APTARGROUP, INC. STOCK OPTION AGREEMENT FOR DIRECTORS
Exhibit 10.5
AptarGroup, Inc., a Delaware corporation (the “Company”), hereby grants to
(the “Director”) as of , (the “Option Date”), pursuant to the provisions of the
AptarGroup, Inc. 2008 Director Stock Option Plan (the “Plan”), a non-qualified option to purchase
from the Company (the “Option”) shares of its Common Stock, $.01 par value (“Stock”), at
the price of $ per share upon and subject to the terms and conditions set forth below.
Capitalized terms not defined herein shall have the meanings specified in the Plan.
1. Option Subject to Acceptance of Agreement.
The Option shall become null and void unless the Director shall accept this Agreement by
executing it in the space provided below and returning it to the Company.
2. Time and Manner of Exercise of Option.
2.1. Maximum Term of Option. In no event may the Option be exercised, in whole or in
part, after , (the “Expiration Date”).
2.2. Exercise of Option. (a) The Option shall become exercisable (i) on the earlier
to occur of (a) each anniversary of the Award Date and (b) the day immediately preceding the date
of that year’s annual meeting of stockholders, with respect to [one third] of the number of shares
until such Option shall have become exercisable in full and (ii) as otherwise provided pursuant to
Sections 2.2(b), (c) and (f) hereof.
(b) If the Director ceases to be a director of the Company by reason of retirement, the Option
shall continue to be exercisable and become exercisable in accordance with Section 2.2(a) and may
thereafter be exercised by the Director or the Director’s Legal Representative from the effective
date that the Director ceases to be a director of the Company until the Expiration Date. For
purposes of this Agreement, “retirement” shall mean retirement either (i) at any age after serving
a minimum of nine years as a director of the Company or (ii) at or after age 70.
(c) If the Director ceases to be a director of the Company by reason of permanent disability
or death, the Option shall become fully exercisable and may thereafter be exercised by the Director
or the Director’s Legal Representative, in the case of permanent disability, or the Director’s
Legal Representative or Permitted Transferees, in the case of death, in each case for a period of
three years from the effective date that the Director ceases to be a director of the Company or
until the Expiration Date, whichever period is shorter. For purposes of this Agreement, “permanent
disability” shall mean the inability of the Director to substantially
perform his or her duties for a continuous period of at least six months as determined by the
Committee.
(d) If the Director ceases to be a director of the Company for any reason other than
retirement, permanent disability or death, the Option shall be exercisable only to the extent that
it was exercisable on the effective date that the Director ceases to be a director of the Company
and may thereafter be exercised by the Director or the Director’s Legal Representative for a period
of one year from the effective date that the Director ceases to be a director of the Company or
until the Expiration Date, whichever period is shorter. The portion of the Option, if any, which
is not vested as of the effective date that the Director ceases to be a director of the Company
shall be forfeited and cancelled by the Company.
(e) If the Director dies on or prior to the Expiration Date following the date the Director
ceases to be a director of the Company by reason of retirement, or if the Director dies during the
three-year period following the date that the Director ceases to be a director of the Company by
reason of permanent disability, or if the Director dies during the one-year period following the
date that the Director ceases to be a director of the Company for any reason other than retirement
or permanent disability, the Option shall be exercisable only to the extent that it was exercisable
on the date of such death and may thereafter be exercised by the Director’s Legal Representative or
Permitted Transferees, as the case may be, for a period of one year from the date of death or until
the Expiration Date, whichever period is shorter.
(f) (1) In the event of a Change in Control (as defined in Appendix A), the Option shall
immediately become exercisable in full.
(2) In the event of a Change in Control pursuant to paragraph (1) or (2) of Appendix A, the
Board of Directors (as constituted prior to such Change in Control) may, in its discretion (subject
to existing contractual arrangements), require that the Option, in whole or in part, be surrendered
to the Company by the Director and be immediately cancelled by the Company, and provide for the
Director to receive a cash payment from the Company in an amount equal to the number of shares of
Stock subject to the Option immediately prior to such cancellation (but after giving effect to any
adjustment pursuant to Section 6(b) of the Plan in respect of any transaction that gives rise to
such Change in Control), multiplied by the excess, if any, of (i) the greater of (A) the highest
per share price offered to holders of common stock in any transaction whereby the Change in Control
takes place and (B) the Market Value of a share of Stock on the date on which such Change of
Control occurs over (ii) the exercise price.
(3) In the event of a Change in Control pursuant to paragraph (3) or (4) of Appendix A, the
Board of Directors (as constituted prior to such Change in Control) may, in its discretion (subject
to existing contractual arrangements):
| (i) | require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Stock subject to the Option, with an appropriate and equitable |
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| adjustment to the exercise price of such Option, as determined by the Board of Directors, such adjustment to be made without an increase in the aggregate purchase price; and/or | |||
| (ii) | require the Option, in whole or in part, to be surrendered to the Company by the Director, and to be immediately cancelled by the Company, and provide for the Director to receive (a) a cash payment in an amount not less than the amount determined by multiplying the number of shares of Stock subject to the Option immediately prior to such cancellation (but after giving effect to any adjustment pursuant to Section 6(b) of the Plan in respect of any transaction that gives rise to such Change in Control), by the excess, if any, of the highest per share price offered to holders of common stock in any transaction whereby the Change in Control takes place over the exercise price, (b) shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, having a Market Value not less than the amount determined under clause (a) above or (c) a combination of a payment of cash pursuant to clause (a) above and the issuance of shares pursuant to clause (b) above. |
(4) The Company may, but is not required to, cooperate with the Director to assure that any
cash payment or substitution in accordance with this Section 2.2(f) to the Director is made in
compliance with Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and the rules and regulations thereunder.
2.3. Method of Exercise. Subject to the limitations set forth in this Agreement, the
Option may be exercised by the Director (i) by giving written notice to the Company specifying the
number of whole shares of Stock to be purchased and accompanied by payment therefor in full in cash
and (ii) by executing such documents as the Company may reasonably request. The purchase price of
the shares being purchased may be paid in cash on behalf of the Director by a broker-dealer
acceptable to the Company to whom the Director has submitted an irrevocable notice of exercise;
provided, however, that the Committee shall have sole discretion to disapprove of
an election to use a broker-dealer. No shares of Stock shall be issued until the full purchase
price has been paid.
2.4. Termination of Option. In no event may the Option be exercised after it
terminates as set forth in this Section 2.4. The Option shall terminate, to the extent not
exercised pursuant to Section 2.3 or earlier terminated pursuant to Section 2.2, on the Expiration
Date.
3. Additional Terms and Conditions of Option.
3.1. Nontransferability of Option. The Option may not be transferred by the Director
other than by will or the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
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foregoing sentence, during the Director’s lifetime the Option is exercisable only by the
Director or the Director’s Legal Representative. Except to the extent permitted by the foregoing,
the Option may not 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 so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of the Option, the Option and all rights hereunder shall immediately become null
and void.
3.2. Compliance with Applicable Law. The Option is subject to the condition that if
the listing, registration or qualification of the shares subject to the Option upon any securities
exchange or under any law, or the consent or approval of any governmental body, or the taking of
any other action is necessary or desirable as a condition of, or in connection with, the purchase
or delivery of shares hereunder, the Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have been effected or obtained.
The Company agrees to make every reasonable effort to effect or obtain any such listing,
registration, qualification, consent or approval.
3.3. Delivery of Certificates. Upon the exercise of the Option, in whole or in part,
the Company shall deliver or cause to be delivered one or more certificates representing the number
of shares purchased against full payment therefor. The Company shall pay all original issue or
transfer taxes and all fees and expenses incident to such delivery.
3.4. Option Confers No Rights as Stockholder. The Director shall not be entitled to
any privileges of ownership with respect to shares of Stock subject to the Option unless and until
purchased and delivered upon the exercise of the Option, in whole or in part, and the Director
becomes a stockholder of record with respect to such delivered shares; and the Director shall not
be considered a stockholder of the Company with respect to any such shares not so purchased and
delivered.
3.5. Option Confers No Rights to Continue to Serve as a Director . In no event shall
the granting of the Option or its acceptance by the Director give or be deemed to give the Director
any right to continue to serve, to be elected or reelected to serve or to be nominated to serve as
a director of the Company.
3.6. Decisions of Board or Committee. The Board of Directors of the Company or the
Committee shall have the right to resolve all questions which may arise in connection with the
Option or its exercise. Any interpretation, determination or other action made or taken by the
Board of Directors or the Committee regarding the Plan or this Agreement shall be final, binding
and conclusive.
3.7. Company to Reserve Shares. The Company shall at all times prior to the
expiration or termination of the Option reserve and keep available, either in its treasury or out
of
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its authorized but unissued shares of Stock, the full number of shares subject to the Option
from time to time.
3.8. Agreement Subject to the Plan. This Agreement is subject to the provisions of
the Plan (including the adjustment provision set forth in Section 6(b) thereof), and shall be
interpreted in accordance therewith. The Director hereby acknowledges receipt of a copy of the
Plan.
4. Miscellaneous Provisions.
4.1. Meaning of Certain Terms. As used herein, (a) the term “Permitted Transferee”
shall include any transferee (i) pursuant to a transfer permitted under Section 6(a) of the Plan
and Section 3.1 hereof or (ii) designated pursuant to Section 6(d) of the Plan on the AptarGroup,
Inc. 2008 Director Stock Option Plan Beneficiary Designation Form attached hereto as Exhibit
A, and (c) the term “Legal Representative” shall include a guardian, administrator, executor or
other person acting in a similar capacity.
4.2. Successors. This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company and any person or persons who shall, upon the death of the
Director, acquire any rights hereunder in accordance with this Agreement or the Plan.
4.3. Notices. All notices, requests or other communications provided for in this
Agreement shall be made in writing by (a) actual delivery to the party entitled thereto, (b)
mailing to the last known address of the party entitled thereto, via certified or registered mail,
return receipt requested or (c) telecopy with confirmation of receipt. The notice shall be deemed
to be received, in case of actual delivery, on the date of its actual receipt by the party entitled
thereto, in case of mailing, on the tenth calendar day following the date of such mailing, and, in
the case of telecopy, on the date of confirmation of receipt.
4.4. Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the internal laws of the State of Delaware.
4.5. Reports Filed with the Securities and Exchange Commission. The Company files
periodic and current reports and proxy statements with the Securities and Exchange Commission.
These documents are available, free of charge, on the website of the Securities and Exchange
Commission (xxx.xxx.xxx) and on the Company’s website (xxx.xxxxxxxxxx.xxx, under Investor Relations
/ “Annual Report & Proxy” and “SEC Filings”), as soon as reasonably practicable after the material
is filed with, or furnished to, the Securities and Exchange Commission. Any of these documents are
available to the Director in paper format, without charge, upon written or oral request to the
Company’s Investor Relations Department located at 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxxxx X, Xxxxxxx
Xxxx, Xxxxxxxx, 00000, U.S.A., phone number 0-000-000-0000.
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4.6. Counterparts. This Agreement may be executed in two counterparts each of which
shall be deemed an original and both of which together shall constitute one and the same
instrument.
| APTARGROUP, INC. | ||||||
| By: | Xxxxx Xxxxxxxx | |||||
| Title: | President and Chief Executive Officer | |||||
Accepted this day of |
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, 20 |
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| Appendix A | ||
| to AptarGroup, Inc. | ||
| Stock Option Agreement | ||
| for Directors |
For purposes of this Agreement, “Change in Control” shall mean:
(1) 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 (i), (ii) and (iii) of subsection (3) of
this Appendix A 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;
(2) 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;
(3) consummation of a reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i) 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, (ii) 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 (iii) 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
(4) consummation of (i) a plan of complete liquidation or dissolution of the Company or (ii)
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, (A) 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, (B) 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
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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 (C) 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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| Exhibit A | ||
| to AptarGroup, Inc. | ||
| Stock Option Agreement | ||
| For Directors |
APTARGROUP, INC.
2008 Director Stock Option Plan
BENEFICIARY DESIGNATION FORM
You may designate a primary beneficiary and a secondary beneficiary. You can name more than
one person as a primary or secondary beneficiary. For example, you may wish to name your spouse as
primary beneficiary and your children as secondary beneficiaries. Your secondary beneficiary(ies)
will receive nothing if any of your primary beneficiaries survive you. All primary beneficiaries
will share equally unless you indicate otherwise. The same rule applies for secondary
beneficiaries.
Designate Your Beneficiary(ies):
| Primary Beneficiary(ies): | ||||
| Secondary Beneficiary(ies): | ||||
I certify that my designation of beneficiary set forth above is my free act and deed.
| Director’s Signature | ||||||
(Please Print) |
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