Exhibit 10.10
 
**VOLUME SERVICES AMERICA HOLDINGS, INC.**
 
**LONG TERM INCENTIVE PLAN**
 

 

**VOLUME SERVICES AMERICA HOLDINGS, INC.**
**LONG TERM INCENTIVE PLAN**
**Purpose of Long Term Incentive Plan**
     The purpose of the Volume Services America Holdings, Inc. Long TermIncentive Plan (the “Plan”) is to enable Volume Services America Holdings, Inc.(the “Corporation”) to strengthen the mutuality of interests between employeesof the Corporation and its Subsidiaries and the Corporation’s Unitholders, byproviding long term performance-based compensation incentives.
**1.** **Defined Terms**
 1.1 In this Plan, the following terms have the following meanings:
          “Account” has the meaning given to such term in Section 4.1.
          “Account Balance” has the meaning given to such term in Section 4.1.
          “Actual Distribution Per Unit” means, for the applicable FiscalYear, the quotient of (x) the Aggregate Distribution Amount in respect ofsuch Fiscal Year, divided by (y) the average number of Units outstandingin such Fiscal Year (calculated by adding the number of Units issued andoutstanding at the end of each calendar month ending in such Fiscal Yearand dividing such sum by the number of calendar months ending in suchFiscal Year).
          “Affiliate” means, with respect to any Person, any other Person thatdirectly, or through one or more intermediaries, controls or iscontrolled by or is under common control with such Person.
          “Aggregate Distribution Amount” in respect of any given Fiscal Yearmeans the aggregate amount of the Distributions.
          AMEX” means the American Stock Exchange, or any other principal U.S.exchange or market upon which the Units are listed or posted for trading.
          “Annual Allocation Amount” has the meaning given to such term inSection 4.1.
          “Applicable Laws” means all applicable provisions of law, domesticor foreign, including, without limitation, the United States SecuritiesAct of 1933, as amended (the “US Securities Act”), the United StatesSecurities Exchange Act of 1934, as amended (the “US Exchange Act”), andthe *Securities Act*(Ontario) as amended (the “Ontario Securities Act”),together with all regulations, rules, policy statements, rulings,notices, orders or other instruments promulgated thereunder and StockExchange Rules.

 

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          “Base Distribution Per Unit” means, for the Fiscal Year 2004, anActual Distribution Per Unit equal to $1.20; and the Committee shall setthe Base Distribution Per Unit in respect of each Fiscal Year thereafter.
          “Beneficiary” means any person designated by a Participant bywritten instrument filed with the Corporation to receive any amount,securities or property payable under the Plan in the event of aParticipant’s death or, failing any such effective designation, theParticipant’s estate as provided in Section 5.3.
          “BNY” means the Bank of New York, in its capacity as depositary ofUnits pursuant to the Prospectus, and any successor thererto.
          “Board” means the board of directors of the Corporation or anycommittee thereof designated by the full board of directors of theCorporation, in each case as constituted from time to time.
          “Cause” means (i) if the applicable Participant is party to aneffective employment agreement with the Corporation or any of itsSubsidiaries, “Cause” shall have the same meaning as such term is definedtherein; (ii) if the applicable Participant is not a party to aneffective employment agreement but is a party to an effective equityaward agreement pursuant to any stock incentive plan of the Corporation,“Cause” shall have the same meaning as such term is defined therein; and(iii) if the applicable Participant is not a party to any such effectiveagreements, “Cause” shall be defined in the good faith determination ofthe Committee, and shall include notice to the Participant of suchdetermination and an opportunity for the Participant to cure such event(if the Committee determines such event is reasonably curable).
          “Code” means the United States Internal Revenue Code of 1986, asamended from time to time.
          “Committee” means the compensation committee of the Board, as suchcommittee is from time to time constituted and which, for purposes ofmeeting certain requirements of Section 162(m) of Code and anyregulations promulgated thereunder, which may be deemed to be anysubcommittee of the Committee, to which the Committee has delegated itsduties and authority under this Plan, consisting solely of at least two“outside directors,” as defined under Section 162(m) of the Code and theregulations promulgated thereunder.
          “Corporation” means Volume Services America Holdings, Inc. and itssuccessors.
          “Distributions” means all distributions of cash (including interestand dividends), securities and other property made in respect ofoutstanding Units made to Unitholders of the Corporation, pursuant to theterms of the Prospectus and other Offering documents.
          “Effective Date” means the closing date of the Offering.

 

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          “Eligible Person” means an executive officer or other senioremployee of the Corporation or one of its Subsidiaries.
          “Excess” for a given Fiscal Year means the amount determined whenthe Excess Per Unit for such Fiscal Year is multiplied by the averagenumber of Units issued and outstanding during such Fiscal Year(calculated by adding the number of Units issued and outstanding at theend of each calendar month ending in such Fiscal Year and dividing suchsum by the number of calendar months ending in such Fiscal Year).
          “Excess Per Unit” in a Fiscal Year means the amount by which theActual Distribution Per Unit in that Fiscal Year exceeds the BaseDistribution Per Unit in respect of such Fiscal Year.
          “Fiscal Year” means any fiscal year of the Corporation and itsSubsidiaries, as in existence from time to time and reported in theCorporation’s annual reports filed with the AMEX and/or the TSX, asapplicable.
          “Initial Performance Period” means the period beginning on January1, 2004 and ending on the last day of the Fiscal Year 2006.
          “Offering” means the initial public offering of the Units asdescribed in the Prospectus.
          “Participant” means an Eligible Person to whom a Right has beengranted by the Committee.
          “Performance Period” means any period during which a Participant maybecome vested in his or her Rights, as may be established by theCommittee.
          “Performance Targets” means, collectively, the Base Distribution PerUnit and the Target Distribution Per Unit, all as may be established bythe Committee for any given Performance Period not later than 90 daysafter the commencement of any such Performance Period.
          “Person” means an individual, corporation, limited liabilitycompany, partnership, association, trust, unincorporated organization,other entity or group (as defined in the US Exchange Act).
          “Plan” means this Volume Services America Holdings, Inc. Long TermIncentive Plan, as an “employee benefit plan” (within the meanings of theUS Exchange Act and the Ontario Securities Act), as amended from time totime.
          “Prescribed Portion” means, for the Fiscal Year 2004, 20% of theExcess; and for each subsequent Fiscal Year means such percentage orpercentages of the Excess as the Committee may establish for that FiscalYear.
          “Prospectus” means the (final) Prospectus filed as the Corporation’sForm S-1 Registration Statement under the US Securities Act providing forthe Offering, and includes any amendment or amendments thereof.

 

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          “Right” means the right of a Participant to vest in and otherwisereceive payment of all Annual Allocation Amounts credited to his or herAccount upon the Corporation’s achievement of the established PerformanceTargets in respect of the applicable Performance Period, subject to andin accordance with the terms and conditions of the Plan.
          “Stock Exchange Rules” means the applicable rules of the AMEX andthe TSX, or any other principal stock exchange or market upon which theUnits are listed or posted for trading.
          “Subsidiary” means any corporation (other than the Corporation) inan unbroken chain of corporations beginning with the Corporation if eachof the corporations (other than the last corporation in the unbrokenchain) owns stock possessing 50% or more of the total combined votingpower of all classes of stock in one of the other corporations in thechain.
          “Target Distribution Per Unit” means, for Fiscal Year 2004, anActual Distribution Per Unit equal to $1.275; and the Committee will setthe annual Target Distribution Per Unit in respect of each Fiscal Yearthereafter in respect of the applicable Performance Period.
          “TSX” means the Toronto Stock Exchange, or any other principalCanadian exchange or market upon which the Units are listed or posted fortrading.
          “Units” means the Income Depository Receipts (“IDRs”) offered to thepublic pursuant to the Prospectus (or such other securities as the IDRsmay convert into or be exchanged for).
          “Unit Value” means, per Unit, on the last day of the applicablePerformance Period in respect of which Account Balances are to be paid toa Participant (or, if the Account Balances are payable upon a terminationof employment, on the Participant’s termination date), (i) the closingtrading price of the Units as reported on the AMEX (or, if the Units arenot traded on AMEX, as reported on the TSX) on such day or (ii) if theclosing trading price is not available for the Units on such date, thenthe next preceding practicable date for which such closing trading priceis available.
**2.** **Administration of the Plan**
     2.1 The Committee shall administer the Plan in accordance with itsprovisions. The Committee may, from time to time, establish administrativerules and regulations and prescribe forms or documents relating to theoperation of the Plan as it may deem necessary to implement or further thepurpose of the Plan and amend or repeal such rules and regulations or forms ordocuments.
     2.2 The Committee may correct any defect or supply any omission orreconcile any inconsistency in the Plan in the manner and to the extent theCommittee deems necessary or desirable to carry it into effect. Any decision ofthe Committee in the interpretation and administration of the Plan, asdescribed herein, shall lie within its sole and absolute discretion and shallbe final, conclusive and binding on all parties concerned. No member of the

 

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Committee and no officer of the Company shall be liable for anything doneor omitted to be done by him or her, by any other member of the Committee or byany officer of the Company in connection with the performance of duties underthe Plan.
**3.** **Grant and Vesting of Rights by the Corporation**
     3.1 From time to time, the Committee may grant Rights to a Participant inaccordance with the Plan. In granting such Rights, the Committee shall have thepower to determine:
 (a) the Eligible Persons who will be a Participant;  (b) subject to Section 3.2, the Rights of each Participant;  (c) the Base Distribution Per Unit and Target Distribution Per Unit;  (d) subject to Section 3.4, the Performance Period; and  (e) such other terms or conditions that the Committeemay, in its sole discretion, determine.
     3.2 In making its determinations pursuant to Section 3.1(a), the Committeemay take into account the Participant’s level of responsibility, rate ofcompensation, individual performance and contribution, and such other criteriaas it deems appropriate in assessing the value of the Participant’s service.Notwithstanding the foregoing, the maximum amount (in cash or Unit Valuepayable in Units) that any one Participant is entitled to receive in anythree-year period may not exceed $2,000,000 (USD).
     3.3 The Committee is not obligated to grant any Rights to any specificindividual, to grant any Rights at all, or to continue granting Rights to anyEligible Person once such grants have commenced. Neither the designation of anindividual as a Participant nor the grant of any Rights to any Participantentitles any Participant to the grant, or any additional grants, as the casemay be, of any Rights under the Plan.
     3.4 Subject to the provisions of Section 7, Rights granted to Participantsin respect of the Initial Performance Period shall vest on the last day of theInitial Performance Period.
     3.5 No certificates shall be issued with respect to any Rights grantedhereunder.
**4.** **Accounts**
     4.1 *Creation and Crediting of Accounts*. The Corporation shall establishand maintain a separate notional account for each Participant (each, an“Account”) to which the percentage, if any, of the Prescribed Portion that theParticipant is allocated by the Committee in respect of any given Fiscal Yearduring an applicable Performance Period, upon the achievement of applicablePerformance Targets (the “Annual Allocation Amounts”) are to be credited. TheCorporation shall credit all Annual Allocation Amounts, if any, to eachParticipant’s Account, by no later than the last day of the first fiscalquarter following the end of the applicable Fiscal Year in respect of which theAnnual Allocation Amounts are determined.

 

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All Annual Allocation Amounts credited to a Participant’s account,collectively, are hereinafter referred to as the “Account Balance.”
     4.2 *Payment of Accounts; Form of Payment*. Unless otherwise agreed inwriting, the Corporation shall make payment to each Participant of his or herAccount Balance following the end of the applicable Performance Period, but inno event later than the last day of the first fiscal quarter following the endof the applicable Performance Period; provided, however, that in the event thata Participant’s Account Balance is to be paid pursuant to the provisions ofSection 7, such payment shall be required to be made no later than thirty (30)business days after the date the Participant ceases to be an Eligible Person.Account Balances will be paid in the form of Units (including Units purchasedby the Corporation in the open market (either on the AMEX or the TSX, as theCommittee deems appropriate, consistent with Applicable Laws)) and/or cash, inthe discretion of the Committee; provided, that if the Account Balances arepaid in the form of Units, the number of Units that will be paid out to theParticipant will be equal to the quotient of (x) the Participant’s AccountBalance divided by (y) the Unit Value on the last day of the applicablePerformance Period (or, if the Account Balance is being paid pursuant toSection 7, the Unit Value on the date the Participant ceases to be an EligiblePerson).
**5.** **Operation of the Plan**
     5.1 As a condition of participating in the Plan, each Participant agreesto comply with all such Applicable Laws and agrees to furnish to theCorporation all information and undertakings as may be required to permitcompliance with such Applicable Laws.
     5.2 In the event that a Participant’s Account Balance is to be paid inUnits, the Corporation shall immediately transfer such Units to suchParticipant through the book-entry system maintained by BNY. Payment (whetherin cash or other property) of the Participant’s Account Balance shall beimmediately transferred by the Corporation to the Participant or as theParticipant otherwise direct.
     5.3 Each Participant agrees to notify in writing the Corporation, as soonas practicable after receipt of notification of such Participant’sparticipation in this Plan, of the name of the Participant’s nominee orBeneficiary, as applicable to which the Account Balance is to be transferred,and any other account details necessary to effect the transfer. TheParticipant shall promptly notify the Corporation in writing of any changes tothe Participant’s nominee and/or Beneficiary.
     5.4 The Corporation may withhold from the payment of each Participant’sAccount Balance all taxes and other assessments, if any, required by ApplicableLaw to be withheld.
**6.** **Fundamental Changes and Adjustments**
     6.1 *If*(a) the Corporation merges into any other entity and more than 50%of its voting power is acquired by a Person or group of Persons acting inconcert; (ii) the Corporation shall sell the whole or substantially the wholeof its assets or business for cash or securities of another corporation orentity (other than to an Affiliate of the Corporation); or (iii) upon any otherform of business combination involving the Corporation wherein more than 50% ofthe voting power of the Corporation is acquired by a Person or Group of Personsacting in concert: *then*(i) the then current Fiscal Year shall be deemed to endon the last day of the month prior to

 

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the effective date of the merger, business combination or sale; (ii) theBase Distribution Per Unit and Actual Distribution Per Unit shall be pro ratedfor the number of months in such shortened Fiscal Year; and (iii) the Committeeshall determine whether there is any Excess, and, if so, the Participants shallvest, immediately prior to the effective date of such merger, businesscombination or sale, in any unvested Account Balances.
     6.2 To the extent applicable (in connection with Section 6.1 orotherwise), the Committee shall give effect to adjustments in the number ofUnits if any, payable hereunder resulting from subdivisions, consolidations orreclassifications of the Units, or other relevant changes, to the Units orcapital structure of the Corporation. The appropriate adjustment in anyparticular circumstance shall be conclusively determined by the Committee inits sole discretion, subject to acceptance by the AMEX and/or TSX, ifapplicable. If any such adjustment would entitle a Participant to a fractionalUnit, the Participant will have the right to acquire only an adjusted number offull Units, rounded downward to the next whole Unit, and no payment or otheradjustment will be made with respect to the disregarded fractional Units.
**7.** **Termination of Employment**
     7.1 If a Participant ceases to be an Eligible Person as a result of (i)the resignation of such Participant or (ii) the termination of such Participantwith Cause by the Corporation or its Subsidiaries, then in each case alloutstanding Rights held by such Participant shall immediately expire.
     7.2 If a Participant ceases to be an Eligible Person as a result of thedeath or disability (as defined in the Corporation’s long-term disability planas in effect from time to time) of such Participant, then such Participantshall immediately vest in his or her Account, and the Corporation shall pay theParticipant’s Account Balances to the Participant (or, in the event terminationwas as a result of death, to the Participant’s Beneficiary) in accordance withSection 4.2.
     7.3 If a Participant ceases to be an Eligible Person as a result of thetermination without Cause (other than due to disability) by the Corporation orits Subsidiaries, then such Participant shall immediately vest in a pro-rataportion of the Participant’s Account, and the Corporation shall pay suchpro-rata amount of the Participant’s Account Balance to the Participant inaccordance with Section 4.2. For purposes of this Section 7.3, the pro-rataportion of the Participant’s Account shall be determined by multiplying theParticipant’s Account Balance by a fraction, the numerator of which shall bethe number of days during the applicable Performance Period that theParticipant was employed by the Corporation (or its Subsidiary) and thedenominator of which shall be the number of days in the applicable PerformancePeriod.
     7.4 The Corporation may enter in agreements with Participants to providerights upon a termination of employment that differ from the provisions setforth in Sections 7.1, 7.2 and/or 7.3.
**8.** **Amendment or Termination of Plan**
     8.1 Subject to Section 8.2, the Committee may amend, suspend ordiscontinue the Plan at any time, subject to the receipt of any requiredregulatory approvals and, where required

 

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by Applicable Law (whether pursuant to Stock Exchange Rules or in order tocause the Account Balances payable under this Plan to be fully deductible bythe Corporation and its Subsidiaries pursuant to Section 162(m) of the Code),subject to approval by the equityholders of the Corporation.
     8.2 No amendment, suspension or discontinuance of the Plan may contravenethe requirements of the TSX, AMEX or any Applicable Laws to which the Plan orthe Corporation is now or may hereafter be subject.
**9.** **Rights of Participants**
     9.1 Nothing contained herein shall be deemed to create a trust of any kindor any fiduciary relationship between the Corporation and any Participant. Tothe extent that any Participant acquires a right to receive payments from theCorporation under the Plan, such right shall be no greater than the right ofany unsecured general creditor of the Company, and the holder of a Right inrespect of an unvested Account shall not have any rights to any claim thereonuntil such holder is vested in his or her Account.
     9.2 The interest of any Participant under the Plan or in any Right shallnot be transferable or alienable by him or her either by pledge, assignment orin any other manner, and after his or her lifetime shall enure to the benefitof and be binding upon the Participant’s Beneficiary.
     9.3 The transfer of a Participant’s employment from (a) the Corporation toan Affiliate or the Corporation, (b) an Affiliate of the Corporation to theCorporation, or (c) an Affiliate of the Corporation to another Affiliate of theCorporation, in any such case shall not be considered a termination ofemployment for the purposes of the Plan, nor shall it be considered atermination of employment if a Participant is placed on such other leave ofabsence which is considered by the Committee as continuing intact theemployment relationship; in such a case, the employment relationship shall becontinued until the later of the date when the leave equals ninety days or thedate when a Participant’s right to re-employment shall no longer be guaranteedby contract, if applicable, except that in the event active employment is notrenewed at the end of the leave of absence, the employment relationship shallbe deemed to have ceased at the beginning of the leave of absence.
**10.** **Miscellaneous**
     10.1 Any payment, notice, statement, certificate or other instrumentrequired or permitted to be given to a Participant or any person claiming orderiving any rights through him or her shall be given by:
 (a) delivering it personally to the Participant orthe person claiming or deriving rights through him or her, asthe case may be; or  (b) mailing it, postage prepaid (provided that thepostal service is then in operation) or delivering it to theaddress, which is maintained for the Participant in therecords of the Corporation.

 

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     10.2 Any notice, statement, certificate or instrument required orpermitted to be given to the Corporation shall be given by mailing it, postageprepaid (provided that the postal service is then in operation) or deliveringit to the Corporation at the following address:
   Volume Services America Holdings, Inc.