BERRY PLASTICS GROUP, INC. NONQUALIFIED STOCK OPTION AGREEMENT
XXXXX
PLASTICS GROUP, INC.
THIS
AGREEMENT, made as of [ ],
2006
(the “Grant Date”), between Xxxxx Plastics Group, Inc. (the “Company”), and
[ ] (the “Optionee”).
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
an option to the Optionee as provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Grant
of Option.
1.1 The
Company hereby grants to the Optionee the right and option (the “Option”) to
purchase all or any part of an aggregate of [ ] whole Shares
subject to, and in accordance with, the terms and conditions set forth in this
Agreement and the Plan.
1.2 The
Option is not intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
1.3 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 Optionee shall be entitled to purchase Shares upon the exercise
of
the Option, to the extent vested and exercisable, shall initially be $[
] per Share (the “Exercise Price”); provided,
that on
December 31 of each of 2007, 2008, 2009, 2010 and 2011, the Exercise Price
then
in effect shall increase by 15%; and provided,
further,
that
upon the closing of an IPO, the then Exercise Price shall be increased by a
percentage equal to the product of (i) 15% multiplied by (ii) a fraction,
the numerator of which is the number of days since the last increase and the
denominator of which is 365, and shall be fixed at such level for the remainder
of the term of the Option.
3. Duration
of Option.
The
Option shall be exercisable to the extent and in the manner provided herein
for
a period often (10) years from the Grant Date; provided,
however,
that
the Option may be earlier terminated as set forth herein.
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4. Vesting
and Exercisability of Option.
Subject
to the terms and conditions of this Agreement and the Plan, the Option shall
become vested and exercisable with respect to five percent of the total number
of Shares covered by the Option on a quarterly basis, beginning January 1,
2007
(the “Initial Vesting Date”) (accordingly, twenty percent of the Shares subject
to such Option shall have vested by the first anniversary of the Initial Vesting
Date, and an additional twenty percent of the Shares subject to such Option
shall be vested by each of the second, third, fourth and fifth anniversaries
of
the Initial Vesting Date).
5. Manner
of Exercise and Payment.
5.1 Subject
to the terms and conditions of this Agreement and the Plan, the Option 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 Optionee is electing to exercise the Option and the number of Shares in
respect of which the Option is being exercised and shall be signed by the person
or persons exercising the Option. 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
Option.
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 Option is being exercised; provided,
however,
that
[following a Termination of Employment (i) by the Company without Cause or
(ii)
by the Optionee after the second anniversary of the Closing following the
attainment of (x) age 55 and (y) at least ten years of completed service with
the Company and/or its Subsidiaries]1 ,
or
otherwise in the sole discretion of the Committee, payment
of the full exercise price for the Shares in respect of which an Option 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, payment, in full or in part, of the
exercise price for the Shares in respect of which an Option is being exercised
may be made (a) in the form of unrestricted Shares (by delivery of such Shares
or by attestation) already owned by the Optionee (based on the Fair Market
Value
of Shares on the date the Option is exercised), (b) by delivering a properly
executed exercise notice to the Company, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds necessary to pay the exercise price, and, if requested, the
amount of any federal, state, local or foreign withholding taxes or (c) by
instructing the Committee to withhold a number of such Shares having a Fair
Market Value on the date of exercise equal to the aggregate exercise price
of
such Option.
5.4 Upon
receipt of notice of exercise and full payment for the Shares in respect of
which the Option is being exercised, the Company shall, subject to
Section 15 of the Plan, take such action as may be necessary to effect the
transfer to the Optionee of the number of
1
Not
applicable to Boots, Xxxxxx and Xxxxxxx, whose Agreements include, in
lieu of
the bracketed language: “in the event of the Employee’s retirement following the
fourth anniversary of the Closing Date” ( “in the event of the Employee’s
retirement following the third anniversary of the Closing Date”, in the case of
Xxxxxx).
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Shares
as
to which such exercise was effective. Each stock certificate representing Shares
issuable upon the exercise of the Option shall bear such legends as the Company
deems appropriate.
5.5 The
Optionee 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 Option until (i) the
Option shall have been exercised pursuant to the terms of this Agreement and
the
Optionee shall have paid the full Exercise Price for the number of Shares in
respect of which the Option was exercised and made arrangements acceptable
to
the Company for the payment of all applicable Withholding Taxes, (ii) the
Company shall have issued and delivered the Shares to the Optionee, (iii) the
Optionee’s name shall have been entered as a shareholder of record on the books
of the Company and (iv) the Optionee has executed such other documents as
required by the Company to cause the Optionee to be a party to, and bound by
the
terms of, the Stockholders Agreement, dated as of [ ], among the Company and
such other stockholders party thereto, a copy of which is attached hereto as
Exhibit B, whereupon the Optionee shall have full voting and other ownership
rights with respect to such Shares.
6. Termination
of Option.
The
Option 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 Optionee is terminated for any reason other than for Cause,
the death or Disability of the Optionee, or other than by reason of Redundancy,
or the voluntary termination of employment by the Optionee, the Option shall
become vested with respect to an additional 5% of the total Shares subject
to
the Option for each full three month period that has elapsed from the last
vesting date through the date of such termination. Any portion of the Option
that is not vested and exercisable after giving effect to the immediately
preceding sentence shall immediately terminate. If the employment of the
Optionee is voluntarily terminated by the Optionee, the portion of the Option
that is not then vested and exercisable shall immediately terminate. To the
extent the Option is vested and exercisable upon a termination described in
this
Section 6.1, the Option shall remain exercisable for a period of ninety (90)
days following such termination of employment, after which time the Option
shall
automatically terminate in full.
6.2 If
the
employment of the Optionee is terminated by reason of the death of Disability
of
the Optionee or by reason of Redundancy, the Option shall become immediately
vested and exercisable with respect to an additional 20% of the total Shares
subject to the Option, plus an additional 5% of the total Shares subject to
the
Option for each full three month period that has elapsed from the last vesting
date through the date of such termination. Any portion of the Option that is
not
vested and exercisable after giving effect to the immediately preceding sentence
shall immediately terminate. If the employment of the Optionee is terminated
as
set forth in this Section 6.2, to the extent the Option 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 Option shall
remain exercisable for one year following such termination of employment, after
which time the Option shall automatically terminate in full.
6.3 If
the
employment of the Optionee is terminated for Cause, (i) the Option shall
immediately terminate in full whether or not the Option is then vested
and
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exercisable
and (ii) the Company shall have the right to purchase from the Optionee and
the
Optionee shall be required to Sell to the Company, at the election of the
Company at any time following such termination of employment, any of the Shares
acquired pursuant to the Option at a per share purchase price equal to the
lesser of (x) the Fair Market Value of a Share at the time of such purchase
by
the Company, or (y) the Exercise Price paid for such Shares. The Company’s right
of repurchase described herein shall expire on the later of (i) one year
following the date on which the Optionee’s employment is terminated or (ii) the
fifth anniversary of the Grant Date.
6.4 Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
for
any reason other than Cause, the Company shall have the right to purchase from
such Optionee and the Optionee (or his successor or representative, as the
case
may be) shall be required to Sell to the Company, at the election of the
Company, all Shares acquired by the Optionee pursuant to the exercise of the
Option, at a per Share purchase price equal to the Fair Market Value of a Share
on the date of such purchase; provided,
however,
that,
at the time the Company exercises its right of repurchase described herein,
the
Shares acquired by the Optionee pursuant to the exercise of the Option have
been
held by the Optionee for at least six months. The Company’s right of repurchase
described herein shall expire one year following the later of (i) the date
on
which the Optionee’s employment is terminated or (ii) the date on which the
Shares being purchased by the Company were acquired by the Optionee pursuant
to
the exercise of an Option.
6.5 Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
by
reason of the death, Disability or Retirement of the Optionee, or by reason
of
Redundancy of the Optionee, the Optionee (or his successor or representative,
as
the case may be) shall have the right to Sell to the Company and the Company
shall be required to purchase from such Optionee (or his successor or
representative, as the case may be), at the election of the Optionee, all Shares
acquired by the Optionee pursuant to the exercise of an Option, at a per Share
purchase price equal to the Fair Market Value of a Share on the date of such
Sale; provided,
however,
that,
at the time the Optionee exercises the put right described herein, the Shares
being Sold have been held by the Optionee for at least six months. The
Optionee’s put right described herein shall expire one year following the date
on which the Optionee’s employment is terminated.
7. Effect
of Change in Control.
Upon
a
Change in Control the Option shall become vested and exercisable with respect
to
an additional 20% of the total Shares subject to the Option (e.g., if,
immediately prior to a Change in Control, 40% of the total Shares subject to
the
Option are vested, then following the Change in Control, 60% of the total Shares
subject to the Option will have vested). Upon an IRR Event, the immediately
preceding sentence shall not apply, and the Option shall become immediately
vested and exercisable with respect to an additional 40% of the total Shares
subject to the Option (e.g., if, immediately prior to a Change in Control that
would constitute an IRR Event, 40% of the total Shares subject to the Option
are
vested, then following the Change in Control, 80% of the total Shares subject
to
the Option will have vested).
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8. Non-Transferability
of Option.
Except
as
determined by the Committee to accommodate the Optionee’s estate planning, the
Option 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
Optionee the Option shall be exercisable only the Optionee.
9. No
Right to Continued Employment.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Optionee 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 Optionee’s employment at any time.
10. Withholding
of Taxes.
The
Company shall have the right to deduct from any distribution of cash to the
Optionee an amount equal to the Withholding Taxes with respect to the Option.
If
the Optionee is entitled to receive Shares upon exercise of the Option, the
Optionee shall make arrangements acceptable to the Company for the payment
of
the Withholding Taxes prior to the issuance of such Shares.
11. Optionee
Bound by the Plan.
The
Optionee 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.
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.
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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 Optionee 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 the Committee
hereunder shall be final, binding and conclusive on the Optionee and the Company
for all purposes.
XXXXX
PLASTICS GROUP, INC.
By:
___________________________________
_______________________________
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