Document:

1 2008
  Incentive Plan Design Exhibit 10.22 

  

 

	
  

  	
  2 2008
  Incentive Plan Design All employees will participate in a companywide
  incentive program. Main incentive component will be overall company
  financials Incentive Plans for Managers and above will have multiple
  components Incentive plan design will include Quarterly payouts with an
  annual payout component. Individuals whose position report into a divisional
  organization will have both divisional and corporate components. 

  

 

	
  

  	
  3 Variable
  Compensation plan design by level Target a percentage of base salary
  Corporate Positions overall target based on DJO Corporate Financials and
  KPI’s Divisional based positions participate using both corporate and
  business line financials Payouts are made quarterly with an annual hold-back
  portion paid after the 4th quarter results for all management positions. No
  hold back for employee (Exempt and Non-Exempt) quarterly bonus. Overall DJO
  companywide financials need to be reach (90% threshold) before any funding of
  overall plans occurs 50% Division / 50% Corporate 100% 40% Vice Presidents
  Target % Target % 100% Division 100% 4% All Non-Exempt 100% Division 100% 5%
  All Exempt Employees 70% Division / 30% Corporate 100% 8% / 10% / 15%
  Managers ( % based on level of position) 60% Division / 40% Corporate 100%
  30% All Directors 50% Division / 50% Corporate 100% 40% Senior Vice
  Presidents -------- 100% 60% Executive Management Divisional Position
  Corporate Position Base Target % Position Level 

  

 

	
  

  	
  4 Variable
  Compensation plan design by level All Financial Performance based on
  Company-wide and Business/Division EBITDA and Operating Free Cash Flow
  Limited number of Quarterly Key Performance Indicators (3-5) will be used as
  modifiers to the overall performance for Management employees after Financial
  Threshold is met. Financial Threshold to be reach is 90% of plan to fund
  bonuses. Payout % based on actual results achieved and a linear scale. Over
  achievement earned only on Year End performance. Any new hire or promotion
  starting after 4/1/08 will have a prorated payout for the year Any new hire
  or promotion starting after 10/1/08 will not participate in incentive plan
  until the following year. Participant must be an active employee at time of
  payout. (Any exception to plan needs to be reviewed and approved by EVP
  Global HR)Exhibit
10.12

 

 

 

AMENDMENT NO.2 TO THE

 

FIRST LIEN SENIOR SECURED
CREDIT AGREEMENT

 

Dated as of January 9,
2007

 

among

 

WII MERGER CORPORATION,

as the initial Borrower,

 

CREDIT SUISSE,

as Administrative Agent, Swing Line Lender and

an L/C Issuer,

 

The Other Lenders Parties
Hereto

 

and

 

CREDIT SUISSE,

as Collateral Agent

 

 

 

CREDIT SUISSE SECURITIES
(USA) LLC

Sole Lead Arranger and Sole
Bookrunning Manager

 

 

 

 

 

 

 

AMENDMENT NO. 2 TO THE

CREDIT AGREEMENT

 

Dated as of June 12,
2007

 

AMENDMENT NO. 2 TO THE CREDIT AGREEMENT  (this “Amendment”) among WII
COMPONENTS, INC., a Delaware corporation (the “Borrower”), the Lenders
party thereto and CREDIT SUISSE, acting through one or more of its branches, or
any Affiliate thereof (collectively, “Credit Suisse”), as Administrative
Agent, Swing Line Lender, an L/C Issuer and Collateral Agent.

 

PRELIMINARY STATEMENTS:

 

(1)           WII
Merger Corporation and Credit Suisse entered into a Credit Agreement dated as
of January 9, 2007, as amended by Amendment No. 1 dated as of February 7,
2007 (as so amended, the “Credit Agreement”).  Capitalized terms not otherwise defined in
this Amendment have the same meanings as specified in the Credit Agreement.

 

(2)           Pursuant
to the Merger and the Assumption Agreement, the Borrower assumed all of the
obligations of WII Merger Corporation under the Loan Documents.

 

(3)           The
Borrower has requested that the Required Lenders agree to amend certain
provisions of the Credit Agreement as described herein.

 

(4)           The
Required Lenders have agreed, subject to the terms and conditions stated below,
to amend the Credit Agreement as hereinafter set forth.

 

SECTION 1.         Amendments to Credit Agreement.  The Credit Agreement is, effective as of the
date hereof and subject to the satisfaction of the conditions precedent set
forth in Section 2, hereby amended as follows:

 

(a)           The definition of “Commitment Letter” in Section 1.01
is hereby deleted.

 

(b)           The definition of “Consolidated Interest Charges” is
hereby replaced in its entirety with the following:

 

““Consolidated Interest
Charges” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments or debt discount of the Borrower and its Subsidiaries in connection
with borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP (but excluding any amortization or write-off
of capitalized financing costs), (b) the portion of rent expense of the
Borrower and its Subsidiaries with respect to such period under Capitalized
Leases that is treated as interest in accordance with GAAP, (c) the amount
of dividends and distributions made to Holdings in respect of interest on the
Acquisition Loan (or any Indebtedness incurred to refinance the Acquisition
Loan) during such period   under Section 7.06(k), and (d) the
implied interest component of Synthetic Leases (regardless of whether accounted
for as interest expense under GAAP), all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers’ acceptances and
net costs in respect of Swap Contracts constituting interest rate swaps,
collars, caps or other arrangements requiring payments contingent upon interest
rates of the Borrower and its Subsidiaries, excluding, amounts referred to in
Sections 2.09(b) and 10.04(a) of this Agreement.”

 

 

2

 

(c)           The definition of “Hedge Bank” in Section 1.01 is
hereby amended by inserting the following after the first reference to the word
“foregoing” therein:  “at the time it
enters into a Secured Hedge Agreement”.

 

(d)           The definition of “Loan Documents” in Section 1.01 is
hereby deleting clauses (a)(ix) and (b)(x) and inserting the word
“and” before each of clauses (a)(viii) and (b)(ix).

 

(e)           The definition of “Obligations” in Section 1.01 is
hereby amended by (i) inserting after “Letter of Credit” in the third line
thereof the words “or under any Secured Hedge Agreement”, (ii) inserting
before the word “whether” in the third line thereof the words “in each case”, (iii) deleting
the words “under the Loan Documents” in the ninth line thereof, and (iv) deleting
the phrase “(including any Secured Hedge Agreement)” at the end of clause (a) thereof
and inserting in lieu thereof the words “or any Secured Hedge Agreement”.

 

(f)            The definition of “Revolving Credit Lender” in Section 1.01
is hereby amended by adding the following at the end thereof:  “or, if the Revolving Credit Commitments have
been terminated, a Lender that holds a Revolving Credit Loan or is obligated in
respect of a participation in Swing Line Loans or Letters of Credit”.

 

(g)           Section 2.01(b) is hereby amended by deleting
clause (iii) thereof.

 

(h)           Section 2.09(a) is hereby amended by deleting
the words “(minus, at all times prior to the Existing Notes Repayment Date, the
amount of the Delayed Revolver Commitment)” from the fourth line thereof.

 

(i)            Clause (a) of Section 6.17 is hereby amended to
read as follows:

 

“(a) at
all times from and after the date on which any Loan Party is required to
deposit funds in or maintain a Cash Collateral Account pursuant to any of the
Loan Documents, a Cash Collateral Account with Credit Suisse or another
commercial bank located in the United States that has executed an account
control agreement with the Borrower and the Collateral Agent for the benefit of
the Secured Parties pursuant to the Security Agreement and”

 

(j)            Section 7.01 is hereby amended by deleting clause (w) thereof.

 

(k)           Section 7.06(j)is hereby amended to read as follows:

 

“(j) so long as no Event of Default shall have
occurred and be continuing or would result therefrom, (i) the Borrower may
declare and directly or indirectly pay cash dividends and distributions to
Holdings for the sole purpose of paying fees, premiums and expenses incurred in
connection with the repayment of all or part of the Acquisition Loan in an
aggregate amount not to exceed $750,000 and (ii) from and after the
Existing Notes Repayment Date, the Borrower may declare and directly or
indirectly pay cash dividends and distributions to Holdings from the proceeds
of the Term Borrowings (other than the Initial First Lien Term Advance) and the
Second Lien Credit Agreement for the sole purpose of repaying the Acquisition
Loan (or any Indebtedness incurred to refinance the Acquisition Loan) and any
related fees, interest or premiums associated therewith.”

 

 

 

3

 

(l)            Section 7.11(c)(ii) is hereby amended by
deleting the word “Ration” appearing therein and replacing it with the word
“Ratio”.

 

(m)          Section 8.03 is hereby amended by (i) deleting
the words “Lenders and the L/C Issuer” from clauses Second, Third
and Fourth thereof and inserting “Secured Parties” in lieu thereof, and (ii) deleting
the words “owing under or in respect of the Loan Documents” from clause Sixth
thereof.

 

(n)           Schedule 2.01 is hereby amended by deleting the figure
“$25,000,000” both times such figure appears under the heading “Revolving
Credit Commitment” and inserting in place thereof the figure “$12,500,000”.

 

SECTION 2.         Conditions
of Effectiveness.  This
Amendment shall become effective as of the date first above written when, and
only when,

 

(a)           the Administrative Agent shall have received counterparts
of this Amendment executed by each Loan Party and the Required Lenders,

 

(b)           the Administrative Agent shall have received a certificate
signed by a duly authorized officer of the Borrower stating that: (i) the
representations and warranties contained in Article V of the Credit
Agreement are true and correct in all material respects on and as of the date
of such certificate as though made on and as of such date other than any such
representations or warranties that, by their terms, refer to a date other than
the date of such certificate; and (ii) no event has occurred and is
continuing that constitutes a Default, and

 

(c)           all fees and expenses of the
Administrative Agent and the Lenders (including all reasonable fees and
expenses of counsel to the Administrative Agent), to the extent invoiced prior
to the date hereof, shall have been paid.

 

SECTION 3.         Confirmation of Representations and
Warranties.  Each of the
Loan Parties hereby represents and warrants, on and as of the date hereof, that
the representations and warranties contained in the Loan Documents are true and
correct in all material respects on and as of the date hereof, before and after
giving effect to this Amendment, as though made on and as of the date hereof,
other than any such representations or warranties that, by their terms, refer
to a specific date.

 

SECTION 4.         Affirmation of Guarantors.  Each Guarantor hereby consents
to the amendments to the Credit Agreement effected hereby, and hereby
confirms and agrees that, notwithstanding the effectiveness of this Amendment,
the obligations of such Guarantor contained in the Holdings Guaranty or the
Subsidiary Guaranty (as the case may be), or in any other Loan Document to
which it is a party are, and shall remain, in full force and effect and are
hereby ratified and confirmed in all respects, except as set forth in Section 5(a) below.

 

SECTION 5.         Reference
to and Effect on the Loan Documents.  (a)  On and after
the effectiveness of this Amendment, each reference in the Credit Agreement to
“this Agreement”, “hereunder”, “hereof” or words of like import referring to
the Credit Agreement, and each reference in each of the other Loan Documents to
“the Credit Agreement”, “thereunder”, “thereof” or words of like import
referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement, as amended by this Amendment.

 

 

 

4

 

(b)           The Credit Agreement and each of the
other Loan Documents, as specifically amended by this Amendment, are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed.

 

(c)           The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender or the
Administrative Agent under the Credit Agreement, nor constitute a waiver of any
provision of the Credit Agreement or any other Loan Document.

 

SECTION 6.         Costs,
Expenses.  The Borrower
agrees to pay on demand all costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and expenses of counsel for
the Administrative Agent) in connection with the preparation, execution,
delivery and administration, modification and amendment of this Amendment and
the other instruments and documents to be delivered hereunder, in accordance
with the terms of Section 10.04 of the Credit Agreement.

 

SECTION 7.         Execution
in Counterparts.  This
Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
but one and the same agreement.  Delivery
of an executed counterpart of a signature page to this Amendment by
facsimile shall be effective as delivery of a manually executed counterpart of
this Amendment.

 

SECTION 8.         Governing
Law.  This
Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York.

 

 

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left blank.]

 

 

 

5

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

	
  WII COMPONENTS, INC., as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

 

 

 

	
  WII HOLDING, INC.,

  
	
  as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
  WOODCRAFT INDUSTRIES, INC.,

  
	
  as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
  BRENTWOOD ACQUISITION CORP.,

  
	
  as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
  PRIMEWOOD, INC.,

  
	
  as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

 

 

 

	
  CREDIT SUISSE,

  
	
  Cayman Islands Branch,

  
	
  as Administrative Agent and Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

 

 

 

	
  CREDIT SUISSE,

  
	
  Cayman Islands Branch,

  
	
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

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