Exhibit 10.3
XXXXX-ILLINOIS
1997 EQUITY PARTICIPATION PLAN
PHANTOM STOCK AGREEMENT
THIS PHANTOM STOCK AGREEMENT, dated May 17, 1999 is made by and between
Xxxxx-Illinois, Inc., a Delaware corporation (the "Company") and ____________,
an employee of the Company or a Parent Corporation or a Subsidiary (the
"Employee"):
WHEREAS, the Company has established the Xxxxx-Illinois Phantom Stock
Plan (the "Plan"); and
WHEREAS, the Plan provides for the issuance of phantom stock units,
subject to certain vesting conditions thereon and to other conditions stated
herein; and
WHEREAS, the Compensation Committee of the Board of Directors of the
Company (the "Committee") has determined it would be to the advantage and best
interest of the Company and its stockholders to issue the Units provided for
herein to the Employee in partial consideration of services rendered, or to be
rendered, to the Company and/or its subsidiaries; and
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below, unless the context clearly indicates to the
contrary. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Plan. The masculine pronoun shall include the
feminine and neuter and the singular the plural, where the context so
indicates.
Section 1.1. Cause
"Cause" shall mean dishonesty, disloyalty, misconduct,
insubordination, failure to reasonably devote working time to assigned duties,
failure or refusal to comply with any reasonable rule, regulation, standard or
policy which from time to time may be established by the Company, including,
without limitation, those policies set forth in the Xxxxx-Illinois Policy
Manual in effect from time to time, and failure to fully cooperate with any
investigation of an alleged violation of any such rule, regulation, standard
or policy.
Section 1.2. Common Stock
"Common Stock" shall mean the common stock of the Company, $.01 par
value.
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Section 1.3. Competing Business
"Competing Business" shall mean any person, corporation or other entity
engaged in Australia or in any other country in which the Company manufactures
or sells its products, in the manufacture or sale of glass containers, plastic
containers, plastic closures, plastic prescription containers, labels, or
multipack plastic carriers for beverage bottles, or any other products
manufactured or sold by the Company within the last two (2) years prior to the
Employee's Termination of Employment.
Section 1.4. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.5. Fair Market Value
"Fair Market Value" of a share of the Company's stock as of a given date
shall be: (i) the closing price of a share of the Company's stock on the
principal exchange on which shares of the Company's stock are then trading, if
any, on the day previous to such date, or, if shares were not traded on the
day previous to such date, then on the next preceding trading day during which
a sale occurred; or (ii) if such stock is not traded on an exchange but is
quoted on NASDAQ or a successor quotation system, (1) the last sales price (if
the stock is then listed as a National Market Issue under the NASD National
Market System) or (2) the mean between the closing representative bid and
asked prices (in all other cases) for the stock on the day previous to such
date as reported by NASDAQ or such successor quotation system; or (iii) if
such stock is not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the mean between the closing bid and asked prices
for the stock, on the day previous to such date, as determined in good faith
by the Committee; or (iv) if the Company's stock is not publicly traded, the
fair market value established by the Committee acting in good faith.
Section 1.6. Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
Section 1.7. Plan
"Plan" shall mean the Company's Phantom Stock Plan.
Section 1.8. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended from time to time.
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Section 1.9. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.10. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.11. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. "Subsidiary" shall also
mean any partnership in which the Company and or any Subsidiary owns more than
fifty (50%) percent of the capital or profits interests.
Section 1.12. Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee and the Company, a Parent Corporation or a
Subsidiary is terminated for any reason, with or without Cause, including, but
not by way of limitation, a termination by resignation, discharge, death,
disability or retirement; but excluding (a) terminations where there is a
simultaneous reemployment or continuing employment of the Employee by the
Company, a Parent Corporation or any Subsidiary, (b) terminations where the
Employee continues a relationship (e.g., as a director or as a consultant)
with the Company, a Parent Corporation or a Subsidiary. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of
limitation, the question of whether a Termination of Employment resulted from
a discharge for good cause, and all questions ofwhether a particular leave of
absence constitutes a Termination of Employment. Notwithstanding any other
provision of this Agreement, the Company or any Subsidiary has the absolute
and unrestricted right to terminate the Employee's employment at any time for
any reason whatsoever, with or without Cause.
ARTICLE II.
ISSUANCE OF UNITS
Section 2.1. Issuance of Units
In consideration of the services rendered or to be rendered to the
Company, a Parent Corporation or a Subsidiary and for other good and valuable
consideration which the Committee has determined to be equal to the par value
of its Common Stock, on the date hereof the Company awards to the Employee
_______ Units of Phantom Stock (the "Units"), upon the terms and conditions
set forth in this Agreement.
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Section 2.2. No Right to Continued Employment
Nothing in this Agreement or in the Plan shall confer upon the Employee
any right to continue in the employee of the Company, any Parent Corporation
or any Subsidiary or shall interfere with or restrict in any way the rights of
the Company, any Parent Corporation or any Subsidiary, which are hereby
expressly reserved, to discharge the Employee at any time for any reasons
whatsoever, with or without Cause.
ARTICLE III.
VESTING EXERCISE
Section 3.1. Termination of Units
Until vested, all Units issued to the Employee pursuant to this
Agreement are subject to termination by the Company immediately upon a
Termination of Employment other than from death or total disability (as
determined by the Committee in accordance with Company plans and policies),
in which event all Units shall immediately fully vest.
Section 3.2. Vesting of Units
The Units shall fully vest upon the later to occur of (a) the third
anniversary of this Agreement, and (b) normal retirement (as determined by the
Committee in accordance with Company plans and policies), early retirement
with the consent of the Chief Executive Officer of the Company (or, in the
case of the Chief Executive Officer of the Company, with the consent of the
Committee), or a Termination of Employment that is not initiated by, and not
voluntary on the part of the Employee, other than for Cause. Subject to the
terms of the Plan, the Employee may exercise his right to receive payment on a
vested Unit or Units by delivering written notice to the Company. The notice
should identify the Unit or Units to be exercised. The Employee's right to
receive payment on a vested Unit shall permanently expire three (3) months
after the date on which the Unit vests. Payment by the Company shall be made
in shares of Common Stock. The Company shall issue one share of Common Stock
to the Employee for each vested Unit exercised by the Employee.
Section 3.3. Merger, Consolidation, Acquisition, Liquidation or Dissolution
Notwithstanding any other provision of this Agreement, upon the merger
or consolidation of the Company into another corporation, the acquisition by
another corporation or person (excluding any employee benefit plan of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company) of all or substantially all of the Company's
assets or 51% or more of the Company's then outstanding voting stock, or the
liquidation or dissolution of the Company, the Committee shall then provide by
resolution adopted prior to such event that, at some time prior to the
effective date of such event, all outstanding Units not previously terminated
pursuant to Section 3.1 shall fully vest.
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Section 3.4. Adjustments
In the event of any change in the number of outstanding shares of Common
Stock as a result of a stock dividend or stock split, the Company shall make a
corresponding and proportionate adjustment in the number of Units credited to
the Employee. If the outstanding shares of Common Stock are changed into or
exchanged for a different number or kind of securities of the Company other
than by reason of a stock dividend or stock split, the Committee shall
determine a similar appropriate adjustment, and the same shall be made in the
number of Units then credited to the Employee.
ARTICLE IV.
NON-COMPETITION/NON-SOLICITATION
Section 4.1. Covenant Not to Compete
Employee covenants and agrees that prior to Employee's Termination of
Employment and for a period of three (3) years following the Employee's
Termination of Employment, Employee shall not, in Australia or in any other
country in which the Company manufactures or sells it products, engage,
directly or indirectly, whether as principal or as agent, officer, director,
employee, consultant, shareholder or otherwise, alone or in association with
any other person, corporation or other entity, in any Competing Business.
Section 4.2. Non-Solicitation of Customers
Employee agrees that prior to his Termination of Employment he shall
not, directly or indirectly, solicit the business of, or do business with, any
customer or prospective customer of the Company for any business purpose other
than for the benefit of the Company. Employee further agrees that for three
(3) years following Employee's Termination of Employment, including without
limitation termination by the Company for Cause or without Cause, Employee
shall not, directly or indirectly, solicit the business of, or do business
with, any customers or prospective customers of the Company.
Section 4.3. Non-Solicitation of Employees
Employee agrees that prior to his Termination of Employment and for
three (3) years following Employee's Termination of Employment, including
without limitation termination by the Company for Cause or without Cause,
Employee shall not, directly or indirectly, solicit or induce, or attempt to
solicit or induce, any employee of the Company to leave the employment of the
Company for any reason whatsoever, or hire any employee of the Company except
into the employment of the Company.
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Section 4.4. Exception
Notwithstanding anything contained in this Agreement to the contrary,
the restrictions set forth in Section 4.1 above shall lapse and be of no
further effect in the event of a Termination of Employment that is not
initiated by, and not voluntary on the part of the Employee, other than for
Cause.
ARTICLE V.
MISCELLANEOUS
Section 5.1. Administration
The Committee shall have the power to interpret the Plan and this
Agreement, and to adopt such rules for the administration, interpretation, and
application of the Plan as are consistent therewith, to interpret, amend or
revoke any such rules. All action taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Employee, the Company and all other interested persons. In its
absolute discretion, the Board may at any time and from time to time exercise
any and all rights and duties of the Committee under the Plan or this
Agreement except with respect to matters which under Rule 16b-3, or any
regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee. No member of the Committee or Board shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or the Units, and all members of the
Committee and the Board shall be fully protected by the Company in respect of
any such action, determination or interpretation.
Section 5.2. Units Not Transferable
No Unit or any interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Employee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, hypothecation, encumbrance, assignment or any other
means, whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), any attempted disposition thereof shall be
null and void and of no effect; provided however, that this Section 5.2 shall
not prevent transfers by will or by the applicable laws of descent and
distribution.
Section 5.3. Conditions to Issuance of Stock Certificates
The Company shall not be required to issue or deliver any certificate or
certificates for shares of stock pursuant to this Agreement prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
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(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory
body, which the Committee shall, in its sole discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its sole discretion,
determine to be necessary or advisable; and
(d) Subject to Section 5.9 the payment by the Employee of all amounts
which, under federal, state or local tax law, the Company (or other employer
corporation) is required to withhold upon issuance of the exercise of a Unit;
and
(e) The lapse of such reasonable period of time as the Committee may
from time to time establish for reasons of administrative convenience.
Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to
be given to the Employee shall be addressed to him at the address given
beneath his signature hereto. By a notice given pursuant to this Section 5.4,
either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Employee shall,
if the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of
his status and address by written notice under this Section 5.4. Any notice
shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States or
Australian Postal Service.
Section 5.5. Dividends
At such times as dividends are paid on the outstanding Common Stock, the
Company shall calculate an equivalent dividend (the "Dividend Equivalent") to
be paid on each Unit. The Company shall pay such Dividend Equivalents to the
Employee in the currency in which the Employee's regular compensation is
customarily paid as soon as administratively feasible after the dividend is
paid on the Common Stock.
Section 5.6. Titles
Titles are provided her in for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.
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Section 5.7. Conformity to Securities Laws
The Employee acknowledges that the Plan and this Agreement is intended
to conform to the extent necessary with all provisions of the Securities Act
and the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, including, without limitation,
the applicable exemptive conditions of Rule 16b-3. Notwithstanding anything
herein to the contrary, this Agreement shall be administered only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
Section 5.8. Amendments
This Agreement and the Plan may be amended without the consent of the
Employee provided that such amendment would not impair any rights of the
Employee under this Agreement. No amendment of this Agreement shall, without
the consent of the Employee, impair any rights of the Employee under this
Agreement.
Section 5.9. Tax Withholding
The Company's obligation : (i) to issue or deliver to the Employee any
certificate or certificates for unrestricted shares of stock; or (ii) to pay
to the Employee any dividends or make any distributions with respect to the
Units, is expressly conditioned upon receipt from the Employee, on or prior to
the date reasonably specified by the Company of:
(a) Full payment (in cash or by check ) of any amount that must be
withheld by the Company for federal, state and/or local tax purposes; or
(b) Subject to the Committee's consent, full payment by delivery to
the Company of unrestricted shares of the Company's Common Stock previously
owned by the Employee duly endorsed for transfer to the company by the
Employee with an aggregate Fair Market Value (determined, as applicable, as of
the date of vesting or as of the date of the distribution) equal to the amount
that must be withheld by the Company for federal, state and/or local tax
purposes; or
(c) Subject to the Committee's consent, an combination of payments
provided for in the foregoing subsections (a) or (b).
Section 5.10. Governing Law
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Delaware, U.S.A., without regard to conflicts of
laws thereof.
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IN WITNESS HEREOF, this Agreement has been executed and delivered by the
parties hereto.
XXXXX-ILLINOIS, INC.
By
Its: Executive Vice President
------------------------
EMPLOYEE
Address
Employee's Taxpayer
Identification Number:
