Exhibit 10.1

 

APTARGROUP, INC.
2014 LONG-TERM INCENTIVE PROGRAM

 

I.  INTRODUCTION

 

1.1       Purposes.  The purposes of this 2014 Long-Term Incentive Program, as
established by AptarGroup, Inc., a Delaware corporation (the “Company”), are
(i) to provide incentive compensation to certain officers of the Company and its
subsidiaries based on the Company’s total shareholder return performance
relative to the S&P 400 MidCap Index over a three-year performance period,
(ii) to advance the interests of the Company and its stockholders by attracting
and retaining highly competent officers and (iii) to motivate such persons to
act in the long-term best interests of the Company and its stockholders.  This
Program shall be subject to, and administered pursuant to, the terms and
conditions of the AptarGroup Performance Incentive Plan (the “Plan”).

 

1.2       Certain Definitions.  For purposes of the Program, the following
capitalized terms shall have the respective meanings set forth below. 
Capitalized terms not defined herein shall have the respective meanings
specified in the Plan.

 

(a)        “Accumulated Shares” means periodic adjustments made to a share of
Common Stock over the Performance Period and the 20 consecutive trading days
immediately preceding the first day of the Performance Period, which is solely
for the purpose of determining the Company TSR and reflecting a hypothetical
reinvestment of dividends on the Accumulated Shares during such period.  The
number of Accumulated Shares shall be equal to the sum of (i) one share and
(ii) the cumulative number of shares of Common Stock that would be purchased
with the dividends paid on Common Stock for which the dividend payment date
occurs during the Performance Period or the 20 consecutive trading days
immediately preceding the Performance Period, assuming such dividends are
immediately reinvested in shares of Common Stock at the closing price of a share
of Common Stock on the applicable dividend payment date.

 

(b)        “Award” means an award conferring a right, contingent upon the
attainment of the Company TSR performance goals set forth in Section 2.2 within
the Performance Period, to receive cash, as determined by the Committee.

 

(c)        “Beginning Stock Value” means the average over the 20 consecutive
trading days immediately preceding the first day of the Performance Period of
the product of (i) the number of Accumulated Shares times (ii) the closing
transaction price of a share of Common Stock, as reported on The New York Stock
Exchange (or such other principal national stock exchange on which shares of
Common Stock are traded).

 

(d)       “Board” means the Board of Directors of the Company.

 

(e)        “Cause” means (i) the commission of a felony involving moral
turpitude, (ii) the commission of a fraud, (iii) the commission of any material
act involving dishonesty with respect to the Company or any of its subsidiaries
or affiliates, (iv) gross negligence or willful misconduct with respect to the
Company or any of its subsidiaries or affiliates, (v) the willful and continued
failure by the Participant to substantially perform the Participant’s duties
with the Company (other than any such failure resulting from the Participant’s
incapacity due to physical or mental

 

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illness) after a written demand for substantial performance is delivered to
Participant by the Company, which demand specifically identifies the manner in
which the Company believes that the Participant has not substantially performed
the Participant’s duties, (vi) breach of any restrictive covenant provision or
agreement with the Company or (vii) any breach by the Participant of any written
agreement with the Company or any of its subsidiaries or affiliates which is
material and which is not cured within 30 days following written notice thereof
to the Participant by the Company.

 

(f)        “Change in Control” means:

 

(i)         the acquisition by any individual, entity or group (a “Person”),
including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of more than 50% of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
the following acquisitions shall not constitute a Change in Control: (A) any
acquisition directly from the Company (excluding any acquisition resulting from
the exercise of a conversion or exchange privilege in respect of outstanding
convertible or exchangeable securities unless such outstanding convertible or
exchangeable securities were acquired directly from the Company); (B) any
acquisition by the Company; (C) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (D) any acquisition by any corporation pursuant to
a reorganization, merger or consolidation involving the Company, if, immediately
after such reorganization, merger or consolidation, each of the conditions
described in clauses (A), (B) and (C) of subsection (iii) of this definition
shall be satisfied; and provided further that, for purposes of clause (B), if
any Person (other than the Company or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company) shall become the beneficial owner of more than 50% of the
Outstanding Company Common Stock or more than 50% of the Outstanding Company
Voting Securities by reason of an acquisition by the Company and such Person
shall, after such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any additional
Outstanding Company Voting Securities and such beneficial ownership is publicly
announced, such additional beneficial ownership shall constitute a Change in
Control;

 

(ii)        individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
such Board; provided, however, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or nomination for election
by the Company’s stockholders, was approved by the vote of at least a majority
of the directors then comprising the Incumbent Board shall be deemed to have
been a member of the Incumbent Board; and provided further, that no individual
who was initially elected as a director of the Company as a result of an actual
or threatened solicitation by a Person other than the Board for the purpose of
opposing a solicitation by any other Person with respect to the election or
removal of directors or any other actual or threatened solicitation of proxies
or consents by or on behalf of any Person other than the Board shall be deemed
to have been a member of the Incumbent Board;

 

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(iii)       consummation of a reorganization, merger or consolidation unless, in
any such case, immediately after such reorganization, merger or consolidation,
(A) 50% or more of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and 50%
or more of the combined voting power of the then outstanding securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (B) no Person (other than the Company, any employee benefit
plan (or related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or consolidation (or any
corporation controlled by the Company) and any Person which beneficially owned,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, more than 50% of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, more than 50% of the then outstanding shares of common
stock of such corporation or more than 50% of the combined voting power of the
then outstanding securities of such corporation entitled to vote generally in
the election of directors and (C) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for such
reorganization, merger or consolidation; or

 

(iv)       consummation of (A) a plan of complete liquidation or dissolution of
the Company or (B) the sale or other disposition of all or substantially all of
the assets of the Company other than to a corporation with respect to which,
immediately after such sale or other disposition, (1) 50% or more of the then
outstanding shares of common stock thereof and 50% or more of the combined
voting power of the then outstanding securities thereof entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such sale or
other disposition and in substantially the same proportions relative to each
other as their ownership, immediately prior to such sale or other disposition,
of the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (2) no Person (other than the Company, any
employee benefit plan (or related trust) sponsored or maintained by the Company
or such corporation (or any corporation controlled by the Company) and any
Person which beneficially owned, immediately prior to such sale or other
disposition, directly or indirectly, more than 50% of the Outstanding Company
Common Stock or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, more than 50% of the then outstanding
shares of common stock thereof or more than 50% of the combined voting power of
the then outstanding securities thereof entitled to vote generally in the
election of directors and (3) at least a majority of the members of the board of
directors thereof were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for such
sale or other disposition.

 

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(g)        “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(h)        “Committee” shall mean the Compensation Committee of the Board.

 

(i)         “Common Stock” shall mean Common Stock, par value $.01 per share, of
the Company.

 

(j)         “Company TSR” means the cumulative total shareholder return of the
Common Stock during the Performance Period, assuming the reinvestment of
dividends during the Performance Period, which shall be equal to (i) the
quotient of (A) the Ending Stock Value divided by (B) the Beginning Stock Value,
minus (ii) one (1).

 

(k)        “Disability” means the Participant’s inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.

 

(l)         “Ending Stock Value” means the average over the 20 consecutive
trading days through the last day of the Performance Period of the product of
(i) the number of Accumulated Shares times (ii) the closing transaction price of
a share of Common Stock, as reported on The New York Stock Exchange (or such
other principal national stock exchange on which shares of Common Stock are
traded).

 

(m)       “Exchange Act” means the Securities Exchange Act of 1934, as then in
effect, or any successor federal statute of substantially similar effect.

 

(n)        “Good Reason” shall mean any of the following actions, if taken
without the express written consent of the Participant:   (i) a material
diminution in the Participant’s base salary; (ii) a material diminution in the
Participant’s authority, duties or responsibilities; or (iii) a material breach
by the Company of any material agreement between the Company and the
Participant.  A Participant’s employment with the Company may be terminated for
Good Reason only if (A) the Participant provides written notice to the Company
of the occurrence of the Good Reason event (as described above) within 90 days
after the Participant has knowledge of the circumstances constituting Good
Reason, which notice shall specifically identify the circumstances which the
Participant believes constitute Good Reason, (B)  the Company fails to correct
the circumstances constituting “Good Reason” within 30 days after such notice
and (C) the Participant resigns within 120 days after the initial existence of
such circumstances.

 

(o)        “Grant Acceptance Agreement” means the Grant Acceptance Agreement
between the Company and the recipient of an Award hereunder.

 

(p)        “Individual Award Opportunity” means a Participant’s Award
opportunity set forth in the Participant’s Grant Acceptance Agreement, expressed
as a percentage of the Participant’s base salary (determined as of the beginning
of the Performance Period).

 

(q)        “Participant” means a person holding an outstanding Award granted
under the Program.

 

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(r)        “Program” means this AptarGroup, Inc. 2014 Long-Term Incentive
Program, as amended from time to time.

 

(s)        “Retirement” means the Participant’s termination of employment after
(i) attaining age 55, but prior to age 65, with at least ten years of continuous
service to the Company or its subsidiaries or (ii) attaining age 65.

 

(t)        “S&P 400 MidCap Comparator Group” means the companies included in the
S&P 400 MidCap Index (including the Company), determined as of the last day of
the Performance Period and excluding any companies that become publicly-traded
after the commencement of the Performance Period.

 

(u)        “S&P 400 MidCap Constituent Company Returns” means, for each company
in the S&P 400 MidCap Comparator Group, the cumulative total shareholder return
during the Performance Period, assuming the reinvestment of dividends during the
Performance Period, which shall be equal to (i) the quotient of (A) the average
closing price of the S&P 400 MidCap Comparator Group over the 20 consecutive
trading days through the last day of the Performance Period divided by (B) the
average closing price of the S&P 400 MidCap Comparator Group over the 20
consecutive trading days immediately preceding the first day of the Performance
Period, minus (ii) one (1).

 

1.3       Administration.  The Program shall be administered by the Committee. 
The Committee shall, in its sole and absolute discretion and subject only to the
terms of the Program and the Plan, have the full power and authority to
interpret the Program and the application thereof, establish (and rescind) any
rules and regulations it may deem necessary, appropriate or desirable for the
administration of the Program, establish the conditions to the payment of all or
a portion of each Award and provide that the Company TSR will be adjusted,
subject to the terms of the Plan, to reflect extraordinary events, and impose,
incidental to the grant of an Award, conditions with respect to the Award, such
as limiting competitive employment or other activities.  All interpretations,
rules, regulations, conditions and other acts of the Committee shall be final,
binding and conclusive on all parties.

 

The Committee may delegate some or all of its power and authority hereunder to
the Chief Executive Officer or other executive officer of the Company as the
Committee deems appropriate; provided, however, that with respect to any person
who is a “covered employee” within the meaning of Section 162(m) of the Code or
who, in the Committee’s judgment, is likely to be a covered employee at any time
during the Performance Period, only the Committee shall be permitted to
(a) designate such person to participate in the Program for such Performance
Period, (b) establish Individual Award Opportunities for such person, and
(c) certify the achievement of the Company TSR performance goal.  The Committee
may also delegate ministerial administrative functions, such as receipt of
notices, implementation of Program payments and mathematical calculations, to
one or more employees or consultants as the Committee may deem necessary or
desirable.

 

No member of the Board or Committee, and neither the Chief Executive Officer nor
any other person to whom the Committee delegates any of its power and authority
hereunder, shall be liable for any act, omission, interpretation, construction
or determination made in connection with this Program in good faith, and each
such person shall be entitled to indemnification and

 

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reimbursement by the Company in respect of any claim, loss, damage or expense
(including attorneys’ fees) arising therefrom to the full extent permitted by
law (except as otherwise may be provided in the Company’s Certificate of
Incorporation and/or By-laws) and under any directors’ and officers’ liability
insurance that may be in effect from time to time.

 

II.  TERMS OF AWARDS

 

2.1       Eligibility.  Participants in the Program shall consist of such
officers or other employees of the Company and its subsidiaries and affiliates
as the Committee in its sole discretion may select from time to time.  For
purposes of the Program, references to employment by the Company shall also mean
employment by a subsidiary or an affiliate of the Company.  A grant of an Award
to any person shall not entitle such person to an additional grant of Awards or
similar awards at any subsequent time.

 

2.2       Terms of Awards.  (a)  In General.  Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Program and the Plan, as the
Committee shall deem advisable.

 

(b)        Performance-Based Vesting.   Subject to (i) the Participant’s
continuous employment with the Company through December 31, 2016 (the “Vesting
Date”) and (ii) the certification by the Committee of the Company TSR
performance level achieved, and except as otherwise provided in
Section 2.2(c) and Section 2.2(d), the Participant shall become vested in the
percentage of his or her Individual Award Opportunity determined in accordance
with the schedule set forth below, based on the extent to which the Company TSR
exceeds the S&P 400 Midcap Constituent Company Returns, as such terms are
defined herein, over the three-year performance period commencing January 1,
2014 and ending December 31, 2016 (the “Performance Period”).  For purposes of
this Program, the Participant’s employment relationship shall be treated as
continuing intact while the individual is on military or sick leave or other
bona fide leave of absence approved by the Company.

 

Performance Level

 

 

Company TSR Percentile
Rank vs. S&P 400 MidCap
Constituent Company
Returns*

 

 

Percentage of Individual
Award Opportunity
Vested**

 

 

 

 

 

 

 

Below Target

 

 

Below the 50th percentile

 

 

0%

 

 

 

 

 

 

 

Target

 

 

50th percentile

 

 

100%

 

 

 

 

 

 

 

Mid-point

 

 

75th percentile

 

 

200%

 

 

 

 

 

 

 

Maximum

 

 

90th percentile and above

 

 

250%

 

 

 

 

 

 

 

 

 

*                                        If the Company’s TSR for the
Performance Period is negative, but exceeds the 50th percentile of the S&P 400
MidCap Constituent Company Returns, the percentage of the Individual Award
Opportunity that is vested shall be capped at 100%.

 

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**                                The vesting percentage of the Individual Award
Opportunity shall be determined using straight-line interpolation between Target
and Mid-point performance levels and the Mid-point and Maximum performance
levels.

 

(c)        Termination of Employment.

 

(i)         Termination of Employment by the Company without Cause, by the
Participant for Good Reason or by Reason of Death, Disability, or Retirement. 
If, prior to the Vesting Date, the Participant’s employment is terminated by the
Company without Cause, by the Participant for Good Reason or by reason of death,
Disability or Retirement, the Participant or the Participant’s beneficiary, as
the case may be, shall be entitled to a prorated payment.  Such prorated payment
shall be determined in accordance with Section 2.2(b) at the end of the
Performance Period based on the actual performance during the Performance Period
multiplied by a fraction, the numerator of which shall equal the number of days
such Participant was employed with the Company during the Performance Period and
the denominator of which shall equal the number of days in the Performance
Period.  The portion of the Award that does not become vested pursuant to this
clause (i) shall be immediately forfeited.

 

(ii)        Termination of Employment by the Company for Cause or by the
Participant Other Than for Good Reason or Retirement.  Subject to
Section 2.2(d), if, prior to the Vesting Date, a Participant’s employment is
terminated by the Company for Cause or by the Participant other than for Good
Reason or Retirement, such Participant’s Award shall be immediately forfeited.

 

(d)       Change in Control.  In the event of a Change in Control prior to the
Vesting Date, the Performance Period shall end as of the date on which the
Change in Control is consummated (the “Change in Control Performance Period”)
and the Participant shall be eligible to receive an Award determined in
accordance with Section 2.2(b) based on actual Company TSR during the Change in
Control Performance Period;  provided, however, if the Change in Control occurs
after the date on which a Participant’s employment is terminated by the Company
without Cause, by the Participant for Good Reason, or by reason of death,
Disability or Retirement, pursuant to Section 2.2(c)(i), the Participant shall
be eligible to receive an Award determined in accordance with
Section 2.2(b) based on actual Company TSR during the Change in Control
Performance Period and prorated in accordance with Section 2.2(c)(i) based on
the number of days such Participant was employed with the Company during the
Performance Period.  In the event of a Change in Control prior to the Vesting
Date and after the date on which a Participant’s employment is terminated by the
Company for Cause or by the Participant other than for Good Reason or
Retirement, such Participant’s Award shall already have been forfeited pursuant
to Section 2.2(c)(ii) and the Participant shall not be eligible for any payment
with respect to such Award.

 

(e)        Payment.  As soon as practicable after the Vesting Date or, if
applicable, the end of the Change in Control Performance Period (but no later
than the March 15th occurring immediately after the Vesting Date or the end of
Change in Control Performance Period, as applicable), the Participant shall
receive a lump sum cash payment from the Company in an amount equal, as
determined by the Committee, to the value of the Award.

 

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III.  GENERAL

 

3.1       Effective Date and Term of Program.  The Program shall be effective as
of January 1, 2014, and shall continue until such time as it is terminated by
the Board.

 

3.2       Amendments.  The Board may amend the Program as it shall deem
advisable in the exercise of its sole and absolute discretion; provided, however
that no such amendment may materially impair the rights granted to a Participant
with respect to an Award without the consent of such Participant.

 

3.3       Non-Transferability.  No Award or any rights thereunder shall be
transferable other than by will or the laws of descent and distribution or
pursuant to any beneficiary designation procedures as may approved by the
Committee for such purpose.  Except as permitted by the preceding sentence, no
Award hereunder shall be sold, transferred, assigned, pledged, hypothecated,
encumbered or otherwise disposed of (whether by operation of law or otherwise)
or be subject to execution, attachment or similar process.  Upon any attempt by
the holder of an Award to so sell, transfer, assign, pledge, hypothecate,
encumber or otherwise dispose of such Award, such Award and all rights
thereunder shall immediately become null and void.

 

3.4       Tax and Other Withholding.  The Company shall have the right to deduct
from any amounts paid pursuant to the Program (or from other compensation
payable by the Company to the Participant) all Federal, state, local and other
taxes and any other amounts which may be required under law or elected by the
Participant to be withheld or paid in connection with the settlement of an Award
or any other payment made hereunder.

 

3.5       No Right of Participation or Employment.  No person shall have any
right to participate in the Program or to be granted Awards under the Program. 
Neither the Program nor any Agreement relating to an Award granted hereunder
shall confer upon any person any right to be employed, reemployed or continue
employment by the Company or any subsidiary or affiliate of the Company or
affect in any manner the right of the Company or any subsidiary or affiliate of
the Company to terminate the employment of any person with or without notice at
any time for any reason without liability hereunder.  Nothing herein shall
confer any right or benefit or any entitlement to any benefit on any Participant
unless and until a benefit is actually vested pursuant to the Program.  The
adoption and maintenance of the Program shall not be deemed to constitute a
contract of employment or otherwise between the Company or any of its
subsidiaries or affiliates and any Participant, or to be a consideration for or
an inducement or condition of any employment.  Neither the provisions of the
Program nor any action taken by the Company or the Board or the Committee
pursuant to the provisions of the Program shall be deemed to create any trust,
express or implied, or any fiduciary relationship between or among the Company,
the Board or Committee, any member of the Board or Committee, or any employee,
former employee or beneficiary thereof.

 

3.6       Unfunded Arrangement.  The Program shall at all times be entirely
unfunded and no provision shall at any time be made with respect to segregating
assets of the Company for payment of any benefit hereunder.  No holder of an
Award shall have any interest in any particular assets of the Company or any of
its subsidiaries or affiliates by reason of the right to receive a benefit under
the Program and any such holder shall have only the rights of an unsecured
creditor of the Company with respect to any rights under the Program.

 

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3.7       Governing Law.  This Program, each Award granted hereunder and its
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the laws of the United States,
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.

 

3.8       Governing Documents.  The  Awards granted hereunder shall be governed
by the terms of the Plan, this Program and the Grant Acceptance Agreement. 
Notwithstanding anything to the contrary, the terms of a Participant’s
employment agreement governing the payout of any bonuses or severance benefits
following a termination of such Participant’s employment shall not apply to the
Awards granted hereunder.

 

3.9       Section 409A of the Code.  This Program and the Awards granted
hereunder are intended to be exempt from Section 409A of the Code as short-term
deferrals pursuant to U.S., Treasury Regulation §1.409A-1(b)(4), and shall be
interpreted and construed accordingly.

 

3.10     Awards Subject to Clawback.  The Awards granted under this Program and
any cash payment delivered pursuant to an Award are subject to forfeiture,
recovery by the Company or other action pursuant to any clawback or recoupment
policy which the Company may adopt from time to time, including without
limitation any such policy which the Company may be required to adopt under the
Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing
rules and regulations thereunder, or as otherwise required by law.

 

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