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Federation of Societies for Coatings Technology: 2003 Annual Report and report of the Fall 2003 Meeting of the Board of Directors.

The following is a summary of reports on Federation activities and significant items of business presented at the Fall 2003 Meeting of the Board of Directors. The full report of the Fall 2003 Board of Directors Meeting can be found on the FSCT's website (http://www.coatingstech.org/About/Activities.html). The full text of Amendments to the Bylaws and Standing Rules approved by the Board at First and Second Readings are published on pages 72-74 of this issue.

The Fall Meeting of the Board of Directors of the Federation of Societies for Coatings Technology was held on November 12, 2003 at the Philadelphia Marriott Hotel, Philadelphia, PA. In addition to the Directors attending, also present were FSCT Past-Presidents A. Clarke Boyce (Toronto); Forest Fleming (Piedmont); James Geiger (Southern); Gerry Gough (British); John Lanning (Louisville); J. Dick Mullen (Rocky Mountain); Deryk Pawsey (Pacific Northwest); Colin Penny (Baltimore); and Joseph P. Walton (Cleveland).

Guests also included: Ian Gardner, President, Surface Coatings Association Australia; Brian Hamilton, President, Surface Coatings Association New Zealand; Ricardo Pria, President, ANAFAPYT; Andre Revillion, President, FATIPEC; Paul Sara, President, Coatings Industry Education Foundation; Rose Ryntz, FSCT Secretary-Treasurer Designate; Freidun Anwari, Chair, FSCT Bylaws Committee; F. Louis Floyd, Chair, FSCT Events Steering Committee; Charles Hegedus, Chair, FSCT Publications Committee; and Society Members Phil Avery, Incoming Director, Golden Gate Society; Sylvain Belisle, President, Montreal Society; James Wasik, Past-President, Pittsburgh Society and Phyllis Henderson, President, Pittsburgh Society.

Summary of FSCT Activities

FSCT President David Jack commented in his report to the Board:

The Spring Board of Directors meetings in Vancouver went a long way to clarifying actions around the controversial decisions that came out of the proposals voted in at the previous Fall Board of Directors meeting in New Orleans. We all listened intently to Society concerns and debated the rationale behind the proposals; everyone had the opportunity to take an active part. Considerable progress took place but there is still more to be accomplished.

Post Vancouver, the Executive Committee addressed the recommendations that came out of the meetings, deferring items to the Federation Bylaws Committee when appropriate. We sought legal advice to help us work through certain items of business and reported progress to Federation Directors, Federation Past-Presidents and Society Presidents.

We all came out of the Vancouver meetings with a better understanding of the issues. Now there is a need to discuss and vote on matters that follow from our discussions in May.

The Board will be requested to address the following matters:

1. Proposals allowing Separate Membership and discuss the voting status of Alternate Society Directors.

2. In the interim, additional items have come before the Executive Committee relating to the withdrawal of certification of the Montreal Society and relief from the Direct Renewal Program.

3. The Events Steering Committee will offer options on the future course of our alternate year program in the absence of ICE in 2005. We are already making preliminary plans for ICE 2004 in Chicago, the first of the new cycle. The Federation cannot afford to lose focus on proposals

that will have the greatest impact on our source of revenue.

All these matters have taken up a considerable amount of time while trying to build a Federation that is more beneficial to the membership and at the same time retain financial viability. The last six months have been less volatile and in many ways more productive.

* We are making considerable progress on the new format of the JCT that received approval at our last meeting.

* Financial Year 2003 pre audited figures indicate a surplus on operations of $484,000 and a surplus of $384,000 when non-operating figures are included.

* Financial Year 2004 (ICE in Philadelphia) A revised budget will be presented based on results of ICE 2003.

* Financial Year 2005 (ICE in Chicago) is our greatest challenge. We need to make a surplus to help carry us through Financial Year 2006 (Alternate Year) without the historical ICE event.

I would be remiss if I did not comment on the decision making process within the Federation. There is an inherent problem in that as currently structured the organization is unable to quickly react, reach agreement and respond to important issues with timely action. I would recommend that the Board of Directors establish a "study group" to review and, if needed, to recommend change to our governance. We should consider how we can manage affairs better in an ever-increasingly fast paced business world.

This has been a difficult year for the Federation, far more so than I imagined when I accepted nomination for the position of Secretary-Treasurer. The past 18 months have been a rough passage for the leadership of the Societies, as well as the Federation, as we worked our way through this period of change and the extremely controversial issues that change brought about.

I hope the leadership of both groups can look forward beyond the "family argument" and say we all contributed to a successful future and advancement of our collective members.

As I come to the end to my year, I wish to thank all the members of the Federation Board, Committees and Staff who have been so helpful in assisting me during an extremely busy period. Without your dedication and leadership and the efforts of all our Society volunteers we would have achieved little for our membership and the industry to which we belong.

It has been an honour and a pleasure to serve the Federation. Thank you.

Bob Ziegler, Executive Vice President, and Rod Moon, Director of Education, reported on FSCT activities during 2002-03:

Since the May 2003 meeting of the Board of Directors much staff effort has gone into assisting the various committees that have responsibilities for directing the future of the organization. Of note is the Events Steering Committee discussions and Executive Committee and Officer discussions related to Society issues. Despite internal challenges, the business of the FSCT continues unabated and, as detailed in this and the accompanying reports of Officers, Staff, and Committees, much has been and is being accomplished on behalf of the FSCT members.

Financials

Following the FY 2002 deficit caused by the economy and a convention affected by the 9/11 events, the FSCT implemented various cost cutting measures in FY 2003, reducing staff, administration and publication expenditures. These expense reductions coupled with the insurance settlement from the effects of 9/11, resulted in FY 2003 financials showing a net operating surplus of $484,009, with income at $3,447,089 and expenses at $2,963,078.

The operating budget for FY 2004 has been revised to reflect projections based on the results of the ICE 2003 convention and will be presented to the Board for approval at its November 12 meeting.

Membership

Continued industry consolidation, retirements, and the movement of several Societies to implement local-only membership resulted in a 23% reduction in overall FSCT membership to approximately 4,350. Contrary to the FSCT Bylaws, this Society separate membership category will be addressed by the Board at its Fall 2003 meeting with Bylaws amendment proposals by the Pittsburgh Society and the FSCT Executive Committee. A resolution to this issue is critical both for the FSCT and for the individual Societies and their members.

International Coatings Expo

Plans for the 2003 International Coatings Expo are finalized. As noted above, with technical programming geared to the theme, "The Spirit of Innovation," the ICE 2003 convention will offer a educational experience that spans the breadth of our industry. Preceded by the International Coatings Technology Conference on Tuesday-Wednesday, November 11-12, the show will open on Wednesday afternoon and feature a networking reception, the "Philly Block Party," beginning at 6:00 pm. The show has currently over 270 exhibiting companies in almost 50,000 nsf of booth space. Taking advantage of the concentration of industry in the northeast region, the FSCT has arranged for special one-day discounted registration for Friday, a corporate registration discount, and regional bus transportation arrangements.

Other Activities

Events Steering Committee: Since May, staff has participated in several conference calls and one in-person meeting of the Events Steering Committee. The committee, under F. Louis Floyd, Chair, will present its report and recommendation on future FSCT activities to the Board at its November 12 meeting.

Paint Industry Council: Staff has attended two meetings of this group, which is composed of the staff executives of the following paint-related organizations: NPCA; Master Painters Institute; Painting & Decorating Contractors of America; Paint Decorating Retailers Association; SSPC; Polyurea Development Association; and Finishing Contractors Association.

While discussions range from regulatory to mutual support topics, the main topic for discussion has been the potential for a joint industry-wide convention that would bring together coatings manufacturers, technical personnel, retailers, and contractors. This concept has been discussed by both the FSCT Executive Committee and the Events Steering Committee. The FSCT will conduct further investigation on this topic prior to making any proposals to the Board.

Education

The FSCT's Virtual Learning Conferences experienced significant growth during 2003, with participating sites increasing from 22 to over 50. Detailed in the report of the Director of Education, the VLC series offers companies low-cost, easily accessible training for their employees.

The Coatings Direct online programs were introduced in 2002. Although the program, which offers digitally recorded technical training courses online, was constructed to be easily accessible, useful, and a cost-effective means of obtaining high level technical information, its success has been very limited. Staff is currently reviewing the program and its possible reintroduction in a different format for 2004.

Meanwhile, the ICE 2003 technical program sessions and Technology Conference Course program developed by members of the Annual Meeting Program (Ray Fernando, Chair) and Professional Development (Jon Lawniczak, Chair) Committees are extensive and are excellent examples of the strengths of FSCT volunteer activities. The ICE 2003 program is, in my opinion, the best that the Federation has ever offered.

Committee Activities

Professional Development Committee:

Jon Lawniczak, Chair. Charged with developing and implementing the International Coatings Technology Conference portion of ICE 2003: the "Spirit of Innovation" as well as programming outside the venue of ICE, i.e., the Virtual Learning Conferences, Professional Development Seminars, etc., the PDC met on December 16-17, 2002 and March 10-11, 2003.

International Coatings Technology Conference: A total of 15 courses are scheduled: five one-day courses, six two-day courses, and three half-day courses.

One-day courses scheduled for Tuesday, November 11:

* Paste Printing Ink Vehicles (cosponsored with OCCA--new);

* Marine Coatings (new);

* Introduction to Coatings Technology for the Non-Technologist;

* Pigments and Properties (new); and

* Coatings for Concrete (new).

Two-day courses scheduled for Tuesday and Wednesday, November 11-12:

* Basic Polymer and Crosslinking Chemistry for the Coatings Chemist (new);

* Fundamentals of Emulsification Polymerization (new);

* Understanding the Transition: Waterborne Coatings Technology;

* Advanced Polymer Technology and Crosslinking;

* Principles of Paint Formulations; and

* Improving Durability and Performance of Coatings.

Half-day courses scheduled for Wednesday, November 12:

* Nanotechnology (new);

* The Impact of Color (new); and

* Combinatorial Chemistry (new).

Virtual Learning Conferences: Combining Internet and audio conferencing technologies in a synchronous delivery program delivery format, Virtual Learning Conferences were introduced to the coatings industry by FSCT in 2000. Many VLCs have been developed and implemented over the years. Most recently, FSCT had a very successful three-part series VLC presented in September: Polymer Chemistry of Paints and Coatings I, II, & III. A total of 52, 47, and 43 sites, respectively, participated in these electronic distance-education activities. A two part series, UV Cure Coatings (Part I--Basic UV Cure and Pigmented Technology and Part II--Advanced UV Cure Technology), is scheduled for December 4 and December 11, respectively, and will be presented in conjunction with RadTech International North America.

Coatings Direct: This new program combines both Internet technologies and educational programming into an asynchronous delivery format that is available to those with World Wide Web access anytime, anywhere. The technology utilized allows FSCT to leverage the effectiveness of live programming by recording the programs and synchronizing the audio with the PowerPoint presentations of the speakers. The end result is that the synchronized Coatings Direct program can be delivered 24 hours a day, 7 days a week to anywhere in the world. Our current offerings include waterborne topics that were presented at the first FSCT Midyear Symposium, "Waterborne Coatings: Meeting the Challenges," in Florida in May 2002. Plans are underway to introduce two new Coatings Direct programs that were recorded at ICE 2002: "Introduction to Coatings Technology for the Non-technologist" and "Failure and Defect Analysis of Coatings."

Professional Development Seminars: The PDC held a two-part Quality Improvement in Coatings series as part of the Professional Development Seminars. Offered in Tampa on March 28, the first part was Gauge/Measurement Process Assessment and Improvement. On June 20, the second part of the series discussed Quality Coatings: How Mixing Affects the Quality of Coatings, in Cleveland, OH. Attendees of both seminars rated the overall program as being moderately to extremely satisfying; were extremely satisfied with the instructor; reported that they would be interested in attending another Professional Development Seminar and offered a number of topics for future seminars.

Annual Meeting Program Committee

Ray Fernando, Chair. The committee is charged with the development and execution of the Annual Meeting Program portion of ICE 2003. Based on the evaluations from past ICE programs, the committee once again developed thematic sessions to enhance the delivery and quality of the paper presentations, as well as increase audience attendance. In addition to the Mattiello Lecture, the Technical Focus Lecture and the Poster sessions, this year's program has 11 additional sessions scheduled, with a total over 50 papers scheduled for presentation.

* Radiation/UV I and II

* Analytical Methods I, II, and III

* Compliant Technologies

* Corrosion

* Coatings Formulations

* Additives

* Ti[O.sub.2] in Coatings

* Non-Polluting Coatings

Manufacturing Committee

While it is not planning to coordinate a course at ICE 2003, the Manufacturing Committee plans to schedule a course at ICE 2004.

Task Forces

Midyear Symposium

Representatives from the Professional Development and the Annual Meeting Program Committees have volunteered to serve on the Midyear Symposium Task Force. They are Jamil Baghdachi, Chair; Ray Fernando; Latoska Price; and Mark Soucek. The symposium is scheduled for May 12-14, 2004 at the Hilton Walt Disney World Resort in Lake Buena Vista (Orlando), FL. The three-day program, "Crosslinking for Coatings: Meeting the Challenges," will be formatted to have a workshop on Wednesday, May 12, followed by paper presentations on Thursday and Friday, May 13-14. The symposium will be part of other FSCT activities planned at the resort during the same time period to include Society Support Training on Thursday, a FSCT Board workshop on Friday, and the Board of Directors Meeting on Saturday.

Other Activities

Collaboration

As mentioned in the PDC section, FSCT is collaborating with the Oil & Colour Chemists' Association (OCCA) in presenting a one-day ink course, Paste Printing Ink Vehicles, on November 11. FSCT is also cosponsoring a four-paper session, Radiation/UV I, part of the Annual Meeting Program on Thursday, November 13, with RadTech International North America. Additionally, a two-part VLC is scheduled for December 4 and 11 with RadTech International North America.

Events Steering Committee

Mr. F. Louis Floyd, Chair of the Events Steering Committee, reported on the committee's discussions. The committee was initiated in response to the FSCT's decision to conduct its major exhibition, ICE, in even years only and the resulting decrease in both educational programming and income in the alternate years. Mr. Floyd reviewed the committee's discussions and areas of investigation over the past 12 months. Based on a thorough review of the FSCT's current activities and taking into consideration numerous studies and surveys of industry needs, the committee presented the following recommendations to the Board of Directors:

(1) Several independent theme-based symposia should be held each in a different part of the country. The optimum number is probably four per year. Topics for the initial symposia were suggested:

(a) Impact Technologies and Techniques. Key is to feature technology and techniques that could have a significant impact on the future of some part of the coatings industry. It is expected that these topics will change annually, to reflect the reality of the challenges/opportunities/emergence of new alternatives.

(b) Substrates. Frequently, substrate developments are as profound to our future as coatings developments. Suggested as a first year topic was forest products. Recommended as future symposia topics were plastics, metals, cementitious materials, and composites.

(c) Manufacturing. The FSCT started as paint and varnish production clubs, but currently under-represent this function. The concept of this topic is to embrace the manufacturing function and its key interfaces with other parts of the organization.

(d) Societal Impact Issues. This topic includes much more than regulatory issues to possibly include service life prediction, life cycle analysis, new regulatory initiatives such as MIR, and chemicals of concern.

(2) A series of workshops and/or short courses should be developed around the theme of organizational interfaces. The essence would be to focus on interactions among various functions of an organization (interfaces), in order to enhance horizontal integration and, therefore, productivity.

Mr. Floyd expanded on the above concepts, providing numerous committee suggestions on prioritization, planning, and implementation, as well as possible collaboration with other industry organizations.

He thanked the members of the ESC: Jon Lawniczak (Eastman); Andy Traister; Chuck Carncross (Buckman); Joe Walton (Jamestown Paint); Rose Ryntz (Visteon); Gail Pollano (Avecia); Joe Brown (Cray Valley); Larry Brandenburger (Valspar); Bob Burke (King Industries); Ray Fernando (Cal Poly); Art Hagopian (ICI, ret); Beverly Spears (Cordano Chemicals); Yasmin Sayed-Sweet (CCP); the late Patrick Finegan (Rohm and Haas); Rod Moon (FSCT); and Bob Ziegler (FSCT).

Following presentation of the report, President Jack expressed the appreciation of the FSCT and the Board for the committee's efforts. The recommendations of the Events Steering Committee were unanimously approved by the Board. The committee was dismissed by President Jack with the thanks of the FSCT.

Publications Committee

Dr. Charles Hegedus, Chair of the FSCT Publications Committee, presented a status report on the development of the FSCT's new publications: JCT RESEARCH and JCT COATINGSTECH. Scheduled for initial publication in January 2004, he presented samples of front cover and page layouts for both publications. The publications, he said, will provide enhanced information, both technical and practical, for the membership and subscribers.

Since the May 2003 meeting of the Board, a sub-committee has investigated and developed the following for both journals: titles, mission statements, guides for both authors and reviewers, review board for JCT RESEARCH, advisory board for JCT COATINGSTECH, marketing/promotion plans, design, and content. In summary, he said, plans and progress have moved along exceptionally well. He thanked the Publications Committee and JCT Editor Dr. Ray Dickie and Pat and Bob Ziegler, of Staff, for their dedicated efforts to launch these important additions to the FSCT information base.

President Jack thanked Dr. Hegedus on behalf of the FSCT for his efforts and congratulated the Committee on the successful completion of this major task.

Actions of the Executive Committee

Approved were the following actions of the Executive Committee:

AUGUST 5-7, 2003

That a resolution of the Board be recommended for adoption by the Board at its Fall 2003 meeting to withdraw certification of the Montreal Society as a Constituent Society of the FSCT for failure to accept the dues increase approved in October 2002. (The resolution was withdrawn by the Executive Committee and was not submitted for approval by the Board of Directors.)

That a resolution of the Board be recommended for adoption by the Board at its Fall 2003 meeting to provide for temporary accommodation of Societies to the previous membership renewal procedures.

That the annual dues of Affiliate Members be revised from that equal to the nonmember subscription price of the Journal of Coatings Technology to an amount equal to the annual dues rates for Full Members, and that the Standing Rules be amended accordingly.

That the titles of the new FSCT publications be approved as "JOURNAL OF COATINGS TECHNOLOGY RESEARCH," and "JCT COATINGSTECH," respectively.

NOVEMBER 11, 2003

That the resolution submitted to the Board of Directors to withdraw certification of the Montreal Society be withdrawn.

That the FY 2004 Operating Budget be revised to show Income at $2,801,200 and Expense at $2,861,561.

2003 Annual Report

Review of the 2003 Statement of Income and Expenses

The following financial report for the fiscal year ending August 31, 2003 was reviewed by the Board and is presented here in accordance with the Articles of Incorporation under the laws of the Commonwealth of Pennyslvania.

Approval of Revised FY 2004 Operating Budget

Reviewed by Dr. Walker, FSCT Secretary-Treasurer, and based on the foregoing approval of the Executive Committee, the Board unanimously approved a revised Operating Budget for fiscal year 2004 showing Income at $2,801,200 and Expenses at $2,861,561, with an operational deficit of $60,361. Dr. Walker noted that the revisions are based on estimates prior to the completion of the FSCT's 2003 convention.

Elections to Officer, Board, and Executive Committee

Elected to FSCT positions for 2003-2004 were:

President-Elect: Dr. Frederick H. Walker (Philadelphia Society), Air Products & Chemicals, Inc., Allentown, PA.

Secretary-Treasurer: Dr. Rose A. Ryntz (Detroit Society), Visteon Corp., Dearborn, MI (One-Year Term)

Executive Committee (Society Director): John F. Bartlett (Pacific Northwest Society), Systems Three Resins, Inc., Auburn, WA. (Three-Year Term); and Dr. Yasmin Sayed-Sweet (Detroit Society), Cook Composites & Polymers, Clarkston, MI (Three-Year Term)

Executive Committee (Director-at-Large): Kevin Pelling (Toronto Society), L.V. Lomas Ltd., Mississauga, Ont., Canada (Three-Year Term)

Board of Directors (Director-at-Large): Deryk Pawsey (Pacific Northwest Society), Ky-Red Technologies, Ocean Park, S. Surry, B.C., Canada (Three-Year Term)

Board of Directors (Past-President): Forest G. Fleming (Piedmont Society), Akzo Nobel, High Point, NC (Two-Year Term)

Richard M. Hille (Cleveland Society), The Flood Company, Aurora, OH, assumed the Presidency on November 14, 2003.

Amendments to FSCT Bylaws And Standing Rules

(Please see pages 72-74 for the full text of these Amendments to the Federation Bylaws and Standing Rules)

APPROVED AT SECOND READING AND FINAL PASSAGE

Having passed First Reading at the May 3, 2003 meeting of the Board, the following amendments to the Federation Bylaws were presented and approved at Second Reading and Final Passage by the Board of Directors at its meeting of November 12, 2003. These revisions will take effect immediately.

Resolution to Revise Bylaws and Standing Rules

To Correct Oversight Regarding Definition of "Full Member"

WHEREAS the definition of "Full Member" approved by the Board of Directors at its meeting of October 29, 2002 inadvertently limited this class of membership, thereby affecting the current and future membership of those individuals that are employed in areas related to coatings manufacture, and

WHEREAS the proposal passed First Reading by the Board of Directors at its meeting of May 3, 2003,

BE IT RESOLVED that the following revision to the Bylaws Article III, Sect. 3.1 be adopted at Second Reading by the FSCT Board of Directors at its meeting of November 12, 2003.

Resolution to Revise Bylaws and Standing Rules

To Correspond with Actions of the Board of Directors

WHEREAS the Board of Directors at its meeting of October 29, 2002 approved various measures affecting the frequency of the International Coatings Expo, and

WHEREAS the proposal passed First Reading by the Board of Directors at its meeting of May 3, 2003,

BE IT RESOLVED that the following revisions to the Bylaw Article III, Sect. 3.3, "Meeting of Members," be adopted at Second Reading by the FSCT Board of Directors at its meeting of November 12, 2003.

REVISIONS TO STANDING RULES

The Board of Directors unanimously approved the following Action of the Executive Committee, thereby amending Standing Rule Article SR IX, Sec. 9.2, "Dues":

"That the annual dues of Affiliate Members be revised from that equal to the nonmember subscription price of the Journal of Coatings Technology to an amount equal to the annual dues rate for Full Members, and that the Standing Rules be amended accordingly."

APPROVED AT FIRST READING

The Bylaws Committee was requested to consider two separate proposals to revise the Bylaws and Standing Rules regarding the topic of separate membership. A proposal from the Pittsburgh Society would have allowed Constituent Societies to accept local-only members, while maintaining the current regulations coupling Federation Full, Educator/Student, and Retired Membership to only those persons that also were Society members. The FSCT Executive Committee offered an alternative proposal that would allow the Constituent Societies and the FSCT to accept membership separately, i.e., without restrictions to concurrent Society membership affiliation.

Following presentation of the resolutions by the Bylaws Committee at First Reading, Mr. Henderson spoke on behalf of the Pittsburgh Society proposal. He said that the goals of the proposal were to maintain the link between the Societies and the FSCT as well as to maintain levels of membership. Decreased annual dues and the encouragement of local member participation in the Societies were also mentioned as reasons behind the proposal.

Mr. Hille presented the Executive Committee's position, saying that the need of some Societies for local-only membership should be balanced against the FSCT's ability to solicit membership outside the Societies' boundaries. The Executive Committee, he said, believed that all individuals should have a freedom of choice in selecting the organizations to which they associate. An outcome of permitting this freedom is that all organizations must develop programs that are relevant to the needs of its members.

Following further discussion by members of the Board and the comments of several guests present at the meeting, a roll call vote of the Directors resulted in the following decisions:

(1) The Pittsburgh Society proposal was defeated by a vote of 4-33, and will not be considered at Second Reading.

(2) The Executive Committee proposal was approved by a vote of 30-7 and will be presented for Second Reading and final approval at the next meeting of the Board.

Resolution to Revise Bylaws and Standing Rules To Allow Separate Membership for Constituent Societies and the FSCT

WHEREAS, in order to allow Constituent Societies to offer both "local only" membership and the Federation to offer "FSCT only" membership, BE IT RESOLVED that the following revisions to the Federation Bylaws and Standing Rules be approved at First Reading by the Board of Directors at its meeting of November 12, 2003.

Recommendation of the Bylaws Committee: The Executive Committee's proposal fulfills the desire of the Societies to allow separate membership. By also allowing the FSCT to accept membership the proposal provides individuals with the opportunity and freedom to select the organization (or both) that best meets their needs. This proposal does not limit or eliminate the need for the Societies and the FSCT to mutually support and promote membership. The Bylaws Committee recommends adoption.

FREIDUN ANWARI

Chair, FSCT Bylaws Committee

REMANDED TO THE BYLAWS COMMITTEE

A proposal, previously submitted by the Pittsburgh Society that would allow Alternate Society Directors to vote in Board decisions, was found by the Bylaws Committee to be in opposition to Pennsylvania Corporate Law. A revised proposal that would allow for the formal election of Alternate Society Directors and thereby allow them to vote was submitted by the Society too late for formal consideration by the Board at this meeting. The proposed amendment to the Bylaws was remanded to the Bylaws Committee for review and comment prior to further consideration.

New Business

Mr. Hille addressed the Board requesting its support of various initiatives during his upcoming year as President:

1. The Executive Committee will address the need to implement the recommendations of the Events Steering Committee, which are critical for the success of the FSCT in years between ICE. In conjunction with this the Committee will also consider the realignment of Federation committees to address future activities.

2. With the approval of the First Reading of the proposed amendments to allow for separate membership, Mr. Hille proposed that a teleconference of the Board be held in the first quarter of 2004 to conduct the Second Reading and Final Approval of these amendments. This will facilitate, he said, implementation of the timely processing of membership renewals for 2004-2005. Notices of the teleconference and solicitation of comments will be forwarded to the Board.

3. He suggested that the FSCT must seriously review its current form of governance to better match the present and future requirements of speed, relevance, representation, and accountability to its professional membership. He proposed that a study group composed of distinguished FSCT and Society leaders be empanelled to deliberate this topic and to make recommendations for change, if necessary, to the Board for its consideration.

4. He spoke of the need for the Societies and FSCT to collectively address the core needs of the respective memberships of the organizations in a manner that retains both their strengths and relevance as independent, yet collaborative professional organizations.

In conclusion, Mr. Hille thanked the Board and the Society and FSCT volunteers for their support during his term of office.

Coatings Industry Education Foundation

Paul Sara, President of CIEF, convened the annual meeting of the Stockholders of CIEF and presented a report on the status of the organization.

REPORT OF THE CIEF PRESIDENT

I. Financial Summary 2002: In the calendar year 2002, CIEF had income of $63,909, expenses of $6997, scholarship disbursements of $77,000, and Roon Awards distributions of $4000. Total assets are valued at $540,990 at the end of calendar 2002. Year-to-date status is not available at the time of this report due to a switch in our fund management. An update will be available at the Board of Director's Meeting, Nov. 11, 2003.

II. Investment Funds: The CIEF Trustees have placed our funds 3/25/03 to the management of Vanguard. This was accomplished in August. The feeling is that the funds will be managed with less "churning," providing a safer and overall better long-term strategy.

III. Project Tomorrow: The 2002 Project Tomorrow activities netted $17,050. This program solicits contributions from companies and individuals. The 2003 Project Tomorrow campaign is just underway--so far $9,750 has been received.

IV. Financial Strategy for 2003: Lower income is expected in 2003 due to the following: (1) Lower Project Tomorrow funds, (2) FSCT matching funds for Project Tomorrow Funds have been discontinued, and (3) Our investments will not perform well again this year due to the general economy. To combat this, the Trustees have implemented a plan to cut expenses by having at least one of our three annual meetings by teleconference and by limiting our scholarship awards this year to $57,000. For the last several years, CIEF has given out approximately $77,000 annually, so this is quite a cut. The total amount of funds requested for 2003 is $128,000. We have funded only 44% of requests this year.

V. Scholarship Recipients: Proposals are received by September of each year from universities requesting scholarship monies for their students. The universities determine which students specifically receive the monies. The schools that received money for scholarships or fellowships this year are: California Polytechnic--$5,000, DePaul--$10,000, Eastern Michigan--$10,500, North Dakota State--$10,500, Southern Mississippi--$10,500 and University of Missouri at Rolla--$10,500. The Trustees evaluate the proposals and decide which programs to help fund. The details are available upon request.

Trustees of the CIEF are: Paul Sara, Jim Geiger, Rick Hille, Sid Lauren, F. Louis Floyd, Roger Woodhull and Fritz Walker, FSCT Secretary /Treasurer. Our next meeting is Thursday, Nov. 12 at 7:00 am at the Marriott Courtyard Hotel in Philadelphia. The trustees up for re-election or first election this year are: F. Louis Floyd, Roger Woodhull, George Schmitz, and incoming FSCT Secretary/Treasurer Rose Ryntz.

Please contact me if there are any questions about what I have submitted in this report or if further details are necessary in future reports.

PAUL S. SARA,

President, CIEF

President Sara gratefully acknowledged recent contributions from the Arizona Society ($1,000) in support of the CIEF's grant to the Cal Poly Western Coatings Technology Center, and of the Western New York Society ($1,418.39) to the CIEF Honor and Remembrance Fund in memory of former CIEF President and Trustee Mary Brodie.

ELECTION OF TRUSTEES

The following individuals were unanimously elected to the CIEF Board Trustees:

F. Louis Floyd (Term, 2004-2006)

James Geiger (2002-2004)

Sidney Lauren (2003-2005)

Rose A. Ryntz (2003-2004)

Paul Sara (2003-2005)

George Schmitz (2004-2006)

Roger Woodhull (2004-2006)
Federation of Societies for Coatings Technology

Balance Sheet as of 8/31/2003 8/31/2002

CURRENT ASSETS
Cash and Cash Equivalents $271,781 $246,753
Investments 878,310 642,464
Accounts receivable 44,263 195,524
Prepaid Expenses 263,056 282,394
Cash surrender value of life insurance 226,531 218,682
Other assets 2,090 3,718
TOTAL CURRENT ASSETS 1,686,031 1,589,535
Property and Equipment, Net 1,149,194 1,241,472
Total Assets $2,835,225 $2,831,007

CURRENT LIABILITIES
Accounts payable and accrued liab $143,669 $210,296
Current portion of deferred income 1,316,435 1,517,231
Pension termination liability 0 76,343
TOTAL CURRENT LIABILITIES 1,460,104 1,803,870

LONG-TERM LIABILITIES
Deferred income 1,259 1,482
Total Liabilities 1,461,363 1,805,352
Net Assets 1,373,862 1,025,655
Total Liabilities and Fund Balance $2,835,225 $2,831,007

Federation of Societies for Coatings Technology Statement of Activities
and Changes in Net Assets

 8/31/2003 8/31/2003 8/31/2002
 Actual Budget Actual
Income
 JCT $654,020.00 $755,250.00 $637,518.00
 Other Publications 132,436.00 162,500.00 126,074.00
 Dues 100,851.00 120,000.00 87,494.00
Conventions/Trade Shows $1,881,053 $1,951,600 $1,881,459
Other Educ. Activities 232,640 261,000 210,615
Other 466,788 46,500 11,3570
Total Revenue 3,467,788 3,296,850 2,954,517

Expense
Program 2,420,512 2,570,090 2,869,181
General and Admin 662,773 703,910 634,869
Total Expense 3,083,285 3,274,000 3,504,050
Change in net assets 384,503 22,850 (549,5330)
Net Assets, Beginning 989,359 989,359 1,538,892
Net Assets, Ending $1,373,862 $1,012,209 $989,359

(signed) David Jack, President, FSCT
(signed) Frederick "Fritz" Walker, Secretary-Treasurer FSCT,
COPYRIGHT 2004 Federation of Societies for Coatings Technology
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Title Annotation:FSCT News
Publication:JCT CoatingsTech
Date:Jan 1, 2004
Words:5708
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