EXHIBIT 10.2


 


EMPLOYMENT AGREEMENT


CHIEF EXECUTIVE OFFICER


 


This Employment Agreement (“Agreement”) is made effective the 1st day
of December, 2008, by and between Otter Tail
Ag Enterprises, LLC, a
Minnesota limited liability company (“Company”), and Anthony J. Hicks, a Minnesota resident (“Executive”).


 


RECITALS


 


WHEREAS, Company is a limited liability company organized for the
purpose, among other things, of operating an ethanol plant and associated business,
with its principal place of business near Fergus Falls, Minnesota; and


 


WHEREAS, Executive is employed by Company as the Chief Financial
Officer and the Chief Executive Officer, having been appointed to such positions
by the Company’s Board of Governors, and Company seeks to retain Executive as
Chief Executive Officer/Chief Financial Officer under the terms of this
Agreement; and


 


WHEREAS, the Company and Executive believe it is in their mutual best
interests to enter into an agreement regarding their mutual obligations
relative to Executive’s employment with the Company.


 


NOW, THEREFORE, the parties hereto agree as follows:


 


1.                            EMPLOYMENT.


 


Company agrees to continue to employ Executive as its Chief Financial
Officer and its Chief Executive Officer/General Manager, under the terms of
this Agreement commencing on December 1, 2008 (the “Start Date”).  The positions shall be referred to as “Chief
Financial Officer” and “Chief Executive Officer”.   Executive
hereby accepts such continued employment commencing on the Start Date, and
agrees to remain employed with the Company in accordance with the terms and
conditions of this Agreement and the terms of employment applicable to regular
employees of Company, including the terms and conditions to be set forth in the
Company’s Human Resources Policy Manual to be developed by the Company (the “Handbook”).  In the event of any conflict or ambiguity
between the terms of this Agreement and terms of employment applicable to
regular employees, the terms of this Agreement shall control.   Any prior agreements or arrangements
concerning Hick’s employment with the Company, oral or written, between
Executive and Hicks are superseded and replaced by the terms of this Agreement.


 


2.                            DUTIES
OF EXECUTIVE.


 


The duties of Executive shall include the performance of all of the
duties typical of the office held by Chief Executive Officer and Chief
Financial Officer of an ethanol plant as described in the organizational
documents of the Company, described in the job description of Chief Executive
Officer and Chief Financial Officer, as the case may be, and such other duties
and obligations as may be assigned or directed by the Company’s Board of Governors
(the 


 

















 


“Board”).  Executive shall perform
all his duties in a professional, ethical and businesslike manner.


 


Executive agrees to serve the Company faithfully and to the best of his
abilities, and to devote his full time, attention, and efforts to the business
and affairs of the Company during the term of his employment with the
Company.  Executive will not, during the
term of this Agreement or his employment with the Company, directly or
indirectly engage in any other part time or full time employment or business,
either as an employee, employer, consultant, principal, officer, director,
advisor, or in any other capacity, either with or without compensation, without
the prior written consent of the Board. 
Executive represents to the Company that he is under no contractual
commitments that are inconsistent with his obligations set forth in this
Agreement or that would preclude his employment with the Company.


 


3.                            COMPENSATION.


 


Executive’s salary during the term of his employment with the Company
under this Agreement will be payable in installments according to the Company’s
regular payroll schedule.  Executive’s
base annualized salary during the term of this Agreement shall be as follows ( the
“Base Salary”):


 


Start Date – December 31, 2009: 
$137,000.00


 


Executive shall have the opportunity to earn a discretionary bonus which
shall be considered by the Board in November, 2009, depending on the fiscal
condition of the Company.  Provided
Executive meets the standard requirements of qualifying to be a member of the
Company, Executive will receive a profit’s interest on a total of an additional
10,000 Class A member units of the Company at a zero basis, with ownership
of said units to vest as follows (the “Vesting Dates”):


 


January 1, 2009-  4,500 Units Vest


December 31, 2009– 4,500 Units Vest


December 31, 2010 – 1,000 Units Vest


 


Vesting is contingent upon Executive being employed with the Company on
any of the Vesting Dates.  A precondition
of any Compensation to be paid under this Agreement is Executive’s performance
of his duties, compliance with this Agreement, and compliance with the
regulations governing plant operations.


 


4.                            BENEFITS.


 


In addition to the compensation described in Section 3
of this Agreement, Executive will be entitled to certain additional benefits
afforded to the Chief Executive Officer position, as well as those benefits
generally available to employees of the Company.  Benefits afforded are generally subject to
being altered, modified, discontinued, amended, or otherwise changed by the
Company.


 


A.                         Vacation/Sick Leave.  Executive will be entitled to paid time off
and extended illness bank benefits or vacation/sick leave benefits as set forth
in the Handbook.


 


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B.                           Health and
Hospitalization Insurance.  Executive
shall be afforded health and hospitalization insurance coverage pursuant to the
Company’s plans afforded other employees, with the Company paying health and
hospitalization insurance premiums for Executive’s individual coverage.


 


C.                           Other Benefits.  Executive shall also be afforded the right to
participate in any other benefit plans now or later available to other Company
employees.


 


D.                          401K.  Executive shall be entitled to participate in
Company’s 401K savings plan, on the basis of the same availability to other
Company employees.


 


E.                            Automobile.  Company has leased a motor vehicle for company
use. The vehicle will be used for administrative purposes by Executive and
other Company employees primarily, but may be used by Executive for personal
use.  A mileage log shall be kept by
Executive noting all business use and personal use miles, and this log shall be
utilized to do a personal value calculation to be reflected on Executive’s W-2
form each year.


 


F.                            Expense
Reimbursement.   Executive shall be
entitled to reimbursement for all reasonable expenses, including travel and
entertainment, incurred by Executive in the performance of Executive’s duties
pursuant to policies adopted by the Board. Executive will maintain records and
written receipt as required by the Company policy and reasonably requested by
the board of directors to substantiate such expenses.


 


G.                           Miscellaneous.  Company will provide Executive with a
cellular phone and service plan, personal computer, PDA, and such other
equipment and tools as are reasonably necessary for Executive to perform
Executive’s duties.  Company shall
reimburse Executive or pay dues or fees incurred by Executive in ethanol
industry related programs, organizations, and education programs as the Company
may, from time to time, authorize Executive to participate in.  Executive is authorized and directed to
involve himself in and participate in the activities of such organizations
related to the ethanol industry as Executive, in his reasonable discretion, and
such other organizations related to the ethanol industry as Executive, in his
reasonable discretion, deems appropriate and necessary, and such activities
shall be regarded as part of Executive’s duties as Chief Executive Officer and
Chief Financial Officer.


 


5.                            TERM
AND TERMINATION.


 


A.                         Term. The term of Executive’s
employment with the Company pursuant to this Agreement shall commence on the
Start Date, and it shall continue in effect for a period terminating on December 31,
2009 (the “Termination Date”), unless earlier terminated as provided in this
Agreement.  On the Termination Date, this
Agreement and Executive’s employment with the Company shall terminate without
any further action, but may be renewed or extended upon the mutual written
agreement of Executive and Company.  In
the sixty (60) day period preceding the Termination Date, or earlier as agreed
to by the parties, Company and Executive will engage in good faith discussions
regarding extension of this Agreement and Executive’s employment with the
Company.


 


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B.                           Termination By Company Without Cause.  Notwithstanding any provision
of this Agreement or applicable law to the contrary, Executive’s employment with
the Company and this Agreement may be terminated by the Company, acting by and
through the Board, at any time prior to the Termination Date without Cause (as
that term is defined herein), in its sole discretion and at its election,
effective upon sixty (60) days’ prior written notice to Executive or such later
date as determined by the Board.  In the
event of termination pursuant to this section, Company’s sole obligation will
be to pay Executive’s salary at the pro-rated Base Salary to the termination
date included in Executive’s original termination notice.


 


C.                           Termination By Employee. 
Executive’s employment with the Company and this Agreement may be
terminated by Executive at any time prior to the Termination Date, effective
upon sixty (60) days’ prior written notice to the Company. This Agreement and
Executive’s employment with the Company will be deemed terminated by Employee upon
the occurrence of any of the following events: (i) the death of Executive;
or (ii) Executive’s inability to carry on the essential functions of his
usual and customary duties, because of illness or sickness, for a period of an
aggregate six (6) months.  In the
event of termination pursuant to this section, Company’s sole obligation will
be to pay Executive’s salary at the pro-rated Base Salary to the termination
date included in Executive’s original termination notice or the date of death
or disability.


 


D.                          Termination by Company for
Cause.  In the event that Executive
is in breach of any obligation owed Company in this Agreement, or engages in
any of the following conduct which shall constitute “Cause,” then Company shall
have the right, at its discretion, to terminate this Agreement and Executive’s
employment with the Company upon five (5) days’ written notice to
Executive.


 


Grounds for termination of this Agreement and Executive’s employment
with the Company, for Cause, includes:


 


i.                                Executive habitually and
willfully neglects the duties to be performed by him;


 


ii.                             Executive engages in any
conduct which is dishonest, or disloyal to Company, or materially damages the
reputation or standing of the Company;


 


iii.                          Executive is convicted of any
crime involving theft or dishonesty, or comprising a felony level offense;


 


iv.                         Executive violates material
Company rules, regulations, directives, or policies;


 


v.                            Executive engages in
conduct unbecoming an officer position which materially impairs the Company’s
operations or Executive’s effectiveness in his work;


 


vi.                         Other good and sufficient
grounds constituting similar serious misconduct.


 


Except for termination on the basis of Subdivisions D(ii), D(iii), or D(iv),
Executive’s employment shall not be terminated upon any of the above specified
grounds constituting Cause, unless he shall have failed to correct a deficiency
to the satisfaction of Company, at its discretion, after having been given
written notice of the specified items of nonperformance and a reasonable amount
of time, not to exceed thirty (30) days within which to correct the claimed 


 


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failure to perform.  Any
recurrence of conduct for which notice was previously given shall constitute
grounds for immediate termination.


 


In event of termination of this Agreement pursuant to this section,
Company’s sole obligation will be to pay Executive’s then earned salary at the
pro-rated Base Salary to the termination date.


 


6.                            BOARD
MEETING ATTENDANCE.


 


Executive shall be notified of and attend all annual, regular, and
special meetings of the Board, but in a non-voting capacity.


 


7.                            SUCCESSOR
TRANSITION.


 


Executive shall assist Company in transitioning to Executive’s
successor to the Chief Executive Officer and Chief Financial Officer positions as
reasonably requested by the Company.


 


8.                            CONFIDENTIAL
INFORMATION; INTELLECTUAL PROPERTY.


 


In connection with this Agreement, and as a condition to Company continuing
to employ Executive, Executive will execute and deliver a confidential
information and intellectual property agreement under which Executive will
agree (i) during the term of his employment with the Company and
thereafter, to not use any Company information, except for the purposes of
performing his duties and services for the Company, and never in competition
with the Company; and (ii) that all developments, know-how, research,
processes, or other concepts developed by Executive during the course and scope
of his employment with Company, shall be the exclusive property of the Company.


 


A breach of said companion agreement will be
a breach of this Agreement. The obligations of Executive under this section
shall survive termination of this Agreement.


 


9.                            NON-COMPETITION;
NON-SOLICIT.


 


As a condition of this Agreement and the arrangements
set forth herein, Hicks agrees to a non-competition and non-solicit arrangement
under which Hicks agrees
that for a period of two (2) years after the termination of Hick’s
employment with the Company,  i) Hicks
will not consult for, be employed with, or otherwise perform services for, any
person or entity in the ethanol business within a geographic area as
follows:  any area located within 100
miles of any outer city limit of Fergus Falls, MN; and ii) that Hicks will not,
directly or indirectly, solicit any customer, supplier, employee, or other
representative of the Company to withdraw, curtail, or cancel its business with
the Company, or leave the employ of the Company, as the case may be.  Employment in or for an elevator not owned or
controlled by an ethanol plant or an affiliate of an ethanol plant will not be
a breach of the non-compete, provided that no grain procurement for ethanol
plants will be permitted within a one-hundred fifty (150) mile radius of the
Company’s ethanol plant. The obligations of Executive under this section shall
survive termination of this Agreement.


 


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10.                     MISCELLANEOUS.


 


A.                         Notices.  Any notice required by this Agreement or
given in connection with it, shall be in writing and shall be given to the
appropriate party by personal delivery, or by certified mail, postage prepaid,
and return receipt requested, or by recognized, national overnight delivery
services;


 


	
   

  	
  If to Company:

  	
  Otter Tail Ag Enterprises, LLC

  
	
   

  	
   

  	
  24096 – 170th Avenue

  
	
   

  	
   

  	
  Fergus Falls, MN 56537

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Executive:

  	
  Anthony Hicks

  
	
   

  	
   

  	
  514 North Union

  
	
   

  	
   

  	
  Fergus Falls, MN 56537

  



 


Notice given by certified mail shall be deemed given five (5) days
after the notice is deposited in the mail. 
All other forms of notice shall be deemed given on the date of personal
delivery or the date of the overnight delivery. 
If either party desires to change their address for notice purposes,
prior notice of such address change shall be given to the other party as set
forth in this section.


 


B.                           Final Agreement.  This Agreement and any other agreements
referred to herein are the entire agreement of the parties relating to the
subject matter hereof, and supersede all prior understandings or agreements on
the subject matter hereof.  This Agreement
may be modified, waived, amended, or altered only by a further writing that is
duly executed by both parties.


 


C.                           Governing Law And
Jurisdiction.  This Agreement shall
be construed and enforced in accordance with the laws of the state of
Minnesota, without regard to choice of law or conflict of law provisions.  Each party consents to the state courts of
Minnesota, Otter Tail County, as exclusive jurisdiction and venue to determine
any disputes and hear any proceedings related to or arising from this Agreement
or the parties’ employer/employee relationship. 
The parties waive any argument or objection to such jurisdiction and
venue and agree that it is mutually convenient.


 


D.                          Headings.  Headings used in this Agreement are provided
for convenience only and shall not be used to construe meaning or intent.


 


E.                            No Assignment.  Neither this Agreement nor any or interest in
this Agreement may be assigned by Executive without the prior express written
approval of Company, which may be withheld by Company at Company’s absolute discretion.


 


F.                            Severability.  If any term of this Agreement is held by a
court of competent jurisdiction to be invalid or unenforceable, then this
Agreement, including all of the remaining terms, will remain in full force and
effect as if such invalid or unenforceable term had never been included.


 


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G.                           Dispute Resolution.  For purposes of this provision, the term “dispute”
means any and all disputes between Company, including its officers, governors,
employees, on the one hand; and Executive, on the other hand, arising out of or
relating to the making, performance, interpretation, or application of this
Agreement, or in any way relating to, concerning, or arising from Executive’s
employment with the Company, or the termination of this Agreement or Executive’s
employment with the Company, and specifically includes, without limitation, any
claim that a termination of employment by Company was not for cause, that
Executive was constructively discharged or terminated, or otherwise.


 


If a dispute arises, the parties agree first to try in good faith for a
period of sixty (60) days to settle the dispute by mediation under the
Commercial Mediation Rules of the American Arbitration Association, before
resorting to arbitration.  Thereafter,
any remaining unresolved dispute, controversy or claim shall be submitted to
binding arbitration pursuant to the Commercial Arbitration Rules of the
American Arbitration Association as modified by this Section; PROVIDED, that
this Section shall not require use of the American Arbitration Association
(only that such Rules as modified by this Section shall be followed).  The arbitration shall be conducted in the
State of Minnesota.  Any award rendered
shall be final and conclusive upon the parties and a judgment thereon may be
entered in any court having competent jurisdiction.  The parties shall (i) agree upon and
appoint as the arbitrator a retired former trial Judge in Minnesota; (ii) direct
the arbitrator to follow substantive rules of law and the Federal Rules of
Evidence; (iii) allow for the parties to conduct discovery pursuant to the
rules then in effect under the Federal Rules of Civil Procedure for a
period not to exceed 60 days; (iv) require the testimony to be
transcribed; and (v) require the award to be accompanied by findings of
fact and a statement of reasons for the decision.  The cost and expense of the arbitrator and
location costs shall be borne equally by the parties to the dispute.  All other costs and expenses, including
reasonable attorney’s fees and expert’s fees, of all parties incurred in any
dispute which is determined and/or settled by arbitration pursuant to this Section shall
be borne by the party incurring such cost and expense. Except where clearly
prevented by the area in dispute, the parties agree to continue performing
their respective obligations under this Agreement while the dispute is being
resolved.


 


H.                          Surrender of Records and
Property.  Upon termination of
employment with the Company, Executive must deliver promptly to the Company all
records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof, which are the
property of the Company or which relate in any way to the business, products,
practices or techniques of the Company, and all other property of the Company
such as keys, computers, cell phones and other tools of the trade, trade
secrets and confidential information of the Company, including, but not limited
to, all documents which in whole or in part contain any trade secrets or
confidential information of the Company, which in any of these cases are in his
possession or under his control.


 


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IN WITNESS WHEREOF, the Executive and the Company enter into this
Agreement dated effective the 1st day of December, 2008.


 


	
   

  	
  OTTER TAIL AG ENTERPRISES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Jerry Larson

  
	
   

  	
  Its Board Chair

  
	
   

  	
  Date:

  	
  11/20/08

  	
   

  
	
   

  	
   

  
	
  /s/ Anthony J. Hicks

  	
   

  
	
  Anthony J. Hicks

  	
   

  
	
  Date 

  	
  11/20/08

  	
   

  	
   

  
							



 


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