exv10w8



 





Exhibit
10.8



DEFERRED SHARE AGREEMENT




     DEFERRED SHARE AGREEMENT (this “Agreement”), dated as of October 24, 2005, is made
between Doane Pet Care Enterprises, Inc. (the “Company”) and the individual whose name
appears on the signature page hereof (the “Employee”) pursuant to the terms of the
Company’s Transaction Bonus Plan (the “Plan”). Capitalized terms used in this Agreement
and not otherwise defined herein shall have the meaning given such terms in the Plan.



     WHEREAS, in connection with the Company’s entering into the Merger Agreement, the Company
established the Plan to provide Participants with a bonus opportunity for the services performed
for Doane prior to the closing of the Transaction; and



     WHEREAS, the Board determined that the Employee shall receive a portion of his Bonus under the
Plan in the form of Deferred Shares, and the Plan requires that the Company and the Employee enter
into a Deferred Share Agreement setting forth the terms and conditions of such Deferred Shares;



     NOW, THEREFORE, in consideration of the premises and subject to the terms and conditions set
forth herein and in the Plan, the parties hereto agree as follows:



          1. Grant of Deferred Shares. Effective as of the date hereof, the Company hereby
evidences and confirms its award to the Employee, on the terms and conditions of this Agreement and
the Plan, of the number of Deferred Shares set forth on the signature page hereof, which represent
the Company’s contractual obligation to deliver shares of Common Stock to the Employee upon the
terms and conditions set forth herein and in the Plan.




          2. Delivery of Shares Underlying Deferred Shares. Any shares of Common Stock
delivered or to be delivered in respect of Deferred Shares under this Section 2 are hereinafter
referred to as “Shares.”




     (a) Unless the Employee shall elect to defer such distribution (a “Deferral Election”)
by written notice to the Company in accordance with the procedures and conditions provided under
Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively,
“Section 409A”), upon the occurrence of a Trigger Event, the Company shall issue to the
Employee, without payment of any consideration by the Employee, one share of Common Stock in
settlement of each Deferred Share that he then holds.



     (b) If a Trigger Event shall not have occurred prior to the dates specified below, and unless
the Employee shall make a Deferral Election, the Company shall issue to the Employee on such dates,
without payment of any consideration by the Employee, one share of Common Stock in settlement of
each Deferred Share to be settled on such dates, as follows: (i) on October 31, 2009, one-third of
the total number of Deferred Shares that he holds on such date; (ii) on October 31, 2010, one-half
of the Deferred Shares that he holds on such date (other than any such Deferred Shares that he may
have elected to defer receiving on October 31, 2009, as provided herein); and (iii) on October 31,
2011, the balance of any Deferred Shares that he holds on that date (other than any such Deferred
Shares that he may have elected to defer receiving on October 31, 2009, or October 31, 2010, as
provided herein). In like manner, any Deferred Shares that are



 









 




the subject of a Deferral Election shall be settled by the issuance of a like number of Shares
on the expiration of the applicable deferral period, unless the same are subject to a subsequent
Deferral Election.




     As a condition to the delivery of any Shares in respect of Deferred Shares, the holder of such
Deferred Shares shall become a party to (and such Shares shall become subject to) the Stockholders
Agreement being entered into between the Company and a majority of its stockholders as of the date
of this Agreement, as the same may be modified or amended from time to time. In the case of any
Shares delivered in connection with a Change in Control, such Shares shall be deemed to be subject
to the Stockholders Agreement effective as of immediately prior to the Change in Control.



     For the purposes of this Agreement, the following definitions shall apply:



     “Trigger Event” means the first to occur of the following: (1) a Change in Control;
(2) the date of a termination of the Employee’s employment with the Company or an affiliate of the
Company, if such termination occurs at any time between January 1 and May 31 in a particular year;
or (3) the first March 15th following the date of a termination of the Employee’s
employment with the Company or an affiliate of the Company, if such termination occurs at any time
between June 1 and December 31 in a particular year. For purposes of this definition, a
termination of the Employee’s employment with the Company shall constitute a Trigger Event only if
such termination constitutes a “separation of service” under Section 409A.



     “Change in Control” means a transaction or series of related transactions occurring
after the closing of the Transaction that:



     (i) involves the acquisition of Common Stock or Class B Common Stock of the Company
representing more than 50% of the total fair market value of the Common Stock and Class B Common
Stock of the Company or any successor by any one person or group (other than Ontario Teachers’
Pension Plan Board, an entity without share capital organized under the laws of Ontario, Canada
(“OTPP”), or an affiliate of OTPP or the Company;



     (ii) involves the acquisition of Common Stock or Class B Common Stock of the Company
representing 35% or more of the total voting power of the Common Stock and Class B Common Stock of
the Company or any successor by any one person or group (other than OTPP or an affiliate of the
Company or OTPP);



     (iii) involves a majority of the members of the Company’s board of directors being replaced
during any 12-month period by directors whose appointment or election is not endorsed by a majority
of the members of the Company’s board of directors before the date of the appointment or election;



     (iv) involves the acquisition by any one person or group (other than OTPP or an affiliate of
the Company or OTPP) of assets of the Company that have a total gross fair market value equal to or
more than 50% of the total gross fair market value of all of the assets of the Company immediately
before such acquisition.



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For purposes of this definition, a Public Offering shall not be a Change in Control unless, in
connection with such Public Offering, one or more of criteria described in items (i) through (iii)
above is satisfied. The term “Change in Control” shall be interpreted in a manner consistent with
the Change in Control Event provisions of Section 409A.




     “Public Offering” means a public offering pursuant to an effective registration
statement filed with the Securities and Exchange Commission (the “Commission”) that covers
shares of Common Stock of the Company or any successor that, after the closing of such public
offering, will be traded on the New York Stock Exchange, the American Stock Exchange or the
National Association of Securities Dealers Automated Quotation System or similar non-U.S. exchange
or quotation system.



          3. Representations and Warranties.




     (a) Investment Intention. The Employee represents and warrants that the Deferred
Shares have been, and any Shares will be, acquired by the Employee solely for the Employee’s own
account for investment and not with a view to or for sale in connection with any distribution
thereof. The Employee further understands, acknowledges and agrees that none of the Deferred
Shares may be sold, transferred, pledged, assigned, encumbered or otherwise alienated or
hypothecated except to the extent expressly permitted hereby and that none of the Shares may be
sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated unless the
provisions of any stockholders agreement to which they are subject shall have been complied with or
have expired.



     (b) Securities Law Matters. The Employee acknowledges that (i) the Deferred
Shares and the Shares have not been registered under the Securities Act of 1933, as amended (the
“Act”), in reliance on an exemption provided under the Act or qualified under any state or
non-U.S. securities or “blue sky” laws, (ii) it is not anticipated that there will be any
current public market for the Shares, (iii) the Deferred Shares and the Shares must be held
indefinitely and the Employee must continue to bear the economic risk of the investment in the
Deferred Shares and the Shares unless the Shares are subsequently registered under the Act and such
state laws or an exemption from registration is available, (iv) Rule 144 promulgated under
the Act (“Rule 144”) is not presently available with respect to sales of the Shares, and
the Company has made no covenant to make Rule 144 available, (v) when and if the Shares may
be disposed of without registration in reliance upon Rule 144, such disposition can be made only in
accordance with the terms and conditions of such Rule, (vi) the Company is not required to
file reports with the Commission or make public information concerning the Company available unless
required to do so by law or by the terms of its financing agreements and (vii) if the
exemption afforded by Rule 144 is not available, sales of the Shares may be difficult to effect
because of the absence of public information concerning the Company.



     (c) Ability to Bear Risk. The Employee represents and warrants that (i) the
financial situation of the Employee is such that the Employee can afford to bear the economic risk
of holding the Deferred Shares and Shares for an indefinite period and (ii) the Employee
can afford to suffer the complete loss of the Employee’s investment in the Deferred Shares and
Shares.



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          4. Miscellaneous.




     (a) Compliance with Section 409A. Notwithstanding other provisions of this Agreement,
the distributions of Shares underlying the Deferred Shares shall be limited to those times
permitted under Section 409A. Any such distributions under this Agreement that are not permitted
under Section 409A shall be automatically modified and limited to the extent necessary to conform
with Section 409A. The Company shall have no authority to accelerate distributions in excess of
the authority permitted under Section 409A. Any provision of this Agreement that is not in
compliance with the terms of Section 409A shall be automatically modified and amended to the extent
necessary to conform with Section 409A, except that no such modification or amendment that would
reduce any benefit payable to the Employee under this Agreement shall be made without the
Employee’s consent.



     (b) Tax Withholding. Whenever Shares or other property are to be distributed in
respect of any Deferred Shares awarded hereunder, the Company shall have the power to withhold, or
require the Employee to remit to the Company, an amount sufficient to satisfy the statutory minimum
federal, state, and local withholding tax requirements relating to such issuance, and the Company
may defer issuance of such Shares or other property until such requirements are satisfied;
provided, however, that the Company shall permit the Employee to elect, subject to such reasonable
conditions as the Board (or a committee thereof) shall impose, to satisfy his minimum withholding
obligation hereunder with Shares or any other property issuable hereunder.



     (c) Nonassignability. The Deferred Shares granted hereby are not assignable or
transferable, in whole or in part, and may not, directly or indirectly, be offered, transferred,
sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including
without limitation by gift, operation of law or otherwise) other than by will or by the laws of
descent and distribution upon the Employee’s death.



     (d) Dividend Equivalents. Until settlement of the Deferred Shares in accordance with
Section 2, any cash dividends paid with respect to Shares subject to the Deferred Shares granted
hereunder shall be credited to the Employee and shall be deemed invested in Shares on the record
date established for the dividend and, accordingly, a number of additional Deferred Shares shall be
credited to the Employee equal to the number obtained by dividing (i) the value of such dividend
payments by (ii) the fair market value of a Share on the record date as determined in accordance
with any stockholders agreement then in effect between the Company and the majority of its
stockholders, or otherwise by the Board in good faith. Any fractional Deferred Shares to be
credited to the Employee hereunder shall be rounded up to the nearest whole number.



     (e) No Voting or Other Rights as a Stockholder. Except for the rights awarded
pursuant to Section 4(d), neither the Employee nor any person or persons to whom the Employee’s
rights under this Agreement shall have passed by will or by the laws of descent and distribution,
as the case may be, shall have any voting, dividend or other rights or privileges as a stockholder
of the Company with respect to any Shares corresponding to the Deferred Shares granted hereby
unless and until such Shares are issued in respect thereof.



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     (f) Capital Adjustments. The number and kind of shares to which the Deferred Shares
may relate and the number and kinds of securities deliverable with respect to the Deferred Shares
shall be proportionally adjusted to reflect, as deemed equitable and appropriate by the Board (or a
committee thereof), any stock dividend, stock split, share combination, recapitalization,
reorganization, exchange of shares, spin-off of assets or other extraordinary dividend, merger,
consolidation, issuance of warrants or other stock rights (but only if such issuance of warrants or
other stock rights disproportionately affects the Employee’s Deferred Shares relative to holders of
Common Stock), or any other similar transaction or event affecting the Common Stock. For the
avoidance of doubt, the Deferred Shares shall remain outstanding following the consummation of the
Transaction and each Deferred Share shall relate to one share of Common Stock following the
consummation of the Merger.



     (g) No Right to Continued Employment. Nothing in the Plan or this Agreement shall
interfere with or limit in any way the right of the Company or any subsidiary to terminate the
Employee’s employment at any time, or confer upon the Employee any right to continue in the employ
of the Company or any subsidiary.



     (h) Interpretation. The Board (or a committee thereof) shall have full power and
discretion to construe and interpret the terms of this Agreement and the Deferred Shares awarded
hereunder, in good faith. Any determination or interpretation by the Board (or a committee
thereof) under or pursuant to this Agreement shall be final and binding and conclusive on all
persons affected hereby.



     (i) Requirements of Law. The issuance of shares of common stock pursuant to the
Deferred Shares shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may be required.



     (j) Notices. All notices, requests, demands, letters, waivers and other
communications required or permitted to be given under this Agreement shall be in writing and shall
be deemed to have been duly given if (i) delivered personally, (ii) mailed, certified or registered
mail with postage prepaid, (iii) sent by next-day or overnight mail or delivery, or (iv) sent by
fax, as follows:



	 	 	 
	(A)

	 	If to the Company, to:
	 
	 	 
	 

	 	Doane Pet Care Enterprises, Inc.
	 

	 	210 Westwood Place South
	 

	 	Suite 400
	 

	 	Brentwood, Tennessee 37027
	 

	 	Attn: President
	 

	 	Fax Number: (615) 309-1191
	 

	 	Attn: General Counsel
	 

	 	Fax Number: (615) 309-1176






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	 	with copies to:
	 
	 	 
	 

	 	Ontario Teachers’ Pension Plan Board
	 

	 	5650 Yonge Street
	 

	 	Toronto, Ontario M2M 4H5 Canada
	 

	 	Attn: General Counsel
	 

	 	Fax Number: (416) 730-3771
	 

	 	Attn: Dean Metcalf
	 

	 	Fax Number: (416) 730-5083
	 
	 	 
	 

	 	Porter, Wright, Morris & Arthur llp
	 

	 	41 South High Street
	 

	 	Columbus, Ohio 43215
	 

	 	Attn: Jeffrey T. Hayes, Esq.
	 

	 	Fax Number: (614) 227-2100
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	Debevoise & Plimpton LLP
	 

	 	919 Third Avenue
	 

	 	New York, New York 10022
	 

	 	Attn: Margaret A. Davenport, Esq.
	 

	 	Fax Number: (212) 909-6836







	 	(B)	 	If to the Employee, to the Employee’s last known home address;
or
	 
	 	(C)	 	to such other person or address as any party shall specify by
notice in writing to the other party.





     All such notices, requests, demands, letters, waivers and other communications shall be deemed
to have been received (w) if by personal delivery, on the day after such delivery,
(x) if by certified or registered mail, on the fifth business day after the mailing
thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, or
(z) if by fax, on the day delivered, provided that such delivery is confirmed.



     (k) Binding Effect; Benefits. This Agreement shall be binding upon and inure to the
benefit of the parties to this Agreement and their respective successors and assigns. Nothing in
this Agreement, express or implied, is intended or shall be construed to give any person other than
the parties to this Agreement or their respective successors or assigns any legal or equitable
right, remedy or claim under or in respect of any agreement or any provision contained herein.



     (l) Waiver. Either party hereto may by written notice to the other (i) extend the
time for the performance of any of the obligations or other actions of the other under this
Agreement, (ii) waive compliance with any of the conditions or covenants of the other contained in
this Agreement and (iii) waive or modify performance of any of the obligations of the other under
this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of either party, shall



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be deemed to constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein. The waiver by either party
hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or
shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or
times hereunder.




     (m) Applicable Law. This Agreement shall be governed by and construed in accordance
with the law of the State of Delaware, regardless of the law that might be applied under principles
of conflict of laws.



     (n) Section and Other Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or interpretation of
this Agreement.



     (o) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be deemed to be one and
the same instrument.



     (p) FOR FLORIDA PURCHASERS. PURCHASERS OF SECURITIES THAT ARE EXEMPTED FROM REGISTRATION BY
SECTION 517.061(11) OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT HAVE THE RIGHT TO VOID
THEIR PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION UNLESS SALES ARE MADE
TO FEWER THAN FIVE (5) PURCHASERS IN FLORIDA (NOT COUNTING INSTITUTIONAL INVESTORS DESCRIBED IN
SECTION 517.061(7)).



     (q) Accredited Investor Status. The Employee represents and warrants to the Company
that he is an “accredited investor” as such term is defined in Rule 501(a) promulgated under the
Act.



     IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as of the date
first above written.



	 	 	 	 	 
	 	 	DOANE PET CARE ENTERPRISES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Douglas J. Cahill, President






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	 	The Employee:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	Address of the Employee:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 





Number of Deferred Shares:                     





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