EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is effective as of
September 29, 2006, by and between GREEN PLAINS RENEWABLE ENERGY, INC., an Iowa
corporation (the "Company"), and XXXXX XXXXXX, an individual (the "Executive").
In consideration of the promises and mutual covenants contained herein,
the parties hereto agree as follows:
1. Employment; Location. The Company hereby employs Executive and
Executive hereby accepts such employment in Shenandoah, Iowa, or in such other
location as may be mutually agreed between the parties.
2. Term. The Company agrees to employ Executive and Executive agrees to
accept employment with the Company for a term (the "Term") commencing on the
date hereof and continuing for a three-year period thereafter, unless earlier
terminated pursuant to Section 6 below. The Term shall be automatically renewed
for successive periods of one (1) years at each otherwise scheduled expiration
of the Term, unless either the Company or Executive objects (in their respective
sole discretion) to such renewal by providing thirty (30) days' prior written
notice to the other party.
3. Duties and Authorities. During the Term (as defined below):
3.1 Executive shall be appointed and serve as the Chief
Financial Officer of the Company. If appointed or requested by the Company's
Board of Directors (the "Board"), the Executive shall also serve during all or
any part of the Term as any other officer (so long as Executive remains employed
in the position of Chief Financial Officer of the Company) of the Company or any
subsidiary thereof without any additional compensation therefor other than as
specified in this Agreement. Executive shall have responsibilities, duties and
authority reasonably accorded to and expected of such positions and such other
responsibilities and duties as required by the Bylaws of the Company and as
reasonably assigned by the Board and/or CEO from time to time.
3.2 Except as otherwise expressly provided herein, Executive
shall diligently execute such duties and shall devote his full time, skills and
efforts to such duties, subject to the general supervision and control of the
Board. Except as otherwise expressly approved by the Board, Executive will not
engage in any outside activities that will impair his ability to devote his
full-time efforts to the performance of his duties under this Agreement.
Notwithstanding the above, it is agreed that Executive may spend up to five (5)
hours per month working in a family owned business known as Xxxxxx Enterprises,
Inc.
4. Compensation and Benefits. The Company shall pay Executive, and
Executive accepts as full compensation for all services to be rendered to the
Company, the following compensation and benefits:
4.1 Base Salary. The Company shall pay Executive a salary of
One Hundred Thirty-Five Thousand Dollars ($135,000) per year, payable in equal
installments twice monthly or at more frequent intervals in accordance with the
Company's customary pay schedule. Executive's base salary shall be raised to One
Hundred Fifty Thousand Dollars ($150,000) per year when the Company has an
ethanol plant that is producing ethanol for commercial sale (the "First
Production Date").
4.2 Equity Incentive Compensation. The Company has retained a
consulting firm with expertise in employment compensation to assist it in
designing an equity incentive compensation plan for its officers and directors
and to consult with the Company on other compensation issues. It is anticipated
that the Company will consider and implement an equity compensation plan based,
in part, on the recommendations received. Executive will be entitled to
participate in the plan. It is anticipated that the equity compensation plan
that is agreed upon by the Executive and the Company, will vest to the benefit
of Executive over a 3 to 5 year time period.
4.3 Bonus Compensation.
a. General. Executive shall also be eligible, during
the Term, to receive such cash bonuses and additional compensation
(collectively, the "Bonus Compensation"), on an annual basis as the Board may,
in its discretion, approve, which may be up to one third of Executive's Base
Salary. The Bonus Compensation shall be payable and issued in accordance with
the applicable payroll option and/or other compensation policies and plans of
the Company as from time to time in effect.
b. Signing Bonus. Executive shall be entitled to a
signing bonus in the amount of 1,250 shares of the Company's restricted common
stock (the "Bonus Shares"). The Bonus Shares will not be deemed earned, and
shall not be issued, until the First Production Date. If Executive is working
for the Company on the First Production Date, then the shares shall be issued to
Executive and shall be deemed to be fully vested. If Executive is not working
for the Company on the First Production Date, then Executive shall not be
entitled to any of the Bonus Shares.
4.4 Additional Benefits. Executive shall be permitted, during
the Term, if and to the extent eligible, to participate in any group life,
hospitalization or disability insurance plan, health or dental program, pension
plan, similar benefit plan or other so-called "fringe benefits" of the Company
in accordance with the rules (if any) established by the Board in its discretion
for participation in any such plans as may be in effect from time to time.
4.5 Vacation/Personal Leave/Sick Leave. Executive shall be
entitled to an aggregate of one (1) day leave for vacation/personal leave/sick
lease (hereinafter "vacation") per calendar month during each calendar year
during the Term at full pay. Executive agrees to give reasonable notice of his
vacation scheduling requests, which shall be allowed subject to the Company's
reasonable business needs. Up to a maximum of twelve (12) days vacation may be
carried over from one fiscal year to the next fiscal year. Any vacation that is
not used during any fiscal year (in excess of the twelve (12) day maximum
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carryover referenced in the prior sentence) shall be lost and may not be carried
forward to a future period. No compensation shall be paid by the Company for any
unused vacation. During each fiscal year, Executive must take at least one, five
(5) consecutive days of vacation.
4.6 Deductions. The Company shall have the right to deduct
from the compensation due to Executive hereunder any and all sums required for
social security and withholding taxes and for any other federal, state or local
tax or charge which may be hereafter enacted or required by law as a charge on
the compensation of Executive.
5. Business Expenses. Executive may incur reasonable, ordinary and
necessary business expenses in the course of his performance of his obligations
under this Agreement, including expenses for travel, food and entertainment. The
Company shall reimburse Executive for all such business expenses if (a) such
expenses are incurred by Executive in accordance with the Company's business
expense reimbursement policy, if any, as may be established and modified by the
Company from time to time, and (b) Executive provides to the Company a record of
(1) the amount of the expense, (2) the date, place and nature of the expense,
(3) the business reason for the expense and (4) all supporting documentation as
may be required from time to time by the relevant tax laws or regulations.
6. Termination.
6.1 Termination for Cause. The Term and Executive's employment
hereunder shall be terminable for Cause (as defined below) upon written notice
from the Company to Executive. As used in this Agreement, "Cause" shall mean one
of the following: (a) a material breach by Executive of the terms of this
Agreement (including without limitation habitual neglect of or deliberate or
intentional refusal to perform any of his material duties and obligations under
this Agreement) other than due to Executive's death or Disability (as defined in
Section 6.3 below), not cured within two (2) weeks from receipt of notice from
the Board of such breach, (b) material wrongful misappropriation of any money,
assets or other property of the Company or any subsidiary or affiliate of the
Company, (c) the conviction of Executive for any felony or a crime involving
moral turpitude, or (d) Executive's chronic alcoholism or chronic drug
addiction.
6.2 Termination without Cause. The Company may terminate
Executive's Employment at any time for any reason (or no reason) other than
Cause, as determined by the Board, provided the Company continues to pay
Executive's full base salary, any Bonus Compensation already resolved by the
Board (including the signing bonus of 1,250 shares of the Company's restricted
common stock, and other benefits as provided in Sections 4.1 through 4.4 for the
period (the "Severance Period") equal to the lesser of (a) the remaining portion
of the Term or (b) six (6) months.
6.3 Termination for Death or Disability. In accordance with
applicable law, the Board may terminate the Term for the death or Disability (as
defined below) of Executive. As used in this Agreement, "Disability" shall mean
Executive is unable to perform (except due to chronic alcoholism or chronic drug
addiction) the essential functions of his job and render services of the
character previously performed in the ordinary course and that such inability
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continues for a period of at least two (2) consecutive weeks. Termination
resulting from Disability may only be effected after at least two (2) weeks
written notice by the Company of its intention to terminate Executive's
employment. Executive shall receive full compensation, benefits, and
reimbursement of expenses pursuant to Sections 4 and 5 above from the date the
Disability begins until the date which is ninety (90) days following the notice
of termination under this Section 6.3, and no other amounts shall be payable
(except pursuant to any Company disability or health plan in which Executive is
then enrolled). In the event of Executive's death, the Company shall pay his
estate full compensation, benefits and reimbursement of expenses pursuant to
Sections 4 and 5 above through the date of such death and shall continue any
health benefits in which Executive's family was participating at the time of
such death for a period of not less than (a) the then otherwise remaining
portion of the Term or (b) such other period as may be required by applicable
law.
6.4 Termination by Executive. Executive may terminate the Term
and his employment with the Company and resign from any and all positions as
officer or director of the Company and/or its subsidiaries only for Good Reason
(as defined below). As used in this Agreement, "Good Reason" shall mean any of
the following: (a) material breach of this Agreement by the Company that
continues following not less than two (2) weeks written notice from Executive of
such breach or (b) a requirement by the Company that the Executive relocate to a
location other than Shenandoah, Iowa or Omaha, Nebraska, or (c) bonus and equity
compensation plan to be presented to Executive on or before January 1, 2007 is
deemed to be unacceptable by Executive. If Executive desires to terminate for
Good Reason under clause (b) above, Executive shall provide written notice of
such determination not later than 30 days of being informed in writing by the
Company of the relevant requirement or event. If Executive terminates for Good
Reason, Executive shall be entitled to all amounts due and payable through the
termination date under Sections 4 and 5 above and the severance payments
described in Section 6.2, and no other amounts shall be payable, except in the
case of termination for Good Reason under clause (c) above in which case
Executive shall only be entitled to all amounts due and payable through the
termination date under Sections 4 and 5 above and no severance payments. If
Executive terminates without Good Reason he will give a ninety (90) day written
notice to Company.
6.5 Effect of Termination. In the event Executive's employment
is terminated, all obligations of the Company and all obligations of Executive
shall cease except that the terms of this Section 6 and of Sections 7 through 20
below shall survive such termination. Executive acknowledges that, upon
termination of his employment, he is entitled to no other compensation,
severance or other benefits other than those specifically set forth in this
Agreement. The provisions of this Section 6 are intended to be and are exclusive
and in lieu of any other rights or remedies to which Executive may otherwise be
entitled, either at law, tort or contract, in equity, or under this Agreement,
as a result of any termination of Executive's employment.
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7. Covenant Not to Compete.
7.1 Covenant. Executive hereby agrees that, while he is
employed or engaged by the Company as either an employee or as a consultant
pursuant to this Agreement and at any time when Executive is receiving severance
payments from the Company, Executive will not directly or indirectly compete (as
defined in Section 7.2 below) with the Company in the U.S. ethanol industry.
Executive further agrees that if Executive were to terminate his employment with
the Company without Good Reason, that he will not directly or indirectly compete
(as defined in Section 7.2 below) with the Company in the U.S. ethanol industry
for period of one (1) year following such termination. Executive shall not
otherwise be prohibited from competing with the Company as a result of this
Section 7 after the termination of this Agreement.
7.2 Direct and Indirect Competition. As used herein, the
phrase "directly or indirectly compete" shall include owning, managing,
operating or controlling, or participating in the ownership, management,
operation or control of, or being connected with or having any interest in, as a
stockholder, director, officer, employee, agent, consultant, assistant, advisor,
sole proprietor, partner or otherwise, any business (other than the Company's)
(a) engaged in the production, marketing, sale or distribution of ethanol, or
(b) which is the same as, or similar to, or competitive with any business
conducted by the Company or any of the Company's subsidiaries; provided,
however, that this prohibition shall not apply to ownership of less than one
percent (1%) of the voting stock in companies whose stock is traded on a
national securities exchange or in the over-the-counter market.
8. Confidential Information. Executive acknowledges that during his
employment or consultancy with the Company he will develop, discover, have
access to and/or become acquainted with technical, financial, marketing,
personnel and other information relating to the present or contemplated products
or the conduct of business of the Company which is of a confidential and
proprietary nature ("Confidential Information"). Executive agrees that all
files, records, documents and the like relating to such Confidential
Information, whether prepared by him or otherwise coming into his possession,
shall remain the exclusive property of the Company, and Executive hereby agrees
to promptly disclose such Confidential Information to the Company upon request
and hereby assigns to the Company any rights which he may acquire in any
Confidential Information. Executive further agrees not to disclose or use any
Confidential Information and to use his best efforts to prevent the disclosure
or use of any Confidential Information either during the term of his employment
or consultancy or at any time thereafter, except as may be necessary in the
ordinary course of performing his duties under this Agreement. Upon termination
of Executive's employment or consultancy with the Company for any reason, (a)
Executive shall promptly deliver to the Company all materials, documents, data,
equipment and other physical property of any nature containing or pertaining to
any Confidential Information, and (b) Executive shall not take from the
Company's premises any such material or equipment or any reproduction thereof.
9. Change of Control. For the purpose of this Agreement, a "Change in
Control" shall mean:
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(a) The acquisition, directly or indirectly, other than from the
Company, by any person, entity or "group" (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), excluding, for this purpose, the Company, its subsidiaries, and
any employee benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company) (a "Third Party") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 50% of the combined voting power of the Company's
then outstanding voting securities entitled to vote generally in the election of
directors; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the Incumbent Directors who are
directors at the time of such vote shall be, for purposes of this Agreement, an
Incumbent Director; or
(c) Consummation of (i) a reorganization, merger or consolidation, in
each case, with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation (other
than the acquiror) do not, immediately thereafter, beneficially own more than
50% of the combined voting power of the reorganized, merged or consolidated
company's then outstanding voting securities entitled to vote generally in the
election of directors, or (ii) a liquidation or dissolution of the Company or
the sale of all or substantially all of the assets of the Company (whether such
assets are held directly or indirectly) to a Third Party.
9.1 If a change of control of the Company were to occur,
Executive shall be paid a bonus of one hundred thousand dollars ($100,000), all
equity in which Executive may have any interest will vest immediately, and there
shall no longer be any restriction on any restricted shares Executive may hold.
10. Inventions.
10.1 Disclosure of Inventions. Executive hereby agrees that if
he conceives, learns, makes or first reduces to practice, either alone or
jointly with others, any "Employment Inventions" (as defined in Section 9.3
below) while he is employed by the Company, either as an employee or as a
consultant, he will promptly disclose such Employment Inventions to the Board or
to any other Company officer designated by the Board.
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10.2 Ownership, Assignment, Assistance and Power of Attorney.
All Employment Inventions shall be the sole and exclusive property of the
Company, and the Company shall have the right to use and to apply for patents,
copyrights or other statutory or common law protection for such Employment
Inventions in any country. Executive hereby assigns to the Company any rights
which he may acquire in such Employment Inventions. Furthermore, Executive
agrees to assist the Company in every proper way at the Company's expense to
obtain patents, copyrights and other statutory or common law protections for
such Employment Inventions in any country and to enforce such rights from time
to time. Specifically, Executive agrees to execute all documents as the Company
may desire for use in applying for and in obtaining or enforcing such patents,
copyrights and other statutory or common law protections together with any
assignments thereof to the Company or to any person designated by the Company.
Executive's obligations under this Section 9 shall continue beyond the
termination of his employment under this Agreement, but the Company shall
compensate Executive at a reasonable rate after any such termination for the
time which Executive actually spends at the Company's request in rendering such
assistance. In the event the Company is unable for any reason whatsoever to
secure Executive's signature (after reasonable attempts to do so) to any lawful
document required to apply for or to enforce any patent, copyright or other
statutory or common law protections for such Employment Inventions, Executive
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as his agents and attorneys-in-fact to act in his stead to
execute such documents and to do such other lawful and necessary acts to further
the issuance and prosecution of such patents, copyrights or other statutory or
common law protection, such documents or such acts to have the same legal force
and effect as if such documents were executed by or such acts were done by
Executive.
10.3 Employment Inventions. The definition of "Employment
Invention" as used herein is as follows: "Employment Invention" means any
invention or part thereof conceived, developed, reduced to practice, or created
by Executive which is: (a) conceived, developed, reduced to practice, or created
by Executive: (i) within the scope of his employment; (ii) on the Company's
time; or (iii) with the aid, assistance, or use of any of the Company's
property, equipment, facilities, supplies, resources, or intellectual property;
(b) the result of any work, services, or duties performed by Executive for the
Company; (c) related to the industry or trade of the Company; or (d) related to
the current or demonstrably anticipated business, research, or development of
the Company.
10.4 Exclusion of Prior Inventions. Executive has identified
on Exhibit A attached hereto a complete list of all inventions which Executive
has conceived, learned, made or first reduced to practice, either alone or
jointly with others, prior to employment with the Company and which Executive
desires to exclude from the operation of this Agreement. If no inventions are
listed on Exhibit A, Executive represents that he has made no such inventions at
the time of signing this Agreement.
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10.5 Inventions of Third Parties. Executive shall not disclose
to the Company, use in the course of his employment, or incorporate into the
Company's products or processes any confidential or proprietary information or
inventions that belong to a third party, unless the Company has received
authorization from such third party and Executive has been directed by the Board
to do so.
11. No Conflicts. Executive hereby represents that, to the best of his
knowledge, his performance of all the terms of this Agreement and his work as an
employee or consultant of the Company does not breach any oral or written
agreement which he has made prior to his employment with the Company.
12. Equitable Remedies. Executive acknowledges and agrees that the
breach or threatened breach by him of certain provisions of this Agreement,
including without limitation Sections 7, 8 or 9 above, would cause irreparable
harm to the Company for which damages at law would be an inadequate remedy.
Accordingly, Executive hereby agrees that in any such instance the Company shall
be entitled to seek injunctive or other equitable relief in addition to any
other remedy to which it may be entitled.
13. Assignment. This Agreement is for the unique personal services of
Executive and is not assignable or delegable in whole or in part by Executive
without the consent of the Board. This Agreement may be assigned or delegated in
whole or in part by the Company and, in such case, the terms of this Agreement
shall inure to the benefit of, be assumed by, and be binding upon the entity to
which this Agreement is assigned.
14. Waiver or Modification. Any waiver, modification or amendment of
any provision of this Agreement shall be effective only if in writing in a
document that specifically refers to this Agreement and such document is signed
by the parties hereto.
15. Entire Agreement. This Agreement constitutes the full and complete
understanding and agreement of the parties hereto with respect to the specific
subject matter covered herein and therein and supersedes all prior oral or
written understandings and agreements with respect to such specific subject
matter.
16. Severability. If any provision of this Agreement is found to be
unenforceable by a court of competent jurisdiction, the remaining provisions
shall nevertheless remain enforceable in full force and effect, and the court
making such determination shall modify, among other things, the scope, duration,
or geographic area of such affected provision to preserve the enforceability
thereof to the maximum extent then permitted by law.
17. Notices. All notices thereunder shall be in writing addressed to
the respective party as set forth below and may be personally served, sent by
facsimile transmission, sent by overnight courier service, or sent by United
States mail, return receipt requested. Such notices shall be deemed to have been
given: (a) if delivered in person, on the date of delivery; (b) if delivered by
facsimile transmission, on the date of transmission if transmitted by 5:00 p.m.
(local time, Shenandoah, Iowa) on a business day or, if not, on the next
succeeding business day; provided that a copy of such notice is also sent the
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same day as the facsimile transmission by any other means permitted herein; (c)
if delivered by overnight courier, on the date that delivery is first attempted;
or (d) if by United States mail, on the earlier of two (2) business days after
depositing in the United States mail, postage prepaid and properly addressed, or
the date delivery is first attempted. Notices shall be addressed as set forth as
set forth on the signature page hereof, or to such other address as the party to
whom such notice is intended shall have previously designated by written notice
to the serving party. Notices shall be deemed effective upon receipt.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa, without reference to the choice
of law provisions thereof.
19. Attorneys' Fees. In the event an action or proceeding is brought by
any party under this Agreement to enforce or construe any of its terms, the
party that prevails by enforcing this Agreement shall be entitled to recover, in
addition to all other amounts and relief, its reasonable costs and attorneys'
fees incurred in connection with such action or proceeding.
20. Construction. Whenever the context requires, the singular shall
include the plural and the plural shall include the singular, the whole shall
include any part thereof, and any gender shall include all other genders. The
headings in this Agreement are for convenience only and shall not limit,
enlarge, or otherwise affect any of the terms of this Agreement. Unless
otherwise indicated, all references in this Agreement to sections refer to the
corresponding sections of this Agreement. This Agreement shall be construed as
though all parties had drafted it.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. Counterparts and
signatures transmitted by facsimile shall be valid, effective and enforceable as
originals.
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IN WITNESS WHEREOF, Executive has signed this Agreement personally and
the Company has caused this Agreement to be executed by its duly authorized
representative.
"Company":
GREEN PLAINS RENEWABLE ENERGY, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: CEO and President
Address:
Green Plains Renewable Energy, Inc.
Attn: Board of Directors
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Fax: 000-000-0000
"Executive":
/s/ Xxxxx Xxxxxx
----------------------------
Xxxxx Xxxxxx, individually
Address:
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EXHIBIT A
EXCLUDED INVENTIONS
NONE
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