Document:

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EXHIBIT 4.0

                 SUB SURFACE WASTE MANAGEMENT OF DELAWARE, INC.

                       2004 EMPLOYEE STOCK INCENTIVE PLAN

                           AS ADOPTED FEBRUARY 5, 2004

1.       PURPOSE.

         The purpose of this Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions are
important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options, Restricted Stock and Stock Bonuses. Capitalized terms
not defined in the text are defined in Section 2.

2.       DEFINITIONS.

         As used in this Plan, the following terms will have the following
meanings:

         "AWARD" means any award under this Plan, including any Option,
Restricted Stock or Stock Bonus.

         "AWARD AGREEMENT" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.

         "BOARD" means the Board of Directors of the Company.

         "CAUSE" means any cause, as defined by applicable law, for the
termination of a Participant's employment with the Company or a Parent or
Subsidiary of the Company.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COMPANY" means Sub Surface Waste Management of Delaware, Inc., a
Delaware corporation, or any successor corporation.

         "DISABILITY" means a disability, whether temporary or permanent,
partial or total, as determined by the Board.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.

         "FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:

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                  (a)      if such Common Stock is publicly traded and is then
                           listed on a national securities exchange, its closing
                           price on the date of determination on the principal
                           national securities exchange on which the Common
                           Stock is listed or admitted to trading as reported in
                           The Wall Street Journal;

                  (b)      if such Common Stock is quoted on the NASDAQ National
                           Market, its closing price on the NASDAQ National
                           Market on the date of determination as reported in
                           The Wall Street Journal;

                  (c)      if such Common Stock is publicly traded but is not
                           listed or admitted to trading on a national
                           securities exchange, the average of the closing bid
                           and asked prices on the date of determination as
                           reported by Bloomberg, L.P.;

                  (d)      in the case of an Award made on the Effective Date,
                           the price per share at which shares of the Company's
                           Common Stock are initially offered for sale to the
                           public by the Company's underwriters in the initial
                           public offering of the Company's Common Stock
                           pursuant to a registration statement filed with the
                           SEC under the Securities Act; or

                  (e)      if none of the foregoing is applicable, by the Board
                           in good faith.

         "INSIDER" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to Section
16 of the Exchange Act.

         "OPTION" means an award of an option to purchase Shares pursuant to
Section 6.

         "PARENT" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

         "PARTICIPANT" means a person who receives an Award under this Plan.

         "PERFORMANCE FACTORS" means the factors selected by the Board, in its
sole and absolute discretion, from among the following measures to determine
whether the performance goals applicable to Awards have been satisfied:

                  (a)      Net revenue and/or net revenue growth;

                  (b)      Earnings before income taxes and amortization and/or
                           earnings before income taxes and amortization growth;

                  (c)      Operating income and/or operating income growth;

                  (d)      Net income and/or net income growth;

                  (e)      Earnings per share and/or earnings per share growth;

                  (f)      Total stockholder return and/or total stockholder
                           return growth;

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                  (g)      Return on equity;

                  (h)      Operating cash flow return on income;

                  (i)      Adjusted operating cash flow return on income;

                  (j)      Economic value added; and

                  (k)      Individual confidential business objectives.

         "PERFORMANCE PERIOD" means the period of service determined by the
Board, not to exceed five years, during which years of service or performance is
to be measured for Restricted Stock Awards or Stock Bonuses.

         "PLAN" means this Sub Surface Waste Management of Delaware, Inc. 2004
Employee Stock Incentive Plan, as amended from time to time.

         "RESTRICTED STOCK AWARD" means an award of Shares pursuant to Section
7.

         "SEC" means the Securities and Exchange Commission.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SHARES" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 3 and 19, and any
successor security.

         "STOCK BONUS" means an award of Shares, or cash in lieu of Shares,
pursuant to Section 8.

         "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

         "TERMINATION" or "TERMINATED" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent
contractor, or advisor to the Company or a Parent or Subsidiary of the Company.
An employee will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence
approved by the Company, provided that such leave is for a period of not more
than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to a
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of any employee on an approved
leave of absence, the Board may make such provisions respecting suspension of
vesting of the Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option agreement.
The Board will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "TERMINATION DATE").

         "UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.

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         "VESTED SHARES" means "Vested Shares" as defined in the Award
Agreement.

3.       SHARES SUBJECT TO THE PLAN.

         3.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 3.2 and 19, the
total aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 1,000,000 plus Shares that are subject to: (a)
issuance upon exercise of an Option but cease to be subject to such Option for
any reason other than exercise of such Option; (b) an Award granted hereunder
but forfeited or repurchased by the Company at the original issue price; and (c)
an Award that otherwise terminates without Shares being issued. At all times the
Company shall reserve and keep available a sufficient number of Shares as shall
be required to satisfy the requirements of all outstanding Options granted under
this Plan and all other outstanding but unvested Awards granted under this Plan.

         3.2 ADJUSTMENT OF SHARES. In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share will not be issued but will either be replaced by a cash payment equal
to the Fair Market Value of such fraction of a Share or will be rounded up to
the nearest whole Share, as determined by the Board.

4.       ELIGIBILITY.

          ISOs (as defined in Section 6 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a
Parent or Subsidiary of the Company. All other Awards may be granted to
employees, officers, directors, consultants, independent contractors and
advisors of the Company or any Parent or Subsidiary of the Company; provided
such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction.

5.       ADMINISTRATION.

         5.1 BOARD AUTHORITY. This Plan will be administered by the Board.
Subject to the general purposes, terms and conditions of this Plan, the Board
will have full power to implement and carry out this Plan. Without limitation,
the Board will have the authority to:

                  (a)      construe and interpret this Plan, any Award Agreement
                           and any other agreement or document executed pursuant
                           to this Plan;

                  (b)      prescribe, amend and rescind rules and regulations
                           relating to this Plan or any Award;

                  (c)      select persons to receive Awards;

                  (d)      determine the form and terms of Awards;

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                  (e)      determine the number of Shares or other consideration
                           subject to Awards;

                  (f)      determine whether Awards will be granted singly, in
                           combination with, in tandem with, in replacement of,
                           or as alternatives to, other Awards under this Plan
                           or any other incentive or compensation plan of the
                           Company or any Parent or Subsidiary of the Company;

                  (g)      grant waivers of Plan or Award conditions;

                  (h)      determine the vesting, ability to exercise and
                           payment of Awards;

                  (i)      correct any defect, supply any omission or reconcile
                           any inconsistency in this Plan, any Award or any
                           Award Agreement;

                  (j)      determine whether an Award has been earned; and

                  (k)      make all other determinations necessary or advisable
                           for the administration of this Plan.

         5.2 BOARD DISCRETION. Any determination made by the Board with respect
to any Award will be made at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and
such determination will be final and binding on the Company and on all persons
having an interest in any Award under this Plan. The Board may delegate to one
or more officers of the Company the authority to grant an Award under this Plan
to Participants who are not Insiders of the Company.

6.       OPTIONS.

          The Board may grant Options to eligible persons and will determine
whether such Options will be Incentive Stock Options within the meaning of the
Code ("ISO") or Nonqualified Stock Options ("NQSOS"), the number of Shares
subject to the Option, the Exercise Price of the Option, the period during which
the Option may be exercised, and all other terms and conditions of the Option,
subject to the following:

         6.1 FORM OF OPTION GRANT. Each Option granted under this Plan will be
evidenced by an Award Agreement that will expressly identify the Option as an
ISO or an NQSO (hereinafter referred to as the "STOCK OPTION AGREEMENT"), and
will be in such form and contain such provisions (which need not be the same for
each Participant) as the Board may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.

         6.2 DATE OF GRANT. The date of grant of an Option will be the date on
which the Board makes the determination to grant such Option, unless otherwise
specified by the Board. The Stock Option Agreement and a copy of this Plan will
be delivered to the Participant within a reasonable time after the granting of
the Option.

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         6.3 EXERCISE PERIOD. Options may be exercisable within the times or
upon the events determined by the Board as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company ("TEN PERCENT STOCKHOLDER") will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Board also may provide for
Options to become exercisable at one time or from time to time, periodically or
otherwise, in such number of Shares or percentage of Shares as the Board
determines.

         6.4 EXERCISE PRICE. The Exercise Price of an Option will be determined
by the Board when the Option is granted and may be not less than 85% of the Fair
Market Value of the Shares on the date of grant; provided that: (a) the Exercise
Price of an ISO will be not less than 100% of the Fair Market Value of the
Shares on the date of grant; and (b) the Exercise Price of any ISO granted to a
Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased may be made in
accordance with Section 9 of this Plan.

         6.5 METHOD OF EXERCISE. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Board, (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

         6.6 TERMINATION. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:

                 (a) If the Participant's service is Terminated for any reason
except death or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been exercisable upon
the Termination Date no later than three (3) months after the Termination Date
(or such shorter or longer time period not exceeding five (5) years as may be
determined by the Board, with any exercise beyond three (3) months after the
Termination Date deemed to be an NQSO), but in any event, no later than the
expiration date of the Options.

                 (b) If the Participant's service is Terminated because of
Participant's death or Disability (or the Participant dies within three (3)
months after a Termination other than for Cause or because of Participant's
Disability), then Participant's Options may be exercised only to the extent that
such Options would have been exercisable by Participant on the Termination Date
and must be exercised by Participant (or Participant's legal representative or
authorized assignee) no later than twelve (12) months after the Termination Date
(or such shorter or longer time period not exceeding five (5) years as may be
determined by the Board, with any such exercise beyond (i) three (3) months
after the Termination Date when the Termination is for any reason other than the
Participant's death or Disability, or (ii) twelve (12) months after the
Termination Date when the Termination is for Participant's death or Disability,
deemed to be an NQSO), but in any event no later than the expiration date of the
Options.

                  (c) Notwithstanding the provisions in paragraph 6.6(a) above,
if a Participant's service is Terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any Shares whatsoever, after
Termination, whether or not after Termination the Participant may receive
payment from the Company or Subsidiary for vacation pay, for services rendered
prior to Termination, for services rendered for the day on which Termination
occurs, for salary in lieu of notice, or for any other benefits. For the purpose
of this paragraph, Termination shall be deemed to occur on the date when the
Company dispatches notice or advice to the Participant that his service is
Terminated.

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         6.7 LIMITATIONS ON EXERCISE. The Board may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent Participant from exercising the Option
for the full number of Shares for which it is then exercisable.

         6.8 LIMITATIONS ON ISO. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISO are exercisable for
the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company, Parent or Subsidiary
of the Company) will not exceed $100,000. If the Fair Market Value of Shares on
the date of grant with respect to which ISO are exercisable for the first time
by a Participant during any calendar year exceeds $100,000, then the Options for
the first $100,000 worth of Shares to become exercisable in such calendar year
will be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.

         6.9 MODIFICATION, EXTENSION OR RENEWAL. The Board may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant's rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
The Board may reduce the Exercise Price of outstanding Options without the
consent of Participants affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 6.4 of this Plan for Options granted on the
date the action is taken to reduce the Exercise Price.

         6.10 NO DISQUALIFICATION. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

7.       STOCK AWARD.

                  A Stock Award is an offer by the Company to sell to an
eligible person Shares that may or may not be subject to restrictions. The Board
will determine to whom an offer will be made, the number of Shares the person
may purchase, the price to be paid (the "PURCHASE PRICE"), the restrictions to
which the Shares will be subject, and all other terms and conditions of the
Stock Award, subject to the following:

         7.1 FORM OF STOCK AWARD. All purchases under a Stock Award made
pursuant to this Plan will be evidenced by an Award Agreement (the "STOCK
PURCHASE AGREEMENT") that will be in such form (which need not be the same for
each Participant) as the Board will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. The offer of Stock
will be accepted by the Participant's execution and delivery of the Stock
Purchase Agreement and full payment for the Shares to the Company within thirty
(30) days from the date the Stock Purchase Agreement is delivered to the person.
If such person does not execute and deliver the Stock Purchase Agreement along
with full payment for the Shares to the Company within thirty (30) days, then
the offer will terminate, unless otherwise extended by the Board.

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         7.2 PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a
Stock Award will be determined by the Board on the date the Stock Award is
granted, except in the case of a sale to a Ten Percent Stockholder, in which
case the Purchase Price will be 100% of the Fair Market Value. Payment of the
Purchase Price must be made in accordance with Section 9 of this Plan.

         7.3 TERMS OF STOCK AWARDS. Stock Awards shall be subject to such
restrictions as the Board may impose. These restrictions may be based upon
completion of a specified number of years of service with the Company or upon
completion of the performance goals as set out in advance in the Participant's
individual Stock Purchase Agreement. Stock Awards may vary from Participant to
Participant and between groups of Participants. Prior to the grant of a Stock
Award, the Board shall: (a) determine the nature, length and starting date of
any Performance Period for the Stock Award; (b) select from among the
Performance Factors to be used to measure performance goals, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the payment of any Stock Award, the Board shall determine the extent to which
such Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Awards that
are subject to different Performance Periods and have different performance
goals and other criteria.

         7.4 TERMINATION DURING PERFORMANCE PERIOD. If a Participant is
Terminated during a Performance Period for any reason, then such Participant
will be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Stock Award only to the extent earned as of the date of Termination in
accordance with the Stock Purchase Agreement, unless the Board determines
otherwise.

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8.       STOCK BONUSES.

         8.1 AWARDS OF STOCK BONUSES. A Stock Bonus is an award of Shares (which
may consist of Restricted Stock) for extraordinary services rendered to the
Company or any Parent or Subsidiary of the Company. A Stock Bonus will be
awarded pursuant to an Award Agreement (the "STOCK BONUS AGREEMENT") that will
be in such form (which need not be the same for each Participant) as the Board
will from time to time approve, and will comply with and be subject to the terms
and conditions of this Plan. A Stock Bonus may be awarded upon satisfaction of
such performance goals as are set out in advance in the Participant's individual
Award Agreement (the "PERFORMANCE STOCK BONUS AGREEMENT") that will be in such
form (which need not be the same for each Participant) as the Board will from
time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. Stock Bonuses may vary from Participant to Participant
and between groups of Participants, and may be based upon the achievement of the
Company, Parent or Subsidiary and/or individual performance factors or upon such
other criteria as the Board may determine.

         8.2 TERMS OF STOCK BONUSES. The Board will determine the number of
Shares to be awarded to the Participant. If the Stock Bonus is being earned upon
the satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Board will: (a) determine the nature, length and starting
date of any Performance Period for each Stock Bonus; (b) select from among the
Performance Factors to be used to measure the performance, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the payment of any Stock Bonus, the Board shall determine the extent to which
such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as may be determined by the Board. The Board
may adjust the performance goals applicable to the Stock Bonuses to take into
account changes in law and accounting or tax rules and to make such adjustments
as the Board deems necessary or appropriate to reflect the impact of
extraordinary or unusual items, events or circumstances to avoid windfalls or
hardships.

         8.3 FORM OF PAYMENT. The earned portion of a Stock Bonus may be paid to
the Participant by the Company either currently or on a deferred basis, with
such interest or dividend equivalent, if any, as the Board may determine.
Payment may be made in the form of cash or whole Shares or a combination
thereof, either in a lump sum payment or in installments, all as the Board will
determine.

9.       PAYMENT FOR SHARE PURCHASES.

         9.1 PAYMENT. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Board and where permitted by law:

                  (a)      by cancellation of indebtedness of the Company to the
                           Participant;

                  (b)      by surrender of shares that either: (1) have been
                           owned by Participant for more than one year and have
                           been paid for within the meaning of Rule 144 of the
                           Securities Act of 1933 (and, if such shares were
                           purchased from the Company by use of a promissory
                           note, such note has been fully paid with respect to
                           such shares); or (2) were obtained by Participant in
                           the public market;

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                  (c)      by waiver of compensation due or accrued to the
                           Participant for services rendered;

                  (d)      with respect only to purchases upon exercise of an
                           Option, and provided that a public market for the
                           Company's stock exists:

                           (1)      through a "same day sale" commitment from
                                    the Participant and a broker-dealer that is
                                    a member of the National Association of
                                    Securities Dealers (an "NASD DEALER")
                                    whereby the Participant irrevocably elects
                                    to exercise the Option and to sell a portion
                                    of the Shares so purchased to pay for the
                                    Exercise Price, and whereby the NASD Dealer
                                    irrevocably commits upon receipt of such
                                    Shares to forward the Exercise Price
                                    directly to the Company; or

                           (2)      through a "margin" commitment from the
                                    Participant and a NASD Dealer whereby the
                                    Participant irrevocably elects to exercise
                                    the Option and to pledge the Shares so
                                    purchased to the NASD Dealer in a margin
                                    account as security for a loan from the NASD
                                    Dealer in the amount of the Exercise Price,
                                    and whereby the NASD Dealer irrevocably
                                    commits upon receipt of such Shares to
                                    forward the Exercise Price directly to the
                                    Company; or

                  (e)      by any combination of the foregoing.

10.      WITHHOLDING TAXES.

         10.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

         10.2 STOCK WITHHOLDING. When, under applicable tax laws, a participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Board may allow the Participant
to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having a
Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Board and be in writing in a form acceptable to the Board.

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11.      PRIVILEGES OF STOCK OWNERSHIP.

         11.1 VOTING AND DIVIDENDS. No Participant will have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and will have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's Purchase Price or Exercise Price pursuant
to Section 12.

         11.2 FINANCIAL STATEMENTS. Pursuant to regulation 260.140.46 of the
Rules of the California Corporations Commissioner, the Company will provide
financial statements to each Participant prior to such Participant's purchase of
Shares under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company will not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.

12.      TRANSFERABILITY.

         Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, other than by will or by the laws of
descent and distribution. During the lifetime of the Participant an Award will
be exercisable only by the Participant. During the lifetime of the Participant,
any elections with respect to an Award may be made only by the Participant
unless otherwise determined by the Board and set forth in the Award Agreement
with respect to Awards that are not ISOs.

13.      RESTRICTIONS ON SHARES.

         At the discretion of the Board, the Company may reserve to itself
and/or its assignee(s) in the Award Agreement a right to repurchase a portion of
or all Unvested Shares held by a Participant following such Participant's
Termination at any time within ninety (90) days after the later of (a)
Participant's Termination Date, or (b) the date Participant purchases Shares
under this Plan. Such repurchase by the Company shall be for cash and/or
cancellation of purchase money indebtedness, and the price per share shall be
the Participant's Exercise Price or the Purchase Price, as applicable.

<PAGE>

14.      CERTIFICATES.

         All certificates for Shares or other securities delivered under this
Plan will be subject to such stock transfer orders, legends and other
restrictions as the Board may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.

15.      ESCROW; PLEDGE OF SHARES.

         To enforce any restrictions on a Participant's Shares, the Board may
require the Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer approved by the
Board appropriately endorsed in blank, with the Company or an agent designated
by the Company to hold in escrow until such restrictions have lapsed or
terminated, and the Board may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase
of Shares under this Plan will be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the
payment of Participant's obligation to the Company under the promissory note;
provided, however, that the Board may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Board will
from time to time approve. The Shares purchased with the promissory note may be
released from the pledge on a pro rata basis as the promissory note is paid.

16.      EXCHANGE AND BUYOUT OF AWARDS.

         The Board may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The Board
may at any time buy from a Participant an Award previously granted with payment
in cash, Shares (including Restricted Stock) or other consideration, based on
such terms and conditions as the Board and the Participant may agree.

17.      SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.

         An Award will not be effective unless such Award is in compliance with
all applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.

<PAGE>

18.      NO OBLIGATION TO EMPLOY.

          Nothing in this Plan or any Award granted under this Plan will confer
or be deemed to confer on any Participant any right to continue in the employ
of, or to continue any other relationship with, the Company or any Parent or
Subsidiary of the Company or limit in any way the right of the Company or any
Parent or Subsidiary of the Company to terminate Participant's employment or
other relationship at any time, with or without cause.

19.      CORPORATE TRANSACTIONS.

         19.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the event of
(a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 19.1,
such Awards will expire on such transaction at such time and on such conditions
as the Board will determine. Notwithstanding anything in this Plan to the
contrary, the Board may provide that the vesting of any or all Awards granted
pursuant to this Plan will accelerate upon a transaction described in this
Section 19. If the Board exercises such discretion with respect to Options, such
Options will become exercisable in full prior to the consummation of such event
at such time and on such conditions as the Board determines, and if such Options
are not exercised prior to the consummation of the corporate transaction, they
shall terminate at such time as determined by the Board.

         19.2 OTHER TREATMENT OF AWARDS. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 19, in the event
of the occurrence of any transaction described in Section 19.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.

         19.3 ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either: (a) granting an Award under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award

<PAGE>

granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

20.      ADOPTION AND STOCKHOLDER APPROVAL.

         This Plan will become effective on the date on which it is adopted by
the Board (the "EFFECTIVE DATE"). This Plan shall be approved by the
stockholders of the Company within twelve (12) months before or after the date
this Plan is adopted by the Board. Upon the Effective Date, the Board may grant
Awards pursuant to this Plan. In the event that stockholder approval of this
Plan is not obtained within the time period provided herein, all Awards granted
hereunder shall be cancelled, any Shares issued pursuant to any Awards shall be
cancelled and any purchase of Shares issued hereunder shall be rescinded.

21.      TERM OF PLAN/GOVERNING LAW.

         Unless earlier terminated as provided herein, this Plan will terminate
ten (10) years from the date this Plan is adopted by the Board or, if earlier,
the date of stockholder approval. This Plan and all agreements thereunder shall
be governed by and construed in accordance with the laws of the State of
California.

22.      AMENDMENT OR TERMINATION OF PLAN.

         The Board may at any time terminate or amend this Plan in any respect,
including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to this Plan; provided, however, that the
Board will not, without the approval of the stockholders of the Company, amend
this Plan in any manner that requires such stockholder approval.

23.      NONEXCLUSIVITY OF THE PLAN.

         Neither the adoption of this Plan by the Board, the submission of this
Plan to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem desirable,
including, without limitation, the granting of stock options and bonuses
otherwise than under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

24.      ACTION BY BOARD.

         Any action permitted or required to be taken by the Board or any
decision or determination permitted or required to be made by the Board pursuant
to this Plan shall be taken or made in the Board's sole and absolute discretion.EXHIBIT
10.1

 

EMPLOYMENT AND NON-COMPETITION AGREEMENT

BETWEEN

GOLDEN OVAL EGGS

AND

DANA PERSSON

 

This Employment and
Non-Competition Agreement (this “Agreement”), effective July 1, 2002 is
entered into by and between Midwest Investors of Renville, Inc. d/b/a Golden
Oval Eggs, a Minnesota cooperative (“Company”) and Dana Persson, (“CEO”).

 

BACKGROUND

 

A.                                   The
Company is a Minnesota Chapter 308A cooperative incorporated on March 16,
1994.

 

B.                                     The
Company desires to continue to employ CEO to manage the day-to-day operations
of the Company.  Company and CEO are
entering into this Agreement to set forth the terms under which CEO will be
employed as Chief Executive Officer of the Company.

 

STATEMENT
OF AGREEMENT

 

Company and CEO (the
“Parties” or either, the “Party”), each in consideration of the promises of the
other contained in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
hereby agree as follows:

 

1.                                      Employment
Term.

 

(a)                                  Initial
Term.  Upon the terms and
conditions set forth in this Agreement and in Exhibit A attached to and a part
of this Agreement, Company offers to employ CEO, and CEO hereby accepts
employment on those terms and conditions with Company. The term of employment
under this Agreement shall be for the “Employment Term” commencing on the
“Effective Date” stated in Exhibit A, unless terminated earlier under
Section 7.

 

(b)                                 Renewal.  The Employment Term, under this
Agreement, shall automatically renew for successive one year periods unless
either Party notifies the other Party in writing, not less than 60 days before
the end of the then current Employment Term, that this Agreement shall not be
renewed at the end of the then current Employment Term.

 

1

 

 

2.                           Duties.

 

Generally.  CEO shall be employed as the Chief Executive
Officer of the Company to provide such services and to have such duties and
responsibilities as are normally associated with that position, together with
any other duties and responsibilities as may be designated by the Board of
Directors from time to time. The CEO shall devote his full time, attention and
energy to the business affairs of the Company and the performance of CEO’s
duties under this Agreement. The CEO shall discharge the duties in a diligent
and proper manner and shall conduct himself at all times so as to advance the
best interests of the Company.  The CEO
shall report to the Company’s Board of Directors.

 

(a)                                  Specific
duties of the CEO include:

 

(1)                                  Preparation
and submission of monthly and fiscal year financial and operations reports for
the Board of Directors;

 

(2)                                  Preparation
and revision of the Company’s operating plan and strategic plan for submission
to the Board of Directors;

 

(3)                                  Reports
to the Board of Directors as soon as practicable all hiring and firing of
management personnel;

 

(4)                                  Reports
to the Board of Directors annually on product sale allocations on changes in
product allocations that have a material impact on the Company’s operations or
finances as often as practicable; and

 

(5)                                  Preparation
and submission of an annual budget to the Board of Directors at least thirty
(30) days prior to the start of the fiscal year.

 

(b)                                 Operating
Control; Expenditures.  The
CEO shall have full day-to-day operating control of the Company and may expend
Company funds under the annual budget approved by the Board of Directors and
within identified spending categories as identified in the budget at the CEO’s
discretion, provided the CEO submits a monthly report of the expenditures to
the Board of Directors.

 

3.                                      Compensation.

 

(a)                                  During
the Employment Term and in consideration of his services provided hereunder,
the Company shall pay CEO an annual “Base Salary” stated in Exhibit A and a
bonus as provided in Section 4 and Exhibit A.

 

(b)                                 Base Salary
Payments.  The Base Salary
shall be paid in equal biweekly installments each month of the Employment Term,
and prorated on a daily basis

 

2

 

for any partial period
for which services are rendered at the end of the Employment Term.

 

(c)                                  Deductions
from Compensation.  Company
shall withhold from CEO’s compensation payments (Base Salary and Bonus) state,
federal and local income taxes, FICA, social security and other amounts that
are customarily withheld from a CEO’s compensation.

 

4.                                      Bonus.

 

(a)                                  Payment of
Bonus.  Except as provided in
Subsection (c), the Company shall pay a bonus to CEO as provided in
Exhibit A.  The Company shall pay the
bonus no later than 120 days after the audited financial statements are
approved by the Company’s Board of Directors unless deferred by the CEO to the
next tax year.  The bonus shall be
prorated for any partial year on a daily basis for which services are rendered
at the beginning and end of the Employment Term.

 

(b)                                 Liquidation
Bonus.   If more than 20% of the fixed or operating
assets of the Company are sold which would represent a proportional capital
gain on Members’ equity allocated to those assets on a pro rata basis, or has a
change in control resulting in a capital gain on Members’ equity, then CEO
shall be paid a “Liquidation Bonus” equivalent to 2% of the actual or
proportional capital gain on the Members’ equity as provided in Exhibit A.  The date for determination of such percentage
amount shall be as of the effective date of the sale, merger, consolidation, or
change in control and the liquidation bonus shall be paid by 60 days after that
effective date.

 

(c)                                  Merger Bonus.  If the Company merges or consolidates with another business
entity and the asset value of the merged or consolidated business entity is at
least 1.5 times the asset value of the Company, then the CEO shall be entitled
to a “Merger Bonus” equivalent to 50% of the CEO’s base salary in the form of
stock or other similar equity in the new or surviving company which shall vest
as provided below.  The number of shares
of stock or units of similar equity shall be valued and determined as of the
date the merger is effective.

 

CEO may not sell more
than one-third of the Merger Bonus stock or similar equity in each of the first
three years.

 

If CEO is offered the
same or a similar position and compensation with the new or surviving company
(whether or not the surviving company is the Company), then one-third of the Merger
Bonus shall vest and CEO shall be granted one-third of the Merger Bonus if
still employed in such position one year after the merger or
consolidation.  Another one-third of the
Merger Bonus shall vest and shall be granted if the CEO is still employed in
such position two years after the merger or consolidation.  And the final one-third of the Merger Bonus
shall vest and shall be granted if the CEO is still employed in such position
three years after the merger or consolidation. 
If the CEO is not offered such a position subsequent to the merger or
consolidation, then the Merger Bonus shall

 

3

 

vest upon the merger or
consolidation and one-third shall be paid each year over three years in stock
or similar equity.

 

For purposes of this
paragraph (c) a merger or consolidation is a combination of the Company and
another business entity whereby the assets of the Company are exchanged or
combined with another entity and the Company and/or the other business entity
cease to exist and the combined assets are jointly operated by one business
entity which may or may not be the Company.

 

(d)                                 No Bonus If
Termination for Cause.  The
Company shall have no obligation to pay a bonus to CEO if the Employment Term
is terminated under Section 7(a)(4).

 

5.                                       CEO
Benefits, Expenses.  CEO
shall have, and the Company shall pay for, the following benefits and expenses
during the Employment Term:

 

(a)                                  Group
Benefits. CEO shall be entitled to participate in group life
insurance, long-term disability, group health and hospitalization, vision and
dental, retirement and other group benefits as are presently or may hereafter
be provided to other employees of Company, which benefits may be in varying
amounts and scope relative to the age, years of employment, compensation and
pay status of the employees.

 

(b)                                 Business
Expenses. Upon CEO’s periodic presentation to Company of an itemized
account therefor, the Company shall pay or reimburse CEO for reasonable
expenses incurred by CEO on behalf of Company directly in connection with, and
reasonably necessary for the rendering of, his services to Company hereunder.

 

(c)                                  Automobile.
 The Company shall provide CEO with
a vehicle owned by the Company for CEO’s use during CEO’s employment with the
Company as approved in the annual budget. 
The Company shall be responsible for the insurance and maintenance of
the vehicle as approved in the annual budget.

 

(d)                                 Vacation. CEO
shall be entitled to five weeks paid vacation for each 12-month period of the
Employment Term.

 

(e)                                  Retirement
Account.  CEO may elect to
reduce his salary and deposit same into the Company 401K retirement plan
subject to, and limited by, any and all ERISA and/or Internal Revenue Code
provisions or regulations or actual plan terms and requirements, as amended
from time to time. Any such deposit by CEO into the Company approved retirement
account shall be matched by Company subject to the maximum amount stated in
Exhibit A.

 

6.                                      Life
Insurance.  Company may at
any time, in its discretion, apply for and procure, as owner and for its own
benefit, insurance on the life of CEO in such amounts and in such form or forms
as Company may choose. CEO shall have no interest in any such policy or
policies, but CEO shall, at the request of Company, submit to such

 

4

 

medical examinations,
supply such information and execute such applications, instruments and other
documents as may be required by the insurance company or companies to whom
Company has applied for such insurance.

 

7.                                      Termination
of Agreement.

 

(a)                                  Termination
Events.  The Employment Term
shall terminate upon the first to occur of any of the following:

 

(1)                                  Last Day of
Term.  The last day of the
then-current Employment Term if either Party has notified the other, in
accordance with Section 1, that the Employment Term will not be renewed;

 

(2)                                  Date Set By
Company.  A date within the
Employment Term specified by Company or 60 days after a “Material Business
Change” occurs.  A termination of the Employment
Term under this provision shall be subject to the requirement to pay severance
benefits as described in Section 8 for a termination date set by the
Company, and after a “Material Business Change” if the CEO is not retained by
the Company with the same position and compensation or is not offered a same or
similar position and compensation with the Company after a change in control,
with the entity to which fifty percent (50%) or more of the Company’s assets
are transferred, or with the joint venture from which fifty percent (50%) or
more of the revenues are received. 
“Material Business Change” shall include:  (i) a transfer of more than fifty percent (50%) of the Company’s
fixed assets in any one or a series of related transactions to another entity
in which the Company does not have a majority of the financial and governance
rights; (ii) a change in control where more than fifty percent (50%) of the
ownership, financial rights, or governance rights are transferred in a single
transaction or a series of related transactions; or (iii) the Company enters a
joint venture in which more than fifty percent (50%) of the Company’s revenues
will be received from the joint venture and either CEO or the Company notifies
the other prior to the effective date of the joint venture that the Company’s
participation in the joint venture will be a “Material Business Change” under
this section;

 

(3)                                  Death or
Permanent Disability.  The
death or permanent disability of CEO which, for purposes of this Agreement, the
“permanent disability” of CEO shall be deemed to occur on the earlier of: (1)
the date on which CEO is determined to be permanently disabled for the purposes
of any disability benefits provided to CEO by Company; or (2) the date as of
which CEO has been incapable of performing CEO’s duties under this Agreement
for a continuous period of 30 days or for periods aggregating 30 days within a
period of 365 days; or (3) the date of certification to Company by a physician
approved by Company that CEO is so mentally or physically disabled or impaired
as to be incapable of engaging in and performing the duties of the employment
position with Company which CEO occupied prior to the commencement of the
disorder that led to the disability and upon the certification by the physician
that the disability is likely to be permanent;

 

5

 

(4)                                  For
Cause.  A date specified by
Company by written notice to CEO of Company’s intention to terminate the
Employment Term for Cause which, for purposes of this clause (4), “Cause” shall
mean:  (i) repeated disobedience or
insubordination, or persistent inattention to CEO’s duties, after written
notice of same by the board to CEO identifying this paragraph of this
Agreement, (ii) any other breach by CEO of any of his agreements contained in
this Agreement if the breach is not cured by CEO within ten (10) days after
receiving notice of the breach from Company, (iii) willfully making derogatory
statements regarding Company, (iv) misappropriation of any of Company’s funds,
(v) fraud, or (vi) any criminal conviction of an act of moral turpitude by CEO
or

 

(5)                                  Mutual
Agreement.  The mutual
agreement of Company and CEO.

 

(6)                                  CEO
Termination.  A date
specified by CEO by written notice to Company of CEO’s intention to terminate
the Employment Term.

 

(b)                                 Notice
Requirements.  Any notice of
termination by either Party under this Section 7 shall clearly state that
the terminating Party elects to terminate the Employment Term and shall specify
the subsection of this Section 7 upon which such Party is relying as
the basis for such termination.

 

(c)                                  Effect of
Termination.  If the
Employment Term is terminated for any reason whatsoever pursuant to this
Section 7, then, except as specifically provided in Section 9 with respect
to any applicable continuing covenants or agreements of CEO and subject to the
provisions for severance benefits contained in Section 8:  (i) this Agreement shall be terminated and
of no further force or effect, (ii) CEO shall have no obligation or duty to
further serve Company in any capacity, and (iii) Company shall not be under any
obligation or duty to employ CEO or provide the benefits specified in
Section 5 other than through the term of employment or as required by law
or make any of the payments provided in Section 4, except to the extent
the obligations of payments which have accrued prior to the effective date of
the termination and remain unpaid as of the date of the termination; provided,
however, that Company may offset against, and deduct from, any amounts due to
CEO under this Agreement the amount of any losses, costs or other damages
incurred by Company, as the case may be, in connection with any actions
constituting “Cause” for termination of CEO pursuant to Subsection (a),
clause (4)(iv) or (v) above.

 

8.                                       Severance
Benefits. In the event that the Employment Term is terminated by
Company prior to the last day thereof pursuant to Section 7(a)(2), then
the Company shall pay CEO an amount equal to the Base Salary that would
otherwise be payable to CEO under this Agreement for a period of twelve (12)
months following termination.  The
amount shall be payable at normal salary payment intervals in effect for
Company’s executive personnel.  In
addition, the Company shall provide to CEO the group benefits referred to in
Subsection 5(a) for the applicable period. In the event any applicable law
or any benefit plan referred to in Subsection 5(a) prohibits or otherwise
precludes the

 

6

 

provision of benefits to
an individual whose employment with Company has terminated, then the Company
shall pay to CEO as expeditiously as is practicable after the effective date of
termination the cash equivalent of such prohibited or precluded benefits.  The unvested portion of any Merger Bonus
under Section 4(c) shall vest upon termination and be paid as provided in
Section 4(c).

 

9.                                       Certain CEO
Covenants. CEO expressly covenants and agrees to and with Company as
hereinafter set forth in this Section:

 

(a)                                  Non-competition.  CEO recognizes and acknowledges
that he has been trained by and has knowledge of know how acquired during his
employment with the Company. During the Employment Term and for a period of
eighteen (18) months after the termination of the Employment Term, CEO shall
not, without the written consent of Company, with Company within the United
States of America, participate through management or control or be employed by
any business or enterprise which is engaged in any business activity similar to
that of the Company that competes with the Company for the Company’s egg
product markets or sources of egg supplies.

 

(b)                                 Confidential
Information. CEO recognizes the interests of Company in maintaining
the confidential nature of its respective proprietary and other business and
commercial information.  CEO shall not,
at any time after the term of employment, or in any manner that does not
promote the interests of the Company during the term of Employment, directly or
indirectly, publish, disclose or use, or authorize anyone else to publish,
disclose or use, any secret, confidential or proprietary information of
Company, or any of its respective affiliates, except for such information as is
in the public domain through no fault of CEO, which is acquired by CEO in connection
with CEO’s employment with Company or work with the Company prior to the date
hereof or thereafter and relates to any aspect of the operations, activities,
research, investigations or obligations of Company, or any of its respective
affiliates, including, without limitation: 
(1) the information described in Subsection (c) below; (2)
information pertaining to Company, the business of the Company, or the business
of any of Company’s respective affiliates; and (3) other confidential material
or information relating to the business, customers, suppliers, trade or
industrial practices, trade secrets, technology, know-how or intellectual
property of Company or any of Company’s affiliates (collectively, the
“Confidential Information”). All records, files, data, documents and the like
relating to suppliers, customers, costs, prices, systems, methods, personnel,
equipment and other materials relating to Company, or Company’s affiliates
(including, but not limited to, the Confidential Information), shall be and
remain the sole property of Company or Company’s affiliate, as the case may
be.  Any disclosure of Confidential
Information by the CEO shall include appropriate protection for the type of
information to protect the Company’s interests in the Confidential
Information.  Upon termination of CEO’s
employment under this Agreement, CEO shall not remove from Company’s premises,
or retain, any of the Confidential Information materials described in this
Section.

 

(c)                                  Development
of Information and Intellectual Property. 
During the Employment Term, CEO shall keep Company informed
of any and all customer lists,

 

7

 

supplier lists, manuals,
handbooks, inventions, discoveries, improvements, trade secrets, secret processes,
technology, know-how or intellectual property made or developed by CEO, in
whole or in part, or conceived of by CEO, alone or with others, which results
from CEO’s employment with Company or any work CEO may do for, or at the
request of, Company or which relates to the operations, activities, research,
investigations or obligations of Company (collectively, the “Information”).

 

CEO shall assign,
transfer and set over, and hereby assigns, transfers and sets over to Company,
all of CEO’s right, title and interest in and to any and all information, and
any patents, patent applications, copyrights, trademarks, trade names or other
intellectual property rights relating thereto, provided or conceived by CEO and
related to the information during the Employment Term.

 

(d)                                 Return of
Information.  Upon
termination of CEO’s employment for whatever reason, CEO shall return to or
leave with Company, without making or retaining copies thereof, all documents,
records, notebooks and other repositories containing Confidential Information.

 

(e)                                  Breach of
Covenants.  If CEO breaches
any of the covenants and agreements contained in this Section 9, then, in
addition to any other rights or remedies of Company hereunder, Company shall
have at its option the following specific rights and remedies: (1) CEO’s right
to any payments pursuant to Sections 3, 4, 5 and 8 may be terminated by
Company; (2) Company shall have the right to enforce any legal or equitable
remedy (including injunctive relief) that may be available to Company; and (3)
Company shall be entitled to an accounting and repayment of all profits,
compensation, commissions, remuneration, or other benefits that CEO has
directly or indirectly realized or may realize as a result of any such breach
and CEO acknowledges that any breach of the covenants and agreements under this
Section 9 will cause irreparable harm and injury to Company.

 

Except to the extent
otherwise expressly limited to a restricted period in Subsection (a) of
this Section, all covenants and provisions contained in this Section 9
shall survive any termination of CEO’s employment with Company.

 

10.                                 Notices.  Any notice or other communication required
or desired to be given under this Agreement shall be in writing and shall be
deemed duly given to a Party when personally delivered or when mailed by first
class mail, registered or certified, return receipt requested and postage
prepaid, addressed to the Party at the address set forth below or at such other
address as may be specified by the Party by a notice to the other Party:

 

If to Company:

 

Midwest Investors of
Renville

340 Dupont Avenue, P.O.
Box 615

Renville, MN  56284

 

8

 

Attention: Chairman of
the Board of Directors

 

If to CEO:

 

Mr. Dana Persson

8833 45th
Avenue N.W.

Pennock, MN  56279

 

11.                               Waiver: Remedies Cumulative.  No waiver of any right or option hereunder
by either Party shall operate as a waiver of any other right or option, or the
same right or option as respects any subsequent occasion for its exercise, or
of any legal remedy. No waiver by any Party of any breach of this Agreement or
of any agreement or covenant contained in this Agreement shall be held to
constitute a waiver of any other breach or a continuation of the same. All
remedies; provided by this Agreement are in addition to all other remedies
provided by it or applicable law.

 

12.                                Assignment.  This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of Company and shall survive
any change of control or change of ownership of Company. Neither this Agreement
nor any rights under this Agreement shall be assignable by CEO and any
purported assignment by CEO shall be void and of no force or effect.

 

13.                                Applicable Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.

 

14.                               Enforceability; Understanding;
Amendment.  The invalidity or
unenforceability of any term or provision of this Agreement shall not impair or
affect the other provisions of this Agreement, which shall remain in full force
and effect. This Agreement shall constitute the entire understanding between
Company and CEO concerning CEO’s employment and shall supersede any and all
previous agreements, whether written or oral, between the Parties concerning
such employment. This Agreement cannot be amended or modified in any respect
unless such amendment or modification is evidenced by a written instrument
executed by Company and CEO. The captions of the various sections of this
Agreement are not a part of the context hereof, but are inserted merely for
convenience in locating the different provisions hereof and shall be ignored in
construing this Agreement.

 

15.                               Indemnification.  Company agrees to indemnify and hold
harmless CEO for any matter relating to his performance of his obligations
under this Agreement, other than acts taken by CEO with the intention to harm
Company and except to the extent that CEO may incur criminal liability for his
acts. The obligation to indemnify and hold harmless includes, but is not
limited to, all pending litigation and claims against Company, its officers,
employees and directors. The expenses against which CEO is

 

9

 

indemnified include, but
are not limited to, all reasonable attorney fees and other costs associated
with legal representation.

 

16.                                 Opportunity
for Independent Legal Counsel.  This
Agreement has been prepared by legal counsel acting as representative solely to
Company. CEO confirms that he has been afforded the opportunity to review this
Agreement with his independent legal counsel.

 

IN WITNESS WHEREOF, the
Parties have executed multiple counterparts of this Agreement, each of which is
deemed to be an original, this
              day
of                       ,
2002.

 

 

	
  COMPANY:

  	
  CEO:

  
	
  MIDWEST INVESTORS OF RENVILLE, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Chairman of
  Board of Directors

  	
   

  	
  Dana Persson

  

 

10

 

EXHIBIT A

 

EMPLOYMENT AND NON-COMPETITION
AGREEMENT

BETWEEN

GOLDEN OVAL EGGS

AND

DANA PERSSON

 

TERMS AND CONDITIONS

 

	
  1.

  	
  Effective Date:

  	
   

  	
  July 1, 2002

  
	
  2.

  	
  Employment Term:

  	
   

  	
  From July 1, 2002
  until August 31, 2003

  
	
  3.

  	
  Base Salary:

  	
   

  	
  $192,000

  
	
  4.

  	
  Annual Bonus:

  	
   

  	
  Company shall pay CEO a
  bonus based upon the Company’s return on equity (“ROE”) calculated from the
  Company’s audited financial statements for each fiscal year during the
  Employment Term.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The bonus shall vary
  depending on Company’s ROE as calculated by dividing Company’s Net Income by
  Company’s Beginning Fiscal Year Equity. 
  Company’s Net Income for the purposes of this calculation shall be
  defined as the before-tax (tax at the Company level) net income if no bonus
  were to be paid.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  •                  2% of the Net Income that is
  generated between 0% and 15% ROE, plus

  
	
   

  	
   

  	
   

  	
  •                  3% of the Net Income that is
  generated greater than 15% and up to 18% ROE, plus

  
	
   

  	
   

  	
   

  	
  •                  4% of the Net Income that is
  generated greater than 18% and up to 20% ROE, plus

  
	
   

  	
   

  	
   

  	
  •                  5% of the Net Income that is
  generated greater than 20% ROE.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  An example of the bonus
  calculation for the past five (5) fiscal years is provided in Exhibit B.
  Bonus Cap:  $384,000.  The bonus shall be calculated as follows
  with a maximum total bonus in the amount of two times the base salary.

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Liquidation Bonus:

  	
   

  	
  2% of capital gain on
  Members’ Equity. Example provided in Exhibit C.

  

 

11

 

	
  6.

  	
  401K Retirement Account Match:

  	
   

  	
  The Company shall match
  CEO’s deposit into a Company approved retirement account under
  Section 5(e) up to a maximum of 6% of the Base Salary.

  

 

12

 

EXHIBIT B

 

EXAMPLE

FIVE YEAR BONUS CALCULATION

 

13

 

EXHIBIT C

 

EXAMPLE

CAPITAL GAIN ON MEMBERS’ EQUITY

 

14

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