BERRY PLASTICS GROUP, INC. STOCK APPRECIATION RIGHTS AGREEMENT
XXXXX
PLASTICS GROUP, INC.
THIS
AGREEMENT, made as of [
], 2006
(the “Grant
Date”),
between Xxxxx Plastics Group, Inc. (the “Company”),
and
[ ]
(the
“Grantee”).
WHEREAS,
the Company has adopted the Xxxxx Plastics Group, Inc. 2006 Equity Incentive
Plan (the “Plan”)
in
order to provide additional incentive to certain employees, officers,
consultants and directors of the Company and its Subsidiaries; and
WHEREAS,
the Committee responsible for administration of the Plan has determined to
grant
a stock appreciation right to the Grantee as provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Grant
of SAR.
1.1 The
Company hereby grants to the Grantee the right and option (the “SAR”)
to
receive an amount in cash equal in value to the excess, if any, of the Fair
Market Value of a Share on the date of exercise over the exercise price paid
pursuant to Paragraph 2 below, and in accordance with, the terms and conditions
set forth in this Agreement and the Plan.
1.2 This
Agreement shall be construed in accordance and consistent with, and subject
to,
the Plan (which is incorporated herein by this reference) and, except as
otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the definitions set forth in the Plan.
2. Exercise
Price.
The
price
at which the Grantee shall be entitled to exercise the SAR, to the extent vested
and exercisable, shall be $[
] per
underlying Share.
3. Duration
of SAR.
The
SAR
shall be exercisable to the extent and in the manner provided herein for a
period of ten (10) years from the Grant Date; provided,
however,
that
the SAR may be earlier terminated as set forth herein.
4. Vesting
and Exercisability of SAR.
(a) Subject
to the terms and conditions of this Agreement and the Plan, upon the achievement
of the EBITDA Target established for each fiscal year or portion thereof as
set
forth on Exhibit
A
hereto,
the SAR shall become vested and exercisable with respect to the percentage
of
the total number of Shares covered by the SAR indicated on Exhibit
A
next to
such EBITDA Target as of the date that the Committee determines that such EBITDA
Target has been achieved (the “Determination
Date”).
Notwithstanding anything contained in this Agreement or the Plan to the
contrary, in the event that an Grantee’s employment is terminated other than
for
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Cause,
following either (i) the end of a fiscal year during the Performance Period,
or
(ii) the end of the Performance Period, but, in either case, prior to the
Determination Date with respect to such period, the Grantee will be entitled
to
vesting, if any (to the extent EBITDA Targets are achieved), with respect to
such period as of the applicable Determination Date; provided
that
such Determination Date occurs prior to the expiration of the post-termination
exercise period as set forth in Section 6.1 or 6.2 herein, as applicable. In
the
event that the EBITDA Target for any fiscal year or portion thereof in a
Performance Period is not achieved (such fiscal year, a “Missed
Year”)
and
the EBITDA Target with respect to (x) the immediately preceding fiscal year
(except in the case that the Missed Year is the first fiscal year in the
Performance Period), or (y) the immediately following fiscal year (except in
the
case that the Missed Year is the last year in such Performance Period), is
exceeded (each such immediately preceding or immediately following year, an
“Excess
Year”),
then
the excess of EBITDA over the EBITDA Target for such Excess Year or Excess
Years
(the excess with respect to an Excess Year, the “Excess
EBITDA”)
shall
be applied to the Missed Year, and if the application of such Excess EBITDA
results in EBITDA with respect to the Missed Year equal to or in excess of
the
EBITDA Target with respect to such Missed Year, then the number of Shares with
respect to which the SAR failed to vest by reason of the Company’s failure to
achieve the EBITDA Target for the Missed Year shall become vested on the date
the Committee determines that such EBITDA Target with respect to the Missed
Year
was achieved with the application of such Excess EBITDA; provided,
with
respect to any Excess Year, Excess EBITDA for such year may only be applied
to
one Missed Year; provided,
further,
that,
for such vesting to occur, the Grantee must remain employed by the Company
or
one of its Subsidiaries for the duration of any such Excess Year and the Missed
Year to which any such Excess EBITDA is applied. The Determination Date for
any
period shall be no later than 30 days following the receipt by the Company
of
audited financial statements for the fiscal year or portion thereof, as
applicable.
(b) The
SAR
shall become vested and exercisable with respect to the total number of Shares
remaining unvested, if any, on the ninth anniversary of the Grant Date,
provided,
that
the Grantee remains employed by the Company or one of its Affiliates through
such ninth anniversary.
5. Manner
of Exercise and Payment.
5.1 Subject
to the terms and conditions of this Agreement and the Plan, the SAR may be
exercised by written notice delivered in person or by mail to the Secretary
of
the Company, at its principal executive offices. Such notice shall state that
the Grantee is electing to exercise the SAR and the number of Shares in respect
of which the SAR is being exercised and shall be signed by the person or persons
exercising the SAR. If requested by the Committee, such person or persons shall
(i) deliver this Agreement to the Secretary of the Company who shall endorse
thereon a notation of such exercise and (ii) provide satisfactory proof as
to
the right of such person or persons to exercise the SAR.
5.2 The
notice of exercise described in Section 5.1 hereof shall be accompanied by
a cash payment in an amount equal to the full exercise price for the Shares
in
respect of which the SAR is being exercised; provided,
however,
that
following a Termination of Employment (i) by the Company without Cause or (ii)
by the Grantee after the second anniversary of the Closing following the
attainment of (x) age 55 and (y) at least ten years of
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completed
service with the Company and/or its Subsidiaries, or otherwise in the sole
discretion of the Committee, payment
of the full exercise price for the Shares in respect of which an SAR is being
exercised may be made in the manner set forth in Section 5.3.
5.3 Subject
to Section 5.2 and to applicable law, the SARs granted hereunder may, to the
extent then vested, be exercised at any time prior to the expiration thereof
in
accordance with Section 6 below, by delivering a written notice to the Company
stating the number of Shares with respect to which the SARs granted hereunder
are being exercised.
5.4 Upon
receipt of notice of exercise, the Company shall, subject to Section 15 of
the Plan, take such action as may be necessary to effect the transfer to the
Grantee of an amount in cash equal to the Fair Market Value of the number of
Shares as to which such exercise was effective.
5.5 The
Grantee shall not be deemed to be the holder of, or to have any of the rights
of
a holder with respect to, any Shares subject to the SAR.
6. Termination
of SAR.
The SAR
shall terminate on the date that is the tenth anniversary of the Grant Date,
unless terminated earlier as follows:
6.1 If
the
employment of the Grantee is terminated for any reason other than the death
or
Disability of the Grantee, other than for Cause or other than by reason of
Redundancy, the portion of the SAR that is not then vested and exercisable
shall
immediately terminate. To the extent the SAR is vested and exercisable as of
the
date of such termination of employment, the SAR shall remain exercisable for
a
period of ninety (90) days following such termination of employment, after
which
time the SAR shall automatically terminate in full.
6.2 If
the
employment of the Grantee is terminated by reason of the death or Disability
of
the Grantee or by reason of Redundancy, the SAR shall become immediately vested
and exercisable with respect to an additional 20% of the total Shares subject
to
the SAR. Any portion of the SAR that is not vested and exercisable after giving
effect to the immediately preceding sentence shall immediately terminate. If
the
employment of the Grantee is terminated as set forth in this Section 6.2, to
the
extent the SAR is vested and exercisable as of the date of such termination
of
employment (after giving effect to additional vesting set forth in this Section
6.2), the SAR shall remain exercisable for one year following such termination
of employment, after which time the SAR shall automatically terminate in
full.
6.3 If
the
employment of the Grantee is terminated for Cause, (i) the SAR shall immediately
terminate in full whether or not the SAR is then vested and exercisable and
(ii)
the Grantee shall be required to pay to the Company, at the election of the
Company at any time following such termination of employment, an amount in
cash
equal to the proceeds received by the Grantee pursuant to the exercise of the
SAR granted hereunder. The Company’s right to receive payment as described
herein shall expire on the later of (i) one year following the date on which
the
Grantee’s employment is terminated or (ii) the fifth anniversary of the Grant
Date.
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7. Effect
of Change in Control.
Upon
a
Change in Control the SAR shall become vested and exercisable with respect
to an
additional 20% of the total Shares subject to the SAR (e.g., if, immediately
prior to a Change in Control, 40% of the total Shares subject to the SAR are
vested, then following the Change in Control, 60% of the total Shares subject
to
the SAR will have vested). Upon an IRR Event, the immediately preceding sentence
shall not apply, and the SAR shall become immediately vested and exercisable
with respect to an additional 40% of the total Shares subject to the SAR (e.g.,
if, immediately prior to a Change in Control that would constitute an IRR Event,
40% of the total Shares subject to the SAR are vested, then following the Change
in Control, 80% of the total Shares subject to the SAR will have
vested).
8. Non-Transferability
of SAR.
Except
as
determined by the Committee to accommodate the Grantee’s estate planning, the
SAR shall not be Sold, transferred or otherwise disposed of other than by will
or by the laws of descent and distribution. During the lifetime of the Grantee
the SAR shall be exercisable only by the Grantee.
9. No
Right to Continued Employment.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Grantee any right with respect to continuance of employment by the Company,
nor shall this Agreement or the Plan interfere in any way with the right of
the
Company to terminate the Grantee’s employment at any time.
10. Withholding
of Taxes.
The
Company shall have the right to deduct from any distribution of cash to the
Grantee an amount equal to the Withholding Taxes with respect to the SAR.
11. Grantee
Bound by the Plan.
The
Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound
by all the terms and provisions thereof.
12. Modification
of Agreement.
This
Agreement may be modified, amended, suspended or terminated, and any terms
or
conditions may be waived, but only by a written instrument executed by the
parties hereto.
13. Severability.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
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14. Governing
Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Delaware, without giving effect to
the
conflicts of laws principles thereof.
15. Binding
Effect.
This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the Grantee without the prior written consent
of
the Company.
16. Resolution
of Disputes.
Any
dispute or disagreement that may arise under or as a result of, or in any way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made by the Committee
hereunder shall be final, binding and conclusive on the Grantee and the Company
for all purposes.
XXXXX
PLASTICS GROUP, INC.
___________________________
______________________
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EXHIBIT
A
EBITDA
Targets
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