|
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This
Employment Agreement is effective the 1
st day
of February, 2008, between South Dakota Soybean Processors, LLC, a
South Dakota limited liability company, and Rodney G. Christianson
(“Employee”).
THE
PARTIES AGREE AS FOLLOWS:
1.
Definitions .
The following terms shall have these meanings:
a.
“Affiliate”
or “Affiliates” shall mean any Person who
controls, is controlled by, or is under common control with,
either directly or indirectly, or through one or more
intermediaries, the Employer. For purposes of this Agreement,
the term Affiliate shall include Urethane Soy Systems
Co.
b.
“Base
Salary” shall mean Employee’s annual compensation
as
set
forth in paragraph 6 of this Agreement.
c.
“Confidential
Information” shall mean any and all information
disclosed by Employer or Affiliate to Employee, whether prior
to or during the term of this Agreement, relating to those
matters not generally known to the public or the industry in
which Employer and/or an Affiliate is or may become engaged
and which pertain to the operations, processes, methods, and
accumulated experience incidental to the manufacture,
processing, sale, and distribution of Employer’s and/or
an Affiliate’s Products, regardless of whether Employer
and/or an Affiliate provides such information to Employee in
tangible form or the information is retained in the memory of
Employee. Confidential Information includes, for example, and
without limitation: (i) sales records, pricing manuals,
training manuals, selling and pricing procedures, and
financing methods, (ii) trade secrets and other know-how
regarding businesses, products and services, (iii) personnel
and salary information, including wages, bonuses, commissions,
and fringe benefits, (iv) production and processing
procedures, formulae and systems, (v) vendor and supplier
information, (vi) Customer lists and Prospective Customer
Lists including, without limitation, names of contacts,
products and services purchased, quantities purchased, credit
histories, timing of purchases, payment histories, special
demands of particular Customers, and current and anticipated
requirements of Customers generally for products or services,
(vii) marketing information, including without limitation,
research, development, testing and customer surveys, and any
specifications of any new products or services under
development, and (viii) business projections, strategic plans,
marketing systems and procedures, and inventory procedures and
systems.
d.
“Control,”
“Controlled by” and “under common control
with” shall mean the power, directly or indirectly, to
direct or cause the direction of the management and policies
of a Person whether through the ownership of voting securities
or by contract or otherwise.
e.
“Customer”
shall mean an individual, business or entity with which
Employer or an Affiliate did business during the two (2) year
period preceding the termination of Employee’s
employment as provided in this Agreement.
f.
“Incentive
Compensation” shall mean compensation paid to Employee
as set forth in paragraph 7 of this Agreement.
g.
“Person”
means an individual, partnership, limited partnership, limited
liability company, trust, estate, corporation, cooperative,
custodian, trustee, executor, administrator, nominee or entity
in a representative capacity.
h.
“Products”
shall mean all products manufactured and/or sold by Employer
or an Affiliate, including polyurethane, plastics, resins,
soybeans, soybean meal, soybean oil and other soybean
products.
i.
“Prospective
Customer” shall mean a potential customer of Employer or
an Affiliate, which has been contacted by Employer or an
Affiliate and for which Employer or an Affiliate has made a
financial investment, such as time, travel, equipment or
material during the two (2) year period preceding the
termination of Employee’s employment as provided in this
Agreement.
2.
Employment .
Employer agrees to employ Employee and Employee accepts employment
upon the terms and conditions set forth in this
Agreement.
3.
Duties and Review .
Employee shall be engaged in full-time employment by Employer as
its Chief Executive Officer and shall devote sufficient time and
attention to the business of Employer, including general management
and oversight of Affiliates, as shall be necessary to complete
Employee's obligations. Employer, through its Board of Managers,
shall have the power to determine the specific duties to be
performed by Employee and the time of performance. Employee shall
undergo performance reviews from time to time during the term of
this Agreement at the request of Employer’s Board of
Managers.
4.
Other Activities .
Employee shall devote substantially all of his working time and
efforts during Employer’s normal business hours to the
business of Employer, including the general management and
oversight of Affiliates. Employee shall be free to invest his
assets in a manner that will not require any substantial services
by Employee in the conduct of the business of the entities or in
the management of the properties in which he invests.
5.
Term .
This Agreement is for a term of four (4) years commencing on the
1
st day
of February, 2008, and terminating on the 31
st day
of January, 2012, unless sooner terminated pursuant to the
provisions of this Agreement.
6.
Base Salary .
For all services to be rendered by Employee pursuant to this
Agreement, Employer agrees to pay Employee compensation at an
annual rate of:
(a)
$300,000.00 until January 31, 2009 (year 1);
(b)
$325,000.00 from February 1, 2009 until January 31, 2010 (year
2); and
(c)
$350,000.00 from February 1, 2010 until January 31, 2012 (year
3 and year 4).
This
Base Salary shall be paid in periodic installments in
accordance with the Employer’s regular payroll
practices. Each installment shall be reduced by deductions for
the withholding of federal income tax, FICA contributions, and
all other deductions required by law or agreed to by
Employee.
7.
Incentive Compensation .
In addition to the Base Salary, Employee shall be paid a bonus
equal to one-half (1/2) of one percent (1%) of Employer’s net
income before taxes and member distributions on net income from
$2,000,000.00 up to $5,000,000.00 If the net income is
$5,000,001.00 to $7,500,000.00, Employee shall be paid a bonus
equal to one percent (1%) of Employer’s net income. If net
income is greater than $7,500,000.00, Employee shall still be paid
a bonus equal to one percent (1%) of Employer’s net income
and will also be paid an additional bonus equal to one percent (1%)
of the amount of the excess of Employer’s net income over
$7,500,000.00. If net income is below $2,000,000.00, no bonus will
be paid. Examples: $1,825,000.00 net income = no bonus;
$4,386,000.00 net income x .5% = $21,930.00; $6,500,000.00 net
income x 1% = $65,000.00; or $8,500,000.00 net income x 1% =
$85,000.00 plus $8,500,000.00 - $7,500,000.00 = $1,000,000.00 x 1%
= $10,000.00 for a total bonus of $95,000.00. This incentive bonus
may be paid directly or deferred at Employee’s option. The
calculation of Employer’s net income shall include the net
income of all of Employer’s subsidiaries for which combined
and audited financial statements must be prepared for GAAP
(“Generally Accepted Accounting Principles”) purposes.
Net income shall be calculated under the GAAP method of accounting
utilized by Employer for its audited financial statements and shall
exclude any items of income or expense that would be considered to
be extraordinary and not arising in the ordinary course of
business. Such items could include but are not limited to the
following:
| |
i.
|
Capital
gains or losses from the sale of marketable securities or other
investments of Employer.
|
| |
ii.
|
Gains
or losses on the sales or dispositions of fixed
assets.
|
| |
iii.
|
Insurance
proceeds received by Employer for the loss of property, capital
assets, or other assets of Employer.
|
| |
iv.
|
Investment
income from securities held by Employer, e.g., interest income,
dividend income, etc.
|
| |
v.
|
Payment
of a legal settlement, or receipt of monies relating to
Employer’s involvement in litigation or other
disputes.
|
Such
items shall be determined by Employer’s Financial Audit
Committee and subsequently adjusted out of net income for
purposes of the calculation of this incentive bonus. The
incentive bonus shall be paid in full within thirty (30) days
following completion of Employer’s audited financial
statements in the year following the year for which the net
income is calculated.
8.
Holidays and Vacations .
Employee shall be entitled to nine (9) paid holidays: New
Year’s Day, Easter, Memorial Day, Fourth of July, Labor Day,
Thanksgiving, the day after Thanksgiving and Christmas, and a
personal floating holiday. Employee shall be entitled
to
twenty
(20) days paid vacation during each fiscal year of employment.
Employee shall take his vacation at such time or times as
shall be approved by Employer’s Board of Managers.
Employee’s vacation time will be administered in
accordance with Employer’s current vacation policies for
all employees.
9.
Benefits .
Employee shall receive the benefits, including participation in
insurance benefits and retirement plans, that are provided to
Employer’s employees, provided Employee meets the
qualification provisions of each plan.
10.
Life Insurance .
Employer may, in its discretion, purchase or renew insurance on the
life of Employee. Employee agrees to submit to reasonable medical
examinations and otherwise reasonably cooperate with Employer in
connection with obtaining such insurance.
11.
Expenses .
During the term of this Agreement, Employee shall be entitled to
prompt reimbursement by Employer of all reasonable travel,
entertainment, and other expenses incurred by Employee in
accordance with the policies and procedures established by
Employer’s Board of Managers and in the performance of his
duties and responsibilities under this Agreement; provided, that
Employee shall properly account for such expenses and present
receipts as required by IRS guidelines.
12.
Vehicle .
During the term of this Agreement, Employee shall be provided a
vehicle for use for company business. The type and cost of the
vehicle as well as its replacement date will be determined by
Employer’s Board of Managers.
| |
13.
|
Termination and Severance Pay .
|
a.
Termination .
This Agreement shall terminate immediately: (i) upon
Employee’s death, (ii) upon Employee becoming disabled, which
determination shall be made by Employer’s Board of Managers
on the basis of medical evidence satisfactory to it, in its sole
discretion, that Employee is so mentally or physically disabled as
to be unable to fulfill Employee’s duties and
responsibilities and that such disability is likely to be
permanent; (iii) upon written notice from Employer that
Employee’s employment is being terminated for
“Cause” as defined in paragraph 13(c) below; (iv) upon
written notice from Employer that Employee’s employment is
being terminated without “Cause” as defined in
paragraph 13(c) below; or (v) upon Employee’s resignation of
employment. In the event of Employee’s termination under this
paragraph 13(a), he or his estate shall be entitled to receive the
Base Salary and other benefits to which he is entitled under this
Agreement up to the date of termination. Employee or his estate
shall have no rights pursuant to this Agreement to any benefits or
compensation for any period after the date of
termination.
b.
Severance Pay .
If Employer terminates the employment of Employee for any reason
other than as provided below in this subparagraph b, Employer shall
pay Employee a sum equal to 1.5 times Employee’s Base Salary
(at the annual rate then existing under paragraph 6) calculated for
a one year period. Payment shall be made in
eighteen
(18) equal monthly installments or as otherwise mutually
agreed by the parties beginning on the first day of the month
following termination of employment. For example, if Employer
terminates Employee’s employment without
“Cause” on August 1, 2009, Employee shall be
entitled to severance pay of $487,500.00 ($325,000.00 x 1.5)
to be paid in 18 equal monthly installments of $27,083.33
each. For example, if Employer terminates Employee’s
employment without “Cause” on September 1, 2010,
Employee shall be entitled to severance pay of $525,000.00
($350,000.00 x 1.5) to be paid in 18 equal monthly
installments of $29,166.66 each. Despite anything in this
Agreement to the contrary, Employee shall not be eligible to
receive the severance pay described in this paragraph 13(b)
if: (i) Employee’s employment is terminated due to
Employee’s death; (ii) Employee’s employment is
terminated due to Employee’s disability; (iii)
Employee’s employment is terminated for
“Cause”; (iv) Employee voluntarily resigns his
employment with Employer, (v) Employee’s employment is
terminated because Employer has ceased all business
activities, become insolvent and/
|
