Exhibit 10.1
Performance-Based (MOIC)
Option
OPTION AGREEMENT
This AGREEMENT (this
“Agreement”) is made as of June 17, 2009 (the
“Grant Date”) and effective as of June 17, 2009 by
and between Graham Packaging Holdings Company, a Delaware limited
partnership (the “Company”), and Mark S. Burgess (the
“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) “ Cause ”
means any of the following:
i) Optionee 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 their duties;
ii) Optionee habitually and
willfully neglects their obligations and duties as an employee of
Holdings or the Company and fails to correct such action within 30
days of notice thereof.
(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) “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.
(e) “ Good Reason
” means the termination of the Optionee’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):
i) a substantial diminution in
Optionee’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
Optionee;
ii) decrease in Optionee’s
Base Salary or Target Annual Bonus;
iii) a reduction in Optionee’s
participation in the Company’s benefit plans and policies to
a level materially less favorable to Optionee unless such reduction
applies to a majority of senior level executives; or
iv) 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.
(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.
(g) “Liquidity Event”
means a sale by Blackstone of its entire interest in the Company
and Graham Packaging Company, L.P., if and only if such event
constitutes a change in effective control or ownership of the
Company and Graham Packaging Company, L.P., within the meaning of
Section 409A of the Code.
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 50
Units (the “Units”) at an Exercise Price of $25,122 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 Optionee shall earn the
right to exercise the Option, provided , that
(i) the Optionee shall have remained in the continuous employ
of the Company, through the date of a Liquidity Event, and
(ii) the Company shall have achieved specified performance
targets with respect to the multiple of invested capital
(“MOIC”) for such Liquidity Event as such targets are
attached hereto as Attachment A. Any units as to which Optionee
does not earn the right to exercise the related Option prior to the
expiration date set forth in Section 3 hereof shall thereupon
expire and terminate; provided, however, that if the
Optionee’s employment is terminated without Cause or for Good
Reason and a Liquidity Event occurs within one year of such
termination of employment, then the Options shall become
immediately exercisable upon such Liquidity Event.
- 2 -
(b) 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.
(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
