SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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SPARTECH CORPORATION
................................................................
(Name of Registrant as Specified in Its Charter)
REGISTRANT
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(Name of Person(s) Filing Proxy Statement)
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[ ] Fee computed on table below per Exchange Act Rules 14a-
(6)(I)(4) and 0-11.
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SPARTECH CORPORATION
7733 Forsyth Boulevard - Suite 1450
Clayton, Missouri 63105
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 12, 1997
TO THE SHAREHOLDERS OF
SPARTECH CORPORATION:
The Annual Meeting of Shareholders of Spartech Corporation will be held
at the Pierre Laclede Conference Center (Second Floor), 7733 Forsyth
Boulevard, Clayton, Missouri 63105, on Wednesday, March 12, 1997 at 10:00 a.m.
for the following purposes:
1. To elect three Class A directors to serve three-year terms.
2. To ratify the selection of Arthur Andersen LLP as independent auditors
of the Company for the 1997 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 13,
1997 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.
Whether or not you plan to attend the meeting in person, please complete,
sign, and return the proxy, which you may revoke at any time prior to its use.
A self-addressed envelope, which requires no postage if mailed in the United
States, is enclosed for your convenience in returning the signed proxy.
By Order of the Board of Directors
/S/David B. Mueller
David B. Mueller
Executive Vice President
and Chief Operating Officer
St. Louis, Missouri
January 22, 1997
SPARTECH CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 12, 1997
To Our Shareholders:
The enclosed proxy is solicited by the Board of Directors of Spartech
Corporation (the "Company" or "Spartech") for use at the Annual Meeting of
Shareholders of the Company to be held at the Pierre Laclede Conference
Center, 7733 Forsyth Boulevard, Clayton, Missouri 63105, on Wednesday, March
12, 1997 at 10:00 a.m. and at any and all adjournments thereof. All expenses
incident to the preparation and mailing of the 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 on behalf of
the Board of Directors 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 stock.
The persons named in the accompanying proxy were selected by the Board of
Directors of the Company. All are 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 management proposal 2, as set forth in the Notice of the Meeting, and
on any other matter which may come before the 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 22, 1997.
Any shareholder given 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 of the proxy will not in any way affect the
shareholder's right to attend the meeting and vote in person.
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended November 2, 1996
accompanies this proxy statement.
OUTSTANDING SHARES AND VOTING PROCEDURES
The outstanding voting securities of the Company on January 13, 1997
consisted of 26,382,904 shares of common stock, entitled to one vote per
share held.
With respect to proposal 1, a plurality of the votes present in person or
represented by proxy at the meeting is required to elect directors.
"Plurality" means the nominees who receive the largest number of votes cast
are elected as directors up to the number of directors scheduled to be
elected at that Annual Meeting. With respect to proposal 2, a majority of the
votes present in person or represented by proxy at the meeting is required to
adopt such proposal. Abstentions and broker non-votes are counted for the
purpose of determining the presence or absence of a quorum for the
transaction of business. Abstentions are counted in the tabulations of the
votes cast on proposals presented to stockholders, and therefore have the
same effect as negative votes. Broker non-votes, however, are not counted for
the purpose of determining whether a proposal has been approved.
Only shareholders of record at the close of business on January 13, 1997
will be 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
stock entitled to vote must be represented at the meeting in person or by
proxy to constitute a quorum.
Page 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. Class A has three
directors and Classes B and C have two directors each. All directors hold
office for a term of three years. Class A directors will hold office until
the Annual Meeting of Shareholders in 2000, Class B directors hold office
until the Annual Meeting of Shareholders in 1998, and Class C directors hold
office until the Annual Meeting of Shareholders in 1999, and, in each case,
until their successors are duly elected and qualified.
The Board of Directors has nominated Thomas L. Cassidy, David B. Mueller,
and Rodney H. Sellers, present directors of the Company, to be reelected
Class A directors of the Company. Vita International Limited ("Vita"); TCW
Special Placements Fund I, TCW Special Placements Fund II, and TCW Capital,
all California limited partnerships (collectively "The TCW Group" or "TCW");
executive officers; and directors as a group, comprising 13,822,940 votes,
have informed the Company that they intend to cast their votes "for" these
Board nominees.
The members of the Company's Board of Directors, whose terms will
continue after the meeting, and the nominees for election to the Board, with
certain information about each of them, including their principal occupations
for the last five years, are listed below.
SPARTECH
NAME, AGE PRINCIPAL OCCUPATION AND DIRECTOR
OTHER DIRECTORSHIPS SINCE
Bradley B. Buechler, 48 President and Chief Executive Officer of 1984
the Company. Mr. Buechler is a CPA and was
with Arthur Andersen LLP prior to joining
the Company in 1981. He was Corporate
Controller and Vice President - Finance of
the Company from 1981 to 1984. He became
Chief Operating Officer of the Company in
1985, President in 1987, and Chief Executive
Officer effective October 1, 1991. Mr. Buechler
is also the immediate past Chairman of the
Sheet Producers Division of the Society of the
Plastics Industry (SPI) and a current member
of the Executive Committee for the Color and
Additive Compounders Division of the SPI. His
term as director expires at the 1998 Annual
Meeting.
Thomas L. Cassidy, 68 Mr. Cassidy has been a Managing Director of 1986
Trust Company of the West and a senior partner
of TCW Capital since 1984. Prior to 1984, he
was a Managing Director of CS First Boston
Corporation. Mr. Cassidy also serves on the
Board of Directors of DeVlieg - Bullard, Inc.,
Holnam, Inc., and Reunion Industries, Inc.
Mr. Cassidy currently stands for re-election.
W.R. Clerihue, 73 Chairman of the Company since October 1, 1991.
He is retired from Celanese Corporation, where
he last served as Executive Vice President and
Chief of Staff. Mr. Clerihue also serves on the
Board of Directors of Reunion Industries, Inc.
His term as director expires at the 1999
Annual Meeting.
Page 2
SPARTECH
DIRECTOR PRINCIPAL OCCUPATION AND DIRECTOR
NAME, AGE OTHER DIRECTORSHIPS SINCE
Francis J. Eaton, 57 Mr. Eaton is a polymer technologist and, 1990
after joining British Vita PLC in 1958, became
General Manager of the Industrial Polymer
Division in 1971. He was appointed to British
Vita's Board of Directors in 1975 and became
their Deputy Chief Executive Officer effective
October 1, 1991. Mr. Eaton is President and a
council member of the British Rubber
Manufacturers' Association in the United
Kingdom. His term as director expires at the
1998 Annual Meeting.
David B. Mueller, 43 Executive Vice President, Chief Operating 1994
Officer and Secretary of the Company. Mr.
Mueller is a CPA and was with Arthur Andersen
LLP from 1974 to 1981. He was Corporate
Controller of Apex Oil Company from 1981 to
1988. He became Vice President and Chief
Financial Officer of the Company in 1988
and was named Secretary in 1991. He became
Executive Vice President and Chief Operating
Officer in 1996. Mr. Mueller currently stands
for re-election.
Jackson W. Robinson, 54 Mr. Robinson is President of Winslow 1993
Management Company, an operating division of
Eaton Vance Management, having held that
position since 1983. He is also a director
of Jupiter International Green Investment Trust,
Jupiter-European Investment Trust, and a Trustee
of Suffield Academy. His term as director
expires at the 1999 Annual Meeting.
Rodney H. Sellers, 50 Mr. Sellers is a Chartered Accountant in the 1990
United Kingdom. He joined British Vita PLC
in 1971, was appointed to British Vita's Board
of Directors in 1974, and was their Chief
Executive from July 1990 through April 1996,
at which time he was appointed their Deputy
Chairman. Mr. Sellers currently stands for
re-election.
On April 13, 1992, the Company's Board of Directors amended the Company's
By-Laws so as to require, with respect to certain significant matters
affecting the Company, the affirmative vote of at least 50% of the members of
the Board, so long as a director nominated by each of Vita and TCW is
included in such 50% vote. Prior to the April 13, 1992 By-Laws amendment,
such affirmative vote percentage was 85%. Matters requiring the aforesaid 50%
vote include (i) merger or consolidation of the Company with another
corporation, (ii) sale or transfer of more than 25% of the Company's assets
or recommended acceptance of any offer or proposal to acquire the securities
or assets of the Company, (iii) purchase or acquisition of substantially all
of another corporation's assets, (iv) the Company's engaging in any new
business or ceasing to engage in an existing business, (v) issuance of shares
of capital stock or any options or warrants to purchase capital stock other
than pursuant to exercise or conversion of outstanding securities of the
Company, (vi) approval of, amendments, extensions to or cancellations of
employment agreements with executives of the Company, (vii) incurrence or
renewal of indebtedness exceeding $500,000, and (viii) redemption of
preferred stock or acquisitions of preferred or common stock of the Company
from an interested shareholder. Any merger, acquisition or business
transaction with Vita or TCW, or any acquisition or redemption of shares of
common or preferred stock from Vita or TCW will require a majority of
directors other than directors designated by such interested shareholder.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE BOARD OF
DIRECTORS' SLATE OF NOMINEES STANDING FOR ELECTION.
Page 3
BOARD OF DIRECTORS
AND COMMITTEES
There were four meetings of the Board during fiscal 1996. No director
attended fewer than 75% of the formal meetings of the Board and Board
Committees of which he was a member, with the exception of Messrs. Eaton and
Sellers of Vita who, because of long and costly international travel
requirements, alternate their attendance at the formal meetings.
The Board has an Audit Committee, currently consisting of Messrs.
Clerihue and Robinson, which formally met twice during fiscal 1996. The
Audit Committee's function is to recommend the appointment of independent
accountants to audit the Company's financial statements and to perform other
services related to the audit; review the scope and results of the audit with
the independent accountants; review with management and the independent
accountants the Company's interim and year-end operating results; consider
the adequacy of the internal accounting and auditing procedures of the
Company; and review the non-audit services to be performed by the independent
accountants and consider the effect of such performance on the accountants'
independence.
The Board has a Compensation Committee, currently consisting of Messrs.
Cassidy, Clerihue, Eaton, and Robinson, which formally met twice during
fiscal 1996. The Compensation Committee's function is to review all
compensation arrangements in excess of $100,000 per annum, as well as any
employment contract.
At its December 9, 1996 meeting, the Board established a Nominating
Committee, currently consisting of Messrs. Eaton, Clerihue, and Robinson, to
serve the following functions: review the size and composition of the Board;
review possible director candidates and recommend director nominations for
presentation to shareholders; and review assignments of Board members to
various Board committees. The Nominating Committee's first meeting is
scheduled to be held in early March 1997.
An annual fee of $27,000 is paid for the services of each non-management
director, and expenses for attendance at each meeting are reimbursed. In
addition, the Company pays an annual fee of $36,000 to British Vita PLC for
services provided to the Company by one of its directors. Mr. Clerihue, the
Company's Chairman of the Board, receives an additional $15,000 per annum for
service to the Company. Each non-management director also receives $1,000
for each Board or Committee Meeting attended of which he is a member.
Certain non-management directors have received options to purchase common
stock of the Company upon membership to the Board and periodically during
their terms as directors. The options are issued outside of the Incentive and
Restricted Stock Option plans of the Company, and the terms are determined at
the time of the grant. In fiscal year 1994, Jackson W. Robinson was granted
30,000 options with a five-year term and an exercise price at the then fair
market value of $5.00 per share. No options were granted in fiscal year 1995.
In fiscal year 1996, W. R. Clerihue and Jackson W. Robinson were granted
10,000 and 5,000 options, respectively, with a ten-year term and an exercise
price at the then fair market value of $11.00 per share.
Page4
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned by the Company's Chief
Executive Officer and each other executive officer whose aggregate salary and
bonus exceeds $100,000 annually.
LONG
TERM
COMPEN-
SATION
NAME AND FISCAL ANNUAL COMPENSATION OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) GRANTED(#) COMPEN-
SATION($)
Bradley B. Buechler 1996 $359,423 $344,920 55,000 $60,025
President and Chief 1995 $333,462 $254,870 50,000 $55,078
Executive Officer 1994 $298,377 $179,091 80,000 $54,891
David B. Mueller 1996 $223,078 $206,952 50,000 $38,625
Executive Vice 1995 $201,154 $140,170 45,000 $34,642
President, Chief 1994 $175,881 $ 85,750 40,000 $32,964
Operating Officer and
Secretary
Randy C. Martin (2) 1996 $111,346 $27,500 --- $5,166
Vice President Finance1995 $10,577 $ 5,000 10,000 ---
and Chief Financial 1994 --- --- --- ---
Officer
Daniel J. Yoder 1996 $148,077 $50,000 14,750 $17,687
Vice President 1995 $134,039 $ 55,000 12,000 $ 18,520
Engineering 1994 $122,841 $ 42,500 10,000 $ 3,019
and Technology
David G. Pocost (3) 1996 $80,577 $24,000 5,250 $10,739
Vice President Quality1995 $69,578 $17,000 3,000 $9,119
and Environmental 1994 $63,615 $13,000 1,000 $2,466
Affairs
(1)The amounts disclosed in this column for fiscal year 1996 include:
(a) Company contributions to non-qualified defined contribution
arrangements on behalf of Mr. Buechler, $57,300; Mr. Mueller, $35,900; Mr.
Martin, $2,996; Mr. Yoder, $15,000, and Mr. Pocost, $8,416.
(b) Company matching contributions under the Company's 401(k) Savings
and Investment Plan on behalf of Mr. Buechler, $2,725; Mr. Mueller, $2,725;
Mr. Martin, $2,170; Mr. Yoder, $2,308; and Mr. Pocost, $2,323.
(c) Company contributions to term life insurance premiums on behalf of
Mr. Yoder, $379.
(2)Mr. Martin commenced employment with the Company on September 25, 1995.
(3)Mr. Pocost was elected as an executive officer in December 1996.
Page 5
OPTION GRANTS
The following table summarizes option grants made during fiscal 1996 to
the executive officers named above.
INDIVIDUAL GRANTS
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO ANNUAL RATES OF
STOCK PRICE
UNDERLYING EMPLOYEES EXPIR- APPRECIATION
OPTIONS IN FISCAL EXERCISE ATION FOR OPTION TERM(1)
NAME GRANTED(#) YEAR PRICE DATE 5%($) 10%($)
Bradley B. Buechler 55,000 (2) 18.3% $6.75 11/29/05 $226,652 $591,677
David B. Mueller 50,000 (2) 16.7% $6.75 11/29/05 $206,047 $537,888
Daniel J. Yoder 14,750 4.9% $6.75 11/29/00 $ 27,507 $62,614
David G. Pocost 5,250 1.8% $6.75 11/29/00 $ 9,791 $22,286
(1) The rates of appreciation presented of 5% and 10% are set by the
Securities and Exchange Commission, and therefore, are not intended to forecast
future appreciation of the Company's stock price.
(2) These represent options issued under the Restricted Stock Option Plan
where neither the options or common stock acquired may be sold or otherwise
disposed of for three years after the date of grant of the option.
The following table summarizes all exercised and unexercised options at
the end of fiscal 1996 for the executive officers named above.
NUMBER OF
UNEXERCISED VALUE OF
OPTIONS UNEXERCISED
SHARES AT FISCAL "IN-THE-MONEY"
ACQUIRED ON VALUE YEAR END (2) OPTIONS AT
FISCAL
NAME EXERCISE (#) REALIZED($)(1) (ALL EXERCISABLE) YEAR END(1)
Bradley B. Buechler 38,000 $255,500 849,062 (3) $6,144,626
David B. Mueller --- --- 215,000 (3) $1,379,375
Randy C. Martin --- --- 10,000 $ 40,000
Daniel J. Yoder --- --- 41,750 $ 236,438
David G. Pocost --- --- 9,250 $ 45,813
(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
and at fiscal year end, respectively.
(2) The Board has resolved that at no time will the total unexercised options
be in excess of 10% of the then outstanding common shares.
(3) These represent options issued under the Restricted Stock Option Plan
where neither the options or common stock acquired may be sold or otherwise
disposed of for three years after the date of grant of the option.
Page 6
EMPLOYMENT AGREEMENTS
MESSRS. BUECHLER AND MUELLER
On July 1, 1992, the Company entered into Amended and Restated Employment
Agreements (the "Agreements") with Messrs. Buechler and Mueller (collectively
hereinafter the "Employees" and individually, an "Employee") which amended
and restated the Employment Agreements previously in effect with each of
these Employees. The terms of each Agreement, which have been amended as of
July 1, 1996, shall continue until terminated by two years' written notice by
the Company to the Employee or by one year's written notice from the Employee
to the Company, such notice not to be given by the Company or the Employee
before June 30, 1998. The Agreements provide for annual base salaries,
subject to periodic review for cost of living and/or merit and other
increases, (the base salaries were fixed at $360,000 for Mr. Buechler and
$230,000 for Mr. Mueller as of July 1, 1996) and with: (a) a bonus based upon
the Company's earnings, (b) term life insurance of $1,250,000 for Mr.
Buechler and $750,000 for Mr. Mueller, and (c) annual contributions to a
pension plan in an amount equal to 15% of each Employee's base salary.
Each Employee shall be entitled to a lump sum severance benefit equal to
two times Employee's then current base salary plus the aggregate amount of
bonus paid or earned by the Employee in the two years prior to the date of
such notice of termination, upon the occurrence of any of the following
events: (a) if the Employee is terminated by the Company for any reason other
than for "cause" as described below, or (b) if the Employee justifiably
resigns and terminates his employment with the Company, provided that such
voluntary termination occurs as permitted under Agreement, as described below.
If the Employee terminates his employment for any other reason pursuant to
written notice as provided in the Agreement, he shall be entitled to a lump
sum severance benefit equal to the sum of: (a) the Employee's then current
base salary for one year, plus (b) one-half of the aggregate amount of bonus
paid or earned by the Employee in the two years prior to the date of such
written notice of termination.
A termination for Cause shall have occurred only if such Employee's
employment is terminated because he was convicted of a felony, or because of
acts or omissions (including failure to follow the lawful instructions of the
Company's Board of Directors) on such Employee's part resulting, or intended
to result in, personal gain at the expense of the Company (including its
subsidiaries) or intentional acts or omissions on such Employee's part
causing material injury in excess of $1,000,000 to the property or business
of the Company (including its subsidiaries). Cause shall not include: (i)
bad judgment or any act or omission reasonably believed by such Employee in
good faith to have been in or not opposed to the best interest of the Company
(including its subsidiaries); or (ii) any acts or omissions by such Employee
in connection with any bid, tender or merger offer, restructuring proposals,
or any controversy or litigation relating thereto (whether involving British
Vita PLC or other persons), in which the Company may become involved, wherein
such Employee's acts or omissions are the subject of controversy with any
persons or firms involved in such matters.
If any of the following events (each a "justification") occur during the
term of the Agreements, each Employee may voluntarily terminate and
justifiably resign his employment immediately upon the occurrence of such
event, and be entitled to the severance benefits described above: (a) any
duties are assigned to such Employee or restrictions are placed on such
Employee which are inconsistent with his position, duties, responsibilities,
and status as President and Chief Executive Officer in the case of Mr.
Buechler and Executive Vice President and Chief Operating Officer in the case
of Mr. Mueller; or (b) such Employee's base salary, options, and bonuses under
such Employee's Agreement are not paid or delivered within seven days of such
Employee's notice to the Company that such are due, or the Company takes
action which otherwise adversely affects or materially reduces any other
benefits or rights which such Employee is entitled to under such Employee's
Agreement.
MR. YODER
On June 30, 1995, the Company entered into an Employment Agreement (the
"Agreement") with Mr. Yoder. The term of the Agreement extends to June 30,
1998 with annual base compensation, subject to periodic review for cost of
living and/or merit and other increases, of $140,000. In addition, the
Agreement requires the Company to maintain term life insurance in the amount
of $250,000 for Mr. Yoder's designated beneficiaries for the term of the
Agreement, all premiums thereon to be paid by the Company. The Agreement
provides for a guaranteed minimum bonus of $25,000 per year, or a greater
amount based upon his performance and the overall results of the Company's
operations.
Page 7
PERFORMANCE GRAPH
The following graph compares cumulative total Company shareholder return
for the last five 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.
10/91 10/92 10/93 10/94 10/95 10/96 CAGR*
SPARTECH CORPORATION $100 $133 $200 $307 $340 $595 42.9%
S&P 500 $100 $107 $119 $120 $148 $179 12.3%
S&P Specialty Chemicals $100 $113 $132 $112 $134 $147 8.0%
* Compound annual growth rate
In 1996, the Company changed to the S&P Specialty Chemicals Index as its
industry comparison instead of the selected peer group index used in prior
years. The Company's peer group was required to be reconstituted due to
Spartech's acquisition of one of its peer group members (Portage Industries
Corporation) in 1996, and the Company believes this broader index is a better
comparison for its mix of businesses. The remaining companies that comprised
the peer group used in the prior years would have presented a 1996 value of
$151, or a CAGR of 8.6% for the five-year period presented.
Page 8
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
To Our Shareholders:
The Compensation Committee of the Board of Directors is responsible for
approving compensation levels for all executive officers of the Company and
for any employee with base compensation in excess of $100,000 per annum, and
for any employee with an employment contract. Our objective is to provide
compensation that is fair and equitable to both the employee and the Company.
Consideration is given to the employee's overall responsibilities,
professional qualifications, business experience, technical expertise, and
their resultant combined value to the Company's long-term performance and
growth.
In establishing compensation levels for the Chief Executive Officer and
Chief Operating Officer, we consulted an independent survey published by the
actuarial and benefits firm of Towers Perrin, entitled "1995 Towers Perrin
Executive Compensation Survey" and had Towers Perrin conduct further analysis
for companies with sales revenue between $300 million and $500 million. Base
salaries, when combined with anticipated bonuses, were established at levels
approximating the average reported for companies of comparable size to
Spartech Corporation. Annual bonuses for these two employees are based on
the operating results of the Company.
The Compensation Committee also reviews the stock options to be awarded
to all employees. Future stock option awards will be granted to individuals
based upon performance.
The Compensation Committee periodically reviews the compensation levels
we established for each employee for whom we are responsible and approves
adjustments recommended by the Chief Executive Officer for changes in
responsibility for various executives of the Company or economic conditions.
We believe that by providing fair and equitable compensation levels, the
Company will continue to attract and maintain qualified individuals who are
dedicated to the long-term performance and growth of Spartech Corporation.
In December 1996, the Board authorized broadly based stock ownership
guidelines for approximately 75 key managers of the Company. Under the
guidelines adopted by the Board, the Company's Chief Executive Officer is
expected to hold stock equal to four times base pay, the Chief Operating
Officer three times base pay, and other key managers up to two times their
base pay. Participants are expected to reach their respective goals over a
four-year period. Unexercised stock options are not counted toward achieving
these targets.
Thomas L. Cassidy Francis J. Eaton
W.R. Clerihue Jackson W. Robinson
Page 9
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 all persons known to the
Company as of December 31, 1996, to be the beneficial owner of more than 5%
of the 26,366,304 shares of common stock outstanding as of that date.
MANAGEMENT
NUMBER OF PERCENTAGE OF
COMMON COMMON
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED(1) OWNED
Directors and
Executive Officers:
Francis J. Eaton
Rodney H. Sellers
Vita International Limited
Soudan Street
Middleton, Manchester
M24 2DB England 8,734,987(2) 33.1%
Thomas L. Cassidy
The TCW Group
200 Park Avenue
New York, NY 10166 4,934,938(3) 18.7%
Bradley B. Buechler 1,002,362(4) 3.7%
W.R. Clerihue 40,000(5) *
Randy C. Martin 19,400(6) *
David B. Mueller 311,170(7) 1.2%
David G. Pocost 17,350(8) *
Jackson W. Robinson 42,000(9) *
Daniel J. Yoder 51,295(10) *
All Directors and
Executive Officers as a
Group (10 persons) 15,153,502(11) 54.7%
CERTAIN BENEFICIAL OWNERS
Other Beneficial Owners
In Excess of 5% of the Common
Shares Outstanding:
FMR Corp.
Fidelity Management &
Research Company
82 Devonshire Street
Boston, MA 02109 1,411,200(12) 5.4%
Page 10
NOTES:
* Denotes that the percentage of class of security beneficially owned is less
than 1%.
(1)Includes shares issuable upon exercise of options as noted for the respective
owners.
(2)Messrs. Eaton and Sellers, each a director of the Company, are also directors
of British Vita PLC and Vita International Limited; as such, these amounts
represent common stock ownedby Vita International Limited.
(3)The TCW Group is comprised of TCW Special Placements Fund I, TCW Special
Placements Fund II and TCW Capital, all California limited partnerships. Mr.
Cassidy, a director, is Managing Director of Trust Company of the West and is a
senior partner of TCW Capital; as such, this amount represents the common stock
owned by TCW Group, Inc. The shares of common stock are held beneficially by TCW
Special Placements Fund I (3,906,451 shares), TCW Special Placements Fund II
(998,624 shares) and TCW Capital (29,863 shares), as Investment Manager,
pursuant to an investment management agreement dated as of June 30, 1987. The
TCW Group, Inc. owns 100% of the stock of TCW Asset Management Company
("TAMCO"). TAMCO is the managing general partner of TCW Capital, a general
partnership. TCW Capital is a general partner of TCW Special Placements Fund I
and TCW Special Placements Fund II. An investment committee of TAMCO controls
the investment decisions and voting of the shares of common stock beneficially
owned by The TCW Group, Inc.; the identities of the members of such investment
committee are unknown to the Company.
(4)Includes 924,062 shares issuable upon exercise of options presently
exercisable.
(5)Includes 10,000 shares issuable upon exercise of options presently
exercisable.
(6)Includes 19,000 shares issuable upon exercise of options presently
exercisable.
(7)Includes 275,000 shares issuable upon exercise of options presently
exercisable.
(8)Includes 16,750 shares issuable upon exercise of options presently
exercisable.
(9)Includes 35,000 shares issuable upon exercise of options presently
exercisable.
(10)Includes 50,750 shares issuable upon exercise of options presently
exercisable.
(11)Includes 1,330,562 shares issuable upon exercise of options presently
exercisable.
(12)FMR Corp. beneficially owned 1,411,200 shares of common stock including
1,003,900 shares beneficially owned by Fidelity Management & Research Company as
a result of it serving as investment adviser to various investment companies
and other funds and 407,300 beneficially owned by Fidelity Management Trust
Company as trustee or managing agent for various private investment accounts and
other funds. FMR Corp. has sole voting power with respect to the 407,300 shares
and sole investment power with respect to the total 1,411,200 shares.
Page 11
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company, on the recommendation of the Audit
Committee, appointed Arthur Andersen LLP as independent auditors of the
Company for fiscal 1997. The Board proposes that the shareholders ratify at
this meeting the appointment of Arthur Andersen LLP as independent auditors
for fiscal 1997. Arthur Andersen LLP has served as the Company's independent
auditors since fiscal 1986. The Company has had no disagreements with Arthur
Andersen 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 meeting are not voted in favor of the
appointment, the Board will reconsider its selection.
Arthur Andersen 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.
DISCRETIONARY VOTING OF PROXIES ON OTHER MATTERS
Management does not intend to bring before the Annual Meeting any
matters other than those disclosed in the Notice of the Meeting, and it does
not know of any business which persons other than management intend to
present at the meeting. Should any other matter requiring a vote of the
shareholders arise, the proxies in the enclosed form confer upon the person
or persons entitled to vote the shares represented by such proxies
discretionary authority to vote such shares in respect of any such other matter
in accordance with their best judgment.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1998 Annual
Meeting of the Shareholders of the Company must be received by the Company,
for inclusion in its proxy statement and form of proxy relating to that
meeting, by September 24, 1997. In order for a stockholder to nominate a
candidate for director, timely notice of the nomination must be received by
the Company in advance of the meeting. The stockholder filing the notice of
nomination must describe various matters regarding the nominee, including
such information as name, address, occupation, and shares held.
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/David B. Mueller
David B. Mueller
Executive Vice President,
January 22, 1997 Chief Operating Officer and Secretary
Page 12
Notice of Annual Meeting
and Proxy Statement
Annual Meeting of Shareholders
March 12, 1997
SPARTECH CORPORATION
7733 FORSYTH * SUITE 1450 * CLAYTON, MISSOURI 63105-1817
Registration Mark
outside back page
SPARTECH CORPORATION PROXY
Proxy to Vote Shares of Common Stock Solicited by the Board of Directors for
the Annual Meeting of Shareholders on March 12, 1997 at 10:00 am CST at the
Pierre Laclede Conference Center, 7733 Forsyth Boulevard, Clayton,
Missouri 63105.
The undersigned hereby appoints W.R. Clerihue and Bradley B. Buechler,
and each of them with full power of substitution, as the proxies of the
undersigned to vote and act with respect to all shares of Common Stock of
Spartech Corporation which the undersigned may be entitled to vote at the
Annual Meeting of Shareholders to be held on March 12, 1997 and at any and all
adjournments thereof with all the powers the undersigned would posses if
personally present, upon the matters noted below and such other matters as may
properly come before the meeting:
1. ELECTION OF DIRECTORS: [ ] FOR all nominees (except as marked to the contrary
[ ] WITHHOLD AUTHORITY for all nominees
Thomas L. Cassidy, David B. Mueller, Rodney H. Sellers
2. PROPOSAL TO RATIFY APPOINTMENT OF ARTHUR ANDERSEN LLP, as auditors of
the Company for the fiscal year 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In accordance with their best judgment upon such matters as may properly
come before the meeting.
[ ] Authority Granted [ ] Authority Withheld
(Back of Card)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREINBY THE UNDERSIGNED. IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE
VOTED "FOR" THE NOMINEES AND THE PROPOSAL LISTED AND IN ACCORDANCE WITH THEIR
BEST JUDGMENT UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Signature of Shareholder
Signature of Shareholder
IMPORTANT: Please sign this
Proxy exactly as your name
appears hereon. IF SHARES ARE
HELD BY MORE THAN ONE OWNER,
EACH MUST SIGN. Executors,
Administrators, trustees,
guardians, and others signing
in representative capacity
should give their full titles.
DATED: ____________, 1997
Be sure to date this proxy.