2009 June Board MeetingWeb Conference

June 5, 200910 to 11:30 am ET

1

June Board Meeting

• Introductions

• Review of ASC Antitrust Policy

• Conflict of Interest Acknowledgement

• Agenda

2

2009 Board of Directors

Dave Burger* - Past Chair (InduGrow)

Marcello Boldrini* - Treasurer (Ashland)

Mike Barch (Clifton Adhesive)

Christine Bryant (Bayer MaterialScience)

Phil Byers (Eastman)

Glenn Frommer (Adco Products)

Scott Johnson* (Wacker Polymers)

Mary Ann Kozel* (Sashco Sealants)

Stefan Leumann (Nolax)

Dick Maxwell (Forbo Adhesives)

Steve Meenan (3M)

Jeff Merkt (Bostik)

Shree Nabar (DAP)

Larry Owen (Franklin International)

Kay Peters (Evans Adhesive)

Gary Reed (Arizona Chemical)

Lex Reynolds (Itochu/Reynolds Co.)

Jim Smith (Kraton Polymers)

Ted Stolz* (ITW Perf Polymers)

Chris Urheim (Dow Chemical)

Larry Sloan* (ASC)

Chairman: Jim Owens* (H.B. Fuller)

* Executive Committee Member 3

Antitrust Compliance Policy

It is the policy of the Council to comply strictly with the letter and spirit of all applicable trade regulations.

Any activities which violate these regulations are contrary to Council policy.

Avoid discussions which might be construed as tending to impact prices; regulate production; allocate markets;

encourage boycotts; foster unfair trade practices; assist in monopolization; or in any way violate applicable trade

regulations and antitrust laws.

4

Conflict of Interest

5

New IRS 990 Requirements take effect now…

At each meeting, we are to include a housekeeping item on the

agenda whereby the board chair asks if there are any conflicts of

interest ASC should be aware of. The outcome is to be reflected in

the meeting minutes.

Agenda

6

• Introductions, Antitrust, Conflict of Interest

• Board Committee Appointments (Administrative)

• Board Metrics Goals (Strategic)

• Update on adhesives.org (Strategic)

• Green/Sustainability Issues: Next Steps (Strategic)

• Financials Update (Fiduciary)

• Other Business

• Adjourn

ASC Ed Foundation Board Call immediately follows

7

Consent Agenda3 Issues 1 Vote

BOARD VOTE

1. Approve the following Directors to serve 2009-12 Board Term:• Mary Ann Kozel (Sashco)• Steve Meenan (3M)• Shree Nabar (DAP)• Jim Owens (H.B. Fuller)• Lex Reynolds (Itochu/The Reynolds Co.)• Ted Stolz (ITW Performance Polymers)

2. Approve Phil Byers to replace Scott Johnson on Executive Committee (2009-11 term, non-renewing)

3. Approve Christine Bryant to replace Phil Byers on the EC Nominating Committee (2009-11 term)

Thank you

Scott!

This October will mark the end of Scott‘s twelve years of service as a member to the ASC‘s Board of Directors. Please join me in thanking Scott for his contributions and dedication to the Council.

Scott, we wish you the best and look forward to seeing you at future conventions!

8

9

Board Standing Committees

2009-10 Executive Committee

Jim Owens (H.B. Fuller) – Chair

Marcello Boldrini (Ashland) – Ashland

Dave Burger (3M Northstar) – Past Chair

Mary Ann Kozel (Sashco Sealants)

Ted Stolz (ITW Performance Polymers)

Phil Byers (Eastman Chemical) – Supplier Seat

Board Nominating Committee

• Form a standing committee of 5 members– Immediate Past Chair

– An Executive Committee Member

– 3 Directors not on the Executive Committee

• Nominating Committee Guidelines

Committee meets at the request of the President

Nominations are to be solicited from Board, staff and other members (candidates must be able to work well with both staff and Directors)

A candidate‘s contribution to the Council should be considered

The period of time since a company has been represented on the Board should be considered

Board make up should strive to be balanced (large vs. small, adhesive vs. sealant, industrial vs. consumer, etc.)

• Standing Committee Members

Dave Burger, Marcello Boldrini, Larry Owens, Kay Peters, +1(past chair) (EC) (non-EC) (non-EC) (non-EC)

10

Audit Committee• Form a standing committee of 4 members

– Treasurer serves as Chair

– 3 Directors (incl. one with CPA/strong finance background)

– ASC President & Director of F&A

• Audit Committee Duties

Oversees ASC financial procedures, recommend changes to Exec

Cmte (includes ensuring ASC has appropriate insurance levels, internal financial controls in place as recommended by Sarbanes-Oxley for small non-profits)

Reviews, acknowledges annual ASC audits

Evaluates and assesses auditor; if warranted, recommends selection

of new auditor every 5 years

• Standing Committee Members as of today…

Marcello Boldrini (chair), Mary Ann Kozel, Gary Reed, +1Kate Zando, Larry Sloan (ASC)

11

EC Nominating Committee• Form a standing committee of 5 members

– Past Chairman, Chairman and Treasurer

– A Director not on the EC

– ASC President

• Nominating Committee Guidelines

Names are solicited from the Board and staff (candidates must be able to

work well with both staff and Directors)

Nominees must be potential candidates for Chairman and express

willingness to move through the chairs of office.

EC should strive to be balanced (large vs. small, adhesive vs. sealant,

industrial vs. consumer, etc.)

A candidate‘s contribution to the Council should be considered

The Treasurer should be willing to move to the Chairman position and is, in

effect, the Chair-elect.

• Standing Committee Members as of today…

Dave Burger, Jim Owens, Marcello Boldrini, Christine Bryant, Larry Sloan(past chair) (chair) (treasurer) (non-EC) 12

The Adhesive and Sealant Council, Inc.

Strategic Map

MISSION

The Adhesive and Sealant Council provides

information, education and representation

to deliver value to its members.

VISION

The Adhesive and Sealant Council will be the

essential center of knowledge and

catalyst for industry growth

for manufacturers, suppliers and end-users.

GROW THE

INDUSTRY

GOAL: To continually provide value

to the membership

INDUSTRY

COMMUNITY

PROACTIVE

INDUSTRY

INFORMATION

STATE-OF-ART

EDUCATIONAL

PROGRAMS

GOVERNMENT

AFFAIRS

ADVOCACY

EFFECTIVE

MANAGEMENT

OF ASC

OPERATIONS

Approved by ASC Board 10/05; Updated 2/09

13

ASC Strategic Plan (2009-11)

OVERARCHING GOAL: To continually provide value to the membership

STRATEGIC INITIATIVES STRATEGIES

1. Grow the industry • Position the ASC as the portal to promote the industry and strengthen the industry’s value

proposition premise with end-user audiences

• Analyzing key influencer (i.e. designer, academia, consultant, government agency) and end-

user needs, develop broad-based educational programs and informational resources

• Research, identify, and pursue grant opportunities to subsidize research aimed at

creating/expanding markets for adhesives & sealants

2. Cultivate a strong sense of

industry community

• Create and maintain active peer group functions for specific segments of the membership

• Organize convention/expos with ample networking functions in accordance with anti-trust

guidelines

• Increase member involvement by promoting individual benefits of membership and maintaining

an active member outreach program

• Research and facilitate development of industry coalitions that address specific issues

• Develop and strengthen relations with international adhesive & sealant associations

3. Proactively provide

information to the industry

• Update and promote benchmarking survey and market report services

• Segment the membership to understand information needs, prioritize and execute per plan

4. Deliver state-of-the art

educational programs

• Revitalize and update industry short course/convention programming/other training

methodologies to improve participation and drive increased member value/revenue

• Analyzing membership’s needs for education and training, evaluate and recommend best

training methodology, prioritize and execute per plan

5. Serve as the industry’s

dedicated advocate in

governmental affairs

• Maintain an active Government Relations Committee, representing the industry based on

sound scientific principles

• Promote interaction and provide frequent information updates on global regulatory and

legislative initiatives and standards

• Proactively organize Special Action Task Forces to address specific government issues

6. Effectively manage the

operations of the Council

• Enhance Board and Executive Committee roles in strategic governance

• Strengthen Council financial controls, expense management, internal procedures

• Effectively manage costs for members and the Council while increasing revenue streams

• Invest in staff professional development; re-align resources as needed to optimize productivity 14

Board Metrics: ASC‟s “Report Card”(updated 5/31/09)

Area Metric Current Performance* Target Goal**

FinancialSurplus Margin from

Operations

13% (audited ’08)

-8% (projected ’09)0 to 10% range

FinancialCash Balance in Unrestricted

Reserves

$865k (12/31/08)

$665k (projected 12/31/09)$500k to $1MM range

MembershipNumber of Manufacturer

Members (incl Affiliates)50 (as of 5/31/09) 65 by 2010

MembershipDues as % of Total Gross

Revenues

45.0% (audited ’08)

59.6% (projected ’09)Not to exceed 50% by 2010

Program

Average of Three-Year Rolling

Average of Core Attendees

from Spring and Fall

Conventions

234* (Fall '06 – Spg ‘09)Total No. Member

Companies 106 x 2 (212)

GeneralMember Satisfaction Index

(Mean Score) 4.11 (1 to 5 scale) 4.25

* Does not include WAC (which attracted 689 core)

** Pending BOD modification

Update

Metrics revisited

Defining size of target audience

Relationship building with end-user groups

2009 marketing spend update

Marketing leads/communications activities

Google Analytics update

Web Advisory Board update

16

Metrics Revisited

17

Product/Program: Adhesives.org – Year 1

Overall Goal: Raise Awareness of Site within Design-Engineering Community

Specific Objectives: Current Status:

Average 5,000 (Monthly) Unique Visitor Traffic approximately 4,000 per month

Average 2,000 (Monthly) Return Visitor Traffic approximately 1,500 per month

Reach 10,000 Design-Engineering Leads approximately 5,700 total

Maximize SEO; Achieve #1 rankings in Google, Yahoo and MSN for search term “adhesives”; Achieve “page 3” or better rankings in Google, Yahoo and MSN for search term “sealants”

currently #4, #1, #2, respectively for adhesives; not in first 10 pages for sealants

Engage a minimum of six Primary Focus Groups (reference next slide) that result in a link exchange, online article, newslettersubmission, etc. that promotes either Adhesives.org or Adhesive CAD symbol

ASTM (Web link, Press Release, Article in May/June Issue of Standardization News)

Initial discussions with CSI, AIA, AAMA, others

Obtain 1,000 e-Newsletter Subscribers approximately 450 total

Obtain 100 Leads for ASC Members approximately 40 total

USA Market Size of End-Users Relevant to Adhesives.org (est.)

ASC: Focus marketing efforts and educational programs in the “Target Markets” by job function; partner with Key Associations that offer best market reach to end-users identified as highest priority by Web Advisory Board

18

44%

Not

AIA

Mem

bers

Not

CS

IM

em

bers

Primary Focus

Sources: 1. SWRI, AAMA, ASRAE, CSI, US DOL; 2. AIA, Paul Lefton Company, Terry Poltrack, CSI, 2006 US Bureau of Labor & Statistics

1,500,0001

SWRI

USA Universe# of people

94%

5%

95%

= 2.0 M+

AIChE, ASCE, ASME, ASHRAE, IOPP, NSPE, SAE, SAMPE, SME,

SPE, ASTM, USGBC

Non-Members68%

32%6%

Secondary Focus

Engineers

56%

AIA

Mem

bers

Not

IS

DA

Mem

bers

Members of Engineering Associations & NGO‘s

TBD

31% affiliated

69% non-affiliated

CSI

IDSA

620k

Relationship Building

Confirmed relationships

CSI

SWR Institute

AAMA

AIA

ASTM

Others pending

19

Marketing – Spend Update

80% of approved marketing spend ($60k) already allocated

GlobalSpec and ThomasNet account for 70% of total budget

Remaining monies to be spent on targeted audiences to promote the Adhesive CAD Symbol (free plug-in), TechSelect Tool and Adhesives.org Web site

Marketing vehicles include Adhesive CAD Symbol video (adhesives.org, GlueTube), engineering portal keyword search package and corresponding ad, tile and banner ads (ThomasNet, GlobalSpec), AIA Product Marketplace

20

Marketing – Leads

GlobalSpec Leads**

Number of engineering leads generated via GlobalSpec

5,639 total leads (Registered users who took action to learn more about company, brand, products and/or services. Figure includes return visitors. ASC captures the contact information.)

57% increase from February statistics

ThomasNet Leads

Primary marketing launch in June; Ran TechSelect Tool tile ad in March (ThomasNet Industrial Newsroom)

128,625 ad impressions (The number of times a unique visitor clicked through on

adhesives/fasteners/hardware related news, saw TechSelect Tool banner ad, and had the opportunity to click through on it.) Resulted in 153 click-thrus.

Search Engine Optimization (organic non-paid keyword search=adhesives)

Google – adhesives.org is #4 (up from #5 at February mtg)

Yahoo – adhesives.org is #1 (up from #2 at February mtg)

MSN – adhesives.org is #2 (up from #4 at February mtg)21**Statistics from 08/01/08 to 05/27/09

Marketing –Communications Activities

Current activities correspond with end-user preferences to receive information as identified in a recent webinar survey (131 participants)

Adhesives.org e-Newsletter (monthly distribution=4,000)

GlobalSpec e-newsletters (Distribution: Specs&Techs=1.2 million; Fasteners=75,000)

E-mail marketing on end-user relevant topics (distribution=3,500)

Online ads & company profiles on engineering portals (reaches millions)

22

Preferred Neutral Not Preferred

Direct Mail 37.1% (36) 21.6% (21) 41.2% (40)

E-mail from ASC 81.5% (97) 13.4% (16) 5.0% (6)

Phone Contact 2.4% (2) 20.0% (17) 77.6% (66)

ASC e-Newsletters 43.6% (41) 35.1% (33) 21.3% (20)

Viral Marketing (electronic alert via LinkedIn, Facebook, Twitter, etc.)

5.8% (5) 23.3% (20) 70.9% (61)

23

3,4

54

2,8

37

66

6

5

2,8

09

2,3

32

56

7

50

3,9

51

3,2

74

87

5

85

4,3

71

3,6

64

1,0

28

15

0

3,7

58

3,0

88

1,0

07

17

7

4,1

91

3,5

26

1,0

05

20

2

5,7

61

4,7

10

1,3

77

20

9

5,0

47

4,1

79

1,2

47

27

2

4,7

90

3,9

07

1,3

03

28

3

5,4

95

4,5

60

1,3

68

44

2

0

1,000

2,000

3,000

4,000

5,000

6,000

Total number of visits Unique visitors Return visitors cumulative e-Newsletter sign-ups (includes industry and

end-users)

Adhesives.org Trending Report - By MonthThrough May 27, 2009 Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

NOTE: The e-Newsletter subscriber spike in May resulted from the call to

action inviting ASC database members to officially subscribe to the publication. It will

no longer be sent to the ASC general database.

Google Analytics

24

Google Analytics

4.0

0

4.6

4

3.2

7

3.5

9

2.5

9

3.4

8

3.4

3

4.1

8

3.1

0

3.5

6

2.5

4

3.3

7

3.3

5

3.7

7

2.4

2

3.1

8

2.3

7

3.1

6

3.1

1 3.4

3

0

1

2

3

4

5

Average minutes spent on site per visit Average page views per visit

Adhesives.org Trending Report - By MonthThrough May 27, 2009

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

25

Google Analytics

16

,01

1

10

,08

7

13

,73

3

18

,25

3

13

,36

0

14

,11

9

21

,73

1

16

,02

8

15

,11

6 18

,86

7

0

5,000

10,000

15,000

20,000

25,000

Total number of page views

Adhesives.org Trending Report - By MonthThrough May 27, 2009

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

NOTE: The page view spikes in February and May

coincide with articles/ads that we ran in GlobalSpec e-

newsletters. Additionally, after the Bonding

Requirement Questionnaire ad (March), Adhesives.org had 11 lead inquiries. To date, 15 of the 37 (41%)

leads resulted from GlobalSpec activities.

26

Google AnalyticsTech Select

1,3

43

47

0

1,4

72

1,0

89

1,1

70

1,5

30

2,3

19

74

2

45

8 51

6

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

TechSelect page views

Adhesives.org Trending Report - By MonthThrough May 27, 2009 Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

NOTE: ASC has collaborated with ASI magazine to post the

TechSelect icon/link to the ASI Web site home

page and the Global Adhesives and Sealants

Directory page. This should boost the traffic to the TechSelect pages

in future months.

11,109 total page views; Average/Month=1,111 (consistent with Feb stats)

Purpose of the ASC Web Advisory Board (WAB)

WAB shall provide oversight and guidance to ASC on adhesives.org content and define the website educational platform and webinar content for end users*.

Purpose:

2009 Request from ASC Board of Directors:

ASC Staff to select a diverse cross section of experts from the adhesive and sealant marketplace to help drive website content, positioning and educational programs

on adhesives.org

27* Note: End Users is defined as: Architects, Engineers, Designers, Specifiers and Consultants

Adhesives.org provides:• Resources for adhesives & sealants specifiers

• An education platform for end users • Tools for the design & engineering community

28

Green/Sustainability

Action items from Winter Meeting…

1. Develop online repository of existing global green building/rating programs.

Status: Ongoing; will create new ―Green‖ portal on ascouncil.org; currently end-user focused programs are posted on adhesives.org (with link from ascouncil.org)www.adhesives.org/HealthSafety/GreenBuildingPrograms.aspxwww.adhesives.org/HealthSafety/GreenRatingSystems.aspx

2. Research feasibility of developing comparative LCA of adhesive vs. mechanical fastener (through point of application)

Status: Update today

3. Develop marketing communications plan around how A&S enable sustainable products

Status: Limited research thus far

Action #2: LCA: Glue vs. Bolt

29

Four companies contacted:

• Athena Institute (Merrickville, Canada)

• Environ (Colorado)

• Five Winds International (Boston)

• CTC (Phila)

30

• Companies generally take the same approach for undertaking

LCA study

• A complete study of 4-5 adhesives and a metal fastener would be in the $40-$100k range

• Pilot Study entailing one construction adhesive and metal fastener est. $10-20k

• Cost could vary some dependent upon how much public information available on metal fasteners

• More robust exercise if ―cradle to grave‖ analysis (vs. ―cradle to gate‖) is performed to more fully demonstrate advantage of the adhesive over mechanical fastener

• ASC members whose product(s) are included in the analysis might need to commit significant time of a staff person to respond to questions about the material and how it was manufactured

Action #2: LCA: Glue vs. Bolt

31

Alternative Approach: Environmental Product Declaration

• New program with limited exposure in EU and Japan; no activity in North America

• An association or group of companies looks at a common product—decide on boundaries of an LCA (i.e. cradle to grave; cradle to manufacturing gate)

• Group decides on a single product. LCA is undertaken utilizing ISO Standard 21930 which documents how an LCA should be undertaken for a building construction materials

• Upon completion of the LCA, results are submitted to a third-party organization which reviews analysis and offers accreditation allowing for logo from the organization to placed on product label.

• Theoretically EPD provides the advantage that an industry-wide LCA has been undertaken. Could metal fasteners respond with their own EPD? ---Absolutely!

• Est. Cost to implement: $10-20k plus $10k (accreditation) = $20-30k total

Action #2: LCA: Glue vs. Bolt

32

Should ASC pursue?

If so, a Member Task Force is recommended to provide input and oversight

Action #2: LCA: Glue vs. Bolt

Action #3: Future Marketing Campaign

33

There is negative press out there…

In initial research for their proposal one contractor found the following quote in Austin Energy‘s Sustainability Sourcebook I:

“When applications allow, choose those installation methods that do not require the use of adhesives.”

34

35

…‖Right Size items‖ based on principles adopted by the

Outdoor Industry Association‟s Eco-Working

Group

Action #3: Future Marketing Campaign

36

Next Steps…

1. Form Member Task Force to:a. Define scope of project – how many

different examples do we want to tell of how adhesives/sealants enable green products

b. Assist in pulling together facts

2. Prepare project budget for board approval

Green: Other Issues

37

• Harmonize with other organizations

ASTM D14: ASC to lead effort to explore need for new Sustainability Sub-Committee

Work closely with FEICA‟s new Sustainability Task Force to align efforts with EU

• As requested via the Formulators Webinar Survey, Green Webinar series coming in July…

Membership Update

38

Membership Report(Updated 5/31/09 – all figures actual)

No. of Estimated Budget -12.50% No. of Actual

Companies Dues Dues Difference Companies Dues

Membership Dues

Manufacturers 46 560,577$ 621,000$ (60,423)$ 54 625,594$

Suppliers 44 305,411 380,000 (74,589)$ 64 383,442

Affiliates 16 39,608 34,000 5,608$ 14 36,217

Total 106 905,596$ 1,035,000$ (129,404)$ 132 1,045,253$

2009 2008

39

2009 Dues

Last Year's Dues 1,045,253

Minus Resignations (151,988)

Minus Mergers (25,786)

Dues after Resigns/Merger 867,479

plus New Members 21,557

Dues after New Members 889,037

plus Part-Yr to Full-Yr 5,351

plus Bracket Creep 11,208

Total 905,596$

Budget 2009 1,035,000$

Over(Under) Budget (129,404)$

Financials Update

40

99 00 01 02 03 04 05 06 07 08 09*

* 2009 Reserve Balance assumes withdrawal of $200k

99 00 01 02 03 04 05 06 07 08 09*

A Retrospective Look: 1999-09

-$150,000

-$100,000

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Net Surplus from Operations

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

Reserves Value

41

Cash Flow: 2004-09

Cash Flow: Projected Actual Actual Actual Actual Actual

Cash Generated from Operations 2009 2008 2007 2006 2005 2004

Start January 1 $323,565 $640,082 $441,007 $573,365 $356,501 $453,261

Cash In $1,819,602 $2,386,780 $2,241,980 $1,681,604 $1,917,074 $1,909,539

Cash Out -$2,002,810 -$2,203,297 -$1,842,905 -$1,561,393 -$1,500,210 -$1,806,298

Balance December 31 $140,357 $823,565 $840,082 $693,576 $773,365 $556,501

Increase (Decrease) in Oper. Cash -$183,208 $183,483 $399,075 $120,211 $416,864 $103,241

Transfers from Reserves $200,000

Transfers to Reserves* $0 -$500,000 -$200,000 -$252,569 -$200,000 -$200,000

Balance Operating Cash $340,357 $323,565 $640,082 $441,007 $573,365 $356,501

*2008: ASC deposited $50,000 Restricted Equity and $300,000 Unrestricted and $150,000

Cash Management

ASC has deposited $1,352,569 into its Reserves over the past five years

42

Statement of Activities(2009 year end estimate as of 5/21/09)

2009 2009 2008 2007 2006 2005 2004

Estimate Budget Actual Actual Actual Actual Actual

Membership Services: $746.1 $788.8 $885.9 $958.4 $863.9 $875.2 $887.2

Dues, Interest, Member Recruitment &

Retention, Surveys, Govt Relations,

Peer & Board Mtgs, Industry Promotion

Conventions, Meetings: $251.5 $356.0 $632.5 $453.4 $372.3 $357.3 $326.8

Conventions, Leadership Conference,

Short Courses, Webinars

Affinity Programs: $20.2 $31.1 $22.8 $33.7 $34.4 $16.8 $31.9

Market/Industry Reports, Affinity

Services, Publications, Online Services

Core Expenses: ($1,140.2) ($1,235.7) ($1,248.2) ($1,124.0) ($1,043.0) ($1,027.6) ($1,130.9)

Occupancy, Comp/Benefits, Web, IT

Depreciation, Taxes, Insurance, Non-

recurring Expense (Moving Exp in '08)

Net Operating Surplus -$122.4 -$59.7 $293.0 $321.4 $227.7 $221.7 $115.0

Non-Operational/Special Projects: CAD

symbol, CHEMARK Design Firm

Research, VT NDE, Formaldehyde Free

Wood Adhesives Work Group $26.0 $0.0 -$86.0 -$144.1

adhesives.org amortization -$33.4 $0.0 -$26.3 -$42.2

Net Surplus after Special Projects -$129.8 -$59.7 $180.7 $135.2

Interest and Gains/Loss on Reserves $10.0 $10.0 -$109.0 $67.7

Unrestricted Audit Totals: -$119.8 -$49.7 $71.7 $202.9

Temporarily Restricted Projects

Service Life Prediction (SLP) Consortium $0.0 $0.0 $14.5 $0.0

Audit Totals w Temporarily Restricted -$119.8 -$49.7 $86.1 $202.9

Funded from Unrestricted

Reserves

43

2009 Statement of Activities Assumptionsas of May 21, 2009

(Comparisons to budget in red)

• Dues: Actual plus 3 renewing members and 3 new members ($914.4k vs $1,035 MM budget)

• Fall Convention: 90% of Budgeted Net ($126k vs $140k)

• Short Courses: PSA 23.5% of Budgeted Nets ($4.6k vs

$19.6k), Waterborne: 40% of Budget ($10k vs $25k),

Additives: 50% of Budget ($7.6k vs $15.2k)

• Webinars: 40% of Budget ($12.6k vs $32.6k)

• Market Reports: 70% of Budget ($15.4k vs $22.1k)

• Proceedings: 50% of Budget ($4.7k vs $9k)

44

2009 Statement of Activities Assumptions (cont‟d)as of May 21, 2009

Expense Reductions:

• Membership Services: -$83.4k (-$42.3k adhesives.org maintenance; -$20.1k no statistical surveys; -$9.5k member visits and FEICA; -$5.2k committee mtgs; -$6.3k general marketing and Adhesion Society Young Investigator award)

• Overhead: -$95.5k (-$65.2k compensation, pension and bonus; -$5k continuing education; -$12.6k outsourcing; -$12.7k supplies, maintenance, general administration expenses)

• Meetings: Lower F&B attributed to reduced attendance, lower speaker fees; re-negotiated lower minimum guarantees on hotel room blocks for both conventions

45

2009 Statement of Activities Summaryas of May 21, 2009

Membership Services• Membership Dues Projected Down -$129k vs. Budget• Projected Membership Services Cost Savings +$86k• Net Profit Comparison (vs. budget) -5% reduction

Conventions/Meetings• Projected Revenue Down -$173k vs. Budget• Projected Cost Savings +$68k• Net Profit Comparison vs. Budget -29% reduction

Affinity• Net Profit Comparison vs. Budget -35% reduction

Core Expenses•Projected Cost Savings +8% vs. Budget

Bottom Line:Operating Revenue: Projected Reduction of -$312k (-17%) Operating Expenses: Projected Cost Savings of +$250k (+13%)

46

Dues 59.7%

Conventions,Leadership

32.4%

Short Courses, Webinars

5.6%

Gross Revenue Estimate for 2009$1,533,100

Market Rpts, Other2.3%

THE ADHESIVE AND SEALANT COUNCIL, INC

as of May 21, 2009 47

Reserve Fund: Pre „09 Withdrawal (updated 5/31/09)

Notes: ASC Restricted Reserve cannot fall below 25% of annual ASC Operating Budget without Board approval. Investment objectives: Equities in Restricted ROR = S&P 500; Fixed in both Restricted & Unrestricted = CPI + 2% (revised per EC in March ‘09)

* Compare vs. 5/31/08 Balances: Total: $2,045,721 (Unrestricted: $1,143,639, Restricted: $902,082)

$864,938“Unrestricted

segment”

Total = $1,868,823*

$1,003,885“Restricted segment” ―Restricted‖ segment is

to be used in an emergency financial

situation to keep operations going

(―rainy day‖ funds)(46% CDs, 39%

Equities, 8% Bonds, 7% Cash)

1-yr Rtn ~ -12.25%

―Unrestricted‖ segment isto be used for advancingthe goals of the Councilor a strategic initiative(78% laddered CDs;

22% cash)1-yr Rtn ~ 2.78%

Target minimum of 50% of

$1.6MM annual ASC operating

budget

48

Reserve Fund: Post „09 Withdrawal Assumes Withdrawal from Unrestricted (updated 5/31/09)

Notes: ASC Restricted Reserve cannot fall below 25% of annual ASC Operating Budget without Board approval. Investment objectives: Equities in Restricted ROR = S&P 500; Fixed in both Restricted & Unrestricted = CPI + 2% (revised per EC in March ‘09)

* Compare vs. 5/31/08 Balances: Total: $2,045,721 (Unrestricted: $1,143,639, Restricted: $902,082)

$664,938“Unrestricted

segment”

Total = $1,668,823*

$1,003,885“Restricted segment” ―Restricted‖ segment is

to be used in an emergency financial

situation to keep operations going

(―rainy day‖ funds)(46% CDs, 39%

Equities, 8% Bonds, 7% Cash)

1-yr Rtn ~ -12.25%

―Unrestricted‖ segment isto be used for advancingthe goals of the Councilor a strategic initiative(94% laddered CDs;

6% cash)1-yr Rtn ~ 2.78%

Target minimum of 50% of

$1.6MM annual ASC operating

budget

49

50

Non-Dues Revenue Strategies(2009 and beyond)

In addition to maintaining an active membership recruitment program, ASC will:

• Explore and enter into business partnerships with third parties to expand ASC Market Report and Past Proceedings sales

• Contract with third parties to realize royalties on sales of related publications of interest to the A&S industry

• Research opportunities to host end-user webinars that may generate a profit to offset adhesives.org maintenance costs; leverage AIA/CES program and others if feasible to enhance marketability

• Scan environment for other non-dues revenue programs that add member value (e.g. MultiView, Industry Shipping Data Report)

• Actively promote banner ad opportunities for e-newsletters

This concludes the 2009 Financial Projections.

Questions?

Next up: In May, EC recommended ASC prepare preliminary 2010 and 2011 Projections…

51

STATEMENT OF ACTIVITIES ($ net x 1000)

2009 2010 2011

Projected (optimistic) (optimistic)

Operations:

Member Services: Dues, member communications,

statistical surveys, govt. relations, adhesives.org

maintenance, etc. $746.1 $738.5 $847.8

Conventions, Meetings: Spring & Fall, Leadership

Conference, short courses, webinars $251.5 $293.2 $370.7

Affinity Programs: Market Rept, Publications, APPI $20.2 $16.0 $48.0

Core Expenses: Occupancy, comp/benefits,

outsourcing, depreciation, taxes, insurance ($1,140.2) ($1,165.5) ($1,229.9)

Net Surplus/(Loss) from Operations ($122.4) ($117.9) $36.6

Estimated Cash from Reserves - Operations $200.0 $85.0 $0.0

Non-Operational and Special Projects:

VA Tech NDE Reimbursement $26.0 $0.0 $0.0

Amortization of adhesives.org ($33.4) ($33.4) ($33.4)

Upgrade iMIS Database $0.0 ($15.0) $0.0

Redesign of ascouncil.org website $0.0 $0.0 ($60.0)

Interest and Gains/(Loss) on Reserves $10.0 $25.0 $35.0Net Surplus/(Loss) Non-Operational and

Special Projects $2.6 ($23.4) ($58.4)

Estimated Cash from Reserves - Special Projects $0.0 $15.0 $60.0

Total Net Surplus/(Loss) ($119.8) ($141.3) ($21.8)

Total Estimated Cash from Reserves $200.0 $100.0 $60.0

Reserve Balance after Interest and Gains $1,687.3 $1,612.3 $1,587.352

2010-11 Optimistic ScenarioStatement of Activities Assumptions

• Dues: $10k in member resignations in 2010, none in ‘11; 50% of members that resigned in ‘09 will rejoin in ‘10 – balance rejoin in ‘11; Henkel rejoins mid-2010; top 10 members drop 1 dues bracket in ‘10 and climb back up in ‘11

• 2011 Winter Leadership Conference/Board Meetings: Host at $5k loss; co-located winter board mtg (like in ‗09); June mtgs via web/call both yrs

• CEO Peer Groups Meetings: Host stand-alone Large CEO & CTO in ‘10; no CEO and co-located CTO at Adhesion Society Conference in ‘11

• International Travel: ASC president attends FEICA & ARAC in ‘10; FEICA in ‘11

• Adhesives.org: Maintenance/marketing funded at ‘09 levels

• Conventions: ‘10: $125k net for spring (25% above ‘09); $135k for fall; ‘11: near ―normal‖ profit of $150k per event

• Short Courses: ‘10: $20k net (comparable to ‘09); ‘11: $62k (bump-up in net due to popularity of courses held in ‘11 vs. ‘10)

• Webinars: $15k net for A&S audience (comparable to ‘09 forecast); $4k for end-users (new programs not currently offered)

• Market Reports: New edition issued Fall ‗10 with return to near ―normal‖ sales

• Staff Compensation/Benefits:

• Freeze salaries for ‘10, 3.5% inc for ‘11; Individual bonuses at 50% for ‘10 and 100% for ‘11

• 401k EOY match 2.5% for ‘10; 5% (standard) for ‘11

• Health insurance premiums increase 15% per year

• IT: Invest in 3 new Desktops and 1 File Server in ‘10 53

STATEMENT OF ACTIVITIES ($ net x 1000)

2009 2010 2011

Projected (pessimistic) (pessimistic)

Operations:

Member Services: Dues, member communications,

statistical surveys, govt. relations, adhesives.org

maintenance, etc. $746.1 $664.4 $711.8

Conventions, Meetings: Spring & Fall, Leadership

Conference, short courses, webinars $251.5 $227.7 $229.7

Affinity Programs: Market Rept, Publications, APPI $20.2 $6.0 $26.2

Core Expenses: Occupancy, comp/benefits,

outsourcing, depreciation, taxes, insurance ($1,140.2) ($1,165.5) ($1,229.9)

Net Surplus/(Loss) from Operations ($122.4) ($267.4) ($262.2)

Estimated Cash from Reserves - Operations $200.0 $235.0 $250.0

Non-Operational and Special Projects:

VA Tech NDE Reimbursement $26.0 $0.0 $0.0

Amortization of adhesives.org ($33.4) ($33.4) ($33.4)

Upgrade iMIS Database $0.0 ($15.0) $0.0

Redesign of ascouncil.org website $0.0 $0.0 ($60.0)

Interest and Gains/(Loss) on Reserves $10.0 $10.0 $15.0Net Surplus/(Loss) Non-Operational and

Special Projects $2.6 ($38.4) ($78.4)

Estimated Cash from Reserves - Special Projects $0.0 $15.0 $60.0

Total Net Surplus/(Loss) ($119.8) ($305.8) ($340.6)

Total Estimated Cash from Reserves $200.0 $250.0 $310.0

Reserve Balance after Interest and Gains $1,687.3 $1,447.3 $1,152.354

2010-11 Pessimistic ScenarioStatement of Activities Assumptions

• Dues: $10k in member resignations in 2010 and ‘11; 25% of members that resigned in ‘09 will rejoin in ‘10 – another 25% in ‘11; Henkel rejoins mid-2011; top 20 members drop 1 dues bracket in ‘10 and only 25% climb back up in ‘11

• 2011 Winter Leadership Conference/Board Meetings: Host at $10k loss; co-located winter board mtg (like in ‗09); June mtgs via web/call both yrs

• CEO Peer Groups Meetings: Host stand-alone Large CEO & CTO in ‘10; no CEO and co-located CTO at Adhesion Society Conference in ‘11

• International Travel: ASC president attends FEICA & ARAC in ‘10; FEICA in ‘11

• Adhesives.org: Maintenance/marketing funded at ‘09 levels

• Conventions: Profit for spring conventions do not recover from ‘09 ($104k/event); fall conventions net only $110k each yr

• Short Courses: ‘10: $10k net across all; ‘11: $22k net

• Webinars: $5k net for A&S audience; $0 for end-users

• Market Reports: New edition issued Fall ‗10 with depressed sales remaining at current levels

• Staff Compensation/Benefits and IT: Same assumptions as for optimistic scenarios

55

Expense Reductions

56

Estimated Savings ($000)

2010 2011 Total

Personnel related

1. Eliminate staff EOY 401k match (2.% in '10, 5% in '11) $16.0 $34.0 $50.0

2. Eliminate part-time admin (1/2 yr in '10, full yr in '11) $10.0 $22.0 $32.0

3. Eliminate year-end staff bonuses (at 50% level in '10, 100% in '11) $8.0 $15.0 $23.0

Subtotal - Personnel $34.0 $71.0 $105.0

Program related

1. adhesives.org

a. No paid marketing $50.0 $50.0 $100.0

b. No e-newsletter $25.0 $25.0 $50.0

2. No statistical surveys (Ind Sales, FOC both yrs; C&B in '10 only) $20.0 $12.0 $32.0

3. No CEO/CTO peer groups (standalone Large CEO and CTO in '10 only) $11.0 $3.0 $14.0

4. No 2011 WLC - $10.0 $10.0

5. Fundamentals S.C. is breakeven $5.0 - $5.0

Subtotal - Program $111.0 $100.0 $211.0

Other

1. No intl travel for pres (FEICA, ARAC in '10; FEICA only in '11) $10.0 $5.0 $15.0

2. Produce e-Catalyst in-house $8.0 $8.0 $16.0

3. Eliminate (or charge members to access) Knovel E-Library $8.0 $8.0 $16.0

4. Eliminate all member visit travel $5.0 $5.0 $10.0

5. Eliminate Ann. Outstanding Young Technologist Award $2.5 $2.5 $5.0

6. Miscellaneous IT savings $10.0 $10.0 $20.0

Subtotal - Other $43.5 $38.5 $82.0

Grand Totals $188.5 $209.5 $398.0

This concludes the 2010-11 Financial Projections.

Questions?

We have Adequate Reserves in place to continue funding Council activities without exercising cuts

on previous slide and maintaining Reserves balance above 50% minimum

57

Background Financial Trend Data

58

The following slides are updates from material presented at the Winter Meeting in Scottsdale.

Major Sources of Revenue

59

Statement of Financial Position

Assets, Liabilities, Members‘ Equity

60

Statements of ActivitiesTotal Revenue, Total Expense, Net Surplus/Loss

61

Statements of Activities

Membership – Revenue, Expense, Net Surplus

62

Statements of Activities

Meetings– Revenue, Expense, Net Surplus

63

Statements of Activities

Affinity Programs– Revenue, Expense, Net Surplus

64

Statements of Activities

Overhead Expense

65

ASC OPERATING CASH BALANCE (x1,000)

Notes:1. Cash balances after deposits to Reserves2. Cash Balance Target = 20% of Operating Expense Budget (~$380k)

As of Dec. 31 each year (2009 as of May 21)

66

Education Foundation Reserves As of Dec. 31 (2009 as of May 21)

67

Fall Board Meeting

Sun., October 11 (3 to 5:30 pm)

@ Fall Convention (Lexington, KY)

December Meeting (Web-Audio)

Fri., December 11 (10 to 11 am ET)

2010 Winter Board Meeting

Wed. evening, Jan. 27 – Fri. noon, Jan. 29

Old Town Alexandria, VA

2009-10 Board Meetings

www.ascouncil.org/members/boardresources/upcomingmeetings.cfm

68

69

June Board Meeting

Web Conference

June 5, 2009

70

June MeetingAgenda

• Introductions

• Future of Education Foundation/Va. Tech. Endowed Professor Fund

• Other Business

• Adjourn

71

2009 Board of Directors

Dave Burger* - Past Chair (InduGrow)

Marcello Boldrini* - Treasurer (Ashland)

Mike Barch (Clifton Adhesive)

Christine Bryant (Bayer MaterialScience)

Phil Byers (Eastman)

Glenn Frommer (Adco Products)

Scott Johnson* (Wacker Polymers)

Mary Ann Kozel* (Sashco Sealants)

Stefan Leumann (Nolax)

Dick Maxwell (Forbo Adhesives)

Steve Meenan (3M)

Jeff Merkt (Bostik)

Shree Nabar (DAP)

Larry Owen (Franklin International)

Kay Peters (Evans Adhesive)

Gary Reed (Arizona Chemical)

Lex Reynolds (Itochu/Reynolds Co.)

Jim Smith (Kraton Polymers)

Ted Stolz* (ITW Perf Polymers)

Chris Urheim (Dow Chemical)

Larry Sloan* (ASC)

Chairman: Jim Owens* (H.B. Fuller)

* Executive Committee Member 72

Status of the Organization

IRS requirements mandate a change in the status of the ASC

Education Foundation (ASCEF) to a Private Foundation because it

has failed the annual fundraising test for more than a decade. As a

private foundation the EF will now incur an annual excise tax on

net investments and possibly an excise tax on undistributed

income. ASC‘s auditor recommends the ASCEF Board pass

resolutions on two issues:

(1) Remove the VT Endowed Professorship Fund from the

EF‟s books (i.e., bequeath or repatriate monies)

(2) Develop an Operating Plan to spend down the

remaining EF funds to $0 over 1 or more years to

minimize taxes payable73

Action Items from Winter Meeting…

• ASC will discuss with Dr. Dillard what role VT can play, if any, in developing end-user oriented materials aimed at educating college engineering students. The consultancy agreement concept will be broached.

• Based on the outcome, an EF Board Task Force will review options and make recommendations to be presented at June meeting

74

EF Board Task Force

Mike Barch

Marcello Boldrini

Christine Bryant

Phil Byers

Stefan Leumann

Dick Maxwell

Jeff Merkt

Larry Owen

Gary Reed

Ted Stolz

75

Task Force Recommendations

BOARD VOTE

• Permanently bequeath the entire Endowed Professor Fund to Virginia Tech in the spirit of goodwill and a continued strong working relationship between VT and ASC.

• Allocate the remaining $30+k left in the Education Foundation Account to development of new end-user educational materials (for adhesives.org and other). ASC intends to use the new Web Advisory Board to evaluate new content ideas and anticipates spending down funds by end of 2010.

• Education Foundation can remain alive as a legal entity possibly potentially even after the monies are spent down so that it can serve as a viable Applicant for future US Federal Grants. If ASC should discover that there is no need to keep the EF open for this purpose, then it will recommend the entity be closed down once all monies are spent.

76

Have a profitable and

healthy summer!

77