Document:

Digital Music Group, Inc. ("DMGI") Management Incentive Bonus Plan

 Exhibit 10.1 
 DIGITAL MUSIC GROUP, INC. (“DMGI”) 
 MANAGEMENT INCENTIVE BONUS PLAN (THE
“PLAN”) 
 FOR THE YEAR ENDING DECEMBER 31, 2007 
  

	A.	Application – This Plan will be applicable for the year ending December 31, 2007, DMGI’s second year as a publicly-traded company and a year focused on continued
top-line growth, achieving profitability and integrating the operations of Digital Rights Agency, which was acquired on September 8, 2006. It is envisioned that this current Plan will be modified as it relates to measurement criteria in each
succeeding year, but the administrative procedures and basic concept of annual incentive bonuses based on both measurable targets and subjective discretion will continue to apply. 

  

	B.	Participants – All Corporate officers, presently consisting of CEO, CSO, and CFO. Participants may be added during the year, if approved by the Compensation Committee, on a pro
rata basis; however, no additions may be made during the final five months of 2007. Only those Participants who are employed on the last day of the fiscal year shall be eligible to receive a bonus, unless there is a contractual obligation otherwise.
Also, Participants who voluntarily resign from DMGI prior to the annual earnings announcement for 2007 shall forfeit all 2007 bonuses. 

  

	C.	Payment – As soon as practical after the release of annual results for 2007 and in no event later than April 15, 2008, calculations of the actual bonus due each
Participant shall be made, approved by the Compensation Committee and paid in cash subject to applicable withholding taxes. 

  

	D.	Administration – The Compensation Committee retains the right to decide all discretionary bonus amounts and to decide all matters of interpretation with respect to this Plan.
Decisions of the Compensation Committee shall be final and binding. The Compensation Committee also retains the right to amend, clarify or redefine, prospectively or retroactively, any and all terms of the plan by a majority vote of its members.

  

	E.	Performance Criteria – Three measurement criteria will be used to calculate bonuses for 2007, as follows: 

  

	 	1.	Revenue as reported on a GAAP-basis. 

  

	 	2.	Net income (loss) as reported on a GAAP-basis, including deductions for accrued bonuses estimated to be payable under this Plan. 

  

	 	3.	Discretionary – Assessment of qualitative factors including, but not limited to: execution of key strategic objectives; maintaining value and liquidity in DMGI’s stock
price; attracting and retaining high-caliber employees in all departments; successfully integrating the operations of DRA and DMGI as demonstrated by the development and implementation of the Unified Data Model system by the third quarter of 2007;
expanding the geographic and various content network of channel partners; maintaining good relationships with channel partners, content owners, artists and other important third parties; penetrating the mobile channel and implementing the DMGI
Network for video content; acquiring quality content; efficiently processing new content, and achieving preliminary performance consistent with the acquisition economics; maintaining an effective investor relations program; maintaining effective
systems and controls over the business and financial reporting in compliance with Sarbanes Oxley Section 404; and maintaining open and candid communications with the Board of Directors. 

  

	F.	Performance Calculations – For the first two criteria above, the following “milestones” will be used to determine the achievement of bonuses:

  

	 	1.	Revenue – If revenue for 2007 is less than $20 million, zero bonus will be earned for this criteria. For every $100,000 in revenue over $20 million, 1.0% of the Target Bonus
potential for this category (see G. below) will be earned, up to a maximum of $30 million in revenue (i.e., 100% of Target Bonus is earned at $30 million in revenue). By way of an example, if 2007 revenue is equal to $25 million, 50% of the Target
Bonus for this criteria will have been earned. 

	 	2.	Net income (loss) – If the Company incurs a net loss for 2007 in excess of $1,000,000, as publicly reported on a GAAP-basis, zero bonus will be earned for this criteria. For
every $100,000 in earnings that is generated for 2007 in excess of a net loss of $1,000,000, a percentage of the Target Bonus potential for this category will be earned according to the following schedule: 

  

	 	a.	2% for every $100,000 increment between a net loss of $1,000,000 and a net loss of $500,000; plus 

  

	 	b.	6% for every $100,000 increment between a net loss of $500,000 and net income of $1,000,000. 

 Thus, 100% of the Target Bonus is earned if the Company’s reported net income for 2007 is $1 million or more. By way of example, if the net income
for 2007 is $500,000, then 70% of the Target Bonus will have been earned for this criteria. 
  

	G.	Target Bonuses and Performance Measurement – For the CEO, CSO and CFO, the Target Bonus is established as 15/50/35, on a percentage basis applied to the three criteria in E.
above, respectively. 

  

	H.	Bonus Calculation – Bonuses are to be calculated using the specific Performance Calculations and Performance Measurement factors set forth in F. and G. above, respectively, and
applied to the annual base salary in effect as of the date this Plan at the rate of 100% for the CEO, CSO and CFO. By way of an example, assume the CEO has an annual base salary of $150,000 and DMGI’s revenue for 2007 is equal to $25 million
and DMGI’s reported net income is equal to $500,000. Further assume that the Compensation Committee believes that a discretionary bonus equal to 20% of the CEO’s annual base salary is appropriate. In this example, the CEO bonus is
therefore $93,750, calculated as follows for each of the three Performance Criteria: 

  

	 	1.	Revenue – 

  

	 	•	 	 $25.0m (actual) – $20.0m (minimum) = $5.0m in revenue over the minimum 

  

	 	•	 	 $5.0m / $100,000 = 50 units of $100,000 each 

  

	 	•	 	 50 units X 1.0% for each unit = 50% of Target Bonus earned 

  

	 	•	 	 50% X 15% target for this criteria for CEO (G. above) = 7.5% 

  

	 	•	 	 7.5% X $150,000 annual base salary = $11,250 bonus earned for this criteria. 

  

	 	2.	Net income – 

  

	 	•	 	 $500,000 in net income (actual) – a net loss of $1 million (minimum) = $1.5m better than minimum 

  

	 	•	 	 $500,000 / $100,000 = 5 units of $100,000 each X 2.0% for each unit + $1m / $100,000 = 10 units of $100,000 each X 6.0% for each unit = 70% of Target Bonus earned

  

	 	•	 	 70% X 50% target for this criteria for CEO (G. above) = 35% 

  

	 	•	 	 35% X $150,000 annual base salary = $52,500 bonus earned for this criteria. 

  

	 	3.	Discretionary – 

  

	 	•	 	 Compensation Committee can award up to 35% of base salary for CEO. 

  

	 	•	 	 Compensation Committee decides on a discretionary award of 20% for the CEO. 

  

	 	•	 	 20% X $150,000 annual base salary = $30,000 bonus earned for this criteria.Supplemental Indenture

 Exhibit 4.1 
 Supplemental Indenture 

 SUPPLEMENTAL INDENTURE 
 Supplemental Indenture (this “Supplemental Indenture”), dated as of May 11, 2007, among 1201/5400 Elm Corporation, a Delaware
corporation (the “Guaranteeing Subsidiary”), a subsidiary of Chaparral Steel Company (or its permitted successor), a Delaware corporation (the “Company”), and Wells Fargo Bank, National Association (or its permitted
successor), as trustee under the Indenture referred to below (the “Trustee”). 
 W I T N E S S E T H 
 WHEREAS, the Company and the other Guarantors party thereto have heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of July 6, 2005 providing for the issuance of 10% Senior Notes due 2013 (the “Notes”); 
 WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall
unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and 
 WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 
 NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 
 1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 
 2. Agreement to Guarantee. 
 (a) In accordance with the terms of Article Ten of the Indenture, the Guaranteeing Subsidiary,
along with all other Guarantors, jointly and severally, and fully and unconditionally, guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: 
 (i) the principal of,
premium, if any, and interest and Liquidated Damages, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest
and Liquidated Damages, if any, on the Notes, if lawful (subject in all cases to any applicable grace period provided herein), and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; 

 (ii) in case of any extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed
or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. The Guaranteeing Subsidiary agrees that this is a guarantee of payment and not a guarantee of collection.

 (b) The Guaranteeing Subsidiary hereby agrees that, to the maximum extent permitted under applicable law, its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance that might otherwise constitute a legal or equitable discharge or defense of a Guarantor. 
 (c) The Guaranteeing Subsidiary, subject to Section 6.06 of the Indenture, hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Note Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the Indenture. 
 (d) The Guaranteeing Subsidiary agrees that if any
Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any custodian, trustee, liquidator or other similar official acting in relation to any of the Company or the Guarantors, any amount paid by any
of them to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. 
 (e) The Guaranteeing Subsidiary agrees that the Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. 
 (f) The Guaranteeing Subsidiary agrees that, as between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article Six of the Indenture, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. 
 (g) The Guaranteeing Subsidiary
shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of Holders under the Note Guarantee. 

 (h) The Guaranteeing Subsidiary confirms, pursuant to Section 10.02 of the Indenture, that it is the
intention of such Guaranteeing Subsidiary that its Note Guarantee not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to its Note Guarantee and, to effectuate the foregoing intention, hereby irrevocably agrees that the obligations of such Guaranteeing Subsidiary will be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guaranteeing Subsidiary that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under Article Ten of the Indenture, result in the obligations of such Guaranteeing Subsidiary under its Note Guarantee not constituting a fraudulent transfer or conveyance. 

3. Execution and Delivery. The Guaranteeing Subsidiary agrees that the Note Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee. 
 4. Guaranteeing Subsidiary May Consolidate, Etc., on Certain
Terms. 
 (a) A Guarantor may not sell or otherwise dispose of all or substantially all of its assets, or consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless: 
 (i) immediately after giving effect to that transaction, no Default or Event of Default exists; and 
 (ii) either:

 (A) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such
consolidation or merger (if other than the Guarantor) is a corporation or limited liability company organized or existing under the laws of the United States, any state thereof or the District of Columbia and assumes all the obligations of that
Guarantor under the Indenture, its Note Guarantee and the Registration Rights Agreement pursuant to a supplemental indenture reasonably satisfactory to the Trustee; or 
 (B) such sale or other disposition or consolidation or merger complies with Section 4.10 of the Indenture. 
 (b) In case of any such consolidation, merger, sale or conveyance governed by Section 4(a) hereof and upon the assumption by the successor Person,
by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the
Indenture to be performed by a Guarantor, such successor Person shall succeed to and be substituted for a Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all
of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which 

 
theretofore shall not have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under the Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of the Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. 

5. Release. 
 (a) Any Guarantor
will be released and relieved of any obligations under its Note Guarantee, (i) in connection with any sale or other disposition of all of the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such
transaction) an Affiliate of the Company, if the sale of all such Capital Stock of that Guarantor complies with Section 4.10 of the Indenture; (ii) if the Company properly designates that Guarantor as an Unrestricted Subsidiary under the
Indenture or (iii) upon the release or discharge of the Guarantee which resulted in the creation of such Note Guarantee, except a discharge or release by or as a result or payment under such Guarantee. Upon delivery by the Company to the
Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that one of the foregoing requirements has been satisfied and the conditions to the release of a Guarantor under this Section 5 have been satisfied, the Trustee
shall execute any documents reasonably required in order to evidence the release of such Guarantor from its obligations under its Note Guarantee. 
 (b) Any Guarantor not released from its obligations under its Note Guarantee shall remain liable for the full amount of principal of and interest and Liquidated Damages, if any, on the Notes and for the other obligations of any Guarantor
under the Indenture as provided in Article Ten of the Indenture. 
 6. No Recourse Against Others. Pursuant to Section 12.07 of
the Indenture, no director, officer, employee, incorporator or stockholder of the Guaranteeing Subsidiary shall have any liability for any obligations of such Guaranteeing Subsidiary under the Notes, the Indenture, the Note Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their creation. 
 7. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE
OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE. 
 8. Counterparts. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 
 9.
Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. 
 10.
Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made
solely by the Guaranteeing Subsidiary and the Company. 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and
attested, all as of the date first above written. 
  

			
	1201/5400 ELM CORPORATION
		
	By:	 	 /s/ Robert E. Crawford, Jr.

	Name:	 	Robert E. Crawford, Jr.
	Title:	 	Vice President
	
	CHAPARRAL STEEL COMPANY
		
	By:	 	 /s/ J. Celtyn Hughes

	Name:	 	J. Celtyn Hughes
	Title:	 	Vice President
	
	 WELLS FARGO BANK,
 NATIONAL ASSOCIATION,
as Trustee

		
	By:	 	 /s/ Patrick Giordano

	Name:	 	Patrick Giordano
	Title:	 	Vice President

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