FIRST AMENDMENT AND RESTATEMENT
OF THE
SPARTECH CORPORATION
NON-QUALIFIED DEFERRED COMPENSATION PLAN
WHEREAS, Spartech adopted its Non-Qualified Deferred Compensation Plan
effective January 1, 1994, to provide certain employees with additional
retirement benefits through the Plan, in order to encourage their continued
employment with Spartech; and
WHEREAS, this amendment and restatement of the Plan has been approved by the
Board;
NOW, THEREFORE, the Plan is amended and restated to read as follows,
effective January 1, 2000:
Article 1. Definitions.
"Account" or "Deferred Compensation Account" means an account established
for a Participant pursuant to Section 4.1, or the balance thereof, according to
the context.
"Affiliated Company" means any corporation which is a member of the
controlled group of corporations of which Spartech is a member, as determined by
Section 1563(a) of the Code, without regard to Sections 1563(a)(4) and (4)(3)(C)
of the Code.
"Beneficiary" means any person, corporation or trust last designated by a
Participant in writing to receive benefits provided under the Plan. Provided,
that if a designation is not made or cannot be located by the time the payment
of Benefits commences, or if the named Beneficiary predeceases the Participant
and no contingent Beneficiary has been named, the Beneficiary shall be the
Participant's Spouse, if such Spouse survives the Participant; or if the Spouse
does not survive the Participant, the Beneficiaries shall be the Participant's
descendants (including adopted children), per stirpes; or if no descendants
survive the Participant, the Beneficiary shall be the Participant's estate.
"Benefits" has the meaning given in Section 5.4.
"Board" means the board of directors of Spartech.
"Cause" means proven dishonesty or theft, conviction of a felony, habitual
drunkenness or drug abuse or material breach of the Participant's employment
contract with Spartech or an Affiliated Company; a determination of whether
Cause exists in any given situation shall be in the sole discretion of the
Board. In addition, termination of the Participant's employment for "cause"
either under applicable law or as defined in the Participant's employment
contract shall be "Cause" under this Plan.
"Code" means the Internal Revenue Code of 1986, as amended.
"Compensation" means, with respect to any Active Participant, the total
amount shown on Internal Revenue Service Form W-2 for a calendar year as
compensation for FICA and Medicare tax purposes.
"Eligible Employee" means a person who serves as a managerial employee of
Spartech or any of its Affiliated Companies.
"Participant" means an Eligible Employee who has been designated to
participate in the Plan and who has executed a Participation Agreement pursuant
to Section 2.1. A Participant will be either an "Active Participant" or an
"Inactive Participant" as described in Article 2.
"Permanent Disability" means a physical or mental condition of a Participant
resulting from injury, disease, or mental disorder which renders the Participant
incapable of continuing his usual and customary employment with Spartech or an
Affiliated Company. The disability of a Participant shall be determined by a
licensed physician chosen by Spartech. The criteria for such determination
shall be applied uniformly to all Participants.
"Plan" means this Spartech Corporation Non-Qualified Deferred Compensation
Plan, as heretofore or hereafter amended and/or restated.
"Qualifying Period" means a twelve-month period which (i) begins on the date
the Participant is employed by Spartech or an Affiliated Company on a permanent,
full-time basis or any anniversary thereof, and (ii) ends on or after January 1,
1994.
"Spartech" means Spartech Corporation, a Delaware corporation, which has
adopted the Plan.
"Spouse" means the person, if any, to whom the Participant is legally
married at the time of his death.
"Termination" has the meaning given in Section 5.3.
"Trustee" means the person or entity named as trustee under the Trust.
"Trust" means the Spartech Corporation Non Qualified Deferred Compensation
Trust.
"Vested Percentage" means a percentage determined as set out in Section 5.4.
"Years of Service" means a whole number determined as set out in Section
5.1.
Article 2. Participation In The Plan.
2.1 Any Eligible Employee may be designated by the Board to become a
Participant in the Plan, effective as of the date the Participant becomes an
Eligible Employee or such later date as the Board may determine. As a condition
of his participation in the Plan, an Eligible Employee so designated must
complete and execute a Participation Agreement in the form attached hereto or in
such other form as the Board may approve.
2.2 A Participant will be an Active Participant so long as the Participant
is an Eligible Employee or until the Board determines that the Participant shall
become an Inactive Participant.
2.3 A Participant will become an Inactive Participant if and when the
Participant ceases to be an Eligible Employee, or upon the Board's determination
that the Participant shall become an Inactive Participant. The Board may also
determine to redesignate an Inactive Participant as an Active Participant, but
such a Participant shall not be entitled to any Benefits which would have
accrued during the time he was an Inactive Participant.
2.4 Upon the Termination of a Participant, the Participant will
automatically cease to be a Participant unless the Board determines that he may
continue as an Inactive Participant for such period of time as the Board may
determine in its sole discretion. No person may be an Active Participant after
his Termination.
2.5 Each Participant shall advise Spartech of his current mailing address
and the address of his Beneficiary, and shall notify Spartech promptly of any
change of address. In the absence of such notice, Spartech shall be entitled,
for all purposes, to rely on the last known address of the Participant or
Beneficiary.
Article 3. Contributions and Funding.
3.1 Spartech shall contribute to the Deferred Compensation Account of each
Active Participant no later than December 31 of each calendar year an amount
equal to 10% of the Participant's Compensation for the immediately preceding
calendar year (e.g. contributions for 2004 shall be based on 2003 Compensation
and shall be made no later than December 31, 2004). For purposes of this
paragraph, a Participant's Compensation for any such year in excess of $150,000
shall be disregarded. However, beginning with the contributions to be made by
December 31, 2004 based on compensation for calendar year 2003, the number in
the preceding sentence shall be increased to $300,000.
3.2 Forfeitures of funded Accounts arising under Section 5.5 or Section 6.2
shall be credited to the Accounts of the remaining Active Participants in
proportion to their respective balances. Spartech's obligation to make
contributions to a Participant's Account in a calendar year shall be reduced by
the amount of any allocations to the Participant's Account in that year as a
result of such forfeitures.
3.3 Unless otherwise approved by the Board, Spartech shall not be required
to make any contribution to the Deferred Compensation Account of an Inactive
Participant, including contributions for years ended while the person was an
Active Participant which are not yet due at the time the person becomes an
Inactive participant. Unless otherwise approved by the Board, Spartech shall
not be required to make any contribution to the Deferred Compensation Account of
a Participant after his Termination, including contributions for years ended
before the Termination which are not yet due at the time of the Termination.
3.4 Contributions by Participants are neither required nor permitted under
the Plan.
3.5 Unless otherwise expressly directed by the Board, Spartech shall
contribute any funding under the Plan to the Trust.
3.6 The determination of the Board as whether to fund the Plan in advance or
as benefits are due, and if in advance, the amount thereof, shall be conclusive
and binding upon all parties in interest.
Article 4. Participant Accounts.
4.1 The Board shall establish a Deferred Compensation Account for each
Participant.
4.2 A Participant's Account shall be invested in such investments as
Spartech shall determine in its discretion. Spartech may, but shall not be
required to, permit Participants to determine in full or in part how the
Participant's Account shall be invested, but only to the extent deemed
appropriate by Spartech in its sole discretion and from among such investment
alternatives as are deemed appropriate by Spartech in its sole discretion.
Spartech shall have no liability whatsoever to any Participant for the
investment results of the Participant's Account.
4.3 To the extent the Plan is funded either through investments owned by
Spartech which are reserved for funding of the Plan or through the Trust,
Deferred Compensation Accounts shall be adjusted as of each December 31 to
reflect increases or decreases as a result of the investment experience of the
Plan for that year. Any increase or decrease shall be allocated among the
Deferred Compensation Accounts based upon the value of each such Account in
proportion to the value of all Deferred Compensation Accounts, appropriately
adjusted to reflect additions to, charges against or distributions from the
Account.
4.4 If a life insurance contract is purchased on the life of a Participant
for purposes of funding his Benefits under the Plan, such contract shall be
credited directly to the Deferred Compensation Account of the insured
Participant. In that event, the value of the Participant's Deferred
Compensation Account shall be reduced by the value of the life insurance
contract for purposes of the annual increases or decreases under Section 4.3.
Death benefits paid pursuant to a life insurance contract shall be credited
directly to the Deferred Compensation Account of the Participant whose life is
insured under such contract.
4.5 Spartech may deduct from a Participant's Account any taxes required to
be withheld as a result of contributions, Benefits, vesting increases or other
events under the Plan.
4.6 The annual accounting period for the Plan shall be the calendar year.
Article 5. Accrual and Payment of Benefits.
5.1 A Participant will accrue one Year of Service for each Qualifying Period
during which the Participant (i) is employed by Spartech or an Affiliated
Company on a permanent, full-time basis for at least six months and (ii) is a
Participant for at least six months. Years of Service need not be accrued in
consecutive Qualifying Periods. The Board may also credit a Participant with
additional Years of Service in its sole discretion which need not be uniformly
exercised. A Termination will not cause the loss of accrued Years of Service
but the re-employment of the Participant after a Termination will reset the
beginning date of the Participant's Qualifying Period for future Years of
Service.
5.2 In specific cases, the Board may authorize the accrual of Years of
Service for Participants who are no longer employed by Spartech but for whom a
Termination has not yet occurred.
5.3 The "Termination" of a Participant will occur when the Participant
ceases to be employed by Spartech or any of its Affiliated Companies; except
that in specific cases, the Board may defer Termination for a Participant who
continues to provide services to Spartech or an Affiliated Company under a
consulting or other non-employee service relationship, but in no event may the
Participant's Termination occur later than the end of such consulting or other
non-employee service relationship.
5.4 Upon the Termination of a Participant, the value of the Participant's
Account (net of any surrender or termination charges) multiplied by the Vested
Percentage set out in the following table ("Benefits") will be distributed to
the Participant as set out in the following table, unless otherwise expressly
agreed to by Spartech and the Participant:
Reason for Age At Vested When Distributions
Termination Terminat Percentage Will Commence
ion
Cause Any age None (0%) N/A
Death Any age 100% Upon collection of
insurance proceeds
Permanent Any age 100% As promptly as
Disability practicable after
Termination
Any other 65 or 100% As promptly as
reason older practicable after
Termination
Under 65 10% times Years As promptly as
of Service practicable after
(minimum 10%, Termination
maximum 100%)
5.5 Upon the Termination of a Participant, any portion of the Participant's
Deferred Compensation Account in excess of the Vested Percentage thereof shall
be forfeited. If such person is subsequently re-employed and again becomes a
Participant, the forfeited amounts will not be restored to the Participant's
Deferred Compensation Account, and the Participant will not be permitted to make
any payment to Spartech in order to have forfeited or previously paid amounts
restored to his Deferred Compensation Account.
5.6 Except to the extent a Participant's Account is invested in a life
insurance policy Spartech may elect to pay the Benefits either by distributing
Account investments to the Participant in kind, by liquidating the Account and
distributing cash, or partly in each manner.
5.7 To the extent a Participant's Account is invested in an unmatured life
insurance policy, Spartech may elect either to distribute the policy in kind or
to surrender the policy and distribute the cash surrender value in cash. Except
in the event of the Participant's death, life insurance policies held in a
Participant's Account will be valued at their cash surrender value, interpolated
terminal reserve value or similar valuation method and not face value, and the
Participant will have no right to receive the face amount of the death benefits
thereunder.
5.8 With respect to Benefits other than life insurance proceeds, Spartech
may elect to pay the Benefits in either a single payment or in substantially
equal monthly, quarterly or annual installments over a period not to exceed five
years from the first payment date, but if a Participant dies, whether before
payment of such Benefits commences or while he is receiving Benefits, any such
remaining Benefits will be paid in a lump sum to the Participant's Beneficiary.
5.9 In the event of the Participant's death, life insurance proceeds will be
payable according to the terms of the policy, and any Benefits represented by
collected life insurance proceeds will be payable in a lump sum to the
Participant's Beneficiary.
5.10 Spartech has no obligation to maintain any policy of insurance on
the life of a Participant for any period of time either before or after the
Participant's Termination; nor shall Spartech have any liability for
reimbursement of premiums due to any delay in canceling or surrendering any
policy of insurance after a Termination.
5.11 If, after a Termination, a Participant is re-employed and again is
designated to participate in the Plan, any payment of Benefits may be suspended
while the person is participating in the Plan and recommence on his subsequent
Termination.
5.12 Any amount payable to or for the benefit of a minor, an incompetent
person or other person incapable of receipting therefor shall be deemed paid
when paid to such person's guardian or to the party providing or reasonably
appearing to provide for the care of such person, and such payment shall fully
discharge Spartech and the Board with respect thereto.
5.13 Neither a Participant nor any other person shall acquire any right,
title, expectancy or other interest in or to any amount outstanding to the
Participant's credit under the Plan other than upon the actual payment of such
portions thereof in accordance with the terms of the Plan. The Plan shall not
be deemed to constitute or create a trust, or an escrow agreement or any type of
fiduciary relationship between Spartech and a Participant and his Spouse; nor
shall the benefits provided herein be deemed in any way to be secured by any
particular assets of Spartech. The Participant's interest and that of his
Spouse shall be only the unsecured contractual right to receive the benefits
provided for herein.
5.14 No right or benefit under the Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or change, and any attempt to
anticipate, alienate, sell, assign, pledge encumber or change the same shall be
void. No right or benefit hereunder shall in any manner be liable for or
subject to the debts, contracts, liabilities or torts of the person entitled to
such benefit. If a Participant or Spouse shall become bankrupt or attempt to
anticipate, alienate, sell, assign, pledge, encumber or change any right or
benefit hereunder, then such right or benefit shall, in the discretion of the
Board, cease and terminate; and in such event, Spartech may hold or apply the
same or any part thereof for the benefit of such Participant or his Spouse at
any time and in such proportion as the Board may deem proper.
5.15 Notwithstanding anything in the Plan apparently to the contrary,
assets reserved for the Plan are subject to market risk, and nothing in the Plan
constitutes a guarantee that said assets will not lose market value causing the
Deferred Compensation Accounts of Participants or Beneficiaries to be reduced.
Article 6. Restrictive Covenants.
6.1 By accepting participation in the Plan, and as a condition of his right
to participate in the Plan, each Participant agrees that during the continuance
of the Participant's employment relationship with Spartech or an Affiliated
Company and for two years following the termination of the Participant's
employment with Spartech or an Affiliated Company, regardless of who initiates
the termination and regardless of whether the termination is with or without
Cause, the Participant will not:
(i) Directly or indirectly, on his own behalf, or on behalf of any other
person, firm, partnership or corporation, transact any business which is
the same as or similar to the business then being conducted by Spartech
or any Affiliated Company, within a 200 mile radius of any facility
owned and/or operated by Spartech or any Affiliated Company, or divert
or solicit any of the business of Spartech or any Affiliated Company
away from Spartech or the Affiliated Company; or
(ii) Divulge to others or use for his own benefit or for the benefit of
others any confidential information, including correspondence and other
records, whether or not reduced to writing, which he may have acquired
from Spartech, an Affiliated Company or others by reason of his
employment with Spartech or an Affiliated Company; it being expressly
understood that all such information, lists, correspondence and other
writings are confidential and shall remain the sole property of Spartech
or the Affiliated Company, as the case may be, and shall not be removed
or transcribed for removal by the Participant upon termination of
employment; or
(iii) Enter into any agreement with or solicit the employment of any
employee of Spartech or any Affiliated Company, or directly or
indirectly attempt to induce any employee of Spartech or any Affiliated
Company to leave Spartech or the Affiliated Company or to take
employment with a competitor of Spartech or any Affiliated Company; or
(iv) Solicit any clients or customers of Spartech or any Affiliated
Company or induce or attempt to induce any such clients or customers to
terminate or alter their relationship with Spartech or any Affiliated
Company.
6.2 Any violation of the provisions of Section 6.1 by a Participant shall
cause a total forfeiture of all rights and payments of Benefits payable under
the Plan and the balance of such Participant's Deferred Compensation Account
shall be forfeited.
6.3 Each Participant also agrees that Spartech shall, without prejudice to
any other remedies, be entitled to injunctive relief for any breach of Section
6.1.
Article 7 Administration.
7.1 The Board shall administer the Plan, and shall have full power and
authority to compute the benefits payable to Participants or their Beneficiaries
under the Plan and to resolve all questions and issues interpreting the terms
and conditions of the Plan. The Board may adopt uniform and nondiscriminatory
regulations for the administration of the Plan.
7.2 The Board shall maintain or cause to be maintained all books of
accounts, records or other data as may be necessary or advisable in the Board's
judgment for the proper administration of the Plan.
7.3 The Board may determine the facts required in the administration of the
Plan from information certified to the Board by the Secretary of Spartech.
7.4 Any denial, in whole or in part, by the Board of a claim for benefits
under the Plan by a Participant or a Beneficiary shall be by written notice,
stating the specific reasons for the denial which must be referable to a
particular provision of the Plan, said notice to be delivered or mailed to the
Participant or, if no Participant is living, to his Beneficiary. The Board
shall afford a reasonable opportunity to any Participant or Beneficiary whose
claim for benefits has been denied, in whole or in part, for a hearing
concerning any decision denying the claim.
7.5 The Board may delegate any of its duties or responsibilities under the
Plan to other individuals, and unless otherwise directed by the Board, the Chief
Executive Officer of Spartech shall be the Board's delegate for all purposes
hereunder; provided that only the Board may amend or terminate the Plan.
7.6 If a member of the Board is also a Participant or other Eligible
Employee, such Board member shall not participate in any determination reserved
to the Board under the Plan to the extent it relates to or would affect such
Board member in such capacity.
Article 8. Miscellaneous Provisions.
8.1 The Board reserves the right to amend or terminate the Plan; however, no
amendment or termination of the Plan may reduce or cancel the Deferred
Compensation Account of a Participant (or the vested interest in such account)
existing as of the date of such amendment or termination, nor change the manner
or timing of payment of Benefits adversely to a Participant, without the consent
of the affected Participant.
8.2 Construction of the Plan shall be governed by the laws of Missouri.
8.3 Nothing in the Plan, or any amendment thereto, shall give a Participant,
Eligible Employee, Beneficiary, Spouse, employee or other person, a right unless
it is specifically provided or is accorded by Spartech pursuant to the Plan.
Nothing in the Plan or any amendment thereto shall be construed as giving a
Participant the right to remain employed in any capacity by Spartech or an
Affiliated Company and all persons shall remain subject to discharge or to
changes in status at any time to the same extent as if the Plan had not been
adopted.
8.4 The terms of the Plan shall be binding upon the heirs, executors,
administrators, successors, assigns and Beneficiaries of all parties in
interest.
8.5 Terms in the masculine shall be deemed to include the feminine, and
terms in the singular shall be deemed to include the plural, and vice versa,
wherever the context so admits or requires.
8.6 The cost of administering the Plan shall be paid by Spartech.
8.7 The Plan became operative and in effect as of January 1, 1994, and any
amendment shall become effective when duly approved by the Board or at such
other date as the Board may determine.
8.8 Headings herein have been inserted for convenience only and shall not
affect the meaning or interpretation of the Plan.
8.9 If any provision of the Plan is found to be invalid, it will not render
the remainder of the Plan invalid.
PARTICIPATION AGREEMENT
SPARTECH CORPORATION
NON-QUALIFIED DEFERRED COMPENSATION PLAN
, an employee of Spartech Corporation or one of its
subsidiaries, has been selected and is hereby designated as a Participant in the
Spartech Corporation Non-Qualified Deferred Compensation Plan, as heretofore or
hereafter amended.
The effective date of the Participant's participation in the Plan is
___________, 20___.
If you wish to accept the benefits of the Plan and are willing to be bound
by its provisions, please execute a copy of this Participation Agreement at the
place indicated below.
SPARTECH CORPORATION
By:
I hereby accept my designation as a Participant in the Spartech Corporation
Non-Qualified Deferred Compensation Plan. I have read the Plan and agree to all
of the provisions of the Plan, including (without limitation) the restrictive
provisions of Article 6 of the Plan.
I hereby designate the following person as my Beneficiary under the Plan:
__________________________________________________
(Print Name and Relationship)
Dated this ____ day of _____________, 20___.
Signature of Participant