Document yp1JvZowKyO8pR88D33GbzRk4

/eScr^ DEO* 1959 NOTES FOR ANNUAL MEETING December 10, 1959 GLD003403 INDEX Notes For Annual Meeting December 10, 1959 I BALANCE SHEET REVIEW A. Cash and Banking B. Short Term Securities C. Accounts and Notes Receivable - Trade D. Inventories E. Other Current Accounts and Investments F. Prepaid Insurance and Other Expenses 0. Property H. Other Assets 1. Short and Long Tens Financing J. Contingent Liability K. Stock end Stockholders II OPERATING STATEMENT A. Groan Profit B. Increase in Selling and Administrative Expense C. Other Income D Depredation E. Fixed Charges F. Advertising Expense 0. Research and Development H. Average Assets and Profit Return 1. Miscellaneous III CASH USE AND PROJECTION A. Application of Funds B. Five Year Forecast - Cash Baals IV EMPLOYEE BENEFITS A. Pension Plans B. Bonus Plan C. Stock Options D. Wage and Salary Ratios E. Salaries F. Other Benefits V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES A. Acquisitions B. Dispositions and Shutdowns C. Mining Activity D. Major Capital Expenditures E* Extraneous Expenses VI OTHER MAJOR FUNCTIONS AND ITEMS A. Donations B. Glidden's Purchasing Policy C. Audit D. Insurance E. Foreign Business F. Miscellaneous Page 1 1 2 3 4 4 4 5 5 8 9 10 10 11 11 11 12 12 12 12 12a 13 14 15 l6 18 18 19 19 21 23 24 25 25 26 26 27 27 29 GLD003404 nOTES FOR ANNUAL MEETING December 10, 1959 I BALANCE SHEET REVIEW A. CASH AND BANKING The Gll&dcn Company ma.intaj.n8 the following bank relationships: Olidden Ltd. Major Account And CreditLine Banks Other Bank Relationships Total 18 ll6 |g 3 2 2 Inti. 4 i Total Number 0* Bank Accounts 168 6 10 Cash is collected at 119 collection points in the Unitod States and In Canada and is deposited in local bank accounts. In addition, 14 post office lock hoses are operated under arrangement with hanks for servicing and deposit of funds received. Funds are then moved hy depository transfer check and hank wire to 12 regional collection centers and are under the control, of the Headquarters Bonking Deportment. Bills are paid by a central accounts payable department and division accounts payable departments which maintain working fund accounts. Small items are paid hy issuance of envelope draft. Funds are transferred to Working Fund accounts periodically hy the Headquarters Banking Department, using hank wire and check transfers. Freight payment plans are used at two hanks. Night depository arrangements are In effect where beneficial. B. SHORT-TERM SECURITIES At August 31, 1959 we reflected $7,957,1^0 of short-term securities, at cost, on our Balance Sheet. These consisted of the following: U. S. Government Tax Bills, Notes end Certificates Coitaiercial Paper Government Agency Obligations Public Housing Authority Notes $2,990,761.20 2,965#597.21 500,468.75 1,500,313.08 TSSEgSlS All of these securities had maturities of less than one year. The total amount of the investment portfolio approximately equaled the Choourgy Division inventories and receivahj.es liquidated hy sole of the Division. These funds will be reinvested at a later date. During the year our average short-term portfolio was $6,382,000. The average after tax interest Income was 1.84# {3.83# equivalent before tax). Average rate includes return on seme very short-term investments. 0LD003405 NOTES FOR ANNUAL MEETING Page 2 I BALANCE SHEET REVIEW C. ACCOUNTS AND NOTES RECEIVABLE - TRADE (OOO omitted) August 31. 1958 8-31-59 Excluding Chemurgy Total Accounts Receivable Notes Receivable Total Reserve for Bed Debts end Allowances Net Per Annual Report $ Bad Debt Reserve to Receivables $17,194 223 $17,417 ^ 512 $10,905 2.9$ $17,448 348 $TTt o 5 519 $17,277 2.9$ $20,357 M $2o7f5^ $557^ 2.6$ Past Du'i Receivables; Dollar Amount $ of Gross Receivables $ 1,215 7.1$ $ 1,108 6.4$ $ 1,113 5.4$ Receivables Charged Off Recoveries Against Receivables Charged Off Net Bad Debt Loss $ 222 102 $ 120 $ 198 $ iS $ 198 J4 $ 12? Bod Debt Loss os $ of Sales: 1959 1953 1957 1956 1955 -06 .06* .0# .04$ .02$ The accounts receivable turnover for the entire Company was approximately 32 days. This compares to 35 days in 1958 (30 days for 1958 excluding Chemurgy, and 32 days in 1957 and 1956 excluding Chemurgy.) The national median la approximately 34-35 days for all types of business. A percentage breakdown of total receivables by major division is as follows: Paint Food C-P-M Organic Chemical Private Ledger 1958 (Excluding Chemurgy) The Chesurgy Division receivables were all collected end the $10,000 reserve carried at August 31, 1958 more than covered any losses and allowances. GL0003A06 NOTES FOR ANNUAL MEETING Page 3 I BALANCE SHEET REVIEW D. INVENTORIES Published inventory up $2,816,766 from $36,771,649 to $39,588,415 t August 31, 1959. Detail is (000 omitted): August 31, 1959 August 31, 1958 Increase (Decrease) Paint Fooc. C-P-M Orgrnic Chemical LIFO Reserve $18,441 12,235 6,578 3,023 $40,277 ...m) $39,588 $16,662 11,383 7,328 2,076 $3t 39 J*a) $3wm $1,779 852 (750) , ?4T_ $2,828 J&i $2^816 principal items bringing about this increase of $2,6l6,,000 were: Paints - Branches Finished Stock up $670,000} and Division Raw Material up $441,000 and Finished Stock up $668,000 due to over-all increased volume. Food - Chicago and Berkeley Raw Material up $800,000 due to necessary additions of palm kernel at Chicago for specialty business and cottonseed at Berkeley for sufficient simply level. C-PeM Decreased Rev Material of $1,260,000 at Baltimore with working off of St. Helena ore piles. Orgsnic Chemical - General re-alignment on increased volume. Turnover - Published Ret Sales to year-end net inventory: 1959 1958 1957 -4.94 to 1 -5.91 to 1 -5.38 to 1 Inventory control is brought about through the Joint efforts of management and operating personnel. In the Paint Division, Finished Stock dollar goals are set up by a Headquarters Inventory Committee on a Regional basis after careful study and consultation with Regional management. It la up to Regional management to allocate geographically and by product within its goal. Results are compared to goal each month both at Headquarters and each Region and reasons for variances are determined and resolved. Raw Material control is brought about by a translation of Finished Stock goals by the joint effort of production management and purchasing perocnnel at both Headquarters and each Region. GLD003407 ROTES FOR ANNUAL MEETING Page 4 I BALANCE SHEET REVIEW D. INVENTORIES (continued) Inventory control in the Food Division also has pars set for total inventory by Division through the Joint effort of Headquarters and Division management. Of greater importance is the daily control exercised for Raw Materials based on market quotations of edible oils and condiment raw materials. The Durkee Trading Office is constantly projecting market conditions into material requirements by means of telephone and teletype communication vith Headquarters and Division management. Market conditions on pepper and other materials are also projected into requirements on a daily basis. The respective division managers in C-P-M and Organic Chemical exercise control of inventories as required by their individual market sources and operating requirements situations. E. OTHER CURRENT ACCOUNTS AND INVESTMENTS Detail at August 31 is: Marketable Securities (Canada) Margin Advances - Durkee and Hammond Misc. Notes and Accounts (G-I.C.A. and from sales of property, etc.) 1952 $ 1*07000 135,572 A 919A1P. $1,094,742 $ 437750 373,925 F. PREPAID INSURANCE AND OTHER EXPENSES Detail at August 31 Is: Prepaid Insurance Prepaid Taxes Prepaid Royalties Other Prepalds G. PROPERTY 113,127 103,01*6 ,, gi8T? $700,912 1958 $355^92 5^,948 122,122 For schedule of major capital expenditures and i960 projection, see page 24* Detail of lease of property to Central Soya is on page22. Depreciation is covered on page 11. Insurable value of all buildings, machinery and equipment owned by the Company, but excluding land and foundations, is $109,000,000. Rental obligations for buildings occupied by Company units are covered on page 8. GLD003408 NOTES FOR ANNUAL MEETING Page 5 I BALANCE SHEET REVIEW H. OTHER ASSETS Detail at August 31 Is: Prepaid Bond Discount and Expense Sundry Investments Advances, Deposits end Claims Misc. Notes and Accounts Receivable 1*0,201 175,369 563,300 *yH2g $ 36/075 209,185 494,276 $7397535 I. SHORT AND LONG TERM FINANCING 1. Short Texts Borrowing And Bank Linos Of Credit Fiscal 1959 Fiscal 1958 Average Short Term Borrowing 87,500 12,278,082 Maximum Short Term Borrowing . Amount Date 4,000,000 9/1*9/5/58 22,000,000 U/29-12/4/57 Minimum Short Tern Borrowing - Amount Date *09/12/58-8/31/59 2,500,000 8/21-8/28/58 Year-end Balance -0- 4,000,000 Average Interest Rate Paid 3.5* 3.8* Date of Payoff of Last Short Term Borrowing 9/12/58 GLD003A09 NOTES FOR ANNUAL MEETING Page 6 I BALANCE SHEET REVIEW I. SHORT AND LONG TERM FINANCING 1. Short Terra Borrowing AM Bank Lines of Credit (continued) We Maintain a line of credit of $10,000,000 for Olldden (plus $1,000,000 for International). This is carried at major banks across the country as fallows: Bank The Citizens end Southern Rational Bank City and State Atlanta, Georgia Amount $ 555753b Continental Illinois Rational Bank and Trust Company of Chicago Chicago, Illinois 1,000,000 The First Rational Bank of Chicago Chicago, Illinois 500,000 The Cleveland Trust Company Cleveland, Ohio 500,000 The Rational City Bank of Cleveland Cleveland, Ohio 1,000,000 Atlantic National Bank of Jacksonville Jacksonville, Florida 500,000 The Florida Nat'l. Bank of Jacksonville Jacksonville, Florida 500,000 Bank of America, Bell Branch Los Angeles, Calif. 500,000 The Louisvilla Trust Company Louisville, Kentucky 500,000 The Chase Manhattan Bank New York, New York 1,000,000 Chemical Bank Rev York Trust Company Rev York, Rev York 1,000,000 The First Nat'l. City Bank of New York New York, Nev York 1,000,000 The Boataen'a Rat'l. Bank of St* Louis St. Louis, Missouri 500,000 Mercantile Trust Company St. Louis, Missouri 500,000 Wells Fargo Bank San Francisco, Calif. 500,000 Union Commerce Bank * International Cleveland, Ohio 1,000,000* Since we sold Chemurgy at August 31> 1958 end issued debentures dated November 1, 1958, we have substantially eliminated our short term borrowing. GLD003410 ROTES FOR ANNUAL MEETING Page 7 I BALANCE SHEET REVIEW I. SHORT AND LONG TERM FINANCING 2. Term Bank Borrowing At August 31, 19^9 we had no tern tank loans. Balances carried at the end of fiscal 1958 vere paid off as follows: Balance 8-31-58 Paid in 1958 Balance September October riovember 11-30-58 Notes payable to 5 banks payable $1,500,000 annually 9-1-58 through 9-1-62 Interest Rate 3-1/4$ $ 7,500,000 $1,500,000 $ 6,000,000 -0- Notes payable to 10 banks under revolving credit agreement due 10-31-60 Interest Rate 4-1/4$ 20,000,000 4,000,000 1,000,000 15,000,000 $27,500,006 $5,500,000 $1,000,000 $21,000,600 0 (Note l] Note 1 Payment concurrent with receipt of proceeds of debenture issue. (Closing 11-6-58) 3. Debenture Issue The entire Indebtedness of The Olidden Company (excluding normal accounts payable and Interest and taxes) is represented by the $30,000,000 of 4-3/4$ sinking fund debentures dated November 1, 1958 and due November 1, 1983. The indenture provides for a sinking fund commencing November 1, 1964 to retire $1,500,000 of debenture annually and 100$ by maturity. The debentures vere offered publicity on October 28, 1958 at 99, and the effective interest cost is 4.90$ based on net proceeds after all expense. Total Issue $30,000,000 Bond Discount (1$) Miscellaneous Expenses Underwriting Commission 1-1/4$ Not Proceeds 300,000 96,277* 3T5,ooo * 918 charged directly to expense GL D003411 NOTES FOR ANNUAL MEETING Pago 8 I BALANCE SHEET REVIEW I. SHORT AND LONG TERM FINANCING 3. Debenture Issue (continued) Annual Interest Cost: Interest @4-3/4fl Amortization of Discount and Expense Year $1,5257000 30,816 $1,45^516 Month $Uff7?50 $121,318 Expense for 10 months Included In 1959 fiscal year $1,213,180 Market price of debentures has varied from a high of 104-5/8 to a low of 98-5/8. Market price was 100 on 8/31/59 and is on December 9, 1959* J. CONTINGENT LIABILITY Federal Income tax returns have been audited and final settlement made through our 1957 fiscal year. Ve know of no unusual items for the 1958 and 1959 fiscal years and have made no special reserve allowance for federal income taxes. No problem in government contract through Renegotiation or otherwise. Total govern ment volume of business, Including state and local, la only about one per cent of Net Sales. A major study of lease carnaltments for both real and personal property (i.e. trans portation equipment, electronic and mechanical office equipment, etc.) is now being made by the Company. Detail of the major real estate lease eamaitments at. August 31, 1959 is (confidential - DO NOT RELEASE): Paint Branches Active Pending Total Bethlehem plant Cleveland executive offices Portland office and warehouse Total Contract $4,914,708 940,480 540,000 1,866,477 JL22095 Fiscal i960 $ 920,099 100,992 $i,5a;gjji 67,500 151,336 19.140 $1,259,067 Sale and leaseback arrangements have not been used by the Company. Whenever such may be used advantageously, they will be given full consideration. GLD00341? MOTES FOR ANNUAL MEETING Pa9 9 I BALANCE SHEET REVIEW K. STOCK AMD STOCKHOUEBRS 1. Common Stock (2,307,850 shares o/s 8-31-59) The Company's cannon stock Is listed on the Rev Tork Stock Exchange and has unlisted trading privileges on the Midwest, Pacific Coast and Phlladelphla^altlmore Stock Exchanges. From January 1, 1959 through November 15, 1959* the price of the Company's stock ranged between a'high of 50-1A and a low of 41-7/8. (See Annual Report, page 18, for prior years.) During this same period an average of 1,300 shares were traded each day on the New York Stock Exchange. Tho dosing price of Glldden common December 9, 1959 was 2. Other Ccannents on Stock a. Ve hove no Treasury stock. b. With debentures out, we do not now see any financing, with stock. c. Stock dividends are always under consideration, but ve have no plana now for such. It is felt that stock dividends only Bpread earnings and value over a larger number of shares, with price adjusting accordingly. 3. Holdings of Shares as Follows: Individuals Institutions Brokers Nominees Total August 31, .1959 August ,31, 1958 No. of * Shares Ay . skares No. of >Shares Av. Shares Shareholders Held Held Shareholders Held Held 20,253 64.2ta> 73 21,665 ''KJ.'JST 73 288 4.21 337 299 3.55 273 179 11.30 1*456 199 14.65 1,692 273 20.23 1*710 242 13.28 1,261 20,993 100.00* 110 SS7E5 100.00* -T55 4. Stockholders are not given special opportunity to buy Company products, aa it is difficult to handle, impractical and unfair* GLd 0034J3 NOTES FOR ANNUAL MEETING Page 10 IX OPERATING STATEMENT A. GROSS PROFIT Published Ratio to Net Sales Dollars $53,229,592 Increase 1959 over 1958 Excluding Chemurgy Due to Net Sales Increase Due to Gross Margin Increase Excluding Chemurgy Published $**8,373,341 % *000 0O1 rw B. INCREASE IN SELLING AND ADMINISTRATIVE EXPENSE The Annual Report shows an Increase of $2,655,421, or on Net Sales decrease of 9.5$. The dollar increase vas explained in Report by mention of Advertising and Salaries, each up $1,100,000, for $2,200,000 of the $2,655,421. Eliminating Chenurgy, the Expense increase vas $4,238,367, or 13*0$ on a Net Sales increase of 5,6. Mojo? items of increase vara: Advertising and Promotion Sales end Office Salaries Cash Discount Maintenance Rent Soles Development Letters Travel Pension Bonus $1,200,000 1,600,000 100,000 60,000 150.000 180.000 200,000 250,000 200,000 $3,9**o,ooo Both Paints and Foods had substantial dollar and $ to Sales increases in Advertising and Promotion which were planned for development of sales volume. Paint Advertising vas merely being restored to pre-recession level. The Salary increase is found In Paint, Food, C-P-M and Headquarters vith all four Divisions of the Company and Headquarters shoving more people on the payroll. Paint is 19 $1,350,000 vith $200,000 due to non-Branch General Paint and the balance in total Branches. About 75 people have been added to direct Branch payrolls with most of them not classified in either inside or outside sales. Food is up $80,000 vith a total of approximately 25 added primarily to office staffs except Bethlehem. C-P-M is $120,000 vith about 40 people added at Baltimore, 10 sales and 30 salary, by August 31, 1959* Headquarters up $90,000 vith about 50 more people Engineering, Executive and Food account for dollars. Cash Discount and Maintenance increases in Paint and C-P*M - not out of line. Rent entirely In Branches. Sales Development in Paints and Foods - Paint in line vith salea; Food is plan for sales development. Travel mostly Paint but Food and Head quarters up substantially. Pension and Bonus restored to pre-recession levels. GLD003414 NOTES FOR ANNUAL MEETING Page 11 II OPERATING STATEMENT B. INCREASE IN SELLING AND ADMINISTRATIVE EXPENSE (continued) A brief statement aa to cause of increase and comparative high level of Selling and Administration Expenses should admit to creeping increase largely tied to Salaries and other expenses of added people which are integral part of our growth program. (A gradual increase from 11.5$ to Net Sales in 1951 to 15*7$ in 1958) The Jump in 1959 to published 18.8$ is due primarily to Chemurgy which as a division bad ratio well below 10$ so elimination raises over-all level and also leaves unabsorbed over head due to non-reinvestment of capital freed. C, OTHER INCOME - PUBLISHED P 3. L The major items this year and last year were; Royalties Interest Earned Gain Disposal Capital Assets Gain - Disposal of Securities Organic Chemical Trading Income Other 1959 $332,131 209,376 75,378 27,528 76,214 44,174 $7557001 107,483 54,731 0 37,479 289,105 &&& Royalty decrease due to 1958 sale of Chemurgy patent to Pfizer. The largest item in 1958 "Other" was the Chemurgy Uee and Occupancy Fire Lose Recovery of $76,726. O.I.C.A. Royalty Income up from $60,000 in 1958 to $68,000 in 1959* D. DEPRECIATION Depreciation and amortization charges for 1959 were $6,579>313 against $5,838,032 in 1958. The charge on Chemurgy properties was $2,100,056 which was more than covered by the rental income of $2,175 >000 from Central Soya. Most property acquired since 1954 is depreciated for tax and booh purposes on the Sum-of-the -Years1 Digits method. Total Depreciation and Amortization Chemurgy Property Estimated S-Y-D Excess Straight Line Charge Excluding Chesurgy E. FIXED CHARGES 1959 $6,5757313 2,100,056 $4,479,257 1,516,519 $,962,738 $5,8387032 2,121,810 $3,716,222 1,135,863 $2,580,359 The two major items of this nature which may be of concern to shareholders and others are: Total Interest Expense - 1959 Real Estate Lease Liability - i960 $1,339,918 1,259,067 see page 8 GLD003415 NOTES FOR ANNUAL MEETING Page 12 II OPERATING STATEMENT F. ADVERTISING EXPENSE Advertising * to Sales Promotion i to Sales Total * to Sales 1959 1958 1957 1956 4,753,263 3,911,358 4,089,903 4,192,647 2.43* 1.79 1.81 1.85 691,547 529,028 598,953 923,723 .35* .24 .26 .41 G. RESEARCH AND DEVELOPMENT - CONTINUING DIVISIONS 5,444,810 4,440,386 4,688,856 5,116,370 2.78* 2.03 2.07 2.26 1958 Actual 1959 Actual 1959 Budget Xncr. i960 Budget Over i960 Actual Budget Research $1,013/666 $1,066,756 Sales Service 1,433,780 1,570,908 Research and Sales Service .$2,447,453 $2,637,65$ Control Lab. 927,648 982,662 Total Research and Lab. $3,375,094 $3,620,540 $1,175,845 a1,M591,M313 1,014,298 $1,259,250 $1,8m51,2%85 shiAm $4,246,710 18.0* 17.8 rm 15,6 17.3* H. AVERAGE ASSETS AND PROFIT RETURN Paint Food C-P-M Organic Chemical Total Division Total Company I. MISCELLANEOUS 1959 Average Assets $ 44,298,000 24,213,000 29,561,000 8,467,000 $106,539,000 $133,371,000 1959 * Return 19.4* 15.2 15.4 7.8 ISIS* 11.9* Attention may be called to ten year statistics In Annual Report. It may be pointed out, on Inquiry, that all departments of the Company were operated profitably In 1959 except the new tall oil unit at Port St. Joe In which there have been seme process difficulties in getting into full operation. GLD0034i6  e NOTES FOR ANNUAL MEETING Page 12 a. Ill CASH USE AND PROJECTION A. APPLICATION OF FUNDS 1959 1958 Source of Funds Net Income Depreciation Abandonment of St. Helena Total from Operations $ 7,633,531 , 6,579,313 0* $i 4,l ,844 $ 6,063,062 5,838,032 1,215,23? $13,116,533 Sale of Debentures Less Bank Loan Payments Sale of 9,680 shares of Ccession Stock under option Disposition of Fixed Assets Other Sources - Net $30,000,000 26,000,000 4,000,000 $ -01,500,000 (1,500,000) 351,033 201,724 (872,8|5) $17,892,766 -0- 1,565,831 100,810 $13,282,974 Disposition of Funds Dividends Declared $ 4,609,795 Expenditures for Property Plant and Equipment 7,607,001 Increases (Decreases) in Working Capital: Cash - Incr. (Deer.) $ (427,588) Short Term Securities * Incr. 7.957,140 A/C Receivable - Net - $ 7,529,552 Incr. (Deer.) Inventory - Incr. (Deer.) (3,270,987)* (939,W3)* Other Accounts - (Deer.) (805,563) Notes Payable - (Deer.) 5,500,000 A/C Payable (Incr.) Deer. (1,209,315) Accrued Taxes (incr.) Deer. (1,113,782) Other Changes (14,452) 5.675.970 $17,892,766 $ 4,596,340 9,214,395 $ (285,706) $ (285,706) 1,832,770 (6,859,707) (2,013,925) 3,500,000 1,535,105 1,861,991 (98,289) (527.761) $13,282,974 * Changes due to Chemurgy disposition are Accounts Receivable decrease of $2,898,438 and Inventory decrease of $3,756,249* CLD003<1 7 NOTES FOR ANNUAL MEETING Pass 13 III CASH USE AND PROJECTION B. FIVE-YEAR FORECAST - CASH BASIS Estimated Funds from Profit, Depreciation, Chemurgy Disposition and Miscellaneous Sources Leas Estimated Dividends Net Cash in Flow Add Cash Balance Net Cash Available Needed for Receivable Si Inventory Growth Needed for Receivable & Inventory Chemurgy Normal Capital Replacement Normal Capital Replacoment-Chemurgy Operational Cash Required Remaining Funds for Growth Usage Growth Capital - Mostly Approved Chemurgy Balance of Funds Available for Future Growth As of 8/31 - 000 Omitted Next -------East Five Years Five Years Fiscal I960 1960-1964 1955-1959 (Actual) $15,661 4,616 $11,045 16,825 $27,870 3,600 m 5,066 as 6,000 $1375537 7,479 $95,311 26,361 $5f5o AgR $85,775 19,000 m 20,351 7,000 $39,454 13,790 Hi,(91 130 16,061 $56,778 12,526 (6,624) 11,630 1,078 6,000 $34,168 33,HI 8,232 $ 5,725 $25,634 $(7,175) Capital Projections: Actual 5 Ira. (1955-59) i960 1961 1962 1963 1964 Estimated 3 Yrs. (1960-64) Paint $71555 3^57 2,660 2,235 1,920 2.120 $12,196 Working Capital Estimated 3 Yrs. (1960-64) $10,000 Food $57586 1,800 800 900 1,000 $S?S&5 $4,000 CPM $2^99 37508 3,461 800 900 1,000 $11,469 Organic Total Chemical (ind. H&q, 3573jf TXTfmr 17425 600 8,571 300 4,185 400 4,170 00 4,670 $3,225 $34,141 $ 2,000 $1,600 $19,000 GL003428 Page 14 Gl_000341q nOTSS FOR ANNUAL MEETING Page 1^ IV EMPLOYEE BENEFITS A. PENSION PLANS (continued) As of October 31, 1959, the cost and market values of our trust investoenta were as follows: Cost: Dollar Amount U.S. Salary $10,664,842 13* S. Hourly IS75357550 Canadian Salary 1664,271 Canadian Hourly $157,195 * Equities Incl. Glidden Stock 38.0653 (4.38*) 32.53* (3.78*) 4o.8* 40.8* Fixed Income Convertibles 53.15* 8.79* 56.72* 10.75* 59.2* 59.2* Market: Dollar Amount 11,763,099 2,912,879 559,218 148,716 * Equities Incl. Glidden Stock 51.93* (4.43*) 44.04* (3.82*) 42.1* 41.2* Fixed Income Convertibles 40.23* 7.84* 45.67* 10.29* 57.9* 58.8* Total Dollar Amount in Funds - At Cost At Market $13,346,158 $15,383,912 Glidden shares held by Pension Fund are voted by Hafner Si Co., oa Nominee of The Cleveland Trust Company, Trustee. B. BONUS PLAN Original plan adopted February 3, 1951 and amended February lk, 1952. Administered by a Bonus Conmltteo elected by the Board of Directors. In 1955 Gilbert suggested provision preventing bonus to top officers until a certain dividend has been paid. Formula provides 12* must be earned - pre tax - on bonus net capital (capital and term debt, etc.) before calculating a bonus provision of 7* of profit. The 1959 calculation of provision was as follows: Capital Stock, Debentures, Surplus 12* of frci^SaqmsJs Bonus Net Capital $120,660,589 Consolidated Net Income Add: Provision for Taxes Bonus and Interest on Debt Loss 12* of Bonus Net Capital Bonus Net Income 7* Equals Maximum Allovable Provision Used 7,633,531 9,621,118 GLD003420 17,254,649 H>79,gra a .775.378 194,276 194,200 NOTES FOR ANNUAL MEETING Page 16 TV EMPLOYEE BENEFITS B. BONUS PLAN (continued) Since 1951 the maximum allowable provision vas $2,557*863* We Lavs returned to profit $952,163 leaving $1,605,700 for bonus pay out. In 1958 no provision vaa made to the bonus reserve because of depressed profits. Forty-eight awards were made from reserve and totalled $48,500 (none to senior officers). A total of 1,072 awards have been made from 1951 through 1958. Maximum in any one year vas 212, lowest 48. The highest individual amount awarded vas $12,000 (to Duncan, Sprague, Ruth and Goldseth in 1951)* Gilbert suggested resubmitting plan every five years to stockholders. We feel vs need do so only vhon there is a material change. Current proxy ounaaarites plan. The 1959 awards will be made December 11, 1959* Approximately made totalling $ swards will be The purpose of the Bonus Plan is to provide reward end incentive to those employees and officers, except the Chairman of the Board of Directors and the President, vho, beyond the call of duty, contribute to the success of the Company. As provided in the Plan, each award of more than $1,000 la paid In annual Installments of 25$ of the amount awarded or $1,000, whichever is greater, and the Bonus Coamlttee determines vhat part of any award is to be paid in cash or stock. No bonus awarded to an employee for eny fiscal year may exceed 50$ of the basic annual salary of such employee at the end of such fiscal year. Ten officers of the Company vho serve as directors, and approximately 460 other employees (including eight officers) vho receive salaries of $750 or more per month, are currently eligible for consideration for bonus swards. The Chairman of the Board . of Directors and President may not be awarded a bonus under the Plea. C. STOCK OPTIONS 1. Old Stock Option Plan a. 1952 Stock Option Incentive Plan Adopted February 14, 1952 Under this Plan 100,000 shares of authorised end unissued Ccoscn Stock were made available. The Plan provided that no option could be granted to an employee after age 65, and no participant could receive options covering more than 5,000 shares. The Plan also provided that the option price could not be less than 95$ of the fair market value of the stock on the day the option vas granted, end the option period could not exceed ten years frea the date the option vas granted nor more than three months after retirement of a participant. All rights to exercise options terminate vhen an employee ceases to be an employee for any cause other than death or retirement. GLD003421 NOTES FOR ANNUAL MEETING Page 1J IV EMPtOYEE BENEFITS C. STOCK OPTIONS I. Old Stock Option Plan a. 1952 Stock Option Incentive Plan Adopted February 14, 1952 (continued) Ao of October 15, 1959, options to purchase 118,870 shares (55,200 by officers and directors) had been granted under the 1952 Plan. (Options for 19,710 shares hod expired by reason of termination of employment, of which options for 18,870 shares vers reissued, as authorized by the Pica, to qualifying employees.) Options representing 17,820 Ghares had been enerciced (3,380 by officers and directors). There were outstanding under the 1952 Plan as of October 15, 1959, options for 8l,34o shares (51,820 for officers and directors), exercisable over a period of ten years from the date granted but not more than three months after termination of a participant's employment. A total of fifteen officers and directors and 113 other employees held options under thaj.952 Plan. Officers and directors nomad in the remuneration table ^n page 5jhold options as follows: V Option Price of $35 Expiring 6-24-62 Option Price of $38 Expiring 12-27-6k Option Price of $37 Expiring 11-29-65 Option Price of $37*50 Expiring 9-29-67 Option Price of $41.50 Expiring 12-28-68 Dvight P. Joyce Alexander D. Dunccn Bsauford W. Maxey John H. Weeks Robert D. Horner William G. Phillips Willard C. Lighter Harvey L. Slaughter George M. Halsey V. David Stallcup George S. Warner All Directors and Officers aS'SL group (including those named above) 2,000 1,220 2,000 1,500 700 500 kOO 500 8,970 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 200 800 2,000 19,500 1,000 1,000 1,000 1,000 2,000 2,000 2,000 2,000 2,000 800 2,000 17,800 ... mmm ... ** mmm mmm ... mmm mmm mmm mmm 350 mmm mmm mmm mmm 300 500 1,000 . mmm 1,000 1,000 500 5,200 On September 29, 1959, the authority of the Company's Stock Option Committee to grant options under the 3.952 Stock Option Incentive Plan vas terminated by action of the Board of Directors* GLD003422 NOTES FOR ANNUAL MEETING Fags 18 IV EMPLOYEE BENEFITS C. STOCK OPTIONS 2. Rev Option Plan Provides Ccmaittec may option 100,000 shares of authorized and unissued Coanoa Stock. Principal differences from old plan: a. Option price not loss than lOCfs of market (old plan 95$) Both not less than book value. b. No option to employee after age 60 (old plan 65) c. May not he terminated and reissued at lover price. d. Tern of option sot by Ccaaittee up to 10 years and may not be exercised for tuo years after grant (old plan all for ten years). The selection of key employees who vill participate in, and the determination of the number of shares to be offered, will be made by the Stock Option Com mittee, elected annually by the Board of Directors. Employees vho have received options under the 1992 Plan vill be eligible to receive additional options. If the proposed 1959 Plan had been in effect as of October 13# 1959# fifteen officers end directors and an estimated 100 other employees vould probably have been considered eligible to participate in the Plan. So participant may receive options covering more than 3,000 shores. Directors vho are not officers or employees of the Company are not eligible to participate. D. WAGE AND SALARY RATIOS Manufacturing Wages to Cost of Products Sold Total Wages and Salaries to Ret Sales 199 o.C9$ 17.3 $ $33*932,101 1958 T31$ 16.2 $ $35*203,072 Total Wages* Salaries and Benefit Costs to Net Sales 18.6 $36*4-36,403 17.2 $ $37*278,752 E. SALARIES Our salary rates* including those for officers and other key employees, including bonus* ere fully in line vith studios on this subject* such os by AMA. We must be competitive in salaries and other inducements* such as stock options* to attract and hold good man. GL D003 423 NOTES FOR ANNUAL MESTH30 Pago 19 IV EMPLOYEE BENEFITS F. OTHER BENEFITS Other than group lnouraaca plans, ve do not have any major progrant or plan of the so-called -welfare benefit or hey employee type. We have considered stock purchase plan for employees, but the Board has felt that matters of personal investment should rest with the Individual. V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES A. ACQUISITIONS Our acquisition progress is an important part of our future plana which ere based on a philosophy of continual growth. We are emphasizing and will follow certain basic product approaches In our growth. First, research and development to improve existing products; second, create and introduce new products; and third, acquisition of established companies and products in the same or related fields of interest. Acquisition of ccopanies and products in the seme or related fields gives us ntaxlmun benefit from the abilities of our management, marketing, manufacturing and research people, and frea our production facilities. This acquisition philosophy should enable 113 to grow stronger in our chosen fields. During the last year, ve reviewed in excess of one hundred acquisition possibilities. We seriously considered twelve and acquired two. These two acquisitions were related to our paint operations in Canada. 1. R. C. Pauli & Sons - November 1, 1956 Bulk spice business consolidated with Berkeley C & C, in quarters leased at $21,600 per year until January 1961 with two year renewal option. Purchase Price Additional Expenditures for Moving and New Equipment $163,995 ^57.730 Consultants' contracts with B. and T. Pauli at total of $25,660 per year to November, 1963. 2. Canadian Branches October 1, 1959 Zn two separata transactions purchased paint business of Humphrey Paint end of Movat-Grant Ltd* and Douglass Paint Ltd., both effective October 1, 1959- Purchase prices are: Inventory gqpt. Total N-O^mt-Grant Si Douglass Vancouver, British Columbia $112,139 $40,312 $152^51 Victoria, British Columbia 24,541 10,247 34,788 Humphrey St. Thomas, Ontario 11,995 3,640 15,635 Windsor, Ontario 19,960 3A36 23,096 London, Ontario 36,925 2.187 39.112 $205,560 $59,522 $265,062 Gt034M ROTES FOR ANNUAL MEETING P&ge 20 V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES A. ACQUISITIONS 2. Canadian Branches - October 1, 1959 (continued) Total Net Sales of these five units in their 1959 fiscal years vaa $1,372,355 of vhich a substantial portion vas sales of Glidden materials purchased from our Toronto Division. 3. General Paint Co. - June 1, 195Q Original investment totaled $785,318. Investment at August 31, 1959 (does not include San Francisco): Plant and Equipment (net) Tulsa, Portland i Branches Accounts Receivable Inventory (except San Francisco) $ 134,170 600,652 Recorded operating results are: Three months - 1958 Fiscal - 1959 Net Sales $l,233,72t 4,816.425 $6,100,152 Net Profit 6L D003425 NOTES FOR ANNUAL MEETING Page 21 V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES B. DISPOSITIONS AND SHUTDOWNS Annual Sales Last Full Year Profit or (Loss) Last Full Year Pre-Tax Avg. Profit Profit or or (Loss) (Loss) on Last 4 Yrs. Sale or Operated Abaadonaent After Tax Cash & Asset Utilisation Last Full Year Basis Hammond 7/l6/51 Oakland 10/25/54 Feed Mill 8/10/54 Portland 9/18/52 Cambridge T/l/55 Yadkin Jojaba - Caste11a Barytes Mines Buena Perk 8/31/56 Eastern Marg. i Salad Prod, 2/1/57 Elmhurst Building A,8/31/57:3,8/1/58 Scranton 6/9/58 St. Helena 3/31/58 Buena Perk Land 1/28/58 Chenurgy 9/l/58 Southern Pine 2/28/58 TOTAL $ 4,076,147 627,505 4,423,653 2,941,393 1,308,738 - to. - 4,033,465 $ (234,346) $ (373,225) $ (226,221) 39,296 65,538 15*608 92,554 13,771 (60,579) (9,537) e -- >m (11,032) (67,338) 142,235 96,376 (290,471) (19,369) (6,542) (8,149) 50,597 - (253,580) 9,996,668 (372,378) (414*580) (197,934) 1,100,590 m tm 31,982,480 1,070,947 $6l[561!55b e 52*028 - 1,477,859 103*448 $586,571 66,056 . 1*503,501 68,240 $ m!w 8 (252,240) 30,690 1[1*215,239) 174,957 1,258,763 Till * $ 2,044,T10 997,955 2,417,154 1,224,149 851,472 58,673 125,640 11,679 1,095,247 2,333,320 1,269,854 455,467 925,924 136,635 27,555,267* After Tax Profit on Sales and Abandonaonts Fixed Assets - Sold Fixed Assets - Abandoned Book Value $17,072^644 2,304,320 $ 197.529 After Ta* Cash Received mtW&6,W 1,198,246 Excess Cash Over Book Value $261,695 1958 Abff"df>nmnnts 1958 Sales of Units Abandoned - $32,937,052 (Will not have la 1959) Pre-Tax Profit (Loss) on 1958 Abandonments: St. Helena (Published) All Others $(1,215,239) 43.618 After Tax Cash Profit Flow from Sales and Abandonaonts Profits Applicable to Future Years (Chomurgy) Pre-Tax $1,337,631; After Tax $ 831*438 $ 1,003,223 <> Estimated on exercise of option to buy property September 1, 1961 GLD003A26 NOTES FOR ANNUAL MEETING Pago 22 V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES B. DISPOSITIONS AND SHUTDOWNS 1. Sale of Eastern Margarine and Salad Products Norwalk equipment and business and Iron Street business sold to Miami Margarine on February 1, 1957* Macon plant and business sold to J. H Filbert on March 1, 1957* Total cash freed up on basis of last four-year average assets vas $2,248,600 and total Net Loss eliminated on basis of last four-years' average was $414,580. Tannage of oil sold to Miami and Filbert in 1959 dropped from 57*000,000 lbs. in 1958 to 53*400,000 lbs. which is the same volume as the total sold to these companies and used in our own margarine and salad products in the 12 months before the sale. Royalty income from Miami dropped from $73*192 in 1958 to $50*053 in 1959. 2. Move of Elmhurst Total cost of the Elmhurst shutdown, sale and the move to Bethlehem was $970*676. Rental on the Bethlehem buildings and land is $67,500 per year to August 1, 1977 with option for ten more years at $54,000 per year. In addition, there is a total net property Investment at August 31, 1959 of $1,126,00.0. 3* St. Helena Abandonment The abandonment of St. Helena in fiscal 1998 vas of. a physical plant only, with the business being taken over by the new Adrian Joyce Works. Thus, there vas no elimination of sales and profits. The loss of $1,215,239 recorded in 1958 is a total of the loss taken on the sale of the equipment, $451,428; the loss on writedown of inventory, $77*042; said the loss on writedown of land and buildings to a sound appraised value* $686*769* The idle buildings and land are still owned by the Company and carried at the same appraised value of $318,742. The soundness of this appraisal has been re-affirmed and sale of the property will be made at the most advan tageous opportunity. 4. Chesnurgy Business of entire Chcnurgy Division sold to Central Soya Co* at September 1* 1998, with real estate leased for three years with option to buy at September 1, 1961. Inventory Sold at Book Value Receivables Assigned - Net 1999 Rental Income (per year) 1999 Depredation Expense 1959 Wise. Expenses - Net Net Cain GLD003AZ7 $3*796,249 if8* (2,100,096) $ NOTES FOR ANNUAL MEETING Pegs 23 V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES B. DISPOSITIONS AND SHUTDOWNS 4. Chemurgy (continued) The net book value of property leased at September 1, 1953 was $13*737*369 which vill be reduced In each of the three years of the lease by approxi mately $2,100,000 depreciation and amortization* The estimated net book value at September 1, 1961 vill be $7*437*000, vhereas the option price is $8,550,000. C. MINING ACTIVITY The zinc mine exploration commenced in 1951 was abandoned In 1956 at an after-tax coot of $563,772* A 20 year supply of ilmanite ore, representing a substantial portion of requirements, was acquired in October, 1959 at Lakewood, Hew Jersey* A concentrating and separating plant is slated for completion late in 3961. Capital requirements per B.AJR* are (do not disclose): Land and Mineral Rights Plant Authorized Capitol Mine Working Capital Total Required for Mins A.J.W. Inventory Reduction Net Required for Project $ 700,162 540.000 $ 4,dt3,242 GLD0034PS 1 i NOTES FOR ANNUAL MEETING Page 24 V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES D. MAJOR CAPITAL EXPENDITURES 1959 (in thousands of dollars) Expended Prior to 1959 Expended in 1959 To Be Expended In I960 Paint: 5 St. Louis Warehouse 14 Pacific Expansion 1-9-12-14 Universal Reactors (4) Branches All Other Paint Total Point $- m $. 15 4T 200 $ 976 $ 380 235 1,186 353 1,107 $ 3,261 Food: 12-21-22 13 13 21 22 Deodorizers (3) Boiler Plant Land Land S Warehouse Land and Building All Other Food Total Food e* $ 536 m 31 $ 832 $ 144 423* 245 250 657 626 $ 2,345 C-P^a: 32 32 32 33 32 ADJ - Phase 2 b 3 ADJ - Expansion Ilnenite Handling Nev Jersey Mina Baltimore Lab. All Other C-P-M Total C-P-H $11,520 348 $ 383 928 2,143 572 568 258 $4,850 $" 3,211 1,000* 147 _2 $ 5,308 Organic Chemical: 71 Port St. Joe Tail Oil Tarpons Plant Menthol Plant All Other Organic Chan. Total Organic Cheatcal $ 3,411 253 Headquarters: Total Coinpany $ 69 18 378 264 $ 729 $7,579 $- 1,007* 418 $ 1,425 206 $12,545 Used in Annual Report 9 10 Million GLD003429 NOTES FOR ANNUAL MEETING Page 25 V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES E. EXTRANEOUS EXPENSES Start-up and development expenses at Adrian Joyce, Pauli and Jacksonville, plus shutdown expenses, principally at St. Helena reduced 1959 earnings .05 cents per share - net. Pauli St. Helena Adrian Joyce Jam. Development Misc. Other Gains and Expenses - Net Before Tax T"9ST 109,697 170,993 113,269 $30&>3U After Tax $ '"*m' 52,655 82,076 5M69 .CT3.866) $U9,96 Per Share TC5? Comparable extraneous Items reduced earnings 58 cents In 1958 and 29 cents In 1957. (These expenses were published in 1957 and 1956 hut not In 1959*) VI OTHER MAJOR FUNCTIONS AND ITH1S A. DONATIONS The donations policy of the Company provides for reasonable support to educational, welfare and charitable organizations. This policy is administered by the Donations Committee under the direction and guidance of the President and Board of Directors. Educational support haa been given through the following: 1. Awarding of five scholarships under the auspices of the National Merit Scholarship Foundation. 1959 winners were: David C. Danoker (Haverford); Donald A. Eldam (M.I.T.); Gary J. Elvell (Stanford); Wa. R. Lowery (Vabash); Robert V. Templeton (Carloton). 2* Cooperative Contribution Plan, under which the Company makes unrestricted grants to degree-granting universities in an equal amount to the donations made by employees of the Cong*any to such colleges and universities. Contri buted 1959 fiscal - $3,^52 to 39 colleges. 3. Chemistry lectureship grants provided to five United States universities and one Canadian university to provide for lectures by outstanding Individuals end to help promote understanding and interest in scientific achievement. 4. Outright grants to selected colleges and universities, such as Case and Western Reserve. 5. Grants to selected foundations, including Ohio Foundation for Independent Colleges. Gi.0003430 ROTES FOR ANNUAL MEETING Page 26 VI OTRER MAJOR FUNCTIONS AND ITEMS A. DONATIONS (continued) In the Welfare and Health category, the Company has supported Halted Fund, Com munity Chest and Red Cross programs in the conmunlties where it has plants or branches. In addition, selective support has been given to other service organisations and foundations. Contributions are not given to sectarian groups, labor organisations, etc. Education Health & Welfare Other Total Donations * of Net Profit Ul $104, (c'Xtixro 1.37* 122 3^* 57 #9,c E 1.14* 1957 22* 70 8 $70,811 97* n, fil $69,852 .86* Per Employee $ 17.35 $ 10.95 $ 10.97 $ 10.93 OLIDDEN'S PURCHASING POLICIES OUdden'a Management has full control of the purchasing of all raw materials, packages, equipment, etc. Certain major coraaodltles such aa edible oils, spices, coconut, ilmenlte ore, gum rosin and turpentine are under the direct control of the operating Vice President. All other raw materials, packages, equipment and operating supplies are under the control end supervision of the General Purchasing Department. On most items the purchase orders are Issued locally by Divisional Purchasing Agents following the pattern established by the General Purchasing Department. We isbu s the purchase orders locally to eliminate a great deal of paper work and to enable our plants to run on smaller inventories and gat a better turnover* We think it good business to buy from our customers. In doing so we expect them to be competitive on service, quality and price. C. AUDIT 1. Ernst & Ernst representatives present at the meeting will be Messrs* N. T. Halvorsen, Partner, end A. A. Vilhelm, Assistant Manager. 2. Company internal audit staff conducts surprise audits of all operating units on a schedule calling for visits about once each year. GLD00343l JOTES FOR ANNUAL MEETING Pago 27 VI OTHER MAJOR FUNCTIONS AND ITEMS D. INSURANCE FIA coverage on all manufacturing properties except Canada, Buena Park, San Francisco, New Orleans, St. Louis, Minnecpolia Varnish only, Portland Tulsa, Iron Street, Collinsville, Scranton, Valdosta and Calumet and River Elevators. This FIA policy for fire, wind, hall, explosion, aircraft, smoke, vandalism and sprinkler leakage. FIA coverage is on agreed amount basis, with no co-insurance requirement. Locations excluded are under separata policies for fire, extended coverage and sprinkler leakage. Are on co-insurance basis - no agreed amount. Elevators under Underwriters Grain Ass'n. policy. Use and occupancy insurance also in FIA for locations they cover for fire, etc. Use and occupancy insurance other divisions specific with co-insurance. Also carry ocean marine and cargo insurance to extent necessary. Carry boiler and pressure vessel insurance where necessary. All employees bonded In substantial amount. Workmen's Compensation - We self-insure in states where possible (11), with an over ride $1,000,000 policy for catastrophe. Self-insurance on Workmen's Compensation has saved us over $1,000,000 in the last 23 years. Also carry comprehensive bodily injury, product liability, and property damage liability. There were no major fires in the 1959 fiscal year. Three smell fires resulted in total recoverable losses of $10,466. Total cost of insurance premiums for fire and extended coverage on buildings, machinery and equipment and Inventory, plus use and occupancy, vaa $265,903 for the fiscal year 1959* (This figure should not be given out.) E. FOREIGN BUSINESS The headquarters office of Glidden International is in San Juan, Puerto Rico. Collection of accounts is made through the Chase Manhattan Bank, San Juan, Puerto Rico. Glidden International, at present, has retail branch operations in San Juan, Puerto Rico; Ponce, Puerto Rico; and Panama, Republic of Panama. International funds have basically been secured frcm bank borrowings at the Union Commerce Bank, Cleveland, Ohio. At August 31> 1959, the borrowed amount was $350,000. At present, the amount stands at $625,000. The current rate of interest on this loan is The loan id guaranteed by The Glidden Company. GLD003432 NOTES FOR ANNUAL MEETING Page 28 VI OTHER MAJOR FUNCTIONS AND ITEMS E. FOREIGN BUSINESS (continued) Glidden International, C. A. has four backing associations throughout the world. They maintain four Collection Accounts and six Vorking Fund Accounts for their operations* Their major relationships are as follow: Union Comnerco Bank, Cleveland, Ohio (Borrowing) Chase Manhattan Bank, San Juan, Puerto Rico Chase Manhattan Bank, Panama, Republic of Panama First National City Bazik of New York, San Juan, Puerto Rico Glidden*s investment in International is $18,018. At August 31, 1959* International owed The Gliddan Cccgmoy $139*051 for merchandise purchased from Glidden during the month of August* International'a investments at August 31* 1959 were as follows: Columbia Pinturas Ico - 1/3 interest - Paint Ecuador - Pinturas Ecuatorlan&s and Distribudora Americana - 1/3 interest Paint Guatemala - Pinturas Contra-Amerlcanas l/3 interest - Paint $315,504 2*837 14,850 In addition. International has the following wholly-owned subsidiaries Which have been consolidated in the International Audited Financial Reports. Mexico - Industries Glidden, S* A. (Inactive) Panama - Paint Branch International still maintains a minority stock interest in Soja Glidden Argentina* Glidden International has seven foreign Licensees. Sales end profits for Glidden International are not consolidated with The Glidden Company for reporting purposes. Sales and profits of International were as follow: Sales Profits Fiscal 1959 2,9057516 i>2,370 1958 3,012,840 68,190 1957 1,684,178 56,603 1956 560,112 32,709 Sales declines were recorded In tee Direct Export business in Paint, Organic Chemical end Chemicals-Pignanta"Metals. Increases were accomplished in the retail sales of the Puerto Rican and Panamanian Branches. A vary slight increase was also noted in tee Durkee sales. Direct export sales of paint have decreased in the Central and South American countries as a result of the addition of licensees in theso areas. GLDOO 3433