Item 1.01
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Entry
into a Material Definitive
Agreement.
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Hurco Cos, Inc - Recent Material EventAs of October 30, 2009, Hurco
Companies, Inc. (the "Company") and JPMorgan Chase Bank, N.A. ("Chase") entered
into a first amendment (the "Amendment") to the outstanding credit agreement,
dated as of December 7, 2007, between the Company and Chase (the "U.S. Credit
Agreement"). Prior to the effectiveness of the Amendment, the U.S.
Credit Agreement provided to the Company a $30 million unsecured revolving
credit and letter of credit facility (the "U.S. Facility"), and a separate
letter of credit facility in the amount of New Taiwan Dollars 100 million (the
"Taiwan Facility"). Pursuant to the Amendment, the maximum available
credit under the U.S. Facility is reduced to $15 million, and the maximum amount
of outstanding letters of credit under the U.S. Facility is set at $3
million. The Amendment does not change the scheduled maturity date of
the U.S. Facility, which remains December 7, 2012. The Taiwan
Facility remains an uncommitted demand credit facility, and the amount of
available credit under the Taiwan Facility is not changed by the
Amendment.
Borrowings
under the U.S. Facility will bear interest at a LIBOR-based rate or a floating
rate based on the prime rate of Chase, in each case, plus an applicable
margin. The Amendment provides that the floating rate will not be
less than a one month LIBOR-based rate plus 2.50% per annum. The
Amendment changes the method by which the applicable margins are
determined. When the consolidated net income of the Company and its
subsidiaries for the four most recently reported consecutive fiscal quarters
is:
(i) equal
to or greater than $0.00 (a "No Loss Four Quarter Period"), the applicable
margins are determined by reference to the ratio of the total consolidated
interest-bearing debt and obligations and the undrawn face amount of all letters
of credit outstanding of the Company and its subsidiaries ("consolidated total
indebtedness"), to their consolidated EBITDA (as defined in the U.S. Credit
Agreement); and
(ii) less
than $0.00 (a "Net Loss Four Quarter Period"), the applicable margins are
determined based on the ratio of the positive remainder, if any, of the
aggregate cash and cash equivalent investments of the Company and its
subsidiaries, on a consolidated basis, minus the consolidated total
indebtedness, to an amount equal to two (2) times the consolidated net loss
(stated as an absolute value) of the Company and its subsidiaries for the two
consecutive fiscal quarters ending at the close of such four quarter period (the
"Excess Cash to Annualized Net Loss Ratio").
Based on
the most recent determination of applicable margins under the U.S. Credit
Agreement, the applicable margin under the U.S. Facility immediately following
the effective date of the Amendment will be the same as was in effect under the
U.S. Facility prior to the Amendment. The Amendment also reduces the
rates used to determine fees payable by the Company for that portion of the U.S.
Facility which is not utilized by the Company from time to time.
The
Amendment adds further limitations on the Company's ability to declare and pay
dividends, incur additional indebtedness and make acquisitions following the
occurrence of a Net Loss Four Quarter Period, which limitations remain in effect
until there occurs a No Loss Four Quarter Period. The Amendment also
changes the Company's financial covenants under the U.S. Credit
Agreement. The Amendment eliminates the minimum quarterly
consolidated net income covenant. Pursuant to the Amendment, the
covenant establishing a maximum ratio of consolidated total indebtedness to
total indebtedness and net worth remains applicable as of the close of the last
fiscal quarter of each No Loss Four Quarter Period. For the last
fiscal quarter of a Net Loss Four Quarter Period, the Amendment establishes a
covenant requiring the Company to achieve an Excess Cash to Annualized Net Loss
Ratio of not less than 1.00 to 1.00.
A copy of
the Amendment is included as Exhibit 10.1 to this filing and is incorporated
herein by reference. A copy of the U.S. Credit Agreement was included
as Exhibit 10.1 to the Form 8-K filed by the Company on December 12,
2007. Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Effective
October 31, 2009, the Board of Directors of the Company appointed Michael Doar
to the office of President. As previously announced by the Company,
James D. Fabris resigned as President and Chief Operating Officer of the Company
effective October 31, 2009. In his capacity as President, Mr. Doar,
age 54, will perform the
functions previously performed by Mr. Fabris. Mr. Doar will continue
to serve as the Company's Chief Executive Officer and Chairman of the Board,
positions he has held since 2001. Mr. Doar's compensation
arrangements, as described in the proxy statement for the Company's 2009 annual
meeting of shareholders, were not changed as a result of his appointment to the
office of President.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: November
3, 2009 EXHIBIT
INDEX
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