EXHIBIT 10.1
THIS AGREEMENT CONTAINS A WAIVER OF CERTAIN OF YOUR LEGAL
RIGHTS. YOU ARE ADVISED TO CONSULT
WITH AN ATTORNEY PRIOR TO SIGNING.
RETIREMENT AGREEMENT AND RELEASE
This Retirement Agreement and Release ("Agreement") is made
and is effective as of May 6, 2005 (the "Retirement Date"), by and between
BRADLEY B. BUECHLER (hereinafter referred to as "Employee") and SPARTECH
CORPORATION, a Delaware corporation, which includes, for purposes of this
Agreement, its subsidiaries and related organizations and, collectively, all of
its and their officers, directors, employees, trustees, agents, representatives,
predecessors, successors and assigns, and compensation plans and programs
sponsored or established by any of the foregoing (hereinafter collectively
referred to as the "Corporation").
WHEREAS, Employee was an employee of the Corporation since
1981 and resigned from employment in order to commence retirement from the
Corporation effective on the Retirement Date; and
WHEREAS, the parties to this Agreement are also parties to an
Amended and Restated Employment Agreement dated as of November 1, 2002 (the
"Employment Agreement") and upon the Payment Date of this Agreement (as "Payment
Date" is defined below) this Agreement shall supersede and replace in its
entirety the Employment Agreement; and
WHEREAS, by this Agreement, the parties desire to provide for
a mutually agreeable transition to the Employee's retirement from employment
with the Corporation and from the Corporation's Board of Directors.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound hereby, it is
understood and agreed as follows:
1. RETIREMENT AND RETIREMENT PAYMENTS AND BENEFITS
On the Retirement Date, the Employee ceased to be an employee or
officer of the Corporation and ceased to be a member of the Board of Directors
of the Corporation. Subject to applicable withholding for taxes and payroll
taxes as described below:
(a) Initial Retirement Payment. On the eighth day after the Corporation
receives a fully executed copy of this Agreement and, if the execution by the
Employee of this Agreement has not then been revoked (the "Payment Date"), the
Corporation will pay to the Employee, in a
lump sum payment, $2,711,174 in full satisfaction of the Company's obligations
under Section 5(a) of the Employment Agreement.
(b) Deferred Retirement Payment. As set forth in Section 4(b) of the
Employment Agreement, at the same time as the Corporation pays other employees
of the Corporation eligible for an annual bonus for the fiscal year ending in
2005, the Corporation shall pay to the Employee, in a lump sum payment, an
amount determined by, first, multiplying 0.90% by the Corporation's earnings
before income taxes as reported in the Corporation's consolidated financial
statements for the fiscal year ending in 2005, adjusted to exclude profit,
income or loss on extraordinary or nonrecurring and unusual items (such as the
sale of a significant amount of assets or securities other than in the ordinary
course of business, one time employee separation costs, including the amount set
forth in Section 1(a) above, and significant litigation costs and recoveries) as
determined by the Corporation's auditors based on generally accepted accounting
principles and then multiplying such amount by a fraction, the numerator of
which is the number of days from the first day of the fiscal year ending in 2005
to the Retirement Date (including each such day) and the denominator is 365.
(c) Compensation and Benefits.
(i) Accrued Vacation and Other Accrued Compensation. On the
Payment Date, the Corporation shall pay the Employee in a single lump sum the
aggregate amount of any accrued but unused vacation pay, accrued and unpaid base
salary and any reimbursement of business travel taken and customer entertainment
provided before the Retirement Date which has not then been reimbursed. The
parties agree that the lump sum value of the accrued and unused vacation pay is
$35,686.
(ii) Amounts Payable Under Benefit Plans and Programs. The
Corporation will pay or cause to be paid in a timely fashion any amount due to
be paid as of the Retirement Date or which would be paid as of the Retirement
Date upon proper and timely application therefor to provide after the Retirement
Date under any Corporation sponsored benefit plan or program. For purposes of
this subparagraph, the Corporation shall transfer to the Employee ownership of
Policy Number 150218609 issued by the Equitable Life Insurance Society of the
United States in complete satisfaction of any obligation of the Corporation
under any and all deferred compensation and split dollar insurance arrangements
which may have been in effect at any time during the Employee's employment with
the Corporation, including, but not limited to, deferred compensation and/or
split dollar obligations of the Corporation arising from or under Section 2(d)
of the Employment Agreement or obligations which may, or could be argued to,
have arisen from any discussion, negotiation, representation or action of either
party with respect to or in contemplation of a deferred compensation or
insurance arrangement in replacement of the arrangement described in Section
2(d) of the Employment Agreement.
(iii) Coverage Under Employee Benefit Plans. Until the third
anniversary of the Retirement Date, the Corporation shall provide coverage (or
cause comparable coverage to be provided if the Corporation determines in good
faith that its then employee benefit plans cannot provide such coverage) to the
Employee and, if the Employee so elects, to Employee's dependents, under the
Corporation's health benefit program and life insurance program generally
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available to other salaried employees of the Corporation, as such programs are
in effect from time to time, on the same terms and conditions and subject to the
same employee contribution rates, times and terms as the Corporation provides
such programs to other employees of the Corporation, provided, however, if the
Employee secures health and/or life coverage through subsequent employment which
is comparable coverage and on terms and conditions reasonably comparable to the
programs then offered by the Corporation, the Corporation's obligation to
continue its health and/or life coverage, as the case may be, shall cease. The
Employee will not receive credit for benefit, vesting or early retirement
eligibility purposes under any employee benefit plan or program of the
Corporation after the Retirement Date.
(iv) Stock Options. Solely for the purpose of determining the
expiration dates of stock options granted to the Employee under the
Corporation's 2004 Equity Compensation Plan and under the Corporation's 2001
Stock Option Plan which vested as of the Retirement Date in accordance with
their respective terms as set on the date of grant, the Employee's separation
from service shall be deemed a "Retirement" as defined in connection with each
such plan. Without limiting the foregoing, stock options that are not vested as
of the Retirement Date under the terms of the option agreements between the
Corporation and the Employee evidencing such stock options shall not, and shall
never become, vested or exercisable. With respect to stock options vested as of
Retirement Date, the Employee shall have the exercise rights and the Employee's
obligations with respect to stock options vested as of the Retirement Date
attendant to a Retirement, including, but not limited to, the automatic
expiration of the options should the Employee take actions which are
inconsistent with Retirement or detrimental to the interests or business of the
Corporation.
(d) Transitional Matters. In connection with the Employee's transition
to retirement from employment with the Corporation, the Corporation shall
provide the following:
(i) Transfer of unencumbered title to the Employee, as soon as
practicable as the required documents can be prepared and filed, the automobile
provided by the Corporation to the Employee in connection with his employment
with the Corporation (with any applicable transfer taxes being paid by the
Corporation);
(ii) Reasonable use of the Corporation's aircraft in
accordance with the terms of the Corporation's policies relating thereto until
June 7, 2005, in accordance with the terms of the Corporation's policies
relating thereto; and
(iii) Transfer of unencumbered title to the Employee to any
and all Corporation-owned property located in the office of the Employee at the
Corporation's headquarters, including, but not limited to, furniture, computers
(but excluding computer files containing Corporation information or records),
memorabilia and other personal items of the Corporation. Without limiting the
foregoing, the intent of the foregoing transfer is to be in addition to the
personal property of the Employee, wherever located.
(e) Fees of Professional Advisors. The Corporation shall reimburse the
Employee for amounts paid by the Employee for reasonable attorneys' fees,
accountants' fees, financial planner fees, tax advisor fees and the cost of such
other professional service providers as the
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Employee deems appropriate in connection with reviewing this Agreement and his
transition to retirement in an aggregate amount not to exceed $25,000.
(f) ERISA Rights. Nothing in this Agreement is intended to surrender or
waive any right the Employee may have under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including, but not limited to, any
vested and accrued balances under Corporation's employee benefit plans, which
accrued benefits shall be payable when and in accordance with the terms of the
respective plans.
(g) Applicable Taxes. Notwithstanding any provision of this Agreement,
prior to the delivery of any thing of value to the Employee, the Corporation
shall withhold from any cash payment under this Agreement the amount determined
in good faith by the Corporation to be required to be withheld for applicable
federal, state and/or local taxes or to be paid by the Employee as federal,
state or local payroll taxes for all things of value to be delivered under this
Agreement. If any thing of value to be delivered under this Agreement is to be
delivered in a form other than cash, withholding for applicable taxes shall be
withheld from cash payments before delivery of non-cash things of values.
2. RELEASE OF LIABILITY AND COVENANT NOT TO SUE
(a) Employee, on behalf of himself, his heirs, dependents, and
administrators, absolutely, irrevocably and unconditionally releases and forever
discharges the Corporation from any and all claims, known and unknown, under
federal, state or municipal law (including all common law claims) and all
federal, state (including Missouri and each other state in which the Corporation
transacts business) and local statutes, ordinances and regulations including,
but not limited to, claims relating to breach of contract, breach of promise,
misrepresentation, wrongful discharge, discrimination on account of age, race,
sex, religion, national origin, military status, disability or other such
characteristics protected by law or retaliation for the exercise of any right,
including refusal to participate in any action, that he may have against the
Corporation relating to, or arising out of, his employment with, or separation
from employment with the Corporation, whether now apparent or yet to be
discovered or which may hereafter develop based on events that have transpired
from the beginning of time to the date of his execution of this Agreement,
whether or not any action, claim, complaint, grievance or charge has been filed
by Employee or on his behalf (collectively "Civil Rights Provisions"). Further,
Employee specifically releases the Corporation from any and all claims arising
under the following Civil Rights Provisions, in each case as amended and in
effect:
(i) Title VII of the Civil Rights Act of 1964, as
amended;
(ii) the Americans With Disabilities Act of 1990; as
amended
(iii) the Age Discrimination in Employment Act, as amended;
and
(iv) any same or similar state or local law, ordinance or
regulation prohibiting such discrimination in
employment.
The Employee specifically recognizes that a portion of the amount set forth in
Section 1 above is in full satisfaction of any claim the Employee may or could
make against the Corporation in connection with the Employment Agreement, the
Corporation's bonus plans, stock option
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programs or any other compensation and deferred compensation plan or program of
the Corporation applicable to senior or executive employees or employees
generally, and the foregoing release is intended to release each and all such
obligations and plans. Without limiting the foregoing, if the Employee believes
or comes to believe he is or may be due any amount from the Corporation which is
not set forth in this Agreement, each such amount is forfeit and forever
discharged from payment by the Corporation.
The foregoing shall not prevent the Employee from filing charges with the Equal
Employment Opportunity Commission but the Employee agrees he shall not
financially benefit from such charges.
(b) If Employee violates this Agreement by filing a claim against or
suing the Corporation, Employee agrees to pay all costs and expenses of
defending against such claims incurred by the Corporation or in prosecuting any
counterclaim or cross claim based on this Agreement, including reasonable
attorney's fees and all other costs and expenses associated therewith.
3. WAIVER OF RELIEF
This Agreement encompasses all relief, no matter how called, whether
now apparent or yet to be discovered, including but not limited to: wages, front
pay, back pay, compensatory damages, pension or retirement benefits, punitive
damages, liquidated damages, damages for pain, suffering, mental anguish and
loss of enjoyment of life, and costs and attorney's fees.
4. NO ADMISSION OF LIABILITY
Execution of this Agreement and compliance with its terms, as provided
above, do not constitute an admission by the Corporation that (i) it has treated
the Employee or any other person unfairly or unlawfully or (ii) that it engaged
in any breach of contract or violation of any Civil Rights Provision or other
employment discrimination statute, or any other legal provision, regulation,
ordinance order or rule of common law.
5. RETURN OF PROPERTY, CONFIDENTIALITY AND NON-DISPARAGEMENT COMMITMENTS
(a) Employee states that he has returned to the Corporation all records
relating to the Corporation and its business in whatever medium and agrees not
to disclose or divulge, directly or indirectly, any business secret or other
confidential or proprietary information of the Corporation to any person, firm,
partnership, venture or corporation, except as required by law.
(b) Employee and Corporation agree that he and it will not, in any way,
disparage one another to any person(s) or organization(s), including, without
limitation, any employee of the Corporation.
(c) The Corporation will respond to all reference inquiries concerning
the Employee by confirming the dates of his employment with the Corporation,
unless the parties mutually agree to another statement.
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6. LITIGATION COOPERATION
Employee agrees to cooperate with the Corporation in the prosecution or
defense of claims asserted by or against the Corporation. Such cooperation shall
include meeting with representatives of the Corporation or the Corporation's
attorneys, or both, divulging to the Corporation any information that the
Corporation may request for possible use in litigation, arbitration, or other
legal proceeding, and testifying on behalf of the Corporation at the
Corporation's request. If called upon by the Corporation for cooperation under
this Section 6, the Corporation shall reimburse the Employee for his reasonable
out-of-pocket expenses in connection with such cooperation.
7. NON-COMPETITION AGREEMENT AND NON-SOLICITATION AGREEMENTS
The Employee agrees that:
(a) Until after the second anniversary of the Retirement Date, he shall
refrain, as a principal, partner, co-venturer, employee, agent, servant or
independent contractor, from any business activity which is engaged in a
business which competes with a business in which the Corporation is engaged as
of the Retirement Date, including, but not limited to, the production of
engineered thermoplastic materials, polymeric compounds and molded and profile
products.
(b) Until after the second anniversary of the Retirement Date, he shall
refrain from soliciting for employment with any business of any type whatsoever
individuals who are employees of the Corporation on the Retirement Date.
(c) Until after the second anniversary of the Retirement Date, he shall
refrain from soliciting business from any direct or indirect customer of the
Corporation who is a customer of the Corporation on the Retirement Date, which
has been a customer of the Corporation within one year prior to the Retirement
Date or to which the Corporation has plans to propose business on the Retirement
Date.
(d) Until after the third anniversary of the Retirement Date, he shall
refrain from taking any action to advance a position with respect to the
Corporation that has not been specifically approved by the Board of Directors of
the Corporation, including, but not limited to, acquiring or accumulating shares
of the Corporation with a view to acquiring effective control of the Corporation
and commencing, participating or assisting, directly or indirectly, in a
solicitation of proxies. Without limiting the foregoing, the Employee will be
deemed to have taken an action that advances a position with respect to the
Corporation that has not been specifically approved by the Board of Directors of
the Corporation if he takes such action individually or becomes a consultant to,
employee of, partner or co-venturer with, or agent of a fund, trust, person,
firm or corporation that has or intends to take a position with respect to the
Corporation that has not been specifically approved by the Board of Directors.
(e) Any breach or threatened breach of any one or more of the
provisions this Section 7 would cause immediate, material and irreparable harm
to the Corporation and that money
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damages would not provide an adequate remedy to the Corporation. The Corporation
shall have all of the rights and remedies available under law or equity,
including, but not limited to, injunctive relief, available to any party
enforcing this covenant not to compete. Each of the rights and remedies shall be
independent of the other and shall be severally enforceable including, but not
limited to, the right to have the covenants specifically enforced by any court
of competent jurisdiction and the right to require Employee to account for and
pay over to the Corporation all benefits derived or received by him as a result
of any such breach of covenant and Employee shall not raise a defense to the
granting of any such relief that the Corporation has an adequate remedy at law.
8. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding of the parties
and supersedes all prior negotiations, understandings and agreements, proposed
or otherwise, written or oral, concerning the subject matters hereof, including
but not limited to the Employment Agreement. Furthermore, no modification of
this Agreement shall be binding unless in writing signed by each of the parties
hereto.
9. SEVERABILITY
Should any provision of this Agreement be declared illegal or
unenforceable by any court of competent jurisdiction and if such provision
cannot be modified to be enforceable (including the general release language),
such provision shall immediately become null and void, leaving the remainder of
this Agreement in full force and effect. However, if any portion of the general
release language in Section 3 or 4 is ruled unenforceable for any reason, the
Corporation and Employee agree to use their best efforts to negotiate in good
faith an enforceable general release.
10. GOVERNING LAW
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, the state in which the
Corporation is incorporated, without regard to its principles or provisions of
conflicts of laws. Any action brought under this Agreement shall be brought in a
court of competent jurisdiction with venue in St. Louis County, Missouri.
11. JUDICIAL ENFORCEMENT
This Agreement may be specifically enforced in judicial proceedings
brought in equity in a court of competent jurisdiction.
12. VOLUNTARY AND UNDERSTANDING EXECUTION
Employee agrees and acknowledges that he has read this Agreement and
fully understands the terms and conditions of this Agreement, including the
release of claims and waiver of rights, that he has consulted with his attorney
and that he enters into this Agreement knowingly, voluntarily, free from duress
and as a result of his own free will.
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13. CONSIDERATION AND REVOCATION PERIODS
(a) EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THIS WRITING AND
PREVIOUSLY BY THE CORPORATION TO CONSULT WITH AN ATTORNEY OF HIS CHOOSING
CONCERNING HIS RIGHTS IN CONNECTION WITH HIS TERMINATION FROM EMPLOYMENT AND THE
TERMS AND CONDITIONS OF THIS AGREEMENT, INCLUDING THE RELEASE OF ALL CLAIMS
CONTAINED HEREIN.
(b) EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED THAT, WITH REGARD TO
THE RELEASE OF CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AS
AMENDED, HE HAS A LEGAL RIGHT TO USE ALL OR ANY PART OF TWENTY-ONE (21) DAYS TO
CONSIDER, IN CONSULTATION WITH HIS ATTORNEY, WHETHER TO SIGN THIS AGREEMENT AND
THAT, DURING SUCH PERIOD OF CONSIDERATION, THE CORPORATION SHALL NOT REVOKE ITS
OFFER TO ENTER INTO THIS AGREEMENT ON THE TERMS AND CONDITIONS SET FORTH HEREIN.
(c) EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED THAT, IF HE SIGNS
THIS AGREEMENT, HE CAN THEREAFTER REVOKE HIS EXECUTION OF THIS AGREEMENT TO THE
EXTENT OF THE RELEASE OF CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT
ON OR BEFORE THE CLOSE OF BUSINESS ON THE SEVENTH DAY AFTER HIS EXECUTION HEREOF
BY DELIVERING A WRITTEN REVOCATION TO THE CORPORATION, ATTENTION, GENERAL
COUNSEL, SPARTECH CORPORATION, 120 CENTRAL AVENUE, SUITE 1700, ST. LOUIS,
MISSOURI 63105.
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IN WITNESS WHEREOF, the aforesaid parties have hereunto set their hands
and seals as of the date written below.
WITNESS BRADLEY B. BUECHLER
/s/ TIMOTHY K. KELLETT /s/ BRADLEY B. BUECHLER
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Date: 5/24/05 Date: 5/24/05
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SPARTECH CORPORATION
ATTEST:
/s/ JEFFREY D. FISHER, Secretary By: /s/ JACKSON W. ROBINSON
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Jackson W. Robinson
Title: Chairman of the Board
Date: 5/26/05
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