SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Fiscal year ended December 31, 1994 Commission file number 1-5222
M. A. HANNA COMPANY
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 34-0232435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
SUITE 36-5000, 200 PUBLIC SQUARE,CLEVELAND, OHIO 44114-2304
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 216-589-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $1 par value New York Stock Exchange
Chicago Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
Aggregate market value of the voting stock held by nonaffiliates of the
Registrant, computed by reference to the price at which the stock was sold as
of March 6, 1995: $834,187,903.00.
Common Shares outstanding as of March 6, 1995: 35,687,183.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by
reference into the designated parts of this Form 10-K: (1)
Registrant's definitive proxy statement distributed to stockholders
dated March 20, 1995, filed with the Commission pursuant to
Regulation 14A and incorporated by reference into Parts I and III
of this Form 10-K; and (2) Registrant's Annual Report distributed
to stockholders for the fiscal year ended December 31, 1994,
incorporated by reference into Parts I and II of this Form 10-K.
With the exception of the information specifically incorporated by
reference, neither the Registrant's proxy statement nor the 1994
Annual Report to stockholders is deemed to be filed as part of this
Form 10-K.
Except as otherwise stated, the information contained in this
report is given as of December 31, 1994, the end of the
Registrant's last fiscal year.
PART I
ITEM 1. BUSINESS
(a) Acquisitions and Dispositions
In March 1994, the Registrant acquired North Coast
Compounders, a producer of thermoplastic elastomers
("TPEs"), now called M. A. Hanna Thermoplastic
Elastomers. Based in North Ridgeville, Ohio, with
approximately 50 employees, M. A. Hanna Thermoplastic
Elastomers produces proprietary TPEs, alloys and blends,
and also engages in toll compounding.
In July 1994 the Registrant announced the formation
of its M. A. Hanna Resin Distribution business unit
through the merger of its three regional resin
distribution subsidiaries: Bruck Plastics Company,
Fiberchem, Inc.; and Plastic Distributing Corp. Based in
Lemont, Illinois, M. A. Hanna Resin Distribution in turn
announced the establishment of the Engineering Services
Group to provide product design, processing and technical
support to customers, including a design center located
in Richardson, Texas.
In July 1994, the Registrant also announced the
formation of the M. A. Hanna Company Engineered Materials
Group, based in Dyersburg, Tennessee, to market specialty
plastics compounds manufactured by the Registrant's
Colonial Plastics division, Monmouth Plastics Company and
Texapol Corporation.
In July 1994 the Registrant acquired Theodor
Bergmann GmbH & Co. Kunststoffwerk KG, one of Germany's
largest producers of specialty and reinforced
thermoplastic compounds. Based in Gaggenau, Germany,
Bergmann has two processing facilities: one at the
Gaggenau headquarters and a second facility at Barbastro,
Spain. The Spanish business, Poliamidas Barbastro S.A.,
operates under the name Polibasa.
In August 1994 the Registrant completed the sale of
the single-ply roof membrane manufacturing assets of its
Colonial Rubber Works, Inc. division located in
Kingstree, South Carolina, to Firestone Building Products
Company, a division of Bridgestone Firestone, Inc.
In December 1994, the Registrant announced that it
plans to sell its Day International, Inc. subsidiary,
based in Dayton, Ohio. Day International, Inc., with
annual sales of $120 million, produces highly engineered
printing blankets for offset printing presses, as well as
aprons, cots and other consumable parts used in the
textile industry.
(b) See the financial information regarding the
Registrant's business segments set forth at page 27 of
the Registrant's Annual Report distributed to
stockholders for the fiscal year ended December 31, 1994,
which page is incorporated herein by this reference.
(c)
(1)(i)
Formulated Polymers
(a) Processing
The Registrant, through its Burton Rubber
Processing, Inc., Bergmann, Colonial Rubber Works, Inc.,
Global Processing Company, Hanna Engineered Materials
Group, MACH-I Compounding, M. A. Hanna Thermoplastic
Elastomers, and Southwest Chemical Services, Inc.,
business units, engages in the custom compounding of
plastic and rubber materials to the specifications of
manufacturers of plastic and rubber products for
customers located throughout the United States, Canada
and Europe.
Through its Allied Color Industries, Inc., PMS
Consolidated, Inc., Hanna Polimeros, S.A. de C.V.,
Synthecolor S.A. and Wilson Color business units, the
Registrant manufactures custom formulated colorants in
the form of color concentrates, liquid dispersions, dry
colorants, and additives for customers in the plastics
industry throughout the United States, Canada, Mexico,
Europe, South America and Asia. PMS Consolidated and
Wilson Color also produce specialty colorants and
additives for the automobile, vinyl siding and textile
industries and for the wire and cable industry,
respectively.
(b) Distribution
Through its M. A. Hanna Resin Distribution Company
(formerly Bruck Plastics Company, Fiberchem, Inc. and
Plastic Distributing Corporation) and M.A. Hanna de
Mexico business units, the Registrant distributes polymer
resins in North America.
Through its Cadillac Plastic business unit,
Registrant engages in the worldwide distribution of
engineered plastic sheet, rod, tube, and film products to
industrial and retail customers as well as cutting and
machining plastic products to customers' specifications
and thermoforming plastic into products such as skylights
and signs.
Other Operations
Registrant, through its Day International Printing
and Textile Products business unit, engages in the
manufacture and worldwide sale of printing blankets and
print rollers for the printing industry and aprons, cots,
and other consumable supplies for the textile industry.
In December 1994 the Registrant announced its plans to
sell this business unit, which is reported as a
discontinued operation in the Registrant's 1994 Annual
Report.
Through its Colonial Rubber Works, Inc. business
unit, Registrant manufactures molded sponge automotive
parts for customers located throughout the United States
and Canada.
Registrant also engages in the management of marine
terminals, management of an iron ore mine in Quebec,
Canada, and insurance services.
Net sales and operating revenues from Registrant's
operations outside the polymers industry do not
individually constitute 10 percent or more of
Registrant's consolidated revenues.
(1)(iii) In Registrant's processing segment the primary raw
materials required are natural and synthetic rubbers,
plastics, and chemicals, all of which are available in
adequate supply. The primary raw materials required by
Registrant's colorant subsidiaries are plastics,
chemicals, and organic and inorganic pigments, all of
which are available in adequate supply.
(1) (iv) Registrant's processing business units own numerous
patents and registered trademarks, which are important in
that they protect the Registrant's corresponding
inventions and trademarks against infringement by others
and thereby enhance Registrant's position in the
marketplace. The patents vary in duration from 1 year to
17 years, and the trademarks have an indefinite life
which is based upon continued use.
(1)(x) The custom compounding of plastic and rubber
materials is highly competitive, with product quality and
service to customers being principal factors affecting
competition. Registrant believes it is the largest
independent custom compounder of rubber and a leading
compounder of plastics in the United States in terms of
pounds produced.
The manufacture of custom formulated colorants for
the plastics industry is highly competitive with product
quality and service to customers being principal factors
affecting competition. Registrant believes it is one of
the leading producers of custom formulated colorants in
the United States and Europe.
The distribution of engineered plastic sheet, rod,
tube, film products, and polymer resins is highly
competitive with product quality and service to customers
being principal factors affecting competition.
Registrant believes it is one of the leading distributors
of such products in the world.
The manufacture of molded sponge automotive parts is
highly competitive, with quality, price and service to
customers being principal factors affecting competition.
Information generally available indicates that Registrant
is among the leading suppliers of such parts in the
United States.
The manufacture of printing blankets and rollers is
highly competitive, with image quality and durability
being principal factors affecting competition.
Registrant believes it ranks as one of the world's
leading producers of these products. The manufacture of
aprons, cots, and other consumable supplies for the
textile industry is highly competitive, with quality and
price being the principal factors affecting competition.
Registrant believes it ranks among the larger producers
of such products in the United States. In December 1994
the Registrant announced its plans to sell its Day
International, Inc. business unit, which manufactures
these products and has been reported as a discontinued
operation in Registrant's 1994 Annual Report.
(1)(xii) At each of its operations the Registrant, its
subsidiaries, and associated companies are governed by
laws and regulations designed to protect the environment
and in this connection Registrant has adopted a corporate
policy which directs compliance with the various
requirements of these laws and regulations. The
Registrant believes that it, its subsidiaries and
associated companies are in substantial compliance with
all such laws and regulations, although it recognizes
that these laws and regulations are constantly changing.
There are presently no material estimated capital
expenditures for further environmental control facilities
projected by the Registrant, its subsidiaries and
associated companies for any of its operations.
(1)(xiii) Registrant employs 6,599 persons at its consolidated
operations (6,334 in 1993) and manages operations for
others that employ 2,245 persons (2,235 in 1993).
(d)(1) See information regarding Registrant's international
operations at page 27 of Registrant's Annual Report
distributed to stockholders for the fiscal year ended
December 31, 1994, which page is incorporated herein by
this reference.
(2) The international operations in which the Registrant
and its subsidiaries have equity interests, and the
investments of the Registrant and its subsidiaries in
such companies, may be affected from time to time by
foreign political and economic developments, laws and
regulations, increases or decreases in costs in such
countries and changes in the relative values of the
various currencies involved.
ITEM 2. PROPERTIES
The table below sets forth the principal plants and properties
owned or leased by the Registrant's formulated polymers business
units. For properties which are leased, the date of expiration of
the current term of the lease is indicated followed by an "R" if
the lease is subject to renewal or a "P" if the property is subject
to an option to purchase. Properties which are shown as owned are
owned in fee simple, subject to any mortgages on the properties.
In addition to mortgages, some properties are subject to minor
encumbrances of a nature which do not materially affect the
Registrant's operations.
In addition, several business units of Registrant lease floor
space at various locations within the United States. They are used
by the regional branches for sales offices, for the distribution of
Registrant's products, for fabrication, and for warehousing. These
are short-term leases.
Registrant and certain of its business units lease or own
space in various locations outside the United States, including
Australia, Belgium, Canada, the United Kingdom, France, Germany,
Mexico, Spain and Sweden.
Approximate
Owned/ Size
Location Facility Leased (sq. ft.)
_____________________________________________________________________
Burton, Burton rubber Owned 160,000
Ohio compounding
_____________________________________________________________________
Macedonia, Burton plastic Owned 87,000
Ohio compounding
_____________________________________________________________________
Approximate
Owned/ Size
Location Facility Leased (sq. ft.)
_____________________________________________________________________
Tillsonburg, Burton rubber Owned 60,000
Ontario compounding
_____________________________________________________________________
Jonesboro, Burton rubber Owned 69,000
Tennessee compounding
_____________________________________________________________________
Santa Fe Springs, Global rubber Leased 13,231
California compounding 1996
_____________________________________________________________________
Broadview Heights, Allied colorant Owned 61,000
Ohio manufacturing
_____________________________________________________________________
Greenville, Allied colorant Owned 65,000
South Carolina manufacturing
_____________________________________________________________________
Phoenix, Allied colorant Owned 20,500
Arizona manufacturing
_____________________________________________________________________
Vonore, Allied colorant Owned 47,000
Tennessee manufacturing
_____________________________________________________________________
North Kansas City, Allied colorant Leased 44,000
Missouri manufacturing 1998
_____________________________________________________________________
San Fernando, Allied colorant Leased 50,000
California manufacturing 1998
_____________________________________________________________________
Vancouver, Allied colorant Leased 35,000
Washington manufacturing 2002-R
_____________________________________________________________________
Troy, Cadillac Plastic Leased 28,620
Michigan headquarters 1998-R
_____________________________________________________________________
Lemont, Hanna resin Leased 103,000
Illinois distribution 2008-P
_____________________________________________________________________
Approximate
Owned/ Size
Location Facility Leased (sq. ft.)
_____________________________________________________________________
Seattle, Hanna resin Leased 79,000
Washington distribution 2005-R-P
_____________________________________________________________________
Three Rivers, Day printing Owned 57,943
Michigan products manufacturing
_____________________________________________________________________
Dundee, Day printing/ Owned 101,000
Scotland textile products
manufacturing
_____________________________________________________________________
Lerma, Day printing Owned 45,000
Mexico products manufacturing
_____________________________________________________________________
Arden, Day printing/ Owned 240,580
North Carolina textile products
manufacturing
_____________________________________________________________________
Kingstree, Colonial rubber Owned 156,174
South Carolina compounding
_____________________________________________________________________
Dyersburg, Colonial polymer Owned 862,399
Tennessee compounding and
products manufacturing
_____________________________________________________________________
Bethlehem, Texapol engineered Leased
Pennsylvania thermoplastic 2004-P 82,000
compounding 1999 25,400
_____________________________________________________________________
Suwanee, PMS Consolidated, Owned 20,000
Georgia Inc., headquarters
_____________________________________________________________________
Somerset, PMS colorant Owned 44,300
New Jersey manufacturing
_____________________________________________________________________
Florence, PMS colorant Owned 30,000
Kentucky manufacturing
_____________________________________________________________________
Approximate
Owned/ Size
Location Facility Leased (sq. ft.)
_____________________________________________________________________
Gastonia, PMS colorant Leased 43,992
North Carolina manufacturing
_____________________________________________________________________
Elk Grove Village, PMS colorant Owned 51,870
Illinois manufacturing
_____________________________________________________________________
St. Peters, PMS colorant Owned 32,480
Missouri manufacturing
_____________________________________________________________________
Fort Worth, PMS colorant Owned 75,080
Texas manufacturing
_____________________________________________________________________
Norwalk, PMS colorant Owned 94,000
Ohio manufacturing
_____________________________________________________________________
Gardena, PMS colorant Owned 46,652
California manufacturing
____________________________________________________________________
Carolina, PMS colorant Leased 12,600
Puerto Rico manufacturing 1999
_____________________________________________________________________
Buford, PMS colorant Leased 73,300
Georgia manufacturing 1997-R
_____________________________________________________________________
Milford, PMS colorant Leased 20,600
New Hampshire manufacturing 1995-R
_____________________________________________________________________
Coral Springs, PMS research & Leased 18,000
Florida development
_____________________________________________________________________
Toluca, Hanna Polimeros Owned 22,000
Mexico colorant
manufacturing
_____________________________________________________________________
LaPorte, Southwest Chemical Owned 200,000
Texas polymer compounding
_____________________________________________________________________
Approximate
Owned/ Size
Location Facility Leased (sq. ft.)
_____________________________________________________________________
Ayer, Hanna Resin Leased 82,000
Massachusetts distribution 2000-R-P
_____________________________________________________________________
Houston, PDC compounding & Leased
Texas resin distribution 1997 88,000
1998 44,120
_____________________________________________________________________
Statesville, Hanna resin Leased 48,240
North Carolina distribution 1998
_____________________________________________________________________
Neshanic Station, Wilson headquarters Leased 123,000
New Jersey & colorant 1997-R-P
manufacturing
____________________________________________________________________
North Ridgeville Thermoplastic Leased 40,750
Ohio Elastomers 1999-R-P
manufacturing
_____________________________________________________________________
Assesse, Wilson colorant Owned 120,976
Belgium manufacturing
_____________________________________________________________________
Tossiat, Wilson colorant Owned 87,188
France manufacturing
_____________________________________________________________________
Bendorf, Wilson colorant Owned 72,086
Germany manufacturing
_____________________________________________________________________
Angered, Wilson colorant Owned 22,259
Sweden manufacturing
_____________________________________________________________________
Paris, Synthecolor Owned 46,285
France colorant Leased 16,146
manufacturing
_____________________________________________________________________
Gaggenau, Bergmann Owned 22,400
Germany plastic compounding sq. meters
_____________________________________________________________________
Approximate
Owned/ Size
Location Facility Leased (sq. ft.)
_____________________________________________________________________
Barbastro, Polibasa plastic Owned 6,600
Spain compounding sq. meters
_____________________________________________________________________
Registrant's combined annual plastic and rubber compounding
capacity and colorant manufacturing capacity, based on the
estimated design capacities of Registrant's plants, amounts to at
least 800 million pounds of compounded rubber products, 850 million
pounds of compounded plastic products and over 235 million pounds
of colorants. A variation in the mix of products produced at a
given plant results in a corresponding increase or decrease in the
quantity (in pounds) of products that can be produced at full
capacity. Beyond these estimated capacities for Registrant's
rubber and plastic compounding and colorant manufacturing
properties, there are no comparative measurement units of
production capacity that reasonably can be ascribed to Registrant's
other properties in the processing segment.
Registrant's 50 percent-owned partnership, DH Compounding
Company, owns and operates an engineering plastics compounding
plant in Clinton, Tennessee. The 150,000 square foot plant has an
annual design capacity of 70 million pounds.
ITEM 3. LEGAL PROCEEDINGS
The State of Idaho filed suit in 1983 in the U.S. District
Court of the District of Idaho against the Registrant and certain
other named and unnamed defendants based on allegations of
violation of the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980 and state environmental law
and upon allegations of strict liability and maintenance of public
nuisance. The state filed amended complaints in 1990 and 1993. In
1993 the U.S. Government also sued the Registrant and the other
defendants in the same court, advancing essentially the same
theories of liability. Plaintiffs are seeking reimbursement from
the defendants for damages to the environment and all costs for
clean-up of the area around the Blackbird Mine, now owned by a
limited partnership in which the Registrant is the limited partner.
The general partner in the limited partnership is a major North
American mining company which has been actively participating in
the defense of this action. The Registrant and the other
defendants filed answers asserting various defenses and served
third-party complaints against former owners and operators of the
Blackbird Mine and the U.S. Government and certain of its
departments and agencies, alleging that such third-party defendants
are legally responsible for the alleged natural resources damage.
Registrant's primary insurance carrier has reserved its rights to
deny coverage and has sued Registrant for declaratory judgement on
this coverage issue, but is funding certain legal defense costs.
In February 1995 an independent arbitrator ruled that, as between
the Registrant and the general partner, the general partner is
responsible for the costs of remediating the Blackbird Mine
properties. In view of the fact that the amount of natural
resources damage has not been finally determined, there has been no
final allocation of liability among the parties and the insurance
coverage has not been accepted by the carrier, it is not possible
at this time to state the amount of Registrant's future costs or
possible liabilities or the probability of insurance recoveries;
however, Registrant believes that the matter will be resolved
without a material adverse effect on Registrant's business or
financial position.
Registrant, through its indirect wholly-owned subsidiary,
Cadillac Plastic Group, Inc. (formerly Day International
Corporation), is obligated for costs of environmental remediation
measures taken and to be taken in connection with certain of
Cadillac's businesses related to operations that have been sold or
discontinued. These include the clean-up of Superfund sites and
participation with other companies in the clean-up of hazardous
waste disposal sites, several of which have been designated as
Superfund sites. Registrant has established reserves for
Cadillac's liabilities for environmental remediation, which do not
reflect potential insurance recoveries and which management
believes are adequate to cover Cadillac's ultimate exposure.
Registrant believes that these liabilities will not have a material
adverse effect on the Registrant's business or financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
_______ EXECUTIVE OFFICERS OF THE REGISTRANT
The following table lists information as of March 1, 1995, as
to each executive officer of the Registrant, including his position
with the Registrant as of that date and other positions held by him
during at least the past five years:
M. D. Walker Chairman and Chief Executive
Age - 62 Officer. Chairman and Chief
Executive Officer, September 1986 to
date; President, December 1988 -
May 1989.
D. J. McGregor President and Chief Operating
Age - 54 Officer. Senior Vice President-
Operations of the Registrant, March
1988 - September 1988; Executive
Vice President, September 1988 -
May 1989; President and Chief
Operating Officer, May 1989 to date.
S. P. Chong Vice President-Total Quality
Age - 52 Planning & Technical Services. Vice
President-Technical Services, 1986 -
May 1990; Vice President Total
Quality Planning & Technical
Services, May 1990 to date.
G. W. Henry Vice President - International
Age - 49 Operations. Comptroller, 1985 -
July 1990; Vice President, 1987 -
July 1990; Vice President - Marine
Services and Special Projects, July
1990 - February 1992; Vice President
- Operations, February 1992 -
October 1994; Vice President,
International Operations, October
1994 to date.
J. S. Pyke, Jr. Vice President, General Counsel
Age - 56 and Secretary. Secretary, 1973 to
date; Vice President, 1979 to date.
D. R. Schrank Vice President and Chief Financial
Age - 46 Officer. Senior Vice President and
Chief Financial Officer, Sealy, Inc.
(bedding manufacturer) 1989 to
September 1993. Vice President and
Chief Financial Officer of the
Registrant, September 1993 to date.
W. J. Tremblay Vice President - Taxes,
Age - 62 1983 to date.
M. S. Duffey Treasurer. Vice President and
Age - 40 Treasurer, Outboard Marine
Corporation (manufacturer of
recreational boats and marine
engines), 1986-1992; Vice President
and Treasurer, Foote, Cone & Belding
Communications, Inc. (world-wide
advertising agency) 1992 - July
1994. Treasurer of the Registrant,
July 1994 to date.
T. E. Lindsey Controller. Assistant Controller
Age - 44 of the Registrant 1987 to July 1990;
Controller, July 1990 to date.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
See the tables regarding Registrant's Stock Price Data at
page 32 and Stock Information at page 33 of Registrant's
Annual Report distributed to stockholders for the fiscal
year ended December 31, 1994, which tables and
information are incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
See Selected Financial Data at page 33 of Registrant's
Annual Report distributed to stockholders for the fiscal
year ended December 31, 1994, which Selected Financial
Data is incorporated herein by this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
See pages 34 through 35 of Registrant's Annual Report
distributed to stockholders for the fiscal year ended
December 31, 1994, which pages are incorporated herein by
this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See pages 19 through 36 of Registrant's Annual Report
distributed to stockholders for the fiscal year ended
December 31, 1994, which pages and section are
incorporated herein by this reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
See Registrant's current report on Form 8-K/A dated
March 8, 1995, which report is incorporated herein by
this reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
See the table listing nominees for directors on page 2 of
Registrant's definitive proxy statement distributed to
stockholders dated March 20, 1995, filed with the
Commission pursuant to Regulation 14A, which table is
incorporated herein by this reference.
Executive Officers
See the item captioned "Executive Officers of the
Registrant" in Part I of this Form 10-K, which item is
incorporated herein by this reference.
ITEM 11. EXECUTIVE COMPENSATION
See the section captioned "Executive Compensation"
through the section captioned "Directors' Compensation"
at pages 5 through 13 of Registrant's definitive proxy
statement distributed to stockholders dated March 20,
1995, filed with the Commission pursuant to Regulation
14A, which sections are incorporated herein by this
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners:
See the section captioned "Holdings of Shares of the
Company's Common Stock" at pages 4 through 5 of
Registrant's definitive proxy statement distributed to
stockholders dated March 20, 1995 filed with the
Commission pursuant to Regulation 14A, which section is
incorporated herein by this reference.
(b) Security Ownership by Management:
See the table, and footnotes thereto, regarding
beneficial ownership of the Registrant's Common Stock by
management, at page 3 of Registrant's definitive proxy
statement distributed to stockholders dated March 20,
1995 filed with the Commission pursuant to Regulation
14A, which table and footnotes are incorporated herein by
this reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See the section captioned "Transactions with Directors"
at page 4 of Registrant's definitive proxy statement
distributed to stockholders dated March 20, 1995 filed
with the Commission pursuant to Regulation 14A, which
section is incorporated herein by this reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) 1. and 2. -- The response to this portion of Item 14 is
submitted as a separate section commencing on
page F-1 of this Form 10-K.
3. List of Exhibits. [Those documents listed below that are
incorporated herein by reference to Registrant's earlier
periodic reports were filed with the Commission under
Registrant's File No. 1-5222.]
(i) Exhibits filed pursuant to Regulation S-K (Item
601):
(3) Articles of Incorporation and By-laws.
(a) Registrant's Articles of Incorporation (as restated as of
November 13, 1989, and currently in effect), filed as Exhibit
3(b) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989, and incorporated herein by this
reference.
(b) Registrant's By-laws (as amended and restated as of
March 2, 1988, and currently in effect), filed as Exhibit 3(d)
to Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987 and incorporated herein by this
reference.
(4) Instruments Defining the Rights of Security Holders:
(a) Rights Agreement, dated December 4, 1991, between the
Registrant and Ameritrust Company National Association, filed
as Exhibit 4.1 to Registrant's Form 8-K dated December 4,
1991, and incorporated herein by this reference.
(b) Credit Agreement, dated June 30, 1994 between the
Registrant, Citibank, N.A. and the other banks signatory
thereto, a copy of which will be provided to the Commission
upon request.
(c) Indenture dated September 15, 1991 between the Registrant
and Ameritrust Company, National Association, Trustee relating
to Registrant's $100,000,000 aggregate principal amount of 9%
Senior Notes due 1998 and $150,000 aggregate principal amount
of 9 3/8% Senior notes due 2003, filed as Exhibit 4 to the
Registrant's Form S-3 filed on September 18, 1991, and
incorporated herein by this reference.
(d) Indenture dated September 26, 1991 between the Registrant
and Ameritrust Texas, National Association, Trustee, relating
to Registrant's $50,000,000 aggregate principal amount of 9%
Notes due 1998, filed as Exhibit 4 to the Registrant's Form S-
3 filed on October 24, 1991, and incorporated herein by this
reference.
(e) Associates Ownership Trust Agreement dated September 12,
1991, between Registrant and Wachovia Bank of North Carolina,
filed as Exhibit 28.3 to Registrant's Current Report on Form
8-K dated September 12, 1991, and incorporated herein by this
reference.
(10) Material Contracts:
*(a) The Restated 1979 Executive Incentive Compensation Plan
of the Registrant, filed as Exhibit 5 to the Form S-8
Registration Statement No. 2-70755 filed with the Commission
on February 19, 1981 and incorporated herein by this
reference, and amendment to the Plan, as ratified and approved
by Registrant's stockholders on October 3, 1983, filed as
Exhibit 10(c) to Registrant's Form 10-K for the fiscal year
ended December 31, 1983 and incorporated herein by this
reference. Also amendment to the Plan as approved by
Registrant's stockholders on May 1, 1985, filed as Exhibit
10(c) to Registrant's Form 10-K for the fiscal year ended
December 31, 1985 and incorporated herein by this reference.
*(b) Forms of 1985 Stock Option Agreement, 1985 Grant of
Appreciation Rights and 1985 Grant of Performance Rights under
the 1979 Executive Incentive Compensation Plan, filed as
Exhibit 10(g) to Registrant's Form 10-K for the fiscal year
ended December 31, 1985 and incorporated herein by this
reference.
*(c) Forms of 1987 Stock Option Agreement, 1987 Grant of
Appreciation Rights and 1987 Grant of Performance Rights under
the 1979 Executive Incentive Compensation Plan, filed as
Exhibit 10(e) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1986, and incorporated
herein by this reference.
*(d) 1988 Long-Term Incentive Plan, and forms of Grants of
Stock Options, Grants of Appreciation Rights and Grants of
Long-Term Incentive Units thereunder, filed as Exhibit 10(e)
to Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988, and incorporated herein by this
reference. Also forms of 1989 Stock Option Agreement, 1989
Grant of Appreciation Rights and 1989 Grant of Long-Term
Incentive Units, filed as Exhibit 10(e) to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31,
1989 and incorporated herein by this reference. Also 1990
Amendment to the Plan, filed as Exhibit 10(e) to Registrant's
Form 10-K for the fiscal year ended December 31, 1990 and
incorporated herein by this reference and forms of 1990 Stock
Option Agreement, 1990 Grant of Appreciation Rights and 1990
Grant of Long-Term Incentive Units, filed as Exhibit 10(e) to
Registrant's Form 10-K for the fiscal year ended December 31,
1990 and incorporated herein by this reference. Also 1991
Amendment to the Plan, and forms of 1991 Stock Option
Agreement, 1991 Grant of Appreciation Rights, 1991 Grant of
Long Term Incentive Units, and 1991 Stock Option Agreement
with non-employee directors of Registration, filed as Exhibit
10(f) to Registrant's Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by this reference.
Also forms of 1992 Stock Option Agreement and 1992 Grant of
Long Term Incentive Units, filed as Exhibit 10(e) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, and incorporated herein by this
reference. Also 1994 Amendment to the Plan, filed as Exhibit
A to Registrant's definitive proxy statement distributed to
stockholders dated March 17, 1994 and incorporated herein by
this reference.
*(e) Form of Supplemental Deferred Compensation agreement in
which any of the five most highly compensated executive
officers of the Registrant participates, filed as Exhibit
10(e) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, and incorporated herein
by this reference.
*(f) Form of Supplemental Death Benefits agreement in which
any of the five most highly compensated executive officers of
the Registrant participates, filed as Exhibit 10(f) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, and incorporated herein by this
reference.
*(g) Form of Employment Agreement dated as of February 17,
1989 between Registrant and certain of Registrant's executive
officers filed as Exhibit 10(h) to Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1988 and
incorporated herein by this reference. Also (i) Employment
Agreement dated as of September 27, 1993, between
D. R. Schrank and Registrant, filed as Exhibit (a) to
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1993, and incorporated herein by this
reference; and (ii) Employment Agreement dated March 1, 1993
between D. J. McGregor and Registrant, filed as Exhibit 10(g)
to Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, and incorporated herein by this
reference.
*(h) Description of Directors' compensation and retirement
plan, set forth in the section captioned "Directors'
Compensation" on pages 12 and 13 of Registrant's definitive
proxy statement dated March 20, 1995, as distributed to
stockholders and filed with the Commission pursuant to
Regulation 14A, which section is incorporated herein by this
reference.
*(i) Excess Benefit Plan in which any of the five most highly
compensated executive officers of the Registrant participates,
filed as Exhibit 10(j) to Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1992 and
incorporated herein by this reference.
*(j) Supplemental Retirement Benefit Plan in which any of the
five most highly compensated executive officers of the
Registrant participates, filed as Exhibit 10 (k) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992 and incorporated herein by this
reference.
[*- Identifies management contract or compensation plans or
arrangements filed pursuant to Item 601(b)(10)(iii)(A)]
(11) Computation of per share earnings, filed herewith.
(13) Registrant's Annual Report as distributed to stockholders for
the fiscal year ended December 31, 1994, filed herewith.
(16) Letter regarding Change in Certifying Accountants, filed as
Exhibit (16) to Registrant's current report on Form 8-K/A dated
March 8, 1995 and incorporated herein by this reference.
(21) Subsidiaries of the Registrant, filed herewith.
(23) Consent of Independent Auditors, filed herewith.
(24) Powers of Attorney of certain Directors of Registrant, filed
herewith.
(ii) Other exhibits:
Financial statements (and consent of independent
auditors) pursuant to Form 11-K and Rule 15d-21 for the year ended
December 31, 1994, for the Capital Accumulation Plan for Salaried
Employees of M. A. Hanna Company and Associated Companies, and for
stock purchase/savings plans of Registrant's subsidiaries and
divisions will be filed as exhibits to the Form 10-K under a Form
10-K/A amendment not later than June 30, 1995.
(b) Since September 30, 1994, Registrant has filed two reports on
Form 8-K, dated December 20, 1994, reporting the Registrant's
plans to sell its Day International, Inc. business units, and
February 17, 1995, as amended and replaced by Form 8-K/A dated
March 8, 1995, reporting a change in Registrant's Certifying
Accountants.
(c) The response to this portion of Item 14 is submitted as a
separate Section commencing on page X-1 of this Form 10-K.
(d) The response to this portion of Item 14 is submitted as a
separate section commencing on page F-1 of this Form 10-K.
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
M. A. HANNA COMPANY
(Registrant)
Date: March 21, 1995 By /s/J. S. Pyke, Jr.
J. S. Pyke, Jr.
Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Date: March 21, 1995 By /s/M. D. Walker
M. D. Walker, Chairman and Chief
Executive Officer (Principal
Executive Officer) and Director
Date: March 21, 1995 By /s/D. R. Schrank
D. R. Schrank, Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: March 21, 1995 By /s/T. E. Lindsey
T. E. Lindsey, Controller
(Principal Accounting Officer)
B. C. Ames, Director
C. A. Cartwright, Director
W. R. Embry, Director
J. T. Eyton, Director
By /s/T. E. Lindsey G. D. Kirkham, Director
T. E. Lindsey
Attorney-in-Fact
M. L. Mann, Director
Date: March 21, 1995
D. J. McGregor, Director
R. W. Pogue, Director
ITEM 14(C)
EXHIBIT LIST
Sequential Page No.
(i) Exhibits filed pursuant to Regulation S-K
(Item 601):
(3) Articles of Incorporation and By-laws.
(a) Registrant's Articles of Incorporation
(as restated as of November 13, 1989, and
currently in effect), filed as Exhibit
3(b) to Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1989, and incorporated
herein by this reference.
(b) Registrant's By-laws (as amended and
restated as of March 2, 1988, and
currently in effect), filed as Exhibit
3(d) to Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1987 and incorporated herein
by this reference.
(4) Instruments Defining the Rights of Security Holders:
(a) Rights Agreement, dated December 4, 1991,
between the Registrant and Ameritrust
Company National Association, filed as
Exhibit 4.1 to Registrant's Form 8-K
dated December 4, 1991, and incorporated
herein by this reference.
(b) Credit Agreement, dated June 30, 1994
between the Registrant, Citibank, N.A.
and the other banks signatory thereto, a
copy of which will be provided to the
Commission upon request.
(c) Indenture dated September 15, 1991
between the Registrant and Ameritrust
Company, National Association, Trustee
relating to Registrant's $100,000,000
aggregate principal amount of 9% Senior
Notes due 1998 and $150,000 aggregate
principal amount of 9 3/8% Senior notes
due 2003, filed as Exhibit 4 to the
Registrant's Form S-3 filed on September
18, 1991, and incorporated herein by this
reference.
(d) Indenture dated September 26, 1991
between the Registrant and Ameritrust
Texas, National Association, Trustee,
relating to Registrant's $50,000,000
aggregate principal amount of 9% Notes
due 1998, filed as Exhibit 4 to the
Registrant's Form S-3 filed on October
24, 1991, and incorporated herein by
this reference.
(e) Associates Ownership Trust Agreement
dated September 12, 1991, between
Registrant and Wachovia Bank of North
Carolina, filed as Exhibit 28.3 to
Registrant's Current Report on Form 8-K
dated September 12, 1991, and
incorporated herein by this reference.
(10) Material Contracts:
*(a) The Restated 1979 Executive Incentive
Compensation Plan of the Registrant,
filed as Exhibit 5 to the Form S-8
Registration Statement No. 2-70755 filed
with the Commission on February 19, 1981
and incorporated herein by this
reference, and amendment to the Plan, as
ratified and approved by Registrant's
stockholders on October 3, 1983, filed as
Exhibit 10(c) to Registrant's Form 10-K
for the fiscal year ended December 31,
1983 and incorporated herein by this
reference. Also amendment to the Plan as
approved by Registrant's stockholders on
May 1, 1985, filed as Exhibit 10(c) to
Registrant's Form 10-K for the fiscal
year ended December 31, 1985 and
incorporated herein by this reference.
*(b) Forms of 1985 Stock Option Agreement,
1985 Grant of Appreciation Rights and
1985 Grant of Performance Rights under
the 1979 Executive Incentive Compensation
Plan, filed as Exhibit 10(g) to
Registrant's Form 10-K for the fiscal
year ended December 31, 1985 and
incorporated herein by this reference.
*(c) Forms of 1987 Stock Option Agreement,
1987 Grant of Appreciation Rights and
1987 Grant of Performance Rights under
the 1979 Executive Incentive Compensation
Plan, filed as Exhibit 10(e) to
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1986, and incorporated herein by this
reference.
*(d) 1988 Long-Term Incentive Plan, and forms
of Grants of Stock Options, Grants of
Appreciation Rights and Grants of Long-
Term Incentive Units thereunder, filed as
Exhibit 10(e) to Registrant's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1988, and incorporated
herein by this reference. Also forms of
1989 Stock Option Agreement, 1989 Grant
of Appreciation Rights and 1989 Grant of
Long-Term Incentive Units, filed as
Exhibit 10(e) to Registrant's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1989 and incorporated
herein by this reference. Also 1990
Amendment to the Plan, filed as
Exhibit 10(e) to Registrant's Form 10-K
for the fiscal year ended December 31,
1990 and incorporated herein by this
reference and forms of 1990 Stock Option
Agreement, 1990 Grant of Appreciation
Rights and 1990 Grant of Long-Term
Incentive Units, filed as Exhibit 10(e)
to Registrant's Form 10-K for the fiscal
year ended December 31, 1990 and
incorporated herein by this reference.
Also 1991 Amendment to the Plan, and
forms of 1991 Stock Option Agreement,
1991 Grant of Appreciation Rights, 1991
Grant of Long Term Incentive Units, and
1991 Stock Option Agreement with non-
employee directors of Registration, filed
as Exhibit 10(f) to Registrant's Form 10-
K for the fiscal year ended December 31,
1991, and incorporated herein by this
reference. Also forms of 1992 Stock
Option Agreement and 1992 Grant of Long
Term Incentive Units, filed as Exhibit
10(e) to Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1992, and incorporated
herein by this reference. Also 1994
Amendment to the Plan, filed as Exhibit A
to Registrant's definitive proxy
statement distributed to stockholders
dated March 17, 1994 and incorporated
herein by this reference.
*(e) Form of Supplemental Deferred
Compensation agreement in which any of
the five most highly compensated
executive officers of the Registrant
participates, filed as Exhibit 10(e) to
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1993, and incorporated herein by this
reference.
*(f) Form of Supplemental Death Benefits
agreement in which any of the five most
highly compensated executive officers of
the Registrant participates, filed as
Exhibit 10(f) to Registrant's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1993, and incorporated
herein by this reference.
*(g) Form of Employment Agreement dated as of
February 17, 1989 between Registrant and
certain of Registrant's executive
officers filed as Exhibit 10(h) to
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1988 and incorporated herein by this
reference. Also (i) Employment
Agreement dated as of September 27, 1993,
between D. R. Schrank and Registrant,
filed as Exhibit (a) to Registrant's
Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, and
incorporated herein by this reference;
and (ii) Employment Agreement dated March
1, 1993 between D. J. McGregor and
Registrant, filed as Exhibit 10(g) to
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1993, and incorporated herein by this
reference.
*(h) Description of Directors' compensation
and retirement plan, set forth in the
section captioned "Directors'
Compensation" on pages 12 and 13 of
Registrant's definitive proxy statement
dated March 20, 1995, as distributed to
stockholders and filed with the
Commission pursuant to Regulation 14A,
which section is incorporated herein by
this reference.
*(i) Excess Benefit Plan in which any of
the five most highly compensated
executive officers of the Registrant
participates, filed as Exhibit 10(j)
to Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1992 and incorporated
herein by this reference.
*(j) Supplemental Retirement Benefit Plan in
which any of the five most highly
compensated executive officers of the
Registrant participates, filed as Exhibit
10 (k) to Registrant's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein
by this reference.
[*- Identifies management contract or compensation
plans or arrangements filed pursuant to Item
601(b)(10)(iii)(A)]
(11) Computation of per share earnings, filed
herewith. ________
(13) Registrant's Annual Report as distributed to
stockholders for the fiscal year ended
December 31, 1994, filed herewith. ________
(16) Letter regarding Change in Certifying
Accountants, filed as Exhibit (16) to
Registrant's current report on Form 8-K/A
dated March 8, 1995 and incorporated herein by
this reference.
(21) Subsidiaries of the Registrant, filed
herewith. ________
(23) Consent of Independent Auditors, filed
herewith. ________
(24) Powers of Attorney of certain Directors of
Registrant, filed herewith. ________
(ii) Other exhibits:
Financial statements (and consent of
independent auditors) pursuant to Form 11-K
and Rule 15d-21 for the year ended
December 31, 1994, for the Capital
Accumulation Plan for Salaried Employees of
M. A. Hanna Company and Associated Companies,
and for stock purchase/savings plans of
Registrant's subsidiaries and divisions will
be filed as exhibits to the Form 10-K under a
Form 10-K/A amendment not later than June 30,
1995.
(b) Since September 30, 1994, Registrant
has filed two reports on Form 8-K,
dated December 20, 1994, reporting
the Registrant's plans to sell
itsDay International, Inc. business
units,and February 17, 1995, as
amended and replaced by Form 8-K/A
dated March 8, 1995.
(c) The response to this portion of Item
14 is submitted as a separate
Section commencing on page X-1 of
this Form 10-K.
(d) The response to this portion of Item
14 is submitted as a separate
section commencing on page F-1 of
this Form 10-K.
FORM 10-K
ITEM 14(a) (1) and (2)
FINANCIAL STATEMENTS AND SCHEDULES
M.A. HANNA COMPANY
The following consolidated financial statements of the
Registrant and its consolidated subsidiaries, included in the
annual report of the Registrant to its stockholders for the
year ended December 31, 1994, are incorporated herein by
reference in Item 8:
Summary of accounting policies
Consolidated balance sheets - December 31, 1994 and 1993
Consolidated statements of income, stockholders' equity
and cash flows - years ended December 31, 1994, 1993 and 1992
Notes to financial statements
The following consolidated financial information, together with
the report of the independent accountants, are included in Item
14 (d):
Schedule II - Valuation and qualifying accounts
All other schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or
are inapplicable, and therefore have been omitted.
Financial statements of unconsolidated subsidiaries or 50% or
less owned persons accounted for by the equity method have been
omitted because they do not, considered individually or in the
aggregate, constitute a significant subsidiary.
F-1
Report of Independent Auditors
Board of Directors
M.A. Hanna Company
We have audited the accompanying consolidated balance sheets of
M.A. Hanna Company and subsidiaries as of December 31, 1994 and
1993, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 1994. Our audits also
included the financial statement schedule listed in the Index
at Item 14(a)(1) and (2). These financial statements and
schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of M.A. Hanna Company and subsidiaries
at December 31, 1994 and 1993, and the consolidated results of
its operations and its cash flows for each of the three years
in the period ended December 31, 1994, in conformity with
generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken
as a whole, presents fairly in all material respects the
information set forth therein.
/s/ Ernst & Young LLP
January 31, 1995
F-2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
M. A. HANNA COMPANY AND CONSOLIDATED SUBSIDIARIES
COL. A COL. B COL. C COL. D
ADDITIONS
Balance at Beginning (1) (2)
DESCRIPTION of Period Charged to Costs Charged to Other Deductions - Describe
and Expenses Accounts - Describe
Year ended December 31, 1994:
Deducted from asset accounts:
Allowance for doubtful accounts $9,993,000 $3,250,000 $531,000 (a) $2,428,000 (c)
Year ended December 31, 1993:
Deducted from asset accounts:
Allowance for doubtful accounts $7,233,000 $3,647,000 $188,000 (a) $2,396,000 (c)
1,321,000 (b)
Year ended December 31, 1992:
Deducted from asset accounts:
Allowance for doubtful accounts $5,569,000 $2,151,000 $1,067,000 (a) $2,445,000 (c)
891,000 (b)
COL. A COL. E
Balance at End
DESCRIPTION of Period
Year ended December 31, 1994:
Deducted from asset accounts:
Allowance for doubtful accounts $11,346,000
Year ended December 31, 1993:
Deducted from asset accounts:
Allowance for doubtful accounts $ 9,993,000
Year ended December 31, 1992:
Deducted from asset accounts:
Allowance for doubtful accounts $ 7,233,000
(a) Reserves of companies acquired.
(b) Charge included in income(loss) from discontinued operations.
(c) Uncollectible amounts written off.
F-3