Exhibit 10.5

FINAL VERSION

EASTON-BELL SPORTS, INC.

2012 CASH INCENTIVE PLAN

Effective as of December 14, 2012

The following sets forth terms and conditions of the cash incentive plan for
specified members of management, directors, consultants and representatives of
Easton-Bell Sports, Inc., its subsidiaries and its parent companies. Certain
capitalized terms have the meanings set forth herein opposite the heading “Key
Definitions”.

 

Plan:    The cash incentive plan shall be referred to as the Easton-Bell Sports
Inc. 2012 Cash Incentive Plan (the “CIP”). Eligibility:    Certain members of
management, members of the board of directors, board of managers or equivalent
governing body, consultants and representatives of Easton-Bell Sports, Inc. (the
“Company”), its subsidiaries and its parent companies shall be eligible to
participate in the CIP. The Board shall award interests in the CIP to any such
persons who the Board considers to be in a position to enhance the success of
the Company, its subsidiaries or its parent companies. Interests:    The
interests in the CIP shall be referred to as “Units” and each grant of Units
shall be evidenced by a certificate, in the form attached as Exhibit A hereto,
executed by the Company. Up to 21,200 Units may be issued under the CIP (such
maximum amount of Units being the “Maximum Unit Amount”). In the event any
previously granted Units are forfeited, the Board shall be authorized to grant
such amount of Units to additional eligible participants provided the aggregate
amount of Units outstanding shall not exceed the Maximum Unit Amount.    Each
holder of Units shall be referred to as a “Unitholder”. A Unitholder who is
employed by Parent, the Company or any of its subsidiaries shall be referred to
as a “Management Unitholder”. Any other Unitholder shall be referred to as an
“Other Unitholder”. Vesting:    Unless otherwise determined by the Board on the
date of grant and subject to the other provisions of the CIP, 100% of the
outstanding Units will vest upon a Liquidity Event that occurs prior to the
seven-year anniversary of the effective date of the CIP (a “Qualified Liquidity
Event”).    Vesting for any Units may be accelerated at any time in the
discretion of the Board.

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Payment:    Upon the occurrence of a Qualified Liquidity Event, subject to the
other limitations set forth herein and the limitations of any indebtedness of
the Company or any of its subsidiaries, after satisfaction of all obligations
(including any such indebtedness) of the Company and its subsidiaries (but prior
to any payments to with respect to equity securities of the Company), each
Unitholder shall have the right to receive from the Company (or its designee) a
cash payment (a “Payment”) equal to the product of (i) the outstanding Units
held by such Unitholder, multiplied by (ii) the quotient obtained when
$21,200,000 (the “Aggregate CIP Proceeds”) is divided by the aggregate amount of
outstanding Units held by all Unitholders at the time of such Qualified
Liquidity Event; provided, that in the case of a Partial Sale, Unitholders that
are not employed by the business being sold or whose employment relationship
with Parent, the Company or any of its subsidiaries is not primarily related to
the assets being sold in such Partial Sale shall only receive 50% of the Payment
amount that would otherwise be made absent this proviso.   

Subject to the immediately succeeding paragraph, in the event that the Total
Enterprise Value equals or exceeds the Threshold TEV at the time of an initial
public offering or Change of Control that otherwise constitutes a Qualified
Liquidity Event, then the Aggregate CIP Proceeds shall be increased to
$27,723,076.92 (the incremental amount of such increase being “Incremental
Additional CIP Proceeds”), and the Payment to each Unitholder as a result of
such initial public offering or Change of Control shall be calculated
accordingly. If a subsequent related purchase price adjustment, earnout or
similar future payment following any such Change of Control would have resulted
in an increase in the Aggregate CIP Proceeds in accordance with the immediately
preceding sentence if such additional amounts were considered part of the Total
Enterprise Value calculated at the time of such Change of Control, then each
Unitholder that received a Payment following such Change of Control shall
receive from the Company (or its designee) an additional cash payment (an
“Additional Payment”) equal to the product of (i) the outstanding Units held by
such Unitholder at the time of such Change of Control, multiplied by (ii) the
quotient obtained when the amount of Incremental Additional CIP Proceeds is
divided by the aggregate amount of outstanding Units held by all Unitholders at
the time of such Change of Control.

 

In addition, if any portion of the consideration payable in connection with a
Qualified Liquidity Event is placed in escrow, the Board shall be entitled to
place a pro rata portion of any Payment or Additional Payment to be made to any
Unitholder in escrow, which escrowed amounts will be held subject to the same
conditions as the escrowed consideration for such Qualified Liquidity Event.

 

Notwithstanding anything herein to the contrary, in the event that after the
occurrence of one or more Partial Sales, a subsequent initial public offering,
Change of Control or Refinancing occurs the Aggregate CIP Proceeds to be used to
calculate the Payment (or Additional Payment) to be made to each holder of
outstanding Units upon such initial public offering, Change of Control or
Refinancing shall be determined by subtracting the aggregate value of all
Payments previously distributed under the CIP.

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   Any Payment (or Additional Payment) shall be made as soon as reasonably
practicable following the Qualified Liquidity Event (or at the time of any
subsequent escrow release, purchase price adjustment, earnout or similar future
payment), but in no event will a Payment (or Additional Payment) be made later
than March 15 of the year following the year in which the Qualified Liquidity
Event (or such subsequent escrow release, adjustment, earnout or similar future
payment) occurs.    In the event there is a merger or similar transaction in
which the Company is not the surviving entity and which does not constitute a
Qualified Liquidity Event, the Board shall, at its option, (i) accelerate all
payment obligations with respect to all Units under the CIP and thereafter
terminate the CIP, (ii) have such surviving or acquiring entity assume all
obligations under the CIP or (iii) provide replacement benefits, which, in the
judgment of the Board, satisfy the requirements of Section 409A of the Internal
Revenue Code and are substantially equivalent to the Units awarded under the
CIP; provided, however, that any such replacement benefits will be payable only
upon the occurrence of a Qualified Liquidity Event or at a time and in a form
that otherwise satisfies the requirements of section 409A of the Internal
Revenue Code applicable to deferred compensation.    The amounts payable under
the CIP (or upon conversion of the Units) are intended to be exempt from the
requirements of Section 409A of the Internal Revenue Code applicable to deferred
compensation. Accordingly, the CIP will be amended in a timely manner to the
extent necessary from time to time to effectuate that intent. Key Definitions:
   “Acquisition TEV” shall mean, with respect to any acquisition by the Company
or any of its subsidiaries, the aggregate Fair Market Value of the consideration
delivered or paid by Parent, the Company or any of its subsidiaries in such
acquisition, including the amount of all indebtedness for borrowed money issued
or assumed by the Company or any of its subsidiaries or affiliates in respect of
such acquisition and, without duplication, any fees or expenses paid by such
entities to consummate such acquisition. The Acquisition TEV shall be determined
by the Board in good faith and using its reasonable judgment at the time of the
closing of the applicable acquisition, which determination shall be final and
binding upon all Unitholders. To the extent there are any subsequent purchase
price adjustments, earnouts or similar anticipated future payments paid or
received by Parent, the Company or any of its subsidiaries or affiliates in such
acquisition, such amounts shall increase or decrease the Acquisition TEV
determined by the Board, if and when such amounts are actually paid or received.

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   “Board” shall mean the Board of Managers of Parent or the comparable
governing board of any successor to Parent.    “Cause” shall mean (a) with
respect to any Management Unitholder, the meaning of such term set forth in the
Management Unitholder’s employment agreement, or, in the absence of an
employment agreement, shall mean any of the following events or conditions, as
determined by the Board in good faith: (i) the Unitholder’s refusal or willful
failure to substantially perform his or her duties within five (5) days after a
written demand for performance is delivered to the Unitholder by the Board, the
board of directors or comparable governing body of any subsidiary or parent
company of the Company or any designee of the Board or such board or body, which
identifies in reasonable details the manner in which it is believed that the
Unitholder has failed to perform his or her duties; (ii) the Unitholder’s gross
negligence or willful misconduct with regard to the Company, any of its
subsidiaries or parent companies, or any of its or their affiliates which has a
material adverse impact on the Company, such subsidiary, parent company or
affiliate, whether economic, or reputation wise or otherwise, as determined by
the Board in good faith; (iii) the Unitholder’s indictment for, charge or
conviction of, or pleading nolo contendere to, (A) a felony or any crime
involving fraud, or material dishonesty or (B) any felony or crime involving
moral turpitude that might reasonably be expected to adversely affect the
Company, any of its subsidiaries or parent companies, or any of its or their
affiliates, (iv) the Unitholder’s refusal or willful failure to follow a lawful,
written direction of the Board, the board of directors or comparable governing
body of any subsidiary or parent company of the Company or any designee of the
Board or such board or body, within the scope of the Unitholder’s duties within
five (5) days after written notice has been given to the Unitholder by the
Board, such board or body that failure to follow the direction will be grounds
for determining that “Cause” exists; (v) the Unitholder’s theft, fraud, or any
material act of dishonesty related to the Company, any of its subsidiaries or
parent companies, or any of its or their affiliates, or (vi) the Unitholder’s
breach of a fiduciary duty owed to the Company, any of its subsidiaries or
parent companies, or any of its or their affiliates; and (b) with respect to any
Other Unitholder, any of the events or conditions described in clauses (i),
(ii), (iii), (iv), (v) or (vi), as determined by the Board in good faith, or any
other circumstance determined by the Board on the date of grant.

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   “Change of Control” shall have the meaning attributed to such term in
Parent’s then current limited liability company operating agreement; provided if
such agreement no longer includes such term, shall have the meaning attributed
to such term in Parent’s limited liability company operating agreement
immediately prior to its removal.   

“Disposition TEV” shall mean, with respect to any disposition by the Company or
any of its subsidiaries, the aggregate Fair Market Value of the consideration
received by or paid on behalf of Parent, the Company or any of its subsidiaries
or affiliates in such disposition, including any cash paid by the acquirer to or
on behalf of Parent, the Company or any of its subsidiaries or affiliates in
respect of any fees or expenses relating to such disposition, and the amount of
all indebtedness for borrowed money, which is assumed by such acquiror, retired
or defeased in connection with such disposition. The Disposition TEV shall be
determined by the Board in good faith and using its reasonable judgment at the
time of the closing of the applicable disposition, which determination shall be
final and binding upon all Unitholders. To the extent there are any subsequent
purchase price adjustments, earnouts or similar anticipated future payments
received or paid by Parent, the Company or any of its subsidiaries or affiliates
in such disposition, such amounts shall increase or decrease the Disposition TEV
determined by the Board, if and when such amounts are actually received or paid,
as the case may be.

 

“Fair Market Value” means, as of any date, as to any item or entity, the Board’s
good faith determination of the fair value of such item or entity, as the case
may be, as of the applicable reference date.

 

“Good Reason” shall mean, with respect to any Management Unitholder, the meaning
of such term set forth in the Management Unitholder’s employment agreement, or,
in the absence of an employment agreement, shall mean the failure by the Company
and its subsidiaries, without the Management Unitholder’s written consent, to
pay base salary, bonus or any other material compensation or material benefits
when due, provided such failure is not cured by the Company and its subsidiaries
within fifteen (15) days after receipt of the Management Unitholder’s written
notification to the Company and its subsidiaries of such failure.

   “Involuntary Termination Event” shall mean (a) with respect to any Management
Unitholder, the termination of such Management Unitholder’s employment with the
Company, its subsidiaries, its parent companies and any successor thereto (i) by
any such entity for any reason other than for Cause, or (ii) by such Management
Unitholder within 60 days of an event constituting Good Reason; and (b) with
respect to any Other Unitholder, the termination of such Unitholder’s board,
consulting or other relationship with the Company, its subsidiaries, its parent
companies and any successor thereto by any such entity (or the applicable
equityholders of such entity) for any reason other than for Cause (for avoidance
of doubt, a resignation or other termination by such Other Unitholder shall not
be considered an Involuntary Termination Event, regardless of the reason).

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“Liquidity Event” shall mean (a) any Change of Control, (b) Partial Sale, (c)
initial public offering of Parent, the Company or any of its subsidaires or (d)
a Refinancing.

 

“Parent” shall mean Easton-Bell Sports, LLC, the ultimate parent company of the
Company.

  

“Partial Sale” shall mean any sale or other disposition of any of Riddell Sports
Group, Inc., a Delaware corporation, Bell Sports Corp., a Delaware corporation,
or Easton Sports, Inc., a Delaware corporation, or any other sale or other
disposition of more than 25% of the assets of the Company and its subsidiaries
taken as a whole (including, without limitation, by way of a merger or
consolidation or through the sale or other disposition of equity interest of any
of its subsidiaries), whether pursuant to one transaction or a series of related
transactions.

 

“Refinancing” shall mean any repurchase, redemption or refinancing of all or any
portion of the capital stock or other equity interests in Parent or the Company
held by the Company’s equity investors other than any such redemption,
repurchase or refinancing that (i) is in accordance with Section 12 or
Section 14 of Parent’s operating agreement or similar provisions in any
stockholders agreement of the Company or any parent company or (ii) is pursuant
to any compensation arrangements with employees arising out of or relating to
the employment of such employee, which compensation arrangement, if with an
officer, is approved by the Board.

 

“Threshold TEV” shall mean $1,200,000,000, plus the amount of any Acquisition
TEV, minus the amount of any Disposition TEV.

 

“Total Enterprise Value” shall mean, in respect of any Qualified Liquidity
Event, an amount equal to the aggregate Fair Market Value of Parent, the Company
and its subsidiaries, on a consolidated basis, immediately prior to such
transaction, which, in respect of any Change of Control shall reflect an amount
equal to the aggregate value of (i) all cash and the Fair Market Value of all
non-cash consideration received by Parent’s or the Company’s equity investors in
such transaction in respect of their capital stock or other equity interests in
Parent, the Company or any of its subsidiaries connection with such Qualified
Liquidity Event, (ii) all purchase price adjustments, fees and expenses of such
investors or the Company and its subsidiaries in connection with such Qualified
Liquidity Event, and (iii) any indebtedness satisfied by the Company or any of
its subsidiaries in connection with such Qualified Liquidity Event. Total
Enterprise Value shall be determined by the Board in good faith and using its
reasonable judgment at the time of such transaction, which determination shall
be final and binding upon all Unitholders.

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Termination:   

The CIP shall immediately and automatically terminate on the first to occur of
(i) the seven-year anniversary of the effective date of the CIP (provided that
the obligation to make a Payment (or Additional Payment) to Unitholders arising
out of any Qualified Liquidity Event that occurred on or prior to such date
shall survive such termination), (ii) in the event any initial public offering
or Change of Control that constitutes a Qualified Liquidity Event occurs
(provided that in such event the obligation to make the Payment or any
Additional Payment to Unitholders arising out of such Qualified Liquidity Event
shall survive such termination), or (iii) Parent, the Company or any future
parent is dissolved, becomes insolvent or files a petition for bankruptcy (or
has such a petition filed against it). In addition, the CIP shall immediately
terminate at such time when the aggregate Payments (and Additional Payments)
under the CIP for all Qualified Liquidity Events equal the Aggregate CIP
Proceeds.

 

In the event a Unitholder’s employment, board, consulting or other relationship
with the Company, any of its subsidiaries, any of its parent companies or any
successor thereto ends for any reason, other than as a result of an Involuntary
Termination Event, such Unitholder’s Units shall automatically terminate and no
longer be considered outstanding, and such Unitholder shall no longer be
eligible to receive any Payment (or Additional Payment) under the CIP.

Conditions:   

In order to receive Units under the CIP, a prospective Unitholder must return to
the Company for cancellation any outstanding “Class B Common Units” (including
any “Qualifying Class B Common Units”) that were previously issued to such
prospective Unitholder pursuant to Parent’s limited liability company agreement.

 

In order to receive any Payment (or Additional Payment) under the CIP, each
Unitholder may be requested by the Board to execute a release indicating such
Unitholder’s acknowledgement and agreement that the calculation of such Payment
(or Additional Payment) is correct and complete and that such Unitholder is not
entitled to any further amounts under the CIP with respect to such Qualified
Liquidity Event. If and to the extent any Unitholder refuses to deliver such
release, the Board may, at its option and in its sole discretion, cancel the
outstanding Units of such refusing Unitholder, whether or not vested.

Transferability:    The Units granted under the CIP are not transferable.

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Administration:    The CIP shall be administered by the Board. The Board shall
have the authority to (a) determine the terms and conditions of each award of
Units; (b) prescribe the form of any instruments evidencing awards and to change
any such form from time to time; (c) adopt, amend, waive and rescind provisions
of the CIP, including by increasing the Maximum Unit Amount and the Aggregate
CIP Proceeds; (d) calculate the amount of any Payment (or Additional Payment)
due hereunder and (e) interpret the CIP and any award granted hereunder and to
decide any questions and settle all controversies and disputes that may arise in
connection with the CIP or any such award. Such determinations of the Board
shall be conclusive and shall bind all Unitholders if made in good faith. Any
amendments to, waivers of or rescission of provisions of the CIP approved by the
Board shall apply to any outstanding Units as well as to future grants of Units;
provided, that if and to the extent any such amendment, waiver or rescission
would adversely affect the aggregate amount of Payments for all outstanding
Units or otherwise adversely affect the right of any Unitholders to receive a
Payment with respect to its Units, such amendment, waiver or rescission must be
approved by the Unitholders that hold at least a majority of the then
outstanding Units, and upon such approval shall thereafter apply to any and all
outstanding Units (whether or not held by the approving Unitholders).

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EXHIBIT A

EASTON-BELL SPORTS, INC. 2012 CASH INCENTIVE PLAN

[FORM OF] UNIT GRANT CERTIFICATE

Dated: [•]

Amount of Units: [•]

Subject to all of the terms and conditions set forth in the Easton-Bell Sports,
Inc. 2012 Cash Incentive Plan (as such may be amended from time to time, the
“Plan”), [•] (the “Participant”) is hereby granted the number of Units (as
defined in the Plan) set forth above.

This certificate and the Units granted to the Participant hereunder will expire
at such time as set forth in the Plan. Upon such expiration, the Units
represented by this certificate will no longer be outstanding.

 

EB SPORTS CORP. By:  

 

  Name:   Title:

By countersigning this certificate, the Participant (i) acknowledges receipt of
the Plan and accepts and agrees to the terms set forth therein as applicable to
the Units granted to the undersigned hereunder, and (ii) acknowledges that it
has returned for cancellation any outstanding “Class B Common Units” (including
any “Qualifying Class B Common Units”) it holds in Easton-Bell Sports, LLC
(“Parent Units”) that were previously issued to the undersigned pursuant to the
limited liability company agreement of such entity, and that it no longer has
any interest in such Parent Units and that any such Parent Units have been
cancelled and are no longer outstanding.

 

Accepted and Agreed: By:  

 

  Name: