Exhibit 10.31

 

APTARGROUP, INC.
2014 LONG-TERM INCENTIVE PROGRAM
(AS AMENDED AND RESTATED)

 

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 three-year
performance periods, (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

 

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(other than any such failure resulting from the Participant’s incapacity due to
physical or mental 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

 

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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;

 

(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

 

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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.

 

(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).

 

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

 

(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 that are included in the S&P 400 MidCap Index (including the
Company) on both the first day and the last day 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

 

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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 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 the last
day of the applicable Performance Period (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 specified in the Participant’s Grant Acceptance Agreement
(each, a “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

%

 

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*                                         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

 

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percentage of the Individual Award Opportunity that is vested shall be capped at
100%.

 

**                                  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

 

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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.

 

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 or the Committee.

 

3.2                               Amendments.  The Board or the Committee 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 be
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

 

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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.

 

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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