SEVERANCE AGREEMENT
Exhibit 10.2
THIS AGREEMENT is entered into as of July 14, 2004 by and between AptarGroup, Inc., a Delaware
corporation (the “Company”), and Xxxxxx Xxxx (the “Executive”), is amended and restated as of July
18, 2008.
WHEREAS, the Executive currently serves as a key employee of the Company and his services and
knowledge are valuable to the Company in connection with the management of one or more of the
Company’s principal operating facilities, divisions, departments or subsidiaries; and
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the
best interests of the Company and its stockholders to secure the Executive’s continued services and
to ensure the Executive’s continued dedication and objectivity in the event of any threat or
occurrence of, or negotiation or other action that could lead to, or create the possibility of, a
Change in Control (as defined in Section 1) of the Company, without concern as to whether the
Executive might be hindered or distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage the Executive’s full attention and dedication to the
Company, the Board has authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and
agreements herein contained, the Company and the Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
respective meanings set forth below:
(a) “Cause” means: (1) a material breach by the Executive of those duties and
responsibilities of the Executive which do not differ in any material respect from the duties and
responsibilities of the Executive during the 90-day period immediately prior to a Change in Control
(other than as a result of incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on the Executive’s part, which is committed in bad faith or without
reasonable belief that such breach is in the best interests of the Company and which is not
remedied in a reasonable period of time after receipt of written notice from the Company specifying
such breach or (2) the commission by the Executive of a felony involving moral turpitude.
(b) “Change in Control” means:
(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 Securities Exchange Act of 1934, as
amended (the “Exchange Act”), of beneficial ownership within the meaning of Rule 13d-3 promulgated
under the Exchange Act, of 30% or more 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 Section (1)(b) 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 30%
or more of the Outstanding Company Common Stock or 30% or more 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 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) more than 60% of the then
outstanding shares of common stock of the corporation resulting from such reorganization, merger or
consolidation and more than 60% 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, 30% or more of the Outstanding
Company Common Stock or
the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly
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or indirectly, 30% or more of the then outstanding shares of common stock of such corporation or 30%
or more 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) more
than 60% of the then outstanding shares of common stock thereof and more than 60% 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, 30% or more of
the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may
be) beneficially owns, directly or indirectly, 30% or more of the then outstanding shares of common
stock thereof or 30% or more 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; provided, however, that no such transaction or event shall constitute a Change in
Control unless it is also a “change in control event” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).
(c) “Date of Termination” means the date on which the Executive separates from service, within
the meaning of Section 409A of the Code..
(d) “Good Reason” means, without the Executive’s express written consent, the occurrence of
any of the following events after a Change in Control:
(1) a reduction by the Company in the Executive’s rate of annual salary in effect immediately
prior to the Change in Control;
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(2) a material reduction in any benefit afforded to the Executive pursuant to any benefit plan
of the Company in effect immediately prior to the Change in Control, unless all comparable
executives of the Company suffer a substantially similar reduction; or
(3) the relocation of the Executive’s office to a location more than 60 miles from Crystal
Lake, Illinois.
For purposes of this Agreement, any good faith determination of Good Reason made by the
Executive shall be conclusive; provided, however, that an isolated, insubstantial
and inadvertent action taken in good faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive shall not constitute Good Reason.
(e) “Nonqualifying Termination” means a termination of the Executive’s employment (1) by the
Company for Cause, (2) by the Executive for any reason other than a Good Reason, (3) as a result of
the Executive’s death or (4) by the Company due to the Executive’s absence from his duties with the
Company on a full-time basis for at least 180 consecutive days as a result of the Executive’s
incapacity due to physical or mental illness.
(f) “Termination Period” means the period of time beginning with a Change in Control and
ending on the earliest to occur of (1) two years following such Change in Control and (2) the
Executive’s death.
2. Obligations of the Executive. The Executive agrees that in the event any person or
group attempts a Change in Control, he shall not voluntarily leave the employ of the Company
without Good Reason (a) until such attempted Change in Control terminates or (b) if a Change in
Control shall occur, until 90 days following such Change in Control. For purposes of clause (a) of
the preceding sentence, Good Reason shall be determined as if a Change in Control had occurred when
such attempted Change in Control became known to the Board.
3. Payments and Other Benefits Upon Termination of Employment.
(a) If during the Termination Period the employment of the Executive shall terminate, other
than by reason of a Nonqualifying Termination, then the Company shall pay to the Executive (or the
Executive’s beneficiary or estate) as compensation for services rendered to the Company:
(1) a cash amount equal to the sum of (i) the Executive’s annual bonus in an amount at least
equal to the highest annualized (for any fiscal year consisting of less than 12 full months or with
respect to which the Executive has been employed by the Company for less than 12 full months) bonus
paid or payable, including by reason of any deferral, to the Executive by the Company and its
affiliated companies in respect of the three fiscal years of the Company (or such portion thereof
during which the Executive performed services for the Company if the Executive shall have been
employed by the Company for less than such three fiscal year period) immediately preceding the
fiscal year in which the Change in Control occurs, multiplied by a fraction, the numerator of which
is the number of days in the fiscal year in which the termination occurs through the Date of
Termination and the denominator of which is 365 or 366, as applicable, and (ii) any vacation pay,
to the extent not theretofore paid; plus
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(2) a lump-sum cash amount (subject to any applicable payroll or other taxes required to be
withheld) in an amount equal to (i) one (1) time the Executive’s highest annual base salary from
the Company and its affiliated companies in effect during the 12-month period prior to the Date of
Termination, plus (ii) one (1) time the Executive’s highest annualized (for any fiscal year
consisting of less than 12 full months or with respect to which the Executive has been employed by
the Company for less than 12 full months) bonus, paid or payable, including by reason of any
deferral, to the Executive by the Company and its affiliated companies in respect of the three
fiscal years of the Company (or such portion thereof during which the Executive performed services
for the Company if the Executive shall have been employed by the Company for less than such three
fiscal year period) immediately preceding the fiscal year in which the Change in Control occurs;
provided, however, that any amount paid pursuant to this Section 3(a)(2) shall be
paid in lieu of any other amount of severance relating to salary or bonus continuation to be
received by the Executive upon termination of employment of the Executive under any severance plan,
policy or arrangement of the Company; plus
(3) (i) Any unpaid salary accrued through the Date of Termination and (ii) in accordance with
Section 14 hereof, any unpaid expenses which shall have been incurred as of the Date of
Termination. The amounts payable to the Executive pursuant to this Section 3(a) shall be paid
within 30 days following the Date of Termination, except as otherwise provided in Section 14
hereof.
(b) If, during the Termination Period, the employment of the Executive shall terminate, other
than by reason of a Nonqualifying Termination, then the Executive shall be entitled, to the extent
provided in any benefit plan in which the Executive has participated, to any plan benefits which by
their terms extend beyond the Date of Termination. In addition thereto, in the event of such a
termination, for a period of one year commencing on the Date of Termination, the Company shall
continue to keep in full force and effect all policies of medical and life insurance with respect
to the Executive and his dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such policies shall have been in effect immediately prior to the
Date of Termination or, if more favorable to the Executive, as provided generally with respect to
other peer executives of the Company, and the Company and the Executive shall share the costs of
the continuation of such insurance coverage in the same proportion as such costs were shared
immediately prior to the Date of Termination.
(c) If during the Termination Period the employment of the Executive shall terminate by reason
of a Nonqualifying Termination, then the Company shall pay to the Executive within 30 days
following the Date of Termination, a cash amount equal to the sum of (1) the Executive’s salary
from the Company and its affiliated companies through the Date of Termination, to the extent not
theretofore paid, (2) any accrued vacation pay, to the extent not theretofore paid and (3) in
accordance with Section 14 hereof, any unpaid expenses which shall have been incurred as of the
Date of Termination. In addition, the Executive shall be entitled, to
the extent provided in any benefit plan in which the Executive has participated, to any plan
benefits which by their terms extend beyond the Date of Termination.
(d) If during the Termination Period the employment of the Executive shall terminate, whether
or not by reason of a Nonqualifying Termination, the Company shall pay to the
Executive any compensation previously deferred by the Executive (together with any interest
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and earnings thereon) in accordance with the terms of the plans pursuant to which such compensation
was deferred.
4. Certain Additional Payments by The Company.
(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be
determined that any payment or distribution by the Company or its affiliated companies to or for
the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any additional payments
required under this Section 4) (a “Payment”) would be subject to the excise tax imposed by Section
4999 of the Code, or any interest or penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 4(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up
Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account both
income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive
resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the
aggregate, to an amount (the “Reduced Amount”) such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments,
in the aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 4(c), all determinations required to be made under
this Section 4, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by the Company’s public accounting firm (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change in Control, the Executive shall
appoint another nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up
Payment, as determined pursuant to this Section 4 shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm’s determination, but in no event later than
the last day of the calendar year following the calendar year in which the related tax is remitted
to the Internal Revenue Service. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive’s applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive. As
a result of the uncertainty in the application of Section 4999 of the Code at the
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time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 4(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10 business days after the
Executive is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive shall:
(1) give the Company any information reasonably requested by the Company relating to such
claim,
(2) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith in order effectively to contest such claim, and
(4) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 4(c) the Company shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct the Executive to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial jurisdiction and in one
or more appellate courts, as the Company shall determine; provided further, that if
the Company directs the Executive to pay such claim and xxx for a refund, the Company shall advance
the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided further,
that any extension of
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the statute of limitations relating to payment of taxes for the taxable year
of the Executive with respect to which such contested amount is claimed to be due is limited solely
to such contested amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 4(c), the Executive becomes entitled to receive, and receives, any refund with respect to
such claim, the Executive shall (subject to the Company’s complying with the requirements of
Section 4(c)) promptly pay to the Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 4(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
5. Withholding Taxes. The Company may withhold from all payments due to the Executive
(or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or
other law, the Company is required to withhold therefrom.
6. Reimbursement of Expenses. If any contest or dispute shall arise under this
Agreement involving termination of the Executive’s employment with the Company or involving the
failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company
shall reimburse the Executive, on a current basis and in accordance with Section 14 hereof, for all
legal fees and expenses, if any, incurred by the Executive in connection with such contest or
dispute, together with interest in an amount equal to the Reference Rate of Bank of America from
time to time in effect, but in no event higher than the maximum legal rate permissible under
applicable law, such interest to accrue from the date the Company receives the Executive’s
statement for such fees and expenses through the date of payment thereof; provided,
however, that in the event the resolution of any such contest or dispute includes a finding
denying, in total, the Executive’s claims in such contest or dispute, the Executive shall be
required to reimburse the Company, over a period of 12 months from the date of such resolution, for
all sums advanced to the Executive pursuant to this Section 6.
7. Operative Event. Notwithstanding any provision herein to the contrary, no amounts
shall be payable hereunder unless and until there is a Change in Control at a time when the
Executive is employed by the Company.
8. Termination of Agreement. (a) This Agreement shall be effective on the date
hereof and shall continue until terminated by the Company as provided in paragraph (b) of this
Section 8; provided, however, that this Agreement shall terminate in any event upon
the first
to occur of (i) the Executive’s death and (ii) termination of the Executive’s employment with
the Company prior to a Change in Control.
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(b) The Company shall have the right prior to a Change in Control, in its sole discretion,
pursuant to action by the Board, to approve the termination of this Agreement, which termination
shall not become effective until the date fixed by the Board for such termination, which date shall
be at least 120 days after notice thereof is given by the Company to the Executive in accordance
with Section 11; provided, however, that no such action shall be taken by the Board
during any period of time when the Board has knowledge that any person has taken steps reasonably
calculated to effect a Change in Control until, in the opinion of the Board, such person has
abandoned or terminated its efforts to effect a Change in Control; and provided
further, that in no event shall this Agreement be terminated in the event of a Change in
Control.
9. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the
Executive to continued employment with the Company or its subsidiaries, and if the Executive’s
employment with the Company shall terminate prior to a Change in Control, then the Executive shall
have no further rights under this Agreement; provided, however, that any
termination of the Executive’s employment following a Change in Control shall be subject to all of
the provisions of this Agreement.
10. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or consolidation of the Company
whereby the Company is or is not the surviving or resulting corporation or as a result of any
transfer of all or substantially all of the assets of the Company. In the event of any such
merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon
the surviving or resulting corporation or the person or entity to which such assets are
transferred.
(b) The Company agrees that concurrently with any merger, consolidation or transfer of assets
referred to in paragraph (a) of this Section 10, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to the Executive (or his beneficiary or
estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such
assumption prior to the effectiveness of any such merger, consolidation or transfer of assets shall
be a breach of this Agreement and if such merger, consolidation or transfer is a “change in control
event,” within the meaning of Section 409A of the Code, the Executive shall be entitled to
compensation and other benefits from the Company in the same amount and on the same terms as the
Executive would be entitled hereunder if the Executive’s employment were terminated following a
Change in Control other than by reason of a Nonqualifying Termination. For purposes of
implementing the foregoing sentence, the date on which any such merger, consolidation or transfer
becomes effective shall be deemed the Date of Termination.
(c) This Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any amounts would be payable to the
Executive hereunder had the Executive continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by the Executive to receive such amounts or, if no
person is so appointed, to the Executive’s estate.
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11. Notices. (a) For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be deemed to have been
duly given when delivered or five days after deposit in the United States mail, certified and
return receipt requested, postage prepaid, addressed (1) if to the Executive, to Xxxxxx Xxxx, and
if to the Company, to AptarGroup, Inc., 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxxxx X, Xxxxxxx Xxxx,
Xxxxxxxx 00000, attention: Xxxxxxx X. Xxxxx, Executive Vice President, Chief Operating Officer,
Chief Financial Officer, Secretary and Treasurer, or (2) to such other address as either party may
have furnished to the other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
(b) A written notice of the Executive’s Date of Termination by the Company or the Executive,
as the case may be, to the other, shall be required to be given and shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and (iii) specify the Date of Termination
(which date shall be not less than 15 days after the giving of such notice). The failure by the
Executive or the Company to set forth in such notice any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting such fact or circumstance in
enforcing the Executive’s or the Company’s rights hereunder.
12. Full Settlement; Resolution of Disputes. (a) The Company’s obligation to make any
payments provided for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and, such amounts shall not
be reduced whether or not the Executive obtains other employment.
(b) If there shall be any dispute between the Company and the Executive in the event of any
termination of the Executive’s employment, then, unless and until there is a final, nonappealable
judgment by a court of competent jurisdiction declaring that such termination was for Cause, that
the determination by the Executive of the existence of Good Reason was not made in good faith, or
that the Company is not otherwise obligated to pay any amount or provide any benefit to the
Executive and his dependents or other beneficiaries, as the case may be, under Section 3(a) or
3(b), the Company shall pay all amounts, and provide all benefits, to the Executive and his
dependents or other beneficiaries, as the case may be, that the Company would be required to pay or
provide pursuant to Section 3(a) or 3(b) as though such termination were by the Company without
Cause or by the Executive with Good Reason; provided, however, that the Company shall not be
required to pay any disputed amounts pursuant to this Section 12(b) except upon receipt of an
undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.
13. Employment with Subsidiaries. Employment with the Company for purposes of this
Agreement shall include employment with any corporation or other entity in
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which the Company has a
direct or indirect ownership interest of 50% or more of the total combined voting power of the then
outstanding securities of such corporation or other entity entitled to vote generally in the
election of directors.
14. Section 409A. This Agreement shall be interpreted and construed in a manner that avoids
the imposition of taxes and penalties under Section 409A of the Code (“409A Penalties”). In the
event the terms of this Agreement would subject the Executive to 409A Penalties, the Company and
the Executive shall cooperate diligently to amend the terms of the Agreement to avoid such 409A
Penalties, to the extent possible. Notwithstanding any other provision in this Agreement, if on
the Date of Termination, the Executive is a “specified employee,” as defined in Section 409A of the
Code, then to the extent any amount payable under this Agreement constitutes the payment of
nonqualified deferred compensation, within the meaning of Section 409A of the Code, that under the
terms of this Agreement would be payable prior to the six-month anniversary of the Date of
Termination, such payment shall be delayed until the earlier to occur of (a) the six-month
anniversary of the Date of Termination or (b) the date of the Executive’s death. Any reimbursement
(including any advancement) payable to the Executive pursuant to this Agreement shall be
conditioned on the submission by the Executive of all expense reports reasonably required by the
Company under any applicable expense reimbursement policy, and shall be paid to the Executive
within 30 days following receipt of such expense reports (or invoices), but in no event later than
the last day of the calendar year following the calendar year in which the Executive incurred the
reimbursable expense. Any amount of expenses eligible for reimbursement or any in-kind benefit
provided during a calendar year shall not affect the amount of expenses eligible for reimbursement
or in-kind benefit provided during any other calendar year. The right to reimbursement or an
in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any
other benefit.
15. Governing Law; Validity. The interpretation, construction and performance of this
Agreement shall be governed by and construed and enforced in accordance with the internal laws of
the State of Illinois without regard to the principle of conflicts of laws. The invalidity or
unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which other provisions shall remain in full force and
effect.
16. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall constitute one and the same
instrument.
17. Miscellaneous. No provision of this Agreement may be modified or waived unless
such modification or waiver is agreed to in writing and signed by the Executive and by a duly
authorized officer of the Company. No waiver by either party hereto at any time
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of any breach by the other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive
or the Company to insist upon strict compliance with any provision of this Agreement or to assert
any right the Executive or the Company may have hereunder, including, without limitation, the right
of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement. The rights of, and
benefits payable to, the Executive, his estate or his beneficiaries pursuant to this Agreement are
in addition to any rights of, or benefits payable to, the Executive, his estate or his
beneficiaries under any other employee benefit plan or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized
officer of the
Company and the Executive has executed this Agreement as of the day and year first above
written.
| APTARGROUP, INC. |
||||
| By: | \s\ Xxxxx Xxxxxxxx | |||
| Name: Xxxxx Xxxxxxxx | ||||
| Title: President and Chief Executive Officer | ||||
| EXECUTIVE | ||||
| \s\ Xxxxxx Xxxx | ||||
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