AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1997
Registration Statement No. 333-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
SPARTECH CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 43-0761773
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7733 Forsyth, Suite 1450
Clayton, Missouri 63105
(314) 721-4242
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
-----------------------------
David B. Mueller
Executive Vice President and Chief Operating Officer
Spartech Corporation
7733 Forsyth Boulevard, Suite 1450
St. Louis, Missouri 63105
(314) 721-4242
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------------
Copies of all communications to:
Albert F. Bender, III, Esq.
Armstrong, Teasdale, Schlafly & Davis
One Metropolitan Square, Suite 2600
St. Louis, Missouri 63102
(314) 621-5070
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities pursuant to Rule 462(b)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _______________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________________
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each class maximum maximum
of offering aggregate Amount of
securities to be Amount to be price offering registration
registered registered per unit price fee
---------------- ------------ -------- --------- ------------
Options to purchase
common stock, $.75
par value, pursuant
to Amended
Restricted Stock 1,340,000 shares (1) (1) (2)
Option Agreement
dated February 18,
1997
Common stock, $.75 1,340,000 shares $3.81 $9,827,400.00 $2,978.00 (2)
par value to
$9.00
(1) The options are being reoffered by the Selling Security Holders described
herein; the registrant will receive no consideration from sales by the Selling
Security Holders and does not know the price or prices at which the options may
be sold.
(2) The registration fee is calculated pursuant to Rule 457(i), based on the
aggregate exercise price of the options being registered hereby.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
* * * * * * * * *
SUBJECT TO COMPLETION, DATED APRIL 4, 1997
PROSPECTUS
Options to Purchase
1,340,000 Shares
and
1,340,000 Shares
Issuable upon Exercise of Options to Purchase
SPARTECH CORPORATION
Common Stock
($.75 par value)
----------------------------
This Prospectus relates to the resale of options ("Options") to purchase
up to 1,340,000 shares ("Shares") of Common Stock, $.75 par value ("Common
Stock") of Spartech Corporation (the "Company") held by Lawrence M. Powers, the
original holder of such Options. This Prospectus also relates to the
subsequent resale by Mr. Powers of the Shares of Common Stock issuable upon
exercise of the Options. No part of the proceeds of any such sale will be
received by the Company. This Prospectus also relates to the issuance of up to
1,340,000 Shares of Common Stock by the Company if, as and when the Options are
exercised by subsequent purchasers of the Options. See "Selling Security
Holders."
The Options are exercisable at prices ranging from $3.81 to $9.00 per
Share and expire at various times from December 31, 1997 to November 1, 2004,
depending on the particular Option. The Options are not traded on any exchange
or listed on the over-the-counter market, and as of the date of this
Prospectus, the Company is not aware of any sales of Options. The Company has
no obligation and does not intend to take any action to create a trading market
for the Options, and believes that it is highly unlikely that such a market
will develop. See "Description of Securities."
The Common Stock is listed on the New York Stock Exchange under the symbol
"SEH." On March 31, 1997, the reported last sale price of the Common Stock on
the New York Stock Exchange Composite Tape was $11.25 per share.
The Company does not know whether or when any offers or sales of the
Options or the Shares covered by this Prospectus will be made, or what the
price, terms or conditions of any such offers or sales will be.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-------------------------------
The date of this Prospectus is April__, 1997.
THE COMPANY
The Company, together with its subsidiaries, is a leading producer of
engineered thermoplastic materials, polymeric compounds and molded products for
a wide spectrum of customers in the plastics industry.
The Company is a Delaware corporation. Its principal executive offices
are located at 7733 Forsyth Blvd., Suite 1450, Clayton, Missouri 63105-1817,
telephone (314) 721-4242.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), a Registration Statement with respect to the securities offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed or
incorporated by reference as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company with the Commission may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at its New York Regional Office, Seven World Trade Center, Suite
1300, New York, New York 10048, and its Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
may also be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
filings may also be obtained from the Commission through the Internet at
http://www.sec.gov.
The Common Stock is listed on the New York Stock Exchange, and such
reports, proxy or information statements and other information concerning the
Company may also be inspected at the offices of the New York Stock Exchange,
Inc., Public Reference Section, 20 Broad Street, New York, New York 10005.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES
TO WHICH IT RELATES, OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH
OFFER WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
-2-
DESCRIPTION OF SECURITIES
The securities covered by this Prospectus consist of Options to purchase
up to 1,340,000 shares of Common Stock, as well as the 1,340,000 Shares of
Common Stock issuable by the Company upon exercise of the Options. The Options
comprise a portion of the options covering an aggregate of 1,360,000 Shares
originally issued to Lawrence M. Powers, a former Director, Chairman of the
Board and Chief Executive Officer of the Company, pursuant to an Amended
Restricted Stock Option Agreement dated February 18, 1997 (the "Option
Agreement"), entered into between the Company and Mr. Powers in connection with
the settlement of certain litigation filed by Mr. Powers in 1992 against the
Company and certain of its Directors and major shareholders. The Options and
the Shares have been included in this Prospectus pursuant to contractual
registration rights held by Mr. Powers. Although the Option Agreement states
that it is governed by the Company's Restricted Stock Option Plans dated
October 1, 1981 and November 1, 1991, there are no provisions of such plans
which are not reflected in or superseded by the express terms of the Option
Agreement.
Exercise Prices and Exercise Dates.
-----------------------------------
The Options are currently exercisable in whole or in any part. They have
varying exercise prices and expire on various dates, as follows:
Number of Exercise Expiration
Shares Price Date
--------- -------- ----------
40,000 $3.81 per share December 31, 1997
200,000 $4.00 per share July 24, 1999
200,000 $3.875 per share July 1, 2000
900,000 $9.00 per share November 1, 2004
The exercise prices and expiration dates were determined through extensive
arms-length negotiations between the Company and Mr. Powers in the course of
the settlement of the above described litigation. The options expiring from
1997 to 2000 were granted in substitution for and in place of options having
the same exercise prices and expiration dates previously issued to Mr. Powers
pursuant to certain restricted stock option plans for Company employees.
Manner of Exercise.
-------------------
The Options may be exercised by delivering to the President or Controller
of the Company, at its principal office, not later than the expiration date of
the Option, a written notice signed by the holder specifying the expiration
date of the Option and the number of Shares which the holder wishes to purchase
pursuant to the Option, together with either (i) a certified check or cash in
the amount of the aggregate exercise price for the number of Shares being
purchased, or (ii) delivery of shares of Common Stock already owned by the
holder and having a fair market value equal to the aggregate exercise price of
the Shares being purchased pursuant to the Option, or (iii) any combination of
certified check, cash and Shares which has an aggregate fair market value equal
to the exercise price of the Shares being purchased. For the purposes of the
Option, the "fair market value" of any shares of Common Stock tendered by the
holder in exercise or partial exercise of the Option shall be the closing price
of the Common Stock on the New York Stock Exchange (or other exchange on which
the Common Stock may then be traded) on the day of exercise of the Option, or
if there were no sales on such day, the latest price for such Common Stock.
Shares will not be issued until full payment shall have been received by the
Company as to such exercise or partial exercise, and the holders of the Options
have no right or status as stockholders of the Company prior to such exercise.
Adjustment on Recapitalization, Merger or Reorganization.
---------------------------------------------------------
If the outstanding shares of Common Stock of the Company are subdivided,
consolidated, increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, capital adjustment or otherwise, or
if the Company shall issue Common Stock as a dividend or upon a stock split,
then the number of Shares subject to the unexercised portion of the Options
shall be appropriately adjusted by the board of directors of the Company, whose
determination as to what adjustment shall be made and the extent thereof shall
be final, binding and conclusive. Any such adjustment on outstanding Options
shall be made without change in the total exercise price applicable to the
unexercised portion of the Options. In computing any such adjustment, any
fractional Shares which might otherwise become subject to the Options shall be
eliminated.
-3-
Transferability of Options and Shares.
--------------------------------------
The Options may be subdivided, and the Options and Shares, when issued or
resold in the manner described herein and in the Option Agreement, will be
freely transferable, by the purchasers thereof; however, a purchaser of Options
or Shares who is an "affiliate" of the Company will be subject to the
restrictions imposed by Section 16 of the Securities Act of 1934, as amended,
and the rules and regulations thereunder, and Securities and Exchange
Commission Rule 144.
MANNER OF SALE
The Options and, following exercise of the Options, the Shares, may be
sold from time to time by Mr. Powers, or by his pledgees, donees, transferees
or other successors in interest (the "Selling Security Holders"). Such sales
may be made on one or more exchanges or in the over-the-counter market, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The securities
offered by this Prospectus may be sold by one or more of the following: (a) a
block trade in which the broker or dealer so engaged will attempt to sell the
Shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers. In effecting sales, brokers or dealers engaged by
the Selling Security Holders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Security Holders in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Act") in connection with such sales. In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 may be sold under Rule 144 rather than pursuant to this prospectus.
The Company will bear the expense of preparation and filing of the
Registration Statement (of which this Prospectus is a part). The aggregate
amount of all such expenses is expected to be approximately $31,000.
See "Selling Security Holders" for information concerning the beneficial
ownership of Company securities by the Selling Security Holders.
SELLING SECURITY HOLDERS
As of the date of this Prospectus, the only Selling Security Holder whose
identity is known to the Company is Lawrence M. Powers. If the identity of
other Selling Security Holders becomes known to the Company, the Company will
supplement this Prospectus accordingly.
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock by the Selling Security
Holders as of March 20, 1997, and as adjusted to reflect the sale of the
maximum number of shares offered by the Selling Security Holders hereby. See
"Description of Securities."
Shares Beneficially Maximum
Owned Prior Number of Shares Beneficially
to Offering (1)(2) Shares Owned After Offering
------------------ Being --------------------
Name Number Percent (3) Offered Number Percent (3)
---- ------ ---------- ------- ------ -----------
Lawrence M. Powers 1,352,000 4.8% 1,340,000 12,000 < 1%
(1) Represents sole voting and investment power unless otherwise noted.
(2) Includes the 1,340,000 shares being offered hereby, which are
issuable upon exercise of presently exercisable options.
(3) Percentage ownership is calculated by assuming the exercise or
conversion of all options or convertible securities held by such
holder and the nonexercise or nonconversion of all other outstanding
warrants and convertible securities.
USE OF PROCEEDS
All of the securities covered by this Prospectus are being offered by the
Selling Security Holders. As a consequence, the Company will not receive any
of the proceeds of sales of such securities.
-4-
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act (File No. 1-5911) are incorporated in this Prospectus by
reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
November 2, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended February 1, 1997; and
(c) The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form 8-A dated November 28, 1994,
filed December 1, 1994, heretofore filed with the Commission under
the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the securities made by this
Prospectus shall be deemed to be incorporated herein by reference and to be a
part hereof on and from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or incorporated herein by reference or in any other subsequently filed document
that also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents incorporated by
reference in this Prospectus (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such documents).
Requests for such documents should be directed to: Spartech Corporation, 7733
Forsyth Boulevard, Suite 1450, St. Louis, Missouri 63105, Attention: Randy C.
Martin; telephone number (314) 721-4242.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
as of November 2, 1996 and October 28, 1995, and for each of the three fiscal
years in the period ended November 2, 1996, incorporated by reference in its
Annual Report on Form 10-K for the fiscal year ended November 2, 1996 and
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in giving said report.
-5-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the securities registered hereby:
Securities and Exchange Commission registration fee $ 2,978
Blue sky fees and expenses 1,000
Transfer agent fees and expenses 200
Printing and engraving fees 500
Legal fees and expenses 20,000
Accounting fees and expenses 2,500
New York Stock Exchange listing fee 3,150
Miscellaneous 672
---------
Total $ 31,000
=========
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law and Section Eight of
the Registrant's Certificate of Incorporation provide for indemnification of
the Registrant's directors and officers in a variety of circumstances, which
may include liabilities under the Securities Act of 1933, as amended.
Item 16. Exhibits
A list of exhibits is set forth in the Exhibit Index appearing elsewhere
in this Registration Statement and is incorporated herein by reference.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to the
information in the registration statement.
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of any employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-1
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Clayton, State of Missouri on April 3, 1997.
Spartech Corporation
By: s/ Bradley B. Buechler
------------------------------
Bradley B. Buechler
President and Chief Executive Officer
Each person whose signature appears below hereby constitutes and appoints
Bradley B. Buechler and David B. Mueller, and each of them, the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of
substitution and resubstitution, for and in the name, place and stead of the
undersigned, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby grants to
such attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on April 3, 1997.
Date Signed Signature Title
- ----------- --------- -----
April 3, 1997 s/Bradley B. Buechler President, Chief
---------------------- Executive Officer and
Bradley B. Buechler Director (Principal
Executive Officer)
April 3, 1997 s/David B. Mueller Executive Vice
---------------------- President, Chief
David B. Mueller Operating Officer
Secretary and Director
April 3, 1997 s/Randy C. Martin Vice President Finance
---------------------- and Chief Financial
Randy C. Martin Officer (Principal
Financial and Accounting
Officer)
April 3, 1997 s/Thomas L. Cassidy Director
----------------------
Thomas L. Cassidy
II-3(a)
April 3, 1997 s/W.R. Clerihue Director
----------------------
W.R. Clerihue
April 3, 1997 s/Francis J. Eaton Director
----------------------
Francis J. Eaton
Director
- ------------------- ----------------------
Jackson W. Robinson
Director
- ------------------- ----------------------
Rodney H. Sellers
II-3(b)
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
4.1 Amended Restricted Stock Option Agreement dated February
18, 1997 between the Company and Lawrence M. Powers
5.1 (*) Opinion of Armstrong, Teasdale, Schlafly & Davis as to the
legality of the shares
23.1 Consent of Independent Public Accountants
23.2 Consent of Armstrong, Teasdale, Schlafly & Davis (included
in Exhibit 5.1)
24.1 Power of Attorney (included on Page II-3)
(*) To be filed by amendment.
AMENDED RESTRICTED STOCK OPTION AGREEMENT
THIS AMENDED RESTRICTED STOCK OPTION AGREEMENT is made as of this 18th
day of February, 1997, by and between SPARTECH CORPORATION, a Delaware
Corporation ("SPARTECH") and Lawrence M. Powers (the "Optionee").
WHEREAS, SPARTECH and Optionee desire to settle litigation relating to
adjustments on all options previously issued to Optionee, in accordance with
the terms of a settlement entered into on February 11, 1997; and
WHEREAS, SPARTECH desires to restate and replace Optionee's option
agreements in accordance with the terms of such settlement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the rights of Optionee under his prior options being
settled hereby, and for other good and valuable consideration, the parties
hereto agree as follows:
1. GRANT OF OPTION. SPARTECH hereby grants to the Optionee the right
and option (hereafter called the "Option"), to purchase all or any part of an
aggregate of 1,360,000 shares of SPARTECH common stock, par value $.75 per
share, on the terms and conditions set forth herein. This Option is in
substitution for and in place of Optionee's original options heretofore
exercised in part and his remaining unexercised Options deemed cancelled
hereby.
2. EXERCISE PRICE AND EXPIRATION. The exercise price and the expiration
dates as to the shares underlying this Option shall be as follows:
Number of Exercise Expiration
Shares Price Date
--------- -------- ----------
900,000 $9.00 per share November 1, 2004
60,000 $3.81 per share December 31, 1997
200,000 $4.00 per share July 24, 1999
200,000 $3.875 per share July 1, 2000
3. DURATION. The Option granted hereby shall become exercisable upon
issuance of this Agreement and shall remain exercisable at the stated prices
through the respective expiration dates set forth above. To facilitate partial
transfer, exercise or sale, this Option may be subdivided into options in
smaller denominations upon Optionee's request in writing from time to time.
4. NO RESTRICTIONS; REGISTRATION. All options or underlying shares
detailed above are free of any restrictions on transfer, exercise or sale,
except for any restrictions under applicable securities laws. The options and
underlying shares are further free of any right to repurchase by SPARTECH as
heretofore contained in its Restricted Stock Options. All underlying shares as
to these options have been duly registered previously under applicable
securities laws and such shares are freely saleable or transferable. SPARTECH
hereby undertakes to register all options hereunder as well by March 15, 1997,
so that all such options are also freely saleable or transferable, in whole or
in part, as options, under applicable securities laws.
5. MANNER OF EXERCISE OF OPTION. This Option may be exercised, subject
to the terms and conditions contained herein, by delivery to the President, or
Controller of SPARTECH, at its principal office, of a written notice signed by
the Optionee specifying the number and expiration date of option shares which
the Optionee wishes to purchase pursuant to this Option, and (i) accompanied by
a certified check or cash in the amount of the aggregate option exercise price
for such number of shares, or alternatively, (ii) by delivery of shares of
SPARTECH common stock already owned by the Optionee having a fair market value
equal to the exercise price, less any amounts owing thereon to SPARTECH, or
(iii) by the delivery of a combination of such shares and cash.
For the purposes of this paragraph, the "fair market value" of any shares
of SPARTECH common stock tendered by Optionee in exercise or partial exercise
of this Option, shall mean the closing price of the shares of SPARTECH common
stock on the New York Stock Exchange (or such other exchange as its common
stock may then be traded) on the day of exercise of such Option, or if there
were no sales on such day, the latest price for such stock.
In no event shall stock be issued or certificates be delivered until full
payment shall have been received by SPARTECH as to such exercise or partial
exercise, nor shall Optionee have any right or status as a stockholder prior to
such exercise.
6. ADJUSTMENT ON RECAPITALIZATION, MERGER OR REORGANIZATION. If the
outstanding shares of the common stock of SPARTECH are subdivided,
consolidated, increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of SPARTECH through reorganization,
merger, recapitalization, reclassification, capital adjustment or otherwise, or
if SPARTECH shall issue common stock as a dividend or upon a stock split, then
the number of shares subject to the unexercised portion of this Option shall be
appropriately adjusted by the Board of Directors. Any such adjustment on
outstanding Options shall be made without change in the total exercise price
applicable to the unexercised portion of this Option. If, in the event of a
merger or consolidation, SPARTECH is not the surviving corporation, and in the
event that the Agreement of Merger or Consolidation does not provide for the
substitution of a new Option for this Option, or for the assumption of this
Option by the surviving corporation, or in the event of the dissolution or
liquidation of SPARTECH, the Optionee shall have the right immediately prior to
the effective date of such merger, consolidation, dissolution or liquidation,
to exercise this Option in whole or in part; provided, however, that this
Option shall not be exercisable in whole or in part, later than the dates noted
in paragraph 2 above. Any adjustments made pursuant to this section shall be
made by the Board of Directors of SPARTECH, whose determination as to what
adjustment shall be made and the extent thereof, shall be final, binding and
conclusive. In computing any adjustment hereunder, any fractional share which
might otherwise become subject to an Option shall be eliminated.
7. GOVERNING PLAN. This Agreement shall, in all respects, be otherwise
subject to the terms and conditions of the Spartech Corporation Restricted
Stock Option Plans dated October 1, 1981 and November 1, 1991, as modified by
the changes in number of shares, exercise prices, expiration dates, elimination
of any rights to repurchase and any restrictions on transfer, and additional
rights set forth herein, all of which modifications shall henceforth be
controlling as to this Option.
SPARTECH CORPORATION
By: s/BRADLEY B. BUECHLER
-----------------------
Bradley B. Buechler
President
OPTIONEE
s/LAWRENCE M. POWERS
--------------------------
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated December 6, 1996
incorporated by reference in Spartech Corporation's Annual Report on Form 10-K
for the fiscal year ended November 2, 1996 and to all references to our Firm
included in or made a part of this registration statement.
St. Louis, Missouri
April 4, 1997
Arthur Andersen LLP
