOR AND AGE AS OF OCTOBER 18, 2000 DIRECTOR
--------------------------- ----------------------------------------------------------- --------
<S> <C> <C>
CONTINUING DIRECTORS SERVING UNTIL 2002 ANNUAL MEETING OF STOCKHOLDERS (CLASS I)
Alan L. Ockene(3)(4)...................... Member, Executive Committee of Akron Regional Development 1992
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 69
Willard R. Holland(2)(3)(4)............... Retired; formerly Chairman of the Board of FirstEnergy 1995
Corp. (electric utility), 1996-1999; 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 64
Dr. Peggy Gordon Elliott(2)(4)............ President, South Dakota State University since January 1994
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 63
John B. Yasinsky(2)....................... Chairman and Chief Executive Officer of Omnova Solutions, 2000
Inc. (decorative and building products and performance
chemicals) since September 1999; formerly, Chairman,
GenCorp., Inc. (aerospace, automotive, chemical and
plastics), 1995-1999, and President and Chief Executive
Officer of GenCorp., Inc., 1995-1999; Age 61
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
FIRST
PRINCIPAL OCCUPATION DURING PAST FIVE YEARS BECAME
NAME OF NOMINEE OR DIRECTOR AND AGE AS OF OCTOBER 18, 2000 DIRECTOR
--------------------------- ----------------------------------------------------------- --------
<S> <C> <C>
CONTINUING DIRECTORS SERVING UNTIL 2001 ANNUAL MEETING OF STOCKHOLDERS (CLASS III)
Terry L. Haines(1)........................ President and Chief Executive Officer of the Corporation 1990
since 1991; formerly, Chief Operating Officer, 1990-1991;
Age 54
Dr. Paul Craig Roberts(2)(3).............. 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 61
James A. Karman(2)........................ Vice Chairman, RPM, Inc. (coatings, sealants and specialty 1995
chemicals) since August 1999; formerly President of RPM,
Inc., 1978-1999; Chief Financial Officer, RPM, Inc.,
1982-1993; Age 63
Joseph M. Gingo(4)........................ Senior Vice President for Technology and Global Products 2000
Planning of Goodyear Tire & Rubber Company (tire and
rubber manufacturing) since 1999; formerly Vice President
and general manager of Goodyear Tire & Rubber Company's
Engineered Products business unit, 1998-1999; and Vice
President of Goodyear Tire and Rubber Company's Asia
operations, 1995-1998; Age 55
</TABLE>
------------------------------
(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Nominating Committee
(4) Member of Compensation Committee
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.
Dr. Elliott is a Director of The Lubrizol Corporation. Messrs. Marlen and Ockene
are Directors 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 Davey Tree Expert Co. Mr. Yasinski is a Director of
CMS Energy 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
4
<PAGE>
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, 2000.
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 three meetings during the year ended August 31,
2000.
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, 2000.
The Board of Directors held seven meetings during the year ended August 31,
2000. 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 Mr. Yasinsky and Mr. Karman.
COMPENSATION OF DIRECTORS
Each Director of the Corporation who is not an employee of the Corporation
receives an annual Director's fee of $28,000, plus $1,200 for each Board or
committee meeting attended. Further, any Director serving as a Chairman of a
committee receives an additional annual fee of $2,500. 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 prior year. 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 day before 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
preceding the date of grant. After giving effect to the proposed amendment to
the 1992 Non-Employee Directors' Stock Option Plan, as described herein,
commencing on the first business day of February 2001, and on the first business
day of February of each year thereafter, each non-employee Director of the
Corporation will receive a grant of an option to purchase 2,000 shares of the
Common Stock of the Corporation and a grant of 500 restricted shares of Common
Stock.
5
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous or future filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934 that might incorporate this Proxy Statement or
future filings with the Securities and Exchange Comnmission, in whole or in
part, the following report shall not be deemed to be incorporated by reference
into any such filing.
This report describes the Corporation's executive compensation programs and
the basis on which fiscal year 2000 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.
6
<PAGE>
BASE SALARIES
The Compensation Committee regularly reviews each executive's base salary.
Base salaries for executives initially are determined by evaluating the
executives' respective levels of responsibility, prior 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 2000, 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.
Under the Corporation's bonus program, the Corporation established a total
target award for each executive 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
executive officer's actual award was increased or decreased for 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 executive officer's individual performance. Mr. Haines' 2000
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 the prior year, the executives'
respective levels of responsibility, prior experience, and historical award
data, and compensation practices at the comparison companies.
Stock options were granted in 2000 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 2000 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
7
<PAGE>
anniversary of the date of grant of the option, so long as the holder remains
employed by the Corporation or a subsidiary.
In 2000, Mr. Haines received options to purchase 75,000 shares at the fair
market value ($12.125) 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 2000. Such
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 2000, Mr. Haines received
an award of 12,000 shares of restricted stock.
The Compensation Committee:
Willard R. Holland, Chairman
Alan L. Ockene
Dr. Peggy Gordon Elliott
Joseph M. Gingo
8
<PAGE>
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, 2000, exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------------------
AWARDS
-------------------------
ANNUAL COMPENSATION(1) RESTRICTED
FISCAL ---------------------- STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARD(S)(2) (#) COMPENSATION
--------------------------- -------- -------- -------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Terry L. Haines .................... 2000 $420,000 $126,000 $145,500 75,000 $154,296(3)
President and Chief Executive 1999 $400,000 $181,200 $183,125 50,000 $136,557
Officer 1998 $380,000 $228,000 $189,063 40,000 $132,011
Robert A. Stefanko ................. 2000 $355,000 $107,000 $109,125 60,000 $105,058(3)
Chairman of the Board of 1999 $340,000 $154,500 $146,500 40,000 $ 92,526
Directors, Chief Financial Officer 1998 $315,000 $189,000 $151,250 35,000 $ 87,981
and Executive Vice
President--Finance and
Administration
Gordon L. Trimmer .................. 2000 $152,300 $ 38,000 $ 32,738 16,500 $ 16,340(3)
Vice President--North American 1999 $145,000 $ 43,500 $ 45,781 11,000 $ 15,610
Sales and Marketing 1998 $135,000 $ 70,000 $ 47,266 10,000 $ 63,642
John M. Myles ...................... 2000 $150,000 $ 37,000 $ 26,675 16,500 $ 16,110(3)
Vice President--North American 1999 $142,800 $ 42,840 $ 27,469 11,000 $ 15,390
Purchasing 1998 $133,140 $ 35,000 $ 37,813 8,000 $ 14,424
Alain Adam ......................... 2000 $141,200 $ 34,000 $ 26,675 12,000 $ 15,230(3)
Vice President--International 1999 $133,200 $ 39,960 $ 32,963 8,000 $ 14,410
Automotive Operations 1998 $128,000 $ 66,000 $ 34,031 4,000 $ 13,910
</TABLE>
------------------------
(1) Includes amounts earned in fiscal year, whether or not deferred.
(2) The amounts set forth in this column represent grants of restricted stock
during the fiscal year, valued at the fair market value of the Corporation's
Common Stock on the grant date ($12.125). The total number of restricted
shares and the aggregate market value at August 31, 2000 (based upon the
fair market value at August 31, 2000 of $12.13) in respect of each named
executive officer are as follows: Mr. Haines held 40,000 shares valued at
$485,200; Mr. Stefanko held 31,500 shares valued at $382,095; Mr. Trimmer
held 8,700 shares valued at $105,531; Mr. Myles held 5,700 shares valued at
$69,141; and Mr. Adam held 5,200 shares valued at $63,076. Dividends accrue
but are not paid on the restricted shares until the restrictions thereon
lapse.
(3) Amounts shown include the following: Corporation contributions to Profit
Sharing Plan--$16,000 for each of Messrs. Haines and Stefanko, $15,230 for
Mr. Trimmer, $15,000 for Mr. Myles, and 14,120 for Mr. Adam; amounts accrued
by the Corporation for the fiscal year ended August 31, 2000 under non-
qualified profit sharing plan--$44,217 for Mr. Haines and $32,510 for
Mr. Stefanko; 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,
2000--$75,061 for Mr. Haines ($4,378 of which was not vested), and $37,530
for
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<PAGE>
Mr. Stefanko ($2,189 of which was not vested); and Director's fees received
from the Corporation's Belgian subsidiary--$17,908 for each of
Messrs. Haines and Stefanko.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options during fiscal year 2000 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 $15.48 and $19.53, respectively. No gain
to the optionees is possible without an increase in stock price which will
benefit all stockholders proportionately. Actual gains, if any, on an option
exercise are dependent upon future performance of the Corporation's Common Stock
and overall market conditions. There can be no assurance that the potential
realizable values shown in this table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS IN 2000 VALUE AT ASSUMED
------------------------------------------------------ ANNUAL RATES OF STOCK
% OF TOTAL PRICE APPRECIATION FOR
OPTIONS EXERCISE 5-YEAR OPTION TERM
GRANTED TO OR BASE -----------------------
OPTIONS EMPLOYEES IN PRICE(3) EXPIRATION 5% ($) 10% ($)
NAME (#)GRANTED(1) FISCAL YEAR(2) ($/SH) DATE (4) (4)
---- ------------- -------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Terry L. Haines............ 75,000 13.34% $ 12.125 8/29/05 $251,625 $555,375
Robert A. Stefanko......... 60,000 10.67% $ 12.125 8/29/05 $201,300 $444,300
Gordon L. Trimmer.......... 16,500 2.94% $ 12.125 8/29/05 $ 55,357 $122,182
John M. Myles.............. 16,500 2.94% $ 12.125 8/29/05 $ 55,357 $122,182
Alain Adam................. 12,000 2.14% $ 12.125 8/29/05 $ 40,260 $ 88,860
</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 562,200 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 29,239,922 shares of
Common Stock outstanding of $98.1 million or $216.5 million, respectively,
over the five-year term of the options.
10
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of October 18, 2000 in respect
of beneficial ownership of shares of the Corporation's Common Stock by each
Director, by each named executive officer, by all Directors and executive
officers as a group, and by each person known to the Corporation to own 5% or
more of its Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OWNERSHIP(1)(2)(3) OUTSTANDING
---- ------------------ -----------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Robert A. Stefanko.......................................... 196,412 *
Terry L. Haines............................................. 175,950 *
Rene C. Rombouts............................................ 158,590 *
Gordon L. Trimmer........................................... 29,151 *
Alain Adam.................................................. 25,248 *
John M. Myles............................................... 16,525 *
Dr. Peggy Gordon Elliott.................................... 3,281 *
James S. Marlen............................................. 6,281 *
Alan L. Ockene.............................................. 4,856 *
Dr. Paul Craig Roberts...................................... 2,586 *
Willard R. Holland.......................................... 5,281 *
James A. Karman............................................. 4,281 *
Joseph M. Gingo............................................. 1,298 *
John B. Yasinsky............................................ 1,000 *
All Directors and Executive Officers as a group
(16 persons).............................................. 670,615 2.29%
5% OR GREATER STOCKHOLDERS
Perkins, Wolf, McDonnell & Company ......................... 3,499,550(4) 11.97%
53 N. Jackson Blvd.
Suite 722
Chicago, Illinois 60604
Snyder Capital Management, L.P ............................. 2,145,500(5) 7.34%
350 California Street
Suite 1460
San Francisco, California 94104
</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: 90,250 by Terry L. Haines; 75,750
by Robert A. Stefanko; 67,750 by Rene C. Rombouts; 19,750 by Gordon L.
Trimmer; 10,500 by John M. Myles; 10,125 by Alain Adam; and 294,500 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: 2,281 by each
of Alan L. Ockene, Dr. Paul Craig Roberts, Dr. Peggy Gordon Elliott,
Willard R. Holland, James A. Karman, and James S. Marlen; and 13,686 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; 40,000 for Terry L.
Haines, 31,500 for Robert A. Stefanko, 20,000 for
11
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Rene C. Rombouts, 8,700 for Gordon L. Trimmer, 5,700 for John M. Myles,
5,200 for Alain Adam; and 123,700 for all Directors and executive officers
as a group.
(4) According to its Amendment to Schedule 13G dated June 30, 2000, Perkins,
Wolf, McDonnell & Company, a registered investment advisor, states that it
beneficially owns 3,499,550 shares of the Corporation's Common Stock, that
it shares voting and dispositive power in respect of 3,379,100 of such
shares, and that it has sole voting and dispositive power in respect of
120,450 of such shares.
(5) According to its Schedule 13G dated December 31, 1999, Snyder Capital
Management, L.P., a group in accordance with Exchange Act Rule 13d-1, states
that it beneficially owns 2,145,500 shares of the Corporation's Common
Stock, that it shares voting power in respect of 1,912,100 of such shares,
and that it shares dispositive power in respect of all 2,145,500 of such
shares, and that it has sole voting and dispositive power in respect of none
of such shares.
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PERFORMANCE GRAPH
The following graph compares total stockholder returns in respect of shares
of the Corporation's Common Stock 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
shares of the Corporation's Common Stock, 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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
A. SCHULMAN, INC. S&P 500 S&P SPECIALTY CHEMICALS
<S> <C> <C> <C>
8/95 $100.00 $100.00 $100.00
8/96 $83.46 $118.69 $99.31
8/97 $85.54 $166.80 $118.09
8/98 $63.47 $180.34 $95.04
8/99 $73.70 $252.07 $127.33
8/00 $51.61 $293.18 $97.20
</TABLE>
13
<PAGE>
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
The Corporation has employment agreements with Messrs. Haines, Stefanko,
Trimmer, Myles, Adam and certain other senior personnel. The employment
agreements of Messrs. Haines, Stefanko, Trimmer, Myles and Adam have an initial
three-year term. Such agreements automatically are 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, June 23,
2006, October 31, 2008, or November 30, 2012, 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 and Stefanko 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
agreements of Messrs. Trimmer, Myles and Adam, 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 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, 2000, the amounts contributed to the Profit Sharing Plan
14
<PAGE>
accounts of the persons listed in the Summary Compensation Table were: $16,000
for each of Messrs. Haines and Stefanko, $15,230 for Mr. Trimmer, $15,000 for
Mr. Myles and $14,120 for Mr. Adam.
The Corporation also has a non-qualified Profit Sharing Plan (the
"Non-Qualified Plan") pursuant to which the Corporation may accrue 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, 2000,
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, $44,217; and Mr. Stefanko, $32,510.
The Corporation also has deferred compensation agreements with
Messrs. Haines and Stefanko, providing for the payment of benefits for ten years
following retirement, disability or death in the annual amount of $100,000 for
Mr. Haines and $100,000 (under two agreements for $50,000 each) for
Mr. Stefanko. Except in the case of disability or death, to the extent that
Messrs. Haines and Stefanko are employed by the Corporation for less than ten
years from the date of their agreements, any amounts payable at retirement will
be reduced proportionately. The effective dates of Mr. Haines' Agreement is 1991
and of Mr. Stefanko's two agreements are 1985 and 1991. 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 and Stefanko 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 and Stefanko, in the amount
of $1,000,000 each.
PROPOSAL TO AMEND THE A. SCHULMAN, INC. 1992 NON-EMPLOYEE DIRECTORS' STOCK
OPTION PLAN
The Board of Directors has approved and recommends that the stockholders
approve an amendment (the "Amendment") of the A. Schulman, Inc. 1992
Non-Employee Directors' Stock Option Plan (the "1992 Plan"), as heretofore
amended. The purpose of the Amendment is to increase the number of shares of
Common Stock subject to annual option grants to two thousand (2,000) shares and
to provide that each eligible Director shall receive an annual grant of five
hundred (500) restricted shares of Common Stock.
The following summary of the amendments to the 1992 Plan which are contained
in the Amendment is qualified by reference to the full text of the Amendment,
which is set forth as Exhibit A to this Proxy Statement. The Amendment does not
increase the total number of shares of the Corporation's Common Stock available
for grant.
The 1992 Plan provides for annual grants of options to purchase shares of
Common Stock to Directors who are not officers or employees of the Corporation
("Non-Employee Directors"). The Amendment provides for an increase in the number
of shares of Common Stock subject to the annual grant of options to each such
Non-Employee Director from 1,000 shares to 2,000 shares. Accordingly, as the
Corporation currently has eight (8) Non-Employee Directors, it annually will
grant to such Directors, in the aggregate, options to purchase 16,000 shares of
Common Stock.
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The Amendment further provides for an annual award of 500 restricted shares
of Common Stock to each Non-Employee Director. Such awards shall be made on the
first day of February of each year to each such Non-Employee Director. The
Corporation's eight (8) existing Non-Employee Directors, therefore, annually
will receive, in the aggregate, an award of 4,000 restricted shares having a
value of approximately $58,500 (based upon the closing price of the
Corporation's Common Stock on February 1, 2000 of $14.625 per share). All such
restricted shares of Common Stock awarded will be non-transferable and subject
to substantial risk of forfeiture until specific conditions are met. The
restricted shares of Common Stock awarded will vest on the earlier to occur of
(i) the fifth anniversary of their date of grant, so long as the holder remains
a Director of the Corporation, or (ii) the Non-Employee Director's retirement
after reaching age 65, Disability, or death or upon a Change in Control (as
those terms are defined in the 1992 Plan, as amended by the Amendment). In no
event may restricted shares of Common Stock awarded under the Amendment vest
prior to six (6) months following the date of award. Certificates evidencing
awards of restricted shares of Common Stock will bear a legend making reference
to the restrictions. The restrictions will lapse in accordance with the
foregoing conditions. During the period of restriction, Non-Employee Directors
holding restricted shares of Common Stock shall have full voting rights in
respect of such shares. Dividends in respect of restricted shares of Common
Stock shall accrue (but shall not be paid) during the period of restriction and
are subject to the same restrictions on transfer as are the restricted shares of
Common Stock. Any accrued dividends shall be paid in one lump sum to
Non-Employee Directors within 30 days following the date the restrictions lapse.
Each award of restricted shares of Common Stock shall be evidenced by a
restricted stock agreement. The restricted stock agreement shall specify the
period or periods of restriction, the number of restricted shares of Common
Stock granted and such other provisions as the Committee shall determine.
Approval of the Amendment will require the affirmative vote of the holders
of the majority of the total votes cast on this proposal in person or by proxy.
Abstentions will be counted as votes cast and will have the same effect as votes
cast against the proposal. Broker non-votes will be counted as votes cast.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT.
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, 2001. 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,
2000, and is considered by the Board of 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 total votes cast on this proposal in person or by
proxy. Abstentions will be counted as votes cast and will have the same effect
as votes cast against the proposal. Broker non-votes will not be counted as
votes cast. 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.
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STOCKHOLDER PROPOSAL
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 2,300
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. STEINER
"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"
STATEMENT OF THE BOARD OF DIRECTORS RECOMMENDING A VOTE AGAINST THE STOCKHOLDER
PROPOSAL
The Board of Directors recommends a vote against the proposal and firmly
believes that the implementation of the proposal described above would not be in
the best interests of the stockholders and would not, in fact, "maximize value"
to the stockholders. 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, and explore acquisitions and alliances
which will complement the Corporation's businesses and result in improved
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. In
addition, the results of the Corporation's European operations have been
17
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adversely impacted by the low valuation of the Euro relative to the U.S. Dollar.
The Board of Directors therefore believes it would not be in the best interests
of the Corporation's stockholders to commit to an auction 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. 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 RECOMMENDS A VOTE AGAINST THE ADOPTION OF THE
STOCKHOLDER PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
SO VOTED UNLESS STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
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. All such persons timely
filed their respective reports during the year ended August 31, 2000, except
Mr. Haines and Mr. Ronald Andres, Vice President--North American Manufacturing
of the Corporation, each of whom filed one such report subsequent to the due
date therefor.
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.
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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, (ii) for approval of the
amendment of the 1992 Non-Employee Directors' Stock Option Plan, (iii) for the
ratification of the selection of the independent accountants, and (iv) against
the stockholder proposal.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented in accordance with
Rule 14a-8 of the Securities and Exchange Commission at the next Annual Meeting
of Stockholders, presently scheduled for December 6, 2001, must be received by
the Corporation no later than July 9, 2001 for consideration for inclusion in
the proxy statement and form of proxy for that meeting. Proposals of
stockholders intended to be presented outside of the requirements of such Rule
at such Annual Meeting must be received by the Corporation by September 26,
2001.
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 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 $5,500 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 10, 2000
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EXHIBIT A
FOURTH AMENDMENT
TO
A. SCHULMAN, INC.
1992 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. PURPOSE OF AMENDMENT.
The A. Schulman, Inc. 1992 Non-Employee Directors' Stock Option Plan (the
"Plan") provides that each Eligible Director (this term and all other
capitalized terms which are not defined herein shall have the meanings
ascribed to such terms in the Plan) shall receive an annual grant of options
to purchase One Thousand (1,000) Shares. The Purpose of this Amendment is to
increase the number of Shares subject to such annual Option Grants to Two
Thousand (2,000) Shares and to provide that each Eligible Director shall
receive an annual grant of Five Hundred (500) Shares of Restricted Stock.
2. AMENDMENT.
Pursuant to the power reserved by the Board in Section 10.2 of the Plan, and
subject to the approval thereof by the stockholders of the Company, the Plan
is hereby amended as follows:
A. Section 2 of the Plan is hereby amended by the addition thereto of the
following Section 2.16:
"2.16 "Award" means a grant under this Plan of an Option
or Restricted Stock."
B. Section 2 of the Plan further is hereby amended by the addition thereto
of the following Section 2.17:
"2.17 "Disability" means a permanent and total disability,
as determined by the Committee in good faith, upon receipt
of sufficient competent medical advice from one or more
individuals, selected by the Committee, who are qualified
to give professional medical advice."
C. Section 2 of the Plan further is amended by the addition thereto of the
following Section 2.18:
"2.18 "Restricted Stock" means a grant of Shares pursuant
to Section 9 herein."
D. Section 3 of the Plan is hereby amended by (i) the deletion of the phrase
"optioned or sold" from the first sentence of the first paragraph
thereof, and the substitution therefor of the word "granted"; (ii) the
deletion of the word "Options" from the first sentence of the first
paragraph thereof, and the substitution therefor of the word "Award";
(iii) the deletion of the phrase "If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased" from the second paragraph thereof, and the substitution
therefor of the phrase "If an Award granted under this Plan is cancelled,
terminates, expires or lapses for any reason, any"; (iv) the deletion of
the word "thereto" from the second paragraph thereof, and the
substitution therefor of the phrase "to such Award"; and (v) the deletion
of the word "Options" from the second paragraph thereof, and the
substitution therefor of the word "Award".
E. Section 4 of the Plan is hereby amended by the deletion of the phrase "a
grant of an Option" from the end of the first sentence thereof, and the
substitution therefor of the phrase "an
A-1
<PAGE>
Award". In addition, the word "Option" is hereby deleted from the last
sentence thereof, and the word "Award" is inserted in its stead.
F. Section 5.1 of the Plan is hereby amended by the deletion of the number
"1,000" therefrom and the substitution therefor of the number "2,000".
G. Section 5.2 of the Plan is hereby amended by the deletion of the phrase
"Section 9" therefrom and the substitution therefor of the phrase
"Section 10".
H. Section 6 of the Plan is hereby amended and restated in its entirety as
follows:
"6. TERM OF PLAN.
Subject to approval of the stockholders as
contemplated by Section 11.1, this Plan shall
become effective upon its adoption by the Board,
and shall continue in effect until all Awards
granted hereunder have expired or been exercised,
unless sooner terminated under the provisions
relating thereto. No Award shall be granted after
ten (10) years from the earlier of the date of the
adoption of the original Plan or its original
approval by the stockholders as contemplated by
Section 11.1."
I. Section 7.1 of the Plan is hereby amended by the deletion of the word
"five" therefrom and the substitution therefor of the phrase "ten (10)".
J. Sections 9, 10, 10.1, 10.2, 10.3, 11, 11.1 and 11.2 of the Plan are
hereby re-numbered as Sections 10, 11, 11.1, 11.2, 11.3, 12, 12.1 and
12.2, respectively. A new Section 9 of the Plan is hereby added to the
Plan to read in its entirety as follows:
"9. RESTRICTED STOCK.
9.1 NONDISCRETIONARY ANNUAL GRANT OF
RESTRICTED STOCK. Each Eligible Director shall
receive an annual grant of 500 Shares of
Restricted Stock on each Grant Date subsequent to
his or her election as a director of the Company.
The number of Shares subject to annual grant
hereunder shall be subject to adjustment from time
to time in accordance with Section 10 hereof.
9.2 RESTRICTED STOCK AGREEMENT. Each
Restricted Stock grant shall be evidenced by a
Restricted Stock Agreement that shall specify a
period of restriction (the "Period of
Restriction"), subject to Section 9.9, terminating
upon five (5) years after the Grant Date. All
restrictions shall lapse upon the expiration of
the Period of Restriction. The Restricted Stock
Agreement shall include the number of Restricted
Stock Shares granted and such other provisions as
the Committee shall determine.
9.3 TRANSFERABILITY. Except as provided in
this Section 9, the Shares of Restricted Stock
granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or
hypothecated until the expiration of the Period of
Restriction. All rights with respect to the
Restricted Stock granted to an Eligible Director
under
A-2
<PAGE>
the Plan shall be available during his or her
lifetime only to such Eligible Director.
9.4 OTHER RESTRICTIONS. The Committee shall
impose such other restrictions on any Shares of
Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without
limitation, restrictions under applicable Federal
or state securities laws; and may legend the
certificates representing Restricted Stock to give
appropriate notice of such restrictions.
9.5 CERTIFICATE LEGEND. In addition to any
legends placed on certificates pursuant to Section
9.4 herein, each certificate representing Shares
of Restricted Stock granted pursuant to the Plan
shall bear the following legend:
"The sale or other transfer of the Shares of
Stock represented by this certificate, whether
voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set
forth in the A. Schulman, Inc. 1992 Non-Employee
Directors' Stock Option Plan, as the same has
heretofore been and may from time to time be
amended, and in a Restricted Stock Agreement. A
copy of the Plan and such Restricted Stock
Agreement may be obtained from the Secretary of A.
Schulman, Inc."
9.6 REMOVAL OF RESTRICTIONS. Except as
otherwise provided in this Section 9, Shares of
Restricted Stock covered by each Restricted Stock
grant made under the Plan shall become freely
transferable by the Eligible Director after the
last day of the Period of Restriction. Once the
Shares are released from the restrictions, the
Eligible Director shall be entitled to have the
legend required by Section 9.5 removed from his or
her Share certificate.
9.7. VOTING RIGHTS. During the Period of
Restriction, Eligible Directors holding Shares of
Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares.
9.8. DIVIDENDS AND OTHER DISTRIBUTIONS.
(A) The Company shall establish a bookkeeping
account on behalf of each Eligible Director, for
the purpose of recording the amount owed to each
Eligible Director with respect to "dividend
equivalents" earned during the Period of
Restriction. For this purpose, "dividend
equivalent" means an amount equal to each regular
or special dividend declared with respect to one
(1) Share of Restricted Stock during the Period of
Restriction. "Dividend equivalent" shall include
distributions either in cash or property. Such
"dividend equivalents" shall be declared and
credited to the bookkeeping account of each
Eligible Director simultaneous with the dividend
payment date for Company stock.
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(B) Dividend equivalents shall be subject to
the same restrictions on transfer as are the
Shares of Restricted Stock. Amounts credited to
Eligible Directors' dividend equivalent
bookkeeping accounts shall not earn interest. The
Company shall have no obligation to fund the
amounts set forth in the dividend equivalent
bookkeeping accounts, and the rights of Eligible
Directors to these amounts shall be equivalent to
those of general creditors of the Company.
(C) Dividend equivalents shall be paid to
Eligible Directors in cash, in one lump sum,
within thirty (30) days following the date the
restrictions lapse on the Shares of Restricted
Stock with respect to which such dividend
equivalents were earned. The decisions of the
Committee with respect to payout of dividend
equivalents shall be final and binding on all
parties and their successors.
9.9 TERMINATION OF MEMBERSHIP ON THE BOARD.
(A) If an Eligible Director's membership on
the Board terminates for any reason other than the
retirement of such Eligible Director upon
attainment of age 65 or any time thereafter
("Retirement"), Disability, death or a Change in
Control, all Shares of Restricted Stock in respect
of which the Period of Restriction has not expired
upon the effective date of termination immediately
shall be forfeited and returned to the Company
(and shall once again become available for grant
under the Plan). The Committee, in its sole
discretion, shall have the right to provide for
lapsing of the restrictions on Restricted Stock
following termination, upon such terms and
provisions as it deems proper.
(B) In the case of an Eligible Director's
Retirement, Disability, death or upon the
occurrence of a Change in Control, all
restrictions on Restricted Stock immediately shall
lapse, and the Period of Restriction shall expire
at such time."
K. Section 10 of the Plan is hereby amended by deleting the phrase
"portions thereof" therefrom and substituting therefor the phrase
"Restricted Stock".
L. Section 11.1 of the Plan is hereby amended by the deletion of the word
"Options" wherever that word appears therein, and the substitution
therefor of the word "Awards". Section 11.1 further is hereby amended by
the addition thereto of the words "such Options" after the word "and" and
before the word "may" in the final sentence thereof.
Section 11.3 of the Plan is hereby amended by the deletion of the phrase
"Options already granted" therefrom and the substitution therefor of the
phrase "outstanding Awards" in the second sentence thereof. Section 11.3
further is hereby amended by the deletion of the word "Options" in each
instance where said word appears, and the substitution therefor of the
word "Awards".
3. EFFECTIVE DATE.
The effective date of this Fourth Amendment shall be December 7, 2000,
provided, however, that if this Fourth Amendment is not approved by the
stockholders of the Company at or prior to the Company's 2000 Annual Meeting of
Stockholders, this Fourth Amendment shall be null and void and of no effect
whatsoever.
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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 18, 2000 at the annual meeting of Stockholders to be held
on December 7, 2000 and at any adjournments thereof.
Election of Class II Directors, Nominees:
James S. Marlen, Rene C. Rombouts and Robert A. Stefanko
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 _
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, 2 and 3 and
AGAINST proposal 4.
1. Election of Class II Directors
(see reverse)
For, except vote withheld from the following nominee(s):
2. To approve the proposal to amend the 1992 Non-Employee Directors' Stock
Option Plan.
3. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants for the fiscal year ending August 31, 2001.
4. A stockholder proposal that the Board of Directors consider the prompt sale
of the Corporation.
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
FOR AGAINST ABSTAIN
SIGNATURE(S) DATE
_ DETACH CARD _
