A.
SCHULMAN, INC.
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(Name
of Registrant as Specified in Its Charter)
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STARBOARD
VALUE AND OPPORTUNITY MASTER FUND LTD.
STARBOARD
VALUE & OPPORTUNITY FUND, LLC
RCG
ENTERPRISE, LTD
PARCHE,
LLC
RCG
STARBOARD ADVISORS, LLC
RAMIUS
CAPITAL GROUP, L.L.C.
C4S
& CO., L.L.C.
PETER
A. COHEN
MORGAN
B. STARK
JEFFREY
M. SOLOMON
THOMAS
W. STRAUSS
MARK
MITCHELL
MICHAEL
CAPORALE, JR.
LEE
MEYER
YEVGENY
V. RUZHITSKY
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(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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(3)
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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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Press
Release
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Source:
Ramius Capital Group, L.L.C.
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THE
PROMISE:
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According
to the terms of the October 21, 2005 settlement agreement, the
Company
agreed to work with representatives of the Barington Group to
create a
“Business Plan” by the end of January 2006 to improve the Company’s
operations and profitability. The Company agreed to issue a
press release disclosing a summary of such a “Business
Plan.”
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THE
REALITY:
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We
don’t recall ever reading any press release regarding the completion
of
the “Business Plan.” Why is that? The answer is
quite simple: The Company did not complete such a Business Plan
nor did it address the significant issues plaguing the
Company. Fiscal 2007 operating income was $54.1 million,
$16 million less than the $70.1 million Schulman reported in
fiscal
2006. We believe it should be clear to all stockholders that
the Company has failed to adequately address
profitability.
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THE
PROMISE:
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According
to the terms of the October 21, 2005 settlement agreement, the
Company
agreed to consummate a self-tender offer to repurchase 8,750,000
shares of
the Company’s common stock at a price of no less than $20 per share. The
tender offer was to be completed by December 20,
2005.
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THE
REALITY:
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Another
promise, another failure to fully deliver. The Company announced
in an April 25, 2006 press release that it accepted for purchase
only
2,071,585 shares.
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THE
PROMISE:
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According
to the terms of the October 21, 2005 settlement agreement, the
Company
agreed to implement certain corporate governance
reforms.
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THE
REALITY:
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Ask
yourself whether the following actions taken by the Company in
the year
after entering into the 2005 Settlement Agreement represent improvements
in “corporate governance.”
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●
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Adopted
a “poison-pill” rights plan without shareholder
approval.
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●
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Elected
Mr. Haines Chairman rather than appoint an independent Chairman
when
Robert Stefanko, the former Chairman of the Board,
retired
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●
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Failed
to respond to a shareholder’s request to inspect certain books, records
and documents of the Company under Delaware
law.
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THE
PROMISE:
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According
to the terms of the October 25, 2006 settlement agreement, the
Company
agreed to work with representatives of the Barington Group to
establish a
special committee of the Board to create a detailed operating
budget and
“Business Plan” to improve the Company’s operations and profitability and
to issue a press release disclosing a summary of such “Business
Plan.”
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THE
REALITY:
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Sound
familiar? We do not believe it should have taken another
threatened election contest and yet another settlement agreement
for the
Company to fulfill this contractual obligation. Finally, the
Company announced in February 2007 that it would implement a
number of
initiatives aimed at improving the Company’s operations and profitability
in North America. However, the North America segment remained
unprofitable for the fifth straight year, and for six of the
last seven
years. This despite reducing operating capacity by 42% through
numerous restructuring efforts aimed at the North America
segment. Ask yourself whether this is too little, too
late?We wonder how many years of settlement agreements
it
will take for the Company to fulfill all of its contractual obligations
under the 2007 Settlement
Agreement.
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THE
PROMISE:
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According
to the terms of the November 15, 2007 settlement agreement, the
Company
has agreed (i) to form a special committee of the Board to consider
all
strategic alternatives available to the Company to maximize shareholder
value, including, without limitation, a strategic acquisition,
merger or
sale of the Company and (ii) to increase to five million the number
of shares authorized to be repurchased under the Company’s current share
repurchase program.
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THE
REALITY:
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?
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●
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Ensure
that the special committee formed to conduct the review of strategic
alternatives consists solely of independent
directors, and
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●
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Ensure
that 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.
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