Exhibit 10.1
BONUS AND BONUS UNIT PLAN
GOLDEN GRAIN ENERGY, LLC
I.
Purpose . The purposes of this Golden Grain
Energy, LLC Bonus and Bonus Unit Plan are to retain the key
management employees of the Company, to compensate those key
management employees for their contributions to the growth of the
Company and to induce those employees to continue making
contributions to the growth of the Company.
II.
Definitions
. As used in this Plan, the
following terms will have the following meanings:
A.
“Board”
shall mean the Board of Directors of
the Company.
B.
“Bonus
Unit” shall mean
the restricted units of ownership interest in the Company awarded
pursuant to this Plan. The Bonus Units shall be “A
Units” and shall be governed by the provisions of the
Company’s most current Operating Agreement, except where a
provision of this Plan is in conflict with the provisions of the
Company’s most current Operating Agreement in which case the
provisions of this Plan shall control.
C.
“Change in
Control” shall mean
the occurrence of any of the following events: (1) a
person or group acquires more than fifty percent (50%) of the
voting power or more than fifty percent (50%) of the fair market
value of all of the Company’s outstanding Units; (2) a
person or group acquires thirty-five percent (35%) or more of the
Company’s outstanding Units over a 12-month period;
(3) over a 12-month period, a majority of the Company’s
directors are replaced by individuals whose election is not
endorsed by the Board of Directors; or (4) over a 12-month period,
a person or group acquires Company assets whose collective fair
market value equals or exceeds forty percent (40%) of the total
fair market value of all assets owned by the Company. Persons
who are Unitholders on December 31, 2005 shall not be counted
in applying this definition.
D.
“Committee” shall mean the Compensation Committee of the
Board of Directors.
E.
“Company”
shall mean Golden Grain Energy,
LLC.
F.
“Issue
Date” shall mean
the date on which a Participant signs an agreement acknowledging
the award of Bonus Units and agreeing
to be bound by the restrictions
contained in this Plan, as further provided in paragraph B of
Article III below.
G.
“Participant”
shall mean an eligible employee who
is awarded Bonus Units pursuant to this Plan.
H.
“Plan”
shall mean the Golden Grain Energy,
LLC Bonus and Bonus Unit Plan as set forth in this document and any
amendments thereof.
I.
“Restricted
Period” shall mean
the time period (after which all restrictions shall lapse)
beginning on the Issue Date of Bonus Units and ending on the fifth
anniversary of the Issue Date.
III.
Eligibility
. All members of the
Company’s Management Team (consisting of the Chief Executive
Officer, the Chief Financial Officer, the Plant Manager, the
Commodities Manager and the Lab Manager) shall be eligible to
receive Cash Bonuses, Bonus Units and Extraordinary Performance
Bonuses under this Plan as further provided in this
section.
A.
Cash Bonuses
. The Committee may from time
to time set group performance goals for the Company’s
Management Team. Such goals shall be measurable and
ascertainable and shall be reasonably calculated to increase the
Company’s efficiency, or profitability or the price at which
the Company can sell its Units to investors. Goals shall be
set with reference to the Company’s fiscal year performance,
and the Committee shall determine whether the Management Team has
met those goals shortly before or after the end of each fiscal year
or as soon as the relevant financial information becomes
available. If the Management Team has met its performance
goals, the Committee shall determine a Cash Bonus amount.
Such amount shall be evenly divided among and promptly distributed
equally to all members of the Management Team who were employed by
the Company throughout the fiscal year for which the goals
applied. The Committee shall not be obligated to determine
and announce Cash Bonus goals for each fiscal year of the
Company.
B.
Bonus Units
. The Committee may also set
individual or additional group performance goals for the members of
the Company’s Management Team. These goals may (but
need not) be different for each Management Team member. Such
goals shall be measurable and ascertainable and shall be reasonably
calculated to increase the Company’s efficiency or
profitability or the price at which the Company can sell its Units
to investors. Goals shall be set with reference to the
Company’s fiscal year performance, and the
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Committee shall determine whether
the goals have been met, either by each individual member of the
Management Team in the case of individual goals or by all members
collectively in the case of group goals. The Committee shall
make its determination shortly before or after the end of each
fiscal year or as soon as the relevant financial information
becomes available. If the goals have been met, the Committee
shall determine a separate cash award for each member of the
Management Team who has met his or her goals. The cash awards
need not be equal, and the Committee shall not be obligated to
determine and announce Bonus Unit goals for each member of the
Management Team or for each fiscal year of the Company.
Each cash award thus determined
shall be converted into Bonus Units by dividing the amount of each
Participant’s cash award by the recent price (or the average
of the recent prices) at which Units have been traded among
Unitholders or otherwise transferred in a private
transaction. If the Committee believes that there are no
private transactions recent enough to indicate the value of a Unit,
the Committee shall determine the fair market value of a Unit on
the basis of all information then available to it, and each
Participant’s cash award shall be divided by the Unit value
determined by the Committee in order to determine the number of
Bonus Units received by each Participant. In converting the
cash awards into Bonus Units, no discount shall be applied on
account of the restricted status of the Bonus Units.
All Participant’s Bonus Unit
awards shall be delivered in Bonus Units. No Participant
shall be entitled to demand the cash amount used to determine the
number of Bonus Units awarded to him or her. Participants
shall not be required to make any payment for their Bonus Units,
but Participants shall be responsible for all income and employment
tax liability incurred with respect to their Bonus Unit
awards.
The Company may require each
Participant to represent that the Participant will hold the Bonus
Units for purposes of investment and with no intent to transfer,
sell or otherwise dispose of the Bonus Units. The Bonus Units
may be transferred only in accordance with this Plan, the
Company’s then-existing Operating Agreement or other
governance documents, and applicable securities law.
As a condition of receiving Bonus
Units, each Participant shall deliver an agreement substantially in
the form of Exhibit A hereto. The date on which the
Participant delivers the Agreement to the
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Company shall be the “Issue
Date” for purposes of this Plan. The Company may also
require the Participant to sign any Operating Agreement or similar
document signed by other Unitholders as a condition to receiving
Bonus Units hereunder.
C.
Extraordinary Performance
Bonus . From time
to time, the Committee may award any one or more Management Team
members cash bonuses for extraordinary performance. The
awarding of any such bonus shall be within the discretion of the
Committee or its delegate. Extraordinary Performance Bonuses
shall be given sparingly.
IV.
Special Provisions for Bonus
Units .
A.
Issuance of
Certificates .
After the Participant has delivered the agreement described in
paragraph B of Article III above, the Participant’s
Bonus Units shall be issued and certificates showing the
Participant’s ownership of such Units shall be
prepared. The Participant shall then become the owner of the
Bonus Units, and shall have all rights belonging to a Unitholder,
other than the right to vote on issues presented to the
Company’s me
