EXHIBIT 10.4
PROPEX HOLDINGS
INC.
CASH INCENTIVE BONUS
PLAN
THIS CASH INCENTIVE BONUS PLAN (this
“ Plan ”) effective as of October 30, 2006 (the
“ Effective Date ”), is intended to provide an
incentive to certain executives of Propex Inc. (“
Propex ”) to increase the value of Propex Holdings
Inc. (the “ Company ”) by allowing them to
participate in such increase in value.
1. Participants . The “
Eligible Participants ” are those employees of Propex
listed on Attachment 1 hereof together with any key
employees of Propex designated by the Bonus Plan Administrator (as
hereinafter defined) from time to time. The Company shall notify
Eligible Participants of their participation in the Plan through
delivery of a grant letter. As used in this Plan, the “
Bonus Plan Administrator ” shall mean a committee
consisting of the Chief Executive Officer of the Company, the
Chairman of the Board of Directors of the Company and the Chairman
of the Compensation Committee of the Board of Directors of the
Company.
2. Realization Event . Each
of the following events shall hereinafter be deemed to be a “
Realization Event ”: (i) any merger,
consolidation or other reorganization (other than a merger or
consolidation with the Principal Holder (as defined below)), in
which the Company is not the surviving entity or in which the
Company survives only as a subsidiary of an entity, other than a
previously wholly-owned subsidiary of the Company or the Principal
Holder; (ii) the Company sells, leases or exchanges all or
substantially all of the Company’s assets to any other person
or entity (other than a wholly-owned subsidiary of the Company, or
the Principal Holder); (iii) any person or entity (other than
the Principal Holder), including a “group” as
contemplated by Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (“1934 Act”), acquires or gains
ownership or control of (including, without limitation, power to
vote) more than 50% of the outstanding shares of the
Company’s voting stock (based upon voting power with respect
to the election of directors); or (iv) any dissolution or
liquidation of the Company or a dividend or distribution by the
Company to its shareholders of cash or assets with a value equal to
50% or more of the aggregate of the Company’s shareholders
equity and retained earnings, or any restructuring of the
Company’s capital that has the effect of the foregoing. As
used in this Section 2, “ Principal Holder
” means The Sterling Group, L.P., Genstar Capital, L.P.,
Laminar Direct Capital, L.P., BNP Paribas Private Capital Group,
and their respective affiliates, in each case, other than their
respective portfolio companies.
3. Adjusted Enterprise Value
. Upon a Realization Event, the “ AEV ” shall be
an amount calculated as the sum of (i) the total net
enterprise value of the Company determined by reference to the
total net consideration paid to the Company or the Principal
Holder, as applicable, at the Realization Event (net only of any
indebtedness associated with the Company that is retained, repaid,
or assumed by the Company or the Principal Holder, as applicable,
and any transaction costs incurred by the Company or the Principal
Holder and amounts reserved for contingencies in connection with
the Realization Event), (ii) any proceeds to be realized by
the Company from the exercise of any options and
warrants
associated therewith and (iii) the
aggregate amount of all dividends or other distributions to holders
of common stock of the Company made at any time prior to or in
connection with the Realization Event. With respect to the
calculation of AEV, the value of any property other than cash
received as consideration with respect to a Realization Event will
be made by an independent third party appraiser chosen by the Bonus
Plan Administrator.
4. Success Pool . Upon a
Realization Event, the Success Pool shall be based upon the AEV of
the Company and the year in which such Realization Event occurs,
and shall be a cash amount determined in accordance with the
schedule set forth on Attachment 2 attached
hereto.
5. Individual Allocations .
Subject to the terms of this Plan, upon a Realization Event, each
Eligible Participant shall receive the percentage of the Success
Pool that is reflected next to his or her name on Attachment
1 . The portion of the Success Pool not allocated hereunder may
be allocated from time to time at the discretion of the Bonus Plan
Administrator; provided, however, that the total percentages
allocated cannot exceed 100%. Each Eligi
