Document:

Exhibit
10.18

 

Employment Offer to Thomas
Kersting

 

	
  Title:

  	
  Merchant

  
	
   

  	
   

  
	
  Reporting to:

  	
  Commercial Manager

  
	
   

  	
   

  
	
  Starting Date:

  	
  May 6, 1996

  
	
   

  	
   

  
	
  Starting Salary:

  	
  $42,000 per year. First
  month to be prorated based upon starting date.

  
	
   

  	
   

  
	
  Incentive Plan:

  	
  Any incentive plan has
  yet to be established. Once established, you will be eligible to participate
  in accordance to the plan’s guidelines.

  
	
   

  	
   

  
	
  Performance Review:

  	
  Performance Reviews will
  be conducted every six (6) months. Salary reviews will be conducted annually
  at the end of each fiscal year (August 31).

  
	
   

  	
   

  
	
  Benefits:

  	
  Any employee benefits
  package has yet to be established. Once established you will become eligible
  to participate in accordance to each plan’s requirements.

  
	
   

  	
   

  
	
  Holidays:

  	
  New Year’s Day, Easter,
  Memorial Day, Fourth of July, Labor Day, Thanksgiving, Christmas

  
	
   

  	
   

  
	
  Vacation:

  	
  You will receive ten
  (10) days vacation per year (September 1 through August 31).

  
	
   

  	
   

  
	
  Termination:

  	
  Employment is at will.

  

 

I have read and understand that my signature below denotes my
acceptance of this offer.

 

	
  SOUTH
  DAKOTA SOYBEAN PROCESSORS  

  	
   

  	
  CANDIDATE 
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Rodney G. Christianson

  	
   

  	
   

  	
  By: 

  	
   /s/ Thomas J. Kersting 

  	
   

  
	
  Rodney G. Christianson 

  	
   

  	
  Thomas J. Kersting 

  
	
  Chief Executive Officer  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   3/26/96

  	
   

  	
   

  	
  Date:

  	
   5/20/96Exhibit
10.19

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (“Agreement”) is
made this 4th day of January, 1995, by and between South Dakota Soybean
Processors (hereinafter “Employer”), and Larry Mahlum (hereinafter “Employee”).

 

W I T N E S S E T H:

 

In consideration of the mutual promises and
covenants as hereinafter set forth, the parties agree as follows:

 

1.             Employment.
The Employer hereby employs the Employee and the Employee hereby accepts
employment with the Employer on the terms and conditions set forth in this
Agreement. The Employee shall be considered an at-will employee and may be
terminated with or without cause.

 

2.             Term.
The term of employment under this Agreement shall commence January 1, 1995, and
shall continue thereafter unless and until terminated as hereinafter provided.
The hours of employment shall be set by the Board of Directors and/or the
President.

 

3.             Duties.
The Employee is engaged to perform consulting services for and on behalf of the
Employer. In addition to consulting services, the Employee shall also perform
services coordinating the construction project for the Cooperative, including
obtaining necessary permits, ensuring compliance with all state and federal
laws and regulations, contacting design engineering firms, requesting bids from
various contractors, and submitting the bids to the Board of Directors.

 

In consideration of the compensation payments
to be made and the other benefits extended herein, the Employee agrees to serve
the Employer faithfully and to the best of his

 

 

ability, to use his best efforts to promote the interests of the
Employer and to devote such time, energy and skill as may be required to
perform the duties and services specified herein.

 

4.             Compensation.
The Employer during the term of this Agreement shall pay the Employee a monthly
salary of Four Thousand and No/100 Dollars ($4,000.00) payable on the last day
of each month.  [Increased to $5,000 per
month or $60,000 per year on September 1, 1995.]

 

5.             Expenses.
Employer will reimburse Employee for all legitimate and reasonable expenses,
including travel, mileage, postage and phone expenses, incurred by Employee in
the discharge of his duties in connection with the business of Employer, and
authorized upon the presentment by Employee, from time to time, of an itemized
account of such expenditures and receipts therefor. Mileage shall be paid at
the rate of $.28 per mile.

 

6.             Termination
by Employee. The Employee may terminate this Agreement upon thirty (30)
days written notice to the Employer.

 

7.             Termination
by Employer. Employer may terminate this Agreement at any time, with or
without cause, without notice and without any liability on the part of
Employer.

 

8.             Construction.
This Agreement shall be governed by the laws of the State of South Dakota.

 

9.             Entire
Agreement. This instrument contains the entire agreement of the parties
concerning employment and may not be changed except by written agreement duly
executed by the parties hereto.

 

10.           Binding
Effect. This Agreement shall inure to the benefit of and be binding upon
the parties hereto, their successors, heirs, and personal representatives.

 

2

 

11.           Severability.
Each provision of this Agreement shall be considered severable and if for any
reason any provision is determined to be invalid, such invalidity shall not
impair or otherwise affect the validity of the other provisions of this
Agreement.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement from the date and year first above written.

 

	
   

  	
  EMPLOYER

  
	
   

  	
   

  
	
   

  	
  SOUTH DAKOTA SOYBEAN PROCESSORS

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Paul W. Casper

  	
   

  
	
   

  	
  Its President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ Larry Mahlum

  	
   

  
	
   

  	
  Larry Mahlum

  
					

 

3Exhibit
10.20

 

DEFERRED
COMPENSATION PLAN

 

This Deferred Compensation Plan is adopted
this 1 day of April 1999, by South Dakota Soybean Processors (hereinafter
“Employer”) for the benefit of a key employee, Rodney C. Christianson
(hereafter “Employee”).

 

1.             Establishment
of Plan. The Employer, by execution of this Agreement, hereby establishes
and adopts this Deferred Compensation Plan which shall become effective as of
September 1, 1998.

 

2.             Purpose
of Plan. The purpose of the Plan is to enable the Employee to enhance his
retirement security and to provide incentive and reward to the Employee for
contributing to the success of Employer through his invention, ability,
industry, loyalty and exceptional service by making him a participant in that
success.

 

3.             Establishment
of Deferred Compensation Account. Employer shall establish an Incentive
Compensation Ledger Account (“Ledger Account”), in which shall be entered the
name of the Employee, the number of Deferred Compensation Units (sometimes
hereafter called “Units”) awarded to Employee, and an amount equivalent to the
Fair Market Value of an equal number of shares of common stock (“Fair Market
Value”) as of August 31, 1998.

 

4.             Number
of Units Credited. The number of Units credited to the Ledger Account of Employee
shall equal 30,000. It is understood that Employer shall have no right, title,
or interest in any actual shares issued by Employer.

 

5.             Additional
Credit to Account of Employee. At the end of each Employer’s fiscal year,
there shall be credited to or debited from the Fair Market Value of the Ledger
Account an amount equal to the excess, or decrease, as applicable, of the then
fair market value of the

 

 

aggregate number of Units
which have been previously awarded to the Employee, over the fair market value
of such shares determined as of the end of the previous fiscal year.

 

6.             Adjustment
of Number of Units.

 

(a)           Share Split. In the event of a share split, an
appropriate adjustment shall be made by the Employer in the number of Units
which may be credited to the Employee in the Ledger Account; provided, however,
that the Employer shall not be required to establish any fractional units. In
the event a payment is required to purchase split shares, the number of Units
in the Ledger Account shall be debited by an amount equivalent to the required
payment.

 

(b)           No Other Credits. The Ledger Account shall not be
credited for any dividends, pool fees, or value-added payments.

 

(c)           No Interest. The Ledger Account shall not accrue
interest or earnings of any kind, except as provided in paragraph 5.

 

7.             Vesting.

 

(a)           Vesting of Units. One-third (1/3) of the Units at
any time credited to the Ledger Account shall become vested on the first
anniversary date of the award of such Units and an additional one-third (1/3)
shall vest on each such anniversary date for the next succeeding two (2) years.
On each such vesting date, the Units at any time credited to the Ledger Account
shall, to the extent not previously vested, become vested in accordance with
the following schedule:

 

2

 

	
  Date

  	
   

  	
  Vested Percentage 

  of Dividend Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First anniversary date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Second anniversary date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Third anniversary date

  	
   

  	
  33 1/3

  	
  %

  

 

Such vesting shall occur only if the Employee
on the date of vesting has continuously been an employee of the Employer since
the date of the award. A leave of absence, unless otherwise determined by the
Employer, shall not constitute a cessation of employment.

 

(b)           Vesting of Appreciation. Any amounts credited to
the Ledger Account representing the appreciation of shares pursuant to
paragraph 5 shall vest on the last day of each Employer’s fiscal year.

 

8.             Payment
of Benefits.

 

(a)           Retirement. If the Employee’s employment is
terminated on or after his sixty-fifth (65th) birthday, the Employer shall pay
to him in five (5) substantially equal annual installments, an amount equal to
the Fair Market Value of the Units standing to his credit in the Ledger
Account. If the Employee should die on or after his sixty-fifth (65th) birthday
but before the five (5) annual payments are made, the unpaid balance shall
continue to be paid in installments for the unexpired portion of the five (5)
years.

 

(b)           Termination of Employment. If the Employee’s employment
is terminated for any reason other than death or disability, the Fair Market
Value of the Units standing to his credit in the Ledger Account shall be paid
in five (5) substantially equal installments.

 

3

 

(c)           Disability or Death. If Employee’s employment is
terminated because of disability or death before he has reached the age of
sixty-five (65) and while he is still in the Employer’s employ, the Employer
shall make five (5) substantially equal annual payments to him (in the event of
his disability) or his estate (in the event of his death) of the Fair Market
Value of the Units standing to his credit in the Ledger Account.

 

(d)           Disability Determination. The Employee shall be
deemed to have become disabled for purposes of paragraph (c) if the Employer
shall find, on the basis of medical evidence satisfactory to it in its sole
discretion, that the Employee is so totally mentally or physically disabled as
to be unable to engage in further employment by the Employer and that such
disability is permanent and continuous during the remainder of his life.

 

(e)           Payment Commencement Date. The installment payments
to be made to the Employee under paragraph 8(a) shall commence on the first day
of the month following the date on which the Employee shall have reached the
age of sixty-five (65). The installments payments to be made to Employee under
paragraphs 8(b) and 8(c) shall commence on the first day of the calendar year
following the date of employment termination, death, or determination of
disability, but in no event earlier than three (3) months from such event.

 

(f)            Option to Accelerate Payments. Notwithstanding
anything contained herein to the contrary, Employer may in its sole discretion
discharge its entire obligation to pay employee benefits under this Plan by
transferring to Employee any amounts credited to him in the Ledger Account at
any time prior to the due date of any installment payment.

 

4

 

(g)           Final Determination of Fair Market Value. In the
event the event entitling Employee to commencement of payments under paragraph
8 is more than ninety (90) days from the end of the Employers fiscal year, the
determination of the Fair Market Value of the Ledger Account shall be
determined by obtaining a weighted average of the fair market value of the
aggregate Units standing to his credit in the Ledger Account during the ninety
(90) day period immediately prior to such event. Any such payments under this
paragraph 8 shall be reduced by any amounts required by law to be withheld by
the Employer.

 

(h)           No Interest. No interest shall be payable on any
sums owing to Employee under this Plan.

 

9.             Non-Compete
Covenant. As a condition to the receipt of benefits hereunder, Employee
agrees he shall not engage directly or indirectly in the same business or
profession as Employer for a period of two (2) years from the date of
termination of his employment with Employer within a five hundred (500) mile
radius from Volga, South Dakota. In the event of any breach of this covenant,
the Employer by written notice to Employee may cause his payments to be
suspended and may permanently cancel such payments and thereupon all rights of
such Employee under this Plan shall terminate forever.

 

10.           Non-Alienation
of Benefits. No right or benefit or payment under this Plan shall be
subject to anticipation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, sell, assign, pledge, encumber, or charge the same
shall be void. No right or benefit or payment hereunder shall in any manner be
liable for or subject to the debts, contracts, liabilities, or torts of the
person entitled to such benefits. If the Employee should become bankruptcy or
attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any
right or benefit or

 

5

 

payment hereunder, then
such right or benefit or payment shall, in the sole discretion of Employer,
terminate.

 

11.           No
Trust. Nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or construe to create a trust of any kind,
or fiduciary relationship between the Employer and Employee, his designated
beneficiary or any other person.

 

12.           Employer’s
Powers and Liabilities. The Employer shall have power and authority to
interpret and administer this Plan. The Employer’s interpretations and
construction of any provision or action taken under this Plan, including any
valuation of the Ledger Account or the amount or recipient of payment due under
it, shall be binding and conclusive on all persons for all purposes. Neither
the Employer, its directors, officers, agents or employees shall be liable to
any person for any action taken or admitted in connection with the
interpretation and administration of this Plan unless attributable to the
Employer’s willful conduct or lack of good faith.

 

13.           Amendment
or Termination of Plan. The Employer may amend or terminate this Plan at
any time; however, any such amendment or termination shall not affect the right
of Employee to awards previously made or the right of the Employee to the
credit in the Ledger Account at the time of such amendment or termination.

 

14.           No
Employment Contract. Nothing contained in this Plan shall be construed as
giving the Employee the right to be retained in the employ of the Employer, nor
shall it limit or restrict the right of the Employer to terminate the
employment of any Employee with or without cause.

 

6

 

15.           Benefits
Not Funded. Employee’s interest in the Plan is an unsecured claim against
the general assets of the Employer, and neither the Employee or any beneficiary
has any right against the account until the Plan has distributed the benefit.
All amounts credited to an account are the general assets of the corporation
and may be disposed of and used by the corporation in such manner as it
determines.

 

16.           Governing
Law. This Plan shall be construed in accordance with and governed by the
laws of the State of South Dakota.

 

17.           Compliance
With Code. Employer intends that this Plan comply with the provisions of
the Internal Revenue Code of 1986, as amended, and regulations in effect at the
time of its execution. If, at a later date, the laws of the United States or
the State of South Dakota are construed in such a way as to make this Plan null
and void, it shall be given effect in a manner that shall best carry out the
parties’ purposes and intentions.

 

Dated this 1 day of April, 1999.

 

	
   

  	
  SOUTH
  DAKOTA SOYBEAN PROCESSORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Paul W. Casper

  	
   

  
	
   

  	
  Its

  	
   President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ Rodney G. Christianson

  	
   

  
	
   

  	
  Rodney G. Christianson

  
						

 

7

 

DEFERRED
COMPENSATION PLAN

 

This Deferred Compensation Plan is adopted
this 13 day of February, 2001, by South Dakota Soybean Processors (hereinafter
“Employer”) for the benefit of a key employee, Thomas Kersting (hereafter
“Employee”).

 

1.             Establishment
of Plan. The Employer, by execution of this Agreement, hereby establishes
and adopts this Deferred Compensation Plan which shall become effective as of
January 1, 2001.

 

2.             Purpose
of Plan. The purpose of the Plan is to enable the Employee to enhance his
retirement security and to provide incentive and reward to the Employee for
contributing to the success of Employer through his invention, ability,
industry, loyalty and exceptional service by making him a participant in that
success.

 

3.             Establishment
of Deferred Compensation Account. Employer shall establish an Incentive
Compensation Ledger Account (“Ledger Account”), in which shall be entered the
name of the Employee, the number of Deferred Compensation Units (sometimes
hereafter called “Units”) awarded to Employee, and an amount equivalent to the
Fair Market Value of an equal number of shares of common stock (“Fair Market
Value”) as of January 1, 2001.

 

4.             Number
of Units Credited. The number of Units credited to the Ledger Account of
Employee shall equal 18,000. It is understood that Employee shall have no right,
title, or interest in any actual shares issued by Employer.

 

5.             Additional
Credit to Account of Employee. At the end of each Employer’s fiscal year,
there shall be credited to or debited from the Fair Market Value of the Ledger
Account an amount equal to the excess, or decrease, as applicable, of the then
fair market value of the

 

8

 

aggregate number of Units
which have been previously awarded to the Employee, over the fair market value
of such shares determined as of the end of the previous fiscal year.

 

6.             Adjustment
of Number of Units.

 

(a)           Share Split. In the event of a share split, an
appropriate adjustment shall be made by the Employer in the number of Units
which may be credited to the Employee in the Ledger Account; provided, however,
that the Employer shall not be required to establish any fractional units. In
the event a payment is required to purchase split shares, the number of Units
in the Ledger Account shall be debited by an amount equivalent to the required
payment.

 

(b)           No Other Credits. The Ledger Account shall not be
credited for any dividends, pool fees, or value-added payments.

 

(c)           No Interest. The Ledger Account shall not accrue
interest or earnings of any kind, except as provided in paragraph 5.

 

7.             Vesting.

 

(a)           Vesting of Units. One-third (1/3) of the Units at
any time credited to the Ledger Account shall become vested on August 31, 2001,
and an additional one-third (1/3) shall vest on each such anniversary date
thereof for the next succeeding two (2) years. On each such vesting date, the
Units at any time credited to the Ledger Account shall, to the extent not
previously vested, become vested in accordance with the following schedule:

 

	
  Date

  	
   

  	
  Vested Percentage 

  of Dividend Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 31, 2001

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  August 31, 2002

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  August 31, 2003

  	
   

  	
  33 1/3

  	
  %

  

 

9

 

Such vesting shall occur only if the Employee
on the date of vesting has continuously been an employee of the Employer since
the date of the award. A leave of absence, unless otherwise determined by the
Employer, shall not constitute a cessation of employment.

 

(b)           Vesting of Appreciation. Any amounts credited to
the Ledger Account representing the appreciation of shares pursuant to
paragraph 5 shall vest on the last day of each Employer’s fiscal year.

 

8.             Payment
of Benefits.

 

(a)           Retirement. If the Employee’s employment is
terminated on or after his sixty-fifth (65th) birthday, the Employer shall pay
to him in five (5) substantially equal annual installments, an amount equal to
the Fair Market Value of the Units standing to his credit in the Ledger
Account. If the Employee should die on or after his sixty-fifth (65th) birthday
but before the five (5) annual payments are made, the unpaid balance shall
continue to be paid in installments for the unexpired portion of the five (5)
years.

 

(b)           Termination of Employment. If the Employee’s
employment is terminated for any reason other than death or disability, the
Fair Market Value of the Units standing to his credit in the Ledger Account
shall be paid in five (5) substantially equal installments.

 

(c)           Disability or Death. If Employee’s employment is
terminated because of disability or death before he has reached the age of
sixty-five (65) and while he is still in the Employer’s employ, the Employer
shall make five (5) substantially equal annual payments to him (in the event of
his disability) or his estate (in the event of his death) of the Fair Market
Value of the Units standing to his credit in the Ledger Account.

 

10

 

(d)           Disability Determination. The Employee shall be
deemed to have become disabled for purposes of paragraph (c) if the Employer
shall find, on the basis of medical evidence satisfactory to it in its sole
discretion, that the Employee is so totally mentally or physically disabled as
to be unable to engage in further employment by the Employer and that such
disability is permanent and continuous during the remainder of his life.

 

(e)           Payment Commencement Date. The installment payments
to be made to the Employee under paragraph 8(a) shall commence on the first day
of the month following the date on which the Employee shall have reached the
age of sixty-five (65). The installments payments to be made to Employee under
paragraphs 8(b) and 8(c) shall commence on the first day of the calendar year
following the date of employment termination, death, or determination of
disability, but in no event earlier than three (3) months from such event.

 

(f)            Option to Accelerate Payments. Notwithstanding
anything contained herein to the contrary, Employer may in its sole discretion
discharge its entire obligation to pay employee benefits under this Plan by
transferring to Employee any amounts credited to him in the Ledger Account at
any time prior to the due date of any installment payment.

 

(g)           Final Determination of Fair Market Value. In the
event the event entitling Employee to commencement of payments under paragraph
8 is more than ninety (90) days from the end of the Employer’s fiscal year, the
determination of the Fair Market Value of the Ledger Account shall be
determined by obtaining a weighted average of the fair market value of the
aggregate Units standing to his credit in the Ledger Account during the ninety
(90) day period immediately prior to such event. Any such payments

 

11

 

under this paragraph 8 shall be reduced by
any amounts required by law to be withheld by the Employer.

 

(h)           No Interest. No interest shall be payable on any
sums owing to Employee under this Plan.

 

9.             Non-Compete
Covenant. As a condition to the receipt of benefits hereunder, Employee
agrees he shall not engage directly or indirectly in the same business or
profession as Employer for a period of two (2) years from the date of
termination of his employment with Employer within a five hundred (500) mile
radius from Volga, South Dakota. In the event of any breach of this covenant,
the Employer by written notice to Employee may cause his payments to be
suspended and may permanently cancel such payments and thereupon all rights of
such Employee under this Plan shall terminate forever.

 

10.           Non-Alienation
of Benefits. No right or benefit or payment under this Plan shall be
subject to anticipation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, sell, assign, pledge, encumber, or charge the same
shall be void. No right or benefit or payment hereunder shall in any manner be
liable for or subject to the debts, contracts, liabilities, or torts of the
person entitled to such benefits. If the Employee should become bankruptcy or
attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any
right or benefit or payment hereunder, then such right or benefit or payment
shall, in the sole discretion of Employer, terminate.

 

11.           No
Trust. Nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or construe to create a trust of any kind,
or fiduciary relationship between the Employer and Employee, his designated
beneficiary or any other person.

 

12

 

12.           Employer’s
Powers and Liabilities. The Employer shall have power and authority to
interpret and administer this Plan. The Employer’s interpretations and
construction of any provision or action taken under this Plan, including any
valuation of the Ledger Account, or the amount or recipient of payment due
under it, shall be binding and conclusive on all persons for all purposes.
Neither the Employer, its directors, officers, agents or employees shall be
liable to any person for any action taken or admitted in connection with the
interpretation and administration of this Plan unless attributable to the
Employer’s willful conduct or lack of good faith.

 

13.           Amendment
or Termination of Plan. The Employer may amend or terminate this Plan at
any time; however, any such amendment or termination shall not affect the right
of Employee to awards previously made or the right of the Employee to the
credit in the Ledger Account at the time of such amendment or termination.

 

14.           No
Employment Contract. Nothing contained in this Plan shall be construed as
giving the Employee the right to be retained in the employ of the Employer, nor
shall it limit or restrict the right of the Employer to terminate the
employment of any Employee with or without cause.

 

15.           Benefits
Not Funded. Employee’s interest in the Plan is an unsecured claim against
the general assets of the Employer, and neither the Employee or any beneficiary
has any right against the account until the Plan has distributed the benefit.
All amounts credited to an account are the general assets of the corporation
and may be disposed of and used by the corporation in such manner as it
determines.

 

16.           Governing
Law. This Plan shall be construed in accordance with and governed by the
laws of the State of South Dakota.

 

13

 

17.           Compliance
With Code. Employer intends that this Plan comply with the provisions of
the Internal Revenue Code of 1986, as amended, and regulations in effect at the
time of its execution. If, at a later date, the laws of the United States or
the State of South Dakota are construed in such a way as to make this Plan null
and void, it shall be given effect in a manner that shall best carry out the
parties’ purposes and intentions.

 

Dated this 13 day of February, 2001.

 

	
   

  	
  SOUTH DAKOTA SOYBEAN
  PROCESSORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Rodney Christianson

  	
   

  
	
   

  	
  Its

  	
   CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Thomas Kersting

  	
   

  
	
   

  	
  Thomas Kersting

  
							

 

14

 

DEFERRED
COMPENSATION PLAN

 

This Deferred Compensation Plan is adopted
this 23rd day of July, 2001, by South Dakota Soybean Processors (hereinafter
“Employer”) for the benefit of a key employee, Connie Kelly, (hereafter
“Employee”).

 

1.             Establishment
of Plan. The Employer, by execution of this Agreement, hereby establishes
and adopts this Deferred Compensation Plan which shall become effective as of
August 1, 2001.

 

2.             Purpose
of Plan. The purpose of the Plan is to enable the Employee to enhance her
retirement security and to provide incentive and reward to the Employee for
contributing to the success of Employer through her invention, ability,
industry, loyalty and exceptional service by making her a participant in that
success.

 

3.             Establishment
of Deferred Compensation Account. Employer shall establish an Incentive
Compensation Ledger Account (“Ledger Account”), in which shall be entered the name
of the Employee, the number of Deferred Compensation Units (sometimes hereafter
called “Units”) awarded to Employee, and an amount equivalent to the Fair
Market Value of an equal number of shares of common stock (“Fair Market Value”)
as of January 1, 2001.

 

4.             Number
of Units Credited. The number of Units credited to the Ledger Account of
Employee shall equal 18,000. It is understood that Employee shall have no
right, title, or interest in any actual shares issued by Employer.

 

5.             Additional
Credit to Account of Employee. At the end of each Employer’s fiscal year,
there shall be credited to or debited from the Fair Market Value of the Ledger
Account an amount equal to the excess, or decrease, as applicable, of the then
fair market value of the

 

15

 

aggregate number of Units
which have been previously awarded to the Employee, over the fair market value
of such shares determined as of the end of the previous fiscal year.

 

6.             Adjustment
of Number of Units.

 

(a)           Share Split. In the event of a share split, an
appropriate adjustment shall be made by the Employer in the number of Units
which may be credited to the Employee in the Ledger Account; provided, however,
that the Employer shall not be required to establish any fractional units. In
the event a payment is required to purchase split shares, the number of Units
in the Ledger Account shall be debited by an amount equivalent to the required
payment.

 

(b)           No Other Credits. The Ledger Account shall not be
credited for any dividends, pool fees, or value-added payments.

 

(c)           No Interest. The Ledger Account shall not accrue
interest or earnings of any kind, except as provided in paragraph 5.

 

7.             Vesting.

 

(a)           Vesting of Units. One-third of the Units at any
time credited to the Ledger Account shall become vested on August 31, 2001, and
an additional one-third shall vest on each such anniversary date thereof for
the next succeeding two (2) years. On each such vesting date, the Units at any
time credited to the Ledger Account shall, to the extent not previously vested,
become vested in accordance with the following schedule:

 

	
  Date

  	
   

  	
  Vested Percentage

  of Dividend Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 31, 2001

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  August 31, 2002

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  August 31, 2003

  	
   

  	
  33 1/3

  	
  %

  

 

16

 

Such vesting shall occur only if the Employee
on the date of vesting has continuously been an employee of the Employer since
the date of the award. A leave of absence, unless otherwise determined by the
Employer, shall not constitute a cessation of employment.

 

(b)           Vesting of Appreciation. Any amounts credited to
the Ledger Account representing the appreciation of shares pursuant to
paragraph 5 shall vest on the last day of each Employer’s fiscal year.

 

8.             Payment
of Benefits.

 

(a)           Retirement. If the Employee’s employment is
terminated on or after her sixty-fifth (65th) birthday, the Employer shall pay
to her in five (5) substantially equal annual installments, an amount equal to
the Fair Market Value of the Units standing to her credit in the Ledger
Account. If the Employee should die on or after her sixty-fifth (65th) birthday
but before the five (5) annual payments are made, the unpaid balance shall
continue to be paid (to her estate) in installments for the unexpired portion
of the five (5) years.

 

(b)           Termination of Employment. If the Employee’s
employment is terminated for any reason other than death or disability, the
Fair Market Value of the Units standing to her credit in the Ledger Account
shall be paid in five (5) substantially equal installments.

 

(c)           Disability or Death. If Employee’s employment is
terminated because of disability or death before she has reached the age of
sixty-five (65) and while she is still in the Employer’s employ, the Employer
shall make five (5) substantially equal annual payments to her (in the event of
her disability) or her estate (in the event of her death) of the Fair Market
Value of the Units standing to her credit in the Ledger Account.

 

17

 

(d)           Disability Determination. The Employee shall be
deemed to have become disabled for purposes of paragraph (c) if the Employer
shall find, on the basis of medical evidence satisfactory to it in its sole
discretion, that the Employee is so totally mentally or physically disabled as
to be unable to engage in further employment by the Employer and that such
disability is permanent and continuous during the remainder of her life.

 

(e)           Payment Commencement Date. The installment payments
to be made to the Employee under paragraph 8(a) shall commence on the first day
of the month following the date on which the Employee shall have reached the
age of sixty-five (65). The installments payments to be made to Employee under
paragraphs 8(b) and 8(c) shall commence on the first day of the calendar year
following the date of employment termination, death, or determination of
disability, but in no event earlier than three (3) months from such event.

 

(f)            Option to Accelerate Payments. Notwithstanding
anything contained herein to the contrary, Employer may in its sole discretion
discharge its entire obligation to pay employee benefits under this Plan by
transferring to Employee any amounts credited to him in the Ledger Account at
any time prior to the due date of any installment payment.

 

(g)           Final Determination of Fair Market Value. In the
event the event entitling Employee to commencement of payments under paragraph
8 is more than ninety (90) days from the end of the Employer’s fiscal year, the
determination of the Fair Market Value of the Ledger Account shall be
determined by obtaining a weighted average of the fair market value of the
aggregate Units standing to her credit in the Ledger Account during the ninety
(90) day period immediately prior to such event. Any such payments

 

18

 

under this paragraph 8 shall be reduced by
any amounts required by law to be withheld by the Employer.

 

(h)           No Interest. No interest shall be payable on any
sums owing to Employee under this Plan.

 

9.             Non-Compete
Covenant. As a condition to the receipt of benefits hereunder, Employee
agrees she shall not engage directly or indirectly in the same business as
Employer for a period of two (2) years from the date of termination of her
employment with Employer within a two hundred (200) mile radius from Volga,
South Dakota. In the event of any breach of this covenant, the Employer by
written notice to Employee may cause her payments to be suspended and may
permanently cancel such payments and thereupon all rights of such Employee
under this Plan shall terminate forever.

 

10.           Non-Alienation
of Benefits. No right or benefit or payment under this Plan shall be
subject to anticipation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, sell, assign, pledge, encumber, or charge the same
shall be void. No right or benefit or payment hereunder shall in any manner be
liable for or subject to the debts, contracts, liabilities, or torts of the
person entitled to such benefits. If the Employee should become bankruptcy or
attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any
right or benefit or payment hereunder, then such right or benefit or payment
shall, in the sole discretion of Employer, terminate.

 

11.           No
Trust. Nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or construe to create a trust of any kind,
or fiduciary relationship between the Employer and Employee, her designated
beneficiary or any other person.

 

19

 

12.           Employer’s
Powers and Liabilities. The Employer shall have power and authority to
interpret and administer this Plan. The Employer’s interpretations and
construction of any provision or action taken under this Plan, including any
valuation of the Ledger Account, or the amount or recipient of payment due
under it, shall be binding and conclusive on all persons for all purposes.
Neither the Employer, its directors, officers, agents or employees shall be
liable to any person for any action taken or admitted in connection with the
interpretation and administration of this Plan unless attributable to the
Employer’s willful conduct or lack of good faith.

 

13.           Amendment
or Termination of Plan. The Employer may amend or terminate this Plan at
any time; however, any such amendment or termination shall not affect the right
of Employee to awards previously made or the right of the Employee to the
credit in the Ledger Account at the time of such amendment or termination.

 

14.           No
Employment Contract. Nothing contained in this Plan shall be construed as
giving the Employee the right to be retained in the employ of the Employer, nor
shall it limit or restrict the right of the Employer to terminate the
employment of any Employee with or without cause.

 

15.           Benefits
Not Funded. Employee’s interest in the Plan is an unsecured claim against
the general assets of the Employer, and neither the Employee or any beneficiary
has any right against the account until the Plan has distributed the benefit.
All amounts credited to an account are the general assets of the corporation
and may be disposed of and used by the corporation in such manner as it
determines.

 

16.           Governing
Law. This Plan shall be construed in accordance with and governed by the
laws of the State of South Dakota.

 

20

 

17.           Compliance
With Code. Employer intends that this Plan comply with the provisions of
the Internal Revenue Code of 1986, as amended, and regulations in effect at the
time of its execution. If, at a later date, the laws of the United States or
the State of South Dakota are construed in such a way as to make this Plan null
and void, it shall be given effect in a manner that shall best carry out the
parties’ purposes and intentions.

 

Dated this 1st day of August, 2001.

 

 

	
   

  	
  SOUTH DAKOTA SOYBEAN
  PROCESSORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Rodney G.
  Christianson

  	
   

  
	
   

  	
  Its

  	
   CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Connie Kelly

  	
   

  
	
   

  	
  Connie Kelly

  
							

 

21

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