EXHIBIT 5.02(2)
FORM OF
STOCK-SETTLED STOCK APPRECIATION RIGHT AWARD
PURSUANT TO THE SPARTECH CORPORATION
2004 EQUITY COMPENSATION PLAN
AWARD NO.: S-SSAR 20__-___
AWARD DATE: _________, 20__
PARTICIPANT: ____________________
NO. OF RIGHTS: ______
BASE PRICE: $_____ (US) per share
[NOT LESS THAN NYSE CLOSING PRICE ON AWARD DATE]
EXPIRATION DATE: 5:00 p.m. St. Louis, Missouri time on ________, 20__
[ONE (1) DAY BEFORE THE 10TH ANNIVERSARY OF
THE AWARD DATE]
THIS STOCK-SETTLED STOCK APPRECIATION RIGHT AWARD ("AWARD") is granted by
Spartech Corporation (the "COMPANY") to the "PARTICIPANT" named above, as of the
"AWARD DATE" specified above, pursuant to the Spartech Corporation 2004 Equity
Compensation Plan (as amended and in effect from time to time, the "PLAN").
Capitalized terms not defined herein have the meanings given to them in the
Plan.
Subject to the terms and conditions set forth in this Award and the Plan, and
subject to the Participant's written acknowledgment and acceptance of this
Award, each "RIGHT" granted by this Award (the total number of which is set
forth above) entitles the Participant to receive, upon exercise of the Award, an
amount equal to the excess (if any) of the fair market value of one share of the
Company's common stock, $.75 par value per share (the "COMMON STOCK") on the
date of exercise over the "BASE PRICE" specified above, which amount shall be
payable to the Participant in shares of Common Stock (the "AWARD SHARES").
This Award is subject to the terms of the Plan and to all of the terms and
conditions contained above and in EXHIBIT A, which begins on the following page
and which is a part of the Award. Among other things, EXHIBIT A contains
important information on vesting, termination and exercise of the Award.
THIS AWARD IS VOID UNLESS SIGNED BY THE PARTICIPANT AND RETURNED TO THE COMPANY
BY THE 60TH DAY AFTER THE AWARD DATE.
SPARTECH CORPORATION
By:______________________________________
(Name)________________________________
(Title)_______________________________
* * * * *
By signing below, the Participant hereby acknowledges and accepts this Award
subject to the terms set forth above and in the Plan, and acknowledges receipt
of a copy of the Plan and the current Prospectus for the Rights and the
underlying Common Stock.
PARTICIPANT: ____________________________
DATE SIGNED: ____________________________
EXHIBIT A
TO
STOCK-SETTLED STOCK APPRECIATION RIGHT AWARD
1. TERM AND TERMINATION OF THE AWARD. The Award is effective as of the Award
Date. The Award will expire, terminating the Participant's unexercised Rights
under the Award, automatically and without any requirement of notice to the
Participant, on the "EXPIRATION DATE" specified above; except that:
(i) If the Participant terminates his or her Employment prior to the
Expiration Date for any reason except Disability or Retirement, the
Award will expire immediately upon the termination of the
Participant's employment; or
(ii) If the Company terminates the Participant's Employment prior to the
Expiration Date for Cause, the Award will expire immediately upon
the termination of the Participant's employment; or
(iii) If the Company terminates the Participant's Employment for any other
reason except Disability or Retirement, the Award will expire one
(1) year after the effective date of termination of the
Participant's employment, but in no event later than the Expiration
Date; or
(iv) In the event of the Participant's death, the Award will expire one
(1) year after the date of death, but in no event later than the
Expiration Date; or
(v) If the Participant directly or indirectly engages in any Detrimental
Activity (as defined below) either during the Participant's
Employment or within the one-year period after termination of the
Participant's Employment provided in Section 1(iii), the Award will
expire upon written notice of termination given by the Company to
the Participant, but in no event later than the Expiration Date.
2. WHEN THE AWARD BECOMES EXERCISABLE. The Award will become exercisable
("VEST") in installments at a rate of 25% of the total number of Award Shares on
each of the first four (4) anniversaries of the grant date, on a cumulative
basis; provided, however, that, subject to the above termination provisions:
(i) The Award will immediately vest in full (A) upon the death of the
Participant, or (B) if the Participant's Employment terminates
because of Disability, or (C) in the event of a Change in Control;
(ii) The Award will continue to vest in accordance with the above
schedule if the Participant's Employment terminates by reason of the
Participant's Retirement; and
(iii) Except as set forth above, no part of the Award will vest after the
termination of the Participant's Employment.
3. EXERCISE OF THE AWARD. Subject to the other terms and conditions contained
herein, the Award may be exercised only in the following manner:
(a) WHO MAY EXERCISE THE AWARD. The Award may be exercised during the lifetime
of the Participant only by the Participant or by a permitted transferee of the
Award registered as such on the Company's books, and thereafter only by the
personal representative of the Participant or such permitted transferee or a
person who acquired the right to exercise the Award by bequest or inheritance or
by reason of the death of the Participant or such permitted transferee. For
purposes of Sections 3(b)-3(d), the term "Participant" shall include any person
permitted to exercise the Award.
(b) METHOD OF EXERCISE. The Participant shall deliver to the Company's Director
of Taxes or Chief Financial Officer or other representative designated or
authorized by the Company for such purpose, at the Company's principal office, a
written notice signed by the Participant (the form of which may be prescribed by
the Company) specifying the number of Rights which the Participant wishes to
exercise pursuant to the Award and the effective date of the exercise if later
than the date the notice is delivered. The effective date of exercise may not be
earlier than the date the notice is actually delivered to the Company. The Award
may be exercised either in full or in part on one or more occasions, up to the
total number of Rights then vested and unexercised.
(c) DETERMINATION OF NUMBER OF AWARD SHARES. Upon receipt of a proper notice of
exercise, the Company shall cause the number of Award Shares to which the
Participant is entitled as a result of the exercise to be issued to or as
directed by the Participant. The number of Award Shares shall be determined as
follows:
(i) The value of each Right being exercised shall be the excess (if any)
of the fair market value of the Common Stock on the date of exercise
over the Base Price;
(ii) The value of each Right being exercised shall be multiplied by the
number of Rights being exercised, to determine the aggregate value
of the Rights being exercised; and
(iii) The number of Award Shares shall be the aggregate value of the
Rights being exercised divided by the fair market value of the
Common Stock on the date of exercise, rounded to the nearest whole
share.
(d) PAYMENT OF WITHHOLDING TAXES. Unless the Participant makes advance
arrangements satisfactory to the Company to reimburse the Company in a timely
manner for the withholding taxes payable by the Company under any federal, state
or local tax law related to the grant of this Award or the vesting of the Award
Shares, the Company:
(i) May withhold from the Award Shares otherwise deliverable to the
Participant under this Award a number of such shares having a fair
market value on the date of exercise sufficient to satisfy its tax
withholding obligations at the minimum statutory rate, in which case
the calculation shall be made prior to any rounding pursuant to
paragraph 3(c)(iii), and/or
(ii) May take such other action as it deems necessary or appropriate to
satisfy any such tax withholding obligations.
(e) DETERMINATION OF FAIR MARKET VALUE. For purposes of this Award, the
per-share fair market value of the Common Stock and the Award Shares on a given
date shall be deemed to be the closing price of the Company's common stock on
the New York Stock Exchange on such date (or if such date is not a trading day,
then the opening price on the next trading day), except to the extent a
different valuation method may be required to be used by applicable tax laws or
regulations.
(f) NO COMMITMENT AS TO TAX TREATMENT. Neither the Company nor any subsidiary
makes any commitment or guarantee that any federal or state tax treatment will
apply or be available to the Participant. The Participant agrees to indemnify
the Company for the Participant's portion of any social insurance obligations or
taxes arising under any foreign law with respect to the grant, vesting or
exercise of this Award or the sale or other disposition of the Award Shares.
4. RESTRICTIONS ON THE AWARD AND THE AWARD SHARES. The Award and Award Shares
shall be subject to the following restrictions:
(a) LIMITATIONS ON TRANSFERS. Neither the Award nor any interest or expectancy
in the Award Shares prior to their issuance may be transferred in whole or in
part except:
(i) By the Participant's last will and testament; or pursuant to the
laws of descent and distribution; or
(ii) By gift or under a domestic relations order to any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, any person sharing the Participant's household other
than a tenant or employee, a trust in which these persons have more
than fifty percent of the beneficial interest, a foundation in which
these persons or the Participant control the management of assets,
and any other entity in which these persons or the Participant own
more than fifty percent of the voting interests (collectively,
"Family Members").
The Company may require appropriate written evidence of such transfer as a
condition of recording any such change of ownership on its books. The Company
shall not be required to recognize any such transfer until the transfer is duly
recorded on its books.
(b) NO PLEDGES. Neither the Award nor any interest or expectancy in the Award
Shares prior to exercise may be pledged, hypothecated, or otherwise used as
collateral to secure the payment of any debt.
(c) COMPANY'S REPURCHASE RIGHTS. If, either during the Participant's Employment
or within one year after the termination of the Participant's Employment
(regardless of the reason for termination or which part initiates it), the
Participant directly or indirectly engages in any Detrimental Activity, the
Company shall have the right to repurchase from the Participant any Award Shares
acquired pursuant to exercise of the Award, subject to the limitations below, at
a price equal to the Base Price of such Award Shares without regard to any tax
effects of the exercise or the repurchase. This repurchase right shall only
apply to Award Shares acquired pursuant to the Award within one year preceding
the Company's notice to the Participant of its exercise of the right, and only
to Award Shares still owned by the Participant, and to exercise the right, the
Company must give the Participant written notice of its election to exercise the
right, specifying the nature of the Detrimental Activity, not later than one
year after termination of the Participant's Employment.
5. ADDITIONAL DEFINITIONS. For purposes of the Award:
(a) "CAUSE" means any of the following:
(i) Conviction of a misdemeanor involving physical harm, moral
turpitude, fraud or misappropriation, or conviction of any felony;
or
(ii) Dishonesty or theft materially adversely affecting the Company's
assets, business reputation or standing in the community; or
(iii) Drunkenness or drug abuse in violation of the Company's policies or
affecting the Participant's performance of his or her usual and
customary employment duties or materially adversely affecting the
Company's assets, business reputation or standing in the community;
or
(iv) The failure of the Participant, within ten days after receipt of
written notice thereof from his or her supervisor, to correct, cease
or otherwise alter any failure to comply with the Company's lawful
policies or instructions concerning the Participant's employment; or
(v) Any other act or circumstance constituting "cause" under any
applicable employment contract or collective bargaining agreement,
or constituting "cause" under common law if the act or circumstance
is determined by Spartech Corporation's Board of Directors (the
"BOARD") or Chief Executive Officer to have a substantial likelihood
of materially adversely affecting the Company's assets or business,
or, if it is or were to become publicly known, the Company's
business reputation or standing in the community.
For purposes of this definition, "the Company" includes any of the Company's
subsidiaries.
(b) "CHANGE IN CONTROL" means:
(i) The occurrence of the "Distribution Date" as such term is defined in
the Rights Agreement dated as of April 2, 2001 between the Company
and Mellon Investor Services LLC; or
(ii) If the "Redemption Date" or the "Final Expiration Date," as such
terms are defined in the aforesaid Rights Agreement, has occurred,
the acquisition by any Person of 50% or more of the combined voting
power of all the Company's then outstanding voting securities,
unless prior to such acquisition the Board has approved such
acquisition and determined that it is in the best interests of the
Company and its shareholders; or
(iii) The approval by the Board of any merger, consolidation or other
transaction involving the Company, or of any one of a series of
related transactions, as a result of which (A) the Company would not
be the surviving corporation, or (B) the holders of the Company's
common stock immediately prior to such transaction would not own at
least a majority of the voting power of the Company immediately
after the transaction in substantially the same relative proportions
as they owned the Company's common stock immediately prior to the
transaction, or (C) the Company's common stock would be converted
into cash or other securities of the Company other than voting
securities having substantially the same relative and proportionate
voting power in the entity or entities surviving the transaction as
the common stock has immediately prior to the transaction; or
(iv) The commencement of any tender offer subject to Section 14(d) of the
Exchange Act for 20% or more of the Company's common stock; if the
person making such offer could own 50% or more of such common stock
when the tender offer terminates; or
(v) Any change or changes in the composition of the Board within any
twenty-four month period such that the individuals constituting the
Board at the beginning of such period, together with any individuals
who became directors after the beginning of such period whose
election by the Board or nomination for election by the Company's
shareholders was approved by at least a majority of the directors
who were on the Board at the beginning of such period or whose
election was previously approved in the same manner, cease to
constitute a majority of the Board; or
(vi) The approval by the stockholders of the Company of a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
For purposes of this definition, "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; however, a Person shall not include (1) the Company or any of its
subsidiaries, (2) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (3) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (4) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of Company stock.
(c) "DETRIMENTAL ACTIVITY" means any of the following, unless done with the
express written consent of the Company:
(i) Engaging in, owning or controlling any interest in (except as a
passive investor in publicly held companies in which the Participant
has less than a one percent interest), or acting as a director,
officer or employee of or a consultant to, any company directly or
indirectly engaged as a material part of its business in a business
substantially similar to that operated by the Company or any of its
subsidiaries in the territories where the Company or any of its
subsidiaries manufactures or distributes its products; or
(ii) In competition with the Company or any of its subsidiaries,
soliciting the business of any customer of the Company or any of its
subsidiaries; or
(iii) Inducing or attempting to induce any employee of the Company or any
of its subsidiaries to leave his or her Employment, or employing or
offering to employ any former employee of the Company or any of its
subsidiaries within three (3) months after any termination of his or
her Employment; or
(iv) Disclosing to anyone outside the Company, or using in other than the
Company's business, any confidential information of the Company or
its subsidiaries relating to their business, acquired by the
Participant either during or after his or her Employment; or
(v) Refusing to disclose promptly and to assign to the Company at its
request all right, title and interest in any invention or idea,
patentable or not, made or conceived by the Participant during his
or her Employment, relating in any manner to the actual or
anticipated business, research or development work of the Company,
or refusing to do anything reasonably requested by the Company to
enable it to secure a patent where appropriate in the United States
and in other countries; or
(vi) Engaging in activity that results in termination of the
Participant's Employment for Cause.
(d) "DISABILITY" means, in the Company's sole discretion, either (A) the
Participant's permanent and total disability as defined in Section 22(e)(3) of
the Internal Revenue Code and as determined consistent with the Code and the
regulations thereunder, or (B) a physical or mental condition which renders the
Participant incapable of continuing his or her usual and customary employment
for a continuous period of 120 days, or for shorter periods aggregating 180 days
or more in any consecutive period of 240 days, which may be determined
conclusively for purposes of the Award by a licensed physician chosen by the
Company, or (C) the commencement of payment of permanent disability benefits
under any disability insurance policy maintained for the benefit of the
Participant.
(e) "EMPLOYMENT" means substantially full-time employment by the Company or a
subsidiary. In this regard, the transfer of the Participant's employment between
the Company and a subsidiary or between subsidiaries shall not be deemed to be a
termination of Employment. Moreover, the Participant's Employment shall not be
deemed to have been terminated because of absence from active employment on
account of temporary illness or authorized vacation or temporary leaves of
absence from active employment granted by the Company or a subsidiary for
reasons of professional advancement, education, health, or government service,
or during military leave for any period if the Participant returns to active
employment within 90 days after the termination of military leave, or during any
period required to be treated as a leave of absence by virtue of any valid law
or agreement. The Committee's determination in good faith regarding whether a
termination of Employment has occurred shall be conclusive.
(f) "RETIREMENT" means the permanent withdrawal of the Participant from the
conduct of regular, active business activities, on or after the Participant
reaches the age of 60. Retirement does not preclude part-time employment,
consulting, service as a non-employee director, passive activities such as the
management of the Participant's investments, or other activities expressly
approved by the Company's Chief Executive Officer. For purposes of Section 1, if
an Participant whose Employment has terminated by reason of Retirement
subsequently engages in business activities inconsistent with Retirement, the
Award shall be construed as if the Participant had voluntarily terminated his or
her Employment on the date such subsequent business activities commence.
6. ADDITIONAL PAYMENT IN CERTAIN EVENTS. In the event a payment or benefit
pursuant to this Award is determined to be an "excess parachute payment" subject
to an excise tax under Section 4999 of the Internal Revenue Code, the Company
shall pay the Participant, within ten days of such determination, an amount
equal to such excise tax plus an additional amount so that the net after tax
effect on the Participant, considering Federal income, Insurance Contributions
Act and Unemployment Tax Act taxes, state income taxes and the excise tax under
Section 4999 of the Code, is the same as if such excise tax had not been
imposed.
7. SECURITIES LAW RESTRICTIONS. The Participant agrees that if at the time of
acquisition or delivery of any Award Shares issued hereunder the sale of such
shares is not covered by an effective registration statement filed under the
Securities Act of 1933 (the "Act"), the Participant will acquire the Award
Shares for the Participant's own account and without a view to resale or
distribution in violation of the Act or any other securities law, and that the
Participant will enter into such written representations, warranties and
agreements as the Company may reasonably request in order to comply with the Act
or any other securities law or with the Award.
8. REORGANIZATION OF THE COMPANY; ADJUSTMENT OF AWARD SHARES. The existence of
the Award shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Award
Shares or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of the Company's assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise. However, if the Common Stock is subdivided, consolidated, increased,
decreased, changed into or exchanged for a different number or kind of shares or
other securities, whether through reorganization, merger, recapitalization,
reclassification, capital adjustment or otherwise, or if the Company shall issue
common stock or other securities as a dividend or upon a stock split, then for
all purposes, references herein to Common Stock or to Award Shares shall mean
and include all securities or other property (other than cash) that holders of
the Common Stock are entitled to receive in respect of the Common Stock by
reason of each such event, which securities or other property (other than cash)
shall be treated in the same manner and shall be subject to the same
restrictions as the underlying Award Shares. Any such adjustment shall be made
without change in the total Base Price applicable to the unexercised portion of
the Award, but in computing any adjustment hereunder, any fractional share or
other fractional security which might otherwise become subject to issuance may
be eliminated.
9. NO GUARANTEE OF EMPLOYMENT OR OTHER CONTRACT RIGHT. The Award is not a
contract of employment, and neither the Award nor the Plan shall confer upon the
Participant any right with respect to continuance of Employment or other service
with the Company or any subsidiary, or interfere in any way with any right the
Company or any subsidiary would otherwise have to terminate the Participant's
Employment or other service. Receipt of the Award shall not be deemed to create
a right to receive any future stock appreciation right, stock option, restricted
stock, restricted stock unit, performance share or performance unit or other
award or bonus in any form, and shall not constitute an acquired labor right for
purposes of any foreign law. The Award is not a part of the Participant's salary
or wages and shall not afford the Participant any additional right to severance
payments or other termination awards or compensation under any the Company
policy or any domestic or foreign law as a result of the termination of the
Participant's employment for any reason whatsoever.
10. AMENDMENT AND TERMINATION. No amendment or termination of the Award which
would impair the rights of the Participant may be made without the written
consent of the Participant. No amendment or termination of the Plan may impair
the rights of the Participant under the Award without the written consent of the
Participant.
11. SEVERABILITY. If any provision of the Award shall be held illegal, invalid,
or unenforceable for any reason, such provision shall be fully severable and
shall not affect the remaining provisions of the Award, and the Award shall be
construed and enforced as if the illegal, invalid, or unenforceable provision
had never been included herein.
12. GOVERNING LAW. The Award shall be construed in accordance with the laws of
the State of Missouri.
END OF EXHIBIT A