Exhibit 10.1
2008 GRAHAM PACKAGING HOLDINGS
COMPANY
MANAGEMENT OPTION
PLAN
This 2008 Graham Packaging Holdings
Company Management Option Plan is hereby adopted by the
Compensation Committee (the “Committee”) of Graham
Packaging Holdings Company, a Pennsylvania limited partnership
(the “Company”), as of the Effective Date (as
defined below).
ARTICLE I
PURPOSE OF PLAN
The Plan is adopted by the Committee
for certain Eligible Individuals as a part of the compensation and
incentive arrangements for such individuals by providing them with
the opportunity to receive Options to purchase Units of the
Company. The Plan is intended to advance the best interests of the
Company by allowing such individuals to acquire an ownership
interest in the Company, thereby motivating them to contribute to
the success of the Company and to remain with the Company and its
Subsidiaries and affiliates. It is anticipated that the
availability of Options under the Plan will also enhance the
Company’s ability to attract and retain individuals of
exceptional talent to contribute to the sustained progress, growth
and profitability of the Company.
ARTICLE II
DEFINITIONS
For purposes of the Plan, except
where the context clearly indicates otherwise, the following terms
shall have the meanings set forth below:
“ 2004 Plan ”
shall mean the 2004 Graham Packaging Holdings Company Management
Option Plan, as amended.
“ Board ” shall
mean the Board of Directors of the Company or such other equivalent
governing body as the Company may have.
“ CEO ” shall
mean the Chief Executive Officer of the Company.
“ Code ” shall
mean the Internal Revenue Code of 1986, as amended.
“ Committee ”
shall mean the Compensation Committee of the Company, which shall
be appointed by the Board.
“ Company ” shall
mean Graham Packaging Holdings Company, a Pennsylvania limited
partnership.
“ Effective Date
” shall mean March 7, 2008.
“ Eligible Individual
” shall mean an Employee, non-employee director, non-employee
advisor or consultant of the Company, or any of its Subsidiaries or
affiliates or any other individual providing services to the
Company, or any of its Subsidiaries or affiliates.
“ Employee ”
shall mean any employee of the Company, or any of its Subsidiaries
or affiliates.
“ Exchange Act ”
shall mean the Securities Exchange Act of 1934, as
amended.
“ Exercise Price
” shall mean the purchase price per Unit subject to an
Option.
“ Fair Market Value
” shall mean that value, per Unit,
(i) prior to an Initial Public
Offering, the fair market value of a Unit as determined in good
faith by the Committee based on the value of the Company as a going
concern, but without any discount with respect to the minority
ownership represented by such partnership interest or the
contractual restrictions on the transfer of the Units.
(ii) on and after an Initial Public
Offering, the average of the closing trading prices on the 20
business days immediately preceding the day of the
valuation.
“ Grantee ” shall
mean any Eligible Individual who holds an outstanding Option
granted under this Plan.
“ Grant Date ”
shall mean the date an Option is granted pursuant to this
Plan.
“ Option ” shall
mean an option granted under the Plan to purchase Units.
“ Option Agreement
” shall mean the Option Agreement between a Grantee and the
Company, substantially in the form of agreement attached hereto as
Exhibit A.
“ Option Units ”
shall mean any Units issuable or issued by the Company upon
exercise of any Option by a Grantee.
“ Person ” shall
mean an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or
political subdivision thereof.
“ Plan ” shall
mean this 2008 Management Option Plan, as amended from time to
time.
“ Plan Year ”
shall mean initially the period beginning on the Effective Date and
ending on December 31, 2008, and thereafter each of the
calendar years from 2009 through 2017.
“ Initial Public
Offering ” shall mean a registered underwritten public
offering of common stock of the Company or a successor to the
Company pursuant to an effective registration statement under the
Securities Act, which results in an active trading market in such
common stock. If such common stock is listed on a national
securities exchange or is quoted on the NASDAQ National Market, it
shall be deemed to be actively traded.
“ Securities Act
” shall mean the Securities Act of 1933, as
amended.
“ Subsidiary ”
shall mean any corporation of which the Company owns, directly or
through one or more Subsidiaries, securities having a majority of
the ordinary voting power in electing the board of directors of
such corporation.
“ Unit ” shall
mean a limited partnership interest in the Company based on 15,288
units outstanding as of the Effective Date (subject to dilution
resulting from other future issuances of equity).
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ARTICLE III
AVAILABLE OPTION
UNITS
3.1 Option Units Subject to the
Plan . Subject to adjustment as described in this
Article III and in Article VIII, the aggregate number of
Units that may be issued under the Plan is 1,278.4 Units, less the
number of Units outstanding under the 2004 Plan. After a Public
Offering, the maximum aggregate number of Units of the Company that
shall be subject to Grants made under the Plan to any individual
during any calendar year shall be 1,278.4 Units, subject to
adjustment as described herein. The Units may be authorized but
unissued Units of the Company or reacquired Units of the Company,
including Units purchased by the Company on the open market for
purposes of the Plan. If and to the extent Options granted under
the Plan terminate, expire, or are canceled, forfeited, exchanged,
or surrendered without having been exercised are forfeited, the
Units subject to such Grants shall be available again for purposes
of the Plan.
3.2 Adjustments to Option
Units . The maximum number of Units available for Options, the
number of Units covered by an outstanding Option, the kind of Units
issued under the Plan, and the price per Unit of such Option shall
be proportionately adjusted by the Committee to reflect any
adjustments to the Units pursuant to the Company’s Agreement
of Limited Partnership and preclude the enlargement or dilution of
rights and benefits under such Options. Any adjustments determined
by the Committee shall be final, binding and conclusive.
ARTICLE IV
GRANT OF OPTIONS; OPTION
TERMS
4.1 Eligibility . All
Eligible Individuals shall be eligible to participate in this
Plan.
4.2 Selection of Grantees .
The Committee shall have the authority to select Eligible
Individuals to receive Options and to grant Options to Eligible
Individuals in such amounts as it shall determine, in its full
discretion. The Board, however, may ratify or approve any grants of
Options as it deems appropriate.
4.3 Option Terms . All
Options shall be subject to the terms and conditions set forth
herein and to such other terms and conditions consistent with this
Plan and as specified in the individual Option Agreement or an
amendment thereto. All Options shall be made conditional upon the
Grantee’s acknowledgement, in writing or by acceptance of the
Option, that all decisions and determination of the Committee or
its delegate shall be final and binding on the Grantee, his or her
beneficiaries and any other Person having or claiming an interest
under such Option. Options granted under the Plan need not be
uniform as among the Grantees.
4.4 Number of Units . The
Committee shall determine the number of Units that will be subject
to each Option grant. Options are not intended to qualify as
“incentive stock options” within the meaning of Code
section 422, and no incentive stock options shall be issue under
the Plan as long as the Company is not a corporation.
4.5 Term of Option . The
Committee shall determine the term of each Option; however, the
term of any Option shall not exceed ten years from the Grant Date
of such Option.
4.6 Vesting and Exercisability of
Options . Options shall become vested and exercisable in
accordance with the terms and conditions consistent with the Plan,
as determined by the Committee, and set forth in the Option
Agreement. The Committee, in its sole discretion, may accelerate
the vesting and exercisability of any or all outstanding Options at
any time for any reason. The Committee shall have the discretion to
determine whether and to what extent the vesting and exercisability
of Options shall be tolled during any unpaid leave of
absences.
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4.7 Grants to Non-Exempt
Employees . Notwithstanding the foregoing, Options granted to
Eligible Individuals who are non-exempt employees under the Fair
Labor Standards Act of 1938, as amended, may not be exercisable for
at least 6 months after the date of grant (except that such Options
may become exercisable, as determined by the Committee, upon the
Grantee’s death, Disability or retirement, or upon any other
circumstances permitted by applicable regulations).
4.8 Termination of Employment,
Disability or Death .
(a) Except as provided below or as
set forth in a Grantee’s Option Agreement, an Option may only
be exercised while the Grantee is employed by, or providing service
to, the Employer (as defined below) as an employee, advisor,
consultant or member of the Board. In the event that a Grantee
ceases to be employed by the Employer for any reason other than a
Disability (as defined below), death, or termination for Cause (as
defined below), any Option which is otherwise exercisable by the
Grantee shall terminate unless exercised within 90 days after the
date on which the Grantee ceases to be employed by, or provide
services to, the Employer (or within such other period of time as
may be specified in the Option Agreement), but in any event no
later than the date of expiration of the Option term. Except as
otherwise determined by the Committee, any of the Grantee’s
Options that are not otherwise exercisable as of the date on which
the Grantee ceases to be employed by, or provide services to, the
Employer, shall terminate as of such date.
(b) Except as otherwise set forth in
a Grantee’s Option Agreement, in the event the Grantee ceases
to be employed by, or provide services to the Employer on account
of a termination for Cause by the Employer, any Option held by the
Grantee shall terminate as of the date the Grantee ceases to be
employed by, or provide services to, the Employer. In addition,
notwithstanding any other provisions of this Section 4, if the
Board determines that the Grantee has engaged in conduct that
constitutes Cause at any time while the Grantee is employed by, or
providing service to, the Employer, or after the Grantee’s
termination of employment or service, any Option held by the
Grantee shall immediately terminate, and the Grantee shall
automatically forfeit all Units underlying any exercised portion of
an Option for which the Company has not yet delivered the Unit
certificates (if any), upon refund by the Company of the Exercise
Price paid by the Grantee for such units. Upon any exercise of an
Option, the Company may withhold delivery of Unit certificates (if
any) pending resolution of an inquiry that could lead to a finding
resulting in a forfeiture.
(c) Except as otherwise set forth in
a Grantee’s Option Agreement, in the event the Grantee ceases
to be employed by, or provide services to, the Employer as a result
of a Disability, any Option which is otherwise exercisable by the
Grantee shall terminate unless exercised within one year after the
date on which the Grantee ceases to be employed by, or provide
services to, the Employer (or within such other period of time as
may be specified in the Option Agreement), but in any event no
later than the date of expiration of the Option term. Except as
otherwise determined by the Board, any of the Grantee’s
Options which are not otherwise exercisable as of the date on which
the Grantee ceases to be employed by, or provide services to, the
Employer, shall terminate as of such date.
(d) Except as otherwise set forth in
a Grantee’s Option Agreement, if the Grantee dies while
employed by, or providing services to, the Employer, or within 90
days after the date on which the Grantee ceases to be employed by,
or provide services to, the Employer on account of a termination of
employment specified in Section 4.8(a) above (or within such
other period of time as may be specified in the Option Agreement),
any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which
the Grantee ceases to be employed by, or provide services to, the
Employer (or within such other period of time as may be specified
in the Option Agreement), but in any event no later than the date
of expiration of the Option term. Except as otherwise determined by
the Committee, any of the Grantee’s Options that are not
otherwise exercisable as of the date on which the Grantee ceases to
be employed by, or provide services to, the Employer shall
terminate as of such date.
(e) For purposes of this
Section 4.8 and Article VI and
Article VIII:
(i) “Employer” shall
mean the Company, or any of its Subsidiaries or
affiliates.
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(ii) “Employed by, or
providing services to, the Company” shall mean employment or
service as an employee, consultant, advisor or member of the Board
(so that, for purposes of exercising Options a Grantee shall not be
considered to have terminated employment or service until the
Grantee ceases to be an employee, consultant, advisor or member of
the Board), unless the Committee determines otherwise.
(iii) “Disability” shall
mean the inability of a Grantee to perform in all material respects
his duties and responsibilities to the Company, or any Subsidiary
of the Grantee, by reason of a physical or mental disability or
infirmity which inability is reasonably expected to be permanent
and has continued (i) for a period of six consecutive months,
or (ii) such shorter period as the Company may determine. A
Grantee (or his or her representative) shall furnish the Company
with satisfactory medical evidence documenting the Grantee’s
disability or infirmity.
(iv) “Cause” shall mean
(A) willful misconduct or disregard for duty in the
performance of the duties assigned by the Company after the Grantee
has received notice of such negligence or disregard and has failed
to cure such in the performance of his duties; or (B) acts of
moral turpitude, dishonesty or fraud, which in the good faith
opinion of the Committee, are materially harmful to the
Company.
ARTICLE V
EXERCISE OF
OPTIONS
5.1 Right to Exercise .
During the lifetime of a Grantee, Options may be exercised only by
the Grantee to whom the Options were granted (except that, in the
event of a Grantee’s disability, Options may be exercised by
his or her legal guardian or legal representative). In the event of
the death of a Grantee, exercise of Options shall be made only by
the executor or administrator of the deceased Grantee’s
estate or the Person or Persons to whom the deceased
Grantee’s rights under the Option shall pass by will or the
laws of descent and distribution.
5.2 Exercise Price . The
Exercise Price per Unit subject to an Option shall be determined by
the Committee and may be less than, equal to or greater than the
Fair Market Value of such Unit on the Grant Date. To the extent
that the Exercise Price per Unit subject to an Option is less than
the Fair Market Value of a Unit on the Grant Date, such Option may
only be exercised on one of the events described in
Section 409A(a)(2)(A) of the Code.
5.3 Procedure for Exercise .
Options may be exercised in whole or in part with respect to any
portion that is exercisable. To exercise an Option, a Grantee (or
such other Person who shall be permitted to exercise the Option, as
set forth in Section 5.1) must complete, sign and deliver to
the Company (to the attention of the Company’s Secretary) a
notice of exercise substantially in the form attached hereto as
Annex I (or in such other similar form as the Committee may
from time to time adopt and provide to a Grantee)
(the “Exercise Notice”), together with payment in
full of the Exercise Price multiplied by the number of Units with
respect to which the Option is exercised and delivery of the Option
to which the Units relate. A Grantee’s right to exercise the
Option shall be subject to the satisfaction of all conditions set
forth in the Exercise Notice. Payment of the Exercise Price shall
be made in cash (including check, bank draft or money order) or by
such other method as the Committee may approve, or if subsequent to
an Initial Public Offering, to the extent permitted by the
Committee (i) throu
