AMENDED AND RESTATED
EMPLOYMENT AGREEMENT OF
DAVID B. MUELLER
AGREEMENT entered into as of the 1st day of November, 1999, by and between
SPARTECH CORPORATION, a Delaware corporation ("Employer"), and DAVID B. MUELLER
("Employee").
WITNESSETH:
WHEREAS, Employee currently holds the position of Executive Vice President
and Chief Operating Officer and Secretary of Employer pursuant to an employment
agreement with Employer dated July 1, 1992, as amended on March 8, 1993, July 1,
1995, July 1, 1996 and November 1, 1997 (as so amended, the "1992 Amended
Employment Agreement"); and
WHEREAS, Employer desires to provide for Employee's continued service to
Employer in his current positions, and Employee is willing to provide such
services on the terms set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the mutual premises set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the 1992 Amended Employment Agreement is hereby
amended and restated to read in its entirety as follows:
1. Employment and Duties of Employee.
(a) Employer employs Employee to act in a senior executive capacity, as
Executive Vice President and Chief Operating Officer and Secretary of Employer,
and in all aspects of its business, as and when requested, and at such times and
places as Employer shall reasonably request, except that (i) Employee shall not
be assigned duties or responsibilities which are inconsistent with his position
and status as Executive Vice President and Chief Operating Officer and
Secretary, and (ii) Employee shall not be required temporarily or permanently,
to relocate his residence. Employer will also use its best efforts to cause
Employee to be a duly elected member of Employer's Board of Directors at all
times during his employment hereunder.
(b) Employee agrees faithfully to perform such duties as Employer assigns
to him; to devote the necessary time and best efforts to the manufacture and
sale of Employer's products; and to endeavor to improve Employer's business,
through plant and production organization, customer and supplier relationships,
capital development and additional financing resources, acquisition of other
businesses, and by other means, in all reasonable ways for the term hereof, the
services to be of a similar nature as those currently provided Employer, subject
always to the control and direction of Employer's Board of Directors.
2. Compensation.
(a) Subject to annual review (without obligation to increase) for cost of
living and/or merit and other increases at the Board's discretion, Employer
agrees to compensate Employee at a fixed rate of $435,000 annually ("Base
Salary"), such Base Salary to be paid in equal weekly installments. Employer
shall further advance or reimburse to Employee such other funds as Employer
determines for credit cards, costs and other reasonable expenses incurred by
Employee in the discharge of Employer's instructions hereunder, and consistent
with the necessities of the operation of the business. Except to the extent
that his participation therein will disadvantage the other participants,
Employee will also participate, as appropriate, in all other stock option and
stock purchase plans, insurance, medical and other employee benefit programs
currently established or hereafter instituted by Employer. In addition, for the
term of this Agreement, Employer will continue to lease or otherwise make
available for Employee an automobile of comparable quality to the automobile
currently leased by Employer for Employee, and to pay the cost of insurance and
maintenance for such automobile.
(b) Employer further agrees to grant to Employee, effective November 1,
1999, an option to purchase 65,000 shares of common stock of Employer, which
shall be in addition to the options previously granted to Employee. Such option
may be granted pursuant to any of Employer's stock option plans or, if
unavailable thereunder, shall be granted directly to Employee outside of such
plans. Such option shall (i) have exercise prices which are equal to the market
price of the underlying shares on the effective date of grant, subject to
appropriate adjustments as provided in the stock option agreement covering such
option, and (ii) otherwise be Employer's customary ten-year option on such terms
as are provided for in the current standard form of option agreement for options
granted pursuant to Employer's Restricted Stock Option Plan, as amended to date.
(c) The Board of Directors of Employer shall annually consider issuing
additional options to Employee.
(d) In addition to the benefits provided for above and elsewhere in this
Agreement, Employer shall contribute each year to a trust to be maintained for
the benefit of Employee an amount equal to the sum of (i) 15% of Employee's base
salary as defined in this Agreement (exclusive of bonuses) plus (ii) the amount
of the premium Employer would pay for $750,000 of term life insurance on
Employee. Such trust shall be of the type commonly known as a "rabbi trust" and
Employer and Employee shall use their best efforts to mutually agree on the
terms thereof and to cause such trust to be created within 90 days after the
date first above written.
(e) Employer agrees to repurchase during each twelve-month period that
this Agreement is in effect, beginning November 1, 1999, a number of Employer's
shares of common stock beneficially owned by Employee, on the following terms
and conditions:
(i) Only mature shares, i.e. shares outstanding at least six months,
will be repurchased;
(ii) The maximum number of shares which Employee may require Employer
to purchase in each twelve-month period shall be 15% of the sum
of (1) the number of outstanding shares beneficially owned by
Employee at the time of the repurchase plus (2) the number of
shares subject to currently-exercisable options beneficially
owned by Employee at the time of the repurchase;
(iii) The price per share will be the average of the publicly-
reported high and low sale prices of the common stock on the New
York Stock Exchange over the three trading days prior to the
sale.
(iv) Employer shall not be obligated to repurchase shares if
Employer's Board of Directors determines in good faith that
Employer's cash needs do not permit the repurchase; and
(v) The repurchases will be effected as of such date as Employee
specifies by notice to Employer's Chief Financial Officer at
least five trading days in advance of the desired repurchase
date; and
(vi) Employer's Board of Directors or its Compensation Committee will
approve each repurchase in advance to the extent required by
Rule 16b-3(e) or Rule 16b-3(d)(1) under the Securities Exchange
Act of 1934 (however, failure to so approve a requested
repurchase which is otherwise in compliance with these conditions
shall nevertheless be deemed a breach of the repurchase covenant
set forth in this paragraph 2(e)).
3. Term of Employment.
(a) The term of this Agreement as amended shall commence November 1, 1999
and shall continue until terminated:
(i) As provided in Section 11 below; or
(ii) Upon at least three years' written notice by Employer to
Employee, such notice not to be given by Employer before November
1, 2002; or
(iii) Upon at least one year's written notice by Employee to
Employer, such notice not to be given by Employee before (A) if
no Change in Control occurs, November 1, 2002, or (B) if a Change
in Control occurs, November 1, 2000.
If notice is given by Employer under clause 3(a)(ii), Employee shall not be
required to perform further services to Employer hereunder; if notice is given
by Employee under clause 3(a)(iii), Employee shall, for a period not to exceed
45 days after the date of such notice, provide such consulting services to
Employer as Employer shall reasonably request.
(b) For purposes of this Agreement, "Change of Control" means the first to
occur of any of the following:
(i) The date Employer's Board of Directors votes to approve and
recommends a stockholder vote to approve:
(A) any consolidation or merger of Employer in which Employer is
not the continuing or surviving corporation; or
(B) any consolidation or merger of Employer in which shares of
Employer's capital stock would be converted into cash,
securities or other property, other than a consolidation or
merger of Employer (1) in which the direct or indirect
holders of Employer capital stock immediately prior to the
consolidation or merger have the right to receive the same
direct or indirect proportionate ownership of voting stock
of the surviving corporation immediately after the
consolidation or merger or (2) with another corporation
which owns Employer capital stock pursuant to which merger
all of the Employer capital stock owned by such corporation
would be canceled or redeemed and Employer capital stock
would be issued to the stockholders of such corporation; or
(C) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of Employer, other than any
sale, lease, exchange or other transfer to any corporation
where Employer owns, directly or indirectly, at least eighty
percent (80%) of the outstanding voting securities of such
corporation after any such transfer; or
(D) any plan or proposal for the liquidation or dissolution of
Employer; or
(ii) The date any person (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, hereinafter the "Exchange Act")
shall become the beneficial owner (within the meaning of Rule 13d-
3 under the Exchange Act) of a majority of Employer's outstanding
voting stock; or
(iii) The date the Board of Directors of Employer or any affiliate
(within the meaning of Rule 12b-2 under the Exchange Act) of
Employer authorizes and approves any transaction which has either
a reasonable likelihood or the purpose of causing, whether
directly or indirectly, Employer's common stock to be held of
record by fewer than 300 persons or not to be listed on any
national securities exchange; or
(iv) The date, during any period of twenty-four (24) consecutive
months, on which those individuals who at the beginning of such
period constitute Employer's Board of Directors shall cease for
any reason to constitute a majority thereof unless the election,
or the nomination for election by Employer's stockholders, of
each new director comprising the majority was approved by a vote
of at least a majority of the Continuing Directors in office on
the date of such election or nomination for election of the new
director. For purposes of this Section, "Continuing Director"
means any member of Employer's Board of Directors who:
(A) is serving as of the close of business on the date first
above written; or
(B) was originally elected to succeed a Continuing Director
described in clause 3(b)(iv)(A), either by a majority of the
Continuing Directors described in clause 3(b)(iv)(A) then
still in office or by Employer's stockholders following
nomination by a majority of the Continuing Directors
described in clause 3(b)(iv)(A); or
(C) was originally elected to fill a vacancy or newly-created
directorship, either by a majority of the Continuing
Directors described in clause 3(b)(iv)(A) then still in
office or by Employer's stockholders following nomination by
a majority of the Continuing Directors described in clause
3(b)(iv)(A).
4. Bonuses.
(a) For each fiscal year of Employer, Employee shall receive an annual
bonus equal to 0.50% of Employer's earnings before income taxes as reported in
Employer's audited financial statements for each year that this Agreement is in
effect, adjusted, however, to exclude profit or loss on extraordinary or
nonrecurring items and unusual items (such as sale of a significant amount of
assets or securities other than in the ordinary course of business operations,
one-time employee separation costs, and significant litigation costs or
recoveries) ("Adjusted Pre-Tax Earnings"), such determination to be made by
Employer's auditors based on generally accepted accounting principles; provided,
however, no such bonuses will be paid with respect to any fiscal year in which
Employer's Adjusted Pre-Tax Earnings are less than 75% of the Company's Adjusted
Pre-Tax Earnings in its immediately preceding fiscal year.
(b) Each fiscal year, an installment equal to 40% of the estimated bonus
for such fiscal year as approved by the Compensation Committee of Employer's
Board of Directors shall be paid to Employee in July, and the balance, if any,
of such bonus shall be paid as soon as practicable upon completion of Employer's
audited financial statements for such fiscal year.
(c) Should this Agreement terminate prior to the close of a fiscal year of
Employer, Employee shall be entitled to a bonus with respect to such fiscal year
(in addition to such other amounts to which he may be entitled on termination
under other provisions of this Agreement) equal to the bonus he would have
earned had this Agreement been in effect for the entire fiscal year multiplied
by a fraction, the numerator of which shall be the number of days in such fiscal
year prior to termination of this Agreement, and the denominator of which shall
be 365.
5. Severance Benefits.
(a) If at any time before a Change in Control Employee's employment with
Employer is terminated:
(i) By Employer for any reason other than "Cause" (as defined in
Section 11(c) below); or
(ii) By Employee with "Justification" (as defined in Section 11(a)
below); or
(iii) By Employee pursuant to notice of termination given by
Employee to Employer pursuant to clause 3(a)(iii), above;
then Employer shall pay to Employee within thirty (30) days of (A) the date
notice of such termination is given to Employee pursuant to Section 3, above, or
(B) the date of such termination with Justification, a lump sum severance
benefit (the "Severance Benefit") equal to (I) two times Employee's then current
Base Salary plus (II) the aggregate amount of bonus paid or earned by Employee
in the two years prior to the date of such notice of termination.
(b) If at any time after a Change in Control Employee's employment with
Employer is terminated:
(i) By Employer for any reason other than "Cause" (as defined in
Section 11(c) below); or
(ii) By Employee with "Justification" (as defined in Section 11(a)
below); or
(iii) By Employee pursuant to notice of termination given by
Employee to Employer pursuant to clause 3(a)(iii), above;
then Employer shall pay to Employee within thirty (30) days of (A) the date
notice of such termination is given to Employee pursuant to Section 3, above, or
(B) the date of such termination with Justification, a lump sum severance
benefit (the "Severance Benefit") equal to 2.95 times the sum of (I) Employee's
then current Base Salary plus (II) one-third of the aggregate amount of bonus
paid or earned by Employee in the three years prior to the date of such notice
of termination.
(c) The Severance Benefit shall be payable in lieu of any further claims
to Base Salary under Section 2 or bonuses under Section 4 hereof, for any
remaining term of this Agreement; however, the Severance Benefit shall be in
addition to and not in lieu of all other compensation and benefits to which
Employee may be entitled under any other provision of this Agreement or
otherwise, including accrued vacation or sick pay, accrued amounts payable for
prior salary or bonuses earned, or any amounts payable under any life insurance,
health, disability or similar employee benefit plan. Employee may elect to have
any life insurance, health plan, disability plan or similar plan which was in
effect immediately prior to Employee's termination extended for a period of two
(2) years beyond when Employee's eligibility for such plan would otherwise have
ended, provided that (i) Employee so notifies Employer within five (5) days of
Employee's termination and (ii) the cost of extending Employee's eligibility as
described above shall be negotiated on a good faith basis and, at Employee's
request, subtracted from the payment of Employee's severance benefit. Should
the Employee subsequently obtain similar coverage from another Employer or
otherwise, Employee will notify Employer and coverage will cease and a pro-rata
refund returned to the Employee. The "cost" for this purpose shall be deemed to
be the most recent rate charged to employees of Employer or its subsidiaries for
such benefits. Promptly after Employee's request for such extension, Employer
shall place sufficient funds in escrow to pay all premiums on such insurance and
plans for the period of the extension.
(d) If all or any portion of the Severance Benefit, together with any
other amounts, including the value of any stock options, received or deemed to
be received by Employee from Employer or any of its subsidiaries and affiliates
or from any pension, employee welfare, incentive compensation or other plans
sponsored by Employer or any of its subsidiaries and affiliates (collectively,
the "Base Payment"), will be subject to any excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended, or any similar tax payable under any
federal, state, local or other law (collectively, "Excise Taxes"), Employer
shall pay Employee an additional amount (the "Gross-Up Payment") such that the
net amount retained by Employee, after deduction of any Excise Taxes payable by
Employee with respect to the Base Payment and the Gross-Up Payment and any
federal, state or local income or other taxes payable by Employee with respect
to the Base Payment and the Gross-Up Payment (collectively, "Other Taxes")
(including any additional tax resulting from any loss or disallowance of
deductions due to the Gross-Up Payment), will equal the Base Payment net of the
Other Taxes on the Base Payment determined without regard to any Excise Taxes.
For the purposes of this determination, Employee's income shall be assumed to be
subject to Other Taxes at the highest marginal rates. The Gross-Up Payment
shall be paid simultaneously with the payment of the Severance Benefit, on the
basis of Employer's good-faith estimate of the Excise Taxes if necessary, but if
the actual amount of Excise Taxes is later determined by Employer or Employee to
be different from the amount on which the Gross-Up Payment was originally
calculated, the difference shall be paid or refunded within 30 days after notice
of such difference is given to the party liable for such payment or refund.
(e) In order to provide security to Employee for Employer's payment of the
amounts payable pursuant to Sections 5(a), 5(b) and 5(d) in the event of a
Change in Control, Employer agrees that within 10 days after a Change in
Control, whether or not Employee's employment is terminated, Employer will
either:
(i) Pay Employee the Base Payment plus the Gross-Up Payment, in full,
in immediately available funds (which will discharge Employer's
obligations under this Section except for payment of any
difference upon final determination of the Gross-Up Amount
pursuant to Section 5(d)); or
(ii) Deposit 110% of the then-estimated Base Payment and Gross-Up
Payment in an interest-bearing escrow account with a St. Louis,
Missouri bank with which Employer has no other banking
relationship, which escrow account shall be maintained pursuant
to a written escrow agreement reasonably satisfactory to counsel
for all parties, as security for Employer's timely payment of the
amounts due pursuant to Sections 5(a), 5(b) and 5(d), the terms
of which shall provide that the escrow account, including the
interest thereon, may be applied only to payment of any amounts
due pursuant to Sections 5(a), 5(b) and 5(d) and may be disbursed
only pursuant to written instructions to the escrow agent from
both Employer and Employee or pursuant to a valid court order.
6. Disability and Death Benefits. If during the term of this Agreement
Employee either dies or becomes physically or mentally disabled (as determined
in accordance with the Social Security Act) from performing his functions
contemplated hereunder, and such period of disability continues for at least six
consecutive months, then Employer will pay to Employee, or, in accordance with
Section 16 below, his Representatives (as defined in Section 16(c)), as the case
may be, the annual salary provided hereunder, together with the annual bonus
above provided pro rata, for a period through the end of the month in which
Employee dies or the end of the month in which the six-month disability period
is satisfied, whichever occurs first. Regular salary, pro rata bonus, and other
payments, shall be made to Employee or Employee's Representatives, as the case
may be, during the first six (6) months of any period of disability.
7. Restrictive Covenants. Employee agrees that while employed by
Employer hereunder (including any renewal term hereunder), and for twenty-four
(24) consecutive months following termination of employment, Employee will not,
in any manner, directly or indirectly:
(i) Disclose or divulge to any person, entity, firm or company whatsoever,
nor use for his own benefit or the benefit of any other person, entity, firm and
company, directly or indirectly in competition with Employer, any proprietary
knowledge, confidential information, production or business methods, techniques
or customer lists of Employer or its affiliates, including Vita International
Limited ("Vita"), except information generally known or used in the trade
("Trade Secrets");
(ii) Solicit, call on, divert, or interfere with any of the customers of
Employer or its affiliates (including Vita) or any trade, business, patronage,
employees or agents of Employer or its affiliates (including Vita), with whom
Employee has done business and in any city where Employee, Employer or its
affiliates (including Vita) is then engaged in the plastics business, for the
purpose of diverting their trade to any plastics business which compete directly
with Employer's businesses; or
(iii) Invest in, or take an active management or advisory role in, any
company in the plastics business whose operations compete directly with any of
Employer's businesses.
8. Inventions, etc. Employee acknowledges that all mechanical or
scientific inventions, production processes, techniques, programs, patents,
discoveries, formulae and improvements invented, discovered or learned by
Employee during employment hereunder, and relating to Employer's business will
be disclosed to Employer and will be the sole property of Employer.
Employee acknowledges that information imparted to him by Employer, or its
affiliates (including Vita), relating to the production methods, techniques,
customer lists, statistics, credit, customers and suppliers of Employer, or its
affiliates (including Vita) is the property of Employer, or its affiliates
(including Vita). Therefore, Employee shall, upon termination of his employment
hereunder, return to Employer all books, records and notes containing customer
lists and addresses, all duplicate invoices, all statements and correspondence
pertaining to such customers, and all other information and documents (including
all copies thereof) relating to customers, their needs, products of Employer, or
its affiliates (including Vita) used by them, schedules of discussions with
them, all formulae, code books, price lists, products, manuals and equipment,
production or processing information or instructions, data applicable to methods
of manufacture, types, kinds, suppliers and costs of raw materials, and all such
other information applicable to Employer, or its affiliates (including Vita),
its customers and the manner of conducting its business. Employer agrees,
however, to provide Employee upon request with copies of whatever documents he
may reasonably require. The restraints on Employee, as set forth in this
Section 8, however, shall not apply to any invention (i) for which no equipment,
supplies, facility or Trade Secrets of Employer was used; (ii) which was
developed entirely on Employee's own time; (iii) which does not relate to the
business of Employer (including Employer's actual or demonstrably anticipated
research or development); and (iv) which does not result from any work performed
by Employee for Employer.
9. Limitation on Restrictive Covenants. The parties recognize that the
services to be rendered by Employee hereunder are special, unique and of an
extraordinary character. However, it is the intention of the parties to
restrict the activities of Employee only to the extent necessary for the
protection of Employer's legitimate business interests. The parties
specifically agree that should any provision set forth in Sections 7 or 8 under
any set of circumstances not now presently foreseen by the parties, be deemed
too broad for that purpose, said provisions will nevertheless be valid and
enforceable to the extent necessary for such protection.
10. Non-Waiver of Breach. Employer's failure to exercise any right
hereunder in the event of Employee's breach of any term hereof, shall not be
construed as a waiver of such breach or prevent Employer from thereafter
enforcing strict compliance with any and all terms of this Agreement.
11. Termination.
(a) If any of the following events (each a "Justification") occurs during
the term hereof, Employee may voluntarily terminate and resign his employment
immediately upon the occurrence of such event, and be entitled to the severance
benefits set forth in Section 5 of this Agreement:
(i) Any duties are assigned to Employee or restrictions are placed on
Employee which are inconsistent with his position, duties,
responsibilities and status pursuant to Section 1; or
(ii) Employee's Base Salary, options and bonuses hereunder are not
paid or delivered within seven days of Employee's notifying
Employer that such are due, or Employer takes action which
otherwise adversely affects or materially reduces any other
benefits or rights which Employee is entitled to hereunder.
If Employer and Employee are unable to agree that any of the above events have
occurred, the matter shall be referred to binding arbitration pursuant to the
rules of the American Arbitration Association.
(b) Employee is not required to seek employment after termination, and no
compensation earned after termination shall reduce the amounts otherwise payable
hereunder, including without limitation, severance benefits payable pursuant to
Section 5 hereof.
(c) If Employee's employment is terminated for Cause, or if Employee
resigns without Justification (i.e., other than as permitted by subsection
11(a)) and without giving notice of termination pursuant to clause 3(a)(iii),
then Employee shall be entitled to receive all accrued compensation and benefits
payable hereunder through the date of such termination but shall not be entitled
to any additional options, compensation, bonuses or severance benefits under
this Agreement. A termination for Cause shall have occurred only if Employee's
employment is terminated because Employee is convicted of a felony, because of
acts or omissions (including failure to follow the lawful instructions of
Employer's Board of Directors) on Employee's part resulting, or intended to
result in personal gain at the expense of Employer or its subsidiaries, or
because of intentional acts or omissions on Employee's part causing material
injury in excess of $1,000,000 to the property or business of Employer or its
subsidiaries. Cause shall not include:
(i) bad judgment or any act or omission reasonably believed by
Employee in good faith to have been in or not opposed to the best
interests of Employer (including its subsidiaries); or
(ii) any acts or omissions by Employee in connection with any bid,
tender or merger offer, restructuring proposals, or any
controversy or litigation relating thereto (whether involving
Vita or other persons), in which Employer may become involved,
wherein Employee's acts or omissions are the subject of
controversy with any persons or firms involved in such matters.
12. Independent Obligations.
(a) Employer's obligations to pay compensation and benefits due hereunder
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off (including no
reduction in compensation or bonuses for compensation which was or could have
been earned elsewhere during the term hereof), counter-claim, recoupment,
defense or other right which the Employer may have against Employee. Any such
set-offs or other such counter-claims shall be the subject of separate action,
claim and proof against Employee without being made subject to any set-off,
counter-claim or cross-claim in any action by the Employee to enforce his rights
under this Agreement.
(b) Employee's obligations under Sections 7, 8, and 9 hereof represent
independent covenants by which Employee shall remain bound irrespective of any
breach by Employer.
13. Indemnification; Arbitration.
(a) In the event that Employee is required to institute or join in any
legal action or arbitration proceeding to obtain or enforce, or to defend the
validity or enforceability of, any contemplated or actual payment of
compensation or benefits under this Agreement, Employer will, if Employee
prevails in such action or proceeding, pay all actual legal fees and expenses
incurred by Employee.
(b) Employee shall have the right, in his sole discretion, to demand
arbitration of any substantive claim he may have against Employer for any
compensation or benefits due under this Agreement. Such arbitration shall be
conducted in St. Louis, Missouri, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. Judgment upon any arbitration
award may be entered in any court having jurisdiction. In the event of
concurrent arbitration and court proceedings relating to this Agreement, the
arbitration will not be stayed pending the conclusion of any court proceedings.
14. Registration Rights. In the case of a proposed registration under the
Securities Act of 1933 (the "Securities Act") of an offering by Employer of
shares of its common stock while any common shares or preferred shares are owned
by Employee, Employee shall have the right to participate in such registration
and public offering as hereinafter provided. Employer will give Employee at
least twenty (20) days' prior written notice of any proposed registration of
shares of common stock under the Securities Act for any offering by it otherwise
relating to an employee stock option or benefit plan or in a merger,
consolidation, acquisition of assets or recapitalization plan. If requested by
Employee in writing, within twenty (20) days after receipt of any such notice or
on two occasions even if no such notice has been given, Employer will use its
best efforts to register all or part of the shares of common stock of Employer
owned by Employee or which Employee has a right to acquire (as specified in such
request) under the Securities Act and from time to time, if possible, amend or
supplement the registration statement and prospectus used in connection
therewith if and to the extent necessary in order to comply with the Securities
Act for a period of up to one hundred twenty (120) days after the initial
effective date of such registration, provided that Employee shall not have
failed to exercise a right following such a notice within six months of the
proposed registration. Such registration shall be at the expense of Employer.
Employer will, at the request of Employee, take any and all such actions, make
such filings and enter into such agreements as may be reasonably necessary or
appropriate to facilitate sales of Employee's securities in the manner
contemplated by any such registration. If Employer or the underwriter managing
or proposing to manage Employer's offering determines that registration of
Employee's securities would impair Employer's offering, then Employer may by
notice in writing to Employee reduce the number of shares to be registered for
Employee (provided any others in a similar position are similarly reduced) or
elect to defer any registration of shares requested by Employee for a period to
be agreed upon between Employer and Employee, such period to be not less than
six (6) months nor more than two (2) years from the date of Employer's offering.
At the deferred date, such registration shall proceed on the terms provided
herein. Employer in any case may defer registration in order to coordinate with
its normal quarterly and annual filings with the Securities and Exchange
Commission.
In the event of any such registration, to the extent permitted by law,
Employer will indemnify Employee, each underwriter and each person, if any, who
controls Employee or any such underwriter within the meaning of the Securities
Act, against all losses, claims, damages, liabilities and expenses (under the
Securities Act, at common law or otherwise) resulting from any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus or resulting from any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses result from any untrue statement or omission or
alleged untrue statement or alleged omission contained or omitted in information
furnished in writing to Employer by Employee or such underwriter expressly for
use therein.
Employee will furnish to Employer in writing such information as shall be
reasonably requested by Employer for use in any such registration statement or
prospectus and, to the extent permitted by law, will indemnify Employer, its
directors, each officer signing such registration statement, each person, if
any, who controls Employer within the meaning of the Securities Act, each
underwriter, and each person, if any, who controls any such underwriter, within
the meaning of the Securities Act, against all losses, claims, damages,
liabilities and expenses resulting from any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of a material
fact required to be stated in the registration statement or prospectus or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission or alleged untrue statement or alleged
omission is contained or omitted in information so furnished in writing by
Employee expressly for use therein.
15. Amendment or Modification. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Employee and a person authorized to sign on
behalf of Employer.
16. Successors; Binding Agreement.
(a) This Agreement shall bind any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Employer, in the same manner and to the same
extent that Employer would be required to perform this Agreement if no such
succession had taken place.
(b) This Agreement shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees ("Representatives"). If
Employee should die before all compensation and benefits that would have been
paid if Employee had continued to live, all such compensation and benefits shall
be paid in accordance with the terms of this Agreement to Employee's
Representatives or, if there be no such Representatives, to Employee's estate.
17. Notice. Notices and all other communication provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the
signature page of this Agreement, provided that all notices to Employer shall be
directed to the attention of the Secretary of Employer, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
18. Validity and Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect, and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
20. Board Approval; Entire Agreement. This Agreement, which has been
reviewed and approved by the Board of Directors of Employer, embodies the entire
agreement between the parties with respect to its subject matter.
21. Governing Law. This Agreement shall be construed and interpreted in
accordance with, and shall be governed by, the substantive laws, but not the
conflicts of law principles, of the State of Missouri.
22. Certain Terms Survive. The obligations of Employer under Sections 13,
14 and 16(a), and the obligations of Employee under Sections 7, 8, 9 and 14,
shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties have set their hands to duplicates on the
day and year first above written.
SPARTECH CORPORATION
By:/s/Bradley B. Buechler /s/David B. Mueller
Employer DAVID B. MUELLER, Employee
120 South Central Ave., Suite 1700 22 Fair Oaks
St. Louis, Missouri 63105 Ladue, Missouri 63124