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071&072-10�� � .mow �F -� ��'f��'xr ��'�Y �' ��n• - [[j{ iid �� � {�1 ds y,3�A f P � �. d ^s• it .mow' 4 � � �. a � -,� � �n � � �. �) RESOLUTION APPROPRIATING FUNDS TO A5515TTHE EXPANSION OF THE MANUFACTURING OPERATION OF WORLQ COLOR I<USA), LLC WHi =REA5, World Color (USAj, LLC, has made known its intent to expand a manufacturing operation by making new taxable real estate and machinery and tools investments and creating new jobs; and WHEREAS, the company meets the policy guidelines of the Frederick County Economic Development . Incentives Fund as established by the Winchester - Frederick County Economic Development Commission in 1995. NOW, THEREFORE, BE IT RESOLVE6}, that the Board of Supervisors of the County of Frederick, Virginia, does hereby approve and appropriate the payment of $300,000.00 to the Industrial Development Authority of Frederick County, Virginia, from the Frederick County's Unreserved Fund Balance to assist the expansion of a manufacturing operation for World Color USA), LLC, in Frederick County, Virginia; and BE IT FURTHER RESOLVED, that appropriation of said funds are sub }ect to an executed Performance Agreement outlining the required performance criteria. ADOPTED this 28`x` day of April' 2010. VOTE: Richard C. Shickle Ape Bill M. Ewing AYe Christopher E. Collins .Ave Gene E. Fisher � Charles S. DeHaven, Jr. Aye Gary A. Lofton Ape Gary W. Dove Aye A COPY TESTS: Joh Riley, Jr., Clerk Bo d of Supervisors Resolution No.: 07210 r � � `..., �� 3�r �.� .- f A � ���� � �������F RE5OtUTION APPROVING tOCAt ECONOMIC DEVELOPMENT INCENTIVE GRANT PERFORMANCE AGREEMENT FOR WORLD COLOR iiUSA), ttC WHEREAS, World Color (EJSA), FFC, has made known its intent to expand a manufacturing operation by making new taxable real estate and machinery and tools investments and creating new jobs; and WHEREAS, the company meets the policy guidelines of the Frederick County Economic Development Incentives Fund as established by the Winchester - Frederick County Economic Development Commission in 1995. NOW, THEREFORI =, BE IT RE501.VED, that the Board of Supervisors of the County of Frederick, Virginia, does hereby approve the Focal Economic Development Incentive Grant Performance Agreement between the County of Frederick, Virginia, World Color (IJSA }, LLC, and the Industrial Development Authority of Frederick County. BE tT FURTHER RESOLVED, that the Board of Supervisors of the County of Frederick, Virginia, does authorize the Chairman to execute.the Performance Agreement on its behalf. ADOPTED this 28th day of April. 201t). VOTE: Richard C. Shickle Aye Bill M. Ewing Aye Christopher E. Collins Ave Gene E. Fisher , AXe Charles S. DeHaven, Jr. Aye Gary A. Lofton Aye Gary W. Rave A"„ve A COPY TESTE: Joh .Riley, r., Clerk Board of Supervisors Resolution No.: 071 -10 ��.�_ ��; .� �. w�.��1C1� CCU %������" i -�' �: ®ATE: April 22, 2010 TO: Frederick County Board of Supervisors FROM: Patrick Barker, Executive Director CC; Jahn R. Riley, jr., County Administrator RE: Performance Agreement and Resolutions for World Color Attached please find the Performance Agreement with World Color (USA), LLC along with the appropriate resolutions approving the agreement and appropriating the necessary funding to complete the company's proposed expansion. As you might recall, the Board of Supervisors discussed this item in closed session and seemed favorable to providing $300,040.00 to secure this expansion. An equal match from the Virginia Investment Partnership Grant has been secured. The Virginia Investment Partnership Grant is a discretionary performance incentive designed to encourage continued capital investment by Virginia companies, resulting in added capacity, modernization, increased productivity, or the creation, development and utilization of advanced technology. This grant involves another performance agreement which is between the company and the State, World Color, formerly Quebecor World, opened their Frederick County facility in 1989. World Color is currently located at 160 Century Lane in 5tnnewail Industrial Park. They currently employ aver 150 people for the printing of various advereising inserts and circulars. World Color will invest $35.2 million to expand in Frederick County. As the recipient of two new printing presses that will increase production capability, the Frederick County operation will retain 150 existing jabs and create. 30 new positions. Virginia successfully competed with Pennsylvania and Tennessee for the project. All parties' legal counsels (i.e. County, IDA, and World Color) have reviewed and approved the performance agreement and staff is seeking Board action regarding this request. Thanks for your help. i am available if you have any questions or comments on these materials for this project. Attachment: • Memorandum of Understanding BOS Resolution �.... ,_ 4��:�:, �.��:�- �.���.�,: t.?... �'iC�tiCca'sJ;fE`I� ��';��� ` tiF�Wr;�C�t 5'r.' ?. ff� .'.�.,4.ir .A ��'�- �� <�- ti�I'_`,' Ip �i�X :j`�?- � <<.- �a�:`� �. 1�, °��u`til'v�kJ, „ \_l.:C:: "'3i PERFORMANCE AGREEI�IENT This PERFORMANCE AGREEMENT made and entered the 14t� day of April, 2010, by and among the COUNTY OF FREDERICK, VIRGINIA (the "Locality ")apolitical subdivision of the Commonwealth of Virginia {the "Commonwealth "), WORLD COLOR (USA }, LLC {the "Company "), a Delaware limited liability company, and the INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA (the "Authority "),apolitical subdivision of the Commonwealth. WITNESSETH: WHEREAS, the Locality is willing to provide through the Authority a $300,000 grant (a "Local Grant ") for the purpose of inducing the Company to expand in the Locality and improve a manufacturing facility in the Locality (the "Facility "), thereby making a significant Capital Investment (as hereinafter defined) and creating a significant number of New Jobs {as hereinafter defined); WHEREAS, the Locality is willing to provide the funds to the Authority with the expectation that the Authority wi11 provide the funds to or for the use of the Company, provided that the Company meets certain criteria relating to Capital- Investment and New Jobs; WHEREAS, the Locality, the Authority and the Company desire to set forth their understanding and agreement as to the payout of the Local Grant, the use of the Local Crrant proceeds, the obligations of the Company regarding Capital Investment and New Job creation, and the repayment by the Company of alI or part of the Local Grant under certain circumstances; WHEREAS, the expansion and operation of the Facility will entail a capital expenditure of approximately $35 million of which approximately $32 million will be invested in machinery and equipment, and approximately $3 million will be invested in the up -fit of the building, and will further entail the continuation afthe Current Sobs at the Facility as of June 16, 2009, and the creation of 30 New Jobs at the Facility; and WHEREAS, the stimulation of the additional tax revenue and economic activity to be generated by the Capital Investment and New Jobs constitutes a valid public purpose for the expenditure of public funds and is the animating purpose for the Local Grant: NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises and undertakings of the parties to this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows. Page i of 6 LEDICi Pert A.gr � World Color 2010 F[I�fAL Section 1. Disbursement al` Local Grant. The Local Grant in the amount of $300,000 will be paid to the Authority by the Locality, in two equal installments upon its request. Within 30 days of its receipt of the Locai Grant proceeds, the Authority will disburse the Local Grant proceeds to the Company as an inducement to the Company to achieve the Targets (as hereinafter defined} at the Facility. The first installment of the Local Grant will be disbursed by the Locality to the Authority no earlier Than March 1, 2010, but no later than June 30, 2010. The second installment of the Local Grant will be disbursed by the Locality to the Authority no earlier than July 1, 2010 but no later than September, 1, 2010. Section 2. Targets; Definitions. The Company will develop and operate the Facility in the Locality, make new Capital Investment of at least $35 million, maintain 150 full -time Current Jobs at the Facility and create and maintain at' least 30 full -time new jobs at the Facility, all as of the Performance Date, as hereinafter defined. The average annual wage of the New Jobs of at least $38,500 is more than the prevailing average annual wage in the County of $36,304 at the time the Local Grant was approved. For the purposes of this Agreement, the fallowing terms shall have the following definitions: "Capital Investment" means a capital expenditure in taxable real property, taxable tangible personal property, or bath, at the Facility excluding the purchase of land or existing real property improvements]. The Capital Investment must be in addition to the capital improvements located at the Facility as of June 16, 2009. "Maintain" means that the Current Jobs and the New Jobs created pursuant to the Local Grant will continue without interruption from the date of creation through the Performance Date. "Current Job" means existing permanent full -time employment jobs for which the standard fringe benefits are paid by the Company for the employee at the Facility as of June 16, 2009. Each Current Job must require a minimum of either (i} 35 hours of an employee's time per week for the entire normal year of the Company's operations, which "normal year" must consist of at least 48 weeks, or {ii} 1,680 hours per year. Seasonal ar temporary positions, positions created when a job function is shifted from an existing location in the Commonwealth, and positions with construction contractors, vendors, suppliers and similar multiplier or spin -off jobs shall not qualify as Current Jobs. "New Job" means new permanent full -time employment of an indef Hite duration at the Facility for which the standard fringe benefits are paid by the Company for the employee, and for which the Company pays an average annual wage of at least $38,500. Each New Jab must require a minimum of either {i) 35 hours of an employee's time per week for the entire normal year of the Company's operations, which "normal year" must consist of at least 48 weeks, or {ii) 1,680 hours per year. Seasonal ar temporary positions, positions created when a job fiznctian is Page 2 of 6 LED�E'i Pert Agr � Worid CoEor 20 ] 0 F17�AL shifted from an existing location in the Commonwealth, and positions with construction contractors, vendors, suppliers and similar multiplier or spinToff jobs shall not qualify as New Jobs. The New Jobs must be in addition to the 150 full time Current Jobs at the Facility as of June 16, 2009. ' "Performance Date" means December 31, 2012. If the Locality, in consultation with the Authority, deems that good faith and reasonable efforts have been made and are being made by the Company to achieve the Targets, the Locality in its discretion may agree to extend the Performance Date by up to 15 months, If the Performance Date is extended, the Locality shall send written notice of the extension to the Authority and the Company and the date to which the Performance Date has been extended shall be the "Performance Date" for the purposes of this Agreement. Neither the Locality and /or the Authority shall have any obligation whatsoever to extend the Performance Date. "Targets" means the Company's obligations to make Capital Investments at the Facility of at ]cast $35 million, to maintain the 150 full -time Current Jobs and to create at least 30 New Jobs at the Facility, all as of the Performance Date. Section �3. 1te�payment Obligation. (a) For purposes of repayment, the Local Grant is to be allocated as $150,000 (50 %) for the Company's Capital Investment Target, $75,000 (25 %) for its Current Jobs Target and $75,00{} (25 %) for its New Jobs Target. If the Company has met at least ninety percent (90 %) of each of the Targets as of the Performance Date, then and thereafter the Company is no longer obligated to repay any portion the Local Grant. If the Company has not met at least ninety percent (90 %) of its Capital Investment Target or $31,500,000, its Current Job Target or 135, and/or its New Jobs Target or 27, the Company shall repay to the Authority that part of the Local Grant that is proportional to the Target or Targets for which there is a shortfall. For example, if as of the Performance Date, the Capital Investment is only $17,500,000, only 75 Current Jobs exist and only 15 New Jobs have been created, the Company shall refund to the Authority fifty percent (50 %) of the moneys allocated to the Capital Investment Target ($75,000), fifty percent (50 %} of the moneys allocated to the Current Jobs Target ($37,500) and fifty percent (50 %) of the moneys allocated to the New Jobs Target ($37,500). 'Whether the New Jobs Target has been met will be determined by comparing the anticipated payroll (30 New Jabs at an average annual salary of at Ieast $38,500) Yo the actual number of New Jobs and the actual average annual salary reported at the Performance Date. (b} U�terminatian of Inability to Comply: If the Locality in its sole and absolute discretion, determines at any time prior to the Performance Date (a "Determination Date "} that the Company is unable or unwilling to meet and maintain its Targets by and through the Performance Date, and if the Locality shall have promptly notified the Company of such determination, the Company must repay such portions of the entire Local Grant to the Authority as represent the extent to which the Company is unable or unwilling to meet and maintain its Targets, as determined. by the Locality. Page 3 of 6 LEDIG Perf Agr � World Color 2010 FIIVAI. (c) Repayment Dates: Such repayment shall' be due from the Company to the Authority within thirty days of the Performance Date or the Determination Date, whichever shall first occur Any moneys repaid by the Company to the Authority hereunder shall be repaid by the Authority to the Locality. Anything in this Agreement to the contrary notwithstanding, the Authority shall not have any responsibility for the repayment of any sums hereunder unless said sums have been received by the Authority from the Company. (d) Default in Repayment by the Campany: In the event that the Company fails to comply with the repayment obligations set forth in this Section 3, the Locality and the Authority shall be entitled to recover their reasonable attorney's fees and costs incurred in connection with such default by the Company, whether or not proceedings are instituted to collect such repayment funds. Section 4. Comuany ReUa>rtin�. The Company shall timely provide, at the Company's expense, detailed verif cation reasonably satisfactory to the Locality and the Authority of the Company's progress on achieving the Targets. Such progress reports will be provided annually, starting on May 1, 2010 and every 12 months thereafter, and at such other times as the Locality ar the Authority may require. Section 6. Notices. Any notices required or permitted under this Agreement shall be given in writing, and shall be deemed to be received upon receipt. or refusal after mailing of the same in the United States Mail by certified mail, postage fully prepaid or by overnight courier {refusal shall mean return of certifed mail or overnight courier package not accepted by the addressee): if to the Company, to: Worldcolor Winchester i 60 Century Lane Winchester, VA 22603 Attention: Controller if to the Locality, to: County of Frederick 107 North Kent St Winchester, VA 22601 Attention: County Administrator if to the Authority, to: County of Frederick Industrial Development Authority 107 North Kent St Winchester, VA 22601 Attention; Chair FINAL, with a copy to: World Color Press Inc 999 de Maisonneuve Blvd. Montreal, PQ H3A 3L4 Attention: Vice President With a copy ta: County of Frederick 107 North Kent St West Ste. 1100 Winchester, VA 22601 Attention: County Attorney with a copy to: Michael L. Bryan, Esq 116 South Braddock Street Winchester, VA 22601 Page 4 of 6 LBDIG PerfAgr � World Colar2070 ,Section 7. 1Vliscellaneo>uls. (a) Entire Agreement; Amendments: This Agreement constitutes the entire agreement between the parties hereto as to the Local Grant and may not be amended or modified, except in writing, signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The Company may not assign its rights and obligations under this Agreement without the prior written consent of the Locality and the Authority, which consent may be withheld. (b) G ©verning Law; Venue: This Agreement is made, and is intended to be performed, in the. Commonwealth of Virginia and shall be construed and enforced by the laws of the Commonwealth. rurisdiction and venue for any litigation arising out of or involving this Agreement shall only lie shall lie in the Circuit Court of the County of Frederick, Va, and such litigation shall be brought only in such court. (c} Counterparts: This Agreement may be executed in one or mare counterparts, each of which shall be an original, and all of which together shall be one and the same instrument. (d) Severability: If any provision of this Agreement is determined to be unenforceable, invalid, or illegal, then the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired, and such provision will be deemed to be restated to reflect the original intentions of the parties as nearly as possible in accordance with applicable law. (e) Time: Tirne is of the essence as to all matters set forth in this Performance Agreement. jTHE REMAINDER Ol� THIS PAGE INTENTIONALLY LEFT BLANK] Fage 5 of 6 T,EDIG Ferf Agr � World Color 2Q 10 FTl+lAl� IN WITNESS WHEREOF, the parties hereto have executed this Performance Agreement as of the date first written above. COUNTY OF FREDERICK, VIRGINIA By Name: Richard C. Shickle Title: Chair, County of Frederick $oard of Su ervisors ......-�_ Date: INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA By Name: Richard G. Dick Title: Chair., Cflunty of Frederick loprr�ent Industrial Deve,. , ,,.,___... Authori Date: WORLD COLOR {USA), LLC By Name: Title: Date: !�?l�%�! Page 6 of 6 LEL3TG Perf Agr � Worid Color ZO i 0