UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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SPARTECH CORPORATION
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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SPARTECH CORPORATION
120 S. Central Avenue, Suite 1700
Clayton, Missouri 63105-1705
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 11, 2009
DEAR FELLOW SHAREHOLDER:
I cordially invite you to attend the 2009 Annual Meeting of Shareholders of Spartech
Corporation to be held at 8 a.m. CST on Wednesday, March 11, 2009, at the Sheraton Clayton Plaza
Hotel, 7730 Bonhomme Avenue, Saint Louis, MO 63105. At the Annual Meeting, shareholders will be
asked to consider proposals:
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1.
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To elect three directors to serve for one-year terms;
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2.
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To ratify the selection of Ernst & Young LLP as the Companys independent
registered public accounting firm for the 2009 fiscal year; and
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3.
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To approve amendments to the Companys 2004 Equity Compensation Plan.
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These proposals are described in detail in the accompanying Proxy Statement. Please read it
carefully.
Your vote is important. Whether or not you plan to attend the meeting, please ensure that
your shares are represented at the meeting by promptly completing your proxy and returning it in
the enclosed envelope.
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Sincerely,
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Myles S. Odaniell
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St. Louis, Missouri
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President and
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February 8, 2009
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Chief Executive Officer
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON MARCH 11, 2009.
Copies of the enclosed Proxy Statement for the 2009 Annual Meeting and the 2008
Annual Report to Shareholders are also available on the Companys Web site at
www.spartech.com
under the Investor
Relations tab.
1
TABLE OF CONTENTS
SPARTECH CORPORATION
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 11, 2009
To Our Shareholders:
Spartech Corporation is soliciting the enclosed proxy on behalf of its Board of Directors for
use at the Companys 2009 Annual Meeting of Shareholders. This Proxy Statement and form of proxy
solicited hereby are being sent or delivered to shareholders of the Company beginning on or about
February 8, 2009.
Any shareholder giving a proxy has the right to revoke it by notifying the Secretary of the
Company of such revocation, in writing, at any time before its exercise. Execution or revocation
of a proxy will not in any way affect the shareholders right to attend the Annual Meeting and vote
in person.
The Board of Directors selected the persons named in the accompanying proxy, who have advised
the Company that they intend, if no contrary instructions are given, to vote the shares represented
by all properly executed and unrevoked proxies received by them FOR the Board of Directors
nominees for director, FOR proposal 2 and FOR proposal 3 as set forth in the Notice of Annual
Meeting of Shareholders, and on any other matter which may come before the Annual Meeting in
accordance with their best judgment.
All expenses for the preparation and mailing of this Proxy Statement and form of proxy will be
paid by the Company. In addition to solicitations by mail, a number of regular employees of the
Company may solicit proxies in person or by telephone. The Company will reimburse banks, brokerage
firms and other custodians, nominees and fiduciaries for reasonable costs incurred by them in
transmitting proxy materials to the beneficial owners of the Companys common stock.
A copy of Spartechs Annual Report to Shareholders for the fiscal year ended November 1, 2008
accompanies this Proxy Statement.
OUTSTANDING SHARES AND VOTING PROCEDURES
The Board of Directors has fixed the close of business on February 3, 2009 as the record date
to determine who is entitled to receive notice of and to vote at the Annual Meeting. There were
30,738,927 shares of Common Stock, $0.75 par value per share, outstanding on the record date, each
entitled to one vote. Only shareholders of record at the close of business on the record date are
entitled to receive notice of and to vote at the Annual Meeting and at any and all adjournments
thereof.
A majority of the outstanding shares of common stock must be represented at the Annual Meeting
in person or by proxy to constitute a quorum for the transaction of business. Abstentions and
broker non-votes will be counted for the purpose of determining the presence or absence of a
quorum.
With respect to
Proposal 1
, the election of directors, a plurality of the votes cast at the
Annual Meeting is required, which means that the three nominees who receive the largest number of
votes cast are elected as directors. Abstentions and broker non-votes will have no effect on the
election.
Proposal 2
, to ratify the selection of Ernst & Young LLP as the Companys independent
registered public accounting firm, requires the affirmative vote of a majority of the votes cast in
person or by proxy at the Annual Meeting. Abstentions will be counted in the tabulations of the
votes cast, and will therefore have the same effect as negative votes; however broker non-votes
will not be counted for the purpose of determining whether the proposal has been approved.
Proposal 3
, to approve an amendment to the Companys 2004 Equity Compensation Plan extending
the term of the Plan and increasing the number of shares available for issuance under the Plan,
requires the affirmative vote of a majority of the votes cast in person or by proxy at the Annual
Meeting. Abstentions will be counted in the tabulations of the votes cast, and will therefore have
the same effect as negative votes; however broker non-votes will not be counted for the purpose of
determining whether the proposal has been approved.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors consists of nine directors. Prior to this Annual Meeting, the
Companys nine directors were divided into three classes, with each director holding office for a
term of three years. Pursuant to an amendment to Article III, Section 1 of the Companys Bylaws
effective March 12, 2008, beginning with this Annual Meeting the Board will be declassified over a
period of not more than three years, so that when the amendment is fully phased in the Companys
nine directors will serve for one year terms and be subject to annual election by the shareholders.
The phase-in schedule is as follows:
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At this 2009 Annual Meeting, three directors will be elected for one-year terms,
to succeed the three Class A directors whose terms expire in 2009.
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At the 2010 Annual Meeting, six directors would be elected for one-year terms,
to succeed the three Class B directors whose terms expire in 2010 as well as the three
directors elected in 2009.
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At the 2011 Annual Meeting, all nine directors would be elected for one-year
terms, to succeed the three Class C directors whose terms expire in 2011 as well as
the six directors elected in 2010; and thereafter, all directors would be elected for
one-year terms.
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As such, the shareholders will elect three directors at this Annual Meeting, each to hold
office until the Annual Meeting of Shareholders in 2010.
Based on the recommendation of the Governance Committee, the Board of Directors has nominated
current directors Victoria M. Holt, Walter J. Klein, and Craig A. Wolfanger to be reelected as
directors of the Company.
The Board of Directors unanimously recommends a vote
FOR the Board of Directors nominees (Item 1 on the Proxy
Card).
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BOARD OF DIRECTORS
Listed below are the members of the Companys Board of Directors, including the nominees for
election to the Board, with certain information about each of them including their principal
occupations for the last five years:
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Director
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Name, Age
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Principal Occupation and Other Directorships
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Since
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Ralph B. Andy, 64
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Mr. Andy became Chairman of the Board of the
Company on January 2, 2008. He has been the
Chairman and Chief Executive Officer of
Pennatronics Corp., a provider of contract
electronic manufacturing services, since 2000.
Prior to his association with Pennatronics,
Mr. Andy was founder, Chairman and Chief
Executive Officer of Polycom Huntsman, Inc.
His term as director expires at the 2011
annual meeting.
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1998
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Lloyd E. Campbell, 51
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Mr. Campbell is a consultant with Spencer
Stuart. Prior to joining Spencer Stuart, Mr.
Campbell was a Managing Director of
Rothschild, Inc. as well as a member of that
firms Investment Banking Committee. Prior to
joining Rothschild in June 2001, Mr. Campbell
was a Managing Director and the Head of the
Private Finance Group at Credit Suisse First
Boston. Mr. Campbell also serves on the
boards of directors of The Guardian Life
Insurance Company of America and Argyle
Security, Inc., a provider of services and
solutions in the physical electronic security
industry. His term as director expires at the
2011 annual meeting.
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2002
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Edward J. Dineen, 54
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Mr. Dineen is President, Chemicals for
LyondellBasell Industries, a global
manufacturer of chemicals and polymers, and a
member of its Management Board. Mr. Dineen
has held a series of senior executive
positions with Lyondell since 1998. Prior to
joining Lyondell, he was with Arco Chemicals
for over 20 years. His term as director
expires at the 2010 annual meeting.
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2006
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Victoria M. Holt, 51
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Ms. Holt is Senior Vice President, Glass and
Fiber Glass, for PPG Industries, Inc., a
global manufacturer of coatings, chemicals and
glass products. Prior to joining PPG in
January 2003, she was Vice President of
Performance Films for Solutia, Inc. Ms. Holt
began her career at Solutias predecessor,
Monsanto Company, where she held various
sales, marketing, and global general
management positions. She currently stands
for re-election.
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2005
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Walter J. Klein, 62
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Mr. Klein is a CPA and from 1992 until April
2002 was Vice President, Finance for Stepan
Company, a specialty chemicals company listed
on the New York Stock Exchange. He brings
more than 20 years of industrial and financial
expertise to the Board. He also serves on the
board of directors of Argyle Security, Inc., a
provider of services and solutions in the
physical electronic security industry. He
currently stands for re-election.
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2003
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4
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Director
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Name, Age
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Principal Occupation and Other Directorships
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Since
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Pamela F. Lenehan, 56
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Ms. Lenehan has been President of Ridge Hill
Consulting, LLC, a strategy and financial
consulting firm, since June 2002. From
September 2001 until June 2002, she was
self-employed as a private investor. From
March 2000 until September 2001, Ms. Lenehan
was Vice President and Chief Financial Officer
of Convergent Networks, Inc., a manufacturer
of switching equipment. She also serves on
the boards of directors of Monotype Imaging
Inc., a provider of font and imaging software
for consumer electronics devices, National
Mentor Holdings, a provider of services to
individuals with intellectual and
developmental disabilities, at-risk youth, and
individuals with acquired brain injury, and
The Center for Women & Enterprise, a
non-profit organization. Her term as director
expires at the 2010 annual meeting.
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2004
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Myles S. Odaniell, 49
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Mr. Odaniell became President and Chief
Executive Officer and a director of the
Company on January 2, 2008. From June 2003 to
February 2006 he was Executive Vice President,
Plastics and Petroleum, of Chemtura
Corporation (formerly Crompton Corporation);
from 2005 to 2006 he was also Chemturas
Executive Vice President, Performance
Chemicals. From 1999 to 2002, Mr. Odaniell
was President, Coatings and Performance
Chemicals, of Cytec Industries, Inc. (formerly
American Cyanamid) and President, Cytec, Latin
America. His term as director expires at the
2010 annual meeting.
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2008
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Jackson W. Robinson, 66
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Mr. Robinson was Chairman of the Board of the
Company from May 2005 to January 2, 2008. He
is also the President and Chief Investment
Officer of Winslow Management Company, LLC,
having held that position since 1983. Mr.
Robinson is also a director Jupiter European
Opportunities Trust PLC. His term as director
expires at the 2011 annual meeting.
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1993
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Craig A. Wolfanger, 50
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Mr. Wolfanger has been President and Chief
Executive Officer of Raptor Partners LLC, an
investment banking firm, and its predecessor
Raptor LLC since March 2005. Prior to that,
he was an investment banker with Kidder,
Peabody & Co. Incorporated, Alex. Brown & Sons
Incorporated and Parker/Hunter Incorporated.
He currently stands for reelection.
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2001
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MEETINGS
Pursuant to the Corporate Governance Standards of the New York Stock Exchange, the Board holds
regularly scheduled executive sessions without management, and at least annually schedules an
executive session with only independent directors. Mr. Andy, as Chairman of the Board, presides
over these sessions.
The Board of Directors held 6 formal meetings during fiscal 2008. Every director attended at
least 75% of the aggregate number of formal meetings of the Board and the committees on which the
director served which were held while he or she was a director.
Because the Company schedules its spring meeting of the Board of Directors in conjunction with
the Annual Meeting of Shareholders, the Companys directors are expected to and normally do attend
each Annual Meeting. Eight of the nine members of the Board of Directors attended the Annual
Meeting of shareholders held in 2008.
COMMITTEES
The Board of Directors has three standing committees, Audit, Compensation and Governance. The
Board has determined that all members of each of these committees are independent under the NYSE
Corporate Governance Standards and the Companys Director Independence Policy.
5
Each of these committees has a written Charter setting forth its duties, responsibilities and
authority as assigned by the full Board. Each Charter is posted in the
Investor
Relations/Corporate Governance
section of the Companys website,
www.spartech.com
, and a printed
copy will be provided to any shareholder on request.
Audit Committee
. The Audit Committee consists of Mr. Campbell, Mr. Klein (Chair), Mr.
Wolfanger. It met eight times during fiscal 2008. The Audit Committees principal
responsibilities are to appoint the independent registered public accounting firm to audit the
Companys financial statements and perform other services related to the audit, to review the scope
and results of the audit with the independent registered public accounting firm, to review with
management and the independent registered public accounting firm the Companys interim and year-end
operating results, to oversee the external reporting by the Company, to consider the adequacy of
the internal accounting and auditing procedures of the Company, to evaluate the objectivity of the
internal auditors and the independence of the independent registered public accounting firm, and to
approve and review any non-audit services to be performed by the independent registered public
accounting firm. The Board has determined that the Audit Committees Chair, Mr. Klein, qualifies
as an audit committee financial expert under the NYSE Corporate Governance Standards.
Compensation Committee
. The Compensation Committee consists of Mr. Dineen, Ms. Holt,
Mr. Wolfanger and Ms. Lenehan (Chair). The Committee met eight times during fiscal 2008. Its
principal responsibilities are to establish, and at least annually, review the compensation package
for the Chief Executive Officer; to review, make suggestions on, and approve the compensation
packages for all other executive officers; to review the financial terms of any other employment
arrangement providing for base salary and target bonus of more than $250,000 per year; and to
approve the annual awards under our equity compensation programs.
Governance Committee
. The Governance Committee consists of Mr. Campbell (Chair), Mr.
Dineen, Ms. Holt and Mr. Robinson. It met two times during fiscal 2008. The Governance Committees
principal responsibilities are to ensure that the Company is governed in an appropriate manner, to
ensure that the membership of the Board continues to have a high degree of quality and independence
by performing the functions generally carried on by a nominating committee, to review and make
recommendations to the Board as to the appropriate amount and form of compensation for non-employee
directors, and to ensure that any future change of control of the Company would occur, if at all,
only on terms fair to the Companys shareholders.
INDEPENDENCE
The listing standards of the New York Stock Exchange include a set of Corporate Governance
Standards applicable to NYSE listed companies. Among other things, the NYSE Corporate Governance
Standards require a majority of the Board and all members of the Audit, Compensation and Governance
Committees to be independent as defined by the NYSE. Pursuant to the NYSE Corporate Governance
Standards, the Board has adopted a set of Corporate Governance Guidelines setting forth certain
internal governance policies and rules as well as a Director Independence Policy implementing the
NYSE director independence requirements. The Corporate Governance Guidelines and Director
Independence Policy are set forth in the
Investor Relations/Corporate Governance
section of the
Companys website at
www.spartech.com
, and a printed copy will be provided to any shareholder on
request.
The Board has determined that all of the Companys directors other than Mr. Odaniell meet all
applicable independence standards and therefore qualify as independent directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2008, the Compensation Committee of the Board of Directors was composed of Mr.
Dineen, Ms. Holt and Ms. Lenehan, none of whom was or is an officer of the Company and none of whom
had or has any relationship requiring disclosure under the rules of the Securities and Exchange
Commission.
CERTAIN BUSINESS RELATIONSHIPS AND TRANSACTIONS
As a matter of practice, the Company generally does not engage in material transactions with
related parties; however, the Director Independence Policy requires directors to disclose to the
Governance Committee any relationship or transaction with a related person with respect to the
Company which may be required to be publicly disclosed under the rules of the Securities and
Exchange Commission. The Governance Committee must then review the transaction and approve or
disapprove it taking into account all relevant
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factors including, in the case of a director, the recommendations of the Companys General
Counsel as to whether it could affect the directors independence. Company policy requires
executive officers to make corresponding disclosures. During fiscal 2008 there were no
related-party transactions that required disclosure pursuant to SEC rules.
CODE OF ETHICS
The Company has adopted a Code of Ethics for its Chief Executive Officer and Senior Financial
Officers. It has posted the Code of Ethics on its website and intends to satisfy the disclosure
requirement under Item 5.05 of Form 8-K by posting such information on its website. The Company
also has adopted a Code of Business Conduct and Ethics for Directors, Officers and Employees. Both
Codes are posted in the
Investor Relations/Corporate Governance
section of the Companys website,
www.spartech.com
, and a printed copy will be provided to any shareholder on request.
COMPENSATION OF DIRECTORS
The compensation of the Companys directors is determined by the Governance Committee subject
to approval by the entire Board.
Since January 1, 2007, the Company has paid each non-management director, except for Mr. Andy,
a base annual fee of $65,000, plus additional base annual fees of $10,000, $7,500 and $7,500 for
the members (including the Chairs) of the Audit, Compensation and Governance committees,
respectively. The Company also pays the Chairs of the Audit, Compensation and Governance
committees additional fees of $10,000, $7,500 and $2,500 respectively. Based on the directors
belief that attendance at meetings is expected as part of Board and Committee service, the Company
does not pay fees for attendance at Board or committee meetings, but it does pay or reimburse the
directors expenses incurred in attending meetings.
Each non-management director, except for current and former Board chairmen, also receives an
annual award of shares of restricted stock having a value of $50,000 based on the closing market
price of the Companys common stock on the date of grant, or if the grant date is not a trading
day, the last previous trading day. Mr. Robinson, a former Chairman, received an annual award of
restricted stock with a value of $60,000 while he was chairman. Restricted stock is common stock
awarded subject to certain restrictions against transfer specified in the award agreement.
Subsequent to Mr. Robinsons fiscal 2008 award as former Board chairman, his yearly award will
return to the standard Board member award.
Mr. Andys Compensation
. On January 2, 2008 the Board elected Mr. Andy as Chairman of
the Board, replacing Mr. Robinson in that position. In lieu of all other cash and non-cash
compensation for Mr. Andy for the remainder of 2008, 2009 and 2010, the Board agreed to grant Mr.
Andy a one-time award of 69,882 shares of restricted stock, which had a value of $1,000,000 based
on the January 2, 2008 closing market price of the Companys common stock. One-third of these
shares vested on the first trading day in January of 2009. The other two-thirds of the shares
awarded will vest over the following two years, one-third on the first trading day in January of
2010 and one-third on the first trading day of January of 2011, and any unvested shares will be
forfeited if Mr. Andy for any reason ceases to serve as Chairman; however, all unvested shares will
immediately vest in the event of a change in control of the Company, which is defined and
described under Potential Payments upon Termination or Change in Control, below.
Director Stock Ownership Policy
. The Board has adopted a Director Stock Ownership
Policy. This Policy requires each non-management director to acquire and hold, within four years
after the director is first elected to the Board (or by December 2010 for current directors),
shares of Company common stock having an aggregate public market value of at least three times the
directors annual cash retainer for Board service. Under the current director compensation
package, each director would be required to hold and retain at least $195,000 of Company common
stock. Each directors current stock ownership is shown in the table in the section captioned
Security Ownership.
7
DIRECTOR COMPENSATION TABLE
The following table discusses Director Compensation for 2008:
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Change in
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Pension Value
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and
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Fees
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Nonqualified
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Earned or
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Stock
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Non-Equity
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Deferred
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Paid in
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Awards
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Option
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Incentive Plan
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Compensation
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All Other
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Name (1)
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Cash (2)
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(3)
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Awards
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Compensation
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Earnings (4)
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Compensation
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Total
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Ralph B. Andy
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$
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25,833
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$
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327,774
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None
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None
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$
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1,864
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None
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$
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355,471
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Lloyd E. Campbell
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$
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105,000
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$
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49,993
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None
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None
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$
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1,864
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None
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$
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156,857
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Edward J. Dineen
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$
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80,000
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$
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49,993
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None
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None
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None
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None
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$
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129,993
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Victoria M. Holt
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$
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80,000
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$
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49,993
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None
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None
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$
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676
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None
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$
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130,669
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Walter J. Klein
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$
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97,500
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$
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49,993
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None
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None
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$
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1,864
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None
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$
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149,357
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Pamela F. Lenehan
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$
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92,500
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$
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49,993
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None
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None
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$
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1,240
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None
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$
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143,733
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Jackson W. Robinson
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$
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83,750
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$
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60,006
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None
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None
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$
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2,540
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None
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$
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146,296
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Craig A. Wolfanger
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$
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82,500
|
|
|
$
|
49,993
|
|
|
None
|
|
None
|
|
$
|
1,864
|
|
|
None
|
|
$
|
134,357
|
|
|
|
|
(1)
|
|
Mr. Odaniell will receive no compensation for his service as a director other than his
compensation as President and Chief Executive Officer of the Company.
|
|
(2)
|
|
Certain directors received additional compensation related to their participation in
the President and CEO candidate search process: Mr. Campbell $20,000; Mr. Andy $12,500;
Ms. Lenehan $12,500; and Mr. Klein $12,500.
|
|
(3)
|
|
The amounts reported in this column are the amounts expensed by the Company for the
2008 annual grant of restricted stock.
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|
(4)
|
|
The amounts reported in this column are the grant date values of restricted stock
units accrued as dividend equivalents pursuant to awards of restricted stock units
originally granted to the directors in 2004 and 2005. Mr. Dineen, who joined the Board
in 2006, holds no such units. Each restricted stock unit represents the right to receive
one share of common stock one year after the director leaves the Board. The awards
provide for additional units to be automatically granted on each dividend payment date;
the number of additional units granted equals the total value of the dividends paid on a
number of shares of common stock equal to the number of units held, divided by the
closing price of the common stock on the dividend payment date. The amounts shown are
based on dividend record dates occurring within fiscal 2008. Directors of the Company
have no pension or other deferred compensation plan.
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8
DIRECTOR NOMINATIONS
The Governance Committee of the Board of Directors is responsible under its Charter for
identifying and selecting qualified candidates for election to the Board at each annual meeting of
the shareholders as well as to fill any vacancies on the Board. In addition, shareholders who wish
to recommend a candidate for election to the Board may submit such recommendation to the Chairman
of the Board of the Company at the address set out under Communication With Directors, below.
Any recommendation must include name, contact information, background, experience and other
pertinent information on the proposed candidate and must be received in writing by October 31, 2009
for consideration by the Governance Committee for the 2010 Annual Meeting.
Although the Governance Committee is willing to consider candidates recommended by
shareholders, it has not adopted a formal policy with regard to the consideration of any director
candidates recommended by security holders. The Committee believes that a formal policy is not
necessary or appropriate because the Company has historically afforded representation on its Board
to major, long-term shareholders on a case by case basis. For the past several years, the Company
has not received any recommendations by shareholders for nominations to the Board.
The Director Independence Policy requires that a person elected to the Board must qualify as
an independent director if there are two or more non-independent directors already serving on the
Board. The Governance Committee does not have any other specific minimum qualifications that must
be met by a candidate for election to the Board of Directors in order to be considered for
nomination by the Committee. In identifying and evaluating nominees for director, the Committee
considers each candidates qualities, experience, background and skills, as well as any other
factors which the candidate may be able to bring to the Board. The process is the same whether the
candidate is recommended by a shareholder, another director, management or otherwise.
COMMUNICATION WITH DIRECTORS
The Company has established procedures for shareholders or other interested parties to
communicate directly with the Board of Directors. Such parties can contact the Board by mail at:
Spartech Board of Directors, Attention: Ralph B. Andy, Chairman of the Board, c/o Pennatronics,
P.O. Box 638, California, PA 15419. All communications made by this means will be received
directly by the Chairman of the Board.
With the unanimous approval of its independent directors, the Company has arranged for a
third-party company, The Network, to provide an Ethics Hotline for employees, security holders and
other interested parties to communicate concerns involving internal controls, accounting or
auditing matters directly to the Audit Committee. The Companys Ethics Hotline phone number is
800-886-2144 (U.S. and Canada) or 770-582-5285 (International). The Ethics Hotline can also be
used to communicate other concerns to the Companys management. Concerns can be reported
anonymously, if the caller chooses.
9
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This section describes Spartechs compensation program for executive officers. The discussion
focuses on the compensation program in effect for the 2008 fiscal year and compensation decisions
made with respect to the compensation program. We address why we believe the program is appropriate
for our Company and our shareholders, and we discuss the methodology for determining appropriate
and competitive levels of compensation.
Currently, Spartech has ten executive officers. These executives have the broadest job
responsibilities and policy-making authority in the Company and are held accountable for the
Companys performance. Details of compensation for our Chief Executive Officer (CEO), Chief
Financial Officer (CFO) and the three other highest paid executive officers (collectively called
the named executive officers) can be found in the tables in the section captioned Compensation
of Executive Officers, below.
What person or group is responsible for determining the compensation levels of executive officers?
The Compensation Committee of our Board of Directors determines compensation for the CEO. It
also reviews, makes suggestions on, and approves the CEOs recommendations for the compensation of
all other executive officers. In making its decisions, the Committee reviews the performance of the
Company based on information provided to all Board members, considers the performance of the
individual executive officers, and confers with an independent compensation consultant to assess
the competitive market for comparable executives.
The Committee assesses the performance of the Company in part based on specific measures and
targets established by the Committee and the Board of Directors. As Board members, they receive
regular updates on our business priorities, strategies and results during which they interact with
our executive officers. However, compensation decisions are not driven entirely by financial
performance assessments. Committee members use their judgment and discretion in making compensation
decisions that support our compensation objectives and align with our compensation principles, as
discussed in more detail below.
Managements recommendations for fiscal 2008 compensation were determined in consultation with
DolmatConnell & Partners, whom the Committee retained as its independent consultant in 2008.
DolmatConnell & Partners advises the Committee on compensation matters directly relating to
executive cash compensation, long-term incentives (LTI) and severance agreements. In particular,
the Committee asked DolmatConnell & Partners to assess the competitive positioning of our
compensation programs relative to an appropriate peer group and against published surveys of a
large number of cross-industry companies. DolmatConnell & Partners also works for the Compensation
Committee on an ongoing basis to review and assess current Spartech compensation relative to
competitive compensation practices and compensation packages for any newly hired executive
officers.
Our CEO, CFO, Senior Vice President of Human Resources, and internal and external legal
counsel are also involved in our executive compensation process. The CEO is responsible for:
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reviewing the performance of his direct reports with the Committee;
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recommending base salary increases;
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establishing bonus targets for the performance-based bonuses;
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establishing equity award levels for the long-term incentive plan;
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establishing the short-term and long-term Company financial and non-financial
performance goals that are used throughout the compensation plans; and
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advising the Committee regarding the compensation programs ability to attract,
retain, and motivate the level of executive talent necessary to achieve continued
success of the Company.
|
The CFO is responsible for providing input on the financial targets for our Incentive
Compensation Plan and for presenting data regarding the impact of the executive compensation
programs on our financials.
10
The Senior Vice President of Human Resources is responsible for providing internal data
regarding current pay programs and equity grant information, as well as providing the Committee
with performance appraisal information.
Our internal and outside external legal counsel are involved in assessing and reviewing
employment agreements, structuring long-term incentive plans, and ensuring compliance with SEC
disclosure processes and regulations.
What are the Companys overall management compensation principles?
The Compensation Committee has established the following principles for compensating Company
management:
Pay for performance
Compensation should reflect the performance of the Company over the last
fiscal year (the short-term) as well as over a longer period. In the short-term, compensation
will reflect the extent to which goals are missed, met, or exceeded, taking into consideration
individual ability to influence results. In the long term, the value delivered under
equity-based programs will be driven largely by the performance of our share price and total
shareholder return, both intrinsically and in comparison to other companies in our industry;
Support business strategy
Compensation programs should be aligned with business strategies
focused on long-term growth and creating value for shareholders;
Pay competitively
Overall target compensation, which is compensation received when achieving
expected results, should be in line with that of individuals holding comparable positions and
producing similar results at other public corporations of similar size and industry; and
Focus on a total compensation perspective
All components of pay should be considered when
making compensation decisions. These components include base salary, annual incentives,
long-term incentives, benefits and perquisites.
Over time, we believe our approach will help us to develop and retain talented managers who
are committed to our success and to achieving superior performance.
What are the Companys executive compensation objectives?
Consistent with our overall compensation principles, the Committee has established the
following executive compensation objectives to help facilitate the Companys long-term success:
Drive superior performance
Encourage leaders to achieve and exceed our performance targets,
both Company-established and relative to peer groups;
Focus on long-term success
Provide a significant portion of executives compensation through
programs linked to our long-term success as incentives to help maximize shareholder return; and
Retain key executives
Retain those executives who have demonstrated superior talent and
performance and whose continued employment is crucial to our success and growth.
How do we determine executive pay?
The Committees compensation philosophy is to target the 50
th
percentile in the
marketplace, plus or minus approximately 15%. In the judgment of the Committee members, based on
data provided by DolmatConnell & Partners, our compensation for the executive officer team is
within the range of the 50
th
percentile and consistent with our philosophy and target.
For fiscal 2008, we benchmarked all significant elements of total direct compensation
base salary, bonus, total cash compensation, and all forms of long-term incentives to the
competitive marketplace, and in particular to a peer group of companies. Our peer group with
respect to compensation decisions made for fiscal 2008 consisted of 16 companies selected by the
Committee in consultation with DolmatConnell & Partners. The Committee considered several factors,
including:
11
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Similar revenue and market capitalization size;
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§
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Operation in the plastics, or another similar, related industry;
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§
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|
Generally overlapping labor market for recruiting top talent; and
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§
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|
Status as a publicly-traded, U.S.-based corporation.
|
The peer group is made up of the following 16 firms:
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|
|
A. Schulman, Inc.
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|
AEP Industries, Inc.
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|
Albermarle Corp.
|
AptarGroup, Inc.
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|
Bemis Co., Inc.
|
|
Ferro Corporation
|
Georgia Gulf Corporation
|
|
Myers Industries, Inc.
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|
PolyOne Corp.
|
Rock-Tenn Co.
|
|
Rockwood Holdings, Inc.
|
|
RPM International, Inc.
|
Tredegar Corp.
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Trex Co., Inc.
|
|
Sonoco Products Co.
|
The Valspar Corp.
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From 2007 to 2008, five peer group firms (Atlantis Plastics, Cytec Industries, Inc., Intertape
Polymer Group, Inc., and ICO, Inc., and Wellman Inc.) were removed from the peer group, and one
peer group firm was added (AptarGroup, Inc,).
DolmatConnell & Partners also provided the Committee with data from broad-based,
cross-industry surveys for comparative purposes as an additional resource for its 2008 executive
compensation decisions. The survey data is used in conjunction with peer group data to offer a
more complete set of data for benchmarking executive compensation.
What are the elements of executive compensation (what), why do we use these elements (why), how are
the elements values determined (how determined), and if applicable, what are the mechanics of each
program (program mechanics)?
Short-Term Compensation Elements
We believe that it is necessary to provide short-term compensation elements, because
short-term incentives provide an immediate benefit paid in cash based on the achievement of
immediate results, thereby promoting the achievement of short-term goals.
Base Salary
What
: Base salary is annual fixed compensation and is a standard element of compensation
necessary to attract and retain talent.
Why
: Base salary represents the payment for a satisfactory level of individual performance
as long as the employee remains employed with the Company.
How Determined
: Base salary is set at the Committees discretion on an annual basis,
primarily based on individual factors, such as position, salary history, individual performance, an
individuals time in that position, placement within the general salary range for the position, and
competitive market conditions. The Committee budgets annual increases in accordance with broader
market trends. The Committee also looks at the competitive marketplace and Company performance in
setting aggregate salary increases. In fiscal 2008, the base salary amount was also benchmarked
for reasonableness against the 50
th
percentile of peer group and market survey base
salary data for comparable jobs.
Performance-Based Bonus
What
: The performance-based bonus is an annual bonus opportunity with actual payouts
contingent upon Committee-approved financial performance goals.
Why
: A performance-based bonus focuses management on our short-term (one fiscal year)
financial results in specific targeted areas determined at the beginning of each year.
12
How Determined
: The percentage of base salary for each executive officer is set at the
Committees discretion. For fiscal 2008, this amount was also benchmarked against the
50
th
percentile of bonus data for comparable jobs and responsibilities at peer group
companies and in the broader market. Management sets performance targets and payout calculations
in advance based on the annual business plan and such metrics as operating earnings, product sold,
and net working capital as a percentage of sales. We pay out 100% of the target bonus if we
achieve the target business plan results, which are not necessarily the amounts in our annual
budget. The Committee also approves a scale for payouts above or below the target based on the
perceived difficulty of achieving the targets; we design payouts above 100% to be self-funding from
the increased earnings resulting from the higher performance results.
Program Mechanics
: The potential payout range for fiscal 2008 for named executive officers
was from 0% to 200% of target, with the payout based on achievement of performance targets. A
multiplier is determined based on the level of performance target achievement. For the management
group, other than the CEO, seventy (70%) percent of the amount is paid as calculated based on
previously established financial goals. All or a portion of the remaining 30% calculated amount is
paid based on an evaluation of the officers leadership and support with respect to the Companys
Oracle implementation. For the CEO performance based bonus, thirty (30%) percent of his target
bonus (24% of base salary) is based on an evaluation of his leadership and support with respect to
the Companys Oracle implementation. The remaining 70% of target bonus (56% of base salary) is
based on achieving the same performance targets as those applicable to the named executive
officers. The 2008 bonus criteria and results are described in footnote (6) to the Summary
Compensation Table under Compensation of Executive Officers, below. For fiscal 2009, the
potential payout range is similar to that of fiscal 2008.
Long-Term Compensation Elements
We believe that long-term compensation elements provide appropriate motivational tools to
achieve certain, long-term Company goals. We employ a portfolio approach to long-term incentive
compensation, including stock-settled stock appreciation rights (SSARs), time-vested restricted
stock, and performance shares. Each of these three elements has different motivational objectives:
SSARs drive better business performance by having value only when the stock price increases;
performance shares motivate the achievement of performance goals; and time-vested restricted stock
effectively facilitates the retention of top talent.
Each year, the Committee approves a target dollar amount based on managements recommendations
and by benchmarking to industry/peer group data provided by management and by our compensation
consultant; this amount is then allocated among the various compensation elements. We have
designed our long-term incentive mix to balance SSARs, time-vested restricted stock, and
performance shares at roughly 40%, 30%, and 30%, respectively, of each individuals total targeted
long-term incentive compensation, but the actual percentages may vary depending on individual
factors
Executives participate in our long-term compensation programs based on their ability to make a
significant contribution to the Companys financial performance, their level of responsibility,
their ability to meet performance objectives, and their leadership potential. No executive is
entitled to participate automatically based on title, position, or salary level.
Stock-Settled Stock Appreciation Rights (SSARs)
What
: SSARs are grants which, upon exercise, give the holder the right to receive the net
appreciation in market value of a specified number of shares of our common stock over a base price.
Under our plans, the base price may not be less than the closing stock price on the award date.
Upon exercise, the net appreciation over the base price is settled in an equivalent number of
common shares valued on the exercise date. SSARs are similar to stock options but result in fewer
shares outstanding because only a net number of shares are issued.
Why
: SSARs motivate long-term increases (up to 10 years) in common stock market price,
because if the stock price does not increase, the award has no value.
13
How Determined
: The number of SSARs issued is based on the approved target dollar amount of
SSARs to be awarded, divided by the value of one SSAR, which we determined to be the Black-Scholes
value of an equivalent stock option on the grant date.
Program Mechanics
: For fiscal 2008, the number of SSARs issued to each executive
represented approximately 40% of the total target value of all LTI awards to that executive. The
specific terms of the fiscal 2008 SSAR awards are described under Compensation of Executive
Officers, below.
Time-Vested Restricted Stock
What
: Time-vested restricted stock is Company common stock which cannot be sold or
transferred during the vesting period.
Why
: Time-vested restricted stock facilitates retention by providing guaranteed
in-the-money value, unlike SSARs or options. In addition, time-vested restricted stock provides
immediate alignment with shareholders through current stock ownership. The value of current stock
ownership may rise or fall and therefore can be more effective and provide a more immediate
retention tool than the possibility of long-term future rewards.
How Determined
: The number of shares of time-vested restricted stock issued is based on
the approved target dollar amount of restricted stock to be awarded, divided by the value of one
share of time-vested restricted stock, which we assume is equal to determined to be the closing
stock price on the grant date.
Program Mechanics
: For fiscal 2008, the number of shares of time-vested restricted stock
issued to each executive represented approximately 30% of the total target value of all LTI awards
to that executive. The specific terms of the fiscal 2008 restricted stock awards are described
under Compensation of Executive Officers, below.
Performance Shares
What
: Performance shares are units that are convertible into shares of Company common
stock based on stated performance goals set by the Committee for each award.
Why
: Performance shares are designed to promote and reward superior medium-term (3-year)
Company performance by using factors which cannot be measured reliably over a one-year period.
How Determined
: The number of performance shares issued is based on the approved target
dollar amount of performance shares to be awarded, divided by the value of one performance share.
Because the value of a performance share is not directly related to current stock price, we have
the unit value of the performance share awards determined by independent valuation. For fiscal
2008, we engaged Deloitte & Touche to perform this valuation.
Program Mechanics
: The performance standard we selected for performance share awards
issued in fiscal 2008 was our total return to shareholders over the 2008, 2009 and 2010 fiscal
years, compared to the total return over the same period to shareholders of our 16-firm peer group.
The value of the award can exceed the target value if Company performance over that period exceeds
that of other companies in the specified performance group; if Company performance over that period
lags that of the companies in the performance group, the award value decreases or can become zero.
For fiscal 2008, the number of performance shares awarded to each executive represented
approximately 30% of the total target value of all LTI awards to that executive. The specific
terms of the fiscal 2008 performance share awards, including the method of calculating total
return to shareholders and the eventual payout amount for these awards, are described in more
detail under Compensation of Executive Officers, below.
Benefit Plans
We offer benefit plans to our executive officers as a competitive measure in order to attract
and retain top talent.
401(k), Life Insurance, and Medical Benefits
14
All Company employees, including the executive officers, are eligible to participate in 401(k),
life insurance, and medical benefits plans. The terms of such benefits for our executive officers
are the same as those for all Company employees.
Deferred Compensation
What
: Deferred compensation consists of annual defined contributions into a non-qualified
executive retirement plan.
Why
: This provides high-level employees with a partial substitute for our lack of a
defined benefit retirement plan and contribution limits on 401(k) Plan contributions. We have no
defined benefit plan, and we wish to remain competitive in the industry by providing a retention
tool and retirement benefit without incurring the significant costs of a supplemental executive
retirement plan or a traditional pension plan.
How Determined
: The Committee reviews the plan in conjunction with its compensation
consultant as a component of the total compensation program. Under the deferred compensation
program, we credit 10% of the cash compensation of each participating executive for the preceding
calendar year, up to $30,000, to a deferred compensation account for the executive. We select the
funds in the portfolio, but the executive selects the funds in which to invest. Subject to
specified vesting requirements, the value of an executives account is paid out upon termination of
the executives employment.
Program Mechanics
: More information about the Deferred Compensation Plan and the named
executive officers accounts is provided under Compensation of Executive Officers, below.
Perquisites
We offer certain perquisites to our executive officers as a competitive measure in order to
attract and retain top talent.
Leased Car / Auto Allowance
What
: The auto allowance is an annual allowance provided to executives for the costs
associated with maintaining an automobile.
Why
: An auto allowance provides an additional perquisite to executives to provide
competitive compensation without increasing base salaries. Company vehicles/car allowances are
commonly provided to senior executives as well as sales personnel.
How Determined
: For leased cars, the compensation amount is based on the value of personal
use per IRS rules. For a car allowance, we set the amount to approximate the average total cost of
financing, maintaining and operating an automobile reasonably appropriate to the executives
position.
Program Mechanics
: For fiscal 2008, the car allowance was $850/month and the business use
of the car was reimbursable at a rate equal to 50% of the standard IRS mileage rate. Our CEO does
not receive a car allowance.
Medicare Tax Gross-Up
What
: The Medicare tax gross-up is a cash payment that is equal to the 1.45% Medicare Tax
on deferred compensation contributions and income from personal use of Company cars.
Why
: It preserves the full value of non-cash employee benefits and helps the executive
avoid having to make out-of-pocket cash payments for non-cash benefits.
How Determined
: The Committee reviews the gross-up in conjunction with its compensation
consultant as a component of the total compensation program. The actual gross-up is determined via
mathematical formula that calculates the percentage that will be grossed up to the executive based
on the tax rate.
Program Mechanics
: Because all executives already pay the maximum Social Security tax, the
1.45% Medicare tax is the only tax for which we make this payment.
15
Severance Agreements
What
: Severance and change in control agreements are designed to protect executives in the
event of certain termination events.
Why
: They provide security for executives against sudden or arbitrary termination and help
promote retention of high performing individuals. They also assist in recruiting and retaining key
employees by providing competitive arrangements.
How Determined
: The provisions of each severance agreement are determined by analysis of
peer group/market trends and practices and are set at competitive levels with industry practice.
Program Mechanics
: We have entered into severance and non-competition agreements to
provide compensation to eligible executives whose employment is terminated involuntarily under
certain circumstances. In January 2008, we entered into an agreement with our CEO upon his
employment. In September 2008, the agreements with other executive managers were amended under
terms and conditions similar to the CEO. Our plans or LTI awards may also provide payments or
benefits in the event of the termination of employment or a change in control of the Company. The
financial terms of these agreements as well as other provisions effective upon severance or a
Change in Control are discussed in detail under Potential Payments upon Termination or Change in
Control, below.
How do our decisions regarding each element affect decisions regarding the other elements?
The Committee considers total cash and equity compensation when setting the compensation of
executive officers. In doing so, the Committee considers the retention value of the long-term
equity currently held by the executive and the impact that retirement or voluntary termination
would have on the executive. Based on this review, the Committee may decide to adjust one or more
elements of an executives total compensation. The Committee aims to provide competitive total
direct compensation and assesses an executives total compensation package when looking at the
executives competitive standing relative to the market.
Additionally, the Committee seeks to provide a competitive compensation mix, with discretion
depending on factors deemed relevant to the Committee, such as individual performance, internal
equity, historical pay practices, etc. Certain compensation decisions may specifically affect other
elements of compensation. For example, because potential bonus payouts and deferred compensation
allocations are based on the executives base salary, increases in base salary also increase the
amount of potential bonus payouts and deferred compensation contributions for which executives are
eligible. Additionally, we employ a portfolio approach to long-term incentive compensation,
including SSARs, time-vested restricted stock, and performance shares. Each of the three tools
provides different motivational attributes that we believe appropriately motivate and retain top
talent.
What were the results of the decisions made with regard to executive compensation for fiscal 2008?
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§
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|
The Committee approved executive base salary increases for fiscal 2008 which were deemed
to be competitive and consistent with the performance of the executive team and general
market conditions.
|
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§
|
|
The Committee reviewed and DolmatConnell & Partners made recommendations to the
Committee to update the peer group previously used in fiscal 2007. The Committee
ultimately approved a 16-company peer group of plastics or chemical industry firms of
generally similar size compared to Spartech, to be used for both benchmarking and
performance share plan purposes during fiscal 2008. From 2007 to 2008, five peer group
firms were removed from the peer group and one peer group firm was added, due to the
Committees assessment that these firms were in an overlapping labor market for recruiting
top talent and were appropriate comparator firms. Compensation analyses used this
16-company peer group during 2008, and the performance group used for fiscal 2008
performance share awards was the same as the 16-company compensation peer group. The
composition of this peer group will be reviewed annually.
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§
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|
The Committee approved target bonus levels for fiscal 2008 that were at the same
percentage levels of salary as target bonuses for fiscal 2007. However, in the interest of
aligning our pay-for-performance metrics with our competitors, for 2008 we reduced the
maximum potential bonus from 300% to 200% of
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16
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target. The Committee determined that the performance targets for the 2008 bonus were
reasonable and related to our historical performance, including comparisons with our peer
group and other related companies.
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§
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|
In the interest of aligning the interests of management with the interests of
shareholders, in May 2008, the Board of Directors increased participation in the executive
stock ownership guidelines to include all Spartech vice presidents including those not
designated as executive officers.
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§
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The Committee approved a one-time restricted stock grant in May 2008 to Michael Marcely,
our Vice President of Planning and Financial Analysis, with a grant date value of $10,000,
in connection with his change in position and responsibilities. This one-time grant was
deemed appropriate and consistent with levels of compensation for his new position.
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§
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The Committee approved amendments to the terms of equity award forms in light of the
effects of certain events, including resignation and retirement, on the vesting and
exercisability of various equity awards. As of May 2008, our terms of equity award forms
now accomplish the following:
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Employees who voluntarily resign will have up to 60 days after their
resignation to exercise any vested SSARs;
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o
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The qualification for retirement changed from age 60 to a combination of
age plus years of service equal to 65;
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o
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Upon an employees retirement, any unvested SSARs or restricted stock
will be forfeited;
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o
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The period during which an award is subject to forfeiture if the
recipient engages in activities competitive with or detrimental to the Company is
extended from one year after termination of employment to the entire remaining term
of the award; and
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o
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Deletes the provision for forfeiture of vested SSARs and performance
shares in the event that a Retired employee engages in activities inconsistent with
retirement.
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The Committee determined that these changes better aligned our equity award terms with the
marketplace.
What decisions did the Committee make with regard to CEO Compensation in fiscal 2008?
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§
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On January 2, 2008, the Board appointed Myles S. Odaniell to the position of President
and Chief Executive Officer, and also elected him a director of the Company. The Company
entered into an offer letter agreement and a severance and non-competition agreement with
Mr. Odaniell, both effective upon commencement of his employment. Based on recommendations
from DolmatConnell & Partners as to CEO compensation in our peer group, the Compensation
Committee approved an annual base salary of $650,000 for Mr. Odaniell and a target bonus
for 2008 equal to 80% of his base salary. Consistent with the terms of the bonuses for our
other executive officers, the actual bonus payout was determined based on the achievement
of the specified 2008 performance metrics, with a specified range from 0% to 200% of the
target. 30% of the amount was awarded based on the Boards evaluation of Mr. Odaniells
leadership and support with respect to the Companys Oracle implementation. In addition,
as hiring and retention incentives and to encourage Mr. Odaniells long-term investment in
the Company, the Committee granted Mr. Odaniell long-term equity awards with a total target
value of $1,500,000, consisting of $500,000 in SSARs (priced at the Black-Scholes value on
the grant date), $625,000 in time-vested restricted stock (priced at the NYSE closing price
of the common stock on the grant date), and $375,000 in performance shares (priced at the
independently appraised value on the grant date), all on the same vesting schedule and
other terms provided in our standard 2007 award forms. Mr. Odaniells severance agreement
provides that in the event of his termination without cause, he would be entitled to 24
months of salary continuation and payment of two times his average annual bonus awarded for
the three fiscal years ended prior to termination; however, if the termination were to
occur within 24 months of a change in control, Mr. Odaniell would receive an additional six
months of salary continuation and an additional one-half times his average annual bonus.
The other terms of his severance agreement are generally consistent with the severance
agreements previously entered into by our other named executive officers, as described
under Potential Payments Upon Termination or Change in control, below, except for the
elimination of the tax gross-up provision.
|
What decisions has the Committee made with regard to executive compensation for fiscal 2009?
17
Executive Officer Salaries
Effective January 1, 2009, the Compensation Committee increased Mr. Marcums base salary from
$250,000 to $290,000 based upon a study of market and industry related data. The Compensation
Committee has determined that there will be no other increases in the annual base salaries of
executive officers for at least the first six months of 2009 in response to the downturn in
business and market conditions. The Compensation Committee will reevaluate the executive officers
base salaries in the second half of 2009.
Executive Bonus Plan
Under the Companys Executive Bonus Plan, cash awards may become payable to the named
executive officers based on the Companys achievement of specified performance goals set annually
by the Compensation Committee. For fiscal 2009, the Committee has established the following target
percentages: Mr. Odaniell 80%, Mr. Martin 60%, Mr. Ploeger 60%, Mr. Marcum 60%, and Mr.
Marcely 40%. In addition, for each fiscal year, the Committee establishes in advance one or more
quantitative Company-wide performance measures, and the weighting of each. For 2009, the Committee
has established the performance measures as earnings before interest, taxes, depreciation and
amortization (EBITDA) (45% weighting), net working capital as a percent of sales (20% weighting),
and individual objectives (35% weighting).
The Committee also establishes a target amount for each performance measure at which the bonus
payout is 100%, and a sliding scale above and below the target providing for greater or lesser
payouts, with a maximum of 200% of the target and a minimum of zero, depending on the extent to
which Company performance exceeds or falls short of the target.
Long-Term Incentive Plan
Effective January 27, 2009, the Committee approved the following grants to the named executive
officers pursuant to the Companys LTI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
|
|
|
|
|
|
Restricted
|
|
|
|
|
|
Performance
|
|
|
Stock
|
|
SSARs
|
|
Shares
|
Mr. Odaniell
|
|
|
48,750
|
|
|
|
107,250
|
|
|
|
39,000
|
|
Mr. Martin
|
|
|
16,250
|
|
|
|
35,750
|
|
|
|
13,000
|
|
Mr. Ploeger
|
|
|
16,250
|
|
|
|
35,750
|
|
|
|
13,000
|
|
Mr. Marcum
|
|
|
10,875
|
|
|
|
23,925
|
|
|
|
8,700
|
|
Mr. Marcely
|
|
|
6,900
|
|
|
|
15,180
|
|
|
|
5,520
|
|
Dolmat-Connell & Partners made recommendations to the committee and the committee ultimately
approved an 18-company peer group of plastics or chemical industry companies of generally similar
size compared to Spartech, to be used for both benchmarking and performance purposes. This
18-company peer group added three companies and deleted one company from the 2008 16-company peer
group. Compensation analyses will use this new 18-company peer group going forward, and the
performance group used for fiscal 2009 performance share awards will be the same as the 18-company
compensation peer group. The composition of this peer group will be reviewed annually.
Does the Company have stock ownership guidelines for executive officers and directors?
We have adopted stock ownership guidelines for both our executive officers and our directors.
We believe it is important to align the interests of executive officers and directors with the
interests of shareholders. The stock ownership guidelines for executive officers apply to all
executive officers and all vice presidents of our principal operating divisions. To be in
compliance with the guidelines, a covered officer must acquire and maintain ownership of Company
common stock having an aggregate value at least equal to the specified multiple of the officers
base salary:
|
|
|
Chief Executive Officer
|
|
3.0 x base salary
|
Executive Vice Presidents
|
|
2.0 x base salary
|
Other Vice Presidents
|
|
1.0 x base salary
|
18
During any period of time that a covered officers ownership is below the applicable
guideline, the officer must retain ownership of at least 50% of any net shares of Company common
stock acquired by the officer pursuant to the vesting, payout or exercise of any stock-based
compensatory award granted after the approval of the guidelines. For this purpose, net means
after subtracting any shares sold or surrendered to pay taxes or to pay any required exercise
price. Shares owned by the officer or members of the officers immediate family and shares held
for the benefit of the officer under an employee benefit or retirement plan are counted towards
attaining the required investment level. Restricted stock also counts towards calculating
ownership levels. Stock options and SSARs do not count in calculating ownership levels, and
performance shares or other performance-based awards also do not count unless all performance
periods have closed and all performance conditions have been satisfied. Upon specific application,
the Compensation Committee or its Chair may grant exceptions to the guidelines in cases of serious
hardship or upon a satisfactory showing that the applicant has met the guidelines through
acquisitions of common stock since the last valuation date.
The stock ownership guidelines for our directors require them to hold a number of common
shares for the tenure of their service. Directors must hold a number of shares with a minimum
aggregate market value equal to three times the directors annual cash retainer for Board service.
Directors must reach and hold the ownership guidelines within four years after being elected to the
Board. These guidelines are generally consistent with practices in our peer group and the broader
market, and we believe they have traditionally worked well to align director and shareholder
interests.
What are the tax and accounting considerations that factor into decisions regarding executive
compensation?
We consider tax and accounting implications in determining all elements of our compensation
programs. Section 162(m) of the Internal Revenue Code of 1986, as amended, generally denies a
deduction to any publicly held corporation for compensation paid in a taxable year to its named
executive officers (other than qualified performance-based compensation) exceeding $1 million. The
Compensation Committee considers the impact of this deductibility limit on the compensation that it
intends to award, and attempts to structure compensation such that it is deductible whenever
possible. For example, our annual bonus program is intended to satisfy the requirements of
Section 162(m). However, the Committee also exercises its discretion to award compensation that
does not meet the requirements of Section 162(m) when it considers it in the best interests of the
Company to do so. The Committee has exercised this discretion, for example, when making stock
awards without any performance-based conditions. The Committee believes that in some instances it
is in the best interests of stockholders to grant stock awards without performance-based
conditions, such as time-vested restricted stock, in order to recruit and retain key executives.
When establishing executive compensation, the Compensation Committee considers its impact for
financial reporting purposes. In particular, the Committee considers the impact on current and
future periods of all equity compensation that it approves.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee reviewed and discussed with management the above section captioned
Compensation Discussion and Analysis. Based on this review and discussions, the Compensation
Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be
included in this Proxy Statement and incorporated by reference into the Companys 2008 Annual
Report on Form 10-K.
Pamela F. Lenehan (Committee Chair)
Edward J. Dineen
Victoria M. Holt
Craig A. Wolfanger
19
COMPENSATION OF EXECUTIVE OFFICERS
The following tables and discussion provide information about the fiscal 2008 compensation of
the Companys Chief Executive Officer, its Chief Financial Officer, its next three most highly
compensated executive officers, and one additional individual, Jeffrey D. Fisher, the former Senior
Vice President and General Counsel of the Company, for whom disclosure would have been provided but
for the fact that he was not serving as an executive officer of the registrant at the end of the
last completed fiscal year.
Summary Compensation Table
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Nonqualified
|
|
|
|
|
Name and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
Incentive Plan
|
|
Deferred
|
|
All Other
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Compensation
|
|
|
Position (1)
|
|
Year
|
|
Salary (2)
|
|
Bonus (3)
|
|
Awards (4)
|
|
(5)
|
|
(6)
|
|
Earnings (7)
|
|
(8)
|
|
Total
|
Myles S. Odaniell
|
|
|
2008
|
|
|
$
|
545,000
|
|
|
$
|
130,000
|
|
|
$
|
240,608
|
|
|
$
|
104,379
|
|
|
$
|
68,250
|
|
|
None
|
|
$
|
495,305
|
|
|
$
|
1,583,542
|
|
President and Chief
|
|
|
2007
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy C. Martin
|
|
|
2008
|
|
|
$
|
417,873
|
|
|
$
|
280
|
|
|
$
|
167,331
|
|
|
$
|
219,253
|
|
|
$
|
58,050
|
|
|
None
|
|
$
|
57,200
|
|
|
$
|
919,987
|
|
Executive Vice
President
|
|
|
2007
|
|
|
$
|
486,346
|
|
|
$
|
280
|
|
|
$
|
64,061
|
|
|
$
|
220,525
|
|
|
$
|
26,076
|
|
|
None
|
|
$
|
47,927
|
|
|
$
|
845,215
|
|
Corporate
Development and
Chief Financial
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven J. Ploeger
|
|
|
2008
|
|
|
$
|
350,462
|
|
|
$
|
280
|
|
|
$
|
163,688
|
|
|
$
|
212,030
|
|
|
$
|
48,060
|
|
|
None
|
|
$
|
65,269
|
|
|
$
|
839,789
|
|
Executive Vice
President Sheet
|
|
|
2007
|
|
|
$
|
333,962
|
|
|
$
|
280
|
|
|
$
|
61,025
|
|
|
$
|
181,369
|
|
|
$
|
17,467
|
|
|
None
|
|
$
|
51,706
|
|
|
$
|
645,809
|
|
and Engineered
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Marcum
|
|
|
2008
|
|
|
$
|
256,969
|
|
|
$
|
280
|
|
|
$
|
233,060
|
|
|
$
|
148,824
|
|
|
$
|
33,750
|
|
|
None
|
|
$
|
47,448
|
|
|
$
|
720,331
|
|
Executive Vice
President Color
|
|
|
2007
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
& Specialty Compounds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael G. Marcely
|
|
|
2008
|
|
|
$
|
239,231
|
|
|
$
|
280
|
|
|
$
|
66,492
|
|
|
$
|
75,485
|
|
|
$
|
24,263
|
|
|
None
|
|
$
|
52,310
|
|
|
$
|
458,061
|
|
Vice President -
|
|
|
2007
|
|
|
$
|
257,269
|
|
|
$
|
4,280
|
|
|
$
|
23,143
|
|
|
$
|
64,455
|
|
|
$
|
10,803
|
|
|
None
|
|
$
|
43,901
|
|
|
$
|
403,851
|
|
Planning and
Analysis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Nonqualified
|
|
|
|
|
Name and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
Incentive Plan
|
|
Deferred
|
|
All Other
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Compensation
|
|
|
Position (1)
|
|
Year
|
|
Salary (2)
|
|
Bonus (3)
|
|
Awards (4)
|
|
(5)
|
|
(6)
|
|
Earnings (7)
|
|
(8)
|
|
Total
|
Jeffrey D. Fisher
|
|
|
2008
|
|
|
$
|
217,623
|
|
|
$
|
280
|
|
|
$
|
6,406
|
|
|
$
|
10,398
|
|
|
$
|
0
|
|
|
None
|
|
$
|
479,388
|
|
|
$
|
714,095
|
|
Former Senior Vice
President and
|
|
|
2007
|
|
|
$
|
278,558
|
|
|
$
|
280
|
|
|
$
|
32,030
|
|
|
$
|
109,651
|
|
|
$
|
10,007
|
|
|
None
|
|
$
|
47,942
|
|
|
$
|
478,468
|
|
General Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Summary Compensation Table:
(1)
|
|
Effective July 16, 2007, George A. Abd resigned as President and Chief Executive
Officer and Randy C. Martin was named by the Board as President and Chief Executive
Officer on an interim basis pending a search for a new Chief Executive Officer. On
January 2, 2008, when Myles S. Odaniell became the Companys President and Chief
Executive Officer, Mr. Martin resumed his prior position and duties. Effective July 25,
2008, Jeffrey D. Fisher, resigned as Senior Vice President and General Counsel of the
Company. Michael L. Marcum was not a named executive officer during fiscal 2007.
|
|
(2)
|
|
In December 2006, the Compensation Committee approved the following increases in the
annual base salaries of current named executive officers: Mr. Martin, from $330,000 to
$345,000; Mr. Ploeger, from $310,000 to $320,000; Mr. Fisher, from $265,000 to $275,000;
and Mr. Marcely, from $190,000 to $206,000. The increases for such named executive
officers were effective January 1, 2007. On July 16, 2007, the Committee approved a
temporary increase in Mr. Martins base salary to reflect his additional status as
interim Chief Executive Officer, and a temporary increase in Mr. Marcelys base salary to
reflect his interim assumption of some of Mr. Martins duties as Chief Financial Officer;
these temporary increases remained in effect until January 2, 2008, when Myles S.
Odaniell became the Companys President and Chief Executive Officer with an annual salary
of $650,000. In December 2007 the Committee approved increases in the named executive
officers base salaries for 2008, to $356,000 for Mr. Martin and Mr. Ploeger, $250,000
for Mr. Marcum, $220,000 for Mr. Marcely and $284,000 for Mr. Fisher. Effective January
1, 2009, the Compensation Committee increased Mr. Marcums base salary from $250,000 to
$290,000 based upon a study of market and industry related data. The Compensation
Committee will consider increases for the CEO, CFO and the other named executive officers
following the first half of fiscal 2009 in response to the downturn in business and
current market conditions.
|
|
(3)
|
|
The amount in this column represents a $130,000 bonus awarded by the Compensation
Committee to Mr. Odaniell during fiscal 2008 for his leadership of the Oracle
implementation. This amount also includes the value of holiday gift cards given to all
Corporate Office employees. Mr. Odaniell did not receive holiday gift cards during
fiscal 2008. Formula bonuses for 2008 paid under the Companys Executive Bonus Plan are
reflected in the column captioned Non-Equity Incentive Plan Compensation.
|
|
(4)
|
|
The amounts in this column reflect the expense recognized for financial statement
reporting purposes for the fiscal years ended November 1, 2008 and November 3, 2007, in
accordance with FAS 123(R), for restricted stock and performance share awards granted in
fiscal 2008. Assumptions used in the calculation of these amounts are included in Note
7, Stock-Based Compensation, to the Companys audited financial statements included in
the Companys Annual Report on Form 10-K for the fiscal year ended November 1, 2008.
|
|
(5)
|
|
The amounts in this column reflect the expense recognized for financial statement
reporting purposes for the fiscal years ended November 1, 2008 and November 3, 2007, in
accordance with FAS 123(R),
|
21
|
|
for stock option and stock-settled stock appreciation right awards granted in fiscal 2008,
2007, 2006 and 2005.
|
|
(6)
|
|
The amounts shown in this column reflect cash awards payable to named executive
officers under the Companys Executive Bonus Plan, based on the Companys achievement of
specified performance goals set annually by the Compensation Committee. Under the
Executive Bonus Plan, for each fiscal year the Committee establishes in advance:
|
|
(i)
|
|
A target award for each officer, based on a specified percentage of the
officers base salary; the target percentages for 2008 were 80% for Mr. Odaniell, 60%
for Mr. Martin, Mr. Ploeger and Mr. Marcum, and 40% for the other named executive
officers.
|
|
|
(ii)
|
|
One or more quantitative Company-wide performance measures, and the weighting of
each; for 2008, the measures were operating earnings (60% weighting), sales volume
(20% weighting), and net working capital as a percentage of sales (20% weighting).
For 2007, the measures were operating earnings (60% weighting), conversion costs per
pound (20% weighting), and net working capital as a percentage of sales (20%
weighting). Conversion cost per pound was defined as total cost to convert raw
materials into finished goods divided by net pounds of finished goods sold; and net
working capital as a percentage of sales was defined as total net receivables plus
inventory plus prepaid and other current assets less accounts payable, accrued
liabilities and other current liabilities,divided by net sales, expressed as a
percentage.
|
|
|
(iii)
|
|
A target amount for each performance measure, at which the bonus payout is
100%, and a sliding scale above and below the target providing for greater or lesser
payouts, with a maximum of 200% of the target and a minimum of zero, depending on the
extent to which Company performance exceeds or falls short of the target; for 2008,
the threshold, target and maximum payout levels were set to correspond with operating
earnings of $74,400,000, $93,000,000 and $111,600,000 respectively; sales volume of
1,258,000,000, 1,480,000,000 and 1,628,000,000 respectively; and average net working
capital as a percentage of sales of 10.7%, 10.2% and 9.2%, respectively; for 2007, the
threshold, target and maximum payout levels were set to correspond with operating
earnings of $90,000,000, $103,854,000 and $122,371,000 respectively; average
conversion cost per pound of $0.235, $0.225 and $0.217, respectively; and average net
working capital as a percentage of sales of 11.0%, 9.0% and 7.4%, respectively. In
each case, achievement of the target amount required an improvement in the prior
years results.
|
|
|
|
|
Based on the Companys fiscal 2008 performance against these measures, comprised of
operating earnings of $26,793,000, sales volume of 1,235,975,000 pounds sold, and net
working capital as a percentage of sales of 10.2%, the Executive Bonus Plan payout for
2008 was 22.5% of the bonus targets. Based on the Companys fiscal 2007 performance
against these measures, comprised of operating earnings of $75,285,000, conversion
costs per pound of $0.233, and net working capital as a percentage of sales of 10.4%,
the Executive Bonus Plan payout for 2007 was 9.1% of the bonus targets.
|
(7)
|
|
The Company does not have a pension plan. Earnings credited to participants accounts
under the Companys Deferred Compensation Plan are not guaranteed but are based on actual
market results, as explained in connection with the table captioned Nonqualified
Deferred Compensation, below.
|
(8)
|
|
The amounts shown in this column consist of the following:
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to
|
|
Matching
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
Contributi
|
|
on
|
|
|
|
|
|
|
|
|
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
ons to
|
|
Unvested
|
|
Tax
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
401(k) Plan
|
|
Restricted
|
|
Gross-
|
|
Relocation
|
|
Personal
|
|
Severance
|
|
|
Name
|
|
Year
|
|
Plan (a)
|
|
(b)
|
|
Stock (c)
|
|
Ups (d)
|
|
(e)
|
|
Benefits (f)
|
|
(g)
|
|
Total
|
Myles S. Odaniell
|
|
|
2008
|
|
|
$
|
0
|
|
|
$
|
7,750
|
|
|
$
|
16,162
|
|
|
$
|
0
|
|
|
$
|
471,393
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
495,305
|
|
|
|
|
2007
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy C. Martin
|
|
|
2008
|
|
|
$
|
30,000
|
|
|
$
|
7,750
|
|
|
$
|
8,022
|
|
|
$
|
371
|
|
|
$
|
0
|
|
|
$
|
11,057
|
|
|
$
|
0
|
|
|
$
|
57,200
|
|
|
|
|
2007
|
|
|
$
|
30,000
|
|
|
$
|
7,750
|
|
|
$
|
2,678
|
|
|
$
|
307
|
|
|
|
|
|
|
$
|
7,192
|
|
|
$
|
0
|
|
|
$
|
47,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven J. Ploeger
|
|
|
2008
|
|
|
$
|
30,000
|
|
|
$
|
7,793
|
|
|
$
|
7,966
|
|
|
$
|
334
|
|
|
$
|
0
|
|
|
$
|
19,176
|
|
|
$
|
0
|
|
|
$
|
65,269
|
|
|
|
|
2007
|
|
|
$
|
30,000
|
|
|
$
|
8,260
|
|
|
$
|
2,570
|
|
|
$
|
332
|
|
|
|
|
|
|
$
|
10,544
|
|
|
$
|
0
|
|
|
$
|
51,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Marcum
|
|
|
2008
|
|
|
$
|
24,937
|
|
|
$
|
3,150
|
|
|
$
|
4,891
|
|
|
$
|
197
|
|
|
$
|
0
|
|
|
$
|
14,273
|
|
|
$
|
0
|
|
|
$
|
47,448
|
|
|
|
|
2007
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael G. Marcely
|
|
|
2008
|
|
|
$
|
28,319
|
|
|
$
|
6,347
|
|
|
$
|
3,400
|
|
|
$
|
338
|
|
|
$
|
0
|
|
|
$
|
13,906
|
|
|
$
|
0
|
|
|
$
|
52,310
|
|
|
|
|
2007
|
|
|
$
|
27,289
|
|
|
$
|
7,389
|
|
|
$
|
1,037
|
|
|
$
|
322
|
|
|
|
|
|
|
$
|
7,864
|
|
|
$
|
0
|
|
|
$
|
43,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey D. Fisher
|
|
|
2008
|
|
|
$
|
28,443
|
|
|
$
|
5,060
|
|
|
$
|
3,731
|
|
|
$
|
265
|
|
|
$
|
0
|
|
|
$
|
8,532
|
|
|
$
|
433,357
|
|
|
$
|
479,388
|
|
|
|
|
2007
|
|
|
$
|
30,000
|
|
|
$
|
7,750
|
|
|
$
|
1,339
|
|
|
$
|
356
|
|
|
|
|
|
|
$
|
8,497
|
|
|
$
|
0
|
|
|
$
|
47,942
|
|
|
|
|
(a)
|
|
The Company established the Spartech Corporation Nonqualified Deferred
Compensation Plan for the benefit of selected senior managers of the Company, in order
to provide high-level employees with a partial substitute for the Companys lack of a
defined benefit retirement plan and the limits on permitted 401(k) Plan contributions.
Each year, the Company credits to each participants account an amount equal to 10%
of the participants cash compensation with a maximum contribution of $30,000.
Further information about the Plan is provided in the table captioned Nonqualified
Deferred Compensation for fiscal 2008, below, and related notes.
|
|
(b)
|
|
For all employees participating in the Spartech Corporation 401(k) Savings and
Investment Plan, the Company contributes an amount equal to 50% of employees
contributions, up to a maximum of 3% of eligible compensation.
|
|
(c)
|
|
Dividends on unvested restricted stock are treated as ordinary income and
reported on the named executive officers W-2, and the named executive officer is
responsible for paying all applicable taxes on this amount. The amount of unvested
restricted stock held by each named executive officer is disclosed below in the table
captioned Outstanding Equity Awards at November 1, 2008. The amount reported is
based on record dates occurring during fiscal 2008.
|
|
(d)
|
|
For non-cash elements of compensation which are subject to the 1.45% Medicare
tax, including Company contributions to deferred compensation accounts and personal
use of Company cars the Company pays this tax on behalf of the employee, and the
amount of compensation is grossed up each calendar year for the taxes paid. The tax
gross up related to other compensation, i.e. relocation expenses of the CEO, is
documented in footnote (e) below.
|
23
|
|
|
(e)
|
|
The Company reimbursed Mr. Odaniell $290,678 for certain expenses associated
with his relocation to St. Louis, MO and paid $180,715 for federal, state and Medicare
taxes on behalf of Mr. Odaniell. Mr. Odaniells compensation was grossed up in 2008
for the taxes paid by the Company associated with his relocation.
|
|
(f)
|
|
The amounts in this column represent automobile benefits and consist exclusively of the
value of either an automobile allowance or the use of a Company-leased automobile which are
provided to the named executive officers along with other executives, senior managers and
sales persons. The amount of the automobile allowance is included as compensation on the
W-2 of the named executive officer who receives this benefit, and the named executive
officer is responsible for paying all applicable taxes on this amount. The value
attributable to the personal use of a Company-provided automobile (as calculated in
accordance with IRS guidelines) is included as compensation on the W-2 of the named
executive officer who receives this benefit, and the named executive officer is responsible
for paying income taxes on this amount; however the Medicare taxes on this amount are paid
by the Company and grossed up as explained in note (d).
|
|
(g)
|
|
As further detailed in the Section entitled Potential Payments Upon Termination or
Change in Control, the amount shown in this column for Mr. Fisher includes $357,457 paid
or to be paid to Mr. Fisher pursuant to his Severance and Noncompetition Agreement entered
into on July 25, 2008. In addition, Mr. Fisher earned $75,900 in consulting fees following
his separation from the Company. The Company was required to treat both amounts as an
expense for fiscal 2008.
|
24
GRANTS OF PLAN-BASED AWARDS TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Option
|
|
Exercise or
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Awards:
|
|
Base Price
|
|
Fair Value
|
|
|
|
|
|
|
Date of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Shares
|
|
Number of
|
|
of Option
|
|
of Stock
|
|
|
|
|
|
|
Compensation
|
|
Estimated Future Payouts Under
|
|
Estimated Future Payouts
|
|
of Stock
|
|
Securities
|
|
Awards
|
|
and Option
|
|
|
|
|
|
|
Committee
|
|
Non-Equity Incentive Plan Awards
|
|
Under Equity Incentive Plan
|
|
or Units
|
|
Underlying
|
|
(per share)
|
|
Awards
|
Name
|
|
Grant Date
|
|
Action (1)
|
|
(2)
|
|
Awards (shares) (3)
|
|
(4)
|
|
Options (5)
|
|
(5)
|
|
(4)(5)(6)
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Myles S. Odaniell
|
|
|
1/2/2008
|
|
|
|
1/2/2008
|
|
|
$
|
0
|
|
|
$
|
520,000
|
|
|
$
|
884,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/1/2008
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,900
|
|
|
|
39,800
|
|
|
|
79,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
375,314
|
|
|
|
|
1/2/2008
|
|
|
|
1/2/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,680
|
|
|
|
|
|
|
|
|
|
|
$
|
625,061
|
|
|
|
|
1/2/2008
|
|
|
|
1/2/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,600
|
|
|
$
|
14.31
|
|
|
$
|
500,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy C. Martin
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
$
|
0
|
|
|
$
|
213,600
|
|
|
$
|
427,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/1/2008
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,600
|
|
|
|
15,200
|
|
|
|
30,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
135,432
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,960
|
|
|
|
|
|
|
|
|
|
|
$
|
242,999
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,100
|
|
|
$
|
13.53
|
|
|
$
|
180,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven J. Ploeger
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
$
|
0
|
|
|
$
|
213,600
|
|
|
$
|
427,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/1/2008
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,600
|
|
|
|
15,200
|
|
|
|
30,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
135,432
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,960
|
|
|
|
|
|
|
|
|
|
|
$
|
242,999
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,100
|
|
|
$
|
13.53
|
|
|
$
|
180,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Marcum
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
$
|
0
|
|
|
$
|
150,000
|
|
|
$
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/1/2008
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,100
|
|
|
|
10,200
|
|
|
|
20,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
90,882
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,200
|
|
|
|
|
|
|
|
|
|
|
$
|
165,066
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,100
|
|
|
$
|
13.53
|
|
|
$
|
120,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael G. Marcely
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
$
|
0
|
|
|
$
|
88,000
|
|
|
$
|
176,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/1/2008
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,200
|
|
|
|
6,400
|
|
|
|
12,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
57,024
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,480
|
|
|
|
|
|
|
|
|
|
|
$
|
101,204
|
|
|
|
|
6/16/2008
|
|
|
|
6/16/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
$
|
10,370
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,800
|
|
|
$
|
13.53
|
|
|
$
|
76,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey D. Fisher
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
$
|
0
|
|
|
$
|
113,600
|
|
|
$
|
227,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/1/2008
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,250
|
|
|
|
8,500
|
|
|
|
17,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
75,735
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,800
|
|
|
|
|
|
|
|
|
|
|
$
|
132,594
|
|
|
|
|
12/19/2007
|
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,400
|
|
|
$
|
13.53
|
|
|
$
|
100,152
|
|
|
|
|
|
Notes to Grants of Plan-Based Awards Table:
|
|
(1)
|
|
The Companys policy is generally to grant all equity awards effective on the date the
Compensation Committee takes action to grant the awards. However, in the case of the
fiscal 2008 Performance Share awards, the unit value of the Performance Shares was
determined by an independent appraisal conducted for the Company by Deloitte & Touche as
of the approval date of December 19, 2007. Because the appraisal could not be completed
until after the approval date, on December 19, 2007 the Committee approved all of the
terms, performance criteria for the awards and the aggregate value per recipient, but
provided for the awards to be issued as of the first day of the month following receipt
of the appraisal, when the actual number of Performance Shares could be determined for
each recipient. This date was February 1, 2008. The delay in the issue date did not
affect the value of the awards, because the performance period and criteria were fixed,
and the value was determined, as of the December 19, 2007 approval/appraisal date. These
awards are described in more detail in footnote (3), below.
|
|
(2)
|
|
The amounts shown in this column are the ranges of cash awards payable to named
executive officers for 2008 under the Companys Executive Bonus Plan, based on the
Companys achievement of the specific performance goals set by the Compensation Committee
in December 2007. Because these goals were measured with respect to the 2008 fiscal
year, the actual payout was determined as
|
25
|
|
|
|
|
of the end of fiscal 2008 and is reflected in the Non-Equity Incentive Plan Compensation
column of the Summary Compensation Table, above. The criteria and method for determining
the threshold, target and maximum amounts for 2008 are described in footnote 6 to that
Table.
|
|
(3)
|
|
The amounts shown in this column are the threshold, target and maximum numbers of
shares issuable to the named executive officers upon payout of the Performance Shares
issued under the Companys Long-Term Equity Incentive Plan, which is described in detail
in the Compensation Discussion and Analysis section. Performance shares are units
convertible into shares of Company common stock at a specified conversion ratio, subject
to the Companys achievement of specified performance goals during a three-year
performance period consisting of the Companys 2007, 2008 and 2009 fiscal years. The
recipient must be employed by the Company during the entire performance period to receive
the full value of the award. The conversion ratio is variable, and will increase or
decrease to the extent the Companys performance exceeds or falls short of the designated
goals. For the performance share awards approved in December 2007, the performance goals
are based on the Companys total shareholder return over a specified performance period
corresponding to Spartechs 2008, 2009 and 2010 fiscal years, compared to the total
shareholder return over the same period for each of the companies in a performance group
consisting of the following 16 public companies in the plastics or related industries:
|
|
|
|
|
|
A. Schulman, Inc.
|
|
AEP Industries, Inc.
|
|
Albermarle Corp.
|
AptarGroup, Inc.
|
|
Bemis Co., Inc.
|
|
Ferro Corporation
|
Georgia Gulf Corporation
|
|
Myers Industries, Inc.
|
|
PolyOne Corp.
|
Rock-Tenn Co.
|
|
Rockwood Holdings, Inc.
|
|
RPM International, Inc.
|
Sonoco Products Co.
|
|
Tredegar Corp.
|
|
Trex Co., Inc.
|
The Valspar Corp.
|
|
|
|
|
|
|
|
|
|
The award agreements define total shareholder return for a company (whether Spartech or a
performance group company) as (a) the sum of (i) cash dividends paid by the company over the
performance period, plus (ii) the companys average stock price over each trading day in
Spartechs 2010 fiscal year, minus (iii) the companys average stock price over each trading
day in Spartechs 2007 fiscal year, divided by (b) the companys average stock price over each
trading day in Spartechs 2007 fiscal year. The payout ratios range from a threshold of 0.5
shares per unit if the Companys total shareholder return exceeds that of at least 30% of the
companies in the performance group to a maximum of 2.0 shares per unit if the Companys total
shareholder return exceeds that of 100% of the companies in the performance group. The target
payout of 1.0 share per unit requires the Companys total shareholder return to exceed that of
at least 50% of the companies in the performance group. If the Companys total shareholder
return does not exceed that of at least 30% of the companies in the performance group, the
payout is zero. In December 2007, the Committee approved performance share awards for LTI
Program participants with target values of approximately 30% of the participants total target
compensation under the LTI Program. The Company engaged Deloitte & Touche as its independent
valuation consultants to determine the unit value of the performance share awards (which will
be the Companys expense for financial accounting purposes); the number of performance shares
granted to each participant was based on the target dollar value divided by the appraised unit
value. The Performance Share awards also provide for the number of Performance Shares to be
increased to reflect the value of dividends paid during the performance period; however,
because these additional amounts cannot be determined in advance they are not reflected in the
table.
|
|
(4)
|
|
The amounts shown in these columns are the numbers and grant date values of shares of
restricted stock issued to the named executive officers under the Companys Long-Term
Equity Incentive Plan, which is described in detail in the Compensation Discussion and
Analysis section. This restricted stock consists of Company common stock issued subject
to conditions which prohibit sale or transfer of the stock during a prescribed vesting
period, during which time the holder has the right to vote and receive dividends on the
shares. The restricted stock awards vest at the rate of 25% per year from the date of
grant. With certain exceptions, unvested shares are forfeited if the holder leaves the
Company. In December 2007, the Committee awarded approximately 40% of the total dollar
value of each participants target compensation under the LTI Program in the form of
restricted stock. For purposes of the awards, the unit value of the restricted stock was
the market price of the stock on the award date (which is equal to the Companys expense
for financial accounting purposes); the number of shares granted to each participant was
based on the total award value divided by the unit value.
|
26
|
|
|
(5)
|
|
The amounts shown in these columns are the numbers and grant date values of
stock-settled stock appreciation rights issued to the named executive officers under the
Companys Long-Term Equity Incentive Plan, which is described in detail in the
Compensation Discussion and Analysis section. A SSAR is economically equivalent to a
stock option for the same number of shares, but it requires no cash to exercise and
results in fewer shares issued by the Company. It gives the holder the right, upon
exercise of the SSAR, to receive the net appreciation in value of a specified number of
shares of Company common stock over a base price, which must be at least equal to the
fair market value of the underlying shares on the grant date. Upon exercise the value of
the award is payable to the holder in shares of Company common stock. Like a stock
option, if the stock price does not appreciate during the award term, the award has no
value. The SSARs become exercisable at the rate of 25% per year from the date of grant,
and once exercisable, they may be exercised at the holders discretion for the remainder
of their term, which is normally ten years; however, with certain exceptions they
terminate if the holder leaves the Company. In December 2007, the Committee awarded
approximately 30% of the total dollar value of each participants target compensation
under the LTI Program in the form of SSARs. For purposes of the awards, the unit value
of the SSARs was calculated under the Black-Scholes method (which is the same method used
by management to calculate the Companys expense for financial accounting purposes); the
number of SSARs granted to each participant was based on the total award value divided by
the unit value.
|
|
(6)
|
|
For purposes of this column, the grant date values of the Performance Share awards are
based on the target payout of 1.0 share per unit.
|
27
OUTSTANDING EQUITY AWARDS AT NOVEMBER 1, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
Incentive
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Value of
|
|
Plan
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Shares
|
|
Shares or
|
|
Awards:
|
|
Awards:
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Units
|
|
Units of
|
|
Number of
|
|
Market or
|
|
|
|
|
|
|
Securities
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
of Stock
|
|
Stock
|
|
Unearned
|
|
Payout Value
|
|
|
|
|
|
|
Underlying
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Value
|
|
That
|
|
That
|
|
Shares, Units
|
|
of Unearned
|
|
|
|
|
|
|
Unexercised
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
of
|
|
Have
|
|
Have
|
|
or Other
|
|
Shares, Units
|
|
|
|
|
|
|
Options -
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Exercisable
|
|
Not
|
|
Not
|
|
Rights That
|
|
or Other Rights
|
Name, Type of
|
|
|
|
|
|
Exercisable
|
|
Options -
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Options
|
|
Vested
|
|
Vested
|
|
Have Not
|
|
That Have Not
|
Award
|
|
Grant Date
|
|
(1)
|
|
Unexercisable (1)
|
|
Options
|
|
Price
|
|
Date
|
|
(2)
|
|
(3)
|
|
(3)
|
|
Vested (4)
|
|
Vested (4)
|
Myles S. Odaniell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
1/2/2008
|
|
|
|
|
|
|
|
110,600
|
|
|
|
|
|
|
$
|
14.31
|
|
|
|
1/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
1/2/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,680
|
|
|
$
|
277,805
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
2/1/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,900
|
|
|
$
|
126,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy C. Martin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
11/1/1999
|
|
|
|
6,750
|
|
|
|
|
|
|
|
|
|
|
$
|
28.63
|
|
|
|
10/31/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/6/2000
|
|
|
|
22,500
|
|
|
|
|
|
|
|
|
|
|
$
|
11.19
|
|
|
|
12/5/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/6/2001
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
21.10
|
|
|
|
12/5/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/12/2002
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
$
|
18.08
|
|
|
|
12/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/11/2003
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
$
|
21.90
|
|
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/10/2004
|
|
|
|
27,000
|
|
|
|
9,000
|
|
|
|
|
|
|
$
|
26.02
|
|
|
|
12/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/19/2005
|
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
21.19
|
|
|
|
12/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
12/15/2006
|
|
|
|
4,425
|
|
|
|
13,275
|
|
|
|
|
|
|
$
|
26.41
|
|
|
|
12/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/15/2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,720
|
|
|
$
|
23,659
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
3/1/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,900
|
|
|
$
|
12,084
|
|
SSAR
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
42,100
|
|
|
|
|
|
|
$
|
13.53
|
|
|
|
12/18/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,960
|
|
|
$
|
114,226
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
2/1/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,600
|
|
|
$
|
48,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven J. Ploeger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
11/1/1999
|
|
|
|
3,250
|
|
|
|
|
|
|
|
|
|
|
$
|
28.63
|
|
|
|
10/31/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/6/2000
|
|
|
|
10,500
|
|
|
|
|
|
|
|
|
|
|
$
|
11.19
|
|
|
|
12/5/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/6/2001
|
|
|
|
7,100
|
|
|
|
|
|
|
|
|
|
|
$
|
21.10
|
|
|
|
12/5/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/12/2002
|
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
$
|
18.08
|
|
|
|
12/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/11/2003
|
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
$
|
21.90
|
|
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/10/2004
|
|
|
|
27,000
|
|
|
|
9,000
|
|
|
|
|
|
|
$
|
26.02
|
|
|
|
12/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/19/2005
|
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
21.19
|
|
|
|
12/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
12/15/2006
|
|
|
|
4,300
|
|
|
|
12,900
|
|
|
|
|
|
|
$
|
26.41
|
|
|
|
12/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/15/2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,570
|
|
|
$
|
22,705
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
3/1/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800
|
|
|
$
|
11,448
|
|
SSAR
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
42,100
|
|
|
|
|
|
|
$
|
13.53
|
|
|
|
12/18/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,960
|
|
|
$
|
114,226
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
2/1/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,600
|
|
|
$
|
48,336
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
Incentive
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Value of
|
|
Plan
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Shares
|
|
Shares or
|
|
Awards:
|
|
Awards:
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Units
|
|
Units of
|
|
Number of
|
|
Market or
|
|
|
|
|
|
|
Securities
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
of Stock
|
|
Stock
|
|
Unearned
|
|
Payout Value
|
|
|
|
|
|
|
Underlying
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Value
|
|
That
|
|
That
|
|
Shares, Units
|
|
of Unearned
|
|
|
|
|
|
|
Unexercised
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
of
|
|
Have
|
|
Have
|
|
or Other
|
|
Shares, Units
|
|
|
|
|
|
|
Options -
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Exercisable
|
|
Not
|
|
Not
|
|
Rights That
|
|
or Other Rights
|
Name, Type of
|
|
|
|
|
|
Exercisable
|
|
Options -
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Options
|
|
Vested
|
|
Vested
|
|
Have Not
|
|
That Have Not
|
Award
|
|
Grant Date
|
|
(1)
|
|
Unexercisable (1)
|
|
Options
|
|
Price
|
|
Date
|
|
(2)
|
|
(3)
|
|
(3)
|
|
Vested (4)
|
|
Vested (4)
|
Michael L. Marcum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
12/15/2006
|
|
|
|
1,175
|
|
|
|
3,525
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/15/2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,020
|
|
|
$
|
6,487
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
3/1/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
800
|
|
|
$
|
5,088
|
|
SSAR
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
28,100
|
|
|
|
|
|
|
|
|
|
|
|
12/18/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,200
|
|
|
$
|
77,592
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
2/1/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,100
|
|
|
$
|
32,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael G. Marcely
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/11/2003
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
$
|
21.90
|
|
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/10/2004
|
|
|
|
7,500
|
|
|
|
2,500
|
|
|
|
|
|
|
$
|
26.02
|
|
|
|
12/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/19/2005
|
|
|
|
6,250
|
|
|
|
6,250
|
|
|
|
|
|
|
$
|
21.19
|
|
|
|
12/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
12/15/2006
|
|
|
|
1,450
|
|
|
|
4,350
|
|
|
|
|
|
|
$
|
26.41
|
|
|
|
12/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/15/2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,440
|
|
|
$
|
9,158
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
3/1/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
650
|
|
|
$
|
4,134
|
|
SSAR
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
17,800
|
|
|
|
|
|
|
|
|
|
|
|
12/18/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
12/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,480
|
|
|
$
|
47,573
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
2/1/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,200
|
|
|
$
|
20,352
|
|
Restricted Stock
|
|
|
6/16/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
$
|
6,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey D. Fisher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
7/1/1999
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
$
|
28.94
|
|
|
|
6/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/6/2001
|
|
|
|
10,300
|
|
|
|
|
|
|
|
|
|
|
$
|
21.10
|
|
|
|
12/5/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/12/2002
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
$
|
18.08
|
|
|
|
12/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/11/2003
|
|
|
|
10,600
|
|
|
|
|
|
|
|
|
|
|
$
|
21.90
|
|
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/10/2004
|
|
|
|
10,875
|
|
|
|
|
|
|
|
|
|
|
$
|
26.02
|
|
|
|
12/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option
|
|
|
12/19/2005
|
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
$
|
21.19
|
|
|
|
12/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
12/15/2006
|
|
|
|
2,100
|
|
|
|
|
|
|
|
|
|
|
$
|
26.41
|
|
|
|
12/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Outstanding Equity Awards Table:
|
|
(1)
|
|
These securities consist of options and SSARs. All options and SSARs granted to
Company employees vest 25% on each of the first four anniversaries of the grant date,
except that vesting is accelerated in the event of the death or disability of the grantee
or a change in control of the Company, as defined in the award agreement.
|
|
(2)
|
|
The unrealized value of exercisable options and SSARs is based on the difference
between the exercise price and the Companys closing stock price of $6.36 on October 31,
2008, the last trading day in the Companys 2008 fiscal year, multiplied by the number of
options and SSARs exercisable at that date.
|
|
(3)
|
|
The shares reported in these columns consist of the unvested portion of restricted
stock awards. All awards of restricted stock to Company employees vest 25% on the first
trading day in January after each of the first four anniversaries of the grant date,
except that vesting is accelerated in the event of the death or disability of the grantee
or a change in control of the Company, as defined in the award agreement. The dollar
value shown is based on the Companys closing stock price of $6.36 on October 31, 2008,
the last trading day in the Companys 2008 fiscal year.
|
|
(4)
|
|
The awards reported in these columns consist of performance share awards whose
performance period is the Companys 2007-2009 and 2008-2010 fiscal years. The dollar
value shown is based on the Companys October 31, 2008 closing stock price of $6.36
Although the actual number of shares issuable on payout of the award cannot yet be
determined, the number of shares shown for each named executive officer is based on the
threshold performance goals for fiscal 2008. If performance period had ended at the end
of fiscal 2008, the performance criteria to that point would have resulted
|
29
|
|
|
|
|
in no payout. of shares; For more information about the performance criteria please refer
to note 3 to the Grants of Plan-Based Awards for 2008 table above, and to the
Compensation Discussion & Analysis section.
|
|
(5)
|
|
Mr. Fishers restricted stock awards and performance share awards, as well as his
unexercised post-1999 options, terminated on October 23, 2008, 90 days after his
resignation as Senior Vice President and General Counsel. None of these awards had
vested by the termination date.
|
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
Number of Shares
|
|
|
|
|
Number of Shares
|
|
Value Realized on
|
|
Acquired on
|
|
Value Realized on
|
Name
|
|
Acquired on Exercise
|
|
Exercise
|
|
Vesting
|
|
Vesting
|
Myles S. Odaniell
|
|
None
|
|
None
|
|
None
|
|
None
|
Randy C. Martin
|
|
None
|
|
None
|
|
|
1,240
|
|
|
None
|
Steven J. Ploeger
|
|
None
|
|
None
|
|
|
1,190
|
|
|
None
|
Michael L. Marcum
|
|
None
|
|
None
|
|
|
340
|
|
|
None
|
Michael G. Marcely
|
|
None
|
|
None
|
|
|
480
|
|
|
None
|
Jeffrey D. Fisher
|
|
None
|
|
None
|
|
|
620
|
|
|
None
|
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
|
|
|
|
Aggregate
|
|
|
|
|
Contributions
|
|
Contributions
|
|
Aggregate Earnings
|
|
Withdrawals/
|
|
Aggregate Balance at
|
Name
|
|
in Last FY
|
|
in Last FY (1)
|
|
in Last FY (2)
|
|
Distributions
|
|
Last FYE (3)
|
Myles S. Odaniell
|
|
None
|
|
$
|
0
|
|
|
$
|
0
|
|
|
None
|
|
$
|
0
|
|
Randy C. Martin
|
|
None
|
|
$
|
30,000
|
|
|
$
|
(104,584
|
)
|
|
None
|
|
$
|
163,003
|
|
Steven J. Ploeger
|
|
None
|
|
$
|
30,000
|
|
|
$
|
(97,696
|
)
|
|
None
|
|
$
|
159,164
|
|
Michael L. Marcum
|
|
None
|
|
$
|
24,937
|
|
|
$
|
871
|
|
|
None
|
|
$
|
44,687
|
|
Michael G. Marcely
|
|
None
|
|
$
|
28,319
|
|
|
$
|
(32,761
|
)
|
|
None
|
|
$
|
65,637
|
|
Jeffrey D. Fisher
|
|
None
|
|
$
|
28,443
|
|
|
$
|
(76,392
|
)
|
|
None
(4)
|
|
$
|
49,113
|
|
|
|
|
|
Notes to Nonqualified Deferred Compensation Table
|
|
(1)
|
|
The Company credits amounts to participants accounts equivalent to cash
contributions, as described below. These amounts are also reported in the All Other
Compensation column of the Summary Compensation Table.
|
|
(2)
|
|
These amounts are not included in the Summary Compensation Table because the earnings
are credited at a market rate of return, as described below.
|
|
(3)
|
|
The balance shown includes both vested and non-vested amounts.
|
|
(4)
|
|
The balance of Mr. Fishers account will be distributed to him in January April 2009.
|
The Company maintains a nonqualified Deferred Compensation Plan for the named executive
officers and approximately nine (9) other officers and senior managers. Either the Board or the
Chief Executive Officer may approve an employees participation in the Plan. Under this Plan, each
year the Company credits to each participants account under the Plan an amount equal to 10% of the
participants cash compensation for the preceding calendar year (excluding certain non-recurring
items such as stock option gains and moving expenses), with a maximum annual credit of $30,000 for
any participant.
30
The Company also increases or decreases each participants account balance by an amount equal
to the gains or losses, respectively, on a hypothetical portfolio of investment funds equal in
value to the participants account. The investment funds, and the percentage of the participants
account invested in each fund, are chosen by the participant from among a list of possible
investment funds selected by the Company. The Company does not guarantee participants a return on
their account balances. The following table lists the funds currently offered by the Plan to
determine accruals to the participants accounts, together with the annual rates of return on those
funds (assuming reinvestment of all income and gains) for the period corresponding to the Companys
2008 fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
2008
|
|
|
Annual
|
|
|
|
Annual
|
|
|
Rate of
|
|
|
|
Return
|
Fund
|
|
Return
|
|
Fund
|
|
Rate of
|
AIM V.I. International Growth Fund Series I
|
|
|
-40.38
|
%
*
|
|
Nationwide NVIT International Index Fund Class II
|
|
|
-43.11
|
%
|
Alliance Bernstein VPS International Value Class A
|
|
|
-53.18
|
%
|
|
Nationwide NVIT Mid Cap Index Fund Class I
|
|
|
-36.46
|
%
|
BlackRock Large Cap Core VIF Fund Class II
|
|
|
-38.85
|
%
|
|
Nationwide NVIT Money Market Fund Class V
|
|
|
2.14
|
%*
|
Dreyfus Stock Index Fund, Inc. Initial Shares
|
|
|
-37.14
|
%
*
|
|
Nationwide Multi-Manager NVIT Small Company Class I
|
|
|
-38.19
|
%
*
|
Fidelity VIP II Contrafund Portfolio Service Class
|
|
|
-42.61
|
%
*
|
|
Nationwide Multi-Manager NVIT Small Cap Growth Class I
|
|
|
-46.42
|
%
|
Fidelity VIP Mid Cap Portfolio Service Shares
|
|
|
-39.51
|
%
*
|
|
PIMCO VIT Total Return Portfolio Administrative
|
|
|
4.84
|
%
|
Franklin Templeton VIP Small Cap Value Securities Class II
|
|
|
-33.02
|
%
*
|
|
Pioneer High Yield VCT Portfolio Class I
|
|
|
-35.43
|
%
|
Janus Aspen Series Forty Portfolio Service Shares
|
|
|
-44.31
|
%
|
|
DWS VS II Dreman High Return Equity VIP Class B
|
|
|
-46.16
|
%
|
Janus Aspen Series Balanced Service Shares
|
|
|
-16.06
|
%
|
|
T. Rowe Price Equity Income Portfolio Class II
|
|
|
-36.26
|
%
*
|
Neuberger Berman AMT Regency Portfolio Class I
|
|
|
-45.82
|
%
*
|
|
Van Kampen UIF Mid Cap Growth Portfolio Class I
|
|
|
-46.77
|
%
|
|
|
|
*
|
|
Indicates funds in which one or more of the named executive officers had
balances at the end of fiscal 2008.
|
The Company does not actually fund participants accounts before payout, and the accounts
therefore represent only the Companys unsecured promise to pay the value of the account to the
participants in the events described above. However, the Company maintains policies of life
insurance on the participants having death benefits approximately equal to the aggregate values of
the participants accounts, in order to offset the Companys obligation to pay out participants
accounts upon termination.
A participants account vests over a ten-year period, and in addition, after the first five
years each annual credit by the Company vests over a four-year period; however, the account becomes
fully vested upon the participants death, disability or retirement or a change in control of the
Company. Upon termination of the participants employment, other than for cause, the participant
is entitled to receive the vested balance in his or her account. Accounts of certain employees who
are subject to the deferred compensation rules under Internal Revenue Code Section 409A may not be
distributed for six months after the employees separation from service.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The information below reflects the amount of compensation payable to each of the Companys
named executive officers in the event of termination of the executives employment and/or upon a
change in control of the Company, pursuant to the terms of their respective agreements and awards
in effect as of November 1, 2008, the last day of our 2008 fiscal year. Any payment that would be
made to a named executive officer under nondiscriminatory plans or policies applicable to employees
generally, such as death and disability benefits, medical and life insurance benefits, and payment
of accrued vacation, are not included below.
31
For continuing officers, the payments and amounts shown assume termination effective as of
November 1, 2008, and in the case of stock-related compensation are valued based on the closing
price of the Companys stock on October 31, 2008, the last trading day before that date; however,
the actual amounts to be paid out would be determinable only at the time of each executives
termination. Information about payments actually due to Mr. Fisher as a result of his resignation
is provided separately below.
Termination
Generally, if the employment of a named executive officer terminates, regardless of the
reason, the officer is entitled to payment of salary and accrued vacation to the termination date,
but any bonus for an uncompleted performance period is forfeited.
The named executive officers are parties to agreements or plans, and hold various options or
awards, which provide for payments to be made, or for benefits to be increased or accelerated, in
varying amounts depending on the circumstances of the termination of the officers employment. The
following sections describe the application of these agreements, plans and awards in the event of
termination under various circumstances.
However, if the employment of a named executive officer is terminated by the Company for
Cause, the officer is generally not entitled to any severance payments, and all equity awards and
Deferred Compensation Plan benefits are forfeited, all as described more fully below. The term
Cause is specifically defined in each agreement, award or plan, and may be defined differently in
different documents, but generally includes such things as:
|
|
|
Being charged with commission of a felony (provided that if the charges are dropped
or the officer is acquitted following termination, the officer shall be entitled to
severance);
|
|
|
|
|
Willful fraud or other dishonesty;
|
|
|
|
|
Gross misconduct or other conduct materially injurious to the Company, including
the willful or grossly negligent failure to comply with the lawful instructions of the
Board or the officers supervisor;
|
|
|
|
|
Failure to comply with the Companys Code of Business Conduct and Ethics, Code of
Ethics for Chief Executive Officer and Senior Financial Officers, or Insider Trading
Policy; or
|
|
|
|
|
Failure to cooperate with the Company in any internal, governmental or regulatory
investigation.
|
Severance and Noncompetition Agreements
Each named executive officer has entered into a Severance and Noncompetition Agreement with
the Company in a form approved by the Compensation Committee. These agreements provide that if the
officers employment is terminated by the Company without Cause, or if the officer resigns for Good
Reason, as those terms are defined in the agreements, the officer is entitled to the following
severance payments:
|
|
|
In the case of Mr. Odaniell, a payment equal to the sum of (i) 24 months base
salary, at the highest rate paid in the preceding three years, plus (ii) two times his
average annual bonus awarded in the preceding three fiscal years, and
|
|
|
|
|
In the case of all other named executive officers, a payment equal to the sum of
(i) 12 months base salary, at the highest rate paid in the preceding three fiscal years,
plus (ii) the average annual bonus paid in the preceding three fiscal years.
|
In the case of the Chief Executive Officer, an additional six months base salary and an additional
one-half times his average annual bonus in the preceding three fiscal years is to be paid if
employment is terminated within 24 months after a change in control of the Company. In the case of
the other named executive officers, an additional six months base salary is to be paid if
employment is terminated within 24 months after a change in control of the Company. In 2008, the
Company entered into new Severance and Noncompetition Agreements with the named executive officers.
Pursuant to the new agreements, severance payments to the named executive officers are no longer
grossed up for any golden parachute tax payable as a result of the severance payments.
32
Good Reason is defined in these agreements as:
|
|
|
One or more reductions in the officers base salary amounting to 10% or more;
however, reductions which are consistent with any across-the-board reductions in Company
pay generally are not counted unless a change in control has occurred;
|
|
|
|
|
A change of more than 50 miles in the officers required office location, or after
a change in control, a relocation of the Companys corporate office by more than 50
miles; or
|
|
|
|
|
One or more other actions by the Company which collectively amount to a
constructive discharge of the officer under applicable law.
|
Deferred Compensation Plan
The Companys Nonqualified Deferred Compensation Plan for officers and other managerial
employees provides that contributions to a participants account are subject to forfeiture upon
termination of employment; provided, however, that each contribution will cease to be subject to
forfeiture at the rate of 25% on December 31 of the calendar year in which the contribution is made
and an additional 25% on December 31 of each of the three years thereafter.
If the officers employment terminates due to death or disability, or once the officer reaches
65 years of age, or in the event of a change in control of the Company, the officer is entitled to
receive 100% of the value of his or her account in the Plan, after deduction of the forfeitable
contributions as described above. If an officer is under age 65 and the officers employment is
terminated for any reason other than Cause, death or disability or a change in control, the officer
is entitled to receive 10% of the value of his or her account in the Plan for each year of service
credited, after deduction of the forfeitable contributions as described above.
In the event of termination of employment for Cause, the participants account is cancelled
and forfeited, regardless of the participants age, and whether or not a change in control has
occurred.
Stock Options and SSARs
The terms of the Companys equity awards are the same for officers as for all other employees.
The effect of a termination of employment on an officers stock options and SSARs depends on the
terms of the particular award and the reason for termination.
The following summary applies to stock options and SSARs issued since 2000. Those issued
before 2000 (of which very few remain) may generally be exercised for up to three years after the
termination date (or up to one year in the event of death), but not later than the original
expiration date of the option.
Resignation or Termination by the Company for Cause
.
Generally, if an officer
voluntarily resigns or if the officers employment is terminated for Cause, as defined in the
award document, any options and SSARs are forfeited and may not be exercised; provided, however,
that for SSARs issued after May 2008, an officer who voluntarily resigns will have up to 60 days
after his or her resignation to exercise any vested SSARs.
Termination by the Company Without Cause
.
If an officers employment is terminated by
the Company without Cause, no further vesting will occur but the option or SSAR will remain
exercisable for one year (or three months in the case of tax-qualified incentive stock options),
but not later than the original expiration date.
Death or Disability
. If an officers employment is terminated by reason of the officers
death or disability, the officers options or SSARs will become fully vested and will remain
exercisable for one year (or three months in the case of tax-qualified incentive stock options),
but not later than the original expiration date.
Retirement
. Upon the Retirement of an officer, the officers options or SSARs will
continue to vest in accordance with their normal vesting schedules, and they will remain
exercisable until the original expiration date; provided, however, that for SSARs issued after
May 2008, upon Retirement, any unvested SSARs will be forfeited. However, options and SSARs held
by retired employees who engage in activities inconsistent with Retirement may be subject to
termination by the Company. For purposes of awards other than SSARs issued after May 2008,
Retirement is defined as the permanent withdrawal from regular, active business
33
activities at or after age 60. Part time employment, consulting, passive activities such as
management of personal investments, and other activities approved by the Company are permitted.
For SSARs issued after May 2008, Retirement is defined as the resignation of the participants
employment, other than because of disability, after the participant reaches an age which, when
added to the number of the participants full years of employment, equals at least 65.
Restricted Stock
Restricted stock awards, which have been granted only since 2006, are treated as follows on
termination of the officers employment:
|
|
|
If the officers employment terminates for Cause or for any other reason except
death, disability or Retirement, the unvested shares are cancelled without any payment
to the officer;
|
|
|
|
|
In the event of the officers death or disability, all unvested shares
immediately vest; and
|
|
|
|
|
In the event of the officers Retirement, unvested shares continue to vest in
the normal course; provided, however, that for restricted stock awards granted after
May 2008, all unvested shares are forfeited if the officers employment terminates for
any reason other than a Change in Control or the officers death or disability.
|
These terms have the same definitions as in the stock options and SSAR awards.
Performance Share
s
Performance share awards, which have been granted only since 2006, are treated as follows on
termination of the officers employment:
|
|
|
If the officers employment terminates for Cause or the officer voluntarily
resigns, the award is cancelled without any payment to the officer; and
|
|
|
|
|
If the officers employment terminates without Cause or in the event of the
officers death, disability or Retirement, the award continues for its normal term,
but the size of the award is pro rated based on the number of years elapsed during the
performance period.
|
Capitalized terms have the same definitions as in the stock options and SSAR awards.
Change In Control
Except as noted below in the case of restricted stock and performance shares, the named
executive officers are not entitled to any payment solely because of a Change in Control of the
Company. However, if the officers employment is terminated after a Change in Control, the amount
received may be higher than it would have been if the Change in Control had not occurred.
For purposes of Spartechs awards and benefits, a Change in Control of the Company is
defined as:
|
|
|
The triggering of the 2001 Rights Agreement which the Company implemented as an
antitakeover measure, or if the Rights Agreement is no longer in effect, if any person
acquires at least 50% of the Companys voting stock without the prior approval of the
Board;
|
|
|
|
|
The approval by the Board of any merger or other transaction as a result of
which either Spartech would not be the surviving corporation, or its stockholders
would not own at least a majority of its voting power in substantially the same
proportions as before the transaction, or its common stock would be converted into
cash or securities not having substantially the same proportionate voting power as
before the transaction;
|
|
|
|
|
Any tender offer for 20% or more of the Companys common stock, if the person
making the tender offer could own 50% or more of the common stock when the tender
offer terminates;
|
34
|
|
|
Any change in a majority of the Board of Directors within any 24-month period,
unless the new directors were approved by a majority of the directors who were on the
Board at the beginning of the period; or
|
|
|
|
|
The approval by Spartechs stockholders of the Companys liquidation or the sale
of substantially all its assets.
|
In the event of a Change in Control of the Company:
|
|
|
All accounts under the Deferred Compensation Plan would become fully vested, and
would no longer be subject to forfeiture of the Companys contributions. However, no
payment would be made until the participants employment terminates, at which time the
reason for the termination would determine whether, and to what extent, the account is
payable to the participant.
|
|
|
|
|
All unvested stock options would become fully vested, allowing immediate
exercise of the options. However, the option holder would still be required to
exercise the option at a time of his or her choosing prior to its expiration or
termination, and would still be subject to the same restrictions and risks as would
apply in the absence of a Change in Control.
|
|
|
|
|
All restricted stock would immediately vest and would be delivered to the holder
free from future service or other restrictions.
|
|
|
|
|
The Performance period for outstanding performance shares would immediately end,
and the award would be paid out based on the degree to which the performance criteria
specified in each award have been satisfied at that time, which may result in a
greater or lesser payout than if the Change in Control had not occurred.
|
In addition, the Severance and Noncompetition Agreements for Messrs. Odaniell, Martin, Ploeger
and Marcum provide that in the event of the termination of their employment by the Company without
Cause within 24 months after a Change in Control, they would receive an additional six months base
salary as severance.
Estimated Amounts Payable
The tables below reflect the amount of compensation payable to each of the Companys named
executive officers in the event of termination of the executives employment for various reasons
and in the event of a Change in Control of the Company, as described above.
The payments and amounts shown assume termination or a Change in Control as of November 1,
2008, the last day of the Companys 2008 fiscal year, and in the case of stock-related compensation
are valued based on the closing price of the Companys stock on October 31, 2008, the last trading
day before that date, which was $6.36 per share. However, the actual amounts to be paid out would
be determinable only at the time of each executives termination. As of that date, none of the
named executive officers had reached the retirement age of 60 and therefore no payments are shown
based on termination due to retirement.
Payments that would be made to a named executive officer under benefit plans or employment
terms generally available to other management employees similarly situated, such as group life or
disability insurance and payment of accrued vacation, are not included below.
35
Myles S. Odaniell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration Payable upon Termination of Employment Due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by the
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
Company without
|
|
|
|
|
|
|
|
|
Resignation
|
|
Termination by
|
|
Cause,
or
|
|
|
|
|
|
Consideration
|
|
|
without Good
|
|
the Company for
|
|
Resignation for
|
|
Death or
|
|
Payable upon
|
Plan or Agreement
|
|
Reason
|
|
Cause
|
|
Good Reason
|
|
Disability
|
|
Change in Control
|
Severance and
Noncompetition
Agreement
|
|
None
|
|
None
|
|
$
|
1,696,500
|
(1)
|
|
None
|
|
|
None
|
|
Deferred Compensation
Plan
|
|
None
|
|
None
|
|
None
|
|
|
None
|
|
|
None
|
(2)
|
Stock Options and SSARs
|
|
None
|
|
None
|
|
None
|
|
|
$
|
0
|
(3)
|
|
None
|
(2)
|
Restricted Stock Awards
|
|
None
|
|
None
|
|
None
|
|
|
$
|
277,805
|
|
|
$
|
277,805
|
|
Performance Share
|
|
None
|
|
None
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(5)
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
None
|
|
None
|
|
$
|
1,696,500
|
(1)
|
|
$
|
277,805
|
|
|
$
|
277,805
|
|
|
Randy C. Martin
|
|
|
Consideration Payable upon Termination of Employment Due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by the
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
Company without
|
|
|
|
|
|
|
|
|
Resignation
|
|
Termination by
|
|
Cause,
or
|
|
|
|
|
|
Consideration
|
|
|
without Good
|
|
the Company for
|
|
Resignation for
|
|
Death or
|
|
Payable upon
|
Plan or Agreement
|
|
Reason
|
|
Cause
|
|
Good Reason
|
|
Disability
|
|
Change in Control
|
Severance and
Noncompetition
Agreement
|
|
None
|
|
|
None
|
|
$
|
452,759
|
(1)
|
|
None
|
|
|
None
|
Deferred Compensation
Plan
|
|
$
|
95,503
|
|
|
None
|
|
$
|
95,503
|
|
|
$
|
163,003
|
|
|
None
|
(2)
|
Stock Options and SSARs
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
0
|
(3)
|
|
None
|
(2)
|
Restricted Stock Awards
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
137,885
|
|
|
$
|
137,885
|
|
Performance Share
|
|
None
|
|
|
None
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(5)
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
95,503
|
|
|
None
|
|
$
|
548,262
|
(1)
|
|
$
|
300,888
|
|
|
$
|
137,885
|
|
|
Steven J. Ploeger
|
|
|
Consideration Payable upon Termination of Employment Due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by the
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
Company without
|
|
|
|
|
|
|
|
|
Resignation
|
|
Termination by
|
|
Cause,
or
|
|
|
|
|
|
Consideration
|
|
|
without Good
|
|
the Company for
|
|
Resignation for
|
|
Death or
|
|
Payable upon
|
Plan or Agreement
|
|
Reason
|
|
Cause
|
|
Good Reason
|
|
Disability
|
|
Change in Control
|
Severance and
Noncompetition
Agreement
|
|
None
|
|
|
None
|
|
$
|
442,394
|
(1)
|
|
None
|
|
None
|
Deferred Compensation
Plan
|
|
$
|
91,664
|
|
|
None
|
|
$
|
91,664
|
|
|
|
$159,164
|
|
|
None
|
(2)
|
Stock Options and SSARs
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
0
|
(3)
|
|
None
|
(2)
|
Restricted Stock Awards
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
136,931
|
|
|
$
|
136,931
|
|
Performance Share
|
|
None
|
|
|
None
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(5)
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
91,664
|
|
|
None
|
|
$
|
534,058
|
(1)
|
|
$
|
296,095
|
|
|
$
|
136,931
|
|
36
Michael L. Marcum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration Payable upon Termination of Employment Due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by the
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
Company without
|
|
|
|
|
|
|
|
|
Resignation
|
|
Termination by
|
|
Cause,
or
|
|
|
|
|
|
Consideration
|
|
|
without Good
|
|
the Company for
|
|
Resignation for
|
|
Death or
|
|
Payable upon
|
Plan or Agreement
|
|
Reason
|
|
Cause
|
|
Good Reason
|
|
Disability
|
|
Change in Control
|
Severance and
Noncompetition
Agreement
|
|
None
|
|
None
|
|
$
|
276,765
|
(1)
|
|
None
|
|
|
None
|
Deferred Compensation
Plan
|
|
$
|
8,937
|
|
|
None
|
|
$
|
8,937
|
|
|
$
|
44,687
|
|
|
None
|
(2)
|
Stock Options and SSARs
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
0
|
(3)
|
|
None
|
(2)
|
Restricted Stock Awards
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
84,079
|
|
|
$
|
84,079
|
|
Performance Share
|
|
None
|
|
|
None
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(5)
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,937
|
|
|
None
|
|
$
|
285,702
|
(1)
|
|
$
|
128,766
|
|
|
$
|
84,079
|
|
|
Michael G. Marcely
|
|
|
Consideration Payable upon Termination of Employment Due to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by the
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
Company without
|
|
|
|
|
|
|
|
|
Resignation
|
|
Termination by
|
|
Cause,
or
|
|
|
|
|
|
Consideration
|
|
|
without Good
|
|
the Company for
|
|
Resignation for
|
|
Death or
|
|
Payable upon
|
Plan or Agreement
|
|
Reason
|
|
Cause
|
|
Good Reason
|
|
Disability
|
|
Change in Control
|
Severance and
Noncompetition
Agreement
|
|
None
|
|
None
|
|
$
|
259,398
|
(1)
|
|
None
|
|
|
None
|
Deferred Compensation
Plan
|
|
$
|
32,818
|
|
|
None
|
|
$
|
32,818
|
|
|
|
$65,637
|
|
|
None
|
(2)
|
Stock Options and SSARs
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
0
|
(3)
|
|
None
|
(2)
|
Restricted Stock Awards
|
|
None
|
|
|
None
|
|
None
|
|
|
$
|
63,091
|
|
|
$
|
63,091
|
|
Performance Share
|
|
None
|
|
|
None
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(4)
|
|
$
|
0
|
(5)
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
32,818
|
|
|
None
|
|
$
|
292,216
|
(1)
|
|
$
|
128,728
|
|
|
$
|
63,091
|
|
|
|
|
|
Notes to Estimated Amounts Payable Tables:
|
|
(1)
|
|
If termination is within 24 months of a Change in Control, Mr. Odaniell, Mr. Martin,
Mr. Ploeger, Mr. Marcum and Mr. Marcely would receive an additional six months base
salary, or an additional $325,000, $178,000, $178,000,$125,000, and $110,000
respectively. In the case of the CEO, an additional one-half times his average annual
bonus in the preceding fiscal year will be paid for a Change in Control.
|
|
(2)
|
|
Although a Change in Control results in 100% vesting, there is no payout unless
employment terminates.
|
|
(3)
|
|
Represents the increase in net exercisable value resulting from acceleration of
vesting; because all unvested options had exercise prices greater than the October 31,
2008 closing stock price of $6.36, acceleration of vesting would have had no value as of
this date.
|
|
(4)
|
|
Represents the value of a pro rata portion of the award, based on the portion of the
performance period completed as of November 1, 2008; however, because the award would
continue for the remainder of the original three year performance period, the actual
payout value would be determinable only at the end of the three-year performance period.
|
37
|
|
|
(5)
|
|
Represents the actual value as if the performance period had ended on November 1,
2008; in the event of a Change in Control, the performance period would end and the
awards would be paid out.
|
Mr. Fishers Severance
The Companys former Senior Vice President and General Counsel, Jeffrey D. Fisher, resigned
effective July 25, 2008. Pursuant to the Companys various employee benefit plans and a Separation
Agreement and Release entered into between Mr. Fisher and the Company effective on that date,
|
|
|
Mr. Fisher provided transitional consulting services to the Company until
October 31, 2008 for additional compensation at the same rate as his final base
salary, for a total of $75,900.
|
|
|
|
|
Mr. Fisher became entitled to separation payments equal to 12 months annual
base salary of $284,000, plus $73,457, representing the average annual bonus paid to
him for fiscal 2005, fiscal 2006 and fiscal 2007, amounting to a total separation
payment of $357,457, payable in equal installments over the 12 months following Mr.
Fishers termination and in accordance with the Companys normal payroll practices.
|
As part of the Separation Agreement and Release, Mr. Fisher agreed not to compete with the
Company or solicit Company employees until after the first anniversary of his termination date, and
to release the Company from any claims.
Post-Employment Restrictions
All Spartech employees have a legal obligation to protect Company confidential information,
whether or not it is expressly provided for in an award or agreement. However, certain awards and
agreements include express obligations of confidentiality and/or other restrictions after
employment ceases, as follows:
Severance and Noncompetition Agreements
. These agreements prohibit competing with the Company
or soliciting its employees for one year after termination of employment.
Deferred Compensation Plan
. In addition to an express confidentiality covenant, this Plan
prohibits competing with the Company or soliciting its employees for one year after termination of
employment.
Stock Options and SSARs
. If within one year after leaving Spartech the holder of an option or
SSAR either competes with Spartech, solicits Spartech employees, discloses Spartech confidential
information, or engages in other activities deemed detrimental to Spartech as specified in the
award agreement, Spartech has the right to cancel any unexercised portion of the award and to
repurchase any shares issued within the past year pursuant to exercise of the award, at the
exercise or base price.
38
SECURITY OWNERSHIP
The following table identifies the aggregate shares of common stock beneficially owned as of
December 31, 2008 by each director and each named executive officer, by the executive officers and
directors as a group, and by each person known to the Company to be the beneficial owner of more
than 5% of the 30,847,794 shares of common stock outstanding as of that date.
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Percentage of
|
|
|
Common Shares
|
|
Common Shares
|
|
|
Beneficially Owned (1)
|
|
Beneficially Owned
|
Directors and named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ralph B. Andy
|
|
|
450,745
|
(2)
|
|
|
1.5
|
%
|
Randy C. Martin
|
|
|
241,169
|
(3)
|
|
|
*
|
|
Steven J. Ploeger
|
|
|
159,138
|
(3)
|
|
|
*
|
|
Myles S. Odaniell
|
|
|
126,330
|
(3)
|
|
|
*
|
|
Jackson W. Robinson
|
|
|
57,643
|
(3)
|
|
|
*
|
|
Jeffrey D. Fisher
|
|
|
55,032
|
(3)
|
|
|
*
|
|
Michael G. Marcely
|
|
|
53,334
|
(3)
|
|
|
*
|
|
Craig A. Wolfanger
|
|
|
47,302
|
(3)
|
|
|
*
|
|
Lloyd E. Campbell
|
|
|
40,956
|
(3)
|
|
|
*
|
|
Pamela F. Lenehan
|
|
|
40,602
|
(3)
|
|
|
*
|
|
Walter J. Klein
|
|
|
30,702
|
(3)
|
|
|
*
|
|
Michael L. Marcum
|
|
|
22,935
|
(3)
|
|
|
*
|
|
Edward J. Dineen
|
|
|
11,602
|
(3)
|
|
|
*
|
|
Victoria M. Holt
|
|
|
8,602
|
(3)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers
as a group (17 persons)
|
|
|
1,367,400
|
(2)(3)
|
|
|
4.4
|
%
|
|
|
|
|
|
|
|
|
|
Other beneficial owners in excess of
5% of the common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FMR LLC
|
|
|
3,805,809
|
(4)
|
|
|
12.3
|
%
|
82 Devonshire Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors LP
|
|
|
2,697,867
|
(5)
|
|
|
8.7
|
%
|
1299 Ocean Avenue, 11
th
Floor
Santa Monica, CA 90401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reed Conner & Birdwell, LLC
|
|
|
2,516,052
|
(6)
|
|
|
8.2
|
%
|
11111 Santa Monica Boulevard, Suite 1700
Los Angeles, CA 90025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Putnam, LLC
|
|
|
2,277,000
|
(7)
|
|
|
7.4
|
%
|
One Post Office Square
Boston, MA 02109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UBS AG
|
|
|
1,953,354
|
(8)
|
|
|
6.3
|
%
|
Bahnhofstrasse 45
PO Box CH-8021
Zurich, Switzerland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barclays Global Investors, NA. /
|
|
|
1,570,451
|
(9)
|
|
|
5.1
|
%
|
Barclays Global Fund Advisors
45 Fremont Street
San Francisco, CA 94105
|
|
|
|
|
|
|
|
|
39
|
|
|
Notes To Security Ownership Table:
|
|
*
|
|
Less than 1%.
|
|
(1)
|
|
Includes shares of time-vested restricted stock, and includes shares issuable upon
exercise of currently exercisable options as noted in the following note.
|
|
(2)
|
|
Includes 25,000 shares issuable upon exercise of currently exercisable options, and
350,261 shares owned by RBA Partners, L.P. Mr. Andy is the sole shareholder of RBA
Investments, Inc., which is a 0.1% general partner of RBA Partners, L.P. As such, Mr.
Andy, through RBA Investments, Inc. has investment and voting power over the shares owned
by RBA Partners, L.P.
|
|
(3)
|
|
Includes shares issuable upon exercise of currently exercisable options and SSARs, as
follows: Mr. Martin, 192,125; Mr. Ploeger, 114,975; Mr. Odaniell, 27,650; Mr. Robinson,
25,000; Mr. Fisher, 53,375; Mr. Marcely, 31,725; Mr. Wolfanger, 30,000; Mr. Campbell,
15,000; Mr. Marcum, 9,375; Mr. Klein, 15,000; and all directors and executive officers as
a group, 519,850.
|
|
(4)
|
|
Based on FMR LLCs latest Schedule 13G/A filing with the Securities and Exchange
Commission on July 10, 2008.
|
|
(5)
|
|
Based on Dimensional Fund Advisors LPs latest Schedule 13G/A filing with the
Securities and Exchange Commission on February 6, 2008. In its role as investment
advisor or manager, Dimensional possesses investment and/or voting power over the
securities that are owned by the funds it represents, and may be deemed to be the
beneficial owner of the shares held by these funds.
|
|
(6)
|
|
Based on Reed Conner & Birdwell, LLCs latest Schedule 13G filing with the Securities
and Exchange Commission on March 24, 2008.
|
|
(7)
|
|
Based on Putnam, LLCs latest Schedule 13G filing with the Securities and Exchange
Commission on February 1, 2008.
|
|
(8)
|
|
Based on UBS AGs latest Schedule 13G filing with the Securities and Exchange
Commission on February 11, 2008.
|
|
(9)
|
|
Based on Barclays Global Investors NA / Barclays Global Fund Advisors latest Schedule
13G filing with the Securities and Exchange Commission on February 6, 2008.
|
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Companys directors and
executive officers and persons who own beneficially more than ten percent of a registered class of
the Companys equity securities to file with the Securities and Exchange Commission and the New
York Stock Exchange initial reports of ownership and reports of changes in ownership of common
stock and other equity securities of the Company. Such officers, directors and greater than ten
percent beneficial owners are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms filed by them.
To the Companys knowledge, based solely on review of the copies of such reports furnished to
the Company and written representations from its directors and executive officers that no other
reports were required, its officers, directors and greater than ten percent beneficial owners
complied with all Section 16(a) filing requirements applicable to them on a timely basis during our
2008 fiscal year.
40
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information as of November 1, 2008 regarding the
Companys 1991 Incentive Stock Option Plan, 1991 Restricted Stock Option Plan, 2001 Stock Option
Plan and 2004 Equity Compensation Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
|
|
|
|
remaining available for
|
|
|
Number of securities to be
|
|
|
|
|
|
future issuance under
|
|
|
issued upon exercise of
|
|
Weighted-average exercise
|
|
compensation plans
|
|
|
outstanding options,
|
|
price of outstanding options,
|
|
(excluding securities
|
Plan Category
|
|
warrants and rights
|
|
warrants and rights
|
|
reflected in column (a))
|
Equity compensation
plans approved by
security holders
|
|
|
1,303,000
|
|
|
$
|
21.94
|
|
|
|
1,323,358
|
(1)
|
Equity compensation
plans not approved
by security holders
|
|
None
|
|
|
None
|
|
None
|
|
Total
|
|
|
1,303,000
|
|
|
$
|
21.94
|
|
|
|
1,323,358
|
(1)
|
|
|
|
(1)
|
|
The maximum amount of common stock for which options or other awards may be granted
under the Companys 2004 Equity Compensation Plan is 3,000,000 shares. The Plan
prohibits the Company from repricing any options granted under the Plan. No options or
other awards may be granted under the Plan after December 31, 2012. No further options
or other awards may be granted under any other plans of the Company. In the event of any
stock split, reverse stock split or stock dividend in excess of 5%, or any other
recapitalization, combination or exchange affecting the common stock generally, the
number and kind of shares available for issuance under the Companys stock option plans
and any outstanding awards will be appropriately and automatically adjusted.
|
41
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Board of Directors unanimously recommends a vote
FOR this proposal (Item 2 on the Proxy Card)
.
The Audit Committee has selected Ernst & Young LLP as the Companys independent registered
public accounting firm for fiscal 2009. The Audit Committee proposes that the shareholders ratify
the selection at this Annual Meeting. Ernst & Young LLP has served as the Companys independent
auditors since fiscal 2002. The Company has had no disagreements with Ernst & Young LLP on any
matters of accounting principles or practices, financial statement disclosure, or auditing scope or
procedures. In the event a majority of the votes cast at the Annual Meeting are not voted in favor
of the selection, the Committee will reconsider its selection.
Ernst & Young LLP has advised the Company that its representatives will be present at the
Annual Meeting, where they will have the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
During fiscal 2007 and 2008, the Companys principal auditor, Ernst & Young LLP, provided
services in the following categories for the following fees:
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
2008
|
Audit Fees
|
|
$
|
1,050,212
|
|
|
$
|
1,141,839
|
|
Audit-Related Fees
|
|
$
|
98,509
|
|
|
$
|
39,075
|
|
Tax Fees
|
|
$
|
|
|
|
$
|
234,957
|
|
All Other Fees
|
|
$
|
|
|
|
$
|
|
|
Audit Fees primarily related to work performed in connection with the audit of the Companys
annual financial statements, the effectiveness of the Companys internal control over financial
reporting and reviews of Securities and Exchange Commission Forms 10-Q and 10-K. Audit-Related
Fees related only to work performed in connection with the audit of employee benefit plans and
acquisition due diligence. Tax Fees related to work performed in connection with tax planning
services.
The Audit Committee approved in advance all services provided by Ernst & Young, LLP. The
Audit Committees pre-approval policies and procedures are included within the Audit Committee
Charter, which is posted in the
Investor Relations/Corporate Governance
section of the Companys
website,
www.spartech.com
.
AUDIT COMMITTEE REPORT
The Companys management has the primary responsibility for its financial reporting process,
including its systems of internal controls, for the financial statements resulting from that
process, and for the public reporting process. The Companys independent registered public
accounting firm is responsible for expressing an opinion on the conformity of those audited
financial statements with accounting principles generally accepted in the United States and on the
effectiveness of the Companys internal control over financial reporting.
Each member of the Audit Committee is an independent director as determined by our Board of
Directors, based on the New York Stock Exchange listing rules and Spartechs independence
guidelines. Each member of the committee also satisfies the Securities and Exchange Commissions
additional independence requirement for members of audit committees. In addition, our Board of
Directors has determined that the Audit Committees Chair, Walter J. Klein, is an audit committee
financial expert as defined by SEC rules.
The Audit Committee retains the independent registered public accounting firm and oversees the
Companys financial reporting process and the audit on behalf of the Board of Directors.
42
In fulfilling our oversight responsibilities for 2008, the Audit Committee:
|
|
|
Retained Ernst & Young LLP to perform the fiscal 2008 audit.
|
|
|
|
|
Reviewed and discussed with management the Companys audited financial
statements for the fiscal year ended November 1, 2008 as well as the quarterly
unaudited financial statements.
|
|
|
|
|
Reviewed and discussed with management the quality and the acceptability of the
Companys financial reporting, internal controls and such other matters as are
required to be discussed with the Committee under auditing standards of the Public
Company Accounting Oversight Board (United States).
|
|
|
|
|
Discussed with Ernst & Young LLP and the Companys internal auditors the overall
scope and plans for their respective audits as well as the results of their
examinations and their evaluations of the Companys internal controls.
|
|
|
|
|
Reviewed with Ernst & Young LLP their judgments as to the quality and the
acceptability of the Companys financial reporting.
|
|
|
|
|
Met with Ernst & Young LLP and the Companys internal auditors, separately and
together, with and without management present, to discuss the Companys financial
reporting processes and internal accounting controls.
|
|
|
|
|
Reviewed significant audit findings by Ernst & Young LLP and by the Companys
internal auditors, together with managements responses.
|
|
|
|
|
Received from Ernst & Young LLP, the written disclosures and letter required by
Rule 3526 of the Public Company Accounting Oversight Board, and discussed with Ernst &
Young LLP the auditors independence from management and the Company, including the
impact of permitted non-audit-related services approved by the Committee to be
performed by Ernst & Young LLP. The committee also concluded that Ernst & Young LLPs
provision of audit and non-audit services to Spartech and its affiliates is compatible
with Ernst & Youngs independence.
|
|
|
|
|
Discussed with Ernst & Young LLP and management such other matters as are
required to be discussed with the Audit Committee under Statement on Auditing
Standards No. 61 and other auditing standards generally accepted in the United States,
the corporate governance standards of the New York Stock Exchange, and the Audit
Committees Charter.
|
Based on the above reviews and discussions, we recommended to the Board of Directors that the
audited financial statements for the fiscal year ended November 1, 2008 be included in the
Companys Annual Report on Form 10-K for filing with the Securities and Exchange Commission.
|
|
|
|
|
|
|
|
|
|
Walter J. Klein (Chair)
|
|
Lloyd E. Campbell
|
|
Craig A. Wolfanger
|
|
|
|
|
|
43
PROPOSAL TO AMEND THE COMPANYS 2004 EQUITY COMPENSATION PLAN
The Board of Directors unanimously recommends a vote
FOR this proposal (Item 3 on the Proxy Card).
The Companys Board of Directors has unanimously determined that the following amendments to
the Companys 2004 Equity Compensation Plan are advisable and has unanimously voted to recommend
the amendments to the Companys shareholders for adoption. The original Plan authorized 3,000,000
shares. The proposed amendments will (i) extend the term of the Plan by two calendar years, through
December 31, 2012, and (ii) increase the maximum amount of shares which may be granted under the
Plan by up to 2,500,000 shares. If these amendments to the Plan are not approved, then the Plan
will remain in effect until it expires by its terms on December 31, 2010.
The proposed amendment will replace Section 2.2 of the Plan in its entirety with the following:
2.2 Shares Available for Awards
. As of the date hereof, there are 667,158 shares
still available under the Plan from the original authorization. As of this
Amendment there will be an additional 2,500,000 shares. Award shares may be issued
either from authorized but unissued shares or from shares reacquired by the Company,
whether purchased in the open market or in private transactions. Shares subject to
issuance under Awards which expire or are cancelled without delivery of shares shall
again become available for Awards under the Plan; but shares subject to issuance
under Awards which are settled in cash, and shares which are withheld to pay the
exercise price or tax withholding with respect to an Award, shall not be available
for new Awards.
In addition, the proposed amendment will replace Section 4.2 of the Plan in its entirety
with the following:
4.2 Approval; Duration
. Subject to the approval of the shareholders of the Company
at the Companys 2004 annual meeting of its shareholders, the Plan shall become
effective as of the date of such meeting. Awards may be made from time to time
thereafter in the discretion of the Committee, but no Awards shall be made hereunder
after December 31, 2012. The Plan shall continue until all shares of Common Stock
subject to outstanding Awards have been issued and no Awards remain outstanding.
Currently, the Plan has 667,158 reserved shares available for issuance. The amendments to the Plan
you are being asked to approve will extend the term of the Plan by two calendar years and increase
the number of shares available for issuance under the Plan by 2,500,000. The extension of the Plan
will allow the Company to continue to make the benefits of the Plan available to eligible
individuals after the Plans currently scheduled termination date. The Board of Directors and
management believe these amendments are advisable to assist in the retention and hiring of
employees, and to continue to provide our employees with an incentive to contribute to our future
success by providing an opportunity to acquire shares of our common stock.
Below is a description of the principal features of the Plan, as proposed to be amended. The only
changes proposed to be made to the Plan have been set forth above. This summary, however, does not
purport to be a complete description of all of the provisions of the Plan. It is qualified in its
entirety by references to the full text of the Plan (as proposed to be amended) which is set forth
in Appendix A and incorporated herein by reference.
Description of the Plan
The Spartech Corporation 2004 Equity Compensation Plan was originally adopted by the Board of
Directors on December 11, 2003. It was then approved by shareholders on March 10, 2004. The Plan
was amended and restated effective September 22, 2006.
44
Purposes of the Plan
The purposes of the Plan are to promote the long-term financial interests of the Company and its
shareholders by enhancing the Companys ability to attract and retain persons eligible to
participate in the Plan through incentive compensation opportunities that are competitive with
those of other similar companies, and by providing an incentive for the participants in the Plan to
identify their interests with those of the Companys other shareholders through compensation based
on the value of the Companys common stock.
Types of Awards
Awards under the Plan may be in any one or more of the following forms:
|
|
|
Stock options/stock-settled stock appreciation rights (SSARs), which are rights whose
value is based on the appreciation in value of common stock over a specified exercise or
base price, such as a right to purchase such shares at the exercise price or a right to
receive a net number of shares equal in value to the amount of such appreciation over such
exercise or base price.
|
|
|
|
|
Restricted stock, which consists of shares of common stock issued to a participant
subject to certain terms and conditions.
|
|
|
|
|
Restricted stock units, which give a participant the right to receive shares of common
stock at a specified future time subject to certain terms and conditions.
|
Eligible Recipients; Granting of Awards
Under the Plan, stock options/SSARs and restricted stock may be granted by the Compensation
Committee of the Board to any of the employees of the Company or its subsidiaries. Restricted
stock units may be granted by the Compensation Committee to any management or highly compensated
employee of the Company or its subsidiaries. The Governance Committee of the Board may grant stock
options/SSARs (other than incentive stock options), restricted stock or restricted stock units to
any non-employee director. In addition, the Plan permits the Board to delegate to one or more
officers of the Company the power to grant a limited number of awards to employees of the Company
or its subsidiaries other than executive officers or directors of the Company. As of January 30,
2009, approximately 500 employees and eight directors are eligible to receive awards pursuant to
the Plan.
The process and procedures involved with granting awards under the Plan are described in detail in
the Compensation Discussion and Analysis section.
Shares Subject to the Plan
The maximum number of shares subject to awards under the Plan may not be increased materially
without shareholder approval. However, in the event of any stock split, reverse stock split or
stock dividend in excess of 5%, or any other recapitalization, combination or exchange affecting
the Companys common stock generally, the number and kind of shares available for issuance under
the Plan and any outstanding awards will be appropriately and automatically adjusted.
If a stock option expires or is terminated without being exercised, or if a stock award is
forfeited prior to becoming fully vested, the unissued shares may again become subject to being
awarded under the Plan. However, shares subject to issuance under awards which are settled in cash
or are withheld at the time of exercise to pay the exercise price, or shares which are withheld to
pay taxes due upon exercise of an option or vesting of a stock award will not be available for new
option grants.
Terms of Individual Awards.
All awards under the Plan will be subject to the following
limitations:
|
|
|
No award to employees may vest earlier than at a rate of
33
1
/
3
% per year from the date of
grant, except upon death, disability or retirement of the employee or a change in control
of the Company.
|
|
|
|
|
No individual may receive awards under the Plan during any fiscal year of the Company
for more than 2% of the outstanding shares of Common Stock, determined as of the prior
fiscal year end.
|
45
Subject to these limitations and the other provisions of the Plan, the applicable Committee will
determine in each case the persons to receive awards, the particular type of award, the size of the
award, and the terms and conditions of each award, including the vesting schedule, the duration of
an option, what events (such as termination of employment) will cause the award to terminate prior
to exercise or vesting, the manner and timing of payment of the option exercise price or the taxes
due upon exercise or vesting, and any restrictions on transfer of the award or the underlying
shares.
Stock Options/SSARs
. All stock options/SSARs granted under the Plan will be subject to the
following limitations:
|
|
|
The exercise or base price may not be less than the fair market value of the underlying
shares at the time of the grant or if greater, the par value of the shares.
|
|
|
|
|
The exercise or base price may not be decreased after the stock option/SSAR is granted
nor may an outstanding option/SSAR be surrendered as consideration for the grant of a new
stock option/SSAR with a lower exercise or base price.
|
|
|
|
|
No stock option/SSAR shall contain any reload provision entitling the optionee or
holder to the automatic grant of additional options or rights in connection with any
exercise of the original award.
|
The Committee may determine to grant some stock options as incentive stock options under Section
422 of the Internal Revenue Code. An incentive stock option entitles the holder to favorable
treatment for federal income tax purposes upon its exercise, as described below. To qualify for
treatment as an incentive stock option, a stock option must satisfy the following additional
limitations:
|
|
|
Members of the Board who are not also employees are not eligible to receive incentive stock options.
|
|
|
|
|
The maximum term of an incentive stock option is ten years.
|
|
|
|
|
Incentive stock options may not be transferred other than by will or the laws of descent
and distribution, and during the lifetime of the original grantee may be exercised only by
the grantee.
|
|
|
|
|
An incentive stock option granted to a person who owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company (or any subsidiary
or parent company) must have a maximum term of only five years (rather than ten years) and
an exercise price of at least 110% (rather than 100%) of the fair market value of the
underlying shares on the grant date.
|
Restricted Stock
A participant who receives restricted stock will not be able to dispose of the stock until the
conditions for vesting, such as continued employment, have been satisfied; but until the conditions
are satisfied the participant will have all the other rights of a stockholder with respect to the
shares awarded, including the right to vote the shares and to receive dividends on the shares.
Restricted Stock Units/Performance Shares
A participant who receives restricted stock units will have the right to receive, at the end of the
restricted period, one share of common stock for each unit (or in the case of performance units,
more or less than one share depending on whether and to what extent the Company has achieved the
performance goals stated in the award). Until then, the participant will not have any rights of a
stockholder, including the right to vote or receive dividends on the underlying shares.
Duration, Amendment and Termination of Plan
No awards may be made under the Plan after December 31, 2012.
The Board may amend or terminate the Plan at any time; however, shareholder approval is required
for any amendment which will:
46
|
|
|
Materially increase the maximum number of shares which may be issued pursuant to awards
under the Plan,
|
|
|
|
|
Expand the types of awards that may be granted under the Plan,
|
|
|
|
|
Materially extend the term of the Plan,
|
|
|
|
|
Permit the granting of stock options/SSARs at less than fair market value,
|
|
|
|
|
Permit the repricing of outstanding options/SSARs, or
|
|
|
|
|
Increase the maximum number of shares which may be granted to any single participant in the Plan.
|
Any amendment must also comply with the rules and regulations of the New York Stock Exchange and
the Securities and Exchange Commission. No amendment or termination may adversely affect the
rights of any participant under any existing award without the written consent of the participant.
Tax Treatment of Awards
Stock Options.
The following general discussion does not purport to describe all of the possible
tax effects of the exercise of an option or a disposition of option shares. It assumes that the
option is held by the original holder and exercised for cash. The tax effects of exercise of the
option may be different if the option is transferred or if the holder surrenders previously-held
shares in payment of the exercise price.
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Non Qualified Stock Options
. The issuance of a stock option under the Plan has
no tax effects on either the option holder or Company. Upon exercise of a stock option,
other than an incentive stock option, the holder recognizes ordinary income in an amount
equal to the excess of the fair market value of the purchased shares on the exercise date
over the exercise price. This income is also subject to Social Security and Medicare
taxes. The Company accrues an income tax deduction equal to the amount of income
recognized by the holder of the option. The holders basis in the shares acquired for
purposes of determining capital gain or loss upon a subsequent sale of such shares equals
the exercise price of the option. The holders holding period in such shares for purposes
of determining whether gain or loss realized on a subsequent sale is long or short term
capital gain commences on the exercise date of the option.
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Incentive Stock Options
. The grant of an incentive stock option has no tax
effects on either the option holder or Company. The exercise of an incentive stock option
also has no tax effects on either the option holder or the Company except that the
difference between the fair market value of the stock acquired upon exercise of the option
and the exercise price of the option is considered in determining the amount, if any, of
the holders alternative minimum tax liability for the year of exercise. If the holder
retains the shares for a period ending two years after the grant of the option or one year
after exercise (holding period), whichever is later, the holder will recognize long term
capital gain or loss upon on a subsequent sale of the stock in amount equal the difference
between the amount paid for the stock and the exercise price of the option. If the holder
disposes of the shares before the end of the holding period, the holder will recognize
ordinary income in an amount equal to the difference between the exercise price of the
option and the lesser of the amount paid by the purchaser for the stock (or the fair
market value of the stock on the date of exercise if it disposed of as a gift) or the fair
market value of the stock on the date of exercise. This amount is not subject to Social
Security and Medicare taxes. The Company does accrue an income tax deduction for the
amount of ordinary income recognized by the holder upon disposition of the stock before
the end of the holding period. If the stock is sold for more than the fair market value
of the stock on the date of exercise, the difference between the amount paid for the stock
and the fair market value of the stock on the date of exercise is taxed to the holder as
capital gain. If the stock is sold for less than the exercise price, the difference
between the exercise price and the sale price is a capital loss. The holding period for
determining whether the capital gain or loss is long or short term commences on the date
the option is exercised.
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Restricted Stock
. Generally, a grant of restricted stock will not be taxable to
the grantee or deductible by the Company. The fair market value of the stock on the date
it vests is taxed as ordinary income to the grantee . This income is subject to Social
Security and Medicare taxes. It is also deductible by
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the Company. The grantees basis in the shares equals the fair market value of the shares
on the vesting date. The grantees holding period in the shares for purposes of
determining whether gain or loss recognized upon a subsequent sale of the shares is long or
short term capital gain commences on the vesting date. The grantee may make an election,
called a 83(b) election to be taxed on the fair market value of the stock as of the grant
date. The grantee must make this election within thirty days of the grant. If the grantee
makes an 83(b) election with respect to a grant of restricted stock, the value of the stock
on the grant date is taxable to the grantee for the year of grant, his or her tax basis in
the shares of restricted stock equals the fair market value of the shares on the grant
date, and the grantees holding period in the shares for purposes of determining whether
capital gain or loss recognized upon a subsequent sale of the shares is short or long term
commences as of the grant date. The Company accrues a corresponding income tax deduction
for income recognized by a grantee pursuant to an 83(b) election. If the grantee makes an
83(b) election and the stock is forfeited or its value declines, no tax deduction or
benefit is available to the grantee under these circumstances.
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Restricted Stock Units (including Performance Units) and SSARs
. The value of
shares received in settlement of restricted stock units and SSARs is taxable to the
grantee as ordinary income at the time such shares are transferred to the grantee. This
amount is also subject to Social Security and Medicare taxes. The Company accrues a
corresponding income tax deduction at the time and in the amount equal to the income
recognized by the grantee.
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This is a general description of the Federal income, Social Security and Medicare
consequences of awards under the 2004 Equity Compensation Plan. It does not address state
income tax consequences. Because the tax effects depend on an individuals personal tax
situation, a participant should consult with a qualified tax advisor regarding how
participation impacts his or her individual tax situation.
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The Board of Directors recommends a vote FOR this proposal.
48
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended for inclusion in the Companys proxy statement for the 2010
Annual Meeting must be received by the Company no later than October 12, 2009. In addition, if a
shareholder fails to notify the Company on or before December 24, 2009 of a proposal which such
shareholder intends to present at the Companys 2010 Annual Meeting other than through inclusion of
such proposal in the Companys proxy materials for the meeting, then management proxies may use
their discretionary voting authority with respect to such proposal if it is presented at the
meeting.
Shareholders are urged to sign, date, and return promptly the enclosed proxy in the
accompanying envelope, which requires no postage if mailed in the United States. Your cooperation
is appreciated.
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By Order of the Board of Directors
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[signature]
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[Michael G. Marcely]
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February 8, 2009
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Assistant Secretary
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49
Appendix A
Spartech Corporation
2004 Equity Compensation Plan
Article I
P
urpose And Definitions
1.1
Purpose
.
This Spartech Corporation 2004 Equity Compensation Plan (the
Plan
) has
been established by Spartech Corporation (the
Company
) to promote the long-term financial
interest of the Company and its shareholders by (i) enhancing the Companys ability to attract and
retain persons eligible to participate in the Plan, through incentive compensation opportunities
that are competitive with those of other similar companies, and (ii) providing an incentive for the
participants in the Plan to identify their interests with those of the Companys other
shareholders, through compensation based on the value of the Companys Common Stock.
1.2
Definitions
.
Award
means a right granted to an Eligible Person to receive Options/Stock-Settled Stock
Appreciation Rights, Restricted Stock or Restricted Stock Units pursuant to the Plan.
Board
means the Board of Directors of the Company.
Committee
means (i) the Governance Committee of the Board with respect to Awards to members
of the Board in their capacity as directors of the Company, or (ii) the Compensation Committee of
the Board with respect to all other Awards.
Common Stock
means the authorized common stock of the Company, subject to any adjustments
under Section 2.3.
Company
has the meaning stated in Section 1.1.
Eligible Person
means:
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(i)
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An employee of the Company or any of its Subsidiaries, with respect to Awards of
Options/Stock-Settled Stock Appreciation Rights or Restricted Stock; or
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(ii)
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A management or highly compensated employee of the Company or any of its
Subsidiaries, with respect to Awards of Restricted Stock Units; or
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(iii)
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A non-employee member of the Board, with respect to Awards of
Options/Stock-Settled Stock Appreciation Rights (other than Incentive Stock Options),
Restricted Stock, or Restricted Stock Units.
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Incentive Stock Option
means an Option/Stock-Settled Stock Appreciation Right which is
intended to satisfy the requirements applicable to an incentive stock option described in Section
422(b) of the Internal Revenue Code.
Option/Stock-Settled Stock Appreciation Right
means a right whose value is based on the
appreciation in value of a specified number of shares of Common Stock over a specified exercise or
base price, such as a right to purchase such shares at the exercise price or a right to receive a
net number of shares equal in value to the amount of such appreciation over such exercise or base
price.
Participant
means an Eligible Person who has received an Award under the Plan.
Performance Units
means Restricted Stock Units wherein the number of shares to be received
is based on whether and to what extent the Companys performance has achieved certain performance
goals stated in the Award.
Plan
has the meaning stated in Section 1.1.
Restricted Stock
means shares of Common Stock issued subject to certain terms and conditions
stated in the Award.
Restricted Stock Units
means a right to receive a specified number of shares of Common Stock
in the future subject to certain terms and conditions stated in the Award.
Subsidiary
means a corporation, limited liability company, partnership, joint venture or
other business entity of which at least a 50% voting or profits interest is owned, directly or
indirectly, by the Company, and any
A-1
other business venture designated by the Committee in which the Company has a significant
interest as determined in the discretion of the Committee.
Article II
Granting of Awards
2.1
Participation
.
Subject to the other terms and conditions of the Plan, the
Committee shall determine and designate, from time to time in its sole discretion, from among the
Eligible Persons, those persons who will be granted one or more Awards under the Plan and who will
thereby become Participants in the Plan. The Committee shall also approve the names of all persons
to whom Awards are proposed to be made, and shall determine, within the limits set forth in the
Plan, the type of Award, the maximum number of shares to be issued pursuant to the Award, the
exercise price (if any) to be paid by the Participant, the vesting schedule (if any), and the other
terms and conditions of any Award to be granted hereunder. The Committee may receive the
recommendations of the officers and managers of the Company with respect thereto.
2.2
Shares Available for Awards
.
As of the date hereof, there are 667,158 shares
still available under the Plan from the original authorization. As of this Amendment there will be
an additional 2,500,00 shares. Award shares may be issued either from authorized but unissued
shares or from shares reacquired by the Company, whether purchased in the open market or in private
transactions. Shares subject to issuance under Awards which expire or are cancelled without
delivery of shares shall again become available for Awards under the Plan; but shares subject to
issuance under Awards which are settled in cash, and shares which are withheld to pay the exercise
price or tax withholding with respect to an Award, shall not be available for new Awards.
2.3
Adjustments to Shares
.
Upon any stock split, reverse stock split or stock
dividend in excess of 5%, or any other recapitalization, combination or exchange affecting the
Common Stock generally, the number and kind of shares of Common Stock available for issuance under
the Plan shall be appropriately and automatically adjusted. The Committee may in its discretion
provide for similar adjustments of outstanding Awards upon any of such events or in the event of
any other combination or exchange of shares, spin-off, split-up, merger or consolidation or similar
event affecting the Common Stock generally, in order to preserve the benefits or potential benefits
of the Awards.
2.4
Limitation on Individual Grants
.
No Participant may receive Awards under the Plan
during any fiscal year of the Company for more than 2% of the shares of Common Stock outstanding
(i.e. excluding treasury shares) as of the end of the Companys previous fiscal year.
2.5
Limited Delegation of Authority
.
Notwithstanding Section 2.1 or any other
provision of the Plan, the Board may, from time to time by express resolution, pursuant to section
157(c) of the Delaware General Corporation Law and subject to such limitations as are set out in
such section or included in such Board resolution, authorize one or more officers of the Company to
do one or both of the following: (i) designate Eligible Persons other than the Companys executive
officers and directors to be recipients of Awards and (ii) determine the type and size of Awards to
be received by such Eligible Persons.
Article III
Terms Of Awards
3.1
Types Of Awards
.
Subject to the provisions of the Plan and applicable laws and
regulations, Awards may be made in the form of (i) Options/Stock-Settled Stock Appreciation Rights,
(ii) Restricted Stock, or (iii) Restricted Stock Units. The terms and conditions of each Award
shall be determined by the Committee in its sole discretion and may include, by way of example,
continued service with the Company for a stated period of time and/or the attainment of stated
performance goals by the Participant, the Company or any business unit thereof.
3.2
Terms of Options/Stock-Settled Stock Appreciation Rights
.
(a) With respect to each Option/Stock-Settled Stock Appreciation Right, the Committee shall
determine in its discretion the terms of the Award, including without limitation:
A-2
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(i)
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The exercise or base price per share, provided that the exercise or base price
shall not be less than the fair market value of the shares subject to the Award on the
date the Award is granted, or if greater, the par value of the shares. Except as
incidental to adjustments under Section 2.3, the exercise or base price of an outstanding
Option/Stock-Settled Stock Appreciation Right may not be decreased after the date of
grant, nor may an outstanding Option/Stock-Settled Stock Appreciation Right be
surrendered to the Company as consideration for the grant of a new Option/Stock-Settled
Stock Appreciation Right with a lower exercise or base price.
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(ii)
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The times at which any Option/Stock-Settled Stock Appreciation Right granted
hereunder may be exercised, including the times at which, and/or the conditions subject
to which, the Option/Stock-Settled Stock Appreciation Right will first become exercisable
in whole or in part, which may include, by way of example and not limitation, continued
service with the Company for a stated period of time and/or the attainment of stated
performance goals by the Participant, the Company or any business unit thereof.
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(iii)
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Such other terms as the Committee may deem appropriate, including without
limitation the procedures for exercising the Option/Stock-Settled Stock Appreciation
Right, the manner of payment of the exercise price and any tax withholding obligations,
and any restrictions on the exercise or transfer of the Option/Stock-Settled Stock
Appreciation Right or on the transfer of the underlying Shares.
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(iv)
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No Option/Stock-Settled Stock Appreciation Right granted under the Plan shall
contain any reload provision entitling the optionee or holder to the automatic grant of
additional options or rights in connection with any exercise of the original Award.
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3.3
Terms of Incentive Stock Options
.
In addition to the other provisions of the
Plan, Incentive Stock Options shall be subject to all laws and regulations from time to time
applicable to incentive stock options, and shall be subject to the following specific provisions:
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(i)
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Members of the Board who are not also employees may not receive Incentive Stock
Options.
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(ii)
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No Incentive Stock Option shall be exercisable in whole or in part later than the
day preceding the 10th anniversary of the grant date.
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(iii)
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Incentive Stock Options may not be transferred other than by will or the laws of
descent and distribution, and may be exercised during the lifetime of the Participant to
whom it is granted only by such Participant.
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(iv)
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An Incentive Stock Option granted to a person who at the time of the grant owns
stock possessing more than 10% of the total combined voting power of all classes of stock
of the Company or any subsidiary or parent company (A) shall have an exercise price at
least 110% of the fair market value of the shares subject to the Incentive Stock Option
on the date the Incentive Stock Option is granted and (B) shall not be exercisable after
the expiration of five years from the date the Incentive Stock Option is granted.
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To the extent that an Incentive Stock Option does not meet the requirements of
Section 422(b) of the Internal Revenue Code the Award shall not be void but shall be
treated as an Option/Stock-Settled Stock Appreciation Right other than an Incentive
Stock Option. No Participant shall have any claim for damages or any other recourse
against the Company, the Board or the Committee because of the failure of any
Option/Stock-Settled Stock Appreciation Right to be an incentive stock option.
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3.4
Rights of Holders of Restricted Stock
.
Except as otherwise provided in an
individual Award, a Participant who receives Restricted Stock shall have all rights as a
stockholder with respect to such shares, including the right to vote the shares and receive
dividends and other distributions.
3.5
Rights of Holders of Restricted Stock Units
.
Subject to the restrictions set
forth in an individual Award, a Participant who receives Restricted Stock Units shall be eligible
to receive, at the expiration of the applicable restricted period, one share of Common Stock for
each Restricted Stock Unit awarded (or in the case of Performance Units, more or less than one
share depending on whether and to what extent the Companys performance has achieved the
performance goals stated in the Award), at which time the Company shall issue to each such
Participant that number of shares of Common Stock. Except as otherwise provided in an individual
Award, a Participant who receives Restricted Stock Units shall have no rights as a stockholder
A-3
with respect to such Restricted Stock Units until such time as shares for such Common Stock
are issued to the Participant.
3.6
Vesting
.
Awards to employees of the Company or a Subsidiary may not vest earlier
than at a rate of 33-1/3% per year from the date of grant, except upon the death, disability or
retirement of the employee or a change in control of the Company.
3.7
Awards to Be in Writing
.
The grant, terms and conditions of each Award shall be
evidenced by a written agreement or other written documentation, a copy of which shall be provided
to the Participant. The Committee may require the Participant to execute such agreement or
otherwise accept the grant and terms as a condition of the Award. In the event of any
irreconcilable inconsistency between the provisions of the Plan and the terms or conditions of an
Award, the provisions of the Plan shall govern.
3.8
Limitation of Implied Rights
.
Neither a Participant nor any other person shall
acquire any right in or title to any assets, funds or property of the Company or any Subsidiary by
reason of participation in the Plan or the grant of any Award. Neither the Plan nor any Award will
constitute a contract of employment or give any Eligible Person any right to be retained in the
employ of the Company or a Subsidiary. No Eligible Person or Participant will have any right under
the Plan or any Award or as a shareholder of the Company except to the extent such right has
accrued under the terms of the Plan and the Award.
Article IV
Administration; Term And Amendment
4.1
Administration
.
The Plan shall be administered by the Committee, which may in its
discretion interpret the Plan; establish, amend and rescind rules and regulations, forms, notices
and agreements relating to the Plan; and make all determinations necessary or advisable for the
operation of the Plan. Subject to the provisions of the Plan, the charter and bylaws of the
Company and applicable laws, all ultimate powers of approval shall be vested in the Committee as a
body, and the Committee shall have absolute and final discretion with respect to all determinations
under the Plan.
4.2
Approval; Duration
.
Subject to the approval of the shareholders of the Company at
the Companys 2004 annual meeting of its shareholders, the Plan shall become effective as of the
date of such meeting. Awards may be made from time to time thereafter in the discretion of the
Committee, but no Awards shall be made hereunder after December 31, 2010. The Plan shall continue
until all shares of Common Stock subject to outstanding Awards have been issued and no Awards
remain outstanding.
4.3
Amendments and Termination
.
The Board may at any time amend or terminate the
Plan; provided that no amendment may, without the further approval of the Companys shareholders,
(i) materially increase the maximum amount of Common Stock that may be issued pursuant to Awards
hereunder (except for adjustments under Section 2.3), or (ii) expand the types of Awards that may
be granted, or (iii) materially extend the term of the Plan, or (iv) permit the granting of
Options/Stock-Settled Stock Appreciation Rights with an exercise or base price less than fair
market value, or (v) permit the repricing of outstanding Options/Stock-Settled Stock Appreciation
Rights (except for adjustments under Section 2.3), or (vi) increase the maximum number of shares
which may be granted to any single Participant. Any amendment shall comply with all applicable
rules and regulations of the New York Stock Exchange and the Securities and Exchange Commission.
No amendment or termination may adversely affect the rights of any Participant which exist on the
date the amendment or termination becomes effective, without the written consent of the
Participant.
Adopted by the Board of Directors December 11, 2003.
Approved by the Shareholders March 10, 2004.
Amended by the Board of Directors September 22, 2006.
A-4
The Board of Directors recommends a vote FOR each of the proposals.
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Please mark
your
votes as
indicated
in
this example
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x
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FOR
ALL
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WITHHOLD
FOR ALL
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*EXCEPTIONS
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FOR
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AGAINST
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ABSTAIN
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ITEM 1.
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Election of Directors.
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ITEM 2.
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Ratification of
selection of
Independent
Registered Public
Accounting Firm.
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o
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o
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Nominees:
01 Victoria M. Holt
02 Walter J. Klein
03 Craig A. Wolfanger
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ITEM 3.
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Amendment of the
Companys 2004
Equity Compensation
Plan to Extend the
Term of the Plan
and Increase the
Number of Shares
Available for
Issuance under the
Plan.
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(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, mark the
Exceptions box above and write that nominees name
in the space provided below.)
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ITEM 4.
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In their discretion, the
Proxies are authorized to vote
upon such other
business as may
properly come
before the meeting.
This proxy when
properly executed
will be voted in
the manner directed
herein.
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*
Exceptions
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YOUR VOTE IS IMPORTANT TO US.
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PLEASE COMPLETE, DATE AND SIGN THIS PROXY CARD AND RETURN IT
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PROMPTLY IN THE ACCOMPANYING ENVELOPE.
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Mark Here for Address
Change or Comments
SEE REVERSE
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NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
5
FOLD AND DETACH HERE
5
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and telephone voting is available through 11:59 PM Eastern Time
on
, 2009
INTERNET
http://www.proxyvoting.com/seh
Use the Internet to vote your proxy. Have
your proxy card in hand when you access the
web site.
OR
TELEPHONE
1-866-540-5760
Use any touch-tone telephone to vote your
proxy. Have your proxy card in hand when
you call.
If you vote your proxy by Internet or by
telephone, you do NOT need to mail back your proxy
card.
To vote by mail, mark, sign and date your proxy
card and return it in the enclosed postage-paid
envelope.
Your Internet or telephone vote authorizes the
named proxies to vote your shares in the same
manner as if you marked, signed and returned your
proxy card.
41927
SPARTECH CORPORATION PROXY
2009 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Myles S. Odaniell and Randy C. Martin, and each of them, with
the power to act alone and with full power of substitution and revocation, as attorneys and
proxies of the undersigned to attend the Annual Meeting of Shareholders of Spartech Corporation
(the Company) to be held at the Sheraton Clayton Plaza Hotel, 7730 Bonhomme Avenue, St. Louis,
Missouri 63105 on Wednesday, March 11, 2009, commencing at 8
a.m. CST, and at any and all adjournments thereof, and to vote all shares of Common Stock of the Company which the undersigned is
entitled to vote with respect to the following matters, all as set forth in the Notice of Annual
Meeting of Shareholders and Proxy Statement dated February 8, 2009.
This Proxy, when properly executed, will be voted in the manner directed herein by the
undersigned. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3, AND IN
ACCORDANCE WITH THEIR BEST JUDGMENT UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING.
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Address Change/Comments
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(Mark the corresponding box on the reverse side)
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BNY MELLON SHAREOWNER SERVICES
P.O . BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
(Continued and to be marked, dated and signed, on the other side)
Choose
MLink
SM
for fast, easy and secure 24/7 online access to
your future proxy materials, investment plan statements, tax documents and
more. Simply log on to
Investor ServiceDirect
®
at
www.bnymellon.com/shareowner/isd
where step-by-step instructions will
prompt you through enrollment.
41927
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PRINT AUTHORIZATION
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(THIS BOXED AREA DOES NOT
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To commence printing on this proxy card please sign,
date and fax this card to:
212-691-9013
Registered Quantity (common)
20
Broker Quantity
0
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