Document:

ex10_1.htm

 

 

Exhibit 10.1

 

CREDIT AGREEMENT

(Amendment to existing credit agreement)

 

The undersigned:

 

1.   Suplusco Holding B.V., established in Beusichem, 

  Key Technology B.V., established in Beusichem,

  hereinafter (together and individually) referred to as 'the Borrower',

2.   ABN AMRO Bank N.V., having its registered office in Amsterdam, the Netherlands, hereinafter referred to as 'ABN AMRO'

 

whereas:

 

-     a credit agreement dated 22.12.2010 exists between ABN AMRO and the borrower(s) specified therein, hereinafter referred to as the "Existing Credit Agreement";

-     the Borrower and ABN AMRO intend to preserve the rights and obligations under or in connection with the Existing Credit Agreement, as amended and/or supplemented, in accordance with the provisions of this Credit Agreement, hereinafter referred to as the "Credit Agreement", which in its entirety will read as follows:

 

hereby agree as follows:

 

The Borrower and ABN AMRO agree to amend and/or supplement the rights and obligations under or in connection with the Existing Credit Agreement, without terminating the Existing Credit Agreement, as recorded in this Credit Agreement.

 

ABN AMRO is prepared to enter into this Credit Agreement on the basis of the information provided. The overdraft facility is granted to finance the business operations of the Borrower.

The Borrower's obligations to ABN AMRO arising from bank guarantees issued by ABN AMRO for the account and risk of the Borrower will be administered under the contingent liability facility.

 

Facility amount                                                                      EUR 1.750.000,=

 

Breakdown of facility amount

Overdraft facility                                                                    EUR    250.000,= 

Contingent liability facility                                              EUR 1.500.000,=

 

Rates and charges

Overdraft facility

-      Current debit interest rate                                             6,05% per annum 

        which is made up of:

        -     ABN AMRO Euro Base Rate                                4,30% per annum (minimum 3,00%)

        -     Individual margin                                                    1,75% per annum

-      Facility fee                                                                       0,25% per quarter

The facility fee is calculated over the highest interest-bearing debit balance, with a minimum of EUR 625,=.

 

  

  

  

Security and covenants

-       Joint and several liability of all parties named under 1. above, pursuant to I.4 of the ABN AMRO General Credit Provisions.

-       Pledge of stocks.

-       Pledge of business chattels.

-       Pledge of receivables.

At first request, the Borrower shall provide ABN AMRO, periodically if so desired, with an itemised and validly signed list of his trade receivables. This list shall be submitted by means of a form supplied by ABN AMRO to the Borrower for this purpose and shall be accompanied by a list of receivables.

-       Subordination agreement providing that the Borrower's debt of EUR 3.748.000,= to Key Inc. under annual accounts for the financial year 30.09.2010 is subordinated to the debt to ABN AMRO. (new)

-       A right of pledge on all goods referred to in Article 24 of the General Banking Conditions.

-       A right of pledge on the rights of recourse and the subrogated rights arising pursuant to the joint and several liability referred to in I.4.3 of the ABN AMRO General Credit Provisions.

 

Establishing a (new) security right in favour of ABN AMRO does not serve to replace or release (existing) security rights in favour of ABN AMRO, unless expressly agreed otherwise.

 

Authorization

 

The Existing Credit Agreement includes a provision on power(s) of attorney, as detailed under the heading "Authorization", hereinafter referred to as the " Authorization Provision". The stipulations of the Authorization Provision shall continue to be effective, irrespective of whether the Authorization Provision or this provision is included in this Credit Agreement, as may be amended, supplemented or replaced from time to time.

 

Other provisions

-  For the purpose of this credit arrangement,

-       tangible net worth is understood to mean:

the equity capital (consisting of the issued and paid-up share capital, the share premium reserves, the revaluation reserve to the extent that it relates to revalued real estate, other statutory reserves (e.g. in relation to share repurchases), reserves required under the articles of association (to the extent these were created for capital maintenance purposes)  and other reserves (e.g. the distributed profits and/or losses for prior financial years and the undistributed profit or loss for the current financial year)),

increased by the deferred tax liabilities with respect to the revalued real estate,

increased by the - in relation to, inter alia, ABN AMRO - subordinated debts owed to third parties or shareholders,

decreased by the intangible fixed assets,

decreased by the deferred tax assets (tax receivables),

decreased by the participating interests (including minority interests),

decreased by the debts owed by shareholders/directors and participating interests (including minority interests) and group companies, and finally

decreased by the shares held by the Borrower in his own capital,

all as shown in the annual accounts;

 

  

  

  

 

-       adjusted balance sheet total is understood to mean:

adjusted balance sheet total:

the balance sheet total,

decreased by the intangible fixed assets,

decreased by the deferred tax assets (tax receivables),

decreased by the participating interests (including minority interests),

decreased by the debts owed by shareholders/directors and participating interests (including minority interests) and group companies, and finally

decreased by the shares held by the Borrower in his own capital, all as shown in the annual accounts;

annual accounts is understood to mean:

the Borrower’s annual accounts, consisting of the consolidated balance sheet, profit and loss account and accompanying notes, including a compilation report drawn up by a qualified accounting consultant acceptable to ABN AMRO in accordance with the calculation bases and accounting principles applied in the Borrower’s consolidated annual accounts for the financial year 30.09.2000.

-       No repayments of principal on the debt of EUR 3.748.000,= to Key Inc. will be made as long and insofar

as the tangible net worth represents less than 30% of the adjusted balance sheet total. (new)

-       With a view to the continuity of the Borrower’s business, ABN AMRO deems it necessary that the tangible net worth must at all times represent at least 30% of the adjusted balance sheet total.

This criterion must be satisfied throughout the facility period.

-      The Borrower will as far as possible lead his incoming and outgoing payments through ABN AMRO.

-      All relations between the Borrower and ABN AMRO shall be subject to the General Conditions ABN AMRO Bank N.V. (in Dutch: ‘Algemene Voorwaarden ABN AMRO Bank N.V.’), consisting of: Part I: General Banking Conditions (in Dutch: ‘Algemene Bankvoorwaarden’) and Part II: Client Relationship Conditions (in Dutch:  ‘Voorwaarden Cliëntrelatie’). In addition, this Credit Agreement shall also be subject to the ABN AMRO General Credit Provisions of November 2009, attached to this Credit Agreement. By signing this Credit Agreement the Borrower declares that he has received a copy of the General Conditions ABN AMRO Bank N.V. and the ABN AMRO General Credit Provisions and is fully aware of the contents thereof.

-      The following will apply in addition or contrary to the ABN AMRO General Credit Provisions:

-       If, in accordance with article 2:362 subsection 8 of the Netherlands Civil Code, the Borrower decides to draw up his consolidated annual accounts in accordance with the accounting standards formulated by the International Accounting Standards Board and approved by the European Commission, or if the Borrower chooses to adopt different calculation methods or principles of valuation, he shall inform ABN AMRO accordingly, in writing.

 

The annual accounts thus drawn up shall be accompanied by calculations prepared by his registeraccountant or qualified accounting consultant, which calculations shall provide an insight into the impact of the new accounting policies and/or standards on the financial ratio(s) stipulated in this Credit Agreement as well as any other agreements entered into by ABN AMRO and the Borrower. Partly on the basis of the aforesaid calculations, and following consultation with the Borrower, ABN AMRO may, if necessary, revise the financial ratio(s) concerned.

 

  

  

  

 

OTC-derivatives

 

-  ABN AMRO is prepared, until further notice, to enter into OTC-derivatives with the Borrower (hereinafter also referred to as “the Client”). However, ABN AMRO is not obliged to enter into such transactions with the Client. ABN AMRO will assess each transaction separately.

-  The above-mentioned security and/or covenants also serve as security for the fulfilment of the obligations arising from derivatives transactions.

-  The General Provisions governing Derivatives Transactions May 2001 (“Algemene Bepalingen Derivatentransacties mei 2001”) and the Treasury Services Conditions of ABN AMRO (“Voorwaarden Treasurydienstverlening ABN AMRO”) will apply to all derivatives transactions between the Client and ABN AMRO insofar no other conditions have been agreed upon.

ABN AMRO effects OTC derivatives transactions pursuant to the Treasury Services Order Execution Policy of ABN AMRO (“Orderuitvoeringsbeleid Treasurydienstverlening ABN AMRO”). By signing this Credit Agreement, the Client grants permission to ABN AMRO to execute orders pursuant to said policy. By signing this Credit Agreement, the Client declares that he has received a copy of the brochure Information Treasury Services of ABN AMRO (“brochure Informatie Treasurydienstverlening ABN AMRO”) and is fully aware of the contents thereof.

Said brochure contains the General Provisions governing Derivatives Transactions May 2001 (“Algemene Bepalingen Derivatentransacties mei 2001”) and the Treasury Services Conditions of ABN AMRO (“Voorwaarden Treasurydienstverlening ABN AMRO”), as well as the Information Sheet Treasury Services of ABN AMRO (“Informatieblad Treasurydienstverlening ABN AMRO”), which contains a general description of the nature and risks of Over-The-Counter (OTC) derivatives.

-  In addition to article 8 of the General Provisions governing Derivatives Transactions May 2001 (“Algemene Bepalingen Derivatentransacties mei 2001”), ABN AMRO may terminate one or more transactions immediately in full or in part, without any warning or notice of default being required, and all debts owed by the Client on account of the transactions, whether or not payable, contingent or absolute, shall be payable to ABN AMRO forthwith and in full if and as soon as:

(i) in the view of ABN AMRO, any such transaction does no longer serve to manage interest rate or other risks and has thus acquired a speculative character;

(ii) the borrowing relationship with ABN AMRO is terminated in full or in part.

 

Availability

The credit facility laid down in this Credit Agreement will be made available if all security and undertakings (verklaringen) referred to in this Credit Agreement have been established to ABN AMRO’s satisfaction.

Signature:

 

Enschede, 31.01.2011

ABN AMRO Bank N.V. 

Branch: De Klanderij 50

/s/ Thijs Winkel

/s/ Patrick Mensen

 

Beusichem, 22-12-2011

Suplusco Holding B.V.

 

/s/ Timothy Lobdell

 

Beusichem, 22-12-2011

Key Technology B.V.

 

/s/ Timothy Lobdellmm02-0811_8ke101.htm

 

EXHIBIT 10.1

DARLING INTERNATIONAL INC. COMPENSATION COMMITTEE

 

2011 AMENDED AND RESTATED EXECUTIVE COMPENSATION PROGRAM POLICY STATEMENT

 

(Revised February 3, 2011)

 

This policy is a statement of the plan for implementation of the 2011 Amended and Restated Executive Compensation Program (the “Program”) effective February 3, 2011 for certain executives of Darling International Inc. (the “Company”), pursuant to the Company’s 2004 Omnibus Incentive Plan (the “Omnibus Plan”) approved by its stockholders in May 2005.  The performance measures set forth in the Omnibus Plan were reapproved by the Company’s stockholders on May 11, 2010.  This Program supersedes for future periods the prior executive compensation plans, which were adopted under the Omnibus Plan on June 16, 2005, January 15, 2009 and January 8, 2010, respectively (the “Prior Programs”); however, the Prior Programs will remain in effect in respect of awards heretofore granted under the Prior Programs.  Awards granted to employees under the Program are intended to be “qualified performance based compensation” under Article 12 of the Omnibus Plan.

 

Program Objectives

 

	
·  

	
Reward Company executives for the achievement of specific annual, long-term and strategic goals of the Company throughout business cycles;

 

	
·  

	
Align the short and long-term interests of Company executives with the interests of stockholders;

 

	
·  

	
Attract and retain superior executives;

 

	
·  

	
Provide compensation to Company executives that is competitive with the compensation paid to similarly situated executives; and

 

	
·  

	
Create retention incentives for Company executives and provide an opportunity for increased equity ownership by Company executives.

 

Eligibility and Participation

 

Participants of the Program (each, a “Program Participant” and collectively, the “Program Participants”) include the Company’s chief executive officer (the “CEO”), the Executive Vice President, Finance and Administration (the “CFO”), the Company’s Executive Vice Presidents (the “EVPs”), and such other executive officers as the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) or the CEO may determine from time to time.

 

Structure and Implementation

 

The elements of compensation for each Program Participant are base salary, annual incentive bonus and long-term incentive equity awards.

 

Base Salary: The base salary element is intended to compensate the Program Participants for services rendered during each fiscal year.  Base salary ranges will be determined for a Program Participant based on his/her position and responsibility and should generally be set at or

 

  

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near the 50th percentile of base salary paid to similarly situated executives of Peer Companies (as defined below); provided, that the Compensation Committee shall have authority to deviate from such percentile target as it deems necessary or appropriate to achieve the Program objectives.  “Peer Companies”, which are selected annually by an outside global human resources consulting firm or other independent third party resources (a “Consulting Firm”), means general industrial companies that have similar total revenue, gross profit, EBITDA margin (earnings before interest, taxes, depreciation and amortization divided by revenue), net income and market capitalization and/or compete with the Company for management talent.  Although there typically may be overlap among the Peer Companies used in respect of the base salary element, the annual incentive bonus element and the long term incentive element, the actual companies in the applicable Peer Companies may differ based on guidance from a Consulting Firm.  Salary information of Peer Companies will be determined by using market data supplied by a Consulting Firm.

 

Annual Incentives:  The annual incentive bonus element for each Program Participant will be the possibility of a cash bonus that will be awarded upon the Program Participant’s achievement of both of two separate components:  the Company’s realization of certain financial measures, which will account for 75% of the annual incentive bonus, and the achievement of specific strategic, operational and personal goals (“SOPs”) designed for each Plan Participant based on his/her title and roles and responsibilities with the Company.  The SOPs will account for 25% of the annual incentive bonus.

 

The financial measures component will be based on the Company’s yearly return on gross investment (“ROGI”), which is defined as earnings before interest, taxes, depreciation and amortization divided by the sum of total assets plus accumulated depreciation minus other liabilities (other than those incurred to financing institutions, indebtedness issued to institutional investors and indebtedness registered under the Securities Act of 1934, as amended), including, but not limited to, accounts payable, accrued expenses, pension liabilities, other non-current liabilities and deferred income taxes.  The Company’s yearly ROGI will be calculated as of the end of each fiscal year based on the Company’s financial statements prepared for and presented in the Company’s Annual Report on Form 10-K; however, from time to time, the calculation of ROGI will be adjusted in the discretion of the Compensation Committee for excess cash on hand or in extraordinary circumstances.  A Program Participant will receive 100% of his/her target payout with respect to the financial measures component of the annual award if the Company attains an annual ROGI for the fiscal year equal to the 50th percentile of the Peer Companies ROGI as calculated by a Consulting Firm.  The Compensation Committee will also set a threshold and maximum ROGI for each Program Participant between which Program Participants will receive a percentage of target payout between 25% (for achievement of the 25th percentile of the Peer Companies ROGI (the “ROGI Threshold”)) and 300% (for achievement of the 80th percentile of the Peer Companies ROGI) depending on the actual ROGI achieved.

 

The SOPs component of the annual incentive bonus will be based on both the Company’s achievement of the ROGI Threshold and a Program Participant’s achievement of individual SOPs.  A Program Participant may receive between 0% and 300% of his/her target payout with respect to the SOPs component depending on such participant’s performance for the fiscal year.  Prior to each fiscal year, the CEO will set individual, objective SOPs for each Program Participant (other than himself), which objectives will be approved by the Compensation

 

  

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Committee.  With respect to the CEO, the Compensation Committee will set and approve the CEO’s SOPs for each fiscal year.  Following the end of each fiscal year, each Program Participant’s performance will be evaluated against his/her SOPs by the CEO (except with respect to his/her own performance), and the Compensation Committee will determine the percentage of target payout to be awarded to such Program Participant based on the calculation by the CEO of such Program Participant’s achievement of his/her SOPs, which determination will be validated by the Compensation Committee.  In the case of the CEO, the Compensation Committee will evaluate the CEO’s performance against his/her SOPs and determine the payout for the SOPs component of the annual incentive bonus based on his/her achievement of the SOPs.  Each Program Participant must achieve a minimum of 75% of his/her SOPs to receive any payout for the SOPs component of the annual incentive bonus.

 

Long Term Incentives:  The long term incentive element of compensation will be awarded to Program Participants in the form of a yearly equity grant, which will be composed of 80% restricted stock and 20% stock options (together, the “Grant”); however, the Company will only award such yearly equity grants if the Company meets certain financial objective(s) for the relevant prior fiscal year as determined by the Compensation Committee from time to time.  The target dollar value of the Grant (the “Target Grant Dollar Value”) for the CEO will equal 125% of the CEO’s base salary and, for all other Plan Participants, will range from 20% to 75% of the Program Participant’s base salary.  The Target Grant Dollar Value for each Program Participant, including the CEO, will be set by the Compensation Committee.  The actual amount of the award will be based on the Company’s actual trailing five-year ROGI average and may range from between 50% and 200% of the Target Grant Dollar Value.  If the Company’s trailing five-year ROGI average is less than or equal to the 25th percentile of the Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to 50% of his/her Target Grant Dollar Value; if the Company’s trailing five-year ROGI average is between the 25th and 50th percentile of Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to between 50% and 100% of his/her Target Grant Dollar Value; if the Company’s trailing five-year ROGI average is between the 50th and 75th percentile of Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to between 100% and 200% of his/her Target Grant Dollar Value; and if the Company’s trailing five-year ROGI average is over the 75th percentile of Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to a maximum amount of 200% of his/her Target Grant Dollar Value.

 

All financial and other objectives for individual Grants that are intended to be treated as "qualified performance-based compensation" under Article 12 of the Omnibus Plan and Section 162(m) of the Code (as defined in the Omnibus Plan) will be determined prior to the end of the first quarter of the fiscal year during which such performance will be determined.

 

Restricted stock granted under the Program will account for 80% of the total Grant.  Within the first fiscal quarter of each fiscal year, the Compensation Committee will determine both (i) the Target Grant Dollar Value for the target number of shares of restricted stock that each such Program Participant will be eligible to receive for such current fiscal year if the requisite ROGI performance is achieved and (ii) the number of shares of restricted stock that the participant is potentially eligible to receive.  Based on the benchmarking methodology utilized by the Company’s current Consulting Firm, the target number of shares of restricted stock that each Program Participant is eligible to receive is calculated by dividing the Target Grant Dollar

 

  

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Value for restricted stock determined for each Program Participant by a Discounted Per Share Price.  The “Discounted Per Share Price” is derived by discounting the closing market price of the Company’s common stock as of the last trading day of the immediately preceding fiscal year to account for forfeiture of the restricted stock based on, among other things, the probability of the failure of the restricted stock to be granted and the failure of the Company to meet the required performance measures.  Restricted stock Grants will have no exercise price and will vest over a period of three years, with 25% vesting immediately upon issuance and 25% vesting on each of the next three anniversaries of the grant date.  Restricted stock will be granted on the fourth business day after the Company releases its annual financial results.

 

Stock options granted under the Program will account for 20% of the total Grant. Stock options will be granted on the fourth business day after the Company releases its annual financial results.  Within the first fiscal quarter of each fiscal year, the Compensation Committee will determine both (i) the Target Grant Dollar Value for the target number of stock options that each such Program Participant will be eligible to receive for such current fiscal year if the requisite ROGI performance is achieved and (ii) the number of stock options that the participant is potentially eligible to receive.  In calculating the target number of stock options that each Program Participant is eligible to receive, the Compensation Committee will divide the Target Grant Dollar Value for stock options determined for each Program Participant by the value of a stock option based on the value of a single share as of the last trading day of the immediately preceding fiscal year, applying the Black-Scholes valuation methodology to determine such share value.  The exercise price of all stock options granted under the LTIP will be the Fair Market Value of the Company’s common stock on the third business day after the Company releases its annual financial results for the relevant year.  Stock options will vest over a period of three years with 25% vesting immediately upon issuance and 25% on each of the next three anniversaries of the grant date.

 

The Compensation Committee has the discretion to award or withhold Grants or to provide additional grants outside the Program if it determines that it is in the best interests of the Company to do so.

 

Additional Award

 

The Compensation Committee will periodically evaluate the advisability of grants of long-term incentives to the executives and employees of the Company.  The Compensation Committee will make such awards as it determines are appropriate, advisable and in the best interests of the Company.

 

Fair Market Value

 

For purposes of this Program, the term “Fair Market Value” has the meaning ascribed to it in the Omnibus Plan.

 

 

 

 

 

 

 

 

 

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