Document 8DmOR2K0LYwpRZzzrMEdkQ8Z

AGENDA MEETING OF THE MCA BOARD OF DIRECTORS 10 a.m. , Tuesday, May 9, 1978 Embassy Row Hotel (Chancery Room) Washington, D. C. L II. III. IV. V. VI. VII. Opening Remarks and Introduction of Guests Minutes of Meeting of April 11, 1978 Business Items: (a) Report of Membership Committee Dover Chemical Corporation (b) Budget and Financing for Fiscal 1978-79 (Proposal mailed to Directors 4/19/78) (c) Ratification of Technical and Functional Committee Member Appointments (d) Report of Nominating Committee Report of Director of Government Relations Technical and Functional Committees Information Items by Directors Report of the President (Attachment) (Attachments) 5,5 ;;s jji 5|s Sis >;c >Js jf; } sjc jjs j|; :}c =[e s|s Chemical Forum Luncheon - The Madison (Dolley Madison Ballroom), Fifteenth and M Streets, N. W. Transportation from Embassy Row will be provided. # >{< ijs >}t ajc >'< ajs ajb CMA 071776 Next Meeting of the Directors - Wednesday, June 7, 1978, at 5:30 p. m. in the West Virginia Room, The Greenbrier, White Sulphur Springs, West Virginia, followed by cocktails at 6 p. m. in the Tyler Room and Dinner at 7 p, m. in the Fillmore and Van Buren Rooms. 2045 MINUTES of the two hundred sixty-seventh meeting of the Board of Directors of the Manufacturing Chemists' Association, Inc. , held at the Embassy Row Hotel, Washington, DC, May 9, 1978, at 10 a. m. Directors: James G. Affleck, Chairman M. Blouke Carus James W. Kent John T. Connor Ralph M. Knight Edward Donley Duncan J. MacLennan William J. Driver John K. McKinley Peter J. Fass Robert L. Mitchell John T. Files Paul F. Oreffice Edward J. Goett George F. Polzer Vincent L. Gregory, Jr. Charles W. Smith Richard E. Heckert' Tom K. Smith, Jr. John M. Henske Otto Sturzenegger Alternates: F. Scott Carpenter, Jr. (for Robert A. Charpie) Richard Fleming (for Edward Donley) Richard J. Hughes (for William S. Sneath) William B. Jackson (for Fletcher L. Byrom) Charles A. Polachi (for George F. Polzer) C. Robert Powell (for William H. Bricker) N. B. Sommer (for James G. Affleck) O. P. Thomas (for M. Donald McClusky) General Counsel: Outside Counsel: Staff Counsel: Edmund B. Frost Daniel K. Mayers Bruce M. Barackman Secretary-Treasurer: George E. Best ` By Invitation: R. P. Batchelor, Jr. , Diamond Shamrock Corporation E. P. Blanchard (SOCMA), E. I. du Pont de Nemours & Company A. C. Clark, MCA E. J. Klecka, MCA V. H. Peterson, MCA J. E. Slavick, MCA W, M. Stover, MCA CMA 071777 2046 I. MINUTES OF APRIL 11, 1978, MEETING Minutes of the April 11th Board meeting, as distributed, including the financial statement for ten months ended March 31, 1978, were approved. II. REPORT OF THE SECRETARY-TREASURER Exhibit A. III. BUSINESS ITEMS (a) Report of Membership Committee As chairman, Mr. Polzer reported the committee's having examined the qualifications of the company named below and recommended its election. ON MOTION, duly made and seconded, it was VOTED: That Dover Chemical Corporation be elected to membership in the Association. (b) Budget and Financing for Fiscal 1978-79 Mr. Affleck called attention to the budget and financing proposal which was mailed to Directors on April 19 as favorably recommended by the Executive and Finance Committees. ON MOTION, duly made and seconded, it was VOTED: That a budget for fiscal year 1978-79 in the amount of $4, 846,900, of which $4, 312,900 is for operations and $534, 000 for projects, be approv ed and presented to the membership at the Annual Meeting, funding to be provided by membership fees, plus income from investments, meetings, sale of publications, and overhead reimbursement from sub scribed projects; That the existing membership fee scale continue to apply in fiscal year 1978-79 except for increasing the maximum to $120, 000; That the maximum fee be further increased to $130, 000 for fiscal year 1979-80, $140, 000 for 1980-81, and $150,000 for 1981-82; That the registration fee for the Annual Meeting be $100 and for the Semiannual Meeting $75, an increase of $25 in each case; CMA 071778 2047 That the authority delegated to the President be con tinued at the same level, namely, to transfer among approved projects 10% ($53,400) of the total funds budgeted for them and to redistribute a like amount under operations, also to approve budget amounts up to a total of 2% ($96,938) of the fiscal year budget, with the understanding that individual amendments in excess of $10, 000 would be cleared with the chairman of the Executive Committee or Board and become subject to Executive Committee approval if so desired; and That there may be carried forward from fiscal year 1977-78 for future expenditure, in full or in part, the unexpended year-end balances of terminating budgeted projects. (c) Ratification of Technical and Functional Committee Member Appointments Appointments by the Executive Committee to become effective June 1. 1978, were ratified as listed in Exhibit B, with the understanding that all prior technical and functional committee member appointments will terminate the day before as a consequence of the approved reorganization. (d) Report of Nominating Committee Reporting as the chair man of the Nominating Committee on which Messrs. Donley and Sneath also served, Mr. Affleck presented the slate listed in Exhibit C, and this report was accepted. (e) Report of Search Committee With the Executive Com mittee serving as a search committee to find a presidential successor, Mr. Donley stated Heidrick and Struggles, Inc. , has been engaged to assist, naming Messrs. McFarland and Wilson as the firm's representatives on this assignment. Mr. Donley reiterated that comments and suggestions would be welcome. IV. REPORT OF DIRECTOR OF GOVERNMENT RELATIONS Mr. Stover's report is attached as Exhibit D. A tabulation of the status of legislation of interest to MCA as of May 5, 1978, was distributed to those present, Mr. Connor stressed the importance of the pending U.S. /U.K. tax treaty, encouraging that it be supported without reservations. V. TECHNICAL AND FUNCTIONAL COMMITTEES Summaries of recent meetings of the following committees were dis tributed in advance with the tentative agenda: 2048 Chemical Packaging Committee Economic Policy Review Committee Legal Advisory Committee Transportation Equipment Committee VI. INFORMATION ITEMS BY DIRECTORS As a committee member of the Business Roundtable, Mr. Thomas spoke apprehensively about the gas deregulation legislation under current considera tion, and invited individual expressions to him about it. Mr. Affleck indicated a position would be sought from MCA's Energy Conservation Committee. VII. REPORT OF THE PRESIDENT Mr. Driver's Staff Report is attached as Exhibit E. He called on Mr. Clark to summarize recent developments within MCA and externally in cooperation with the Association of American Railroads and the Department of Transportation directed to safer rail transport of hazardous substances. In the course of two hearings, one by a congressional subcommittee, MCA's CHEMTREC was strongly endorsed by several witnesses. Mr. Driver reported the Executive Committee's approval earlier today to retain Covington & Burling as special counsel to institute legal proceedings appealing EPA regulations on spills of hazardous substances under Section 311 of the Clean Water Act, legal costs for which may range up to $100, 000. Mr. Driver than handed out to those present copies of the Special Review Committee's Supplemental Report on Recommended Bylaws Revisions (April 11, 1978) and the drafted Bylaws changes pursuant thereto (Exhibit F). He characterized this as the second phase of a reorganization designed to im prove the Association's effectiveness, and outlined the principal changes to be accomplished. Because of the time deadline for including the Bylaws in the formal notice of the Annual Meeting, response by phone or telex by May 16 was requested. Mr. Affleck stated the revisions as presented were favorably recom mended by the Executive Committee, except for leaving to the Board whether five Board meetings a year would be preferred rather than four in view of the long span from June to November. Scheduling five regular meetings, i. e. , adding one in September, was approved. George E. Best Secretary - Treasurer CMA 071780 2048 Chemical Packaging Committee Economic Policy Review Committee Legal Advisory Committee Transportation Equipment Committee VI. INFORMATION ITEMS BY DIRECTORS As a committee member of the Business Roundtable, Mr. Thomas spoke apprehensively about the gas deregulation legislation under current considera tion, and invited individual expressions to him about it. Mr. Affleck indicated a position would be sought from MCA's Energy Conservation Committee. VU. REPORT OF THE PRESIDENT Mr. Driver's Staff Report is attached as Exhibit E. He called on Mr. Clark to summarize recent developments within MCA and externally in cooperation with the Association of American Railroads and the Department of Transportation directed to safer rail transport of hazardous substances. In the course of two hearings, one by a congressional subcommittee, MCA's CHEMTREC was strongly endorsed by several witnesses. Mr. Driver reported the.Executive Committee's approval earlier today to retain Covington & Burling as special counsel to institute legal proceedings appealing EPA regulations on spills of hazardous substances under Section 311 of the Clean Water Act, legal costs for which may range up to $100, 000. Mr. Driver than handed out to those present copies of the Special Review Committee's Supplemental Report on Recommended Bylaws Revisions (April 11, 1978) and the drafted Bylaws changes pursuant thereto (Exhibit F). He characterized this as the second phase of a reorganization designed to im prove the Association's effectiveness, and outlined the principal changes to be accomplished. Because of the time deadline for including the Bylaws in the formal notice of the Annual Meeting, response by phone or telex by May 16 was requested. Mr. Affleck stated the revisions as presented were favorably recommended by the Executive Committee, except for leaving to the Board whether five Board meetings a year would be preferred rather than four in view of the long span from June to November. Scheduling five regular meetings, i. e. , adding one in September, was approved. /LfrW i C. /_ 1' ,,, George E. Best Secretary-Treasurer Chairman of the Board CMA 071781 EXHIBIT A REPORT OF THE SECRETARY-TREASURER May 9, 1978 Dollar amounts rounded from tabular details ($000) INCOME & EXPENSE June 1. 1977 - April 30, 1978 - 11 Months (92%) Income - Membership Fees Other $3,249 730 $3,979 Expense - Operations Projects $3,142 212 $3,354 Percent of Budget 101.215% 135.185% 106.107% 90.106% 44.632% 84.654% ASSETS (As of April 30, 1978) Cash Investments Miscellaneous $ 23 6,697 6 $6,726 CMA 071782 4 MANUFACTURING CHEMISTS ASSOCIATION SJAlfc.MtNl OF FINANCIAL FOSfllON April 30, 1978 BALANCE SHEET Assets National Savings & Trust - Commercial Account National Savings & Trust - Payroll Account Imprest Funds Investments Bank Certificates of Deposit Bank Repurchase Agreements U. S. Govemnent Securities U. S. Government Agency Securities Corporate Securities Deposits 6 Advances 0. S. Government Printing Office American Airlines Postage Meter Travel Advances $ 16,026 6,000 600 $ 22,826 $ 700,000 175,000 3,217,653 1,202,500 1,402,250 6,697,403 $ 500 425 3,042 2.097 6.064 $6,726,293 Liabilities D. C. Use Tax Employee Benefits Installment Purchase* Liabilities & Fund Balances $ 54 29 6.147 $ 6,230 Reserve Deferred Compensation 125,625 Fund Balances Restricted (Schedule I (e>) Unrestricted - From Previous Fiscal Years - Current Fiscal Year $1,894,371 624,626 $4,075,241 2.519,197 6.594.438 $6,726,293 INCOME & EXPENSE INCOME Memberships Dues & Entrance Fees Income from Investments publications Sales Meeting & Special Funds (Schedule 1 (d)) Overhead Reimbursement Subscribed Projects (Schedule 1 (d)) Miscellaneous Total Income $ 79,320 $3t248,739 366,262 94,075 190,165 269,465 215 $3,978,796 EXPENSE (Schedule II) Management Technical - General Technical - Chemtrec Public Relations Government Relations Staff Services Total Expense Income less Expense FOOTNOTE; *Net Income on Completed Projects $ 924,036 963,346 251,064 532,426 369,146 313,946 $3,353,970 $ 624,826 E 8 iViOVWO CMA 071784 SCHEDULE 1 - RESTRICTED FUNDS tx MEETING ADVANCES Carry-Over of Budgeted Funds A -23 Hydrocarbon Emissions Control Cost Analysis A -24 Oxidant Level Control Study OH -5 Epidemology (Mortality) Study of Petrochemical Workers/Feasibility Total Carry-Over of Budgeted Funds Non-Budgeted Funds 4 Meetings Meetings, Workshops & Symposia Tank Car Mileage Compensation Vinyl Chloride Research Vinyl!dene Chloride Monomer Research Styrene Monomer Research Acrylonitrile Monomer Research Trichloroethylene Research Ethylene Bichloride Research Chlorobenzenes Research Phosgene Safety Research Fluorocarbons Research Allyl Chloride Research Epichlorobydrin Research Phthalate Esters Research Loss Data Bank Project Benzene Study Epoxy Resins Research Titanium Dioxide Research Butylsted Hydroxytoluene Research Chemical Industry Trade Advisor Total - Non-Budgeted Funds U Meetings Advance Membership Dues Plastics Croup Financial Package Document Center/OSHA Cancer Poltcv Total Balance June 1, 1977 (a) $ 45 ,000 24,748 7,500 $ 77,248 $ m,8i6 81,180 251,530 199,430 167,883 354,770 150,526 50,196 4,354 39,678 1 ,623,337 223,413 250,973 20,910 3,850 356,742 - $3,890,588 $ 10,000 $ 111,482 $ $4,089,318 Receipts (b) $* - $ $ 310,271 5,071 447,263 - 27 ,040 - 94,200 157,014 (529) 1,589,199 55,442 12,000 157,150 10,000 45,500 35,000 12,000 $2,956,621 $ $ 59,600 $ 5,000 $3,021,221 Expenditures <c) $ 44,980 24,748 7 ,500 $ 77,228 $ 196,058 40,028 306,549 47,838 96,311 246,124 118,089 6,996 - 12,692 1,203,354 88,690 14,646 27 ,094 12,586 200,536 - 87 11,885 $2,629,563 $ $ 45,426 $ 3,596 $2,755,813 Trans Eers To Income (d) $ $- $ 79,320 - L6 ,4 12 8,987 7 ,320 11,788 20,107 10,200 2,641 5,933 68,240 3,453 8,335 8,721 8,440 3,400 1,147 5,041 " $ 269,485 $ 10,000 $- $- $ 279 ,485 April 30, 1978 Balance April 30. 1978 (e) $ 20 - $ 20 $ 146,709 46,223 375,832 142,605 91,292 96,858 106,530 190,014 1,184 21,053 1,940,942 131,270 227,992 40,537 3,264 304,916 6,600 44,353 29,872 115 $3,948,161 $ $ 125,656 $ 1,404 $4,075,241 jtroccT raoGUN Employees operator; EXPENSE Salaries & Related Expense Retirement Plan & Croup Ins. Hosp. Ins. & Health Plan *(4)Legal Fees & Expense Consultants & Investment Serv. MANAGEMENT EXPENSE 13 BUDGET EXPENSE 27 BUDGET EXPENSE 7 BUDGET PUBLIC RELATIONS EXPENSE 12 BUDGET GOV'T RELATIONS EXPENSE 12 BUDGET STAFF SERVICES EXPENSE 14 BUDGET Afttl 30, 11 TOTAL TO DATE 11 MONTHS EXPENSE BUDGET 85 86 $352,825 $379,134 56,022 62,058 6,068 6,417 414,203 295,167 - 5,225 $543,979 $ 98,790 15,115 27,450 15,882 581,533 95,058 14,300 36,667 22,917 $127,182 $128,287 23,286 20,992 1,652 1,375 -- -- $232,255 $233,475 $$206,025 $228,342 56,481 38,042 33,143 32,129 6,168 6,142 4,662 5,042 - - 23,707 27,500 -" -- $190,621 $190,897 37,707 33,304 7,628 6,600 -- $1,652,887 $1,741,668 306,229 279,583 41,293 39,876 465,360 359,334 15,882 28,142 Audit Rent & Premises Expense Taxes & Insurance Supplies & Gen, Office Exp. Furniture & Equipment 4,500 21,534 17,234 8,750 3,511 3,667 23,558 14,071 11,000 1,833 _ 31,905 32,531 26,801 5,031 _ 35,292 26,583 33,917 6,600 - 6,987 67,888 2,550 168 _ 7,746 108,350 2,750 5,500 17,707 14,829 13,340 - _ 19,800 12,329 18,333 229 - 15,031 15,238 13,174 3,210 - 13,200 11,596 11,917 1,833 - 30,953 15,494 6,388 14,947 - 33,504 12,146 7,333 550 4,500 124,117 163,214 71,003 26,867 3,667 133,100 185,075 85,250 16,545 Printing Telephone & Telegraph Postage Travel & Entertainment Meeting Expense 4,498 6,903 3,316 10,370 8,257 5,225 6,783 4,125 13,750 13,750 18,882 24,375 26,293 585 2,475 21,358 32,083 27,500 825 1,358 18,804 510 398 - 1,191 19,617 917 1,375 - 4,925 9,183 41,482 24,021 47 4,858 8,433 50,417 25,208 92 - 8,915 8,045 13,066 3,484 917 7,608 11,000 18,333 3,667 - 6,091 1,740 578 - 1,558 6,692 2,108 917 - 10,781 68,778 79,468 74,726 12,373 16,224 70,491 100,650 87,083 18,334 *(7)Period lea Is,Books.Business Services Organizational Memberships Contingency 845 3,243 1,159 1,925 3,208 4,583 5,720 2,449 - 4,950 2,567 - 199 550 2,055 1,650 5,500 7,333 1,637 1,833 15,956 18,241 82 92 984 917 948 1,375 162 138 7,868 6,297 -- -- -" " 1,159 4,583 Operating Expense Totals $924,038 $855,479 $875,788 $ 944,625 $251,064 $298,742 $423,477 $419,925 $354,148 $381,792 $313,946 $295,580 $3,142,461 $3,196,143 PROJECTS Technical *(2) Insurance *(8) Occupational Health *(5) Water Resources Multl-Ccamit tee/Transport at Ion Multi-Commit tee/Publications; Safety Other gilt) 1 i c Relations Comunity Relations Conswer Information Environmental Quality Internal Publications Media Relations + (1) Water Pollution Comtunicatlons College & HI School Teacher Awards Education Exhibits Education Publications Government Relations *(3) Equal bployment Advisory Council Trade Advlaor Staff Services *(6) Document Center/OSHA Cancer Policy $ 15,601 $ - 46,417 969 17,314 7,257 22,917 9,167 82,500 3,850 78,650 23,833 $ 17,602 $ 22,183 15,952 44,643 30,370 32,083 5,250 23,633 7,182 9,167 6,805 6,875 16,571 15,125 4,361 4,125 4,058 16,958 $ 5,000 $ 4,583 10,000 33,000 $ $ 15,601 $ 22,917 - 9,167 46,417 82,500 969 3,850 17,314 7,257 78,650 23,833 17,602 15,952 30,370 5,250 7,182 6,805 16,571 4,361 4,858 22,183 44,643 32,083 23,833 9,167 6,875 15,125 4,125 16,958 5,000 10,000 4,583 33,000 $ 1,833 - 1,833 Project Totals $$ $ 87,558 $ 220,917 $ $ $108,951 $174,992 $ 15,000 $ 37,583 $ $ 1,833 $ 211,509 $ 435,325 COMBINED TOTAL $924,038 $855,479 $963,346 $1 ,165,542 $251,064 $298,742 $532,428 $594,917 $369,148 $419,375 $313,946 $297,413 $3,353,970 $3,631,468 Budget Amendments (1) by Executive Coonlttee July 22, 1977, provides $5,000 for Water Pollution Communications; supplement of $2,500 approved by the President September 19, 1977. (2) by Executive Committee September 13, 1977, provides $25,000 for Product Liability Survey. (3) by Executive Connlttee Septenber 13, 1977, provides $5,000 Contribution to the Equal Employment Advisory Council. (4) by the President October 14, 1977, provides $5,000 for Legal Fees to protest proposed Increase in Tank TruckFreight Rates; and by the Executive Comnlttee November 21, 1977, provides $30,000 for services of Special Legal Counsel in regard to legislativedevelopments on energyconservation. (5) by Board of Directors November 21, 1977, provides $75,000 for expert evaluation of EPA Toxic pollutants Criteria for Water. (6) by thePresident, December 27, 1977, provides $2,000 for MCA Document Center/OSHA Cancer Policy. (7) by the Executive Coras It tee January 10, 1978, provides $3,000 for Reporting Service on Product Liability. bv the Executive ' '^78, provides $20,000 for American industrial Health Councll/OSHA Hearings Monitor. CMA 071785 Exhibit B Manufacturing Chemists Association CHEMICAL REGULATIONS ADVISORY COMMITTEE Effective June 1, 1978 Term ending May 31, 1979 John Behun George S. Dominguez E. H. Hurst J. Roger McDonough, M. D. Thomas W. Mooney Term ending May 31, 1980 Etcyl H. Blair, Chairman* Joel B. Charm Richard Fleming Curtis W. Smith Melford F. Tietze Term ending May 31, 1981 Lory A. Crisorio Donald E. Ellison Taylor W. Hanavan L. Starr Monte C. Throdahl ^Through May 31, 1979 Mobil Chemical Company CIBA-GEIGY Corporation Nalco Chemical Company Tennessee Eastman Company The Procter & Gamble Company The Dow Chemical Company Allied Chemical Corporation Air Products and Chemicals, Inc. Shell Chemical Company ICI Americas Inc. Union Carbide Corporation Virginia Chemicals Inc. E. I. du Pont de Nemours & Company Celanese Corporation Monsanto Company MCA EC - 4/11/78 BD - 5/9/78 CMA 071786 Manufacturing Chemists Association DISTRIBUTION COMMITTEE Effective June 1, 1978 Term ending May 31, 19 79 Jack W. Bodenheimer L, L. Dintiman Donald G. Griffin James S. Paterson Charles E. Webb Term ending May 31, J. J. Clemens Thomas Gordon Herbert W. Kirby R. J. Kreps R. P. McFall 1980 Term ending May 31, 1981 Grant Arnold, Chairman* George A. Coffenberg Roland H. Dunlop V. H, Goodwin, Jr. John H. Norton ^Through May 31, 1979 Shell Chemical Company Union Carbide Corporation PPG Industries, Inc. Diamond Shamrock Corporation Pennwalt Corporation Dow Chemical U.S.A. ICI Americas Inc. Allied Chemical Corporation Chevron Chemical Company Gulf Oil Co. - U.S. Ethyl Corporation Stauffer Chemical Company Monsanto Company Exxon Chemical Company U.S.A. E, I, du Pont de Nemours & Company i MCA EC - 4/11/78 BD - 5/9/78 CM* 071787 I Manufacturing Chemists Association ENERGY CONSERVATION COMMITTEE Effective June 1, 19 78 Term ending May 31, 1979 M. O. Clark Raymond E. Doerr E. Fredericks Daniel M. Greeno, Chairman C. L, Knowles, Jr. Term ending May 31, 1980 Quentin Ebert Thomas A. Gamble Edward H. Mergens Larry L. Saphier Ray J. Seitz Term ending May 31, 1981 Walter F. Allaire Byron R. Brown, Jr. A. Bruce Burns Hugh R. Irvine J. Emmett Stevens Phillips Petroleum Company Monsanto Company Engelhard Minerals & Chemicals Corporation Stauffer Chemical Company Olin Corporation PPG Industries, Inc. Hercules Incorporated Shell Chemical Company The Dow Chemical Company Pfizer Inc. Allied Chemical Corporation E. I. du Pont de Nemours & Company Union Carbide Corporation Exxon Chemicals U.S.A. Air Products and Chemicals, Inc. , j MCA EC - 4/11/78 BD 5/9/78 CMA 071788 Manufacturing Chemists Association ENGINEERING ADVISORY COMMITTEE Effective June 1, 1978 Term ending May 31, 1979 T. W. Booth F. J. Heller Allen F. Jones William J. Knapp Bertrand B. Pearlman Term ending May 31, 1980 W. L. Henry R. G. Jobe Anthony T. Massari William T. McNair R. E. Olsen, Chairman* Term ending May 31, 1981 Andrew G. Gibson Gordon C. Hullar John W. Kelsall T. J, Kofodimos Walter Ta Rector * Through May 31, 1979 Tennessee Eastman Company Phillips Petroleum Company E. I. du Pont de Nemours St Company FMC Corporation Stauffer Chemical Company Dow Chemical U.S.A. Shell Oil Company Allied Chemical Corporation Celanese Corporation Exxon Chemical Company Olin Corporation The Procter St Gamble Company. Engelhard Minerals St Chemicals Corporation ARCO/Chemical Company Air Products and Chemicals, Inc. MCA EC - 4/11/78 BD - 5/9/78 CMA 071789 Manufacturing Chemists Association ENVIRONMENTAL MANAGEMENT COMMITTEE Effective June 1, 1978 Term ending May 31, 1979 E. McIntosh Cover J. L. Gray L, P. Haxby E. Neil Helmers J. D. Underwood Term ending May 31, 1980 Jackson B. Browning J. F. Byrd Lynn D. Johnson Ernest C. Ladd J. Richard Sayers Term ending May 31, 1981 E W. Callahan, Chairman* Anthony J. Diglio Richard J. Samelson Charles L. Sercu J. P. Thorn ^Through May 31, 1979 Olin Corporation Chemical Products Corporation Shell Oil Company E. I. du Pont de Nemours & Company Celanese Corporation Union Carbide Corporation The Procter & Gamble Company Rohm and Haas Company FMC Corporation Monsanto Company Allied Chemical Corporation Air Products and Chemicals, Inc. PPG Industries, Inc. The Dow Chemical Company Exxon Chemical Company U.S.A. MCA EC - 4/11/78 BD - 5/9/78 CMA 071790 Manufacturing Chemists Association GOVERNMENT RELATIONS COMMITTEE Effective June 1, 1978 Term ending May 31, 1979 Don A. Goodall Carroll W. Hayes J. Wilson Malloy, Jr,, Chairman Harris C. Miller Jack Woolley Term ending May 31, 1980 Robert E. Bates, Jr. Kenneth E. Davis John T. Estes William J. Kendrick Jeremiah J, Kenney, Jr. Term ending May 31, 1981 Francis E. Cook William C. Lowrey Charles T. Marck Sam Pickard E. Rogers Pleasants American Cyanamid Company Celanese Corporation Eastman Chemical Products, Inc. Hooker Chemical Corporation PPG Industries, Inc. Mobil Oil Corporation Rohm and Haas Company Allied Chemical Corporation Air Products and Chemicals, Union Carbide Corporation Inc. Stauffer Chemical Company Shell Oil Company Dow Chemical U.S.A. Monsanto Company E. I. du Pont de Nemours & Company MCA EC - 4/11/78 BD - 5/9/78 CMA 071791 Manufacturing Chemists Association INSURANCE COMMITTEE Effective June 1, 1978 Term ending May 31, 19 79 Donald W. Illingworth Richard E. Klingman, Chairman Peter F. Lopez William A. Miller Henry Taylor Term ending May 31, 1980 Robert B. Chapman Edward A. DeKoskie William F. Quinn, Jr, James R. Taylor Walter E. Winans Term ending May 31, 1981 John J, Delaney, Jr. Fred W. Ingham Donald M. Purdy David D. Ward W. C. Zacharias Hercules Incorporated UNIROYAL, Inc. Celanese Corporation Dart Industries Inc. Rohm and Haas Company Monsanto Company Allied Chemical Corporation Engelhard Minerals & Chemicals Corporation ICI Americas Inc. Stauffer Chemical Company Olin Corporation Union Carbide Corporation Diamond Shamrock Corporation Air Products and Chemicals, Inc. The Dow Chemical Company CA EC - 4/11/78 BD - 5/9/78 Manufacturing Chemists Association OCCUPATIONAL SAFETY AND HEALTH COMMITTEE Effective June 1, 1978 Term ending May 31, 1979 R. D. Fulwiler Richard O. Howard John M, Pardee Robert E. Rutherford Arlin G. Voress Term ending May 31, 1980 Linda M, Casey Robert M. Clyne, M. D. Carl De Martino, Chairman* H. L,, Kusnetz W. Mayo Smith Term ending May 31, 1981 Emil E. Christofano Benjamin Brace Holder, M. D. Richard L. O'Connell, M. D. Jack S. Snyder Frank A. Ubel * Through May 31, 1979 The Procter & Gamble Company Virginia Chemicals Inc, Eastman Kodak Company Gulf Science and Technology Company Union Carbide Corporation Ashland Oil, Inc. American Cyanamid Company E. I, du Pont de Nemours & Company Shell Oil Company Air Products and Chemicals, Inc. Hercules Incorporated Dow Chemical U.S.A. Oiin Corporation Merck &. Co. , Inc. Minnesota Mining and Manufacturing Company MCA EC - 4/21/78 JBD 5/9/78 CMA 071793 1- Manufacturing Chemists Association PATENTS AND INFORMATION RETRIEVAL COMMITTEE Effective June 1, 19 78 Term ending May 31, 1979 Edith Baker John J, Hagan Robert C. Kline, Chairman William L. Krayer Thomas I, O'Brien Term ending May 31, 1980 John B. Clark Robert C. Clement Joanne M. Egan Pauline Newman Patrick O'Leary Term ending May 31, 1981 John Erickson Lloyd L. Mahone Roy H. Massengill Richard G. Waterman Jacqueline N. Weitzel Hercules Incorporated American Cyanamid Company E. I. du Pont de Nemours & Company United States Steel Corporation Union Carbide Corporation Monsanto Company Shell Oil Company Air Products and Chemicals, Inc. FMC Corporation Gulf Oil Corporation Minnesota Mining and Manufacturing Company Stauffer Chemical Company Allied Chemical Corporation Dow Chemical U.S.A. PQ Corporation MCA EC - 4/11/78 BD - 5/9/78 CMA 071794 Manufacturing Chemists Association TAX POLICY COMMITTEE Effective June 1, 1978 Term ending May 31, 1979 Frederick T. Barbour, Chairman Matthew P. Landers Joseph R. Levee Robert C. Plumb Thomas M. Rasmussen Term ending May 31, 1980 Fred M. Cassidy Robert E. Glass Robert J. Moody Cornelius P. Powell Glenn W. White Term ending May 31, 1981 William M. Bellamy, Jr. Richard W. Brust Wallace J. Clarfield Theodore Killheffer G. Wesley Read Rohm and Haas Company Pfizer Inc. J. T. Baker Chemical Company American Cyanamid Company Monsanto Company Exxon Chemical Company Shell Oil Company FMC Corporation Air Products and Chemicals, Inc. The Dow Chemical Company Union Carbide Corporation Minnesota Mining and Manufacturing Company Olin Corporation E. I. du Pont de Nemours & Company El Paso Products Company I MCA EC - 4/11/78 BD - 5/9/78 CMA 071795 Nominating Committee Report for year beginning June 1, 1978 Exhibit C Chairman of the Board Vice Chairman of the Board Chairman of the Executive Committee President Edward Donley Tom K. Smith, Jr. John M. Henske William J. Driver [pending installation of successor Directors Terms ending May 31, 1981 Edward E. Barr, President, Sun Chemical Corporation Richard M. Bressler, President, ARCO/Chemical Company J. Earl Burrell, President, PPG Industries, Inc. William J. Ferracone, President, Chemicals Group, Crompton & Knowles Corporation Emerson Kampen, President, Great Lakes Chemical Company Seymour S. Preston III, President, Pennwalt Corporation Toy F. Reid, Vice President, Eastman Kodak Company Jack B. St. Clair, President, Shell Chemical Company William G. Simeral, Senior Vice President, E. I. du Pont de Nemours & Company Raymond C. Tower, President, FMC Corporation Alexander B. Trowbridge, Vice Chairman, Allied Chemical Corporation H, Kent Vanderhoef, Chairman and President, Kay-Fries Chemicals, Inc. Terms ending May 31, 1979 Edward Donley, Chairman, Air Products and Chemicals, Inc. ^Richard J. Hughes, Senior Vice President, Union Carbide Corporation ^Succeeding Mr. Sneath who will resign as of May 31, 1978 MCA - 5/9/78 Exhibit D 1 REPORT BY THE DIRECTOR OF GOVERNMENT RELATIONS WILLIAM M. STOVER MAY 9, 1978 TAX REFORM LEGISLATION IN LIMBO The House Ways and Means Committee began markup of the tax reduction/tax reform package, H.R. 12078, on April 17 under an ambitious schedule which calls for completion of markup by May 26 and filing of a Committee report by June 1. However, the Com mittee is already well behind schedule. Most markup sessions were postponed, ostensibly because of a conflict with the resump tion of the energy conference. It is also clear, however, that time is needed for the Administration and its supporters to regroup and to arrive at acceptable alternatives which can draw support from a majority of the Committee. During this period, President Carter met with several groups of Ways and Means Committee members ^^Erom both parties. Resumption of the markups is indefinite. There appears to be little enthusiasm for tax reform at this time either in the Ways and Means Committee or in Congress as a whole. In fact, a group of Ways and Means Committee Democrats, headed by Charles A. Vanik (D.-Ohio), has proposed that the Presi dent's tax cut/tax reform proposal be scrapped in favor of the mere extension of present tax cuts. To date the Ways and Means Committee has not reached decisions on the items of principal concern to the chemical industry, such as corporate tax rate reductions, other capital formation incentives, and foreign tax matters, such as DISC and deferral. ifl 1 i i MCA COMMENTS ON INTEGRATION OF TAXES On the last day of House Ways and Means Committee tax hearings in early April, Chairman Al Ullman invited interested persons to testify on his proposal for partial integration of personal and corporate income taxes. MCA did not testify at this session, but we later submitted a written statement on the subject, as an ex tension of Mr. Affleck's testimony March 6 in which he expressed |tCA support for the principle of eliminating double taxation of corporate earnings. CMA 071797 2 Among the more important points included in our statement was a recommendation that the proposal should take into account, for purposes of computing the shareholder credit account, the allowable foreign tax credit and the investment tax credit. Similarly, we proposed that consideration be given to computing taxes paid, for purposes of the shareholder credit account, prior to deductions such as accelerated depreciation. We also suggested that where a corporation suffers a net operating loss prior to the effective date of the proposal, income taxes, for purposes of the shareholder credit account, should not be reduced in the carry-forward year. VOTE DUE IN JUNE ON THE U, S. - U. K, INCOME TAX TREATY The Senate Foreign Relations Committee approved the United States - United Kingdom Income Tax Treaty on March 15. Senate floor action on this Treaty has now been postponed at least until June. A provision of the Treaty which would restrict the states' methods of taxing multinational corporations is controversial and has been opposed by California and several other states. During Senate floor dabate on the Treaty, Senator Frank Church (D.-Idaho) is expected to propose that a reservation be attached to Article 9, paragraph 4, of the Treaty, which would limit the methods states may use in apportioning income for state income tax purposes. A number of companies, primarily those with business connec tions in the U. K., strongly oppose the attachment of any reser vation to the Treaty and have urged their Senators to support ratification of the Treaty without reservation. ENERGY: NATURAL GAS Selected members of the House and Senate natural gas conference committee met on April 21 in the continuing effort to resolve their differences. This leadership group announced that an agreement had been reached, but a subsequent dispute arose as to the exact details. Senate spokesmen claim a conference majority in favor of the agree ment, which was described by Senator Henry M. Jackson as "right down the middle" between previous positions. The vote among House conferees is less certain. After a largely unproductive session last week, the full House/Senate conference meets again today to hear staff discussion of a re-drafted version of the compromise. CMA 071798 3 ENERGY: TAXES The energy tax conferees will not meet prior to an agreement being reached by the natural gas pricing conferees. However, hints of progress toward a natural gas agreement spurred some recent ac tivity. A user tax proposal was prepared by the Joint Committee on Taxation at the request of Congressmen Ullman (D.-Ore.) and Ashley (D.-Ohio). The MCA joined with a coalition of business organiza tions in requesting that the user tax proposal be scrapped, and communicated with each energy tax conferee to that effect. The status of the crude oil equalization tax (COET), considered the backbone of the Carter energy program, remains uncertain. Mr. Ullman was recently quoted as speculating that the tax might have to be set aside for the present, with Congress proceeding to complete work on the four other segments of the President's program. SENATE DEBATE NEARS ON LABOR LAW REFORM The Senate leadership has now agreed that floor debate on labor law reform will begin May 15. Opponents of S. 2467 are expected to mount a filibuster in an attempt to prevent passage of the bill, since there are insufficient votes to defeat it outright. Critical votes will therefore come when proponents move to invote cloture (cut off debate). MCA is working with a broad coalition of business groups to oppose the bill. We expect that the first test vote to invoke cloture may come as early as May 19, and we have alerted member companies to the need for a renewal of contacts with their Senators, urging that they support the filibuster and oppose cloture. Organized labor continues to consider this bill its top legis lative priority, and can be expected to step up the pressure on Senators during the Memorial Day Recess, May 26 - June 5. The best hope of blocking the bill lies in "extended debate" which would force the Senate leadership to lay it aside in order to move on to vital appropriations bills and other important measures. CMA 071799 - 4- A study on the economic impact of S. 2467 was released on April 11. Noted economist Dr. Pierre Rinfret pointed out in his report that the proposed amendments to the National Labor Relations Act would have a widespread negative impact on the economy. The study concluded that the proposed bill would increase the Consumer Price Index by about three percent for every ten percent increase in the unionization of American workers. In addition, the proposed legislation would raise the average hourly earnings in the manu facturing sector each time a non-union business becomes unionized. f SENATE COMMITTEE TO MARKUP LOBBYING REFORM BILL On April 26, the House of Representatives passed a lobbying disclosure bill (H.R. 8494), by a vote of 259 - 140. The House bill includes two objectionable floor amendments which would: (1) expand the definition of lobbying to include "grassroots con tacts"; and (2) require a registered lobbying organization that allocates more than one percent of its budget for lobbying to disclose details of its financial support from those who provide more than $3,000 to the organization. The Senate Governmental Affairs Committee, chaired by Senator Ribicoff (R.-Ct.), is scheduled to begin markup of lobbying dis closure bills, including S. 2971 (Ribicoff), on May 10 and 11. The Ribicoff bill is even more complicated and onerous than the House-passed bill. Another Senate bill (Muskie-Mathias, S. 2026) appears less objectionable. MCA is supporting the efforts of a business coalition to stop the Ribicoff bill, and working to modify the Muskie-Mathias bill into a more acceptable form. We have urged that member companies promptly contact their Senators, and especially members of the Governmental Affairs Com mittee, requesting opposition to the Ribicoff bill. . ( j < 1 j j i ( HOUSE SUBCOMMITTEE APPROVES LIMITED AMENDMENT TO THE TOXIC SUBSTANCES CONTROL ACT On May 4 the House Subcommittee on Consumer Protection and Finance completed markup of a clean bill, H.R. 12441 (Eckhardt), and passed it on to the full Interstate and Foreign Commerce Com mittee . 4 CMA 071800 5 The new bill amends Section 29 of the Toxic Substances Control Act, authorization for appropriations, by striking out $16,200,000 for the fiscal year ending September 30, 1978, and inserting $50,000,000. No other changes to existing law are contained in H.R. 12441. It is likely that the full Interstate and Foreign Commerce Committee will approve and report the bill without amendment by the May 15 deadline. The staff indicates there is a possibility the bill will then be brought to the House floor under suspension of rules as early as the first Monday in June. If this approach is adopted, floor amendments would not be germane. Assuming House approval of the authorization bill, it can be anticipated that the Senate will request a conference. We will then step up the process of educating conference committee members con cerning the undesirable substantive amendments to TSCA contained in the Senate-passed S. 1531. CMA 071801 Exhibit E STAFF REPORT by William J. Driver May 9, 1978 In a letter to members of the conference on the energy tax portion of the National Energy Plan (NEP), I strongly urged the elimi nation from the NEP of any tax on the business use of oil and gas. The letter was prompted by a March 23 business use tax proposal drafted by the Joint Committee on Taxation. The user tax concept was originally proposed by President Carter, and under the Administration's proposal, a tax of 90 cents per barrel would be imposed on industrial use of oil beginning in 1979. This would rise to $3.00 per barrel in 1985 and thereafter. The tax on natural gas would begin at $1.05 per barrel in 1979. It would make natural gas, per Btu content, equal to the cost of dis tillate oil by 1985, after which the tax would be phased out. Ii The President's user tax proposal underwent significant modifi cation in the House and Senate. The tax on industry now would apply only to oil and gas used as fuel in unspecified "certain" boilers, turbines and other internal combustion engines, and would be based on a complicated tier system. In my letter, I said that the proposed tax would have an adverse impact on our industry's positive balance of trade and would dupli cate objectives already addressed by conference agreements in coal conversion and energy conservation. I pointed out that the proposed tax would discriminate against industrial boilers relative to utilities and would create a complex bureaucratic system, which, from an accounting standpoint, might be impossible to administer. **** On April 10, I wrote to the chairman of the House Ways and Means Committee about his proposal to eliminate partially the double taxa tion of corporate earnings. These comments augmented Jim Affleck's MCA testimony of March 6 before the committee on President Carter's tax proposals. I stated that the Association favors the principle of eliminating double taxation, not just because it is a serious inequity, but because double taxation has contributed to the low rate of capital formation and the reliance on debt rather than on equity financing. +*** CMA 071802 2 In response to a request to present our views on the Department of Energy's regulatory process, we expressed concern that we cannot contribute earlier to the policymaking and regulatory process. One specific regulatory area that needs reviewing, we said, is the ob vious conflict between the regulatory objectives of the Clean Air Act and the objectives of the energy program to increase the use of coal and reduce dependency on imported oil. We applauded proposals that the non-regulatory Energy Information Administration review pro posed and final departmental regulations and recommended that EIA serve as DOE's data collection agency, since it would require periodic reviews of data and regulations. We urged a vigorous campaign to elimi nate unnecessary regulations. Efforts continue to convince Special Trade Representative Robert Strauss he should avoid making large tariff cuts on almost all chemicals in the multilateral trade negotiations. A congressional visitation campaign is being carried out through MCA's Government Relations Committee. Twenty-five to thirty congressmen have been contacted, including Russell Long, chairman of the Senate Finance Committee, and A1 Ullman, chairman of the House Ways and Means Committee. We are telling the congressmen of the industry's concern if the tariff cuts on chemicals are made as planned. The con gressmen are asked to intercede with Ambassador Strauss and to request that certain chemicals be exempted from the tariff cut agreement. There is considerable evidence that the congressmen are res ponding favorably, but there is no evidence that Ambassador Strauss has altered his plan. i /' ! j j ' i An effort also was made to inform the White House of the chemical industry's views and to request White House intercession with Ambassador Strauss. Bill Sneath, Jack Connor, Dick Heckert and Myron Foveaux met with Messrs. Rubenstein and Ginsberg of the White House on April 27 for a good interchange of information and ideas. The White House feels very confident that Ambassador Strauss will bring back a good agreement from Geneva. The industry made it clear it hoped to be in agreement with the Administration when the trade agreements were presented to Congress, probably in 1979, The impression was left that there might be opposition. The White House people agreed to contact Ambassador Strauss about the meeting and discuss our proposals. The door was left open for additional contacts. , , **** OSHA has not yet published proposals on chemical substances identification or on how to handle medical and industrial hygiene records. We expect the latter proposal to be published separately very soon. Our views on how to handle the chemical identification ^ CMA 071803 3 issue have been incorporated in an an alternate proposal drafted by a special MCA task group. The alternative, the task group feels, improves worker safety and health, but in a practical way. It focuses on chemical hazards in the workplace and on protective measures to be taken and does not simply list all substances to which an em ployee may be exposed, whether or not the substance may be potenti ally harmful. The plan also provides for maintaining the confidential ity of proprietary information and builds on the successful training practices of companies. **** The Subcommittee on Consumer Protection and Finance of the House Commerce Committee heard testimony on April 26 from Steven jellinek, EPA's assistant administrator for toxic substances. A roundtable discussion, at which MCA would have participated, has been postponed for the third time because of Chairman Eckhardt's involvement in the energy legislation conference committee. Com menting on Senate-passed amendments to the Toxic Substances Control Act, Mr. Jellinek repeated EPA's belief that the agency is not the correct one to administer federal indemnification programs for vic tims of chemical poisonings. Mr. Eckhardt said that this issue and consideration of a rulemaking amendment would be considered when the roundtable discussion by industry, labor, environmental groups and EPA could be rescheduled. We expect that the full com mittee will authorize additional funds for the implementation of TSCA by May 15, with no substantive amendments being included. **** The Executive Committee has approved a proposal to hire a con sultant to perform a rail systems analysis to identify problem areas in safety. The analysis will be used as a basis for developing ways to prevent rail accidents and to control the inadvertent release of chemicals. The proposal was made by the Task Force on Rail Trans portation of Hazardous Materials of MCA and the Association of American Railroads. Costs, estimated at $100,000 to $150,000, will be shared equally by MCA and AAR. Our share will come from an assessment on member companies of not over $2 per tank car. **** We continue to appear before various panels to discuss chemi cal industry programs for safe rail transportation of hazardous materials. The latest appearance was by A1 Clark before the Sub committee on Government Operations to explain the operations of CHEMTREC. On April 13, he spoke before the Federal Railroad Ad ministration, which is considering imposing the same requirements for type 105 tank cars now being retrofitted on type 112 and type 114 tank cars. MCA supports using shelf couplers, but recommends deferring other considerations until after further study. CMA 071804 4 In this connection, Secretary of Transportation Brock Adams will address the Chemical Forum today. He is expected to announce a revised and accelerated timetable for retrofitting rail tank cars used to transport hazardous materials. **** We have told the Office of Management and Budget that EPA's request for generic clearance of all data-gathering activities under certain sections of the Clean Water Act of 1977 is excessive. EPA, we said, would then have full discretionary power to accumulate an excessive amount of specific information, far beyond that needed to assess the impact of technology guidelines. We recommended that EPA be requested to withdraw their proposal and use the data it already has or which is available to it from state agencies, to make the evalv. ation it needs. Because of numerous requests from industry, OMB held a public hearing on May 8 on EPA's proposals. Ed Frost appeared for MCA in order to emphasize member company concern about the unreason ably broad and unnecessary data gathering that is implicit in EPA's request. **** I have approved funding for a research program recommended by the Technical Panel on Chlorobenzenes to conduct teratologica1 studies and cosponsor research currently in progress under the supervision of the Central Toxicological Laboratory of Imperial Chemical Industries Limited. Total costs, including those of administration and supple mental research, are estimated to be $180,000, I have also approved, as part of the vinylidene chloride research program administered by MCA, new work to investigate the toxicological differences between four mice strains as well as the pharmacokine tics and metabolism of mice. The cost of the additional work is esti mated to be about $130,000, including administration. **** CMA 071805 Exhibit F MANUFACTURING CHEMISTS ASSOCIATION Special Review Committee For Examination of the Objectives, Structure, and Programs Of The Association SUPPLEMENTAL REPORT ON RECOMMENDED BY-LAWS REVISIONS April 11, 1978 CMA071806 FOREWORD Establishment of a Special Review Committee was authorized by the Executive Committee of the Board at its meeting in April 1977 for the purpose of undertaking a current examina tion of the objectives, structure and programs of the Manufacturing Chemists Association in a manner similar to prior Board-level examinations in 1957, 1962 and 1968. The Special Review Committee began its work in July 1977 under the chairmanship of Mr. Werner C. Brown and has met frequently since that time. The other members of the Committee are Messrs. James G. Affleck, Edward Donley, William J. Driver, Richard E. Heckert, Harry D. McNeeley, Paul F. Oreffice, George F. Polzer and Tom K. Smith, Jr. In January 1978 the Board approved the Committee's final report of its findings and substantive recommendations with respect to Association policy in various areas. In same month the Committee also undertook an examination of the Association's By-Laws (Appendix A)". In doing so, the Committee's particular focus was upon the structural interrelationships of the Board of Directors, Executive Committee and the offices of their respective chairmen and the President of the Association. :;:Omitted in Attachment to Board of Directors Minutes for May 9, 1978 2 CMA 071807 The authority of each such executive officer and body, including its responsibility for supervision, was carefully reviewed in an effort to determine whether the existing structure, both as set forth in the Association's By-Laws and in related practices and procedures, provided a rational and effective allocation of authority and duties among them and one which lent itself to accomplishing the Association's stated objects. In particular, the Special Review Committee was concerned with the sufficiency of the existing structure . to accomplish certain objects enumerated by the Board by resolution adopted March 12, 1963, as amended January 13, 1970, including the following: "1. To provide leadership to its members, and to represent them in presenting industry interests, views and recommendations to the legislative and executive branches of the Federal government (and to state and local governments where appropriate) on those matters which affect the industry's health, vigor and well being. ..." In the course of its review, the Special Review Committee reaffirmed its strong support for an organizational structure wherein allocation of authority and responsibilities is CMA 071808 3 carefully balanced among the Board, the Executive Committee and the President of the Association. The Committee rejected as inappropriate the approach taken by certain industry trade associations which have invested a single executive officer or body (for example, the association president) with disproportionate authority to direct its policies and manage its operations. The Committee believed, however, that the appropriate "balance" could be preserved while facilitating more aggressive decision-making and response to major problems, including advocacy of commonly held industry positions on public issues, by investing the Executive Committee with greater responsibility than that with which it has been previously endowed. It was recognized that the workload of the Executive Committee would be commensurately increased while that of the Eoard itself would be lessened, thus requiring fewer Board meetings. At the same time, consistent with continuing growth of the Association's membership -- 18 percent over the past five years -- and providing wider representation of the membership, the Committee has recommended enlargement of the Board. I I / 1 i \ CMA 071809 I The Special Review Committee has sought, by its recommen dations, to avoid derogating from the authority and respon sibilities of the office of the President, the latter being a full-time professional staff executive whose role, among other important responsibilities perceived by the Committee, includes being the Association's chief public spokesman and advocate. It was felt that a Board having a broader base of member representation and an Executive Committee having relatively greater responsibility would facilitate more incisive Board-level action which, in turn, would provide greater impetus and support to the Association's chief staff executive and his colleagues. The Committee did not believe that the authority of the President by virtue of the powers of his office as expressly set forth in the By-Laws requires any significant change. Even so, by following the more active direction of the Executive Committee, it is intended that he become as aggressive an executive or strong an advocate on various matters as the Executive Committee itself may determine from time to time. While no proposal has been made to recast the By-laws definition of the President's authority, the Committee puts forth its recommendation that the President provide the direct link between the Committee chairmen, including chairmen CMA 071810 5 of the technical and functional committees, and the members of the Executive Committee and Board. It was felt that the feasibility of this recommendation was assured by reason of the Board's recent action in reducing the number of committees requiring liaison with these bodies and oversight of their activities. Direct linkage through the office of the President was believed to be necessary to enable more timely and discreet response to committees' requests for authoritative direction and support. The proliferation of committee growth in the past, with attendant diffusion of staff support, was seen as having adversely affected, in the Committee's opinion, the effectiveness of Board-level contact, support and direction. Finally, as a policy matter, the Special Review Committee recommended that the Association's By-laws be amended to follow the practice of virtually every other trade association in providing for indemnification of officers and directors. It was believed that this was also consistent with the recommendation for more aggressive Board-level executive and staff action. April 11, 1978 WERNER C. BROWN, Chairman HARRY D. McNEELEY, Vice Chairman JAMES G. AFFLECK EDWARD DONLEY WILLIAM J. DRIVER RICHARD E. HECKERT PAUL F. OREFFICE GEORGE F. POLZER TOM K. SMITH. JR. -6- CMA 071811 PROPOSED AMENDMENTS TO THE BY-LAWS OF MANUFACTURING CHEMISTS ASSOCIATION Pursuant to the direction of the Special Review Committee at its meeting held on March 6, 1978, the following proposal for revision of Articles V, VI and VII of the By-Laws of the Manufacturing Chemists Association is set forth for consid eration by the Executive Committee of the Board of Directors of the Association. If the Executive Committee so approves, this proposal will be submitted to the Board of Directors and thereafter to the Annual Meeting of the Association to be held on June 8, 1978, together with specific language revisions prepared by the General Counsel of the Association for adoption pursuant to Article XI of the Association's ByLaws . Proposed Amendments to Article V ("Board of Directors") Section 1. Functions and Powers (1) This provision should be revised to increase membership of the Board of Directors to a maximum of 49 i | CMA 071812 7 directors, including 45 directors elected in accordance with Section 3 of the Article, and the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Committee and the President as ex officio members. Committee Comment: The By-Laws now provide for a maximum of 37 directors, including the four principal executive officers of the Association. By operation of Section 3, 15 new directors instead of 11 directors will be elected each year under the existing system of staggering successive three-year terms. The increase in Board membership generally reflects the growth in the membership of the Association. (2) References to specifically enumerated powers of the Board should be deleted. Committee Comment: The Board's pov;ers should be more generally stated, to-wit, to manage the business, property and affairs of the Association. To facilitate broader representation of the membership on the Board and to encourage improved attendance by Board members, regular meetings would be scheduled on a quarterly rather than monthly basis. Specific references to the , 1 i , 8 CMA 071813 power of the Board of Directors to control property and expenditures would be deleted to remove any implication that transactions affecting the Association's property or its expenditures would require Board approval in each instance and to reflect existing practice and procedure. Section 2. Eligibility (1) This provision should be revised to reflect the fact that the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Committee, and the President of the Association should be ex officio members of the Board who shall be elected to such offices by action of the Board of Directors. Committee Comment: The Chairman of the Board, the Vice Chairman of the Board and the Chairman of the Executive Committee, and the President are now elected by the Annual Meeting of the membership. Section 3. Election (1) This provision should be revised in a manner consistent with the revision of Sections 1 and 2 of this CMA 071814 9 Article to reflect the proposed revision of the method of electing certain of the principal executive officers of the Association by the Board of Directors as set forth above. Section 5. Meetings (1) This section should be revised to provide for the conduct of regular quarterly meetings of the Board of Directors in January, April, June and November of each year, with provision made for special meetings of the Board at any time when called by the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Committee or the President of the Association, or upon the written request of five members of the Board of Directors. Committee Comment: The Board of Directors has tended to function more as would the meeting of general share holders of a corporation rather than as an actionoriented body. Its function as a widely representative body approving or disapproving action or planning initiatives of the Association should be strengthened by expanding such representation while recognizing that it is not well constituted to originate and develop such initiatives. It is also believed that fewer 10 CMA 071815 meetings will promote the improvement of agenda presenta tions and attendance at meetings of the Board. (2) Express provision would be made to designate the June meeting of the Board of Directors as the Annual Meeting of the Board to reflect existing practice and to conform with other proposed revisions of the By-Laws' provisions for the periodic election of officers and members of the Executive Committee which are set forth, infra. Section 6. Quorum (1) This provision should be revised to provide that a quorum for meetings of the Board of Directors will be at least one-third of its members. Committee Comment: This amendment is intended to retain approximately the same minimum number of directors as the standard for constituting a quorum, notwithstanding the proposed expanded membership of the Board. 1 i CMA 071816 Section 8. Committees (1) The characterization of the Executive Committee should be revised to provide for its establishment as a standing committee rather than as an optional committee. Committee Comment: This change would not only reflect existing practice but underscore the view of the Special Review Committee that the Executive Committee is an important executive body of the Association which should exercise a stronger decision-making role. (2) Provision should be made for the annual election of members of Executive Committee at the Annual Meeting of the Board of Directors in June of each year. In accordance with existing practice, each member will serve until the next annual meeting or until his successor is appointed and qualified. Committee Comment: This revision will serve to make express provision for the existing practice. (3) This section should be revised to provide that, when the Board of Directors is not in session, the Executive 12 CMA 071817 } Committee shall possess and may exercise all of the powers I of the Board with respect to managing the business, property and affairs of the Association, including all matters of policy and administration. Committee Comment: The existing By-Laws provide that the Executive Committee may function "in respect of urgent matters which require action before the next Board meeting and as to which it is not practicable to secure the vote of the Board". This narrow definition of the authority of the Executive Committee is at variance with the widespread practice of major industry wide trade associations as well as the Committee's perception of the proper role of the Executive Committee. (4) Provision should be made for regularly scheduled meetings of the Executive Committee to be held once each month, with further provision made for special meetings of the Executive Committee when called by the designated executive officers of the Association or on the written request of three members. (5) The existing By-Laws provision entitled "Other Committees" should be expanded to provide for the appoint- 1J CMA 071818 ment by the Executive Committee of such special technical and functional committees as it deems necessary or advisable and the chairmen of such committees. Committee Comment: The Executive Committee will receive from the chairmen of existing technical and functional committees a description of their objectives and working strategies. Each will be reviewed and, if desirable, approved by the Executive Committee. We further contemplate that the President will initiate from time to time specific recommendations to the Executive Committee for the formation of other technical and functional committees and restructuring of existing committees as circumstances require. Regularly scheduled presentations by each committee before the Executive Committee and Board, or both, shall be arranged at least annually. j i | > 1 (6) Reference should be made to the Board's power to fill vacancies on the Executive Committee and the authority of the Board or the Executive Committee to fill vacancies among members of other committees. Committee Comment: This revision is appropriate to conform the provisions of the By-Laws to the existing practice. 14 _ CMA 071819 Section 10. Special Provision with Respect to the President (1) This provision should be deleted as unnecessary if the proposed revisions of Sections 3 and 4 of this Article are made as described above. Section 11. Alternates to Directors (1) The provision whereby a director may designate a proxy to attend Board meetings in his stead and to vote on matters of pending business would be deleted. Committee Comment: The Committee believes that change of this practice, which is not commonly followed by the Boards of other trade association, will promote attendance at quarterly Board meetings. Despite this change of practice, a director may continue to send a representative (as may any other member of the Association) to attend any Board meeting as an observer. Proposed Amendments to Article VI ("Officers" )___ i 15 CMA 071820 Section 1. Number and Election (1) This section should be revised to provide for the annual election of all executive officers of the Association by the Board of Directors at its Annual Meeting rather than by the Annual Meeting of the Association. Committee Comment: A conforming amendment of Section 1 of Article VII should also be made with respect to the Annual Meeting of the Association. Section 5. The President (1) No significant amendment of the description of the powers and duties of the office of the President is required and, accordingly, none is recommended other than the making of any technical changes necessary to conform this provision with the language of other provisions. Notwithstanding this, the Committee views many of the other proposed changes as measures which will strengthen the role of the President and permit the President to act even more aggressively than in the past. Administratively, he will be the direct link between the committees and the staff, on the one hand, and the Executive Committee and the Board, on the other hand. He 16 OMA 071821 will personally see, for example, that appearances by chairmen of committees are made at both scheduled dates for such appearances and, whenever required from time to time, at other meeting dates. New Section Proposed. Indemnification of Officers and Directors (1) Provision should be made for the indemnification of officers and directors of the Association to the extent permitted by the law. Committee Comment: Consideration of the procurement of appropriate insurance is also in order. Proposed Amendments to Article VII ("Meetings") Section 1. Annual Meeting. (1) Reference to the election of officers at the Annual Meeting of the Association membership would be deleted, The members would, however, continue to elect the directors of the Association other than ex officio members of the Board. - 17 - CMA 071822 PROPOSED AMENDMENTS TO THE BYLAWS (Language to be deleted struck through; new language underscored) Article V -- BOARD OF DIRECTORS Seeti-on-I- -Functions'and Powers- Th-e business and affairs-of-the Association shall-be-managedby-a -Board of-Directors consisting of the Gharirm&n-of-the -Board,- theViee-Chairman ef the Board, -the Chairman of the-Executive -Committee;the Presideotr and- up to thrity-three (-333 additional-Directors,- ft shallbe-the duty of-the Board ef-Di-renters to establish-and -direct the policiesef the Association,- to eontrol-its property-and operations,-to be respensible-for the expenditure-of-its funds- andrto exercise all-of-the powers ef the Assoeiatien,- e-xoept as-otherwise provided by-law-or by these Bylaws-, Section 1, Membership, Functions and Powers The business, property and affairs of the Association shall be man aged by a Board of Directors composed of the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Com mittee, and the President as ex officio members, and up to forty-five (45) additional Directors who shall be elected by the membership. Comment: The Bylaws now provide for a maximum of 37 directors, including the four principal executive officers of the Association. By operation of revised Section 3, 15 new directors instead of 11 directors will be elected each year under the existing system of staggering successive three-year terms. The increase in Board membership to forty-five (45) plus four ex officio members generally reflects the growth in the membership of the Association. The Board's powers in the revised section are gen erally stated in terms of the power to manage the busi ness, property and affairs of the Association. Specific references to the power of the Board of Directors to control property and expenditures would be deleted to remove any implication that transactions affecting the Association's property or its expenditures would re quire Board approval in each instance and to reflect existing practice and procedure. CMA 071823 Article V -- BOARD OF DIRECTORS Section 2. Eligibility (Second and Third sentences) No Director who has served a full three-year term shall be elected to a second consecutive three-year term, but may be re-elected after an interval of one year. The Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Committee, and the President shall be eligible to serve as ex officio Directors without regard to the time limitation of this section; and the President mav be choann from the public at large. A Bireeto-r -serving a>s Chairman of the- Execu tive Committee during-the concluding year -of- said- Director's- torm maybe-re-elected-to-a-contigHOHS-one-year- term if also-elected to serve ooiveurrenfcly-as Ghair-man-of the-Beardr oontiHuatiorvof ouch directorship being- contingent-on holding-the latter office-. Comment: The Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Com mittee, and the President are to be elected by the Board at its Annual Meeting and will serve ex officio without regard to the bylaw limitation on Directors' tenure. Instead, eligibility of Executive Officers will be left to the discretion of the Board subject to Article VI, Section 1. \ Article V -- BOARD OF DIRECTORS Section 3. Election (First andThird sentences) The Directors other than ex officio Directors shall be classified in respect of the time for which they shall severally hold office, by divid ing them into three classes.... The Pr-es-idenfr Chairman of the Board, Vice Chairman of the Board, Chairman of the Executive Committee and President upon election to that such offices shall become i. Directors^ without further election. Comment: These revisions are made to provide consistency with revisions of Article V, Section 1 and Article VI, Section 1. Article V -- BOARD OF DIRECTORS Section 4. Vacancies Any vacancy among the members of the Beard of Directors may be filled until the next Annual Meeting of the Association by the Board, or, if not filled by the Board, by the members of the Association at a special meeting. The term "vacancy" as used in this Section shall include any directorship which is unfilled as the result of the election of a Board member as one of the officers who is an ex officio member of the Board or the result of the death, resignation, removal or disqualification of a Director, 2- - CMA 071824 Comment: This revision is to conform with Article V, Section 1. Article V -- BOARD OF DIRECTORS Section 5, Meetings Regular meetings of the Board of Directors shall be held eneeeaeh-month-exce-pt-i-n -July-and August-, and e-x&ept-in- a-ny-ofehe-r -month -inwhich suoh -a meeting i-s defeermined-to-be unneoes-sa-ry- by the- Gha-irmanef-the Board and the-President,- four times a year in January, April, June and November. Special meetings of the Board may be held at any time when called by the Chairman of the Board, or by the President, or by written request of three members of the Board. Meetings of the Board shall be held at such time and place within or without the State of New York, as it may determine from time to time. The June meeting of the Board of Directors shall be the Annual Meeting of the Board for the election of officers, the appointment of the Executive Committee, and the transaction of other business. Comment: The Board of Directors has tended to function more as would the meeting of general shareholders of a corporation rather than as an action-oriented body. Its function as a widely representative body approv ing or disapproving action or planning initiatives of the Association should be strengthened by expanding such representation while recognizing that it is not well constituted to originate and develop such initia tives. To facilitate broader representation of the membership on the Board, and to encourage im proved attendance by Board members regular meet ings should be scheduled on a quarterly rather than a monthly basis. It is also believed that fewer meet ings will promote the improvement of agenda presenta tions and attendance at meetings of the Board. To con form with existing practice and other revisions of the ibylaws, express provision should be made to designate the June meeting as the Annual Meeting of the Board. Article V -- BOARD OF DIRECTORS Section 6. Quorum A ma-jorifey - One third (I {3) of all the members of the Board of Directors shall constitute a quorum, and when a quorum is present, ex cept as otherwise provided by law or by these Bylaws, action may be taken by the affirmative vote of a majority of those present. Comment; This amendment is intended to retain approximately the same minimum number of directors as the number which now constitutes a quorum, notwithstanding the proposed expanded membership of the Board, CMA 071825 Article V -- BOARD OF DIRECTORS Section 8. Committees Executive Gommittee. - - The Board ef Di-recters may appoint-an Executive- Gommittee of not- less than five ef its- own members,- including the Gha-ir-man-of- the -Board,- the -Vice Chairman-of-the -Board,- the-Chai-r-- man -ofbhe Executive Gommittee, -and -the President-of the-Asseciabion. The members-of the-Executive Gommi-ttee ether than the eleeted -officials heretofere named -shall serve-dHring- the-pleaeure-of the-Beardj- -The -Ex- ecative-Committee sha41 have-and-may-exercise between-meetings ef die Board fa)-a!l the powers and functions-of-the -Board -in-respect to urgentmatters which require -aetien-before- the next-Beard-meeting and as-to- which it i-s not prae tic able to -s e-cure-the vote -of- the -Board,- and-(h) euehether specific- pewe re and functions as-the -Board may-delegate -to- it-from time-to-time, - Three members -shall- c-onetitute -a -quorum ef the E-xece- tive Gommittee.- Executive Committee. The Executive Committee shall be a standing committee composed of the Chairman of the Board, the Vice Chair man of the Board, the Chairman of the Executive Committee, and the President as ex officio members, and at least five (5) other Directors who shall be ap pointed by the Board of Directors at its Annual Meeting and serve until the next Annual Meeting of the Board. Vacancies on the Executive Committee shall be filled by the Board of Directors at its regular meetings. The Execu tive Committee shall possess and may exercise all the powers of the Board of Directors with respect to conducting the business and affairs of the Assoc iation, including all matters of policy and administration, except when the Board of Directors is in session. It shall keep the Board fully informed concerning the business and affairs of the Association. Regular meetings of the Executive Committee shall be held in accordance with the schedule it shall prescribe. Special meetings may be held at any time when called by the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Com- mittee. or the President of the Association or on the written request of three (3) members. One-third (1/3) of all the members of the Executive Committee shall constitute a quoroum of the Executive Committee. Comment: This change would not only reflect existing practice but underscore the view of the Special Review Com mittee that the Executive Committee is an important executive body of the Association which should exercise a stronger decision-making role. This revision will also serve to make express provision for the existing practice regarding appointment of Executive Committee members. The existing Bylaws provide that the Execu tive Committee may function "in respect of urgent matters which require action before the next Board meeting and as to which it is not practicable to secure the vote of the -4- CMA 071826 Board". This narrow definition of the authority of the Executive Committee is at variance with the widespread practice of major industry-wide trade associations as well as the Special Review Committee's perception of the proper role of the Executive Committee, In accordance with the broadened role and responsibili ties of the Executive Committee under the revised Bylaws provision is made for regular monthly meetings and special meetings. Membership Committee. At its -fir-st- Annual Meeting each year (following- the-Annual Meeting-of the-A 6 sedation) - the Board of Directors shall appoint a Membership Committee consisting, among others, of three of its members, one of whom it shall designate as Chairman, Its duty shall be to receive and pass upon each application for membership in the Association, and to report to the Board of Directors, as to the eligi bility for membership of each applicant. Comment: This change is to conform with the change in Article V, section 5, Technical and Functional Committees. The Executive Committee may from time to time appoint such technical and functional committees as it shall deem necessary or advisable, each of which shall have such field of interest or activity, with such powers and duties, as the Executive Com mittee shall from time to time by resolution determine. The chairman and members of each such committee shall be appointed by the Executive Com mittee which shall also be empowered to fill vacancies. Comment: Appointment of other committees by the Executive Com mittee is consistent with the expanded authority of the Executive Committee. Rules and Regulations. Each committee appointed by the Board of Directors or the Executive Committee may, unless otherwise directed by the Board (or the Executive Committee if the committee was appointed by the Executive Committee) adopt such rules and regulations for the conduct of its affairs as it may deem desirable. Such rules and regulations as may be adopted shall be those that are appropriate for the conduct of the committee's affairs, consistent with the policy of the Association and subject to review and approval by the Board of Directors (or the Executive Committee if the com-_ mittee was appointed by the Executive Committee) in those instances where the Board or the Executive Committee may deem such review and approval desirable. -5- CMA 071827 r Comment: These changes conform this provision to foregoing changes which provide for Executive Committee appointment and supervision of "other committees." Article V -- BOARD OF DIRECTORS Seetin-I9. - Special-Provision with-Respeet to-the President- Notwithstanding-th-e ether-provisions-of this Artide-Vr one-D-ir-ecfeorfwho-may-be nominated- and-eleoted to -ser-v-e as-President ef -the Assoeia-tien)may -be-chosen from-the public at large. - T-hore- shall -be-ne limitation-of ti-me . with reepec-t t-o the- number-of-censeeutiv-e ter-me that sueh-Di-recbor-may- s-erv. either as-Director-or as -President.- Comment: This Section should be deleted as unnecessary in light of the proposed revisions of Article V, Sections 1, 2, and 3, and Article VI, Section 1. Article V -- BOARD OF DIRECTORS Seetion-1 i,, - Alter-nate-s to Dire-eters Any ireeto-r who de-siresto-de &o may-de-signute an alternate-to represent him- at those-meetings of the- Board w-hi-ch-he i-6 unable -to-attendr Be-eignati-on-of alternate s-skail be-subject to the approval of the Board of Direetora. -Any-alternate whe has-been-se designated and approved shallbe-entitled to eaet=the vote-of-the Dir eater-whom he-representa at any meeting of the Board whieh-he attends r and alternates-shall be -counted in ascertaining whether or not a quorum-is-present.- Comment: Change of this practice, which is not commonly fol lowed by the Boards of other trade associations will promote attendance at regular Board meetings. Article VI -- OFFICERS Section 1. Number and Election (First sentence only) The Officers of the Association shall consist of a Chairman of the Board, a Vice Chairman of the Board, a Chairman of the Executive Com mittee, a President, one or more Vice Presidents, and a Secretary-Trea surer, each of whom, except the Vice Presidents and the Secretary-Trea surer shall be an ex officio member of the Board of Directors. Except for the Vice Presidents and the Secretary-Treasurer, the Officers shall be elected annually at-the Annual-Meeting ef-the Assoeiafienr by the Board of Directors at the Annual Meeting of the Board. -6- CMA 071828 Comment: This section is revised to provide for the annual election of all executive officers of the Association by the Board of Directors at its Annual Meeting rather than at the Annual Meeting of the Association. This should promote a closer interrelationship be tween the Board, the executive officers, and the Executive Committee. L Article VI -- OFFICERS Section 5. President There may shall be elected as President an executive who will devote his full time to the affairs of the Association. The President, if ull-timer shall not be limited with respect to the duration of his ser 1 vice either as President or as a member of the Board of Directors, The President, in the absence or disability of the Chairman and Vice Chairman of the Board and the Chairman of the Executive Committee, shall preside at all meetings of the Board of Directors and Executive Committee. He shall also perform such other duties as are incident to the office of Presi dent, or as may be designated by the Board of Directors. Comment: These revisions are technical changes to conform this provision with the language of other revisions and to pres ent practice. Nevertheless, many of the other proposed changes should be viewed as measures which will strengthen the role of the President and permit the ) President to act even more aggressively than in the past. Administratively, he will be the direct link between the committees and the staff, on the one hand, and the Executive Committee and the Board, on the other hand. He will personally see, for ex ample, that appearances by chairmen of committees are made at both scheduled dates for such appearances and, whenever required from time to time, at other meeting dates. Article VII -- MEETINGS Section 1. Annual Meeting (First sentence only) The Annual Meeting of members of the Association for the election of Officers and Directors and other purposes, shall be held during the month of June each year, at such time and place, either within or without the State of New York, as may be fixed by the Board of Directors. Comment: This revision is made in conformance with the changes in Article VI, Section 1. -7- CMA 071829 Article VIII -- MISCELLANEOUS Section 4.Indemnification of Directors and Officers Directors and Officers of the Association shall be indemnified against expenses and liabilities arising by reason of the fact that they are a Director or Officer of the Association in accordance with and to the full extent permitted by the Not-for-Profit Corporation Law of the State of New York, Comment: This new provision explicitly provides for the indemnification of Officers and Directors mandated by the Not-for-Profit law of the State of New York, MCA EC 5/9/78 -8- * CMA 071830