Document:

Exhibit101SecondAmendmenttoCreditAgreement

EXHIBIT 10.1
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT
This Second Amendment to Amended and Restated Credit Agreement and Consent (this “Amendment”) is entered into as of June 26, 2012, among Chiquita Brands L.L.C., a Delaware limited liability company (the “Borrower”), Chiquita Brands International, Inc., a New Jersey corporation (“CBII”), each of the Lenders party hereto and Coöperatieve Centrale Raiffeisen ‐ Boerenleenbank B.A., “Rabobank Nederland”, New York Branch (“Rabobank”), as the Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, CBII, the Administrative Agent and each of the Lenders party thereto from time to time have entered into that certain Amended and Restated Credit Agreement dated as of July 26, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement);
WHEREAS, the Borrower has requested that certain changes be made to the Financial Covenants set forth in the Credit Agreement, that the Lenders consent to the non-renewal of certain trademarks, and that certain other amendments be made to the Credit Agreement; and
WHEREAS, the Administrative Agent, the Lenders, the Borrower and CBII have agreed to the requested amendment and consent on the terms and conditions provided herein;
NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.    Amendments to the Credit Agreement.  
1.1.    Section 1.1 of the Credit Agreement (Definitions) is hereby amended by inserting the following definitions in appropriate alphabetical order:
“Available Liquidity” means, at any time, the sum of (i) the Unused Revolving Commitment of the Borrower, and (ii) unrestricted cash and cash equivalents of the Borrower and its Subsidiaries.
“Covenant Amendment Period” means the period during which either (i) the maximum Borrower Leverage Ratio permitted pursuant to Section 5.03(a) is greater than 3.50 to 1.0, or (ii) the minimum Fixed Charge Coverage Ratio permitted pursuant to Section 5.03(b) is less than 1.15 to 1.0.

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“Fleet Asset Basket” has the meaning set forth in Section 5.02(q).
1.2.    The first sentence of the definition of “Applicable Margin” appearing in Section 1.1 of the Credit Agreement (Definitions) is hereby amended and restated in its entirety to read as follows:
“Applicable Margin” shall mean, (a) with respect to each Term Loan, (i) at all times during the Covenant Amendment Period, 3.75% per annum for Loans bearing interest at the Base Rate and 4.75% for Loans bearing interest at the LIBOR Rate, and (ii) at all other times, the per annum margin which is determined pursuant to the Term Loan Pricing Grid (subject to adjustment pursuant to Section 2.17) and added to the Base Rate or LIBOR Rate, as the case may be, for such Term Loan, (b) with respect to each Revolving Loan, (i) at all times during the Covenant Amendment Period, 3.75% per annum for Loans bearing interest at the Base Rate and 4.75% for Loans bearing interest at the LIBOR Rate, and (ii) at all other times, the per annum margin which is determined pursuant to the Revolving Loan Pricing Grid and added to the Base Rate or LIBOR Rate, as the case may be, for such Revolving Loan, (c) with respect to the calculation of the Letter of Credit Fee Percentage, (i) at all times during the Covenant Amendment Period, 4.75% per annum, and (ii) at all other times, the per annum margin which is determined pursuant to the Revolving Loan Pricing Grid and added to the LIBOR Rate for Revolving Loans and (d) with respect to the calculation of the Commitment Fee Percentage, (i) at all times during the Covenant Amendment Period, 0.75% per annum, and (ii) at all other times, the per annum margin which is determined pursuant to the Revolving Loan Pricing Grid. 
1.3.    Clause (v) of Section 2.06(c) of the Credit Agreement (Prepayments, Mandatory Prepayments), is hereby amended by deleting the percentage “50%” appearing therein and inserting “75%” in lieu thereof.
1.4.    Section 5.01(a)(xi) of the Credit Agreement (Affirmative Covenants, Financial Statements, Reports) is hereby amended by (i) deleting the number “60” appearing therein and (ii) inserting “45” in lieu thereof. 
1.5.    Section 5.01(a) of the Credit Agreement (Affirmative Covenants, Financial Statements, Reports) is hereby amended by (i) deleting the word “and” appearing at the end of clause (xvii) thereof, (ii) deleting the period at the end of clause (xviii) thereof and inserting “; and” in lieu thereof, and (iii) inserting the following clause as a new clause (xix):
(xix)    At all times during the Covenant Amendment Period, as soon as available and in no event later than 30 days after the last day of each calendar month that is not also the last day of a fiscal quarter, a copy of the internal Financial Statements of the Borrower Entities (prepared on a consolidated basis and in form and substance consistent with past practice of the Borrower) for the calendar month ended and the fiscal year to date, certified by the Chief Accounting Officer or the Chief Financial Officer of the Borrower to present fairly in all material respects the financial condition, results of operations and other information reflected therein and to have been prepared in accordance with GAAP (such internal Financial Statements of the

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 Borrower Entities are subject to the omission of normal quarter end adjustments including but not limited to adjustments from income tax calculations and quarterly cut-off procedures and omission of footnotes and statements of cash flows, shareholder’s equity and comprehensive income).
1.6.    Section 5.02(q) of the Credit Agreement (Negative Covenants, Fleet Assets), is hereby amended by inserting the following words at the end thereof “(the “Fleet Asset Basket”)”.
1.7.    Section 5.02 of the Credit Agreement (Negative Covenants), is hereby amended by inserting the following as a new subsection (r) at the end of such Section:
(r)    Prepayment of Indebtedness.  At all times during the Covenant Amendment Period, the CBII Entities shall not prepay, redeem, purchase, repurchase, defease or otherwise satisfy prior to the scheduled maturity thereof any Indebtedness (other than the Loans) except as otherwise required pursuant to the terms of such Indebtedness (collectively, a “Prepayment”) except for a prepayment of Indebtedness made with the proceeds of other unsecured Indebtedness incurred by CBII and containing terms and conditions (including terms of subordination and maturity but excluding interest rate and prepayment or redemption premiums) no less favorable, taken as a whole, in any material respect to the Lenders than the Indebtedness subject to such Prepayment, as determined by the Borrower in good faith.
1.8.    Section 5.03 of the Credit Agreement (Financial Covenants), is hereby amended by amending and restating such Section in its entirety to read as follows:
Section 5.03.    Financial Covenants.  Until the termination of the Commitments and the satisfaction in full by the Loan Parties of all Secured Obligations (other than any Unaccrued Indemnity Claims), the Borrower will comply, and will cause compliance, with the following financial covenants, unless the Required Lenders shall otherwise consent in writing:
(a)    Borrower Leverage Ratio.  As of the last day of each fiscal quarter of the Borrower ending during the relevant period set forth below, the Borrower shall not permit the Borrower Leverage Ratio to be greater than the corresponding ratio set forth opposite such period:

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	Period(s) Ending
	Borrower Leverage Ratio shall not be greater than:

	Fiscal quarters ending on or about 6/30/2012 - 12/31/2012
	6.50 to 1.0

	Fiscal quarter ending on or about 3/31/2013
	5.75 to 1.0

	Fiscal quarter ending on or about 6/30/2013
	4.50 to 1.0

	Fiscal quarter ending on or about 9/30/2013
	4.00 to 1.0

	Fiscal quarter ending on or about 12/31/2013 and the end of any fiscal quarter ended thereafter
	3.50 to 1.0

provided, however, that if the Borrower elects to end the Covenant Amendment Period pursuant to Section 5.03(f), at all times thereafter the Borrower shall not permit the Borrower Leverage Ratio to be greater than 3.50 to 1.00 as of the end of any fiscal quarter.
(b)    Fixed Charge Coverage Ratio.  As of the last day of each fiscal quarter of the Borrower ending during the relevant period set forth below, the Borrower shall not permit the Fixed Charge Coverage Ratio to be less than the corresponding ratio set forth opposite such period:
	
		
	Period(s) Ending
	Fixed Charge Coverage Ratio shall not be less than:

	Fiscal quarters ending on or about 6/30/2012 - 6/30/2013
	1.00 to 1.0

	Fiscal quarter ending on or about 9/30/2013 and the end of any fiscal quarter ended thereafter
	1.15 to 1.0

provided, however, that if the Borrower elects to end the Covenant Amendment Period pursuant to Section 5.03(f), at all times thereafter the Borrower shall not permit the Fixed Charge Coverage Ratio to be less than 1.15 to 1.00 as of the end of any fiscal quarter.
(c)    Maximum Capital Expenditures.  The Borrower shall not permit the aggregate amount of Capital Expenditures (excluding any Permitted Acquisition which is treated as a Capital Expenditure under GAAP and any reinvestment of insurance Net Cash Proceeds and Capital Expenditures made in connection with the acquisition of Fleet Assets) made by the Borrower Entities in any fiscal year to exceed (i) $125,000,000 with respect to the fiscal year ending December 31, 2012, (ii) $85,000,000 with respect to the fiscal year ending December 31, 2013, and (iii) $150,000,000 with respect to any fiscal year ending thereafter; provided, however, that if, for any fiscal year, the amount specified in this

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 Section 5.03(c) exceeds the aggregate amount of Capital Expenditures made by the Borrower Entities during such fiscal year, the Borrower Entities shall be entitled to make additional Capital Expenditures in the immediately succeeding fiscal year in an amount (such amount being referred to herein as the “Capex Carryover”) equal to such excess.
(d)    Minimum Liquidity.  At all times during the Covenant Amendment Period, the Borrower shall have Available Liquidity of at least $50,000,000.
(e)    Restriction on Certain Negative Covenants During Covenant Amendment Period.  Notwithstanding anything in Section 5.02 to the contrary, during the Covenant Amendment Period, none of the Borrower Entities may: (1) make any acquisitions pursuant to Section 5.02(d)(iii), (2) make any Investments pursuant to Section 5.02(e)(xvi), (xvii), (xix) or (xxii), or (3) make any Distributions or set apart any sum pursuant to Section 5.02(f)(ii)(F) or (iv), except (x) Permitted Acquisitions the aggregate consideration for such acquisitions when added to all other such acquisitions since the date hereof does not exceed Euro 6,000,000 and (y) solely with respect to Section 5.02(e)(xvii), to the extent (A) such Borrower Entity contractually agreed prior to the date hereof to make such Investment or (B) the aggregate amount of such Investments when added to all other such Investments since the date hereof do not exceed Euro 6,000,000.
(f)    Covenant Amendment Period.  The Borrower may elect to end the Covenant Amendment Period at any time by delivering a written notice to the Administrative Agent so long as the Borrower can demonstrate at such time, on a pro forma basis, that the Borrower shall be in compliance with all of the covenants set forth in this Section 5.03 that are applicable after the termination of the Covenant Amendment Period.
2.    Consent.  The Credit Agreement requires that the Required Lenders consent to the deletion of any material “Principal Trademarks”.  The Borrower has requested that the following “Principal Trademarks” no longer constitute “Principal Trademarks” as such trademarks are not being renewed: United States Registration Number 1,183,170 for honeydew melon and cantaloupe, United States Registration Number 1,906,730 for cookies and breakfast cereals, and United States Registration Number 1,903,716 for cookies.  The Required Lenders, by their execution hereof, hereby agree to the deletion of the foregoing trademarks as “Principal Trademarks.”
3.    No Other Amendments, Consents or Waivers.  Except as expressly set forth above, the execution, delivery and effectiveness of this Amendment shall not operate as an amendment or waiver of any right, power or remedy of the Administrative Agent or the Lenders under the Credit Agreement or any of the other Credit Documents, nor constitute a waiver of any provision of the Credit Agreement or any of the other Credit Documents.  Except for the amendment set forth above, the text of the Credit Agreement and all other Credit Documents shall remain unchanged and in full force and effect and the Borrower and CBII hereby ratify and confirm their respective obligations thereunder.  This Amendment shall not constitute a modification of the Credit Agreement or any of the other Credit Documents or a course of dealing with

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 the Administrative Agent or the Lenders at variance with the Credit Agreement or the other Credit Documents such as to require further notice by the Administrative Agent or the Lenders to require strict compliance with the terms of the Credit Agreement and the other Credit Documents in the future, except as expressly set forth herein.  The Borrower and CBII acknowledge and expressly agree that the Administrative Agent and the Lenders reserve the right to, and do in fact, require strict compliance with all terms and provisions of the Credit Agreement and the other Credit Documents, as amended herein.  The Borrower and CBII have no knowledge of any challenge to the Administrative Agent’s or any Lender’s claims arising under the Credit Documents, or to the effectiveness of the Credit Documents.
4.    Conditions Precedent to Effectiveness.  This Amendment shall become effective as of the date hereof when, and only when, (i) the Administrative Agent shall have received counterparts of this Amendment duly executed by the Borrower, CBII, the Administrative Agent and the Required Lenders, and (ii) the Administrative Agent shall have received an amendment fee, for the benefit of each of the Lenders approving this Amendment as evidenced by their execution of a counterpart to this Amendment, in an amount equal to 0.35% multiplied by the sum of the Revolving Loan Commitment of such Revolving Lender and the outstanding amount of such Lender’s Term Loan.
5.    Representations and Warranties of the Borrower and CBII.  In consideration of the execution and delivery of this Amendment by the Administrative Agent and Lenders, the Borrower and CBII each hereby represents and warrants in favor of the Administrative Agent and the Lenders as follows:
(a)    the execution, delivery and performance by such Person of this Amendment and the consummation of the transactions contemplated hereby (i) are within the corporate, limited liability company or similar power of such Person and (ii) have been duly authorized by all necessary actions on the part of such Person;
(b)    this Amendment has been duly executed and delivered by such Person and constitutes a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as limited by Debtor Relief Laws relating to or affecting the enforcement of creditors’ rights generally and general principles of equity;
(c)    the execution and delivery by such Person of this Amendment and the performance and consummation of the transactions contemplated hereby do not (i) violate any Requirement of Law applicable to such Person, (ii) violate any provision of, or result in the breach or the acceleration of, or entitle any other Person to accelerate (whether after the giving of notice or lapse of time or both), any Contractual Obligation of such Person, (iii) result in the creation or imposition of any Lien (or the obligation to create or impose any Lien) upon any property, asset or revenue of such Person or (iv) violate any provision of any existing law, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority to which it is subject, except, in each case in each of clauses (i), (ii), (iii) and (iv) above, where such breach or violation could not reasonably be expected to have a Material Adverse Effect;

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(d)    other than any such matters that may be required of a Lender that is not a US Person in connection with its involvement in the transactions contemplated by this Amendment, no consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or other Person (including the shareholders of any Person) is required in connection with the execution and delivery of this Amendment by such Person or its performance or consummation of the transactions contemplated hereby, except for those which have been made or obtained and are in full force and effect;
(e)    all Governmental Authorizations for the due execution, delivery, recordation, filing or performance by such Person of this Amendment, or further consummation by such Person of the transactions contemplated hereby, have been duly obtained and are in full force and effect without any known conflict with the rights of others and free from any unduly burdensome restrictions, except where any such failure to obtain such Governmental Authorizations or any such conflict or restriction could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;
(f)    no Default has occurred and is continuing; and
(g)    all Credit Documents to which such Person is a party, including, without limitation, the Credit Agreement, constitute valid and legally binding obligations of such Person and are enforceable against such Person in accordance with the terms thereof, except as limited by Debtor Relief Laws relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
6.    Counterparts.  This Amendment may be executed in any number of counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes.  Transmission by facsimile or other electronic transmission of an executed counterpart of this Amendment shall be deemed to constitute due and sufficient delivery of such counterpart.
7.    Reference to and Effect on the Credit Documents.  Upon the effectiveness of this Amendment, on and after the date hereof, 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 the other Credit 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 hereby.
8.    Costs, Expenses and Taxes.  The Borrower agrees to pay on demand all reasonable out‐of‐pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect hereto and thereto and with respect to advising the Administrative Agent as to its rights and responsibilities hereunder and thereunder. 

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9.    Headings.  The captions and section headings appearing in this Amendment are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Amendment.
10.    Entire Agreement.  This Amendment and each of the other Credit Documents, taken together, constitute and contain the entire agreement of the Borrower, CBII, the Lenders and the Administrative Agent and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.
11.    Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York without reference to conflicts of law rules (other than Sections 5‐1401 and 5‐1402 of the New York General Obligations Law).  The scope of the foregoing governing law provision is intended to be all encompassing of any and all disputes that may be brought in any court or any mediation or arbitration proceeding and that relate to the subject matter of this Amendment, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims.
12.    Credit Document.  This Amendment shall be deemed to be a Credit Document for all purposes.
[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the day and year first written above.

	
		
	 
	BORROWER:

	 
	CHIQUITA BRANDS L.L.C., a Delaware limited liability company

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

	
		
	 
	CBII:

	 
	CHIQUITA BRANDS INTERNATIONAL, INC., a New Jersey corporation

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

REAFFIRMATION, ACKNOWLEDGEMENT, AND CONSENT OF PARENT GUARANTOR
The undersigned heretofore executed and delivered to the Bank that certain Parent Guarantee Agreement dated as of March 31, 2008 (the “Guaranty”).  The undersigned hereby consents to the Amendment to the Credit Agreement as set forth above and confirms that its Guaranty, and all obligations of the undersigned thereunder, remains in full force and effect.  The undersigned further agrees that the consent of the undersigned to any further amendments to the Credit Agreement shall not be required as a result of this consent having been obtained.  The undersigned acknowledges that the Bank is relying on the assurances provided herein in entering into the Amendment set forth above.

	
		
	 
	“PARENT GUARANTOR”

	 
	CHIQUITA BRANDS INTERNATIONAL, INC.

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

REAFFIRMATION, ACKNOWLEDGEMENT, AND CONSENT OF SUBSIDIARY GUARANTORS
The undersigned heretofore executed and delivered to the Bank that certain Subsidiary Guarantee Agreement dated as of March 31, 2008 (the “Guaranty”).  The undersigned hereby consents to the Amendment to the Credit Agreement as set forth above and confirms that its Guaranty, and all obligations of the undersigned thereunder, remains in full force and effect.  The undersigned further agrees that the consent of the undersigned to any further amendments to the Credit Agreement shall not be required as a result of this consent having been obtained.  The undersigned acknowledges that the Bank is relying on the assurances provided herein in entering into the Amendment set forth above.

	
		
	 
	“SUBSIDIARY GUARANTORS”

	 
	AMERICAN PRODUCE COMPANY

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

	
		
	 
	B C SYSTEMS, INC.

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

	
		
	 
	CHIQUITA FRESH NORTH AMERICA L.L.C.

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

	
		
	 
	COAST CITRUS DISTRIBUTORS HOLDING COMPANY

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

    
Second Amendment to Amended and Restated Credit Agreement

	
		
	 
	FRESH EXPRESS INCORPORATED

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

	
		
	 
	FRESH INTERNATIONAL CORP.

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

	
		
	 
	TRANSFRESH CORPORATION

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

	
		
	 
	VERDELLI FARMS, INC.

	 
	 

	 
	By: /s/ Joseph W. Bradley

	 
	Name: Joseph W. Bradley

	 
	Title: Vice President, Taxation & Treasurer

    
Second Amendment to Amended and Restated Credit Agreement

	
		
	 
	ADMINISTRATIVE AGENT AND LENDERS:

	 
	COÖPERATIEVE CENTRALE RAIFFEISEN ‐ BOERENLEENBANK B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH, as Administrative Agent and as a Lender

	 
	 

	 
	By /s/ Michael L. Laurie

	 
	Name: Michael L. Laurie

	 
	Title: Managing Director

	 
	 

	 
	By /s/ Andrew Sherman

	 
	Name: Andrew Sherman

	 
	Title: Managing Director

	
		
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

	 
	 

	 
	By /s/ Beth A. Tiffin

	 
	Name: Beth A. Tiffin

	 
	Title: Senior Vice President

	
		
	 
	BARCLAYS BANK PLC, as a Lender

	 
	 

	 
	By /s/ Noam Azachi

	 
	Name: Noam Azachi

	 
	Title: Assistant Vice President

	
		
	 
	ROYAL BANK OF CANADA, as a Lender

	 
	 

	 
	By /s/ Gordon MacArthur

	 
	Name: Gordon MacArthur

	 
	Title: Authorized Signatory

	
		
	 
	PNC BANK, NATIONAL ASSOCIATION, as a Lender

	 
	 

	 
	By /s/ Gregory S. Duchaw

	 
	Name: Gregory S. Duchaw

	 
	Title: Senior Vice President

	
		
	 
	KEYBANK NATIONAL ASSOCIATION, as a Lender

	 
	 

	 
	By /s/ Gene Fugare

	 
	Name: Gene Fugare

	 
	Title: SVP & City President

	
		
	 
	BANK OF AMERICA, N.A., as a Lender

	 
	 

	 
	By /s/ Charles R. Dickerson

	 
	Name: Charles R. Dickerson

	 
	Title: Senior Vice President

	
		
	 
	FIFTH THIRD BANK, as a Lender

	 
	 

	 
	By /s/ Megan S. Szewc

	 
	Name: Megan S. Szewc

	 
	Title: Vice President

	
		
	 
	RB INTERNATIONAL FINANCE (USA) LLC, as a Lender

	 
	 

	 
	By /s/ John Valiska

	 
	Name: John Valiska

	 
	Title: First Vice President

	 
	 

	 
	By /s/ Shirley Ritch

	 
	Name: Shirley Ritch

	 
	Title: Vice President

	
		
	 
	UNITED FCS, PCA DBA FCS COMMERCIAL FINANCE GROUP, as a Lender

	 
	 

	 
	By /s/ Daniel J. Best

	 
	Name: Daniel J. Best

	 
	Title: Vice President

	
		
	 
	FARM CREDIT WEST, PCA, as a Lender

	 
	 

	 
	By /s/ Ben Madonna

	 
	Name: /s/ Ben Madonna

	 
	Title: Vice President

	
		
	 
	AGSTAR FINANCIAL SERVICES, PCA/FLCA, as a Lender

	 
	 

	 
	By /s/ Melissa Cross

	 
	Name: Melissa Cross

	 
	Title: Assistant General Counsel

	
		
	 
	1ST FARM CREDIT SERVICES, PCA, as a Lender

	 
	 

	 
	By  /s/ Corey J. Waldinger

	 
	Name: Corey J. Waldinger

	 
	Title: Vice President, Capital Markets

	
		
	 
	AMMC CLO IV, Limited, as a Lender

	 
	 

	 
	By: American Money Management Corp., as Collateral Manager

	 
	By /s/ Chester M. Eng

	 
	Name: Chester M. Eng

	 
	Title: Senior Vice President

	
		
	 
	AMMC CLO V, Limited, as a Lender

	 
	 

	 
	By: American Money Management Corp., as Collateral Manager

	 
	By /s/ Chester M. Eng

	 
	Name: Chester M. Eng

	 
	Title: Senior Vice Presidentex1011.htm

Exhibit 10.11

 

 

JOHN WILEY & SONS, INC.

 

FY 2013 QUALIFIED EXECUTIVE LONG TERM INCENTIVE PLAN

 

PLAN DOCUMENT

 

CONFIDENTIAL

 

May 1, 2012

 

 

 

 

 

 

 

 

  

  

  

 

 

	
Section

	
Subject

	
Page

	
I.

	
Definitions

	
2

	
II.

	
Plan Objectives

	
3

	
III.

	
Eligibility

	
3

	
IV.

	
Performance Targets and Measurement

	
4

	
V.

	
Performance Evaluation

	
4

	
VI.

	
Restricted Performance Shares Award Provisions

	
5

	
VII.

	
Stock Options

	
6

	
VIII.

	
Payouts

	
6

	
IX.

	
Administration and Other Matters

	
7

 

 

 

  

1

  

I.  DEFINITIONS

 

Following are definitions for words and phrases used in this document.  Unless the context clearly indicates otherwise, these words and phrases are considered to be defined terms and appear in this document in italicized print:

 

award  The award made to a participant under this plan in connection with the attainment of specified performance levels for the plan period as specified in the participant’s award summary.

 

business criteria An indicator of financial performance, chosen from the business criteria listed in Section 7(b)(ii)(B) of the shareholder plan. The following business criteria are used in this plan:

 

cumulative free cash flow  Net income for the three-year plan period, excluding unusual items not related to the period being measured, plus/minus any non-cash items included in net income and changes in operating assets and liabilities, minus normal investments in product development assets and property and equipment.

 

earnings per share Earnings per share, excluding unusual items not related to the period being measured.  Actual results shall be increased by one cent for VCH tax basis step-up recovery.

 

business unit The Company, a business or subsidiary of the Company, or a global unit of the Company.

 

Company  John Wiley & Sons, Inc.

 

Executive Compensation and Development Committee (Committee) The committee of the Company’s Board of Directors responsible for the review and approval of executive compensation.  The Committee was previously known as the Compensation Committee.

 

financial goal  A targeted level of attainment of a given business criteria.

 

financial results The published, audited financial results of the Company.

 

participant  A person selected to participate in the plan.

 

performance levels

 

threshold  The minimum acceptable level of achievement of a financial goal in order to earn a payout, expressed as a percentage of target e.g., 90% of target).

 

target   Achievement of the assigned financial goal-100%.

 

outstanding superior achievement of a financial goal, earning the maximum payout, expressed as a percentage of target (e.g., 115% of target).

 

 

  

2

  

 

performance target  A participant's objective to achieve specific financial goals for assigned business criteria in the plan period, as approved by the Committee.  A performance target comprises all of the financial goals for the business criteria in a business unit.

 

plan   This FY 2013 Qualified Executive Long Term Incentive Plan.

 

plan-end adjusted restricted performance shares award   The number of restricted performance shares awarded to a participant at the end of the plan period after adjustments, if any, are made, as set forth in Sections V and VIII.

 

plan period   The three year period from May 1, 2012 to April 30, 2015, or a portion of this period, at the discretion of the Committee.

 

restricted performance share  A share of stock issued pursuant to this plan and the shareholder plan that is subject to forfeiture.  In the shareholder plan, such stock is referred to as “Performance-Based Stock.”

 

restricted period  The period during which the restricted performance shares shall be subject to forfeiture in whole or in part, as defined in the shareholder plan, in accordance with the terms of the award.

 

shareholder plan   The John Wiley & Sons, Inc.  2009 Key Employee Stock Plan.

 

stock   Class A Common Stock (par value $1 per share) of the Company.

 

target incentive  The targeted number of restricted performance shares that a participant is eligible to receive if 100% of his/her/her applicable performance targets are achieved and the participant remains employed by the Company through the vesting dates of April 30, 2016 and April 30, 2017, except as otherwise provided in Section VIII.

 

 

 

II.  PLAN OBJECTIVES

 

The plan is intended to provide the officers and other key colleagues of the Company and of its subsidiaries, affiliates and certain joint venture companies, upon whose judgment, initiative and efforts the Company depends for its growth and for the profitable conduct of its business, with additional incentive to promote the success of the Company.

 

 

 

III.  ELIGIBILITY

 

A participant is selected by the President and CEO and recommended for participation to the Committee, which has sole discretion for determining eligibility, from among those colleagues in key management positions deemed able to make the most significant contributions to the growth and profitability of the Company.  The President and CEO of the Company is a participant.

 

  

3

  

 

 

IV.  PERFORMANCE TARGETS AND MEASUREMENT

 

The President and CEO recommends and the Committee adopts, in its sole discretion, performance targets and performance levels for each participant, not later than 90 days from the commencement of the plan period.  No performance target or performance level may be modified after 90 days from the commencement of the plan period.

 

	
A.  

	
Performance targets, comprising one or more financial goals, are defined for each business unit. Each financial goal is assigned a weight, such that the sum of the weights of all financial goals for a business unit equals 100%.

 

	
B.  

	
Each participant is assigned performance targets for one or more business units, based on the participant’s position, responsibilities, and his/her ability to affect the results of the assigned business unit. For each participant, each business unit is assigned a weight, such that the sum of the weights of all business units for a participant equals 100%. Collectively, all business unit performance targets constitute the participant’s plan period objectives.

 

	
C.  

	
Each financial goal is assigned performance levels (threshold, target and outstanding).

 

 

 

V.  PERFORMANCE EVALUATION

 

	
A.  

	
Financial Results

 

	
1.  

	
At the end of the plan period, the financial results for each business unit are compared with that unit’s financial goals to determine the payout for each participant.

 

	
2.  

	
In determining the attainment of financial goals, the impact of  any of the events (a) through (i) listed in Section 7(b)(ii)(B) of the shareholder plan, if dilutive (causes a reduction in the financial result) will be excluded from the financial results for any affected business unit.

 

	
3.  

	
Award Determination

 

	
·  

	
Achievement of threshold performance of at least one financial goal of a performance target is necessary for a participant to receive a payout for that performance target.

 

	
·  

	
The unweighted payout factor for each financial goal is determined as follows:

 

	
1.  

	
For performance below the threshold level, the payout factor is zero.

 

	
2.  

	
For performance at the threshold level, the payout factor is 50%.

 

	
3.  

	
For performance between the threshold and target levels, the payout factor is between 50% and 100%, determined on a pro-rata basis.

 

 

  

4

  

 

 

	
4.  

	
For performance at the target level, the payout factor is 100%.

 

	
5.  

	
For performance between the target and outstanding levels, the payout factor is between 100% and 150%, determined on a pro-rata basis.

 

	
6.  

	
For performance at or above the outstanding level, the payout factor is 150%.

 

	
·  

	
A participant’s plan-end adjusted restricted performance shares award is determined as follows:

 

	
7.  

	
Each financial goal’s unweighted payout factor determined above times the weighting of that financial goal equals the weighted payout factor for that financial goal

 

	
8.  

	
The sum of the weighted payout factors for a business unit’s performance target equals the payout factor for that performance target.

 

	
9.  

	
The participant’s target incentive

 

times

 

the business unit weight

 

times

 

the performance target payout factor

 

equals

 

the participant’s payout for that business unit

 

	
10.  

	
The sum of the payouts for all the business units assigned to a participant equals the participant’s total plan-end adjusted restricted performance shares award.

 

	
·  

	
The Committee may, in its sole discretion, reduce a participant’s payout to any level it deems appropriate.

 

 

VI.  RESTRICTED PERFORMANCE SHARES AWARD PROVISIONS

 

	
A.  

	
Restricted performance shares, equal to a participant’s target incentive, shall be determined at the beginning of the plan period.  In addition to the terms and conditions set forth in the shareholder plan, the restricted period for the plan-end adjusted restricted performance shares award shall be as follows: subject to continued employment except as otherwise provided in Section VIII, the lapse of restrictions on one-half of the restricted performance shares awarded will occur on the first anniversary of the plan period end date (April 30, 2016), and the lapse of restrictions on the remaining half will occur on the second anniversary of the plan period end date (April 30, 2017).

 

	
B.  

	
The plan-end adjusted restricted performances share award will be compared to the restricted performance shares targeted at the beginning of the plan period, and the appropriate amount of restricted performance shares will be awarded or forfeited, as required, to bring the restricted performance shares award to the number of shares designated as the plan-end adjusted restricted performance shares award.

 

  

5

  

 

 

VII.  STOCK OPTIONS

 

The participant may be granted a stock option pursuant to the shareholder plan at the beginning of the plan period, representing another incentive vehicle by which the participant is able to share in the equity growth of the Company. The terms and conditions of the award of the stock option are contained in the shareholder plan and in the stock option award.

 

 

 

VIII.  PAYOUTS

 

	
A.  

	
Normal Payout.  Plan-end adjusted restricted performances share awards will be made within 2-1/2 months after the end of the plan period.

 

	
B.  

	
Resignation or Termination with or without Cause.  Except as otherwise provided in this Section VIII or in a written agreement approved by the Committee, a participant who resigns, or whose employment is terminated by the Company, with or without cause before the award is vested, will forfeit the right to receive an award.

 

	
C.  

	
Death or Disability.  Solely to the extent provided by the Committee in the award summary or in a written agreement, in the event of a participant’s death or disability while in employment prior to the end of the plan period, the participant (or, in the event of death, his or her estate) will receive a prorated plan-end adjusted performance share award which shall be paid out in shares based upon actual performance upon the conclusion of the plan period, within 2-1/2 months after the end of the plan period. “Disability” for this purpose will be determined by the Committee under a definition permitted under Code Section 409A.

 

	
D.  

	
Retirement.  Except as otherwise provided in this Section VIII or in a written agreement approved by the Committee, in the event of a participant’s retirement as that term is defined in the shareholder plan, prior to the end of the plan period, the participant will receive a prorated plan-end adjusted performance share award (as determined by the Committee) which shall be paid out in shares based upon actual performance upon the conclusion of the plan period, within 2-1/2 months after the end of the plan period.

 

	
E.  

	
Change of Control.  In the event of a Change of Control, as that term is defined in the shareholder plan, in cases where:

 

	
·  

	
the acquiring company is not publicly traded, or

 

	
·  

	
where the acquiring company is publicly traded and the company does not assume or replace the outstanding equity, or

 

	
·  

	
your employment is terminated due to a "without cause termination" or "constructive discharge" within twenty-four months following a change of control,

 

 

  

6

  

 

during the plan period, all then outstanding “target” restricted performance shares shall immediately become fully vested, and all plan-end adjusted restricted performance share awards that are not yet vested shall immediately become fully vested.

 

	
F.  

	
Restricted Stock for Completed Plan Periods.  In the event of the participant’s death, Disability, or retirement as that term is defined in the shareholder plan, following the end of the plan period but prior to full vesting of the plan-end adjusted restricted performance share awards, such restricted performance shares shall immediately become fully vested.

 

	
G.  

	
Change in Position.  A participant who is hired or promoted into an eligible position during the plan period may receive a prorated plan-end adjusted restricted performances share award as determined by the Committee, in its sole discretion.

 

 

IX.  ADMINISTRATION AND OTHER MATTERS

 

	
A.  

	
The plan will be administered by the Committee, which shall have authority in its sole discretion to interpret and administer this plan, including, without limitation, all questions regarding eligibility and status of any participant, and no participant shall have any right to receive a payout or payment of any kind whatsoever, except as determined by the Committee hereunder.

 

	
B.  

	
The Company will have no obligation to reserve or otherwise fund in advance any amount which may become payable under the plan.

 

	
C.  

	
In the event that the Company is required to file a restatement of its financial results due to fraud, gross negligence or intentional misconduct by one or more employees and/or material non-compliance with Securities laws, the Company will cancel the unvested restricted performance shares previously granted to all participants in the amount by which such shares exceeded any lower number of shares that would have been earned based on the restated financial results, for the plan cycle in which the restatement was required, and if applicable, any gain associated with the award for that plan cycle will be repaid to the Company by the participant in the amount by which such gain exceeded any lower gain that would have been made based on the restated financial results, to the full extent required or permitted by law.  This provision extends beyond the clawback requirements under Sarbanes-Oxley that are limited to our Chief Executive Officer and Chief Financial Officer.

 

If a participant is directly responsible for or involved in fraud, gross negligence or intentional misconduct that causes the Company to file a restatement of its financial results, the Company will cancel the unvested restricted performance shares previously granted to such participant, for the plan cycle in which the restatement was required, and if applicable, any gain associated with the award for that plan cycle will be repaid to the Company by the participant, to the full extent required or permitted by law. 

 

 

  

7

  

 

	
D.  

	
This plan may not be modified or amended except with the approval of the Committee, in accordance with the provisions of the shareholder plan.

 

	
E.  

	
In the event of a conflict between the provisions of this plan and the provisions of the shareholder plan, the provisions of the shareholder plan shall apply.

 

	
F.  

	
No awards of any type under this plan shall be considered as compensation for purposes of defining compensation for retirement, savings or supplemental executive retirement plans, or any other benefit.

 

  

8

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