Document:

EXHIBIT
10.7

 

TD HOLDING CORPORATION

2003 ROLLOVER DEFERRED COMPENSATION

AND PHANTOM STOCK UNIT PLAN

 

ARTICLE I

 

Definitions

 

As used in the Plan, the following terms shall have the meanings set
forth below:

 

(a)                                  “Board”
means the Board of Directors of the Company.

 

(b)                                 “Carrying
Value” means, with respect to any Deferred Compensation Account, an amount
equal to the Initial Amount plus interest accruing at two percent (2%) per
year, compounded annually.

 

(c)                                  “Cause”
shall have the meaning ascribed to such term in the Management Stockholders’
Agreement.

 

(d)                                 “Committee”
means the Compensation Committee of the Board.

 

(e)                                  “Company”
means TD Holding Corporation, a Delaware corporation.

 

(f)                                    “Conversion
Date” means the date upon which any Debt is converted into Stock.

 

(g)                                 “Debt”
means the Senior Unsecured Promissory Notes due 2008 issued by the Company at
the Effective Time.

 

(h)                                 “Debt
Interest Rate” means the rate of interest applicable to the Debt.  In the event that the Debt is refinanced or
the interest rate on the Debt is amended, the Debt Interest Rate shall be
appropriately adjusted.

 

(i)                                     “Deferred
Compensation Account” means a bookkeeping account established and
maintained by the Company in the name of each Participant.

 

(j)                                     “Effective
Time” shall have the meaning ascribed to such term in the Merger Agreement.

 

(k)                                  “Fair
Market Value” shall have the meaning ascribed to such term in the Incentive
Plan.

 

(l)                                     “Good
Reason” shall have the meaning ascribed to such term in the Management
Stockholders’ Agreement.

 

 

(m)                               “Initial
Amount” means, for each Participant, the initial amount being credited to
such Participant’s Deferred Compensation Account immediately following the
Effective Time.  Schedule A,
attached hereto, sets forth the Initial Amount for each Participant.

 

(n)                                 “Incentive
Plan” means the TD Holding Corporation 2003 Stock Option Plan.

 

(o)                                 “IPO”
means an initial public offering of the Stock registered under the Securities
Act pursuant to an effective registration statement.

 

(p)                                 “Management
Stockholders’ Agreement” means that certain Management Stockholders’
Agreement, dated July 22, 2003, by and among the Company and certain of
the Company’s stockholders.

 

(q)                                 “Merger
Agreement” means the Agreement and Plan of Merger, dated as of June 6,
2003, between TD Acquisition Corporation, a Delaware corporation, and the
Company.

 

(r)                                    “Participant”
means a person to whom a Rollover Option is granted pursuant to the
Incentive Plan.

 

(s)                                  “Phantom
Stock Unit” means the right to receive one share of Stock on a date
determined in accordance with Article IV below.

 

(t)                                    “Plan”
means the TD Holding Corporation 2003 Rollover Deferred Compensation and
Phantom Stock Unit Plan.

 

(u)                                 “Rollover
Option” shall have the meaning ascribed to such term in the Incentive Plan.

 

(v)                                 “Sale
Transaction” means any sale of the Stock or substantially all of the assets
of the Company, or any merger, consolidation or similar transaction including
the Company, provided that, following such transaction, the stockholders of the
Company immediately after the Effective Time do not directly or indirectly own
securities representing 50% or more of the aggregate voting power of all
securities entitled to vote generally in the election of directors of the
Company, its resulting successor entity or the ultimate parent entity of such
successor entity.

 

(w)                               “Securities
Act” means the Securities Act of 1933, as amended.

 

(x)                                   “Stock”
means the common stock of the Company, par value $0.01 per share.

 

(y)                                 “Vested
Equity” shall have the meaning ascribed to such term in the Management
Stockholders’ Agreement.

 

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ARTICLE II

 

Deferred Compensation Account

 

(a)                                  Immediately
following the Effective Time, the Company shall credit to each Participant’s
Deferred Compensation Account an amount equal to such Participant’s Initial
Amount.  For so long as the Debt remains
outstanding, each Participant’s Deferred Compensation Account shall be credited
with interest at the Debt Interest Rate in the same manner the interest is
accrued with respect to the Debt.

 

(b)                                 Upon
the date of the retirement of all or a portion of the Debt, whether in
connection with an IPO, a Sale Transaction, a recapitalization of the Company
or any other event, the Company shall pay to each Participant a percentage of
the amount credited to such Participant’s Deferred Compensation Account equal
to the percentage of the Debt so retired, and the amount credited to such
Participant’s Deferred Compensation Account shall be reduced by such amount
paid.  The balance of the amount
credited to a Participant’s Deferred Compensation Account after such reduction
shall thereafter continue to be credited with interest in accordance with
subsection (a) above.

 

(c)                                  In
the event that a Participant’s employment is terminated prior to the Conversion
Date by the Company for Cause or by the Participant without Good Reason, in
lieu of paying to such Participant the value of his or her Deferred
Compensation Account, the Company may at any time during the period commencing
on the date of such termination and ending on an IPO, elect to pay such
Participant an amount equal to the Carrying Value (calculated to the time of
payment), and, upon such payment, the Participant shall have no further right
or interest under the Plan.  For so long
as the Company does not elect to pay such Participant the Carrying Value, the
Participant’s Deferred Compensation Account shall continue to be treated in
accordance with the terms of this Article II, unless and until converted
into Phantom Stock Units in accordance with Article III, as if his
employment had not so terminated.

 

(d)                                 Upon
any other termination of a Participant’s employment prior to the Conversion
Date, such Participant shall be paid the amount credited to the Participant’s
Deferred Compensation Account as of the date of such termination.

 

(e)                                  Any
provision of the Plan notwithstanding, to the extent that the Company would
otherwise not be permitted or obligated to purchase a Participant’s Vested
Equity under any provision of the Management Stockholders’ Agreement at the
time of such Participant’s termination of employment (whether pursuant to a
“put” or “call” right), such Participant shall not be paid the amount credited
to his or her Deferred Compensation Account to such extent, and the portion of
the Deferred Compensation Account not paid shall remain outstanding, shall
continue to be credited Interest at the Debt Interest Rate and shall be paid at
such later date that the Company is permitted or obligated to purchase such
Participant’s Vested Equity in accordance with the Management Stockholders’
Agreement.

 

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ARTICLE III

 

Conversion of Deferred Compensation Account to Phantom
Stock Units

 

(a)                                  On
the Conversion Date, to the extent not otherwise paid or due to be paid
pursuant to subsection (b), (c) or (d) of Article II above, a
Participant’s Deferred Compensation Account shall be converted into Phantom
Stock Units.

 

(b)                                 The
number of Phantom Stock Units into which a Participant’s Deferred Compensation
Account converts shall be equal to the amount credited to such Participant’s
Deferred Compensation Account on the Conversion Date divided by the Fair Market
Value of the Stock; provided, however, that if the Debt converts
into Stock based upon a price other than the Fair Market Value, the
determination of the number of Phantom Stock Units credited to a Participant
upon conversion shall be based on such other price.  The conversion of the Deferred Compensation Account into Phantom
Stock Units shall otherwise be subject to the same terms and conditions
applicable to the conversion of the Debt into Stock.

 

(c)                                  In
the event that less than all of the Debt converts into Stock, a Participant’s
Deferred Compensation Account shall convert into Phantom Stock Units in the
same proportion as the proportion of the Debt so converted.  In such event, any portion of the Deferred
Compensation Account not converted to Phantom Stock Units shall remain subject
to the terms of Article II above, unless and until converted into Phantom
Stock Units at a future date in accordance with this Article III.

 

ARTICLE IV

 

Phantom Stock Units

 

(a)                                  Shares
of Stock acquired upon settlement of Phantom Stock Units prior to an IPO shall
be subject to the terms and conditions of the Management Stockholders’
Agreement.

 

(b)                                 Phantom
Stock Units shall be settled in Stock in accordance with the following
provisions:

 

(i)                                     Termination of Employment.  Phantom Stock Units shall be settled as soon
as practicable following the termination of a Participant’s employment for any
reason; provided, however, that, if under any provision of the
Management Stockholders’ Agreement the Company is not permitted or obligated to
purchase Vested Equity at the time of such Participant’s termination of
employment prior to an IPO (whether pursuant to a “put” or “call” right), such
Participant’s Phantom Stock Units shall not be settled, and such Phantom Stock
Units shall remain outstanding until the earlier of (x) such time that the
Company is permitted or obligated to purchase such Vested Equity in accordance
with the Management Stockholders’ Agreement, (y) the applicable time referred
to in Subsection (b)(ii) of this Article IV and (z) the applicable
time referred to in Subsection (b)(iii) of this Article IV.

 

(ii)                                  IPO. 
In the event of an IPO, Phantom Stock Units shall be settled upon
expiration of any applicable management lock-up period applicable to
Participants.

 

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(iii)                               Sale of the Company.  Upon the consummation of a Sale Transaction,
the Phantom Stock Units shall be settled as follows:

 

(1)                                  Cash
Transaction.  If the consideration
paid to the Company’s stockholders in a Sale Transaction is cash, in lieu of
settlement of the Phantom Stock Units in Stock, the Phantom Stock Units shall
be settled in cash at the same time and at the same price paid for the Stock
pursuant to the terms of such transaction.

 

(2)                                  Public
Stock Transaction.  If the Sale
Transaction is a stock merger where the Stock is exchanged for publicly-traded
stock of the acquiror, the Phantom Stock Units shall roll over into phantom
stock units for common stock of the acquiror, and shall be settled in stock of
the acquiror at such time as Participants are first permitted to sell stock of
the acquiror in the public market.

 

(3)                                  Private
Stock Transaction.  If the Sale
Transaction is a stock merger where the Stock is exchanged for stock of an
acquiror which is not publicly-traded, the Phantom Stock Units shall rollover
into phantom stock units for common stock of the acquiror, based on the same
exchange ratio applicable to the underlying Stock pursuant to the terms of such
transaction, and the Phantom Stock Units shall remain outstanding and shall
otherwise remain subject to the provisions of this Article IV.

 

(4)                                  Hybrid
Transaction.  If a Sale Transaction
that is described in clauses (2) or (3) above also results in consideration
being paid to the Company’s stockholders in cash, a pro rata portion of the
Phantom Stock Units shall be settled in the manner described in clause (1)
above, based on the ratio of cash-to-stock that the Company’s stockholders
receive pursuant to the terms of the Sale Transaction, and the balance of the
Phantom Stock Units shall be treated in accordance with the provisions of clause
(2) or (3) above, whichever is applicable.

 

(c)                                  In
the event of any recapitalization of the Company, a Participant shall be paid
an amount equal to the dividends or other distributions paid by the Company
with respect to one share of Stock for each outstanding vested Phantom Stock
Unit then credited to such Participant at the time such dividends are actually
paid to Company’s stockholders.

 

(d)                                 The
number of Phantom Stock Units awarded to a Participant may be equitably
adjusted or modified at the discretion of the Committee in the event that there
is (i) a stock split, reverse stock split, stock dividend, recapitalization,
reclassification, additional issuance or other similar capital adjustment of
the Company’s shares effected without the receipt of consideration, (ii) a
merger, consolidation, spin-off, split-up, or other similar corporate
transaction with respect to the Company, or (iii) any other event for which the
Committee, in its sole discretion, determines that such adjustment or
modification is appropriate and equitable to prevent inappropriate penalties or
windfalls with respect to the terms of the Plan or its applicability to any
Participant.

 

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(e)                                  No
person shall be entitled to the privileges of stock ownership in respect of
shares of Stock that are subject to Phantom Stock Units hereunder until such
shares shall have been issued to such person.

 

(f)                                    The
obligation of the Company to settle Phantom Stock Units in Stock or otherwise
shall be subject to all applicable laws, rules, and regulations, and to such
approvals by governmental agencies as may be required.  Notwithstanding anything contained herein to
the contrary, the Company shall be under no obligation to offer to sell or to
sell, and shall be prohibited from offering to sell or selling, any shares of
Stock pursuant to Phantom Stock Units unless such shares have been properly
registered for sale pursuant to the Securities Act with the Securities and
Exchange Commission or unless the Company has received an opinion of counsel,
satisfactory to the Company, that such shares may be offered or sold without
such registration pursuant to an available exemption therefrom and the terms
and conditions of such exemption have been fully complied with.  The Company shall be under no obligation to
register for sale or resale under the Securities Act any of the shares of Stock
to be offered or sold under the Plan or any shares of Stock issued upon
settlement of Phantom Stock Units unless the Stock is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and such
registration is necessary in order to permit settlement of Phantom Stock Units
in accordance with this Article IV. 
If the shares of Stock offered for sale or sold under the Plan are
offered or sold pursuant to an exemption from registration under the Securities
Act, the Company may restrict the transfer of such shares and may legend the
Stock certificates representing such shares in such manner as it deems
advisable to ensure the availability of any such exemption.

 

ARTICLE V

 

General Provisions.

 

(a)                                  The
establishment of the Plan shall not be deemed to confer upon any person any
legal right to be employed by, or to be retained in the employ of, the Company,
or to give to any Participant or any person any right to receive any payment
whatsoever, except as provided under this Plan.  All Participants shall remain subject to termination to the same
extent as if this Plan never had been adopted.

 

(b)                                 The
payment of the Deferred Compensation Account shall be subject to withholding
for the payment of any Federal, state, local or foreign taxes required to be
paid by the Company on account of such payments.  In addition, each Participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be paid by the
Company with respect to the settlement of any Phantom Stock Unit.  If so determined by the Committee in its
sole discretion, satisfaction of the withholding tax obligation may be
accomplished by withholding from the shares of Stock otherwise payable one or
more of such shares having an aggregate Fair Market Value, determined as of the
date the withholding tax obligation arises, less than or equal to the amount of
the total withholding tax obligation.

 

(c)                                  The
Plan is intended to constitute an unfunded obligation of the Company.  All amounts to be paid pursuant to the Plan
shall be paid by the Company from its general assets and a Participant (or his
heir, devisee or designated beneficiary) shall have only the rights of a 

 

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general, unsecured
creditor against the Company for any amounts payable under the Plan.  Neither the establishment of the Plan nor
any other action taken in connection with the Plan shall be deemed to create an
escrow or trust fund of any kind.

 

(d)                                 To
the maximum extent permitted by law, a Participant’s rights or benefits under
this Plan shall not be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber or charge the same shall be void; provided, however,
that in the event of a Participant’s death, any such benefit not forfeited upon
death shall pass to such Participant’s beneficiaries or estate in accordance
with the laws of descent and distribution. 
Except as prohibited by law, payments or benefits payable to or with
respect to a Participant pursuant to this Plan may be reduced by amounts the
Participant may owe to the Company, including, without limitation, any amounts
owed on account of loans, travel or standing advances, and personal charges on
credit cards issued through the Company.

 

(e)                                  In
addition to any obligations imposed by law upon any successor to the Company,
the Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the assets of the Company to expressly assume the Plan and agree to perform the
obligations hereunder in the same manner and to the same extent that the
Company would be required to perform them if no such succession had taken
place.

 

(f)                                    The
Plan shall be governed by and construed in accordance with the internal laws of
the State of Delaware without reference to the principles of conflicts of laws
thereof.

 

(g)                                 If
the Committee determines that any portion of the notional value of a
Participant’s Deferred Compensation Account is taxable to such Participant
prior to the time such Participant would otherwise be paid under the Plan, the
Company shall either (i) cause to be paid to such Participant an amount equal
to the amount necessary for such Participant to meet the related tax obligation,
in which event the notional value of such Participant’s Deferred Compensation
Account shall be reduced by the amount so paid, or (ii) make such other
arrangements with such Participant regarding payment of such tax obligation,
and to the extent any amounts are paid to such Participant pursuant to such
arrangements, such Participant’s Deferred Compensation Account shall be reduced
by the amount so paid.

 

7EXHIBIT 10.8

 

TD HOLDING CORPORATION

2003 MANAGEMENT DEFERRED COMPENSATION

AND PHANTOM STOCK UNIT PLAN

 

ARTICLE I

 

Definitions

 

As used in the Plan, the following terms shall have the meanings set
forth below:

 

(a)                                  “Adjustment
Factor” means, as of any DCA Determination Date, a number equal to
[(1/(1-X))-1], where X equals a fraction, the numerator of which equals the sum
of (i) the total number of shares of Stock available for issuance in respect of
outstanding New Management Options granted prior to such DCA Determination Date
(as adjusted pursuant to Section 10 of the Incentive Plan), (ii) the total
number of shares of Stock issued in respect of the exercise of New Management
Options (irrespective of whether any such shares are then outstanding), and
(iii) the number of shares of Stock withheld by the Company in connection with
the exercise of New Management Options, whether to pay exercise price or
withholding tax (the sum of the shares described in (i), (ii) and (iii) being
referred as herein as the “New Management Option Pool”), and the
denominator of which equals the sum of (x) the total number of shares of Stock
outstanding on such DCA Determination Date, (y) the number of shares of Stock
reserved for issuance under the Incentive Plan (whether or not granted), which,
as of the Effective Time is 35,340 shares of Stock, and (z) any Stock issued
upon conversion or exercise of any other option, warrant or any convertible or
exchangeable securities.

 

(b)                                 “Aggregate
Pool” means, as of a DCA Determination Date, an amount equal to the
Adjustment Factor multiplied by the sum of the interest accrued on the Debt and
the notional interest credited to participants under the Rollover Plan as of
such DCA Determination Date, determined without regard to (i) interest accrued
on any portion of the Debt which was retired prior to such DCA Determination
Date, and (ii) notional interest credited to Participants under the Rollover
Plan which was paid to such Participants in connection with the retirement of a
portion of the Debt prior to such DCA Determination Date.

 

(c)                                  “Board”
means the Board of Directors of the Company.

 

(d)                                 “Carrying
Value” means, with respect to any Deferred Compensation Account, an amount
equal to X multiplied by Y, where X equals a fraction, the numerator of which
equals two percent (2%), and the denominator of which equals the Debt Interest
Rate, and Y equals the notional value of such Deferred Compensation Account.

 

(e)                                  “Cause”
shall have the meaning ascribed to such term in the Stockholders’ Agreement.

 

(f)                                    “Committee”
means the Compensation Committee of the Board.

 

(g)                                 “Company”
means TD Holding Corporation, a Delaware corporation.

 

 

(h)                                 “Conversion
Date” means the date upon which any Debt is converted into Stock.

 

(i)                                     “DCA
Determination Date” means, as to any Participant, (i) the earlier to occur
of (A) the Conversion Date, and (B) the date upon which such Participant’s
employment with the Company is terminated for any reason, and (ii) any date
prior to the Conversion Date upon which all or a portion of the Debt is
retired.

 

(j)                                     “Debt”
means the Senior Unsecured Promissory Notes due 2008 issued by the Company at
the Effective Time.

 

(k)                                  “Debt
Interest Rate” means the rate of interest applicable to the Debt.  In the event that the Debt is refinanced or
the interest rate on the Debt is amended, the Debt Interest Rate shall be
appropriately adjusted.

 

(l)                                     “Deferred
Compensation Account” means a bookkeeping account established and
maintained by the Company in the name of each Participant.

 

(m)                               “Effective
Time” shall have the meaning ascribed to such term in the Merger Agreement.

 

(n)                                 “Enterprise
Value” means, as of any date, the aggregate principal amount of the Debt,
the Company’s outstanding equity, and the management rollover contribution, as
evidenced by Rollover Options and amounts credited to management under the
Rollover Plan, but shall be determined without regard to (i) the retirement of
all or any portion of the Debt, and (ii) any additional issuance of debt or
equity to investors after the Effective Time.

 

(o)                                 “Fair
Market Value” shall have the meaning ascribed to such term in the Incentive
Plan.

 

(p)                                 “Good
Reason” shall have the meaning ascribed to such term in the Management
Stockholders’ Agreement.

 

(q)                                 “Incentive
Plan” means the TD Holding Corporation 2003 Stock Option Plan.

 

(r)                                    “Initial
Enterprise Value” means $534.9 million.

 

(s)                                  “IPO”
means an initial public offering of the Stock registered under the Securities
Act pursuant to an effective registration statement.

 

(t)                                    “Management
Stockholders’ Agreement” means that certain Management Stockholders’
Agreement, dated July 22, 2003, by and among the Company and certain of
the Company’s Management stockholders.

 

(u)                                 “Merger
Agreement” means the Agreement and Plan of Merger, dated as of June 6,
2003, between TD Acquisition Corporation, a Delaware corporation, and the
Company.

 

2

 

(v)                                 “New
Management Option” shall have the meaning ascribed to such term in the
Incentive Plan.

 

(w)                               “Option
Percentage” means, for each Participant, a fraction, the numerator of which
is equal to the number of shares of Stock subject to New Management Options
granted to such Participant under the Incentive Plan, and the denominator of
which is equal to the number of shares of Stock in the New Management Option
Pool.

 

(x)                                   “Participant”
means a person to whom a New Management Option is granted pursuant to
the Incentive Plan.

 

(y)                                 “Phantom
Stock Unit” means the right to receive one share of Stock on a date
determined in accordance with Article IV below.

 

(z)                                   “Plan”
means the TD Holding Corporation 2003 Management Deferred Compensation and
Phantom Stock Unit Plan.

 

(aa)                            “Rollover
Plan” means the TD Holding Corporation 2003 Rollover Deferred Compensation
and Phantom Stock Unit Plan.

 

(bb)                          “Sale
Transaction” means any sale of the Stock or substantially all of the assets
of the Company, or any merger, consolidation or similar transaction including
the Company, provided that, following such transaction, the stockholders of the
Company immediately after the Effective Time do not directly or indirectly own
securities representing 50% or more of the aggregate voting power of all
securities entitled to vote generally in the election of directors of the
Company, its resulting successor entity or the ultimate parent entity of such
successor entity.

 

(cc)                            “Securities
Act” means the Securities Act of 1933, as amended.

 

(dd)                          “Stock”
means the common stock of the Company, par value $0.01 per share.

 

(ee)                            “Vested
Equity” shall have the meaning ascribed to such term in the Management
Stockholders’ Agreement.

 

(ff)                                “Vested
Intrinsic Value” means, with respect to any Participant and as of any date,
(x) the number of vested New Management Options multiplied by (y) the
difference between the Fair Market Value of a share of Stock as of such date
and the exercise price for such New Management Options as of such date.

 

(gg)                          “Vested
Notional Value” means, with respect to any Participant and as of any date,
the notional value of the vested percentage of such Participant’s Deferred
Compensation Account, or Phantom Stock Units, as the case may be.

 

(hh)                          “Vested
Option Percentage” means, for each Participant and at any particular date,
the percentage of New Management Options granted to such Participant that have

 

3

 

vested in accordance with the
terms of the Incentive Plan as of such date, and that have not previously
expired in accordance with the terms of the Incentive Plan as of such date.

 

ARTICLE II

 

Deferred
Compensation Account

 

(a)                                  On
any DCA Determination Date, a Participant’s Deferred Compensation Account shall
(i) have a notional value equal to the Aggregate Pool multiplied by such
Participant’s Option Percentage, and (ii) be vested as to the same percentage
as such Participant’s Vested Option Percentage.  To the extent that any percentage of a Participant’s New
Management Options expire in accordance with the terms of the Incentive Plan,
an equivalent percentage of such Participant’s Deferred Compensation Account
shall be forfeited, and a Participant shall have no further right or interest
with respect to such forfeited portion under the Plan.

 

(b)                                 Upon
the date of the retirement of all or a portion of the Debt, whether in
connection with an IPO, a Sale Transaction, a recapitalization of the Company
or any other event, the Company shall pay to each Participant a percentage of
the notional value of the vested portion of such Participant’s Deferred
Compensation Account equal to the percentage of the Debt so retired.  Such percentage of the notional value of the
unvested portion of such Participant’s Deferred Compensation Account shall be
paid as and when such unvested portion vests.

 

(c)                                  In
the event that a Participant’s employment is terminated prior to the Conversion
Date by the Company for Cause or by the Participant without Good Reason, in
lieu of paying to such Participant the Vested Notional Value of his or her
Deferred Compensation Account, the Company may at any time during the period
commencing on the date of such termination and ending on an IPO, elect to pay
such Participant an amount equal to the Carrying Value (calculated to the
payment date), and, upon such payment, the Participant shall have no further
right or interest under the Plan.  For
so long as the Company does not elect to pay such Participant the Carrying
Value, the vested portion of such Participant’s Deferred Compensation Account
shall continue to be treated in accordance with the terms of this
Article II, unless and until converted into Phantom Stock Units in
accordance with Article III, as if his employment had not so terminated.

 

(d)                                 Upon
any other termination of a Participant’s employment prior to the Conversion
Date, such Participant shall be paid the Vested Notional Value of his or her
Deferred Compensation Account as of the date of such termination.

 

(e)                                  Upon
any Participant’s termination of employment for any reason, the unvested
portion of such Participant’s Deferred Compensation Account shall be forfeited
and the Participant shall have no further right or interest with respect to
such unvested portion under the Plan.

 

(f)                                    Any
provision of the Plan notwithstanding, to the extent that the Company would
otherwise not be permitted or obligated to purchase a Participant’s Vested
Equity under 

 

4

 

any provision of the Management Stockholders’
Agreement at the time of such Participant’s termination of employment (whether
pursuant to a “put” or “call” right), such Participant shall not be paid the
Vested Notional Value of such Participant’s Deferred Compensation Account to
such extent, and the portion of the Vested Notional Value of such Deferred
Compensation Account not paid shall remain outstanding and continue to be
subject to the terms of this Article II as if such portion had not
otherwise been payable and shall be paid at such later date that the Company is
permitted or obligated to purchase such Participant’s Vested Equity in
accordance with the Management Stockholders’ Agreement or, if the Management
Stockholders’ Agreement is terminated, is otherwise permitted to make such
payments.

 

ARTICLE III

 

Conversion
of Deferred Compensation Account to Phantom Stock Units

 

(a)                                  On
the Conversion Date, to the extent not otherwise paid or due to be paid
pursuant to subsection (b), (c) or (d) of Article II above, a
Participant’s Deferred Compensation Account shall be converted into Phantom
Stock Units.

 

(b)                                 The
number of Phantom Stock Units into which a Participant’s Deferred Compensation
Account converts shall be equal to X divided by Y, where X equals the notional
value of such Participant’s Deferred Compensation Account, as determined in
accordance with subsection (a) of Article II above, and Y equals the
Fair Market Value of the Stock; provided, however, that if the
Debt converts into Stock based upon a price other than the Fair Market Value,
the determination of the number of Phantom Stock Units credited to a
Participant upon conversion shall be based on such other price.  The conversion of the Deferred Compensation
Account into Phantom Stock Units shall otherwise be subject to the same terms
and conditions applicable to the conversion of the Debt into Stock.

 

(c)                                  In
the event that less than all of the Debt converts into Stock, a Participant’s
Deferred Compensation Account shall convert into Phantom Stock Units in the
same proportion as the proportion of the Debt so converted.  In such event, any portion of the Deferred
Compensation Account not converted to Phantom Stock Units shall remain subject to
the terms of Article II above, unless and until converted into Phantom
Stock Units at a future date in accordance with this Article III; provided,
however, that the notional value of such Deferred Compensation Account
on any future DCA Determination Date shall be reduced by the notional value of
the Deferred Compensation Account so converted to Phantom Stock Units.

 

(d)                                 Phantom
Stock Units shall be subject to vesting at the same time and in the same manner
as the Deferred Compensation Account, such that the vested portion of the
Deferred Compensation Account shall convert into vested Phantom Stock Units,
and the unvested portion of the Deferred Compensation Account shall convert
into unvested Phantom Stock Units.

 

5

 

ARTICLE IV

 

Phantom
Stock Units

 

(a)                                  To
the extent that any percentage of a Participant’s New Management Options expire
in accordance with the terms of the Incentive Plan, an equivalent percentage of
Phantom Stock Units shall be forfeited, and a Participant shall have no further
right or interest with respect to such forfeited portion under the Plan.

 

(b)                                 Shares
of Stock acquired upon settlement of Phantom Stock Units prior to an IPO shall
be subject to the terms and conditions of the Management Stockholders’
Agreement.

 

(c)                                  Phantom
Stock Units shall be settled in Stock in accordance with the following
provisions:

 

(i)                                     Termination of Employment.  Vested Phantom Stock Units shall be settled
as soon as practicable following the termination of a Participant’s employment
for any reason; provided, however, that, if under any provision
of the Stockholders’ Agreement the Company is not permitted or obligated to
purchase Vested Equity at the time of such Participant’s termination of
employment prior to an IPO (whether pursuant to a “put” or “call” right), such
Participant’s Phantom Stock Units shall not be settled, and such Phantom Stock
Units shall remain outstanding until the earlier of (x) such time that that the
Company is permitted or obligated to purchase such Vested Equity in accordance
with the Stockholders’ Agreement, (y) the applicable time referenced to in
Subsection (b)(ii) of this Article IV, and (z) the applicable time
referenced to in Subsection (b)(iii) of this Article IV.  Unvested Phantom Stock Units shall be
forfeited upon such termination and such Participant shall have no further
right or interest with respect to such Phantom Stock Units.

 

(ii)                                  IPO. 
In the event of an IPO, Phantom Stock Units shall be settled upon
expiration of any applicable management lock-up period applicable to
Participants; provided, however, unvested Phantom Stock Units
shall be settled only as and when such Phantom Stock Units vest.

 

(iii)                               Sale of the Company.  Upon the consummation of a Sale Transaction,
the Phantom Stock Units shall be settled as follows:

 

(1)                                  Cash
Transaction.  If the consideration
paid to the Company’s stockholders in a Sale Transaction is cash, in lieu of
settlement of vested Phantom Stock Units in Stock, vested Phantom Stock Units
shall be settled in cash at the same time and at the same price paid for the
Stock pursuant to the terms of such transaction.  Unvested Phantom Stock Units will be treated in a manner
consistent with the treatment of unvested New Management Options in such
transaction.

 

(2)                                  Public
Stock Transaction.  If the Sale
Transaction is a stock merger where the Stock is exchanged for publicly-traded
stock of the acquiror, vested and unvested Phantom Stock Units shall be
converted into vested and unvested phantom stock units for common stock of the
acquiror and, to the extent vested, shall be settled in 

 

6

 

stock of the acquiror at
such time as Participants are first permitted to sell stock of the acquiror in
the public market.  Converted phantom
stock units which are not vested at such time shall be settled as and when they
vest.

 

(3)                                  Private
Stock Transaction.  If the Sale
Transaction is a stock merger where the Stock is exchanged for stock of an
acquiror which is not publicly-traded, vested and unvested Phantom Stock Units
shall rollover into vested and unvested phantom stock units for common stock of
the acquiror, based on the same exchange ratio applicable to the underlying
Stock pursuant to the terms of such transaction, and such Phantom Stock Units
shall remain outstanding and shall otherwise remain subject to the provisions
of this Plan.

 

(4)                                  Hybrid
Transaction.  If a Sale Transaction
that is described in clauses (2) or (3) above also results in consideration
being paid to the Company’s stockholders in cash, a pro rata portion of the
Phantom Stock Units shall be settled in the manner described in clause (1)
above, based on the ratio of cash-to-stock that the Company’s stockholders
receive pursuant to the terms of the Sale Transaction, and the balance of the
Phantom Stock Units shall be treated in accordance with the provisions of
clause (2) or (3) above, whichever is applicable.

 

(d)                                 In
the event of any recapitalization of the Company, a Participant shall be paid
an amount equal to the dividends or other distributions paid by the Company
with respect to one share of Stock for each outstanding vested Phantom Stock
Unit then credited to such Participant at the time such dividends are actually
paid to Company’s stockholders.

 

(e)                                  The
number of Phantom Stock Units awarded to a Participant may be equitably
adjusted or modified at the discretion of the Committee in the event that there
is (i) a stock split, reverse stock split, stock dividend, recapitalization,
reclassification, additional issuance or other similar capital adjustment of
the Company’s shares effected without the receipt of consideration, (ii) a
merger, consolidation, spin-off, split-up, or other similar corporate
transaction with respect to the Company, or (iii) any other event for which the
Committee, in its sole discretion, determines that such adjustment or
modification is appropriate and equitable to prevent inappropriate penalties or
windfalls with respect to the terms of the Plan or its applicability to any
Participant.

 

(f)                                    No
person shall be entitled to the privileges of stock ownership in respect of
shares of Stock that are subject to Phantom Stock Units hereunder until such
shares shall have been issued to such person.

 

(g)                                 The
obligation of the Company to settle Phantom Stock Units in Stock or otherwise
shall be subject to all applicable laws, rules, and regulations, and to such
approvals by governmental agencies as may be required.  Notwithstanding anything contained herein to
the contrary, the Company shall be under no obligation to offer to sell or to
sell, and shall be prohibited from offering to sell or selling, any shares of
Stock pursuant to Phantom Stock Units unless such shares have been properly
registered for sale pursuant to the Securities Act with the Securities and
Exchange Commission or unless the Company has received an opinion of counsel,
satisfactory to the Company, that such shares may be offered or sold without
such registration

 

7

 

pursuant to an available exemption therefrom and the
terms and conditions of such exemption have been fully complied with.  The Company shall be under no obligation to
register for sale or resale under the Securities Act any of the shares of Stock
to be offered or sold under the Plan or any shares of Stock issued upon
settlement of Phantom Stock Units unless the Stock is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and such
registration is necessary in order to permit settlement of Phantom Stock Units
in accordance with this Article IV. 
If the shares of Stock offered for sale or sold under the Plan are
offered or sold pursuant to an exemption from registration under the Securities
Act, the Company may restrict the transfer of such shares and may legend the
Stock certificates representing such shares in such manner as it deems
advisable to ensure the availability of any such exemption.

 

ARTICLE V

 

Adjustments
to Payments

 

Any provision of the Plan to the contrary notwithstanding, no payment
in respect of a Participant’s Deferred Compensation Account and no settlement
of a Participant’s Phantom Stock Units shall be made, or shall be required to
be made, if at the time such payment or settlement would otherwise be required
to be made pursuant to the Plan, the Enterprise Value is less than or equal to
the Initial Enterprise Value.  In
addition, at the time such payment or settlement would otherwise be so
required, such Participant’s Vested Notional Value shall be reduced or
increased by the amount necessary, if any, to ensure that (i) the sum of such
Participant’s Vested Notional Value and Vested Intrinsic Value at such time
does not exceed and is not less than (ii) such amount which would have
represented such Participant’s Vested Intrinsic Value if (A) the Company’s
capital structure immediately following the Effective Time had been comprised
entirely of Stock (assuming the same Initial Enterprise Value), (B) such
Participant had received a grant of New Management Options representing a
percentage of the Company’s total equity immediately following the Effective
Time that is equal to the percentage of the Company’s actual total equity
represented by such Participant’s New Management Options immediately following
the Effective Time (the “Pro Forma Options”), (C ) the exercise price
for the Pro Forma Options is the same as the exercise price for the New
Management Options and (D) the vesting schedule for the Pro Forma Options is
the same (as a percentage of the total) as the New Management Options.

 

ARTICLE VI

 

General
Provisions.

 

(a)                                  The
establishment of the Plan shall not be deemed to confer upon any person any
legal right to be employed by, or to be retained in the employ of, the Company,
or to give to any Participant or any person any right to receive any payment
whatsoever, except as provided under this Plan.  All Participants shall remain subject to termination to the same
extent as if this Plan never had been adopted.

 

(b)                                 The
payment of the Deferred Compensation Account shall be subject to withholding
for the payment of any Federal, state, local or foreign taxes required to be
paid by the Company on account of such payments.  In addition, each Participant shall pay to the 

 

8

 

Company, or make arrangements satisfactory to the
Company regarding the payment of, any Federal, state, local or foreign taxes of
any kind required by law to be paid by the Company with respect to the
settlement of any Phantom Stock Unit. 
If so determined by the Committee in its sole discretion, satisfaction
of the withholding tax obligation may be accomplished by withholding from the
shares of Stock otherwise payable one or more of such shares having an
aggregate Fair Market Value, determined as of the date the withholding tax
obligation arises, less than or equal to the amount of the total withholding
tax obligation.

 

(c)                                  The
Plan is intended to constitute an unfunded obligation of the Company.  All amounts to be paid pursuant to the Plan
shall be paid by the Company from its general assets and a Participant (or his
heir, devisee or designated beneficiary) shall have only the rights of a
general, unsecured creditor against the Company for any amounts payable under
the Plan.  Neither the establishment of
the Plan nor any other action taken in connection with the Plan shall be deemed
to create an escrow or trust fund of any kind.

 

(d)                                 To
the maximum extent permitted by law, a Participant’s rights or benefits under
this Plan shall not be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber or charge the same shall be void; provided, however,
that in the event of a Participant’s death, any such benefit not forfeited upon
death shall pass to such Participant’s beneficiaries or estate in accordance
with the laws of descent and distribution. 
Except as prohibited by law, payments or benefits payable to or with
respect to a Participant pursuant to this Plan may be reduced by amounts the
Participant may owe to the Company, including, without limitation, any amounts
owed on account of loans, travel or standing advances, and personal charges on
credit cards issued through the Company.

 

(e)                                  In
addition to any obligations imposed by law upon any successor to the Company,
the Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the assets of the Company to expressly assume the Plan and agree to perform the
obligations hereunder in the same manner and to the same extent that the
Company would be required to perform them if no such succession had taken
place.

 

(f)                                    The
Plan shall be governed by and construed in accordance with the internal laws of
the State of Delaware without reference to the principles of conflicts of laws
thereof.

 

(g)                                 If
the Committee determines that any portion of the notional value of a
Participant’s Deferred Compensation Account is taxable to such Participant
prior to the time such Participant would otherwise be paid under the Plan, the
Company shall either (i) cause to be paid to such Participant an amount equal
to the amount necessary for such Participant to meet the related tax
obligation, in which event the notional value of such Participant’s Deferred
Compensation Account shall be reduced by the amount so paid, or (ii) make such
other arrangements with such Participant regarding payment of such tax
obligation, and to the extent any amounts are paid to such Participant pursuant
to such arrangements, such Participant’s Deferred Compensation Account shall be
reduced by the amount so paid.

 

9

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