Document:

exv10w13a

 

Exhibit 10.13a

AGREEMENT

     This is an Agreement among UGS Capital Corp., (“Capital Corp.”), UGS Capital Corp. II
(“Capital Corp II”), UGS Corp., (“UGS Corp.”), all Delaware corporations, (collectively and
individually, the “Company”), and the undersigned (the “Employee”), entered into in connection with
certain awards previously made to the Employee under the UGS Capital Corp. and UGS Capital Corp. II
2004 Management Incentive Plan (the “Management Incentive Plan”).

     WHEREAS:

     A. As of May 27, 2004, the Employee received awards (the “Awards”) from Capital Corp. and
Capital Corp. II under the terms of the UGS Capital Corp. Non-Qualified Roll-Over Option and
Conditional Deferred Cash Award Agreement and the UGS Capital Corp. II Non-Qualified Roll-Over
Option and Conditional Deferred Cash Award Agreement (the “Award Agreements”);

     B. The Awards granted options (the “Options”) to the Employee to purchase stock of Capital
Corp. and Capital Corp. II and, in connection with the Options, granted to the Employee the right
to receive from UGS Corp conditional deferred cash awards (the “Deferred Cash Awards”), but only
if, when, and to the extent, that the Options were exercised;

     C. In October, 2004, Congress enacted into law Section 409A of the Internal Revenue Code
(“409A”), placing restrictions on the payment of deferred compensation and imposing severe
penalties on recipients of nonqualifying deferred compensation;

     D. Under the initial guidance on 409A issued by the Internal Revenue Service (the “IRS
Guidance”), a stock option coupled with a cash bonus that is payable only upon exercise of the
option would be treated as nonqualifying deferred compensation;

     E. By statute, 409A applies to pre-existing deferred compensation arrangements to the extent
that rights under such arrangements were not scheduled to vest before the end of 2004;

     F. The Awards were not scheduled to vest fully before the end of 2004 and are therefore
subject, at least in part, to 409A;

     G. Under the IRS Guidance, nonqualifying deferred compensation awards may be terminated or
amended to comply with 409A during calendar-year 2005, provided that the arrangement is operated in
good faith prior to such termination or amendment; and

     H. The parties wish to terminate that part of the Awards that might cause the Awards to be
treated as nonqualifying deferred compensation arrangements and

 

 

substitute therefor arrangements that will qualify under 409A or fall outside the bounds of 409A.

     THEREFORE, the parties agree as follows:

     1. Each Award Agreement is amended to delete Section 10, entitled “Conditional Deferred Cash
Award,” and all other references in the Award Agreements to “conditional deferred cash award” or
“deferred cash award” shall be of no effect. As a result of this amendment, exercise of an Option
will not cause the payment of any cash award to the Employee. All other terms and conditions of
the Award Agreements remain in full force and effect.

     2. On July 29, 2005, UGS Corp. will pay to the Employee a cash bonus in the amount shown on
the attached schedule (less applicable tax withholding) (“2005 Cash Bonus Amount”). This amount
equals the “conditional deferred cash award” that the Employee would have been eligible to receive
upon exercise of vested options prior to the date of this Agreement.

     3. UGS Corp. will pay to the Employee on the Company’s next regularly-scheduled payroll date
following the Payment Event (as defined below) an additional cash bonus in the amount shown on the
attached schedule (“Additional Cash Bonus”), less applicable tax withholding. This amount
represents the remainder of the “conditional deferred cash award”. A Payment Event shall be the
earliest of: (a) May 27, 2006, if the Employee’s Employment (as defined in the Management Incentive
Plan) has not been terminated previously; (b) the effective date of termination of Employee’s
Employment by the Company other than for Cause (as defined in the Award Agreement); and (c) the
effective date of a Change in Control (as defined below). For purposes of this Agreement “Change
in Control” means an event that is both a “Change in Control” as defined for purposes of the
Management Incentive Plan and a “Change in Control Event” as defined for purposes of 409A.

     4. To the extent the Employee is not entitled to receive his bonus (a) prior to the cessation
of Employment or (b) upon cessation of Employment as set forth in Paragraph 3 above, then upon
cessation of Employment, Employee’s right to receive any remaining cash bonus will be forfeited.

     5. Notwithstanding the foregoing, unless contrary to applicable law or the terms of a written
agreement signed by an officer of UGS, your employment with UGS is for an indefinite term and is
terminable, with or without cause, at any time by either you or the Company. Nothing in this
Agreement, will be construed to oblige UGS to continue your employment for any particular time or
under any particular terms or conditions of employment.

-2-

 

     Executed as of the 8th day of July, 2005.

	 	 	 	 	 
	UGS Capital Corp.	 	UGS Capital Corp.
	 
	 	 	 	 
	 

	 	 	 	/s/ Thomas M. Lemberg
	 	 	 
	 
	 	 	 	 
	UGS Corp.

	 	UGS
	 	Corp.
	 
	 	 	 	 
	 

	 	 	 	/s/ Thomas M. Lemberg
	 	 	 
	 
	 	 	 	 
	Employee

	 	 	 	/s/ Charles C. Grindstaff
	 	 	 
	 

	 	Name:
	 	 Charles C. Grindstaff

-3-

 

Schedule A

2005 Cash Bonus: $158,125.00*

Additional Cash Bonus $94,875.00*

 
 

* Subject to applicable tax withholding amounts.

A-1exv10w22

 

Exhibit 10.22

Executive Bonus Plan

Each named executive officer is eligible for an annual bonus equal to 70%-100% of his base salary
assuming the plan payments are made at target. Bonus payments are based on our overall achievement
of our financial plan and individual contributions. The financial plan component, which represents
70% of the bonus opportunity, is determined by assessing our achievement of specified Adjusted
EBITDA (defined as Consolidated EBITDA in our senior secured credit facility) and revenue
thresholds. The targets of the bonus plan can be adjusted by a range of performance within a
minimum to maximum threshold varying bonus payments between 25% and 250% percent of target. To be
eligible for a bonus payment, the executive officer must demonstrate satisfactory performance,
contribution and effort consistent with his peer group. Bonus payments are typically made in the
first quarter of each calendar year reflecting accomplishments of the prior calendar year. Bonus
payments will not be made if the minimum Adjusted EBITDA threshold is not met.<PAGE>

EXHIBIT 10.1

                              SPARTECH CORPORATION

                      SEVERANCE AND NON-COMPETITION POLICY

Policy

It shall be the general practice of Spartech Corporation (the "Company") to
enter into a Severance and Noncompetition Agreement with each officer employed
by the Company whose compensation is subject to the authority of the
Compensation Committee of the Board of Directors. The Severance and
Noncompetition Agreement shall generally be in the form attached hereto as
Exhibit A and incorporated herein by reference; however, with respect to the
Chief Executive Officer of the Company, the Severance and Noncompetition
Agreement shall be in the form attached hereto as Exhibit B, and with respect to
any Chief Financial Officer, General Counsel or Executive Vice President of the
Company, the Severance and Noncompetition Agreement shall be in the form
attached hereto as Exhibit C. Subject to the terms of the Compensation Committee
Charter, the Board of Directors delegates to the Compensation Committee full
authority to make any determinations regarding amendments to the terms of the
attached Severance and Noncompetition Agreements or the interpretation of the
provisions of this Policy, in its sole discretion, and to oversee the
administration of this Policy.

Amendment

The Board of Directors shall have the unilateral right to amend, waive or cancel
this Policy at any time if it determines in its sole discretion that such action
would be in the best interests of the Corporation and its stockholders.

<PAGE>

                                    EXHIBIT A

                     SEVERANCE AND NONCOMPETITION AGREEMENT

     THIS SEVERANCE AND NONCOMPETITION AGREEMENT (this "Agreement") is made by
and between SPARTECH CORPORATION, a Delaware corporation (together with its
subsidiaries, the "Company") and _____________________ ("Employee") effective as
of the ___ day of _________, 20__.

     In consideration of the terms and conditions hereof, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee agree as follows:

     1.   Severance.

     (a) If Employee's employment with the Company is terminated by the Company
for any reason other than for Cause, or if Employee's employment with the
Company is terminated by the Company for any reason other than for Cause within
24 months following a Change in Control, or if Employee terminates his or her
employment with the Company for Good Reason, Employee shall be entitled to
receive as a severance payment to be paid in accordance with the Company's
normal payroll practices an amount equal to: (i) twelve months' base salary at
the highest rate paid to Employee during the past three years plus (ii) the
average annual bonus awarded to Employee for the three fiscal years ended prior
to Employee's termination (or for the period of Employee's employment by the
Company if less than three years).

     (b) As used herein:

     "Cause" means: (i) Employee being charged with commission of a crime that
constitutes a felony (provided that if following Employee's termination the
charges are dropped or Employee is acquitted then Employee shall be entitled to
the severance payment); (ii) acts of Employee which, in the judgment of the
Company's board of directors (the "Board"), constitute willful fraud or
dishonesty on the part of Employee in connection with his or her duties; or
(iii) Employee willfully engaging in conduct materially injurious to the Company
or gross misconduct, including but not limited to the willful or grossly
negligent failure or refusal of Employee to comply with the lawful instruction
of the Board or Employee's supervisor, after a written demand for compliance is
delivered to Employee by the Board or Employee's supervisor which specifically
identifies the manner in which the Board or Employee's supervisor believes that
Employee has violated this provision. Any act or failure to act based upon
authority given pursuant to a resolution duly adopted by the Board or based on
the advice of a senior officer or counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Employee in good faith and in the
best interests of the Company.

     "Change in Control" means a change in the ownership or effective control of
the Company or ownership of a substantial portion of the assets of the Company
within the meaning of Section 409A(a)(2)(C)(v) of the Internal Revenue Code of
1986, as amended, or any successor statute ("Code").

     "Good Reason" means any of the following: (i) one or more reductions of
Employee's base salary amounting to 10% or more from Employee's highest previous
base salary, provided that any reduction which is generally consistent with
across-the-board reductions in pay of the Company as a whole shall not be
counted for this purpose unless a Change in Control has occurred; (ii) the
Company's requiring Employee to be based at any office or location greater than
50 miles from the office of the Company at which Employee is employed as of the
date of this Agreement; (iii) after a Change in Control, a relocation of the
office of the Company at which Employee is employed as of the date of this
Agreement more than 50 miles from its present location; or (iv) one or more
other actions by the Company which collectively amount to a constructive
discharge of Employee.

<PAGE>

     (c) In the event a payment or payments pursuant to this Agreement is or are
subject to an excise tax under Code Section 4999, the Company shall pay
Employee, within ten days of such determination, an amount equal to such excise
tax plus an additional amount so that the net after tax effect, considering
Federal and state income taxes and the excise tax under Code Section 4999, of
the payment of such excise tax is as if such additional payment had not been
made. In the event Employee is a "specified employee" within the meaning of Code
Section 409A(a)(2)(B)(i), payment under this Agreement for any reason other than
following a Change in Control shall be deferred until the Company's first
payroll date which is more than six months following Employee's termination of
employment with the Company, at which time the amount so deferred shall be paid
in a lump sum.

     2. Nondisclosure. During the period of Employee's employment with the
Company, and after the termination thereof for any reason, Employee agrees to
use his or her best efforts to maintain and protect the secrecy of the
Confidential Information and not to directly or indirectly undertake or attempt
to undertake: (i) any disclosure of any Confidential Information to any other
person or entity; (ii) to use any Confidential Information for Employee's own
purposes; (iii) to make any copies or reproductions of any Confidential
Information; (iv) to authorize or permit any other person or entity to use,
copy, disclose, publish or distribute any Confidential Information; or (v) any
activity the Company is prohibited from undertaking or attempting to undertake
by any of its present or future clients, customers, suppliers, vendors,
consultants, agents or contractors. As used herein, "Confidential Information"
means any knowledge, information or property relating to, or used or possessed
by, the Company, and includes, without limitation, the following: trade secrets;
manufacturing or production know-how, methods and processes, patents,
copyrights, software (including, without limitation, all programs,
specifications, applications, routines, subroutines, techniques and ideas for
formulas); concepts, data, drawings, designs and documents; names of clients,
customers, employees, agents, contractors, and suppliers; marketing information;
financial information and other business records; and all copies of any of the
foregoing, including notes, extracts, memoranda prepared or directed to be
prepared by Employee based on any Confidential Information. Employee agrees that
all information possessed by Employee, or disclosed to Employee, or to which
Employee obtains access during the course of Employee's employment with the
Company shall be presumed to be Confidential Information under the terms of this
Agreement. Confidential Information shall not include any information which is
publicly available or which is generally known to persons employed in the
plastics processing business. Upon termination of Employee's employment with the
Company for any reason, Employee agrees not to retain or remove from the
Company's premises any Confidential Information whatsoever, and to surrender the
same to the Company, wherever it is located, immediately upon termination of
Employee's employment.

     3. Noncompetition/Nonsolicitation. Employee agrees that, during the term of
Employee's employment with the Company and for a period of one (1) year after
the termination of Employee's employment with the Company (whether such
termination is with or without Cause or Good Reason or results from Employee's
resignation) Employee shall not, directly or indirectly, in any market in which
the Company then is engaged in business activities (the "Geographic Area"): (i)
engage in, consult with, be employed by or be connected with any business or
activity which directly or indirectly competes with the Company's business (a
"Competing Business"), (ii) canvass, solicit or accept any business from any of
the Company's current or former clients, (iii) own any interest in any Competing
Business (provided, however, Employee may own up to 1% of the outstanding equity
interests of any publicly traded Competing Business); (iv) assist others to open
or operate any Competing Business; (v) solicit, recommend or induce any employee
of the Company to terminate his or her employment with the Company; or (vi)
solicit, recommend or induce any customers, suppliers or any other person or
entity which has a business relationship with the Company to discontinue, reduce
or modify such relationship.. Employee agrees and acknowledges that the
Geographic Area is reasonable in scope and that the one (1) year period is
reasonable in length. Employee has agreed to the foregoing noncompetition
agreement because: (a) Employee recognizes that the Company has a legitimate
interest in protecting the confidentiality of its business secrets (including
the Confidential Information), (b) Employee agrees that such

<PAGE>

noncompetition agreement is not oppressive to Employee nor injurious to the
public, and (c) the Company has provided specialized and valuable training and
information to Employee.

     4. Injunction. Because the award of monetary damages would be an inadequate
remedy, in the event of a breach or threatened breach by Employee of any of the
provisions of this Agreement, the Company shall be entitled to an injunction
restraining Employee from undertaking any such breach or threatened breach.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies for such breach or threatened breach, including the recovery of
damages from Employee.

     5. Amendment. No amendment, whether express or implied, to this Agreement
shall be effective unless it is in writing and signed by both parties hereto.

     6. Waiver. No consent or waiver, express or implied, by the Company to or
of any breach or default by Employee in the performance of his or her agreements
hereunder shall operate as a consent to or waiver of any other breach or default
in the performance of the same or any other obligations of Employee hereunder.
The Company's failure to complain of any such breach or default shall not
constitute a waiver by the Company of its rights hereunder, irrespective of how
long such failure continues.

     7. Governing Law; Venue. This Agreement shall be governed by, and construed
under, the laws of the State of Delaware. Each of the parties submits to the
jurisdiction of the state court sitting in St. Louis County, Missouri or federal
court sitting in St. Louis, Missouri, in any action or proceeding arising out of
or relating to this Agreement and agrees that all such claims may be heard and
determined in any such court.

     8. Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision. In
addition, should any time or area restriction contained herein be found by a
court to be unreasonable, such restriction shall nevertheless remain as to the
time or area such court finds reasonable, and as so amended, shall be enforced.

     9. Miscellaneous. This Agreement shall apply to all periods when Employee
is employed by the Company irrespective of whether or not this Agreement is
re-executed at the beginning of each such period. This Agreement is binding upon
and shall inure to the benefit of the parties' heirs, representatives,
affiliates, successors or assigns. The use of any gender shall include all other
genders.

SPARTECH CORPORATION                    EMPLOYEE

By:
    ---------------------------------   ----------------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

<PAGE>

                                    EXHIBIT B

                     SEVERANCE AND NONCOMPETITION AGREEMENT

     THIS SEVERANCE AND NONCOMPETITION AGREEMENT (this "Agreement") is made by
and between SPARTECH CORPORATION, a Delaware corporation (together with its
subsidiaries, the "Company") and _____________________ ("Employee") effective as
of the ___ day of _________, 20__.

     In consideration of the terms and conditions hereof, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee agree as follows:

     1. Severance.

     (a) If Employee's employment with the Company is terminated by the Company
for any reason other than for Cause, or if Employee's employment with the
Company is terminated by the Company for any reason other than for Cause within
24 months following a Change in Control, or if Employee terminates his or her
employment with the Company for Good Reason, Employee shall be entitled to
receive as a severance payment to be paid in accordance with the Company's
normal payroll practices an amount equal to: (i) twenty-four months' base salary
(or thirty months' base salary, in the event the termination results from a
Change in Control) at the highest rate paid to Employee during the past three
years plus (ii) the average annual bonus awarded to Employee for the three
fiscal years ended prior to Employee's termination (or for the period of
Employee's employment by the Company if less than three years).

     (b) As used herein:

     "Cause" means: (i) Employee being charged with commission of a crime that
constitutes a felony (provided that if following Employee's termination the
charges are dropped or Employee is acquitted then Employee shall be entitled to
the severance payment); (ii) acts of Employee which, in the judgment of the
Company's board of directors (the "Board"), constitute willful fraud or
dishonesty on the part of Employee in connection with his or her duties; or
(iii) Employee willfully engaging in conduct materially injurious to the Company
or gross misconduct, including but not limited to the willful or grossly
negligent failure or refusal of Employee to comply with the lawful instruction
of the Board, after a written demand for compliance is delivered to Employee by
the Board which specifically identifies the manner in which the Board believes
that Employee has violated this provision. Any act or failure to act based upon
authority given pursuant to a resolution duly adopted by the Board or based on
the advice of a senior officer or counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Employee in good faith and in the
best interests of the Company.

     "Change in Control" means a change in the ownership or effective control of
the Company or ownership of a substantial portion of the assets of the Company
within the meaning of Section 409A(a)(2)(C)(v) of the Internal Revenue Code of
1986, as amended, or any successor statute ("Code").

     "Good Reason" means any of the following: (i) one or more reductions of
Employee's base salary amounting to 10% or more from Employee's highest previous
base salary, provided that any reduction which is generally consistent with
across-the-board reductions in pay of the Company as a whole shall not be
counted for this purpose unless a Change in Control has occurred; (ii) the
Company's requiring Employee to be based at any office or location greater than
50 miles from the principal executive offices of the Company; (iii) after a
Change in Control, a relocation of the principal offices of the Company more
than 50 miles from its present location; or (iv) one or more other actions by
the Company which collectively amount to a constructive discharge of Employee.

<PAGE>

     (c) In the event a payment or payments pursuant to this Agreement is or are
subject to an excise tax under Code Section 4999, the Company shall pay
Employee, within ten days of such determination, an amount equal to such excise
tax plus an additional amount so that the net after tax effect, considering
Federal and state income taxes and the excise tax under Code Section 4999, of
the payment of such excise tax is as if such additional payment had not been
made. In the event Employee is a "specified employee" within the meaning of Code
Section 409A(a)(2)(B)(i), payment under this Agreement for any reason other than
following a Change in Control shall be deferred until the Company's first
payroll date which is more than six months following Employee's termination of
employment with the Company, at which time the amount so deferred shall be paid
in a lump sum.

     2. Nondisclosure. During the period of Employee's employment with the
Company, and after the termination thereof for any reason, Employee agrees to
use his or her best efforts to maintain and protect the secrecy of the
Confidential Information and not to directly or indirectly undertake or attempt
to undertake: (i) any disclosure of any Confidential Information to any other
person or entity; (ii) to use any Confidential Information for Employee's own
purposes; (iii) to make any copies or reproductions of any Confidential
Information; (iv) to authorize or permit any other person or entity to use,
copy, disclose, publish or distribute any Confidential Information; or (v) any
activity the Company is prohibited from undertaking or attempting to undertake
by any of its present or future clients, customers, suppliers, vendors,
consultants, agents or contractors. As used herein, "Confidential Information"
means any knowledge, information or property relating to, or used or possessed
by, the Company, and includes, without limitation, the following: trade secrets;
manufacturing or production know-how, methods and processes, patents,
copyrights, software (including, without limitation, all programs,
specifications, applications, routines, subroutines, techniques and ideas for
formulas); concepts, data, drawings, designs and documents; names of clients,
customers, employees, agents, contractors, and suppliers; marketing information;
financial information and other business records; and all copies of any of the
foregoing, including notes, extracts, memoranda prepared or directed to be
prepared by Employee based on any Confidential Information. Employee agrees that
all information possessed by Employee, or disclosed to Employee, or to which
Employee obtains access during the course of Employee's employment with the
Company shall be presumed to be Confidential Information under the terms of this
Agreement. Confidential Information shall not include any information which is
publicly available or which is generally known to persons employed in the
plastics processing business. Upon termination of Employee's employment with the
Company for any reason, Employee agrees not to retain or remove from the
Company's premises any Confidential Information whatsoever, and to surrender the
same to the Company, wherever it is located, immediately upon termination of
Employee's employment.

     3. Noncompetition/Nonsolicitation. Employee agrees that, during the term of
Employee's employment with the Company and for a period of one (1) year after
the termination of Employee's employment with the Company (whether such
termination is with or without Cause or Good Reason or results from Employee's
resignation) Employee shall not, directly or indirectly, in any market in which
the Company then is engaged in business activities (the "Geographic Area"): (i)
engage in, consult with, be employed by or be connected with any business or
activity which directly or indirectly competes with the Company's business (a
"Competing Business"), (ii) canvass, solicit or accept any business from any of
the Company's current or former clients, (iii) own any interest in any Competing
Business (provided, however, Employee may own up to 1% of the outstanding equity
interests of any publicly traded Competing Business); (iv) assist others to open
or operate any Competing Business; (v) solicit, recommend or induce any employee
of the Company to terminate his or her employment with the Company; or (vi)
solicit, recommend or induce any customers, suppliers or any other person or
entity which has a business relationship with the Company to discontinue, reduce
or modify such relationship.. Employee agrees and acknowledges that the
Geographic Area is reasonable in scope and that the one (1) year period is
reasonable in length. Employee has agreed to the foregoing noncompetition
agreement because: (a) Employee recognizes that the Company has a legitimate
interest in protecting the confidentiality of its business secrets (including
the Confidential Information), (b) Employee agrees that such

<PAGE>

noncompetition agreement is not oppressive to Employee nor injurious to the
public, and (c) the Company has provided specialized and valuable training and
information to Employee.

     4. Injunction. Because the award of monetary damages would be an inadequate
remedy, in the event of a breach or threatened breach by Employee of any of the
provisions of this Agreement, the Company shall be entitled to an injunction
restraining Employee from undertaking any such breach or threatened breach.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies for such breach or threatened breach, including the recovery of
damages from Employee.

     5. Amendment. No amendment, whether express or implied, to this Agreement
shall be effective unless it is in writing and signed by both parties hereto.

     6. Waiver. No consent or waiver, express or implied, by the Company to or
of any breach or default by Employee in the performance of his or her agreements
hereunder shall operate as a consent to or waiver of any other breach or default
in the performance of the same or any other obligations of Employee hereunder.
The Company's failure to complain of any such breach or default shall not
constitute a waiver by the Company of its rights hereunder, irrespective of how
long such failure continues.

     7. Governing Law; Venue. This Agreement shall be governed by, and construed
under, the laws of the State of Delaware. Each of the parties submits to the
jurisdiction of the state court sitting in St. Louis County, Missouri or federal
court sitting in St. Louis, Missouri, in any action or proceeding arising out of
or relating to this Agreement and agrees that all such claims may be heard and
determined in any such court.

     8. Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision. In
addition, should any time or area restriction contained herein be found by a
court to be unreasonable, such restriction shall nevertheless remain as to the
time or area such court finds reasonable, and as so amended, shall be enforced.

     9. Miscellaneous. This Agreement shall apply to all periods when Employee
is employed by the Company irrespective of whether or not this Agreement is
re-executed at the beginning of each such period. This Agreement is binding upon
and shall inure to the benefit of the parties' heirs, representatives,
affiliates, successors or assigns. The use of any gender shall include all other
genders.

SPARTECH CORPORATION                    EMPLOYEE

By:
    ---------------------------------   ----------------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

<PAGE>

                                    EXHIBIT C

                     SEVERANCE AND NONCOMPETITION AGREEMENT

     THIS SEVERANCE AND NONCOMPETITION AGREEMENT (this "Agreement") is made by
and between SPARTECH CORPORATION, a Delaware corporation (together with its
subsidiaries, the "Company") and _____________________ ("Employee") effective as
of the ___ day of _________, 20__.

     In consideration of the terms and conditions hereof, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee agree as follows:

     1. Severance.

     (a) If Employee's employment with the Company is terminated by the Company
for any reason other than for Cause, or if Employee's employment with the
Company is terminated by the Company for any reason other than for Cause within
24 months following a Change in Control, or if Employee terminates his or her
employment with the Company for Good Reason, Employee shall be entitled to
receive as a severance payment to be paid in accordance with the Company's
normal payroll practices an amount equal to: (i) twelve months' base salary (or
eighteen months' base salary, in the event the termination results from a Change
in Control) at the highest rate paid to Employee during the past three years
plus (ii) the average annual bonus awarded to Employee for the three fiscal
years ended prior to Employee's termination (or for the period of Employee's
employment by the Company if less than three years).

     (b) As used herein:

     "Cause" means: (i) Employee being charged with commission of a crime that
constitutes a felony (provided that if following Employee's termination the
charges are dropped or Employee is acquitted then Employee shall be entitled to
the severance payment); (ii) acts of Employee which, in the judgment of the
Company's board of directors (the "Board"), constitute willful fraud or
dishonesty on the part of Employee in connection with his or her duties; or
(iii) Employee willfully engaging in conduct materially injurious to the Company
or gross misconduct, including but not limited to the willful or grossly
negligent failure or refusal of Employee to comply with the lawful instruction
of the Board or Employee's supervisor, after a written demand for compliance is
delivered to Employee by the Board or Employee's supervisor which specifically
identifies the manner in which the Board or Employee's supervisor believes that
Employee has violated this provision. Any act or failure to act based upon
authority given pursuant to a resolution duly adopted by the Board or based on
the advice of a senior officer or counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Employee in good faith and in the
best interests of the Company.

     "Change in Control" means a change in the ownership or effective control of
the Company or ownership of a substantial portion of the assets of the Company
within the meaning of Section 409A(a)(2)(C)(v) of the Internal Revenue Code of
1986, as amended, or any successor statute ("Code").

     "Good Reason" means any of the following: (i) one or more reductions of
Employee's base salary amounting to 10% or more from Employee's highest previous
base salary, provided that any reduction which is generally consistent with
across-the-board reductions in pay of the Company as a whole shall not be
counted for this purpose unless a Change in Control has occurred; (ii) the
Company's requiring Employee to be based at any office or location greater than
50 miles from the office of the Company at which Employee is employed as of the
date of this Agreement; (iii) after a Change in Control, a relocation of the
office of the Company at which Employee is employed as of the date of this
Agreement more than 50 miles from its present location; or (iv) one or more
other actions by the Company which collectively amount to a constructive
discharge of Employee.

<PAGE>

     (c) In the event a payment or payments pursuant to this Agreement is or are
subject to an excise tax under Code Section 4999, the Company shall pay
Employee, within ten days of such determination, an amount equal to such excise
tax plus an additional amount so that the net after tax effect, considering
Federal and state income taxes and the excise tax under Code Section 4999, of
the payment of such excise tax is as if such additional payment had not been
made. In the event Employee is a "specified employee" within the meaning of Code
Section 409A(a)(2)(B)(i), payment under this Agreement for any reason other than
following a Change in Control shall be deferred until the Company's first
payroll date which is more than six months following Employee's termination of
employment with the Company, at which time the amount so deferred shall be paid
in a lump sum.

     2. Nondisclosure. During the period of Employee's employment with the
Company, and after the termination thereof for any reason, Employee agrees to
use his or her best efforts to maintain and protect the secrecy of the
Confidential Information and not to directly or indirectly undertake or attempt
to undertake: (i) any disclosure of any Confidential Information to any other
person or entity; (ii) to use any Confidential Information for Employee's own
purposes; (iii) to make any copies or reproductions of any Confidential
Information; (iv) to authorize or permit any other person or entity to use,
copy, disclose, publish or distribute any Confidential Information; or (v) any
activity the Company is prohibited from undertaking or attempting to undertake
by any of its present or future clients, customers, suppliers, vendors,
consultants, agents or contractors. As used herein, "Confidential Information"
means any knowledge, information or property relating to, or used or possessed
by, the Company, and includes, without limitation, the following: trade secrets;
manufacturing or production know-how, methods and processes, patents,
copyrights, software (including, without limitation, all programs,
specifications, applications, routines, subroutines, techniques and ideas for
formulas); concepts, data, drawings, designs and documents; names of clients,
customers, employees, agents, contractors, and suppliers; marketing information;
financial information and other business records; and all copies of any of the
foregoing, including notes, extracts, memoranda prepared or directed to be
prepared by Employee based on any Confidential Information. Employee agrees that
all information possessed by Employee, or disclosed to Employee, or to which
Employee obtains access during the course of Employee's employment with the
Company shall be presumed to be Confidential Information under the terms of this
Agreement. Confidential Information shall not include any information which is
publicly available or which is generally known to persons employed in the
plastics processing business. Upon termination of Employee's employment with the
Company for any reason, Employee agrees not to retain or remove from the
Company's premises any Confidential Information whatsoever, and to surrender the
same to the Company, wherever it is located, immediately upon termination of
Employee's employment.

     3. Noncompetition/Nonsolicitation. Employee agrees that, during the term of
Employee's employment with the Company and for a period of one (1) year after
the termination of Employee's employment with the Company (whether such
termination is with or without Cause or Good Reason or results from Employee's
resignation) Employee shall not, directly or indirectly, in any market in which
the Company then is engaged in business activities (the "Geographic Area"): (i)
engage in, consult with, be employed by or be connected with any business or
activity which directly or indirectly competes with the Company's business (a
"Competing Business"), (ii) canvass, solicit or accept any business from any of
the Company's current or former clients, (iii) own any interest in any Competing
Business (provided, however, Employee may own up to 1% of the outstanding equity
interests of any publicly traded Competing Business); (iv) assist others to open
or operate any Competing Business; (v) solicit, recommend or induce any employee
of the Company to terminate his or her employment with the Company; or (vi)
solicit, recommend or induce any customers, suppliers or any other person or
entity which has a business relationship with the Company to discontinue, reduce
or modify such relationship.. Employee agrees and acknowledges that the
Geographic Area is reasonable in scope and that the one (1) year period is
reasonable in length. Employee has agreed to the foregoing noncompetition
agreement because: (a) Employee recognizes that the Company has a legitimate
interest in protecting the confidentiality of its business secrets (including
the Confidential Information), (b) Employee agrees that such

<PAGE>

noncompetition agreement is not oppressive to Employee nor injurious to the
public, and (c) the Company has provided specialized and valuable training and
information to Employee.

     4. Injunction. Because the award of monetary damages would be an inadequate
remedy, in the event of a breach or threatened breach by Employee of any of the
provisions of this Agreement, the Company shall be entitled to an injunction
restraining Employee from undertaking any such breach or threatened breach.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies for such breach or threatened breach, including the recovery of
damages from Employee.

     5. Amendment. No amendment, whether express or implied, to this Agreement
shall be effective unless it is in writing and signed by both parties hereto.

     6. Waiver. No consent or waiver, express or implied, by the Company to or
of any breach or default by Employee in the performance of his or her agreements
hereunder shall operate as a consent to or waiver of any other breach or default
in the performance of the same or any other obligations of Employee hereunder.
The Company's failure to complain of any such breach or default shall not
constitute a waiver by the Company of its rights hereunder, irrespective of how
long such failure continues.

     7. Governing Law; Venue. This Agreement shall be governed by, and construed
under, the laws of the State of Delaware. Each of the parties submits to the
jurisdiction of the state court sitting in St. Louis County, Missouri or federal
court sitting in St. Louis, Missouri, in any action or proceeding arising out of
or relating to this Agreement and agrees that all such claims may be heard and
determined in any such court.

     8. Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision. In
addition, should any time or area restriction contained herein be found by a
court to be unreasonable, such restriction shall nevertheless remain as to the
time or area such court finds reasonable, and as so amended, shall be enforced.

     9. Miscellaneous. This Agreement shall apply to all periods when Employee
is employed by the Company irrespective of whether or not this Agreement is
re-executed at the beginning of each such period. This Agreement is binding upon
and shall inure to the benefit of the parties' heirs, representatives,
affiliates, successors or assigns. The use of any gender shall include all other
genders.

SPARTECH CORPORATION                    EMPLOYEE

By:
    ---------------------------------   ----------------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

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