Attached files
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| 10-K - Otter Tail Ag Enterprises, LLC | v170271_10k.htm |
| EX-31.1 - Otter Tail Ag Enterprises, LLC | v170271_ex31-1.htm |
| EX-32.1 - Otter Tail Ag Enterprises, LLC | v170271_ex32-1.htm |
EMPLOYMENT
AGREEMENT
CHIEF
EXECUTIVE OFFICER
AMENDED
AND RESTATED – SEPTEMBER 9, 2009
This
Employment Agreement ("Agreement"), originally made effective the 1st day of
December, 2008, as amended and restated effective September 9, 2009, is by and
between Otter Tail Ag
Enterprises, LLC, a Minnesota limited liability company (“Company”), and
Anthony Hicks, a
Minnesota resident ("Executive").
RECITALS
WHEREAS, Company is a limited liability
company organized for the purpose, among other things, of operating an ethanol
plant and associated business, with its principal place of business near Fergus
Falls, Minnesota; and
WHEREAS, Company seeks to continue to
retain Executive as Chief Executive Officer under the terms of this Agreement;
and
WHEREAS, the Company and Executive
believe it is in their mutual best interests to enter into an agreement
regarding their mutual obligations relative to Executive's employment with the
Company.
NOW,
THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT.
Company
agrees to continue to employ Executive as Chief Executive Officer/General
Manager, under the terms of this Agreement through the Termination Date, subject
to earlier termination as herein provided. The position shall be
referred to as “Chief Executive Officer.” Executive hereby
accepts such continued employment , and agrees to remain employed with the
Company in accordance with the terms and conditions of this Agreement and the
terms of employment applicable to regular employees of Company, including the
terms and conditions to be set forth in the Company’s Human Resources Policy
Manual to be developed by the Company (the "Handbook"). In the event
of any conflict or ambiguity between the terms of this Agreement and terms of
employment applicable to regular employees, the terms of this Agreement shall
control. Any prior agreements or arrangements concerning Hick’s
employment with the Company, oral or written, between Executive and Hicks are
superseded and replaced by the terms of this Agreement.
2. DUTIES
OF EXECUTIVE.
The
duties of Executive shall include the performance of all of the duties typical
of the office held by Chief Executive Officer of an ethanol plant as described
in the organizational documents of the Company, and such other duties and
obligations as may be assigned or directed by the Company’s Board of Governors
(the "Board"). Executive shall perform all his duties in a
professional, ethical and businesslike manner.
Executive has developed a great deal
of knowledge regarding Company's operations, finance, and
systems. This knowledge will be valuable, if not essential, in
Company's restructuring and reorganization efforts. Executive's
services will be critical in the effort to maximize the value of the Company's
assets and member benefits. In connection with the current and
continuing operations of the Company, Executive will continue to perform a broad
range of services including: development of short-term cash flows,
forecasting tools and planning methodologies; developing Company’s business plan
as may be required by lenders in the context of negotiations; assisting the
“working group” of professionals who will be assisting Company in the
reorganization processes or working with the various stakeholders to improve the
coordination of the effort in restructuring; assisting with testimony before the
various courts; and assisting with the preparation of such pleadings as may be
required in any bankruptcy matter, including any plan of
reorganization. In that respect, Executive will serve as Company's
chief restructuring officer and shall report directly to the Company's Board of
Directors. These duties and roles represent an increase in
responsibility and time commitment from Executive supporting revised
compensation arrangements, in order to secure Executive's continued availability
for Company's services. Accordingly, the Company will make a one-time
retention payment to Executive on September 9, 2010, in the amount of
$30,000.00. Notwithstanding anything to the contrary in this
contract, Executive agrees to continue his employment without voluntary early
termination through at least December 31, 2009. Commencing January 1,
2010 this Agreement is terminable by Executive as set forth in Section 5(C), or
by the Company as set forth in Section 5(B) or 5(D).
Executive
agrees to serve the Company faithfully and to the best of his abilities, and to
devote his full time, attention, and efforts to the business and affairs of the
Company during the term of his employment with the Company. Executive
will not, during the term of this Agreement or his employment with the Company,
directly or indirectly engage in any other part time or full time employment or
business, either as an employee, employer, consultant, principal, officer,
director, advisor, or in any other capacity, either with or without
compensation, without the prior written consent of the
Board. Executive represents to the Company that he is under no
contractual commitments that are inconsistent with his obligations set forth in
this Agreement or that would preclude his employment with the
Company.
3. COMPENSATION.
Executive's
salary during the term of his employment with the Company under this Agreement
will be payable in installments according to the Company's regular payroll
schedule. Executive's base annualized salary during the term of this
Agreement shall be as follows (the “Base Salary”):
Start Date through December 31,
2010: $137,000.00
Executive
shall have the opportunity to earn annual discretionary bonuses which shall be
considered by the Board first in November, 2009, and next in November, 2010,
depending on the fiscal condition of the Company.
Provided
Executive meets the standard requirements of qualifying to be a member of the
Company, Executive will receive a profit's interest on a total of an additional
10,000 Class A member units of the Company at a zero basis, with ownership of
said units to vest as follows (the "Vesting Dates"):
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January
1, 2009-4,500
December
31, 2009– 4,500 Units Vest
December
31, 2010 – 1,000 Units Vest
Vesting is contingent upon Executive
being employed with the Company on any of the Vesting Dates. A
precondition of any Compensation to be paid under this Agreement is Executive's
performance of his duties, compliance with this Agreement, and compliance with
the regulations governing plant operations.
4. BENEFITS.
In
addition to the compensation described in Section 3 of this Agreement, Executive
will be entitled to certain additional benefits afforded to the Chief Executive
Officer position, as well as those benefits generally available to employees of
the Company. Benefits afforded are generally subject to being
altered, modified, discontinued, amended, or otherwise changed by the
Company.
A. Vacation/Sick
Leave. Executive will be entitled to paid time off and
extended illness bank benefits or vacation/sick leave benefits as set forth in
the Handbook. Executive will be allowed up to three weeks of vacation annually,
and up to six days of sick leave annually, or their equivalent in
PTO/EIB.
B. Health and Hospitalization
Insurance. Executive shall be afforded health and
hospitalization insurance coverage pursuant to the Company's plans afforded
other employees, with the Company paying health and hospitalization insurance
premiums for Executive’s individual coverage.
C. Other
Benefits. Executive shall also be afforded the right to
participate in any other benefit plans now or later available to other Company
employees.
D. 401K. Executive
shall be entitled to participate in Company's 401K savings plan, on the basis of
the same availability to other Company employees.
E. Automobile. Company
has a motor vehicle for company use. The vehicle will be used for administrative
purposes by Executive and other Company employees primarily, but may be used by
Executive for personal use. A mileage log shall be kept by Executive
noting all business use and personal use miles, and this log shall be utilized
to do a personal value calculation to be reflected on Executive's W-2 form each
year.
F. Expense
Reimbursement. Executive shall be entitled to
reimbursement for all reasonable expenses, including travel and entertainment,
incurred by Executive in the performance of Executive's duties pursuant to
policies adopted by the Board. Executive will maintain records and written
receipt as required by the Company policy and reasonably requested by the board
of directors to substantiate such expenses.
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G. Miscellaneous. Company
will provide Executive with a cellular phone and service plan, personal
computer, PDA, and such other equipment and tools as are reasonably necessary
for Executive to perform Executive's duties. Company shall reimburse
Executive or pay dues or fees incurred by Executive in ethanol industry related
programs, organizations, and education programs as the Company may, from time to
time, authorize Executive to participate in. Executive is authorized
and directed to involve himself in and participate in the activities of such
organizations related to the ethanol industry as Executive, in his reasonable
discretion, and such other organizations related to the ethanol industry as
Executive, in his reasonable discretion, deems appropriate and necessary, and
such activities shall be regarded as part of Executive's duties as Chief
Executive Officer.
5. TERM
AND TERMINATION.
A. Term. The term of
Executive's employment with the Company pursuant to this Agreement shall
commence on the Start Date, and it shall continue in effect for a period
terminating on December 31, 2010 (the “Termination Date”), unless earlier
terminated as provided in this Agreement. On the Termination Date,
this Agreement and Executive’s employment with the Company shall terminate
without any further action, but may be renewed or extended upon the mutual
written agreement of Executive and Company. In the sixty- (60-) day
period preceding the Termination Date, or earlier as agreed to by the parties,
Company and Executive will engage in good faith discussions regarding extension
of this Agreement and Executive's employment with the Company.
B. Termination By Company
Without Cause. Notwithstanding any provision of this Agreement
or applicable law to the contrary, Executive's employment with the Company and
this Agreement may be terminated by the Company, acting by and through the
Board, at any time prior to the Termination Date without Cause (as that term is
defined herein), in its sole discretion and at its election, effective upon
sixty (60) days’ prior written notice to Executive or such later date as
determined by the Board. In the event of such termination, the
Company shall pay to Executive a sum equal to six months of his then annual
salary (the “Severance Payment”). In the event of termination
pursuant to this section, Company’s sole obligation will be to pay the Severance
Payment and Executive’s salary at the pro-rated Base Salary to the termination
date included in Executive's original termination notice. As a condition to
receiving the Severance Payment, Executive will execute and deliver to Company a
release of all claims against Company, its officers, trustees, employees,
affiliates, or other agents or representatives from any and all legal and
equitable claims, of any nature whatsoever.
C. Termination By
Employee. Executive's employment with the Company and this
Agreement may be terminated by Executive at any time prior to the Termination
Date, effective upon sixty (60) days' prior written notice to the Company. This
Agreement and Executive’s employment with the Company will be deemed terminated
by Employee upon the occurrence of any of the following events: (i) the death of
Executive; or (ii) Executive's inability to carry on the essential functions of
his usual and customary duties, because of illness or sickness, for a period of
an aggregate six (6) months. In the event of termination pursuant to
this section, Company’s sole obligation will be to pay Executive’s salary at the
pro-rated Base Salary to the termination date included in Executive's original
termination notice or the date of death or disability.
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D. Termination by Company for
Cause. In the event that Executive is in breach of any
obligation owed Company in this Agreement, or engages in any of the following
conduct which shall constitute "Cause," then Company shall have the right, at
its discretion, to terminate this Agreement and Executive's employment with the
Company upon five (5) days' written notice to Executive.
Grounds
for termination of this Agreement and Executive's employment with the Company,
for Cause, includes:
i. Executive
habitually and willfully neglects the duties to be performed by
him;
ii. Executive
engages in any conduct which is dishonest, or disloyal to Company, or materially
damages the reputation or standing of the Company;
iii. Executive
is convicted of any crime involving theft or dishonesty, or comprising a felony
level offense;
iv. Executive
violates material Company rules, regulations, directives, or
policies;
v. Executive
engages in conduct unbecoming an officer position which materially impairs the
Company's operations or Executive's effectiveness in his work;
vi. Other
good and sufficient grounds constituting similar serious
misconduct.
Except
for termination on the basis of Subdivisions D(ii), D(iii), or D(iv),
Executive's employment shall not be terminated upon any of the above specified
grounds constituting Cause, unless he shall have failed to correct a deficiency
to the satisfaction of Company, at its discretion, after having been given
written notice of the specified items of nonperformance and a reasonable amount
of time, not to exceed thirty (30) days within which to correct the claimed
failure to perform. Any recurrence of conduct for which notice was
previously given shall constitute grounds for immediate
termination.
In event
of termination of this Agreement pursuant to this section, Company's sole
obligation will be to pay Executive’s then earned salary at the pro-rated Base
Salary to the termination date.
6. BOARD MEETING
ATTENDANCE.
Executive
shall be notified of and attend all annual, regular, and special meetings of the
Board, but in a non-voting capacity.
7. SUCCESSOR
TRANSITION.
Executive
shall assist Company in transitioning to Executive's successor to the Chief
Executive Officer positions as reasonably requested by the Company.
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8. CONFIDENTIAL
INFORMATION; INTELLECTUAL PROPERTY.
In
connection with this Agreement, and as a condition to Company continuing to
employ Executive, Executive will execute and deliver a confidential information
and intellectual property agreement under which Executive will agree (i) during
the term of his employment with the Company and thereafter, to not use any
Company information, except for the purposes of performing his duties and
services for the Company, and never in competition with the Company; and (ii)
that all developments, know-how, research, processes, or other concepts
developed by Executive during the course and scope of his employment with
Company, shall be the exclusive property of the Company.
A breach
of said companion agreement will be a breach of this Agreement. The obligations
of Executive under this section shall survive termination of this
Agreement.
9. NON-COMPETITION;
NON-SOLICIT.
As a
condition of this Agreement and the arrangements set forth herein, Hicks agrees
to a non-competition and non-solicit arrangement under which Hicks agrees that
for a period of two (2) years after the termination of Hick's employment with
the Company, i) Hicks will not consult for, be employed with, or
otherwise perform services for, any person or entity in the ethanol business
within a geographic area as follows: any area located within 100
miles of any outer city limit of Fergus Falls, MN; and ii) that Hicks will not,
directly or indirectly, solicit any customer, supplier, employee, or other
representative of the Company to withdraw, curtail, or cancel its business with
the Company, or leave the employ of the Company, as the case may
be. The obligations of Executive under this section shall survive
termination of this Agreement. An express condition of the
effectiveness of the foregoing provisions is payment to Executive of the
Severance Payments . In the event that the Severance Payment is not
made, Executive shall be released from provisions of this Section
9.
10. MISCELLANEOUS.
A. Notices. Any
notice required by this Agreement or given in connection with it, shall be in
writing and shall be given to the appropriate party by personal delivery, or by
certified mail, postage prepaid, and return receipt requested, or by recognized,
national overnight delivery services;
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If
to Company:
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Otter
Tail Ag Enterprises, LLC
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24096
170th Ave
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Fergus
Falls, MN 56537
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If
to Executive:
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Anthony
Hicks
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24096
170th
Ave
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Fergus
Falls, MN 56537
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Notice
given by certified mail shall be deemed given five (5) days after the notice is
deposited in the mail. All other forms of notice shall be deemed
given on the date of personal delivery or the date of the overnight
delivery. If either party desires to change their address for notice
purposes, prior notice of such address change shall be given to the other party
as set forth in this section.
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B. Final
Agreement. This Agreement and any other agreements referred to
herein are the entire agreement of the parties relating to the subject matter
hereof, and supersede all prior understandings or agreements on the subject
matter hereof. This Agreement may be modified, waived, amended, or
altered only by a further writing that is duly executed by both
parties.
C. Governing Law And
Jurisdiction. This Agreement shall be construed and enforced
in accordance with the laws of the state of Minnesota, without regard to choice
of law or conflict of law provisions. Each party consents to the
state courts of Minnesota, Otter Tail County, as exclusive jurisdiction and
venue to determine any disputes and hear any proceedings related to or arising
from this Agreement or the parties' employer/employee relationship, subject to
the Dispute Resolution provisions of Subdivision G below. The parties
waive any argument or objection to such jurisdiction and venue and agree that it
is mutually convenient.
D. Headings. Headings
used in this Agreement are provided for convenience only and shall not be used
to construe meaning or intent.
E. No
Assignment. Neither this Agreement nor any or interest in this
Agreement may be assigned by Executive without the prior express written
approval of Company, which may be withheld by Company at Company's absolute
discretion.
F. Severability. If
any term of this Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, then this Agreement, including all of the remaining
terms, will remain in full force and effect as if such invalid or unenforceable
term had never been included.
G. Dispute
Resolution. For purposes of this provision, the term “dispute”
means any and all disputes between Company, including its officers, governors,
employees, on the one hand; and Executive, on the other hand, arising out of or
relating to the making, performance, interpretation, or application of this
Agreement, or in any way relating to, concerning, or arising from Executive's
employment with the Company, or the termination of this Agreement or Executive's
employment with the Company, and specifically includes, without limitation, any
claim that a termination of employment by Company was not for cause, that
Executive was constructively discharged or terminated, or
otherwise.
If a
dispute arises, the parties agree first to try in good faith for a period of
sixty (60) days to settle the dispute by mediation under the Commercial
Mediation Rules of the American Arbitration Association, before resorting to
arbitration. Thereafter, any remaining unresolved dispute,
controversy or claim shall be submitted to binding arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association as modified
by this Section; PROVIDED, that this Section shall not require use of the
American Arbitration Association (only that such Rules as modified by this
Section shall be followed). The arbitration shall be conducted in the
State of Minnesota. Any award rendered shall be final and conclusive
upon the parties and a judgment thereon may be entered in any court having
competent jurisdiction. The parties shall (i) agree upon and appoint
as the arbitrator a retired former trial Judge in Minnesota; (ii) direct the
arbitrator to follow substantive rules of law and the Federal Rules of Evidence;
(iii) allow for the parties to conduct discovery pursuant to the rules then in
effect under the Federal Rules of Civil Procedure for a period not to exceed 60
days; (iv) require the testimony to be transcribed; and (v) require the award to
be accompanied by findings of fact and a statement of reasons for the
decision. The cost and expense of the arbitrator and location costs
shall be borne equally by the parties to the dispute. All other costs
and expenses, including reasonable attorney's fees and expert's fees, of all
parties incurred in any dispute which is determined and/or settled by
arbitration pursuant to this Section shall be borne by the party incurring such
cost and expense. Except where clearly prevented by the area in dispute, the
parties agree to continue performing their respective obligations under this
Agreement while the dispute is being resolved.
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H. Surrender of Records and
Property. Upon termination of employment with the Company,
Executive must deliver promptly to the Company all records, manuals, books,
blank forms, documents, letters, memoranda, notes, notebooks, reports, data,
tables, calculations or copies thereof, which are the property of the Company or
which relate in any way to the business, products, practices or techniques of
the Company, and all other property of the Company such as keys, computers, cell
phones and other tools of the trade, trade secrets and confidential information
of the Company, including, but not limited to, all documents which in whole or
in part contain any trade secrets or confidential information of the Company,
which in any of these cases are in his possession or under his
control. Notwithstanding the foregoing, at no cost to Executive,
Executive shall be permitted to retain his cellular phone and phone number, with
the requirement that Executive is responsible for service plans after any date
of termination. Additionally, at no cost to Executive, Executive
shall be permitted to retain his personal notebook computer, on the condition
that Executive pays the cost of cleansing the computer of any Company
information, which cleansing shall be done as directed by the
Company.
I. Restatement and
Amendment. This Agreement amends and fully restates the prior
agreement entered into between the parties dated December 1, 2008. As
of September 9, 2009, the terms and conditions of this Agreement shall govern
the parties relationship.
IN
WITNESS WHEREOF, the Executive and the Company enter into this Agreement dated
effective the 9th day of September, 2009.
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OTTER
TAIL AG ENTERPRISES, LLC
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By
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Its
Board Chair
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Date:
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Anthony
Hicks
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Date:
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