Document:

Exhibit 10.12

 

EXECUTION COPY

 

EXECUTIVE
EMPLOYMENT AND NON-COMPETITION AGREEMENT

 

AGREEMENT, dated as of the 30th day of June, 2006,
by and among Hawkeye Renewables, LLC, a Delaware limited liability company (the
“Company”), Hawkeye Intermediate, LLC, a
Delaware limited liability company (“Holdings”), Hawkeye
Holdings, Inc., a Delaware corporation (“IPO Corp.”), and
Timothy Callahan (the “Executive”).

WHEREAS, the Company is engaged primarily in the business of
constructing, owning, managing and operating ethanol plants (the “Business”);

WHEREAS, the Company and Holdings have entered into a Membership
Interest Purchase Agreement dated as of May 11, 2006 (the “Purchase Agreement”) among the Company, Holdings, Hawkeye
Holdings, L.L.C. (the “Seller”), THL
Hawkeye Acquisition Partners (“THL”), THL
Acquisition Partners II (“THL II”), THL
Acquisition Partners III (“THL III”,
collectively with THL and THL II, the “Investors”) and
the other parties thereto (the “Transaction”);

WHEREAS, the Company desires to continue to engage the services of the Executive
and the Executive desires to continue to be employed by the Company until the Conversion
(as defined below);

WHEREAS, IPO Corp. desires to engage the services of the Executive and
the Executive desires to continue to be employed by the IPO Corp. from and
after the Conversion as defined below;

WHEREAS, the Company and IPO Corp. desire to be assured that the unique
and expert services of the Executive will be substantially available to the
Company and IPO Corp., and that the Executive is willing and able to render
such services on the terms and conditions hereinafter set forth; and

WHEREAS, the Company and IPO Corp. desire to be assured that the
confidential information and good will of the Company and IPO Corp. will be
preserved for the exclusive benefit of the Company and IPO Corp.;

NOW, THEREFORE, in consideration of such employment and the mutual
covenants and promises herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company, Holdings and the Executive agree as follows:

Section 1.               Employment
and Position.  Subject to Section 2,
the Company hereby agrees to employ the Executive as its Senior Vice President —
Finance & Business Development, and the Executive hereby agrees to such
employment under and subject to the terms and conditions hereinafter set forth.  From and after the date that the equity
securities of Holdings are converted to common stock of IPO Corp. in accordance
with Section 3.6 of the Securityholders Agreement (the “Conversion”),
all references to Company in this Agreement shall mean IPO Corp.  In no event will the substitution of IPO Corp.
as the Company under this Agreement constitute a termination of employment
under this Agreement.

 

 

Section 2.               Term.  The term of employment under this Agreement
shall begin on the date hereof and, unless sooner terminated as provided in
Section 6, shall conclude on the three year anniversary of the date hereof (the
“Term”). 
The Term shall automatically renew for an additional one year period at
the end of the initial Term and each successive year thereafter unless either
party provides the other with written notice of termination at least 30 days’
prior to the end of such initial Term or successive one year term thereafter.

Section 3.               Duties.  The Executive shall perform services in a
managerial capacity in a manner consistent with the Executive’s position as Senior
Vice President — Finance & Business Development, subject to the direction
of the Chief Executive Officer and President of the Company and the general
supervision of the Board of Directors of the Company (the “Board”)
and the terms of the Amended and Restated Limited Liability Company Agreement
dated the date hereof, among the Executive, Holdings, the Seller, the Investors
and the other parties thereto (the “LLC Agreement”),
the Limited Liability Company Securityholders Agreement dated the date hereof,
among the Executive, Holdings, the Seller, the Investors and the other parties
thereto (the “Securityholders Agreement”) and,
after the date of the Conversion, the by-laws of IPO Corp.; provided, however,
that no amendment or modification of the LLC Agreement, the Securityholders
Agreement or the by-laws of IPO Corp. after the date hereof which would have
the effect of altering any of the terms of this Agreement shall be effective
without the consent of the Executive.  The
Executive hereby agrees to devote his full business time and best efforts to
the faithful performance of such duties and to the promotion and forwarding of the
business and affairs of the Company for the Term.

Section 4.               Compensation;
Equity Participation.

Section 4.01           Compensation.  (a) Salary.  In consideration of the services rendered by
the Executive under this Agreement, the Company shall pay the Executive a base
salary at the rate of $225,000 per calendar year (the “Base Salary”).  The Base Salary shall be paid in such
installments and at such times as the Company pays its regularly salaried executives
and shall be subject to all necessary withholding taxes, FICA contributions and
similar deductions.  The Board will
review annually the Base Salary payable to Executive hereunder and may, in its
sole discretion, increase but not decrease, the Executive’s rate of compensation.  Any such increased Base Salary shall be and
become the “Base Salary” for purposes of this Agreement.

                (b)           Annual Bonus.  During the Term, the Executive shall be
eligible to receive an annual bonus in an amount up to two hundred percent (200%)
of the Base Salary (the “Annual Bonus”).  The Annual Bonus shall be calculated and
payable in accordance with and based on operating performance targets
established by the Board by reference to the budget approved from time to time
by the Board for such fiscal year (the “Annual Budget”).  The Annual Bonus will be calculated and
payable in accordance with formula to be agreed to by the Company and the
Executive after the date hereof.  The
parties each will use their commercially reasonable efforts (including taking the
actions described in Section 13.01 hereof) to structure and pay such
Annual Bonus so as to comply with the requirements of Internal Revenue
Code Section 409A in order to ensure that any amounts paid or payable as an
Annual Bonus are not subject to the additional 20% income tax.  The
Annual Bonus shall be paid within thirty (30) days after receipt
of audited financial statements by the Company for the applicable fiscal
year.  For purposes of determining any
Annual Bonus for 2006, such Annual Bonus shall be pro rated based on the date
of 

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commencement of employment.  Any compensation paid to the Executive as the Annual
Bonus shall be in addition to the Base Salary. 
Annual Bonus performance criteria are subject to annual review and
change by the Board relative to key strategic objectives for the year; provided
that, the Executive’s Annual Bonus opportunity provided for hereunder (i.e., the percentage of Base Salary) may not be modified
without the Executive’s prior written consent. 
Upon calculation of the Annual Bonus, the Board shall be provided with a
summary of the Executive’s compensation and other payments received by the
Executive from the Company for the preceding fiscal year, including but not
limited to, Base Salary, Annual Bonus, expenses, and related party
transactions.

Section 4.02: 
Profits Interest.   The Executive shall be granted on the date
hereof 650,000 Class B common units in Holdings representing 1.499% of the
outstanding common equity interests of Holdings on the date hereof (the “Employee Units”).  The
Employee Units shall participate in distribution of Holdings and shall be
subject to vesting and the other terms contained in (i) the LLC Agreement, and
(ii) that certain Restricted Unit Agreement of even date between the Executive
and Holdings (“Restricted Unit Agreement”),
which is incorporated herein by reference.

Section 5.   Benefits.  In addition to the compensation detailed in
Section 4 of this Agreement, the Executive shall be entitled to the following
additional benefits:

Section 5.01.  Paid Vacation.  The Executive shall be entitled to 15 paid
vacation days per calendar year, such vacation to extend for such periods and
shall be taken at such intervals as shall be appropriate and consistent with
the proper performance of the Executive’s duties hereunder.

Section 5.02.          Insurance
Coverage.  During the Term, the
Executive and the Executive’s family shall be eligible for participation in and
shall receive benefits under welfare benefit plans, practices, policies and
programs provided by the Company which provide benefits and coverage levels
which are at least equal to the benefits and coverage levels made available to executives
of the Company immediately prior to the date hereof.  The Company may, at its election and for its
benefit, insure the Executive against disability, accidental loss or death and
the Executive shall submit to such physical examinations and supply such
information as may be required in connection therewith.

Section 5.03.          Relocation;
Reimbursement of Expenses.  (a) Until the earlier to occur of (i) six (6)
months from the date hereof, and (ii) the Executive relocating to permanent
housing in Iowa, the Company will pay (A) the reasonable cost of temporary housing
for the Executive and (B) reasonable out-of-pocket travel expenses to enable
the Executive to commute on a weekly basis from his current residence in New
York to Iowa.   In addition, the Company
shall reimburse the Executive for the reasonable out-of-pocket expenses of a
professional moving company in moving the Executive’s belongings to a new
permanent residence in Iowa.

Section 5.04.          Reimbursement
of Expenses.  The Company
shall reimburse the Executive for all reasonable and necessary expenses actually
incurred by the Executive directly in connection with the business affairs of the
Company and the performance of his duties hereunder upon presentation of proper
receipts or other proof of expenditure and subject to such guidelines 

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established by the Company
from time to time.  The Executive shall
comply with such guidelines and reporting requirements with respect to such
expenses as the Board may establish from time to time.

Section 5.05.          Other
Benefit Plans.  During the Term, the
Executive shall be entitled to participate in all incentive, savings, retirement
and pension plans, practices, policies and programs applicable generally to
other executives of the Company, including but not
limited to, an equity incentive plan maintained by the Company; provided,
however, that if the Company does not provide retirement or pension plans after
the date of the Conversion, the Executive shall be entitled to participate in
any such plans that may, in the Company’s discretion, be maintained by Hawkeye
Renewables, LLC.

Section 6.               Termination.  This Agreement shall be terminated at the end
of the Term or earlier as follows:

Section 6.01.          Death.  This Agreement shall automatically terminate
upon the death of the Executive.

Section 6.02.          Permanent
Disability.  In the event of any
physical or mental disability of the Executive rendering the Executive unable
to perform his duties hereunder for a period of at least 120 days out of any
twelve-month period (a “Disability”),
this Agreement shall terminate automatically. 
Any determination of Disability shall be made by the Board in
consultation with a qualified physician or physicians selected by the Board and
reasonably acceptable to the Executive. 
The failure of the Executive to submit to a reasonable examination by
such physician or physicians shall act as an estoppel to any objection by the Executive
to the determination of disability by the Board.

Section 6.03.          By the
Company For Cause.  The employment of
the Executive may be terminated by the Company for Cause (as defined below) at
any time effective upon written notice to the Executive.  For purposes hereof, the term “Cause” shall mean:

(a)           the Executive’s
admission, confession, or plea bargain to or conviction in a court of law of
any felony or other crime involving moral turpitude or the Executive’s commission
of any other act or any omission to act involving dishonesty or fraud involving
the Company which is material;

(b)           engaging in conduct
that is demonstrably and materially injurious to the business, reputation,
character, or community standing of the Company;

(c)           continued material failure to
perform the duties described in Section 3 for 15 days after written notice from
the Company to the Employee providing a detailed description of the failure
constituting cause;

(d)           gross
negligence or willful misconduct with respect to the Company that is demonstrably and materially
injurious to the Company; or

 

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(e)           breach of any restrictive
covenant with the Company not cured within 15 days of written notice from the
Company to the Executive providing a detailed description of the activities
constituting Cause.

Section 6.04.          By the
Company without Cause.  The Company
may terminate the Executive’s employment at any time without Cause effective
upon 60 days prior written notice to the Executive, provided  that,
in lieu of such prior written notice, the Company may continue to pay the
Executive’s compensation and provide the benefits contemplated hereunder for
such 60-day period and for purposes of Section 7.02 the Executive’s
termination date shall be considered to be the end of such 60-day period.  Expiration or termination of the Term as
provided for in Section 2 shall not constitute termination without Cause.

Section 6.05.          By the Executive
Voluntarily.  The Executive may
terminate this Agreement at any time without Good Reason effective upon at
least 60 days prior written notice to the Company.

Section 6.06.          By the Executive
for Good Reason.  The Executive may
terminate this Agreement effective upon written notice to the Company for Good
Reason.  Such notice must provide a
detailed explanation of the Good Reason. 
Any such termination shall be treated for purposes of this Agreement as a
termination by the Company without Cause. 
For this purpose, the term “Good Reason”
shall mean:  (i) a material
diminution in or assignment of duties inconsistent with Executive’s position
prior to the date of this Agreement or a change in the Executive’s direct
reporting relationship, provided, however, that a change in title shall not
itself be considered a material diminution; (ii)  a reduction in Base
Salary or a reduction in Annual Bonus (it being understood that the failure to
receive an Annual Bonus or a reduced Annual Bonus due to failure to meet applicable
performance targets shall not be considered a reduction in Annual Bonus
hereunder); or (iii) any breach of this Agreement by Company, provided, the
Company is provided written notice of such breach by Executive and is provided
15 days to cure such breach; or (iv) any material breach of the Securityholders’
Agreement or LLC Agreement by the Company which has an adverse impact upon
Executive and which is not cured within 15 days after written notice of such
breach is provided by Executive to the Company.

Section
7.               Termination Payments
and Benefits.

Section 7.01.          Death, Voluntary
Termination, Termination For Cause. 
Upon any termination of this Agreement either (i) voluntarily by the Executive
other than for Good Reason, (ii) by the Company for Cause as provided in
Section 6.03 or (iii) as a result of the Executive’s death or permanent Disability,
except as otherwise specifically provided, all payments, salary and other
benefits hereunder shall cease at the effective date of termination.  Notwithstanding the foregoing, the Executive
shall be entitled to receive from the Company (i) all salary earned or accrued
through the date the Executive’s employment is terminated, (ii) reimbursement
for any and all monies advanced in connection with the Executive’s employment
for reasonable and necessary expenses incurred by the Executive through the
date the Executive’s employment is terminated and (iii) all other payments and
benefits to which the Executive may be entitled under the terms of any
applicable compensation arrangement or benefit plan or program of the Company
or Holdings, including any earned and accrued, but unused vacation pay ((i)
through (iii) collectively, “Accrued Benefits”),
except that, for this 

 

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purpose, Accrued Benefits shall not include any
entitlement to severance under any Company severance policy generally
applicable to the Company’s salaried employees. 
In addition, in the event of the Executive’s death or Disability, the
Executive (or his estate, executors, administrators, heirs, beneficiaries and
legal representatives, or family as the case may be) shall be entitled to
receive (i) an amount equal to (a) the projected Annual Bonus for the year
in which the termination occurs (calculated as set forth in Section 7.02
below) multiplied  by  a fraction, the numerator of which is
the number of days in the current fiscal year prior to the date of the
termination, and the denominator of which is 365 and (ii) at no cost
to the Executive or his family, the same or equivalent medical, dental, and
life insurance coverages as in effect for the Executive and his family
immediately prior to the termination of his employment for a period of twelve
(12) months after the Executive’s termination of employment after which time,
the Executive’s and his family’s rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) shall apply.

Section 7.02.          Termination
without Cause or for Good Reason.  In
the event that this Agreement is terminated by the Company without Cause or by
the Executive for Good Reason, except as otherwise specifically provided, all
payments, salary and other benefits hereunder shall cease at the effective date
of termination.  Notwithstanding the
foregoing, the Executive shall be entitled to receive, (i) his Accrued
Benefits, except that, for this purpose, Accrued Benefits shall not include any
entitlement to severance under any Company severance policy generally
applicable to the Company’s salaried employees, (ii) as long as the
Executive does not violate the provisions of Section 8 and Section 9 hereof,
severance pay equal to (a) the Executive’s then current monthly Base Salary,
payable in accordance with the Company’s regular pay schedule, for twelve (12)
months from the date of termination of employment, plus (b) a lump sum
cash payment in an amount equal to the Executive’s projected Annual Bonus for
the fiscal year in which the termination occurs (with the amount of such Annual
Bonus being determined based on the Company’s actual year-to-date
performance (through the end of the month immediately preceding termination)
compared to the Company’s year-to-date targets (through the end of
the month immediately preceding termination), as set forth in the Company’s
Annual Budget, and (iii)  at no cost to the Executive or his family, the
same or equivalent medical, dental, and life insurance coverages as in effect
for the Executive and his family immediately prior to the termination of his
employment, until the earlier of (a) the expiration of the period for which he
receives severance pay pursuant to clause (ii) above or (b) the date the
Executive has commenced new employment and has thereby become eligible for
comparable benefits, subject to the Executive’s rights under COBRA.

Section 7.03.          Accrued
Benefits.  Notwithstanding anything
else herein to the contrary, all Accrued Benefits to which the Executive (or
his estate or beneficiary) is entitled shall be payable in cash promptly upon
termination, except as otherwise specifically provided herein, or under the
terms of any applicable policy, plan or program.

Section 7.04.          Survival
of Certain Provisions.  Provisions of
this Agreement shall survive any termination of employment if so provided
herein or if necessary or desirable fully to accomplish the purposes of such
provision, including, without limitation, the obligations of the Executive
under Section 8 and 9 hereof.  The
obligation of the Company to make payments to or on behalf of the Executive
under Section 7 hereof is expressly conditioned upon the Executive’s continued
full performance of obligations under Section 8 and Section 9 hereof.  The Executive 

 

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recognizes that, except as expressly provided in
Section 7, no compensation is earned after termination of employment.

Section 7.05.          No Other
Benefits.  Except as specifically
provided in this Section 7, the Executive shall not be entitled to any
compensation, severance or other benefits from the Company or any of its
subsidiaries or affiliates upon the termination of this Agreement for any
reason whatsoever.  Acceptance by the
Executive of performance by the Company shall constitute full settlement of any
claims that the Executive might otherwise assert against the Company, its
affiliates or any of their respective shareholders, partners, directors,
officers, employees or agents relating to such termination or arising out of
this Agreement.  Notwithstanding the
foregoing, nothing contained in this Section 7.05 shall be deemed a release by
Executive of any benefits he may be entitled to under any other written
agreements between the Company and the Executive, including, without
limitation, the Restricted Unit Agreement.

Section
8.               Proprietary
Information; Inventions in the Field. 
For purposes of Sections 8 and 9, “Company” shall
include Holdings and its subsidiaries.

Section 8.01.          Proprietary
Information.  In the course of service
to the Company, the Executive will have access to confidential specifications,
know-how, strategic or technical data, marketing research data, product
research and development data, manufacturing techniques, confidential customer
lists, sources of supply and trade secrets, all of which are confidential and
may be proprietary and are owned or used by the Company, or any of its
subsidiaries or affiliates.  Such
information shall hereinafter be called “Proprietary Information”
and shall include any and all items enumerated in the preceding sentence and
coming within the scope of the business of the Company or any of its
subsidiaries or affiliates as to which the Executive may have access, whether
conceived or developed by others or by the Executive alone or with others
during the period of service to the Company, whether or not conceived or
developed during regular working hours. 
Proprietary Information shall not include (i) any records, data or
information which are in the public domain prior to, during or after the period
of service by the Executive provided the same are not in the public domain as a
consequence of disclosure directly or indirectly by the Executive in violation of
this Agreement, or (ii) general industry knowledge or know-how.

Section 8.02.          Fiduciary
Obligations.  The Executive agrees
that Proprietary Information is of critical importance to the Company and a
violation of this Section 8.02 and Section 8.03 would seriously and irreparably
impair and damage the Company’s business. 
The Executive agrees that he shall keep all Proprietary Information in a
fiduciary capacity for the sole benefit of the Company.

Section 8.03.          Non-Use
and Non-Disclosure.  The Executive
shall not during the Term or at any time thereafter (a) disclose, directly or
indirectly, any Proprietary Information to any person other than the Company or
executives thereof at the time of such disclosure who, in the reasonable
judgment of the Executive, need to know such Proprietary Information or such
other persons to the extent required in the course of the Executive’s service
to the Company or (b) use any Proprietary Information, directly or indirectly,
for his own benefit or for the benefit of any other person or entity other than
the Company.  At the termination of his
employment, the Executive shall deliver to the Company all notes, letters,
documents and records which may 

 

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contain Proprietary Information which are then in his
possession or control and shall destroy any and all copies and summaries
thereof.

Section 8.04.          Assignment
of Inventions.  The Executive agrees
to assign and transfer to the Company or its designee, without any separate
remuneration or compensation, his entire right, title and interest in and to
all Inventions in the Field (as defined below), together with all United States
and foreign rights with respect thereto, and at the Company’s expense to
execute and deliver all appropriate patent and copyright applications for
securing United States and foreign patents and copyrights on Inventions in the
Field and to perform all lawful acts, including giving testimony, and to
execute and deliver all such instruments that may be necessary or proper to
vest all such Inventions in the Field and patents and copyrights with respect
thereto in the Company, and to assist the Company in the prosecution or defense
of any interference which may be declared involving any of said patent
applications, patents, copyright applications or copyrights.  For the purposes of this Agreement, the words
“Inventions in the Field” shall include any
discovery, process, design, development, improvement, application, technique,
or invention, whether patentable or copyrightable or not and whether reduced to
practice or not, conceived or made by the Executive, individually or jointly
with others (whether on or off the Company’s premises or during or after normal
working hours) while in the employ of the Company, and which was or is directly
or indirectly related to the Business of the Company, or which resulted or
results from any work performed by the Executive or agent thereof during the
Term.

Section 8.05           Return
of Documents.  All notes, letters,
documents, records, tapes and other media of every kind and description
relating to the business, present or otherwise, of the Company or its
affiliates and any copies, in whole or in part, thereof (collectively, the “Documents”), whether or not prepared by the Executive, shall
be the sole and exclusive property of the Company.  The Executive shall safeguard all Documents
and shall surrender to the Company at the time his employment terminates, or at
such earlier time or times as the Board or its designee may specify, all
Documents then in the Executive’s possession or control.

Section
9.               Restrictions on
Activities of the Executive

Section 9.01.          Acknowledgments.  The Executive and Company agree that he is
being employed hereunder in a key capacity with the Company and that the
Company is engaged in a highly competitive business and that the success of the
Company’s business in the marketplace depends upon its goodwill and reputation
for quality and dependability.  The Executive
and Company further agree that reasonable limits may be placed on his ability
to compete against the Company as provided herein to the extent that they
protect and preserve the legitimate business interests and good will of the
Company.

Section
9.02.          Non-Competition.

Executive shall not, directly or indirectly for one (1) year following
termination of employment for any or no reason, own, manage, engage in,
operate, control, work for, consult with, render services for, do business
with, maintain any interest in (proprietary, financial or otherwise) or
participate in the ownership, management, operation or control of, any
business, whether in corporate, proprietorship or partnership form or otherwise,
engaged in the Business; 

 

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provided, however, that the restrictions contained in
this Section 9.02 shall not restrict (A) the acquisition by the Executive,
directly or indirectly, of less than 2% of the outstanding capital stock of any
publicly traded company engaged in the Business, or (B) the Executive from
owning, operating, controlling or working for an investment bank which may
involve advising on energy (including ethanol) companies or transactions.

Section 9.03.          Non-Solicitation.

Executive agrees he shall not, directly or indirectly, for one (1) year
following termination of employment for any or no reason, (a) cause, solicit,
induce or encourage any employees of the Company to leave such employment or
hire or employ any such individual; or (b) cause, induce or encourage any
material client, customer, supplier, or licensor of the Company (including any
existing or former customer of the Company and any person that becomes a client
or customer of the Company after the Closing Date) to terminate or modify any
such actual or prospective relationship.

Section 9.04.          THE EXECUTIVE
REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES
AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT
HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A
LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF SECTION 8
OR 9 HEREOF, FOR EXAMPLE, BY USING SUCH KNOWLEDGE, SKILLS AND ABILITIES, OR
SOME OF THEM, IN THE SERVICE OF A NON-COMPETITOR.

Section 10.  Remedies.  It is specifically understood and agreed that
any breach of the provisions of Section 8 or 9 of this Agreement is likely to
result in irreparable injury to the Company and that the remedy at law alone
will be an inadequate remedy for such breach, and that in addition to any other
remedy it may have, the Company shall be entitled to enforce the specific
performance of this Agreement by the Executive and to seek both temporary and
permanent injunctive relief (to the extent permitted by law) without bond.  Neither the right to obtain such relief nor
the obtaining of such relief shall be exclusive or preclude the Company from
any other remedy.

Section 11.  Severable
Provisions.  The provisions of this
Agreement are severable and the invalidity of any one or more provisions shall
not affect the validity of any other provision. 
In the event that a court of competent jurisdiction shall determine that
any provision of this Agreement or the application thereof is unenforceable in
whole or in part because of the duration or scope thereof, the parties hereto
agree that said court in making such determination shall have the power to
reduce the duration and scope of such provision to the extent necessary to make
it enforceable, and that the Agreement in its reduced form shall be valid and
enforceable to the full extent permitted by law.

Section 12.  Notices.  All notices hereunder, to be effective, shall
be in writing and shall be delivered by hand, facsimile or mailed by certified
mail, postage and fees prepaid, as follows:

9

	
  If to the Company,

  	
   

  	
   

  
	
  Holdings or IPO Corp.:

  	
   

  	
  Hawkeye Intermediate, LLC

  
	
   

  	
   

  	
  21050 140th Street

  
	
   

  	
   

  	
  Iowa Falls, IA 50126

  
	
   

  	
   

  	
  Facsimile No: (641) 648-8925

  
	
   

  	
   

  	
  Attention: President

  
	
   

  	
   

  	
   

  
	
  With copies to:

  	
   

  	
  Thomas H. Lee Partners, L.P.

  
	
   

  	
   

  	
  100 Federal Street

  
	
   

  	
   

  	
  Boston, MA 02110

  
	
   

  	
   

  	
  Facsimile No: (617) 227-3514

  
	
   

  	
   

  	
  Attention:

  	
  Scott Sperling

  
	
   

  	
   

  	
   

  	
  Thomas Hagerty

  
	
   

  	
   

  	
   

  	
  Soren Oberg

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Weil, Gotshal & Manges LLP

  
	
   

  	
   

  	
  100 Federal Street

  
	
   

  	
   

  	
  Boston, MA 02110

  
	
   

  	
   

  	
  Facsimile No: (617) 772-8333

  
	
   

  	
   

  	
  Attention: James Westra and Marilyn French

  
	
   

  	
   

  	
   

  
	
  If to the Executive:

  	
   

  	
  Timothy Callahan

  
	
   

  	
   

  	
  309 Garfield Place #2

  
	
   

  	
   

  	
  Brooklyn, NY 11215

  

 

or
to such other address as a party may notify the other pursuant to a notice
given in accordance with this Section 12.

Section 13.             Miscellaneous.

Section 13.01.        Amendment.  This Agreement constitutes the entire
Agreement between the parties hereto with regard to the subject matter hereof,
superseding all prior understandings and agreements, whether written or
oral.  This Agreement may not be amended
or revised except by a writing signed by the parties.  Notwithstanding any other
provision of this Agreement to the contrary, the parties shall in good faith
amend this Agreement to the limited extent necessary to comply with the
requirements under Internal Revenue Code Section 409A in order to ensure that
any amounts paid or payable hereunder are not subject to the additional 20% income
tax thereunder while maintaining to the maximum extent practicable the original
intent of this Agreement.

Section 13.02.        Assignment
and Transfer.  The provisions of this
Agreement shall be binding on and shall inure to the benefit of any such
successor in interest to the Company and Holdings.  Neither this Agreement nor any of the rights,
duties or obligations of the Executive shall be assignable by the Executive.  However, all rights of the Executive under
this Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, estates, executors,
administrators, heirs and beneficiaries. 
All amounts payable 

 

10

to the Executive hereunder shall be paid, in the event
of the Executive’s death, to the Executive’s estate, heirs or representatives.

Section 13.03         Waiver of
Breach.  A waiver by the Company or
the Executive of any breach of any provision of this Agreement by the other
party shall not operate or be construed as a waiver of any other or subsequent
breach by the other party.

Section 13.04.        Entire
Agreement.  This Agreement (together
with the other agreements expressly referenced herein) contain the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements among the parties with respect to such subject
matter.

Section 13.05         Withholding.  The Company shall be entitled to withhold
from any amounts to be paid or benefits provided to the Executive hereunder any
federal, state, local, or foreign withholding or other taxes or charges which
it is from time to time required to withhold. 
The Company shall be entitled to rely on an opinion of counsel if any
question as to the amount or requirement of any such withholding shall arise.

Section 13.06.        Captions.  Captions herein have been inserted solely for
convenience of reference and in no way define, limit or describe the scope or
substance of any provision of this Agreement.

Section 13.07         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and shall have the same
effect as if the signatures hereto and thereto were on the same instrument.

Section 13.08         Governing
Law.  This Agreement shall be
construed under and enforced in accordance with the laws of the State of Delaware.

[Remainder of page
left intentionally blank]

 

11

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as a sealed instrument as of the day and year first above written.

	
   

  	
  HAWKEYE RENEWABLES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Bruce Rastetter

  
	
   

  	
  Name: Bruce Rastetter

  
	
   

  	
  Title: CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWKEYE INTERMEDIATE,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Bruce Rastetter

  
	
   

  	
   

  	
  Name: Bruce Rastetter

  
	
   

  	
  Title: CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWKEYE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce Rastetter

  
	
   

  	
  Name: Bruce Rastetter

  
	
   

  	
  Title: CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Timothy Callahan

  
	
   

  	
  TIMOTHY CALLAHAN

  
				

 

 

12Exhibit 10.13

 

EXECUTION COPY

 

EXECUTIVE
EMPLOYMENT AND NON-COMPETITION AGREEMENT

 

 

AGREEMENT, dated as of the 30th day of June, 2006,
by and among Hawkeye Renewables, LLC, a Delaware limited liability company (the
“Company”), Hawkeye Intermediate, LLC, a Delaware
limited liability company (“Holdings”), Hawkeye
Holdings, Inc., a Delaware corporation (“IPO Corp.”), and
Bruce Rastetter, a resident of Iowa (the “Executive”).

WHEREAS, the Company is engaged primarily in the business of
constructing, owning, managing and operating ethanol plants (the “Business”);

WHEREAS, the Company and Holdings have entered into a Membership
Interest Purchase Agreement dated as of May 11, 2006 (the “Purchase Agreement”) among the Company, Holdings, Hawkeye
Holdings, L.L.C. (the “Seller”), THL
Hawkeye Acquisition Partners (“THL”), THL
Acquisition Partners II (“THL II”), THL
Acquisition Partners III (“THL III”,
collectively with THL and THL II, the “Investors”) and
the other parties thereto (the “Transaction”);

WHEREAS, the Company desires to continue to engage the services of the Executive
and the Executive desires to continue to be employed by the Company until the Conversion
(as defined below);

WHEREAS, IPO Corp. desires to engage the services of the Executive and
the Executive desires to continue to be employed by the IPO Corp. from and
after the Conversion as defined below;

WHEREAS, the Company and IPO Corp. desire to be assured that the unique
and expert services of the Executive will be substantially available to the
Company and IPO Corp., and that the Executive is willing and able to render
such services on the terms and conditions hereinafter set forth; and

WHEREAS, the Company and IPO Corp. desire to be assured that the
confidential information and good will of the Company and IPO Corp. will be
preserved for the exclusive benefit of the Company and IPO Corp.;

NOW, THEREFORE, in consideration of such employment and the mutual
covenants and promises herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company, Holdings and the Executive agree as follows:

Section 1.               Employment
and Position.  Subject to Section 2,
the Company hereby agrees to continue to employ the Executive as its Chief
Executive Officer, and the Executive hereby agrees to continue such employment
under and subject to the terms and conditions hereinafter set forth.  From and after the date that the equity
securities of Holdings are converted to common stock of IPO Corp. in accordance
with Section 3.6 of the Securityholders Agreement (the “Conversion”),
all references to Company in this Agreement shall mean IPO Corp.  In no 

event will the substitution of IPO Corp. as the
Company under this Agreement constitute a termination of employment under this
Agreement.

Section 2.               Term.  The term of employment under this Agreement
shall begin on the date hereof and, unless sooner terminated as provided in
Section 6, shall conclude on the three year anniversary of the date hereof (the
“Term”). 
The Term shall automatically renew for an additional one year period at
the end of the initial Term and each successive year thereafter unless either
party provides the other with written notice of termination at least 30 days’
prior to the end of such initial Term or successive one year term thereafter.

Section 3.               Duties.  The Executive shall perform services in a
managerial capacity in a manner consistent with the Executive’s position as Chief
Executive Officer, subject to the general supervision of the Board of Directors
of the Company (the “Board”) and the
terms of the Amended and Restated Limited Liability Company Agreement dated the
date hereof, among the Executive, Holdings, the Seller, the Investors and the
other parties thereto (the “LLC Agreement”),
the Limited Liability Company Securityholders Agreement dated the date hereof,
among the Executive, Holdings, the Seller, the Investors and the other parties
thereto (the “Securityholders Agreement”) and,
after the date of the Conversion, the by-laws of IPO Corp.; provided, however,
that no amendment or modification of the LLC Agreement, the Securityholders
Agreement or the by-laws of IPO Corp. after the date hereof which would have
the effect of altering any of the terms of this Agreement shall be effective
without the consent of the Executive.  The
Executive hereby agrees to devote his full business time and best efforts to
the faithful performance of such duties and to the promotion and forwarding of the
business and affairs of the Company for the Term.

Section 4.               Compensation;
Equity Participation.

Section 4.01           Compensation.  (a) Salary.  In consideration of the services rendered by
the Executive under this Agreement, the Company shall pay the Executive a base
salary at the rate of $250,000 per calendar year (the “Base Salary”).  The Base Salary shall be paid in such
installments and at such times as the Company pays its regularly salaried executives
and shall be subject to all necessary withholding taxes, FICA contributions and
similar deductions.  The Board will
review annually the Base Salary payable to Executive hereunder and may, in its
sole discretion, increase but not decrease, the Executive’s rate of
compensation.  Any such increased Base
Salary shall be and become the “Base Salary”
for purposes of this Agreement.

                (b)           Annual Bonus.  During the Term, the Executive shall be
eligible to receive an annual bonus in an amount up to two hundred percent (200%)
of the Base Salary (the “Annual Bonus”).  The Annual Bonus shall be calculated and
payable in accordance with and based on operating performance targets
established by the Board by reference to the budget approved from time to time
by the Board for such fiscal year (the “Annual Budget”).  The Annual Bonus will be calculated and
payable in accordance with formula to be agreed to by the Company and the
Executive after the date hereof.  The
parties each will use their commercially reasonable efforts (including taking the
actions described in Section 13.01 hereof) to structure and pay such
Annual Bonus so as to comply with the requirements of Internal Revenue
Code Section 409A in order to ensure that any amounts paid or payable as an
Annual Bonus are not subject to the additional 20% income tax.  The
Annual Bonus shall be paid within thirty (30) days after receipt
of audited 

2

financial statements by the
Company for the applicable fiscal year.  For
purposes of determining any Annual Bonus for 2006 (assuming projected bonuses
for 2006 have been accrued on the Company’s monthly balance sheets for each
month preceding the closing of the Transaction), the Executive shall be deemed
to have commenced employment hereunder as of the first day of such fiscal year.  Any compensation paid to the Executive as the Annual Bonus
shall be in addition to the Base Salary. 
Annual Bonus performance criteria are subject to annual review and
change by the Board relative to key strategic objectives for the year; provided
that, the Executive’s Annual Bonus opportunity provided for hereunder (i.e., the percentage of Base Salary) may not be modified
without the Executive’s prior written consent. 
Upon calculation of the Annual Bonus, the Board shall be provided with a
summary of the Executive’s compensation and other payments received by the
Executive from the Company for the preceding fiscal year, including but not
limited to, Base Salary, Annual Bonus, expenses, and related party
transactions.

Section 4.02: 
Profits Interest.   The Executive shall be granted on the date
hereof one million eighty-three thousand three-hundred and thirty three (1,083,333)
Class B common units in Holdings representing 2.499% of the outstanding common equity
interests of Holdings on the date hereof (the “Employee
Units”).  The Employee Units
shall participate in distribution of Holdings and shall be subject to vesting
and the other terms contained in (i) the LLC Agreement, and (ii) that certain
Restricted Unit Agreement of even date between the Executive and Holdings (“Restricted Unit Agreement”), which is incorporated herein by
reference.

Section 5.   Benefits.  In addition to the compensation detailed in
Section 4 of this Agreement, the Executive shall be entitled to the following
additional benefits:

Section 5.01.  Paid Vacation.  The Executive shall be entitled to 15 paid
vacation per calendar year, such vacation to extend for such periods and shall
be taken at such intervals as shall be appropriate and consistent with the
proper performance of the Executive’s duties hereunder.

Section 5.02.          Insurance
Coverage.  During the Term, the
Executive and the Executive’s family shall be eligible for participation in and
shall receive benefits under welfare benefit plans, practices, policies and
programs provided by the Company which provide benefits and coverage levels
which are at least equal to the benefits and coverage levels made available to executives
of the Company immediately prior to the date hereof.  The Company may, at its election and for its
benefit, insure the Executive against disability, accidental loss or death and
the Executive shall submit to such physical examinations and supply such
information as may be required in connection therewith.

Section 5.03.          Reimbursement
of Expenses.  The Company
shall reimburse the Executive for all reasonable and necessary expenses
actually incurred by the Executive directly in connection with the business
affairs of the Company and the performance of his duties hereunder upon
presentation of proper receipts or other proof of expenditure and subject to
such guidelines established by the Company from time to time.  The Executive shall comply with such guidelines
and reporting requirements with respect to such expenses as the Board may
establish from time to time.

3

Section 5.04.          Other
Benefit Plans.  During the Term, the
Executive shall be entitled to participate in all incentive, savings, retirement
and pension plans, practices, policies and programs applicable generally to
other executives of the Company, including but not limited
to, an equity incentive plan maintained by the Company; provided, however, that
if the Company does not provide retirement or pension plans after the date of
the Conversion, the Executive shall be entitled to participate in any such
plans that may, in the Company’s discretion, be maintained by Hawkeye
Renewables, LLC.

Section 6.               Termination.  This Agreement shall be terminated at the end
of the Term or earlier as follows:

Section 6.01.          Death.  This Agreement shall automatically terminate
upon the death of the Executive.

Section 6.02.          Permanent
Disability.  In the event of any
physical or mental disability of the Executive rendering the Executive unable
to perform his duties hereunder for a period of at least 120 days out of any
twelve-month period (a “Disability”),
this Agreement shall terminate automatically. 
Any determination of Disability shall be made by the Board in
consultation with a qualified physician or physicians selected by the Board and
reasonably acceptable to the Executive. 
The failure of the Executive to submit to a reasonable examination by
such physician or physicians shall act as an estoppel to any objection by the Executive
to the determination of disability by the Board.

Section 6.03.          By the
Company For Cause.  The employment of
the Executive may be terminated by the Company for Cause (as defined below) at
any time effective upon written notice to the Executive.  For purposes hereof, the term “Cause” shall mean:

(a)           the Executive’s
admission, confession, or plea bargain to or conviction in a court of law of
any felony or other crime involving moral turpitude or the Executive’s commission
of any other act or any omission to act involving dishonesty, disloyalty or
fraud involving the Company which is material;

(b)           engaging in conduct
that is demonstrably and materially injurious to the business, reputation,
character, or community standing of the Company;

(c)           continued material failure to
perform the duties described in Section 3 for 15 days after written notice from
the Company to the Employee providing a detailed description of the failure
constituting cause;

(d)           gross
negligence or willful misconduct with respect to the Company that is demonstrably and materially
injurious to the Company; or

(e)           breach of any
restrictive covenant with the Company not cured within 15 days of written
notice from the Company to the Executive providing a detailed description of
the activities constituting Cause.

Section 6.04.          By the
Company without Cause.  The Company
may terminate the Executive’s employment at any time without Cause effective
upon 60 days prior written notice to 

4

the Executive, provided  that, in lieu of
such prior written notice, the Company may continue to pay the Executive’s
compensation and provide the benefits contemplated hereunder for such 60-day
period and for purposes of Section 7.02 the Executive’s termination date shall
be considered to be the end of such 60-day period.  Expiration or termination of the Term as
provided for in Section 2 shall not constitute termination without Cause.

Section 6.05.          By the Executive
Voluntarily.  The Executive may
terminate this Agreement at any time without Good Reason effective upon at
least 60 days prior written notice to the Company.

Section 6.06.          By the Executive
for Good Reason.  The Executive may
terminate this Agreement effective upon written notice to the Company for Good
Reason.  Such notice must provide a
detailed explanation of the Good Reason. 
Any such termination shall be treated for purposes of this Agreement as
a termination by the Company without Cause. 
For this purpose, the term “Good Reason”
shall mean:  (i) a material
diminution in or assignment of duties inconsistent with Executive’s position
prior to the date of this Agreement or a change in the Executive’s direct
reporting relationship, provided, however, that a change in title shall not
itself be considered a material diminution; (ii)  a reduction in Base
Salary or a reduction in Annual Bonus (it being understood that the failure to
receive an Annual Bonus or a reduced Annual Bonus due to failure to meet applicable
performance targets shall not be considered a reduction in Annual Bonus
hereunder); or (iii) any breach of this Agreement by Company, provided, the
Company is provided written notice of such breach by Executive and is provided
15 days to cure such breach; or (iv) any material breach of the Securityholders’
Agreement or LLC Agreement by the Company which has an adverse impact upon
Executive and which is not cured within 15 days after written notice of such
breach is provided by Executive to the Company.

Section
7.               Termination Payments
and Benefits.

Section 7.01.          Death, Voluntary
Termination, Termination For Cause. 
Upon any termination of this Agreement either (i) voluntarily by the Executive
other than for Good Reason, (ii) by the Company for Cause as provided in
Section 6.03 or (iii) as a result of the Executive’s death or permanent Disability,
except as otherwise specifically provided, all payments, salary and other benefits
hereunder shall cease at the effective date of termination.  Notwithstanding the foregoing, the Executive
shall be entitled to receive from the Company (i) all salary earned or accrued
through the date the Executive’s employment is terminated, (ii) reimbursement
for any and all monies advanced in connection with the Executive’s employment
for reasonable and necessary expenses incurred by the Executive through the
date the Executive’s employment is terminated and (iii) all other payments and
benefits to which the Executive may be entitled under the terms of any
applicable compensation arrangement or benefit plan or program of the Company
or Holdings, including any earned and accrued, but unused vacation pay ((i)
through (iii) collectively, “Accrued Benefits”),
except that, for this purpose, Accrued Benefits shall not include any
entitlement to severance under any Company severance policy generally
applicable to the Company’s salaried employees. 
In addition, in the event of the Executive’s death or Disability, the
Executive (or his estate, executors, administrators, heirs, beneficiaries and
legal representatives, or family as the case may be) shall be entitled to
receive (i) an amount equal to (a) the projected Annual Bonus for the year
in which the termination occurs (calculated as set forth in Section 7.02
below) multiplied  by  a fraction, 

 

5

the numerator of which is the number of days in the
current fiscal year prior to the date of the termination, and the denominator
of which is 365 and (ii) at no cost to the Executive or his family, the
same or equivalent medical, dental, and life insurance coverages as in effect
for the Executive and his family immediately prior to the termination of his
employment for a period of twelve (12) months after the Executive’s termination
of employment after which time, the Executive’s and his family’s rights under
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) shall
apply.

Section 7.02.          Termination
without Cause or for Good Reason.  In
the event that this Agreement is terminated by the Company without Cause or by
the Executive for Good Reason, except as otherwise specifically provided, all
payments, salary and other benefits hereunder shall cease at the effective date
of termination.  Notwithstanding the
foregoing, the Executive shall be entitled to receive, (i) his Accrued
Benefits, except that, for this purpose, Accrued Benefits shall not include any
entitlement to severance under any Company severance policy generally
applicable to the Company’s salaried employees, (ii) as long as the
Executive does not violate the provisions of Section 8 and Section 9 hereof,
severance pay equal to (a) the Executive’s then current monthly Base Salary,
payable in accordance with the Company’s regular pay schedule, for twelve (12)
months from the date of termination of employment, plus (b) a lump sum
cash payment in an amount equal to the Executive’s projected Annual Bonus for
the fiscal year in which the termination occurs (with the amount of such Annual
Bonus being determined based on the Company’s actual year-to-date
performance (through the end of the month immediately preceding termination)
compared to the Company’s year-to-date targets (through the end of
the month immediately preceding termination), as set forth in the Company’s
Annual Budget, and (iii)  at no cost to the Executive or his family, the
same or equivalent medical, dental, and life insurance coverages as in effect
for the Executive and his family immediately prior to the termination of his
employment, until the earlier of (a) the expiration of the period for which he
receives severance pay pursuant to clause (ii) above or (b) the date the
Executive has commenced new employment and has thereby become eligible for
comparable benefits, subject to the Executive’s rights under COBRA.

Section 7.03.          Accrued
Benefits.  Notwithstanding anything
else herein to the contrary, all Accrued Benefits to which the Executive (or
his estate or beneficiary) is entitled shall be payable in cash promptly upon
termination, except as otherwise specifically provided herein, or under the
terms of any applicable policy, plan or program.

Section 7.04.          Survival
of Certain Provisions.  Provisions of
this Agreement shall survive any termination of employment if so provided
herein or if necessary or desirable fully to accomplish the purposes of such
provision, including, without limitation, the obligations of the Executive
under Section 8 and 9 hereof.  The
obligation of the Company to make payments to or on behalf of the Executive
under Section 7 hereof is expressly conditioned upon the Executive’s continued
full performance of obligations under Section 8 and Section 9 hereof.  The Executive recognizes that, except as
expressly provided in Section 7, no compensation is earned after termination of
employment.

Section 7.05.          No Other
Benefits.  Except as specifically
provided in this Section 7, the Executive shall not be entitled to any
compensation, severance or other benefits from the Company or any of its
subsidiaries or affiliates upon the termination of this Agreement for any 

 

6

reason whatsoever. 
Acceptance by the Executive of performance by the Company shall
constitute full settlement of any claims that the Executive might otherwise
assert against the Company, its affiliates or any of their respective
shareholders, partners, directors, officers, employees or agents relating to
such termination or arising out of this Agreement.  Notwithstanding the foregoing, nothing
contained in this Section 7.05 shall be deemed a release by Executive of any
benefits he may be entitled to under any other written agreements between the
Company and the Executive, including, without limitation, the Restricted Unit
Agreement.

Section
8.               Proprietary
Information; Inventions in the Field. 
For purposes of Sections 8 and 9, “Company” shall
include Holdings and its subsidiaries.

Section 8.01.          Proprietary
Information.  In the course of service
to the Company, the Executive will have access to confidential specifications,
know-how, strategic or technical data, marketing research data, product
research and development data, manufacturing techniques, confidential customer
lists, sources of supply and trade secrets, all of which are confidential and
may be proprietary and are owned or used by the Company, or any of its
subsidiaries or affiliates.  Such
information shall hereinafter be called “Proprietary Information”
and shall include any and all items enumerated in the preceding sentence and
coming within the scope of the business of the Company or any of its
subsidiaries or affiliates as to which the Executive may have access, whether
conceived or developed by others or by the Executive alone or with others
during the period of service to the Company, whether or not conceived or
developed during regular working hours. 
Proprietary Information shall not include (i) any records, data or
information which are in the public domain prior to, during or after the period
of service by the Executive provided the same are not in the public domain as a
consequence of disclosure directly or indirectly by the Executive in violation of
this Agreement, or (ii) general industry knowledge or know-how.

Section 8.02.          Fiduciary
Obligations.  The Executive agrees
that Proprietary Information is of critical importance to the Company and a
violation of this Section 8.02 and Section 8.03 would seriously and irreparably
impair and damage the Company’s business. 
The Executive agrees that he shall keep all Proprietary Information in a
fiduciary capacity for the sole benefit of the Company.

Section 8.03.          Non-Use
and Non-Disclosure.  The Executive
shall not during the Term or at any time thereafter (a) disclose, directly or
indirectly, any Proprietary Information to any person other than the Company or
executives thereof at the time of such disclosure who, in the reasonable
judgment of the Executive, need to know such Proprietary Information or such
other persons to the extent required in the course of the Executive’s service
to the Company or (b) use any Proprietary Information, directly or indirectly,
for his own benefit or for the benefit of any other person or entity other than
the Company.  At the termination of his
employment, the Executive shall deliver to the Company all notes, letters,
documents and records which may contain Proprietary Information which are then
in his possession or control and shall destroy any and all copies and summaries
thereof.

Section 8.04.          Assignment
of Inventions.  The Executive agrees
to assign and transfer to the Company or its designee, without any separate
remuneration or compensation, his entire right, title and interest in and to
all Inventions in the Field (as defined below), together with all 

 

7

United States and foreign rights with respect thereto,
and at the Company’s expense to execute and deliver all appropriate patent and
copyright applications for securing United States and foreign patents and
copyrights on Inventions in the Field and to perform all lawful acts, including
giving testimony, and to execute and deliver all such instruments that may be
necessary or proper to vest all such Inventions in the Field and patents and
copyrights with respect thereto in the Company, and to assist the Company in
the prosecution or defense of any interference which may be declared involving
any of said patent applications, patents, copyright applications or
copyrights.  For the purposes of this
Agreement, the words “Inventions in the Field”
shall include any discovery, process, design, development, improvement,
application, technique, or invention, whether patentable or copyrightable or
not and whether reduced to practice or not, conceived or made by the Executive,
individually or jointly with others (whether on or off the Company’s premises
or during or after normal working hours) while in the employ of the Company,
and which was or is directly or indirectly related to the Business of the
Company, or which resulted or results from any work performed by the Executive
or agent thereof during the Term.

Section 8.05           Return
of Documents.  All notes, letters,
documents, records, tapes and other media of every kind and description
relating to the business, present or otherwise, of the Company or its
affiliates and any copies, in whole or in part, thereof (collectively, the “Documents”), whether or not prepared by the Executive, shall
be the sole and exclusive property of the Company.  The Executive shall safeguard all Documents
and shall surrender to the Company at the time his employment terminates, or at
such earlier time or times as the Board or its designee may specify, all
Documents then in the Executive’s possession or control.

Section
9.               Restrictions on
Activities of the Executive

Section 9.01.          Acknowledgments.  The Executive and Company agree that he is
being employed hereunder in a key capacity with the Company and that the
Company is engaged in a highly competitive business and that the success of the
Company’s business in the marketplace depends upon its goodwill and reputation
for quality and dependability.  The Executive
and Company further agree that reasonable limits may be placed on his ability
to compete against the Company as provided herein to the extent that they
protect and preserve the legitimate business interests and good will of the
Company.

Section
9.02.          Non-Competition.

Executive shall not, directly or indirectly for the longer of (i) three
(3) years from the Closing Date (as defined in the Purchase Agreement) or (ii)
one (1) year following termination of employment for any or no reason, own,
manage, engage in, operate, control, work for, consult with, render services
for, do business with, maintain any interest in (proprietary, financial or
otherwise) or participate in the ownership, management, operation or control
of, any business, whether in corporate, proprietorship or partnership form or
otherwise, engaged in the Business; provided, however, that the
restrictions contained in this Section 9.02 shall not restrict the acquisition
by the Executive, directly or indirectly, of less than 2% of the outstanding
capital stock of any publicly traded company engaged in the Business.

8

Section 9.03.          Non-Solicitation.

Executive agrees he or she shall not, and shall cause, if applicable,
their directors, officers and employees not to, directly or indirectly, for the
longer of (i) three (3) years from the Closing Date or (ii) one (1) year
following termination of employment for any or no reason, (a) cause, solicit,
induce or encourage any employees of the Company to leave such employment or
hire or employ any such individual; or (b) cause, induce or encourage any
material client, customer, supplier, or licensor of the Company (including any
existing or former customer of the Company and any person that becomes a client
or customer of the Company after the Closing Date) to terminate or modify any
such actual or prospective relationship.

Section 9.04.          THE EXECUTIVE
REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES
AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT
HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A
LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF SECTION 8
OR 9 HEREOF, FOR EXAMPLE, BY USING SUCH KNOWLEDGE, SKILLS AND ABILITIES, OR
SOME OF THEM, IN THE SERVICE OF A NON-COMPETITOR.

Section 10.  Remedies.  It is specifically understood and agreed that
any breach of the provisions of Section 8 or 9 of this Agreement is likely to
result in irreparable injury to the Company and that the remedy at law alone
will be an inadequate remedy for such breach, and that in addition to any other
remedy it may have, the Company shall be entitled to enforce the specific
performance of this Agreement by the Executive and to seek both temporary and
permanent injunctive relief (to the extent permitted by law) without bond.  Neither the right to obtain such relief nor
the obtaining of such relief shall be exclusive or preclude the Company from
any other remedy.

Section 11.  Severable
Provisions.  The provisions of this
Agreement are severable and the invalidity of any one or more provisions shall
not affect the validity of any other provision. 
In the event that a court of competent jurisdiction shall determine that
any provision of this Agreement or the application thereof is unenforceable in
whole or in part because of the duration or scope thereof, the parties hereto
agree that said court in making such determination shall have the power to
reduce the duration and scope of such provision to the extent necessary to make
it enforceable, and that the Agreement in its reduced form shall be valid and
enforceable to the full extent permitted by law.

Section 12.  Notices.  All notices hereunder, to be effective, shall
be in writing and shall be delivered by hand, facsimile or mailed by certified
mail, postage and fees prepaid, as follows:

 

9

	
  If to the Company,

  	
   

  	
   

  
	
  Holdings or IPO Corp.:

  	
   

  	
  Hawkeye Intermediate, LLC

  
	
   

  	
   

  	
  21050 140th Street

  
	
   

  	
   

  	
  Iowa Falls, IA 50126

  
	
   

  	
   

  	
  Facsimile No: (641) 648-8925

  
	
   

  	
   

  	
  Attention: President

  
	
   

  	
   

  	
   

  
	
  With copies to:

  	
   

  	
  Thomas H. Lee Partners, L.P.

  
	
   

  	
   

  	
  100 Federal Street

  
	
   

  	
   

  	
  Boston, MA 02110

  
	
   

  	
   

  	
  Facsimile No: (617) 227-3514

  
	
   

  	
   

  	
  Attention:

  	
  Scott Sperling

  
	
   

  	
   

  	
   

  	
  Thomas Hagerty

  
	
   

  	
   

  	
   

  	
  Soren Oberg

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Weil, Gotshal & Manges LLP

  
	
   

  	
   

  	
  100 Federal Street

  
	
   

  	
   

  	
  Boston, MA 02110

  
	
   

  	
   

  	
  Facsimile No: (617) 772-8333

  
	
   

  	
   

  	
  Attention: James Westra and Marilyn French

  
	
   

  	
   

  	
   

  
	
  If to the Executive:

  	
   

  	
  Bruce Rastetter

  
	
   

  	
   

  	
  22051, 230th Street

  
	
   

  	
   

  	
  Hubband, Iowa 50122

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Baker & McKenzie

  
	
   

  	
   

  	
  130 E. Randolph Drive,
  Suite 3000

  
	
   

  	
   

  	
  Chicago, IL  60601

  
	
   

  	
   

  	
  Facsimile No:  (312) 698-2188

  
	
   

  	
   

  	
  Attention:  Christopher G. Guldberg

  

 

 

or
to such other address as a party may notify the other pursuant to a notice
given in accordance with this Section 12.

Section 13.             Miscellaneous.

Section 13.01.        Amendment.  This Agreement constitutes the entire
Agreement between the parties hereto with regard to the subject matter hereof,
superseding all prior understandings and agreements, whether written or
oral.  This Agreement may not be amended
or revised except by a writing signed by the parties.  Notwithstanding any other
provision of this Agreement to the contrary, the parties shall in good faith
amend this Agreement to the limited extent necessary to comply with the
requirements under Internal Revenue Code Section 409A in order to ensure that
any amounts paid or payable hereunder are not subject to the additional 20%
income tax thereunder while maintaining to the maximum extent practicable the
original intent of this Agreement.

10

Section 13.02.        Assignment
and Transfer.  The provisions of this
Agreement shall be binding on and shall inure to the benefit of any such
successor in interest to the Company and Holdings.  Neither this Agreement nor any of the rights,
duties or obligations of the Executive shall be assignable by the Executive.  However, all rights of the Executive under
this Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, estates, executors,
administrators, heirs and beneficiaries. 
All amounts payable to the Executive hereunder shall be paid, in the
event of the Executive’s death, to the Executive’s estate, heirs or
representatives.

Section 13.03         Waiver of
Breach.  A waiver by the Company or
the Executive of any breach of any provision of this Agreement by the other
party shall not operate or be construed as a waiver of any other or subsequent
breach by the other party.

Section 13.04.        Entire
Agreement.  This Agreement (together
with the other agreements expressly referenced herein) contain the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements among the parties with respect to such subject
matter.

Section 13.05         Withholding.  The Company shall be entitled to withhold
from any amounts to be paid or benefits provided to the Executive hereunder any
federal, state, local, or foreign withholding or other taxes or charges which
it is from time to time required to withhold. 
The Company shall be entitled to rely on an opinion of counsel if any
question as to the amount or requirement of any such withholding shall arise.

Section 13.06.        Captions.  Captions herein have been inserted solely for
convenience of reference and in no way define, limit or describe the scope or
substance of any provision of this Agreement.

Section 13.07         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and shall have the same
effect as if the signatures hereto and thereto were on the same instrument.

Section 13.08         Governing
Law.  This Agreement shall be construed
under and enforced in accordance with the laws of the State of Iowa.

[Remainder of page
left intentionally blank]

 

11

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as a sealed instrument as of the day and year first above written.

	
   

  	
  HAWKEYE RENEWABLES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ J.D. Schlieman

  
	
   

  	
  Name: J.D. Schlieman

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWKEYE INTERMEDIATE,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ J.D. Schlieman

  
	
   

  	
   

  	
  Name: J.D. Schlieman

  
	
   

  	
  Title:President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWKEYE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J.D. Schlieman

  
	
   

  	
  Name: J.D. Schlieman

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Bruce Rastetter

  
	
   

  	
  BRUCE RASTETTER

  
				

 

12

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