CONFIDENTIAL
PORTION MARKED [**] HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION
EXHIBIT 10.7
FIRST AMENDMENT TO
THE
STOCK OPTION
AGREEMENT
This First Amendment to the Stock Option
Agreement (“Amendment”) is made as of this 30
th day of June, 2008 between Simmons Holdco, Inc.,
a Delaware corporation (the “Company”), and the
undersigned (the “Optionee”).
WHEREAS, the Company and the Optionee entered
into that certain Stock Option Agreement, dated as of January 16,
2008 (the “Agreement”); and
WHEREAS, the Company and the Optionee desire to
amend the Agreement on the terms set forth herein.
NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned hereby agree as follows:
1. Definitions
. Capitalized terms used herein but not defined shall
have the meanings ascribed thereto in the Agreement.
(a)
Section 2(a)(i) of the Agreement is hereby amended by
deleting the schedule titled “EBITDA Targets” in its
entirety and replacing it with the following:
“EBITDA
Targets
(dollars in millions)
|
Measurement
Years
|
Target EBITDA
|
Cumulative Target
EBITDA
|
90% of
Target EBITDA
|
90% of Cumulative Target
EBITDA
|
Eligible
Shares
|
|
2008
|
$225.0
|
$225.0
|
$202.5
|
$202.5
|
25% of Shares
|
|
2009
|
$251.3
|
$476.3
|
$226.2
|
$428.7
|
25% of Shares
|
|
2010
|
$280.0
|
$756.3
|
$252.0
|
$680.7
|
25% of Shares
|
|
2011
|
(See Note Below)
|
(See Note Below)
|
(See Note Below)
|
(See Note Below)
|
25% of Shares
|
Note: The 2011 Targets will be
determined by the Board of Directors at a later
date.
(b) The
Agreement is hereby amended by replacing the word
“solely” in the first sentence of
Section 2(b)(i) with the phrase “under this
Section 2(b)(i)”.
(c) The
Agreement is hereby amended by re-designating the section
designated as Section 2(b)(iii) in the Agreement as the new
Section 2(b)(iv) .
(d) The
Agreement is hereby amended by adding the following as a new
Section 2(b)(iii):
Tier One and Tier Two Changes of
Control .
(A) Upon
the consummation of a Tier One Change of Control (as defined
below), up to 50% of the Missed Shares and up to 50% of the Shares
that are not yet Eligible Shares shall become Vested
Shares. A “ Tier One Change of Control
” means any Change of Control that (i) is not a Tier Two
Change of Control (as defined below), (ii) occurs during one of the
years reflected in the table below and (iii) results in Tier
One Proceeds (as defined below). “ Tier One
Proceeds ” means Net Proceeds Per Class A Share (as
defined below) payable at closing of the Change of Control, when
added to the dividend proceeds per share previously received by THL
thereon, that equal or exceed the product of
(x) the “ Applicable Tier One Multiple ” (as
reflected in the table below) and (y) the Original Cost (as defined
in the Certificate of Incorporation of the Company, as amended from
time to time) of a share of Class A Common Stock, par value $0.01
per share, of the Company (the “ Class A Common Stock
”) purchased on December 19, 2003.
|
Year in which
Tier One Change of Control
Occurs
|
Applicable Tier One
Multiple
|
|
2009
|
** x
|
|
2010
|
