Document:

Exhibit 10.01

 

MSC INDUSTRIAL DIRECT CO., INC.

 

AMENDED AND RESTATED ASSOCIATE STOCK
PURCHASE PLAN

 

(As amended and restated effective November 1,
2008)

 

The following are
the provisions of the Amended and Restated MSC Industrial Direct Co., Inc.
Associate Stock Purchase Plan (the “Plan”).

 

1.              Purpose.

 

The
purpose of the Plan is to provide Associates of MSC Industrial Direct Co., Inc.
(the “Company”) and its Subsidiaries with an opportunity to purchase
shares of the Company’s Class A Common Stock.  The Plan is intended to qualify as an
“employee stock purchase plan” under Section 423 of the Code.  The provisions of the Plan will be construed
so as to extend and limit participation consistent with the requirements of the
Code.

 

2.              Definitions.

 

(a)          “Associate”
shall mean any person, including an officer, who is customarily employed by the
Company or one of its Designated 
Subsidiaries, for at least twenty (20) hours per week and more than five
(5) months in a calendar year.

 

(b)         “Board”
shall mean the Board of Directors of the Company.

 

(c)          “Class A
Common Stock” shall mean the Class A Common Stock, $.001 par value, of
the Company.

 

(d)         “Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

(e)          “Compensation”
shall mean all regular straight time gross earnings and commissions, and shall
include payments for overtime, shift premium, incentive compensation, incentive
payments, bonuses and other compensation.

 

(f)            “Continuous
Status as an Associate” shall mean the absence of any interruption or
termination of service as an Associate. 
Continuous Status as an Associate shall not be considered interrupted in
the case of a leave of absence agreed to in writing by the Company or a
Subsidiary, provided that such leave is for a period of not more than 90 days or
re-employment upon the expiration of such leave is guaranteed by contract or
statute.

 

(g)         “Contributions”
shall mean all amounts credited to the account of a participant pursuant to the
Plan.

 

November 20, 2008

 

 

(h)         “Designated
Subsidiaries” shall mean the Subsidiaries which have been designated by the
Board in its sole discretion as eligible to participate in the Plan.

 

(i)             “Exercise
Date” shall mean the last business day of each Offering Period of the Plan.

 

(j)             “Fair
Market Value” shall mean as of any date (i) the closing sale price of
the Class A Common Stock on the New York Stock Exchange on such date or,
if such day is not a business day, as of the immediately preceding business
day, (ii) if there is no sale of the Class A Common Stock on such Exchange
on such business day, the average of the bid and asked prices on such Exchange
at the close of the market on such business day, and (iii) if the Class A
Common Stock is no longer traded on such Exchange, as determined by the Board
in its reasonable discretion.

 

(k)          “Offering
Date” shall mean the first day of each Offering Period of the Plan.

 

(l)             “Offering
Period” shall mean a period of three (3) months commencing on the
following dates of each year except as otherwise determined by the Company:

 

(i)                                     November 1,

 

(ii)                                  February 1,

 

(iii)                               May 1, and

 

(iv)                              August 1.

 

(m)       “Purchase
Price” shall mean 90% of the Fair Market Value of the Class A Common
Stock on the Exercise Date, unless otherwise determined by the Board in its
discretion.  Subject to Section 19 hereof, the Board may from time to
time, in its discretion and without shareholder approval, change the method for
calculating the Purchase Price, provided that the Purchase Price may not be
less than the lesser of (a) 85% of the Fair Market Value of the Company’s Class A
Common Stock on the Offering Date and (b) 85% of the Fair Market Value on
the Exercise Date.

 

(n)         “Subsidiary”
shall mean a corporation, domestic or foreign, of which not less than 50% of
the voting shares are held by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by the Company or
a Subsidiary.

 

3.              Eligibility.

 

(a)          All
Associates are eligible to participate in such Offering Period under the Plan
commencing on the first day of the month following the completion of both the
month in which he or she was hired and the next full calendar month, subject to
the requirements of Section 5 and the limitations imposed by Section 423(b) of
the Code.

 

(b)         An
Associate shall not be granted an option under the Plan, if:

 

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(i)                                     immediately
after the grant, the Associate (or any other person whose stock would be
attributed to such Associate pursuant to Section 424(d) of the Code)
would own shares and/or hold outstanding options to purchase shares possessing
five percent (5%) or more of the total combined voting power or value of all
classes of shares of the Company; or

 

(ii)                                  the
rate of withholding under such option would permit the Associate’s rights to
purchase shares under all “employee stock purchase plans” (described in Section 423
of the Code) of the Company and its Subsidiaries to accrue (i.e., become
exercisable) at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of
Fair Market Value of such shares (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any
time.

 

4.              Offering Periods.

 

(a)          The
Plan shall be implemented by consecutive Offering Periods with a new Offering
Period to begin on or about November 1, February 1, May 1 and August 1
of each year (or at such other time or times as may be determined by the
Board).  The first Offering Period shall
begin on November 1, 1998.

 

(b)         The
Board will have the power to change the duration and/or the frequency of an
Offering Period with respect to any future offerings without shareholder
approval if such change is announced at least fifteen (15) days prior to the
scheduled beginning of the first Offering Period to be affected.

 

5.              Participation.

 

(a)          An
eligible Associate may become a participant in the Plan by completing a
subscription agreement provided by the Company, designating a percentage,
between one percent (1%) and fifteen percent (15%) of such Associate’s
Compensation, to be withheld as a payroll deduction and paid as his or her
Contribution to the Plan, and submitting the subscription agreement to the
Company’s human resources department, or such other person or group as
designated by the Company, prior to the applicable Offering Date.  Once enrolled, the Associate shall remain
enrolled in each subsequent Offering Period of the Plan at the designated
payroll deduction unless the Associate withdraws from an Offering Period by providing
the Company with a written notice of withdrawal in accordance with Section 10
or files a new subscription agreement prior to the applicable Offering Date
changing the Associate’s designated payroll deduction.

 

(b)         Payroll
deductions begin on the first payroll date during the applicable Offering
Period and end on the last payroll date on or prior to the Exercise Date of the
Offering Period to which the subscription agreement is applicable, unless
sooner terminated by the participant as provided in Section 10.

 

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6.              Method of Payment of Contributions.

 

(a)          Payroll
deductions shall be made on each payroll date during the Offering Period in an
amount between one percent (1%) and fifteen percent (15%) (in whole number
increments) of a participant’s Compensation on each such payroll date.

 

(b)         All
payroll deductions made by a participant will be credited to his or her account
under the Plan.

 

(c)          A
participant may not make any additional payments into the account.

 

(d)         A
participant may discontinue his or her participation in the Plan as provided in
Section 10, or may change the rate of his or her payroll deduction during
an Offering Period by completing and filing with the Company a new
authorization for payroll deduction, provided that the Board may, in its
discretion, impose reasonable and uniform restrictions on a participant’s
ability to change the rate of payroll deductions.  The change in rate shall be effective no
later than fifteen (15) days following the Company’s receipt of the new
authorization.  A participant may
decrease or increase the amount of his or her payroll deductions as of the
beginning of an Offering Period by completing and filing with the Company, at
least fifteen (15) days prior to the beginning of such Offering Period, a new
payroll deduction authorization.

 

(e)          Notwithstanding
the foregoing, to the extent necessary, but only to such extent, to comply with
Section 423(b)(8) of the Code and Section 3(b) herein, a
participant’s payroll deductions may be automatically decreased to zero percent
(0%) at any time during any Offering Period. 
Payroll deductions shall commence at the rate provided in such
participant’s subscription agreement at the beginning of the next succeeding
Offering Period, unless terminated by the participant as provided in Section 10.

 

7.              Grant of Option.

 

(a)          An
eligible Associate participating in an Offering Period may purchase shares of
the Company’s Class A Common Stock on the Exercise Date with the
Contributions accumulated on or prior to such Exercise Date.

 

(b)         The
number of whole and fractional shares to be purchased on the Exercise Date
shall be determined by dividing the Purchase Price into the Contributions
accumulated in the participant’s account as of the Exercise Date.

 

(c)          The
maximum number of shares of the Class A Common Stock which may be
purchased during each Offering Period by a participant shall not exceed 5,000
shares, and the purchase is subject to the limitations set forth in Sections 3(b) and
12.

 

8.              Exercise of Option.

 

(a)          Unless
a participant withdraws from the Plan as provided in Section 10, the
Associate’s option for the purchase of shares will be exercised automatically
on the Exercise Date of each Offering Period.

 

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(b)         The
maximum number of whole and fractional shares will be determined based on the
Purchase Price and the accumulated Contributions in the participant’s account.

 

(c)          The
shares purchased will be issued to the participant as promptly as practicable
after the Exercise Date.

 

(d)         The
option to purchase shares hereunder is exercisable only by the participant.

 

(e)          Notwithstanding
anything in the Plan to the contrary, any shares acquired by a participant
hereunder after the first Offering Date subsequent to January 6, 2004 may
not be assigned, transferred, pledged or otherwise disposed of in any way by
the participant for a period of forty-five (45) days (or such other longer
or shorter time period (including 0 days) as may be established by the
Board in its sole discretion) following the date on which the participant
acquired such shares as a result of the exercise of such participant’s option.

 

9.              Delivery.

 

As promptly as
practicable after the Exercise Date of each Offering Period, the Company shall
arrange the delivery of shares to each participant by means of direct deposit
into the participant’s brokerage account.

 

10.       Voluntary Withdrawal; Termination of
Employment.

 

(a)          A
participant may withdraw all, but not less than all, of the payroll deductions
credited to his or her account and not yet used to exercise his or her option
under the Plan at any time prior to an Exercise Date by giving written notice
to the Company on a form provided for such purpose.  If the participant withdraws from an Offering
Period, all of the participant’s payroll deductions credited to his or her
account will be paid to the participant as promptly as practicable after
receipt of the notice of withdrawal, his or her option for such Offering Period
will be automatically canceled, and no further payroll deductions for the
purchase of shares will be made during such Offering Period or subsequent
Offering Periods, except pursuant to a new subscription agreement filed in
accordance with Section 5 hereof.

 

(b)         Upon
termination of the participant’s Continuous Status as an Associate prior to an
Exercise Date of an Offering Period for any reason, including retirement or
death, the payroll deductions accumulated in his or her account will be
returned to him or her as promptly as practicable after such termination or, in
the case of death, to the person or persons entitled thereto under Section 14,
his or her option will be automatically canceled and he or she will be deemed
to have elected to withdraw from the Plan.

 

(c)          A
participant’s withdrawal from an Offering Period will not have any effect upon
his or her eligibility to participate in a succeeding Offering Period or in any
similar plan that may hereafter be adopted by the Company; provided, that the
Board may, in its discretion and subject to compliance with Section 423 of
the Code (or any successor rule or provision or any applicable law or
regulation), impose reasonable and uniform restrictions on a participant’s
ability to participate in succeeding Offering Periods.

 

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11.       Interest.

 

No interest shall
accrue on the Contributions of a participant in the Plan.

 

12.       Stock.

 

(a)          The
maximum number of shares of the Company’s Class A Common Stock made
available for sale under the Plan is 1,150,000 and is subject to adjustment
upon changes in the capitalization of the Company.

 

(b)         If
the total number of shares subject to options granted exceeds the number of
shares available under the Plan, the Company will make a pro rata allocation of
the shares remaining available for option grant in a practical and equitable
manner.  A written notice will be
distributed to each Associate stating the reduction of the number of shares due
to the adjustment and the corresponding reduction in the Contribution.

 

(c)          The
participant will have no interest or voting right in shares covered by his or
her option until such option has been exercised.

 

(d)         Shares
to be delivered to a participant under the Plan will be registered in the name
of the participant.

 

13.       Administration.

 

The Board, or a
committee appointed by the Board, will:

 

(a)          Supervise
and administer the Plan and will have full power to adopt, amend and rescind
any rules deemed desirable and appropriate and consistent for the
administration of the Plan.

 

(b)         Construe
and interpret the Plan in its sole and absolute discretion, and make all other
determinations necessary or advisable for the administration of the Plan.

 

14.       Designation of Beneficiary.

 

(a)          A
participant may file a written designation of a beneficiary who is to receive
cash, if any, from the participant’s account under the Plan in the event of
such participant’s death.

 

(b)         Designation
of a beneficiary may be changed by the participant at any time by written
notice.

 

(c)          In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant’s death, the Company will deliver the cash to the executor or
administrator of the estate of the participant, or if no such executor or administrator
has been appointed (to the knowledge of the Company), then the Company, in its
discretion, may deliver the cash to the spouse or to any one or more dependents
or relatives of the participant.

 

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15.       Transferability.

 

a)   Neither Contributions credited to a
participant’s account nor any rights with regard to an option to purchase
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (except as provided in Section 14).

 

b)   Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company
may treat such act as an election to withdraw funds in accordance with Section 10.

 

16.       Use of Funds.

 

All Contributions
received or held by the Company under the Plan may be used by the Company for
any corporate purpose, and the Company shall not be obligated to segregate such
Contributions.

 

17.       Reports.

 

An individual
Account Statement will be given to participating Associates promptly following
each Exercise Date. The Account Statement will report:

 

(a)          amount
of Contributions,

 

(b)         per
share Purchase Price,

 

(c)          number
of shares purchased, and

 

(d)         remaining
cash balance (if any).

 

18.       Adjustments Upon Changes in Capitalization;
Corporate Transactions.

 

(a)          In
the event that a dividend shall be declared upon the Class A Common Stock
payable in shares of Class A Common Stock, the number of shares of Class A
Common Stock then subject to any option and the number of shares of Class A
Common Stock which may be purchased upon the exercise of options granted under
the Plan but not yet covered by an option shall be adjusted by adding to each
share the number of shares which would be distributed thereon if such shares
had been outstanding on the date fixed for determining the stockholders
entitled to receive such stock dividend. 
In the event that the outstanding shares of Class A Common Stock
shall be changed into or exchanged for a different number or kind of share of
stock or other securities of the Company or of another corporation, whether
through reorganization, recapitalization, stock split-up, combination of
shares, sale of assets, merger or consolidation in which the Company is the
surviving corporation, then, there shall be substituted for each share of Class A
Common Stock then subject to any option and for each share of Class A
Common Stock which may be purchased upon the exercise of options granted under
the Plan but not yet covered by an option, the number and kind of shares of
stock or other securities into which each outstanding share of Class A
Common Stock shall be so changed or for which each such share shall be
exchanged.

 

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(b)         In
the event that there shall be any change, other than as specified in the first
paragraph of Section 18(a) hereof, in the number or kind of
outstanding shares of Class A Common Stock, or of any stock or other
securities into which the Class A Common Stock shall have been changed, or
for which it shall have been exchanged, then, if the Board shall, in it sole
discretion, determine that such change equitably requires an adjustment in the
number or kind of shares then subject to any option and the number or kind of
shares available for issuance in accordance with the provisions of the Plan but
not yet covered by an option, such adjustment shall be made by the Board and
shall be effective and binding for all purposes of the Plan and of each option.

 

(c)          In
the case of any substitution or adjustment in accordance with the provisions of
this Section 18, the option price in each option for each share covered
thereby prior to such substitution or adjustment shall be the option price for
all shares of stock or other securities which shall have been substituted for
such share or to which such share shall have been adjusted in accordance with
the provisions of this Section 18.

 

(d)         No
adjustment or substitution provided for this Section 18 shall require the
Company to issue a fractional share under any option.

 

(e)          In
the event of dissolution or liquidation of the Company, or a merger,
reorganization or consolidation in which the Company is not the surviving
corporation, the Board, in its discretion, may accelerate the exercise of each
option and/or terminate the same within a reasonable time thereafter.

 

19.       Amendment or Termination.

 

The Board may at
any time terminate or amend the Plan in whole or part.  Except as provided in Section 18 or as
necessary to comply with applicable law, stock exchange rules or
accounting rules, no such termination may affect options to purchase shares
previously granted, nor may an amendment make any change in any option which
has been granted which adversely affects the rights of any participant.  In addition, to the extent necessary to
comply with Section 423 of the Code (or any successor rule or
provision or any applicable law or regulation), the Company shall obtain
shareholder approval in such manner as required.

 

20.                               Notices.  All notices or other communications by a participant
to the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.

 

21.       Conditions Upon Issuance of Shares.

 

(a)          Shares
shall not be issued with respect to an option to purchase, unless the exercise
of such option and the issuance and delivery of such shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed.

 

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(b)         As
a condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

 

(c)          Each
participant agrees, by entering the Plan, to promptly give the Company notice
of any disposition of shares purchased under the Plan where such disposition
occurs within two (2) years after the date of grant of the option pursuant
to which such shares were purchased.

 

22.       Term of Plan; Effective Date.

 

The Plan shall continue
in effect for a term of ten (10) years from November 1, 2008, unless
sooner terminated under Section 19. 
Continuance of the Plan shall be subject to approval by the shareholders
of the Company no later than October 16, 2009.  Such shareholder approval shall be obtained
in the manner required under the New York Business Corporation Law.

 

23.       No Rights to Continued Employment.

 

Neither this plan,
nor the grant of any option hereunder, shall confer any right on any Associate
or restrict the right of the Company or any Subsidiary to terminate such
Associate’s employment or service to the Company or such Subsidiary.

 

24.       Responsibility.

 

Neither the Company, the
Board, any Subsidiary, nor any director, officer or employee of the Company or
any Subsidiary shall be liable to any Associate under the Plan for any mistake
of judgment or omission or wrongful act unless resulting from willful
misconduct or intentional misfeasance.

 

25.       Governing Law.

 

The validity,
construction and effect of the Plan and any rules and regulations relating
to the Plan shall be determined in accordance with the internal laws of the
State of New York and any applicable United States federal laws.

 

9EXHIBIT 10.2

 

EMPLOYMENT AGREEMENT

CHIEF EXECUTIVE OFFICER

 

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

 

RECITALS

 

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

 

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

 

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

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.                            EMPLOYMENT.

 

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

 

2.                            DUTIES
OF EXECUTIVE.

 

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

 

 

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

 

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

 

3.                            COMPENSATION.

 

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

 

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

 

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

 

January 1, 2009-  4,500 Units Vest

December 31, 2009– 4,500 Units Vest

December 31, 2010 – 1,000 Units Vest

 

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

 

4.                            BENEFITS.

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

5.                            TERM
AND TERMINATION.

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

6.                            BOARD
MEETING ATTENDANCE.

 

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

 

7.                            SUCCESSOR
TRANSITION.

 

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

 

8.                            CONFIDENTIAL
INFORMATION; INTELLECTUAL PROPERTY.

 

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

 

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

 

9.                            NON-COMPETITION;
NON-SOLICIT.

 

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

 

5

 

10.                     MISCELLANEOUS.

 

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

 

	
   

  	
  If to Company:

  	
  Otter Tail Ag Enterprises, LLC

  
	
   

  	
   

  	
  24096 – 170th Avenue

  
	
   

  	
   

  	
  Fergus Falls, MN 56537

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Executive:

  	
  Anthony Hicks

  
	
   

  	
   

  	
  514 North Union

  
	
   

  	
   

  	
  Fergus Falls, MN 56537

  

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

7

 

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

 

	
   

  	
  OTTER TAIL AG ENTERPRISES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Jerry Larson

  
	
   

  	
  Its Board Chair

  
	
   

  	
  Date:

  	
  11/20/08

  	
   

  
	
   

  	
   

  
	
  /s/ Anthony J. Hicks

  	
   

  
	
  Anthony J. Hicks

  	
   

  
	
  Date 

  	
  11/20/08

  	
   

  	
   

  
							

 

8

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