Exhibit 10.11
MANAGEMENT SERVICES
AGREEMENT
This MANAGEMENT SERVICES AGREEMENT
(“Agreement”) is made and entered into to be effective
as of the 15 th
day of December, 2008, by and
between Golden Grain Energy, LLC, an Iowa Limited Liability Company
(“Golden”) and Homeland Energy Solutions, LLC, an Iowa
Limited Liability Company (“Homeland”) and is as
follows:
RECITALS
1.
WHEREAS, Golden currently owns and
operates an ethanol facility; and Homeland is currently
constructing an ethanol facility which Homeland will own and
operate;
2.
WHEREAS, the highly competitive
nature of the ethanol industry requires that both Golden and
Homeland take advantage of all possible costs savings measures
— with one such cost saving measure being the reduction of
administrative overhead through sharing of management
services;
3.
WHEREAS, Golden and Homeland wish to
share management services so as to reduce overhead but still have
available a full management team for carrying out ethanol
production;
4.
WHEREAS, Golden and Homeland, in
connection with accomplishing the sharing of management services,
each requires other terms and conditions as necessary to protect
each company’s confidential/proprietary/trade secret
information; and such terms and conditions as will cause all shared
management employees to respect the separate interests and
objectives of each company; and
5.
WHEREAS, the parties have had
discussions regarding such shared management services, have reached
agreement as to the same, and which to put their understandings and
agreements in writing.
NOW, THEREFORE, for good and
valuable consideration, the parties agree as follows:
1.
SHARED MANAGEMENT
SERVICES . Each
of Golden and Homeland shall provide shared management services to
the other with respect to the following job descriptions and
titles:
a.
Positions Shared by
Golden . Golden
shall provide to Homeland the following management services,
to-wit:
i.
Chief Executive Officer
(CEO)
ii.
Chief Financial Officer
(CFO)
iii.
Plant Manager
iv.
OSHA/Safety Manager —
Environmental Protection Agency (EPA) Compliance officer
v.
Human Resources Manager
b.
Positions Shared by
Homeland .
Homeland shall provide to Golden the following management services,
to-wit:
i.
Accounting Controller
ii.
Financial Accountant.
c.
Time Commitment
.
i.
Each Person filling the above
described positions shall devote approximately 50% of their time to
Homeland and 50% of their time to Golden.
ii.
Each person shall use their best
efforts when performing work irrespective of whether that work is
for Homeland or Golden. Those best efforts may, from time to
time, require that time reasonably necessary to perform work for
Homeland or for Golden will result in a departure from the time
sharing goals as stated above.
iii.
Approximate hours worked per week by
each shared position for each party shall be disclosed at monthly
management/CEO meetings; and reported to the Homeland Board and to
the Golden Board no less than quarterly.
d.
Reporting and
Organization .
Each person filling one of the above described positions shall
report in accordance with the ongoing organizational chart attached
hereto as Exhibit 1 and made a part hereof. In
connection therewith:
i.
The CEO and CFO shall report
directly to the Homeland Board of Directors.
ii.
Each Board of Directors reserves the
right to require, from time to time, any of the above named persons
to do such work or make such reports directly to or for the
Board.
iii.
Pursuant to the Operating Agreement
of Homeland, the persons holding the following positions shall
serve, until a successor is duly appointed and qualified by
Homeland, as the Officers required pursuant to Section 5.19 of
the Operating Agreement of Homeland, to-wit:
|
Office
|
|
Appointed Person
|
|
President
|
|
Walt Wendland
|
|
Vice-President
|
|
current holder of position
|
2
|
Secretary
|
|
current holder of position
|
|
Treasurer
|
|
Christy Marchand
|
iv.
Homeland and Golden shall adopt a
mutual agreed job description for each position identified at
Section 1(a) and Section 1(b) above.
v.
Homeland and Golden shall use their
best efforts to create and adopt substantially similar personnel
policies and procedures so as to enhance the ability to coordinate
the work required hereunder.
vi.
Subject to the policies and
procedures of each Company, the CEO shall be primarily responsible
for hiring and firing of persons providing shared management
services as described herein.
vii.
Nothing herein is intended to create
an employment contract, or guaranty of employment, or a guaranty of
employment for any length of time to any person. Each person
providing management services hereunder shall, at all times, remain
the employee of the Company designated to share services as
provided above.
viii.
To the extent that the CEO and/or
CFO provide certifications or reports to the SEC on behalf of
Homeland, Homeland shall provide reasonable cooperation with
respect to securing, if necessary, back up certifications with
respect to accuracy of information provided by Homeland employees
for use in preparing such reports and which information is not
otherwise available to the CEO/CFO.
2.
TERM AND
TERMINATION .
The initial term of this Agreement, subject to the remaining terms
and conditions hereof, shall be for three years from the effective
date as stated in the preamble hereof. With respect to the
term and termination hereof:
a.
Evergreen
. At the expiration of the
initial term, this Agreement shall continue from year to year under
its then existing conditions unless and until a party hereto gives
the other no less than 90 days written notice of termination prior
to expiration of the initial term or of the one year extension then
in effect.
b.
Termination of CEO Services
Only .
Notwithstanding the foregoing, Homeland may terminate its
obligation to use the CEO services provided by Golden by giving to
Golden no less than 90 days written notice of termination of use of
such services on or before the first anniversary date of this
Agreement; or 90 days on or before any extension then in
effect. Upon appointment by Homeland of a separate CEO, all
persons providing management services to Homeland as provided for
herein, shall report to the appointed by Homeland CEO. The
parties agree that, except as
3
otherwise provided herein,
Golden shall provide CEO services for at least one year.
c.
Termination for
Cause .
Notwithstanding the forgoing, this Agreement may be terminated for
cause, as follows:
i.
If a party seeks to terminate this
Agreement for cause, it shall deliver to the other party written
notice of termination; which notice shall describe the basis for
determining cause exists; and which notice shall provide 30 days
notice and opportunity to cure. In the event that basis for
determining cause has not been cured to the reasonable satisfaction
of the party giving notice within 30 days, then the party may
deliver notice that this Agreement has been terminated.
ii.
Cause means:
A.
A material breach of this
Agreement. Material breach shall be: a failure of a party (to
include failure of the person being provided by a party) to comply
with applicable laws or regulations; a willful breach by a party
(to include a person being provided by a party) of a term of this
Agreement; or acts or conduct by a party (to include a person being
provided by a party) which demonstrates intentional misconduct,
reckless misconduct or grossly negligent misconduct.
B.
A deadlock in the management of
Golden and/or Homeland. Deadlock shall be the occurrence of
disagreements between the Board of Homeland and the Board of Golden
which, in the opinion of one or both Boards, has impaired the
ability of the management team to carry out the policies and/or
procedures as directed by one or both Boards of
Directors.
d.
Return of Confidential
Information .
Upon termination each party shall return to the other all of the
other’s Confidential Information that may be in possession of
the returning party.
e.
Surviving
Obligations .
Payment of any reimbursement obligations which have accrued and are
unpaid as of the date of termination, together with the obligations
of the parties as set forth at Sections 4 — 7 hereof, shall
survive termination. In all other respects the obligations of
the parties to each other shall cease upon termination
hereof.
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3.
REIMBURSEMENT
. The parties intend and agree
that compensation by each party to the other party shall occur as
follows:
a.
Compensation
. Each party shall be
responsible for and shall directly pay salary, wages, and/or
benefits to their respective employees, who are providing
management services hereunder.
b.
Reimbursement of
Compensation .
Each party shall be reimbursed by the other for wages, salaries
and/or benefits of persons providing management services hereunder
at the rate of 50% of such wages, salaries, and/or
benefits.
c.
Reimbursement of
Costs . With
respect to costs, reimbursement shall also include 50% of all costs
associated with employment of such persons, to include, social
security taxes, health insurance, workers’ compensation and
mileage.
d.
Income in
Compensation .
Compensation for any person providing management services shall be
as agreed by Golden and Homeland at the time of execution hereof;
or at the time such position is subsequently filled.
Thereafter, compensation for such persons shall be reviewed
annually; but the party with the obligation to reimburse shall not
be required to provide reimbursement of compensation in excess of
cost of living adjustment announced by the U.S. Department of Labor
absent its advance consent. In no event shall any bonus
program or bonus payment be included in reimbursement obligations
of either party.
e.
Bonuses
. In the exercise of their
respective sole discretion, Golden may pay bonuses to employees of
Homeland and Homeland may pay bonuses to employees of Golden;
provided that any such bonuses will be to reward performance for
shared services as provided for herein. The party proposing a
bonus to a person holding a shared position as provided for herein
shall report to the other the bonus proposal in advance of awarding
the same to the subject employee.
f.
Payment
. Payment by each party to the
other for shall occur on the 10 th day of each month.
4.
SEPARATE RIGHTS AND
RESPONSIBILITIES OF GOLDEN AND HOMELAND . The parties agree that to the following
reservation of their separate rights and statement of their
separate responsibilities, to-wit:
a.
Separate
Authority .
Nothing herein shall be construed as a grant of authority by Golden
as to Homeland, or by Homeland as to Golden, to m
