RAMIUS
CAPITAL FILES DEFINITIVE PROXY MATERIALS TO ELECT TWO
NOMINEES
TO
SCHULMAN’S BOARD OF DIRECTORS AND SENDS OPEN LETTER TO
STOCKHOLDERS
Surprised
Schulman Board Appointed New CEO Who Has No Relevant Operating Experience
And No
Prior CEO Experience And Is A Close Personal Friend Of Terry
Haines
Urges
Stockholders To Elect Two Independent Directors With Significant Operating
and
Transaction Experience Who Will Represent The Best Interests of All
Stockholders
New
York – December 20, 2007– Starboard Value and Opportunity Master Fund
Ltd. (“Starboard”), an affiliate of RCG Starboard Advisors, LLC and Ramius
Capital Group, L.L.C. (collectively, “Ramius”), announced today that it has
filed with the Securities and Exchange Commission definitive proxy materials
in
connection with its nomination of two highly qualified and independent
candidates for election to the Board of Directors of A. Schulman, Inc.
(“Schulman” or the “Company”) (NASDAQ: SHLM) at its 2007 Annual Meeting. The
meeting is to be held on January 10, 2008 at 10:00 a.m., Eastern Time, at
The
Hilton Inn West, located at 3180 West Market Street, Akron,
Ohio. Ramius’ nominees are Michael Caporale, Jr. and Lee
Meyer.
Ramius
also announced today that it has issued an open letter to the stockholders
of
Schulman in which it urges stockholders not to be misled by recent announcements
from the Company, which Ramius believes are intended to distract stockholders’
attention from the significant strategic and operational issues facing the
Company and to buy management and the board of directors time to continue
their
flawed business strategy.
Ramius
Partner Mark R. Mitchell stated, “As a long-term stockholder of Schulman, we
have witnessed the Company’s repeated failures to fully live up to the
contractual obligations and promises agreed to in prior settlement agreements,
and the latest settlement agreement is another attempt to create the illusion
of
change at Schulman.”
Mr.
Mitchell added, “We were surprised to learn that the Board appointed Joseph
Gingo, a Schulman Board member since 2000 and a close personal friend of
Terry
Haines, to succeed Mr. Haines as the Company’s CEO. Mr. Gingo, a
lifetime tire industry employee, has no relevant industry experience and no
prior CEO experience. We believe that Mr. Gingo’s appointment, his participation
on the special committee, and the current Board’s promise to name him Chairman
if elected to the Board at the 2007 Annual Meeting, reveals the Company’s lack
of commitment to conducting a full and comprehensive strategic alternatives
review process.”
The
full
text of the letter follows:
Dear
Fellow Stockholders:
DO
NOT BE FOOLED BY THE ILLUSION OF CHANGE AT A. SCHULMAN
As
a
long-term stockholder of A. Schulman, Inc. (“Schulman” or the “Company), we have
seen Schulman repeatedly create the illusion of change in an effort to distract
stockholders’ attention from the strategic and operating issues facing the
Company. Time and time again, management and the Board of Directors
(the “Board”) have promised change at Schulman in order to buy more time to
continue to implement their flawed strategic business plan.
THREE
CONSECUTIVE CONTESTED ELECTIONS, THREE CONSECUTIVE SETTLEMENT AGREEMENTS,
BUT
NOTHING HAS CHANGED
The
Company’s latest settlement agreement with a group led by Barington Capital (the
“2007 Settlement Agreement”) calls for, among other things, establishing a
special committee of the Board to:
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“…consider
all strategic alternatives available to the Company to maximize
stockholder value, including, without limitation, a strategic
acquisition, merger or sale of the
Company.”
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Given
the
Board’s repeated failures to fully live up to the contractual obligations and
promises agreed to in the 2005 and 2006 settlement agreements, we believe
the
2007 Settlement Agreement is yet another attempt to create the illusion of
change at Schulman. Look only as far as Terry Haines’ latest communication to
employees of Schulman (an excerpt is included below) and ask yourself
whether you believe the Company is going to live up to the terms of this
latest
settlement agreement.
ANOTHER
PROMISE…
…
ANOTHER DISAPPOINTMENT
We
were
shocked to learn that the Board picked Joseph Gingo, a Schulman Board member
since 2000, and a close personal friend of Terry Haines, to
succeed Mr. Haines as the CEO. Given Mr. Gingo’s background and
Schulman’s unacceptable operating performance since he joined the Board in 2000,
we were surprised that he would even be considered for the CEO position at
Schulman.
Consider
the facts:
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Since
Mr. Gingo joined the Board:
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o
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Schulman’s
operating margins declined approximately 400 basis
points
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o
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Despite
numerous restructuring efforts, the North American segment was
unprofitable in six out of the last seven
years. The $19.1 operating loss in fiscal 2007 was its worst
performance yet.
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§
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Mr.
Gingo’s background:
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o
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NO
prior CEO experience
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o
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R&D
background - in RUBBER
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o
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No
relevant industry experience - spent his entire career at a
TIRE company
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Mr.
Gingo has no relevant industry experience, has not had any real operating
experience outside the tire business, and has no prior CEO
experience. Schulman is a plastics company with diversified end
markets and a complex set of strategic and operational
issues.
Ask
yourself, is Mr. Gingo the BEST candidate to run Schulman?
Ask
yourself, did the current Board run a full CEO search process and consider
candidates from outside the Schulman board room?
WE
QUESTION WHETHER THE BOARD IS TRULY COMMITTED TO EXPLORING STRATEGIC
ALTERNATIVES
Consider
the language from Terry Haines’ letter filed in Schulman’s December 17, 2007 8-K
filing:
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“…Joe
(Gingo) has a long history at A. Schulman and is a
long-time Akron, Ohio resident. In addition to Joe’s own
service to the Company as a Board member, his father was a manager at
our first plant in Akron. In fact, his father was one of my
first bosses… In discussions with Joe, he has expressed to me that he
is taking this position because of his loyalty to the
Company… The Board and I believe that Joe is
absolutely the right person to lead A. Schulman and to build on
the progress we have made across our
business… I know that with his leadership, the
continued implementation of our strategic business
plan, and your commitment, A. Schulman is poised for a
strong
future….”
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Additionally,
not only has Mr. Gingo been given a seat on the Special Committee formed
to
explore strategic alternatives, but, if elected to the Board at the
2007 Annual Meeting, the Board has already committed to name him
Chairman of the Board.
Why
hasn’t the Board separated the roles of Chairman and CEO? Why is Mr.
Gingo, who is clearly conflicted, being appointed to the Special Committee
to
review strategic alternatives?
Instead,
shouldn’t the CEO be responsible for submitting a stand-alone restructuring
plan to be evaluated by an independent special committee as one of several
alternatives for the committee to review?
YOU
HAVE THE OPPORTUNITY TO PROTECT YOUR INVESTMENT
Ramius
is
proposing two independent, highly qualified industry executives, Michael
Caporale Jr. and Lee Meyer, for election to Schulman’s Board. Our nominees bring
a wealth of leadership and operational experience, and are committed to
examining all strategic and operating issues at Schulman with an open
mind.
Specifically,
our nominees have broad specialty chemicals, plastics and related industry
experience, and are experts in supply chain management, business process
improvement, manufacturing process optimization, operational restructurings,
and
business and corporate development. Both of our nominees have
successful CEO, board, and transaction related experience. We
have included highlights of their experience below, however, a more detailed
summary of their qualifications can be found in our proxy
materials.
Michael
Caporale Jr. is a strong leader and seasoned operator. Most recently, as
the
Chairman and CEO of Associated Materials, Mr. Caporale was responsible for
organic growth initiatives and strategic acquisitions that resulted in revenue
growth from $596 million in 2001 to $1.3 billion in 2006, an increase of
110%.
During his tenure, EBITDA improved from approximately $61 million in 2001
to $125 million in 2006. Prior to joining Associated Materials, Mr.
Caporale spent 17 years at General Electric, where, most notably, he was
responsible for managing the plastics manufacturing operations of a division
within GE Appliance.
Lee
Meyer
has a solid background in operations and manufacturing as well as proven
leadership skills. Most recently, as a member of the special committee of
the
Board of Directors of PW Eagle, Mr. Meyer was instrumental in executing a
sale
of the company at an attractive price to J-M Manufacturing in a very difficult
M&A environment. Prior to his involvement at PW Eagle, Mr. Meyer
served as President and CEO of Ply Gem from 2002 to 2006. Although data is
not
available for 2002, from 2003 to 2006 revenue grew from $509 million to $1
billion, and operating income improved from $57 million to $90
million. Prior to Ply Gem, Mr. Meyer spent 8 years as an operations
manager and a plant manager of various General Electric Plastics / Borg Warner
Chemicals polymer plants.
OUR
NOMINEES HAVE ONE GOAL: TO MAXIMIZE STOCKHOLDER VALUE
By
voting
for BOTH Mr. Caporale and Mr. Meyer, you empower our nominees to ensure that
the
Company performs all of its obligations under the 2007 Settlement Agreement
and
takes all actions to maximize stockholder value. Rest assured that
they can, and will, appropriately represent the best interests of ALL
stockholders.
If
elected, our nominees will work diligently with management and the Board
to
ensure that:
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The
special committee formed to conduct the review of strategic alternatives
consists solely of independent
directors,
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The
special committee conducts a real strategic
alternatives review process in which all options to maximize stockholder
value are analyzed and a sale of the Company is fully explored,
and
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The
Board separates the roles of the Chairman and
CEO
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If
elected, our nominees will not control the Board. They will have
minority representation on the Board, and therefore, by themselves cannot
force
the implementation of any one strategic alternative.
WE
ARE ASKING FOR YOUR SUPPORT TO ELECT DIRECTORS WHO WILL REPRESENT
THE BEST INTERESTS OF ALL SCHULMAN STOCKHOLDERS
Please
vote for Mr. Caporale and for Mr. Meyer on the enclosed GOLD proxy
card. We offer you the opportunity to elect to the Schulman boardroom
stockholder representatives committed to building the value of your
investment. In the meantime, we urge you NOT to return any WHITE
proxy card Schulman management sends you.
Respectfully,
Mark
R.
Mitchell
Partner,
Ramius Capital Group, LLC
About
Ramius Capital Group, L.L.C.
Ramius
Capital Group is a registered investment advisor that manages assets of
approximately $9.6 billion in a variety of alternative investment strategies.
Ramius Capital Group is headquartered in New York with offices located in
London, Tokyo, Hong Kong, Munich, and Vienna.
CERTAIN
INFORMATION CONCERNING THE PARTICIPANTS
On
December 19, 2007, Starboard Value and Opportunity Master Fund Ltd., an
affiliate of Ramius Capital Group, L.L.C. (“Ramius Capital”), together with the
other participants named herein, made a definitive filing with the Securities
and Exchange Commission (“SEC”) of a proxy statement and an accompanying GOLD
proxy card to be used to solicit votes for the election of its nominees at
the
2007 annual meeting of stockholders of A. Schulman, Inc., a Delaware corporation
(the “Company”).
RAMIUS
CAPITAL ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE DEFINITIVE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS ARE AVAILABLE AT
NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION,
THE PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE DEFINITIVE
PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE
DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR, INNISFREE M&A INCORPORATED,
AT ITS TOLL-FREE NUMBER: (888) 750-5834.
The
participants in the proxy solicitation are Starboard Value and Opportunity
Master Fund Ltd., a Cayman Islands exempted company (“Starboard”),
Starboard Value & Opportunity Fund, LLC, a Delaware limited liability
company (“Starboard Value”), Parche, LLC, a Delaware limited liability company
(“Parche”), RCG Enterprise, Ltd, a Cayman Islands exempted company (“RCG
Enterprise”), RCG Starboard Advisors, LLC, a Delaware limited liability company
(“RCG Starboard”), Ramius Capital, a Delaware limited liability company, C4S
& Co., L.L.C., a Delaware limited liability company (“C4S”), Peter A. Cohen
(“Mr. Cohen”), Morgan B. Stark (“Mr. Stark”), Thomas W. Strauss (“Mr. Strauss”),
Jeffrey M. Solomon (“Mr. Solomon”), Mark Mitchell (“Mr. Mitchell”), Michael
Caporale, Jr. (“Mr. Caporale Jr.”), Lee Meyer (“Mr. Meyer”) and Yevgeny V.
Ruzhitsky (“Mr. Ruzhitsky”) (collectively, the “Participants”). As of
December 19, 2007, Starboard beneficially owns 998,073 shares of Common Stock
of
the Company, Starboard Value beneficially owns 736,984 shares of Common Stock
of
the Company and Parche beneficially owns 327,738 shares of Common Stock of
the
Company. As the sole non-managing member of Parche and owner of all
economic interests therein, RCG Enterprise is deemed to beneficially own
the
327,738 shares of Common Stock of the Company owned by Parche. As the investment
manager of Starboard and the managing member of each of Parche and Starboard
Value, RCG Starboard Advisors is deemed to beneficially own the 998,073 shares
of Common Stock of the Company owned by Starboard, the 736,984 shares of
Common
Stock of the Company owned by Starboard Value and the 327,738 shares of Common
Stock of the Company owned by Parche. As the sole member of RCG
Starboard Advisors, Ramius Capital is deemed to beneficially own the 998,073
shares of Common Stock of the Company owned by Starboard, the 736,984 shares
of
Common Stock of the Company owned by Starboard Value and the 327,738 shares
of
Common Stock of the Company owned by Parche. As the managing member
of Ramius Capital, C4S is deemed to beneficially
own the 998,073 shares of Common Stock of the Company owned by Starboard,
the
736,984 shares of Common Stock of the Company owned by Starboard Value and
the
327,738 shares of Common Stock of the Company owned by Parche. As the managing
members of C4S, each of Messrs. Cohen, Stark, Strauss and Solomon is deemed
to
beneficially own the 998,073 shares of Common Stock of the Company owned
by
Starboard, the 736,984 shares of Common Stock of the Company owned by Starboard
Value and the 327,738 shares of Common Stock of the Company owned by
Parche. Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial
ownership of such shares of Common Stock of the Company to the extent of
their
respective pecuniary interest therein. As members of a “group” for the purposes
of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, each
of
Messrs. Caporale, Jr., Meyer, Mitchell and Ruzhitsky is deemed to beneficially
own the 998,073 shares of Common Stock of the Company owned by Starboard,
the
736,984 shares of Common Stock of the Company owned by Starboard Value and
the
327,738 shares of Common Stock of the Company owned by
Parche. Messrs. Caporale, Jr., Meyer, Mitchell and Ruzhitsky each
disclaim beneficial ownership of the shares of Common Stock of the Company
that
they do not directly own.
Contact:
Media
& Stockholders:
Sard
Verbinnen & Co.
Dan
Gagnier or Renée Soto, 212-687-8080