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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[X] Definitive Proxy Statement
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[_] Soliciting Material Pursuant to (S) 240.14a-12
SPARTECH CORPORATION
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(Name of Registrant as Specified In Its Charter)
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[LOGO]
SPARTECH CORPORATION
120 S. Central Avenue, Suite 1700
Clayton, Missouri 63105-1705
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 9, 2005
DEAR FELLOW SHAREHOLDER:
I cordially invite you to attend the 2005 Annual Meeting of Shareholders of
Spartech Corporation to be held at 10:00 a.m. on Wednesday, March 9, 2005, at
Washington University's Knight Center, One Brookings Drive, St. Louis, Missouri
63130 for the following purposes:
1. To elect three Class C directors to serve three-year terms.
2. To ratify the selection of Ernst & Young LLP as independent auditors of the
Company for the 2005 fiscal year.
3. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on January 10, 2005 as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting and at any and all adjournments thereof.
After the formal business of the meeting is covered, I will give a brief
update on the Company's first quarter results and then discuss in more detail
our strategy for the future. This will include a review of our new "Investing
in People, Products, Technology and Globalization" initiative which we believe
will assist us in achieving our short-term operating & financial goals while
also preparing us for a successful future.
I look forward to seeing you at the meeting, so please mark your calendar for
the second Wednesday in March. However, if you are unable to attend, you can
ensure that your shares are represented at the meeting by promptly completing
your proxy and returning it in the enclosed envelope.
Sincerely,
/s/Bradley B. Buechler
Bradley B. Buechler
St. Louis, Missouri Chairman, President, and
January 21, 2005 Chief Executive Officer
SPARTECH CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 9, 2005
To Our Shareholders:
The enclosed proxy is solicited by Spartech Corporation on behalf of its
Board of Directors for use at the Company's 2005 Annual Meeting of Shareholders.
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 Company's common
stock.
The persons named in the accompanying proxy were selected by the Board of
Directors of the Company. They have advised the Company of their intentions, 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 and for proposal 2, 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.
This Proxy Statement and the proxy solicited hereby are being first sent or
delivered to shareholders of the Company on or about January 21, 2005. 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 shareholder's
right to attend the Annual Meeting and vote in person.
A copy of Spartech's Annual Report to Shareholders for the fiscal year
ended October 30, 2004 accompanies this Proxy Statement.
OUTSTANDING SHARES AND VOTING PROCEDURES
The outstanding voting securities of the Company on January 10, 2005
consisted of 32,210,054 shares of Common Stock, $0.75 par value per share,
entitled to one vote per share.
Only shareholders of record at the close of business on January 10, 2005
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.
With respect to proposal 1, a plurality of the votes cast in person or by
proxy at the Annual Meeting is required to elect directors, which means that the
nominees who receive the largest number of votes cast are elected as directors,
up to the number of directors to be elected at the meeting. With respect to
proposal 2, a majority of the votes cast in person or by proxy at the Annual
Meeting is required to approve the proposal. Abstentions and broker non-votes
will be counted for the purpose of determining the presence or absence of a
quorum for the transaction of business. Abstentions will be counted in the
tabulations of the votes cast on proposal 2, and will therefore have the same
effect as negative votes. Broker non-votes, however, will not be counted for
the purpose of determining whether the proposal has been approved.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors currently consists of nine directors, divided into
three classes. All directors hold office for a term of three years. The Class
C directors elected at this Annual Meeting will hold office until the Annual
Meeting of Shareholders in 2008, the Class A directors will continue in office
until the Annual Meeting of Shareholders in 2006, and the Class B directors will
continue in office until the Annual Meeting of Shareholders in 2007, and, in
each case, until their successors are duly elected and qualified.
The Board of Directors has nominated Ralph B. Andy, Lloyd E. Campbell and
Jackson W. Robinson, present directors of the Company, to be reelected Class C
directors of the Company.
Listed below are the members of the Company's 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:
Spartech
Director
Name, Age Principal Occupation and Other Since
Directorships
Ralph B. Andy, 60 Mr. Andy has been the Chairman and Chief 1998
Executive Officer of Pennatronics Corp., a
provider of contract electronic
manufacturing services, since 2000. He
currently stands for reelection.
Bradley B. Mr. Buechler is the Chairman of the Board, 1984
Buechler, 56 President and Chief Executive Officer of
the Company. Mr. Buechler, a CPA, was
Corporate Controller and Vice
President-Finance of the Company from 1981
to 1984, and Chief Financial Officer from
1983 to 1987. He became Chief Operating
Officer of the Company in 1985, President
in 1987, Chief Executive Officer in 1991,
and Chairman of the Board in March 1999.
Mr. Buechler is a past Chairman of the
Sheet Producers Division of the Society of
the Plastics Industry, Inc. and currently
serves on its Executive Board and
Processors Council. He also serves on
several local charitable boards. His term
as director expires at the 2007 Annual
Meeting.
Lloyd E. Mr. Campbell is the Managing Director and 2002
Campbell, 47 Head of the Global Private Placement Group
at Rothschild, Inc. as well as a member of
that firm's 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 board of directors of
Alderwoods Group and the board of trustees
of Georgetown University. In addition, he
is the Chairman and Founder of Pride First
Corporation, a non-profit organization
dedicated to improving the scholastic
achievement of young people in New York
City. He currently stands for reelection.
Walter J. Klein, Mr. Klein is a CPA and from 1992 until 2003
58 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. His term as director expires at
the 2006 Annual Meeting.
Pamela F. Ms. Lenehan has been President of Ridge 2004
Lenehan, 52 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. From February 1995
until January 2000, she was Senior Vice
President-Corporate Development and
Treasurer for Oak Industries, Inc., a
manufacturer of telecommunications
components. Ms. Lenehan also serves on
the board of directors of Avid Technology
and The Center for Women & Enterprise, a
non-profit organization. The Board of
Directors elected Ms. Lenehan as a
director in December 2004 when the Board
was expanded from eight to nine members.
Her term as director expires at the 2007
Annual Meeting.
Randy C. Martin, Mr. Martin is Executive Vice President, 2001
42 Corporate Development and Chief Financial
Officer of the Company. He is a CPA, and
became Corporate Controller of the Company
in 1995, Vice President and Chief
Financial Officer in 1996, and an
Executive Vice President in September
2000. His term as director expires at the
2007 Annual Meeting.
Jackson W. Mr. Robinson is the President of Winslow 1993
Robinson, 62 Management Company, a division of Adams
Harkness & Hill in Boston, having held
that position since 1983. He is also a
director of Jupiter Global Green
Investment Trust PLC and Jupiter European
Opportunities Trust PLC, and a Trustee of
Suffield Academy. He currently stands for
reelection.
Richard B. Mr. Scherrer is a partner of Armstrong 2000
Scherrer, 57 Teasdale LLP and has been Managing Partner
of that firm since January 1998. He is a
Fellow in the International Society of
Barristers and is listed in The Best
Lawyers In America publication. His term
as director expires at the 2006 Annual
Meeting.
Craig A. Mr. Wolfanger is the Senior Managing 2001
Wolfanger, 46 Director and Head of Investment Banking at
Parker/Hunter Incorporated, having held that
position since 1995. Mr. Wolfanger
has over 20 years of experience in
advising corporations on mergers and
acquisitions for various investment banking
firms. He is an Allied Member of the New
YorkStock Exchange. His term as director
expires at the 2006 Annual Meeting.
The Board of Directors recommends that shareholders vote "FOR" the Board of
Directors' slate of nominees.
CERTAIN BUSINESS RELATIONSHIPS AND TRANSACTIONS
Mr. Scherrer is the Managing Partner of Armstrong Teasdale LLP, which the
Company retained as its principal outside law firm during fiscal 2004 and
expects to retain through fiscal 2005.
In September 2004, pursuant to a provision in Mr. Buechler's employment
contract and approval from the Compensation Committee of the Board, the Company
repurchased 70,000 shares of its common stock from Mr. Buechler at $23.67 per
common share. The purchase price was the average of the publicly reported high
and low sale prices of the common stock on the New York Stock Exchange over the
ten trading days prior to the purchase.
BOARD OF DIRECTORS
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 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 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 Company's 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 Company's directors other than
Messrs. Buechler, Martin and Scherrer meet all applicable independence standards
and therefore qualify as "independent" directors.
The Board of Directors held seven regular meetings during fiscal 2004.
Every incumbent 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 Company's directors normally attend each Annual Meeting. The
2004 Annual Meeting was attended by all eight directors then serving.
Pursuant to the NYSE Corporate Governance Standards, the Board holds
regularly scheduled executive sessions without management, and at least annually
schedules an executive session with only independent directors. The Board has
elected Mr. Robinson as its Presiding Director, to preside over these meetings
and any other meetings of the Board at which the Chairman of the Board is not
present.
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 Director Independence Policy.
Each committee 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 Company's
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 (Chairman), Ms.
Lenehan, Mr. Robinson and Mr. Wolfanger. It met six times during fiscal 2004.
The Audit Committee's principal responsibilities are to appoint the independent
accountants to audit the Company's financial statements and perform other
services related to the audit, to review the scope and results of the audit with
the independent accountants, to review with management and the independent
accountants the Company's 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 independence
of the internal and external auditors, and to approve and review any non-audit
services to be performed by the independent accountants. The Board has
determined that the Audit Committee's Chairman, Mr. Klein, qualifies as an
"audit committee financial expert" under the NYSE Corporate Governance
Standards.
Compensation Committee
The Compensation Committee consists of Mr. Andy (Chairman), Mr. Klein, Mr.
Robinson and Mr. Wolfanger. It met three times during fiscal 2004. The
Compensation Committee's principal responsibilities are to establish, and at
least annually review the compensation package for the Chief Executive Officer,
and to approve and at least annually review the compensation packages
for all other executive officers, to review the financial terms of any other
employment arrangement providing for compensation of more than $200,000 per
year, and to approve substantially all awards under the Company's 2004 Equity
Compensation Plan.
Governance Committee
The Governance Committee consists of Mr. Andy, Mr. Campbell (Chairman), Mr.
Robinson and Mr. Wolfanger. It met four times during fiscal 2004. The
Governance Committee's 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
Company's shareholders.
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
Company's website, www.spartech.com, and a printed copy will be provided to any
shareholder on request.
COMPENSATION OF DIRECTORS
The Company pays each non-management director an annual fee of $40,000.
Mr. Robinson receives an additional $20,000 annual fee as Presiding Director,
Mr. Klein receives an additional $15,000 annual fee as Audit Committee Chairman,
Mr. Andy receives an additional $10,000 annual fee as Compensation Committee
Chairman, and Mr. Campbell receives an additional $10,000 annual fee as
Governance Committee Chairman. Each non-management director also receives
$1,200 for each Board and Committee Meeting attended, and the Company reimburses
each director for the expenses incurred in attending each meeting.
Prior to 2004, it was the policy of the Company to grant non-management
directors options to purchase common stock of the Company periodically during
their terms as directors, as additional compensation. However, no options were
granted to directors during fiscal 2004 pending the results of a study by the
Governance Committee's compensation consultant. Upon the recommendation of the
compensation consultant, the Board determined to replace grants of stock options
to its non-management directors with annual awards of restricted stock units
having a value of $30,000 based on the market value of the Company's common
stock at the date of grant. These restricted stock units are non-forfeitable
but are non-transferable and non-redeemable until one year after the end of the
director's service on the Board. At that time, they will be automatically
exchanged for shares of the Company's common stock. In June 2004 the Board
awarded 1,266 restricted stock units to each non-management director for 2003,
and in December 2004 the Board awarded 1,153 restricted stock units to each non-
management director for 2004.
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 prior to 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
Presiding Director 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 November 25, 2005 for
consideration by the Governance Committee for the 2006 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 both
because of the small size of the Board and because the Company has historically
afforded representation on its Board to major 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 candidate's 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. The
Company does not regularly pay a fee to any third party for the identification
or evaluation of candidates; however, in June 2004, the Governance Committee
retained the consulting firm of Spencer Stuart to assist it in identifying
candidates for possible election to an expanded Board. The Committee has
considered and is currently considering several individuals identified by its
consultant.
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: Jackson
W. Robinson, Presiding Director, Ninety Nine High Street, 12th Floor, Boston, MA
02110. All communications made by this means will be received directly by the
Presiding Director.
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 Company's 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 Company's management. Concerns can
be reported anonymously, if the caller chooses.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Committee Composition and Responsibilities
The Compensation Committee of the Board of Directors currently consists of
four directors, all of whom are independent as defined by the Securities and
Exchange Commission and the New York Stock Exchange. Pursuant to its Charter,
the Compensation Committee is solely responsible for establishing the
compensation of the Company's Chief Executive Officer and for determining the
various components of the Chief Executive Officer's compensation. It is also
responsible for reviewing the financial terms of any employment arrangement for
other executive officers or otherwise providing for compensation of more than
$200,000 per year.
The Committee also establishes goals for incentive compensation and
determines whether those goals have been achieved, makes recommendations to the
Board as to long-term compensation plans, oversees and administers the Company's
Deferred Compensation Plan for senior executives, and approves substantially all
awards to employees under the Company's 2004 Equity Compensation Plan.
General Compensation Philosophy
The Committee's objective is to establish compensation levels that are fair
and equitable to both senior management and the Company, considering each
employee's overall responsibilities, professional qualifications, business
experience and technical expertise, and the resultant combined value of the
employee to the Company's long-term performance and growth. The Committee
believes that both incentive and long-term compensation are important elements
of the Company's management compensation program. The Committee believes that
by providing fair and equitable compensation levels, the Company will be able to
continue to attract and retain qualified individuals who are dedicated to the
long-term performance and growth of the Company.
Factors Considered
The Compensation Committee at least annually reviews the compensation
established for each employee for whom it is responsible and reviews and
approves adjustments recommended by the Chief Executive Officer to reflect
individual performance evaluations and responsibilities, operating results of
the Company and its operating units, and current economic conditions.
In late 2004, the Committee retained Mercer Human Resources Consulting to
conduct a comprehensive study of the compensation of the Company's Chief
Executive Officer and senior management, including both levels and components of
compensation. For further information about the study, see "Recent Compensation
Actions," below.
Elements of Executive Officer and Senior Management Compensation
Cash Compensation. The cash compensation of the Company's senior
management other than Mr. Buechler consists of base salary and a discretionary
annual bonus determined by the Chief Executive Officer and reviewed by the
Committee. The annual bonus for senior management with operational
responsibilities is based on individual performance evaluations, individual
responsibilities, and the annual performance of those operating units for which
the manager is responsible as well as annual performance of the Company as a
whole. The annual bonus for corporate management is based on individual
performance evaluations, individual responsibilities and the annual performance
of the Company as a whole.
Long-Term Compensation. In addition to receiving cash compensation, senior
management generally receives annual awards of stock options under the Company's
2004 Equity Compensation Plan, which the Company's stockholders approved in
March 2004. All awards to the Company's executive officers are approved by the
Compensation Committee. Under recently adopted changes to public company
accounting standards, beginning with the fourth quarter of fiscal 2005 the
Company will need to begin recording an expense for financial statement purposes
upon the issuance and vesting of stock options. The Company's management and
the Committee will consider whether to change the Company's stock option program
once these new standards become effective.
The Company also maintains a nonqualified Deferred Compensation Plan for
senior management other than Mr. Buechler who are selected to participate in the
Plan by the Board or the Chief Executive Officer. Under this Plan, each
December the Company contributes cash to each participant's account equal to
10% of the participant's annual cash compensation from the Company (with certain
adjustments) for the preceding calendar year, subject to a maximum annual
contribution per participant. The participant's account balance is invested on
behalf of the participant, and vests over a ten-year period. Upon termination
of the participant's employment, other than for cause, the participant is
entitled to receive the vested balance in his or her account. In order to
provide a more competitive incentive for hiring and retaining senior management,
the Committee amended the Plan in September 2004 to increase the maximum
contribution from $15,000 to $30,000 beginning with the December 2004
contribution.
The American Jobs Creation Act of 2004, enacted by Congress in late 2004,
imposes strict new requirements on deferred compensation arrangements such as
the Deferred Compensation Plan. Based on preliminary guidance issued by the
Treasury Department, the Committee believes that only minor amendments will be
necessary to bring the Plan into compliance with the Act. The Company maintains
a separate deferred compensation arrangement for Mr. Buechler in accordance with
his employment agreement, as described below. The Committee has not yet reached
a conclusion as to the effect the Act will have on this arrangement.
Retirement Plan. The Company also offers a voluntary 401(k) plan for all
eligible employees, including senior management, pursuant to which the Company
matches 50% of participants' contributions up to a maximum of 6% of their
compensation. The Company has no defined benefit or defined contribution
pension plan for management.
Compensation of Chief Executive Officer. In establishing the compensation
for the Chief Executive Officer, the Committee consults independent published
surveys and studies by compensation and benefit consulting firms. We endeavor
to establish Mr. Buechler's total compensation at levels that are competitive
with this position for other publicly-traded companies of comparable size to
Spartech, subject to the achievement of annually specified strategic and
financial performance objectives.
Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended,
limits the Company's tax deduction to $1 million per year (the "Compensation
Cap") for certain compensation paid in a given year to the Chief Executive
Officer and the four other most highly compensated executives named in the
annual Proxy Statement. The Code and regulations issued under the Code exclude
from the Compensation Cap amounts based on attainment of pre-established,
objective performance goals, if certain other requirements are met. Currently
only Mr. Buechler receives total compensation that exceeds $1 million per year.
The Committee endeavors to structure Mr. Buechler's compensation so that it will
be deductible by the Company without limitation.
Mr. Buechler's current Employment Agreement provides for cash compensation
consisting of an annual base salary and an annual bonus equal to 0.9% of the
Company's annual earnings before income taxes. Mr. Buechler's bonus for fiscal
2004 was $606,285, and his current base salary has been set by the Committee at
$750,000. The Committee has been advised that Mr. Buechler's bonus satisfies
the requirements for performance-based compensation for purposes of Code Section
162(m).
The Committee also awards Mr. Buechler annual nonqualified stock option
grants pursuant to the Company's 2004 Equity Compensation Plan, on the same
terms as other participants in the Plan.
Mr. Buechler does not participate in the Company's Deferred Compensation
Plan, but under his Employment Agreement he is entitled to receive an annual
contribution to a universal life insurance policy maintained for Mr. Buechler
equal to 15% of his base salary plus the amount of the premium on $1,250,000 of
term life insurance.
Further details of Mr. Buechler's Employment Agreement are provided under
"Employment Agreements," below.
Compensation of Other Executive Officers. Pursuant to its Charter, the
Committee approves and reviews at least annually the compensation of all other
executive officers, and reviews all other compensation arrangements that involve
annual compensation of $200,000 or more.
Recent Compensation Actions
In November 2004, the Committee retained Mercer Human Resources Consulting
to conduct a comprehensive study of the compensation of the Company's Chief
Executive Officer and senior management, and make recommendations to the Company
as to appropriate levels and types of compensation for these positions. For
purposes of the study, the Committee defined senior management to include
approximately 27 designated individuals, including most of the participants in
the Company's Deferred Compensation Plan. Upon completion of the study, the
Committee will consider the recommendations of its consultant.
/s/Ralph B. Andy /s/Walter J. Klein /s/Jackson W. Robinson
Ralph B. Andy Walter J. Klein Jackson W. Robinson
Chairman
/s/Craig A. Wolfanger
Craig A. Wolfanger
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes compensation earned by the Company's Chief
Executive Officer and the four other most highly compensated executive officers
whose aggregate salary and bonus exceeded $100,000 for fiscal 2004.
Annual Compensation Long-Term
Compensation
---------------------------------------------------- -----------
Name and Fiscal Other Annual Options
Principal Position Year Salary Bonus Compensation (1) Granted
- ----------------------------- ------------ ----------- ---------- --------------- ------------
Bradley B. Buechler 2004 $794,821 $606,285 $132,468 100,000
Chairman, President, & 2003 $727,212 $479,889 $207,326 100,000
Chief Executive Officer 2002 $649,038 $486,567 $111,465 200,000
George A. Abd 2004 $301,385 $240,000 $ 37,096 28,000
Executive Vice President, 2003 $281,260 $240,000 $ 21,076 30,000
Color & Specialty Compounds 2002 $247,000 $240,000 $ 21,686 25,000
and Molded & Profile Products
Randy C. Martin 2004 $304,334 $175,000 $ 36,191 30,000
Executive Vice President, 2003 $275,750 $175,000 $ 20,200 30,000
Corporate Development & 2002 $250,682 $150,000 $ 20,542 25,000
Chief Financial Officer
Steven J. Ploeger (2) 2004 $249,279 $150,000 $ 35,374 9,000
Executive Vice President, 2003 $203,991 $141,240 $ 21,039 7,500
Custom Sheet & Rollstock 2002 $185,818 $125,000 $ 20,432 7,100
Jeffrey D. Fisher 2004 $223,005 $ 95,000 $ 33,992 15,000
Vice President & General 2003 $205,000 $ 85,000 $ 19,931 15,000
Counsel 2002 $205,342 $ 75,000 $ 19,867 15,000
(1) The amounts disclosed in this column for fiscal year 2004 include Company
contributions to non-qualified deferred compensation arrangements on behalf of
Mr. Buechler, $122,575; Mr. Abd, $30,000; Mr. Martin, $30,000; Mr. Ploeger,
$30,000; and Mr. Fisher, $28,926.
(2) Mr. Ploeger has been employed with the Company since June 1985 and was
elected as an executive officer in March 2004.
The Company provides leased automobiles to certain senior management and
sales personnel for their business and personal use, with the value of any
personal use treated as additional compensation to them. The Company also
permits its Chief Executive Officer and Executive Vice Presidents to charter the
Company's airplane for their personal use when it is not scheduled for Company
business, provided that they reimburse the Company in advance for such personal
use.
Option Grants
The following table summarizes option grants made during fiscal 2004 to the
executive officers named in the Summary Compensation Table.
Individual Grants
---------------------------------------------
Number of % of Potential Realizable Value
Securities Total at Assumed Annual Rates
Underlying Options of Stock Price Appreciation
Options Granted For Option Term (1)
Granted to
Employees
in Fiscal Exercise Expiration --------------------------
Name Year Price Date 5% 10%
- ------------------- ------------ --------- --------- ---------- ------------- -------------
Bradley B. Buechler 100,000 (2) 23.3% $21.90 12/10/13 $1,377,279 $3,490,296
George A. Abd 28,000 (2) 6.5% $21.90 12/10/13 $ 385,638 $ 977,283
Randy C. Martin 30,000 (2) 7.0% $21.90 12/10/13 $ 413,184 $1,047,089
Steven J. Ploeger 9,000 (2) 2.1% $21.90 12/10/13 $ 123,955 $ 314,127
Jeffrey D. Fisher 15,000 (2) 3.5% $21.90 12/10/13 $ 206,592 $ 523,544
(1) The rates of appreciation presented of 5% and 10% are set by the
Securities and Exchange Commission, and therefore, are not intended to
forecast future appreciation of the Company's stock price.
(2) All options were granted at market value and vest in four equal annual
installments beginning December 11, 2004.
Option Exercises and Outstanding Options
The following table summarizes all options exercised in fiscal 2004 and
unexercised options at the end of fiscal 2004 for the executive officers named
in the Summary Compensation Table.
Shares Value Number of Securities Value of Unexercised "In-
Acquired Realized (1) Underlying Unexercised the-Money" Options at
on Options at Fiscal Year End Fiscal Year End (2)
-------------------------- -------------------------
Name Exercise Exercisable Unexercisable Exercisable Unexercisable
- ------------------ --------- ------------ ----------- ------------- ---------- -------------
Bradley B. Buechler 97,500 $945,375 397,500 282,500 (3) $2,023,625 $1,379,075
George A. Abd 12,501 $175,096 55,500 68,624 (3) $ 197,013 $ 382,642
Randy C. Martin - - 55,376 70,624 (3) $ 415,033 $ 389,242
Steven J. Ploeger - - 33,301 20,799 (3) $ 260,947 $ 121,067
Jeffrey D. Fisher 4,300 $ 53,613 25,201 37,499 (3) $ 154,834 $ 212,873
(1) The values represent the difference between the exercise price of the
options and the price of the Company's common stock on the date of exercise.
(2) The values represent the difference between the exercise price of the
options and the price of the Company's common stock at fiscal year end.
(3) These represent the unvested portion of options granted during fiscal
2001, 2002, 2003 and 2004 which vest in four equal annual installments
beginning one year after date of grant.
Employment Agreements
Mr. Buechler
Effective November 1, 2002, the Company entered into an Amended and
Restated Employment Agreement with Mr. Buechler, which modified but continued
Mr. Buechler's existing employment contract. The Agreement will continue until
terminated either by the Company on three years' notice or by Mr. Buechler on
one year's notice. Notice of termination may not be given before November 1,
2005, except that Mr. Buechler may give notice of termination at any time if a
"Change of Control" (described below) occurs. For 24 months after termination
of the Agreement, Mr. Buechler may not disclose any Company trade secrets,
solicit the Company's customers, business or employees, or otherwise compete
directly with the Company.
The Agreement provides for compensation consisting of: (i) an annual base
salary, which has been set by the Compensation Committee at $750,000 for 2005,
(ii) an annual bonus equal to 0.9% of the Company's annual earnings before
income taxes, subject to certain adjustments and exceptions, (iii) periodic
stock option grants under the Company's stock option plans, and (iv) an annual
contribution to a universal life insurance policy maintained for Mr. Buechler
equal to 15% of his base salary plus the amount of the premium on $1,250,000 of
term life insurance. The agreement also contains a provision that Mr. Buechler
may require the Company to repurchase during any twelve-month period that the
Agreement is in effect a number of shares of his common stock not exceeding 15%
of his then-current holdings of common stock plus currently-exercisable options,
at the average of the publicly-reported high and low sale prices of the common
stock on the New York Stock Exchange over the ten trading days prior to the sale
and subject to certain other terms and conditions.
If the Company terminates Mr. Buechler's employment for any reason other
than "Cause" (defined below), or if Mr. Buechler terminates his employment with
"Justification" (defined below) or with prior notice (as discussed above), then
he will receive a cash severance benefit equal to two times his then current
base salary plus the aggregate amount of the bonuses paid or earned by him in
the two years before the notice of termination is given. However, if a Change
of Control has occurred before the termination, the severance benefit becomes
2.95 times the sum of base salary plus one-third of the aggregate amount of
bonuses paid or earned by him in the three years before the notice of
termination is given. In either case, if the severance benefit and any other
payments received as a result of the termination are subject to the excise tax
imposed on excessive termination payments under the Internal Revenue Code, the
Company will pay Mr. Buechler an additional severance amount so that he will
receive the same net amount he would have received if there had been no excise
tax.
The Agreement defines certain terms, as follows:
A "Change of Control" takes place if any of the following occurs: (i) the
Board of Directors approves and recommends to the Company's shareholders (A) any
consolidation or merger of the Company where either the Company is not the
surviving corporation or the Company's shares are exchanged and the shareholders
do not retain the same proportionate voting interest in the Company or its
successor, (B) a sale or other transfer of all or substantially all of the
Company's assets, other than to a subsidiary, or (C) the liquidation or
dissolution of the Company; (ii) any person acquires a majority of the Company's
voting stock; (iii) the Board of Directors approves any transaction whose
purpose or likely effect is to cause the Company's common stock to be held by
fewer than 300 persons or not to be listed on any national securities exchange;
or (iv) there is a change in a majority of the Company's Board of Directors
within any 24 consecutive months, unless each new director was approved by a
majority of the continuing directors.
"Cause" for termination of Mr. Buechler's employment by the Company occurs
only if he is convicted of a felony, or commits an act or omission (including
failure to follow lawful instructions of the Board of Directors) resulting or
intended to result in his personal gain at the expense of the Company's property
or business. However, Mr. Buechler will not be liable merely for his bad
judgment, acts or omissions done in good faith or in connection with any tender,
merger offer or other restructuring proposal.
"Justification" for termination of his employment by Mr. Buechler occurs
only if the Company reassigns or restricts him in a way inconsistent with his
position, duties, responsibilities and status as Chairman of the Board,
President, and Chief Executive Officer or fails to pay him any salary, option or
bonus within seven days after he notifies the Company that such amount is due,
or otherwise adversely affects or materially reduces any other benefits or
rights he has under the Agreement.
Messrs. Abd, Martin, Ploeger and Fisher
The Company has also entered into a three-year employment agreement with
Mr. Abd expiring February 28, 2006, a three-year employment agreement with Mr.
Martin expiring January 1, 2006, a three-year employment agreement with Mr.
Ploeger expiring April 30, 2007, and a three-year employment agreement with Mr.
Fisher expiring November 30, 2006. The annual base compensation under these
agreements, subject to periodic review for cost of living and/or merit and other
increases, is currently $310,000, $300,000, $275,000 and $225,000 respectively.
The agreements also provide for annual bonuses based upon individual performance
and the overall results of the Company's operations. In addition, the
agreements require the Company to provide term life insurance for the employees'
designated beneficiaries for the term of the agreements, in the amount of
$500,000 for Mr. Abd, $300,000 for Mr. Martin, $250,000 for Mr. Ploeger and
$250,000 for Mr. Fisher.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information as of October 30, 2004
regarding the Company's 1991 Incentive Stock Option Plan, 1991 Restricted Stock
Option Plan, 2001 Stock Option Plan and 2004 Equity Compensation Plan:
(a) (b) (c)
Plan Category Number of Weighted-average Number of
securities to be exercise price securities
issued upon of outstanding remaining
exercise of options, available for
outstanding warrants and future issuance
options, rights under
warrants and compensation
rights plans (excluding
securities
reflected in
column (a))
Equity compensation plans 2,685,000 $20.38 (1)
approved by security holders
Equity compensation plans not None None None
approved by security holders
Total 2,685,000 $20.38
(1) The maximum amount of common stock for which options or other awards may be
granted under the Company's 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, 2010. No further options may be granted under any other stock option 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 Company's stock option plans and any outstanding awards
will be appropriately and automatically adjusted.
AUDIT COMMITTEE REPORT
The Company's management has the primary responsibility for its financial
reporting process, including its systems of internal controls, and for the
financial statements resulting from that process. The Company's independent
auditors are responsible for expressing an opinion on the conformity of those
audited financial statements with accounting principles generally accepted in
the United States. The Audit Committee, which is comprised entirely of
independent directors, retains the independent auditors and oversees the
Company's financial reporting process and the audit on behalf of the Board of
Directors.
In fulfilling our oversight responsibilities for 2004, the Audit Committee:
Retained Ernst & Young LLP to perform the fiscal 2004 audit.
Reviewed and discussed with management the Company's audited financial
statements for the fiscal year ended October 30, 2004 as well as the
quarterly unaudited financial statements.
Reviewed and discussed with management the quality and the acceptability
of the Company's financial reporting and internal controls.
Discussed with the independent auditors the overall scope and plans for
their audit as well as the results of their examinations, their
evaluations of the Company's internal controls, and the overall quality
of the Company's financial reporting.
Reviewed with the independent auditors their judgments as to the quality
and the acceptability of the Company's financial reporting.
Received from the independent auditors the written disclosures and
letter required by Standard No. 1 of the Independence Standards Board,
and discussed with the independent auditors 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 the
independent auditors.
Discussed with the independent auditors 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 Committee's
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
October 30, 2004 be included in the Company's Annual Report on Form 10-K for
filing with the Securities and Exchange Commission.
/s/Walter J. Klein /s/Lloyd E. Campbell /s/Jackson W. Robinson
Walter J. Klein Lloyd E. Campbell Jackson W. Robinson
Chairman
/s/ Craig A. Wolfanger
Craig A. Wolfanger
FEES PAID TO AUDITORS
During fiscal 2003 and 2004, the Company's principal auditor, Ernst & Young
LLP, provided services in the following categories for the following fees:
2003 2004
------------- -------------
Audit Fees $ 307,530 (1) $ 360,285 (2)
Audit-Related Fees $ 40,598 $ 128,448
Tax Fees $ 190,000 $ _
All Other Fees $ _ $ _
Audit-Related Fees primarily related to work performed in connection with
the filing of the Company's shelf registration statement on Form S-3, the review
of internal controls and the audit of employee benefit plans. Tax Fees represent
work performed in connection with a tax planning engagement. The Audit
Committee has considered whether retaining the Company's principal auditor to
provide non-audit services is compatible with maintaining auditor independence
and believes that it is.
(1) Includes amounts billed after the date of the 2004 proxy statement
(2) As of the date of this proxy statement the Company had not received the
final bill for fees related to the fiscal 2004 audit.
SECURITY OWNERSHIP
The table set forth below identifies the aggregate shares of common stock
beneficially owned by each director, by each executive officer, by the executive
officers and directors as a group, and by each person known to the Company as of
December 31, 2004 to be the beneficial owner of more than 5% of the 32,203,854
shares of common stock outstanding as of that date.
Number of Percentage of
Common Shares Common Shares
Beneficially Owned (1) Beneficially Owned
---------------------- ------------------
Directors and Executive Officers:
Bradley B. Buechler 608,013 (2) 1.9%
Ralph B. Andy 175,261 (3) *
Randy C. Martin 98,981 (4) *
George A. Abd 91,764 (4) *
Jackson W. Robinson 55,000 (4) *
Steven J. Ploeger 50,345 (4) *
Jeffrey D. Fisher 44,515 (4) *
Richard B. Scherrer 44,350 (4) *
Craig A. Wolfanger 31,700 (4) *
Lloyd E. Campbell 19,372 (4) *
Walter J. Klein 17,500 (4) *
Phillip M. Karig 14,500 (4) *
William F. Phillips 14,032 (4) *
Suzanne M. Riney 8,710 (4) *
Donna F. Loop 3,730 (4) *
Michael G. Marcely 1,100 (4) *
Pamela F. Lenehan 0 *
All Directors and Executive
Officers as a Group
(17 persons) 1,278,873 (4) 3.9%
Other Beneficial Owners
In Excess of 5% of the
Common Shares Outstanding:
FMR Corp. 3,471,757 (5) 10.8%
Fidelity Management & Research Company
82 Devonshire Street
Boston, MA 02109
Columbia Wanger Asset
Management, L.P. 3,332,900 (6) 10.3%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Notes To Security Ownership Table:
* Less than 1%.
(1) Includes shares issuable upon exercise of currently exercisable options
as noted for the respective owners.
(2) Includes 505,000 shares issuable upon exercise of currently exercisable
options.
(3) Includes 25,000 shares issuable upon exercise of currently exercisable
options, and 150,261 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.
(4) Includes shares issuable upon exercise of currently exercisable options,
as follows: Mr. Martin, 79,000; Mr. Abd, 78,625; Mr. Robinson, 35,000; Mr.
Ploeger, 32,013; Mr. Fisher, 40,200; Mr. Scherrer, 30,000; Mr. Wolfanger,
30,000; Mr. Campbell, 15,000; Mr. Klein, 15,000; Mr. Karig, 12,000; Mr.
Phillips, 6,687; Ms. Riney, 6,975; Ms. Loop, 3,500; Mr. Marcely, 1,100 and
all directors and executive officers as a group, 915,100.
(5) Based on information presented as of March 31, 2004 in FMR Corp.'s
latest available Schedule 13G, FMR Corp. beneficially owned 3,471,757 shares
of common stock including 2,622,257 shares beneficially owned by Fidelity
Management & Research Company as a result of its serving as investment
adviser to various investment companies and other funds, 214,600 shares
beneficially owned by Fidelity Management Trust Company as trustee or
managing agent for various private investment accounts and other funds and
634,900 shares beneficially owned by Fidelity International Limited. FMR
Corp. has sole voting power with respect to 850,550 shares and sole
investment power with respect to all 3,471,757 shares.
(6) Based on information presented as of November 30, 2004 in Columbia
Wanger Asset Management, L.P.'s ("WAM") latest available Schedule 13G, WAM
beneficially owned 3,332,900 shares of common stock. WAM has shared voting
and investment power with WAM Acquisition GP, Inc. the general partner of
WAM.
In 2003, the Company issued a set of stock ownership guidelines under
which, by 2007, the Board of Directors and management are expected to maintain
stock ownership ranging from one to four times Board retainer or base pay. As
of fiscal year end 2004 nearly 50% of the participants were in line to meet
these guidelines.
COMMON STOCK PERFORMANCE GRAPH
The following graph compares cumulative total Company shareholder return
for the last five fiscal years with overall market performance, as measured by
the cumulative return of the Standard & Poor's 500 Stock Index and the Standard
& Poor's Specialty Chemicals Index, assuming an initial investment of $100 at
the beginning of the period and the reinvestment of all dividends.
GRAPH
10/31/99 10/30/00 10/28/01 11/3/02 11/1/03 10/30/04 CAGR*
- --------------------------- -------- -------- -------- ------- ------- -------- ------
SPARTECH STOCK PRICE $28.63 $13.00 $21.05 $18.79 $23.18 $25.20 (0.7%)
Assumed $100 Investment:
SPARTECH CORPORATION $ 100 $ 46 $ 76 $ 69 $ 87 $ 96 (0.7%)
S&P 500 $ 100 $ 101 $ 80 $ 66 $ 77 $ 83 (3.7%)
S&P Specialty Chemicals $ 100 $ 69 $ 84 $ 97 $ 106 $ 119 3.6%
Index
*Compound annual growth rate.
PROPOSAL 2: TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
In December 2004, the Audit Committee appointed Ernst & Young LLP as
independent auditors of the Company for fiscal 2005. The Audit Committee
proposes that the shareholders ratify the appointment at this Annual
Meeting. Ernst & Young LLP has served as the Company's 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 appointment, 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.
The Board of Directors recommends that shareholders vote FOR this proposal.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own beneficially
more than ten percent of a registered class of the Company's 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 Company's 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, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with on a timely
basis during the fiscal year ended October 30, 2004.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended for inclusion in the Company's
proxy statement for the 2006 Annual Meeting must be received by the Company
no later than September 23, 2005. In addition, if a shareholder fails to
notify the Company on or before December 7, 2005 of a proposal which such
shareholder intends to present at the Company's 2006 Annual Meeting other
than through inclusion of such proposal in the Company's 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.
By Order of the Board of Directors
/s/Jeffrey D. Fisher
Jeffrey D. Fisher
January 21, 2005 Secretary
FORM OF PROXY
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE Please Mark
"FOR" EACH ITEM. Here for Address
Change or Comments | |
SEE REVERSE SIDE
Item 1 - Election of Directors
Election of three Class C Directors to serve until the 2008 Annual Meeting.
NOMINEES: 01 Ralph B. Andy; 02 Lloyd E. Campbell and 03 Jackson W. Robinson.
FOR all the nominees WITHHOLD
listed above AUTHORITY
(except as marked to vote for all the
to the contrary) nominees listed above
|_| |_|
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the name in the list above.
FOR AGAINST ABSTAIN
Item 2 - Ratify Independent Auditors |_| |_| |_|
Item 3 - 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.
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
- -------------- ------------ -------------- ------------
Signature Date Signature Date
Please sign exactly as the name appears hereon. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
- -------------------------------------------------------------------------------
^FOLD AND DETACH HERE^
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59PM Eastern Time
on March 8, 2005.
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.
- ---------------------------------- ---------------------------------- -------------------
Internet Telephone
http://www.proxyvoting.com/seh 1-866-540-5760 Mail
Use the Internet to vote your proxy. Use any touch-tone telephone to Mark, sign and date
Have your proxy card in hand when vote your proxy. Have your proxy your proxy card
you access the web site. OR card in hand when you call. OR and
return it in the
enclosed postage-paid
envelope.
- ---------------------------------- ---------------------------------- -------------------
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
SPARTECH CORPORATION PROXY
2005 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Bradley B. Buechler 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
Washington University's Knight Center, One Brookings Drive, St. Louis, Missouri
63130, on Wednesday, March 9, 2005, commencing at 10:00 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 January 21, 2005.
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 AND 2 AND IN ACCORDANCE WITH THEIR BEST JUDGMENT UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
(Continued on the reverse side)
- --------------------------------------------------------------------------------
Address Change/Comments (Mark the corresponding box on the reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
^FOLD AND DETACH HERE^