EXHIBIT 10.1
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement ("Agreement") between Minnesota Corn
Processors, LLC, a Colorado limited liability company (the "Company"), and
___/s/ Executive___ (the "Executive") is made and entered into effective as of
April 22, 2002 (the "Effective Date").
WHEREAS, Executive is a key executive of the Company; and
WHEREAS, it is in the best interest of the Company and its members if
the key executives 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 executives 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 management and to
help ensure continuity of key management;
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive 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 fifth anniversary of the
Effective Date; provided, however, commencing on the first day
following the fourth anniversary of the Effective Date and on each day
thereafter, the Term of this Agreement shall automatically be extended
for one additional day unless the Board shall give written notice to
Executive that the Term shall cease to be so extended, in which event
the Agreement shall terminate on the first anniversary of the date such
notice is given.
(b) Termination of this Agreement shall not alter or impair any rights
of Executive 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 (i) Executive's highest
salary for any of the three years immediately prior to the Change of
Control or the current annual salary, whichever is higher, (ii)
Executive's highest bonus for any year in the three years immediately
prior to the year in which the Change of Control occurs, (iii) the
highest amount paid by the Company with respect to Executive'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, (iv) the highest amount of possible pension
contributions made by the Company with respect to the Executive for any
of the three years immediately prior to the year in which the Change of
Control occurs and (v) the highest amount of the Company's possible
401(k) contribution made by the Company with respect to Executive 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.
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3. COMPENSATION REGISTER
A formal register of the Annual Base Compensation and the Adjusted
Annual Compensation for each Executive shall be maintained in the
office of and adjusted by the Vice-President of Human Resources and
Administration and verified by the Chief Financial Officer Company.
Such verification shall take place on the Effective Date. Further
adjustments to the formal register shall be made by the Vice-President
of Human Resources and Administration of the Company and verified by
the Chief Executive Officer of the Company. The formal register noted
in this section shall become part of and incorporated into this
Agreement. Any adjustments to the formal register, when made and
verified shall be immediately made part of and incorporated into this
Agreement. The formal register shall also note the amount to be
determined pursuant to Section 4(a)(i).
4. CHANGE OF CONTROL PAYMENT
(a) If a Change of Control occurs during the Term, Executive shall
receive the following from the Company:
(i) immediately at the time of the Change of Control, the
Company shall pay to Executive 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 Executive 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 Executive under
this Agreement.
(d) If Executive'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 Executive 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 Executive's
termination of employment.
(e) In the event the Executive dies or becomes disabled after a
definitive agreement relating to a Change of Control event or the
Company's Board
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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
Executive (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 Executive is unable to
perform the material duties of the Executive's occupation with the
Company.
5. PARACHUTE TAX GROSS UP.
If any payment made, or benefit provided, to or on behalf of Executive
pursuant to this Agreement or otherwise ("Payments") results in
Executive 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 Executive an additional
amount in cash (the "Additional Amount") such that after payment by
Executive of all taxes, including, without limitation, any income taxes
and Excise Tax, imposed on the Additional Payment, Executive retains an
amount of the Additional Payment equal to the Excise Tax imposed on the
Payments. Such determinations shall be made by the Company's
independent certified public accountants.
6. 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
Executive to the Company or otherwise.
7. 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 Executive
to the payments hereunder as if triggered by a Change of Control.
8. 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.
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9. 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.
10. ENTIRE AGREEMENT.
This Agreement, other than the Minnesota Corn Processors Supplemental
Executive Retirement Plan, employment contracts of any Executives, 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.
11. 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.
12. 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 Executive 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.
13. 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.
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IN WITNESS WHEREOF, the Company and Executive 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
_________________________
EXECUTIVE
/s/ Executive
______________________________
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