Document:

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                                                                    Exhibit 10.7

TERMS OF METAL MANAGEMENT, INC. FISCAL 2007 RONA INCENTIVE COMPENSATION PLAN
(the "Plan") APPLICABLE TO EXECUTIVE OFFICERS

PURPOSE

The objective of the Plan is to maintain flexibility in the determination of
individual awards while providing guidelines for senior managers that are
financially sound and practical.

As in prior fiscal years, the Plan will measure performance based on return on
net assets ("RONA"), with several important modifications that are described
herein.

ADMINISTRATION

The Plan is administered by the Compensation Committee of the Board of Directors
(the "Compensation Committee"). The Compensation Committee consists of members
of the Board who are not employees and who are not eligible for participation in
this Plan. Awards under the Plan will be made, at the discretion of the
Compensation Committee, in the form of a cash bonus, stock options and
restricted stock, or any combination thereof.

The Compensation Committee may establish such rules and regulations, as it deems
necessary for the Plan and its interpretation. The Compensation Committee may
delegate some or all of its administrative powers and responsibilities under the
Plan to the Chief Executive Officer for employees other than any "covered
employee" (as defined in Section 162(m) of the Internal Revenue Code of 1986).

ELIGIBILITY

Employees must be actively employed by the Company at the end of the fiscal
year, March 31, 2007 to be eligible for participation in the Plan.

                 BONUSES AS % OF BASE SALARY PAID IN FISCAL YEAR

<TABLE>
<CAPTION>
            JOB CATEGORY               THRESHOLD   TARGET   MAXIMUM
------------------------------------   ---------   ------   -------
<S>                                    <C>         <C>      <C>
SENIOR MANAGEMENT
   Chief Executive Officer                 50%       100%     200%
   CFO                                     25%        50%     100%
   Other Senior Corporate Executives       25%        50%      75%
</TABLE>

In the event an employee changes Job Category Positions during the fiscal year,
their bonus distribution will be based upon a pro-rata amount earned at each
position. The determination of the exact date of change will be based on the
effective date of the position change in payroll, and require formal approval by
the CEO.

<PAGE>

CONDITIONS UNDERLYING THE RONA PROGRAM FOR FISCAL 2007

The Threshold level indicates the minimum acceptable performance level that
will generate a bonus award that is equal to 100% of the threshold payouts. The
maximum level indicates the highest level of performance that will result in
increased awards. Between threshold performance and maximum performance awards
are linear. Additional performance above the maximum level will not generate
awards above the maximum unless otherwise approved by the Compensation
Committee.

COMPENSATION COMMITTEE DISCRETION

When the Compensation Committee determines RONA performance, they may exclude
any or all "extraordinary items" as determined under U.S. generally accepted
accounting principles and any other unusual or non-recurring items, including,
without limitation, the charges or costs associated with restructurings of the
Company, discontinued operations, and the cumulative effects of accounting
changes. The Compensation Committee also may adjust RONA performance and
Adjusted Enterprise Value (as defined below) for the year as it deems equitable
in recognition of unusual or non-recurring events affecting the Company, region
or business unit (including, without limitation, mergers, acquisitions and
divestitures); changes in applicable tax laws or accounting principles; or such
other factors as the Compensation Committee may determine (including, without
limitation, any adjustments that would result in the Company paying
non-deductible compensation to a covered employee).

The Compensation Committee, in its discretion and for reasons sufficient to the
Compensation Committee, may reduce the bonus award payable to any participant,
or any number of participants, upon his or her achievement of Threshold, Target
or Maximum level; provided, however, the Compensation Committee may not reduce
the bonus award payable to a participant below that which would be payable at
the Threshold level, unless the Compensation Committee determines, in its
discretion, that the participant has (i) failed to satisfactorily perform his or
her duties and responsibilities, (ii) violated in some material respect written
Company policies or procedures, (iii) engaged in fraud or conduct resulting or
intending to result directly or indirectly in gain or personal enrichment for
the participant at the Company's expense, or (iv) otherwise acted, or failed to
act, in a manner that warrants forfeiting all or a part of his or her bonus.

PERFORMANCE MEASURE

The CEO, the CFO and other senior corporate executives will be evaluated based
on 100% of the Company's performance.

<PAGE>

CALCULATION OF RONA RETURNS

Minimum, target and maximum RONA returns have been established by the
Compensation Committee at 16%, 20% and 24%, respectively, for Fiscal 2007.
Required returns will be determined by applying the applicable percentage of
16%, 20% or 24% to the Company's enterprise value at the beginning of Fiscal
2007 as determined by the Compensation Committee, plus or minus Changes in Net
Assets during Fiscal 2007. For purposes of the calculation, the term "Change in
Net Assets" refers to the change measured in the balances of cash, accounts
receivable, inventories, prepaid expenses, other current assets, net property,
plant and equipment and long term assets (including investments in joint
ventures, goodwill and other intangibles) minus the sum of accounts payable,
accrued expenses, and other current liabilities.

AWARD DISTRIBUTIONS

At the end of the fiscal year, the program will be administered and awards
determined by the CEO subject to the approvals of the Compensation Committee. It
is contemplated that payments under the RONA Plan will be distributed in the
last payroll of May 2007.

On or about May 15, 2007, the Compensation Committee will review and finalize
the RONA Schedule for the previous Fiscal Year. Any recommendations, changes,
alterations to Job Categories or Performance Measures to that previous Fiscal
Year's RONA Schedule need to be communicated to human resources prior to March
31, 2007. Any requests made after March 31, 2007 will not be accepted or
processed for that Fiscal Year RONA Schedule.exv10w1

 

Exhibit 10.1

PANERA BREAD COMPANY

[Form of]

NON-QUALIFIED STOCK OPTION AGREEMENT

(Granted Under 2006 Stock Incentive Plan)

     AGREEMENT
(the “Agreement”) made as of the ___ day of                     ,                      (the “Grant Date”), between
Panera Bread Company (the “Company”), a Delaware corporation having a principal place of business
in Richmond Heights, Missouri, and                                          (the “Participant”).

     WHEREAS, the Company desires to grant to the Participant an Option to purchase shares of its
Class A Common Stock, $.0001 par value per share (the “Shares”), under and for the purposes set
forth in the Company’s 2006 Stock Incentive Plan (the “Plan”);

     WHEREAS, the Company and the Participant understand and agree that any terms used and not
defined herein have the same meanings as in the Plan; and

     WHEREAS, the Company and the Participant each intend that the option granted herein shall be a
Non-Qualified Option.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:

     1. GRANT OF OPTION.

     The Company hereby grants to the Participant the right and option (the “Option”) to purchase
all or any part of an aggregate of                      Shares, subject to adjustment, as provided in Section
8 of the Plan, in the event of a stock dividend, stock split, reverse stock split or other events
affecting the holders of Shares, and on the terms and conditions and subject to all the limitations
set forth herein and in the Plan, which is incorporated herein by reference and a copy of which has
been furnished to the Participant with this Agreement.

     It is intended that the Option evidenced by this Agreement shall not be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the
term “Participant”, as used in this Option, shall be deemed to include any person who acquires the
right to exercise this Option validly under its terms.

     2. PURCHASE PRICE.

     The purchase price of the Shares covered by the Option shall be $  per Share, subject to
adjustment, as provided in Section 8 of the Plan, in the event of a stock dividend, stock split,
reverse stock split or other events affecting the holders of Shares. Payment shall be made in
accordance with Section 5(h) of the Plan.

Page 1 of 8

 

     3. EXERCISABILITY OF OPTION.

     Subject to the terms and conditions set forth in this Agreement and the Plan, the Option
granted hereby shall [describe vesting terms (e.g., “become immediately vested as of the date of
the grant”)].

     The foregoing rights are (i) cumulative so that to the extent the Option is not exercised in
any period to the maximum extent permissible, it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date (as defined below) or the termination of this Option under Section 4 hereof or the Plan and
(ii) are subject to the other terms and conditions of this Agreement and the Plan.

     4. TERM OF OPTION.

     The Option shall expire at 5:00 p.m., Central Time, on the date six (6) years from the Grant
Date (the “Final Exercise Date”), but shall be subject to earlier termination as provided herein or
in the Plan; provided, however that termination or expiration of the Plan shall not affect the
Option or the rights of the Participant under this Agreement.

     If the Participant ceases to be an employee, officer, director, consultant or advisor of the
Company or of an affiliate of the Company for any reason other than the death or Disability (as
defined below) of the Participant or termination of the Participant for Cause (as defined below),
the Option may be exercised, if it has not previously terminated, within three (3) months after the
date the Participant ceases to be an employee, officer, director, consultant or advisor of the
Company or an affiliate of the Company, or within the originally prescribed term of the Option,
whichever is earlier, but in no event may the Option be exercised after the Final Exercise Date.
In such event, the Option shall be exercisable only to the extent that the Option has become
exercisable and is in effect at the date of such cessation of employment, directorship or
consultancy or status as an officer or advisor of the Company or an affiliate of the Company. For
purposes of this Agreement: “Disability” shall mean permanent and total disability, as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, and “Cause” shall include (and
is not limited to) dishonesty with respect to the Company or any affiliate of the Company,
insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of
confidential information, or conduct substantially prejudicial to the business of the Company or
any affiliate of the Company or any other circumstance which would constitute or be deemed “cause”
pursuant to any other agreement entered into between the Participant and the Company or an
affiliate of the Company, as determined by the Board of Directors or any officer designated by it,
in its, his or her sole discretion. The determination of the Board of Directors or such designated
officer as to the existence of Cause will be conclusive on the Participant and the Company.

     Notwithstanding the foregoing, in the event of the Participant’s Disability or death within
three (3) months after the termination of employment, directorship or consultancy or status as an
officer or advisor, the Participant or the Participant’s survivors may exercise the Option within
one (1) year after the date of the Participant’s termination of employment, directorship or

Page 2 of 8

 

consultancy or status as an officer or advisor, but in no event after the date of Final
Exercise Date.

     In the event the Participant’s employment, directorship or consultancy or status as an officer
or advisor is terminated by the Company or an affiliate of the Company for Cause, the Participant’s
right to exercise any unexercised portion of this Option shall cease as of such termination, and
this Option shall thereupon terminate. Notwithstanding anything herein to the contrary, if
subsequent to the Participant’s termination, but prior to the exercise of the Option, the Board of
Directors of the Company determines that, either prior or subsequent to the Participant’s
termination, the Participant engaged in conduct which would constitute Cause, then the Participant
shall immediately cease to have any right to exercise the Option and this Option shall thereupon
terminate.

     In the event of the Disability of the Participant, the Option shall be exercisable within one
(1) year after the Participant’s termination of service or, if earlier, within the term originally
prescribed by the Option. In such event, the Option shall be exercisable:

	 	(a)	 	to the extent exercisable but not exercised as of the date of Disability; and
	 
	 	(b)	 	in the event rights to exercise the Option accrue periodically, to the extent
of a pro rata portion of any additional rights to exercise the Option as would have
accrued had the Participant not become Disabled prior to the end of the accrual period
which next ends following the date of Disability. The proration shall be based upon
the number of days during the accrual period prior to the date of Disability.

     In the event of the death of the Participant while an employee, officer, director, consultant
or advisor of the Company or of an affiliate of the Company, the Option shall be exercisable by the
Participant’s survivors within one (1) year after the date of death of the Participant or, if
earlier, within the originally prescribed term of the Option. In such event, the Option shall be
exercisable:

	 	(x)	 	to the extent exercisable but not exercised as of the date of death; and
	 
	 	(y)	 	in the event rights to exercise the Option accrue periodically, to the extent
of a pro rata portion of any additional rights to exercise the Option as would have
accrued had the Participant not died prior to the end of the accrual period which next
ends following the date of death. The proration shall be based upon the number of days
during the accrual period prior to the Participant’s death.

     5. METHOD OF EXERCISING OPTION.

     Subject to the terms and conditions of this Agreement, the Option (or any part or installment)
may be exercised by written notice signed by the Participant and delivered to the Company at its
principal executive office, in substantially the form of Exhibit A attached hereto or other
form approved by the Company, accompanied by payment in full in the manner provided in Section 5(h)
of the Plan. Such notice shall state the number of Shares with respect to

Page 3 of 8

 

which the Option is being exercised and shall be signed by the person exercising the Option.
The Company shall deliver a certificate or certificates representing such Shares, or issue the
Shares in electronic form or book-entry credit, as applicable, as soon as practicable after the
notice shall be received; provided, however, that the Company may delay issuance of such Shares
until completion of any action or obtaining of any consent, which the Company deems necessary under
any applicable law (including, without limitation, state securities or “blue sky” laws). The
Shares as to which the Option shall have been so exercised shall be registered in the name of the
person or persons so exercising the Option (or, if the Option shall be exercised by the Participant
and if the Participant shall so request in the notice exercising the Option, shall be registered in
the name of the Participant and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or persons exercising the
Option. In the event the Option shall be exercised, pursuant to Section 4 hereof, by any person or
persons other than the Participant, such notice shall be accompanied by appropriate proof of the
right of such person or persons to exercise the Option. All Shares that shall be purchased upon
the exercise of the Option as provided herein shall be fully paid and nonassessable.

     6. PARTIAL EXERCISE.

     The Participant may purchase less than the number of Shares covered by this Option at any time
and from time to time, provided that no partial exercise of this Option may be for any fractional
share.

     7. NON-TRANSFERABILITY.

     This Option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order and, during the lifetime of the
Participant, this Option shall be exercisable only by the Participant. References to a
Participant, to the extent relevant in the context, shall include references to authorized
transferees.

     8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

     The Participant shall have no rights as a stockholder with respect to Shares subject to this
Agreement until registration of the Shares in the Company’s share register in the name of the
Participant. Except as is expressly provided in the Plan with respect to certain changes in the
capitalization of the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date of such registration.

     9. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.

     The Plan contains provisions covering the treatment of Options in a number of contingencies
such as stock splits and mergers. Provisions in the Plan for adjustment with respect to stock
subject to Options and the related provisions with respect to successors to the business of the
Company are hereby made applicable hereunder and are incorporated herein by reference.

Page 4 of 8

 

     10. TAXES.

     The Participant acknowledges that upon exercise of the Option the Participant will be deemed
to have taxable income measured by the difference between the then fair market value of the Shares
received upon exercise and the price paid for such Shares pursuant to this Agreement. The
Participant acknowledges that any income or other taxes due from him or her with respect to this
Option or the Shares issuable pursuant to this Option shall be the Participant’s responsibility.

     The Participant agrees that the Company shall be entitled to withhold from the Participant’s
remuneration, if any, the minimum statutory amount of federal, state and local withholding taxes
attributable to such amount that is considered compensation includable in the Participant’s gross
income. At the Company’s discretion, the amount required to be withheld may be withheld in cash
from such remuneration, or in kind from the Shares otherwise deliverable to the Participant on
exercise of the Option. The Participant further agrees that, if the Company does not withhold an
amount from the Participant’s remuneration sufficient to satisfy the Company’s income tax
withholding obligation, the Participant will reimburse the Company on demand, in cash, for the
amount under-withheld.

     11. RESTRICTIONS ON TRANSFER OF SHARES.

     11.1 If, in connection with a registration statement filed by the Company pursuant to the
Securities Act, the Company or its underwriter so requests, the Participant will agree not to sell
any Shares for a period not to exceed 180 days following the effectiveness of such registration.

     11.2 The Participant acknowledges and agrees that neither the Company, its stockholders nor
its directors and officers, has any duty or obligation to disclose to the Participant any material
information regarding the business of the Company or affecting the value of the Shares before, at
the time of, or following a termination of the employment, directorship or consultancy or status as
officer or director of the Participant by the Company, including, without limitation, any
information concerning plans for the Company to make a public offering of its securities or to be
acquired by or merged with or into another firm or entity.

     12. NO OBLIGATION TO MAINTAIN RELATIONSHIP.

     The Company is not by this Agreement or the Plan granting the Participant any right to
continued employment or any other relationship with the Company. The Company expressly reserves
the right at any time to dismiss or otherwise terminate its relationship with the Participant free
from any liability or claim under this Agreement or the Plan.

     13. NOTICES.

     Any notices required or permitted by the terms of this Agreement or the Plan shall be given by
recognized courier service, facsimile, registered or certified mail, return receipt requested,
addressed as follows:

Page 5 of 8

 

     If to the Company:

	 	 	 
	 

	 	Panera Bread Company
	 

	 	6710 Clayton Road
	 

	 	Richmond Heights, MO 63117
	 

	 	ATTN: Director, Compensation & Benefits

     If to the Participant:

	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

or to such other address or addresses of which notice in the same manner has previously been given.
Any such notice shall be deemed to have been given upon the earlier of receipt, one (1) business
day following delivery to a recognized courier service or three (3) business days following mailing
by registered or certified mail.

     14. GOVERNING LAW.

     This Agreement shall be governed by and interpreted in accordance with the laws of the State
of Delaware, excluding choice-of-law principles of the law of such state that would require the
application of the laws of a jurisdiction other than such state.

     15. BENEFIT OF AGREEMENT.

     Subject to the provisions of the Plan and the other provisions hereof, this Agreement shall be
for the benefit of and shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties hereto.

     16. ENTIRE AGREEMENT.

     This Agreement, together with the Plan, embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict, the express terms and provisions of this
Agreement, provided, however, in any event, this Agreement shall be subject to and governed by the
Plan.

     17. MODIFICATIONS AND AMENDMENTS.

     The terms and provisions of this Agreement may be modified or amended as provided in the Plan.

     18. WAIVERS AND CONSENTS.

Page 6 of 8

 

     Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to
be or shall constitute a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not constitute a continuing
waiver or consent.

19. ACKNOWLEDGMENT. 

     By executing this Agreement, the Participant acknowledges receipt of a copy of the Plan, and
acknowledges that all decisions, determinations and interpretations of the Administrator in respect
of the Plan, this Agreement and the Option shall be final and conclusive.

20. SECURITIES LAWS

     Notwithstanding anything to the contrary herein, no part of this Option shall be exercisable
at any time that such exercise would violate any federal or state securities laws.

[Signature Page Follows]

Page 7 of 8

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Participant has hereunto set his or her hand, all as of the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	PANERA BREAD COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	PARTICIPANT:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	[                    ]	 	 	 	 

Page 8 of 8

 

Exhibit
A

	 	 	 	 	 
	THOMAS C. COCHRAN III
	 	 	 	 
	ADAMS, HARKNESS & HILL, INC.

	 	 	 	Panera Bread Company
	60 STATE STREET, 12TH FLOOR

	 	 	 	6710 Clayton Rd.
	BOSTON, MA 02109

	 	 	 	Richmond Heights, MO 63117
	(800) 225-6201

	 	 	 	(314) 633-7100
	(617) 371-3741
	 	 	 	 
	FAX (617) 371-3796
	 	 	 	 

NOTICE OF STOCK OPTION EXERCISE – EXHIBIT A

	1.	 	I elect to purchase:

	 	 	 	 	 	 	 
	 

	 	 	 	Number of Shares
	 	Exercise Price
	Grant Number

	 	Grant Date
	 	To Exercise
	 	Per Share
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 

	2.	 	I elect to use the “cashless exercise” program of Adams, Harkness & Hill, Inc.
(AH&H) to purchase the Shares as follows:

	 	 	 	 	 
	                    	 	a. Number of Shares to be sold by AH&H
	 	 	I hereby authorize and direct AH&H to sell a sufficient number of shares in
order to pay for the stock option price and required taxes.
	 
	 	 	 	 
	 	 	Shares which are not required to be sold pursuant to the above paragraph will
be credited to my account at AH&H which is directed to have the Shares:
	 

	 	                    
	 	Held in my account by AH&H in street name.
	 

	 	                    
	 	Mailed to me according to account standing instructions.
	 

	 	                    
	 	Other:                                                                                 
	 
	 	 	 	 
	                    	 	I hereby authorize and direct AH&H to sell all my Shares. Proceeds from the sale
of the Shares after payment of the stock option exercise price and required taxes are to be:
	 

	 	                    
	 	Mailed to me.
	 

	 	                    
	 	Held in my account at AH&H.
	 
	 	 	 	 
	 	 	b. Sale Price
	 	 	AH&H is authorized to sell my Shares no lower than:
	 

	 	                    
	 	 The market price when this form is received by AH&H.
	 

	 	                    
	 	 The following minimum price: $                    .
	 
	 	 	 	 
	 	 	c. AH&H Account Number:                                         

AH&H is authorized to pay the stock option exercise price and withholding taxes, if
applicable, to Panera Bread Company and to provide to PNRA a duplicate confirmation of sale.

Upon the sale of my stock option shares through AH&H, my authorization and direction to
deliver those Shares to my account at AH&H is irrevocable.

	 	 	 
	Employee Signature

	 	Position at Panera Bread Company
	 
	 	 
	Print Name

	 	Daytime Telephone Number
	 
	 	 
	Street Address

	 	Social Security Number
	 
	 	 
	City, State, Zip Code

	 	Company Authorization

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