Document:

ex10_2.htm

Exhibit 10.2

EMCORE CORPORATION

2000 EMPLOYEE STOCK PURCHASE PLAN

AMENDED June 14, 2011

ARTICLE I

ESTABLISHMENT

Purpose

The EMCORE Corporation 2000 Employee Stock Purchase Plan (the “Plan”) is hereby established by EMCORE Corporation (the “Company”), the purpose of which is to provide a method whereby employees of the Company or any Designated Subsidiary (as defined herein), will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of Common Stock.  The Plan is also established to help promote the overall financial objectives of the Company’s stockholders by promoting those persons participating in the Plan to achieve long-term growth in stockholder equity. The Plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).  The provisions of the Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of Section 423 of the Code and the regulations promulgated thereunder.

ARTICLE II

DEFINITIONS

The following words and phrases, as used herein, shall have the meanings indicated unless the context clearly indicates to the contrary:

2.01          Account shall mean the bookkeeping account established on behalf of a Participant to which is credited all contributions paid for the purpose of purchasing Common Stock under the Plan, and to which shall be charged all purchases of Common Stock, or withdrawals, pursuant to the Plan.  Such Account shall remain unfunded as described in Section 8.11 of the Plan.

2.02          Affiliate shall mean, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person.  Any “Relative” (for this purpose, “Relative” means a spouse, child, parent, parent of spouse, sibling or grandchild) of an individual shall be deemed to be an Affiliate of such individual for this purpose.  Neither the Company nor any Person controlled by the Company shall be deemed to be an Affiliate of any holder of Common Stock.

2.03          Agreement shall mean, either individually or collectively, any subscription, enrollment and/or withholding agreement, in the form prescribed by the Committee, entered into pursuant to the Plan between the Company or a Designated Subsidiary and a Participant.  Such Agreement shall be an authorization for the Company or a Designated Subsidiary to withhold amounts from such Participant’s Compensation, at the Contribution Rate specified in the Agreement, to be applied to purchase Common Stock.

2.04          Beneficial Ownership (including correlative terms) shall have the meaning given such term in Rule 13d-3 promulgated under the Exchange Act.

 

2.05          Beneficiary shall mean the person specified by a Participant in his or her most recent written designation that is filed with the Committee to receive any benefits under the Plan in the event of such Participant’s death, in accordance with Section 8.01.

  

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2.06          Board shall mean the Board of Directors of the Company

2.07          Change in Control shall mean the occurrence of any of the following:

 

(a) an acquisition in one transaction or a series of related transactions (other than directly from the Company or pursuant to awards granted under the Plan or compensatory options or other similar awards granted by the Company) of any Voting Securities by any Person, immediately after which such Person has Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding Voting Securities; provided, however, in determining whether a Change in Control has occurred pursuant to this  Section 2.07(a), Voting Securities which are acquired in a Non-Control Acquisition shall not constitute an acquisition that would cause a Change in Control;

(b) the individuals who, immediately prior to the Effective Date, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the election, or nomination for election, by the Company’s common stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, such new director shall, for purposes of the Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “Election Contest” (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

(c) the consummation of:

(1) a merger, consolidation or reorganization involving the Company unless:

(A) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own, directly or indirectly, immediately following such merger, consolidation or reorganization, more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the “Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization,

(B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least a majority of the members of the board of directors of the Surviving Corporation, or a corporation Beneficially Owning, directly or indirectly, a majority of the voting securities of the Surviving Corporation, and

(C) no Person, other than (i) the Company, (ii) any Related Entity (as defined in Section 2.20), (iii) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company, the Surviving Corporation, or any Related Entity or (iv) any Person who, together with its Affiliates, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of fifty percent (50%) or more of the then outstanding Voting Securities, owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Surviving Corporation’s then outstanding voting securities

(a transaction described in clauses (A) through (C) above is referred to herein as a “Non-Control Transaction”);

(2) a complete liquidation or dissolution of the Company; or

  

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(3) an agreement for the sale or other disposition of all or substantially all of the assets or business of the Company to any Person (other than a transfer to a Related Entity or the distribution to the Company’s stockholders of the stock of a Related Entity or any other assets).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the then outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and (1) before such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities in a related transaction or (2) after such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities which in either case increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall be deemed to occur.

2.08          Commission shall mean the Securities and Exchange Commission or any successor entity or agency.

2.09          Committee shall mean the Plan Committee of the Board as described in Article VII.

2.10          Compensation shall mean, for the relevant period, (a) the total compensation paid in cash to a Participant by the Company and/or a Designated Subsidiary, including salaries, wages, commissions, overtime pay, shift premiums, bonuses, and incentive compensation, plus (b) any pre-tax  contributions made by a Participant under Section 401(k) or 125 of the Code.  Compensation shall exclude non-cash items, moving or relocation allowances, geographic hardship pay, car allowances, tuition reimbursements, imputed income attributable to cars or life insurance, severance or notice pay, fringe benefits, contributions (except as provided in clause (b) of the immediately preceding sentence) or benefits received under employee benefit or deferred compensation plans or arrangements, income attributable to stock options and similar items.

2.11          Common Stock shall mean shares of common stock of the Company, without par value, or the common stock of any successor to the Company, which is designated for the purposes of the Plan.

2.12          Contribution Rate shall be that rate of contribution of Compensation to the Plan stated in the Agreement, subject to determination in accordance with Article IV.

2.13          Designated Subsidiary shall mean any Subsidiary that has been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.

2.14          Effective Date shall mean April 1, 2000.

2.15          Eligible Employee shall mean any individual who is employed on a full-time or part-time basis by the Company or a Designated Subsidiary on an Enrollment Date, except that the Committee in its sole discretion may exclude:

	
  

	
(i)

	
employees whose customary employment is not more than 20 hours per week;

	
  

	
(ii)

	
employees whose customary employment is for not more than five months in any calendar year; and

	
  

	
(iii)

	
employees who are considered to be a highly compensated employee of the Company or Designated Subsidiary within the meaning of Section 414(q) of the Code.

As of the Effective Date, and unless and until the Committee determines otherwise, only those employees described in Section 2.15(i) and (ii) are excluded from the class of Eligible Employees.

  

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2.16          Enrollment Date shall mean the first day of each Offering Period.

2.17          Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

2.18          Exercise Date shall mean the last day of each Offering Period.

2.19          Fair Market Value of a share of Common Stock as of a given date shall mean:  (i) if the Common Stock is listed or admitted to trading on an established stock exchange (including, for this purpose, the Nasdaq National Market), the mean of the highest and lowest sale prices for a share of the Common Stock on the composite tape or in Nasdaq National Market trading as reported in The Wall Street Journal (or, if not so reported, such other nationally recognized reporting source as the Committee shall select) for such date, or, if no such prices are reported for such date, the most recent day for which such prices are available shall be used; (ii) if the Common Stock is not then listed or admitted to trading on such a stock exchange, the mean of the closing representative bid and asked prices for the Common Stock on such date as reported by the Nasdaq Small Cap Market or, if not so reported, by the OTC Bulletin Board (or any successor or similar quotation system regularly reporting the market value of the Common Stock in the over-the-counter market), or, if no such prices are reported for such date, the most recent day for which such prices are available shall be used; or (iii) in the event neither of the valuation methods provided for in clauses (i) and (ii) above are  practicable, the fair market value of a share of Common Stock determined by such other reasonable valuation method as the Committee shall, in its discretion, select and apply in good faith as of such date.

2.20          Non-Control Acquisition shall mean an acquisition by (1) an employee benefit plan (or a trust forming a part thereof) maintained by (x) the Company or (y) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (a “Related Entity”), (2) the Company or any Related Entity, (3) any of Thomas Russell, The AER Trust 1997, Robert Louis-Dreyfus, Gallium Enterprises, Inc. and Reuben Richards, or (4) any Person in connection with a Non-Control Transaction.

2.21          Offering Period shall mean a period as determined by the Committee during which a Participant’s Option may be exercised and the accumulated value of the Participant’s Account may be applied to purchase Common Stock.  Unless otherwise specified by the Committee, the initial Offering Period will begin on February 25th and end on the last Trading Day on or before August 25th of the same calendar year.   The 2nd offer period will begin on August 26th and end on the last Trading Day on or before February 24th.  The duration of Offering Periods may be changed by the Committee or the Board pursuant to Section 3.06 or 5.04.

2.22          Option shall mean the right to purchase the number of shares of Common Stock specified in accordance with the Plan at a price and for a term fixed in accordance with the Plan, and subject to such other limitations and restrictions as may be imposed by the Plan or the Committee in accordance with the Plan.

2.23          Option Price shall mean an amount equal to 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or Exercise Date, whichever is lower.

2.24          Participant shall mean an Eligible Employee who satisfies the eligibility conditions of Article III, and to whom an Option has been granted by the Committee under the Plan.

2.25          Person shall mean “person” as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act, including, without limitation, any individual, corporation, limited liability company, partnership, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity or any group of Persons.

2.26          Plan Year shall mean the period of twelve (12) or fewer consecutive months commencing on the Effective Date and ending on December 31st of the same calendar year, and the twelve (12) consecutive month period ending the last day of each December of each calendar year thereafter.  The Committee may at any time designate another period as the Plan Year.

  

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2.27          Reserves shall mean the number of shares of Common Stock covered by each Option under the Plan that have not yet been exercised and the number of shares of Common Stock that have been authorized for issuance under the Plan but not yet placed under an Option.

2.28          Securities Act shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

2.29          Subsidiary shall mean any present or future corporation, domestic or foreign, which is or would be a “subsidiary corporation,” as defined under Section 424(f) of the Code, of the Company.

2.30          Trading Day shall mean a day on which national stock exchanges are open for trading.

2.31          Voting Securities shall mean all outstanding voting securities of the Company entitled to vote generally in the election of the Board.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

	
  

	
3.01

	
Initial Eligibility

Any individual who is otherwise an Eligible Employee and who is employed with the Company or a Designated Subsidiary on the Effective Date or becomes employed with the Company or a Designated Subsidiary after the Effective Date and is otherwise an Eligible Employee, may participate in the Plan immediately beginning with the first Offering Period that occurs concurrent with or next following either the Effective Date or that individual’s initial date of such employment.

	
  

	
3.02

	
Leave of Absence

For purposes of the Plan, an individual’s employment relationship is still considered to be continuing intact while such individual is on sick leave, or other leave of absence approved by the Committee or the Participant’s supervisor; provided, however, that if the period of leave of absence exceeds ninety (90) days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the ninety-first (91st) day of such leave.

	
  

	
3.03

	
Eligibility Restrictions

Notwithstanding any provisions of the Plan to the contrary, no employee of the Company or a Designated Subsidiary shall be granted an Option under the Plan:

	
  

	
(a)

	
if, immediately after the Option is granted, applying the rules under Section 424(d) of the Code to determine Common Stock ownership, such employee would own, immediately after the Option is granted, five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary; or

	
  

	
(b)

	
which permits such employee’s rights to purchase stock under the Plan and any other employee stock purchase plans of the Company or any Subsidiary to accrue at a rate that exceeds $25,000 (or such other amount as may be adjusted from time to time under applicable provisions of the Code or Regs) in Fair Market Value of Common Stock (determined at the time such Option is granted) for each calendar year in which such Option is outstanding.

  

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3.04

	
Participation

(a)           An Eligible Employee may commence participation by completing an Agreement authorizing payroll deductions and filing it with the payroll office of the Company prior to the applicable Enrollment Date.  Such an Eligible Employee is referred to as a Participant.

(b)           Any payroll deductions for a Participant shall commence on the first payroll date following the Enrollment Date and shall end on the last payroll date in the Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Article VI.

	
  

	
3.05

	
Option Grant

On the Enrollment Date of each Offering Period, each Participant participating in the Offering Period shall be granted an Option to purchase on the Exercise Date of such Offering Period (at the appropriate Option Price) up to a number of shares of Common Stock as determined by dividing the particular Participant’s payroll deductions that have accumulated prior to such Exercise Date and retained in such Participant’s Account as of that Exercise Date by the appropriate Option Price.  Such purchase of shares of Common Stock shall be subject to the limitations under Sections 3.03 and 3.09.  Exercise of the Option shall occur as provided in Section 3.07, unless the Participant has withdrawn as provided in Article VI.  The Option shall expire on the last day of the Offering Period.  The Committee may determine that there shall be no Options granted under the Plan for any particular Plan Year.

	
  

	
3.06

	
Offering Period

The Plan shall be implemented by consecutive Offering Periods of Common Stock.  Each Agreement shall specify the Offering Period for which the Option is granted, which shall be determined by the Committee in accordance with the Plan.  The Committee shall have the authority to change the duration of Offering Periods, including the commencement dates thereof, with respect to future offerings without approval of the Company’s stockholders.  Under such circumstances, any change to the Offering Periods shall be announced at least ten (10) days prior to the scheduled beginning of the initial Offering Period to be affected.  In no event, however, shall an Offering Period extend beyond the period permitted under Section 423(b)(7) of the Code.

	
  

	
3.07

	
Exercise of Option

Unless a Participant provides written notice to the Company, or withdraws from the Plan as provided in Article VI, his Option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the Option shall be purchased for such Participant at the applicable Option Price, using the accumulated payroll deductions in his Account, subject to the limitations under Sections 3.03 and 3.09.  No fractional shares shall be purchased.  Any payroll deductions accumulated in an Account that are not sufficient to purchase a full share of Common Stock shall be retained in the Account for the subsequent Offering Period, subject to earlier withdrawal by the Participant as provided in Article VI.  Any other monies remaining in a Participant’s Account after the Exercise Date shall be returned to the Participant or his Beneficiary in cash, without interest.  During a Participant’s lifetime, such Participant’s Option is exercisable only by such Participant.

	
  

	
3.08

	
Delivery of Stock

(a)           As promptly as practical after each Exercise Date on which a purchase of Common Stock occurs, the Company shall arrange the delivery to each Participant, or his Beneficiary, of a certificate representing the shares of Common Stock purchased upon exercise of such Participant’s Option, except that the Committee may determine that such shares shall be held for each Participant’s benefit by a broker designated by the Committee unless the Participant has delivered to the Committee a written election that certificates representing such shares be issued to him.  Shares of Common Stock issued upon exercise of an Option and delivered to or for the benefit of a Participant or Beneficiary will be registered in the name of such Participant or Beneficiary, as the case may be.  Alternatively, at the direction of a Participant through written notice to the Committee at least ten (10) days prior to the applicable Exercise Date, such shares shall be registered in the names of such Participant and one other person as may be designated by the Participant, as joint tenants with rights of survivorship, community property or as tenants by the entirety, to the extent permitted by applicable law.

  

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(b)           The Committee may require a Participant or his Beneficiary to give prompt written notice to the Company concerning any disposition of shares of Common Stock received upon the exercise of such Participant’s Option within:  (i) two (2) years from the date of granting of such Option to such Participant, (ii) one (1) year from the transfer of such shares of Common Stock to such Participant, or (iii) such other period as the Committee may from time to time determine.

	
  

	
3.09

	
Maximum Number of Shares

In no event shall the number of shares of Common Stock that a Participant may purchase during any one Offering Period under the Plan exceed the number of shares determined by (a) multiplying twenty percent (20%) of the amount of the Participant’s Compensation for the payroll period immediately preceding the date he is first granted an Option for such Offering Period by the number of payroll periods from such date to the end of such Offering Period, and (b) dividing that product by 85% of the Fair Market Value of a share of Common Stock on such date.

	
  

	
3.10

	
Withholding

At the time an Option is exercised, or at the time some or all of the Common Stock that is issued under the Plan is disposed of, the Company may withhold from any Compensation or other amount payable to the applicable Participant, or require such Participant to remit to the Company (or make other arrangements satisfactory to the Company, as determined in the Committee’s discretion, regarding payment to the Company of), the amount necessary for the Company to satisfy any Federal, state or local taxes required by law to be withheld with respect to the shares of Common Stock subject to such Option or disposed of, as a condition to delivery of any certificate or certificates for any such shares of Common Stock.  Whenever under the Plan payments are to be made in cash, such payments shall be made net of an amount sufficient to satisfy any Federal, state or local tax or withholding obligations with respect to such payments.

ARTICLE IV

PAYROLL DEDUCTIONS

	
  

	
4.01

	
Contribution Rate

(a)           At the time a Participant files an Agreement with the Committee authorizing payroll deduction, he may elect to have payroll deductions made on each payday during the Offering Period, and such Contribution Rate shall be a minimum of one percent (1%) and a maximum of ten percent (10%) of the Participant’s Compensation in effect on each payroll period during the Offering Period, unless the Committee determines otherwise in a manner applicable uniformly to all Participants.  The payroll deductions shall only be made in whole percentages of the Participant’s Compensation.  Participants may not make any separate cash payments outside payroll deductions under the Plan except as otherwise provided in Section 5.04(d) in the event of a Change in Control.

(b)           A Participant may discontinue his participation in the Plan as provided in Article VI, or may elect to decrease the rate of his payroll deductions during the Offering Period by filing a new Agreement with the Committee that authorizes a change in his Contribution Rate.  Such election by the Participant to decrease his Contribution Rate shall only be permitted once during each Offering Period.  The Committee may, in its discretion, in a fair and equitable manner, limit the number of Participants who change their Contribution Rate during any Offering Period.  Any such change in Contribution Rate accepted by the Committee shall be effective with the first full payroll period following ten (10) business days after the Committee’s receipt of the new Agreement authorizing the new Contribution Rate, unless the Committee elects to process a change in the Contribution Rate more quickly.  A Participant’s authorization to change his Contribution Rate shall remain in effect for successive Offering Periods unless terminated as provided in Article VI.

  

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(c)           Notwithstanding the foregoing provisions of this Section 4.01, the Committee may decrease a Participant’s Contribution Rate, but not below zero percent, at any time during an Offering Period to the extent necessary to comply with Section 423(b)(8) of the Code or Section 3.03 of the Plan.  To the extent necessary in such case, payroll deductions shall recommence at the rate provided in such Participant’s Agreement at the beginning of the first Offering Period that is scheduled to begin in the following Plan Year, unless the Participant withdraws from the Plan in accordance with Article VI.

	
  

	
4.02

	
Participant Account

All payroll deductions made for a Participant shall be credited to his Account under the Plan.

	
  

	
4.03

	
Interest

No interest shall accrue on the payroll deductions of a Participant under the Plan.  In addition, no interest shall be paid on any and all money that is distributed to a Participant, or his Beneficiary, pursuant to the provisions of Sections 6.01 and/or 6.03.

ARTICLE V

COMMON STOCK

	
  

	
5.01

	
Shares Provided

(a)           The maximum number of shares of Common Stock that may be issued under the Plan shall be 7,000,000 shares. This number is subject to an adjustment upon any changes in capitalization of the Company as provided in Section 5.04.

(b)           The Committee may determine, in its sole discretion, to include in the number of shares of Common Stock available under the Plan any shares of Common Stock that cease to be subject to an Option or are forfeited or any shares subject to an Option that terminates without issuance of shares of Common Stock actually being made to the Participant.

(c)           If the number of shares of Common Stock that Participants become entitled to purchase under the Plan is greater than the shares of Common Stock offered in a particular Offering Period or remaining available under the Plan, the available shares of Common Stock shall be allocated by the Committee among such Participants in such manner as the Committee determines is fair and equitable.

	
  

	
5.02

	
Participant Interest

The Participant shall have no interest as a shareholder, including, without limitation, voting or dividend rights, with respect to shares of Common Stock covered by his Option until such Option has been exercised in accordance with the Plan and his Agreement.

	
  

	
5.03

	
Restriction of Shares Upon Exercise

The Committee may, in its discretion, require as conditions to the exercise of any Option that the shares of Common Stock reserved for issuance upon the exercise of the Option shall have been duly listed upon a stock exchange, and that either:

	
  

	
(a)

	
a registration statement under the Securities Act with respect to the shares shall be effective, or

	
  

	
(b)

	
the Participant shall have represented at the time of purchase, in form and substance satisfactory to the Company, that it is his intention to purchase the shares for investment and not for resale or distribution.

  

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5.04

	
Changes in Capital

(a)           Subject to any required action by the shareholders of the Company, upon changes in the outstanding Common Stock by reason of a stock split, reverse stock split, stock dividend, combination or exchange of shares, merger, recapitalization, consolidation, corporate separation or division of the Company (including, but not limited to, a split-up, spin-off, split-off or distribution to Company stockholders other than a normal cash dividend), reorganization, reclassification, or increase or decrease in the number of shares of capital stock of the Company effected without receipt of full consideration therefor, or any other similar change affecting the Company’s capital structure, the Committee shall make appropriate adjustments, in its discretion, to, or substitute, as applicable, the number, class and kind of shares of stock available for Options under the Plan, outstanding Options and the Reserves, the maximum number of shares that a Participant may purchase per Offering Period, the Option Prices of outstanding Options and any other characteristics or terms of the Options or the Plan as the Committee shall determine are necessary or appropriate to reflect equitably the effects of such changes to the Participants; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated by rounding to the next lower whole number of shares with appropriate payment for such fractional shares as shall be reasonably determined by the Committee.  Notice of any such adjustment shall be given by the Committee to each Participant whose Option has been adjusted and such adjustment, whether or not such notice has been given, shall be effective and binding for all purposes of the Plan.

(b)           The existence of the Plan and any Options granted hereunder shall not affect in any way the right or power of the Board or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company or a Subsidiary, any issue of debt, preferred or prior preference stock ahead of or affecting Common Stock, the authorization or issuance of additional shares of Common Stock, the dissolution or liquidation of the Company or any Subsidiary, any sale or transfer of all or part of the Company’s or a Subsidiary’s assets or business or any other corporate act or proceeding.

(c)           The Board may at any time terminate an Offering Period then in progress and provide, in its discretion, that Participants’ then outstanding Account balances shall be used to purchase shares pursuant to Article III or returned to the applicable Participants.

(d)           In the event of a Change in Control, the Committee may, in its discretion:

	
  

	
(i)

	
permit each Participant to make a single sum payment with respect to his outstanding Option before the Exercise Date equal to the amount the Participant would have contributed as determined by the Committee for the payroll periods remaining until the Exercise Date, and provide for termination of the Offering Period then in progress and purchase of shares pursuant to Article III; or

	
  

	
(ii)

	
provide for payment in cash to each Participant of the amount standing to his Account plus an amount equal to the highest value of the consideration to be received in connection with such transaction for one share of Common Stock, or, if higher, the highest Fair Market Value of the Common Stock during the 30 consecutive Trading Days immediately prior to the closing date or expiration date of such transaction, less the Option Price of the Participant’s Option (determined for all purposes of this Section 5.04(d)(ii) using such closing or termination date as the Exercise Date in applying Section 2.23), multiplied by the number of full shares of Common Stock that could have been purchased for such Participant immediately prior to the Change in Control with the amount standing to his Account at the Option Price, and that all Options so paid shall terminate.

  

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ARTICLE VI

WITHDRAWAL

	
  

	
6.01

	
General

By written notice to the Company, at any time up to 3 days prior to the last day of any particular Offering Period, a Participant may elect to withdraw all of the accumulated payroll deductions in his Account at such time.  All of the accumulated payroll deductions credited to such withdrawing Participant’s Account shall be paid to such Participant promptly after receipt of his written notice of withdrawal.  In addition, upon the Participant’s written notice of withdrawal, the Participant’s Option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares on behalf of such Participant shall be made for such Offering Period.  If a Participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the Participant delivers to the Committee a new Agreement authorizing payroll deductions.

	
  

	
6.02

	
Effect on Subsequent Participation

A Participant’s withdrawal from an Offering Period shall not have any effect upon his eligibility to participate in any similar plan that may hereafter be adopted by the Company or a Subsidiary or in succeeding Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.

	
  

	
6.03

	
Termination of Employment

Upon termination of employment as an Eligible Employee, for any reason, a Participant shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such Participant’s Account during the Offering Period but not yet used to exercise the Option shall be returned to such Participant, or, in the case of a Participant’s death, the payroll deductions credited to such deceased Participant’s Account shall be paid to his Beneficiary or Beneficiaries, and the Participant’s Option shall be automatically terminated.  A transfer of a Participant’s employment between or among the Company and any Designated Subsidiary or Designated Subsidiaries shall not be treated as a termination of employment for purposes of the Plan.

ARTICLE VII

ADMINISTRATION

	
  

	
7.01

	
Generally

The Plan shall be administered by a committee the members of which are appointed by the Board.  The Committee shall consist of no fewer than three (3) members.  Notwithstanding the foregoing, the Board, in its absolute discretion, may at any time and from time to time exercise any and all rights, duties and responsibilities of the Committee under the Plan, including, but not limited to, establishing procedures to be followed by the Committee, except with respect to any matters which under any applicable law, regulation or rule are required to be determined in the sole discretion of the Committee.  If and to the extent that no Committee exists which has the authority to administer the Plan, the functions of the Committee shall be exercised by the Board.  In addition, the Board shall have discretionary authority to designate, from time to time, without approval of the Company’s stockholders, those Subsidiaries that shall be Designated Subsidiaries, the employees of which are eligible to participate in the Plan.

	
  

	
7.02

	
Authority of the Committee

The Committee shall have all authority that may be necessary or helpful to enable it to discharge its responsibilities with respect to the Plan.  Without limiting the generality of the foregoing sentence or Section 7.01, subject to the express provisions of the Plan, the Committee shall have full and exclusive discretionary authority to interpret and construe any and all provisions of the Plan and any Agreements, determine eligibility to participate in the Plan, adopt rules and regulations for administering the Plan, adjudicate and determine all disputes arising under or in connection with the Plan, determine whether a particular item is included in “Compensation,” and make all other determinations deemed necessary or advisable for administering the Plan.  Decisions, actions and determinations by the Committee with respect to the Plan or any Agreement shall be final, conclusive and binding on all parties.  Except to the extent prohibited by applicable law or the rules of a stock exchange, the Committee may, in its discretion, from time to time, delegate all or any part of its responsibilities and powers under the Plan to any member or members of the management of the Company, and revoke any such delegation.

  

10

  

	
  

	
7.03

	
Appointment

The Board may from time to time appoint members to the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, on the Committee.  The Committee may select one member as its Chair and shall hold its meetings at such times and places as it shall deem advisable.  It may also hold telephonic meetings.  A majority of its members shall constitute a quorum.  All determinations of the Committee shall be made by a majority of its members.  The Committee may correct any defect or omission or reconcile any inconsistency in the Plan or any Agreement in the manner and to the extent the Committee determines to be desirable.  Any decision or determination reduced to writing and signed by a majority of the members of the Committee shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held.  The Committee may appoint a secretary and shall make such rules and regulations for the conduct of its business as it shall deem advisable.

ARTICLE VIII

MISCELLANEOUS

	
  

	
8.01

	
Designation of Beneficiary

(a)           A Participant may file with the Committee a written designation of a Beneficiary who is to receive any Common Stock and/or cash from the Participant’s Account in the event of such Participant’s death subsequent to an Exercise Date on which the Option is exercised but prior to delivery to such Participant of such Common Stock and cash.  Unless a Participant’s written Beneficiary designation states otherwise, the designated Beneficiary shall also be entitled to receive any cash from the Participant’s Account in the event of such Participant’s death prior to exercise of his Option.

(b)           A Participant’s designation of Beneficiary may be changed by the Participant at any time by written notice to the Committee.  In the event of the death of a Participant and in the absence of a valid Beneficiary designation under the Plan at the time of such Participant’s death, the Company shall deliver the shares and/or cash to which the deceased Participant was entitled under the Plan to the executor or administrator of the estate of such Participant.  If no such executor or administrator has been appointed as can be determined by the Committee, the Company shall deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Committee may designate.  Any such delivery or payment shall be a complete discharge of the obligations and liabilities of the Company, the Subsidiaries, the Committee and the Board under the Plan.

	
  

	
8.02

	
Transferability

Neither payroll deductions credited to the Participant’s Account nor any rights with regard to the exercise of an Option or to receive Common Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way other than by will, the laws of descent and distribution, or as provided under Section 8.01.  Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Article VI.

  

11

  

	
  

	
8.03

	
Conditions Upon Issuance of Shares

(a)           If at any time the Committee shall determine, in its discretion, that the listing, registration and/or qualification of shares of Common Stock upon any securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of shares of Common Stock hereunder, no Option may be exercised or paid in whole or in part unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee.

(b)           If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to an Option is or may be in the circumstances unlawful, contravene the requirements of any stock exchange, or result in the imposition of excise taxes on the Company or any Subsidiary under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act, or otherwise with respect to shares of Common Stock or Options and the right to exercise any Option shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company or any Subsidiary.

(c)           The Committee, in its absolute discretion, may impose such restrictions on the ownership and transferability of the shares of Common Stock purchasable or otherwise receivable by any person under any Option as it deems appropriate.  The certificates evidencing such shares may include any legend that the Committee deems appropriate to reflect any such restrictions.

	
  

	
8.04

	
Participants Bound by Plan

By accepting any benefit under the Plan, each Participant and each person claiming under or through such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Committee, the Company or the Board, in any case in accordance with the terms and conditions of the Plan.

	
  

	
8.05

	
Use of Funds

All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

	
  

	
8.06

	
Amendment or Termination

The Board may terminate, discontinue, amend or suspend the Plan at any time, with or without notice to Participants.  No such termination or amendment of the Plan may materially adversely affect the existing rights of any Participant with respect to any outstanding Option previously granted to such Participant, without the consent of such Participant, except for any amendment or termination permitted by Section 5.04.  In addition, no amendment of the Plan by the Board shall, without the approval of the shareholders of the Company, (i) increase the maximum number of shares that may be issued under the Plan or that any Participant may purchase under the Plan in any Offering Period, except pursuant to Section 5.04; (ii) change the class of employees eligible to receive Options under the Plan, except as provided by the Board pursuant to the last sentence of Section 7.01; or (iii) change the formula by which the Option Price is determined under the Plan.

	
  

	
8.07

	
No Employment Rights

The Plan does not, either directly or indirectly, create an independent right for the benefit of any employee or class of employees to purchase any shares of Common Stock under the Plan.  In addition, the Plan does not create in any employee or class of employees any right with respect to continuation of employment by the Company or any Subsidiary, and the Plan shall not be deemed to interfere in any way with the Company’s or any Subsidiary’s employment at will relationship with the employee and/or interfere in any way with the Company’s or any Subsidiary’s right to terminate, or otherwise modify, an employee’s employment at any time or for any or no reason.

  

12

  

	
  

	
8.08

	
Indemnification

No current or previous member of the Board, or the Committee, nor any officer or employee of the Company acting on behalf of the Board, or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan.  All such members of the Board or the Committee and each and every officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation of the Plan.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Certificate of Incorporation, or Bylaws, as a matter of law or otherwise.

	
  

	
8.09

	
Construction of Plan

Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall also include the plural, and conversely.  The words “Article” and “Section” herein shall refer to provisions of the Plan, unless expressly indicated otherwise.

	
  

	
8.10

	
Term of Plan

Following the adoption of the Plan by the Board, and approval of the Plan by the shareholders of the Company who are present and represented at a special or annual meeting of the shareholders where a quorum is present, which approval must occur not earlier than one (1) year before, and not later than one (1) year after, the date the Plan is adopted by the Board, the Plan shall become effective on the Effective Date.

	
  

	
8.11

	
Unfunded Status of Plan

The Plan shall be an unfunded plan.  The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payments, provided that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.

	
  

	
8.12

	
Governing Law

The law of the State of New Jersey will govern all matters relating to the Plan except to the extent such law is superseded by the laws of the United States.

 

13ex10_1.htm

Exhibit 10.1

 

FIRST AMENDMENT

 

THIS FIRST AMENDMENT (the “Amendment”) is dated as of June10, 2011, and is made with respect to that certain Amended and Restated Agreement, dated as of June 4, 2010 (the “Credit Agreement”; unless otherwise defined herein, capitalized terms used herein shall have the meanings given to them in the Credit Agreement), by and among NATIONAL BEEF PACKING COMPANY, LLC, a Delaware limited liability company (the “Borrower”), CERTAIN OF ITS SUBSIDIARIES, as Loan Parties, the LENDERS PARTY THERETO (each individually, a “Lender” and collectively, the “Lenders”), and COBANK, ACB, as agent for the Lenders, the Issuers and the Swing Line Lender (in such capacity, the “Agent”).

 

RECITALS:

 

WHEREAS, the Borrower, the Lenders and the Agent are parties to the Credit Agreement;

 

WHEREAS, the Borrower has requested that the Lenders agree to amend the Credit Agreement to, among other things, extend the maturity date and reduce the applicable rate of interest pursuant to the terms and subject to the applicable conditions set forth herein, and the Lenders signatory hereto have agreed to amend the Credit Agreement as hereinafter provided.

 

NOW, THEREFORE, in consideration of the foregoing and intending to be legally bound, and incorporating the above-defined terms herein, the parties hereto agree as follows:

 

 

1.             Amendments to Credit Agreement,

 

(a)           Applicable Margin.  The definition of “Applicable Margin” in Section 1.2 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“Applicable Margin” means, with respect to Line of Credit Loans, Swing Line Loans, Term Loans, LC Fees or Non-Use Fees, as the case may be, the rates per annum set forth below for the then applicable  “Financial Performance Level” referenced in the first column below (each being called a “Financial Performance Level”):

 

	
Financial Performance Level:

	
Funded Debt to EBITDA Ratio:

	 	
Base Rate Advance Line of Credit Loans, Swing Line Loans and Term Loans:

	 	 	
LIBOR Rate Line of Credit Loans and Term Loans:

	 	 	
LC Fee:

	 	 	
Non-Use Fee:

	 
	
Level I

	
Less than or equal to 1.50: 1.00

	 	 	0.75	%	 	 	1.75	%	 	 	1.75	%	 	 	0.25	%
	
Level II

	
Greater than 1.50:1.00 and less than 2.50:1.00

	 	 	1.00	%	 	 	2.00	%	 	 	2.00	%	 	 	0.375	%
	
 

Level III

	
Greater than or equal to 2.50:1.00

	 	 	1.50	%	 	 	2.50	%	 	 	2.50	%	 	 	0.50	%

 

  

5

  

From and after the First Amendment Effective Date, the initial Financial Performance Level shall be Level I until the Borrower’s consolidated financial statements (and the related Compliance Certificate) in respect of the first full fiscal quarter ending after the First Amendment Effective Date are delivered pursuant to Section 9.1(b) and, thereafter, upon Agent’s receipt of the Borrower’s consolidated financial statements (and the related Compliance Certificate) for each subsequent fiscal quarter.  The Agent will review each of the Borrower’s Compliance Certificates to determine the Funded Debt to EBITDA Ratio as of the end of the applicable fiscal quarter.  Any change in the Financial Performance Level will be effective five (5) days after receipt of the relevant Compliance Certificate; provided, however, that if the Borrower’s consolidated financial statements (and the related Compliance Certificate) are not delivered on a timely basis in accordance with Section 9.1(b), the Agent may, at its option, deem the Borrower’s Financial Performance Level to be Level III until ten (10) Business Days after the Agent’s receipt of such financial statements (and the Compliance Certificate).

 

Notwithstanding the foregoing, if at any time while any Commitment is in effect or any of the Liabilities remain outstanding, any financial statement or Compliance Certificate delivered by the Borrower is shown to be inaccurate, and such inaccuracy, if it had been corrected prior to the Borrower’s delivery, would have caused the application of a higher Applicable Margin (as defined above) for any period than the Applicable Margin that was actually applied for such period, then (a) within five (5) Business Days of discovery or notice of discovery of such inaccuracy the Borrower shall deliver to the Agent for distribution to the Lenders a corrected financial statement or Compliance Certificate, as applicable, for such period, (b) the Applicable Margin for such period shall be recalculated and applied as if the higher Applicable Margin had originally been applicable, and (c) within five (5) Business Days of such recalculation the Borrower shall pay to the Agent the additional amount of interest and fees owed as a result of such higher Applicable Margin for such period to the extent accrued through the last applicable payment date, and any subsequent payments required to be made on any subsequent payment date shall be adjusted accordingly.  Nothing contained in this paragraph shall limit or otherwise prejudice any of the other rights and remedies of the Agent or the Lenders under this Agreement.

 

 

(b)           Fixed Charge Coverage Ratio.  The definition of “Fixed Charge Coverage Ratio” in Section 1.2 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“Fixed Charge Coverage Ratio” means , as of the end of any fiscal quarter, the ratio of (a) the result of (x) EBITDA during the eight consecutive fiscal quarters then ended, less (y) Net Capital Expenditures during such eight fiscal quarter period, plus (z) the Suppressed Availability Amount as of the last day of the fiscal quarter then ended, to (b) the sum of (i) the aggregate amount of all scheduled payments of principal of and interest on Funded Debt during such eight fiscal quarter period, (ii) Borrower’s consolidated cash income taxes incurred and paid during such eight fiscal quarter period and (iii) Equity Distributions made by Borrower during such eight fiscal quarter period (other than (x) Equity Distributions permitted under the $150 Million Basket, (y) up to $125,484,074.72 in Equity Distributions made by Borrower in April 2009 and (z) up to $8,000,000 in Equity Distributions made by Borrower pursuant to the terms of the Consent to Sixth Amended and Restated Credit Agreement dated May 27, 2010).

  

6

  

 

(c)           Maturity Date.  The definition of “Maturity Date” in Section 1.2 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“Maturity Date” means the earliest of (a) the date on which the Commitments are terminated in whole pursuant to Section 11.1, (b) the date on which the Borrower voluntarily terminates the Commitments in whole and pays the Liabilities in full, (c) in the case of the Line of Credit Loans, June 4, 2016, (d) in the case of the Term Loans, June 4, 2016, and (e) in the case of any Swing Line Loan, June 4, 2016, or any earlier Business Day specified by notice from the Swing Line Lender to the Borrower and the Lenders.

 

 

(d)           New Definitions. The following new definitions are hereby inserted in Section 1.2 of the Credit Agreement in their correct alphabetical place:

“First Amendment Effective Date” means June 10,2011.

 

“NB Leathers Bonds” means the Taxable Industrial Revenue Bonds (National Beef Leathers, LLC Project) Series 2010 issued by the City of St. Joseph, Missouri, the proceeds of which are used solely to acquire personal property to be leased to National Beef Leathers, LLC pursuant to a capital lease.

 

“Suppressed Availability Amount” means, as of the end of any fiscal quarter, the lesser of (a) $30,000,000 and (b) the greater of (i) $0 and (ii) the result of (x) the Borrowing Base minus (y) the aggregate amount of the Line of Credit Loan Commitments.

 

 

(e)           Amendment to Section 4.3.  Section 4.3 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

4.3           Term Loan Installments.

 

The principal amount outstanding under the Term Notes shall be payable in quarterly installments commencing on the first day of the fourth full fiscal month following the Closing Date and, thereafter, on each three-month anniversary thereof (each such date, a “Term Loan Payment Date”) as follows: (a) on each Term Loan Payment Date, in an amount equal to $9,250,000 and (b) on the Maturity Date, in any amount equal to the remaining aggregate principal amount of the Term Loans outstanding on such date.

 

 

(f)            Amendment to Section 5.4.  Section 5.4 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

5.4           Capital Adequacy Requirements.

  

7

  

(a)           If any Lender or Issuer shall have determined that the adoption after the date of this Agreement of any applicable law, rule or regulation regarding capital adequacy, or any change (“Change”) therein after the date of this Agreement, or any change in the interpretation or administration thereof after the date of this Agreement by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender or Issuer with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency issued after the date of this Agreement, affects or would affect the amount of capital required or expected to be maintained by such Lender or Issuer or any corporation controlling such Lender or Issuer, and that the amount of such capital requirement is increased, or has or would have the effect of reducing the rate of return on such Lender’s or such Issuer’s or such corporation’s capital to a level below that which such Lender or Issuer or such corporation could have achieved but for such adoption, change or compliance, in each case as a consequence of its obligations hereunder (taking into consideration such Lender’s or Issuer’s policies with respect to capital adequacy), then the Borrower shall pay to such Lender such additional amount or amounts as such Lender or Issuer  reasonably determines to be sufficient to compensate such Lender or Issuer or such corporation in the light of such circumstances, subject to the provisions of Section 12.10.  Without limiting the generality of the foregoing, the term “Change” shall include (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines  or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) or in the interpretation, promulgation, implementation or administration thereof after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender or Issue or any corporation controlling any Lender or Issuer.  Notwithstanding the foregoing, for purposes of this Agreement, all requests, rules, guidelines or directives in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act shall be deemed to be a Change regardless of the date enacted, adopted or issued and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States financial regulatory authorities shall be deemed to be a Change regardless of the date adopted, issued, promulgated or implemented.  “Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.

 

(b)           A certificate of such Lender or Issuer setting forth such amount or amounts as shall be necessary to compensate such Lender or Issuer as specified in Section 5.4(a) above shall be delivered within nine (9) months of such occurrence described in Section 5.4(a) above to the Borrower and shall be conclusive and binding, absent manifest error.  The Borrower shall pay such Lender or Issuer the amount shown as due on any such certificate within fifteen (15) days after such Lender or Issuer delivers such certificate. In preparing such certificate, such Lender or Issuer may employ such assumptions and allocations of costs and expenses as it shall in good faith deem reasonable and may use any reasonable averaging and attribution method.

  

8

  

 

(g)           Amendment to Section 10.3.  Section 10.3 of the Credit Agreement is hereby amended by (i) deleting the “and” immediately following clause (r) of the first sentence thereof, and (ii) inserting the following immediately following clause (s) of the first sentence thereof and immediately preceding the “.” at the end of such first sentence:

; and (t) in the case of National Beef Leathers, LLC, investments in the purchase of the NB Leathers Bonds in an amount not to exceed $14,500,000 in the aggregate, so long as, in the case of this clause (t), no Default or Matured Default exists at the time such investment is made or will result therefrom

 

(h)           Amendment to Section 10.4.  Section 10.4 of the Credit Agreement is hereby amended by (i) deleting the “and” immediately following clause (g) thereof and (ii) inserting the following immediately following clause (h) thereof and immediately preceding the “.” at the end thereof:

; and (i) in the case of National Beef Leathers, LLC, the NB Leathers Bonds, so long as, in the case of this clause (i), no Default or Matured Default exists at the time such Indebtedness is incurred, created or assumed or will result therefrom

 

(i)             Exhibit 9A.  Exhibit 9A of the Credit Agreement is hereby amended and restated in its entirety to read as set forth on Annex I attached hereto.

 

2.             Representations and Warranties.  In order to induce the Agent and the Lenders to enter into this Amendment, each Loan Party hereby represents and warrants to the Agent and the Lenders that (a) it has duly authorized, executed and delivered this Amendment, (b) no consent, approval, exemption, order or authorization of, or a registration or filing with, any Governmental Authority, regulatory body or any other third party is required for the due execution, delivery and performance of this Amendment by such Loan Party, other than such consents, approvals, exemptions, orders or authorizations that have already been obtained, (c) the representations and warranties of such Loan Party set forth in the Credit Agreement and the other Financing Documents are true and correct in all material respects (unless stated to relate solely to an earlier date, in which case the representations and warranties are true and correct as of such earlier date) and (c) no Default or Matured Default has occurred and is continuing or exists.

 

3.             Conditions to Effectiveness.  This Amendment shall be effective on the date when the following conditions shall have occurred:

 

(a)           The Agent shall have received each of the following documents, each of which shall be satisfactory to the Agent in form and substance:

 

(i)           from each party to this Amendment, executed counterparts of this Amendment, signed on behalf of such party or written evidence satisfactory to the Agent (which may include telecopy transmission of a signed signature page to this Amendment) that such party has signed a counterpart of this Amendment;

  

9

  

 

(ii)           counterparts to the attached Consent and Acknowledgment of Subsidiary Loan Parties, duly executed by each Subsidiary Loan Party;

 

(iii)          such other documents as the Agent or any Lender (acting through the Agent) may reasonably request.

 

(b)           No Default or Matured Default shall have occurred and be continuing or shall exist;

 

(c)           The Borrower shall have paid to Agent for its sole account, the arrangement fee described in that certain letter agreement dated as of June 9, 2011 by and among Agent and the Borrower (the “Arrangement Fee Letter”);

 

(d)          The Borrower shall have paid to Agent for the account of each Lender, an amendment fee in an amount equal to 0.10% of the aggregate principal amount of the Term Loans and the Line of Credit Loan Commitments of each such Lender, which fee shall be due and payable, and non-refundable, upon the effectiveness of this Amendment; and

 

(e)           The Borrower shall have paid all fees and expenses of Agent’s counsel, Fulbright & Jaworski L.L.P., owing to date.

 

4.             Miscellaneous.

 

(a)           Reference to Credit Agreement.  Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” or words of like or similar import shall mean and be a reference to the Credit Agreement, as modified and amended by this Amendment.  Each reference to the Credit Agreement in any other Financing Document shall mean and be a reference to the Credit Agreement, as modified and amended by this Amendment.

 

(b)           Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

 

(c)            Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the Borrower and its respective successors and assigns, and upon the Agent and the Lenders and their respective successors and assigns.

 

(d)           Continuing Effect.  Except as expressly amended hereby, the Credit Agreement, as amended by this Amendment, shall continue to be and shall remain in full force and effect in accordance with its terms.  This Amendment shall not constitute an amendment or waiver of any provision of the Credit Agreement not expressly referred to herein and shall not be construed as an amendment, waiver or consent to any action on the part of the Borrower or any other Loan Party that would require an amendment, waiver or consent of the Agent or the Lenders except as expressly stated herein.  This Amendment constitutes a Financing Document.

 

(e)            GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS AND DECISIONS OF THE STATE OF COLORADO WITHOUT REGARD TO THE APPLICATION OF CONFLICT OF LAWS PRINCIPLES.

  

10

  

 

(f)            Counterparts. This Amendment may be signed in counterparts (by facsimile transmission or otherwise) but all of such counterparts together shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.

 

(g)           Incorporation into Credit Agreement. This Amendment shall be incorporated into the Credit Agreement by this reference.

 

 

[SIGNATURE PAGES FOLLOW]

  

11

  

 

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Amendment as of the day and year first above written.

 

	 	BORROWER:
	 	 	 
	 	NATIONAL BEEF PACKING COMPANY, LLC
	 	 	  
	 	 	 
	 	By:	
/s/ Jay D. Nielsen

	 	Name:	
Jay D. Nielsen

	 	Title:	
Chief Accounting Officer

 

	 	
SUBSIDIARY LOAN PARTIES:

	 	 
	 	
NATIONAL BEEF CALIFORNIA, LP

	 	 
	 	  	By:	
NATIONAL CARRIERS, INC.,  its General Partner

	 	  	 	  
	 	 	 	 
	 	  	By:	
 /s/ Jay D. Nielsen

	 	  	Name:	
Jay D. Nielsen

	 	  	Title:	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

NATIONAL CARRIERS, INC.

	 	 
	 	 
	 	By:	/s/ Jay D. Nielsen
	 	Name:	Jay D. Nielsen
	 	Title:	

Chief Financial Officer

 

 

Signature Page to First Amendment

 

  

  

  

 

	 	AGENT:
	 	 	 
	 	COBANK, ACB, as Agent
	 	 	  
	 	 	 
	 	By:	
/s/ James H. Matzat

	 	Name:	
James H. Matzat

	 	Title:	
Vice President

 

 

Signature Page to First Amendment

 

  

  

  

	 	LENDER:
	 	 	 
	 	COBANK, ACB, as Lender and Swing Line Lender
	 	 	  
	 	 	 
	 	By:	
/s/ James H. Matzat

	 	Name:	
James H. Matzat

	 	Title:	
Vice President

 

 

Signature Page to First Amendment

 

  

  

  

	 	LENDER:
	 	 	 
	 	BANK OF AMERICA, N.A.
	 	 	 
	 	 	  
	 	By:	
 /s/ Martha Carpenter Smith

	 	Name:	
Martha Carpenter Smith

	 	Title:	
SVP

 

 

Signature Page to First Amendment

 

  

  

  

 

	 	LENDER:
	 	 	 
	 	COOPERATIEVE CENTRALE RAIFFEISEN BOERENLEENBANK, B.A., “RABOBANK NEDERLAND” NEW YORK BRANCH
	 	 	  
	 	 	 
	 	By:	
/s/ Robert K. Hughes

	 	Name:	
Robert K. Hughes

	 	Title:	
Executive Director

	 	 	  
	 	 	 
	 	By:	
/s/ Izumi Fukushima

	 	Name:	
Izumi Fukushima

	 	Title:	
Executive Director

 

 

Signature Page to First Amendment

 

  

  

  

	 	LENDER:
	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION
	 	 	  
	 	 	 
	 	By:	
/s/ James D. Pegues

	 	Name:	
James D. Pegues

	 	Title:	
Vice President

 

 

Signature Page to First Amendment

 

  

  

  

	 	LENDER:
	 	 	 
	 	WELLS FARGO BANK, ASSOCIATION
	 	 	  
	 	 	 
	 	By:	
/s/ John R. Carley

	 	Name:	
John R. Carley

	 	Title:	
Vice President

 

 

Signature Page to First Amendment

 

  

  

  

	 	LENDER:
	 	 	 
	 	UMB BANK, N.A.
	 	 	  
	 	 	 
	 	By:	
/s/ Billy Weiland

	 	Name:	
Billy Weiland

	 	Title:	
Vice President

 

 

Signature Page to First Amendment

 

  

  

  

	 	LENDER:
	 	 	 
	 	AMERICAN AGCREDIT, PCA
	 	 	 
	 	 	 
	 	By:	
/s/ Gary Van Schuyver

	 	Name:	
Gary Van Schuyver

	 	Title:	
Vice President

 

 

Signature Page to First Amendment

 

  

  

  

Exhibit 9A to

 

Amended and Restated

 

Credit Agreement

 

Form of Compliance Certificate

 

(period from _________, 200__ to    , 200_)

 

Pursuant to Section 9.1 of the Amended and Restated Credit Agreement dated as of June 4, 2010 (as the same may be amended, amended and restated, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”) by and among National Beef Packing Company, LLC (the “Borrower”), certain of its subsidiaries, CoBank, ACB, as agent (the “Agent”), and the Persons from time to time party thereto, the undersigned certifies to the Agent and the Lenders as follows:

 

	
1.

	
The Borrower’s consolidated financial statements, attached hereto, for the period indicated above (the “Financial Statements”), have been prepared in accordance with the requirements of Section 9.1 of the Credit Agreement and have been delivered on or before the date they are due.

 

	
2.

	
The representations and warranties contained in Article VII of the Credit Agreement, as updated by disclosures in writing to the Agent as permitted therein, are true and correct as of the date hereof as though made on this date.

 

	
3.

	
The Borrower is in compliance with all of the affirmative and negative covenants set forth in Articles IX and X of the Credit Agreement as of the date hereof.

 

	
4. 

	
Specifically, as of the date of the Financial Statements:

 

	 	
a.

	
The Borrower shall have a Funded Debt to EBITDA Ratio of not more than 3.25 to 1.00 as at the end of each fiscal quarter.

 

Borrower’s Funded Debt to EBITDA Ratio for the four consecutive fiscal quarters ending on the date of the Financial Statements wasto 1.00.

 

In Compliance: Yes ___     No ___

 

	 	
b.

	
[The Borrower and its consolidated Subsidiaries shall have Adjusted Net Worth of not less $275,000,000 as at the end of each Fiscal Year.

 

The Adjusted Net Worth of the Borrower and its consolidated Subsidiaries as the date of the Financial Statements was $___________________.

 

In Compliance: Yes ___     No ___]1

 

1 Applicable for Financial Statements delivered in respect of a Fiscal Year end only.

9-A-1

  

  

  

	 	
c.

	
The Borrower shall have a Fixed Charge Coverage Ratio of at least 1.05 to 1.00 as at the end of each fiscal quarter.

 

Borrower’s Fixed Charge Coverage Ratio for the eight consecutive fiscal quarters ending on the date of the Financial Statements wasto 1.00.

 

In Compliance: Yes ___     No ___

 

	 	
d.

	
The rate at which interest accrues in respect of the Line of Credit Loans, Swing Line Loans, Term Loans, LC Fees and Non-Use Fees, as the case may be, is determined in accordance with a Financial Performance Level (as described in the Credit Agreement), which, in turn, is determined by the Borrower’s Funded Debt to EBITDA Ratio, as set forth below:

 

	
Financial Performance Level:

	
Funded Debt to EBITDA Ratio:

	
Base Rate Advance Line of Credit Loans, Swing Line Loans and Term Loans:

	
LIBOR Rate Line of Credit Loans and Term Loans:

	
LC Fee:

	
Non-Use Fee:

	
Level I

	
Less than or equal to 1.50: 1.00

	
0.75%

	
1.75%

	
1.75%

	
0.25%

	
Level II

	
Greater than 1.50:1.00 and less than 2.50:1.00

	
1.00%

	
2.00%

	
2.00%

	
0.375%

	
Level III

	
Greater than or equal to 2.50:1.00

	
1.50%

	
2.50%

	
2.50%

	
0.50%

 

As of the date of the Financial Statements, Borrower’s Funded Debt to EBITDA Ratio wasand the Financial Performance Level was _____.

 

	 	
e

	
The Suppressed Availability Amount for the fiscal quarter ending on the date of the Financial Statements was $________.

 

	
5. 

	
All adjustments and calculations related to the amounts set forth in each of 4.a. through 4.e above are attached hereto.

 

9-A-2

  

  

  

	
Dated:  _________, 200_

 

	 	
National Beef Packing Company, LLC

	 	 
	 	By: 	
 

	 	Its: 	
 

9-A-3

  

  

  

Schedule 4.a..  Funded Debt to EBITDA Ratio2

 

	
1.  Funded Debt

	  
	
a.  Outstanding Principal Amount of Interest-

	
$______

	
Bearing Indebtedness (including Capital Leases)

	  
	
b.  Undrawn Amount of Outstanding Letters of

	
$______

	
Credit (including the LCs)

	  
	  	
=======

	
c.  Subtotal (Lines a and b)

	
$______

	  	  
	
Minus:

	  
	
d.  LCs or Indemnity Obligations Issued to

	
$______

	
Support other Indebtedness

	  
	
e.  Class A or B Units subject to

	
$______

	
Redemption Rights

	  
	
f.   Obligations under Deferred Compensation Plans

	
$______

	  	
=======

	
g.  Subtotal (Lines d through f)

	
$______

	  	  
	
h.   Funded Debt (Line c – Line g)

	
$______

	  	  
	
2.   EBITDA

	  
	
a.   Net Income

	
$______

	  	  
	
Plus:

	  
	
b.  Income Taxes

	
$______

	
c.  Interest Expense

	
$______

	
d.  Depreciation Expense

	
$______

	
e.  Amortization Expense

	
$______

	
f.   Other Non-Cash Expenses or Charges

	
$______

	  	
=======

	
g.  Subtotal (Lines b through f)

	
$______

	  	  
	
Minus:

	  
	
h.  Non-Operating Gains

	
$______

	
i.   Non-Operating Losses

	
$______

	  	
=======

	
j.   Subtotal (Lines h and i)

	
$______

	  	
=======

	
k.  EBITDA (Line a + Line g - Line j)

	
$______

	 	 
	Funded Debt to EBITDA Ratio (Line 1h over Line 2k)	_____ to 1.00

 

2 The Funded Debt to EBITDA Ratio is measured for the four (4) consecutive fiscal quarters ending on the date of the Financial Statements.

9-A-4

  

  

  

Schedule 4.b.  Adjusted Net Worth

	
a.  Book Value of all Assets

	
$______

	
b.  Total Liabilities

	
$______

	  	
=======

	
c.  Net Worth (Line a - Line b)

	
$______

	  	  
	
d.  Negative Impact Occurring as a Result of

	
$______

	
Making Equity Distributions in accordance

	  
	
with the $150 Million Basket

	  
	  	  
	
Adjusted Net Worth (Line c - Line d)

	
$______

	  	  
	  	  
	  	  
	
Schedule 4.c.  Fixed Charge Coverage Ratio3

	  
	  	  
	
1.  EBITDA

	  
	
a.  Net Income

	
$______

	  	  
	
Plus:

	  
	
b.  Income Taxes

	
$______

	
c.  Interest Expense

	
$______

	
d.  Depreciation Expense

	
$______

	
e.  Amortization Expense

	
$______

	
f.   Other Non-Cash Expenses or Charges

	
$______

	  	
=======

	
g.  Subtotal (Lines b through f)

	
$______

	  	  
	
Minus:

	  
	
h.  Non-Operating Gains

	
$______

	
i.   Non-Operating Losses

	
$______

	  	
=======

	
j.   Subtotal (Lines g and h)

	
$______

	  	
=======

	
k.  EBITDA (Line a + Line g - Line j)

	
$______

	
Minus:

	  
	
l.   Net Capital Expenditures

	
$______

	
m.  Numerator (Line k – Line l)

	
$______

 

3 The Fixed Charge Coverage Ratio is measured for the eight (8) consecutive fiscal quarters ending on the date of the Financial Statements.

9-A-5

  

  

  

2.  Fixed Charges

	
a.  Scheduled Payments of Principal and Interest

	  
	
on Funded Debt

	
$______

	
b.  Cash Income Taxes Incurred and Paid

	
$______

	
c.  Equity Distributions (other than Equity Distributions

	
$______

	
under the $150 Million Basket, Certain Equity Distributions

	  
	
Made in April 2009 and up to $8 Million in Equity

	  
	
Distributions made in May 2010)

	  
	  	
=======

	
d.  Fixed Charges (Lines a + b +c)

	
$______

	  	  
	
3.  Suppressed Availability

	  
	
a.  Borrowing Base as of the last day of the fiscal quarter

	  
	
ended __________, 20__

	
$______

	
b.  Line of Credit Commitments as of the last day of the fiscal quarter

	  
	
ended __________, 20__

	
$______

	
c.  Result of Line a – Line b

	
$______

	
d.  Greater of $0 and Line c

	
$______

	  	  
	
e.  Suppressed Availability Amount (Lesser of Line 4 and $30,0000,000)

	
$_______

	  	  
	  	  
	
Fixed Charge Coverage Ratio ((Sum of Line 1m + Line 3e) over Line 2d)

	
 _____ to 1.00

 

9-A-6

  

  

 

CONSENT AND ACKNOWLEDGMENT OF SUBSIDIARY LOAN PARTIES

June 10, 2011

The undersigned Subsidiary Loan Parties (a) acknowledge and consent to the execution of the foregoing First Amendment (the “Amendment”), (b) confirm that the Guaranty Agreement previously executed by the undersigned Subsidiary Loan Parties, as well as any other Financing Documents, if any, previously executed by the undersigned Subsidiary Loan Parties, apply and shall continue to apply to all Guaranteed Obligations (as defined in the Guaranty Agreement), notwithstanding the execution and delivery of the foregoing Amendment by the Borrower, the Agent and the Required Lenders, and (c) acknowledge that without this consent and confirmation, the Lenders and the Agent would not agree to the modifications of the Credit Agreement which are evidenced by the foregoing Amendment.

 

 

CONSENT AND ACKNOWLEDGMENT OF SUBSIDIARY LOAN PARTIES

9-A-5

  

 

  

	 	SUBSIDIARY LOAN PARTIES:
	 	 	 
	 	NATIONAL BEEF CALIFORNIA, LP
	 	 	 
	 	 	By:	
NATIONAL CARRIERS, INC.,

	 	 	  	
its General Partner

	 	 	  	  
	 	 	 	 
	 	 	By:	
/s/ Jay D. Nielsen

	 	 	Name:	
Jay D. Nielsen

	 	 	Title:	
Chief Financial Officer

 

	 	NATIONAL CARRIERS, INC.
	 	 	  
	 	 	 
	 	By:	
/s/ Jay D. Nielsen

	 	Name:	
Jay D. Nielsen

	 	Title:	
Chief Financial Officer

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