RAMIUS
CAPITAL ISSUES LETTER TO A. SCHULMAN STOCKHOLDERS
Urges
Stockholders Not To Be Distracted By The Company’s Announcements Attempting To
Create The Illusion Of Change
Says
New
CEO Gingo’s Hastily Fabricated “100 Day Plan” Is Nothing More Than A Desperate,
Last Minute Attempt To Sway Stockholder Votes
Calls
On
Stockholders To Vote for Ramius' Two Independent Nominees To Ensure The Company
Takes All Actions To Maximize Stockholder Value
NEW
YORK
– January 4, 2007 – Starboard Value and Opportunity Master Fund Ltd., an
affiliate of RCG Starboard Advisors, LLC and Ramius Capital Group, L.L.C.
(collectively, "Ramius"), today issued a letter to all stockholders of A.
Schulman Inc. ("Schulman" or the "Company") (NASDAQ: SHLM) highlighting the
Company’s latest desperate effort to mislead stockholders. Ramius
urges stockholders to ignore the Company’s rhetoric and elect both Michael
Caporale, Jr. and Lee Meyer to the Company’s Board of Directors at the upcoming
2007 Annual Meeting of stockholders scheduled for January 10, 2008.
The
letter notes that Mr. Gingo’s “100 Day Plan” is nothing more than another
restructuring plan that has no tangible or substantive metrics by which to
hold
management or the Board accountable, and questions whether the Board is truly
committed to exploring all strategic alternatives.
Ramius
Partner Mark Mitchell stated, “In our view, Mr. Gingo’s ‘100 Day Plan’ has
absolutely no substance and creates nothing more than the illusion of
change. Clearly it is a desperate, last minute attempt to sway
stockholder votes just before the Annual Meeting. The only tangible
aspect of Mr. Gingo’s ‘100 Day Plan’ was a decision to suspend further capital
investment in Invision. Less than a week ago in its presentation to
stockholders, Schulman advertised Invision as an important part of the Company’s
future success and an area for investment. The Company is clearly
still trying to find a direction”
Mr.
Mitchell added, “Ramius' independent nominees have successful and proven track
records with significant CEO, board, and relevant industry experience.
Stockholders deserve a board comprised of knowledgeable, experienced and
truly
independent directors who are committed to exploring all available strategic
alternatives and ensuring that the Company is run for the best interest of
all
stockholders.”
Ramius
is
the beneficial holder of approximately 7.4% of Schulman’s outstanding
shares.
The
full
text of the letter follows:
Dear
Fellow Stockholders:
RECENT
ACTIONS BY THE A. SCHULMAN BOARD ARE A LAST-DITCH EFFORT TO SWAY YOUR
VOTES
DO
NOT BE DISTRACTED BY THE ILLUSION OF CHANGE
As
long-term stockholders of A. Schulman, Inc. (“Schulman” or the “Company), we
have seen Schulman take actions time and time again to distract stockholders’
attention from the real strategic and operating issues facing the
Company. These initiatives are designed to buy management and the
board of directors even more time to continue to implement their flawed business
strategy. The Company’s recent announcement of the new CEO’s generic,
so-called “100 Day Plan” and of Ramius’ unwillingness to settle the Company’s
third consecutive election contest just one week before the Annual Meeting
is
unmistakably a product of desperation designed to sway your vote.
PAST
SETTLEMENT AGREEMENTS HAVE NOT LED TO IMPROVED OPERATING
PERFORMANCE
The
time
has come for this Board to stop using settlement agreements as a tool to
entrench itself and to continue its misguided business
strategy. Consecutive settlement agreements have not led to improved
operating performance. Glass Lewis & Co., a leading independent
proxy advisory firm, recognizing the fallibility of past settlement agreements,
recently stated that it is “troubled by the lack of improvement in the Company’s
operational performance despite the presence of at least one Barington nominee
on the Board since 2005.” We will not sit by any longer while this
Board continues to fail to live up to its promises under settlement agreements
as both stockholder value and operating performance continue to
erode. If these settlement agreements were really part of the
solution at Schulman, ask yourself why would three of them in a row even
be
necessary? We think the answer is clear: The
Schulman Board is only committed to settlement agreements to the extent that
they buy this Board more time for it to rubber-stamp its failed
strategies.
PLEASE
DO NOT BE MISLED BY SCHULMAN’S ACTIONS TO CREATE THE ILLUSION OF
CHANGE
ILLUSION
#1: The Company identified and hired a “highly qualified”
candidate to replace Terry Haines as CEO.
THE
REALITY: The Board failed to bring in “new blood” to help
turn around the Company and instead hand-picked a Schulman insider with no
apparent relevant industry experience and who has been a Board member, and
therefore a part of the problem at Schulman, since 2000. Since Mr.
Gingo joined the Board, the Company’s North American
segment has been unprofitable in six of the past seven years and operating
margins have declined by approximately 400 basis points despite numerous
restructuring efforts. This Board did not run a comprehensive
CEO search process.
ILLUSION
#2: Mr. Gingo has hatched a so-called “100 Day Plan” with a
“real sense of urgency” to position the Company for success.
THE
REALITY: The “100 Day Plan” is yet another restructuring
plan that has no tangible or substantive metrics by which to hold management
or
the Board accountable, and is simply, in our view, another guise under which
the
Company will continue its failed business strategies. Where has Mr.
Gingo’s “real sense of urgency” been while he has sat on a Board that has
watched over significant deterioration in the Company’s operating performance
for the past seven years? In our view, this “100 Day Plan” --
that provides for no accountability -- is nothing more than a desperate,
last
minute attempt to sway stockholder votes just before the Annual
Meeting. It seems to us that Mr. Gingo only feels a real “sense of
urgency” to say and do whatever it takes to get past this election
contest.
The
only
tangible aspect of Mr. Gingo’s “100 Day Plan” was a decision to suspend further
capital investment in Invision. Less than a week ago, in its
presentation to stockholders, Schulman advertised Invision as an important
part
of the Company’s future success and an area for investment. Consider
the fact that Mr. Gingo has been the Board’s technical advisor on this product
since his appointment to the Board in 2000. Why did it take so long
for this Board to suspend capital investment and assess the viability of
this
product?
ILLUSION
#3: The Board is committed to exploring strategic
alternatives and has a “wholly-independent” Special Committee already in
place.
THE
REALITY: The Company adamantly opposed such a strategic
alternatives review process in its initial response to our stockholder proposal
on November 2, 2007 and “flip-flopped” its position, in our opinion, to get past
this election contest. Despite obvious conflicts as CEO, Mr. Gingo
was selected to sit on the Special Committee and only in the face of pressure
from Ramius did the Company recently announce that he would not participate
as a
“voting member” on the Special Committee.
ILLUSION
#4: The Company is “responsive to stockholders’ interests” and has
“implemented numerous corporate governance policy and practice
improvements.”
THE
REALITY: The only “improvements” that the Company has
implemented, such as the redemption of its “poison pill” and the establishment
of a “lead independent director”, have been reactionary responses in the face of
proxy contests. In fact, the Company was required to implement each
of these reforms under the terms of past settlement agreements.
YOU
HAVE THE OPPORTUNITY TO PROTECT YOUR INVESTMENT!
By
voting
for BOTH of our highly qualified nominees, Michael Caporale, Jr. and Lee
Meyer,
on the GOLD proxy card, you empower our nominees to ensure that
the Company takes all actions to maximize stockholder value. Rest
assured that they can, and will, appropriately represent the stockholders’ best
interests.
WE
ARE ASKING FOR YOUR SUPPORT TO ELECT DIRECTORS WHO WILL REPRESENT YOUR BEST
INTERESTS ON THE SCHULMAN BOARD
Please
vote for Mr. Caporale and for Mr. Meyer on the 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.
If
you
have any questions, or need assistance in voting your shares, please call
Innisfree M&A Incorporated, toll-free, at 1-888-750-5834.
Respectfully,
/s/
Mark
R. Mitchell
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
January 4, 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