Exhibit 10.1

 

APTARGROUP

PERFORMANCE INCENTIVE PLAN

 

I.
Purposes

 

The purposes of the AptarGroup Performance Incentive Plan are to retain and
motivate the officers and other employees of AptarGroup, Inc., and its
subsidiaries who have been designated by the Compensation Committee to
participate in the Plan for a specified Performance Period by providing them
with the opportunity to earn incentive payments based upon the extent to which
specified performance goals have been achieved or exceeded for the Performance
Period. It is intended that all amounts payable to Participants who are “covered
employees” within the meaning of Section 162(m) of the Code will constitute
“qualified performance-based compensation” within the meaning of U.S. Treasury
regulations promulgated thereunder, and the Plan and the terms of any awards
hereunder shall be so interpreted and construed to the maximum extent possible.

 

II.
Certain Definitions

 

“Annual Base Salary” shall mean for any Participant an amount equal to the rate
of annual base salary in effect or approved by the Committee or other authorized
person at the time or immediately before performance goals are established for a
Performance Period, including any base salary that otherwise would be payable to
the Participant during the Performance Period but for his or her election to
defer receipt thereof.

 

“Applicable Period” shall mean, with respect to any Performance Period, a period
commencing on or before the first day of the Performance Period and ending not
later than the earlier of (a) 90 days after the commencement of the Performance
Period and (b) the date on which twenty-five percent (25%) of the Performance
Period has been completed. Any action required to be taken within an Applicable
Period may be taken at a later date if permissible under Section 162(m) of the
Code or regulations promulgated thereunder, as they may be amended from time to
time.

 

“Board” shall mean the Board of Directors of the Company.

 

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

 

“Committee” shall mean the Compensation Committee of the Board or such other
committee designated by the Board that satisfies any then applicable
requirements of the principal national stock exchange on which the Common Stock
is then traded to constitute a compensation committee, and which consists of two
or more members of the Board, each of whom is intended to be an “outside
director” within the meaning of Section 162(m) of the Code.

 

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

 

“Company” shall mean AptarGroup, Inc., a Delaware corporation and any successor
thereto.

 

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“Individual Award Opportunity” shall mean the potential of a Participant to
receive an incentive payment if the performance goals for a Performance Period
shall have been satisfied. An Individual Award Opportunity may be expressed in
U.S. dollars, in Restricted Stock Units or pursuant to a formula that is
consistent with the provisions of the Plan.

 

“Participant” shall mean an officer or other employee of the Company or any of
its subsidiaries who is designated by the Company to participate in the Plan for
a Performance Period, in accordance with Article III.

 

“Performance Criteria” shall mean one or more of the following objective
corporate-wide or subsidiary, business segment, division, operating unit or
individual measures:

 

(a)         Profitability Measures: (i) earnings per share, (ii) earnings before
interest and taxes (“EBIT”), (iii) earnings before interest, taxes, depreciation
and amortization (“EBITDA”), (iv) business segment income, (v) net income,
(vi) operating income, (vii) revenues, (viii) profit margin, (ix) cash
flow(s) and (x) expense reduction;

 

(b)         Capital Return Measures: (i) return on equity, (ii) return on
assets, (iii) return on invested capital, (iv) EBIT to capital ratio, (v) EBITDA
to capital ratio, (vi) business segment income to business segment capital
ratio, (vii) working capital ratios and (viii) total shareholder return; and

 

(c)          Other Performance Measures: (i) successful implementation of
strategic initiatives relating to cost reduction, revenue production and/or
productivity improvement, and (ii) successful integration of acquisitions.

 

Each such goal may be measured (A) on an absolute or relative basis; or
(B) comparatively with current internal targets, the past performance of the
Company (including the performance of one or more subsidiaries, business
segments, divisions, or operating units) or the past or current performance of
other companies (or a combination of such past and current performance).  In the
case of earnings based measures, in addition to the ratios specifically
enumerated above, performance goals may include comparisons relating to capital
(including, but not limited to, the cost of capital), shareholders’ equity,
shares outstanding, assets or net assets, or any combination thereof.  Where
applicable, each of the foregoing measures will be determined in accordance with
Section 4.2.

 

“Performance Period” shall mean any period commencing on or after January 1,
2013 for which performance goals are established pursuant to Article IV. A
Performance Period may be coincident with one or more fiscal years of the
Company or a portion of any fiscal year of the Company.

 

“Plan” shall mean the AptarGroup Performance Incentive Plan as set forth herein,
as it may be amended from time to time.

 

“Restricted Stock Unit” shall mean a right that entitles the holder thereof to
receive, upon vesting, one share of Common Stock on the date of vesting and that
is available for grant in accordance with the terms of a stock plan of the
Company, the eligible participants in which include Participants.

 

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III.
Administration

 

3.1. General.  The Plan shall be administered by the Committee, which shall have
the full power and authority to interpret, construe and administer the Plan and
any Individual Award Opportunity granted hereunder (including reconciling any
inconsistencies, correcting any defaults and addressing any omissions). The
Committee’s interpretation, construction and administration of the Plan and all
its determinations hereunder shall be final, conclusive and binding on all
persons for all purposes.

 

3.2. Powers and Responsibilities.  The Committee shall have the following
discretionary powers, rights and responsibilities in addition to those described
in Section 3.1.

 

(a)

to designate within the Applicable Period the Participants for a Performance
Period;

 

 

(b)

to establish within the Applicable Period the performance goals and other terms
and conditions that are to apply to each Participant’s Individual Award
Opportunity, including the extent to which any incentive payment shall be made
to a Participant in the event of (i) the Participant’s termination of employment
with or service to the Company due to disability, retirement, death or any other
reason or (ii) a change in control of the Company;

 

 

(c)

to determine in writing prior to the payment with respect to any Individual
Award Opportunity that the performance goals for a Performance Period and other
material terms applicable to the Individual Award Opportunity have been
satisfied;

 

 

(d)

to determine whether, and under what circumstances and subject to what terms, an
Individual Award Opportunity is to be paid in cash or in Restricted Stock Units,
or partly in cash and partly in Restricted Stock Units;

 

 

(e)

to determine whether, and under what circumstances and subject to what terms, an
Individual Award Opportunity is to be paid on a deferred basis, including
whether such a deferred payment shall be made solely at the Committee’s
discretion or whether a Participant may elect deferred payment; and

 

 

(f)

to adopt, revise, suspend, waive or repeal, when and as appropriate, in its sole
and absolute discretion, such administrative rules, guidelines and procedures
for the Plan as it deems necessary or advisable to implement the terms and
conditions of the Plan.

 

3.3. Delegation of Power.  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 applicable Performance Period, only
the Committee shall be permitted to (a) designate such person to participate in
the Plan for such Performance Period, (b) establish performance goals and
Individual Award Opportunities for such person, and (c) certify the achievement
of such performance goals.

 

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IV.
Performance Goals

 

4.1. Establishing Performance Goals.  The Committee shall establish within the
Applicable Period of each Performance Period one or more objective performance
goals for each Participant or for any group of Participants (or both), provided
that the outcome of each goal is substantially uncertain at the time the
Committee establishes such goal.  Performance goals shall be based exclusively
on Performance Criteria.  With respect to Participants who are not “covered
employees” within the meaning of Section 162(m) of the Code and who, in the
Committee’s judgment, are not likely to be covered employees at any time during
the applicable Performance Period, the performance goals established for the
Performance Period may consist of any objective corporate-wide or subsidiary,
division, operating unit or individual measures, whether or not listed herein. 
Performance goals shall be subject to such other special rules and conditions as
the Committee may establish at any time within the Applicable Period.

 

4.2. Impact of Extraordinary Items or Changes in Accounting.  The Performance
Criteria utilized in establishing performance goals under the Plan for any given
Performance Period shall be determined in accordance with generally accepted
accounting principles (“GAAP”) and in a manner consistent with the methods used
in the Company’s audited consolidated financial statements, to the extent
applicable, without regard to (a) extraordinary or other nonrecurring or unusual
items, as determined by the Company’s independent public accountants in
accordance with GAAP, (b) changes in accounting, as determined by the Company’s
independent public accountants in accordance with GAAP, or (c) special charges,
such as restructuring or impairment charges, unless, in each case, the Committee
decides otherwise within the Applicable Period or as otherwise required under
Section 162(m) of the Code.

 

V.
Individual Award Opportunities

 

5.1. Terms.  At the time performance goals are established for a Performance
Period, the Committee also shall establish an Individual Award Opportunity for
each Participant or group of Participants, which shall be based on the
achievement of one or more specified targets of performance goals. The targets
shall be expressed in terms of an objective formula or standard which may be
based upon the Participant’s Annual Base Salary or a multiple thereof. In all
cases the Committee shall have the sole and absolute discretion to reduce the
amount of any payment with respect to any Individual Award Opportunity that
would otherwise be made to any Participant or to decide that no payment shall be
made. No Participant shall receive a payment, whether in cash or in Restricted
Stock Units, under the Plan with respect to any Performance Period having a
value in excess of $3,000,000, which maximum amount shall be proportionately
increased or decreased with respect to Performance Periods that are more than or
less than, respectively, one year in duration.

 

5.2 Vesting.  The Committee may, in its sole discretion, specify that rights to
receive payments related to an Individual Award Opportunity may be (a) subject
to a vesting schedule (e.g., pro-rata vesting, cliff vesting or other vesting
schedule), or (b) fully vested when an Individual Award Opportunity target has
been met.

 

5.3. Payments.  Payments with respect to Individual Award Opportunities shall be
made in cash or in Restricted Stock Units, or partly in cash and partly in
Restricted Stock Units, and shall be made at the time determined by the
Committee after the end of the Performance Period for which the awards are
payable, provided that (a) no such payment shall be made unless and until
(i) such payments are vested (if such payments are subject to a vesting
schedule) and (ii) the Committee has certified in writing the extent to which
the applicable performance goals for such

 

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Performance Period have been satisfied and (b) no such payment shall be made
later than March 15 of the year immediately following the later to occur of
(A) the year in which the applicable Performance Period ends or (B) the year in
which the payment becomes vested.

 

VI.
General

 

6.1. Effective Date and Term of Plan.  The Plan shall be submitted to the
stockholders of the Company for approval at the 2013 annual meeting of
stockholders and, if approved by the affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy at such
meeting, shall become effective for Performance Periods beginning on and after
January 1, 2013. The Plan shall terminate as of January 1, 2018, unless
terminated earlier by the Board. In the event that the Plan is not approved by
the stockholders of the Company, the Plan shall be null and void with respect to
Participants who are “covered employees” within the meaning of Section 162(m) of
the Code.

 

6.2. Amendments.  The Board may amend the Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 162(m) of the Code.

 

6.3. Non-Transferability of Awards.  No award under the Plan shall be
transferable other than by will, the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company. Except
to the extent permitted by the foregoing sentence, no award may 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 to sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any such award, such award
and all rights thereunder shall immediately become null and void.

 

6.4. Tax Withholding.  The Company shall have the right to require, prior to the
payment of any amount pursuant to an award made hereunder, payment by the
Participant of any Federal, state, local or other taxes which may be required to
be withheld or paid in connection with such award.

 

6.5. No Right of Participation or Employment.  No person shall have any right to
participate in the Plan. Neither the Plan nor any award made hereunder shall
confer upon any person any right to continued 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 at any time without liability hereunder.

 

6.6. Designation of Beneficiary.  If permitted by the Company, a Participant may
file with the Committee a written designation of one or more persons as such
Participant’s beneficiary or beneficiaries (both primary and contingent) in the
event of the Participant’s death.

 

Each beneficiary designation shall become effective only when filed in writing
with the Committee during the Participant’s lifetime on a form prescribed by the
Committee. The spouse of a married Participant domiciled in a community property
jurisdiction shall join in any designation of a beneficiary other than such
spouse. The filing with the Committee of a new beneficiary designation shall
cancel all previously filed beneficiary designations.

 

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If a Participant fails to designate a beneficiary, or if all designated
beneficiaries of a Participant predecease the Participant, then each outstanding
award shall be payable to the Participant’s executor, administrator, legal
representative or similar person.

 

6.7. Governing Law.  The Plan and each award hereunder, and all determinations
made and actions taken pursuant thereto, to the extent not otherwise governed by
the Code or 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.

 

6.8. Other Plans.  Payments pursuant to the Plan shall not be treated as
compensation for purposes of any other compensation or benefit plan, program or
arrangement of the Company or any of its subsidiaries, unless either (a) such
other plan provides that compensation such as payments made pursuant to the Plan
are to be considered as compensation thereunder or (b) the Board or the
Committee so determines in writing. Neither the adoption of the Plan nor the
submission of the Plan to the Company’s stockholders for their approval shall be
construed as limiting the power of the Board or the Committee to adopt such
other incentive arrangements as it may otherwise deem appropriate.

 

6.9. Binding Effect.  The Plan shall be binding upon the Company and its
successors and assigns and the Participants and their beneficiaries, personal
representatives and heirs. If the Company becomes a party to any merger,
consolidation or reorganization, then the Plan shall remain in full force and
effect as an obligation of the Company or its successors in interest, unless the
Plan is amended or terminated pursuant to Section 6.2.

 

As adopted by the Board of Directors on February 21, 2013.

 

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