exv10w44



 






EXHIBIT 10.44




SUMMARY DESCRIPTION OF SWIFT FOODS COMPANY

2005 STOCK PURCHASE PLAN




General



     The Plan is named the “Swift Foods Company 2005 Stock Purchase Plan.” The federal tax
identification number of Swift Foods Company (formerly known as Rawhide Subsidiary 1 Inc., the
“Company”) is 20-1413756.



     The purpose of the Plan is to provide an incentive for eligible employees and eligible
non-employees to advance the interests of the Company by affording such individuals an opportunity
to purchase shares of the Company’s common stock, par value $.01 (the “Common Stock”).



     The Plan is not subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended. Plan participants are encouraged to carefully review this summary description,
the financial statements included in S&C Holdco 3, Inc.’s Annual Report on Form 10-K for the fiscal
year ended May 30, 2004 and S&C Holdco 3, Inc.’s Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 29, 2004 and November 28, 2004, each attached hereto as Exhibit A,
the Subscription Agreement (as defined below), and the Stockholders’ Agreement (as defined below)
attached hereto as Exhibit B, before entering into a Subscription Agreement in connection
with the Plan. This summary description, the Subscription Agreement and the Stockholders’
Agreement collectively comprise the written compensatory benefit plan for purposes of Rule 701
under the Securities Act of 1933, as amended (the “Securities Act”). While we believe that
this summary covers the material terms of the Plan, this summary may not contain all of the
information that is important to Plan participants. Participants should carefully read the
Subscription Agreement provided to them concurrently with this summary as well as the Stockholders’
Agreement and financial statements attached hereto.



Administration of the Plan



     The Plan will be administered by the Board of Directors of the Company (the “Board”). All
decisions, determinations, and actions taken by the Board in good faith in connection with the
administration of the Plan shall be final and binding on all parties.



Employees and Non-Employees Who May Participate in the Plan



     The Board has determined that the officers of the Company and its subsidiaries named on
Exhibit C shall be eligible to participate in the Plan (such individuals, the “Eligible
Individuals”). Other than having been classified by the Board in the course of its
administration of the Plan as an Eligible Individual and being an “Accredited Investor,” as such
term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act, there are no
participation or eligibility requirements. As reflected on Exhibit C, the Board has
determined that each Eligible Individual shall be provided with a subscription agreement (the
“Subscription Agreement”) pursuant to which such Eligible Individual may purchase pursuant
to the Plan the number of shares of Common Stock set forth on Exhibit C.



 









 





     The Board may revoke the right of any Eligible Individual to participate in the Plan. The
decision to revoke such designation as an Eligible Individual, and thus a person’s ability to
participate in the Plan, shall be made by the Board in good faith. The Board may determine to
revoke a person’s designation as an Eligible Individual due to such person’s death or disability,
the person ceasing to be employed by the Company or its subsidiaries, the person ceasing to be a
non-employee, director, consultant or advisor to the Company or its subsidiaries, the existence of
circumstances that have arisen which would allow the Company or its subsidiaries to terminate the
person’s employment for cause, if an employee of the Company or its subsidiaries.



Securities to be Offered



     The total number of shares of Common Stock which may be sold pursuant to the Plan may not
exceed 657,095 shares. The Common Stock sold pursuant to the Plan may be unissued shares or
treasury shares which have been reacquired by the Company. There are no fees, commissions or other
charges applicable to a purchase of Common Stock under the Plan.



     The minimum number of shares of Common Stock which each participant under the Plan may
purchase shall be the number of shares set forth on Exhibit C for such participant. As
soon as practicable following the Company’s receipt of an executed Subscription Agreement from an
Eligible Individual, the Company will cause to be delivered one or more certificates representing
the aggregate number of whole shares of Common Stock issued pursuant to the Subscription Agreement
and the Plan. Any such certificate shall be issued in the name of the applicable Eligible
Individual as such Eligible Individual’s name appears on the Subscription Agreement. A participant
will not be deemed a stockholder nor have any of the rights and privileges of a stockholder with
respect to shares of Common Stock subject to a Subscription Agreement until a certificate for such
shares has been issued.



Purchase of Securities



     The Board has determined that the purchase price at which shares of Common Stock will be sold
under the Plan shall be $1.32 per share (the “Purchase Price”).



     In order to participate in the Plan, the Company must receive an executed Subscription
Agreement from a participant in the Plan. The purchase price of the shares of Common Stock to be
purchased under the Plan shall be paid by participants in the Plan either by wire transfer to the
Company in immediately available funds or the participant may elect to have the Company withhold or
offset such purchase price from any amounts due to be paid to the participant by the Company. Each
participant in the Plan shall be solely responsible for any federal withholding tax payable in
respect of the participant’s participation in the Plan. Payment of any applicable withholding
(which shall, for purposes hereof, be made at the rate of $0.29 per share purchased) must be paid
by the participant to the Company at the time shares of Common Stock are purchased by the
participant under the Plan by wire transfer to the Company in immediately payable funds or
certified or cashiers check. With the exception of the Purchase Price and any related withholding
under federal tax laws, there are no fees or costs associated with participation in the Plan.



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Term of Plan



     The Plan will terminate concurrently with the termination of the Stockholders’ Agreement. The
Board may amend the Plan at any time prior to the termination of the Plan. Termination of the Plan
shall have no effect on shares of Common Stock issued pursuant to the Plan.



Amendment of Plan



     The Board may alter or amend the Plan or any part thereof from time to time without the
approval of the stockholders of the Company. The Board expressly reserves the right to revoke the
designation of any participant as an Eligible Individual and thus revoke their ability to
participate in the Plan.



Tax Consequences of Plan



     The following discussion is for general information only and is intended to summarize briefly
the federal income tax consequences arising from participation in the Plan. This description is
based on current law, which is subject to change (possibly, retroactively). The tax treatment of a
participant in the Plan may vary depending on his or her particular situation and may, therefore,
be subject to special rules not discussed herein. No attempt has been made to discuss any
potential foreign, state or local tax consequences or the effect, if any, of gift, estate or
inheritance taxes. A participant should consult with his or her tax advisor concerning the
specific tax consequences of participating in the Plan.



     The purchase of Common Stock pursuant to the Plan will result in the participant receiving, as
ordinary income, the difference between the fair market value of the Common Stock on the date of
purchase and the purchase price for the Common Stock paid by the participant (the
“Spread”). The amount of the Spread will be reported as compensation to the participant
and shall be reported to the Internal Revenue Service on Form W-2 on behalf of the participant.
The participant shall be responsible for all applicable federal tax withholding payable by the
participant as a result of and related to the Spread. Participants will have a basis in the Common
Stock purchased equal to the price paid for the Common Stock. Upon disposition of the Common
Stock, any gain or loss incurred will constitute long-term or short-term capital gains or losses
depending upon the length of time the participant held the Common Stock. If the Common Stock was
held for one year or more, the disposition will be subject to long-term treatment.



     The Common Stock purchased pursuant to the Plan is not subject to forfeiture restrictions and
therefore an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended
(the “Code”) is inapplicable. Additionally, the Plan is not designed pursuant to Section
423 of the Code and, therefore, application of such section is inapplicable.



     The foregoing brief summary of the effect of federal income taxation upon participants with
respect to the purchase of shares under the Plan does not purport to be complete, and reference
should be made to the applicable provisions of the Code.



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Stockholders Agreement



     The shares of Common Stock issued pursuant to the Plan will be subject to a Stockholders’
Agreement, dated September 19, 2002, among HMTF Rawhide, ConAgra Foods, Inc. (“CAGCO”),
Hicks, Muse, Tate & Furst Incorporated (“Hicks Muse”), the Company and the participants, as
amended by that certain Amendment to Stockholders Agreement, dated November 3, 2004, among HMTF
Rawhide, SFC Inc. (formerly known as Swift Foods Company), the Company, Hicks Muse and the
participants (as amended, the “Stockholders’ Agreement”). A copy of the Stockholders’
Agreement is attached hereto as Exhibit B. Each participant who acquires shares of Common
Stock in accordance with the Plan will be required to agree in writing to take and hold such shares
subject to the provisions and upon the conditions specified in the Stockholders’ Agreement.



     The Stockholders’ Agreement includes provisions regarding, among others, the election of
directors, registration rights, restrictions on transfer and other rights regarding sales of Common
Stock by Hicks Muse and CAGCO, the sale of the Company’s cattle feeding operations and a right to
force the sale of the Company after five years. The Stockholders’ Agreement will terminate upon
the 18th anniversary of the closing of the Acquisition. On September 23, 2004, in connection with
the exercise and consummation of the HMC Call Option (as defined in the Stockholders Agreement),
the HMC Group (as defined in the Stockholders Agreement) purchased all shares of Common Stock of
the Company held by CAGCO and, accordingly, CAGCO has no further rights under the Stockholders
Agreement.



     Registration Rights. The Stockholders’ Agreement also provides that HMTF Rawhide and may
require the Company, subject to certain registration volume limitations, to effect up to four
demand registrations of its Company Common Stock under the Securities Act at any time after the
consummation of a qualified initial public offering. The Stockholders’ Agreement also provides
that in the event the Company proposes to register any shares of Common Stock under the Securities
Act, whether or not for its own account, holders of Common Stock subject to the Stockholders’
Agreement, other than Plan participants, will be entitled, subject to certain exceptions, to
include their shares of Common Stock in such registration.



     Drag Along Rights. The Stockholders’ Agreement provides that, subject to certain exceptions,
in connection with any transfer of the Company’s Common Stock by the HMC Group to certain third
parties, Hicks Muse has the right to cause the participants in the Plan to include a proportionate
percentage of their shares of Common Stock in the sale to the third party. The Common Stock sold
by the participants in the Plan pursuant to this “drag-along right’ of the HMC Group shall be sold
at the same price and on the same terms as the securities sold by the HMC Group. If any holders of
Common Stock are given an option as to the form and amount of consideration to be received, all
such holders shall be given the same option. In addition, each participant in such sale shall bear
its own costs and expenses and any indemnity obligations of the participants arising under the
documentation for such sale shall be several and shall relate solely to the representations and
warranties described below and shall be limited to the amount of consideration received by such
participant in the sale.



     If the HMC Group wishes to exercise its “drag-along rights” in a sale of securities, it is
required to give at least 20 days prior written notice to the participants in the Plan. After
receipt



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of such notice, participants in the sale shall take such action as may be reasonably required
and otherwise cooperate in good faith. In connection with such a sale, participants may be
required to give representations and warranties to the effect that (i) their shares of Common Stock
are being transferred free and clear of all liens, (ii) they have the power and authority to effect
such a transfer, and (iii) such matters pertaining to compliance with securities laws as the
transferee may reasonably require.



     Tag Along Rights. The Stockholders’ Agreement provides that, subject to certain exceptions,
in connection with certain transfers by the HMC Group to certain third parties, participants in the
Plan and the non-selling holders of securities of the Company who are parties to the Stockholders’
Agreement have the right to include a proportionate number of their shares of Common Stock in such
transfers on the same terms. The Common Stock sold by participants in the Plan pursuant to this
“tag-along right” shall be sold at the same price and on the same terms as the securities sold by
the HMC Group. Provided, that if the consideration to be received by the HMC Group includes any
securities, then, unless the selling party and the transferee both reasonably determine that an
exemption is otherwise available under the Securities Act and all applicable state securities laws
for such transaction, only participants who have certified to the reasonable satisfaction of the
selling party that they are Accredited Investors shall be entitled to participate in such transfer.



     If a participant wishes to exercise its “tag-along rights” in a sale of securities, they are
required to give written notice within ten days of their receipt of a Participation Offer (as
defined in the Stockholders’ Agreement) from the HMC Group. The Participation Offer is conditioned
upon (i) the consummation of the transactions described in the Participation Offer with the
transferee named therein, and (ii) the execution and delivery of each holder exercising their
“tag-along rights” of all agreements and documents which the HMC Group is required to execute in
connection with the transaction. In connection with such a sale, participants may be required to
give representations and warranties to the effect that (x) their shares of Common Stock are being
transferred free and clear of all liens, (y) they have the power and authority to effect such a
transfer, and (z) such matters pertaining to compliance with securities laws as the transferee may
reasonably require.



     Right of First Refusal. The Stockholders’ Agreement also provides that Hicks Muse has a right
of first refusal on any transfers of Common Stock. Prior to any transfer, other than a Permitted
Transfer (as defined in the Stockholders’ Agreement), by any party subject to the Stockholders’
Agreement that is not a member of the HMC Group, such non-HMC Group holder shall be required to
give a transfer notice to Hicks Muse. The transfer notice must describe the terms and conditions
of the proposed transfer, including the purchase price and the identity of the prospective
transferee. After receipt of the transfer notice Hicks Muse shall have 30 days to elect to
purchase all of the offered securities upon the same terms and conditions as set forth in the
transfer notice by delivering a written notice of such election to the non-HMC Group holder within
such 30-day period, and subject to any earlier delivery by the HMC Group of any Option Notice (as
defined in the Stockholders’ Agreement) in respect of the HMC Call Option (as defined in the
Stockholders’ Agreement).



     If Hicks Muse exercises its right to purchase the offered securities by timely delivery of an
election notice, the closing will take place on the later of the fifteenth business day after the



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date of the election notice, or, if applicable, on the fifth business day after all required
governmental approvals have been obtained. By delivery of the certificates or instruments
representing the offered shares, the non-HMC Group holder will be deemed to represent and warrant
to Hicks Muse that the transferred securities are owned by such non-HMC Group holder free and clear
of all liens. If Hicks Muse does not elect to purchase all the offered securities or fails to make
a timely election, the non-HMC Group holder may transfer all, but not less than all, of the offered
securities to the prospective transferee at a price and on terms no more favorable than those
specified in the transfer notice, during the 60-day period immediately following the expiration of
the 30-day election period. The right of first refusal under the Stockholders’ Agreement is
subordinate to the right of first refusal contained in any stock option plan of the Company with
respect to Plan participants.



     Termination of Employment. If the employment of a participant terminates for any reason
whatsoever, the Company is entitled, but not obligated, to repurchase all or any portion of the
Common Stock held by a participant at the then current fair market value as determined in good
faith by the Board. To exercise this right, the Company must deliver a notice of such election
within one year following the date of termination of a participant’s employment with the Company or
any of its subsidiaries. If the Company exercises its right to purchase the Common Stock held by a
participant by timely delivery of an election notice, the closing will take place at the Company’s
principal executive offices within ten days after delivery of such notice. The right of the
Company to repurchase the Common Stock held by a participant upon termination of such participant’s
employment with the Company or any of its subsidiaries is subordinate to any repurchase rights
contained in any stock option plan of the Company with respect to Plan participants.



     Restrictions on Transfer. The shares of Common Stock acquired by a participant pursuant to
the Plan may not be transferred while the participant is an employee of the Company or its
subsidiaries, except pursuant to the drag along and tag along provisions of the Stockholders’
Agreement described above. In addition, participants will be allowed to transfer the shares of
Common Stock acquired under the Plan (a) by gift to a member of the immediate family of a holder of
such shares of Common Stock (a “Holder”) or a trust whose sole beneficiaries are the Holder
and/or members of the Holder’s immediate family, (b) with respect to a Holder who is a trust, to
any beneficiary of the trust or any member of the immediate family of a beneficiary of the trust,
or (c) upon the death of a Holder to such Holder’s executors, administrators, testamentary
trustees, legatees or beneficiaries; provided that, in each case of clause (a), (b) or (c) above,
the proposed transferee shall certify to the reasonable satisfaction of the Company that such
transferee is an Accredited Investor and shall agree in writing to take and hold such securities
subject to the provisions and upon the conditions specified in the Stockholders’ Agreement.



Resales



     The shares of Common Stock issued pursuant to the Plan are issued in compliance with and under
Rule 701 of the Securities Act. Accordingly, subject to the provisions of the Plan and the
Stockholders’ Agreement, the shares of Common Stock acquired by participants pursuant to the Plan
are intended to be eligible for resale as provided by Rules 701 and 144 of the Securities Act.



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     Rule 701 of the Securities Act exempts from the registration requirements of Section 5 of the
Securities Act certain transactions in which securities are issued in compensatory circumstances
under a written compensatory benefit plan. Accordingly, securities issued under Rule 701 are
deemed to be “restricted securities” and as such, resales of such securities must be in compliance
with the registration requirements of the Securities Act or an exemption from those requirements.
Rule 701(d) provides that 90 days after the Company becomes subject to the periodic reporting
requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), persons who are
not “affiliates” (as defined in Rule 144) may rely on Rule 144 without compliance with the current
public information, holding period, limitations on number of shares sold and notice of proposed
sale requirements contained in Rule 144.



     Rule 144 defines an “affiliate” of an issuer as those persons that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control with
such issuer. “Person” is defined under Rule 144 to generally include (i) the individual for whose
account the securities are to be sold; (ii) any relatives, the individual’s spouse, or any
relatives of such spouse, any of whom lives in the same home as the individual; (iii) any trust in
which the persons named in (ii) above collectively own 10% or more of the beneficial interest; or
(iv) any corporation or other entity in which the persons named in (ii) above collectively own more
than 10% of the equity interest.



     Accordingly, persons who are not affiliates of the Company may, 90 days after the Company
becomes subject to the periodic reporting requirements of the Exchange Act, resell the shares of
Common Stock acquired pursuant to the Plan if the shares are sold in “brokers’ transactions” (as
defined by Rule 144) or in transactions directly with a “market maker.”



     If a participant is an affiliate of the Company the restrictions on resale are more extensive.
Rule 701(d) provides that 90 days after the Company becomes subject to the periodic reporting
requirements of the Exchange Act, persons who are affiliates may rely on Rule 144 without
compliance with the holding period requirement of Rule 144. Accordingly, affiliates will still
have to comply with (i) the current public information requirements of Rule 144(c), (ii) the
limitations on the number of shares which may be sold under Rule 144(e) (in general, the number of
shares, restricted and unrestricted, which may be sold in any three month period are limited to the
greater of (a) 1% of the number of shares outstanding or (b) the average weekly trading volume in
such securities), (iii) the shares are sold in “brokers’ transactions” (as defined by Rule 144(g))
or in transactions directly with a “market maker” and the transactions comply with the requirements
set forth in Rule 144(f) and (g), and (iv) if the number of shares sold in reliance upon Rule 144
in any three month period exceeds 500 shares or has an aggregate sale price greater than $10,000,
then the seller of such shares must file a Form 144 in compliance with Rule 144(h).



     The foregoing discussion of the resale limitations imposed by the federal securities laws on
the shares of Common Stock acquired pursuant to the Plan is a summary only and participants are
encouraged to review the applicable federal securities laws and to consult with their attorney
before determining whether to participate in the Plan.



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EXHIBIT A




(Annual Report on Form 10-K)




(Quarterly Reports on Form 10-Q)




Exhibit 10 44 — 2005 Option Plan



 









 








EXHIBIT B




(Form of Stockholders’ Agreement)




Exhibit 10 44 — 2005 Option Plan



 









 








EXHIBIT C




(Participant List)




	 	 	 	 	 
	Name	 	Number of Shares
	Kevin Yost

	 	 	23,714	 
	 
	 	 	 	 
	Ed Bick

	 	 	17,783	 
	 
	 	 	 	 
	Marshall Ernst

	 	 	47,433	 
	 
	 	 	 	 
	Dan Halstrom

	 	 	14,225	 
	 
	 	 	 	 
	Dennis Henley

	 	 	118,573	 
	 
	 	 	 	 
	Jim Herlihy

	 	 	50,000	 
	 
	 	 	 	 
	Danny Herron

	 	 	35,571	 
	 
	 	 	 	 
	Brad Lorenger

	 	 	23,714	 
	 
	 	 	 	 
	Mike Rempe

	 	 	23,714	 
	 
	 	 	 	 
	Jack Shandley

	 	 	11,858	 
	 
	 	 	 	 
	John Simons

	 	 	237,151	 
	 
	 	 	 	 
	Don Wiseman

	 	 	29,645	 
	 
	 	 	 	 
	Marty Dooley

	 	 	23, 714	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	657,095	 
	 

	 	 	 	 






Exhibit 10 44 — 2005 Option Plan