Exhibit 10.1
EMPLOYMENT
AGREEMENT
Between
GRAHAM PACKAGING HOLDINGS
COMPANY,
GRAHAM PACKAGING COMPANY,
L.P.,
And
The Chief Financial
Officer
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT dated as of
May 4, 2009 and effective as of May 5, 2009 (the
“Agreement”) between Graham Packaging Holdings Company
(“Holdings”), Graham Packaging Company, L.P., a
Delaware Limited Partnership (“Limited Partnership”, or
“L.P.” or “Company”), and David Bullock
(“Executive”).
WHEREAS, the Company desires to
employ Executive as its Chief Financial Officer and Holdings
desires to employ Executive as its Chief Financial Officer and
Executive desires to be employed by the Company and Holdings in
each such capacity and on the terms and subject to the conditions
set forth herein:
NOW, THEREFORE, in consideration of
the promises and the mutual agreements contained herein, the
Company, Holdings and Executive hereby agree as follows:
ARTICLE I
DEFINITIONS
The terms set forth below have the
following meanings (such meanings to be applicable to both the
singular and plural forms, except where otherwise expressly
indicated):
1.1 “ Accounting Firm
” - see Exhibit A.
1.2 “ Accrued Base
Salary ” means the amount of Executive’s Base
Salary that is accrued but not yet paid as of the Date of
Termination.
1.3 “ Affiliate ”
means any Person directly or indirectly controlling, controlled by,
or under direct or indirect common control with, the Company. For
the purposes of this definition, the term “control”
when used with respect to any Person means the power to direct or
cause the direction of management or policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
1.4 “ Agreement ”
- see the recitals to this Agreement
1.5 “ Agreement Date
” means the effective date that is specified in the recitals
to this Agreement.
1.6 “ Annual Bonus
” - see Section 4.2(a).
1.7 “ Base Salary
” - see Section 4.1.
1.8 “ Beneficial Owner
” means a “beneficial owner,” as such term is
defined in Rule 13d-3 under the Exchange Act (or any successor rule
thereto).
1.9 “ Beneficiary
” - see Section 9.3.
1.10 “ Blackstone
” means collectively, Blackstone Capital Partners III
Merchant Banking Fund L.P., Blackstone Offshore Capital Partners
III L.P. and their Affiliates (other than the Company and its
Subsidiaries).
1.11 “ Board ”
means the Board of Directors of the Company subsequent to the
incorporation of the L.P. and the substitution of it as successor
for the L.P. as a party to this Agreement. Prior thereto, the Board
shall mean the General Partner (as defined in the LP
Agreement).
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1.12 “ Cause ”
means any of the following:
(a) Executive commits an act of
gross negligence, willful misconduct, fraud, embezzlement,
misappropriation or breach of fiduciary duty against Holdings, the
Company or any of its Affiliates, or shall be convicted by a court
of competent jurisdiction of, or shall plead guilty or nolo
contendere to, any felony or any crime involving moral
turpitude or any crime which reasonably could affect the reputation
of Holdings or the Company or the Executive’s ability to
perform the duties required under the Employment
Agreement;
(b) Executive commits a material
breach of any of the covenants in the Employment Agreement, which
breach has not been remedied within 30 days of notice thereof,
or
(c) Executive habitually and
willfully neglects his obligations under the Employment Agreement
or the Executive’s duties as an employee of Holdings or the
Company and fails to correct such action within 30 days of notice
thereof.
1.13 “ Code ”
means the Internal Revenue Code of 1986, as amended from time to
time.
1.14 “ Committee
” means the Compensation Committee of the Board.
1.15 “ Common Stock
” means the common stock of the Company following its
incorporation, and the equivalent L.P. units prior to its
incorporation.
1.16 “ Company ”
see the recitals to this Agreement.
1.17 “ Company
Inventions ” - see Section 8.2(b).
1.18 “ Date of
Termination ” means the effective date of a Termination
of Employment for any reason, including death or Disability,
whether by either the Company or the Executive.
1.19 “ Director ”
means a director of the Company subsequent to its incorporation or
a member of the governing body of the L.P. prior to its
incorporation.
1.20 “ Disability
” means the Executive is “disabled” as determined
under Section 409A of the Code.
1.21 “ Employment
Period ” - see Section 3.1.
1.22 “ Exchange Act
” means the Securities Exchange Act of 1934, as amended or
any successors thereto.
1.23 “ Excise Tax
” - see Exhibit A.
1.24 “ Executive
” - see the recitals to this Agreement.
1.25 “ Extension Date
” - see Section 3.2.
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1.26 “ Good Reason
” means the termination of the Executive’s employment
with the Company within 90 days following the occurrence of any of
the following events (provided such event occurs without
Executive’s written consent):
(a) a substantial diminution in
Executive’s position, authority, duties or responsibilities
as contemplated by this Agreement, excluding any isolated,
insubstantial and inadvertent action which is remedied by Company
promptly after receipt of notice thereof from the
Executive;
(b) a decrease in Executive’s
Base Salary or Target Annual Bonus;
(c) a reduction in Executive’s
participation in the Company’s benefit plans and policies to
a level materially less favorable to Executive unless such
reduction applies to a majority of senior level executives;
or
(d) the announcement of the
relocation or the actual relocation of the Executive’s
primary place of employment to a location 60 or more miles from the
Company’s current headquarters; or
(e) a breach by the Company of any
of its obligations under Articles IV, V, VI and VII of this
Agreement and the failure to correct the same within ten
(10) days of notice thereof.
1.27 “ Gross-Up Payment
” - Exhibit A.
1.28 “ Holdings Board
” means the Board of Directors of Holdings.
1.29 “ Inventions
” see Section 8.2(a).
1.30 “ LP Agreement
” means the Amended and Restated Agreement of Limited
Partnership of Graham Packaging Company.
1.31 “ Payment ”
- see Exhibit A.
1.32 “ Permitted
Transferee ” means the spouse of Executive, a lineal
descendant of Executive or a spouse of a lineal descendant of
Executive or a trust, limited partnership or other entity
principally benefiting all or a portion of such
individuals.
1.33 “ Person ”
means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or
government instrumentality, division, agency, body or
department.
1.34 “ Prior Inventions
” - see Section 8.2(a).
1.35 “ Prorata Annual
Bonus ” means the product of (a) the Annual Bonus
Executive would have been entitled to receive pursuant to
Section 4.2 hereof in the Year of the Executive’s
Termination of Employment multiplied by (b) a fraction of
which the numerator is the numbers of days that have elapsed in
such Year of Termination of Employment through the Date of
Termination and the denominator is 365.
1.36 “ Restricted
Period ” means the twelve (12) month period
immediately following a Termination of Employment for any
reason.
1.37 “ Safe Harbor
Amount ” see Exhibit A.
1.38 “ Shareholder
” or “ Stockholder ” means an owner of the
Company’s securities.
1.39 “ Subsidiary
” means, with respect to any Person, (a) any corporation
of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether, at the
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time, stock of any other class or classes of
such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or
indirectly, owned by such Person, and (b) any partnership,
limited liability company or other entity in which such Person has
a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than
50%.
1.40 “ Target Annual
Bonus ” means the product of Base Salary multiplied by
100 percent, as such percentage may be adjusted upwards from time
to time by the Board.
1.41 “ Termination For Good
Reason ” means a Termination of Employment during the
Employment Period by Executive for Good Reason.
1.42 “ Termination of
Employment ” means a termination by the Company or by
Executive (or due to Executive’s death) of Executive’s
employment with the Company and its Affiliates.
1.43 “ Termination Without
Cause ” means a Termination of Employment during the
Employment Period by the Company for any reason other than Cause or
Executive’s death or Disability.
1.44 “ Underpayment
” - see Exhibit A.
1.45 “ Year ”
means a calendar year period ending on December 31.
ARTICLE II
DUTIES
2.1 Duties . The Company
shall employ Executive during the Employment Period as its Chief
Financial Officer and Holdings shall employ Executive during the
Employment Period as its Chief Financial Officer. During the
Employment Period, Executive shall perform the duties assigned to
him hereunder by the Company’s Chief Executive Officer and
the Holdings Board from time to time, shall devote his full
business time, attention and effort to the affairs of the Company
and shall use his reasonable best efforts to promote the interests
of the Company. During the Employment Period, and excluding any
periods of disability, vacation, or sick leave to which Executive
is entitled, Executive agrees to devote his full business time and
attention and time to the business and affairs of the Company. If
requested, Executive shall also serve as a member of the Board
without additional compensation.
2.2 Other Activities .
Executive may serve on one corporate board other than the Company
and Holdings, and may also (i) serve on other corporate, civic
or charitable boards or committees, deliver lectures, fulfill
speaking engagements, or teach at educational institutions, subject
to the consent of the Board (which shall not be unreasonably
withheld) and/or (ii) manage personal investments, provided
that all such activities do not individually or in the aggregate
significantly interfere with the performance of his duties under
this Agreement or violate Section 8.1 of this
Agreement.
ARTICLE III
EMPLOYMENT PERIOD
3.1 Employment Period .
Subject to Section 3.2 and the termination provisions
hereinafter provided, the term of Executive’s employment
under this Agreement (the “Employment Period”) shall
begin on the Agreement Date and end on the third anniversary
of
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the Agreement Date, or, if applicable at the end
of any extension pursuant to Section 3.2. The employment of
Executive by the Company shall not be terminated other than in
accordance with Article VII.
3.2 Extensions of Employment
Period . Commencing on the third anniversary of the Agreement
Date, and on each anniversary date thereafter, (each an
“Extension Date”) if 90 days before that date either
Holdings or the Company has not delivered to Executive, and
Executive has not delivered to Company and Holdings, a written
notice that the Employment Period will not be extended, the
Employment Period will be automatically extended for one year from
its then scheduled expiration date (i.e., the next occurring
Extension Date).
ARTICLE IV
COMPENSATION
4.1 Salary . The Company
shall pay Executive in accordance with its normal payroll practices
(but not less frequently than monthly) an annual salary at a rate
of $420,000 per year (“Base Salary”). During the
Employment Period, the Base Salary shall be reviewed at least
annually by the Committee after consultation with Executive and may
from time to time be increased as determined by the Committee.
Effective as of the date of any such increase, the Base Salary as
so increased shall be considered the new Base Salary for all
purposes of this Agreement. Any increase in Base Salary shall not
limit or reduce any other obligation of the Company to Executive
under this Agreement.
4.2 Annual Bonus .
(a) Subject to Article 7,
Executive shall be eligible to earn an annual cash bonus
(“Annual Bonus”) in accordance with the terms hereof
for the current Year and each subsequent Year that begins during
the Employment Period. Executive shall be eligible for an Annual
Bonus based upon the achievement of the financial budget or other
performance criteria established by the Board at its discretion.
The Annual Bonus shall be equal to the Target Annual Bonus upon
full achievement of the performance criteria, but may be less than
the Target Annual Bonus upon lesser levels of
achievement.
(b) The Company
shall pay the entire Annual Bonus that is payable with respect to a
Year in a lump-sum cash payment within 2 1 / 2 months following the close of
such Year. Any such Annual Bonus shall in any event be paid no
later than the date annual bonuses are paid to the other senior
executives of the Company.
ARTICLE V
OTHER BENEFITS
5.1 Incentive, Savings and
Retirement Plans . In addition to Base Salary and the Annual
Bonus, Executive shall be entitled to participate during the
Employment Period in all incentive, savings and retirement plans,
practices, policies and programs that are from time to time
generally available to other senior executives of the
Company.
5.2 Welfare Benefits . During
the Employment Period, Executive and/or his eligible dependents, as
the case may be, shall be eligible for participation in all
benefits under welfare benefit plans, practices, policies and
programs provided by the Company (including any medical,
prescription, dental disability, salary continuance, employee life,
group life, dependent life, accidental death and travel accident
insurance plans and programs) generally available to other senior
executives of the Company and, to the extent permissible under any
medical and prescription plans, without regard to any applicable
waiting periods.
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5.3 Fringe Benefits . During
the Employment Period, Executive shall be entitled to all fringe
benefits that are from time to time generally available to other
senior executives of the Company.
5.4 Vacation . During the
Employment Period, Executive shall be entitled to paid vacation
time in accordance with the plans, practices, policies, and
programs generally available to other senior executives of the
Company, with a minimum of three (3) weeks vacation per
year.
5.5 Expenses
. During the Employment Period, Executive shall be entitled to
receive prompt reimbursement for all reasonable employment related
expenses incurred by Executive for the prior month upon the receipt
by the Company of accounting in accordance with practices, policies
and procedures generally available to other senior executives of
the Company; provided that all reimbursements shall in any event be
made within 2 1 / 2 months following the Year in
which they were incurred.
5.6 Office; Support Staff .
During the Employment Period, Executive shall be entitled to an
office or offices of a size and with furnishings and other
appointments, and to secretarial and other assistance, appropriate
to his position and duties under this Agreement.
5.7 Relocation Package .
Pursuant to the Company’s relocation program (see attached
Cartus relocation program), the Executive shall be entitled to
receive certain cash advances and moving expense reimbursements.
Further, the Executive shall be entitled to participate in the sale
or purchase of a home program provided under the Company relocation
program. Additionally, the Executive shall receive a miscellaneous
allowance of $20,000, in lieu of the one month of salary advance
provided for in the Company relocation program. In addition, the
Executive shall be entitled to receive payment on an after-tax
basis for relocating up to six (6) cars. All of the payments
described in this Section 5.7 shall be referred to as
Relocation Package Costs.
In the event that the Executive
voluntarily terminates his employment without Cause or for Good
Reason prior to June 30, 2010, then Executive shall reimburse
the Company 100% of the Relocation Package Costs received. In the
event that the Executive voluntarily terminates his employment
without cause or for Good Reason prior to June 30, 2011, then
Executive shall reimburse the Company 50% of the Relocation Package
Costs received. Any reimbursement shall be made within sixty
(60) days of Executive’s termination date.
5.8 Tax Gross-Up Payment . If
it shall be determined that any payment to Executive pursuant to
this Agreement or any other payment or benefit from the Company
would be subject to the excise tax imposed by section 4999 of the
Code, then Executive shall receive a Gross-Up Payment pursuant to
Exhibit A attached hereto.
ARTICLE VI
OTHER EXECUTIVE BENEFITS
6.1 Equity Incentive
Agreement . Executive shall be eligible to participate in
Holdings 2004 Management Option Plan pursuant to those Option
Agreements set forth as Exhibits B and C hereto.
6.2 Indemnification . The
Company shall, to the maximum extent permitted by law, and in
addition to any such right granted to or available to the Executive
under the Company’s Charter, By-laws or standing or other
resolutions, defend, indemnify and hold
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harmless the Executive from and against any and
all claims made against the Executive concerning or relative to his
service, actions or omissions on behalf of the Company and its
Affiliates as an officer, employee, director or agent of the
Company and Holdings; provided, however, that the obligation to
indemnify the Executive shall not apply to any claim made against
the Executive that arises out of the act, omission or failure to
act that would constitute Cause for the Executive’s
termination of employment. The Company shall, upon the
Executive’s request, promptly advance or pay any amounts for
reasonable costs, charges, or expenses (including any legal fees
and expenses incurred by counsel retained by the Executive) that
have been actually incurred by Executive at the time of such
request in respect of his right to indemnification hereunder or in
furtherance of such right, subject to a later determination as to
the Executive’s ultimate right to receive indemnification.
The Executive’s right to indemnification shall survive until
the expiration of all applicable statutes of limitations, without
regard to the earlier termination of the Executive’s
employment.
ARTICLE VII
TERMINATION BENEFITS
7.1 Termination of Employment
. The Employment Period and Executive’s employment hereunder
may be terminated by Executive or the Company at any time and for
any reason; provided that Executive will be required to give the
Company at least 30 days’ advance written notice of any
resignation of Executive’s employment except if such
resignation is for Good Reason. Notwithstanding any other provision
of this Agreement, the provisions of this Article VII shall
exclusively govern Executive’s rights under this Agreement
following the expiration of the Employment Period or if
Executive’s employment with the Company or its Affiliates is
terminated during the Employment Period for any reason.
7.2 Termination for Cause or
Other Than for Good Reason, etc .
(a) If the Company terminates
Executive’s employment during the Employment Period for Cause
or Executive terminates his employment during the Employment Period
other than for Good Reason, death or Disability, the Company shall
pay to Executive as soon as administratively feasible after the
Date of Termination an amount equal to the total of
(i) Executive’s Accrued Base Salary, (ii) accrued
but unpaid vacation, and (iii) and any unpaid business
expenses properly incurred by Executive in accordance with Company
policy and Section 5.5 hereof prior to the date of
Executive’s termination.
(b) Before terminating
Executive’s employment for Cause, the Board will specify in
writing to Executive in detail the nature of the act, omission,
refusal, or failure that it deems to constitute Cause.
7.3 Termination for Death or
Disability . If Executive’s employment terminates during
the Employment Period due to his death or Disability, the Company
shall pay to Executive or his Beneficiaries, as the case may be, as
soon as administratively feasible after the Date of Termination an
amount that is equal to the total of (i) the Executive’s
Accrued Base Salary, (ii) accrued but unpaid vacation,
(iii) unpaid business expenses properly incurred by Executive
in accordance with Company policy prior to the date of
Executive’s termination, and (iv) any accrued but unpaid
Annual Bonus
7.4 Termination Without Cause or
Resignation for Good Reason . Upon termination of the
Executive’s employment with the Company and Holdings during
the Employment Period either (i) by the Company and Holdings
without Cause or (ii) by the Executive’s resignation for
Good Reason, and subject to the Executive’s execution and
non-revocation of a release in substantially
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