Exhibit 10.1


 


ADVANCED BIOENERGY, LLC


 


Perry C. Johnston


 


AMENDED AND RESTATED EMPLOYMENT
AGREEMENT


 


This Amended and Restated Employment Agreement (this
“Agreement”) is entered into on December 11,
2007 by and between Advanced BioEnergy, LLC, a Delaware limited liability
company (the “Company”), and Perry C. Johnston,
a resident of Minnesota (“Employee”).


 


Background


 


A.            The
Company, which was formed in early 2005, is establishing and currently owns and
operates dry mill corn-based ethanol plants throughout the Midwest.


 


B.            Employee’s
employment with the Company commenced on August 8, 2007 (the “Effective
Date”). Employee is employed by the Company as its Vice President, General
Counsel and Company Secretary.


 


C.            The
Company and Employee are parties to an Employment Agreement dated July 7,
2007 (the “Prior Agreement”), which the parties desire to amend and restate in
its entirety as set forth in this Agreement.


 


D.            It
is desirable and in the best interests of the Company to provide inducement for
Employee (1) to remain in the service of the Company in the event of any
proposed or anticipated change in control of the Company and (2) to remain
in the service of the Company in order to facilitate an orderly transition in
the event of a change in control of the Company.


 


E.             In
addition, in October 2004, the American Jobs Creation Act of 2004 (the “Act”)
was enacted, Section 885 of which Act added new provisions to the Internal
Revenue Code pertaining to deferred compensation. The Treasury Department has
issued final regulations and guidances regarding the deferred compensation
provisions of the Act, which permit service providers and service recipients a
transition period to modify existing deferred compensation arrangements to
bring them into compliance with the Act.


 


F.             The
parties agree that it is in their mutual best interests to modify, amend and
clarify the terms and conditions of the Prior Agreement, as set forth in this
Agreement, with the full intention of complying with the Act so as to avoid the
additional taxes and penalties imposed under the Act.


 


G.            In
consideration of the foregoing premises and the respective agreements of the
Company and Employee set forth below, the Company and Employee, intending to be
legally bound, agree as follows.


 

















 


Agreement


 


1.              Employment. Subject to
all terms and conditions hereof, the Company will continue to employ Employee,
and Employee will continue to serve the Company and perform services for the
Company, until Employee’s employment terminates under Section 11.


 


2.              Position
and Duties.


 


(a)           Position with the Company (“Position”). Employee will
continue to serve as Vice President, General Counsel and Company Secretary and
will perform such duties and responsibilities as the Company’s Chief Executive
Officer (“CEO”), the CEO’s designee, or the
Company’s Board of Directors (“Board”) may
assign to Employee from time to time. Employee’s employment hereunder will be
based at the Company’s headquarters located in the Minneapolis, Minnesota
metropolitan area.


 


(b)          Performance of Duties and
Responsibilities. Employee will serve the Company faithfully and to
the best of Employee’s ability and will devote Employee’s full time, attention
and efforts to the business of the Company during Employee’s employment.
Employee will report to the Company’s CEO, the CEO’s designee, or to such other
party that may be designated by the Board. During Employee’s employment
hereunder, Employee will not accept other employment or engage in other
material business activity, except as approved in writing by the Board. During
his employment with the Company, Employee may participate in charitable
activities and personal investment activities to a reasonable extent, and he
may serve as a director of business and civic organizations as approved by the
Board, so long as such activities and directorships do not interfere with the
performance of his duties and responsibilities hereunder.


 


(c)           Prior Commitments. Employee
hereby represents and warrants that Employee is under no contractual or legal
commitments that would prevent Employee from fulfilling the duties and
responsibilities as set forth in this Agreement. Employee has provided copies
to the Company of any employment agreements, non-competition agreements or
other agreements that Employee previously signed that might arguably restrict
Employee’s right to work for the Company, the services that Employee may
provide to the Company, or the information that Employee may disclose to the
Company or use in the course and scope of his employment with the Company.


 


3. Compensation.


 


(a)           Base Salary. The Company
will pay to Employee an annual base salary of $200,000,
less deductions and withholdings, which base salary will be paid in accordance
with the


 

















 


Company’s normal payroll policies and procedures.
During each year after the first year of Employee’s employment hereunder, the
Board may review and may increase Employee’s base salary in its sole
discretion.


 


 (b)       Employee Benefits. While Employee is employed
by the Company hereunder, Employee and his family members will be entitled to
participate in all employee benefit plans and programs of the Company to the
extent that Employee and his family members meet the eligibility requirements
for each particular plan or program. These benefit plans and programs currently
include a 401(k) plan and medical, dental, life and disability insurance
programs. The Company provides no assurance as to the adoption or continuance
of any particular employee benefit plan or program.


 


(c)           Expenses. The Company
will reimburse Employee for all reasonable and necessary out-of-pocket
business, travel and entertainment expenses incurred by Employee in the
performance of the duties and responsibilities hereunder, subject to Employee’s
providing receipts and complying with the Company’s normal policies and
procedures for expense verification and documentation; provided, however, that
Employee shall submit verification of expenses within 30 days after the date
the expense was incurred, and the Company shall reimburse Employee for such
expenses eligible for reimbursement within 30 days thereafter. The right to
reimbursement hereunder is not subject to liquidation or exchange for any other
benefit, and the amount of expenses eligible for reimbursement in a calendar
year shall not affect the expenses eligible for reimbursement in any other
calendar year.


 


(d)          Vacation. Employee will
receive 15  business days paid vacation time off
per full calendar year, such time to be taken with the approval of the CEO or
his designee, at such times so as not to disrupt the operations of the Company.
For the period from August 8, 2007 through December 31, 2007,
Employee will receive 8  business days
of paid vacation time off.


 


(e)           Annual Performance Bonus. After September 30,
2007, for each complete fiscal year that Employee is employed by the Company,
Employee shall be eligible for an annual bonus in an amount up to 25% of
Employee’s base salary during such fiscal year. Employee’s  eligibility
for any such bonus, and the amount of any such bonus that is paid, shall be
based upon and subject to reasonable criteria established by the Board or a
committee of the Board. Any bonus earned by Employee for a fiscal year shall be
payable to Employee no later than 60 days following the fiscal year for which
the bonus was earned.


 


(f)             Restricted Units. As soon as
reasonably practicable after the Effective Date, the Company will issue and
grant to Employee 15,000 units representing membership interests in the Company
(the “Initial Membership Units”). The terms
and conditions of such grant will be as set forth in a Restricted Unit
Agreement in substantially the


 

















 


form attached as Exhibit A (the “Restricted Unit Agreement”). The terms of the Restricted
Unit Agreement governing such Initial Membership Units will control over this Section 3(f).


 


(g)          Long-term Compensation Plan.
The Board is considering a plan to provide for long term equity
incentive compensation for employees, directors and consultants to the Company.
The plan is subject to final Board and member approval. Employee will be
eligible to participate if and when such a plan becomes effective.


 


(h)          Relocation Package. The Company
provided Employee with a “relocation package” consisting of cash payments in
the aggregate amount of $125,000. The Company paid $85,000 to Employee prior to
or within three (3) business days of the Effective Date and the remaining
$40,000 within thirty (30) calendar days after the Effective Date. If Employee
voluntarily resigns his employment with the Company for any reason other than
Good Reason (as defined herein), or the Company terminates Employee’s
employment with the Company for abandonment or for Cause only as it is
described in Sections 12 (g)(1), (2) or (3), in any case prior to the
first anniversary of the Effective Date, Employee will promptly repay Company
any and all monies that have been paid to Employee under this Section 3(h).


 


4.              Affiliates. As used in
this Agreement, “Affiliates” includes the Company
and each corporation, partnership, LLC or other entity that controls the
Company, is controlled by the Company, or is under common control with the
Company (in each case “control” meaning the direct or indirect ownership of 50%
or more of all outstanding equity interests).


 


5.              Confidential
Information. Except as permitted by the Company, Employee will
not at any time divulge, furnish or make accessible to anyone or use in any way
other than in the ordinary course of the business of the Company or its
Affiliates, any confidential, proprietary or secret knowledge or information of
the Company or its Affiliates that Employee has acquired or will acquire about
the Company or its Affiliates, whether developed by Employee or by others,
concerning (i) any trade secrets, (ii) any confidential, proprietary
or secret designs, programs, processes, formulae, plans, devices or material
(whether or not patented or patentable) directly or indirectly useful in any
aspect of the business of the Company or of its Affiliates, (iii) any
customer or supplier lists, (iv) any confidential, proprietary or secret development
or research work, (v) any strategic or other business, marketing or sales
plans, (vi) any financial data or plans, or (vii) any other
confidential or proprietary information or secret aspects of the business of
the Company or of its Affiliates. Employee acknowledges that the
above-described knowledge and information constitutes a unique and valuable
asset of the Company and represents a substantial investment of time and
expense by the Company, and that any disclosure or other use of such knowledge
or information other than for the sole benefit of the Company or its Affiliates
would be wrongful and would cause irreparable harm to the Company. The
foregoing obligations of confidentiality will not apply to any knowledge or
information that (A) is now or


 

















 


subsequently becomes generally publicly known, other
than as a direct or indirect result of the breach of this Agreement, (B) is
independently made available to Employee in good faith by a third party who has
not violated a confidential relationship with the Company or its Affiliates, or
(C) is required to be disclosed by law or legal process.


 


6.              Ventures. If, during
Employee’s employment with the Company, Employee is engaged in or provides
input into the planning or implementing of any project, program or venture
involving the Company, all rights in such project, program or venture belong to
the Company. Except as approved in writing by the Board, Employee will not be
entitled to any interest in any such project, program or venture or to any commission,
finder’s fee or other compensation in connection therewith. Employee will have
no interest, direct or indirect, in any customer or supplier that conducts
business with the Company.


 


7.              Non-Competition
and Non-Solicitation Agreements.


 


(a)           Agreement Not to Compete. During
Employee’s employment with the Company or any Affiliates and for a period of
twenty-four (24) consecutive months from and after the date of termination of
Employee’s employment, whether such termination is with or without Cause, or whether
such termination is at the instance of Employee or the Company, Employee shall
not, directly or indirectly, within 100 miles of any existing facility or
development site that the Company or any of its Affiliates operates or
contemplates operating during the 12 months prior to the last day of Employee’s
employment with the Company and any of its Affiliates, own, manage, control,
have any interest in, participate in, lend his name to, act as consultant or
advisor to or render services (alone or in association with any other person,
firm, corporation or other business organization) for:


 


(1)          any other person or entity
engaged in an ethanol production or co-production business; or


 


(2)          any other business in which
the Company or any of its Affiliates engages and the gross revenues from which
constitute at least 20% the Company’s or any of its Affiliates’ gross revenues.


 


For purposes of this Section, Employee agrees not to
engage in any such activity as a proprietor, principal, agent, partner,
officer, director, stockholder, employee, member of any association,
consultant, agent or otherwise. Ownership by Employee, as a passive investment,
of less than 1.0% of the outstanding shares of capital stock of any corporation
listed on a national securities exchange or publicly traded in the
over-the-counter market will not constitute a breach of this Section 7(a).


 


(b)          Agreement Not to Solicit or
Hire Away Employees. During Employee’s employment with the Company or
any Affiliates and for a period of twenty-four (24) consecutive


 

















 


months from and after the termination of Employee’s
employment, whether such termination is with or without cause, or whether such
termination is at the instance of Employee or the Company, Employee will not,
directly or indirectly, hire, engage or solicit any person who is then an
employee or contractor of the Company or who was an employee of the Company at
any time during the twelve-month period immediately preceding Employee’s
termination of employment, in any manner or capacity, including without
limitation as a proprietor, principal, agent, partner, officer, director,
stockholder, employee, member of any association, consultant or otherwise.


 


(c)           Agreement Not to Solicit
Customers and Other Business Relations. During Employee’s employment
with the Company or any Affiliates and for a period of twenty-four (24)
consecutive months from and after the termination of Employee’s employment,
whether such termination is with or without cause, or whether such termination
is at the instance of Employee or the Company, Employee will not, directly or
indirectly, solicit, request, advise or induce any current or potential
customer, supplier or other business contact of the Company to cancel, curtail
or otherwise adversely change its relationship with the Company, in any manner
or capacity, including without limitation as a proprietor, principal, agent,
partner, officer, director, stockholder, employee, member of any association,
consultant or otherwise.


 


(d)          Acknowledgment. Employee
hereby acknowledges that the provisions of this Section 7 are reasonable
and necessary to protect the legitimate interests of the Company and that any
violation of this Section 7 by Employee will cause substantial and
irreparable harm to the Company to such an extent that monetary damages alone
would be an inadequate remedy therefore. Therefore, in the event that Employee
violates any provision of this Section 7, the Company shall be entitled to
an injunction, in addition to all the other remedies it may have, restraining
Employee from violating or continuing to violate such provision.


 


(e)           Blue Pencil Doctrine. If the
duration of, the scope of, or any business activity covered by any provision of
this Section 7 is in excess of what is determined to be valid and
enforceable under applicable law, such provision will be construed to cover
only that duration, scope or activity that is determined to be valid and
enforceable. Employee hereby acknowledges that this Section 7 will be
given the construction which renders its provisions valid and enforceable to
the maximum extent, not exceeding its express terms, possible under applicable
law.


 


8.              Patents,
Copyrights and Related Matters.


 


(a)           Disclosure and Assignment. Employee
shall immediately disclose to the Company any and all improvements and
inventions that Employee may conceive and/or reduce to practice individually or
jointly or commonly with others while he is employed with the Company with
respect to (i) any methods, processes or apparatus concerned with the


 

















 


development, use or production of any type of
products, goods or services sold or used by the Company, and (ii) any type
of products, goods or services sold or used by the Company. Employee also shall
immediately assign, transfer and set over to the Company his entire right,
title and interest in and to any and all of such inventions as are specified in
this Section 8(a), and in and to any and all applications for letters
patent that may be filed on such inventions, and in and to any and all letters
patent that may issue, or be issued, upon such applications. In connection
therewith and for no additional compensation therefor, but at no expense to
Employee, Employee shall sign any and all instruments deemed necessary by the
Company for:


 


(1)          the filing and prosecution
of any applications for letters patent of the United States or of any foreign
country that the Company may desire to file upon such inventions as are
specified in this Section 8(a);


 


(2)          the filing and prosecution
of any divisional, continuation, continuation-in-part or reissue applications
that the Company may desire to file upon such applications for letters patent;
and


 


(3)          the reviving, re-examining
or renewing of any of such applications for letters patent.


 


This Section 8(a) shall not apply to any
invention for which no equipment, supplies, facilities, confidential,
proprietary or secret knowledge or information, or other trade secret
information of the Company was used and that was developed entirely on Employee’s
own time, and (i) that does not relate (A) directly to the business
of the Company, or (B) to the Company’s actual or demonstrably anticipated
research or development, or (ii) that does not result from any work
performed by Employee for the Company.


 


(b)          Copyrightable Material. All right,
title and interest in all copyrightable material that Employee shall conceive
or originate individually or jointly or commonly with others, and that arise
during the term of his employment with the Company and out of the performance
of his duties and responsibilities under this Agreement, shall be the property
of the Company and are hereby assigned by Employee to the Company, along with
ownership of any and all copyrights in the copyrightable material. Upon request
and without further compensation therefor, but at no expense to Employee,
Employee shall execute any and all papers and perform all other acts necessary
to assist the Company to obtain and register copyrights on such materials in
any and all countries. Where applicable, works of authorship created by Employee
for the Company in performing his duties and responsibilities hereunder shall
be considered “works made for hire,” as defined in the U.S. Copyright Act.


 

















 


(c)           Know-How and Trade Secrets. All know-how
and trade secret information conceived or originated by Employee that arises
during the term of his employment with the Company and out of the performance
of his duties and responsibilities hereunder or any related material or
information shall be the property of the Company, and all rights therein are hereby
assigned by Employee to the Company


 


9.              Return
of Records and Property. Upon termination of Employee’s
employment or at any time upon the Company’s request, Employee will promptly
deliver to the Company any and all Company and Affiliate records and any and
all Company and Affiliate property in Employee’s possession or under Employee’s
control, including without limitation manuals, books, blank forms, documents,
letters, memoranda, notes, notebooks, reports, printouts, computer disks,
computer tapes, source codes, data, tables or calculations and all copies
thereof, documents that in whole or in part contain any trade secrets or
confidential, proprietary or other secret information of the Company or its
Affiliates and all copies thereof, and keys, access cards, access codes,
passwords, credit cards, personal computers, telephones and other electronic
equipment belonging to the Company or its Affiliates.


 


10.       Remedies. Employee
acknowledges that it would be difficult to fully compensate the Company for monetary
damages resulting from any breach by him of the provisions hereof. Accordingly,
in the event of any actual or threatened breach of any such provisions, the
Company will, in addition to any other remedies it may have, be entitled to
injunctive and other equitable relief to enforce such provisions, and such
relief may be granted without the necessity of proving actual monetary damages.
In the event that a court of competent jurisdiction concludes that Employee has
violated Employee’s obligations under Sections 5, 6, 7, 8 or 9 of this
Agreement, Employee shall also be liable to the Company for the reasonable
costs and attorneys’ fees that it incurs in any legal action in which it
enforces its legal rights under those paragraphs.


 


11.       Termination of Employment. The Employee’s
employment with the Company will terminate immediately upon:


 


(a)           Employee’s receipt of
written notice from the Company of the termination of Employee’s employment,
effective as of the date indicated in such notice;


 


(b)          The Company’s receipt of
Employee’s written resignation from the Company, effective as of the date
indicated in such resignation or Employee’s abandonment of his employment or
resignation other than by notice from the Company;


 


(c)           Employee’s Disability (as
defined below); or


 


(d)          Employee’s death.


 

















 


The date upon which Employee’s
termination of employment with the Company occurs is the “Termination
Date”. For purposes of Section 12 of this Agreement only, and
with respect to timing of any payments thereunder only, the “Termination Date” shall mean the date on which a “separation
from service” has occurred for purposes of section 409A of the Internal Revenue
Code, and the regulations and guidance thereunder.


 


“Disability”
means the inability of Employee to perform on a full-time basis the duties and
responsibilities of Employee’s employment with the Company by reason of illness
or other physical or mental impairment or condition, if such inability
continues for an uninterrupted period of 90 days or for more than 90 complete
days during any 12-month period. Notwithstanding any other provision of this
Agreement, the Termination of Employee’s employment does not terminate Employee’s
other obligations under this Agreement.


 


12.       Payments upon Termination of
Employment.


 


(a)           Payments Upon Involuntary
Termination Without Cause Or Resignation For Good Reason. If Employee’s
employment with the Company is terminated by the Company for any reason other
than for “Cause” (as defined below), including without limitation termination
of Employee’s employment in connection with a Change in Control (as defined
herein), or by Employee as a result of his resignation for “Good Reason” (as
defined below) such that Employee’s Termination Date occurs within twenty-four
(24) months after the occurrence of the condition which is the basis for the
Good Reason termination by Employee, then Employee shall in either case receive
from Company the following severance pay and benefits.


 


(1)          The Company will pay
Employee severance pay in an aggregate amount equal to fifty two weeks of
Employee’s weekly base salary amount immediately prior to the Termination Date,
payable over one year in equal installments in accordance with the Company’s
regular payroll practices, with the first payment beginning no earlier than the
expiration of all applicable rescission periods provided by law and no later
than forty-five (45) calendar days following the termination of employment.


 


(2)          The Company will pay
Employee a pro rata portion (based on the portion of the fiscal year Employee
provided services to the Company) of any annual performance bonus pursuant to Section 3(e) that
would have been payable to Employee if he had remained employed by the Company
for the fiscal year in which the Termination Date occurs, based on actual
Company performance for such fiscal year. Such payment shall be made in the
same manner and at the same time that annual incentive bonus payments are made
to current executive officers of the Company, but no earlier than the
expiration of all applicable rescission periods provided by law and no later
than the date 2-1/2 months following the end of the fiscal year.


 

















 


(3)          The Company will continue to
provide Employee’s and his family’s then-applicable health, dental, disability
and life insurance under the same terms and conditions as then made available
to other Company employees and their families (the employer- and
employee-portions being the same as for then-current Company employees) for up
to one year following the Termination Date. The Company shall be entitled to
cease providing any health, dental, disability, or life insurance benefits
prior to one year after the Termination Date if Employee becomes eligible for
group health, dental, disability or life insurance coverage (as applicable)
from any other employer. Once Employee has become eligible for comparable group
health, dental, disability or life insurance coverage from any other such
employer, Employee shall promptly and fully disclose this fact to the Company
in writing and shall be liable to repay any amounts to the Company that
should have been so mitigated or reduced but for Employee’s failure or
unwillingness to make such disclosure.


 


(b)          If a Change in Control (as
defined in Appendix A of this Agreement) occurs and Employee’s employment with
the Company is terminated by the Company without Cause then, in addition to the
severance pay and benefits payable to Employee pursuant to Sections 12(a)(1)(2) and
(3), and provided that such termination occurs during a period beginning the
earlier of (x) the date the Company signs a letter of intent regarding the
Change in Control transaction or (y) 60 days prior to the consummation of
the Change in Control, and ending on the day immediately prior to the date of
Change in Control, Employee shall receive severance pay in an aggregate amount
equal to the lesser of (x) fifty two weeks of Employee’s weekly base
salary amount immediately prior to the Termination Date, or (y) Employee’s
weekly base salary amount for the number of weeks Employee had been employed by
the Company or its successor as of the Termination Date, payable in equal
installments in accordance with the Company’s regular payroll practices,
beginning on the first payroll date following the last severance payment made
pursuant to Section 12(a)(1) above.


 


(c)           If a Change in Control
occurs and Employee’s employment with the Company or its successor is
terminated by the Company or its successor without Cause or by Employee for
Good Reason then, in addition to the severance pay and benefits payable to
Employee pursuant to Sections 12(a)(1)(2) and (3), and provided that such
termination occurs (1) during the period starting on the date of
consummation of the Change in Control transaction and ending two years after
consummation of the Change in Control transaction in respect of termination by
Company or its successor, or (2) by Employee as a result of Employee’s
resignation for Good Reason during the period beginning 90 days after the
closing of the Change in Control transaction and ending on the date two years
after consummation of the Change in Control transaction, then Employee shall
receive severance pay in an aggregate amount equal to the lesser of (x) fifty
two weeks of Employee’s weekly base salary amount immediately prior to the
Termination Date, or (y) Employee’s weekly base salary amount for the
number of 


 

















 


weeks Employee had been employed by the Company or
its successor as of the Termination Date, payable in equal installments in
accordance with the Company’s regular payroll practices, beginning on the first
payroll date following the last severance payment made pursuant to Section 12(a)(1) above.


 


(d)          Wages Due. If Employee’s
employment with the Company is terminated by reason of (1) Employee’s
abandonment of Employee’s employment or Employee’s resignation for any reason; (2) termination
of Employee’s employment by the Company for Cause (as defined below); or (3) Employee’s
Disability or death, the Company will pay to Employee, Employee’s beneficiary
or Employee’s estate, as the case may be, Employee’s base salary through the
Termination Date.


 


(e)           Limitations on Severance Pay.
Notwithstanding the foregoing provisions of this Section 12, the
obligation of the Company to make any of the termination payments to Employee
in Sections 12(a), 12(b), or 12(c) of this Agreement is contingent upon
Employee’s execution of a full and valid release of claims arising out of his
employment or the termination of that employment in favor of the Company, its
officers, directors, agents, employees, successors, assigns and affiliates.
Execution of such a release and the expiration of any applicable rescission
period, following such execution, is a condition precedent to the Company’s
obligation to make any of the termination payments set forth in this Agreement.


 


The Company will not be
obligated to make any payments or provide any benefits under this Section 12
if Employee’s employment with the Company is terminated by the Company in
connection with a Change in Control and the Employee rejects an offer of employment
in the Minneapolis, Minnesota metropolitan area from any successor in interest
of the Company in respect of the Change in Control on terms that are comparable
to those provided for by this Agreement.


 


(f)             If, as of the Termination
Date, Employee is a “specified employee” under Section 409A(a)(2)(B)(i) of
the Code, and if any payments that Employee is entitled to receive hereunder
may not be made at the time contemplated by the terms of this Agreement without
causing Employee to be subject to the additional tax imposed by Section 409A
of the Code, then any such payments under this Agreement that would have been
paid during the period six months after Termination Date shall be held and paid
in a lump sum on the first day of the seventh month following the Termination
Date (without interest or earnings). Such deferral, if any, shall have no
effect on any payments scheduled following the period six months after the
Termination Date.


 


 (g) For purposes of this Agreement, “Cause” shall mean:


 

















 


(1)          an act of dishonesty
undertaken by Employee and intended to result in personal gain or enrichment of
Employee or another at the expense of the Company or its Affiliates;


 


(2)          unlawful conduct or gross
misconduct by Employee, whether on the job or off the job, that, in either
event, is publicly detrimental to the reputation or goodwill of the Company;


 


(3)          the conviction of Employee
of a felony, or Employee’s entry of a no contest or nolo contendre plea to a
felony;


 


(4)          persistent failure of
Employee to perform Employee’s material duties and responsibilities hereunder
or to meet reasonable performance objectives set by the CEO or Board, as
applicable, from time to time, which failure is willful and deliberate on
Employee’s part and has not been cured by Employee within fifteen (15) days
after written notice thereof to Employee from the Company;


 


(5)          willful and deliberate
breach by Employee of his fiduciary obligations as an officer or director of
the Company; or


 


(6)          material breach of any terms
or conditions of this Agreement by Employee which breach has not been cured by
Employee within fifteen (15) days after written notice thereof to Employee from
the Company.


 


For the purposes of this Section 12(g), no act
or failure to act on Employee’s part shall be considered “dishonest,” “willful”
or “deliberate” unless done or omitted to be done by Employee in bad faith and
without reasonable belief that Employee’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board shall be conclusively
presumed to be done, or omitted to be done, by Employee in good faith and in
the best interests of the Company.


 


(h)          For purposes of this
Agreement, “Good Reason” shall mean the occurrence
of any of the following conditions without Employee’s consent, provided that
Employee has first given written notice to the Company of the existence of the
condition within 90 days of the occurrence of such condition which is the basis
for Good Reason termination by Employee, and the Company has failed to remedy
the condition within 30 days thereafter:


 


(1)          a material reduction in the
duties, responsibilities, or authority of Employee, whether such reduction is
initiated by Company or any successor in interest (except in connection with
the termination of Employee’s employment for Cause);


 

















 


(2)          A material reduction in the
duties, responsibilities, or authority of the person to whom Employee reports;


 


(3)          any reduction in Employee’s
base salary or failure to pay Employee any base salary or bonus to which he is
entitled under this Agreement;


 


(4)          any material breach by the
Company of its obligations under this Agreement;


 


(5)          requiring Employee to be
principally based at any office or location more than 50 miles from
Minneapolis, Minnesota (other than for normal travel in connection with
Employee’s performance of responsibilities hereunder); or


 


 (6) the failure of the Company to assign
this Agreement to a successor pursuant to Section 13(i), or failure of
such successor to explicitly assume and agree to be bound by this Agreement.


 


13.       Miscellaneous.


 


(a)           Tax Matters. Employee
acknowledges that the Company shall deduct from any compensation payable to
Employee or payable on his behalf under this Agreement all applicable federal,
state, and local income and employment taxes and other taxes and withholdings
required by law.


 


(b)          Beneficiary. If Employee
dies before receiving all of the amounts payable to him in accordance with the
terms and conditions of this Agreement, such amounts shall be paid to the
beneficiary (“Beneficiary”) designated by
Employee in writing to the Company during his lifetime, or if no such
Beneficiary is designated, to Employee’s estate. Employee may change his
designation of Beneficiary or Beneficiaries at any time or from time to time
without the consent of any prior Beneficiary, by submitting to the Company in
writing a new designation of Beneficiary.


 


(c)           Governing Law. All matters
relating to the interpretation, construction, application, validity and
enforcement of this Agreement will be governed by the laws of the State of
Minnesota without giving effect to any choice or conflict of law provision or
rule, whether of the State of Minnesota or any other jurisdiction, that would cause
the application of laws of any jurisdiction other than the State of Minnesota


 


(d)          Arbitration. Employee and
Company agree to submit any and all disputes concerning the terms of this
Agreement or any other terms and conditions of Employee’s employment, with the
exception of an action for injunctive relief under Sections 5, 7 or 8  of this Agreement, to final and binding
arbitration. The arbitration will be conducted in Minneapolis, Minnesota in
accordance with the procedural rules of the American Arbitration
Association. The arbitrator may order any legal and equitable remedies,


 

















 


including backpay and/or reimbursement, but will
have no authority to alter, modify or amend the terms of this Agreement or to
award punitive damages.


 


(e)           Jurisdiction and Venue. Employee and
the Company consent to jurisdiction of the courts of the State of Minnesota
and/or the federal district courts, District of Minnesota, for the purpose of
resolving all issues of law, equity, or fact, arising out of or in connection
with this Agreement. In connection therewith, each party consents to personal
jurisdiction over such party in the state and/or federal courts of Minnesota
and to venue for the purpose of such decisions in Hennepin County, State of
Minnesota, and hereby waives any defense of lack of personal jurisdiction or forum non conveniens.


 


(f)             Entire Agreement. This
Agreement, together with the Restricted Unit Agreement and all attachments and
exhibits hereto or thereto, contains the entire agreement of the parties relating
to Employee’s employment with the Company and supersedes all prior agreements
and understandings with respect to such subject matter, and the parties hereto
have made no agreements, representations or warranties relating to the subject
matter of this Agreement that are not set forth herein.


 


(g)          Amendments. No amendment
or modification of this Agreement will be deemed effective unless made in
writing and signed by Employee and the CEO or the Chairman of the Board.


 


(h)          No Waiver. No term or
condition of this Agreement will be deemed to have been waived, except by a
statement in writing signed by the party against whom enforcement of the waiver
is sought. Any written waiver will not be deemed a continuing waiver unless
specifically stated, will operate only as to the specific term or condition
waived and will not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.


 


(i)              Assignment. This
Agreement shall not be assignable, in whole or in part, by either party without
the written consent of the other party, except that the Company may, without
the written consent of Employee, assign its rights and obligations under this
Agreement to any corporation or other business entity (i) with which the
Company may merge or consolidate, (ii) to which the Company may sell or
transfer all or substantially all of its assets or membership interests, or (iii) of
which 50% or more of the voting control is owned, directly or indirectly, by
the Company. No such assignment without the written consent of Employee shall
discharge the Company from liability hereunder, and such assignee jointly and
severally with the Company shall thereafter be deemed to be the “Company” for
purposes of all terms and conditions of this Agreement, including this Section 13(i).


 

















 


(j)              Notices. Any notice
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand, sent by reliable next-day courier, or sent by registered or
certified mail, return receipt requested, postage prepaid, to the party to
receive such notice addressed as follows:


 


If to the Company:


 


Advanced BioEnergy, LLC


10201 Wayzata Boulevard


Suite 250


Hopkins, Minnesota 55305


Attention:  Chief Executive Officer


 


If to Employee:


 


Perry Johnston


4517 Belvidere Lane


Edina, MN 
55435


 


or addressed to such other address as may have been
furnished to the sender by notice hereunder. All notices shall be deemed given
on the date on which delivered if delivered by hand or on the date sent if sent
by overnight courier or certified mail, except that notice of change of address
will be effective only upon receipt by the other party.


 


(k)           Counterparts. This
Agreement may be executed by facsimile signature and in any number of
counterparts, and such counterparts executed and delivered, each as an
original, will constitute but one and the same instrument.


 


(l)              Severability. Subject to Section 7(e) hereof,
to the extent that any portion of any provision of this Agreement is held
invalid or unenforceable, it will be considered deleted herefrom and the
remainder of such provision and of this Agreement will be unaffected and will
continue in full force and effect.


 


(m)        Captions and Headings. The captions
and paragraph headings used in this Agreement are for convenience of reference
only and will not affect the construction or interpretation of this Agreement
or any of the provisions hereof.


 


(n)          Company Approvals. The Company
represents and warrants to Employee that it (and to the extent required, the
Board) has taken all corporate action necessary to authorize this Agreement.


 


(remainder of page intentionally
left blank)


 

















 


SIGNATURES


 


Employee and the Company have executed this
Agreement as of the date set forth in the first paragraph.


 


	
   

  	
   

  	
  Advanced BioEnergy LLC

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  , 2007

  	
   

  	
  By:

  	
  /s/ Revis L. Stephenson
  III

  	
   

  
	
   

  	
   

  	
   

  	
  Revis L. Stephenson III

  
	
   

  	
   

  	
   

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  , 2007

  	
   

  	
  /s/ Perry C. Johnston

  	
   

  
	
   

  	
   

  	
  Perry C. Johnston

  



 

















 


Appendix A


 


“Change in Control” for purposes of this Amended and Restated
Employment Agreement shall mean the occurrence of any one or more of the
following:


 


(1)           the acquisition, during any 12
consecutive month period that ends subsequent to the Effective Date, by any “person”
(within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange
Act) (an “Acquirer”) of ownership (determined taking into account the ownership
attribution rules of Section 318(a) of the Code) of membership
interests of the Company possessing 30% or more of the total voting power of
the then outstanding membership interests of the Company; provided that for
purposes of this paragraph (1):


 


(a)           any
membership interests of the Company owned by the Acquirer prior to the start of
the applicable 12 consecutive month period shall not be counted toward the 30%
threshold specified above; and


 


(b)           an
acquisition shall not constitute a Change in Control pursuant to this paragraph
(1) if: (i) prior to the acquisition, the Acquirer owns membership
interests of the Company possessing more than 50% of the total fair market
value or total voting power of the then outstanding membership interests of the
Company; (ii) the acquisition occurs after the Acquirer has satisfied the
30% threshold specified in paragraph (1) above; (iii) the acquisition
is by the Company or a Subsidiary of the Company; (iv) the acquisition is
by an employee benefit plan (or related trust) sponsored or maintained by the
Company or one or more of its Subsidiaries; (v) the acquisition is by the
Employee or any group that includes the Employee; or (vi) the acquisition
is by a surviving or acquiring entity in connection with a Business Combination
described in clause (4)(a) below;


 


(2)           the acquisition by an Acquirer of
membership interests of the Company that, together with membership interests
already held by such Acquirer, constitutes more than 50% of the total fair
market value or total voting power of the membership interests of the Company,
other than an acquisition by an Acquirer who, prior to the acquisition, owned
more than 50% of the total fair market value or total voting power of the
membership interests of the Company;


 


(3)           the replacement, during any 12
consecutive month period that ends subsequent to the Effective Date, of a
majority of the members of the Board with members whose appointment or election
is not endorsed by a majority of the members of the Board before the date of
the appointment or election;


 


(4)           the consummation of a merger or
consolidation of the Company with or into another entity, a statutory share exchange
or a similar business combination involving the Company (each, a “Business
Combination”) which, subsequent to the Effective Date, has been approved by the
stockholders of the Company, other than (a) a Business Combination where
the holders of membership interests of the Company immediately before the
Business Combination own, directly or indirectly, 65% or more of the total
voting power of all the outstanding equity securities of the surviving or
acquiring entity resulting from such Business Combination, or (b) a
Business Combination where the Employee or a group that includes the Employee
owns, directly


 

















 


or
indirectly, 30% or more of the total value or voting power of all the
outstanding equity interests of the surviving or acquiring entity resulting
from such Business Combination; or


 


(5)           the acquisition, during any 12
consecutive month period that ends subsequent to the Effective Date, by an
Acquirer of assets of the Company with a total gross fair market value
(determined without regard to any liabilities associated with such assets)
equal to more than 40% of the total gross fair market value of all assets of
the Company immediately prior to the acquisition, other than an acquisition (a) by
a holder of membership interests in the Company immediately prior to such
acquisition in exchange for or with respect to its Company membership
interests, (b) by an entity 65% or more of the total voting power of which
is owned, directly or indirectly, by the Company, (c) by a Person or group
(within the meaning of 26 CFR § 1.409A-3(i)(5)(vii)(C)) that owns,
directly or indirectly, 65% or more of the total voting power of all
outstanding membership interests of the Company, (d) an entity 65% or more
of the total voting power of which is owned, directly or indirectly, by a
Person or group described in the immediately preceding clause (c), or (e) by
a corporation 30% or more of the total value or voting power of which is owned,
directly or indirectly, by the Employee or a group that includes the Employee;


 


provided,
however, that in each case the transaction or transactions constitutes a change
in the ownership of the Company, a change in the effective control of the
Company or a change in the ownership of a substantial portion of the assets of
the Company, as determined under Section 409A of the Code.