Time-Based Option
Exhibit 10.3
OPTION AGREEMENT
This AGREEMENT (this
“Agreement”) is made as of May 4, 2009 (the
“Grant Date”) and effective as of May 5, 2009 by
and between Graham Packaging Holdings Company, a Delaware limited
partnership (the “Company”), and David Bullock
(“Optionee”).
1. Certain Definitions
. Capitalized terms used, but not otherwise defined, in this
Agreement will have the meanings given to such terms in the
Company’s 2008 Management Option Plan (the
“Plan”). As used in this Agreement:
(a) “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).
(b) “Change in Control”
shall have the same meaning as in the Credit Agreement as of the
date hereof.
(c) “Credit Agreement”
shall mean the Credit Agreement dated as of October 7, 2004
among Graham Packaging Holdings Company, Graham Packaging Company,
L.P., GPC Capital Corp. I, the Lenders Named Therein, Deutsche Bank
AG Cayman Islands Branch, Citigroup Global Markets Inc., Goldman
Sachs Credit Partners, L.P., General Electric Capital Corporation
and Lehman Commercial Paper Inc., and any extensions, renewals,
refinancings or refundings thereof in whole or in part.
(d) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
(e) “Financing Default”
shall mean an event which would constitute (or with notice or lapse
of time or both would constitute) an event of default (which event
of default has not been cured or waived) under any of the following
as they may be amended from time to time: (i) the Credit
Agreement; (ii) the Indentures and any extensions, renewals,
refinancings or refundings thereof in whole or in part; and
(iii) any other agreement under which an amount of
indebtedness of the Company or any of its Subsidiaries is
outstanding as of the time of the aforementioned event, and any
extensions, renewals, refinancings or refundings thereof in whole
or in part, (iv) any amendment of, supplement to or other
modification of any of the instruments referred to in clauses
(i) through (iii) above; and (v) any of the
securities issued pursuant to or whose terms are governed by the
terms of any of the agreements set forth in clauses
(i) through (iii) above, and any extensions, renewals,
refinancings or refundings thereof in whole or in part.
(f) “Indentures” shall
mean the indentures dated as of October 7, 2004 among Graham
Packaging Company, L.P., GPC Capital Corp. I, Graham Packaging
Holdings Company, and The Bank of New York.
2. Grant of Option .
Subject to and upon the terms, conditions, and restrictions set
forth in this Agreement and in the Plan, the Company hereby grants
to Optionee an option (the “Option”) to purchase 40
Units (the “Units”) at an Exercise Price of $25,122.00
per Unit, which is not less than the Fair Market Value per Unit on
the Grant Date, subject to adjustment. The Option may be exercised
from time to time in accordance with the terms of this
Agreement.
3. Term of Option .
The term of the Option shall commence at the Grant Date and, unless
earlier terminated in accordance with Section 7 hereof, shall
expire ten (10) years from the Effective Time.
4. Right to Exercise .
Unless terminated as hereinafter provided, the Option shall become
exercisable only as follows:
(a) The Option shall become
exercisable with respect to 25% of the Units on the first
anniversary of the Effective Time, an additional 25% of the Units
on the second anniversary of the Grant Date, an additional 25% of
the Units on the third anniversary of the Grant Date and an
additional 25% of the Units on the fourth anniversary of the Grant
Date if Optionee remains in the continuous employ of the Company as
of each such date. Notwithstanding the foregoing, the Units shall
become immediately exercisable upon the Optionee’s
termination of employment without Cause or for Good Reason during
the Employment Period, as such terms are defined in
Optionee’s Employment Agreement with the Company and Graham
Packaging Company, L.P., effective as of May 5, 2009 (the
“Employment Agreement”).
(b) Notwithstanding the foregoing,
the Options granted hereby shall become immediately exercisable in
full upon the occurrence of a Change in Control if Optionee remains
in the continuous employ of the Company until the date of the
consummation of such Change in Control.
(c) Optionee shall be entitled to
the privileges of ownership with respect to the Units purchased and
delivered to Optionee upon the exercise of all or part of this
Option, subject to Section 8 hereof. No election to exercise
any Option granted hereunder shall become effective unless and
until the Optionee executes a counterpart of the Company’s
Agreement of Limited Partnership in order to become bound
thereby.
5. Option
Nontransferable . Optionee may not transfer or assign all
or any part of the Option other than by will or by the laws of
descent and distribution. This Option may be exercised, during the
lifetime of Optionee, only by Optionee, or in the event of
Optionee’s legal incapacity, by Optionee’s guardian or
legal representative acting on behalf of Optionee in a fiduciary
capacity under state law and court supervision.
6. Notice of Exercise;
Payment .
(a) To the extent then exercisable,
the Option may be exercised in whole or in part by written notice
to the Company stating the number of Units for which the Option is
being exercised and the intended manner of payment. The date of
such notice shall be the exercise date. Payment equal to the
aggregate Exercise Price of the Units being purchased pursuant to
an exercise of the Option must be tendered in full with the notice
of exercise to the Company as provided in the Plan.
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(b) As soon as practicable upon the
Company’s receipt of Optionee’s notice of exercise and
payment, the Company shall direct the due issuance of the Units so
purchased.
(c) As a further condition precedent
to the exercise of this Option in whole or in part, Optionee shall
comply with all regulations and the requirements of any regulatory
authority having control of, or supervision over, the issuance of
the Units and in connection therewith shall execute any documents
which the Board shall in its sole discretion deem necessary or
advisable.
7. Termination of
Agreement . The Agreement and the Option granted hereby
shall terminate automatically and without further notice on the
earliest of the following dates:
(a) Subject to Sections 4(a) and
4(b) hereof, after Optionee’s termination of employment for
any reason, all unvested Options will be forfeited immediately, and
all vested Options shall remain exercisable until the lesser of
(i) ninety (90) days following the Optionee’s date
of termination or (ii) the remaining term of the Option;
provided , however , if the Optionee is terminated
for Cause, as defined in the Employment Agreement, a
