Exhibit 10.2
APTARGROUP, INC.
ANNUAL BONUS PLAN
I. Purposes
The purposes of the AptarGroup, Inc. Annual Bonus Plan are to retain and
motivate the officers and other employees of AptarGroup, Inc. and its
subsidiaries who have been designated by the Committee to participate in the
Plan for a specified Performance Period by providing them with the opportunity
to earn incentive payments based upon the extent to which specified performance
goals have been achieved or exceeded for the Performance Period. It is intended
that all amounts payable to Participants who are "covered employees" within the
meaning of Section 162(m) of the Code will constitute "qualified
performance-based compensation" within the meaning of U.S. Treasury regulations
promulgated thereunder, and the Plan and the terms of any awards hereunder shall
be so interpreted and construed to the maximum extent possible.
II. Certain Definitions
"Annual Base Salary" shall mean for any Participant an amount equal to the
rate of annual base salary in effect or approved by the Committee or other
authorized person at the time or immediately before performance goals are
established for a Performance Period, including any base salary that otherwise
would be payable to the Participant during the Performance Period but for his or
her election to defer receipt thereof.
"Applicable Period" shall mean, with respect to any Performance Period, a
period commencing on or before the first day of the Performance Period and
ending not later than the earlier of (a) 90 days after the commencement of the
Performance Period and (b) the date on which twenty-five percent (25%) of the
Performance Period has been completed. Any action required to be taken within an
Applicable Period may be taken at a later date if permissible under Section
162(m) of the Code or regulations promulgated thereunder, as they may be amended
from time to time.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation Committee of the Board or such
other committee designated by the Board that satisfies any then applicable
requirements of the principal national stock exchange on which the Common Stock
is then traded to constitute a compensation committee, and which consists of
three or more members of the Board, each of whom may be an "outside director"
within the meaning of Section 162(m) of the Code.
"Common Stock" shall mean Common Stock, par value $.01 per share, of the
Company.
"Company" shall mean AptarGroup, Inc., a Delaware corporation and any
successor thereto.
"Individual Award Opportunity" shall mean the potential of a Participant to
receive an incentive payment if the performance goals for a Performance Period
shall have been satisfied. An Individual Award Opportunity may be expressed in
U.S. dollars, in Restricted Stock Units or pursuant to a formula that is
consistent with the provisions of the Plan.
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"Participant" shall mean an officer or other employee of the Company or any
of its subsidiaries who is designated by the Company to participate in the Plan
for a Performance Period, in accordance with Article III.
"Performance Period" shall mean any period commencing on or after January
1, 2008 for which performance goals are established pursuant to Article IV. A
Performance Period may be coincident with one or more fiscal years of the
Company or a portion of any fiscal year of the Company.
"Plan" shall mean the AptarGroup, Inc. Annual Bonus Plan as set forth
herein, as it may be amended from time to time.
"Restricted Stock Unit" shall mean a right that entitles the holder thereof
to receive, upon vesting, one share of Common Stock on the date of vesting and
that is available for grant in accordance with the terms of a stock plan of the
Company, the eligible participants in which include Participants.
III. Administration
3.1. General. The Plan shall be administered by the Committee, which shall
have the full power and authority to interpret, construe and administer the Plan
and any Individual Award Opportunity granted hereunder (including reconciling
any inconsistencies, correcting any defaults and addressing any omissions). The
Committee's interpretation, construction and administration of the Plan and all
its determinations hereunder shall be final, conclusive and binding on all
persons for all purposes.
3.2. Powers and Responsibilities. The Committee shall have the following
discretionary powers, rights and responsibilities in addition to those described
in Section 3.1.
(a) to designate within the Applicable Period the Participants for a
Performance Period;
(b) to establish within the Applicable Period the performance goals and
other terms and conditions that are to apply to each Participant's
Individual Award Opportunity, including the extent to which any
incentive payment shall be made to a Participant in the event of (i)
the Participant's termination of employment with or service to the
Company due to disability, retirement, death or any other reason or
(ii) a change in control of the Company;
(c) to determine in writing prior to the payment with respect to any
Individual Award Opportunity that the performance goals for a
Performance Period and other material terms applicable to the
Individual Award Opportunity have been satisfied;
(d) to determine whether, and under what circumstances and subject to what
terms, an Individual Award Opportunity is to be paid in cash or in
Restricted Stock Units, or partly in cash and partly in Restricted
Stock Units;
(e) to determine whether, and under what circumstances and subject to what
terms, an Individual Award Opportunity is to be paid on a deferred
basis, including whether such a deferred payment shall be made solely
at the Committee's discretion or whether a Participant may elect
deferred payment; and
(f) to adopt, revise, suspend, waive or repeal, when and as appropriate,
in its sole and absolute discretion, such administrative rules,
guidelines and procedures for the Plan as it deems necessary or
advisable to implement the terms and conditions of the Plan.
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3.3. Delegation of Power. The Committee may delegate some or all of its
power and authority hereunder to the Chief Executive Officer or other executive
officer of the Company as the Committee deems appropriate; provided, however,
that with respect to any person who is a "covered employee" within the meaning
of Section 162(m) of the Code or who, in the Committee's judgment, is likely to
be a covered employee at any time during the applicable Performance Period, only
the Committee shall be permitted to (a) designate such person to participate in
the Plan for such Performance Period, (b) establish performance goals and
Individual Award Opportunities for such person, and (c) certify the achievement
of such performance goals.
IV. Performance Goals
4.1. Establishing Performance Goals. The Committee shall establish within
the Applicable Period of each Performance Period one or more objective
performance goals for each Participant or for any group of Participants (or
both), provided that the outcome of each goal is substantially uncertain at the
time the Committee establishes such goal. Performance goals shall be based
exclusively on one or more of the following objective corporate-wide or
subsidiary, division, operating unit or individual measures: earnings per share;
earnings before interest and taxes ("EBIT"); earnings before interest, taxes,
depreciation and amortization ("EBITDA"); financial return ratios, consisting of
return on equity; return on assets and return on invested capital; the ratio of
EBIT to capital; the ratio of EBITDA to capital; net income; operating income;
revenues; profit margin; cash flow(s); expense reduction; working capital
ratios; successful implementation of strategic initiatives; and successful
integration of acquisitions. Each such goal may be expressed on an absolute or
relative basis and may include comparisons based on current internal targets,
the past performance of the Company (including the performance of one or more
subsidiaries, divisions, or operating units) or the past or current performance
of other companies (or a combination of such past and current performance). In
the case of earnings-based measures, in addition to the ratios specifically
enumerated above, performance goals may include comparisons relating to capital
(including, but not limited to, the cost of capital), shareholders' equity,
shares outstanding, assets or net assets, or any combination thereof. With
respect to Participants who are not "covered employees" within the meaning of
Section 162(m) of the Code and who, in the Committee's judgment, are not likely
to be a covered employees at any time during the applicable Performance Period,
the performance goals established for the Performance Period may consist of any
objective corporate-wide or subsidiary, division, operating unit or individual
measures, whether or not listed herein. Performance goals shall be subject to
such other special rules and conditions as the Committee may establish at any
time within the Applicable Period.
4.2. Impact of Extraordinary Items or Changes in Accounting. The measures
utilized in establishing performance goals under the Plan for any given
Performance Period shall be determined in accordance with generally accepted
accounting principles ("GAAP") and in a manner consistent with the methods used
in the Company's audited consolidated financial statements, to the extent
applicable, without regard to (a) extraordinary or other nonrecurring or unusual
items, as determined by the Company's independent public accountants in
accordance with GAAP, (b) changes in accounting, as determined by the Company's
independent public accountants in accordance with GAAP, or (c) special charges,
such as restructuring or impairment charges, unless, in each case, the Committee
decides otherwise within the Applicable Period or as otherwise required under
Section 162(m) of the Code.
V. Individual Award Opportunities
5.1. Terms. At the time performance goals are established for a Performance
Period, the Committee also shall establish an Individual Award Opportunity for
each Participant or group of Participants, which shall be based on the
achievement of one or more specified targets of performance goals. The targets
shall be expressed in terms of an objective formula or standard which may be
based upon the Participant's Annual Base Salary or a multiple thereof. In all
cases the Committee shall have the sole and absolute discretion to reduce the
amount of any payment with respect to any Individual Award Opportunity that
would otherwise be made to any Participant or to decide that no payment shall be
made. No Participant shall receive a payment, whether in cash or in Restricted
Stock Units, under the Plan with respect to any Performance Period having a
value in excess of $2,000,000, which maximum amount shall be prorated with
respect to Performance Periods that are less than one year in duration.
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5.2. Payments. Payments with respect to Individual Award Opportunities
shall be made in cash or in Restricted Stock Units, or partly in cash and partly
in Restricted Stock Units, and shall be made at the time determined by the
Committee after the end of the Performance Period for which the awards are
payable, provided that (a) no such payment shall be made unless and until the
Committee has certified in writing the extent to which the applicable
performance goals for such Performance Period have been satisfied and (b) no
such payment shall be made later than March 15 of the year immediately following
the last day of the applicable Performance Period.
VI. General
6.1. Effective Date and Term of Plan. The Plan shall be submitted to the
stockholders of the Company for approval at the 2008 annual meeting of
stockholders and, if approved by the affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy at such
meeting, shall become effective for Performance Periods beginning on and after
January 1, 2008. The Plan shall terminate as of December 31, 2012, unless
terminated earlier by the Board. In the event that the Plan is not approved by
the stockholders of the Company, the Plan shall be null and void with respect to
Participants who are "covered employees" within the meaning of Section 162(m) of
the Code.
6.2. Amendments. The Board may amend the Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 162(m) of the Code.
6.3. Non-Transferability of Awards. No award under the Plan shall be
transferable other than by will, the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company. Except
to the extent permitted by the foregoing sentence, no award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any such award, such award
and all rights thereunder shall immediately become null and void.
6.4. Tax Withholding. The Company shall have the right to require, prior to
the payment of any amount pursuant to an award made hereunder, payment by the
Participant of any Federal, state, local or other taxes which may be required to
be withheld or paid in connection with such award.
6.5. No Right of Participation or Employment. No person shall have any
right to participate in the Plan. Neither the Plan nor any award made hereunder
shall confer upon any person any right to continued employment by the Company or
any subsidiary or affiliate of the Company or affect in any manner the right of
the Company or any subsidiary or affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.
6.6. Designation of Beneficiary. If permitted by the Company, a Participant
may file with the Committee a written designation of one or more persons as such
Participant's beneficiary or beneficiaries (both primary and contingent) in the
event of the Participant's death.
Each beneficiary designation shall become effective only when filed in
writing with the Committee during the Participant's lifetime on a form
prescribed by the Committee. The spouse of a married Participant domiciled in a
community property jurisdiction shall join in any designation of a beneficiary
other than such spouse. The filing with the Committee of a new beneficiary
designation shall cancel all previously filed beneficiary designations.
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If a Participant fails to designate a beneficiary, or if all designated
beneficiaries of a Participant predecease the Participant, then each outstanding
award shall be payable to the Participant's executor, administrator, legal
representative or similar person.
6.7. Governing Law. The Plan and each award hereunder, and all
determinations made and actions taken pursuant thereto, to the extent not
otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of laws.
6.8. Other Plans. Payments pursuant to the Plan shall not be treated as
compensation for purposes of any other compensation or benefit plan, program or
arrangement of the Company or any of its subsidiaries, unless either (a) such
other plan provides that compensation such as payments made pursuant to the Plan
are to be considered as compensation thereunder or (b) the Board or the
Committee so determines in writing. Neither the adoption of the Plan nor the
submission of the Plan to the Company's stockholders for their approval shall be
construed as limiting the power of the Board or the Committee to adopt such
other incentive arrangements as it may otherwise deem appropriate.
6.9. Binding Effect. The Plan shall be binding upon the Company and its
successors and assigns and the Participants and their beneficiaries, personal
representatives and heirs. If the Company becomes a party to any merger,
consolidation or reorganization, then the Plan shall remain in full force and
effect as an obligation of the Company or its successors in interest, unless the
Plan is amended or terminated pursuant to Section 6.2.
As adopted by the Board of Directors on February 28, 2008.
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