Document:

ex10_63.htm

Exhibit 10.63

FIRST AMENDMENT TO CREDIT AGREEMENT

Dated as of December 9, 2011

among

KCP&L GREATER MISSOURI OPERATIONS COMPANY,

as the Borrower,

GREAT PLAINS ENERGY INCORPORATED,

as the Guarantor,

CERTAIN LENDERS,

UNION BANK, N.A. and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Syndication Agents

and

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender and an Issuer

THE ROYAL BANK OF SCOTLAND PLC and

BNP PARIBAS,

as Documentation Agents

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

UNION BANK, N.A.

and

WELLS FARGO SECURITIES, LLC,

as Joint Lead Arrangers and Joint Book Managers

 

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of December 9, 2011 (this “Agreement”) is entered into among KCP&L Greater Missouri Operations Company, a Delaware corporation (the “Borrower”), Great Plains Energy Incorporated, a Missouri corporation (the “Guarantor”), the Lenders, Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents and Bank of America, N.A., as Administrative Agent, Swing Line Lender and an Issuer.  All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

RECITALS

WHEREAS, the Borrower, the Guarantor, the Lenders, Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents and Bank of America, N.A., as Administrative Agent entered into that certain Credit Agreement dated as of August 9, 2010 (as amended or modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement as set forth below;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.           Amendments.  The Credit Agreement is hereby amended as follows:

(a)           The definition of “Administrative Agent’s Fee Letter” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

“Administrative Agent’s Fee Letter” means that certain fee letter dated November 10, 2011 among Bank of America, MLPFS, the Guarantor, the Borrower and KCPL.

(b)           The definition of “Aggregate Commitment” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

“Aggregate Commitment” means the aggregate of the Commitments of all Lenders, as changed from time to time pursuant to the terms hereof.  The amount of the Aggregate Commitment in effect as of the First Amendment Effective Date is FOUR HUNDRED AND FIFTY MILLION DOLLARS ($450,000,000).

(c)           The definition of “Change” in Section 1.1 of the Credit Agreement is hereby deleted in its entirety and the definition of “Change in Law” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

“Change in Law” means the occurrence, after the First Amendment Effective Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or

 

 

 

(c) the making or issuance of any request, rules, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

(d)           The definition of “Facility Termination Date” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

“Facility Termination Date” means (a) the later of (i) December 9, 2016 and (ii) with respect to some or all of the Lenders if the facility termination date is extended pursuant to Section 2.21, such extended facility termination date or (b) any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

(e)           The definition of “Fee Letter” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

“Fee Letter” means that certain fee letter dated November 10, 2011 among Bank of America, Wells Fargo, BTMU, the Arrangers, the Guarantor, the Borrower and KCPL.

(f)           The following definition is hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order to read as follows:

“First Amendment Effective Date” means December 9, 2011.

(g)           The definition of “BAS” is hereby deleted from Section 1.1 of the Credit Agreement in its entirety, each reference to “BAS” in the Credit Agreement is hereby amended to read “MLPFS” and the following definition is hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order to read as follows:

“MLPFS” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as joint lead arranger and joint book manager.

(h)           The introductory paragraph and clause (i) of Section 3.1 of the Credit Agreement are hereby amended to read as follows:

If any Change in Law:

(i)           subjects any Lender or Issuer to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Loan made by it, or changes the basis of taxation of payments to such Lender or such Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.5 and the imposition of, or any change in the rate of, any Excluded Tax), or

(i)           Section 3.2 of the Credit Agreement is hereby amended to read as follows:

 

 

 

If a Lender or an Issuer determines the amount of capital required or expected to be maintained by such Lender, any Lending Installation of such Lender, such Issuer or any corporation controlling such Lender or such Issuer is increased as a result of a Change in Law, then, within thirty (30) days of written demand by such Lender or such Issuer, the Borrower shall pay such Lender or such Issuer the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender or such Issuer determines is attributable to this Agreement, its Outstanding Credit Exposure or its Commitment to make Loans or to issue or participate in Letters of Credit hereunder (after taking into account such Lender’s or such Issuer’s policies and the policies of any corporation controlling such Lender or such Issuer as to capital adequacy).

(j)           Section 3.3 of the Credit Agreement is hereby amended to read as follows:

If (i) any Lender determines, or any Governmental Authority has asserted, that making, funding or maintaining Loans whose interest is determined by reference to the Eurodollar Base Rate at a suitable Lending Installation, or determining or charging interest rates based on the Eurodollar Base Rate, would violate any applicable law, rule, regulation, or directive, whether or not having the force of law, enacted or imposed after the date of this Agreement, (ii) any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, (iii) the Required Lenders determine that (a) deposits of a type and maturity appropriate to match fund Eurodollar Advances are not available or (b) the interest rate applicable to a Type of Advance does not accurately reflect the cost of making or maintaining such Advance or (iv) the Administrative Agent determines that adequate and reasonable means do not exist for determining the Eurodollar Base Rate, then the Administrative Agent shall suspend the availability of the affected Type of Advance (or, if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Base Rate, the Administrative Agent shall during the period of such suspension compute the Alternate Base Rate applicable to such Lender without reference to the Eurodollar Base Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Base Rate) and, in the case of clauses (i) and (ii), require any affected Eurodollar Advances to be repaid or converted to Floating Rate Advances, subject to the payment of any funding indemnification amounts required by Section 3.4.

(k)           Schedule I to the Credit Agreement is hereby amended to read as shown in Schedule I attached to this Agreement.

(l)           The pricing grid in Schedule III to the Credit Agreement is hereby amended to read as follows:  

	  	
>A-/A3

	
BBB+/Baa1

	
BBB/Baa2

	
BBB-/Baa3

	
BB+/Ba1

	
<BB/Ba2

	
 

Pricing

	
Level I Status

	
Level II Status

	
Level III Status

	
Level IV Status

	
Level V

Status

	
Level VI Status

	
Applicable Margin for Eurodollar Advances and Letter of Credit Fee Rate

	
1.125%

	
1.25%

	
1.50%

	
1.75%

	
2.00%

	
2.25%

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
Commitment Fee Rate

	
0.125%

	
0.175%

	
0.225%

	
0.275%

	
0.375%

	
0.50%

	
Applicable Margin for Floating Rate Advances

	
0.125%

	
0.25%

	
0.50%

	
0.75%

	
1.00%

	
1.25%

2.           Conditions Precedent.  This Agreement shall be effective upon:

(a)           receipt by the Administrative Agent of counterparts of this Agreement duly executed by the Borrower, the Guarantor, the Administrative Agent and the Lenders;

(b)           the receipt by the Administrative Agent of the following, each of which shall be originals or facsimiles (followed promptly by originals), in form and substance satisfactory to the Administrative Agent:

(i)           copies of the Organization Documents of the Borrower and of the Guarantor certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation or organization, where applicable, and certified by a secretary or assistant secretary of the Borrower or the Guarantor, as applicable, to be true and correct as of the date hereof;

(ii)           such certificates of resolutions and/or other certificates of Authorized Officers of each of the Borrower and the Guarantor as the Administrative Agent may require evidencing the identity, authority and capacity of each Authorized Officer thereof authorized to act as an Authorized Officer in connection with this Agreement; and

(iii)           such documents and certifications as the Administrative Agent may require to evidence that each of the Borrower and the Guarantor is duly organized or formed, and is validly existing, in good standing and qualified to engage in business in its state of organization or formation;

(c)           any portion of the Loans and Commitments held by a Person who is not executing this Agreement as a Lender shall have been assigned to a Person who is a Lender under the Credit Agreement (as amended by this Agreement).

(d)           the receipt by the Administrative Agent of favorable opinions of legal counsel to the Borrower and the Guarantor, addressed to the Administrative Agent and each Lender, dated as of the date hereof and in form and substance satisfactory to the Administrative Agent, addressing the execution, delivery and enforceability of this Agreement and other matters that were addressed in the opinion provided in connection with the original delivery of the Credit Agreement on August 9, 2010, with respect to this Agreement; and

(e)           all fees required to be paid to the Administrative Agent, the Arrangers and the Lenders pursuant to the Fee Letter and the Administrative Agent’s Fee Letter on or before the date hereof shall have been paid.

3.           Miscellaneous.

(a)           The Credit Agreement, and the obligations of the Borrower and the Guarantor thereunder and under the other Loan Documents, are hereby ratified and confirmed and shall 

 

 

remain in full force and effect according to their terms.  The Borrower and the Guarantor acknowledge and confirm that as of the date hereof the Borrower’s obligation to repay the outstanding principal amount of the Loans and reimburse the Issuers for any drawing on a Letter of Credit is unconditional and not subject to any offsets, defenses or counterclaims.  The Administrative Agent, each Syndication Agent, each Lender, the Borrower and the Guarantor acknowledge and confirm that by entering into this Agreement, each party does not waive or release any term or condition of the Credit Agreement or any of the other Loan Documents or any of their rights or remedies under such Loan Documents or applicable Law or any of the obligations of such party thereunder.

(b)           The Borrower and the Guarantor hereby represent and warrant as follows:

(i)           The Borrower and the Guarantor have taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement.

(ii)           This Agreement has been duly executed and delivered by each of the Borrower and the Guarantor and constitutes the Borrower’s and the Guarantor’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(iii)           No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by the Borrower or the Guarantor of this Agreement.

(c)           The Borrower and the Guarantor represent and warrant to the Lenders that (i) the representations and warranties of the Borrower and the Guarantor set forth in Article VI of the Credit Agreement are true and correct as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate solely to an earlier date and (ii) no event has occurred and is continuing which constitutes a Default or an Unmatured Default.

(d)           The Guarantor (a) acknowledges and consents to all of the terms and conditions of this Agreement, (b) affirms all of its obligations under the Loan Documents and (c) agrees that this Agreement and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Loan Documents except as expressly set forth herein.

(e)           This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart of this Agreement by telecopy or electronic mail shall be effective as an original and shall constitute a representation that an executed original shall be delivered.

(f)           THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

  

 

(g)           Upon and after the execution of this Agreement by each of the parties hereto, 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 Loan 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 modified hereby.  This Amendment shall constitute a Loan Document.

[remainder of page intentionally left blank]

 

 

 

Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

	
BORROWER:

	
KCP&L GREATER MISSOURI OPERATIONS COMPANY, a Delaware corporation

By:  /s/ Kevin E. Bryant                                                                

Name:  Kevin E. Bryant                                                                

Title:    Vice President – Investor Relations and Treasurer

	  	  
	
GUARANTOR:

	
GREAT PLAINS ENERGY INCORPORATED, a Missouri corporation

By:  /s/ Kevin E. Bryant                                                                

Name:  Kevin E. Bryant                                                                

Title:   Vice President – Investor Relations and Treasurer

	  	  
	
ADMINISTRATIVE AGENT

	
BANK OF AMERICA, N.A.,

as Administrative Agent

By: /s/ Kelly Weaver                                                                

Name:  Kelly Weaver                                                      

Title:    Assistant Vice President                                                      

	  	  
	
LENDERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
BANK OF AMERICA, N.A.,

as a Lender, an Issuer and Swing Line Lender

By:  /s/ Patrick Martin                                                                

Name:  Patrick Martin                                                                

Title:    Director       

                                                         

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Lender, Syndication Agent and an Issuer

By:/s/ Allison Newman                                                                

Name: Allison Newman                                           

Title:    Director    

                                       

THE BANK OF TOKYO-MITSUBISHI UFJ,

LTD.,

as a Lender and as an Issuer

By: /s/ Chi-Cheng Chen                                                                

Name:  Chi-Cheng Chen                                           

Title:     Vice President 

 

UNION BANK, N.A.,

as a Lender and Syndication Agent

By: /s/ Susan K. Johnson                                                      

Name:  Susan K. Johnson                                           

Title:    Vice President                                                      

 

BARCLAYS BANK PLC,

as a Lender

By: /s/ David Barton                                                                

Name:  David Barton                                                      

Title:  Director                                                                

 

BNP PARIBAS,

as a Lender

By: /s/ Francis DeLaney                                                                

Name:  Francis DeLaney                                                      

Title:  Managing Director                                                      

 

By: /s/ Pasquale Perraglia                                                      

Name:  Pasquale Perraglia                                           

Title:  Vice President                                                                

 

GOLDMAN SACHS BANK USA.

as a Lender

By: /s/ Mark Walton                                                                

Name:  Mark Walton                                           

Title:  Authorized Signatory  

                                                              

	  	
 

 

JPMORGAN CHASE BANK, N.A

as a Lender

By: /s/ John E. Zur                                                      

Name:  John E. Zur                                           

Title:  Authorized Officer     

                                                 

	  	
THE BANK OF NOVA SCOTIA

as a Lender

By: /s/ Thane Rattew                                                                

Name:  Thane Rattew                                                      

Title:  Managing Director              

                                        

	  	
THE ROYAL BANK OF SCOTLAND plc,

as a Lender

By: /s/ Andrew N. Taylor                                                      

Name:  Andrew N. Taylor                                                      

Title:  Vice President            

                                                    

	  	
U.S. Bank National Association,

as a Lender

By: /s/ Eric J. Cosgrove                                                                

Name:           Eric J. Cosgrove                                           

Title:  Vice President      

                                                          

	  	
SUNTRUST BANK,

as a Lender

By: /s/ Andrew Johnson                                                                

Name:  Andrew Johnson                                           

Title:  Director                                   

                             

	  	
KeyBank National Association

as a Lender

By: /s/ Craig A. Hanselman                                                                

Name:  Craig A. Hanselman                                                      

Title:  Vice President                         

                                       

	  	
The Bank of New York Mellon

as a Lender

By: /s/ Hussam S. Alsahlani                                                                

Name:  Hussam S. Alsahlani                                                      

Title:  Vice President               

                                                 

	  	
UMB BANK, N.A.

As a Lender

By: /s/ Robert P. Elbert                                                                

Name:  Robert P. Elbert                                                      

Title:  Senior Vice President  

                                                              

	  	
COMMERCE BANK

as a Lender

By: /s/ Aaron M. Siders                                                                

Name:  Aaron M. Siders                                           

Title:  Vice President                                                                

SCHEDULE I

COMMITMENTS

	
Lender

	
Commitment

	
Bank of America, N.A.

	
$41,400,000

	
Wells Fargo Bank, National Association

	
$41,400,000

	
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

	
$20,700,000

	
Union Bank, N.A.

	
$20,700,000

	
Barclays Bank PLC

	
$30,600,000

	
BNP Paribas

	
$30,600,000

	
Goldman Sachs Bank USA

	
$30,600,000

	
JPMorgan Chase Bank, N.A.

	
$30,600,000

	
The Bank of Nova Scotia

	
$30,600,000

	
The Royal Bank of Scotland plc

	
$30,600,000

	
U.S. Bank National Association

	
$30,600,000

	
SunTrust Bank

	
$28,800,000

	
KeyBank National Association

	
$27,000,000

	
The Bank of New York Mellon

	
$27,000,000

	
UMB Bank, N.A.

	
$18,000,000

	
Commerce Bank

	
$10,800,000

	
Total

	
$450,000,000

LETTER OF CREDIT COMMITMENTS

	
Issuer

	
Letter of Credit Commitment

	
Bank of America, N.A.

	
$16,666,666.67

	
Wells Fargo Bank, National Association

	
$16,666,666.67

	
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

	
$16,666,666.66

	
Total

	
$50,000,000.00EXHIBIT 10.1

 

SUMMARY OF FISCAL 2012 ANNUAL INCENTIVE AND PROFIT SHARING PLANS

 

Fiscal 2012 Annual Incentive Plan

 

Under the Fiscal 2012 Annual Incentive Plan
(the “Annual Incentive Plan”), the Company’s officers and named executive officers can earn annual incentive
cash compensation sixty percent (60%) based upon performance against pre-established financial targets and thirty percent (30%)
based upon achievement of two personal goals that are aligned with the Company’s strategic objectives. The final ten percent
(10%) of any annual incentive cash compensation is at the discretion of the Management Development, Compensation and Stock Option
Committee (the “Committee”). The Company’s director-level team members can earn annual incentive cash compensation
sixty percent (60%) based upon performance against pre-established financial targets and forty percent (40%) based upon achievement
of two personal goals that are aligned with the Company’s strategic objectives. The financial targets and personal goals
include threshold, target and maximum level incentive objectives for the executive officers. The amount of the award of any cash
incentives under the Annual Incentive Plan for fiscal 2012 performance will be based on the Company’s achievement of specified
results with respect to corporate operating income and revenue targets for fiscal 2012. However, no annual incentive cash compensation
payouts will be made under the Annual Incentive Plan unless the Company’s net income exceeds a minimum trigger point.

 

If the threshold, target or maximum performance
objectives are met and the net income trigger point is exceeded, participants will receive a cash incentive payment under the Annual
Incentive Plan, with the specific amount that such participant receives dependent on personal and company performance and, for
certain named executive officers, business unit performance.

 

The amount that could be received by our President
and Chief Executive Officer under the Annual Incentive Plan ranges from 0% (assuming the threshold objectives were not met) and
60% (assuming the maximum objectives were met) of base salary, with a threshold cash incentive amount of 10% of base salary. For
each of the other named executive officers, the amount such officers could receive under the Annual Incentive Plan ranges from
0% to 48% of base salary, with a threshold cash incentive amount of 8% of base salary.

 

The financial targets and weightings relevant
to the cash incentive determination for fiscal 2012 for each of the named executive officers will be as follows:

 

	Name	 	Title	 	Financial Targets
	Harry R. Rittenour	 	President and Chief	 	Company Operating Income (30%)
	 	 	Executive Officer	 	Company Revenue (30%)
	 	 	 	 	 
	John H. Lowry, III	 	Vice President, Chief	 	Company Operating Income (30%)
	 	 	Financial Officer	 	Company Revenue (30%)
	 	 	 	 	 
	Richard Price	 	Senior Vice President	 	Company Operating Income (30%)
	 	 	Commercial Products	 	Company Revenue (10%)
	 	 	Business Unit	 	CBU Revenue (20%)
	 	 	 	 	 
	Mark S. Hoefing	 	Senior Vice President	 	Company Operating Income (30%)
	 	 	Industrial Business	 	Company Revenue (10%)
	 	 	Unit	 	IBU Revenue (20%)

 

    	 

    	 

    

 

After completion of fiscal 2012, the Committee
will determine the extent to which the specified goals relating to the financial targets and personal goals have been achieved
and will determine the actual amounts to be paid.

 

The Committee reserves the right, in its sole
and absolute discretion, to change the eligibility for participation under the Annual Incentive Plan, to revise, eliminate or otherwise
modify any performance targets, to modify any participant’s target cash incentive, or otherwise to increase, decrease or
eliminate any incentive payouts to any participant under the Annual Incentive Plan, regardless of the level of performance targets
that have been achieved, including to provide for no cash incentive payout to a participant even though one or more performance
targets have been achieved.

 

Participating team members under the Annual
Incentive Plan must be employed on or before December 31, 2011 in order to be eligible. Those hired between July 1, 2011 and December
31, 2011 will receive a pro-rata portion of their individual participation level. Participating team members must be employed by
the Company at the date of the payment in fiscal 2013.

 

Fiscal 2012 Profit Sharing Plan

 

Under the Fiscal 2012 Profit Sharing Plan (the
“Profit Sharing Plan”), most of the Company’s team members below the director level can earn a profit sharing
cash payment based upon pre-established financial targets. The financial targets include threshold, target and maximum level bonus
objectives for team members. The amount of the award of any cash payments under the Profit Sharing Plan for fiscal 2012 performance
will be based on our achievement of specified results with respect to corporate operating income targets for fiscal 2012. However,
no profit sharing payouts will be made under the Profit Sharing Plan unless the Company’s net income exceeds a minimum trigger
point.

 

Team member participation levels are stated
as a percentage of base salary. There is a cap on the amount of the profit sharing cash payment that could be earned. The profit
sharing pool will be distributed pro rata according to each team member’s predetermined participation level.

 

After completion of fiscal 2012, the Committee
will determine the extent to which the specified goals relating to the financial targets have been achieved and will determine
the actual amounts to be paid.

 

The Committee reserves the right, in its sole
and absolute discretion, to change the eligibility for participation under the Profit Sharing Plan, to revise, eliminate or otherwise
modify any financial performance targets, to modify any participant’s target cash payment, or otherwise to increase, decrease
or eliminate any profit sharing payouts to any participant under the Profit Sharing Plan, regardless of the level of financial
performance targets that have been achieved, including to provide for no profit sharing payout to a participant even though one
or more financial performance targets have been achieved.

 

Participating team members under the Profit
Sharing Plan must be employed on or before December 31, 2011 in order to be eligible. Those hired between July 1, 2011 and December
31, 2011 will receive a pro-rata portion of their individual participation level. Participating team members must be employed by
the Company at the date of the payment in fiscal 2013.

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