Document:

EX-10.4

 

Exhibit 10.4

March 22, 2006

BY FACSIMILE

JPMorgan Chase Bank, as Agent

Attention: Cherry Arnaez

Loan & Agency Services

1111 Fannin, Floor 10

Houston, TX 77002

F: (713) 750-2894

JP Morgan Chase Bank

Attention: Thomas Hou

270 Park Avenue

New York, NY 10017

P: (212) 270-6072

F: (212) 270-3897

			
	           RE:	 	THE PEPSI BOTTLING GROUP, INC.

5-YEAR CREDIT AGREEMENT

COMMITMENT INCREASE NOTICE

Ladies and Gentlemen:

     We make reference to the 5-Year Credit Agreement (the “Credit Agreement”) dated as of April
28, 2004 by and among the The Pepsi Bottling Group, Inc. (the “Company”), Bottling Group, LLC,
JPMorgan Chase Bank, as Agent, and certain banks identified in the Credit Agreement. Capitalized
terms in this letter shall have the same meaning as the terms defined in the Credit Agreement.

     In accordance with Section 2.05(c)(ii) of the Credit Agreement, the Company hereby delivers
this Increase Notice to the Agent, by which the Company hereby requests that the aggregate amount
of the Commitments be increased by a total amount of $50,000,000 (Fifty Million Dollars) (the
“Proposed Aggregate Commitment Increase”) to be effective April 24, 2006 (the “Increase Date”).
The Proposed Aggregate Commitment Increase shall be offered solely to Morgan Stanley.

     If you have any questions, please do not hesitate to contact the undersigned at (914)
767-7096. We appreciate your assistance in connection with the foregoing request.

	 	 	 	 	 
	 	THE PEPSI BOTTLING GROUP, INC.

 	 
	 	By:  	/s/ Kenneth Smith
 	 
	 	 	Kenneth Smith 	 
	 	 	Vice President and TreasurerEX-10.1

 

Exhibit 10.1

MARTHA STEWART LIVING OMNIMEDIA, INC.

BONUS CONVERSION POLICY

          This MARTHA STEWART LIVING OMNIMEDIA, INC. BONUS CONVERSION POLICY (the “Policy”) authorizes
certain eligible officers of the Company as designated by the Compensation Committee (in each
instance, a “Named Eligible Individual”) to elect to convert up to $100,000 of any annual cash
bonus that they have been awarded under the Martha Stewart Living Omnimedia, Inc. Annual Incentive
Plan (the “Plan”) into Restricted Stock Units (“Stock Units”) representing the number of shares of
the Martha Stewart Living Omnimedia, Inc. Class A Common Stock having a value equal to 115% of the
amount of cash bonus being converted. We have provided definitions for certain capitalized terms
not otherwise defined in Section 9 below.

          1. PURPOSE

          The Policy was adopted to provide a means whereby the Named Eligible Individuals may develop
an increased sense of proprietorship and personal involvement in the development and financial
success of the Company, and to encourage them to devote their best efforts to the business of the
Company, thereby advancing the interests of the Company and its stockholders.

          2. ADMINISTRATION

          The Policy shall be administered by the Compensation Committee of the Board of Directors of
the Company (the “Committee”). The Committee shall have full authority to establish the rules and
regulations relating to the Policy, to interpret the Policy and those rules and regulations, to
select the Named Eligible Individuals in any year to participate in the Policy, to decide the facts
in any case arising under the Policy and to make all other determinations and to take all other
actions necessary or appropriate for the proper administration of the Policy, including the
delegation of such authority or power, where appropriate. The Committee’s administration of the
Policy, including all such rules and regulations, interpretations, selections, determinations,
approvals, decisions, delegations, amendments, terminations and other actions, shall be final and
binding on the Company, its stockholders and the Participants and their beneficiaries.

          3. ELIGIBILITY

          “Named Eligible Individuals” means any Eligible Individuals under the Plan designated by the
Committee in any given fiscal year.

          4. EFFECTIVE DATE

          The Effective Date of the Policy is February 22, 2007.

 

 

          5. STOCK UNITS

                    (a) 1999 Stock Incentive Plan and Restricted Stock Unit Agreements. The Stock Units to be
awarded in connection with the Policy will be granted pursuant to Section 8 of the Company’s 1999
Stock Incentive Plan (the “Plan”), which provision provides for the grant of Performance Units to
eligible individuals under the Plan, and pursuant to Restricted Stock Unit Agreements (each an
“Agreement”) to be entered into between the Company and any Named Eligible Individual who elects to
participate. The Stock Units will have the terms set forth in such Named Eligible Individual’s
Agreement and, to the extent not set forth in such Agreement, in the Plan or in this Policy. The
Stock Units will not be designated as “Qualified Performance-Based Awards” (as defined in the
Plan), meaning that the settlement of the Stock Units shall not be conditioned on the attainment of
any Performance Goals (as defined in the Plan). The Agreements will be in a form approved by the
Committee.

                    (b) Number of Shares. A Named Eligible Individual may elect to convert into Stock Units up
to $100,000, per fiscal year, of the cash bonus to which they are otherwise entitled pursuant to
annual bonus determinations made by the Committee under the Company’s Annual Incentive Plan. Upon
electing to convert a cash bonus into Stock Units by the execution of an Agreement, such Named
Eligible Individual will receive Stock Units representing that number of Shares having a value,
based on the closing price of a Share as reported on the Stock Exchange on the last business day
immediately preceding the later of (a) the Effective Date of this Policy and (b) the date on which
the Committee determined the actual amount of cash bonus to be awarded to the Participant under the
Company’s Annual Incentive Plan for performance in the prior fiscal year (such later date, the
“Bonus Determination Date”), equal to 115% of the amount of cash bonus being converted.

                    (c) Election Period. Unless otherwise specified by the Committee, a Named Eligible Individual
will have 5 business days, from and including the Bonus Determination Date, to elect to convert up
to $100,000 of his or her cash bonus into Stock Units, and the amount to be converted, if any.
Such election will be evidenced by the execution by such Named Eligible Individual of an Agreement.

                    (d) Delivery of Shares. Upon satisfying the specified Conditions applicable to a grant of
Stock Units, and unless otherwise set forth in the Grantee’s Agreement, the Company will deliver to
the Grantee or the Grantee’s beneficiary or estate, as the case may be, a certificate or
certificates evidencing the Shares represented by the Stock Units.

                    (e) Vesting of Stock Units. Unless otherwise set forth in the Agreement, Stock Units granted
to a Named Eligible Individual pursuant to this Policy will vest in accordance with the following
schedule: 33% will vest on the first anniversary of the Bonus Determination Date; 33% will vest on
the second anniversary of the Bonus Determination Date; and 34% will vest on the third anniversary
of the Bonus Determination. In the event that a Named Eligible Individual’s employment with the
Company is terminated during this three year period due to death or disability or pursuant to the
terms of any arrangement between the Named Eligible Individual and the Company, the Stock Units
shall immediately vest in full. In the event that a Named Eligible Individual’s employment with
the Company is otherwise terminated during this three year period, such Named Eligible

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Individual will forfeit the number of Stock Units representing the 15% surplus beyond the cash bonus awarded
prior to the conversion election (such forfeiture applying only to the remaining unvested portion
of such award), and shall immediately vest in full as to the remainder.

For illustrative purposes only, and subject to the vesting and other terms specified in the
Agreement, which terms shall control, the following is an example of how the vesting described
above would be implemented (calculations are approximated/rounded for illustrative purposes):

Assuming a Grantee elects to convert $100,000 of cash bonus into Stock Units,
s/he would be entitled to a 15% mark-up, valued at $15,000. Assuming that the
closing stock price is $20.00 on the last business day immediately preceding
the Bonus Determination Date, Grantee would be entitled to Stock Units
representing 5,750 shares, of which 5,000 shares would be based on the initial
cash bonus, and 750 shares would be based on the 15% mark-up. On the first
anniversary of the Bonus Determination Date, Grantee would vest with respect
to 33% of the 5,750, or approximately 1,898 shares, of which 248 shares would
be based on the 15% mark-up. Assuming that Grantee resigned from the Company
prior to the second anniversary of the Bonus Determination Date, he would
forfeit the Stock Units representing the remainder of the mark-up shares, or
502 shares (= 750 mark-up shares less the 248 mark-up shares that vested on
the first anniversary). Grantee would immediately vest upon termination with
respect to the remaining 3,350 shares.

                    (f) Waiver of Restrictions and Acceleration. By written notice to a Grantee, the Board
or Committee may waive restrictions and may accelerate the date on which a Stock Unit may become
vested.

          6. REQUIREMENTS OF LAW

          We will not issue any Shares under the Plan or in connection with the Policy if doing so would
result in a violation by us or anyone else of any law or regulation, including any federal or state
securities law or regulation. We are not obligated to register any Shares or other securities
covered by the Plan under the Securities Act. We are not obligated to take any action to cause
Shares issued or sold because of the grant or vesting of Stock Units to comply with any law or
regulation, including the Securities Act and the regulations thereunder.

          7. TRANSFER RESTRICTIONS

          The Stock Units shall not be transferable by the Grantee by means of sale, assignment, exchange,
encumbrance, pledge or otherwise.

          8. AMENDMENT AND TERMINATION OF THE POLICY

          The Committee may amend, suspend or terminate the Policy at any time and for any reason.
Except as permitted under any Agreement or the Plan, no amendment,

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suspension or termination of the Policy will alter or impair any rights or obligations under
any Stock Unit previously granted under the Plan in connection with the Policy without the
Grantee’s consent. With the consent of a Grantee, the Committee may amend any Agreement with such
Grantee in a manner not inconsistent with the Plan and this Policy.

          9. DEFINITIONS

          For purposes of interpreting the Policy and related documents (including Agreements), the
following definitions will apply:

          “Board” means the board of directors of the Company.

          “Class A Common Stock” means the Class A Common Stock, par value $0.01 per share, of the
Company.

          “Company” means Martha Stewart Living Omnimedia, Inc., a Delaware corporation, and any
successor or assignee of Martha Stewart Living Omnimedia, Inc. that assumes the Plan or awards
granted thereunder.

          “Conditions” means, as applicable, the continuous service requirements that must be met before
Stock Units become vested.

          “Grantee” means a Named Eligible Individual to whom the Company has granted awards under the
Plan and this Policy.

          “Securities Act” means the Securities Act of 1933, as in effect on the Effective Date or as
hereafter amended.

          “Shares” means shares of the Class A Common Stock.

          “Stock Exchange” means the OTC Bulletin Board, the New York Stock Exchange, the Nasdaq Stock
Market and any other established national or regional stock exchange on which the Class A Common
Stock is listed or admitted to trading.

          “We,” “us” and “our” refer to the Company.

*    *    *

          The Committee duly adopted and approved the Policy on the 22nd day of February, 2007.

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