EXHIBIT 10.2
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement ("Agreement") between Minnesota Corn
Processors, LLC, a Colorado limited liability company (the "Company"), and
Xxxxxxx X. Xxxxxx (the "Employee") is made and entered into effective as of
April 22, 2002 (the "Effective Date").
WHEREAS, Employee is a key employee of the Company; and
WHEREAS, it is in the best interest of the Company and its members if
the key employees can approach material business decisions objectively and
without concern for their personal situation; and
WHEREAS, the Company recognizes that the possibility of a Change of
Control (as defined below) of the Company may result in the early departure of
key employees to the detriment of the Company and its members; and
WHEREAS, the Board of Directors of the Company (the "Board") has
authorized and directed the Company to enter into this Agreement or other
similar agreements in order to help retain and motivate key employees and to
help ensure continuity of key employees;
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Employee agree as
follows:
1. TERM OF AGREEMENT.
(a) The term of this Agreement ("Term") shall commence on
the Effective Date and shall continue in effect
through the six-month anniversary of the Effective
Date. In the event there is a definitive agreement
signed by MCP and another entity within the
aforementioned six month period that would give rise
to a Change of Control occurrence, then the term of
this Agreement shall extend to the date of that
Change of Control occurrence.
(b) Termination of this Agreement shall not alter or
impair any rights of Employee arising hereunder on or
before such termination.
2. CERTAIN DEFINITIONS.
(a) "Change of Control" means the occurrence of any of
the following:
(i) any "person" (as such term is used in
Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the
"Exchange Act")), other than a trustee or
other fiduciary holding securities under an
employee benefit plan of the Company,
becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act),
directly or indirectly, of Class A Units of
the Company representing 35% or more of the
voting power of the Company's then
outstanding Class A Units;
(ii) during any period of two consecutive years
(not including any period prior to the
effective date of this Agreement),
individuals who at the beginning of such
period constitute the Board, and any new
director (other than a director designated
by a person who has entered into an
agreement with the Company to effect a
transaction described in clause (i), (iii)
or (v) of this Change of Control definition)
whose election by the Board or nomination
for election by the Company's members was
approved by a vote of at least two-thirds of
the members of the Board then still in
office who either were members of the Board
at the beginning of the period or whose
election or nomination for election was
previously so approved, cease for any reason
to constitute at least 75% of the members
thereof;
(iii) the consummation of a merger, acquisition or
consolidation of the Company with or by any
other corporation or entity;
(iv) the Board of Directors of the Company
approve a plan of complete liquidation or
dissolution of the Company or a court orders
a complete liquidation of the Company; or
(v) the sale, lease, disposition, exchange or
transfer of all or substantially all of the
assets of the Company.
(b) "Annual Base Compensation" means the sum of the
dollar amount specified in the sixth column of
Schedule A calculated based on the following: (i) the
Employee's projected salary had Employee continued to
be the Senior Vice President of Sales and Marketing
including bonus, (ii) the highest amount paid by the
Company with respect to Employee's allocable share of
the Company's life and health insurance premiums for
any of the three years immediately prior to the year
in which the Change of Control occurs, (iii) the
highest amount of possible pension contributions made
by the Company with respect to the Employee for any
of the three years immediately prior to the year in
which the Change of Control occurs and (iv) the
highest amount of the Company's possible 401(k)
contribution made by the Company with respect to
Employee for any of the three years immediately prior
to the year in which the Change of Control occurs.
(c) "Adjusted Annual Compensation" means the Annual Base
Compensation as increased by an annual interest
factor of 3% compounded annually for each full year
of service including the current year even if not
completed.
3. CHANGE OF CONTROL PAYMENT
(a) If a Change of Control occurs during the Term,
Employee shall receive the following from the
Company:
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(i) immediately at the time of the Change of
Control, the Company shall pay to Employee
in a lump sum, in cash, payable in United
States currency, an amount equal to 5.26
times the Adjusted Annual Compensation; and,
(ii) notwithstanding anything in any Company
incentive plan or arrangement to the
contrary, all incentive awards and/or
deferred amounts of Employee thereunder
shall become 100% vested and payable in full
in cash immediately on the date of the
Change of Control.
(b) The Company may withhold from any amounts payable
under this Agreement all such taxes as it shall be
required to withhold pursuant to any applicable law
or regulation.
(c) Company may not withhold any sums due payable to
Employee under this Agreement.
(d) If Employee's employment with the Company terminates
prior to, but within six months of, the date on which
a Change of Control occurs and it is reasonably
demonstrated by Employee that such termination of
employment was by the Company (including a
constructive discharge) in connection with or in
anticipation of the Change of Control, then, for
purposes of this Agreement, the Change of Control
shall be deemed to have occurred on the date
immediately prior to the date of Employee's
termination of employment.
(e) In the event the Employee dies or becomes disabled
after a definitive agreement relating to a Change of
Control event or the Company's Board of Directors has
approved a Change of Control event has been entered
into but prior to the effective date of the Change of
Control, the Employee (or, in the event of his death,
his estate) shall receive the amounts payable herein
within fifteen (15) days of the effective date of the
Change of Control. For purposes of this section,
"disability" shall mean due to sickness or injury
where an Employee is unable to perform the material
duties of the Employee's occupation with the Company.
4. PARACHUTE TAX GROSS UP.
If any payment made, or benefit provided, to or on behalf of
Employee pursuant to this Agreement or otherwise ("Payments")
results in Employee being subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code (or any successor or
similar provision) ("Excise Tax"), the Company shall promptly
pay Employee an additional amount in cash (the "Additional
Amount") such that after payment by Employee of all taxes,
including, without limitation, any income taxes and Excise
Tax, imposed on the Additional Payment, Employee retains an
amount of the Additional Payment equal to the Excise Tax
imposed on the
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Payments. Such determinations shall be made by the Company's
independent certified public accountants.
5. NO OFFSET.
The amount of any payment or benefit provided for in this
Agreement shall not be reduced or offset against any amount
claimed to be owed by Employee to the Company or otherwise.
6. SUCCESSOR AGREEMENT.
The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly in writing prior to the effective
date of such succession and agree to perform this Agreement in
the same manner and to the same extent that the Company would
be required to perform if no succession had taken place.
Failure of the successor to so assume as provided herein shall
constitute a breach of this Agreement and immediately entitle
Employee to the payments hereunder as if triggered by a Change
of Control.
7. NOTICES.
All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed, in either case, to the Company's
headquarters or to such other address as either party shall
have furnished to the other in writing in accordance herewith.
Notices and communications shall be effective when actually
received by the addressee.
8. GOVERNING LAW.
This Agreement will be governed by and construed in accordance
with the laws of the state of Minnesota without regard to
conflicts of law principles.
9. ENTIRE AGREEMENT.
This Agreement, other than the Minnesota Corn Processors
Supplemental Employee Retirement Plan, employment contracts of
any Employees, and any applicable severance agreements, is an
integration of the parties' agreement and no agreement or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
10. SEVERABILITY.
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in
full force and effect.
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11. AMENDMENT AND WAIVERS.
No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Employee and such
authorized member of the Company as may be specifically
authorized by the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or in
compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
12. COUNTERPARTS.
The Agreement may be executed in several counterparts, each of
which shall be deemed an original but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement effective for all purposes as of the Effective Date.
MINNESOTA CORN PROCESSORS, LLC
By: /s/ L. Xxx Xxxxxxxx
_________________________
Name: L. Xxx Xxxxxxxx
_________________________
Title: President & Chief
Executive Officer
_________________________
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxx
__________________________
