Document:

Exhibit 10.1

 

MEDICOR LTD.

 

NON-EMPLOYEE
DIRECTORS’ DEFERRAL PLAN

 

MediCor Ltd., a corporation organized under the laws of the State of
Delaware, maintains the MediCor Ltd. Amended and Restated 1999 Stock
Compensation Program (the “Program”). 
Among the forms of compensation contemplated by the Program are awards
to Non-Employee Directors.  The Company
wishes to align further the interests of Non-Employee Directors and
stockholders and generally increase the effectiveness of its compensation
structure for Non-Employee Directors, by implementing the Non-Employee
Directors’ Deferral Plan (the “Plan”). 
In furtherance thereof, and in connection with the authority to make
grants under the Program, the Plan is adopted to implement certain such grants,
and to govern the manner in which the Shares underlying such grants shall be
delivered, as set forth herein.  In
addition, the Plan provides for other deferrals of certain directors’ fees in
accordance with the terms hereof.

 

1.             Definitions.

 

Capitalized terms used herein without definitions shall have the
meanings given to those terms in the Program. 
In addition, whenever used herein, the following terms shall have the
meanings set forth below except as the context requires otherwise:

 

“Account” means a deferred compensation account established for a
Participant in accordance with Section 5.2(c).

 

“Board” means the Board of Directors of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock Equivalent” means a unit representing a right of a
Participant to payment of a Share, or if applicable, the Fair Market Value of a
Share.

 

“Company” means MediCor Ltd., a corporation organized under the laws of
the State of Delaware.

 

“CSE Agreement” means a written agreement in a form approved by the
Board, to be entered into by the Company and the Participant as provided in
Section 6.

 

“CSE Value,” per Common Stock Equivalent as of a particular date, means
the Fair Market Value of a Share as of such date.

 

“Disability” has the same meaning as in Section 409A(a)(2)(C) of the
Code or as otherwise determined by the Board.

 

“Non-Employee Director” means a non-employee director of the Company.

 

“Participant” means a Non-Employee Director of the Company who is
credited with one or more Common Stock Equivalents or who has deferred receipt
of fees hereunder as permitted by the Board.

 

“Plan” means the Company’s Non-Employee Directors’ Deferral Plan, as
set forth herein and as the same may from time to time be amended.

 

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“Program” means the MediCor Ltd. Amended and Restated 1999 Stock
Compensation Program.

 

“Regular Distribution Date” means the date determined under Section 8.

 

“Reorganization” shall have the same meaning as in Part I Section 7 of
the Program; provided, however, that no event or condition shall constitute a
Reorganization to the extent that, if it were, a 20% tax would be imposed under
Section 409A of the Code; provided that, in such a case, the event or condition
shall continue to constitute a Reorganization to the maximum extent possible
(e.g., if applicable, in respect of vesting without an acceleration of
distribution) without causing the imposition of such 20% tax.

 

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

 

“Shares” means shares of Common Stock.

 

“Valuation Date” means the last day of each calendar month and such
additional dates as the Board may designate.

 

2.             Grants Under the
Program.

 

The grants of Common Stock Equivalents and Dividend Equivalent Rights
shall constitute grants under and governed by the Program.  Thus, the Common Stock Equivalents shall be
subject to the provisions of the Program governing grants to Non-Employee
Directors; provided that the Program Administrators shall not be designated to
act hereunder, and all functions of the Program Administrators shall be
fulfilled by the Board.  Cash payments
under the Plan not relating to Common Stock Equivalents or Dividend Equivalent
Rights shall also be governed by the same rules as are established under the Program
as to interpretation, beneficiary designation, exculpation (and
indemnification) and all other matters of administration.

 

3.             Effective Date of
Plan; Termination of the Plan.

 

The effective date of the Plan is March 31, 2006.  The Plan shall terminate on, and no Common
Stock Equivalents shall be granted or other deferrals made hereunder on or
after, the 10-year anniversary of the effective date of the Plan (and, in the
case of Common Stock Equivalents and Dividend Equivalent Rights, the date of
termination or expiration of the Program, if earlier).

 

4.             Eligibility.

 

Except as otherwise determined by the Board, each individual who is a
Non-Employee Director shall be eligible to participate in the Plan.

 

5.             Cash Fees.

 

5.1           Types of Fees.

 

In consideration of each Non-Employee Director’s service as a member of
the Board, each Non-Employee Director may be eligible to receive as
compensation (i) an annual retainer fee; (ii) a fee per Board meeting attended;
and (iii) a fee per committee meeting attended (together with the annual
retainer and Board meeting fees, collectively referred to as “Cash Fees”).  These amounts are subject to deferral under
the Plan, as set forth herein.

 

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5.2           Election to Defer Cash Fees.

 

(a)   The Participant may elect that
up to 100% (in increments of 1%) of the Participant’s Cash Fees shall be
payable as compensation deferred under the Plan.  With respect to a Participant’s election to
defer all or a portion of the Cash Fees for a calendar year, such election
shall be made prior to December 31st of the year preceding the calendar year
with respect to which the applicable services are performed, except that in the
case of a new Participant, the Participant may make an election within 30 days
after such Participant first becomes eligible to participate in accordance with
Section 4, with respect to Cash Fees otherwise payable in the annual period of
the election, for services performed after the effective date of such election.

 

(b)   The election described in
Section 5.2(a) shall be made in writing substantially in such form as the
Board may prescribe from time to time, within the times specified herein.  With respect to a Participant’s election to
defer all or a portion of the Cash Fees, such election shall, except as
otherwise permitted by the Board (taking into account, without limitation, the
application of Section 409A of the Code, as
the Board may deem appropriate), be irrevocable as of the first day of
the applicable annual period.  Except as
may be permitted by the Board, elections described in Section 5.2(a) shall
continue in effect from year to year unless revoked prior to the beginning of
the applicable year.  All deferrals under
this Section 5.2 shall be fully vested.

 

(c)   A Participant may elect, prior
to earning a Cash Fee, to defer such a Cash Fee in the form of fixed-return
credits.  Upon such an election, the
amount of the deferred fee shall not be paid currently but rather shall be
credited to the Participant’s Account. 
Such credits shall be made when Cash Fees would otherwise have been paid
to the Participant but for an election pursuant to Section 5.2(a).  A separate sub-account under each Participant’s
Account may in the discretion of the Board be established to record each year’s
deferrals, and the credits and deductions with respect thereto.  With respect to credits under this Section
5.2(c), earnings and losses shall accrue on the balance in the applicable
Participant’s Account at the rate or rates specified in advance of the
effective time of the applicability of such rate or rates, and from time to
time, by the Board.  As determined by the
Board, such rate or rates may be a fixed rate, and may be established by
reference to an index or indices, or may be a return on one or more specific
investments or on a specific investment fund or funds (including, if and to the
extent so provided by the Board, hypothetical investments selected by the
Participant in accordance with procedures established by the Board).  Earnings and losses shall be credited to
Participants’ Accounts as of the end of each calendar month and, with respect
to any particular Participant’s Account, shall continue to be credited thereto
until all amounts are distributed with respect to the Participant’s Account in
accordance with the Plan.  Upon
distribution, any accrued earnings shall be credited to the Participant’s
Account and distributed therewith, and any accrued losses shall reduce the
amount of distributions hereunder.

 

(d)   The Board may permit a Participant
to elect, two times per each 12-month period, to convert as of the end of the
calendar month of the election, Common Stock Equivalents to Account credits,
and vice-versa, in whole or in part (but, in the case of Common Stock
Equivalents, only in whole Common Stock Equivalents) with credits and
liquidation of Common Stock Equivalents to be effected based on the CSE Value
as of the end of such month, and credits and liquidation of Accounts to be
effected based on Account values as of the end of such month.

 

(e)   The establishment and
maintenance of, and credits to and deductions from, the Participant’s Account
shall be mere bookkeeping entries, and shall not vest in the Participant or his
beneficiary any right, title or interest in or to any specific assets of the
Company.  A separate subaccount under
each Participant’s Account shall be established to record each year’s
deferrals, and the credits and deductions with respect thereto.

 

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6.             Equity Awards.

 

6.1           Awards of Common Stock Equivalents.

 

(a)   Effective as of each annual
meeting of stockholders of the Company at which directors are elected occurring
after 2005, each Non-Employee Director shall receive an annual award of 20,000 Common
Stock Equivalents.

 

(b)   With respect to the 2005 annual
meeting, each Non-Employee Director shall be credited with an award of 20,000 Common
Stock Equivalents.

 

6.2           Vesting.

 

Unless otherwise provided by the Board in the applicable CSE Agreement,
and subject to the following provisions of this Section 6.2, Common Stock
Equivalents credited to a Participant under Section 6.1 will vest on the date
of the next following annual meeting after the date of grant, except that the
Common Stock Equivalents awarded under Section 6.1(b) shall vest six months
after the date of the 2005 annual meeting. 
Common Stock Equivalents credited pursuant to Section 6.1(a) shall be
subject to the following vesting conditions:

 

(i)            If a Non-Employee
Director does not stand for re-election at an annual meeting at the request of
the Company (other than a request made following a breach by the Non-Employee
Director of the Company’s Code of Business Conduct and Financial Ethics), the
vesting of all of the Common Stock Equivalents held by the Non-Employee Director
will be accelerated to the date of the annual meeting at which the Non-Employee
Director does not stand for reelection.

 

(ii)           If a Non-Employee
Director resigns of his or her own accord or otherwise ceases to serve as a
Non-Employee Director before the end of a vesting period, then, except as
otherwise provided herein or in the applicable CSE Agreement, the Non-Employee
Director will retain Common Stock Equivalents that have vested through the date
of resignation and will therewith forfeit all Common Stock Equivalents that
have not then vested.

 

(iii)          Notwithstanding any
other provision of the Plan, if the Company determines that a Non-Employee
Director has breached the Company’s Code of Business Conduct and Financial
Ethics, the Non-Employee Director will forfeit all Common Stock Equivalents
that have not then vested.

 

(iv)          The vesting of Common
Stock Equivalents will be accelerated if a Non-Employee Director ceases to
serve as a Non-Employee Director by reason of death or Disability or upon a
Reorganization.

 

7.             Dividend
Equivalent Rights.

 

(a)   Except as may otherwise be
provided by the Board at or before the time the applicable Common Stock
Equivalent is credited, Non-Employee Directors will receive a Dividend
Equivalent Right in respect of any credited Common Stock Equivalents (whether
from deferred Cash Fees or equity awards), which right consists of the right to
receive a cash payment in an amount equal to the dividend distributions paid on
a Share from time to time.  Except as
provided in Section 7(b), or as may otherwise be provided by the Board (taking into account the rules applicable under
Section 409A of the Code) at or before the time the applicable Common
Stock Equivalent is paid, payment in respect of a Dividend Equivalent Right
shall be made at the same time as dividends are paid on the Common Stock.

 

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(b)   Instead of the form of payment
as contemplated by Section 7(a) above, except as may otherwise may be provided
by the Board (taking into account the rules
applicable under Section 409A of the Code), Participants may elect, in
accordance with the deferral election timing rules set forth in Section 5.2(a),
to have Common Stock Equivalents credited in respect of the Dividend Equivalent
Rights referred to in Section 7(a). 
Unless otherwise determined by the Board, the number of Common Stock
Equivalents to be credited with respect to a Dividend Equivalent Right shall be
equal to (i) the amount of the payment in respect of the Dividend
Equivalent Right otherwise to be made divided by (ii) the Fair Market
Value of a Share on the date the corresponding dividend distribution is made to
stockholders of the Company, provided that such Common Stock Equivalent shall
vest at such time as the underlying Common Stock Equivalent vests (and shall be
forfeited if the underlying Common Stock Equivalent is forfeited).

 

8.             Settlement and
Withdrawal.

 

(a)   Distributions with respect to
(i) vested Common Stock Equivalents will be settled by the transfer of Common
Stock to the Participant, or, in the discretion of the Board, solely in cash or
in a combination of cash and Common Stock, with an aggregate amount of any cash
and the Fair Market Value of any such Common Stock to equal the aggregate CSE
Value of such Common Stock Equivalents on the date of such distribution; and
(ii) cash deferrals from a Participant’s Account will be settled by a cash
payment to the Participant, or, in the discretion of the Board, solely in
Common Stock or in a combination of Common Stock and cash, in an amount equal
to the value of the Participant’s Account as of the Valuation Date coincident
with or immediately prior to the date of such distribution.  Unless otherwise elected, as provided below,
such distributions shall be made as soon as practicable after the Regular
Distribution Date by the transfer of Common Stock or cash, as applicable, to
the Participant.  Notwithstanding
anything to the contrary contained in the Plan, in no event will Common Stock be
used to settle distributions unless the Common Stock is available for such use
pursuant to the rules of any stock exchange on which the Common Stock is then
traded.

 

(b)   The Regular Distribution Date
with respect to a Participant is the earlier of (1) the January 1
coincident with or next following the earlier of (i) the Non-Employee
Director’s ceasing to be a Non-Employee Director of the Company (or its
successor in interest), and (ii) the Non-Employee Director’s death, and
(2) a Reorganization (the “Regular Distribution Date”).

 

(c)   A Non-Employee Director will be
permitted, prior to the beginning of the applicable annual period, with respect
to Cash Fees paid during such applicable annual period, to elect to receive
distributions at times other than the Regular Distribution Date.  Each such election will apply to all Common
Stock Equivalents and credits to a Participant’s Account during the applicable
annual period after the election is made, unless the Non-Employee Director
specifically elects otherwise.  Elections
to defer distributions to a time or times after the Regular Distribution Date
will be permitted only to the extent the election is accepted by the Board.

 

(d)   After a Common Stock Equivalent
is awarded or Cash Fees are deferred to a Participant’s Account, the
Non-Employee Director will have the right to make a new distribution election
with respect thereto in accordance with this Section 8(d).  Such an election, unless otherwise determined by the Board (taking into account the rules
applicable under Section 409A of the Code) must (A) be effective at least one
year after the election is made, or, in the case of payments to commence at a
specific time, be made at least one year before the first scheduled payment and
(B) defer the commencement of distributions (and each affected distribution)
for at least five years.  Each
such election will apply to all Common Stock Equivalents and credits to the
deferral Account (other than distributions that do not satisfy the timing
requirements of the foregoing sentence), unless the Non-Employee Director
specifically elects otherwise.  Elections
to defer distributions to a time or times after the Regular Distribution Date
will be permitted only to the extent the election is accepted by the Board.

 

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(e)   All distributions in respect of
Common Stock Equivalents and Participant Accounts will be made no later than 45
days after the amounts become eligible for settlement as provided in this
Section 8; provided, however, that, in lieu of providing a single delivery of
Common Stock or a single sum of cash, a Non-Employee Director may elect to have
the aggregate amounts paid in substantially equal annual installments over a
period not to exceed 10 years.  (The
amount of each installment shall be determined without regard to the
possibility of earnings and losses subsequent to such installment.)  Any such election must be made within the
time frame for making distribution elections as described in Section 5.2 and
Section 8(c) or (d), as applicable.

 

(f)    Notwithstanding the foregoing
provisions of this Section 8, a Participant may receive any amounts deferred by
the Participant in the event of an “Unforeseeable Emergency.”  For these purposes, an “Unforeseeable
Emergency,” as determined by the Board in its sole discretion, is a severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or “dependent,” as defined in Section
152(a) of the Code, of the Participant, loss of the Participant’s property due
to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.  The circumstances that will constitute an
Unforeseeable Emergency will depend upon the facts of each case, but, in any
case, payment may not be made to the extent that such hardship is or may be
relieved:

 

(i)            through reimbursement
or compensation by insurance or otherwise,

 

(ii)           by liquidation of the
Participant’s assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship, or

 

(iii)          by future cessation of
the making of additional deferrals.

 

Without limitation, the
need to send a Participant’s child to college or the desire to purchase a home
shall not constitute an Unforeseeable Emergency.  Distributions of amounts because of an
Unforeseeable Emergency shall be permitted to the extent reasonably needed to
satisfy the emergency need.  It is
understood that, no event or condition shall constitute an Unforeseeable
Emergency to the extent that, if it were, a 20% tax would be imposed under
Section 409A of the Code; provided that, in such a case, the event or condition
shall continue to constitute an Unforeseeable Emergency to the maximum extent
possible without causing the imposition of such 20% tax.

 

(g)   Notwithstanding the foregoing
provisions of this Section 8, in the event of a Reorganization, the Regular
Distribution Date shall be the date of such Reorganization and all amounts due
with respect to Common Stock Equivalents and Accounts to a Participant
hereunder shall be paid as soon as practicable (but in no event more than 30
days) after such Reorganization, unless the Board permits such Participant to
elect otherwise and the Participant so elects in accordance with procedures established
by the Board.

 

9.             Tax Withholding.

 

Each Non-Employee Director is generally responsible for his or her own
tax obligations as a result of the operation of the Plan.  However, in the event the Company is required
to withhold any taxes in connection with credits of Common Stock Equivalents
(including any related Dividend Equivalent Rights) or deferred Cash Fees or
related payments hereunder, the Company may in its sole discretion determine
the method and amount of withholding, including, if payment with respect to the
Common Stock Equivalent is made in Common Stock, (i) requiring the
Participant to pay to the Company, at the time such payment is made to such
Participant, the amount that the Board deems necessary to satisfy the Company’s
obligation to withhold federal, state or local income or other taxes incurred
by reason of such payment or (ii) withholding Shares from the Shares
otherwise to be received

 

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by the Participant in order to satisfy the liability
for such withholding taxes.  In the event
that the Board chooses the method described in clause (ii) above, the
number of Shares so withheld shall have an aggregate Fair Market Value on the
applicable Valuation Date sufficient to satisfy the applicable withholding
taxes.  Notwithstanding anything
contained in the Plan to the contrary, the Participant’s satisfaction of any
tax-withholding requirements imposed by the Board shall be a condition
precedent to the Company’s obligation as may otherwise be provided hereunder to
make any payments or other distributions with respect to Common Stock
Equivalents and deferred Cash Fees, and the failure of the Participant to
satisfy such requirements with respect to the payment in respect of any Common
Stock Equivalent or deferred cash fee shall cause the applicable Common Stock
Equivalent or deferred cash fee and any rights relating thereto and to be
forfeited.

 

10.           Administration of
Plan.

 

(a)   The Plan shall be administered
by the Board.  The Board shall have authority
to (taking into account, without limitation, the application of Section 409A of
the Code, as the Board may deem appropriate): 
(i) determine the number of Common Stock Equivalents to be credited
to each Participant; (ii) determine the amount of Cash Fees to be paid to
each Participant; and (iii) determine or impose conditions on such Common
Stock Equivalents and deferred Cash Fees under the Plan as it may deem
appropriate.  The Participant shall take
whatever additional actions and execute whatever additional documents the Board
may in its reasonable judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on the
Participant pursuant to the express provisions of the Plan.  Notwithstanding the foregoing, the Board may
delegate any or all of its powers under the Plan to a committee of the Board,
and to the extent of such delegation, such committee shall have the powers and
authority otherwise applicable with respect to the Board hereunder.

 

11.           Regulations and
Approvals.

 

(a)   The Board may make such changes
to the Plan as may be necessary or appropriate to comply with the rules and
regulations of any government authority or to obtain tax benefits applicable to
deferred equity units.

 

(b)   Each credit of Common Stock
Equivalents (or issuance of Shares in respect thereof) is subject to the
requirement that, if at any time the Board determines, in its discretion, that
the listing, registration or qualification of Shares issuable pursuant to the
Plan is required by any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body or of the
stockholders of the Company is necessary or desirable as a condition of, or in
connection with, the issuance of Common Stock Equivalents or Shares, no payment
shall be made, or Common Stock Equivalents or Shares issued, in whole or in
part, unless listing, registration, qualification, consent or approval has been
effected or obtained free of any conditions in a manner acceptable to the
Board.

 

(c)   In the event that the
disposition of stock acquired pursuant to the Plan is not covered by a then
current registration statement under the Securities Act, and is not otherwise
exempt from such registration, such Shares shall be restricted against transfer
to the extent required under the Securities Act, and the Board may require any
individual receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that such Shares
will be disposed of only if registered for sale under the Securities Act or if
there is an available exemption for such disposition, and may provide for a
legending of such Shares to that effect.

 

12.           Interpretation and
Amendments.

 

(a)   The Board may make such rules
and regulations and establish such procedures for the administration of the
Plan as it deems appropriate.  Without
limiting the generality of the foregoing, the

 

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Board may (i) determine the extent, if any, to
which Cash Fees or equity awards shall be forfeited (whether or not such
forfeiture is expressly contemplated hereunder); (ii) interpret the Plan,
elections made under the Plan, and the Common Stock Equivalents hereunder, with
such interpretations to be conclusive and binding on all persons and otherwise
accorded the maximum deference permitted by law; and (iii) take any other
actions and make any other determinations or decisions that it deems necessary
or appropriate in connection with the Plan or the administration or
interpretation thereof.  Unless otherwise
expressly provided hereunder, the Board, with respect to any Participant’s
Account, may exercise its discretion hereunder at the time of such credit or
thereafter.  In the event of any dispute
or disagreement as to the interpretation of the Plan or of any rule, regulation
or procedure, or as to any question, right or obligation arising from or
related to the Plan, the decision of the Board shall be final and binding upon
all persons.

 

(b)   The Board may amend the Plan as
it shall deem advisable, except that no amendment may adversely affect a
Participant with respect to deferred Cash Fees or equity awards previously
credited unless such amendments are required in order to comply with applicable
laws; provided that the Board may not make any amendment to the Plan that
would, if such amendment were not approved by the holders of the Common Stock,
cause the Plan to fail to comply with any requirement of applicable law or
regulation, unless and until the approval of the holders of such Common Stock
is obtained.

 

13.           Assignment and
Alienation; No Funding; Etc.

 

(a)   Rights or benefits with respect
to Cash Fees or equity awards credited to a Participant’s Account under the
Plan (including any related Dividend Equivalent Rights) shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, charge, garnishment, execution, or levy of any kind,
either voluntary or involuntary, prior to actually being received by the person
entitled to the benefit under the terms of the Plan; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, attach, charge
or otherwise dispose of any right or benefits payable hereunder shall be void.

 

(b)   A Participant may designate in
writing, on forms to be prescribed by the Board, a beneficiary or beneficiaries
to receive any payments payable after his or her death and may amend or revoke
such designation at any time.  If no
beneficiary designation is in effect at the time of a Participant’s death,
payments hereunder shall be made to the Participant’s estate.  If a Participant dies: (i) with a vested
Common Stock Equivalent, such Common Stock Equivalent shall be settled and
Shares or the CSE Value, as applicable, with respect to such Common Stock
Equivalents paid; (ii) any payments deferred pursuant to an election under
Section 5 shall be accelerated and paid; or (iii) any other amounts in the
Participant’s Account then payable to the Participant shall be paid, as soon as
practicable (but no later than 90 days) after the date of death to such
Participant’s beneficiary or estate, as applicable.

 

(c)   Common Stock Equivalents and
the Accounts are solely a device for the measurement and determination of the
amounts to be paid to a Participant under the Plan.  Each Participant’s right in the Common Stock
Equivalents (including any related Dividend Equivalent Rights) and the Accounts
is limited to the right to receive payment, if any, as may herein be
provided.  The Common Stock Equivalents
do not constitute Common Stock and any other credits to a Participant’s Account
hereunder shall not be treated as (or as giving rise to) property or as a trust
fund of any kind; provided, however, that the Company may establish a mere
bookkeeping reserve to meet its obligations hereunder or a trust or other
funding vehicle that would not cause the Plan to be deemed to be funded for tax
purposes.  The right of any Participant
to receive payments by virtue of participation in the Plan shall be no greater
than the right of any unsecured general creditor of the Company.  Nothing contained in the Plan, and no action
taken pursuant to the provisions of the Plan (including without limitation
Section 5.2(c)), shall create or shall be construed to create a trust of any
kind, or a fiduciary relationship between the Company or its officers or the
Board, on the one hand, and the Participant, the Company or any other

 

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person or entity, on the other.  Nothing contained in the Plan shall be
construed to give any Participant any rights with respect to Shares or any
ownership interest in the Company. 
Without limiting Section 7, no provision of the Plan shall be
interpreted to confer upon any Participant any voting, dividend or derivative
or other similar rights with respect to any Common Stock Equivalent.

 

(d)   Common Stock distributed
hereunder, if any, may, without limitation, be treasury Shares or authorized but
unissued Shares.

 

14.           Changes in Capital
Structure.

 

(a)   If (i) the Company or its
Subsidiaries shall at any time be involved in a merger, consolidation,
dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of the Company or its Subsidiaries or
a transaction similar thereto, (ii) any stock dividend, stock split,
reverse stock split, stock combination, reclassification, recapitalization or
other similar change in the capital structure of the Company or its
Subsidiaries, or any distribution to holders of Common Stock other than cash
dividends, shall occur or (iii) any other event shall occur which in the
judgment of the Board necessitates action by way of adjusting the terms of the
outstanding Common Stock Equivalents, then the Board may take any such action
as in its judgment shall be necessary to preserve the Participants’ rights in
their respective Common Stock Equivalents substantially proportionate to the
rights existing in such Common Stock Equivalents prior to such event,
including, without limitation, adjustments in the number of Common Stock
Equivalents credited, CSE Value, Dividend Equivalent Rights, and the number and
kind of shares to be distributed in respect of Common Stock Equivalents (as
applicable).

 

(b)   The judgment of the Board with
respect to any matter referred to in this Section 14 shall be conclusive and
binding upon each Participant without the need for any amendment to the Plan.

 

15.           Notices.

 

All notices under the Plan shall be in writing, and if to the Company,
shall be delivered to the Board or mailed to its principal office, addressed to
the attention of the Board; and if to the Participant, shall be delivered
personally or mailed to the Participant at the address appearing in the records
of the Company.  Such addresses may be
changed at any time by written notice to the other party given in accordance
with this Section 15.

 

16.           No Rights to
Service.

 

Nothing in the Plan, in amounts credited to a Participant’s Account, or
in Common Stock Equivalents credited pursuant to the Plan shall confer on any
individual any right to continue in the service of the Company or its
Subsidiaries or interfere in any way with the right of the Company or its
Subsidiaries and its stockholders to terminate the individual’s service at any
time.

 

17.           Exculpation and
Indemnification.

 

The Company shall indemnify and hold harmless the members of the Board
and the members of the Committee from and against any and all liabilities,
costs and expenses incurred by such persons as a result of any act or omission
to act in connection with the performance of such person’s duties,
responsibilities and obligations under the Plan, to the maximum extent
permitted by law, other than such liabilities, costs and expenses as may result
from the gross negligence, bad faith, breach of the Company’s Code of Ethics,
willful misconduct or criminal acts of such persons.

 

9

 

18.           Captions.

 

The use of captions in this Plan is for convenience.  The captions are not intended to provide
substantive rights.

 

10Exhibit 10.1

 

MANAGEMENT SUBSCRIPTION AGREEMENT

 

MANAGEMENT SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of November 24, 1999,
by and among Big Flower Holdings Inc., a Delaware corporation (the “Company,”
which term shall, in the context of employment with the Company, also refer to
any subsidiaries thereof), Thomas H. Lee Equity Fund IV, L.P. (the “Sponsor”)
and Donald E. Roland (the “Purchaser”), who is presently an officer, member of
management or key employee of the Company.

 

WHEREAS, the Company has previously issued options (the “BFH Options”)
to purchase common stock, par value $.01 per share, of the Company to certain
officers, members of management, key employees, consultants and advisors of the
Company and certain of its subsidiaries, and the Company may issue to the
Purchaser and to certain other officers, members of management and key
employees of the Company and certain of its subsidiaries, (the “Other
Purchasers”) Rights (as hereinafter defined) to acquire shares of common stock,
$.01 par value, of the Company (the “Common Stock”) upon the acceptance by the
Company of an offer (the “Offer”) by the Purchaser and by Other Purchasers to
surrender and exchange such Purchaser’s or such Other Purchasers’ BFH Options
(or a portion thereof), as the case may be, for such Rights, on the terms
and conditions set forth herein;

 

WHEREAS, in addition to the surrender and exchange of BFH Options for
Rights, the Purchaser (and the Other Purchasers) may be given the
opportunity to subscribe for and acquire from the Company, and the Company will
sell to the Purchaser, up to the number of shares of Common Stock of the
Company (the “Shares”) set forth on Schedule I hereto, on the terms and
conditions set forth herein;

 

WHEREAS, to the extent the Purchaser elects to borrow the Share
Purchase Price (as hereinafter defined) from the Company, upon the Company’s
agreement to loan funds to the Purchaser, the Purchaser will enter into a
Promissory Note (the “Note”), the form of which is attached as Exhibit B
hereto, and the Securities Pledge Agreement (as hereinafter defined); and

 

WHEREAS, this Agreement is one of several Management Subscription Agreements
(such Management Subscription Agreements with the Other Purchasers, the “Other
Purchasers’ Agreements”), that have been and are being entered into by the
Company with the Purchaser and the Other Purchasers.

 

NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:

 

1.                             Certain Definitions.

 

As used in this Agreement, the following terms shall have the meanings
ascribed to them below:

 

 

Agreement.
The term “Agreement” shall have the meaning ascribed to it in the preamble
hereto.

 

Allotment.
The term “Allotment” shall have the meaning ascribed to it in Section 7.1.

 

BFH Options.
The term “BFH Options” shall have the meaning ascribed to it in the first “Whereas”
clause.

 

Closing. The
term “Closing” shall have the meaning ascribed to it in Section 2.2(a).

 

Closing Date.
The term “Closing Date” shall have the meaning ascribed to it in Section 2.2(a).

 

Common Stock.
The term “Common Stock” shall have the meaning ascribed to it in the first “Whereas”
clause.

 

Company. The
term “Company” shall have the meaning ascribed to it in the preamble hereto.

 

Disability.
The term “Disability” of the Purchaser shall mean the inability of the
Purchaser to perform substantially Purchaser’s duties and responsibilities
to the Company or any subsidiary of the Company by reason of a physical or mental
disability or infirmity for a continuous period of three months. The date of
such Disability shall be the earlier of (x) last day of such three-month period
or (y) the day on which the Purchaser submits to the Company medical evidence
of such Disability reasonably satisfactory to the Company.

 

Exchange. The
term “Exchange” shall mean the principal stock exchange, including the Nasdaq
Stock Market, on which the Common Stock is listed or approved for listing.

 

Fair Market Value. The term “Fair Market Value” used in connection with the value of
Rights or Shares shall mean, with respect to such Rights or Shares, the fair
market value thereof as determined by the Board of Directors of the Company in
its reasonable discretion after considering any valuations of the Company or
any subsidiary of the Company which have been received by the Company or any
subsidiary of the Company or the trustee of any benefit plan of the Company or
any subsidiary of the Company during the preceding 12 months; provided,
however, that if there is a Minimum Public Float, the term “Fair Market
Value” shall mean (x) the average of the daily closing prices, or the average
of the daily bid and asked prices (as the case may be), per share of
Common Stock for the 20 trading days immediately preceding the date of
termination of the Purchaser’s employment with the Company multiplied by (y)
the number of shares of Common Stock (including Rights to purchase shares of
Common Stock) being purchased and sold.

 

2

 

Liquidation Event. The term “Liquidation Event” shall mean (1) a public offering of
the Common Stock registered pursuant to the Securities Act where there is a
Minimum Public Float immediately following such offering, (2) a merger or
other business combination or recapitalization whereby the Common Stock is
exchanged for cash and/or publicly traded equity or debt securities in another
entity or a combination of cash and other non-publicly traded equity or debt
securities where cash constitutes at least a majority of the consideration to
be received in such merger, business combination or recapitalization or (3) a
sale or other disposition of all or substantially all of the Company’s assets
to another entity, for cash and/or publicly traded equity or debt securities of
another entity or a combination of cash and other non-publicly traded equity or
debt securities where cash constitutes at least a majority of the proceeds of
such sale or disposition, in each case, other than to the Company, any subsidiary
of the Company, or any entity controlled by the ultimate control persons of the
Company.

 

Memorandum.
The term “Memorandum” shall have the meaning ascribed to it in Section 2.1.

 

Merger. The
term “Merger” shall mean the Merger of BFH Merger Corp. with and into the
Company as contemplated by the Merger Agreement.

 

Merger Agreement.
The term “Merger Agreement” shall mean that certain Amended and Restated
Agreement and Plan of Merger dated as of October 11, 1999, between BFH
Merger Corp. and the Company, as amended and supplemented from time to time.

 

Minimum Public Float. The term “Minimum Public Float” shall mean the circumstances existing
when (i) the consummation of one or more public offerings registered
pursuant to the Securities Act of shares of Common Stock if, upon such
consummation, the aggregate number of shares of Common Stock held by the public
represents at least 20% of the total number of outstanding shares of Common
Stock at the time of such public offering and (ii) the Common Stock is
listed on an Exchange.

 

Note. The
term “Note” shall have the meaning ascribed to it in the third “Whereas”
clause.

 

Offer. The
term “Offer” shall have the meaning ascribed to it in the first “Whereas”
clause.

 

Other Purchasers.
The term “Other Purchasers” shall have the meaning ascribed to it in the first “Whereas”
clause.

 

Other Purchasers’ Agreements. The term “Other Purchasers’ Agreements” shall have the meaning
ascribed to it in the fourth “Whereas” clause.

 

Participants.
The term “Participants” shall have the meaning ascribed to it in Section 7.1.

 

3

 

Permitted Transferee. The term “Permitted Transferee” shall have the meaning ascribed to it
in Section 4.2.

 

Person. The
term “person” shall mean any individual, group, corporation, limited liability
company, partnership, trust, unincorporated organization or government or
political department or agency thereof or other entity.

 

Purchaser.
The term “Purchaser” shall have the meaning ascribed to it in the preamble
hereto.

 

Purchaser’s Donee’s Estate. The term “Purchaser’s Donee’s Estate” shall have the meaning ascribed
to it in Section 4.2(d).

 

Purchaser’s Donee. The term “Purchaser’s Donee” shall have the meaning ascribed to it in
Section 4.2(d).

 

Purchaser’s Estate. The term “Purchaser’s Estate” shall have the meaning ascribed to it
in Section 4.2(b).

 

Purchaser’s Group. The term “Purchaser’s Group” shall have the meaning ascribed to it in
Section 5.1.

 

Purchaser’s Trust. The term “Purchaser’s Trust” shall have the meaning ascribed to it in
Section 4.2(c).

 

Retirement.
The term “Retirement” shall mean, with respect to the Purchaser, the Purchaser’s
retirement as an employee of the Company as determined by the applicable policy
of the Company or subsidiary of the Company which employs the Purchaser or, if
no such policy exists, then upon the Purchaser reaching age 65, provided that
the Purchaser has at least three years of continuous service with the Company
or such subsidiary following the Closing Date.

 

Rights. The
term “Rights” shall mean the right to receive Common Stock pursuant to the
terms set forth herein.

 

Rights Consideration. The term “Rights Consideration” shall have the meaning ascribed to it
in Section 2.1(b).

 

SEC. The term
“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

Securities.
The term “Securities” shall mean the Rights (and any shares of Common Stock
issued upon exercise of the Rights) and the Shares.

 

4

 

Securities Act.
The term “Securities Act” shall mean the Securities Act of 1933, as amended,
and all rules and regulations promulgated thereunder.

 

Securities Pledge Agreement. The term “Securities Pledge Agreement”
shall mean the agreement, substantially in the form of Exhibit B
hereto, or any other agreement to which the Purchaser and the Company are
parties and pursuant to which the Purchaser has pledged the Shares as
collateral for a loan by the Company, the proceeds of which loan are used to
fund the Share Purchase Price.

 

Share Purchase Price. The term “Share Purchase Price” shall have the meaning ascribed to it
in Section 2.1(a).

 

Shares. The
term “Shares” shall have the meaning ascribed to it in the second “Whereas”
clause.

 

Sponsor. The
term “Sponsor” shall have the meaning ascribed to it in the preamble hereto.

 

Tag-Along Notice.
The term “Tag-Along Notice” shall have the meaning ascribed to it in Section 7.1.

 

Tag-Along Transfer. The term “Tag-Along Transfer” shall have the meaning ascribed to it
in Section 7.1.

 

Third Party.
The term “Third Party” shall mean any person or entity excluding each of the
following: (a) the Purchaser, the Other Purchasers and their respective
Permitted Transferees; (b) the Company, and its subsidiaries or
affiliates; and (c) the principal beneficial owners of the Company and
their respective affiliates.

 

Transfer. The
term “Transfer,” when used with respect to the Shares, the Rights or shares of
Common Stock issuable upon exercise of Rights, shall mean any sale, transfer,
assignment, pledge, hypothecation, encumbrance or other disposition thereof.

 

Transfer Date.
The term “Transfer Date” shall have the meaning ascribed to it in Section 7.1.

 

Trust. The
term “Trust” shall have the meaning ascribed to it in Section 2.1.

 

Violation.
The term “Violation” shall have the meaning ascribed to it in Section 6.1.

 

5

 

2.             Purchase of Shares and Grant of Rights.

 

2.1           (a)           Purchase of Shares. Upon the terms and subject to the
conditions set forth in this Agreement and, if applicable, the Note and the
Securities Pledge Agreement, the Purchaser, in reliance upon (i) this
Agreement, (ii) the Confidential Private Placement Memorandum, dated November 12,
1999, and the attachments thereto (the “Memorandum”), relating to the issuance
and sale of the Shares and the Rights, and (iii) other information
provided to the Purchaser upon such Purchaser’s request (all of which the
Purchaser has received and reviewed), hereby subscribes for and agrees to
purchase, and the Company hereby agrees to issue and sell to the Purchaser, on
the Closing Date, that number of Shares set forth under the column “Shares” on Schedule I
hereto (which number may be zero; if such number is zero, then provisions
of this Section 2.1(a) shall be of no force and effect) at a price of
$31.50 per Share (the aggregate amount to be received by the Company for such
Shares is referred to herein as the “Share Purchase Price”). The Share Purchase
Price will be payable in cash in full at the Closing. The Purchaser
acknowledges and agrees that the Shares, to the extent pledged as collateral
under the Securities Pledge Agreement, will remain in the possession of the
Company until the conditions contained in the Securities Pledge Agreement have
been satisfied or waived.

 

(b)           Grant of Rights. Upon the terms and subject to the
conditions set forth in this Agreement, the Purchaser, in reliance upon (i) this
Agreement, (ii) the Memorandum, (iii) the Offer to Surrender, the form of
which is attached hereto as Exhibit A, and (iv) other information
provided to the Purchaser upon such Purchaser’s request (all of which the
Purchaser has received and reviewed), hereby irrevocably Offers to surrender
and exchange the number of Purchaser’s BFH Options (or portions thereof) as set
forth under the column “BFH Options Surrendered” on Schedule I hereto (the
“Rights Consideration”; this number of BFH Options may be zero; if such
number is zero, then the provisions of this Section 2.1(b) shall be
of no force and effect) for that number of Rights as determined in accordance
with the Offer to Surrender. Purchaser acknowledges and agrees that such Offer
must be accepted by the Company in compliance with the terms set forth in the
Offer to Surrender for the Offer to be effective. Each Right shall entitle the
Purchaser to one share of Common Stock upon the occurrence of a Liquidation
Event. The Purchaser acknowledges and agrees that the Company shall issue that
number of shares of Common Stock (as determined by the Company in accordance
with Section 2.2 hereof) equal to the Aggregate Spread (as defined in the
Offer to Surrender) of the BFH Options surrendered, to an irrevocable trust
(the “Trust”), which assets will be subject to the claims of the Company’s
creditors. The Purchaser shall have no security interest in the Trust or its
assets and shall have the status of an unsecured creditor of the Company with
respect to the Company’s obligation to issue the shares of Common Stock to the
Purchaser upon the occurrence of a Liquidation Event. The shares of Common
Stock deposited in the Trust will be issued and outstanding as of the Closing
Date, and will be beneficially owned by the Trust. Until the occurrence of a
Liquidation Event, all actions with respect to the shares of Common Stock
deposited in the Trust, including, without limitation, the voting thereof, will
be performed solely by the Trust, without any communication with, notice to, or
approval of the holder of the Rights.

 

6

 

(c)           Limitation on the Company’s Obligations. Notwithstanding the foregoing, the Company
shall have no obligation to issue, sell or deliver any Rights or Shares to the Purchaser
if (i) the Purchaser is not a full-time employee of the Company on the
Closing Date, (ii) the Purchaser is a resident of a jurisdiction in which
such issuance, sale or delivery to such Purchaser would constitute a violation
of the securities or “blue sky” laws of such jurisdiction or (iii) any of
the representations or warranties of the Purchaser set forth in Section 3
of this Agreement are not true and correct in all respects as of the date
hereof and as of the Closing Date or the Purchaser shall have failed to perform and
comply with in full all of the covenants and agreements contained in this
Agreement and, if applicable, the Securities Pledge Agreement that are required
to be performed or complied with by the Purchaser at or prior to the Closing
Date.

 

(d)           Redemption Upon Exchange Offer. At any time that the Company offers to the
Purchaser to exchange the Securities for securities in the subsidiary by which
the Purchaser is employed, the Purchaser shall have the right, on one occasion,
during the 10-day period after commencement of such offer to exchange, to sell
to the Company any or all of the Rights and Shares then held by the Purchaser
or the Purchaser’s Group at a price per Security equal to (x) the Aggregate
Spread (as defined in the Offer) of the BFH Options (or portion thereof)
surrendered pursuant to the Offer divided by the number of Rights originally
subscribed for under this Agreement, in the case of the Rights, and (y) $31.50,
in the case of Shares, The Company shall be required to purchase such Rights
and Shares at such price, subject to Section 6 hereof.

 

2.2           The Closing. (a) The closing (the “Closing”) of the purchase and sale of the
Shares and the surrender and exchange of BFH Options for Rights shall take
place at the offices of the Company on any business day selected by the Company
following the Effective Time (as defined in the Merger Agreement), as more
fully described in the Memorandum, or at such other time and place as the
parties may agree (the “Closing Date”); provided, however, that the
Company shall have the right to terminate this Agreement at any time prior to
the Closing. If the Company terminates this Agreement prior to the Closing, the
Company shall promptly notify the Purchaser and shall return to the Purchaser
any funds tendered as payment of the Share Purchase Price without interest.

 

(b)           At the Closing (if the Purchaser is purchasing Shares), the Company and
the Purchaser shall execute and deliver, if applicable, the Securities Pledge
Agreement, and the Company shall deliver certificates representing the number
of Shares set forth in Section 2.1(a) hereof to the Purchaser (or the
Company shall retain or otherwise deliver such certificates in accordance with
the terms of the Securities Pledge Agreement), and the Purchaser shall deliver
to the Company a certified or bank cashier’s check payable to the Company in
the amount of the Share Purchase Price and, if applicable, the Note.

 

(c)           At the Closing (if the Purchaser is surrendering and exchanging BFH Options
for Rights), upon acceptance by the Company of the Purchaser’s Offer, the
Company shall deliver to the Trust that number of shares of Common Stock equal
to the Aggregate Spread as determined in accordance with the Offer to Surrender
and the Purchaser shall deliver to the

 

7

 

Company
the BFH Options as set forth in the Offer to Surrender (previously delivered to
the Company) in satisfaction of the Rights Consideration.

 

2.3           Representations and Warranties of the Company. The Company represents and warrants to the
Purchaser as follows:

 

(a)           the Company has full corporate power and authority to execute and deliver
this Agreement and the Securities Pledge Agreement and to perform its
obligations hereunder and thereunder, and upon the Closing Date, this Agreement
and the Securities Pledge Agreement will be, duly authorized, executed and
delivered by the Company and when executed and delivered by the Purchaser, this
Agreement and the Securities Pledge Agreement will be valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, liquidation, reorganization, moratorium and
other laws affecting the rights of creditors generally and subject to the
exercise of judicial discretion in accordance with general principles of equity
(whether applied by a court of law or equity);

 

(b)           the Securities to be issued to the Purchaser, when issued in accordance
with this Agreement will be duly and validly issued and fully paid and
nonassessable; and

 

(c)           the execution, delivery and performance of this Agreement and the Securities
Pledge Agreement by the Company will not conflict with the Company’s
Certificate of Incorporation or Bylaws or result in any material breach of any
terms or provisions of, or constitute a material default under, any material
contract, agreement or instrument to which the Company is a party or by which
the Company is bound.

 

2.4           Representations and Warranties of the
Purchaser. The Purchaser
represents and warrants to the Company as follows:

 

(a)           the Purchaser has all requisite power and authority to enter into this
Agreement and, if applicable, the Offer to Surrender, the Note and the
Securities Pledge Agreement, and to perform the obligations required to be
performed by the Purchaser hereunder and thereunder, and upon the Closing Date,
this Agreement and, if applicable, the Offer to Surrender, the Note and the
Securities Pledge Agreement, will be, duly executed and delivered by the
Purchaser, and, the Offer to Surrender is, and, when executed and delivered by
the Company, this Agreement, the Note and the Securities Pledge Agreement will
be, valid and binding obligations of the Purchaser enforceable against the
Purchaser in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
liquidation, reorganization, moratorium and other laws affecting the rights of
creditors generally and subject to the exercise of judicial discretion in
accordance with general principles of equity (whether applied by a court of law
or equity);

 

8

 

(b)           the Purchaser has received and, by execution hereof, has accepted the
offer with respect to the Securities in the state indicated on Schedule I;
the address set forth on Schedule I for the Purchaser is the address where
the Purchaser is a resident and domiciliary (not a temporary or transient
resident); and the Purchaser is a citizen of the United States or such other
jurisdiction as set forth on Schedule I and is not acquiring the
Securities as an agent or otherwise for any other person; and

 

(c)           if the purchaser is a holder of BFH Options, the Purchaser has good and
marketable title to the BFH Options, which are free and clear of any and all liens,
claims or encumbrances of any nature whatsoever (whether absolute, accrued,
contingent or otherwise), and the BFH Options have been duly authorized for
transfer as contemplated in this Agreement and the Offer to Surrender.

 

3.             Investment Representations of the Purchaser.

 

3.1           Investment Intent. The Purchaser hereby represents and
warrants that the Purchaser is acquiring the Securities for investment solely
for the Purchaser’s own account and not with a view to, or for resale in
connection with, the distribution or other disposition thereof.

 

3.2           Additional Investment Representations. The Purchaser further acknowledges and
represents and warrants that:

 

(a)           no Federal or state agency has passed upon the Securities or made any
finding or determination as to the fairness of this investment;

 

(b)           the Purchaser understands that the Securities are a speculative investment
which involve a high degree of risk of loss of the Purchaser’s investment
therein, there are substantial restrictions on the transferability of the
Securities, and, on the Closing Date and for an indefinite period following the
Closing, there will be no public market for the Securities and, accordingly, it
may not be possible for the Purchaser to liquidate the Purchaser’s investment
in case of emergency, if at all;

 

(c)           the Purchaser has received and carefully reviewed (i) this Agreement,
(ii) the Memorandum and (iii) other information provided to the
Purchaser upon such Purchaser’s request, and the Purchaser understands and has
taken cognizance of the risks related to the purchase of the Securities, and no
representations or warranties have been made to the Purchaser concerning the
Securities or the Company and its prospects, subsidiaries or other matters
except as set forth in this Agreement and the Memorandum;

 

(d)           the Purchaser has been given the opportunity to examine all documents
and to ask questions of, and to receive answers from, the Company concerning
the terms and conditions of the purchase of the Securities and to obtain any
additional information requested by the Purchaser;

 

9

 

(e)           the Purchaser is an officer, member of management or key employee of
the Company or one of its subsidiaries and as such has a high level of
familiarity with the business, operations, financial condition and prospects of
the Company and its subsidiaries; and

 

(f)            the Purchaser has sufficient available
financial resources to provide adequately for the Purchaser’s needs currently
and in the future, including possible personal contingencies, and can bear the
economic risk of a complete loss of the Purchaser’s investment hereunder
(including the Note) without materially affecting the Purchaser’s financial
condition.

 

4.             Restrictions on Transfer.

 

4.1           General Restrictions on Transfer. (a) The Purchaser agrees that until a Liquidation
Event occurs neither the Purchaser nor any of the Purchaser’s Permitted
Transferees will Transfer any Rights or any Shares except as permitted by
Sections 4.2 or 5 hereof. Prior to recognizing or permitting any proposed
Transfer, the Company may require the Purchaser or any of the Purchaser’s
Permitted Transferees to deliver such opinions of counsel and other documents as
the Company deems reasonably necessary in connection with such proposed
Transfer. No Transfer of Shares or Rights in violation of this Agreement or the
Securities Pledge Agreement shall be made or recorded on the books of the
Company and any such Transfer shall be void and of no effect.

 

(b)           The provisions of this Sections 4.1 shall not apply to any Transfers of
Common Stock (i) in a registered public offering, (ii) in an open
market sale pursuant to Rule 144 under the Securities Act or (iii) after
a Liquidation Event occurs.

 

4.2           Certain Permitted Transfers of Securities. Notwithstanding Section 4.1 hereof,
any of the following Transfers of Securities shall be deemed to be in
compliance with this Agreement and no opinion of counsel as to the availability
of an exemption under the Securities Act will be required in connection
therewith; provided, however, that no Transfer of Securities pursuant
to this Section 4.2 (other than a Transfer to the Company) shall be given
effect on the books of the Company unless and until such Permitted Transferee
agrees in writing with the Company to become bound by all the terms of this
Agreement; and provided, further, that any such Transfer must
comply with the terms of the Securities Pledge Agreement, if applicable.

 

(a)           a Transfer made to the Company, any subsidiary of the Company or any of
their respective affiliates;

 

(b)           a Transfer upon the death of the Purchaser to the Purchaser’s executors,
administrators, testamentary trustees, legatees or beneficiaries (the “Purchaser’s
Estate”);

 

10

 

(c)           a Transfer made in compliance with federal and all applicable state securities
laws to a trust, the beneficiaries of which include only the Purchaser and the Purchaser’s
spouse, siblings, or direct lineal ancestors or descendants (a “Purchaser’s
Trust”);

 

(d)           a Transfer made as a gift to the Purchaser’s spouse or lineal descendants
(a “Purchaser’s Donee”) and, upon the death of a Purchaser’s Donee, to his or
her executors, administrators, testamentary trustees, legatees or beneficiaries
(a “Purchaser’s Donee’s Estate”); and

 

(e)           a Transfer made pursuant to a court order in connection with a divorce
proceeding. 

 

Each of the foregoing persons described in subclauses (a) through (e) above
are referred to herein as a “Permitted Transferee.” Any Permitted Transferee may further
Transfer any Securities to any other Permitted Transferee of the Purchaser
(including Transfers back to the Purchaser); provided that no such
Transfer shall be made to a Permitted Transferee (or the Purchaser) hereunder
(whether by the Purchaser or another Permitted Transferee) unless and until
such Permitted Transferee (or, in the event of Transfers back to the Purchaser,
the Purchaser) shall agree in writing, in form and substance satisfactory
to the Company, to become bound by all the terms of this Agreement.

 

4.3           Rule 144. If any shares of Common Stock held by the
Purchaser are disposed of in accordance with Rule 144 under the Securities
Act or otherwise, the Purchaser shall deliver to the Company at or prior to the
time of such disposition such documentation as the Company may reasonably
request in connection with such sale and, in the case of a disposition in accordance
with Rule 144, an executed copy of Form 144 required to be filed with
the SEC (if required by Rule 144).

 

4.4           Discharge of Indebtedness upon Transfer of
Common Stock. Any Transfer
of Shares by the Purchaser, any Permitted Transferee of the Purchaser or any
other person (other than the Company or any of its respective subsidiaries or
affiliates) who has acquired Shares, directly or indirectly, from the Purchaser
shall be void and of no effect unless and until all outstanding indebtedness
(including, but not limited to, the obligations under or relating to the Note
and the Securities Pledge Agreement) of the Purchaser and the Purchaser’s Permitted
Transferees to, or guaranteed by, the Company or any of its subsidiaries or
affiliates (including interest accrued but unpaid thereon and all other fees,
expenses and penalties in connection therewith) shall have been paid and discharged
in full and evidence of same, reasonably acceptable to the Company, is
presented by the Purchaser to the Company.

 

4.5           Legend. (a) Each certificate representing the Shares and the shares of Common
Stock issued upon the exercise of Rights, if any, and any certificates
representing the Rights shall bear substantially the following legends:

 

11

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF A MANAGEMENT SUBSCRIPTION AGREEMENT DATED
AS OF NOVEMBER      , 1999 (A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE COMPANY AND WHICH WILL BE MAILED TO A
STOCKHOLDER WITHOUT CHARGE PROMPTLY AFTER RECEIPT BY THE COMPANY OF A WRITTEN
REQUEST THEREFORE FROM SUCH STOCKHOLDER).

 

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTION THEREFROM.

 

(b)           A notation shall be made in the appropriate records of the Company
indicating that the Securities are subject to restrictions on transfer and, if
the Company should at some time in the future engage the services of a
securities transfer agent, appropriate stop-transfer instructions will be
issued to such transfer agent with respect to the Securities.

 

5.             Certain Sales Upon Termination of Employment.

 

5.1           Put. (a) If the Purchaser’s employment with the Company is terminated
by either the Purchaser or the Company due to Retirement, Disability or death
of the Purchaser, and there is no Minimum Public Float at the time of such
Retirement, Disability or death, each of the Purchaser and the Purchaser’s
Permitted Transferees (hereinafter sometimes collectively referred to as the “Purchaser’s
Group”) shall have the right (subject to Section 6 hereof) for 90 days
after the date of termination of such employment, to sell to the Company, on
one occasion for the Purchaser’s Group, any or all of the Rights and the Shares
then held by the Purchaser’s Group at the price set forth in Section 5.3
and the Company shall be required to purchase (subject to Section 6
hereof) such Rights and Shares at such price.

 

(b)           Each member of the Purchaser’s Group who desires to sell any or all of
its Shares or Rights shall, not later than 90 days after the date of
termination of employment, send to the Company written notice of the Purchaser’s
Group’s intention to sell Shares or Rights pursuant to this Section 5.1,
specifying the number of Shares and Rights to be sold. The closing of the
purchase shall take place at the principal office of the Company within 10 days
after the giving of such notice as designated in writing by the Company.

 

(c)           If the Purchaser or the Purchaser’s Permitted Transferees do not exercise
the put right pursuant to this Section 5.1, then upon
expiration of such 90-day period,

 

12

 

the
Company shall have a call right with respect to such Shares and Rights held by
the Purchaser and the Purchaser’s Group for a period of 30 days exercisable
upon notice to the Purchaser or the Purchaser’s Group that the Closing will
take place at the principal office of the Company within 10 days after the
giving of such notice.

 

5.2           Call. (a) Subject to Section 5.3, if the Purchaser’s employment
with the Company is terminated by either the Purchaser or the Company for any
reason other than Retirement, Disability or death of the Purchaser, the Company
shall have the right and option to purchase, for 90 days after the date of
termination of such employment, any or all of the Rights and the Shares then
held by the Purchaser and the Purchaser’s Group, at the price set forth in Section 5.3.

 

(b)           If the Company desires to exercise its option to purchase any Shares or
Rights pursuant to this Section 5.2, the Company shall, not later than
90 days after the date of such termination of employment, send to the Purchaser
written notice of its intention to purchase Shares and Rights pursuant to this Section 5.2,
specifying the number of Shares and Rights to be purchased. The closing of the
purchase shall take place at the principal office of the Company within 10 days
after the giving of such notice.

 

5.3           Purchase Price to Be Paid by Company. The purchase price to be paid by the
Company upon exercise of a put or call right as set forth in Section 5.1
or 5.2 shall be the Fair Market Value of such Rights or Shares determined as of
the date the notice of such exercise is first given; provided, however, that if
the Employee is terminated for cause (as defined in the Purchaser’s employment
agreement with the Company in effect at such time or as determined by the board
of directors of the entity by which the Purchaser is employed), then the
purchase price to be paid by the Company under Section 5.2 shall be the
lesser of the Fair Market Value and the original cost of such Securities paid
by the Purchaser hereunder (i.e., the Rights Consideration in the case
of Rights and the Share Purchase Price in the case of Shares).

 

5.4           Obligation to Sell. If there is more than one member of the
Purchaser’s Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by the
Company shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

 

6.             Certain Limitations on the Company’s
Obligations to Purchase Common Stock or Rights.

 

6.1           Limitation on Purchases. (a) The Company shall not be obligated
to purchase any Shares or any Rights at any time pursuant to Section 2.1(d),
4 or 5 hereof, regardless of whether it has delivered a notice of its election
to purchase any such Shares or Rights, to the extent that the purchase of such
Shares or Rights (together with any other purchases of Common Stock, Other
Rights or other securities of the Company pursuant to Section 2.1(d), 4 or
5 hereof, or pursuant to the Other Purchasers’ Agreements, of which the Company
has at such time been given or has given notice) would (i) conflict with
or result in a

 

13

 

violation
of, any law, rule, regulation, policy, guideline, order, writ, injunction,
decree or judgment promulgated or entered by any federal, state, local or
foreign court or governmental authority applicable to the Company or any of its
subsidiaries or any of its or their properties or assets or (ii) result in
a default (or require the consent of any Third Party in order to avoid a
default) under any material contract, deed, mortgage, trust, financing or
credit agreement, arrangement or agreement of the Company or any of its
subsidiaries (any of such results described in (i) or (ii) being
sometimes hereinafter referred to as a “Violation”). The Company shall purchase
such Shares or Rights as promptly as practicable upon determining that such
purchase would not be a Violation.

 

(b)           If at any time consummation of all purchases by the Company of Shares,
Rights, Other Rights and other securities of the Company pursuant to Section 2.1
(d), 4 or 5 hereof, or pursuant to the Other Purchasers’ Agreements, is
prohibited pursuant to Section 6.1(a), then the Company shall purchase
from the members of the Purchaser’s Group desiring or obligated to sell to the
Company the Shares or Rights pursuant to this Agreement and from the other
persons having the right or obligation to sell the Shares, the Rights, Other
Rights and other securities of the Company pursuant to this Agreement, or
pursuant to the Other Purchasers’ Agreements, the maximum number of Shares and
Rights, Other Rights and other securities which it is able to purchase without
a Violation resulting. If any Violation would result from the purchase of any
Shares, Rights, Other Rights or other securities of the Company, the Board of
Directors of the Company, in its sole discretion, may determine priorities
among members of the Purchaser’s Group and the other persons having the right
or obligation to sell Shares, Rights, Other Rights or other securities of the
Company, as the case may be, taking into account contractual obligations
and relative hardship and such other factors as it deems relevant, and, without
limiting the generality of the foregoing, may purchase from any such
member or person less than all the Shares, Rights, Other Rights or other securities
of the Company which such member or person has elected or is obligated to sell
to the Company or the Company is obligated to purchase.

 

(c)           Any Shares or Rights which the Company is obligated to purchase
pursuant to Section 2.1(d), 4 or 5, but which in accordance with Section 6.1(a) or
Section 6.2 hereof are not purchased at the applicable time provided in Section 2.1(d),
4 or 5 hereof, shall be purchased by the Company on the tenth day after such
date or dates that the Company learns that (after taking into account any
purchases of Shares, Rights, other Rights or other securities of the Company,
to be made at such time pursuant to the Other Purchasers’ Agreements or
otherwise) it is no longer permitted to defer purchasing such securities under Section 6.
l(a) hereof at the relevant purchase price set forth in Section 2.1(d),
4 or 5 hereof, and the Company shall give the Purchaser seven days prior notice
of any such purchase.

 

6.2           Payment for Common Stock or Rights. The purchase price of Shares or Rights
purchased by the Company pursuant to Section 4 or 5 hereof will be paid (i) first
by the cancellation of indebtedness owing from the Purchaser or his Permitted
Transferees to the Company or any of its subsidiaries or affiliates and
interest accrued but unpaid thereon (so long as such indebtedness is evidenced
by a writing signed by the Purchaser or his Permitted

 

14

 

Transferees)
and (ii) then, to the extent such payment would not result in a Violation,
by the Company’s delivery of a bank cashier’s check or certified check for the
remainder of the purchase price, if any. The Company shall have the right set
forth in the preceding clause (i) whether or not the member of the
Purchaser’s Group selling such Shares or Rights is an obligor under any of the
indebtedness referred to therein.

 

7.             Tag-Along Rights.

 

7.1           Tag-Along Rights. After the occurrence of a Liquidation
Event, subject to Section 7.2, the Sponsor agrees that the Purchaser shall
be afforded the opportunity to participate in sales by the Sponsor to a Third
Party of all or substantially all of the shares of Common Stock of the Company
then held by the Sponsor and its affiliates (any such sale, a “Tag-Along
Transfer”). As soon as practicable after the time any Tag-Along Transfer is
proposed, but in any event at least 20 days prior to the Transfer Date (as
defined below), the Sponsor shall give written notice thereof to the Purchaser
identifying the proposed purchaser and stating the number of shares of Common
Stock proposed to be sold, the proposed offering price, the proposed date of
such Tag-Along Transfer (the “Transfer Date”) and any written material terms or
conditions of the proposed Tag-Along Transfer. If the Purchaser desires to
participate in the Tag-Along Transfer, the Purchaser shall give written notice
(the “Tag-Along Notice”) to the Sponsor not less than 10 days prior to the
Transfer Date setting forth the number of Shares that the Purchaser desires to
include in the Tag-Along Transfer. Failure to give the Tag-Along Notice at
least 10 days prior to the Transfer Date shall constitute an irrevocable
election by the Purchaser not to participate in the Tag-Along Transfer. The
total number of shares of Common Stock which the Sponsor is to include in the
Tag-Along Transfer (the “Allotment”) shall be apportioned among the Sponsor,
the Purchaser if he gives the Tag-Along Notice at least 10 days prior to the
Transfer Date, Other Purchasers giving Tag-Along Notices during such 10-day
period pursuant to Other Purchasers’ Agreements and any other persons entitled
to give (and giving on a timely basis) Tag-Along Notices pursuant to agreements
substantially similar to this Agreement (collectively, the “Participants”) in
accordance with the number of issued and outstanding Shares of Common Stock
each Participant holds at such time (without regard to any shares of Common
Stock issuable upon exercise of options, warrants, Rights or other rights of
any kind); provided that in no event will the Sponsor’s portion of the
Allotment be less than the number of shares of Common Stock constituting the
Allotment less the number of issued and outstanding shares which the
Participants (other than the Sponsor) have included in their Tag-Along Notices
(without regard to any shares issuable upon exercise of options, warrants,
Rights or other rights of any kind).

 

7.2           No Rights Following Termination of Employment. Notwithstanding any other provision of this
Agreement, the Purchaser shall have no rights under Section 7.1 following the
termination of the Purchaser’s employment with the Company or any of its
subsidiaries for any reason including (without limitation) death, Disability or
Retirement.

 

7.3           No Sponsor Liability. Neither the Sponsor nor any of its
affiliates shall have any personal liability to the Purchaser or any of the
Purchaser’s Permitted Transferees or the

 

15

 

Company
or any of its subsidiaries under any provision of this Agreement, including
(without limitation) Section 7.1.

 

7.4           Termination of Tag-Along Rights. In addition to the provisions of Section 7.2,
the provisions of Section 7.1 shall not be applicable if (x) the Common
Stock becomes publicly traded and there exists a Minimum Public Float, (y) the
Purchaser ceases to own Shares or Rights or (z) the sale by the Sponsor
involves less than all or substantially all of the Common Stock owned by the
Sponsor at the time of sale.

 

8.             Miscellaneous.

 

8.1           State Securities Laws. The Company hereby agrees to use
commercially reasonable efforts to comply with all state securities or “blue
sky” laws which might be applicable to the sale of the Securities by the
Company to the Purchaser pursuant to this Agreement.

 

8.2           Binding Effect. The provisions of this Agreement shall be
binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that
the Purchaser and the Purchaser’s Permitted Transferees shall not assign any
rights hereunder except as specifically permitted by the terms of this
Agreement. The Company may assign its rights under the put contained in Section 5.1
or the call contained in Section 5.2 to any of its subsidiaries or
affiliates, or to the principal beneficial owners of the Company or any of
their Permitted Transferees or affiliates, provided that no such assignment shall
release the Company from its obligations thereunder. Neither this Agreement nor
any purchase or sale of Securities pursuant hereto shall create, or be
construed or deemed to create, any right to employment or continued employment
in favor of the Purchaser or any other person by the Company or any subsidiary
or affiliate of the Company.

 

8.3           Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or enforceability
of this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.

 

8.4           Recapitalizations, Exchanges, Etc. Affecting
Common Stock. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to the Rights and the Shares, to any and all shares of capital stock of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of all or substantially all of the assets of the Company or
otherwise) which may be issued in respect of, in exchange for, or in substitution
of the Rights and the Shares, by reason of any stock dividend, stock split,
stock issuance, reverse stock split, combination, recapitalization, reclassification,
merger, consolidation, conversion or otherwise. Upon the occurrence of any of
such events, amounts hereunder shall be appropriately adjusted.

 

16

 

8.5           Amendment. This Agreement may be amended only by a written instrument duly
signed by the Company and the Purchaser.

 

8.6           Notices. All notices and other communications provided for herein shall be
dated and in writing and shall be deemed to have been duly given when
delivered, if delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid and when received if delivered
otherwise, to the party to whom it is directed:

 

(a)           If to the Company, to it at the following address:

 

3 East 54th Street

New York, New York 10022

Attention: General Counsel

Fax No.:    (212) 521-1640

 

(b)           If to the Purchaser or any of the Purchaser’s Permitted Transferees, to
the Purchaser at the address set forth on Schedule I hereto;

 

(c)           If to the Sponsor, to it at the following address:

 

Thomas H. Lee Equity Fund IV, L.P.

c/o Thomas H. Lee Company

75 State Street, Suite 2600

Boston, MA 02109

Attention: General Counsel

Fax No.:    (617) 227-3514

 

or at such other address as the parties hereto shall have specified by
notice in writing to the other parties (provided, that such notice of
change of address shall be deemed to have been duly given only when actually
received).

 

8.7           Applicable Law. The laws of the State of Delaware shall
govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under Delaware’s
principles of conflicts of law.

 

8.8           Consent to Service of Process. The Purchaser hereby irrevocably submits to
the jurisdiction of any New York state court sitting in the City of New York or
any federal court sitting in the City of New York in respect of any suit,
action or proceeding arising out of or relating to this Agreement, and
irrevocably accepts for the Purchaser and in respect of the Purchaser’s
property, generally and unconditionally, jurisdiction of the aforesaid courts.
The Purchaser irrevocably waives, to the fullest extent the Purchaser may effectively
do so under applicable law, trial by jury and any objection that the Purchaser may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in any such court has been brought in an

 

17

 

inconvenient
forum. Nothing herein shall affect the right of the Company to serve process in
any manner permitted by law or to commence legal proceedings or otherwise
proceed against Purchaser in any other jurisdiction.

 

8.9           Integration. This Agreement and the documents referred to herein or delivered
pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof. There
are no restrictions, agreements, promises, representations, warranties,
conditions, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein or in the Offer to Surrender. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter other than such agreements and understandings set
forth in the Offer to Surrender, the Note and the Securities Pledge Agreement.

 

8.10         Descriptive Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning of terms contained
herein.

 

8.11         Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.

 

8.12         Rights to Negotiate. Nothing in this Agreement shall be deemed
to restrict or prohibit the Company from purchasing Shares or Rights from the
Purchaser or the Purchaser’s Permitted Transferees at any time upon such terms
and conditions and at such price as may be mutually agreed upon between
the Company and the Purchaser or the Purchaser’s Permitted Transferees, whether
or not at the time of such purchase circumstances exist which specifically grant
the Company the right to purchase, or the Purchaser or his Permitted
Transferees the right to sell, shares of Common Stock or Rights pursuant to the
terms of this Agreement.

 

8.13         Rights Cumulative: Waiver. The rights and remedies of parties hereto shall
be cumulative and not exclusive of any rights or remedies which any party would
otherwise have hereunder or at law or in equity or by statute, and (subject to
the provisions of this Agreement regarding specific time periods within which a
right must be exercised or a notice must be given) no failure or delay by any
party in exercising any right or remedy shall impair any such right or remedy
or operate as a waiver of such right or remedy, nor shall any single or partial
exercise of any power or right preclude such party’s other or further exercise
or the exercise of any other power or right. The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any preceding or succeeding breach and no failure by any party
to exercise any right or privilege hereunder shall be deemed a waiver of such
party’s other rights or privileges hereunder.

 

8.14         Specific Performance. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party would be irreparably

 

18

 

harmed
and could not be made whole by monetary damages. It is accordingly agreed that
the parties hereto will waive the defense in any action for specific
performance that a remedy at law would be adequate and that the parties hereto,
in addition to any other remedy to which they may be entitled at law or in
equity, shall be entitled to compel specific performance of this Agreement. The
parties hereto consent to personal jurisdiction in any such action brought in
any such court and to service of process upon it or him in the manner set forth
in Section 8.6 hereof.

 

19

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates set forth herein.

 

	
   

  	
  THE
  PURCHASER

  
	
   

  	
   

  
	
   

  	
  /s/
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone
  No.

  	
   

  	
   

  
	
   

  	
  Social
  Security No.

  	
   

  	
   

  
	
   

  	
   

  
	
  Accepted
  and Agreed to

  	
   

  
	
  as
  of November 24, 1999

  	
   

  
	
   

  	
   

  
	
  THE
  COMPANY:

  	
   

  
	
   

  	
   

  
	
  Big
  Flower Holdings, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /S/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For
  Purposes of Section 7 only

  Accepted and Agreed to as of

  November       , 1999

  	
   

  
	
   

  	
   

  
	
  THE
  SPONSOR:

  Thomas H. Lee Equity Fund IV, L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /S/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
								

 

[Signature page to Big Flower Holdings, Inc. Management
Subscription Agreement]

 

20

 

SCHEDULE I

 

NSO OPTIONS ONLY

 

	
  Name and Address of

  Purchaser

  	
   

  	
  BFH
  Options

  Surrendered

  	
   

  	
  Rights

  	
   

  	
  Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Donald E. Roland

  	
   

  	
  48,200 NSO Options with
  Strike price of $ 18.125 = aggregate share of $ 644,675.50

  	
   

  	
  20,466 Rights ($ 644,675,50
  ÷ 31.50 = 20,466 Rights)

  	
   

  	
  None

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]