Document:

10.38 - Employee Bonus Plan 12-13

Cardinal Ethanol, LLC
Employee Bonus Plan
Fiscal Year 2012-2013
(Issued 10-1-12)

The purpose in developing and continuing an Employee Bonus Plan is to reward the employees for their contributions that directly impact the financial results of the Company, reflect a positive safety culture, and to promote teamwork needed to complete desired goals.  This year's Plan is again made up of financial and team goals relating to the Company's financial success, safety, and production efficiency.   

For the purpose of the Plan, wages are defined as the amount paid during the defined period and limited to regular pay, overtime, holiday, and paid time off (PTO). 

Rules of the Plan:
		
	a)
	All plan payouts must be approved by the Board of Directors.

		
	b)
	Employee must be employed on the day that the Board approves the payout to be eligible for any bonus payout.

		
	c)
	Employee must be working from October 1, 2012 to September 30, 2013 to be eligible for the full bonus. 

Financial Goal:
		
	a)
	Eligibility for the Financial Goal payout portion of the plan begins at $7,500,000 net income. There will be NO payout under the financial goal section if the Company does not meet this minimum income threshold. 

		
	b)
	The Financial Goal section is eligible to all employees that meet the eligibility requirements.

		
	c)
	Payout for the Financial Goal will be made prior to December 31, 2013 once the fiscal year end results are calculated and approved.

Team Goals:
		
	a)
	Team Goals are not subject to a minimum net income requirement.

		
	b)
	Payout for the Team Goals will be made quarterly and based on company “Operational Statistics”, Christianson Benchmarking Results and Individual Safety Participation.

		
	c)
	Employee must be employed on the last day of the quarter to receive any payout from the Team Goals.

		
	d)
	Employee does not need to have worked the full quarter to be eligible. Payout will be made once final results are known and have been approved by the Board of Directors.

		
	e)
	Team Goal payout is applicable to all employees that meet the eligibility requirements.

FY 2011-12 Employee Incentive Plan

Financial Goal - Max Payout 10% of eligible wage.
	
		
	Minimum required net profit needed for payout $7.5M (Annual Payout)

	- Payout Level 1............................................................................
	$7,500,000 - $11,999,999   = 5% payout

	- Payout Level 2............................................................................
	$12,000,000 - $19,999,999 = 7.5% payout

	- Payout Level 3............................................................................
	$20,000,000 and above       = 10% payout

Team Goals - Max Payout 10% of eligible wage.

Team Goal #1 - Improved efficiency and production through increased ethanol yield per bushel ground as compared to industry; based on rankings through Benchmarking surveys (Quarterly Payout)

Team Goal #2 - Optimize natural gas usage by reducing BTU/gallon. Achieved Natural Gas Usage number will be based on "Operation Statistics" work papers.  (Quarterly Payout)

Team Goal #3 - Improve Safety performance.  Increase awareness and maintain safety performance. Near misses will be based on individual reports submitted on time to the EHS Manager.  Other Safety criteria are based on individual participation. (Quarterly Payout)

	
		
	Goal #1  Lead Rankings for Ethanol Yield (Christianson Benchmarking; Geo-East, undenatured, moisture adjusted gallons per bushel ground based on corn at 15%) (4% max payout)

	1) Ranking outside of the top 42%........................................................
	0% payout

	2) Ranking in the top 42.00%................................................................
	1% payout

	3) Ranking in the top 33.33%................................................................
	2% payout

	4) Ranking in the top 25.00%................................................................
	3% payout

	5) Ranking in the top 17.00%...............................................................
	4% payout

	 
	 

	Goal #2 Optimize Natural Gas Usage (BTU per Anhydrous Ethanol gallon) (3% max payout)
	 

	1) Greater than 28,215......................................................
	0% payout

	2) 28,215 - 28,001.............................................................
	1% payout

	3) 28,000 - 27,501.............................................................
	2% payout

	4) 27,500 or less................................................................
	3% payout

	 
	 

	Goal #3 Improve Safety Record - Individual Safety Participation; subject to verification and approval by management. (3% max payout)
	 

	- Near Miss Reporting (Required)
	 

	1) 2 Near Miss Reports completed................................
	.5% payout

	2) 3 Near Miss Reports completed (required 1 per month)
	1% payout

	 
	 

	Employee Participation (Any combination of 2 - limit of 1% per selection)
	 

	1) Safety Committee Attendance/Participation (member of guest)
	1% payout

	2) Safety Program Area Audit Complete
	1% payout

	3) Non-Routine Task Pre-work Audit Completed
	1% payout

	4) Lead a Toolbox Talk
	1% payout

	5) LOTO/Confined Space Program Review
	1% payout

	6) Contractor Observation, Review and Evaluation
	1% payout

Personal Incentive (10% additional opportunity available)

Available to the following positions: Production Manager, ESH MAnager, Maintenance Manager, and Controller.

These positions will be eligible for an additional 10% payout if they meet certain personal goals.  These individual goals will be ones the positioned employee will have a direct impact in achieving the best return to the business.

Personal Incentive (10% additional opportunity available)

	
		
	Production Manager: Personal Goals (annual payout)

	Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2%)
	 

	Ÿ Final Results "Improvement Required" 
	0% payout

	Ÿ Final Results "Acceptable Area"
	1% payout

	Ÿ Final Results "Exceptional" 
	2% payout

	Production - Improve  Ranking of Ethanol Yield (Christianson Benchmarking; Geo-East, undenatured, moisture adjusted gallons per bushel ground based on corn at 15% (3% max payout)

	Ÿ Ranking outside of the top 42%
	0% payout

	Ÿ Ranking in the top 42.00%
	1% payout

	Ÿ Ranking in the top 33.33%
	1.5%payout

	Ÿ Ranking in the top 25.00%
	2% payout

	Ÿ Ranking in the top 17.00%
	3% payout

	Production - Maximize Corn Oil Production (3%)
	 

	Ÿ Less than 0.56 pounds per bushel ground
	0% payout

	Ÿ 0.560 - 0.635 pounds per bushel ground
	1% payout

	Ÿ 0.636 - 0.699 pounds per bushel ground
	2% payout

	Ÿ Greater than 0.699 pounds per bushel ground.
	3% payout

	Production - Ethanol Throughput, anhydrous gallons (2%)
	 

	Ÿ Less than 111.5 M gallons
	0% payout

	Ÿ 111.5M to 113.4 M gallons
	1% payout

	Ÿ 113.5M to 115.4 M gallons
	1.5%payout

	Ÿ Greater than 115.5 M gallons
	2% payout

	 
	 

	EHS Manager: Personal Goals (annual payout)
	 

	Safety - Improve ERI Safety Audit Scores (based on last audit score prior to yearend) (6%)
	 

	Ÿ Final Results "Improvement Required"
	0% payout

	Ÿ Final Results "Acceptable Area"
	3% payout

	Ÿ Final Results "Exceptional"
	6% payout

	Environmental Compliance - Maintain Permit Parameters (4%)
	 

	Ÿ 100% Completion of EHS Compliance Calendar
	1% payout

	 - Including additions and updates.
	 

	Ÿ No ESH violations resulting in fines
	1% payout

	 - EPA, IDEM, OSHA, etc.
	 

	Ÿ Training and PSM in Compliance
	1% payout

	Ÿ Written Monthly EHS Review
	1% payout

	 - To include Company policy violations, observation summary, recommended actions, etc.

	
		
	Maintenance Manager: Personal Goals (annual payout)
	 

	Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2%)
	 

	Ÿ Final Results "Improvement Required"
	0% payout

	Ÿ Final Results "Acceptable Area"
	1% payout

	Ÿ Final Results "Exceptional"
	2% payout

	Maintenance - Reduction of supply cost (Based on Christianson Benchmarking for "All Plants - Plant Supplies/Repair/Maintenance") (3%)

	Ÿ Ranking outside of the top 20 plants
	0% payout

	Ÿ Top 20 Benchmarking rank for all plants
	1% payout

	Ÿ Leader (top 25% ranking for all plants)
	3% payout

	Maintenance - Uptime (lincludes all downtime) (3%)
	 

	Ÿ Greater than 336 hours downtime
	0% payout

	Ÿ 336 to 313 hours downtime
	1% payout

	Ÿ 312 to 288 hours downtime
	2% payout

	Ÿ Less than 288 hours downtime
	3% payout

	Maintenance - Inventory Accuracy and Count Frequency, Spare Parts (Accuracy based on adjustments per count/inventory units per count with total inventory counted quarterly) (2%)
	 

	Ÿ Greater than a 2% accuracy error
	0% payout

	Ÿ 1% to 2% accuracy error (min. of 6 counts/quarter)
	1% payout

	Ÿ Less than 1% accuracy error (min. of 9 counts/quarter)
	2% payout

	 
	 

	Controller: Personal Goals (annual payout)
	 

	Accounting - Close out monthly financials.  Close EOM, including CFO's review and correction of any notes made by CFO, within 5 business days after the last day of the month (3%)

	Ÿ Less than 6 successful closes
	0% payout

	Ÿ 6 - 8 successful closes
	1% payout

	Ÿ 9 - 10 successful closes
	2% payout

	Ÿ Over 10 successful closes
	3% payout

	Tax/K-1 - Completed K-1s by 5:00 p.m. the date of the annual meeting (2%)
	 

	Ÿ Completion after February 1, 2013
	0% payout

	Ÿ Completion by February 1, 2013
	1% payout

	Ÿ Completion by January 25, 2013
	2% payout

	FY 10-K close for timely SEC filing and bank/Investor Obligations (2%)
	 

	Ÿ Completion after December 7, 2012
	0% payout

	Ÿ Completion on or before December 7, 2012
	2% payout

	Develop and Implement Accounting Roles and Descriptions/Processes.  Write-up the primary accounting department roles and responsibilities with complete descriptions and processes (3%)

	Ÿ Outline of all identified roles not completed
	0% payout

	Ÿ 10 - 12 Written descriptions and processes completed
	1% payout

	Ÿ 13 - 18 Written descriptions and processes completed
	2% payout

	Ÿ 19 - 24 Written descriptions and processes completed
	3% payout

Personal Incentive (10% additional opportunity available)

Available to the following positions: CEO, CFO, Commodity Manager, and Plant Manager.

These positions will be eligible for an additional 10% payout.  60% of this payout will be tied to the Managers mentioned under item #1 meeting their goals.  40% of this payout will be based on COGS as a percentage of Sales.  

"Senior Management" : Goals (annual payout) (CEO, CFO, Commodity Manager, Plant Manager)
Leadership/Management/Coaching - Develop and Support Mid-management (6%)
•Average completion score of mid management incentive award times 60% award value.
Financial - Target COGS as a % of Sales (COGS + unrealized losses = unrealized gains/Revenues) (4%)
	
		
	ž > 96.3%
	0% payout

	ž 96.29% - 95.0%
	1% payout

	ž 94.99% - 93.00%
	2% payout

	ž < 92.99%
	4% payoutblku_ex1024.htm

EXHIBIT 10.24

 

TERMINATION AND RELEASE AGREEMENT

 

TERMINATION AND RELEASE AGREEMENT, dated as of December 5, 2012 (this “Agreement”), by and between BLINK COUTURE, INC., a Delaware corporation (“Blink Couture”), with an address at c/o Regent Private Capital, LLC, 5727 South Lewis Avenue, Tulsa Oklahoma 74105 and LATITUDE GLOBAL, INC., a Florida corporation with an address at 6022 San Jose Boulevard, Jacksonville, Florida 32217 (“Latitude Global”).  Blink Couture and Latitude Global are sometimes collectively referred to herein as the “Parties.”

WHEREAS, the Parties, along with Latitude Global Acquisition Corp., a corporation previously formed and existing under the laws of the State of Florida and dissolved by administrative dissolution on September 28, 2012 (“Latitude Acquisition”), executed and entered into that certain Agreement and Plan of Merger, dated as of November 10, 2011, a copy of which is annexed hereto as Exhibit A (the “Merger Agreement”); and

WHEREAS, Brent Brown, the Chief Executive Officer of Latitude Global, sent a letter, dated November 27, 2012, to Lawrence Field, the Chief Executive Officer of Blink Couture, notifying Mr. Field that Latitude Global was terminating the Merger Agreement, pursuant to the provisions of Section 7.1 therein, effective as of November 27, 2012; and

WHEREAS, Latitude Global has agreed to reimburse Blink Couture, in the aggregate amount of $47,500, for its expenses incurred, in connection with the Merger Agreement and any and all actions taken by Blink Couture in furtherance of its efforts to consummate the transactions contemplated under the Merger Agreement (the “Expense Reimbursement”); and

WHEREAS, in consideration of Latitude Global’s payment of the Expense Reimbursement and its execution and delivery of a Release, in the form annexed hereto as Exhibit B (the “Latitude Global Release”), Blink Couture has agreed to execute and enter into this Agreement and to deliver a Release, in the form annexed hereto as Exhibit C (the “Blink Couture Release”);

NOW THEREFORE, in consideration of the mutual agreements contained herein, the parties agree as follows:

1.           Termination of Merger Agreement.  Effective as of the date of this Agreement, the Parties hereby mutually agree, pursuant to the provisions of subsection 7.1(a) of the Merger Agreement, to the termination of the Merger Agreement.  Except as otherwise provided herein or in the Latitude Global Release or the Blink Couture Release, upon the effectiveness of this Agreement, all of the Parties rights, liabilities and obligations shall be terminated and of no further force or effect.

2.           Payment of Expense Reimbursement by Latitude Global.  In consideration for Blink Couture’s execution and delivery of this Agreement and the Blink Couture Release, as provided herein, Latitude Global hereby agrees to pay the Expense Reimbursement, in the aggregate amount of $47,500, to Blink Couture, as follows:

(a) Concurrent with its execution and delivery of this Agreement, Latitude Global shall wire funds to the account of Blink Couture, in the amount of $7,916.66, pursuant to the wire instructions set forth in Schedule 1 to this Agreement; and

(b)  Concurrent with its execution and delivery of this Agreement, Latitude Global also shall execute and deliver to Blink Couture a promissory note, in the form of Exhibit D annexed hereto (the “Note”), in the principal amount of $39,583.34, in respect of Latitude Global’s payment of the remaining portion of the Expense Reimbursement.

3.           Representations, Warranties and Covenants of Latitude Global.  Latitude Global hereby represents, warrants and covenants to Blink Couture as follows:

(a) Existence, Power.  Latitude Global is a corporation, validly existing and in good standing under the laws of the State of Florida and has all powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted.

  

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(b)   Authorization. This Agreement has been duly executed by Latitude Global and, when delivered in accordance with the terms hereof will constitute the valid and binding obligation of Latitude Global enforceable against it in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally or (ii) by other equitable principles of general application.

(c) Noncontravention. The execution, delivery and performance by Latitude Global of this Agreement and the consummation of the transactions contemplated hereby do not and will not violate (i) the Articles of Incorporation or By-laws of Latitude Global or (ii) any applicable law, rule, regulation, judgment, injunction, order or decree.

(d) Payment of Note.  Latitude Global covenants and agrees that there are no conditions or further obligations of Blink Couture, with respect to Latitude Global’s obligations to make the applicable payments to Blink Couture, pursuant to the terms of the Note, and Latitude Global agrees to comply with all of its obligations under the Note.

4.           Representations and Warranties of Blink Couture.  Blink Couture hereby represents and warrants to Latitude Global as follows:

(a) Existence, Power.  Blink Couture is a corporation, validly existing and in good standing under the laws of the State of Delaware and has all powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted.

(b)   Authorization. This Agreement has been duly executed by Blink Couture and, when delivered in accordance with the terms hereof will constitute the valid and binding obligation of Blink Couture enforceable against it in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally or (ii) by other equitable principles of general application.

(c) Noncontravention. The execution, delivery and performance by Blink Couture of this Agreement and the consummation of the transactions contemplated hereby do not and will not violate (i) the Certificate of Incorporation or By-laws of Blink Couture or (ii) any applicable law, rule, regulation, judgment, injunction, order or decree.

5.           Mutual Release.

(a)           In consideration for Latitude Global’s payment to Blink Couture of the Expense Reimbursement set forth in Paragraph 2 above, Blink Couture shall deliver the Blink Couture Release to Latitude Global to release all of Blink Couture’s and Latitude Acquisition’s potential claims against Latitude Global relating to the Merger Agreement, as more fully described in the Blink Couture Release.  Neither Blink Couture nor Latitude Acquisition has assigned, and shall not assign, any right to any claim to any affiliate or third party.

(b)           In consideration for Blink Couture’s agreement to enter into this Agreement, as well as its agreement to deliver the Blink Couture Release described in subparagraph 5(a) immediately preceding, and such other good and valuable consideration as shall be delivered by Blink Couture, Latitude Global shall deliver, upon the execution of this Agreement by the Parties, the Latitude Global Release to release all potential claims of Latitude Global against Blink Couture and Latitude Acquisition.  Latitude has not assigned any right to any claim to any affiliate or third party.

6.           Expenses.  Except as otherwise provided herein or in any other agreement between the Parties, all fees and expenses incurred by any of the Parties hereto shall be borne by the Party incurring such fees and expenses.

7.           Confidentiality and Nondisclosure.  The Parties agree that the terms and conditions of this Agreement shall be kept confidential and shall not be disclosed to any third party, except pursuant to written agreement by the Parties, or as may be required by law or court order.  Nothing in this Agreement shall prohibit each Party from disclosing this Agreement to its legal and accounting advisers.

 

  

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8.           Miscellaneous.

(a)           Entire Agreement; Amendment.  This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements and understandings, whether oral or written, between them with respect to the subject matter hereof.  This Agreement may not be amended orally, but only by an instrument in writing signed by each of the Parties to this Agreement.

(b)           Binding Effect and Benefit.  This Agreement shall inure to the benefit of and be binding upon the Parties and their respective directors, officers, heirs, legal representatives, attorneys, successors and assigns.

(c)           Survival.  All representations, warranties and covenants shall survive the date hereof for a period of two (2) years.

(d)           Governing Law; Jurisdiction.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without reference to the conflict of laws principles thereof.

 

(e)           Notices.  All notices and other communications under this Agreement shall be in writing and delivery thereof shall be deemed to have been made when transmitted by hand delivery, commercial overnight delivery service, facsimile or email transmission, when confirmed, or, if by certified mail, return receipt requested, within three (3) business days after deposit in the U.S. mail, to the party entitled to receive the same at the address indicated below or at such other address as such party shall have specified by written notice to the other parties hereto given in accordance herewith:

(i) if to Blink Couture, addressed to:

Blink Couture, Inc.

c/o Regent Private Capital, LLC

5727 S. Lewis Ave,

Tulsa, OK 74105

Attn:  Lawrence Field, Chief Executive Officer

Fax: (918) 392-2861

Email: lfield@regentprivatecapital.com

with a copy to:

Scott M. Miller, Esq.

Kantor Davidoff Wolfe Mandelker Twomey & Gallanty, P.C.

51 East 42nd Street, 17th Floor

New York, NY 10017

Fax:  (212) 949-5206

Email: smiller@kantorlawonline.com

  

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; and

(ii)           if to Latitude Global, addressed to:

 

Latitude Global, Inc.

6022 San Jose Blvd, 2nd Floor

Jacksonville, FL 32217

Attn: Brent W. Brown, Chief Executive Officer

Fax: (904) 730-0010

Email: bbrown@the-brownstonegroup.com

 

             with a copy to:

Greenberg Traurig, P.A

5100 Town Center Circle

Suite 400

Boca Raton, FL 33486

Attn: Bruce C. Rosetto, Esq.

Fax: (561) 367-6225

Email: rosettob@gtlaw.com

(f)           Waiver.  Any waiver by any Party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement.  The failure of a Party to insist upon strict adherence to any term of this Agreement or one or more sections shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other terms of this Agreement.

 

(g)           Counterparts; Signatures by Facsimile.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to the other Party, it being understood that both Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format or other electronic data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile, “.pdf” or other electronic data file signature page were an original thereof.

(h)           Severability.  No invalidity or unenforceability of any paragraph of this Agreement or any portion thereof will affect the validity or enforceability of any other paragraph or the remainder of such paragraph.

 

(i)           Preparation of Agreement.  The Parties acknowledge that this Agreement was the result of negotiation and discussion among the Parties.  The Parties further acknowledge that this Agreement shall be deemed to have been jointly prepared and that no particular Party is to be deemed the drafter or preparer of this Agreement.  Accordingly, none of the provisions of this Agreement shall be construed in favor or against a particular Party to this Agreement based on any party having prepared this Agreement.

 

(j)           Voluntary Agreement.  The Parties represent and declare that they have each carefully read this Agreement and know the contents thereof and that they have executed and entered into this Agreement freely and voluntarily.

 

  

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IN WITNESS WHEREOF, and intending to be legally bound hereby, Latitude Global and Blink Couture have executed this Agreement on the date first above written.

 

	 	
LATITUDE GLOBAL, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Brent W. Brown	 
	 	 	
Brent W. Brown

	 
	 	 	Chief Executive Officer	 
	 	 	 	 

	 	
BLINK COUTURE, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Lawrence Field	 
	 	 	
Lawrence Field

	 
	 	 	Chief Executive Officer	 
	 	 	 	 

 5

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