SECURITIES AND EXCHANGE COMMISSION
Form 10-Q
[X] |
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended June 30, 2006 |
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OR
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[ ] |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from__________ to__________ |
Commission File Number 1-8524
Myers Industries, Inc
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(Exact name of registrant as specified in its charter)
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Ohio
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34-0778636
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1293 South Main Street
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(330) 253-5592
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes
X
No
.
Indicate by check mark whether the registrant is a large accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. Large accelerated filer
Accelerated filer
X
Non-accelerated filer
.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
No
X
.
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class |
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Outstanding as of July 31, 2006 |
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Common Stock, without par value |
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35,007,159 shares |
Table of Contents
Part I -- Financial Information |
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Item 1. Financial Statements |
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Condensed Statements of Consolidated Financial Position |
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Condensed Statements of Consolidated Income |
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Condensed Statements of Consolidated Cash Flows |
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Condensed Statement of Consolidated Shareholders' Equity |
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Notes to Condensed Consolidated Financial Statements |
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosure About Market Risk |
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Item 4. Controls and Procedures |
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Part II -- Other Information |
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Item 4. Submission of Matters to a Vote of Security Holders |
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Item 6. Exhibits |
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Signature |
1
Item 1. Financial Statements
Myers Industries, Inc.
Condensed Statements of Consolidated Financial Position (Unaudited)
As of June 30, 2006 and December 31, 2005
Assets |
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June 30, 2006 |
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December 31, 2005 |
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Current Assets |
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Cash |
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$27,622,699 |
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$19,159,220 |
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Accounts receivable-less allowances
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Inventories |
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Finished and in-process products |
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76,168,455 |
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78,114,802 |
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Raw materials and supplies |
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37,720,132 |
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37,693,510 |
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113,888,587 |
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115,808,312 |
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Prepaid expenses |
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6,608,549 |
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4,409,328 |
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Deferred income taxes |
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6,608,048 |
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5,252,878 |
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Total Current Assets |
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302,607,682 |
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289,580,618 |
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Other Assets |
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Goodwill |
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162,214,948 |
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263,883,274 |
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Patents and other intangible assets |
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11,112,090 |
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11,739,163 |
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Other |
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3,619,300 |
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4,335,084 |
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176,946,338 |
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279,957,521 |
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Property, Plant and Equipment, at Cost |
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Land |
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8,778,797 |
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8,477,973 |
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Buildings and leasehold improvements |
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93,218,490 |
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90,641,676 |
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Machinery and equipment |
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407,497,200 |
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394,800,272 |
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509,494,487 |
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493,919,921 |
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Less allowances for depreciation
and
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190,017,042 |
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195,721,782 |
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$669,571,062 |
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$765,259,921 |
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See notes to unaudited condensed consolidated financial statements.
2
Myers Industries, Inc.
Condensed Statements of Consolidated Financial Position (Unaudited)
As of June 30, 2006 and December 31, 2005
Liabilities and Shareholders' Equity |
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June 30, 2006 |
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December 31, 2005 |
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Current Liabilities |
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Accounts payable |
$73,672,585 |
$67,838,604 |
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Accrued expenses |
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Employee compensation |
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27,036,225 |
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28,979,004 |
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Taxes, other than income taxes |
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3,517,104 |
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2,558,217 |
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Accrued interest |
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1,145,922 |
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1,175,193 |
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Other |
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15,665,992 |
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24,783,252 |
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Current portion of long-term debt |
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3,658,267 |
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3,240,821 |
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Total Current Liabilities |
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124,696,095 |
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128,575,091 |
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Long-term Debt, less current portion |
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232,322,707 |
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249,523,633 |
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Other Liabilities |
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12,667,000 |
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12,667,000 |
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Deferred Income Taxes |
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36,678,521 |
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35,092,826 |
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Shareholders' Equity |
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Serial Preferred Shares
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Common Shares, without par value
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Additional paid-in capital |
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269,488,401 |
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267,562,138 |
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Accumulated other comprehensive
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Retained (deficit) income |
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(40,500,459 |
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52,174,705 |
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263,206,739 |
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339,401,371 |
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$669,571,062 |
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$765,259,921 |
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See notes to unaudited condensed consolidated financial statements.
3
Myers Industries, Inc.
Condensed Statements of Consolidated Income (Unaudited)
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For The Three Months Ended |
For The Six Months Ended |
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June 30, |
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June 30, |
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June 30, |
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June 30, |
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2006 |
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2005 |
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2006 |
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2005 |
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Net sales |
$238,219,569 |
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$225,021,732 |
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$483,076,801 |
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$461,246,892 |
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Cost of sales |
165,857,526 |
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166,379,493 |
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341,309,957 |
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338,777,814 |
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Gross profit |
72,362,043 |
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58,642,239 |
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141,766,844 |
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122,469,078 |
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Selling and administrative expenses |
53,476,203 |
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47,700,145 |
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102,417,208 |
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95,595,103 |
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Goodwill Impairment |
109,823,227 |
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-0- |
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109,823,227 |
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-0- |
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Operating (loss) income |
(90,937,387 |
) |
10,942,094 |
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(70,473,591 |
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26,873,975 |
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Interest expense, net |
4,216,506 |
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3,899,158 |
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8,166,057 |
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7,734,724 |
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(Loss) income before income taxes |
(95,153,893 |
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7,042,936 |
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(78,639,648 |
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19,139,251 |
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Income taxes |
4,824,000 |
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1,893,000 |
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10,541,000 |
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6,220,000 |
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Net (loss) income per basic
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Net (loss)income per diluted
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See notes to unaudited condensed consolidated financial statements.
4
Myers Industries, Inc.
Condensed
Statements of Consolidated Cash Flows (Unaudited)
For the Six Months Ended June 30, 2006 and 2005
June 30, 2006 |
June 30, 2005 |
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Cash Flows From Operating Activities |
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Net (loss) income |
$(89,180,648 |
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$12,919,251 |
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Items not affecting use of cash |
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Goodwill impairment |
109,823,227 |
-0- |
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Depreciation |
16,109,237 |
17,959,984 |
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Amortization of other intangible assets |
878,860 |
1,061,316 |
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Non cash stock compensation |
300,621 |
-0- |
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Deferred taxes |
146,438 |
1,881,432 |
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Cash flow provided by (used for) working capital |
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Accounts receivable |
918,039 |
269,661 |
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Inventories |
3,912,403 |
12,463,498 |
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Prepaid expenses |
(2,083,777 |
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(1,284,089 |
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Accounts payable and accrued expenses |
(7,497,869 |
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(17,759,770 |
) |
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Net cash provided by operating activities |
33,326,531 |
27,511,283 |
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Cash Flows From Investing Activities |
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Additions to property, plant and
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Other |
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547,983 |
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(1,361,695 |
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Net cash used for investing activities |
(6,571,483 |
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(11,850,135 |
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Cash Flows From Financing Activities |
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Net borrowing (repayment) of credit facility |
(17,380,944 |
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(3,656,667 |
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Deferred financing costs |
0 |
(262,500 |
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Cash dividends paid |
(3,494,516 |
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(3,469,001 |
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Tax benefit from stock options |
231,000 |
-0- |
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Proceeds from issuance of common stock |
1,507,807 |
633,437 |
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Net cash used for financing activities |
(19,136,653 |
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(6,754,731 |
) |
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Foreign Exchange Rate Effect on Cash |
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845,084 |
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(1,683,794 |
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Increase in Cash |
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8,463,479 |
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7,222,623 |
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Cash at January 1 |
19,159,220 |
8,018,623 |
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Cash at June 30 |
$27,622,699 |
$15,241,246 |
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See notes to unaudited condensed consolidated financial statements.
5
Myers Industries, Inc.
Condensed
Statement of Consolidated Shareholders' Equity (Unaudited)
For the Six Months Ended June 30, 2006
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Accumulative
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December 31, 2005 |
$21,188,831 |
$267,562,138 |
($1,524,303 |
) |
$52,174,705 |
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Net (loss) |
-0- |
-0- |
-0- |
(89,180,648 |
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Foreign currency
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Common Stock
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Stock based
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Tax benefit
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Dividends - $.10 per share |
-0- |
-0- |
-0- |
(3,494,516 |
) |
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June 30, 2006 |
$21,301,996 |
$269,488,401 |
$12,916,801 |
$(40,500,459 |
) |
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See notes to unaudited condensed consolidated financial statements.
6
Part I - Financial Information
Myers Industries, Inc.
Unaudited
Statement of Accounting Policy
7
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
The change in goodwill for the six months ended June 30, 2006 is as follows:
(Amount in thousands) |
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Balance at
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Acquisitions |
Foreign
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Impairment |
Balance at
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Distribution |
$214 |
$0 |
$0 |
$0 |
$214 |
Material Handling - North America |
30,383 |
0 |
0 |
0 |
30,383 |
Material Handling - Europe |
101,668 |
0 |
8,155 |
(109,823) |
0 |
Automotive and Custom |
60,074 |
0 |
0 |
0 |
60,074 |
Lawn and Garden |
71,544 |
0 |
0 |
0 |
71,544 |
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Total |
$263,883 |
$0 |
$8,155 |
$(109,823) |
$162,215 |
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Net Income Per Share
Net income (loss) per share, as shown on the Condensed Statement of Consolidated Income, is determined on the basis of the weighted average number of common shares outstanding during the period as follows:
Stock Compensation
In 1999, the Company and its shareholders adopted the 1999 Stock Plan allowing the Board of Directors to grant key employees and Directors the right to purchase common stock of the Company at the market price on the date of grant. In general, options granted and outstanding vest over time, with 20 percent of the shares granted exercisable six months from the date of grant and an additional 20 percent of the shares granted vesting thereafter on each anniversary of the grant date. The options expire ten years from the date of grant. At June 30, 2006, there were 1,585,058 stock option shares available for future grant.
On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), ("SFAS 123R"), Share-Based Payment, which requires the Company to measure all employee stock-based compensation awards using a fair value method and record the related expense in the financial statements. The Company elected to use the modified prospective transition method. The modified prospective transition method requires that compensation cost be recognized in the financial statements for all awards granted after the date of adoption as well as for existing awards for which the requisite service has not
8
Part I - Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Three Months Ended
Six Months Ended
(In thousands, except per share amounts)
Net income as reported
$5,150
$12,919
Stock option compensation as reported, net of tax
-0-
-0-
Fair Value of stock option compensation net of tax
10
122
Proforma net income
$5,140
$12,797
Net income per share:
Basic and diluted as reported
$.15
$.37
Basic and diluted proforma
.15
.37
June 30, 2005
June 30, 2005
During 2006, the Company granted 32,500 options with an exercise price equal to the closing price of the Company's stock on the date of the grant. The options expire ten years from the date of grant. The average fair value of the options granted was $3.00. This value was estimated at the date of grant using a trinomial lattice option pricing model with the following weighted average assumptions:
9
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Risk free interest rate |
3.7% |
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Expected dividend yield |
1.8% |
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Expected life of award (years) |
4.3 |
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Expected volatility |
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First vesting period |
26.5% |
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Second vesting period |
32.0% |
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Thereafter |
37.5% |
Shares
Average
Weighted
Aggregate
Outstanding at December 31, 2005
684,636
$9.58
Options Granted
32,500
16.24
Options Exercised
(178,106
)
7.99
Cancelled or Forfeited
(15,726
)
7.81
Outstanding at June 30, 2006
523,304
10.59
7.99
$3,453,806
Exercisable at June 30, 2006
272,983
$9.93
7.88
1,981,857
Exercise
Price
Average
Life
Intrinsic
Value
The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The total intrinsic value of the options exercised during the six months ended June 30, 2006 and 2005 was approximately $1.4 million and $289,000, respectively.
Inventory
In November 2004, the FASB issued SFAS No. 151 ("SFAS 151"), Inventory Costs - an amendment of ARB No. 43, Chapter 4. SFAS 151 requires abnormal amounts of idle facility expense, freight, handling costs, spoilage to be recognized as current period charges. SFAS 151 also requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The adoption of SFAS 151 by the Company as of January 1, 2006, did not have a material effect of the Company's financial condition, results of operations or cash flows.
Recent Pronouncements
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109." This Interpretation provides accounting guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return as well as additional disclosures related to these tax positions. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently assessing the effect of FIN No. 48 on its financial statements.
10
Part I - Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Supplemental Disclosure of Cash Flow Information
The Company made cash payments for interest of $3,577,000 and $5,567,000 for the three months ended June 30, 2006 and 2005, respectively. Cash payments for interest totaled $5,991,000 and $7,782,000 for the six months ended June 30, 2006 and 2005, respectively. Cash payments for income taxes totaled $10,621,000 and $7,984,000 for the three months ended June 30, 2006 and 2005, respectively. Cash payments for income taxes were $12,679,000 and $8,803,000 for the six months ended June 30, 2006 and 2005, respectively.
An unaudited summary of comprehensive income for the three months and six months ended June 30, 2006 and 2005 was as follows:
Retirement Plans
The Company previously disclosed in its financial statements for the year ended December 31, 2005, that it expected to make contributions of approximately $700,000 to its defined benefit plans in 2006. As of June 30, 2006, contributions of $271,000 have been made to these plans.
11
Part I - Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Contingencies
In July 2004, the Company reported to four U.S. governmental agencies certain business practices which were believed to be in violation of certain laws. An independent investigation was conducted by our Audit Committee using outside legal counsel and the results of the investigation were provided to the agencies. The U.S. Department of Justice determined not to proceed against the Company or its employees. The Bureau of Industry and Security notified the Company that it had completed its investigation and decided not to refer the matter for criminal or administrative prosecution and closed the matter by issuing a warning letter. We are voluntarily working with the SEC and the Office of Foreign Asset Control to settle any enforcement issues arising from these matters, however, we cannot reasonably estimate the potential liability and, therefore, we have not recorded any provision for settlement. Management believes that any liability, although possible, will not have a material effect on our consolidated financial position, results of operations or cash flows.
12
Part I - Financial Information
Subsequent Event
In July 2006, the Company entered into an amendment of its revolving credit agreement (the "Credit Agreement"). The amendment revises the definition of EBIT (earnings before interest and taxes) to exclude certain charges, including the goodwill impairment charge recorded in the quarter ended June 30, 2006. The amendment also waives the violations of the Credit Agreement covenants related to minimum interest coverage and maximum leverage ratios as of June 30, 2006.
Results of Operations
For the quarter ended June 30, 2006, net sales were $238.2 million, an increase of 6 percent from the $225.0 million reported in 2005 as the Company had strong sales in most of its business segments. Despite the increased sales, the Company reported a net loss of $100 million in the quarter ended June 30, 2006, which includes a goodwill impairment charge of $109.8 million related to its Material Handling - Europe business segment.
For the six months ended June 30, 2006, net sales were $483.1 million, an increase of 5 percent from the $461.2 million reported in the first half of 2005. Due to the impact of the goodwill impairment charge, the Company reported a net loss of $89.2 million in the six months ended June 30, 2006, compared to net income of $13.0 million in the prior year period.
During the quarter and six months ended June 30, 2006, the Company experienced increased sales in its Distribution, Material Handling -- North America and Automotive and Custom business segments, primarily on the basis of higher selling prices which began to take effect in the second half of 2005. The increased selling prices also resulted in a higher gross margin of 30.4 percent for the second quarter of 2006 compared to 26.1 percent in the prior year period, even though the Company experienced higher raw material cost in the second quarter of 2006. For the six months ended June 30, 2006, gross margins improved to 29.3 percent compared to 26.6 percent in the prior year. On average, plastic resin raw material costs were approximately 10 percent higher in the quarter and 6 percent higher for the six months ended June 30, 2006 compared with the prior year periods.
Selling and administrative expenses for the second quarter of 2006 increased $5.8 million or 12 percent compared with the prior year quarter. For the six months ended June 30, 2006, expenses increased $6.8 million
13
Part I - Financial Information
or 7 percent compared to the second quarter of 2005. The increases reflect the impact of variable selling expense on higher sales combined with costs associated with streamlining the Company's organizational structure. As a percentage of sales, selling and administrative costs increased to 22.4 percent for the quarter and 21.2 percent for the six months ended June 30, 2006 compared to 21.2 percent and 20.7 percent in the prior year periods.
In the quarter ended June 30, 2006, a non-cash, non-tax deductible goodwill impairment charge of $109.8 million was recognized in the Company's Material Handling - Europe business segment. During the second quarter of 2006, the Company determined that the European businesses in its Material Handling -- Europe business segement were not core to the Company's long term growth strategy and, accordingly, began evaluating the strategic options of these businesses. As a result of this evaluation and taking into consideration the economic factors and evolution of business conditions in Europe, it became necessary for the Company to perform an interim goodwill impairment test in accordance with Statement of Accounting Standards No. 142, "Goodwill and Other Intangible Assets." In performing this analysis, the fair value of the reporting unit was based on estimated proceeds from a potential sale and the implied fair value of goodwill was estimated by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value. As a result of this analysis, all of the recorded goodwill in the reporting unit was determined to be impaired and, accordingly, the Company recorded the $109.8 million impairment charge to write off goodwill in the Material Handling - Europe business segment as of June 30, 2006.
Net interest expense for the quarter ended June 30, 2006 was $4.2 million, an increase of 8 percent compared to $3.9 million in the prior year period. For the six months ended June 30, 2006, net interest expense was $8.2 million an increase of 6 percent from the prior year period. For both the quarter and year to date periods, the increase in current year expenses reflects higher interest rates which more than offset lower average borrowing levels.
The Company's income tax rate for the quarter and six month periods ended June 30, 2006, was significantly impacted by the goodwill impairment charge of $109.8 million which was not deductible for tax purposes. Excluding the impact of the goodwill impairment, income taxes as a percent of income before taxes for the quarter ended June 30, 2006, increased to 32.9 percent compared to 26.9 percent in the prior year period. The lower effective rate in 2005 was primarily the result of foreign tax rate differences, including the utilization of foreign tax loss carry forwards for which valuation allowances were previously provided. Excluding the impact of the goodwill adjustment, income taxes as a percent of pretax income for the six months ended June 30, 2006 increased to 33.8 percent from 32.5 percent in the prior year period. The higher effective rate in 2006 was the result of foreign tax rate differences and the relative proportion of domestic and foreign based income to pretax income.
Business Segment Results
Distribution
Sales in the Distribution business segment for the quarter ended June 30, 2006 were $50.1 million, an increase of 2 percent compared to the prior year period. For the six month period, sales in the current year were $96.6 million, an increase of 6 percent compared to $91.5 million in the first six months of 2005. The increased sales reflect higher selling prices and increased volume of both equipment and consumable supplies, although the segment experienced a slow down of equipment sales in the current quarter.
Income before taxes was $5.5 million in the second quarter of 2006, an increase of 4 percent compared to $5.3 million in the prior year period. Increased sales of higher margin supplies and improved performance from the business segment's export and international branch operations were the primary reason for the current year increase. For the six months ended June 30, 2006, income before taxes increased 14 percent to $10.3 million compared to $9.0 million in the prior year period. This increase was a result of the increased sales combined with ongoing cost controls and the improved performance of the export and international business.
14
Part I - Financial Information
Material Handling -- North America
Sales in the Material Handling -- North America business segment were $60.0 million for the quarter ended June 30, 2006, an increase of $12.0 million or 25 percent compared to the $48.0 million reported in the second quarter of 2005. For the six months ended June 30, 2006, sales were $122.1 million, an increase of 15 percent compared to the $105.9 million reported in the first half of 2005. The increase in sales for both the quarter and year to date periods was primarily the result of higher selling prices implemented through most product lines and markets.
Income before taxes in the second quarter of 2006 was $8.4 million, an increase of 664 percent compared the $1.1 million reported in the second quarter of 2005. For the six months ended June 30, 2006, income before taxes was $16.9 million, an increase of 177 percent compared to the $6.1 million reported in the first half of 2005. The increased profitability in both periods primarily reflects improved gross margins as higherselling prices and productivity gains more than offset the impact of higher plastic raw material costs. On average, raw material plastic resin prices were approximately 10 percent higher in the quarter and 6 percent higher for the six months ended June 30, 2006 compared with the prior year periods.
Material Handling - Europe
Sales in the Material Handling - Europe business segment in the second quarter of 2006 were $44.1 million, a decrease of 2 percent from the $45.0 million reported in the prior year period as slow conditions in the markets served by this segment continued to constrain demand. There was no significant impact on sales in the quarter from the translation of foreign currencies. For the six months ended June 30, 2006, sales were $83.3 million, a decrease of 7 percent compared to the $89.4 million reported in the first half of 2005. The translation of foreign currencies, primarily the euro, decreased sales by $2.4 million in the current year. Excluding the impact of foreign currency translation, sales in the segment were down $3.7 million or 4 percent for the year as weakness in European industrial markets resulted in lower sales volumes for those product lines.
The business segment reported a loss before income taxes of $106.9 million for the quarter and $106.1 million for the six months ended June 30, 2006 which included a goodwill impairment charge of $109.8 million. Additionally, improvement in lower operating expenses and higher selling prices in some product lines offset the impact of lower sales volumes. Foreign currency translation did not have a significant effect on the segment's income before taxes reported between years.
Automotive and Custom
In the Automotive and Custom business segment, sales for the second quarter of 2006 were $52.9 million, an increase of 6 percent compared to $49.7 million in the prior year period. For the six month period, 2006 sales in the business segment were $104.7 million, an increase of 7 percent compared to the $97.7 million reported in 2005. The higher sales reflect both increased volume and higher selling prices from strategic pricing initiatives in some market segments.
Income before taxes for the second quarter of 2006 was $4.7 million, an increase of 42 percent compared to the $3.3 million reported in the second quarter of 2005. For the six months ended June 30, 2006, income before taxes was $8.6 million, an increase of 32 percent from $6.5 million in the prior year period. The improvement in profitability was primarily due to higher margins resulting from increased selling prices.
15
Part I - Financial Information
Lawn and Garden
In the Lawn and Garden business segment, sales in the quarter ended June, 30, 2006 were $36.8 million, a decrease of 7 percent from the $39.6 million in the prior year period. For the six month period, current year sales were $88.3 million, a decrease of 2 percent from the $90.3 million reported in the second half of 2005. The reduction in sales was primarily volume driven as weather conditions in the South and Midwest regions of the United States resulted in low demand from growers for certain product lines throughout the first half of the year.
Income before taxes of $2.0 million in the quarter and $8.9 million for the six months ended June 30, 2006 were essentially flat with the prior year periods as increased selling prices offset lower sales volume.
Liquidity and Capital Resources
Cash provided from operating activities was $33.3 million for the six months ended June 30, 2006 compared with $27.5 million in the prior year period. The increase of $5.8 million in cash provided by operating activities was primarily due to an increase of $7.7 million in 2006 net income for the period, excluding the non cash goodwill impairment charge. Depreciation and other non cash expenses were $17.4 million in the current year compared with $20.9 million in 2005 and cash used for working capital was reduced to $4.7 million in the six months ended June 30, 2006 compared to $6.3 million in the prior year period. The decrease in cash used for working capital reflects a reduction of $8.5 million in cash provided by inventories as current year inventories have been relatively stable while the prior year period included a substantial reduction of inventories built up at 2004 yearend to protect against price increases. Offsetting the reduced cash provided by inventories was a reduction of $10.3 million in cash used for accounts payable and accrued expenses. Total debt at June 30, 2006 was $236.0 million, a reduction of $16.8 million from $252.8 million at December 31, 2005. At June 30, 2006, the Company had working capital of $177.9 million and a current ratio of 2.4, which represents a slight improvement compared to the prior year end.
In July 2006, the Company entered into an amendment of its revolving credit agreement (the "Credit Agreement"). The amendment revises the definition of EBIT (earnings before interest and taxes) to exclude certain charges, including the goodwill impairment charge recorded in the quarter ended June 30, 2006. The amendment also waives the violations of the Credit Agreement covenants related to minimum interest coverage and maximum leverage ratios as of June 30, 2006 resulting from the goodwill impairment charge. The Company believes it is in compliance with all of the covenants of the Credit Agreement as amended. At June 30, 2006, the Company has approximately $98 million available under the Credit Agreement.
Capital expenditures for the six months ended June 30, 2006 were $7.1 million and are expected to be in the range of $20 to $25 million for the year ending December 31, 2006. Cash flows from operations and funds available under the Credit Agreement will be the Company's primary sources of financing. Management believes that cash flows from operations and available credit facilities will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital and debt service.
Recent Pronouncements
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109." This Interpretation provides accounting guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return as well as additional disclosures related to these tax positions. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently assessing the effect of FIN No. 48 on its financial statements.
16
Part I - Financial Information
The Company has financing arrangements that require interest payments based on floating interest rates. As such, the Company's financial results are subject to changes in the market rate of interest. Our objective in managing the exposure to interest rate changes is to limit the volatility and impact of rate changes on earnings while maintaining the lowest overall borrowing cost. At present, the Company has not entered into any interest rate swaps or other derivative instruments to fix the interest rate on any portion of its financing arrangements with floating rates.
Some of the Company's subsidiaries operate in foreign countries and, as such, their financial results are subject to the variability that arises from exchange rate movements. The Company believes that foreign currency exchange rate fluctuations do not represent a significant market risk due to the nature of the foreign countries in which we operate, primarily Canada and Western Europe, as well as the size of those operations relative to the total Company.
The Company uses certain commodities, primarily plastic resins, in its manufacturing processes. As such, the cost of operations is subject to fluctuation as the market for these commodities changes. The Company monitors this risk but currently has no derivative contracts to hedge this risk, however, the Company also has no significant purchase obligations to purchase fixed quantities of such commodities in future periods.
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 evaluation 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 the foregoing, 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.
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.
17
Item 4.
Submission of Matters to a Vote of Security Holders
.
The Annual Meeting of Shareholders was held on April 25, 2006, and the following matters were voted on at that meeting. |
|
1. |
At the meeting, nine Directors were elected. The results of this voting are as follows: |
Votes
Keith A. Brown
32,112,176
736,206
Vincent Byrd
32,846,764
1,618
Karl S. Hay
24,567,741
8,280,641
Richard P. Johnston
27,320,167
5,528,215
Edward Kissel
32,525,189
323,193
Stephen E. Myers
32,660,848
187,534
John C. Orr
32,657,844
190,538
Richard Osborne
32,339,477
508,905
Jon H. Outcalt
26,787,897
6,060,485
Name of Director
Votes for
Withheld
Item 6. Exhibits
(a) Exhibits
Exhibit Index
10(o) |
Employment Agreement between Myers Industries, Inc. and Kevin C. O'Neil dated August 21, 2005. Reference is made to Exhibit 10(j) to Form 10-Q filed with the Commission on November 4, 2005.* |
10(p) |
Amendment to the Myers Industries, Inc. Executive Supplemental Retirement Plan (Kevin C. O'Neil) effective August 21, 2005. Reference is made to Exhibit 10(p) to Form 10-K filed with the Commission on March 16, 2006.* |
10(q) |
Separation Agreement between Myers Industries, Inc. and Kevin C. O'Neil dated August 8, 2006.* |
10(r) |
Retirement and Separation Agreement between Myers Industries, Inc. and Stephen E. Myers effective May 1, 2005. Reference is made to Exhibit 10(k) to Form 10-Q filed with the Commission on August 10, 2005.* |
10(s) |
Form of Stock Option Grant Agreement. Reference is made to Exhibit 10(r) to Form 10-K filed with the Commission on March 16, 2005.* |
10(t) |
Amended and Restated Loan Agreement between Myers Industries, Inc. and Banc One, NA, Agent dated as of February 27, 2004. Reference is made to Exhibit 10(n) to Form 10-K filed with the Commission on March 15, 2004. |
10(u) |
First Amendment to Amended and Restated Loan Agreement between Myers Industries, Inc. and Banc One, NA, Agent, dated as of June 18, 2004. Reference is made to Exhibit 10(q) to Form 10-Q filed with the Commission on August 6, 2004. |
10(v) |
Second Amendment to Amended and Restated Loan Agreement between Myers Industries, Inc. and JP Morgan Chase Bank, N.A., Agent dated as of June 30, 2005. Reference is made to Exhibit 10(n) to Form 8-K filed with the Commission on July 5, 2005. |
10(w) |
Third Amendment to Amended and Restated Loan Agreement between Myers Industries, Inc. and JP Morgan Chase Bank, N.A., Agent dated as of July 27, 2006. Reference is made to Exhibit 10 to Form 8-K filed with the Commission on July 27, 2006. |
10(x) |
Note Purchase Agreement between Myers Industries, Inc. and the Note Purchasers, dated December 12, 2003, regarding the issuance of (i) $65,000,000 of 6.08% Series 2003-A Senior Notes due December 12, 2010, and (ii) $35,000,000 of 6.81% Series 2003-A Senior Notes due December 12, 2013. Reference is made to Exhibit 10(o) to Form 10-K filed with the Commission on March 15, 2004. |
10(y) |
Myers Industries, Inc. Non-Employee Board of Directors Compensation Arrangement. Reference is made to Exhibit 10(w) to Form 10-K filed with the Commission on March 16, 2006. * |
14(a) |
Myers Industries, Inc. Code of Business Conduct and Ethics. Reference is made to Exhibit 14(a) to Form 10-K filed with the Commission on March 16, 2005. |
14(b) |
Myers Industries, Inc. Code of Ethical Conduct for the Finance Officers and Finance Department Personnel. Reference is made to Exhibit 14(b) to Form 10-K filed with the Commission on March 16, 2005. |
21 |
List of Direct and Indirect Subsidiaries, and Operating Divisions, of Myers Industries, Inc. |
31(a) |
Certification of John C. Orr, President and Chief Executive Officer of Myers Industries, Inc, pursuant to Section 302 of the Sarbanes-Oxley Act of 2003. |
31(b) |
Certification of Donald A. Merril, Vice President (Chief Financial Officer) of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2003. |
32 |
Certifications of John C. Orr Myers, President and Chief Executive Officer, and Donald A. Merril, Vice President (Chief Financial Officer), of Myers Industries, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
______________
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
MYERS INDUSTRIES, INC.
Date:
August 9, 2006
By:
/s/ Donald A. Merril
Donald A. Merril
Vice President and Chief Financial
Officer (Duly Authorized Officer
and Principal Financial and
Accounting Officer)
report to be signed on its behalf by the undersigned thereunto duly authorized.
Exhibit 10 (q)
SEPARATION AGREEMENT
SEPARATION AGREEMENT (this "Agreement") is entered into as of August 8, 2006, between Myers Industries, Inc., an Ohio Corporation ("Company"), and Kevin C. O'Neil ("Executive").
RECITALS
A. |
Executive has been employed by the Company as its Vice President, General Counsel and Secretary.
|
B. |
Executive and the Company are parties to an Employment Agreement dated August 21, 2005 ("Employment Agreement").
|
C. |
Executive and the Company have mutually agreed to terminate the employment relationship effective upon the Effective Date of this Agreement.
|
D. |
Company is aware and acknowledges that Executive will be joining the law firm of Roetzel & Andress as a partner in its business services group.
|
E. |
Executive and the Company desire to provide for a smooth transition of Executive's responsibilities and to resolve all issues regarding his employment with and separation from the Company. Accordingly, and without admitting any liability or wrongdoing whatsoever, they are entering into this Agreement. |
In consideration of the promises and mutual agreements, provisions and covenants contained in this Agreement and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:
AGREEMENTS
1.1 |
Executive hereby acknowledges, covenants and agrees: |
(a) |
That his employment with the Company as Vice President, General Counsel and Secretary and the Employment Agreement are terminated effective upon the Effective Date of this Agreement ("Termination Date"), and he hereby resigns from any and all other positions held with the Company and any affiliate thereof as of such date. |
(b) |
To release and discharge forever the Company and its: (i) affiliated companies and entities, (ii) present and former directors, shareholders, officers, employees, agents and attorneys, (iii) predecessors, (iv) successors, (v) insurance carriers, and (vi) assigns (the Company and (i) through (vi) are sometimes hereinafter collectively referred to as the "Company and All Related Parties"), and each of them, from all liabilities, claims, causes of action, charges, complaints, obligations, costs, losses, damages, injuries, attorneys' fees and other legal responsibilities, of any form whatsoever, whether known or unknown, foreseen or unforeseen, anticipated or unanticipated, suspected or unsuspected, manifest or latent, which Executive now owns or holds, has at any time heretofore owned or held or may at any time own or hold by reason of any matter or thing arising from any cause whatsoever prior to the Effective Date of this Agreement, and without limiting the generality of the foregoing, from all claims, demands and causes of action based on, relating to or arising out of Executive's status as a shareholder, or ownership of shares, in the Company, or Executive's employment with the Company or any of its affiliates, compensation for such employment, or the termination of such employment relationship, including but not limited to claims for breach of contract, claims under the Employment Agreement, defamation, invasion of privacy, wrongful discharge, retaliatory discharge based on the asserted engagement of any type of protected activity or whistleblowing including, without limitation, under the Sarbanes-Oxly Act, or those claims arising under the Americans With Disabilities Act, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, Ohio Revised Code Chapter 4112, and any other federal, state or local laws prohibiting age, sex, race, national origin, disability or any other forms of discrimination or sexual or other forms of harassment. The foregoing shall not release any rights under this Agreement or the obligation of the Company to indemnify or advance expenses, or the rights to indemnification or advancement of expenses Executive has, pursuant to any director and officer or other insurance policy the Company maintains or has maintained (including self-insurance), the General Corporation laws of the State of Ohio or other applicable state or jurisdiction, pursuant to the articles of incorporation or code of regulations of the Company, or pursuant to the Indemnification Agreement between the Executive and the Company. |
(c) |
That (i) he has made no assignment and will make no assignment of the claims, demands, causes of action or other rights released herein; and (ii) he will not institute any legal or administrative proceedings or, absent an order from a court of competent jurisdiction, participate in any manner in any civil lawsuit or administrative proceeding based upon, arising out of or relating to any claim, demand, cause of action or other right released herein. In the event any such civil lawsuit or administrative proceeding is initiated by Executive or any assignee or successor of Executive, Executive agrees to repay to the Company all consideration paid by the Company under this Agreement upon the demand of the Company. Executive further agrees to indemnify and hold harmless the Company and All Related Parties against any loss or liability whatsoever, including but not limited to reasonable attorneys' fees, caused by or incurred in any action or proceeding before any court or governmental agency, commission, division or department, whether state, federal or local, which is brought by or on behalf of Executive or Executive's successors in interest if such action or proceeding arises out of, is based on or is related to any claims, demands, causes of action or other rights released herein. The foregoing shall not prohibit Executive from filing a charge of discrimination with the Equal Employment Opportunity Commission, however, Executive acknowledges and agrees that this Agreement waives and releases any right to individual relief at law or equity that Executive may otherwise have in connection with any proceeding arising out of any such charge of discrimination. |
(d) |
That he will not apply for or seek reemployment with the Company or any affiliate thereof at any time in the future, and acknowledges that the Company shall have no obligation to consider him for employment at any time in the future. |
(e) |
To the best of his knowledge and belief, the Executive has already reported to the Company any actions or inactions by the Company or any Related Parties which could constitute the basis for a claimed violation of any federal, state or local law or regulation. |
2.1 |
The Company hereby acknowledges and agrees that upon Executive's prior execution and on the Effective Date (as defined in paragraph 3.8) of this Agreement the Company shall: |
(a) |
Pay Executive the sum of $675,000 within seven (7) days of the Effective Date, subject to all required federal, state and local income and employment taxes and related deductions and withholdings. The parties agree that the payment made to Executive hereunder is allocated as follows: $412,000 to obligations under the Employment Agreement, and $263,000 for the settlement and release of all claims. The payment hereunder shall not be considered compensation for purposes of any retirement plan. In addition, the Company will pay directly to Clark, Perdue, Arnold and Scott, LPA ("Arnold"), a sum not to exceed $17,500, representing Executive's attorney fees incurred in connection with this Agreement. Company has further agreed to pay such reasonable moving costs, not to exceed $1,000 for the transport of Executive's personal effects and furniture to two locations, one being his home and the second being his new place of business. All such payments will be reported as income to Executive with applicable taxing authorities by way of an IRS Form 1099 or W-2, as applicable. |
(b) |
Executive's coverage under the Company's medical, dental, long term and short term disability, life and any other insurance plans or policies in which Executive participated immediately prior to the Effective Date, as well as any such insurance obtained by Executive and reimbursed by the Company immediately prior to the Effective Date will cease on the Effective Date, subject to Executive's right to continue health coverage pursuant to COBRA at his sole expense, and further subject to any conversion rights he may have under any other insurance policies at his sole expense. The company will provide any notices regarding the foregoing as required by law. |
(c) |
The Company and Executive acknowledge that Executive has a vested right under the Company's Executive Supplemental Retirement Plan, as amended and pursuant to the Amendment to the Company's Executive Supplemental Retirement Plan between the Executive and the Company effective August 21, 2005 (the "SERP"), that Executive currently is vested in eight years of service under the SERP and that he is entitled to a Supplemental Vested Pension pursuant to Section 4.4 of the SERP. The parties agree that such Supplemental Vested Pension to be paid Executive at age 65 is $1,096.49 per month payable for a period of 120 months ($131,579 total benefit) or such lesser amount should Executive seek Early Retirement pursuant to the terms of the SERP.. |
(d) |
The Company and Executive acknowledge that nothing herein shall affect the stock options granted to Executive by the Company which are now vested, being a total of 17,987 shares, and that Executive shall have a right to exercise such vested options for a period of 90-days after the Effective Date (or on or before November 13, 2006), subject to any restrictions under law. The Company agrees to assist Executive in the exercise of such options and agrees to facilitate Executive's filing of any Form 4s as necessary with the SEC in the same manner it does for other executives. Executive acknowledges that the filing of the Form 4s is ultimately his responsibility. Executive further acknowledges (i) that if he is in possession of material non-public information concerning the Company's business and operations there may exist restrictions under law regarding the manner or ability to exercise any options and sell the underlying securities and (ii) that compliance with any such restrictions is solely Executive's responsibility. |
(e) |
The Company acknowledges that Executive has certain personal effects, which are his personal possessions and which Executive shall (other than the office furniture and certain other items which shall be professionally moved), have a right to remove from the Company on or before August 15, 2006. Executive and the Company will cooperate in good faith in the review of the Company's files and documents to determine those items which Executive may retain. Executive's retention of any such items shall be subject to his confidentiality and nondisclosure obligations under this Agreement and his ethical duty to maintain client confidences. |
(f) |
The Company agrees to provide Executive in advance with sufficient time for review and comment (which shall be deemed to be no less than 24-hours by e-mail), any press release or filing to be made publicly, or with the SEC or NYSE, which has as its subject the termination of Executive's relationship with the Company. Company need only provide the portion which deals with Executive. |
(g) |
The Company releases and forever discharges Executive, his heirs, attorneys, successors and assigns from all liabilities, claims, causes of action, charges, complaints, obligations, costs, losses, damages, injuries and attorneys' fees and other legal responsibilities, whether known or unknown, foreseen or unforeseen, anticipated or unanticipated, suspected or unsuspected, manifest or latent, which the Company now holds, has at any time heretofore owned or held, or may at any time own or hold by reason of any matter or thing arising from any cause whatsoever prior to the Effective Date of this Agreement. |
(h) |
That (i) the Company has made no assignment and will make no assignment of the claims, demands, causes of action or other rights released herein; and (ii) it will not institute or legal or administrative proceedings or, absent an order from a court of competent jurisdiction, participate in any manner in any civil lawsuit or administrative proceeding based upon, arising out of or relating to any claim, demand, cause of action or other right released herein. |
3.1 |
Executive shall fully cooperate with the Company in the transition of his duties and responsibilities by being reasonably available to answer questions and other inquiries by telephone. In the event Executive's compliance with this provision requires more than four (4) hours per month, Executive may condition any additional time beyond such four (4) hour period upon payment by the Company of reasonable compensation. |
3.2 |
Subject to paragraph 2.1(e), Executive covenants and represents that he has returned, or will return before the Effective Date of this Agreement, to the Company all of the Company's property of any kind in his possession or the possession of his agents including, without limitation, all keys, credit cards, files, papers, documents, and devices for holding electronic information. Executive further agrees that he will not, without prior written consent of the Company, directly or indirectly, disclose, reveal or communicate, or cause or allow to be disclosed, revealed or communicated, to any third party any confidential matters, non-public information concerning the Company, proprietary information or trade secrets of the Company or its affiliates. |
3.3 |
All provisions of this Agreement will be binding on and inure to the benefit of the dependents, successors, heirs, executors, representatives, administrators and assigns of Executive, the Company and All Related Parties. |
3.4 |
With the exception of the SERP, the indemnification rights and Indemnification Agreement, the vested stock options, the conversion rights to any insurance benefits, the vested rights in the Company's profit sharing or other retirement plan, the vested rights in Company's 401(k) Plan, and the COBRA rights, which all shall remain in full force and effect, this Agreement constitutes the entire agreement among the parties and supersedes and extinguishes all prior negotiations and agreements among the parties. It is further agreed that, other than the payments and entitlements specifically referenced in this Agreement, all payments due Executive as a result of his employment or pursuant to the Employment Agreement, whether salary, severance, bonus, commission, stock options, membership interest, stock grant or other payments, have been made and that Executive is due no other payments whatsoever except those specifically provided for herein. |
3.5 |
Executive and the Company further acknowledge and agree: |
(a) |
Neither Executive nor the Company (including Related Parties) will make any statement or otherwise communicate, divulge or disseminate any information regarding the events, discussions or communications relating to or leading up to this Agreement, to any person or entity, other than the information set forth in the Company's Form 8-K filing regarding Executive's separation from employment, the Agreement and any subsequent filings required under the SEC or NYSE rules. Nothing herein shall limit any communication Executive may have with his spouse or legal advisor, nor by the Company with its legal advisor and independent registered audit firm, provided that Executive and Company, as applicable, will cause them and the Related Parties to comply with this paragraph 3.5. Further, subject to the limitations in paragraph 3.1 hereof, nothing shall limit Executive's duty to respond to any request by the Company's Board of Directors or a Committee thereof, any attorney representing the Company, or in response to a lawfully issued subpoena from a court or agency of competent jurisdiction, provided that in the event Executive receives such a subpoena he shall provide notice to the Company within two days of receipt thereof to enable the Company to move to quash, or otherwise limit such subpoena. Further, Executive agrees not to oppose any action by the Company in connection with any such subpoena. |
(b) |
Executive and the Company agree they will not make any disparaging remarks about the other. Disparagement for purposes of this Agreement means to engage in any act or omission that would in either case subject the Executive or Company to public disrespect, scandal or ridicule or have a material adverse effect on its business, results of operation or financial condition, reputation or standing in the community. |
(c) |
For purposes of paragraphs 3.2 and 3.5, Executive and the Company acknowledge that the term "Company" includes the Company and All Related Parties as defined in paragraph 1.1(b) hereof. |
(d) |
Executive retains any and all rights he may have as a shareholder of the Company under Ohio law, the Company's articles of incorporation or code of regulations except to the extent any such right is expressly waived, released, prohibited or otherwise restricted by this Agreement. |
3.6 |
Executive and the Company acknowledge that they understand the terms of this Agreement, that they have had the opportunity to review it with legal counsel of their own choosing and that they are relying solely on the contents of this Agreement and are not relying on any other representation whatsoever as an inducement to enter into this Agreement. |
3.7 |
This Agreement will be construed and enforced in accordance with the laws of the State of Ohio. This Agreement may not be varied, altered, modified, canceled, changed or in any way amended except by written agreement of the parties. However, by signing this Agreement, Executive agrees, without any further consideration, to consent to any amendment necessary to avoid penalties or excise taxes under IRS Code Section 409A. The Company shall have no affirmative obligation to amend (or propose an amendment to) this Agreement to the extent necessary to avoid any such penalties or interest, except that it agrees to consent to any such amendment proposed by Executive to the extent such amendment would not materially increase the Company's obligations hereunder. |
3.8 |
Executive acknowledges that he is aware of his right to revoke this Agreement at any time within the seven (7) day period following the date this Agreement is signed by him and that, unless so revoked by written notice to the Company, this Agreement will become effective and enforceable upon the expiration of the seven (7) day revocation period ("Effective Date"). Executive further acknowledges that the payments to him specified in this Agreement will be paid only after the expiration of such seven (7) day revocation period. |
3.9 |
Company and Executive further acknowledge that (a) they have read this Agreement, (b) the Company has offered Executive a period of 21 days to consider whether to enter into it and has either considered this Agreement and its terms for that period of time or has knowingly and voluntarily waived his right to do so, (c) they have been advised in writing to consult with an attorney prior to signing, (d) they are each signing it voluntarily with full knowledge that it is intended, to the maximum extent permitted by law, as a complete release and waiver of all claims, and without any coercion, undue influence, threat or intimidation of any kind or type whatsoever, and (e) nothing herein constitutes any admission of liability or wrongdoing on the part of the Executive or the Company. Company represents that it has the full authority to enter into this Agreement and that the terms and conditions are fully binding upon it. |
3.10. |
Executive hereby designates Amy L. O'Neil of Copley, Ohio, his spouse, as the primary beneficiary of any rights or amounts to be received under this Agreement that are vested or unpaid when Executive dies. |
3.11 |
Any notices, consents, request, demands, approvals or other communications to be given under this Agreement must be given in writing and must be sent by registered or certified mail, return receipt requested, to Executive and his legal counsel at the last address which he has provided in writing to the Company or, in the case of the Company, to the President and CEO, and legal counsel for the Company. |
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of each of the parties hereto as of the date first written above.
/s/ Kevin C. O'Neil |
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KEVIN C. O'NEIL |
MYERS INDUSTRIES, INC. |
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(the "Company") |
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By: /s/ Donald A. Merril |
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DONALD A. MERRIL, Vice President, Chief Financial |
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Officer and Secretary |
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Myers Industries, Inc. |
AMENDED AND RESTATED |
1999 INCENTIVE STOCK PLAN |
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Amended and Restated April 25, 2006 |
Table of Contents
I. INTRODUCTION |
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1.1 |
Purpose of the Plan. |
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1.2 |
Definitions |
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II. ADMINISTRATION |
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2.1 |
Administration |
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2.2 |
General Plan Restrictions |
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2.3 |
Maximum Number of Shares Available. |
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2.4 |
Participation. |
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2.5 |
Committee Action. |
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III. EMPLOYEE AWARD PROGRAM |
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3.1 |
Award of Stock Options. |
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(a) Documentation of Stock Option Awards. |
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(b) Option Price. |
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(c) Exercise and Term of Options. |
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(d) Limitations on ISOs. |
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3.2 |
Award of Stock Appreciation Rights |
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(a) General |
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(b) Number |
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(c) Duration. |
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(d) Exercise. |
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(e) Payment. |
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3.3 |
Performance Shares and Units |
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(a) Award of Performance Shares and Performance Units. |
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(b) Documentation of Performance Awards. |
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(c) Performance Period and Targets. |
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(d) Payment Respecting Performance Awards. |
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3.4 |
Restricted Stock and Restricted Stock Equivalents. |
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(a) Award of Restricted Stock. |
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(b) Documentation of Restricted Stock Awards. |
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(c) Restriction Period. |
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(d) Award of Restricted Stock Equivalents. |
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(e) Restricted Stock and Restricted Stock Equivalents Awarded to
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3.5 |
Other Awards. |
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3.6 |
Leave of Absence. |
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3.7 |
Separation or Termination of Employment. |
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-15- |
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(a) Definitions. |
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(b) Un-vested Awards. |
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(c) Vested Awards. |
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(d) Performance Awards |
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-16- |
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(e) Restricted Stock Awards. |
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(f) Adverse Act. |
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(g) Committee Discretion and Limitations. |
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IV. DIRECTOR AWARD PROGRAM |
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4.1 |
Definitions. |
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4.2 |
Director Awards. |
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4.3 |
Grant of Director Awards . |
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4.4 |
Award Agreement. |
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4.5 |
Vesting of Award |
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V. GENERAL PROVISIONS |
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-18- |
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5.1 |
Termination. |
-18- |
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5.2 |
Amendment. |
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5.3 |
Adjustments. |
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5.4 |
Registration Conditions. |
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5.5 |
Government and Other Regulations. |
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5.6 |
Other Compensation Plans and Programs. |
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5.7 |
Foreign Participants. |
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5.8 |
Miscellaneous Provisions. |
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VI. PLAN HISTORY |
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6.1 |
Effective Date |
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6.2 |
History. |
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I. INTRODUCTION
1.1 Purpose of the Plan
. The Board of Directors of Myers Industries, Inc., has established the Plan to further the Company's long-term financial success by creating the opportunity for key employees and non-employee directors of the Company and its Subsidiaries to receive stock-based compensation whereby they can share in achieving and sustaining such success. The Plan also provides a means to attract and retain the executive talent needed to achieve the Company's long-term growth and profitability objectives.
1.2 Definitions
When used in the Plan, unless otherwise defined, the following terms shall have the meanings set forth below.
(a) "Award" shall mean incentive stock options, non-qualified stock options, stock appreciation rights, performance awards, restricted stock or restricted stock equivalents, or other forms of equity-based awards consistent with the purposes of the Plan. The provisions of Awards and this Plan are intended to qualify awards made to certain Participants under the "performance-based" exception to the Code Section 162(m) deduction limitation.
(b) "Award Agreement" shall mean an agreement which shall evidence the particular terms, conditions, rights and duties of the Company and the Participant with respect to an Award.
An Award Agreement may be in written, electronic or other media, may be limited to a notation on the books and records of the Company and need not be signed by a representative of the Company or a Participant.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change of Control" shall mean a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended, as in effect on the date of this Agreement (the "Exchange Act"), whether or not the Company is then subject to such reporting requirement; provided that, without limitation, a Change in Control shall be deemed to have occurred if:
(i) Any "person" (as defined in Sections 13(d) and 14(d) of the Exchange Act), other than Stephen E. Myers or Mary Myers, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company's then outstanding securities; provided that a Change in Control shall not be deemed to occur under this clause (i) by reason of the acquisition of securities by the Company or an employee benefit plan (or any trust funding such a plan) maintained by the Company;
(ii) During any period of one year there shall cease to be a majority of the Board comprised of "Continuing Directors" as hereinafter defined; or
(iii) There occurs (A) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (B) the approval by the stockholders of the Company of a plan of complete liquidation of the Company, or (C) the sale or disposition by the Company of more than fifty percent (50%) of the Company's assets. For purposes of this Section 1.2(d)(iii), a sale of more than fifty percent (50%) of the Company's assets includes a sale of more than fifty percent (50%) of the aggregate value of the assets of the Company and its subsidiaries or the sale of stock of one or more of the Company's subsidiaries with an aggregate value in excess of fifty percent (50%) of the aggregate value of the Company and its subsidiaries or any combination of methods by which more than fifty percent (50%) of the aggregate value of the Company and its subsidiaries is sold.
(iv) For purposes of this Plan, a "Change of Control" will be deemed to occur:
(A) |
on the day on which a twenty percent (20%) or greater ownership interest described in Section 1.2(d)(i) is acquired, provided that a subsequent increase in such ownership interest after it first equals or exceeds twenty percent (20%) shall not be deemed a separate Change of Control; |
(B) |
on the day on which "Continuing Directors," as hereinafter defined, cease to be a majority of the Board as described in Section 1.2(d)(ii); |
(C) |
on the day of a merger, consolidation or sale of assets as described in Section 1.2(d)(iii); or |
(D) |
on the day of the approval of a plan of complete liquidation as described in Section 1.2(d)(iii). |
(v) For purposes of this Section 1.2(d), the words "Continuing Directors" mean individuals who at the beginning of any period (not including any period prior to the date of this Agreement) of one year constitute the Board and any new Director(s) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least a majority of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was previously so approved.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the Compensation Committee of the Board, or such other committee of the Board which shall be designated by the Board to administer the Plan (except where such authority has been granted to the Administrator under Article IV). If the Board does not designate the Compensation Committee as the Committee, the Committee will be composed of three or more persons who are from time to time appointed to serve by the Board. Each member of the Committee will be a "non-employee director" within the meaning of Rule 16b-3 of the Exchange Act or any successor rule, as any such rule may be amended from time to time, and will also qualify as an "outside director" within the meaning of Code Section 162(m). A person may be appointed to the Committee who does not qualify as a "non-employee director" if the Committee adopts and follows a recusal procedure which is determined to qualify under the Section 16 Rules.
(g) "Common Stock" shall mean the common stock of the Company, no par value per share, and may be either stock previously authorized but unissued, or stock reacquired by the Company.
(h) "Company" shall mean Myers Industries, Inc., its subsidiaries, and any successor in a merger, consolidation, reorganization or similar transaction.
(i) "Date of Grant" shall mean the date specified by the Committee or the Board of Directors on which a grant of an Award shall becomes effective.
(j) "Director" shall mean a duly elected member of the Board.
(k) "Fair Market Value" shall mean with respect to a given day, the closing sales price of a share of Common Stock, as reported by such responsible reporting service as the Committee may select, or if there were no transactions in the Common Stock on such day, then the last preceding day on which transactions took place. The foregoing notwithstanding, the Committee may determine the Fair Market Value in such other manner as is required by applicable laws or regulations.
(l) "Participant" shall mean an officer or full-time salaried employee (including a director who is also a full-time employee) of the Company or any of its Subsidiaries who, in the judgment of the Committee, is in a position to make a positive contribution to the management, growth and success of the Company and is thus designated by the Committee to receive an Award. A "Covered Participant" shall mean an executive officer of the Company.
(m) "Performance Measures" shall mean those measures that are stared in Section 3.3(c)(2).
(n) "Plan" shall mean the Company's Amended and Restated 1999 Incentive Stock Plan.
(o) "Securities Act" shall mean the Securities Act of 1933, as amended.
(p) "Subsidiaries" shall mean the majority-owned subsidiaries of the Company.
II. ADMINISTRATION
2.1 Administration.
The Plan shall be administered by the Committee with regard to the Employee Award Program, and by the Administrator with regard to the Director Award Program. The Committee and Administrator, as applicable, subject to the express provisions of the Plan, shall have full and exclusive authority to interpret the applicable provisions of the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan and to make all other determinations deemed necessary or advisable in the implementation and administration of the Plan. The Committee's and Administrator's interpretation and construction of the applicable parts of the Plan shall be conclusive and binding on all persons, including the Company and all Participants
Subject to the express provisions hereof or unless required by applicable law or regulation, no action of the Committee or the Administrator shall adversely affect the terms and conditions of any Award made to, or any rights hereunder or under any Award Agreement of, any Participant, without such Participant's consent.
2.2 General Plan Restrictions
. In addition to other restrictions contained in this Plan, the following restrictions shall apply:
(a) No annual grant under the Plan can exceed 2.0% of the shares of Common Stock (or equivalent) in any fiscal year.
(b) No employee, including executive officers, may receive more than 1.5% of shares of Common Stock (or equivalent) as an Award in any fiscal year.
(c) No re-load stock options may be granted.
(d) For Awards of Restricted Stock or Restricted Stock Equivalents granted to employees, the restriction periods must be at least three years for time-based restrictions, and at least one year for performance-based restrictions.
2.3 Maximum Number of Shares Available
. The maximum number of shares of Common Stock which currently may be granted under the Plan, including but not limited to those sold upon the exercise of Stock Options, delivered upon the exercise of Stock Appreciation Rights, awarded or sold as Restricted Stock or Restricted Stock Equivalents and released from any substantial risk of forfeiture, or awarded or delivered as Performance Shares and Performance Units, shall not exceed 1,617,171 shares, of which 1,544,371 are reserved for the Employee Award Program and 73,800 are reserved for the Director Award Program, but subject to adjustment pursuant to Section 5.3. No Incentive Stock Options shall be granted after January 1, 2009, or such other period required under the Code.
Any shares of Common Stock subject to an Award which for any reason is canceled (excluding shares subject to a Stock Option canceled upon the exercise of a related SAR to the extent shares are issued upon exercise of such SAR) or terminated without having been exercised; or any shares corresponding to other Awards under the Plan, which are forfeited, surrendered, expire or terminate before delivery of such shares, shall again be available for Awards under the Plan.
2.4 Participation
The Committee shall, from time to time, make the selection of Participants of the Employee Stock Option program and determine the Award or Awards to be granted to each Participant. In making its determinations, the Committee may take into account the nature of the services rendered or expected to be rendered by the respective Participants, their present and potential contributions to the Company's success, and such other factors as the Committee in its discretion shall deem relevant.
2.5 Committee Action
. The Committee may, through Award Agreements, limit its discretion under this Plan. To the extent such discretion is not specifically waived in an Award Agreement, the Committee shall retain such discretion.
III. EMPLOYEE AWARD PROGRAM
3.1 Award of Stock Options
. The Committee may, from time to time, subject to the provisions of the Plan and such other terms and conditions as the Committee may prescribe, award to any Participant ISOs and NSOs to purchase Common Stock.
(a)
Documentation of Stock Option Awards
(i) the number of shares of Common Stock as to which the SAR is exercised multiplied by the amount of the appreciation in such shares (for this purpose, the "appreciation" shall be the amount by which the Fair Market Value of a share of Common Stock subject to the SAR on the exercise date exceeds (A) in the case of an SAR related to a stock option, the purchase price of a share of Common Stock under the stock option or (B) in the case of an SAR granted alone, without reference to a related stock option, an amount which shall be determined by the Committee at the time of grant, provided, however, such amount is at least equal to the Fair Market Value of the Common Stock on the date the SAR is awarded (subject to adjustment under Section 5.3); by |
(ii) the Fair Market Value of a share of Common Stock on the exercise date. |
(g) Committee Discretion and Limitations. The Committee may, in its sole direction, permit the exercise of all or any portion of an Award not otherwise vested or exercisable or which may be deemed forfeited under the terms of the Plan, and may provide that all or some portion of the Award shall not terminate upon or by virtue of such employment termination. It is expressly provided, however, that no such discretion may permit the exercise of any Award in less than six months from the Date of Grant, represent a material increase in benefits, nor allow an Award to be exercisable after the stated expiration date.
V. GENERAL PROVISIONS
5.1 Termination
. The Board may, at any time and from time to time, suspend or terminate the Plan in whole or part.
No such amendment, suspension or termination shall materially and adversely affect the rights of Participants under outstanding Awards, without the consent of the Participants affected thereby.
5.2 Amendment
. After the Plan has been approved by the shareholders of the Company, no amendment of the Plan shall be made by the Committee, Board or Administrator without the approval of the Company's shareholders to the extent shareholder approval of the amendment is required by applicable law or regulations or the requirements of the NYSE (or subsequent exchange if applicable) on which the Common Stock is listed, or to the extent the amendment increases the maximum number of shares specified in the Plan (except that adjustments authorized shall not be limited by this provision).
The Committee, Board or Administrator may amend any Award Agreement evidencing an Award, provided, however, that except as provided in Section 5.3 (a) the option price per share may not be decreased nor the number increased following the Date of Grant of any related option right and (b) no such amendment shall, without the consent of the Participant, adversely affect such Participant's rights or obligations under any Award made prior to the date of such amendment, except as otherwise set forth in the Plan or the applicable Award Agreement.
5.3 Adjustments
. In the event of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations, exchanges of shares, spin-offs, liquidations, reclassifications or other similar changes in the capitalization of the Company, the number of shares of Common Stock available for grant under this Plan shall be adjusted proportionately or otherwise by the Board and, where deemed appropriate, the number of shares covered by outstanding stock options and the option price of outstanding stock options shall be similarly adjusted. Also, in instances where another corporation or other business entity is acquired by the Company, and the Company has assumed outstanding employee option grants under a prior existing plan of the acquired entity, similar adjustments are permitted at the discretion of the Committee. In the event of any other change affecting the Common Stock reserved under the Plan, such adjustment, if any, as may be deemed equitable by the Board, shall be made to give proper effect to such event.
5.4 Registration Conditions
. Unless issued pursuant to a registration statement under the Securities Act, no shares shall be issued to a Participant under the Plan unless the Participant represents to and agrees with the Company that such shares are being acquired for investment and not with a view to the resale or distribution thereof, or such other documentation as may be required by the Company unless, in the opinion of counsel to the Company, such representation, agreement or documentation is not necessary to comply with the Securities Act. Any restriction on the resale of shares shall be evidenced by an appropriate legend on the stock certificate.
The Company shall not be obligated to deliver any Common Stock until it has been listed on each securities exchange on which the Common Stock may then be listed or until there has been qualification under or compliance with such federal or state laws, rules or regulations as the Company may deem applicable. The Company shall use reasonable efforts to obtain such listing, qualification and compliance.
5.5 Government and Other Regulations
. The obligation of the Company to issue Awards under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any government agencies as may be required.
5.6 Other Compensation Plans and Programs
. The Plan shall not be deemed to preclude the implementation by the Company of other compensation plans or programs which may be in effect from time to time.
5.7 Foreign Participants
. The Committee may, in its sole discretion, from time to time and at anytime, take any and all action it deems desirable or necessary, which may include the following as example, but without limitation: (a) amending the Plan, (b) adopting new plan provisions, (c) adopting sub-plans, (d) adopting forms of Award Agreements, and (e) modification of any option grants to be awarded or which have been awarded; so that Awards to Participants who are foreign nationals or employed outside the United States recognize and comply with the differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.
In the case of any Award to any Participant who is an employee of a foreign subsidiary or foreign branch of the Company, the Committee may specify that such Award shall not be represented by shares of Common Stock or other securities but shall be represented by rights approximately equivalent (as determined by the Committee) to the rights that such Participant would have received if shares of Common Stock or other securities had been issued in the name of such Participant otherwise in accordance with the Plan, such rights being Stock Equivalents. The Stock Equivalents representing any such Award may subsequently, at the option of the Committee, be converted into cash or an equivalent number of shares of Common Stock or other securities under such circumstances and in such manner as the Committee may determine. Stock Equivalents shall be applied against the limits on the maximum number of shares of Common Stock in this Plan.
5.8 Miscellaneous Provisions
.
(a)
No Right to Continue Employment
. Nothing in the Plan or in any Award or Award Agreement confers upon any Participant the right to continue in the employ of the Company or its Subsidiaries or interferes with or restricts in any way the rights of the Company or its Subsidiaries to discharge any Participant at any time for any reason whatsoever, with or without cause.
(b)
Non-Transferability
. No right or interest of any Participant in any Award under the Plan shall be (i) assignable or transferable, except by will or the laws of descent and distribution or a valid beneficiary designation made in accordance with procedures established by the Committee, or (ii) liable for, or subject to, any lien, obligation or liability. An ISO may be exercised only by the Participant during his lifetime, by his estate or by the person who acquires the right to exercise such option by bequest or inheritance.
(c)
Designation of Beneficiary
. A Participant, in accordance with procedures established by the Committee, may designate a person or persons to receive, in the event of the Participant's death, (i) any payments with respect to which the Participant would then be entitled, and (ii) the right to continue to participate in the Plan to the extent of such Participant's outstanding Awards. Such designation shall be made upon forms supplied by and delivered to the Company and may be revoked in writing.
(d)
Withholding Taxes
. The Company shall have the right to deduct from any transfer of shares or other payment under the Plan an amount equal to the federal, state and local income taxes and employment taxes required to be withheld by it with respect to such transfer and payment and, if the cash portion of any such payment is less than the amount of taxes required to be withheld, to require the Participant or other person receiving such transfer or payment, to pay to the Company the balance of such taxes so required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay to the Company an amount required to be withheld under applicable income and employment tax laws, the Participant, in accordance with such rules as may be specified by the Board of Directors or the Administrator, may elect to satisfy the obligation, in whole or in part, by electing to have withheld, from the shares required to be delivered to the Participant, shares of Common Stock having a value equal to the amount required to be withheld (except in the case of Restricted Stock where an election under Section 83(b) of the Code has been made), or by delivering to the Company other shares of Common Stock held by such Participant.
The shares used for tax withholding settlement will be valued at an amount equal to the Fair Market Value of such Common Stock on the "Tax Date."
"
Tax Date" means the date upon which the tax is first determinable
.
Election by a Participant to have shares withheld or to deliver other shares of Common Stock for this purpose will be subject to the following restrictions: (a) such election must be made prior to the Tax Date and (b) such election will be subject to the disapproval of the Committee, Board of Directors or Administrator. In no event shall the aggregate Fair Market Value of the shares of Common Stock withheld and/or delivered pursuant to this Section to satisfy applicable withholding taxes in connection with an Award exceed the minimum amount of taxes required to be withheld.
(e)
Plan Expenses
. Any expenses of administering the Plan shall be borne by the Company.
(f)
Construction of Plan
. The interpretation of the Plan and the application of any rules implemented hereunder shall be determined solely in accordance with the laws of the State of Ohio.
(g)
Unfunded Plan
. The Plan shall be unfunded, and the Company shall not be required to segregate any assets which may at any time be represented by Awards. Any liability of the Company to any person with respect to an Award under this Plan shall be based solely upon any obligations which may be created by this Plan; no such obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company.
(h)
Benefit Plan Computations
. Any benefits received or amounts paid to a Participant with respect to any Award granted under the Plan shall not have any effect on the level of benefits provided to or received by any Participant, or the Participant's estate or beneficiary, as part of any employee benefit plan (other than the Plan) of the Company.
(i)
Pronouns, Singular and Plural
. The masculine may be read as feminine, the singular as plural and the plural as singular as necessary to give effect to the Plan.
(j)
Payment
. The exercise price will be payable in one of the alternative forms specified below:
(i) |
full payment in cash or check made payable to the Company's order; or
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(ii) |
full payment in shares of Common Stock held for the requisite period necessary to avoid a charge to the Company's reported earnings and valued at fair market value on the Exercise Date (as such term is defined below); or
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(iii) |
full payment in a combination of shares of Common Stock held for the requisite period necessary to avoid a charge to the Company's reported earnings and valued at fair market value on the Exercise Date and cash or check payable to the Company's order; or
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(iv) |
full payment through a sale and remittance procedure pursuant to which the Participant will provide irrevocable written directives to a designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate price payable for the purchased shares and shall concurrently provide written instructions to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction. |
For purposes of this subsection, the "Exercise Date" will be the date on which written notice of the option exercise is delivered to the Company, and the Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the provisions of the Plan. Except to the extent the sale and remittance procedure specified above is utilized for the exercise of the Award, payment of the Award price for the purchased shares must accompany the exercise notice.
(k)
Fractional Shares
. The Company shall not be required to sell or transfer any fractional share of Common Stock pursuant to the Plan, and any fractions will be settled in cash.
VI. PLAN HISTORY
6.1 Effective Date
. The Plan became effective as of January 1, 1999, upon approval by shareholders of the Company in April 1999. The Plan was amended and restated by the Company in February, 2002, and by the shareholders effective April 25, 2002, April 23, 2003, and April 25, 2006. The Plan and all outstanding Awards shall remain in effect until all outstanding Awards have been exercised, vested, awarded, expired, canceled or forfeited; provided, however, no additional grants of Awards mey be made after the earlier of (i) ten years from the date of adoption of the plan, or (ii) there are no additional shares available for issuances under awards.
6.2 History.
(a) On January 1, 1999, the Board of Directors of Myers Industries, Inc. adopted the 1999 Incentive Stock Plan, which Plan was approved in April 1999 by the shareholders at the Annual Shareholders Meeting.
(b) In February 2002, the Board proposed certain amendments to the Plan related to the grant of stock options to the non-employee directors of the Company and for certain non-material administrative changes, which Plan amendments were approved in April 2002 by the shareholders at the Annual Shareholders Meeting.
(c) In February 2003, the Board proposed certain amendments to the Plan related to the grant of stock options to the non-employee directors of the Company, which Plan amendments were approved in April 2003 by the shareholders at the Annual Shareholders Meeting.
(d) In February 2006, the Board proposed certain amendments to the Plan related to allowing the Board to (1) make grants of equity incentives to key employees in addition to incentive and non-qualified stock options, such as stock appreciation rights, performance awards, restricted stock or restricted stock equivalents, or other forms of equity-based awards consistent with the purposes of the Plan, (2) changing the annual award of to each non-employee member of the Board from 2,500 non-qualified stock options to acquire the Company's Common Stock, to 1,000 shares of restricted Common Stock vesting equally over four years, and without voting or dividend rights until vested, and (3) certain non-material administrative changes in line with the other changes. The Plan amendments were approved by the shareholders at the Annual Shareholders Meeting.
Exhibit 31(a)
Certification Per Section 302 of the Sarbanes-Oxley Act of 2003
I, John C. Orr, President and Chief Executive Officer of Myers Industries, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Myers Industries, 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 company as of, and for, the periods presented in this report;
4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company 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 company, 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 company'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 company's internal control over financial reporting that occurred during the company'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 company's internal control over financial reporting; and
5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
(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 company'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: August 9, 2006 |
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/s/ John C. Orr |
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John C. Orr, President and Chief Executive Officer |
Exhibit 31(b)
Certification Per Section 302 of the Sarbanes-Oxley Act of 2003
I, Donald A. Merril, Vice President and Chief Financial Officer of Myers Industries, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Myers Industries, 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 company as of, and for, the periods presented in this report;
4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company 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 company, 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 company'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 company's internal control over financial reporting that occurred during the company'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 company's internal control over financial reporting; and
5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
(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 company'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: August 9, 2006 |
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/s/ Donald A. Merril |
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Donald A. Merril, Vice President and Chief Financial Officer |
Exhibit 32
CERTIFICATIONS
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
/s/ John C. Orr |
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John C. Orr, President and Chief Executive Officer |
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Dated: August 9, 2006 |
In connection with the Quarterly Report of Myers Industries, Inc. (the Company) on
Form 10-Q for the period ended June 30, 2006, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Donald A. Merril, Vice President (Chief Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and to my knowledge:
(1) The Quarterly Report on Form 10-Q of the Company for the period ended
June 30, 2006 which this certification accompanies fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Donald A. Merril |
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Donald A. Merril, Vice President and Chief Financial Officer |
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Dated: August 9, 2006 |