Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________

FORM 10-Q

______________________________

(Mark One)



þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2015



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 0-7459

______________________________

A. SCHULMAN, INC.

(Exact Name of Registrant as Specified in its Charter)

______________________________



Delaware		34-0514850
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

3637 Ridgewood Road, Fairlawn, Ohio		44333
(Address of Principal Executive Offices)		(ZIP Code)

Registrant’s telephone number, including area code: (330) 666-3751

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	þ		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Number of shares of common stock, $1.00 par value, outstanding as of July 2, 2015– 29,290,184

TABLE OF CONTENTS



		PAGE
PART I — FINANCIAL INFORMATION
Item 1	Financial Statements	1
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3	Quantitative and Qualitative Disclosure about Market Risk	37
Item 4	Controls and Procedures	37
PART II — OTHER INFORMATION
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6	Exhibits	39
	SIGNATURES

Exhibit 3.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT
EX-101 LABEL LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1—Financial Statements

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



	Three months ended May 31,						Nine months ended May 31,
	2015			2014			2015				2014
	Unaudited (In thousands, except per share data)
Net sales	$	560,858		$	645,735		$	1,718,206			$	1,819,640
Cost of sales	470,101			553,771			1,462,531				1,574,269
Selling, general and administrative expenses	64,842			65,536			195,482				181,647
Restructuring expense	2,649			1,078			10,530				4,583
Asset impairment	—			—			—				104
Operating income	23,266			25,350			49,663				59,037
Interest expense	2,618			1,433			7,288				6,112
Bridge financing fees	18,750			—			18,750				—
Foreign currency transaction (gains) losses	857			(28		)	3,097				2,120
Other (income) expense, net	(335		)	(64		)	(900		)		(478		)
Gain on early extinguishment of debt	—			—			(1,290		)		—
Income (loss) from continuing operations before taxes	1,376			24,009			22,718				51,283
Provision (benefit) for U.S. and foreign income taxes	10,344			4,662			18,801				12,657
Income (loss) from continuing operations	(8,968		)	19,347			3,917				38,626
Income (loss) from discontinued operations, net of tax	(18		)	(23		)	(86		)		2,979
Net income (loss)	(8,986		)	19,324			3,831				41,605
Noncontrolling interests	(343		)	(233		)	(890		)		(584		)
Net income (loss) attributable to A. Schulman, Inc.	(9,329		)	19,091			2,941			41,021
Convertible special stock dividends	(563		)	—			(563		)		—
Net income (loss) available to A. Schulman, Inc. common stockholders	$	(9,892	)	$	19,091		$	2,378			$	41,021

Weighted-average number of shares outstanding:
Basic	29,219			29,081			29,125				29,052
Diluted	29,219			29,375			29,547				29,300

Basic earnings per share available to A. Schulman, Inc. common stockholders
Income (loss) from continuing operations	$	(0.34	)	$	0.66		$	0.08			$	1.31
Income (loss) from discontinued operations	—			—			—				0.10
Net income (loss) available to A. Schulman, Inc. common stockholders	$	(0.34	)	$	0.66		$	0.08			$	1.41

Diluted earnings per share available to A. Schulman, Inc. common stockholders
Income (loss) from continuing operations	$	(0.34	)	$	0.65		$	0.08			$	1.30
Income (loss) from discontinued operations	—			—			—				0.10
Net income (loss) available to A. Schulman, Inc. common stockholders	$	(0.34	)	$	0.65		$	0.08			$	1.40

Cash dividends per common share	$	0.205		$	0.200		$	0.615			$	0.600

The accompanying notes are an integral part of the consolidated financial statements

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A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Three months ended May 31,						Nine months ended May 31,
	2015			2014			2015			2014
	Unaudited (In thousands)
Net income (loss)	$	(8,986	)	$	19,324		$	3,831		$	41,605
Other comprehensive income (loss):
Foreign currency translation gains (losses)	(7,786		)	(1,290		)	(65,892		)	15,076
Defined benefit retirement plans, net of tax	429			78			1,364			312
Other comprehensive income (loss)	(7,357		)	(1,212		)	(64,528		)	15,388
Comprehensive income (loss)	(16,343		)	18,112			(60,697		)	56,993
Less: comprehensive income (loss) attributable to noncontrolling interests	282			225			768			462
Comprehensive income (loss) attributable to A. Schulman, Inc.	$	(16,625	)	$	17,887		$	(61,465	)	$	56,531

The accompanying notes are an integral part of the consolidated financial statements

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A. SCHULMAN, INC.

CONSOLIDATED BALANCE SHEETS



	May 31, 2015			August 31, 2014
	Unaudited (In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	107,043		$	135,493
Restricted cash	378,509			—
Accounts receivable, less allowance for doubtful accounts of $9,537 at May 31, 2015 and $10,844 at August 31, 2014	357,688			384,444
Inventories	270,227			292,141
Prepaid expenses and other current assets	38,867			40,473
Total current assets	1,152,334			852,551
Property, plant and equipment, at cost:
Land and improvements	25,568			28,439
Buildings and leasehold improvements	143,002			160,858
Machinery and equipment	372,030			398,563
Furniture and fixtures	31,896			41,255
Construction in progress	23,015			16,718
Gross property, plant and equipment	595,511			645,833
Accumulated depreciation	358,979			391,912
Net property, plant and equipment	236,532			253,921
Deferred charges and other noncurrent assets	83,149			65,079
Goodwill	191,489			202,299
Intangible assets, net	119,508			138,634
Total assets	$	1,783,012		$	1,512,484
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	293,203		$	314,957
U.S. and foreign income taxes payable	7,350			6,385
Accrued payroll, taxes and related benefits	46,513			54,199
Other accrued liabilities	78,558			46,054
Short-term debt	14,290			31,748
Total current liabilities	439,914			453,343
Long-term debt	607,585			339,546
Pension plans	110,498			129,949
Deferred income taxes	20,681			23,826
Other long-term liabilities	25,571			29,369
Total liabilities	1,204,249			976,033
Commitments and contingencies
Stockholders’ equity:
Common stock, $1 par value, authorized - 75,000 shares, issued - 48,367 shares at May 31, 2015 and 48,185 shares at August 31, 2014	48,367			48,185
Convertible special stock, no par value	120,296			—
Additional paid-in capital	274,138			268,545
Accumulated other comprehensive income (loss)	(81,097		)	(16,691		)
Retained earnings	591,781			606,898
Treasury stock, at cost, 19,078 shares at May 31, 2015 and 18,973 shares at August 31, 2014	(383,148		)	(379,894		)
Total A. Schulman, Inc.’s stockholders’ equity	570,337			527,043
Noncontrolling interests	8,426			9,408
Total equity	578,763			536,451
Total liabilities and equity	$	1,783,012		$	1,512,484

The accompanying notes are an integral part of the consolidated financial statements

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A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Nine months ended May 31,
	2015			2014
	Unaudited (In thousands)
Operating from continuing and discontinued operations:
Net income	$	3,831		$	41,605
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
Depreciation	26,481			24,751
Amortization	11,899			10,308
Bridge financing fees	18,750			—
Deferred tax provision (benefit)	(1,143		)	(3,182		)
Pension, postretirement benefits and other compensation	8,318			9,157
Restricted stock compensation - CEO transition costs, net of cash	4,789			—
Asset impairment	—			104
Gain on sale of assets from discontinued operations	—			(3,344		)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable	(13,610		)	(26,048		)
Inventories	(13,309		)	(15,330		)
Accounts payable	9,599			2,847
Income taxes	2,598			204
Accrued payroll and other accrued liabilities	4,776			260
Other assets and long-term liabilities	(6,698		)	(6,296		)
Net cash provided from (used in) operating activities	56,281			35,036
Investing from continuing and discontinued operations:
Expenditures for property, plant and equipment	(32,662		)	(24,126		)
Investment in equity investees	(12,456		)	—
Proceeds from the sale of assets	1,411			5,255
Restricted cash	(3,509		)	—
Business acquisitions, net of cash	(6,698		)	(115,624		)
Net cash provided from (used in) investing activities	(53,914		)	(134,495		)
Financing from continuing and discontinued operations:
Cash dividends paid to common stockholders	(18,058		)	(17,717		)
Increase (decrease) in short-term debt	(12,995		)	3,747
Borrowings on long-term debt	255,196			703,141
Repayments on long-term debt including current portion	(353,647		)	(609,501		)
Payment of debt issuance costs	—			(1,782		)
Noncontrolling interests' contributions (distributions)	(1,750		)	—
Issuances of stock, common and treasury	231			403
Issuances of convertible special stock, net	120,296			—
Redemptions of common stock	(4,999		)	(361		)
Purchases of treasury stock	(3,335		)	(1,116		)
Net cash provided from (used in) financing activities	(19,061		)	76,814
Effect of exchange rate changes on cash	(11,756		)	(605		)
Net increase (decrease) in cash and cash equivalents	(28,450		)	(23,250		)
Cash and cash equivalents at beginning of period	135,493			134,054
Cash and cash equivalents at end of period	$	107,043		$	110,804

Non-cash Activity:
Senior Notes funding held in restricted cash	$	375,000		$	—
Unpaid debt issuance costs	$	11,116		$	—

The accompanying notes are an integral part of the consolidated financial statements

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


(1)	GENERAL

The unaudited interim consolidated financial statements included for A. Schulman, Inc. (the “Company”) reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of the interim periods presented. All such adjustments are of a normal recurring nature. The fiscal year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto incorporated in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

The results of operations for the three and nine months ended May 31, 2015 are not necessarily indicative of the results expected for the fiscal year ending August 31, 2015.

The accounting policies for the periods presented are the same as described in Note 1 – Business and Summary of Significant Accounting Policies to the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015. In addition to these accounting policies, the Company applied the following policy during the third quarter of fiscal 2015:

Restricted Cash

Restricted cash is classified according to the timing of use of such cash. At May 31, 2015, restricted cash included proceeds from the issuance of the $375 million aggregate principal amount of Notes, as discussed in Note 4 of this Form 10-Q. This amount was held in an escrow account, as required by the terms of the Notes, until June 1, 2015 at which time the restricted cash, along with a refinancing of the Company's long-term debt, was used to complete the acquisition of HGGC Citadel Plastics Holdings, Inc. (“Citadel”), as discussed in Note 2 of this Form 10-Q.

Certain items previously reported in specific financial statement captions have been reclassified to conform to the fiscal 2015 presentation. All previously reported segment disclosures have also been reclassified to reflect the Company's new reportable segments as further discussed in Note 13 of this Form 10-Q.


(2)	BUSINESS ACQUISITIONS

Citadel

On June 1, 2015, the Company acquired all of the issued and outstanding shares of privately held Citadel, a portfolio company of certain private equity firms, for approximately $800 million. Citadel is a leading plastics materials science business that produces engineered composites and engineered plastics for specialty product applications spanning multiple industries including transportation, industrial & construction, consumer, electrical, energy and healthcare & safety. The acquisition expands the Company's presence substantially, especially in the North America engineered plastics markets as well as balancing the global geographic footprint and gives A. Schulman a second growth platform with its industry-leading, added-value specialty engineered composites business. The business enhances the Company's existing portfolio and presents attractive expansion opportunities in other fast-growing sectors such as aerospace, medical, LED lighting and oil & gas. Through this acquisition the Company's portfolio becomes more highly specialized, which will enable the Company to better serve its global customer base.

The information included herein has been prepared based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of assets acquired and liabilities assumed which were determined with the assistance of independent valuations using discounted cash flow and comparative market multiple approaches, quoted market prices and estimates made by management. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets and liabilities acquired are fully evaluated by the Company.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the preliminary estimated fair value of the assets acquired and liabilities assumed from the Citadel acquisition at the date of acquisition:



	As of June 1, 2015
	(In thousands)
Accounts receivable	$	72,926
Inventories	44,300
Prepaid expenses and other current assets	7,755
Property, plant and equipment	81,551
Intangible assets	321,900
Other long-term assets	3,967
Total assets acquired	$	532,399

Accounts payable	32,278
Accrued liabilities	10,517
Deferred income taxes	124,067
Other long-term liabilities	1,265
Total liabilities assumed	$	168,127
Identifiable net assets acquired	$	364,272
Goodwill	437,628
Net assets acquired	$	801,900

The Company anticipates recording acquired intangible assets of $321.9 million, with an estimated weighted-average useful life of 14.1 years. These intangible assets include customer related intangibles of $227.7 million, developed technology of $75.0 million, and trademarks and trade names of $19.2 million, with estimated weighted-average useful lives of 13.9 years, 16.3 years and 8.1 years, respectively. In addition, the estimated fair value of accounts receivable acquired was $72.9 million with the gross contractual amount being $73.9 million.

Goodwill is calculated as the excess of the purchase price over the estimated fair values of the assets acquired and the liabilities assumed in the acquisition, and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The amount allocated to goodwill associated with the Citadel acquisition is primarily the result of anticipated synergies and the previously discussed market expansion resulting from the consolidation and centralization of manufacturing and global purchasing activities, insurance savings, and elimination of duplicate corporate administrative costs. The Company will allocate the goodwill to its USCAN engineered plastics and global engineered composites reporting units. Except for certain goodwill acquired from Citadel, none of the goodwill associated with this transaction will be deductible for income tax purposes.

A. Schulman's fiscal year ends on August 31 while Citadel's fiscal year ended on December 31. The pro forma information in the table below for the three and nine months ended May 31, 2015 includes (1) A. Schulman’s three and nine months ended May 31, 2015 and (2) Citadel’s three and nine months ended March 31, 2015. The following pro forma information represents the consolidated results of the Company as if the Citadel acquisition occurred as of September 1, 2014:



	Three months ended May 31,				Nine months ended May 31,
	2015		2014		2015		2014
	Unaudited (In thousands, except per share data)
Net sales	$	688,823	$	753,458	$	2,095,541	$	2,142,810
Net income available to A. Schulman, Inc. common stockholders	$	6,393	$	14,711	$	2,504	$	(9,999	)
Net income per share of common stock attributable to A. Schulman, Inc. - diluted	$	0.22	$	0.50	$	0.08	$	(0.34	)

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The unaudited pro forma information has been adjusted with respect to certain aspects of the Acquisition to reflect the following:


•	Citadel acquired The Composites Group (“TCG”) in November of 2014. For purposes of the pro forma information disclosed above, the TCG acquisition was included as if the acquisition date was as of the earliest presented period.


•	Additional depreciation and amortization expenses that would have been recognized assuming fair value adjustments to the existing Citadel assets acquired and liabilities assumed, including intangible assets, fixed assets and expense associated with the fair value step-up of inventory acquired.


•	Increased interest expense due to additional borrowings to fund the acquisition.


•	Adjustment of valuation allowances associated with US deferred tax assets.


•	Acquisition-related costs of $4.9 million, which were included in the Company’s results of operations for the nine months ended May 31, 2015.


•	Costs associated with the Bridge Financing discussed in Note 4 of this Form 10-Q of $18.8 million, which were expensed during the three months ended May 31, 2015.

The pro forma results do not include any anticipated cost synergies or other effects of the planned integration of the acquired business. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed as of September 1, 2014, nor are they indicative of the future operating results of the Company.

Specialty Plastics Business of Ferro Corporation

On July 1, 2014, the Company acquired the majority of the assets of the specialty plastics business of Ferro Corporation (“Specialty Plastics” acquisition) for $91.0 million. The results of operations for this business have been included in the consolidated financial statements since the date of acquisition.

The information included herein has been prepared based on the allocation of the purchase price using the fair value and useful lives of assets acquired and liabilities assumed which were determined with the assistance of independent valuations using discounted cash flow and comparative market multiple approaches, quoted market prices and estimates made by management.

The following table presents the fair value of the assets acquired and liabilities assumed from the Specialty Plastics acquisition at the date of acquisition:



	As of July 1, 2014
	(In thousands)
Accounts receivable	$	27,850
Inventories	12,781
Prepaid expenses and other current assets	553
Property, plant and equipment	20,049
Intangible assets	26,985
Total assets acquired	$	88,218

Accounts payable	15,192
Accrued payroll, taxes and related benefits	1,690
Other accrued liabilities	951
Other long-term liabilities	181
Total liabilities assumed	$	18,014
Identifiable net assets acquired	$	70,204
Goodwill	20,796
Net assets acquired	$	91,000

The Company recorded acquired intangible assets of $27.0 million, all of which are customer related intangibles with an estimated weighted-average useful life of 13.6 years. In addition, the fair value of accounts receivable acquired was $27.9 million with the gross contractual amount being $28.0 million.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following pro forma information represents the consolidated results of the Company as if the Specialty Plastics acquisition occurred as of September 1, 2013:



	Three months ended May 31, 2014		Nine months ended May 31, 2014
	Unaudited (In thousands, except per share data)
Net sales	$	688,334	$	1,938,731
Net income available to A. Schulman, Inc. common stockholders	$	21,715	$	46,067
Net income per share of common stock attributable to A. Schulman, Inc. - diluted	$	0.74	$	1.57

The following table summarizes the Company's other business acquisitions for the periods presented:



Transaction Description	Date of Transaction	Purchase Consideration (In millions)		Segment
Perrite Group	September 2, 2013	$	51.3	EMEA and APAC
Network Polymers, Inc.	December 2, 2013	$	49.2	USCAN
Prime Colorants	December 31, 2013	$	15.1	USCAN
Compco Pty. Ltd.	September 2, 2014	$	6.7	APAC

The Company incurred $3.6 million and $8.0 million of acquisition and integration related costs, primarily included in selling, general and administrative expenses, during the three and nine months ended May 31, 2015, respectively, and $0.9 million and $3.4 million during the three and nine months ended May 31, 2014, respectively.


(3)	GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the Company's carrying value of goodwill are as follows:



	EMEA				USCAN		⁽¹⁾	LATAM			⁽¹⁾	APAC			Total
	(In thousands)
Balance as of August 31, 2014	$	85,957			$	102,735		$	12,944			$	663		$	202,299
Acquisitions	(109		)	⁽²⁾	1,327		⁽²⁾	—				407			1,625
Translation	(11,314		)		—			(956		)		(165		)	(12,435		)
Balance as of May 31, 2015	$	74,534			$	104,062		$	11,988			$	905		$	191,489

⁽¹⁾During the second quarter of fiscal 2015, the Company reallocated a portion of the goodwill associated with its former Americas segment to its U.S. & Canada and Latin America segments based on relative fair value.

⁽²⁾Activity relates to adjustments to preliminary purchase price allocation made in fiscal 2015.

Goodwill is tested for impairment at the reporting unit level on an annual basis in the fourth quarter and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

The Company completed its annual impairment review of goodwill as of June 1, 2014 and noted no impairment. Management uses judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement approach that combines the income and market valuation techniques for each of the Company’s reporting units that carry goodwill. These valuation techniques use estimates and assumptions including, but not limited to, the determination of appropriate market

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

comparables, projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions.

During the second quarter of fiscal 2015, the Company reviewed goodwill allocated to each of the reporting units within the former Americas segment and newly created USCAN and LATAM segments immediately before and after the reallocation and concluded no interim impairment tests were necessary. Additionally, the Company is not aware of any triggers which would require a goodwill impairment test as of May 31, 2015.

The following table summarizes intangible assets with finite useful lives by major category:



	May 31, 2015							August 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
Customer related	$	130,626	$	(34,035	)	$	96,591	$	139,990	$	(29,088	)	$	110,902
Developed technology	18,053		(7,658		)	10,395		19,603		(6,914		)	12,689
Registered trademarks and tradenames	18,891		(6,369		)	12,522		20,945		(5,902		)	15,043
Total finite-lived intangible assets	$	167,570	$	(48,062	)	$	119,508	$	180,538	$	(41,904	)	$	138,634

Foreign currency translation reduced the gross carrying amount of intangible assets by $13.0 million from August 31, 2014 to May 31, 2015. Amortization expense of intangible assets was $3.3 million and $10.0 million for the three and nine months ended May 31, 2015, respectively, and $3.4 million and $9.5 million for the three and nine months ended May 31, 2014, respectively.

(4) LONG-TERM DEBT AND CREDIT ARRANGEMENTS

The following table summarizes short-term and long-term debt obligations outstanding:



	May 31, 2015		August 31, 2014
	(in thousands)
Notes payable and other, due within one year	$	4,290	$	18,429
Current portion of long-term debt	10,000		13,319
Short-term debt	$	14,290	$	31,748

Revolving credit loan, LIBOR plus applicable spread, due September 2018	$	164,174	$	105,400
Senior notes, 6.875%, due June 2023	375,000		—
Term loan, due September 2018	68,125		180,625
Euro notes, 4.485%, due March 2016	—		53,106
Capital leases and other long-term debt	286		415
Long-term debt	$	607,585	$	339,546

2013 Credit Agreement

On September 24, 2013, the Company entered into a $500.0 million Credit Agreement ("Previous Credit Agreement") that was replaced on June 1, 2015 by the Credit Agreement (as defined below). For discussion of the Company's Previous Credit Agreement, refer to Note 5 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

On May 26, 2015, an amendment was issued to the Previous Credit Agreement which, among other things, altered both the minimum interest coverage ratio and the maximum net debt leverage ratio to exclude the impact of the issuance of the Notes (as defined below) on May 26, 2015. The amendment also provided a waiver by which the lenders to the Previous Credit Agreement waived any default or event of default that has or may, on or prior to July 15, 2015, directly arise out of or result from the completion of the issuance of the Notes. The Company was in compliance with all covenants under the Previous Credit Agreement, as amended, as of May 31, 2015.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Additional Debt

During the third quarter of fiscal 2015, the Company obtained commitments for a senior unsecured bridge loan of $425.0 million and a senior secured credit facility of $875.0 million (together, the "Bridge Financing") to finance the Citadel acquisition in the event permanent financing was not available in time to close the Citadel acquisition. The Company did not draw on the Bridge Financing during the third quarter of fiscal 2015 due to the successful issuance of the Notes and the Convertible Special Stock (refer to Note 9 of this Form 10-Q) and the execution of the Credit Agreement. The Company incurred and expensed financing fees of $18.8 million on the Bridge Financing during the third quarter of fiscal 2015.

On February 3, 2015, the Company obtained a $25.0 million uncommitted line of credit from a financial institution, originally available until December 31, 2015. The interest rate is based upon the 30-day LIBOR index plus a spread at least 10 basis points below the applicable spread on the Company’s Previous Credit Agreement. During the third quarter of fiscal 2015, the Company terminated this $25.0 million uncommitted line of credit, in addition to the $15.0 million uncommitted line of credit entered into on February 14, 2014, in conjunction with the new financing transactions discussed below.

During the second quarter of fiscal 2015, the Company prepaid the entire principal balance of €42.8 million of its Euro Notes along with accrued interest. The Company recognized a net gain of $1.3 million on the early extinguishment of debt consisting of a gain of $3.9 million on a related foreign currency swap, partially offset by early termination fees of $2.5 million and a write-off of $0.1 million of deferred financing fees.

Senior Notes

On May 26, 2015, the Company issued $375.0 million aggregate principal amount of 6.875% Senior Notes due 2023 (the “Notes”). During the third quarter of fiscal 2015, the Company capitalized $11.3 million in debt issuance costs related to the Notes. Additionally, the Company had to fund $3.8 million of interest on the Notes as of May 31, 2015, of which $0.4 million relates to interest expense from the date of funding to May 31, 2015 and $3.4 million is a prepayment.

As discussed in Note 1 of this Form 10-Q, the proceeds from the Notes and interest prepayment are recorded as restricted cash as of May 31, 2015 as the funds were restricted to be used until the Citadel acquisition was consummated on June 1, 2015.

The Notes mature on June 1, 2023 and are senior unsecured obligations of the Company that are guaranteed on a senior basis by the material domestic guarantors under the Credit Facility (as defined below).

The Notes contain certain covenants that, among other things, limit the ability, in certain circumstances, of the Company to incur additional indebtedness, pay dividends or other restricted payments, incur liens on assets, enter into transactions with affiliates, merge or consolidate with another company, and transfer or sell all or substantially all of the Company’s assets. The Company was in compliance with these covenants as of May 31, 2015.

The Company has the option to redeem these Notes, in whole or in part, at any time on or after June 1, 2018 at redemption prices, plus accrued and unpaid interest to the redemption date of 105.156%, 103.438%, 101.719% and 100% during the 12-month periods commencing on June 1, 2018, 2019, 2020 and 2021 and thereafter, respectively. Prior to June 1, 2018, the Company may redeem these Notes, in whole or in part, and pay the applicable premium that includes the redemption price plus accrued and unpaid interest to the redemption date.

2015 Credit Agreement

On June 1, 2015, the Company and certain of its wholly-owned subsidiaries entered into an amended and restated Credit Agreement for approximately $1.0 billion with JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Europe Limited, as global agent, the lenders named in the Credit Agreement and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint bookrunners and joint lead arrangers (the "Credit Agreement"). The Credit Agreement provides for:


•	a multicurrency revolving credit facility in the aggregate principal amount of up to $300 million (the “Revolving Facility");


•	a $200 million term loan A facility (the "Term Loan A Facility") with quarterly payments due until maturity;


•	a $350 million U.S. term loan B facility (the "U.S. Term Loan B Facility") with quarterly payments due until maturity;


•	a €145 million term loan B facility (the "Euro Term Loan B Facility") with quarterly payments due until maturity; and

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

•

an expansion feature allowing the Company to incur additional revolving loans and/or term loans in an aggregate principal amount of up to $250 million plus additional amounts that are subject to certain terms and conditions (the "Incremental Facility" and, together with the Revolving Facility, the Term Loan A Facility, the U.S. Term Loan B Facility and the Euro Term Loan B Facility, the "Credit Facility").

The Revolving Facility and Term Loan A Facility each mature on June 1, 2020, and the U.S. Term Loan B Facility and Euro Term Loan B Facility each mature on June 1, 2022.

The Credit Facility is jointly and severally guaranteed by certain material domestic subsidiaries of the Company (the "Guarantors”). Payment and performance under the Credit Facility is secured by a first priority security interest in substantially all tangible property of the Company and each Guarantor; including a pledge of 100% of the stock of certain domestic subsidiaries and 65% of the stock of certain foreign subsidiaries subject to materiality and customary exceptions. Foreign obligations are secured by a pledge of 100% of the stock of the foreign borrower and other pledged foreign subsidiaries.

The Credit Agreement contains certain covenants that, among other things, restrict the Company and its subsidiaries' ability to incur indebtedness and grant liens other than certain types of permitted indebtedness and permitted liens. In addition, the Company is required to maintain a minimum interest coverage ratio and cannot exceed a maximum net debt leverage ratio for the Revolving Facility and Term Loan A Facility.

Interest rates under the Credit Agreement are based on ABR or LIBOR (depending on the borrowing currency) plus a spread determined by the Company's total leverage ratio. Borrowings under the U.S. Term Loan B Facility and Euro Term Loan B Facility are subject to a LIBOR floor of 0.75%. When market LIBOR rates are lower than the 0.75% floor, the interest rate on the Term Loan B Facilities is based on the LIBOR floor plus a spread. The Company is also required to pay a facility fee on the commitments for the unused portion of the Revolving Facility. Additionally, the Revolving Facility provides for a portion of the funds to be made available as a short-term swing-line loan.

The table below summarizes the Company’s available funds:



	May 31, 2015		August 31, 2014
	(In thousands)
Existing capacity:
Revolving Facility, due September 2018	$	300,000	$	300,000
Domestic short-term lines of credit	—		15,000
Foreign short-term lines of credit	47,734		53,520
Total capacity from credit lines	$	347,734	$	368,520
Availability:
Revolving Facility, due September 2018	$	134,542	$	193,909
Foreign short-term lines of credit	41,194		49,250
Total available funds from credit lines	$	175,736	$	243,159

Total available funds from credit lines represents the total capacity from credit lines less outstanding borrowings of $170.7 million and $124.6 million as of May 31, 2015 and August 31, 2014, respectively, and issued letters of credit of $1.3 million and $0.7 million, as of May 31, 2015, and August 31, 2014, respectively.

After completion of the Citadel acquisition on June 1, 2015, the total capacity from credit lines and total available funds from credit lines was $347.7 million and $301.9 million, respectively.

(5) FAIR VALUE MEASUREMENT

The following table presents information about the Company’s assets and liabilities measured at fair value:



	May 31, 2015								August 31, 2014
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)
Assets recorded at fair value:
Foreign exchange forward contracts	$	876	$	—	$	876	$	—	$	713	$	—	$	713	$	—
Liabilities recorded at fair value:
Foreign exchange forward contracts	$	1,550	$	—	$	1,550	$	—	$	557	$	—	$	557	$	—
Liabilities not recorded at fair value:
Long-term fixed-rate debt	$	382,268	$	—	$	382,268	$	—	$	58,882	$	—	$	58,882	$	—

Cash and cash equivalents are recorded at cost, which approximates fair value. Additionally, the carrying value of the Company's variable-rate debt approximates fair value.

The Company measures the fair value of its foreign exchange forward contracts using an internal model. The model maximizes the use of Level 2 market observable inputs including interest rate curves, currency forward and spot prices, and credit spreads. The total contract value of foreign exchange forward contracts outstanding was $146.9 million and $118.0 million as of May 31, 2015 and August 31, 2014, respectively. The amount of foreign exchange forward contracts outstanding as of the end of the period is indicative of the exposure of current balances and the forecasted change in exposures for the following quarter. Any gains or losses associated with these contracts as well as the offsetting gains or losses from the underlying assets or liabilities are included in the foreign currency transaction (gains) losses line in the Company’s consolidated statements of operations. The fair value of the Company’s foreign exchange forward contracts is recognized in other current assets or other accrued liabilities in the consolidated balance sheets based on the net settlement value. The foreign exchange forward contracts are entered into with creditworthy financial institutions, generally have a term of three months or less, and the Company does not hold or issue foreign exchange forward contracts for trading purposes. There were no foreign exchange forward contracts designated as hedging instruments as of May 31, 2015 and August 31, 2014.

Long-term fixed-rate debt as of May 31, 2015 represents the Senior Notes, due 2023, recorded at cost and presented at fair value for disclosure purposes. Long-term fixed-rate debt as of August 31, 2014 represents debt issued in Euros recorded at cost and presented at fair value for disclosure purposes. On February 26, 2015, the Euro Note debt was extinguished, as discussed in Note 4 of this Form 10-Q. As of May 31, 2015 and August 31, 2014, the Level 2 fair value of the Company's fixed-rate debt was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities.

For a discussion of the Company’s fair value measurement policies under the fair value hierarchy, refer to Note 1 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015. The Company has not changed its valuation techniques for measuring the fair value of any financial assets or liabilities during fiscal 2015, and transfers between levels within the fair value hierarchy, if any, are recognized at the end of each quarter. There were no transfers between levels during the periods presented.

Additionally, the Company remeasures certain assets to fair value, using Level 3 measurements, as a result of the occurrence of triggering events. There were no significant assets or liabilities that were remeasured at fair value on a non-recurring basis during the periods presented.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(6) INCOME TAXES

The effective tax rate for the three and nine months ended May 31, 2015 was 751.5% and 82.8%, respectively, and for the three and nine months ended May 31, 2014 was 19.4% and 24.7%, respectively. The increase in the effective tax rates for the three and nine months ended May 31, 2015 as compared with the same periods last year was driven primarily by the increase in the U.S. restructuring and other U.S. charges with no tax benefit. These charges include $18.8 million of U.S. financing fees on the Bridge Financing related to the Citadel acquisition which occurred during the three months ended May 31, 2015 (refer to Note 4 of this Form 10-Q) and $6.2 million of U.S. costs related to the accelerated vesting of equity compensation awards for the CEO transition which occurred during the three months ended February 28, 2015 (refer to Note 11 of this Form 10-Q).

We record quarterly taxes based on overall estimated annual effective tax rates. In addition to the U.S. charges with no tax benefit noted above, the difference between our effective tax rate and the U.S. statutory federal income tax rate in both years was primarily attributable to our overall foreign tax rate being less than the U.S. statutory federal income tax rate and the valuation allowance on our U.S. and certain foreign deferred tax assets.

As a result of the Citadel acquisition discussed in Note 2 of this Form 10-Q, the Company anticipates a one-time release in the fourth quarter of a portion of its U.S. valuation allowance resulting from the Company’s ability to offset its U.S. deferred income tax assets with Citadel’s U.S. deferred income tax liabilities. The Company expects to release approximately $6.0 million of historical valuation allowance as a result of the Citadel acquisition. The Company will also recognize approximately $7.0 to $9.0 million of deferred tax assets associated with the U.S. restructuring and other U.S. charges with no tax benefit that occurred during the nine months ended May 31, 2015.

As of May 31, 2015, the Company's gross unrecognized tax benefits totaled $3.7 million. If recognized, $3.0 million of the total unrecognized tax benefits would favorably affect the Company's effective tax rate. The Company reports interest and penalties related to income tax matters in income tax expense. As of May 31, 2015, the Company had $1.3 million of accrued interest and penalties on unrecognized tax benefits.

The Company’s statute of limitations is open in various jurisdictions as follows: Germany - from 2005 onward, France - from 2010 onward, U.S. - from 2012 onward, Belgium - from 2012 onward, other foreign jurisdictions - from 2009 onward.

The amount of unrecognized tax benefits is expected to change in the next 12 months; however, the change is not expected to have a significant impact on the financial position of the Company.

(7) PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The components of the Company’s net periodic benefit cost for defined benefit pension and other postretirement benefit plans are shown below:



	Three months ended May 31,						Nine months ended May 31,
	2015			2014			2015			2014
	(In thousands)
Defined benefit pension plans:
Service cost	$	1,093		$	970		$	3,516		$	2,878
Interest cost	1,036			1,370			3,299			4,059
Expected return on plan assets	(435		)	(461		)	(1,354		)	(1,360		)
Actuarial loss (gain) and amortization of prior service cost (credit), net	692			359			2,213			1,063
Net periodic pension benefit cost	$	2,386		$	2,238		$	7,674		$	6,640

Other postretirement benefit plan:
Service cost	$	1		$	1		$	3		$	3
Interest cost	110			123			330			369
Actuarial loss (gain) and amortization of prior service cost (credit), net	(135		)	(139		)	(406		)	(419		)
Net periodic postretirement benefit cost (credit)	$	(24	)	$	(15	)	$	(73	)	$	(47	)

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8) CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

A summary of the changes in stockholders’ equity is as follows:



	Common Stock ($1 par value)			Convertible Special Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Non-controlling Interests			Total Equity
	(In thousands, except per share data)
Balance as of September 1, 2014	$	48,185		$	—	$	268,545		$	(16,691	)	$	606,898		$	(379,894	)	$	9,408		$	536,451
Comprehensive income (loss)									(64,406		)	2,941						768			(60,697		)
Cash dividends paid, $0.615 per share												(18,058		)							(18,058		)
Cash distributions to noncontrolling interests																		(1,750		)	(1,750		)
Purchase of treasury stock															(3,335		)				(3,335		)
Issuance of treasury stock						86									81						167
Stock options exercised	3					61															64
Restricted stock issued, net of forfeitures	329					(329		)													—
Redemption of common stock to cover tax withholdings	(150		)			(4,849		)													(4,999		)
Amortization of restricted stock						10,624															10,624
Issuance of convertible special stock, net of issuance costs				120,296																	120,296
Balance as of May 31, 2015	$	48,367		$	120,296	$	274,138		$	(81,097	)	$	591,781		$	(383,148	)	$	8,426		$	578,763

(9) CONVERTIBLE SPECIAL STOCK

On May 4, 2015, the Company filed with the Delaware Secretary of State a Certificate of Designation, Preferences, Rights and Limitations (the "Certificate of Designation") for the purpose of amending its Restated Certificate of Incorporation to fix the designations, preferences, limitations and relative rights of 125,000 shares of the Company’s 6.00% Cumulative Perpetual Convertible Special Stock, without par value (the “Convertible Special Stock”). On May 4, 2015, the Company received gross cash proceeds of $125.0 million from the sale of 125,000 shares of Convertible Special Stock. The $120.3 million amount recorded in the Convertible Special Stock line in the balance sheet is net of issuance costs of $4.7 million.

The Certificate of Designation for the Convertible Special Stock provides that:

Ranking. The Convertible Special Stock, with respect to the payment of dividends and distributions upon the Company’s liquidation, winding-up or dissolution, will rank:


•	senior to the Company’s common stock and to all of the Company’s other capital stock issued in the future, unless the terms of that stock expressly provide that it ranks senior to, or on parity with, the Convertible Special Stock;


•	on parity with any of the Company’s capital stock issued in the future, the terms of which expressly provide that it will rank on parity with the Convertible Special Stock; and


•	junior to all of the Company’s capital stock issued in the future, the terms of which expressly provide that such stock will rank senior to the Convertible Special Stock.

Dividends. Holders of Convertible Special Stock are entitled to receive cumulative dividends at the rate of 6.00% per annum on the $1,000 liquidation preference per share of the Convertible Special Stock. When declared by the Company’s Board of Directors, dividends will be payable quarterly in arrears on each dividend payment date. Dividends may be paid in cash or, where freely transferable by any non-affiliate recipient thereof, in common stock of the Company or a combination thereof, and are payable on February 1, May 1, August 1 and November 1 of each year, commencing on August 1, 2015. The Company currently intends to pay dividends in cash. No dividends had been declared as of May 31, 2015; however, $0.6 million of dividends were considered earned for purposes of the earnings per share calculation.

Voting Rights. Except as required by Delaware law, and subject to the following limitations, holders of the Convertible Special Stock will have no voting rights. If dividends are in arrears and unpaid for six or more quarterly periods, until

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

such arrearage is paid in full, the holders of the Convertible Special Stock will be entitled (voting on an as-converted basis, together with the holders of the Company’s common stock) at the next regular or special meeting of the Company’s stockholders, to vote on matters presented to the Company’s stockholders for a vote at such meeting. Furthermore, so long as any shares of Convertible Special Stock remain outstanding, the Company may not, without the affirmative consent of the holders of at least 66.67% of the shares of the Convertible Special Stock outstanding at the time, voting together as a single class with all series of parity stock with similar voting rights, take certain actions altering or preempting the rights of the holders of the Convertible Special Stock, as described in the Certificate of Designation.

Liquidation. In the event of any liquidation, winding-up or dissolution of the Company, whether voluntary or involuntary, each holder of Convertible Special Stock shall be entitled to receive and to be paid out of the assets of the Company available for distribution to its stockholders, a liquidation preference per share of Convertible Special Stock equal to $1,000 ($125.0 million in aggregate for the 125,000 shares outstanding as of May 31, 2015) plus accumulated dividends to the date fixed for liquidation, winding-up or dissolution in the order described within Ranking above.

Redemption. The Convertible Special Stock has no maturity date, is not redeemable by the Company at any time and will remain outstanding unless converted by the holders or mandatorily converted by the Company as described below.

Optional Conversion by Holders. Each share of Convertible Special Stock is convertible, at the holder’s option at any time, into shares of common stock at the initial conversion rate of approximately 19.1113 shares of common stock of the Company (which is equivalent to an initial conversion price of approximately $52.33 per share) to one share of Convertible Special Stock. The conversion rate is subject to specified adjustments as set forth in the Certificate of Designation. There have been no conversions as of May 31, 2015.

If the Company undergoes a fundamental change, as defined in the Certificate of Designation, and a holder converts its shares of Convertible Special Stock at any time beginning at the opening of business on the trading day immediately following the effective date of such fundamental change and ending at the close of business on the 30th trading day immediately following such effective date, the holder will receive, for each share of Convertible Special Stock surrendered for conversion, a number of shares of common stock of the Company as set forth in the Certificate of Designations.

There have been no fundamental changes as of May 31, 2015.

Optional Conversion by the Company. On or after May 1, 2020, the Company may, at its option, give notice of its election to cause all outstanding shares of Convertible Special Stock to be automatically converted into shares of common stock of the Company at the conversion rate then in effect, if the closing sale price of the Company’s common stock equals or exceeds 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days.

(10) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income (loss) are as follows⁽¹⁾:



	Foreign Currency Translation Gain (Loss)			Pension and Other Retiree Benefits				Total Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of February 28, 2015	$	(35,259	)	$	(38,542	)		$	(73,801	)
Other comprehensive income (loss) before reclassifications	(7,786		)	—				(7,786		)
Amounts reclassified to earnings	—			429			⁽²⁾	429
Net current period other comprehensive income (loss)	(7,786		)	429				(7,357		)
Less: comprehensive income (loss) attributable to noncontrolling interests	(61		)	—				(61		)
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.	(7,725		)	429				(7,296		)
Balance as of May 31, 2015	$	(42,984	)	$	(38,113	)		$	(81,097	)

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	Foreign Currency Translation Gain (Loss)			Pension and Other Retiree Benefits				Total Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of August 31, 2014	$	22,786		$	(39,477	)		$	(16,691	)
Other comprehensive income (loss) before reclassifications	(65,892		)	—				(65,892		)
Amounts reclassified to earnings	—			1,364			⁽²⁾	1,364
Net current period other comprehensive income (loss)	(65,892		)	1,364				(64,528		)
Less: comprehensive income (loss) attributable to noncontrolling interests	(122		)	—				(122		)
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.	(65,770		)	1,364				(64,406		)
Balance as of May 31, 2015	$	(42,984	)	$	(38,113	)		$	(81,097	)



	Foreign Currency Translation Gain (Loss)			Pension and Other Retiree Benefits				Total Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of February 28, 2014	$	34,192		$	(16,796	)		$	17,396
Other comprehensive income (loss) before reclassifications	(1,290		)	—				(1,290		)
Amounts reclassified to earnings	—			78			⁽²⁾	78
Net current period other comprehensive income (loss)	(1,290		)	78				(1,212		)
Less: comprehensive income (loss) attributable to noncontrolling interests	(8		)	—				(8		)
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.	(1,282		)	78				(1,204		)
Balance as of May 31, 2014	$	32,910		$	(16,718	)		$	16,192



	Foreign Currency Translation Gain (Loss)				Pension and Other Retiree Benefits				Total Accumulated Other Comprehensive Income (Loss)
	(In thousands)
Balance as of August 31, 2013	$	17,712			$	(17,030	)		$	682
Other comprehensive income (loss) before reclassifications	15,961				—				15,961
Amounts reclassified to earnings	(885		)	⁽³⁾	312			⁽²⁾	(573		)
Net current period other comprehensive income (loss)	15,076				312				15,388
Less: comprehensive income (loss) attributable to noncontrolling interests	(122		)		—				(122		)
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.	15,198				312				15,510
Balance as of May 31, 2014	$	32,910			$	(16,718	)		$	16,192

⁽¹⁾ All amounts presented are net of tax. All tax amounts are related to pension and other retiree benefits.

⁽²⁾Represents amortization of net actuarial loss and prior service costs. Reclassified from accumulated other comprehensive income into cost of sales and selling, general & administrative expenses on the consolidated statements of operations. These components are included in the computation of net periodic pension cost. Refer to Note 7 of this Form 10-Q for further details.

⁽³⁾Reclassified from accumulated other comprehensive income into income (loss) from discontinued operations on the consolidated statements of operations on the sale of the rotational compounding business in Australia. Refer to Note 19 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015 for further details.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(11) SHARE-BASED INCENTIVE COMPENSATION PLANS

On December 12, 2014, upon approval by its stockholders and Board of Directors, the Company adopted the A. Schulman, Inc. 2014 Equity Incentive Plan (the "2014 Equity Incentive Plan"). The 2014 Equity Incentive Plan provides for the grant of various share-based incentive compensation awards and unless terminated earlier, will continue until December 12, 2024. A total of 2,000,000 shares of common stock may be issued under the 2014 Equity Incentive Plan.

During the second quarter of fiscal 2015, the Company granted 29,274 and 175,636 shares of time-based and performance-based restricted stock awards, with a weighted-average grant date fair value of $33.52 per share. All of the performance-based restricted awards granted during fiscal 2015 vest based on the attainment of specific performance conditions. Vesting of the ultimate number of shares underlying a portion of these performance-based awards, if any, will be dependent upon the Company's return on invested capital ("ROIC") while vesting for the remaining performance-based awards, if any, will be dependent upon the Company's cumulative earnings per share ("Cumulative EPS"), both over a three-year performance period. All other terms and conditions of the awards granted during the current year are consistent with the awards granted in the prior year. Additionally, the Company granted non-employee directors a total of 18,810 shares of unrestricted common stock.

The following table summarizes the impact to the Company’s consolidated statements of operations from share-based incentive compensation plans, which is primarily included in selling, general and administrative expenses in the accompanying consolidated statements of operations:



	Three months ended May 31,				Nine months ended May 31,
	2015		2014		2015		2014
	(In thousands)
Time-based and performance-based restricted stock awards	$	1,590	$	3,161	$	5,266	$	5,360
Board of Directors unrestricted awards	—		—		630		797
CEO transition costs	—		—		6,167		—
Total share-based incentive compensation	$	1,590	$	3,161	$	12,063	$	6,157

CEO transition costs represent a one-time charge for the modification and accelerated vesting upon retirement of the outstanding equity compensation awards granted to Joseph M. Gingo in 2013 and 2014.

Total unrecognized compensation cost, including a provision for estimated forfeitures, related to non-vested stock-based compensation arrangements as of May 31, 2015 was $9.7 million. This cost is expected to be recognized over a weighted-average period of 1.6 years.

As of May 31, 2015, there were 750,912 shares of common stock available for grant pursuant to the Company’s 2006 Incentive Plan, 188,249 shares of common stock available for grant pursuant to the Company's 2010 Rewards Plan and 2,000,000 shares of common stock available for grant pursuant to the Company's 2014 Equity Incentive Plan. For further discussion of the Company's share-based incentive compensation plans, refer to Note 10 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(12) EARNINGS PER SHARE

Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if common stock equivalents are exercised as well as the impact of restricted stock awards expected to vest, which combined would then share in the earnings of the Company.

Dividends on convertible special stock that an issuer has paid or intends to pay are deducted from net income or added to the amount of a net loss in computing income available to common shareholders.

The difference between basic and diluted weighted-average shares results from the assumed exercise of outstanding stock options and vesting of restricted stock awards, calculated using the treasury stock method, and the inclusion of the convertible special stock dividends, calculated using the if-converted method. The following table presents the number of incremental weighted-average shares used in computing diluted per share amounts:



	Three months ended May 31,		Nine months ended May 31,
	2015	2014	2015	2014
	(In thousands)
Weighted-average shares outstanding:
Basic	29,219	29,081	29,125	29,052
Incremental shares from equity awards	—	294	422	248
Incremental shares from convertible special stock	—	—	—	—
Diluted	29,219	29,375	29,547	29,300

Diluted weighted-average shares outstanding for the three months ended May 31, 2015 excludes approximately 300,000 shares related to equity awards and 700,000 shares related to convertible special stock, as their inclusion would have been anti-dilutive. For the nine months ended May 31, 2015 approximately 200,000 shares related to convertible special stock were excluded, as their inclusion would have been anti-dilutive.

(13) SEGMENT INFORMATION

The Company considers its operating structure and the types of information subject to regular review by its President and Chief Executive Officer (“CEO”), who is the Chief Operating Decision Maker (“CODM”), to identify reportable segments. The CODM makes decisions, assesses performance and allocates resources by the following current reportable segments: Europe, Middle East and Africa (“EMEA”), United States & Canada (“USCAN”), Latin America (“LATAM”), and Asia Pacific (“APAC”).

The CODM uses net sales to unaffiliated customers, segment gross profit and segment operating income in order to make decisions, assess performance and allocate resources to each segment. Segment operating income does not include items such as CEO transition costs, restructuring and related costs including accelerated depreciation, asset impairments, or costs and inventory step-up charges related to business acquisitions and integration. Corporate expenses include the compensation of certain personnel, certain audit expenses, Board of Directors related costs, certain insurance costs, costs associated with being a publicly traded entity and other miscellaneous legal and professional fees.

On January 1, 2015, the Company’s new President and CEO assumed the role of CODM. Based on the new management structure and an evaluation of how the new CODM makes decisions, assesses performance and allocates resources, the Company discloses the following four reportable segments from the second quarter of fiscal 2015: EMEA, USCAN, LATAM and APAC.

On June 1, 2015, the Company acquired Citadel, as discussed in Note 2 of this Form 10-Q. Based on the new structure and an evaluation of how the CODM will make decisions, assess performance and allocate resources, the Company expects to include the engineered plastics market within the USCAN segment and add a new reportable segment, Engineered Composites, beginning in the fourth quarter of fiscal 2015.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table summarizes net sales to unaffiliated customers by segment:



	Three months ended May 31,				Nine months ended May 31,
	2015		2014		2015		2014
	(In thousands)
EMEA	$	326,255	$	413,788	$	1,012,592	$	1,189,274
USCAN	137,080		131,645		415,221		336,277
LATAM	44,821		49,754		132,135		148,748
APAC	52,702		50,548		158,258		145,341
Total net sales to unaffiliated customers	$	560,858	$	645,735	$	1,718,206	$	1,819,640

Below the Company presents gross profit by segment:



	Three months ended May 31,						Nine months ended May 31,
	2015			2014			2015			2014
	(In thousands)
EMEA	$	51,695		$	56,798		$	145,908		$	156,237
USCAN	22,104			23,791			66,478			50,911
LATAM	9,324			4,472			22,075			20,011
APAC	7,771			7,052			22,403			20,202
Total segment gross profit	90,894			92,113			256,864			247,361
Inventory step-up	—			—			(341		)	(1,199		)
Accelerated depreciation, restructuring and related costs	(78		)	(149		)	(674		)	(791		)
Costs related to acquisitions and integrations	(59		)	—			(174		)	—
Total gross profit	$	90,757		$	91,964		$	255,675		$	245,371

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Below is a reconciliation of segment operating income to operating income and income from continuing operations before taxes:



	Three months ended May 31,						Nine months ended May 31,
	2015			2014			2015			2014
	(In thousands)
EMEA	$	24,716		$	23,565		$	61,032		$	61,537
USCAN	7,982			11,906			25,299			18,603
LATAM	4,654			(649		)	7,531			6,286
APAC	3,972			3,328			10,903			9,870
Total segment operating income	41,324			38,150			104,765			96,296
Corporate	(8,502		)	(9,752		)	(24,992		)	(24,149		)
Costs related to acquisitions and integrations	(3,590		)	(888		)	(7,972		)	(3,377		)
Restructuring and related costs	(5,937		)	(2,160		)	(15,303		)	(8,322		)
CEO transition costs	—			—			(6,167		)	—
Asset impairment	—			—			—			(104		)
Accelerated depreciation	(29		)	—			(327		)	(108		)
Inventory step-up	—			—			(341		)	(1,199		)
Operating income	23,266			25,350			49,663			59,037
Interest expense	(2,618		)	(1,433		)	(7,288		)	(6,112		)
Bridge financing fees	(18,750		)	—			(18,750		)	—
Foreign currency transaction gains (losses)	(857		)	28			(3,097		)	(2,120		)
Other income (expense), net	335			64			900			478
Gain on early extinguishment of debt	—			—			1,290			—
Income from continuing operations before taxes	$	1,376		$	24,009		$	22,718		$	51,283

Globally, the Company operates in five product families: (1) custom performance colors, (2) masterbatch solutions, (3) engineered plastics, (4) specialty powders and (5) distribution services. The Company offers tolling services to customers primarily in the specialty powders product family. The consolidated net sales for these product families are as follows:



	Three months ended May 31,
	2015				2014
	(In thousands, except for %'s)
Custom performance colors	$	45,305	8	%	$	50,212	8	%
Masterbatch solutions	187,927		34		202,273		31
Engineered plastics	181,725		32		195,661		30
Specialty powders	71,133		13		97,121		15
Distribution services	74,768		13		100,468		16
Total consolidated net sales	$	560,858	100	%	$	645,735	100	%

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	Nine months ended May 31,
	2015				2014
	(In thousands, except for %'s)
Custom performance colors	$	136,649	8	%	$	140,918	8	%
Masterbatch solutions	568,408		33		564,750		31
Engineered plastics	549,072		32		559,399		31
Specialty powders	222,722		13		263,931		14
Distribution services	241,355		14		290,642		16
Total consolidated net sales	$	1,718,206	100	%	$	1,819,640	100	%

The three and nine months ended May 31, 2014 include a reclassification of revenue between product families to better reflect the way the businesses are managed.

(14) RESTRUCTURING

Fiscal 2015 Restructuring Plans

EMEA Reorganization Plan

In October 2014, the Company announced actions to optimize the back-office and support functions in EMEA. The Company reduced headcount in EMEA by approximately 40 during the first half of fiscal 2015. The Company recorded pretax employee-related costs of $0.6 million and $5.1 million during the three and nine months ended May 31, 2015, respectively, and expects to recognize additional pretax employee-related costs of $1.0 million throughout the remainder of fiscal 2015 for this plan. As of May 31, 2015, the Company has a balance of $1.3 million accrued for this plan. Cash payments associated with this plan are expected to occur during fiscal 2015 and into fiscal 2016 as the plan is completed.

North American Production Facilities Consolidation Plan

In November 2014, the Company announced plans to consolidate its North American production facilities. As part of the ongoing review of its manufacturing footprint, the Company closed its plant in Stryker, Ohio in the third quarter of fiscal 2015 and shifted the plant’s production to other North American facilities. The Company expects to reduce headcount by approximately 70, of which the majority occurred during the third quarter of fiscal 2015. The Company recorded pretax employee-related costs of $0.1 million and $1.1 million during the three and nine months ended May 31, 2015, respectively, and expects minimal charges related to this plan to be recognized throughout the remainder of fiscal 2015. As of May 31, 2015, the Company has a balance of $0.1 million accrued for this plan. Cash payments associated with this plan are expected to occur during fiscal 2015 as the plan is completed.

North American SG&A Reduction Plan

In November 2014, the Company announced plans to reduce headcount primarily in North America selling, general and administrative functions as part of its ongoing effort to drive further synergies from recent acquisitions. The Company expects to reduce headcount by approximately 15 by the end of fiscal 2015. The Company recorded pretax employee-related costs of $0.1 million and $0.7 million during the three and nine months ended May 31, 2015, respectively, and expects minimal charges related to this plan to be recognized throughout the remainder of fiscal 2015. As of May 31, 2015, the Company has a balance of $0.2 million accrued for this plan. Cash payments associated with this plan are expected to occur during fiscal 2015 as the plan is completed.

Brazil Production Facilities Consolidation Plan

In February 2015, the Company initiated plans to close its facility in Contagem, Brazil. During the third quarter of fiscal 2015, the Company shifted the production to its facility in Sumare, Brazil. The Company reduced headcount by approximately 20, of which the majority occurred during the second quarter of fiscal 2015. The Company recorded pretax employee-related costs of $0.1 million and $0.5 million during the three and nine months ended May 31, 2015, respectively, and expects minimal charges related to this plan to be recognized throughout the remainder of fiscal 2015. As of May 31, 2015, the Company has no balance accrued for this plan. Cash payments associated with this plan are expected to be minimal during fiscal 2015 as the plan is completed.

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

EMEA Shared Service Center Plan

In May 2015, the Company announced plans to relocate its EMEA Shared Service Center from Londerzeel, Belgium to Poznan, Poland as part of the Company’s ongoing cost control initiatives. The Company expects to reduce headcount by approximately 40 employees by the end of fiscal 2016. The Company recorded pretax employee-related costs of $1.6 million during the three and nine months ended May 31, 2015, and expects to recognize additional pre-tax employee-related costs of $0.5 million throughout the remainder of fiscal 2015 and $5.0 million in fiscal 2016. As of May 31, 2015, the Company has a balance of $1.6 million accrued for this plan. Cash payments associated with this plan are expected to occur through fiscal 2016 as the plan is completed.

For discussion of the Company's previous restructuring plans, refer to Note 15 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

The following table summarizes the activity related to the Company’s restructuring plans:



	Employee-related Costs			Other Costs			Translation Effect			Total Restructuring Costs
	(In thousands)
Accrual balance as of August 31, 2014	$	1,745		$	371		$	(304	)	$	1,812
Fiscal 2015 charges	9,734			796			—			10,530
Fiscal 2015 payments	(6,593		)	(852		)	—			(7,445		)
Translation	—			—			(669		)	(669		)
Accrual balance as of May 31, 2015	$	4,886		$	315		$	(973	)	$	4,228

Restructuring expenses are excluded from segment operating income but are attributable to the reportable segments as follows:



	Three months ended May 31,				Nine months ended May 31,
	2015		2014		2015		2014
	(In thousands)
EMEA	$	2,091	$	313	$	7,710	$	938
USCAN	254		96		1,910		754
LATAM	304		669		910		2,815
APAC	—		—		—		76
Total restructuring expense	$	2,649	$	1,078	$	10,530	$	4,583

(15) COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company is at times subject to pending and threatened legal actions, some for which the relief or damages sought may be substantial. Although the Company is not able to predict the outcome of such legal actions, after reviewing all pending and threatened legal actions with counsel and based on information currently available, management believes that the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the results of operations, financial position or cash flow of the Company. However, it is possible that the ultimate resolution of such matters, if unfavorable, may be material to the results of operations in a particular future period as the time and amount of any resolution of such legal actions and its relationship to the future results of operations are not currently known.

Reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. In many lawsuits and arbitrations, it is not considered probable that a liability has been incurred or it is not possible to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no reserve would be recognized until that time.

On January 7, 2015, the Company completed its remaining capital contribution with a cash investment of €10.8 million for its joint venture agreement, Natpet Schulman Specialty Plastic Compounds Co., with NATPET of Jeddah, Saudi Arabia. On March 22, 2015, the Company entered into an agreement with the Saudi Industrial Development Fund ("SIDF") guaranteeing the payment by the joint venture of Saudi riyal 50 million, or $13.3 million, equivalent to 50% of loans to be made by SIDF to the joint venture.

As discussed in Note 4 of this Form 10-Q, the Company completed various financing transactions in conjunction with the Citadel acquisition that impact the timing of contractual debt payments. There were no other material changes to the Company’s future contractual obligations as previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

(16) SHARE REPURCHASE PROGRAM

For a discussion of the Company's Share Repurchase programs, refer to Note 18 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015. The Company purchased 109,422 shares of common stock entirely in the first quarter of fiscal 2015 at an average price of $30.46 per share for a total cost of $3.3 million. As of May 31, 2015, shares valued at $51.7 million remained authorized for repurchase.

(17) ACCOUNTING PRONOUNCEMENTS

In April 2015, the Financial Accounting Standards Board (“the FASB”) issued an update to simplify presentation of debt issuance costs, requiring debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability. The standard is effective for fiscal years beginning after December 15, 2015, including interim periods. Early application is permitted. The Company will evaluate the effects that the adoption of this guidance will have on its consolidated financial statements.

In February 2015, the FASB released updated consolidation guidance that changed the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The standard is effective for fiscal years ending after December 15, 2016, including interim periods. Early application is permitted. The Company will evaluate the effects, if any, that the adoption of this guidance will have on its consolidated financial statements.

In August 2014, the FASB issued new accounting guidance that requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The standard is effective for fiscal years ending after December 15, 2016, including interim periods. Early application is permitted. The standard is not anticipated to have an impact on the Company's consolidated financial statements.

In May 2014, the FASB issued new accounting guidance that creates a single revenue recognition model, while clarifying the principles for recognizing revenue. The standard is effective for fiscal years beginning after December 15, 2016, including interim periods, and the Company will adopt the new guidance on September 1, 2017. Early adoption is not permitted. The Company will evaluate the effects, if any, that the adoption of this guidance will have on its consolidated financial statements.

In April 2014, the FASB issued new accounting guidance related to reporting discontinued operations that changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. The standard is effective for fiscal years beginning on or after December 15, 2014 on a prospective basis, including interim periods, with early adoption permitted. The Company will evaluate the effects, if any, that the adoption of this guidance will have on its consolidated financial statements.

No other new accounting pronouncements issued or with effective dates during fiscal 2015 had or are expected to have a material impact on the Company's consolidated financial statements.

(18) DISCONTINUED OPERATIONS

The Company completed the sale of all of the fixed and intangible assets of its rotational compounding business in Australia for $3.0 million on September 3, 2013. The operating results for this business were previously included in the Company's specialty powders product family within the APAC segment.

The following summarizes select financial information included in income (loss) from discontinued operations:



	Three months ended May 31,						Nine months ended May 31,
	2015			2014			2015			2014
	(In thousands)
Net sales	$	—		$	—		$	—		$	1,372
Income (loss) from discontinued operations, net of tax	$	(18	)	$	(23	)	$	(86	)	$	2,979

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A. SCHULMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the nine months ended May 31, 2014, the Company recorded a gain on the sale of assets of $3.3 million. Income taxes were minimal for all periods presented.

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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help investors understand our results of operations, financial condition and current business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report and the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

The MD&A is organized as follows:


•	Overview: From management’s point of view, we discuss the following:


◦	Summary of our business and the markets in which we operate; and


◦	Significant events during the current fiscal year.

•

Results of Operations: An analysis of our results of operations as reflected in our consolidated financial statements. Throughout this MD&A, the Company provides operating results for continuing operations exclusive of certain items such as costs related to acquisitions and integration, restructuring and related expenses, and asset write-downs, which are considered relevant to aid analysis and understanding of the Company’s results and business trends.


•	Liquidity and Capital Resources: An analysis of our cash flows, working capital, debt structure, contractual obligations and other commercial commitments.

Overview

Business Summary

A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Fairlawn, Ohio. The Company’s customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, custom services, and sports, leisure & home.


•	Europe, Middle East and Africa (“EMEA”),


•	United States & Canada (“USCAN”),


•	Latin America (“LATAM”), and


•	Asia Pacific (“APAC”).

As of May 31, 2015, the Company has approximately 3,800 employees and 41 manufacturing facilities worldwide. Globally, the Company operates in five product families: (1) custom performance colors, (2) masterbatch solutions, (3) engineered plastics, (4) specialty powders and (5) distribution services. The Company offers tolling services to customers primarily in the specialty powders product family.

On June 1, 2015, the Company acquired HGGC Citadel Plastics Holdings, Inc. (“Citadel”), as discussed in Note 2 of this Form 10-Q. Based on the new structure and an evaluation of how the CODM will make decisions, assesses performance and allocate resources, the Company expects to include the engineered plastics market within the engineered plastics product family and add a new product family, global engineered composites, beginning in the fourth quarter of fiscal 2015. Additionally, the Citadel acquisition will add approximately 1,200 employees and 19 wholly owned manufacturing facilities.

Fiscal Year 2015 Significant Events

The following represent significant events during fiscal year 2015:

Business Acquisitions. On June 1, 2015, the Company acquired all of the issued and outstanding shares of privately held Citadel, a portfolio company of certain private equity firms, for approximately $800 million. Citadel is a leading plastics materials science business that produces engineered composites and engineered plastics for specialty product applications spanning multiple industries including transportation, industrial & construction, consumer, electrical, energy and healthcare & safety. In conjunction with the acquisition of Citadel, the Company raised approximately $1.2 billion through a combination of debt and equity financing. Refer to Notes 2, 4 and 9 of this Form 10-Q for further discussion.

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On September 2, 2014, the Company acquired Compco Pty. Ltd. (“Compco”), a manufacturer of masterbatches and custom colors in Melbourne, Australia for $6.7 million.


2.	CEO Transition. On January 1, 2015, Bernard Rzepka succeeded Joseph M. Gingo as the Company’s President and Chief Executive Officer. On December 12, 2014, Mr. Gingo was re-elected as the Chairman of the Company’s Board of Directors and Mr. Rzepka was elected to the Board.


3.	Dividend Activities. In October 2014, the Company increased its regular quarterly cash dividend by 2.5% to $0.205 per common share which reflects the Company's confidence in its ability to generate cash and its long-term growth prospects, along with a continued commitment to shareholders. This continues the Company's history of annual dividend payments that began in 1972.


4.	APAC Expansion. In December 2014, the Company announced that it has added equipment in its manufacturing facility in Dongguan, China to accommodate an increase in demand in the masterbatch solutions product family. This new production line will double the current masterbatch solutions production capacity at the facility.

In June 2015, the Company approved plans to add a second line in its India manufacturing facility to improve product offerings and profitability within the masterbatch solutions product family. Total capital costs are expected to be approximately $5.3 million and production is expected to start-up during the first quarter of fiscal 2017.


5.	Restructuring Plans. In the first nine months of fiscal 2015, the Company announced six restructuring actions that will further optimize its back-office and support functions as well as consolidate its manufacturing footprint. The Company expects to reduce headcount by approximately 200 and realize annual savings of approximately $17.0 million on completion of these activities.


6.	Share Repurchases. The Company repurchased 109,422 shares of its common stock during the first quarter of fiscal 2015 at an average price of $30.46 per share for a total cost of $3.3 million.

Results of Operations

Segment Information



	Three months ended May 31,
												Favorable (unfavorable)
EMEA	2015			2014			Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	322,891			328,784			(5,893		)	(1.8	)%
Net sales	$	326,255		$	413,788		$	(87,533	)	(21.2	)%	$	(79,707	)	(1.9	)%
Segment gross profit	$	51,695		$	56,798		$	(5,103	)	(9.0	)%	$	(11,277	)	10.9	%
Segment gross profit percentage	15.8		%	13.7		%
Segment operating income	$	24,716		$	23,565		$	1,151		4.9	%	$	(4,905	)	25.7	%
Price per pound	$	1.010		$	1.259		$	(0.249	)	(19.8	)%	$	(0.247	)	(0.2	)%
Segment operating income per pound	$	0.077		$	0.072		$	0.005		6.9	%	$	(0.015	)	27.8	%

Three months ended May 31, 2015

EMEA net sales for the three months ended May 31, 2015 were $326.3 million compared with $413.8 million in the corresponding prior-year period. Excluding the unfavorable impact of foreign currency translation of $79.7 million, sales declined by 1.9%, primarily due to lower volumes in the engineered plastics and distribution services product families partially offset by the $11.8 million and 9.8 million pound incremental contribution of the Specialty Plastics acquisition.

EMEA gross profit was $51.7 million for the three months ended May 31, 2015. Excluding the negative impact of foreign currency translation of $11.3 million, gross profit increased by $6.2 million, or 10.9% primarily due to improved product mix as well as the incremental contribution of the Specialty Plastics acquisition.

EMEA operating income for the three months ended May 31, 2015 was $24.7 million. Excluding the negative impact of foreign currency translation of $4.9 million, operating income increased by $6.1 million, or 25.7%. Operating income increased due to higher gross profit as noted above and lower selling, general and administrative ("SG&A") expense. SG&A expense decreased by $6.3 million primarily due to the favorable impact of foreign currency translation of $6.4 million, lower variable incentive

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compensation expense of $1.2 million and restructuring savings, partially offset by incremental SG&A expenses from the Specialty Plastics acquisition of $0.9 million and increased professional fees of $0.7 million.



	Nine months ended May 31,
												Favorable (unfavorable)
EMEA	2015			2014			Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	948,207			947,220			987			0.1	%
Net sales	$	1,012,592		$	1,189,274		$	(176,682	)	(14.9	)%	$	(152,888	)	(2.0	)%
Segment gross profit	$	145,908		$	156,237		$	(10,329	)	(6.6	)%	$	(20,862	)	6.7	%
Segment gross profit percentage	14.4		%	13.1		%
Segment operating income	$	61,032		$	61,537		$	(505	)	(0.8	)%	$	(8,624	)	13.2	%
Price per pound	$	1.068		$	1.256		$	(0.188	)	(15.0	)%	$	(0.161	)	(2.1	)%
Segment operating income per pound	$	0.064		$	0.065		$	(0.001	)	(1.5	)%	$	(0.009	)	12.3	%

Nine months ended May 31, 2015

EMEA net sales for the nine months ended May 31, 2015 were $1,012.6 million compared with $1,189.3 million in the corresponding prior-year period. Excluding the unfavorable impact of foreign currency translation of $152.9 million, sales declined by 2.0%. Lower organic volumes across most product families were partially offset by increased volumes in the masterbatch solutions product family. During the nine months ended May 31, 2015, the incremental contribution of the Specialty Plastics acquisition in EMEA was $32.5 million and 24.7 million pounds in net sales and volume, respectively.

EMEA gross profit was $145.9 million for the nine months ended May 31, 2015. Excluding the negative impact of foreign currency translation of $20.9 million, gross profit increased by $10.5 million or 6.7% primarily due to improved product mix as well as the incremental contribution of the Specialty Plastics acquisition.

EMEA operating income for the nine months ended May 31, 2015 was $61.0 million compared with $61.5 million for the nine months ended May 31, 2014. Excluding the negative impact of foreign currency translation of $8.6 million, operating income increased by $8.1 million, or 13.2%. Operating income increased due to higher gross profit as noted above and lower SG&A expense. SG&A expense decreased by $9.8 million primarily due to the favorable impact of foreign currency translation of $12.2 million, decreased variable incentive compensation expense of $1.4 million and restructuring savings partially offset by incremental SG&A expenses from the Specialty Plastics acquisition of $2.6 million and increased professional fees of $1.6 million.



	Three months ended May 31,
												Favorable (unfavorable)
USCAN	2015			2014			Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	142,481			140,989			1,492			1.1	%
Net sales	$	137,080		$	131,645		$	5,435		4.1	%	$	(518	)	4.5	%
Segment gross profit	$	22,104		$	23,791		$	(1,687	)	(7.1	)%	$	(79	)	(6.8	)%
Segment gross profit percentage	16.1		%	18.1		%
Segment operating income	$	7,982		$	11,906		$	(3,924	)	(33.0	)%	$	(78	)	(32.3	)%
Price per pound	$	0.962		$	0.934		$	0.028		3.0	%	$	(0.004	)	3.4	%
Segment operating income per pound	$	0.056		$	0.084		$	(0.028	)	(33.3	)%	$	(0.001	)	(32.1	)%

Three months ended May 31, 2015

USCAN net sales for the three months ended May 31, 2015 were $137.1 million, an increase of $5.4 million or 4.1% compared with the prior-year period. During the third quarter of fiscal 2015, the incremental contribution from the Specialty Plastics acquisition, which includes the additional utilization of newly acquired plants, was $19.6 million and 12.8 million pounds in net sales and volume, respectively. The incremental sales were partially offset by lower sales of $11.6 million in the specialty powders product family primarily as a result of weaker oilfield services demand.

USCAN gross profit was $22.1 million for the three months ended May 31, 2015, a decrease of $1.7 million from the comparable period last year. The benefits of the recent acquisition and related integration were more than offset by unfavorable product mix.

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USCAN operating income for the three months ended May 31, 2015 was $8.0 million compared with $11.9 million in the same quarter of fiscal 2014. Operating income decreased due to the above noted decrease in gross profit, incremental SG&A expenses from the recent acquisition of $1.4 million and increased compensation and benefits of $0.6 million.



	Nine months ended May 31,
											Favorable (unfavorable)
USCAN	2015			2014			Increase (decrease)				FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	428,914			381,337			47,577		12.5	%
Net sales	$	415,221		$	336,277		$	78,944	23.5	%	$	(1,241	)	23.8	%
Segment gross profit	$	66,478		$	50,911		$	15,567	30.6	%	$	(182	)	30.9	%
Segment gross profit percentage	16.0		%	15.1		%
Segment operating income	$	25,299		$	18,603		$	6,696	36.0	%	$	(182	)	37.0	%
Price per pound	$	0.968		$	0.882		$	0.086	9.8	%	$	(0.003	)	10.1	%
Segment operating income per pound	$	0.059		$	0.049		$	0.010	20.4	%	$	—		20.4	%

Nine months ended May 31, 2015

USCAN net sales for the nine months ended May 31, 2015 were $415.2 million, an increase of $78.9 million or 23.5% compared with the prior-year period. During the nine months ended May 31, 2015, the incremental contribution of the Network Polymers, Prime Colorants and Specialty Plastics acquisitions was $89.0 million and 57.2 million pounds in net sales and volume, respectively. The acquisition impact was partially offset by lower volumes in the specialty powders, engineered plastics and custom performance colors product families. Foreign currency translation negatively impacted net sales by $1.2 million.

USCAN gross profit was $66.5 million for the nine months ended May 31, 2015, an increase of $15.6 million from the comparable period last year. The benefits of recent acquisitions and related integration were partially offset by unfavorable product mix.

USCAN operating income for the nine months ended May 31, 2015 was $25.3 million compared with $18.6 million in the same period last year. Operating income increased due to the above noted increase in gross profit, partially offset by incremental SG&A expenses from recent acquisitions of $6.5 million and increased compensation and benefits of $1.6 million.



	Three months ended May 31,
												Favorable (unfavorable)
LATAM	2015			2014			Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	33,557			35,034			(1,477		)	(4.2	)%
Net sales	$	44,821		$	49,754		$	(4,933	)	(9.9	)%	$	(8,536	)	7.2	%
Segment gross profit	$	9,324		$	4,472		$	4,852		108.5	%	$	(465	)	118.9	%
Segment gross profit percentage	20.8		%	9.0		%
Segment operating income	$	4,654		$	(649	)	$	5,303		n/m		$	329		n/m
Price per pound	$	1.336		$	1.420		$	(0.084	)	(5.9	)%	$	(0.254	)	12.0	%
Segment operating income per pound	$	0.139		$	(0.019	)	$	0.158		n/m		$	0.010		n/m

Three months ended May 31, 2015

LATAM net sales for the three months ended May 31, 2015 were $44.8 million, a decrease of $4.9 million or 9.9% compared with the prior-year period. Excluding the unfavorable impact of foreign currency translation of $8.5 million, net sales increased 7.2% primarily due to improved product mix in the specialty powders and engineered plastics product families.

LATAM gross profit was $9.3 million for the three months ended May 31, 2015, an increase of $4.9 million from the comparable period last year. The benefits of improved product mix and operations were partially offset by unfavorable foreign currency translation of $0.5 million.

LATAM operating income for the three months ended May 31, 2015 was $4.7 million compared with a loss of $0.6 million in the same quarter of fiscal 2014. Operating income increased due to improved gross profit, as noted above, and decreased SG&A expenses.

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	Nine months ended May 31,
												Favorable (unfavorable)
LATAM	2015			2014			Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	96,894			106,154			(9,260		)	(8.7	)%
Net sales	$	132,135		$	148,748		$	(16,613	)	(11.2	)%	$	(18,001	)	0.9	%
Segment gross profit	$	22,075		$	20,011		$	2,064		10.3	%	$	(1,901	)	19.8	%
Segment gross profit percentage	16.7		%	13.5		%
Segment operating income	$	7,531		$	6,286		$	1,245		19.8	%	$	(350	)	25.4	%
Price per pound	$	1.364		$	1.401		$	(0.037	)	(2.6	)%	$	(0.185	)	10.6	%
Segment operating income per pound	$	0.078		$	0.059		$	0.019		32.2	%	$	(0.003	)	37.3	%

Nine months ended May 31, 2015

LATAM net sales for the nine months ended May 31, 2015 were $132.1 million, a decrease of $16.6 million or 11.2% compared with the prior-year period. Excluding the unfavorable impact of foreign currency translation of $18.0 million, net sales increased by $1.4 million primarily driven by improved product mix in the specialty powders, masterbatch solutions and engineered plastics product families.

LATAM gross profit was $22.1 million for the nine months ended May 31, 2015, an increase of $2.1 million from the comparable period last year. The benefits of improved product mix were partially offset by unfavorable foreign currency translation of $1.9 million.

LATAM operating income for the nine months ended May 31, 2015 was $7.5 million compared with $6.3 million in the same period last year. Operating income increased due to the above noted increase in gross profit, partially offset by increased SG&A of $0.8 million of which primarily relates to higher compensation and benefits expense.



	Three months ended May 31,
												Favorable (unfavorable)
APAC	2015			2014			Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	46,177			40,447			5,730			14.2	%
Net sales	$	52,702		$	50,548		$	2,154		4.3	%	$	(2,631	)	9.5	%
Segment gross profit	$	7,771		$	7,052		$	719		10.2	%	$	(211	)	13.2	%
Segment gross profit percentage	14.7		%	14.0		%
Segment operating income	$	3,972		$	3,328		$	644		19.4	%	$	(50	)	20.9	%
Price per pound	$	1.141		$	1.250		$	(0.109	)	(8.7	)%	$	(0.057	)	(4.2	)%
Segment operating income per pound	$	0.086		$	0.082		$	0.004		4.9	%	$	(0.001	)	6.1	%

Three months ended May 31, 2015

APAC net sales for the three months ended May 31, 2015 were $52.7 million, an increase of $2.2 million or 4.3% compared with the same prior-year period. During the third quarter of fiscal 2015, the Compco acquisition in Australia contributed net sales and volume of $2.6 million and 2.1 million pounds, respectively. Organic volumes also increased across nearly all product families, partially offset by decreased price per pound driven by competitive pricing pressures primarily in the masterbatch solutions product family, unfavorable product mix in the engineered plastics product family and negative foreign currency translation of $2.6 million.

APAC gross profit for the three months ended May 31, 2015 was $7.8 million, an increase of $0.7 million compared with the prior-year period. Gross profit benefited from the positive contribution of the Compco acquisition and increased organic volume, partially offset by negative foreign currency translation of $0.2 million.

APAC operating income for the three months ended May 31, 2015 was $4.0 million compared with $3.3 million in the prior-year comparable quarter. The increase in operating income was primarily due to the aforementioned increase in gross profit, partially offset by incremental SG&A expenses from the Compco acquisition of $0.2 million and increased variable incentive compensation expense of $0.2 million.

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	Nine months ended May 31,
												Favorable (unfavorable)
APAC	2015			2014			Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	132,664			113,903			18,761			16.5	%
Net sales	$	158,258		$	145,341		$	12,917		8.9	%	$	(5,158	)	12.4	%
Segment gross profit	$	22,403		$	20,202		$	2,201		10.9	%	$	(480	)	13.3	%
Segment gross profit percentage	14.2		%	13.9		%
Segment operating income	$	10,903		$	9,870		$	1,033		10.5	%	$	(173	)	12.2	%
Price per pound	$	1.193		$	1.276		$	(0.083	)	(6.5	)%	$	(0.039	)	(3.4	)%
Segment operating income per pound	$	0.082		$	0.087		$	(0.005	)	(5.7	)%	$	(0.001	)	(4.6	)%

Nine months ended May 31, 2015

APAC net sales for the nine months ended May 31, 2015 were $158.3 million, an increase of $12.9 million compared with the same prior-year period. During the nine months ended May 31, 2015, the Compco acquisition in Australia contributed net sales and volume of $8.5 million and 6.2 million pounds, respectively. Organic volumes also increased across nearly all product families, partially offset by decreased price per pound driven by competitive pricing pressures primarily in the masterbatch solutions product family, unfavorable product mix in the engineered plastics product family and negative foreign currency translation of $5.2 million.

APAC gross profit for the nine months ended May 31, 2015 was $22.4 million, an increase of $2.2 million compared with the same prior-year period. Gross profit benefited from the positive contribution of the Compco acquisition and increased organic volumes, partially offset by negative foreign currency translation of $0.5 million.

APAC operating income for the nine months ended May 31, 2015 was $10.9 million compared with $9.9 million in the prior-year. The increase in operating income was primarily due to the aforementioned increase in gross profit, partially offset by incremental SG&A expenses from the Compco acquisition of $0.6 million and increased variable incentive compensation expense of $0.5 million.



	Three months ended May 31,
										Favorable (unfavorable)
Consolidated	2015		2014		Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	545,106		545,254		(148		)	—	%
Net sales	$	560,858	$	645,735	$	(84,877	)	(13.1	)%	$	(91,392	)	1.0	%
Operating income	$	23,266	$	25,350	$	(2,084	)	(8.2	)%	$	(4,468	)	9.4	%
Total operating income before certain items*	$	32,822	$	28,398	$	4,424		15.6	%	$	(4,703	)	32.1	%
Price per pound	$	1.029	$	1.184	$	(0.155	)	(13.1	)%	$	(0.168	)	1.1	%
Total operating income per pound before certain items*	$	0.060	$	0.052	$	0.008		15.4	%	$	(0.009	)	32.7	%

* Total operating income before certain items, a non-GAAP measurement, represents segment operating income combined with Corporate expenses. For a reconciliation of segment operating income to operating income and income from continuing operations before taxes, refer to Note 13 of this Form 10-Q.

Three months ended May 31, 2015

Consolidated net sales for the three months ended May 31, 2015 were $560.9 million compared with $645.7 million for the three months ended May 31, 2014. Incremental net sales and volume in the third quarter of fiscal 2015 from the Company’s recent acquisitions contributed $34.0 million and 24.7 million pounds, respectively. Foreign currency translation unfavorably impacted net sales for the three months ended May 31, 2015 by $91.4 million.

Operating income decreased $2.1 million for the three months ended May 31, 2015 compared with the same prior-year period. Total operating income before certain items for the three months ended May 31, 2015 was $32.8 million, an increase of $4.4 million compared with the same prior-year period. The increase in total operating income before certain items was primarily due to the contribution from recent acquisitions of $2.8 million and decreased SG&A expense as noted below, partially offset by the negative impact of foreign currency translation of $4.7 million.

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The Company’s SG&A expenses, excluding certain items, decreased by $5.6 million for the three months ended May 31, 2015 compared with the same period in the prior year. The decrease was primarily attributable to favorable foreign currency translation of $7.3 million and decreased variable incentive compensation expense of $3.5 million, partially offset by incremental SG&A expense of $2.5 million from recent acquisitions and increased professional fees of $1.6 million. Items excluded from SG&A expenses consist of $6.8 million and $1.8 million of expense related to acquisition and integration activities and restructuring and related costs for the three months ended May 31, 2015 and May 31, 2014, respectively.



	Nine months ended May 31,
										Favorable (unfavorable)
Consolidated	2015		2014		Increase (decrease)					FX Impact			Excluding FX
	(In thousands, except for %’s and per pound data)
Pounds sold	1,606,679		1,548,614		58,065			3.7	%
Net sales	$	1,718,206	$	1,819,640	$	(101,434	)	(5.6	)%	$	(177,288	)	4.2	%
Operating income	$	49,663	$	59,037	$	(9,374	)	(15.9	)%	$	(8,890	)	(0.8	)%
Total operating income before certain items*	$	79,773	$	72,147	$	7,626		10.6	%	$	(9,330	)	23.5	%
Price per pound	$	1.069	$	1.175	$	(0.106	)	(9.0	)%	$	(0.111	)	0.4	%
Total operating income per pound before certain items*	$	0.050	$	0.047	$	0.003		6.4	%	$	(0.005	)	17.0	%

Nine months ended May 31, 2015

Consolidated net sales for the nine months ended May 31, 2015 were $1,718.2 million compared with $1,819.6 million for the nine months ended May 31, 2014. Incremental net sales and volume for the nine months ended May 31, 2015 from the Company’s recent acquisitions contributed $130.0 million and 88.1 million pounds, respectively. Foreign currency translation unfavorably impacted net sales for the nine months ended May 31, 2015 by $177.3 million. Refer to the previous segment discussions for further details.

Operating income decreased $9.4 million for the nine months ended May 31, 2015 compared with the same prior-year period. Total operating income before certain items for the nine months ended May 31, 2015 was $79.8 million, an increase of $7.6 million compared with last year. The increase in total operating income before certain items was primarily due to the contribution from recent acquisitions of $12.4 million and increased gross profit partially offset by the negative impact of foreign currency translation of $9.3 million and the increased SG&A expense as noted below.

The Company’s SG&A expenses, excluding certain items, increased by $1.9 million for the nine months ended May 31, 2015 compared with the same period in the prior year. The increase was primarily attributable to incremental SG&A expense of $8.7 million from recent acquisitions and increased professional fees of $3.7 million, partially offset by favorable foreign currency translation of $14.1 million. Items excluded from SG&A expenses consist of $18.4 million of expense related to CEO transition costs, acquisition and integration activities and restructuring and related costs for the nine months ended May 31, 2015 and $6.5 million of acquisition and integration activities and restructuring and related costs for the nine months ended May 31, 2014.

Additional consolidated results

Interest expense increased $1.2 million for both the three and nine months ended May 31, 2015 compared with the same periods in the prior year as a result of higher outstanding debt. Additionally the Company incurred $18.8 million related to the Bridge Financing fees from the Citadel acquisition, as discussed in Note 4 of this Form 10-Q.

The Company experienced foreign currency transaction losses of $0.9 million and $3.1 million for the three and nine months ended May 31, 2015, respectively. Generally, the foreign currency transaction gains or losses relate to the changes in the value of the U.S. dollar compared with the Euro and other local currencies throughout all regions, and changes between the Euro and other non-Euro European currencies. The Company may enter into foreign exchange forward contracts to reduce the impact of changes in foreign exchange rates on the consolidated statements of operations. These contracts reduce exposure to currency movements affecting the remeasurement of foreign currency denominated assets and liabilities primarily related to trade receivables and payables, as well as intercompany activities. Any gains or losses associated with these contracts, as well as the offsetting gains or losses from the underlying assets or liabilities, are recognized on the foreign currency transaction line in the consolidated statements

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of operations. There were no foreign exchange forward contracts designated as hedging instruments as of May 31, 2015 and August 31, 2014.

Noncontrolling interests represent a 37% equity position of Alta Plastica S.A. in an Argentinean venture and a 35% equity position of P.T. Prima Polycon Indah in an Indonesian joint venture.

Net income available to the Company’s common stockholders was a loss of $9.9 million and income of $19.1 million for the three months ended May 31, 2015 and 2014, respectively. Net income available to the Company’s common stockholders was $2.4 million and $41.0 million for the nine months ended May 31, 2015 and 2014, respectively. Foreign currency translation negatively impacted net income by $2.8 million and $4.7 million for the three and nine months ended May 31, 2015, respectively.

Product Families

Globally, the Company operates in five product families: (1) custom performance colors, (2) masterbatch solutions, (3) engineered plastics, (4) specialty powders and (5) distribution services. The Company offers tolling services to customers primarily in the specialty powders product family. The amount and percentage of consolidated net sales for these product families are as follows:



	Three months ended May 31,
	2015				2014
	(In thousands, except for %'s)
Custom performance colors	$	45,305	8	%	$	50,212	8	%
Masterbatch solutions	187,927		34		202,273		31
Engineered plastics	181,725		32		195,661		30
Specialty powders	71,133		13		97,121		15
Distribution services	74,768		13		100,468		16
Total consolidated net sales	$	560,858	100	%	$	645,735	100	%



	Nine months ended May 31,
	2015				2014
	(In thousands, except for %'s)
Custom performance colors	$	136,649	8	%	$	140,918	8	%
Masterbatch solutions	568,408		33		564,750		31
Engineered plastics	549,072		32		559,399		31
Specialty powders	222,722		13		263,931		14
Distribution services	241,355		14		290,642		16
Total consolidated net sales	$	1,718,206	100	%	$	1,819,640	100	%

The three and nine months ended May 31, 2014 include a reclassification of revenue between product families to better reflect the way the businesses are managed.

Capacity

The Company’s practical capacity is not based on a theoretical 24-hour, seven-day operation, rather it is determined as the production level at which the manufacturing facilities can operate with an acceptable degree of efficiency, taking into consideration factors such as longer term customer demand, permanent staffing levels, operating shifts, holidays, scheduled maintenance and mix of product. Capacity utilization is calculated by dividing actual production pounds by practical capacity at each plant. A comparison of capacity utilization levels is as follows:



	Three months ended May 31,				Nine months ended May 31,
	2015		2014		2015		2014
EMEA	90	%	87	%	84	%	84	%
USCAN	61	%	67	%	63	%	62	%
LATAM	76	%	68	%	71	%	76	%
APAC	67	%	73	%	65	%	71	%
Worldwide	76	%	77	%	73	%	74	%

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Restructuring

The following table summarizes the activity related to the Company’s restructuring plans:



	Employee-related Costs			Other Costs			Translation Effect			Total Restructuring Costs
	(In thousands)
Accrual balance as of August 31, 2014	$	1,745		$	371		$	(304	)	$	1,812
Fiscal 2015 charges	9,734			796			—			10,530
Fiscal 2015 payments	(6,593		)	(852		)	—			(7,445		)
Translation	—			—			(669		)	(669		)
Accrual balance as of May 31, 2015	$	4,886		$	315		$	(973	)	$	4,228

For discussion of the Company's fiscal 2015 restructuring plans, refer to Note 14 in this Form 10-Q.

Income Tax

Goodwill

Goodwill is tested for impairment annually as of June 1. Management uses judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement approach that combines the income and market valuation techniques for each of the Company’s reporting units that carry goodwill. These valuation techniques use estimates and assumptions including, but not limited to, the determination of appropriate market comparables, projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions.

If circumstances change between annual tests that would more likely than not reduce the fair value of a reporting unit below its carrying value, the Company would test goodwill for impairment. Factors which would necessitate an interim goodwill impairment assessment include a sustained decline in the Company's stock price, prolonged negative industry or economic trends, and significant under-performance relative to historical or projected future operating results.

As of June 1, 2014, the annual goodwill impairment test date for fiscal 2014, goodwill was included in five of the Company's reporting units in EMEA (masterbatch solutions, engineered plastics, specialty powders, custom performance colors and distribution services), four reporting units in the former Americas reportable segment (masterbatch solutions, custom performance colors, engineered plastics and specialty powders), and one reporting unit in APAC (engineered plastics). In the first quarter of fiscal 2015, additional goodwill was recorded as a result of the Compco acquisition and allocated to the APAC custom performance colors reporting unit.

As of January 1, 2015, the goodwill that was previously allocated to four reporting units within the former Americas reportable segment was split into seven reporting units within the Company's two new reportable segments, USCAN and LATAM. The Company now reports goodwill in four new reporting units in USCAN (masterbatch solutions, custom performance colors, engineered plastics and specialty powders) and three new reporting units in LATAM (masterbatch solutions, custom performance colors and specialty powders). For further discussion of the Company's goodwill allocation and reportable segment split, refer to Notes 3 and 13 of this Form 10-Q.

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Management concluded, based on the quantitative fair value measurements performed, that as of June 1, 2014, the fair values of the EMEA specialty powders and USCAN engineered plastics reporting units exceeded their carrying values by 13% in each instance. As of May 31, 2015, the EMEA specialty powders reporting unit had goodwill of $17.5 million while goodwill in the USCAN engineered plastics reporting unit was $34.6 million. The goodwill associated with these reporting units is primarily the result of the acquisitions made within the last few years. Generally, goodwill recorded in business combinations is more susceptible to risk of impairment soon after the acquisition primarily because the business combination is recorded at fair value based on operating plans and economic conditions present at the time of the acquisition. If operating results or economic conditions deteriorate soon after an acquisition, it could result in the impairment of the acquired goodwill. A change in macroeconomic conditions in the USCAN and EMEA regions, as well as future changes in the judgments, assumptions and estimates that were used in the Company's goodwill impairment testing for these two reporting units, including the discount rate and future cash flow projections, could result in a significantly different estimate of the fair value.

During the second quarter of fiscal 2015, the Company reviewed the goodwill allocated to each of the reporting units within the former Americas segment and newly created USCAN and LATAM segments immediately before and after the reallocation and concluded no interim impairment tests were necessary. Additionally, as of May 31, 2015, the Company concluded there were no triggering events which would have required a goodwill impairment test.

Liquidity and Capital Resources

Net cash provided from operations was $56.3 million and $35.0 million for the nine months ended May 31, 2015 and 2014, respectively. The Company’s cash and cash equivalents decreased $28.5 million from August 31, 2014. This decrease was driven primarily by net debt repayments of $98.5 million, capital expenditures of $32.7 million, dividend payments of $18.1 million, foreign currency translation of $11.8 million, capital investment in joint ventures of $12.5 million, the Compco acquisition of $6.7 million, redemption of common stock of $5.0 million, and share repurchases of $3.3 million. These outflows were funded primarily by the issuance of convertible special stock of $120.3 million and cash generated from operations of $56.3 million.

The Company’s approximate working capital days are summarized as follows:



	May 31, 2015	August 31, 2014	May 31, 2014
Days in receivables	57	55	54
Days in inventory	53	50	52
Days in payables	51	48	46
Total working capital days	59	57	60

The following table summarizes certain key balances on the Company’s consolidated balance sheets and related metrics:



	May 31, 2015		August 31, 2014		$ Change			% Change
	(In thousands, except for %’s)
Cash and cash equivalents	$	107,043	$	135,493	$	(28,450	)	(21.0	)%
Restricted cash	$	378,509	$	—	$	378,509		100.0	%
Working capital, excluding cash and restricted cash	$	226,868	$	263,715	$	(36,847	)	(14.0	)%
Long-term debt	$	607,585	$	339,546	$	268,039		78.9	%
Total debt	$	621,875	$	371,294	$	250,581		67.5	%
Net debt*	$	136,323	$	235,801	$	(99,478	)	(42.2	)%
Total A. Schulman, Inc.’s stockholders’ equity	$	570,337	$	527,043	$	43,294		8.2	%

* Net debt, a non-GAAP financial measure, represents total debt less cash and cash equivalents and restricted cash. The Company believes that net debt provides useful supplemental liquidity information to investors.

As of May 31, 2015, 92% of the Company's cash and cash equivalents were held by its foreign subsidiaries, compared to 95% as of August 31, 2014. The majority of these foreign cash balances are associated with earnings that we have asserted are permanently reinvested and which we plan to use to support continued growth plans outside the U.S. through funding of capital expenditures, acquisitions, operating expenses or other similar cash needs of foreign operations. From time to time, we repatriate cash from foreign subsidiaries to the U.S. through intercompany dividends for normal operating needs and service of outstanding debt. These dividends are typically paid out of current year earnings. In addition, excess cash in the U.S. is generally used to repay outstanding debt.

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Working capital, excluding cash and restricted cash, was $226.9 million as of May 31, 2015, a decrease of $36.8 million from August 31, 2014. The primary reasons for the decrease in working capital from August 31, 2014 include decreases of $26.8 million in accounts receivable and $21.9 million in inventories, and an increase in other accrued liabilities of $32.5 million. These decreases to working capital were partially offset by a decrease in accounts payable of $21.8 million and a decrease in short-term debt of $17.5 million. The translation effect of foreign currencies, primarily the Euro, decreased working capital by $32.3 million.

Capital expenditures for the nine months ended May 31, 2015 were $32.7 million compared with $24.1 million last year. The Company continued regular and ongoing investments in its global manufacturing facilities and technical innovation centers.

2013 Credit Agreement

Additional Debt

Senior Notes

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commencing on June 1, 2018, 2019, 2020 and 2021 and thereafter, respectively. Prior to June 1, 2018, the Company may redeem these Notes, in whole or in part, and pay the applicable premium that includes the redemption price plus accrued and unpaid interest to the redemption date.

2015 Credit Agreement


•	a multicurrency revolving credit facility in the aggregate principal amount of up to $300 million (the “Revolving Facility");


•	a $200 million term loan A facility (the "Term Loan A Facility") with quarterly payments due until maturity;


•	a $350 million U.S. term loan B facility (the "U.S. Term Loan B Facility") with quarterly payments due until maturity;


•	a €145 million term loan B facility (the "Euro Term Loan B Facility") with quarterly payments due until maturity; and

•

The Revolving Facility and Term Loan A Facility each mature on June 1, 2020, and the U.S. Term Loan B Facility and Euro Term Loan B Facility each mature on June 1, 2022.

Below summarizes the Company’s available funds:



	May 31, 2015		August 31, 2014
	(In thousands)
Existing capacity:
Revolving Facility, due September 2018	$	300,000	$	300,000
Domestic short-term lines of credit	—		15,000
Foreign short-term lines of credit	47,734		53,520
Total capacity from credit lines	$	347,734	$	368,520
Availability:
Revolving Facility, due September 2018	$	134,542	$	193,909
Foreign short-term lines of credit	41,194		49,250
Total available funds from credit lines	$	175,736	$	243,159

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After completion of the Citadel acquisition on June 1, 2015, the total capacity from credit lines and total available funds from credit lines was $347.7 million and $301.9 million, respectively.

The Company was in a net debt position of $136.3 million and $235.8 million as of May 31, 2015 and August 31, 2014, respectively. The decrease of $99.5 million was a result of the special stock issuance, which was primarily used to pay down revolver and term loan debt. These debt repayments totaled $98.5 million for the nine months ended May 31, 2015.

During the three and nine months ended May 31, 2015, the Company declared and paid quarterly cash dividends of $0.205 and $0.615 per common share. The total amount of these dividends was $6.1 million and $18.1 million, respectively.

For a discussion of the Company's share repurchase programs, refer to Note 18 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015. The Company repurchased 109,422 shares of common stock entirely in the first quarter of fiscal 2015 at an average price of $30.46 per share for a total cost of $3.3 million. As of May 31, 2015, shares valued at $51.7 million remain authorized for repurchase.

The Company has foreign currency exposures primarily related to the Euro, British pound sterling, Polish zloty, Mexican peso, Brazilian real, and Argentine peso, among others. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using current exchange rates. Income statement items are translated at average exchange rates prevailing during the period. The resulting translation adjustments are recorded in the accumulated other comprehensive income (loss) account in stockholders’ equity. A significant portion of the Company’s operations uses the Euro as its functional currency. Accumulated other comprehensive income decreased by $64.4 million during the nine months ended May 31, 2015 primarily due to the strengthening of the U.S. dollar against various foreign currencies, most significantly the Euro which declined by 16.8% from 1.319 U.S. dollars to 1 Euro as of August 31, 2014 to 1.097 as of May 31, 2015.

Cash flow from operations, borrowing capacity under the credit facilities and cash and cash equivalents are expected to provide sufficient liquidity to maintain the Company’s current operations and capital expenditure requirements, pay dividends, repurchase shares, pursue acquisitions and service outstanding debt.

Contractual Obligations

A summary of the Company's future obligations related to the recent financing transactions, as discussed in Note 4 of this Form 10-Q, is presented below, subsequent to the June 1, 2015 Citadel acquisition date:



	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
	(In thousands)
Short-Term Debt	$	19,278	$	—	$	—	$	—	$	19,278
Long-Term Debt	—		30,181		218,181		858,612		1,106,974
Convertible Special Stock Dividends	7,500		15,000		15,000		—		37,500
Interest Payments	13,300		116,200		124,900		176,700		431,100
	$	40,078	$	161,381	$	358,081	$	1,035,312	$	1,594,852

There were no other material changes to the Company’s future contractual obligations as previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

The Company’s outstanding commercial commitments as of May 31, 2015 are not material to the Company’s financial position, liquidity or results of operations.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements as of May 31, 2015.

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Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Management bases its estimates on historical experience and other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. The Company’s critical accounting policies are the same as discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

Accounting Pronouncements

For a discussion of accounting pronouncements, refer to Note 17 of this Form 10-Q.

Cautionary Statements

A number of the matters discussed in this document that are not historical or current facts deal with potential future circumstances and developments and may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and relate to future events and expectations. Forward-looking statements contain such words as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which management is unable to predict or control, that may cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company’s future financial performance, include, but are not limited to, the following:


•	worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company’s major product markets or countries where the Company has operations;


•	the effectiveness of the Company’s efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;


•	competitive factors, including intense price competition;


•	fluctuations in the value of currencies in areas where the Company operates;


•	volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company’s products, particularly plastic resins derived from oil and natural gas;


•	changes in customer demand and requirements;


•	effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions and the integration thereof, joint ventures and restructuring initiatives;


•	escalation in the cost of providing employee health care;


•	uncertainties regarding the resolution of pending and future litigation and other claims;


•	the performance of the global automotive market as well as other markets served;


•	further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products;


•	operating problems with our information systems as a result of system security failures such as viruses, cyber-attacks or other causes;


•	the impact of the indebtedness incurred to finance the Citadel acquisition;


•	integration of the business of Citadel with our existing business, including the risk that the integration will be more costly or more time consuming and complex or simply less effective than anticipated;


•	our ability to achieve the anticipated synergies, cost savings and other benefits from the Citadel acquisition;

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•	transaction and acquisition-related costs incurred in connection with the Citadel acquisition and related transactions; and


•	substantial time devoted by management to the integration of the Citadel acquisition.

The risks and uncertainties identified above are not the only risks the Company faces. Additional risk factors that could affect the Company’s performance are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company’s business, financial condition and results of operations.

Item 3 – Quantitative and Qualitative Disclosure about Market Risk

In the ordinary course of business, the Company is subject to interest rate, foreign currency, and commodity risks. Information related to these risks and management of these exposures is included in Part II, ITEM 7A, QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK, in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014 as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015. Exposures to market risks have not changed materially since August 31, 2014.

Item 4 – Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company carries out a variety of on-going procedures, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this report.

In the first quarter of fiscal 2015, the Company acquired Compco Pty. Ltd. The scope of the Company's assessment of the effectiveness of internal control over financial reporting did not include Compco Pty. Ltd. This exclusion is in accordance with the SEC's general guidance that an assessment of a recently acquired business may be omitted from the Company's scope in the year of acquisition.

There has been no change in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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PART II – OTHER INFORMATION

Items 1, 3, 4 and 5 are not applicable or the answer to such items is negative; therefore, the items have been omitted and no reference is required in this Quarterly Report.

Item 1A – Risk Factors

There are certain risks and uncertainties in the Company’s business that could cause our actual results to differ materially from those anticipated. In “ITEM 1A. RISK FACTORS” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015, the Company included a detailed discussion of its risk factors. There are no material changes from the risk factors previously disclosed.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The Company did not repurchase any shares of common stock during the third quarter of fiscal 2015. The Company repurchased 109,422 shares of common stock during the first quarter of fiscal 2015 an average price of $30.46 per share for a total cost of $3.3 million. Shares valued at $51.7 million remain authorized for repurchase as of May 31, 2015. For further discussion of the Company's Share Repurchase program, refer to Note 18 in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2014, as amended and superseded in part by the Company's Current Report on Form 8-K filed on April 27, 2015.

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Item 6 – Exhibits


(a)	Exhibits



Exhibit Number		Exhibit

2.1		Stock Purchase Agreement, dated as of March 15, 2015, by and among A. Schulman, Inc., HGGC Citadel Plastics Holdings, Inc., Citadel Plastics Holdings, LLC (in its capacity as the representative of the holders of securities of the company), and certain other individual persons (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-3 filed with the Commission on April 27, 2015 (Reg. No. 333-203670)).*

3.1		Amended and Restated Certificate of Incorporation of the Company, as amended (for purposes of Commission reporting compliance only).

3.2		Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on June 27, 2011).

4.1		Indenture, dated as of May 26, 2015, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (including the Form of 6.875% Senior Note due 2023) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 28, 2015).

4.2		First Supplemental Indenture, dated as of June 1, 2015, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 3, 2015).

4.3		Registration Rights Agreement, dated as of May 26, 2015, by and among A. Schulman, Inc., the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as representatives of the initial purchasers of the Notes ) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 28, 2015).

4.4		Joinder to Registration Rights Agreement, dated as of June 1, 2015, by and among A. Schulman, Inc., the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as representatives of the initial purchasers (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on June 3, 2015).

4.5		Specimen Certificate for 6.00% Cumulative Perpetual Convertible Special Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 4, 2015).

10.1		Credit Agreement, dated as of June 1, 2015, by and among A. Schulman, Inc., A. Schulman S.a.r.l., and JPMorgan Chase Bank, N.A., as Administrative agent and J.P. Morgan Europe Limited as Global Agent, and the lenders named in the Credit Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 3, 2015).

31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

32		Certifications of Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. 1350.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

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101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

* Certain immaterial schedules and exhibits to this exhibit have been omitted pursuant to the provisions of Regulation S-K, Item 601(b)(2). A copy of any of the omitted schedules and exhibits will be furnished to the Commission upon request.

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SIGNATURES

Pursuant to the requirements 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.

A. Schulman, Inc.

(Registrant)



/s/ Joseph J. Levanduski
Joseph J. Levanduski , Executive Vice President, Chief Financial Officer of A. Schulman, Inc. (Signing on behalf of Registrant as a duly authorized officer of Registrant and signing as the Principal Financial Officer of Registrant)
Date:	July 6, 2015

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Exhibit 3.1

RESTATED

CERTIFICATE OF INCORPORATION, AS AMENDED

A. SCHULMAN, INC.

(Reflecting amendments through May 4, 2015)

[for purposes of SEC reporting compliance only]

A. Schulman, Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

1. The name of the Corporation is A. Schulman, Inc. and the date of the original filing of its Certificate of Incorporation with the Secretary of State was August 20, 1969;

2. This Restated Certificate of Incorporation was duly adopted in accordance with Sections 141 and 245 of the Delaware General Corporation Law at a meeting duly called and held of the Directors of the Corporation;

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation of this Corporation as heretofore amended or supplemented and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation; and

4. The text of the Certificate of Incorporation as heretofore amended or supplemented is hereby restated without further amendments or charges to read as herein set forth in full.

FIRST. The name of the Corporation is A. Schulman, Inc.

SECOND. The registered office of the Corporation in the State of Delaware located at No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name and address of its registered agent therein is The Corporation Trust Company, No. 100 West Tenth Street, Wilmington, Delaware 19801.

THIRD. The nature of the business, or objects or purposes to be transacted, promoted, or carried on by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware, including the following:

(1) To manufacture, fabricate, buy, sell, export, import and generally trade and deal in and with all types of plastics, rubber, resins and related materials.

(2) To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, lease, assign and transfer or otherwise dispose of, trade, deal in and deal with goods, wares and merchandise and personal property of every class and description and to render services of all kinds.

(3) To acquire, and pay for in cash, stock or bonds of this Corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation; to aid in any lawful manner, by loan, subsidy, guarantee or otherwise, any corporation whose stocks, bonds, notes,

debentures or other securities are held or controlled directly or indirectly by the Corporation, and to do any and all lawful acts or things necessary or advisable to protect, preserve, improve or enhance the value of any such stocks, bonds, notes, debentures, or other securities or obligations; and to endorse or guarantee the payment of principal or interest or both, or dividends upon any stocks, bonds, obligations or other securities or evidences of indebtedness, and to guarantee the performance of any contracts or other undertakings in which the Corporation is or becomes interested of any corporation, association, partnership, firm, individual or others, or any country, nation or governmental or political authority.

(4) To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trade-marks and trade names, relating to or useful in connection with any business of this Corporation.

(5) To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other securities, obligations, chooses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trust or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency or instrumentality, and as owner thereof to possess and exercise all the rights, powers and privileges and ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof.

(6) To enter into, make and perform contracts of every kind and description with any person, firm, association, corporation, municipality, county, state, body politic or government or colony or dependency thereof.

(7) To make, enter into and carry out any arrangements which may be deemed to be for the benefit of the Corporation, with any domestic or foreign governmental, municipal or public authority, or with any corporation, partnership, association, combination, organization, entity or person; to obtain therefrom or otherwise to acquire by purchase, lease, assignment or otherwise, any powers, rights, privileges, immunities, franchises, guaranties, grants and concessions; to hold, own, exercise, exploit, dispose of and realize upon the same, and to undertake and prosecute any business dependent thereon which may lawfully be undertaken by a corporation organized under the laws of the State of Delaware; and to cause to be formed, to promote and to aid in any way in the formation of, any corporation, domestic or foreign, for any such purpose.

(8) To act in any and all parts of the world, in any capacity whatsoever as agent, general or special, for domestic and foreign corporations, individuals, partnerships, associations, combinations, organizations, entities, states, governments, and other public and private bodies.

(9) To borrow or raise moneys for any of the purposes of the Corporation and, from time to time without limit as to amount, to draw, make, accept, endorse, execute and issue promissory

notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of or lien upon the whole or any part of the property of the Corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds, debentures or other obligations of the Corporation for its corporate purposes; to confer upon the holders of any bonds, debentures or obligations of the Corporation, secured or unsecured, the right to convert the principal thereof into stock of the Corporation upon such terms and conditions as may be deemed advisable; to create, issue, sell and otherwise dispose of, for money, property or other considerations deemed useful for the purpose of the Corporation, certificates entitling the holder to an interest in all or any part of the securities from time to time held by the Corporation; to permit the holders of any bonds, debentures or obligations of the Corporation, secured by specific securities, to share in the income of such securities in lieu of or in addition to, a fixed return on their investment; and to issue certificates for partly-paid stock of the Corporation.

(10) To the extent permitted by law, to lend to any person, firm or corporation any of its uninvested funds, either with or without security.

(11) To purchase or otherwise acquire, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase or acquisition of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly.

(12) To have one or more offices, to carry on all or any of its operations and business and without restriction or limit as to amount to purchase or otherwise acquire, hold, own, mortgage, sell, convey or otherwise dispose of, real and personal property of every class and description in any of the states, districts, territories or colonies of the United States, and in any and all foreign countries, subject to the laws of such state, district, territory, colony or country.

(13) To acquire in whole or in part the business, good will, rights, property and assets of all kinds of any corporation, association, partnership, combination, organization, entity, or individual, domestic or foreign; and to pay for the same in cash, stocks, bonds, notes, debentures or other securities or obligations of the Corporation or otherwise; and to hold, possess and improve such properties and to conduct in any legal manner the whole or any part of the business so acquired; and to pledge, mortgage, sell or otherwise dispose of the same.

(14) To endorse or guarantee the payment of principal or interest, or both, or dividends upon any stocks, bonds, obligations or other securities or evidences of indebtedness issued or created by any other corporation of the State of Delaware or any other state, or of any country, nation or government, or political authority so far as the same may be permitted by law.

(15) To enter into any legal arrangement for sharing profits, union of interest, reciprocal concession, or cooperation with any person, partnership, association, combination, organization, entity or corporation carrying on or proposing to carry on any business which the Corporation is authorized to carry on, or any business transaction deemed necessary, convenient, or incidental to carrying out any of the object of the Corporation.

(16) The object and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause herein contained, but the objects and purposes specified in each of the foregoing clauses of this article, shall be regarded as independent objects and purposes.

FOURTH. The total number of, shares of stock which the Corporation shall have authority to issue is 76,010,707 shares, consisting of 1,000,000 shares of special stock without par value, 10,707 shares of preferred stock of the par value of $100.00 per share and 75,000,000 of common stock of the par value of $1.00 per share.

The designations and the powers, preferences and rights, and the qualifications, limitations and restrictions thereof are as follows:

The Board of Directors of the Corporation shall have the authority from time to time, in a resolution or resolutions duly adopted by it, to cause the issuance of the special stock for such lawful consideration as it shall deem appropriate. Such special stock shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, and relative, participating, optional or other special rights and qualifications, limitations or restrictions as shall be stated in the resolution or resolutions providing for the issuance of such stock.

The holders of the preferred shares shall be entitled to receive, when and as declared by the Board of Directors of the Corporation, cumulative dividends at the rate of Five Dollars ($5.00) per share per annum, and no more, payable as the Board of Directors may from time to time determine, in each year to shareholders of record at the close of business on such dates respectively preceding the payment thereof as may be fixed by the Board of Directors in declaring any such dividend. Such dividend shall be cumulative from the date of issue, so that if dividends on the outstanding preferred shares at said rate shall not have been paid or declared and set apart for payment for all past dividend periods, and payment of, or provision for the payment of all dividends thereon for the current dividend period shall not have been made, dividends to the amount of such deficiency, but without interest thereon, shall be paid or declared and set apart for payment before any dividends on the common shares shall be paid or declared and set apart for payment.

After full cumulative dividends as aforesaid upon the outstanding preferred shares shall have been paid for all past dividend periods, and after full dividends on the preferred shares for the current dividend period shall have been paid or declared and set apart for payment, then and not otherwise, dividends in cash, property or shares may be declared and paid upon the common shares to the exclusion of the holders of preferred shares. The preferred shares shall be preferred as to assets as well as dividends. Upon any dissolution, liquidation or winding up of the Corporation, the holders of preferred shares shall be entitled to receive in cash, before any payment shall be made to the holders of common shares, the sum of One Hundred Dollars ($100.00) per share, together with an amount equal to all accrued and unpaid dividends thereon to the date of payment. The consolidation or merger of the Corporation at any time or from time to time, with any other corporation or corporations, or a sale of all or substantially all of the assets of the Corporation, shall not be construed as a dissolution, liquidation or winding up of the Corporation within the meaning thereof.

After payment of the full preferential amounts aforesaid, the holders of preferred shares shall not be entitled to any further participation in any distribution of the assets or funds of the Corporation, and the remaining assets and funds of the Corporation shall be divided and distributed among the holders of the common shares then outstanding according to their respective interests.

The term “accrued and unpaid dividends” used with reference to the preferred shares shall mean an amount equal to Five Dollars ($5.00) per share per annum from the date on which the dividends thereon become cumulative to the date of computation, less the aggregate amount of dividends paid.

The preferred shares at any time outstanding may be redeemed by the Corporation, in whole or in part, at any time or from time to time, at its election expressed by resolution of the Board of Directors upon not less than thirty (30) days prior notice to the holders of record of the preferred share to be redeemed, given as hereinafter provided, at One Hundred Dollars ($100.00) per share plus an amount equal to the accrued and unpaid dividends thereon to the redemption date. If less than all of the outstanding preferred shares are to be redeemed, the redemption may be made either by lot or pro rata or by such other equitable method as the Board of Directors in its discretion may determine. Notice of such redemption, stating the redemption date and the redemption price and the place of payment thereof shall be given to the respective holders of the preferred shares to be redeemed by mailing the same first-class, postage prepaid, to such holders at their respective addresses as shown on the books of the corporation. Such notice shall be so mailed not less than thirty (30) days and not more than sixty (60) days prior to the redemption date specified therein. If such notice of redemption shall have been duly given and if, on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside so as to be available therefor, then, notwithstanding that any certificate for preferred shares so called for redemption shall not have been surrendered for cancellation, the shares represented thereby shall no longer be deemed outstanding, the right to receive dividends thereon shall cease to accrue from and after the date of redemption so fixed, and all rights with respect to such preferred shares so called for redemption shall forthwith on such redemption date cease and terminate except only the right of the holders thereof to receive the amount payable upon redemption thereof, but without interest.

Subject to the provisions and limitations herein contained, the Board of Directors shall have full power and authority to prescribe the manner in which and the terms and conditions upon which preferred shares shall be redeemed.

The Corporation shall have the right to purchase preferred shares for the purpose or in anticipation of redemption at not to exceed the redemption price thereof. Preferred shares which have been redeemed or purchased by the Corporation shall be cancelled and not reissued.

Except as otherwise provided by statute, the holders of the preferred shares shall have no voting power and no holder thereof shall be entitled to receive notice of any meeting of shareholders.

Of the 1,000,000 shares of special stock without par value, the Board of Directors of the Corporation created, by resolution adopted January 11, 1996, a series of 100,000 shares of Special Stock designated as

Series A Junior Participating Special Stock with the voting powers, preferences, special rights, qualifications, limitations or restrictions as follows:

(A) The holders of shares of Series A Junior Participating Special Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Special Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b) subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions. other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the “Common Stock”) since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Special Stock. In the event the Corporation shall at any time after January 11, 1996 (the “Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Special Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Special Stock as provided in Paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the Series A Junior Participating Special Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Special Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Special Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Special Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Special Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Special Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

Section 2. Voting Rights. The holders of shares of Series A Junior Participating Special Stock shall have the following voting rights:

(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Special Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Special Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Special Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(C) (i) If at any time dividends on any Series A Junior Participating Special Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Special Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, all holders of Special Stock (including holders of the Series A Junior Participating Special Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) Directors.

(ii) During any default period, such voting right of the holders of Series A Junior Participating Special Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of ten percent (10%) in number of shares of Special Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Special Stock of such voting right. At any meeting at which the holders of Special Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Special Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of the Special Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Special Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Special Stock.

(iii) Unless the holders of Special Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Special Stock outstanding, irrespective of series, may request, the calling of special meeting of the holders of Special Stock, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Special Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each holder of record of Special Stock by mailing a copy of such notice to him or her at his or her last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Special Stock outstanding. Notwithstanding the provisions of this Paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.

(iv) In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of Directors until the holders of Special Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of Special Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in Paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the class of stock which elected the Director whose office shall have become vacant. References in this Paragraph (C) to Directors elected by the holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence.

(v) Immediately upon the expiration of a default period, (x) the right of the holders of Special Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Special Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the certificate of incorporation or by-laws irrespective of any increase made pursuant to the provisions of Paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the certificate of incorporation or by-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors.

(D) Except as set forth herein, holders of Series A Junior Participating Special Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

Section 3. Certain Restrictions.

(A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Special Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid

dividends and distributions, whether or not declared, on shares of Series A Junior Participating Special Stock outstanding shall have been paid in full, the Corporation shall not

(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating special Stock;

(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Special Stock, except dividends paid ratably on the Series A Junior Participating Special Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Special Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Special Stock; or

(iv) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Special Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Special Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

Section 4. Reacquired Shares. Any shares of Series A Junior Participating Special Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Special Stock and may be reissued as part of a new series of Special Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

Section 5. Liquidation, Dissolution or Winding Up.

(A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Special Stock unless, prior thereto, the holders of shares of Series A Junior Participating Special Stock shall have received an amount equal to 1,000 times the Exercise Price, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series A Liquidation Preference”). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions

shall be made to the holders of shares of Series A junior Participating Special Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the “Adjustment Number”). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Special Stock and Common Stock, respectively, holders of Series A Junior Participating Special Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Special Stock and Common Stock, on a per share basis, respectively.

(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences, of all other series of special stock, if any, which rank on a parity with the Series A Junior Participating Special Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

(C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 6. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Special Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Special Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 7. No Redemption. The shares of Series A Junior Participating Special Stock shall not be redeemable.

Section 8. Amendment. The Restated Certificate of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preferences or special

rights of the Series A Junior Participating Special Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior Participating Special Stock, voting separately as a class.

Section 9. Fractional Shares. Series A Junior Participating Special Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Special Stock.

FIFTH. No holder of shares of the Corporation of any class shall be entitled as of right to subscribe for, purchase, or receive any part of any new or additional issue of stock of any class, whether now or hereafter authorized, or of any bonds, debentures, or other securities convertible into stock of any class, and all such additional shares of stock, bonds, debentures or other securities convertible into stock may be issued and disposed of by the Board of Directors to such person or persons and on such terms and for such consideration (so far as may be permitted by law) as the Board of Directors, in their absolute discretion, may deem advisable.

SIXTH. The minimum amount of capital with which the Corporation will commence business is $1,000.00.

SEVENTH. The Corporation is to have perpetual existence.

EIGHTH.

(A) The number of Directors shall be fixed from time to time exclusively by the Board of Directors pursuant to resolution adopted by a majority of the Directors then in office, provided, however, that the number of Directors shall not be less than three.

(B) Directors of the Corporation shall be elected annually and shall hold office until the next annual meeting of stockholders (provided, however, that the foregoing shall not have the effect of shortening the term of any Director to which they have been previously elected) and their successors are elected, or until earlier resignation, removal from office or death.

(C) Subject to the rights of holders of any special stock, vacancies in the Board of Directors, however caused, and newly created directorships shall be filled solely by a majority vote of the Directors then in office, whether or not a quorum, or by a sole remaining Director, and any Director so chosen shall hold office for a term expiring at the next annual meeting of stockholders.

(D) Subject to the rights of holders of any special stock, any Director or the entire Board of Directors may be removed, with or without cause, by the affirmative vote of the holders of a majority of the shares of Common Stock of the Corporation outstanding and entitled to vote for the election of Directors at an annual meeting of stockholders

NINTH. The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever.

TENTH. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:

(1) To make, alter or repeal the by-laws of the Corporation.

(2) To authorize and cause to be executed mortgages and liens upon the real and personal property of the Corporation.

(3) To set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and to reduce or abolish any such reserve in the manner in which it was created.

(4) By resolution passed by a majority of the whole board, to designate one or more committees, each committee to consist of two or more of the directors of the Corporation which to the extent provided in the resolution or in the by-laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the by-laws of the Corporation or as may be determined from time to time by resolution adopted by the Board of Directors.

(5) When and as authorized by the affirmative vote of the holders of a majority of the stock issued and outstanding having voting power given at a stockholders’ meeting duly called for that purpose, or when authorized by the written consent of the holders of a majority of the voting stock issued and, outstanding, to sell, lease or exchange all of the property and assets of the Corporation, including its good will and its corporate franchises, on such terms and conditions and for such consideration, which may be in whole or in part shares of stock in, or other securities of, or both, any other corporation or corporations, as the Board of Directors shall deem expedient and for the best interests of the Corporation.

ELEVENTH. Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title B of the Delaware Code, or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the, creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

TWELFTH. In the absence of fraud, no contract or other transaction between this Corporation and any other person, firm or corporation or any partnership or association shall be affected or invalidited by the fact that any director or officer of this Corporation is pecuniarily or otherwise interested in or is a director, member or officer of such other corporation or of such person, firm, association or partnership or is a party to or is a pecuniarily or otherwise interested in such contract or other transaction or in any way connected with any person or persons, firm, association, partnership or corporation pecuniarily or otherwise interested therein; any director so interested may be counted in determining the existence of a quorum at any meeting of the

Board of Directors of this Corporation for the purpose of authorizing any such contract or transaction with like force and effect as if he were not so interested, or were not a director, member or officer of such other corporation, firm, association or partnership. Any director whose interest in any such contract or transaction arises solely by reason of the fact that he is a stockholder, officer or creditor of such other corporation (or solely by reason of the fact that he is a director of such other corporation or partner in such firm where such dealing, contract or arrangement is made by officers or employees of the Corporation in the ordinary performance of their duties and without the actual participation of such director) shall not be deemed interested in such contract or other transaction under any of the provisions of this article, nor shall any such contract or transaction be void or voidable, nor shall any such director be liable to account because of such interest nor need any such interest be disclosed.

Apart from and in addition to the other provisions of this section, no contract or other transaction between the Corporation and any other corporation or firm which provides for the purchase or sale of securities by such other corporation or firm upon terms not less favorable to the Corporation than offered by such other corporation or firm to others, shall in any case be void or voidable because of the fact that directors of the Corporation are directors of such other corporation or partners in such firm, nor shall any such director be deemed interested in such contract or other transaction under any of the provisions of this article, nor shall any such director be liable to account in respect thereof.

No contract or other transaction between the Corporation and any other corporation, at least a majority of the stock of which having voting power is owned or controlled by the Corporation or which owns or controls at least a majority of the stock having voting power of the Corporation, shall in any case be void or voidable because of’ the fact that directors of the Corporation are directors of such other corporation, nor shall any such director be deemed interested in such contract or other transaction under any of the provisions of this article, nor shall any such director be liable to account because of such interest nor need any such interest be disclosed.

Any contract or act that shall be approved or ratified by the vote of the holders of a majority of the capital stock of the Corporation having power which is represented in person or by proxy at any annual meeting of stockholders or at any special meeting called for the purpose, among others, of considering the approval the ratification of the acts of officers or directors (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and as binding upon the Corporation and upon all its stockholders as though it had been approved or ratified by every stockholder of the Corporation.

THIRTEENTH. The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the Corporation or serves or served any other enterprise as a director, officer, employee or agent at the request of the Corporation.

FOURTEENTH.

(A) Meetings of stockholders may be held outside of the State of Delaware, if the by-laws so provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the by-laws of the Corporation. Elections of Directors need not be by ballot unless the by-laws of the Corporation shall so provide.

(B) No action required to be taken or which may be taken at any annual or special meeting of the stockholders of the Corporation may be taken without a meeting and the power of stockholders to consent in writing, without a meeting, is specifically denied. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called only by the president or by the Board of Directors pursuant to a resolution adopted by a majority of the Directors then in office. The affirmative vote of the holders of not less than 80 percent of the outstanding voting shares of capital stock of the Corporation entitled to vote generally in the election of Directors, voting together as a single class, shall be required to alter, amend or repeal this Paragraph (B) of Article FOURTEENTH, provided, however, that this sentence shall not apply to, and such 80 percent vote shall not be required for, any alteration, amendment or repeal recommended by the affirmative vote of at least two-thirds of the Directors then in office.

FIFTEENTH. The Corporation reserves the right to amend, alter, charge or repeal any provision herein contained in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to the reservation.

SIXTEENTH. Notwithstanding that a lesser vote or no vote may be specified by law, the Certificate of Incorporation or the By-Laws of the Corporation, Section 5 of Article II, Section 1 and 2 of Article III and Article IX of the By-Laws and this Article SIXTEENTH may be amended, altered or repealed only by (1) the affirmative vote of the holders of 80 percent or more of the outstanding shares of capital stock of the Corporation entitled to vote in the election of Directors, voting together as a single class, or (2) the vote of at least two-thirds of the Directors then in office.

SEVENTEENTH. Repealed 12/08/2005

EIGHTEENTH. No Director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any breach of the Director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the Director derived an improper personal benefit.

IN WITNESS WHEREOF, said A. SCHULMAN, INC. has caused this Restated Certificate of Incorporation to be signed by David C. Minc, Vice President, General Counsel and Secretary, and attested to by Paul F. DeSantis, Vice President, Chief Financial Officer and Treasurer, this 5th day of May, 2009.

By: /s/ David C. Minc

Name: David C. Minc

Title: Vice President, General Counsel and Secretary of A. Schulman, Inc.

ATTEST:

/s/ Paul F. DeSantis

Name: Paul F. DeSantis,

Title: Vice President, Chief Financial

Officer and Treasurer of A. Schulman, Inc.

CERTIFICATE OF DESIGNATION,

PREFERENCES, RIGHTS AND LIMITATIONS

6.00% CUMULATIVE PERPETUAL CONVERTIBLE SPECIAL STOCK

A. SCHULMAN, INC.

Pursuant to Section 151 of the General Corporation Law of the State of Delaware

A. Schulman, Inc., a Delaware corporation (the “Corporation”), certifies that pursuant to the authority contained in Article FOURTH of its Restated Certificate of Incorporation (the “Restated Certificate of Incorporation”), and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of the Corporation has adopted the following resolution on April 28, 2015, creating a series of special stock, without par value, designated as 6.00% Cumulative Perpetual Convertible Special Stock, which resolution remains in full force and effect on the date hereof.

RESOLVED, that, pursuant to the authority contained in the Restated Certificate of Incorporation of the Corporation, (the “Certificate of Incorporation”), including, without limitation, the authorizations of ARTICLE FOURTH of the Certificate of Incorporation, a series of special stock, without par value, of the Corporation was created, 6.00% Cumulative Perpetual Convertible Special Stock of the Corporation, which shall constitute the shares of “Convertible Special Stock,” be, and hereby is, designated and the number of shares of such series of special stock and the voting powers, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof be, and hereby are, as set forth in substantially the form attached hereto as Annex A (the “Amendment”) approved and adopted.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of April 28, 2015.



A. SCHULMAN, INC.

By:	/s/ David C. Minc
	Name:	David C. Minc
	Title:	Vice President, Chief Legal Officer and Secretary
	Title:	Vice President, Chief Legal Officer and Secretary

Annex A

6.00% Cumulative Perpetual Convertible Special Stock

1. Designation and Amount; Ranking; Certificates; Maturity.

(a) There shall be created from the 1,000,000 shares of special stock, without par value, of the Corporation authorized to be issued pursuant to the Restated Certificate of Incorporation, a series of special stock, designated as “6.00% Cumulative Perpetual Convertible Special Stock” (the “Convertible Special Stock”), and the authorized number of shares of Convertible Special Stock shall be 125,000. Shares of Convertible Special Stock that are purchased or otherwise acquired by the Corporation, or that are converted into shares of Common Stock, shall be cancelled and shall revert to authorized but unissued shares of special stock.

(b) The Convertible Special Stock, with respect to dividend rights and rights upon the liquidation, winding-up or dissolution of the Corporation, ranks: (i) senior to all Junior Stock; (ii) on a parity with all Parity Stock; and (iii) junior to all Senior Stock, (iv) junior to all existing and future indebtedness; and (v) structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of subsidiaries and any Capital Stock of the subsidiaries not held by the Corporation, in each case as provided more fully herein.

(c) The Convertible Special Stock has no maturity date, and will remain outstanding unless converted by the Holders or mandatorily converted by the Corporation in accordance with the terms of this Certificate Designation.

2. Definitions. As used in this Certificate of Designation, the following terms shall have the following meanings:

(a) “Accumulated Dividends” shall mean, with respect to any share of Convertible Special Stock, as of any date, the aggregate accumulated and unpaid dividends on such share from the Issue Date until the most recent Dividend Payment Date on or prior to such date. There shall be no Accumulated Dividends with respect to any share of Convertible Special Stock prior to the Issue Date.

(b) “Additional Shares” shall have the meaning specified in Section 5(d).

(d) “Board” shall mean the Board of Directors of the Corporation or, with respect to any action to be taken by the Board of Directors of the Corporation, any committee of the Board of Directors of the Corporation duly authorized to take such action, except that for purposes of the definition of “Fundamental Change,” the Board shall refer to the full Board of Directors of the Corporation.

(e) “Business Day” shall mean any day other than a Saturday, Sunday or other day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

(f) “Capital Stock” shall mean, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity (excluding, for the avoidance of doubt, any convertible or exchangeable debt securities, which, prior to conversion or exchange rank senior in right of payment to the Convertible Special Stock).

(g) “close of business” means 5:00 p.m. (New York City time).

(h) “Closing Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported in composite transactions for the principal United States national or regional securities exchange on which the Common Stock is traded or, if the Common Stock is not listed for trading on a United States national or regional securities exchange on the relevant date, the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date, as reported by OTC Markets Group Inc. or a similar organization. In the absence of such a quotation, the Closing Sale Price shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.

(i) “Common Stock” shall mean the common stock, par value $1.00 per share, of the Corporation, subject to Section 8(h).

(j) “Conversion Date” shall have the meaning specified in Section 8(b).

(k) “Conversion Price” shall mean, at any time, $1,000 divided by the Conversion Rate in effect at such time.

(l) “Conversion Rate” shall have the meaning specified in Section 8(a).

(m) “DTC” or “Depository” shall mean The Depository Trust Company, or any successor depository.

(n) “Dividend Payment Date” shall mean February 1, May 1, August 1 and November 1 of each year, commencing on August 1, 2015.

(o) “Dividend Penalty Event” shall have the meaning specified in Section 3(a).

(p) “Dividend Rate” shall mean the rate per annum of 6.00% per share of Convertible Special Stock on the Liquidation Preference.

(q) “Dividend Record Date” shall mean, with respect to any Dividend Payment Date, the January 15, April 15, July 15 or October 15, as the case may be, immediately preceding such Dividend Payment Date.

(r) “Effective Date” shall mean the date on which a Fundamental Change event occurs or becomes effective, except that, as used in Section 8(d), Effective Date shall mean the first date on which the shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable.

(s) “Event” shall have the meaning specified in Section 6(c).

(t) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(u) “Ex-Date,” when used with respect to any issuance, dividend or distribution on the Common Stock, means the first date on which the Common Stock trades on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution from the Corporation or, if applicable, from the seller of the Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

(v) “Fundamental Change” shall be deemed to have occurred at any time after the Convertible Special Stock is originally issued if any of the following occurs:

(i) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Corporation, its Subsidiaries and the employee benefit plans of the Corporation and its Subsidiaries, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of more than 50% of the voting power in the aggregate of all classes of Capital Stock then outstanding entitled to vote generally in elections of the Board;

(ii) the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Corporation pursuant to which the Common Stock will be converted into cash, securities or other property; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Corporation and its Subsidiaries, taken as a whole, to any Person other than one of the Corporation’s Subsidiaries; provided, however, that any merger solely for the purpose of changing the Corporation’s jurisdiction of incorporation to the United States of America, any State thereof or the District of Columbia, and resulting in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving entity, shall not be a Fundamental Change;

(iii) the Common Stock (or other common stock underlying the Convertible Special Stock) ceases to be listed or quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors); or

(iv) the stockholders of the Corporation approve any plan or proposal for the liquidation or dissolution of the Corporation;

provided, however, that a transaction or transactions described in clause (i) or (ii) above shall not constitute a Fundamental Change if at least 90% of the consideration received or to be received by the holders of Common Stock of the Corporation, excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions the Convertible Special Stock becomes convertible into such consideration, excluding cash payments for fractional shares, pursuant to the terms hereof.

(w) “Fundamental Change Notice” shall have the meaning specified in Section 5(a).

(x) “Global Convertible Special Stock” shall have the meaning specified in Section 11(a)(i).

(y) “Holder” shall mean a holder of record of the Convertible Special Stock.

(z) “Initial Dividend Threshold” shall have the meaning specified in Section 8(d)(iv).

(aa) “Issue Date” shall mean May 4, 2015, the original date of issuance of the Convertible Special Stock.

(bb) “Junior Stock” shall mean the Common Stock and each other class of Capital Stock established after the Issue Date, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Convertible Special Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Corporation.

(cc) “Liquidation Preference” shall mean, with respect to each share of Convertible Special Stock, $1,000.00.

(dd) “Mandatory Conversion Date” shall have the meaning specified in Section 9(b).

(ee) “Market Value” shall mean the average of the per share volume-weighted average prices of the Common Stock for each day during a 20 consecutive Trading Day period ending immediately prior to the date of determination, as displayed under the heading “Bloomberg VWAP” on Bloomberg page “SHLM <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on each such Trading Day (or if such volume-weighted average price is unavailable on any such Trading Day, the Closing Sale Price shall be used for such Trading Day), including any trades that occur prior to the scheduled close of trading of the primary trading session, but settle after the scheduled close of trading of the primary trading session on each such Trading Day. The per share volume-weighted average price on each such Trading Day shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

(ff) “Notice of Conversion” shall have the meaning specified in Section 8(b)(ii).

(gg) “Officer” shall mean the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Corporation.

(hh) “Officers’ Certificate” shall mean a certificate signed by two Officers.

(ii) “open of business” means 9:00 a.m. (New York City time).

(jj) “Parity Stock” shall mean any class of Capital Stock established after the Issue Date, the terms of which expressly provide that such class or series will rank on parity with the Convertible Special Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Corporation.

(kk) “Penalty Rate” shall have the meaning specified in Section 3(a).

(ll) “Person” shall mean any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock company, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

(mm) “Record Date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board, statute, contract or otherwise).

(nn) “Reference Property” shall have the meaning specified in Section 8(h).

(oo) “Reorganization Event” shall have the meaning specified in Section 8(h).

(pp) “Rule 144” shall mean Rule 144 as promulgated under the Securities Act

(qq) “SEC” or “Commission” shall mean the Securities and Exchange Commission.

(rr) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(ss) “Senior Stock” shall mean any class of Capital Stock established after the Issue Date, the terms of which expressly provide that such class or series will rank senior to the Convertible Special Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Corporation.

(tt) “Special Rights End Date” shall have the meaning specified in Section 5(b).

(uu) “Spin-Off” shall have the meaning specified in Section 8(d)(iii).

(vv) “Stock Price” shall mean (i) if holders of Common Stock receive in exchange for their Common Stock only cash in the transaction constituting a Fundamental Change, the cash amount paid per share or (ii) otherwise, the average of the Closing Sale Prices of the Common Stock on the five Trading Days immediately preceding, but excluding the Effective Date.

(ww) “Subsidiary” shall mean, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.

(xx) “Trading Day” shall mean a day during which trading in the Common Stock generally occurs on the NASDAQ Global Select Market or, if the Common Stock is not listed on the NASDAQ Global Select Market, on the principal other national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not listed on a national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading. If the Common Stock is not so listed or traded, Trading Day means a Business Day.

(yy) “Transfer Agent” shall mean Wells Fargo Shareowner Services, acting as the Corporation’s duly appointed transfer agent, registrar, conversion agent and dividend disbursing agent for the Convertible Special Stock. The Corporation may, in its sole discretion, remove the Transfer Agent with 10 days’ prior notice to the Transfer Agent and Holders; provided that the Corporation shall appoint a successor Transfer Agent who shall accept such appointment prior to the effectiveness of such removal.

(zz) “Voting Rights Triggering Event” shall mean dividends on the Convertible Special Stock or any other series of securities that ranks equally with the Convertible Special Stock as to payment of dividends and with similar voting rights are in arrears and unpaid with respect to six or more quarterly dividend periods (whether or not consecutive and including the dividend period beginning on the Issue Date and ending on August 1, 2015).

3. Dividends.

(a) Holders shall be entitled to receive, when, as and if declared by the Board out of funds of the Corporation legally available for payment, cumulative cash dividends at the Dividend Rate. Dividends on the Convertible Special Stock shall be payable quarterly in arrears at the Dividend Rate, and shall accumulate, whether or not earned or declared, from the most recent date to which dividends have been paid, or if no dividends have been paid, from the Issue Date (whether or not in any dividend period or periods (i) any agreements of the Corporation prohibit the current payment of dividends, (ii) there shall be funds of the Corporation legally available for the payment of such dividends or (iii) the Corporation declares the payment of dividends), and may be paid in cash or, where freely transferable by any non-Affiliate recipient thereof in Common Stock as provided pursuant to Section 4. Dividends shall be payable in arrears on each Dividend Payment Date (commencing on August 1, 2015) to the holders of record of Convertible Special Stock as they appear on the Corporation’s stock register at the close of business on the relevant Dividend Record Date. If dividends are in arrears and unpaid for six or more quarterly dividend periods (whether or not consecutive and including the dividend period beginning on the Issue Date and ending on August 1, 2015 (such event, a “Dividend Penalty Event”), the Dividend Rate specified shall be increased by 0.25% to 6.25% per share of Convertible Special Stock on the Liquidation Preference. The Penalty Rate shall remain in effect until all accrued but unpaid dividends on the Convertible Special Stock have been paid in full, at which time the dividend rate shall revert to the rate of 6.00% per share of Convertible Special Stock on the Liquidation Preference for the next occurring dividend payment period and shall remain at 6.00% unless and until a subsequent Dividend Penalty Event shall occur. Accumulations of dividends on shares of Convertible Special Stock for any past dividend periods may be declared and paid at any time to holders of record of Convertible Special Stock not more than 30 nor less than 10 calendar days immediately preceding any Dividend Payment Date and shall not bear interest. The Corporation shall provide not less than 20 scheduled Trading Days’ notice prior to any such Dividend Payment Date. Dividends payable for any period less than a full quarterly dividend period (based upon the number of days elapsed during the period) shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

(b) No dividend shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any outstanding share of the Convertible Special Stock with respect to any dividend period unless all dividends for all preceding dividend periods have been declared and paid, or declared and a sufficient sum has been set apart for the payment of such dividend, upon all outstanding shares of Convertible Special Stock.

(c) No dividends or other distributions (other than a dividend or distribution payable solely in shares of Parity Stock or Junior Stock (in the case of Parity Stock) or Junior Stock (in the case of Junior Stock) and cash in lieu of fractional shares) may be declared, made or paid, or set apart for payment upon, any Parity Stock or Junior Stock, nor may any Parity Stock or Junior Stock be redeemed, purchased or otherwise acquired for any consideration (or any money paid to or made available for a sinking fund for the redemption of any Parity Stock or Junior Stock) by the Corporation or on behalf of the Corporation (except by (i) conversion into or exchange for shares of Parity Stock or Junior Stock (in the case of Parity Stock) or Junior Stock (in the case of Junior Stock) and cash solely in lieu of fractional shares of Parity Stock or Junior Stock (in the case of Parity Stock) or Junior Stock (in the case of Junior Stock) and (ii) payments in connection with the satisfaction of employees’ tax withholding obligations pursuant to employee benefit plans or outstanding awards (and payment of any corresponding requisite amounts to the appropriate governmental authority)), unless all Accumulated Dividends shall have been or contemporaneously are declared and paid, or are declared and a sum sufficient for the payment thereof is set apart for such payment, on the Convertible Special Stock and any Parity Stock for all dividend payment periods ending on or prior to the date of such declaration, payment, redemption, purchase or acquisition. Notwithstanding the foregoing, if full dividends have not been paid on the Convertible Special Stock and any Parity Stock, dividends may be declared and paid on the Convertible Special Stock and such Parity Stock so long as the dividends are declared and paid pro rata so that the amounts of dividends declared per share on the Convertible Special Stock and such Parity Stock shall in all cases bear to each other the same ratio that accumulated and unpaid dividends per share on the shares of Convertible Special Stock and such Parity Stock bear to each other at the time of declaration.

(d) Holders shall not be entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends.

(e) If any Dividend Payment Date falls on a day that is not a Business Day, the required payment will be on the next succeeding Business day and no interest or dividends on such payment will accrue or accumulate as the case may be, in respect of the delay.

(f) The Holders at the close of business on a Dividend Record Date shall be entitled to receive the dividend payment on those shares on the corresponding Dividend Payment Date notwithstanding the conversion of such shares in accordance with Section 8 following such Dividend Record Date or the Corporation’s default in payment of the dividend due on such Dividend

Payment Date. However, notwithstanding the foregoing, shares of Convertible Special Stock surrendered for conversion during the period between the close of business on any Dividend Record Date and the close of business on the Business Day immediately preceding the corresponding Dividend Payment Date must be accompanied by payment of an amount of cash equal to the dividend payable on such shares on that Dividend Payment Date; provided, that no such payment is required in respect of a mandatory conversion pursuant to Section 9 during such period or if the Special Rights End Date occurs during such period. Except as provided in Section 8, the Corporation shall make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Convertible Special Stock or for dividends on the shares of Common Stock issued upon conversion.

(g) The Corporation’s ability to declare and pay dividends and make other distributions with respect to its Capital Stock, including the Convertible Special Stock, may be limited by the terms of the Corporation’s existing and future indebtedness and may be limited by applicable Delaware law. In addition, the Corporation’s ability to declare and pay dividends on the Convertible Special Stock in shares of Common Stock may be limited by applicable Delaware law.

4. Method of Payment of Dividends.

(a) Subject to the restrictions set forth herein, the Corporation may elect to pay any dividend on the Convertible Special Stock: (i) in cash; (ii) by delivery of shares of Common Stock; or (iii) through any combination of cash and Common Stock.

(b) If the Corporation elects to make a dividend payment, or any portion thereof, in shares of Common Stock, the number of shares deliverable shall be such dividend payment, or such portion, divided by 95% of the Market Value per share of Common Stock as determined on the second Trading Day immediately prior to the Dividend Payment Date for such dividend.

(c) The Corporation shall make each dividend payment on the Convertible Special Stock in cash, except to the extent the Corporation elects to make all or any portion of such payment in shares of the Common Stock as set forth above. The Corporation shall give Holders notice of any such election and the portion of such payment that will be made in cash and the portion that will be made in Common Stock 20 scheduled Trading Days prior to the Dividend Payment Date for such dividend.

(d) Notwithstanding the foregoing, the Corporation shall not pay any portion of a dividend on the Convertible Special Stock by delivery of Common Stock unless (i) the Common Stock to be delivered as payment therefor is freely transferable under the United States securities laws or the terms of the Convertible Special Stock or this Certificate of Designation or otherwise by the recipient without further action on its behalf, other than by reason of the fact that such recipient is the Corporation’s Affiliate, or (ii) a shelf registration statement relating to that Common Stock has been filed with the SEC and is effective to permit the resale of that Common Stock by the holders thereof.

5. Special Rights Upon a Fundamental Change.

(a) The Corporation must give notice (a “Fundamental Change Notice”) of each Fundamental Change to all Holders no later than 20 Business Days prior to the anticipated Effective Date (determined in good faith by the Board) of the Fundamental Change or, if not practicable because the Corporation is unaware of the Fundamental Change, as soon as reasonably practicable but in any event no later than five Business Days after the Corporation becomes aware of such Fundamental Change.

(b) If a Holder converts its Convertible Special Stock pursuant to Section 8 below at any time during the period beginning at the open of business on the Trading Day immediately following the Effective Date of a Fundamental Change and ending at the close of business on the 30th Trading Day immediately following such Effective Date (the “Special Rights End Date”), the Corporation shall deliver to the converting Holder, for each share of Convertible Special Stock surrendered for conversion, the greater of:

(i) a number of shares of Common Stock equal to the sum of (A) the Conversion Rate and (B) the number of Additional Shares determined pursuant to clause (d) below. Notwithstanding the foregoing, the number of shares of Common Stock issuable pursuant to this clause will not exceed 35.8337 shares of Common Stock per share of Convertible Special Stock (subject to adjustment in the same manner as the Conversion Rate), which is equal to the Liquidation Preference, divided by 66 ²/₃% of the Closing Sale Price of Common Stock on April 28, 2015; and

(ii) a number of shares of Common Stock equal to the Conversion Rate which will be increased to equal (A) the sum of the Liquidation Preference plus all accumulated and unpaid dividends to, but excluding, the settlement date for such conversion, divided by (B) the average of the Closing Sale Prices of the Common Stock for the five consecutive Trading Days ending on the third Business Day prior to such settlement date. Notwithstanding the foregoing, the Conversion Rate

as adjusted as described in this clause (ii) will not exceed 35.8337 shares of Common Stock per share of Convertible Special Stock (subject to adjustment in the same manner as the Conversion Rate as provided in Section 8), which is equal to the Liquidation Preference, divided by 66 ²/₃% of the Closing Sale Price of the Common Stock on April 28, 2015.

(c) The Fundamental Change Notice shall be given to each Holder at such Holder’s address as the same appears on the books of the Corporation. Each such notice shall state (i) the anticipated Effective Date; (ii) that the Special Rights End Date is the 30th Trading Day immediately following the Effective Date; (iii) the name and address of the Transfer Agent; and (iv) the procedures that Holders must follow to exercise their conversion right pursuant to this Section 5.

(d) The number of additional shares of Common Stock to be added to the Conversion Rate per share of Convertible Special Stock (the “Additional Shares”) as set forth above shall be determined by reference to the table below, based on the Effective Date and the Stock Price.



	Stock Price (1)
Effective Date	$41.86	$45.00	$52.33	$60.00	$70.00	$78.50	$90.00	$100.00	$110.00	$130.00	$150.00
May 4, 2015	4.7778	4.4380	3.2642	2.4092	1.6465	1.1965	0.7700	0.5120	0.3253	0.0919	0.0000
May 1, 2016	4.7778	4.3185	3.1413	2.2920	1.5445	1.1100	0.7041	0.4619	0.2882	0.0735	0.0000
May 1,2017	4.7778	4.1886	2.9952	2.1429	1.4071	0.9899	0.6105	0.3898	0.2346	0.0471	0.0000
May 1, 2018	4.7778	4.0677	2.8385	1.9648	1.2275	0.8262	0.4797	0.2893	0.1610	0.0126	0.0000
May 1, 2019	4.7778	3.9820	2.6955	1.7622	0.9819	0.5839	0.2806	0.1397	0.0568	0.0000	0.0000
May 1, 2020 and thereafter	4.7778	4.0322	2.6400	1.6467	0.7155	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000



(1)	The Stock Prices set forth in the table above shall be adjusted as of any date on which the Conversion Rate is adjusted. The adjusted Stock Prices shall be equal to the Stock Prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares in the table above will be adjusted in the same manner and at the same time as the Conversion Rate as set forth under Section 8.

(e) The exact Stock Price and Effective Date may not be set forth on the table above, in which case:

(i) if the Stock Price is between two Stock Prices on the table or the Effective Date is between two Effective Dates on the table, the number of Additional Shares shall be determined by straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices or the earlier and later Effective Dates, as applicable, based on a 365-day year;

(ii) if the Stock Price is in excess of $150.00 per share (subject to adjustment in the same manner as the Stock Prices), no Additional Shares will be added to the Conversion Rate; and

(iii) if the Stock Price is less than $41.86 per share (subject to adjustment in the same manner as the Stock Prices), no Additional Shares will be added to the Conversion Rate.

(f) Whenever any provision of this Certificate of Designation requires the Corporation to calculate the Closing Sale Prices or the Stock Prices for purposes of determining any market value in connection with a dividend payment made in shares of Common Stock or a Fundamental Change, the Board shall make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Record Date of the event occurs, at any time during the period when such Closing Sale Prices or Stock Prices are to be calculated.

6. Voting. The Holders shall have no voting rights except as set forth below or as otherwise required by Delaware law:

(a) If and whenever at any time or times a Voting Rights Triggering Event occurs, then the Holders shall be entitled at the next regular or special meeting of stockholders of the Corporation to vote, on an as-converted basis, together with the holders of Common Stock on matters presented to stockholders for a vote at such meeting.

(b) Such voting rights may be exercised at a special meeting of the Corporation’s stockholders, or at any annual meeting of stockholders, and thereafter at each such special meeting or annual meeting until such time as all dividends in arrears on the shares of Convertible Special Stock shall have been paid in full, at which time or times such voting rights shall terminate.

(c) So long as any shares of Convertible Special Stock remain outstanding, unless a greater percentage shall then be required by law, the Corporation shall not, without the affirmative vote or consent of the Holders of at least 66 ²/₃% of the shares of Convertible Special Stock outstanding at the time, voting together as a single class together with the holders of all series of Parity Stock upon which similar voting rights have been conferred and are exercisable, given in person or by proxy, either in writing or at a meeting: (i) authorize or create, or increase the authorized or issued amount of, any class or series of Senior Stock (including preferred stock) or reclassify any of our authorized Capital Stock into shares of Senior Stock or preferred stock, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any shares of Senior Stock or preferred stock; or (ii) amend, alter or repeal the provisions of the Restated Certificate of Incorporation, whether by merger, consolidation or otherwise (each of clause (i) and (ii), an “Event”), so as to materially and adversely affect any right, preference, privilege or voting powers of the shares of Convertible Special Stock; provided, however, with respect to the occurrence of any Event set forth in clause (ii) above, so long as any shares of Convertible Special Stock remain outstanding with the terms thereof materially unchanged, the occurrence of any such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of Holders and, provided further, that any increase in the amount of authorized special stock (including additional Convertible Special Stock) or the creation or issuance of any additional shares of Convertible Special Stock or other series of special stock, or any increase in the amount of authorized shares of such series, in each case of Parity Stock or Junior Stock, shall not be deemed to materially and adversely affect the rights, preferences, privileges or voting powers of Holders specified herein.

(d) In all cases in which Holders shall be entitled to vote, each share of Convertible Special Stock shall be entitled to one vote.

7. Liquidation Preference.

(a) In the event of any liquidation, winding-up or dissolution of the Corporation, whether voluntary or involuntary, each Holder shall be entitled to receive and to be paid out of the assets of the Corporation available for distribution to its stockholders, the Liquidation Preference plus Accumulated Dividends to the date fixed for liquidation, winding-up or dissolution, before any payment or distribution is made on, any Junior Stock, including, without limitation, the Common Stock.

(b) Neither the sale (for cash, shares of stock, securities or other consideration) of all or substantially all the assets or business of the Corporation (other than in connection with the liquidation, winding-up or dissolution of the Corporation) nor the merger or consolidation of the Corporation into or with any other Person shall be deemed to be a liquidation, winding-up or dissolution, voluntary or involuntary, for the purposes of this Section 7.

(c) After the payment to the Holders of full preferential amounts provided for in this Section 7, the Holders as such shall have no right or claim to any of the remaining assets of the Corporation.

(d) In the event the assets of the Corporation available for distribution to the Holders of and holders of shares of Parity Stock upon any liquidation, winding-up or dissolution of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such Holders are entitled pursuant to this Section 7, no such distribution shall be made on account of any shares of Parity Stock upon such liquidation, dissolution or winding-up unless proportionate distributable amounts shall be paid on account of the shares of Convertible Special Stock, equally and ratably, in proportion to the full distributable amounts for which Holders and holders of any Parity Stock are entitled upon such liquidation, winding-up or dissolution.

8. Conversion.

(a) Each Holder shall have the right at any time, at its option, to convert, subject to the terms and provisions of this Section 8, any or all of such Holder’s shares of Convertible Special Stock at an initial conversion rate of 19.1113 shares of fully paid and nonassessable shares of Common Stock (subject to adjustment as provided in this Section 8, the “Conversion Rate”) per share of Convertible Special Stock. Upon conversion of any share of Convertible Special Stock, the Corporation shall deliver to the converting Holder, in respect of each share of Convertible Special Stock being converted, a number of shares of Common Stock equal to the Conversion Rate, together with a cash payment in lieu of any fractional share of Common Stock in accordance with Section 10, on the third Business Day immediately following the relevant Conversion Date.

(b) Before any Holder shall be entitled to convert a share of Convertible Special Stock as set forth above, such Holder shall (i) in the case of a beneficial interest in a Global Convertible Special Stock, comply with the procedures of the Depository in effect at that time and, if required, pay funds equal to any dividend payable on the next Dividend Payment Date to which such Holder is not entitled as set forth in Section 3(f) and (ii) in the case of Certificated Convertible Special Stock (1) complete, manually sign

and deliver an irrevocable notice to the office of the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) in the form of Exhibit B hereto (a “Notice of Conversion”) and state in writing therein the number of shares of Convertible Special Stock to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered to be registered, (2) surrender such shares of Convertible Special Stock, at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents and (4) if required, pay funds equal to interest payable on the next Dividend Payment Date to which such Holder is not entitled as set forth in Section 3(f).

The Corporation will pay any documentary, stamp or similar issue or transfer tax on the issuance of Common Stock upon conversion of the Convertible Special Stock, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder will pay the tax.

The Conversion Agent shall notify the Corporation of any conversion pursuant to this Section 8 on the Conversion Date for such conversion. The date on which a Holder complies with the procedures in this clause (b) is the “Conversion Date.” If more than one share of Convertible Special Stock shall be surrendered for conversion at one time by the same Holder, the number of shares of Common Stock to be delivered upon conversion of such shares of Convertible Special Stock shall be computed on the basis of the aggregate number of shares of Convertible Special Stock so surrendered.

(c) Immediately prior to the close of business on the Conversion Date with respect to a conversion, a converting Holder shall be deemed to be the holder of record of the Common Stock issuable upon conversion of such Holder’s Convertible Special Stock notwithstanding that the share register of the Corporation shall then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Holder. On the date of any conversion, all rights with respect to the shares of Convertible Special Stock so converted, including the rights, if any, to receive notices, will terminate, excepting only the rights of Holders thereof to (i) receive certificates for the number of whole shares of Common Stock into which such shares of Convertible Special Stock have been converted (with a cash payment in lieu of any fractional share of Common Stock in accordance with Section 10); and (ii) exercise the rights to which they are thereafter entitled as holders of Common Stock.

(d) The Conversion Rate shall be adjusted, without duplication, upon the occurrence of any of the following events:

(i) If the Corporation exclusively issues shares of Common Stock as a dividend or distribution on all shares of its Common Stock, or if the Corporation effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:



		OS₁
CR₁ = CR₀	x	OS₀

where,



CR₀	=	the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as the case may be;

CR₁	=	the Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date of such share split or share combination, as the case may be;

OS₀	=	the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as the case may be; and

OS₁	=	the number of shares of Common Stock outstanding immediately after giving effect to such dividend or distribution, or such share split or share combination, as the case may be.

Any adjustment made under this Section 8(d)(i) shall become effective immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as the case may be. If any dividend or distribution of the type described in this Section 8(d)(i) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the

Board determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(ii) If the Corporation distributes to all or substantially all holders of Common Stock any rights, options or warrants entitling them, for a period expiring not more than 60 days immediately following the announcement date of such distribution, to purchase or subscribe for shares of its Common Stock at a price per share that is less than the average of the Closing Sale Prices of the Common Stock over the 15 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution, the Conversion Rate shall be increased based on the following formula:



		OS₀ + X
CR₁ = CR₀	x	OS₀+ Y

where,




CR₀	=	the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution;

CR₁	=	the Conversion Rate in effect immediately after the close of business on the Record Date for such distribution;

OS₀	=	the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such distribution;

X	=	the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

Y	=	the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the closing sale prices of Common Stock over the 15 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution.

Any increase made under this Section 8(d)(ii) shall be made successively whenever any such rights, options or warrants are distributed and shall become effective immediately after the close of business on the Record Date for such distribution. To the extent that shares of Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted, effective as of the date of such expiration, to the Conversion Rate that would then be in effect had the increase with respect to the distribution of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so distributed, the Conversion Rate shall be decreased, effective as of the date the Board determines not to make such distribution, to be the Conversion Rate that would then be in effect if such Record Date for such distribution had not occurred. If such rights, options or warrants are only exercisable upon the occurrence of certain triggering events, then the Conversion Rate shall not be adjusted until the triggering events occur. To the extent rights, options or warrants are not so exercised, the Conversion Rate shall be decreased, effective as of the date of the expiration of such rights, options or warrants, to be the Conversion Rate that would then be in effect had the adjustment been made on the basis of delivery of only the number of shares of Common Stock actually delivered upon exercise of such rights, options or warrants.

For purposes of this Section 8(d)(ii), in determining whether any rights, options or warrants entitle the Holders to subscribe for or purchase shares of Common Stock at less than such average of the Closing Sale Prices of the Common Stock for the 15 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Corporation for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board.

(iii) If the Corporation distributes shares of its Capital Stock, evidences of its indebtedness or other assets, securities or property of the Corporation or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of Common Stock, excluding (a) dividends, distributions or issuances as to which an adjustment

was effected pursuant to Section 8(d)(i) or Section 8(d)(ii), (b) dividends or distributions paid exclusively in cash as to which an adjustment was effected pursuant to (or a cash amount paid pursuant to the last paragraph of) Section 8(d)(iv) and (c) Spin-Offs as to which the provisions set forth below in this Section 8(d)(iii) shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets, securities or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:



		SP₀
CR₁ = CR₀	x	SP₀– FMV

where,




CR₀	=	the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution;

CR₁	=	the Conversion Rate in effect immediately after the close of business on the Record Date for such distribution;

SP₀	=	the average of the Closing Sale Prices of Common Stock over the 15 consecutive trading day period ending on, and including, the trading day immediately preceding the Ex-Date for such distribution; and

FMV	=	the fair market value as of the Record Date for such distribution (as determined by the Board) of Distributed Property with respect to each outstanding share of the Common Stock.

Any increase made under the portion of this Section 8(d)(iii) above shall become effective immediately after the close of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased, effective as of the date the Board determines not to pay the distribution, to be the Conversion Rate that would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP₀” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each share of Convertible Special Stock, at the same time and upon the same terms as holders of Common Stock, the amount and kind of Distributed Property that such Holder would have received as if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Record Date for the distribution.

With respect to an adjustment pursuant to this Section 8(d)(iii) where there has been a payment of a dividend or other distribution on the Common Stock consisting solely of shares of Capital Stock of any class or series, or similar equity interests, of or relating to a Subsidiary or other business unit of the Corporation where such Capital Stock or similar equity interest is, or will be when issued, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate will be increased based on the following formula:



		FMV + MP₀
CR₁ = CR₀	x	MP₀

where,



CR₀	=	the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Ex-Date for the SpinOff;

CR₁	=	the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Ex-Date for the Spin-Off;

FMV	=	the average of the Closing Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of the Common Stock over the 15 consecutive Trading Day period immediately following, and including, the Ex-Date for the Spin-Off; and

MP₀	=	the average of the Closing Sale Prices of the Common Stock over the 15 consecutive Trading-Day period immediately following, and including, the Ex-Date for the Spin-Off.

The adjustment to the Conversion Rate under the preceding paragraph shall become effective at the close of business on the 15th Trading Day immediately following, and including, the Ex-Date for the Spin-Off; provided that, for purposes of determining the Conversion Rate, in respect of any conversion during the 15 Trading Days following, and including, the Ex-Date of any Spin-Off, references within the portion of this Section 8(d)(iii) related to Spin-Offs to 15 consecutive Trading Days shall be deemed to be replaced with such lesser number of consecutive Trading Days as have elapsed between the Ex-Date of such Spin-Off and the relevant Conversion Date.

(iv) If any cash dividend or distribution is made to all or substantially all holders of Common Stock, excluding (i) any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its Subsidiaries and (ii) any regular quarterly cash dividends or distributions of up to and including $0.205 per share of Common Stock (the “Initial Dividend Threshold”), the Conversion Rate shall be increased based on the following formula:



		SP₀
CR₁ = CR₀	x	SP₀– C

where,




CR₀	=	the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution;

CR₁	=	the Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution;

SP₀	=	the average of the Closing Sale Prices of the Common Stock over the 15 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date for such dividend or distribution; and

C	=	the amount in cash per share of the Common Stock the Corporation distributes to all or substantially all holders of Common Stock; provided that in the case of a regular quarterly cash dividend or distribution, such amount shall only include the amount of such dividend or distribution in excess of the Initial Dividend Threshold.

Any increase pursuant to this Section 8(d)(iv) shall become effective immediately after the close of business on the Record Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board determines not to pay or make such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP₀” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each share of Convertible Special Stock, at the same time and upon the same terms as holders of Common Stock, the amount of cash that such Holder would have received as if such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such cash dividend or distribution.

The Initial Dividend Threshold is subject to adjustment in a manner inversely proportional to adjustments to the Conversion Rate; provided that no adjustment will be made to the Initial Dividend Threshold for any adjustment made to the Conversion Rate under this Section 8(d)(iv).

(v) If the Corporation or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock and the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Closing Sale Price of the Common Stock over the 15 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:



		AC + (SP₁ x OS₁)
CR₁ = CR₀	x	OS₀ x SP₁

where,




CR₀	=	the Conversion Rate in effect immediately prior to the close of business on the last Trading Day of the 15 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

CR₁	=	the Conversion Rate in effect immediately after the close of business on the last Trading Day of the 15 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

AC	=	the aggregate value of all cash and any other consideration (as determined by the Board) paid or payable for shares purchased in such tender or exchange offer;

OS₀	=	the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS₁	=	the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP₁	=	the average of the closing sale prices of the Common Stock over the 15 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.

The increase to the Conversion Rate under this Section 8(d)(v) shall occur at the close of business on the 15th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that, for purposes of determining the Conversion Rate, in respect of any conversion during the 15 Trading Days immediately following, and including, the Trading Day next succeeding the date that any such tender or exchange offer expires, references within this Section 8(d)(v) to 15 consecutive Trading Days shall be deemed to be replaced with such lesser number of consecutive Trading Days as have elapsed between the date such tender or exchange offer expires and the relevant Conversion Date.

In the event that the Corporation or one of its Subsidiaries is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Corporation or such Subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall be readjusted to be such Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made.

(vi) All calculations and other determinations under this Section 8(d) shall be made by the Corporation and shall be made to the nearest one-ten thousandth (1/10,000th) of a share. Notwithstanding anything herein to the contrary, no adjustment under this Section 8(d) shall be made to the Conversion Rate unless such adjustment would result in a change of at least 1% in the Conversion Rate then in effect. Any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment, if any, which, together with any adjustment or adjustments

so carried forward, shall amount to a change of at least 1% in such Conversion Rate; provided, however, that the Corporation shall make such carried-forward adjustments, regardless of whether the aggregate adjustment is less than 1%, (a) on August 31 of each calendar year, (b) on the Conversion Date for any conversions of Convertible Special Stock, (c) upon the occurrence of a Fundamental Change and (d) in the event that the Corporation exercises its mandatory conversion right pursuant to Section 9. No adjustment to the Conversion Rate shall be made if it results in a Conversion Price that is less than the par value (if any) of the Common Stock. The Corporation shall not take any action that would result in the Conversion Price being less than the par value (if any) of the Common Stock pursuant to this Certificate of Designation and without giving effect to the previous sentence.

(vii) In addition to those adjustments required by clauses (i), (ii), (iii), (iv) and (v) of this Section 8(d), and to the extent permitted by applicable law and subject to the applicable rules of the NASDAQ Global Select Market, the Corporation from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days or any longer period permitted or required by law if the increase is irrevocable during that period and the Board determines that such increase would be in the Corporation’s best interest. In addition, the Corporation may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event. Whenever the Conversion Rate is increased pursuant to any of the preceding two sentences, the Corporation shall mail to the Holder at its last address appearing on the stock register of the Corporation a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(viii) For purposes of this Section 8(d), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation so long as the Corporation does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Corporation, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

(ix) If any applicable law requires the deduction or withholding of any tax from any payment or deemed dividend to a Holder, the Corporation or an applicable withholding agent may withhold on cash dividends, shares of Common Stock or sale proceeds paid, subsequently paid or credited with respect to such Holder or such Holder’s successors and assigns.

(e) Notwithstanding anything to the contrary in Section 8(d), no adjustment to the Conversion Rate shall be made with respect to any transaction described in Section 8(d)(ii) through Section 8(d)(iv) (other than for share splits or share combinations) if the Corporation makes provision for each Holder to participate in such transaction, at the same time as holders of Common Stock, without conversion, as if such Holder held a number of shares of Common Stock equal to the Conversion Rate in effect on the Record Date or Effective Date, as the case may be, for such transaction, multiplied by the number of shares of Convertible Special Stock held by such Holder.

(f) If the Corporation shall take a record of the holders of Common Stock for the purpose of entitling them to receive a dividend or other distribution, and shall thereafter (and before the dividend or distribution has been paid or delivered to stockholders) legally abandon its plan to pay or deliver such dividend or distribution, then thereafter no adjustment in the Conversion Rate then in effect shall be required by reason of the taking of such record.

(g) Upon any increase in the Conversion Rate, the Corporation promptly shall deliver to each Holder a certificate signed by an authorized officer of the Corporation, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the increased Conversion Rate then in effect following such adjustment.

(h) In the case of:

(i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination),

(ii) any consolidation, merger or combination involving the Corporation,

(iii) any sale, lease or other transfer to a third party of the consolidated assets of the Corporation and the Corporation’s Subsidiaries substantially as an entirety, or

(iv) any statutory share exchange,

in each case, as a result of which the Common Stock is converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such transaction or event, a “Reorganization Event”), then, at and after the effective time of such Reorganization Event, the right to convert each share of Convertible Special Stock shall be changed into a right to convert such share into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a common stockholder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Reorganization Event would have owned or been entitled to receive upon such Reorganization Event (such stock, securities or other property or assets, the “Reference Property”). If the Reorganization Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then the Reference Property into which the Convertible Special Stock will be convertible shall be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election. The Corporation shall notify Holders of such weighted average as soon as practicable after such determination is made. The Corporation shall not become a party to any Reorganization Event unless its terms are consistent with this Section 8(h). None of the foregoing provisions shall affect the right of a Holder to convert its Convertible Special Stock into shares of Common Stock as set forth in Section 8(a) prior to the effective time of such Reorganization Event. Notwithstanding Section 8(d), no adjustment to the Conversion Rate shall be made for any Reorganization Event to the extent stock, securities or other property or assets become the Reference Property receivable upon conversion of Convertible Special Stock.

The Corporation shall provide, by amendment hereto effective upon any such Reorganization Event, for anti-dilution and other adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Section 8. The provisions of this Section 8 shall apply to successive Reorganization Events.

In this Certificate of Designation, if the Common Stock has been replaced by Reference Property as a result of any such Reorganization Event, references to the Common Stock are intended to refer to such Reference Property.

(i) The Corporation shall at all times reserve and keep available for issuance upon the conversion of the Convertible Special Stock a number of its authorized but unissued shares of Common Stock equal to the aggregate Liquidation Preference divided by the Closing Sale Price of the Common Stock on April 28, 2015, and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Convertible Special Stock (including any Additional Shares in connection with a Fundamental Change) or the payment or partial payment of dividends declared on Convertible Special Stock that are payable in Common Stock.

(j) The issuance or delivery of certificates for Common Stock upon the conversion of shares of Convertible Special Stock or the payment or partial payment of a dividend on Convertible Special Stock in Common Stock, shall be made without charge to the converting Holder or recipient of shares of Convertible Special Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the Holders converted; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the holder of the shares of the relevant Convertible Special Stock and the Corporation shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Corporation the amount of such tax or shall have established to the reasonable satisfaction of the Corporation that such tax has been paid.

(k) Notwithstanding Sections 8(d)(ii) and 8(d)(iii), if the Corporation has a rights plan (including the distribution of rights pursuant thereto to all holders of Common Stock) in effect while any shares of Convertible Special Stock remain outstanding, Holders will receive, upon conversion of Convertible Special Stock, in addition to the Common Stock to which such Holder is entitled, a corresponding number of rights in accordance with the rights plan. If, prior to any conversion, such rights have separated from the shares of Common Stock in accordance with the provisions of the applicable rights plan so that Holders would not be entitled to receive any rights in respect of the Common Stock delivered upon conversion of Convertible Special Stock, the Conversion Rate will be adjusted at the time of separation as if the Corporation had distributed to all holders of Common Stock, shares of Capital Stock, evidences of indebtedness, assets, securities, property, rights, options or warrants as described in Section 8(d)(iii) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

9. Mandatory Conversion.

(a) At any time on or after May 1, 2020, the Corporation shall have the right, at its option, to give notice of its election to cause all outstanding shares of Convertible Special Stock to be automatically converted into that number of whole shares of Common Stock for each share of Convertible Special Stock equal to the Conversion Rate in effect on the Mandatory Conversion Date, with cash in lieu of any fractional share pursuant to Section 10. The Corporation may exercise its right to cause a mandatory conversion pursuant to this Section 9 only if the Closing Sale Price of the Common Stock equals or exceeds 150% of the Conversion Price for at least 20 Trading Days (whether or not consecutive) in a period of 30 consecutive Trading Days, including the last Trading Day of such 30-Trading Day period, ending on, and including, the Trading Day immediately preceding the Business Day on which the Corporation issues a press release announcing the mandatory conversion as described in Section 9(b).

(b) To exercise the mandatory conversion right described in Section 9(a), the Corporation must issue a press release for publication on the Dow Jones News Service, PR Newswire or Bloomberg Business News (or if none of such services are available, another broadly disseminated news or press release service selected by the Corporation) prior to the open of business on the first Trading Day following any date on which the condition described in Section 9(a) is met, announcing such a mandatory conversion. The Corporation shall also give notice by mail or by publication (with subsequent prompt notice by mail) to the Holders (not later than three Business Days after the date of the press release) of the mandatory conversion announcing the Corporation’s intention to convert the Convertible Special Stock. The conversion date will be a date selected by the Corporation (the “Mandatory Conversion Date”) and will be no later than 10 calendar days after the date on which the Corporation issues the press release described in this Section 9(b).

(c) In addition to any information required by applicable law or regulation, the press release and notice of a mandatory conversion described in Section 9(b) shall state, as appropriate: (i) the Mandatory Conversion Date; (ii) the number of shares of Common Stock to be issued upon conversion of each share of Convertible Special Stock; and (iii) that dividends on the Convertible Special Stock to be converted will cease to accrue on the Mandatory Conversion Date.

(d) On and after the Mandatory Conversion Date, dividends shall cease to accrue on the Convertible Special Stock called for a mandatory conversion pursuant to Section 9 and all rights of Holders shall terminate except for the right to receive the whole shares of Common Stock issuable upon conversion thereof with a cash payment in lieu of any fractional share of Common Stock in accordance with Section 10. The full amount of any dividend payment with respect to the Convertible Special Stock called for a mandatory conversion pursuant to Section 9 on a date during the period beginning at the close of business on any Dividend Record Date and ending on the close of business on the corresponding Dividend Payment Date shall be payable on such Dividend Payment Date to the record holder of such share at the close of business on such Dividend Record Date if such share has been converted after such Dividend Record Date and prior to such Dividend Payment Date. Except as provided in the immediately preceding sentence with respect to a mandatory conversion pursuant to Section 9, no payment or adjustment shall be made upon conversion of Convertible Special Stock for Accumulated Dividends or dividends with respect to the Common Stock issued upon such conversion thereof.

(e) The Corporation may not authorize, issue a press release or give notice of any mandatory conversion pursuant to Section 9 unless, prior to giving the conversion notice, all Accumulated Dividends on the Convertible Special Stock (whether or not declared) for periods ended prior to the date of such conversion notice shall have been paid.

10. No Fractional Shares. No fractional shares of Common Stock or securities representing fractional shares of Common Stock shall be delivered upon conversion, whether voluntary or mandatory, or in respect of dividend payments on the Convertible Special Stock made in Common Stock, of the Convertible Special Stock. Instead, the Corporation will deliver a cash payment to each Holder that would otherwise be entitled to a fractional share based on the Closing Sale Price of the Common Stock on the relevant Conversion Date.

11. Certificates.

(a) Form and Dating. The Convertible Special Stock and the Transfer Agent’s certificate of authentication shall be substantially in the form set forth in Exhibit A, which is hereby incorporated in and expressly made a part of this Certificate of Designation. The Convertible Special Stock certificate may have notations, legends or endorsements required by law or stock exchange rules; provided that any such notation, legend or endorsement is in a form acceptable to the Corporation. Each Convertible Special Stock certificate shall be dated the date of its authentication.

(i) Global Convertible Special Stock. The Convertible Special Stock shall be issued initially in the form of one or more fully registered global certificates with the global securities legend set forth in Exhibit A hereto (the “Global Convertible Special Stock”), which shall be deposited on behalf of the purchasers represented thereby with the Transfer Agent, as custodian for DTC (or with such other custodian as DTC may direct), and registered in the name of Cede & Co. or other nominee of DTC, duly executed by the Corporation and authenticated by the Transfer Agent as hereinafter provided. The number of shares of Convertible Special Stock represented by Global Convertible Special Stock may from time to time be increased or decreased by adjustments made on the records of the Transfer Agent and DTC or its nominee as hereinafter provided. All shares of Common Stock issued in respect of shares of Convertible Special Stock on any Conversion Date or paid as a dividend on any Dividend Payment Date shall be freely transferable without restriction under the Securities Act (other than by the Corporation’s Affiliates), and such shares shall be eligible for receipt in global form through the facilities of DTC.

(ii) Book-Entry Provisions. In the event Global Convertible Special Stock is deposited with or on behalf of DTC, the Corporation shall execute and the Transfer Agent shall authenticate and deliver initially one or more Global Convertible Special Stock certificates that (a) shall be registered in the name of Cede & Co. as nominee for DTC as depository for such Global Convertible Special Stock or the nominee of DTC and (b) shall be delivered by the Transfer Agent to DTC or pursuant to DTC’s instructions or held by the Transfer Agent as custodian for DTC. Members of, or participants in, DTC (“Agent Members”) shall have no rights under this Certificate of Designation with respect to any Global Convertible Special Stock held on their behalf by DTC or by the Transfer Agent as the custodian of DTC or under such Global Convertible Special Stock, and DTC may be treated by the Corporation, the Transfer Agent and any agent of the Corporation or the Transfer Agent as the absolute owner and holder of such Global Convertible Special Stock for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Corporation, the Transfer Agent or any agent of the Corporation or the Transfer Agent from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices of DTC governing the exercise of the rights of a holder of a beneficial interest in any Global Convertible Special Stock.

iii) Certificated Convertible Special Stock. Except as provided in this Section 11(a) or in Section 11(c), owners of beneficial interests in Global Convertible Special Stock will not be entitled to receive physical delivery of Convertible Special Stock in fully registered certificated form (“Certificated Convertible Special Stock”).

(b) Execution and Authentication. The Chief Executive Officer or the President or a Vice President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation shall sign the Convertible Special Stock certificate for the Corporation by manual or facsimile signature.

If an Officer whose signature is on a Convertible Special Stock certificate no longer holds that office at the time the Transfer Agent authenticates the Convertible Special Stock certificate, the Convertible Special Stock certificate shall be valid nevertheless.

A Convertible Special Stock certificate shall not be valid until an authorized signatory of the Transfer Agent manually signs the certificate of authentication on the Convertible Special Stock certificate. The signature shall be conclusive evidence that the Convertible Special Stock certificate has been authenticated under this Certificate of Designation.

The Transfer Agent shall authenticate and deliver certificates for up to 125,000 shares of Convertible Special Stock for original issue upon a written order of the Corporation signed by two Officers of the Corporation. Such order shall specify the number of shares of Convertible Special Stock to be authenticated and the date on which the original issue of the Convertible Special Stock is to be authenticated.

(i) Transfer and Exchange of Certificated Convertible Special Stock. When Certificated Convertible Special Stock is presented to the Transfer Agent with a request to register the transfer of such Certificated Convertible Special Stock or to exchange such Certificated Convertible Special Stock for an equal number of shares of Certificated Convertible Special Stock, the Transfer Agent shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided that the Certificated Convertible Special Stock surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Corporation and the Transfer Agent, duly executed by the Holder thereof or its attorney duly authorized in writing.

(ii) Restrictions on Transfer of Certificated Convertible Special Stock for a Beneficial Interest in Global Convertible Special Stock. Certificated Convertible Special Stock may not be exchanged for a beneficial interest in Global Convertible Special Stock except upon satisfaction of the requirements set forth below. Upon receipt by the Transfer Agent of Certificated Convertible Special Stock, duly endorsed or accompanied by appropriate instruments of transfer, in form reasonably satisfactory to the Corporation and the Transfer Agent, together with written instructions directing the Transfer Agent to make, or to direct DTC to make, an adjustment on its books and records with respect to such Global Convertible Special Stock to reflect an increase in the number of shares of Convertible Special Stock represented by the Global Convertible Special Stock, then the Transfer Agent shall cancel such Certificated Convertible Special Stock and cause, or direct DTC to cause, in accordance with the standing instructions and procedures existing between DTC and the Transfer Agent, the number of shares of Convertible Special Stock represented by the Global Convertible Special Stock to be increased accordingly. If no Global Convertible Special Stock is then outstanding, the Corporation shall issue and the Transfer Agent shall authenticate, upon written order of the Corporation in the form of an Officers’ Certificate, a new Global Convertible Special Stock representing the appropriate number of shares.

(iii) Transfer and Exchange of Global Convertible Special Stock. The transfer and exchange of Global Convertible Special Stock or beneficial interests therein shall be effected through DTC, in accordance with this Certificate of Designation (including applicable restrictions on transfer set forth herein, if any) and the procedures of DTC therefor.

(iv) Transfer of a Beneficial Interest in Global Convertible Special Stock for Certificated Convertible Special Stock.

(A) If at any time:

(1) DTC notifies the Corporation that DTC is unwilling or unable to continue as depository for the Global Convertible Special Stock and a successor depository for the Global Convertible Special Stock is not appointed by the Corporation within 90 days after delivery of such notice; or

(2) DTC ceases to be a clearing agency registered under the Exchange Act and a successor depository for the Global Convertible Special Stock is not appointed by the Corporation within 90 days, then the Corporation shall execute, and the Transfer Agent, upon receipt of a written order of the Corporation signed by two Officers of the Corporation requesting the authentication and delivery of Certificated Convertible Special Stock to the Persons designated by the Corporation, shall authenticate and deliver Certificated Convertible Special Stock equal to the number of shares of Convertible Special Stock represented by the Global Convertible Special Stock, in exchange for such Global Convertible Special Stock. Subject to the foregoing, the beneficial interests in a Global Convertible Special Stock shall not be exchangeable for Certificated Convertible Special Stock.

(B) Certificated Convertible Special Stock issued in exchange for a beneficial interest in a Global Convertible Special Stock pursuant to this Section 11(c)(iv) shall be registered in such names and in such authorized denominations as DTC, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Transfer Agent. The Transfer Agent shall deliver such Certificated Convertible Special Stock to the Persons in whose names such Convertible Special Stock are so registered in accordance with the instructions of DTC.

(v) Restrictions on Transfer of Global Convertible Special Stock. Notwithstanding any other provisions of this Certificate of Designation (other than the provisions set forth in Section 11(c)(iv)), Global Convertible Special Stock may not be transferred as a whole except by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a successor depository or a nominee of such successor depository.

(vi) Cancellation or Adjustment of Global Convertible Special Stock. At such time as all beneficial interests in Global Convertible Special Stock have either been exchanged for Certificated Convertible Special Stock, converted or canceled, such Global Convertible Special Stock shall be returned to DTC for cancellation or retained and canceled by the Transfer Agent. At any time prior to such cancellation, if any beneficial interest in Global Convertible Special Stock is exchanged for Certificated Convertible Special Stock, converted or canceled, the number of shares of Convertible Special Stock represented by such Global Convertible Special Stock shall be reduced and an adjustment shall be made on the books and records of the Transfer Agent with respect to such Global Convertible Special Stock, by the Transfer Agent or DTC, to reflect such reduction.

(A) To permit registrations of transfers and exchanges, the Corporation shall execute and the Transfer Agent shall authenticate Certificated Convertible Special Stock and Global Convertible Special Stock as required pursuant to the provisions of this Section 11(c).

(B) All Certificated Convertible Special Stock and Global Convertible Special Stock issued upon any registration of transfer or exchange of Certificated Convertible Special Stock or Global Convertible Special Stock shall be the valid Capital Stock of the Corporation, entitled to the same benefits under this Certificate of Designation as the Certificated Convertible Special Stock or Global Convertible Special Stock surrendered upon such registration of transfer or exchange.

(C) Prior to due presentment for registration of transfer of any shares of Convertible Special Stock, the Transfer Agent and the Corporation may deem and treat the Person in whose name such shares of Convertible Special Stock are registered as the absolute owner of such Convertible Special Stock and neither the Transfer Agent nor the Corporation shall be affected by notice to the contrary.

(D) No service charge shall be made to a Holder for any registration of transfer or exchange upon surrender of any Convertible Special Stock certificate or Common Stock certificate at the office of the Transfer Agent maintained for that purpose. However, the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Convertible Special Stock certificates or Common Stock certificates.

(viii) No Obligation of the Transfer Agent.

(A) The Transfer Agent shall have no responsibility or obligation to any beneficial owner of Global Convertible Special Stock, a member of or a participant in, DTC or any other Person with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Convertible Special Stock or with respect to the delivery to any participant, member, beneficial owner or other Person (other than DTC) of any notice or the payment of any amount, under or with respect to such Global Convertible Special Stock. All notices and communications to be given to the Holders and all payments to be made to Holders under the Convertible Special Stock shall be given or made only to the Holders (which shall be DTC or its nominee in the case of the Global Convertible Special Stock). The rights of beneficial owners in any Global Convertible Special Stock shall be exercised only through DTC subject to the applicable rules and procedures of DTC. The Transfer Agent may rely and shall be fully protected in relying upon information furnished by DTC with respect to its members, participants and any beneficial owners.

(B) The Transfer Agent shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Certificate of Designation or under applicable law with respect to any transfer of any interest in any Convertible Special Stock (including any transfers between or among DTC participants, members or beneficial owners in any Global Convertible Special Stock) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Certificate of Designation, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

d) Replacement Certificates. If any of the Convertible Special Stock certificates shall be mutilated, lost, stolen or destroyed, the Corporation shall issue, in exchange and in substitution for and upon cancellation of the mutilated Convertible Special Stock certificate, or in lieu of and substitution for the Convertible Special Stock certificate lost, stolen or destroyed, a new Convertible Special Stock certificate of like tenor and representing an equivalent number of shares of Convertible Special Stock, but only upon receipt of evidence of such loss, theft or destruction of such Convertible Special Stock certificate and indemnity, if requested, satisfactory to the Corporation and the Transfer Agent.

(e) Temporary Certificates. Until definitive Convertible Special Stock certificates are ready for delivery, the Corporation may prepare and the Transfer Agent shall authenticate temporary Convertible Special Stock certificates. Any temporary Convertible Special Stock certificates shall be substantially in the form of definitive Convertible Special Stock certificates but may have variations that the Corporation considers appropriate for temporary Convertible Special Stock certificates. Without unreasonable delay, the Corporation shall prepare and the Transfer Agent shall authenticate definitive Convertible Special Stock certificates and deliver them in exchange for temporary Convertible Special Stock certificates.

(f) Cancellation. In the event the Corporation shall purchase or otherwise acquire Certificated Convertible Special Stock, the same shall thereupon be delivered to the Transfer Agent for cancellation.

(i) At such time as all beneficial interests in Global Convertible Special Stock have either been exchanged for Certificated Convertible Special Stock, converted, repurchased or canceled, such Global Convertible Special Stock shall thereupon be delivered to the Transfer Agent for cancellation.

(ii) The Transfer Agent and no one else shall cancel and destroy all Convertible Special Stock certificates surrendered for transfer, exchange, replacement or cancellation and deliver a certificate of such destruction to the Corporation unless the Corporation directs the Transfer Agent to deliver canceled Convertible Special Stock certificates to the Corporation. The Corporation may not issue new Convertible Special Stock certificates to replace Convertible Special Stock certificates to the extent they evidence Convertible Special Stock which the Corporation has purchased or otherwise acquired.

12. Other Provisions.

(a) With respect to any notice to a Holder required to be provided hereunder, neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding-up, or the vote upon any such action. Any notice which was communicated in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives the notice.

(b) Shares of Convertible Special Stock that have been issued and reacquired in any manner, including shares of Convertible Special Stock that are purchased or exchanged or converted, shall (upon compliance with any applicable provisions of the laws of Delaware) have the status of authorized but unissued shares of special stock of the Corporation undesignated as to series and may be designated or redesignated and issued or reissued, as the case may be, as part of any series of special stock of the Corporation; provided that any issuance of such shares as Convertible Special Stock must be in compliance with the terms hereof.

(d) Any payment required to be made hereunder on any day that is not a Business Day shall be made on the next succeeding Business Day and no interest or dividends on such payment will accrue or accumulate, as the case may be, in respect of such delay.

(e) Holders shall not be entitled to any preemptive rights to acquire additional capital stock of the Corporation.

EXHIBIT A

FORM OF SPECIAL STOCK CERTIFICATE

FACE OF SECURITY

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATION REFERRED TO BELOW.](1)



(1)	Insert if a global security.




		Number of Shares of Convertible Special Stock [ ]

		CUSIP No.: 808194 302
		ISIN No. US8081943024

6.00% Cumulative Perpetual Convertible Special Stock

A. SCHULMAN, INC.

A. SCHULMAN, INC., a Delaware corporation (the “Corporation”), hereby certifies that [ ] (the “Holder”) is the registered owner of [ ] fully paid and non-assessable shares of special stock, without par value per share, of the Corporation designated as the 6.00% Cumulative Perpetual Convertible Special Stock (the “Convertible Special Stock”). The shares of Convertible Special Stock are transferable on the books and records of the Transfer Agent, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Convertible Special Stock represented hereby are as specified in, and the shares of the Convertible Special Stock are issued and shall in all respects be subject to the provisions of, the Certificate of Designation, Preferences, Rights and Limitations dated May 4, 2015, as the same may be amended from time to time (the “Certificate of Designation”). Capitalized terms used herein but not defined shall have the meaning given them in the Certificate of Designation. The Corporation will provide a copy of the Certificate of Designation to a Holder without charge upon written request to the Corporation at its principal place of business.

Reference is hereby made to the Certificate of Designation, which shall for all purposes have the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of Designation and is entitled to the benefits thereunder.

Unless the Transfer Agent’s Certificate of Authentication hereon has been properly executed, these shares of Convertible Special Stock shall not be entitled to any benefit under the Certificate of Designation or be valid for any purpose.

IN WITNESS WHEREOF, the Corporation has executed this certificate this day of May, 2015.



A. SCHULMAN, INC.

By:
		Name:
		Title:

By:
		Name:
		Title:

TRANSFER AGENT’S CERTIFICATE OF AUTHENTICATION

These are shares of the Convertible Special Stock referred to in the within-mentioned Certificate of Designation.



Dated:



WELLS FARGO SHAREOWNER, as Transfer Agent

By:
		Authorized Signatory

REVERSE OF SECURITY

The Corporation will furnish without charge and upon written request to each Holder the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock and the qualifications, limitations or restrictions of such preferences and/or rights.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Convertible Special Stock evidenced hereby to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints:

agent to transfer the shares of Convertible Special Stock evidenced hereby on the books of the Transfer Agent. The agent may substitute another to act for him or her.



Date:

Signature:

(Sign exactly as your name appears on the other side of this Convertible Special Stock Certificate)



Signature				(2)
Guarantee:



(2)	(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

EXHIBIT B

NOTICE OF CONVERSION

(To be Executed by the Holder in order to Convert the Convertible Special Stock)

The undersigned hereby irrevocably elects to convert (the “Conversion”) shares of 6.00% Cumulative Perpetual Convertible Perpetual Special Stock (the “Convertible Special Stock”) of A. Schulman, Inc. (the “Corporation”), represented by stock certificate No(s) (the “Convertible Special Stock Certificates”), into shares of common stock (“Common Stock”) of the Corporation according to the conditions of the Certificate of Designation of the Convertible Special Stock (the “Certificate of Designation”). The Corporation will pay any documentary, stamp or similar issue or transfer tax on the issuance of the shares of our Common Stock upon conversion of the Convertible Special Stock, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder will pay the tax. A copy of each Convertible Special Stock Certificate is attached hereto (or evidence of loss, theft or destruction thereof).

Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or pursuant to the Certificate of Designation.

Number of shares of Convertible Special Stock to be converted:

Name or Names (with addresses) in which the certificate or certificate for any shares of Common Stock to be issued are to be registered:(3)

Signature:

Name of registered Holder:

Fax No.:

Telephone No.:



(3)	The Corporation is not required to issue shares of Common Stock until you (a) if required, furnish appropriate endorsements and transfer documents and (b) if required, pay funds equal to interest payable on the next Dividend Payment Date to which such Holder is not entitled.

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Bernard Rzepka, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of A. Schulman, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedure (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	July 6, 2015
		/s/ Bernard Rzepka
		Bernard Rzepka
		President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Joseph J. Levanduski, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of A. Schulman, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedure (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	July 6, 2015
		/s/ Joseph J. Levanduski
		Joseph J. Levanduski
		Executive Vice President, Chief Financial Officer

Exhibit 32

Certifications of Principal Executive and Principal Financial Officers

Pursuant to 18 U.S.C. 1350

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of A. Schulman, Inc. (the “Company”) on Form 10-Q for the period ending May 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company does hereby certify that:


(a)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(b)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Bernard Rzepka
Bernard Rzepka
President and Chief Executive Officer of A. Schulman, Inc.
July 6, 2015

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002


(a)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(b)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Joseph J. Levanduski
Joseph J. Levanduski
Executive Vice President, Chief Financial Officer of A. Schulman, Inc.
July 6, 2015

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