Document:

Exhibit 10.1

 

A.                                    Performance Criteria for Incentive Plan Awards for Year
2008 Pursuant to the 2003 Executive Incentive Plan

 

1.             Awardees:

 

                                                a.                                       Henry J.
Herrmann

                                                b.                                      Michael L.
Avery

                                                c.                                       Thomas W. Butch

                                                d.                                      Daniel P.
Connealy

                                                e.                                       Daniel C.
Schulte

                                                f.                                         Michael D.
Strohm

g.                                      John E. Sundeen, Jr.

 

2.             Performance Goal:

 

a.                                       The aggregate
Incentive Plan Award to the Awardees shall equal four percent of the Adjusted
2008 Operating Income (defined below). 
The aggregate Incentive Plan Award shall be allocated among the Awardees
as follows:

 

	
  

  Awardee

  	
   

  	
  Portion of Aggregate

  Incentive Plan Award

  
	
  Henry
  J. Herrmann

  	
   

  	
  32%

  
	
  Michael
  L. Avery

  	
   

  	
  17%

  
	
  Thomas
  W. Butch

  	
   

  	
  15%

  
	
  Daniel
  P. Connealy

  	
   

  	
  9%

  
	
  Daniel
  C. Schulte

  	
   

  	
  9%

  
	
  Michael
  D. Strohm

  	
   

  	
  9%

  
	
  John
  E. Sundeen, Jr.

  	
   

  	
  9%

  

 

Notwithstanding
the foregoing, the Compensation Committee may, in its sole discretion, elect to
award each Awardee less of the Incentive Plan Award for the 2008 Year than is
set forth above, provided that any such decrease in the Incentive Plan Award
for any one Awardee shall not increase the award for any other Awardee.

 

b.                                      The term “Adjusted
2008 Operating Income” means the operating income of the Company for its
fiscal year ending December 31, 2008 (the “2008 Year”), determined
pursuant to generally accepted accounting principles, adjusted as follows:  (i) such amount shall be increased by
the Company’s interest expense for the 2008 Year; (ii) such amount shall
be increased by the Company’s federal, state and local income taxes for the
2008 Year; (iii) such amount shall be increased by bonuses paid under
Company executive compensation and deferred compensation plans for the 2008
Year; (iv) such amount shall be increased by losses from
publicly-disclosed transactions entered into during the 2008 Year that the 

 

Compensation
Committee considers to be extraordinary or non-recurring; (v) such amount
shall be decreased by gains from publicly-disclosed transactions entered into
during the 2008 Year that the Compensation Committee considers to be
extraordinary or non-recurring; (vi) such amount shall be increased by any
net losses during the 2008 Year from entities, trades or businesses and lines
of businesses acquired from unrelated parties (“2008 Acquisitions”); and
(vii) such amount shall be decreased by any net profits during the 2008
Year from entities, trades or businesses and lines of businesses acquired
pursuant to 2008 Acquisitions.

 

B.                                    Performance Criteria for Restricted Stock Awards for
Year 2008 Pursuant to the 1998 Stock Incentive Plan

 

1.             Awardees:

 

                                                a.                                       Henry J.
Herrmann

                                                b.                                      Michael L.
Avery

                                                c.                                       Thomas W. Butch

                                                d.                                      Daniel P.
Connealy

                                                e.                                       Daniel C.
Schulte  

                                                f.                                         Michael D.
Strohm

                                                g.                                      John E. Sundeen, Jr.

 

2.             Performance Goal:

 

a.                                       The aggregate
Restricted Stock Award to the Awardees shall equal 420,000 shares of Company
common stock, provided that no such award shall be made unless the Threshold
Condition (defined below) is met.  The
aggregate Restricted Stock Plan Award shall be allocated among the Awardees as
follows:

 

	
  

  Awardee

  	
   

  	
  Portion of Aggregate

  Incentive Plan Award

  
	
  Henry
  J. Herrmann

  	
   

  	
  30%

  
	
  Michael
  L. Avery

  	
   

  	
  15%

  
	
  Thomas
  W. Butch

  	
   

  	
  15%

  
	
  Daniel
  P. Connealy

  	
   

  	
  10%

  
	
  Daniel
  C. Schulte

  	
   

  	
  10%

  
	
  Michael
  D. Strohm

  	
   

  	
  10%

  
	
  John
  E. Sundeen, Jr.

  	
   

  	
  10%

  

 

Notwithstanding
the foregoing, the Compensation Committee may, in its sole discretion, elect to
award each Awardee less of a Restricted Stock Plan Award for the 2008 Year than
is set forth above, provided that any such decrease in the Restricted Stock
Plan Award for any one Awardee 

 

shall
not increase the award for any other Awardee. 
These awards, if any, are to be granted in December 2008.

 

b.                                      The term “Threshold
Condition” means that the quotient of (i) Adjusted 2008 Operating
Income (defined in Section A), divided by (ii) Adjusted 2008 Equity
(defined below), equals or exceeds 0.40.

 

c.                                       The term “Adjusted
2008 Equity” means the quotient of (i) the sum of Beginning 2008
Equity (defined below) plus Adjusted Ending 2008 Equity (defined below),
divided by (ii) 2.0.

 

d.                                      The term “Beginning
2008 Equity” means the shareholders equity of the Company as of January 1,
2008, determined pursuant to generally accepted accounting principles.

 

e.                                       The term “Adjusted
Ending 2008 Equity” means the shareholders equity of the Company as of December 31,
2008, determined pursuant to generally accepted accounting principles, adjusted
as follows:  (i) such amount shall
be increased by bonuses paid under Company executive compensation and deferred
compensation plans for the 2008 Year; (ii) such amount shall be increased
by losses from publicly-disclosed transactions entered into during the 2008
Year that the Compensation Committee considers extraordinary or non-recurring; (iii) such
amount shall be decreased by gains from publicly-disclosed transactions entered
into during the 2008 Year that the Compensation Committee considers to be
extraordinary or non-recurring; (iv) such amount shall be increased by any
net losses during the 2008 Year from entities, trades or businesses and lines
of businesses acquired pursuant to 2008 Acquisitions; and (v) such amount
shall be decreased by any net profits during the 2008 Year from entities,
trades or businesses and lines of businesses acquired pursuant to 2008
Acquisitions.Exhibit
10.1

 

REDEMPTION
AGREEMENT

 

This Redemption Agreement (this “Agreement”) is made as of this 20th day of February,
2008 between Western Plains Energy, L.L.C., a Kansas limited liability company
(“WPE”),
and Midwest Development, Inc., a Kansas corporation (referred to herein as
the “Member”). 
Capitalized terms used, but not otherwise defined herein, shall have the
meaning assigned to such terms in the Operating Agreement (as defined below).

 

RECITALS:

 

WHEREAS,  the Member currently owns 20 Class B Membership Units (the
“Class B Membership
Interests”) of WPE, which interests are governed by WPE’s Third Amended
and Restated Operating Agreement dated as of July 7, 2003 (the “Operating Agreement”);
and

 

WHEREAS, the Member has offered to
sell to WPE and WPE desires to purchase from the Member all of the Member’s Class B
Membership Interests on the terms and subject to the conditions as set forth in
more detail below; and

 

WHEREAS, Section 4.3 of the Operating Agreement, as
amended, permits WPE to redeem the membership interests of a member as the
parties may agree.

 

NOW THEREFORE, in consideration of the mutual promises and
covenants of the parties, and subject to the terms and conditions set forth
herein, the parties agree as follows:

 

AGREEMENT:

 

I. REDEMPTION OF THE CLASS B MEMBERSHIP INTERESTS

 

A.            Purchase
and Sale of Class B Membership Interests.   In accordance
with Section 4.3 of the Operating Agreement, WPE hereby agrees to
purchase, and the Member agrees to sell to WPE, on the terms and conditions set
forth herein, the Member’s Class B Membership Interests, free and clear of
all security interests, pledges, liens, charges and encumbrances, on the
Closing Date (as hereinafter defined), together with (a) Member’s rights
under the Operating Agreement, including, without limitation, all the
associated pro rata interest in, and rights to receive, distributions that
accrue up to the Closing Date and (b) all other allocations which, under
the terms of the Operating Agreement, would be attributable to the Class B
Membership Interests from January 1, 2008 until the Closing Date.  
At the Closing (as hereinafter defined), the Member shall transfer good, valid
and marketable title to the Class B Membership Interests and shall deliver
to WPE the unit certificate and an assignment of such Class B Membership
Interests.

 

B.            Consideration
and Payment.  The purchase price for the redemption of the Member’s Class B
Membership Interests shall be an amount equal to $35,000 per 

 

 

Class B
Capital Unit, or a total of Seven Hundred Thousand Dollars ($700,000) (the “Purchase Price”)
which shall be paid by WPE to the Member at the Closing.

 

II. REPRESENTATIONS
AND WARRANTIES.

 

A.            Representations
and Warranties — Member.  The Member represents and warrants to WPE as
follows:

 

1.            
Organization and Standing of the Member. The Member is duly organized,
validly existing and in good standing under the laws of the State of Kansas.
The Member has full power and authority to carry out the transactions
contemplated hereunder.

 

2.            
Title.    The Class B Membership Interests represent
all of the Capital Units owned by the Member in WPE, and the Member is the sole
legal and beneficial owner of the Class B Membership Interests, free and clear
of any liens, claims or encumbrances.  There are no outstanding options to
purchase the Class B Membership Interests and no agreements or understandings
of any kind affecting or relating to the voting, issuance, purchase,
redemption, repurchase or transfer of Class B Membership Interests, except
as contemplated herein and in the Operating Agreement.

 

3.            
Authority.   The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary actions of the Member, none of
which actions has been modified or rescinded and all of which actions are in
full force and effect. This Agreement constitutes and, upon execution and
delivery will constitute, a valid and binding agreement and obligation of the
Member, enforceable in accordance with its terms.

 

4.            
No Conflicts.  The execution and delivery of this Agreement, and
the performance of the obligations of the Member hereunder do not and will not
conflict with or constitute a default under the Articles of Incorporation or
other organizational agreement of the Member, or any contract, agreement,
lease, commitment or understanding to which the Member is a party or its assets
or business are subject, or any law, ordinance, regulations, order, award,
judgment, injunction or decree applicable to the Member or its assets or
business.

 

5.            
Litigation and Proceedings.   There are no actions, suits or
proceedings pending or overtly threatened against or affecting the Member, at
law or in equity, or before or by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind, that relate directly or indirectly to the Class B
Membership Interests or the transactions contemplated by this Agreement.

 

 

6.            
No Consent.   No authorization, consent or approval of any
person, entity, court or governmental body or authority is necessary to the
validity of the transfer of the Class B Membership Interests to WPE.

 

7.            Independent
Decision.  The Member has conducted its own due diligence in
determining whether to undertake the transactions contemplated herein, and has
been represented by legal counsel in the negotiation of this Agreement and it
has made an independent and informed decision to proceed with the redemption of
its Class B Membership Interests as set forth in this Agreement.  The Member has reviewed the Annual Report on Form 10-K
of WPE for the fiscal year ended September 30, 2007 as filed with the
Securities and Exchange Commission.

 

B.            Representations
and Warranties of WPE.  WPE hereby represents and warrants as follows:

 

1.            
Organization and Standing. WPE is duly organized, validly existing and
in good standing under the laws of Kansas. WPE has full power and authority to
carry out the transactions contemplated hereunder.

 

2.            
Authorization.  The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary actions of WPE, none of which
actions has been modified or rescinded and all of which actions are in full
force and effect. This Agreement constitutes and, upon execution and delivery
will constitute, a valid and binding agreement and obligation of WPE
enforceable against it in accordance with its terms.

 

3.            
No Conflicts.  The execution and delivery of this Agreement, and
the performance of the obligations of WPE hereunder do not and will not
conflict with or constitute a default under the Articles of Organization, Operating
Agreement or other organizational agreement of WPE, or any contract, agreement,
lease, commitment or understanding to which WPE is a party or its assets or
business are subject, or any law, ordinance, regulations, order, award,
judgment, injunction or decree applicable to WPE or its assets or business.

 

4.            
Litigation and Proceedings.   There are no actions, suits or
proceedings pending or overtly threatened against or affecting WPE, at law or
in equity, or before or by any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind, that relate directly or indirectly to the redemption of
the Class B Membership Interests by WPE as contemplated herein.

 

5.            
No Consent.   No authorization, consent or approval of any
person, entity, court or governmental body or authority is necessary to the
validity of the transfer of the Class B Membership Interests to WPE.

 

 

6.            
Distributions.   WPE has paid to the Member, or will have paid
by the Closing Date, all distributions of earnings or profits and dividends
that have been declared or have accrued and become payable or allocated to the
Member in respect to its Class B Membership Interests through the Closing Date
as paid by WPE to all its Members in the ordinary course of business.

 

7.            
Independent Decision.  WPE has conducted its own due diligence in
determining whether to undertake the transactions contemplated herein, and has
been represented by legal counsel in the negotiation of this Agreement and it
has made an independent and informed decision to proceed with the redemption of
the Member’s Class B Membership Interests as set forth in this Agreement.

 

III.         COVENANTS

 

Between the date of this Agreement and the Closing Date, the Member
will not (i) solicit any offer from or negotiate with any third party for
the direct or indirect acquisition or transfer of its Class B Membership
Interests, (ii) grant any options, warrants or similar rights to acquire
any direct or indirect interest, whether legal or beneficial, in the Class B
Membership Interests, or (iii) pledge, hypothecate, mortgage or otherwise
encumber said Class B Membership Interests.

 

IV.  THE
CLOSING.

 

A.            Closing
Date.  The closing of the transactions contemplated herein (the “Closing”) shall take
place at the offices of WPE on March 28, 2008 (the “Closing Date”) or at
such other date, time and place as may be mutually agreed upon by the
parties.  Notwithstanding the actual Closing Date, however, the
transaction shall be effective for tax purposes on December 31, 2007 and
Member shall not be entitled to any allocation of profits, losses, income,
expense, deductions, gain or credit following such date.

 

B.            Closing. 
At the Closing, WPE shall pay the Purchase Price to the Member, in collectible
funds, and the Member shall deliver the unit certificate, duly endorsed, and an
assignment of the Class B Membership Interests.

 

V. NATURE
AND SURVIVAL OF

REPRESENTATIONS
AND WARRANTIES.

 

All representations and warranties set forth herein will remain
operative and in full force and effect, and will survive the Closing and the
Closing Date and the delivery of all consideration and documents under to this
Agreement for a period of three (3) years.

 

VI. RELEASE;
INDEMNIFICATION.

 

A.          
The Member hereby releases WPE and agrees to hold WPE and its officers,
directors, employees, and agents harmless from any and all claims, rights to
contribution or indemnity, suits, damages, injuries, demands, causes of action,
obligations, agreements, debts, and liabilities whatsoever, both at law and in
equity, that the Member may have against WPE and arising from its status as a
member of WPE, except for any claims for breach of this Agreement.

 

B.            WPE
hereby releases the Member and agrees to indemnify and hold the Member and its
officers, directors, employees, and agents harmless from any and all claims,
rights to contribution or indemnity, suits, damages, injuries, demands, causes
of action, obligations, agreements, debts, and liabilities whatsoever, both at
law and in equity, that WPE may have against the Member and arising from the
status of Member as a member of WPE, except for any claims for breach of this
Agreement.

 

C.           
With respect to any third party claim or demand which might be subject to a
claim for indemnification under this Agreement, the party potentially entitled
to indemnification (“Indemnitee”) will promptly notify the party potentially
required to indemnify under this Agreement (“Indemnitor”), and the Indemnitor
may defend, in good faith and at its expense, any such claim or demand, and the
Indemnitee, at its expense, will have the right to participate in the defense
in any such third party claim. So long as the Indemnitor is defending in good
faith any such third party claim, the Indemnitee will not settle or compromise
such third party claim. The Indemnitee will make available to the Indemnitor or
its representatives, all records and other materials reasonably required by
them for its use in contesting any third party claim and will cooperate fully
with the Indemnitor in the defense of all such claims. If the Indemnitor does
not so elect to defend any such third party claim, the Indemnitee will have no
obligation to do so.

 

VII. EXPENSES.

 

 WPE and the Member will pay their own expenses (including without
limitation counsel and accounting fees and expense) incident to the preparation
and carrying out of this Agreement and the consummation of the transactions
contemplated herein.

 

VIII. NOTICES.

 

The parties agree that all notices under this Agreement will be in
writing and will either be delivered personally to a party, transmitted by
facsimile transmission, or sent by overnight courier or certified mail, to the
address set forth below, or to such other address as may be furnished by either
party to the other from time to time:

 

 

If to WPE:

 

Western Plains Energy, LLC

3022 County Road 18

Oakley, KS 67748

Telephone: 
(785) 672-8810

Facsimile:  
(785) 672-4494

 

With a copy to (which shall not constitute notice):

 

David J. Babiarz, Esq.

Dufford & Brown,
P.C.

1700 Broadway Suite 2100

Denver, CO 80290

Telephone: 
(303) 861-8013

Facsimile:  
(303) 832-3804

 

If to Member:

 

Midwest Development, Inc..

PO Box 898

Hays, KS 67601

Telephone:  (785) 625-1400

Facsimile:   (785)
625-1494

 

With a copy to (which shall not constitute notice):

 

Donald F. Hoffman, Esq.

Dreiling, Bieker & Hoffman, LLP

PO Box 579

Hays, KS 67601

 

or
to such other address as the parties may specify in writing by sending notice
thereof to the opposite party.

 

Receipt of notice shall be deemed to be the earlier of the following
dates: (1) the date notice was received by the named recipient or his
agent; or (2) if the recipient refuses or fails to accept notice, the date
of such refusal, which shall include, but not be limited to, the date the
notice was returned by the postal or other service as undeliverable, refused or
otherwise returned pursuant to actions on behalf of the recipient.

 

Either party may designate a different address by written notice given
to the other party.

 

 

IX. MISCELLANEOUS.

 

A.            Binding
Effect.  This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and the
heirs, executors, administrators and personal representatives.

 

B.            Section and
Paragraph Headings.  The section and paragraph headings of this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.

 

C.            Amendment.
 This Agreement may be amended only by an instrument in writing
executed by the parties.

 

D.            Entire
Agreement.  This Agreement and the exhibits, schedules, certificates
and documents referred to herein constitute the entire agreement of the parties
and supersede all understandings of the parties.

 

E.            
Waiver.  No waiver will be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent of such writing. No delay or failure on
the part of any party in exercising any right, power or privilege under this
Agreement or any document contemplated hereby will impair any such right, power
or privilege or be construed as a waiver of any default or any acquiescence
therein.

 

F.            
Benefit and Assignment.  No party hereto will assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the other party, and any purported
assignment contrary thereto will be null and void and of no force or effect. No
person or entity other than the parties is or will be entitled to bring any
action to enforce the provisions of this Agreement, and the covenants and
agreements set forth herein will be solely for the benefit of, and will be
enforceable only by, the parties or their respective successors and assigns as
permitted hereunder.

 

G.            Counterparts. 
This Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which will constitute one and the same instrument.

 

H.            Governing
Law. This Agreement will be construed in accordance and governed by the
laws of the State of Kansas.

 

I.             
Reformation.  It is agreed that if any part, term, paragraph, or
provision of this Agreement is determined by the courts or any tribunal to be
illegal, void, or unenforceable, or to be in conflict of any law of the State
of Kansas, the validity of the remaining portions or provisions shall not be
affected, and the rights and obligations of 

 

 

the
parties shall be construed and enforced as if this Agreement did not contain
the particular part, term, paragraph, or provision determined to be invalid,
illegal, void, or unenforceable and that such particular part, term, paragraph
or provision be reformed to the minimum extent necessary for such particular
part, term, paragraph or provision to be enforceable.

 

[Remainder of
Page Intentionally Blank]

 

 

IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties to be effective as of the date first above written.

 

	
   

  	
  WESTERN
  PLAINS ENERGY, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Steven R. McNinch  

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MIDWEST
  DEVELOPMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Earnest A. Lehman 

  
	
   

  	
   

  	
  Title:
  President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]