Annual Report (Form 10-K), fiscal year 1994

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.



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.

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.

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.

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.

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.

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.


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.

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.



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.

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.

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.

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.

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 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 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 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.
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