EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”), dated as of the 15th day of August, 2006, is
entered into by and between Orion Ethanol, LLC, a Kansas Limited Liability
Company (the “Company”) and Xxxxxxx X. Xxxxxx (“Executive”).
IN
CONSIDERATION of the premises and the mutual covenants set forth below, the
parties hereby agree as follows:
1. Employment.
The
Company hereby agrees to employ Executive as Chief Executive Officer of the
Company, and Executive hereby accepts employment, on the terms and conditions
set forth in this Agreement.
2. Term.
The
term of Executive’s employment by the Company under this Agreement shall
commence on August 16, 2006 (the “Effective Date”) and terminate on August 15,
2008 (the “Employment Period”); provided, however, that commencing on the
one-year anniversary of the Effective Date and each annual anniversary of such
date (the “Renewal Date”), the Employment Period shall be automatically extended
so as to terminate two (2) years from such Renewal Date. If, at least 90 days
prior to the Renewal Date, the Company gives Executive notice that the
Employment Period will not be so extended, this Agreement will continue for
the
remainder of the then current Employment Period and expire. The Employment
Period may be sooner terminated under Section 6 of this Agreement.
3. Position
and Duties.
During
the Employment Period, Executive will report directly to the Board of Directors
of the Company. Executive shall perform all services reasonably required by
the
standards of the ethanol industry to fully execute the duties and
responsibilities associated with such position. Executive will devote
substantially all of his working time, attention and energies (other than
absences due to illness or vacation) to the performance of his duties for the
Company. Notwithstanding the above, Executive will be permitted, to the extent
such activities do not interfere with the performance by Executive of his duties
and responsibilities under this Agreement or violate Sections 11(a), (b) or
(c)
of this Agreement, to (i) manage Executive’s personal, financial and legal
affairs, and (ii) serve on civic or charitable boards or committees.
4. Place
of Performance.
Executive’s place of employment will be the Company’s principal executive
offices in Pratt, Kansas.
5. Compensation
and Related Matters.
(a) Base
Salary.
During
the Employment Period, the Company will pay Executive a base salary of not
less
than $300,000.00 per year (“Base Salary”), in approximate equal installments in
accordance with the Company’s customary payroll practices. Executive’s Base
Salary may be increased, but not decreased, pursuant to annual review by the
Board. In the event Executive’s Base Salary is increased, the increased amount
will then constitute the Base Salary for all purposes of this
Agreement.
(b) Annual
Incentive Bonus.
The
Board shall establish a bonus program for Executive during each year of the
Employment Period.
(c) Welfare,
Pension and Incentive Benefit Plans; Reimbursement for COBRA
Coverage.
During
the Employment Period, Executive (and his spouse and/or dependents to the extent
provided in the applicable plans and programs) will be entitled to participate
in and be covered under all the welfare benefit plans or programs maintained
by
the Company for the benefit of its senior executive officers pursuant to the
terms of such plans and programs including, without limitation, all medical,
life, hospitalization, dental, disability, accidental death and dismemberment
and travel accident insurance plans and programs. In addition, during the
Employment Period, Executive will be eligible to participate in all pension,
retirement, savings and other employee benefit plans and programs maintained
from time to time by the Company for the benefit of its senior executive
officers.
6. Termination.
Executive’s employment under this Agreement may be terminated during the
Employment Period under the following circumstances:
(a) Death.
Executive’s employment under this Agreement will terminate upon his
death.
(b) Disability.
If, as
a result of Executive’s incapacity due to physical or mental illness, Executive
is substantially unable to perform his duties under this Agreement (with or
without reasonable accommodation, as defined under the Americans With
Disabilities Act) for an entire period of six (6) consecutive months, and within
thirty (30) days after a Notice of Termination (as defined in Section 7(a))
is
given after such six (6) month period, and Executive does not return to the
substantial performance of his duties on a full-time basis, the Company has
the
right to terminate Executive’s employment under this Agreement for “Disability,”
and such termination will not be a breach of this Agreement by the
Company.
(c) Cause.
The
Company has the right to terminate Executive’s employment for Cause, and such
termination will not be a breach of this Agreement by the Company. “Cause”
means termination of employment for one of the following reasons: (i) the
conviction of Executive by a federal or state court of competent jurisdiction
or
a plea of no contest to a felony which relates to Executive’s employment at the
Company; (ii) an act or acts of dishonesty taken by Executive and intended
to
result in substantial personal enrichment of Executive at the expense of the
Company; or (iii) Executive’s “willful” failure to follow a direct lawful
written order from the Board of Directors of the Company, within the reasonable
scope of Executive’s duties, which failure is not cured within thirty (30) days.
Further, for purposes of this Subsection (c):
(1) No
act or
failure to act on Executive’s part shall be deemed “willful” unless done or
omitted to be done by Executive, not in good faith and without reasonable belief
that Executive’s action or omission was in the best interest of the
Company.
(2) Executive
shall not be deemed to have been terminated for Cause unless and until there
has
been delivered to Executive a copy of the resolution duly adopted by the
affirmative vote of not less than three-fourths (3/4ths) of the entire
membership of the Board of Directors of the Company, at a meeting of the Board
of Directors called and held for such purpose (after reasonable notice to
Executive and an opportunity for Executive, together with Executive’s counsel,
to be heard before the Board of Directors), finding that in the good faith
opinion of the Board of Directors Executive was guilty of the conduct set forth
in clauses (i), (ii), or (iii) above and specifying the particulars thereof
in
detail.
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(d) Good
Reason.
Executive may terminate his employment for “Good Reason” by providing Notice of
Termination to the Company within one hundred and twenty (120) days after
Executive has actual knowledge of the occurrence, without the written consent
of
Executive, of one of the events set forth below, and such termination will
not
be a breach of this Agreement:
(1) the
assignment to Executive of any duties materially and adversely inconsistent
with
Executive’s status as Chief Executive Officer of the Company or a material and
adverse alteration in the nature of Executive’s authority, duties or
responsibilities;
(2) the
reduction by the Company of Executive’s Base Salary;
(3) the
requirement that Executive be based at any office or location that is more
than
100 miles from the Company’s current location in Pratt, Kansas except for travel
reasonably required in the performance of Executive’s responsibilities;
or
(4) the
failure of any successor to the Company to assume this Agreement pursuant to
Section 15.
(e) Without
Cause.
The
Company has the right to terminate Executive’s employment under this Agreement
without Cause by providing Executive with a Notice of Termination, subject
to
the obligations set forth in Section 8(a) hereof.
(f) Voluntary
Termination.
Executive may voluntarily terminate employment with the Company at any time,
and
if such termination is not for Good Reason, then, Executive shall only be
entitled to compensation and benefits as described in Section 8(b)
hereof.
7. Termination
Procedure.
(a) Notice
of Termination.
Any
termination of Executive’s employment by the Company or by Executive during the
Employment Period (other than termination pursuant to Section 6(a)) will be
communicated by written Notice of Termination to the other party in accordance
with Section 17. For purposes of this Agreement, a “Notice of Termination” means
a written notice which indicates the specific termination provision in this
Agreement relied upon and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment.
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(b) Date
of Termination.
“Date
of Termination” shall mean (i) if Executive’s employment is terminated by his
death, the date of his death, (ii) if Executive’s employment is terminated due
to Disability pursuant to Section 6(b), thirty (30) days after Notice of
Termination (provided that Executive has not returned to the substantial
performance of his duties on a full-time basis during such thirty (30) day
period), (iii) if Executive’s employment is terminated for Good Reason pursuant
to Section 6(d), the date provided in such Section, or (iv) if Executive’s
employment is terminated for any other reason, the date on which a Notice of
Termination is given or any later date (within thirty (30) days after the giving
of such Notice of Termination) set forth in such Notice of
Termination.
8. Compensation
Upon Termination or During Disability.
In the
event of Executive’s Disability or termination of his employment under this
Agreement during the Employment Period, the Company will provide Executive
with
the payments and benefits set forth below. Executive agrees that the Company
has
the right to deduct any amounts owed by Executive to the Company for any reason,
including, without limitation, Executive’s misappropriation of Company funds,
from the payments set forth in this Section 8.
(a) Termination
by Company Without Cause or by Executive for Good Reason.
If
Executive’s employment is terminated by the Company without Cause or by
Executive for Good Reason:
(i) the
Company will pay to Executive within 75 days of the Date of Termination in
a
single lump sum payment (A) his Base Salary and accrued vacation pay through
the
Date of Termination, as soon as practicable following the Date of Termination,
and (B) an amount equal to his Base Salary multiplied by two (2.0);
(ii) the
Company will pay to Executive within 75 days of the end of the year in which
the
Date of Termination occurs, the product of (i) the annual bonus that would
have
otherwise been paid at the end of the year in which the Date of Termination
occurs and (ii) a fraction, the numerator of which is the number of days in
the
current year through the Date of Termination and the denominator of which is
365;
(iii) the
Company will maintain in full force and effect, for the continued benefit of
Executive (and his spouse and/or his dependents, as applicable) for a period
of
twelve (12) months following the Date of Termination, the medical,
hospitalization, and dental programs in which Executive (and his spouse and/or
his dependents, as applicable) participated immediately prior to the Date of
Termination, at the level in effect and upon substantially the same terms and
conditions (including, without limitation, contributions required by Executive
for such benefits) as existed immediately prior to the Date of Termination;
provided, if Executive (or his spouse) is eligible for Medicare or a similar
type of governmental medical benefit, such benefit shall be the primary provider
before Company medical benefits are provided. If Executive (or his spouse and/or
his dependents, as applicable) cannot continue to participate in the Company
programs providing such benefits, the Company shall arrange to provide Executive
(and his spouse and/or his dependents, as applicable) with the economic
equivalent of such benefits which they otherwise would have been entitled to
receive under such plans and programs (“Continued Benefits”). However, if
Executive becomes reemployed with another employer and is eligible to receive
medical, hospitalization and dental benefits under another employer-provided
plan, the medical, hospitalization and dental benefits described herein shall
be
secondary to those provided under such other plan during the applicable
period;
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(iv) the
Company will reimburse Executive, pursuant to the Company’s policy, for
reasonable business expenses incurred, but not paid, prior to the Date of
Termination; and
(v) Executive
will be entitled to any other rights, compensation and/or benefits as may be
due
to Executive following such termination to which he is otherwise entitled in
accordance with the terms and provisions of any plans or programs of the
Company
(b) Termination
by Company for Cause or by Executive Without Good Reason.
If
Executive’s employment is terminated by the Company for Cause or by Executive
(other than for Good Reason):
(i) the
Company will pay Executive his Base Salary and his accrued vacation pay (to
the
extent required by law or the Company’s vacation policy) through the Date of
Termination, as soon as practicable following the Date of
Termination;
(ii) the
Company will reimburse Executive, pursuant to the Company’s policy, for
reasonable business expenses incurred, but not paid, prior to the Date of
Termination, unless such termination resulted from a misappropriation of Company
funds; and
(iii) Executive
will be entitled to any other rights, compensation and/or benefits as may be
due
to Executive following termination to which he is otherwise entitled in
accordance with the terms and provisions of any plans or programs of the
Company.
(c) Disability.
During
any period that Executive fails to perform his duties under this Agreement
as a
result of incapacity due to physical or mental illness (“Disability Period”),
Executive will continue to receive his full Base Salary set forth in Section
5(a) until his employment is terminated pursuant to Section 6(b). In the event
Executive’s employment is terminated for Disability pursuant to Section
6(b):
(i) the
Company will (A) pay to Executive his Base Salary and accrued vacation pay
through the Date of Termination, as soon as practicable following the Date
of
Termination, and (B) provide Executive with disability benefits pursuant to
the
terms of the Company’s disability programs and/or practices;
(ii) the
Company will reimburse Executive, pursuant to the Company’s policy, for
reasonable business expenses incurred, but not paid, prior to the Date of
Termination; and
(iii) Executive
will be entitled to any other rights, compensation and/or benefits as may be
due
to Executive following such termination to which he is otherwise entitled in
accordance with the terms and provisions of any plans or programs of the
Company.
(d) Death.
If
Executive’s employment is terminated by his death, the Company will pay in a
lump sum to Executive’s beneficiary, legal representatives or estate, as the
case may be, Executive’s earned but unpaid Base Salary as of the date of death,
accrued vacation and unreimbursed business expenses and amounts due under any
plans, programs or arrangements of the Company through the Date of
Termination.
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9. Obligations
of the Company Following a Change of Control.
Notwithstanding anything in this Agreement to the contrary, in the event of
a
Change of Control, Executive may terminate employment for any reason following
his continued employment for twelve (12) months after the effective date of
the
Change of Control, and such termination shall be deemed to be a termination
for
Good Reason for all purposes of this Agreement, including provisions of Section
8(a). For purposes of this Agreement, Change of Control shall mean
(a) any
“person” or “group” (within the meaning of Section 13(d) or 14(d)(2) under the
Securities Exchange Act of 1934, as amended) becomes the ultimate “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of more than 50% of the total voting power of the Voting Stock of
the
Company on a fully diluted basis, and such ownership represents a greater
percentage of the total voting power of the Voting Stock of the Company, on
a
fully diluted basis, than is held by the Existing Stockholders and their
Affiliates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended) on such date; or
(b) individuals
who, on September 30, 2006, constitute the Board of Directors of the Company
(together with any new directors whose election by the Board of Directors or
whose nomination for election by the Company’s stockholders, was approved by a
vote of at least a majority of the members of the Board of Directors then in
office who either were members of the Board of Directors on September 30, 2006,
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the members of the Board of Directors
of the Company then in office; or
(c) the
sale,
lease, transfer, conveyance or other disposition (other than by way of merger
or
consolidation), in one or a series of related transactions, of more than 50%
of
the combined assets of the Company to any Person other than a wholly-owned
subsidiary of the Company, the Existing Stockholders or any Affiliate thereof;
or
(d) the
adoption of a plan of liquidation or dissolution of the Company;
provided,
that the following events shall not constitute a Change of Control:
(i) the
acquisition of shares of Voting Stock by the Company or any of its majority
or
wholly-owned subsidiaries;
(ii) the
acquisition of shares of Voting Stock by any employee benefit plan (or trust)
sponsored or maintained by the Company;
(iii) any
transfer of Voting Stock by gift, devise or descent by an Existing Stockholder
to or by any spouse, parent, grandparent, child, grandchild or trust established
or maintained for the benefit of any such persons; or
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(iv) the
acquisition of shares of Voting Stock by any Existing Stockholder or by any
spouse, parent, grandparent, child, grandchild or trust established or
maintained for the benefit of any such persons.
The
term
“Existing Stockholder” when used in reference to the Company means those
individuals listed as shareholders of the Company on Exhibit ___ of the
Shareholders Agreement, dated August 16, 2006 and any of their respective
spouses, parents, grandparents, children, grandchildren, and/or any trust
established or maintained for either of such persons.
As
used
herein, the term “Voting Stock” means capital stock of the Company of any class
or kind ordinarily having the power to vote for the election of directors of
the
Company.
10. Mitigation.
Executive will not be required to mitigate amounts payable under this Agreement
by seeking other employment or otherwise, and there will be no offset against
amounts due Executive under this Agreement on account of subsequent employment
except as specifically provided herein.
11. Confidential
Information; Non-Solicitation.
(a) Nondisclosure
of Confidential Information.
Executive acknowledges that it is the policy of the
Company
to maintain as secret and confidential (i) all valuable and unique information,
(ii) other information heretofore or hereafter acquired by the Company or any
affiliated entity and deemed by it to be confidential, and (iii) information
developed or used by the Company or any affiliated entity relating to the
business, operations, employees and customers of the Company or any affiliated
entity including, but not limited to, processes, site development, customer
lists or employee information (all such information described in clauses (i),
(ii) and (iii) above, other than information which is known to the public or
becomes known to the public through no fault of Executive, is hereinafter
referred to as “Confidential Information”). The parties recognize that the
services to be performed by Executive pursuant to this Agreement are special
and
unique and that by reason of his employment by the Company after the date
hereof, Executive has acquired and will acquire Confidential Information.
Executive recognizes that all such Confidential Information is the property
of
the Company. Accordingly, at any time during or after the Employment Period,
Executive shall not, except in the proper performance of his duties under this
Agreement, directly or indirectly, without the prior written consent of the
Company, disclose to any Person other than the Company, whether or not such
a
Person is a competitor of the Company, and shall use his best efforts to prevent
the publication or disclosure of any Confidential Information obtained by,
or
which has come to the knowledge of, Executive prior or subsequent to the date
hereof. Notwithstanding the foregoing, Executive may disclose to other Persons,
as part of his occupation, information with respect to the Company or any
affiliated entity, which (i) is of a type generally not considered by standards
of the ethanol industry to be proprietary, or (ii) is otherwise consented to
in
writing by the Company.
(b) Non-Solicitation.
Executive shall not, during the Employment Period or for the eighteen
month-period following Executive’s termination of employment (the “Covered
Period”), either personally or by or through his agent or by letters, circulars
or advertisements and whether for himself or on behalf of any other person,
seek
to persuade any employee of the Company or any affiliated entity or any Person
who was an employee of the Company or any affiliated entity during the Covered
Period, to discontinue his or her status or employment with the Company or
such
affiliated entity or to become employed in a Competitive Business. Additionally,
Executive shall not, for himself or on behalf of any person, directly or
indirectly, solicit, divert or attempt to solicit or divert any customer of
the
Company or any affiliated entity who was a customer of the Company during the
Covered Period.
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(c) Noncompete.
Executive
shall not while employed by the Company and for the twenty-four-month period
immediately after Executive ceases to be employed by the Company, without the
prior written consent of the Company, either directly or indirectly, perform
any
services (whether advisory, consulting, employment or otherwise) for, invest
in
or otherwise become associated with in any capacity, any person, corporation,
partnership or other entity which engages in a Competitive Business (as defined
below); provided, however, that nothing herein shall prevent Executive from
purchasing and holding for investment less than 2% of the shares of any
corporation, the shares of which are regularly traded either on a national
securities exchange or in the over-the-counter market. For purposes of this
Agreement, “Competitive Business” means a business engaged in the operation of a
corn dry-mill ethanol plant in the United States.
(d) Obligations
of Executive Upon Termination.
Upon
termination of this Agreement for any reason, Executive shall return to the
Company all documents and copies of documents in his possession relating to
any
Confidential Information including, but not limited to, internal and external
business forms, manuals, correspondence, notes and computer programs, and
Executive shall not make or retain any copy or extract of any of the foregoing.
In addition, in the event Executive’s employment is terminated for Cause,
Executive shall resign from all offices and positions held with the
Company.
(e) Remedies.
Executive acknowledges and understands that paragraphs 11(a), 11(b) and 11(c)
and the other provisions of this Agreement are of a special and unique nature,
the loss of which cannot be adequately compensated for in damages by an action
at law, and that the breach or threatened breach of the provisions of this
Agreement would cause the Company irreparable harm. In the event of a breach
or
threatened breach by Executive of the provisions of this Agreement, the Company
shall be entitled to an injunction restraining him from such breach. Nothing
contained in this Agreement shall be construed as prohibiting the Company from
pursuing, or limiting the Company’s ability to pursue, any other remedies
available for any breach or threatened breach of this Agreement by Executive.
The provision of this Agreement relating to arbitration of disputes shall not
be
applicable to the Company to the extent it seeks an injunction in any court
to
restrain Executive from violating paragraphs 11(a), 11(b) and 11(c)
hereof.
(f) Continuing
Operation. Except as specifically provided in this Section 11, the
termination of Executive’s employment or of this Agreement will have no effect
on the continuing operation of this Section 11.
(g) Additional
Related Agreements.
Executive agrees to sign and to abide by the provisions of any additional
agreements, policies or requirements of the Company related to the subject
of
this Section 11.
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12. Release.
Executive agrees, if his employment is terminated under circumstances entitling
him to payments under Section 8(a) of this Agreement, that in consideration
for
the payments described in Section 8(a), he will execute a General Release in
substantially the form of Exhibit A attached hereto, through which Executive
releases the Company from any and all claims as may relate to or arise out
of
his employment relationship (excluding claims Executive may have under any
“employee pension plan” as described in Section 3(3) of ERISA or any claims
under this Agreement). The form of the Release may be modified as needed to
reflect changes in the applicable law or regulations that are needed to provide
a legally enforceable and binding Release to the Company at the time of
execution.
13. Indemnification
and Insurance.
Executive shall be indemnified and held harmless by the Company during the
term
of this Agreement and following any termination of this Agreement for any reason
whatsoever in the same manner as would any other key management employee of
the
Company with respect to acts or omissions occurring prior to (a) the termination
of this Agreement or (b) the termination of employment of Executive. In
addition, during the term of this Agreement and for a period of three years
following the termination of this Agreement for any reason whatsoever, Executive
shall be covered by a Company-held directors and officers liability insurance
policy covering acts or omissions occurring prior to (a) the termination of
this
Agreement or (b) the termination of employment of Executive. Provided, in no
event will the obligation of the Company to indemnify Executive or provide
directors and officers insurance to Executive under this Section 13 be less
than
the obligation and insurance coverage which the Company provided to Executive
immediately prior to the occurrence of a Change of Control.
14. Arbitration;
Legal Fees and Expenses.
The
parties agree that Executive’s employment and this Agreement relate to
interstate commerce, and that any disputes, claims or controversies between
Executive and the Company which may arise out of or relate to Executive’s
employment relationship or this Agreement shall be settled by arbitration.
This
agreement to arbitrate shall survive the termination of this Agreement. Any
arbitration shall be in accordance with the Rules of the American Arbitration
Association and undertaken pursuant to the Federal Arbitration Act. Arbitration
will be held in Wichita,
Kansas
unless
the parties mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent jurisdiction. The
parties agree that punitive, liquidated or indirect damages shall not be awarded
by the arbitrator(s)
unless
such damages would have been awarded by a court of competent
jurisdiction.
Nothing
in this Agreement to arbitrate, however, shall preclude the Company from
obtaining injunctive relief from a court of competent jurisdiction prohibiting
any ongoing breaches by Executive of this Agreement including, without
limitation, violations of Section 11.
If any
contest or dispute arises
between
the Company and Executive regarding any provision of this Agreement, the Company
will reimburse Executive for all legal fees and expenses reasonably incurred
by
Executive in connection with such contest or dispute. Such reimbursement will
be
made as soon as practicable following the final,
non-appealable resolution
of such contest or dispute to the extent the Company receives reasonable written
evidence of such fees and expenses.
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15. Agreement
Binding on Successors.
(a) Company’s
Successors.
No
rights or obligations of the Company under this Agreement may be assigned or
transferred except that the Company will require any successor (whether direct
or indirect, by purchase, merger, reorganization,
sale, transfer of stock, consolidation
or otherwise) to all or substantially all of the business and/or assets of
the
Company to expressly assume and agree
to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no succession had taken place. As
used in this Agreement, “Company” means
the
Company
as
hereinbefore defined,
and any
successor to its business and/or assets (by merger, purchase or otherwise)
which
executes and delivers the agreement provided for in this Section 15
or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) Executive’s
Successors.
No
rights or obligations of Executive under this Agreement may be assigned or
transferred by Executive other than his rights to payments or benefits
under
this
Agreement,
which
may be transferred only by will or the laws of descent and distribution. Upon
Executive’s death, this Agreement and all rights of Executive under
this
Agreement
shall
inure to the benefit of and be enforceable by Executive’s beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent
any
such person succeeds to Executive’s interests under this Agreement. Executive
will
be
entitled to select and change a beneficiary or beneficiaries to receive any
benefit or compensation payable under this
Agreement following
Executive’s death by giving the Company written notice thereof
in a
form acceptable to the Company.
In the
event of Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate,
to
refer to his
beneficiary(ies), estate or other legal representative(s). If Executive should
die following his Date of Termination while any amounts would still be payable
to him
under
this
Agreement if
he had
continued to live, unless otherwise provided,
all such
amounts shall be paid in accordance with the terms of this Agreement to such
person or persons so appointed in writing by Executive, or otherwise to his
legal representatives or estate.
16. Maximum
Payments by the Company.
It
is the
objective of this Agreement to maximize Executive’s Net After-Tax Benefit (as
defined herein) if payments or benefits provided under this Agreement are
subject to excise tax under Section 4999 of the Code. Therefore, in the event
it
is determined that any payment or benefit by the Company or otherwise to or
for
the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, including,
by example and not by way of limitation, acceleration by the Company or
otherwise of the date of vesting or payment or rate of payment under any plan,
program, arrangement or agreement of the Company, would be subject to the excise
tax imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest
and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then
the Company shall first make a calculation under which such payments or benefits
provided to Executive under this Agreement are reduced to the extent necessary
so that no portion thereof shall be subject to the excise tax imposed by Section
4999 of the Code (the “4999 Limit”). The Company shall then compare (x)
Executive’s Net After-Tax Benefit assuming application of the 4999 Limit with
(y) Executive’s Net After-Tax Benefit without the application of the 4999 Limit
and Executive shall be entitled to the greater of (x) or (y). “Net After-Tax
Benefit” shall mean the sum of (i) all payments and benefits which Executive
receives or is then entitled to receive from the Company, less (ii) the amount
of federal income taxes payable with respect to the payments and benefits
described in (i) above calculated at the maximum marginal income tax rate for
each year in which such payments and benefits shall be paid to Executive (based
upon the rate for such year as set forth in the Code at the time of the first
payment of the foregoing), less (iii) the amount of excise taxes imposed with
respect to the payments and benefits described in (i) above by Section 4999
of
the Code. The determination of whether a payment or benefit constitutes an
excess parachute payment shall be made by tax counsel selected by the Company
and reasonably acceptable to Executive. The costs of obtaining this
determination shall be borne by the Company.
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17. Notice.
For the
purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered either personally or by United States certified
or registered mail, return receipt requested, postage prepaid, addressed as
follows:
If
to
Executive:
At
his
last known address
evidenced
on the Company’s
payroll
records.
If
to the
Company:
Orion
Ethanol, LLC
000
X.
Xxxx
Xxxxx,
Xxxxxx 00000
or
to
such other address as any party may have furnished to the others in writing
in
accordance with
this
Agreement,
except
that notices of change of address shall be effective only upon
receipt.
18. Withholding.
All
payments hereunder will be subject to any required withholding of federal,
state
and local taxes pursuant to any applicable law or regulation.
19. Miscellaneous.
No
provisions of this Agreement may be amended, modified, or waived unless agreed
to in writing and
signed
by
Executive and by a duly authorized officer of the Company. No waiver by either
party of any breach by the other party of any condition or provision of this
Agreement shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The respective rights
and obligations of the parties under
this
Agreement shall
survive Executive’s termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations. The validity, interpretation, construction and performance
of
this Agreement shall be governed by the laws of the State of Kansas
without
regard to its conflicts of law principles.
20. Validity.
The
invalidity or unenforceability of any provision or provisions of this Agreement
will not affect the validity or enforceability of any other provision of this
Agreement, which will remain in full force and effect.
11
21. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together will constitute one and
the
same instrument.
22. Section
Headings.
The
section headings in this Agreement are for convenience of reference only, and
they form no part of this Agreement and will not affect its
interpretation.
23. Entire
Agreement.
Except
as
provided elsewhere herein, this Agreement sets
forth the entire agreement of the parties with respect to
its
subject
matter and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any
officer, employee or representative of any party to this
Agreement with respect
to
such
subject matter.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
| ORION ETHANOL, LLC, a Kansas Limited Liability Company | |
|
By:
____________________________________
________________,
___________________
|
|
|
“COMPANY”
|
|
|
“EXECUTIVE”
|
12
EXHIBIT
A
NOTICE.
Various laws, including Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1866, the Pregnancy Discrimination Act of 1978, the Equal Pay
Act,
the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Americans With Disabilities Act, the Employee
Retirement Income Security Act and the Veterans Reemployment Rights Act (all
as
amended from time to time), prohibit employment discrimination based on sex,
race, color, national origin, religion, age, disability, eligibility for covered
employee benefits and veteran status. You may also have rights under laws such
as the Older Worker Benefit Protection Act of 1990, the Worker Adjustment and
Retraining Act of 1988, the Fair Labor Standards Act, the Family and Medical
Leave Act, the Occupational Health and Safety Act and other federal, state
and/or municipal statutes, orders or regulations pertaining to labor, employment
and/or employee benefits. These laws are enforced through the United States
Department of Labor and its agencies, including the Equal Employment Opportunity
Commission (EEOC), and various state and municipal labor departments, fair
employment boards, human rights commissions and similar agencies.
This
General Release is being provided to you in connection with the Employment
Agreement between you and Orion Ethanol, LLC dated August 15, 2006, 2006 (the
“Agreement”). The federal Older Worker Benefit Protection Act requires that you
have at least twenty-one (21) days, if you want it, to consider whether you
wish
to sign a release such as this one in connection with a special, individualized
severance package. You have until the close of business twenty-one (21) days
from the date you receive this General Release to make your decision. You may
not sign this General Release until, at the earliest, your official date of
separation from employment, _________________.
BEFORE
EXECUTING THIS GENERAL RELEASE YOU SHOULD REVIEW THESE DOCUMENTS CAREFULLY
AND
CONSULT WITH YOUR ATTORNEY.
You
may
revoke this General Release within seven (7) days after you sign it and it
shall
not become effective or enforceable until that revocation period has expired.
If
you do not accept the severance package and sign and return this General
Release, or if you exercise your right to revoke the General Release after
signing it, you will not be eligible for the special, individualized severance
package. Any revocation must be in writing and must be received by Orion
Ethanol, LLC, Attention: _______________, 000 X. Xxxx, Xxxxx, Xxxxxx 00000,
within the seven-day period following your execution of this General
Release.
GENERAL
RELEASE
In
consideration of the special, individualized severance package offered to me
by
Orion Ethanol, LLC and the separation benefits I will receive as reflected
in
the Employment Agreement between me and Orion Ethanol, LLC dated August 15,
2006
(the “Agreement”), I hereby release and discharge Orion Ethanol, LLC and its
predecessors, successors, affiliates, parent, subsidiaries and partners and
each
of those entities’ employees, officers, directors and agents (hereafter
collectively referred to as the “Company”) from all claims, liabilities,
demands, and causes of action, known or unknown, fixed or contingent, which
I
may have or claim to have against the Company either as a result of my past
employment with the Company and/or the severance of that relationship and/or
otherwise, and hereby waive any and all rights I may have with respect to and
promise not to file a lawsuit to assert any such claims.
This
General Release includes, but is not limited to, claims arising under Title
VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Pregnancy
Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991,
the
Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the
Americans With Disabilities Act, the Employee Retirement Income Security Act
or
1974 and the Veterans Reemployment Rights Act (all as amended from time to
time). This General Release also includes, but is not limited to, any rights
I
may have under the Older Workers Benefit Protection Act of 1990, the Worker
Adjustment and Retraining Act of 1988, the Fair Labor Standards Act, the Family
and Medical Leave Act, the Occupational Health and Safety Act and any other
federal, state and/or municipal statutes, orders or regulations pertaining
to
labor, employment and/or employee benefits. This General Release also applies
to
any claims or rights I may have growing out of any legal or equitable
restrictions on the Company’s rights not to continue an employment relationship
with its employees, including any express or implied employment contracts,
and
to any claims I may have against the Company for fraudulent inducement or
misrepresentation, defamation, wrongful termination or other retaliation claims
in connection with workers’ compensation or alleged “whistleblower” status or on
any other basis whatsoever.
It
is
specifically agreed, however, that this General Release does not have any effect
on any rights or claims I may have against the Company which arise after the
date I execute this General Release or on any vested rights I may have under
any
of the Company’s qualified or non-qualified benefit plans or arrangements as of
or after my last day of employment with the Company, or on any of the Company’s
obligations under the Agreement or as otherwise required under the Consolidated
Omnibus Budget and Reconciliation Act of 1985 (COBRA).
I
have
carefully reviewed and fully understand all the provisions of the Agreement
and
General Release, including the foregoing Notice. I have not relied on any
representation or statement, oral or written, by the Company or any of its
representatives, which is not set forth in those documents.
The
Agreement and this General Release, including the foregoing Notice, set forth
the entire agreement between me and the Company with respect to this subject.
I
understand that my receipt and retention of the separation benefits covered
by
the Agreement are contingent not only on my execution of this General Release,
but also on my continued compliance with my other obligations under the
Agreement. I acknowledge that the Company gave me twenty-one (21) days to
consider whether I wish to accept or reject the separation benefits I am
eligible to receive under the Agreement in exchange for this General Release.
I
also acknowledge that the Company advised me to seek independent legal advice
as
to these matters, if I chose to do so. I hereby represent and state that I
have
taken such actions and obtained such information and independent legal or other
advice, if any, that I believed were necessary for me to fully understand the
effects and consequences of the Agreement and General Release prior to signing
those documents.
Dated
this ___ day of __________, ____.
|
Xxxxxxx
X. Xxxxxx
|
2
