Document:

Exhibit
10.21

 

AMENDMENT
NO. 4

TO

AMERICAN
CRYSTAL SUGAR COMPANY

2005
LONG TERM INCNETIVE PLAN

 

WHEREAS, the Board of
Directors of American Crystal Sugar Company (“ACSC”) previously adopted the
American Crystal Sugar Company 2005 Long Term Incentive Plan (the “Plan”),
generally effective January 1, 2005; and

 

WHEREAS, pursuant to Article 11
of the Plan, the Board of Directors has the authority to amend the Plan at any
time; and

 

WHEREAS, the Board of
Directors deems it necessary to amend the Plan with regard to annual Profit
Payments in the event the calculation of Profit Payments results in a loss and
to provide for repayment of benefits in the event of the restatement of ACSC’s
financial statements due to material noncompliance with financial reporting requirements.

 

NOW, THEREFORE, RESOLVED, that,
effective August 1,2010, the American Crystal Sugar Company 2005 Long Term
Incentive Plan be and it is hereby amended as follows:

 

1.             Section 6.5 of Article 6 of the Plan is hereby
amended in its entirety to read as follows:

 

“Section 6.5  Profit Payments.  Each Participant shall be eligible to receive
an annual profit payment, determined in accordance with this Section 6.5,
for each vested share of Phantom Stock held by the Participant under the Plan.
The annual profit payments payable to or on behalf of a Participant shall be
paid by the Company to the Participant, or the Participant’s Beneficiary, at
the end of each fiscal year unless the Participant has made an election to
defer the payments on forms provided by the Company.  If such an election has been made, no profit
payments shall be paid directly to the Participant or the Participant’s
Beneficiary under this Section 6.5, but shall be allocated to the
Participant’s Deferred Compensation Account and paid to the Trust for the
benefit of the Participant. The amount of each profit payment per share of
Phantom Stock shall be based on the difference between the average gross beet
payment per acre net of unit retains and the average cost of production (as
established by the Board and based upon reputable cost surveys) for the most
recent year for which data is available. 
In the event the average cost of production is greater than the average
gross beet payment per acre net of unit retains, thereby resulting in a loss
rather than a profit, a profit payment will not be paid to Participants for
that fiscal year.  Such loss will not
reduce the amount of any annual profit payments due and payable for future
fiscal years.  Profit payments shall be
made on the same schedule and with the same adjustments and partial payouts as
beet payments are made to the Company’s shareholders.”

 

2.             Section 6.6(a) of Article 6 of the Plan
is hereby amended in its entirety to read as follows:

 

 

“(a)         Each Participant
shall be eligible to receive an annual unit retain payment as determined by the
Company and subject to this Section 6.6. 
The annual unit retain payment payable to or on behalf of a Participant
shall be paid by the Company to the Participant, or the Participant’s
Beneficiary, unless the Participant has made an election to defer the payments
on forms provided by the Company.  If
such an election has been made, no unit retain payment shall be paid to the
Participant or the Participant’s Beneficiary under this Section 6.6, but
shall be allocated to the Participant’s Deferred Compensation Account and paid
to the Trust.  The amount of each unit
retain payment shall be equal to the amount subtracted from the gross beet
payment per acre for unit retains used in the calculation of the profit
payments in Section 6.5.  Each such
unit retain payment shall be determined during the fiscal year of the Company
as may correspond to the revolvement cycle, if any, for the Company’s preferred
shareholders; it being the intention that the amount of unit retains payment to
be paid to Participants will be paid on the same schedule as unit retains are
revolved to the Company’s preferred shareholders.   In the event the unit retain is zero or
negative, no unit retain payment will be paid to Participants for that fiscal
year, and will have no effect on the amount of any unit retain payments due and
payable for future fiscal years.

 

3.             Article VI of the Plan is
hereby amended by adding the following new Section 6.8 at the end thereof:

 

“6.8         Overpayments.  If the Company discovers that a significant
restatement of the Company’s financial results is required due to material
noncompliance with financial reporting requirements, the Company shall
recalculate the number of shares of Phantom Stock awarded to the Participant
and the amount of any annual profit payments paid to the Participant for the
current fiscal year and for the three immediately preceding fiscal years.  By way of example, but not by way of
limitation, if in FY2012 the Company discovers that a significant restatement
of the Company’s financial results is required for FY2009, such recalculation
shall be made for FY2009 through FY2012. 
However, if in FY2012 the Company discovers that a significant
restatement of the Company’s financial results is required for FY2008, no such
recalculation shall be made for FY2009 through FY2012, but not for FY2008.

 

If
such recalculation results in a lower number of shares of Phantom Stock, the
Participant’s vested shares of Phantom Stock shall be adjusted to reflect such
lower number of shares.  If such
recalculation results in a lower amount for any annual profit payments, the
Participant’s Deferred Compensation Account, if applicable, shall be adjusted
to reflect such lower value.  If, as a
result of such recalculation, the Participant received any payments for shares
of Phantom Stock that should not have been awarded to the Participant or if the
Participant received any excess annual profit payments (collectively, the “Excess
Payments”), the Participant shall pay to the Company the amount of such Excess
Payments within thirty (30) days of the date that the Company provides written
notice to the Participant specifying the amount of such Excess Payments.  Such notice shall be deemed given as of the
date of delivery or, if delivery is made by mail, three days after the notice
is mailed to the last known address of the Participant.  This Section 6.8 shall be administered
in accordance with the requirements

 

 

of Code Section 409A
and the regulations, notices and other guidance of general applicability issued
thereunder.”

 

4.             Except as expressly modified herein, all other
provisions of the Plan shall remain in full force and effect.

 

IN WITNESS WHEREOF, the Chief
Executive Officer of American Crystal Sugar Company has caused this instrument
to be executed as of this 31st day of July, 2010.

 

	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ David A. Berg

  
	
   

  	
   

  	
  David A. Berg, Chief
  Executive Officer

  

 

	
  STATE OF MINNESOTA

  	
  )

  
	
   

  	
  ) SS.

  
	
  COUNTY OF 

  	
  )

  

 

On this
             day of
                          ,
2010, before me personally appeared David Berg, to me personally known, who,
being by me first duly sworn, did depose and say that he the Chief Executive
Officer of American Crystal Sugar Company, the corporation named in the
foregoing instrument; that the seal (if any) affixed to said instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed (if sealed) on behalf of said corporation by authority of its Board of
Directors; and he acknowledged said instrument to be the free act and deed of
said corporation.

 

	
   

  	
   

  
	
   

  	
  Notary
  PublicExhibit 10.22

 

STATE OF NORTH DAKOTA

BEFORE THE

STATE DEPARTMENT OF HEALTH

 

	
  IN THE MATTER OF:

  	
   

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
   

  	
  ADMINISTRATIVE

  	
   

  
	
  American Crystal Sugar Company

  	
   

  	
  )

  	
   

  	
  CONSENT
  AGREEMENT

  	
   

  
	
  101 North Third Street N.

  	
   

  	
  )

  	
   

  	
   

  	
   

  
	
  Moorhead, MN 56560-1990

  	
   

  	
  )

  	
   

  	
  Case No.
  10-001 APC

  	
   

  

 

The North Dakota Department of
Health (“Department”), together with American Crystal Sugar Company (“Respondent”),
agree to settle this administrative action on the following terms:

 

PRELIMINARY STATEMENT

 

I.                                                                 Department is the state agency responsible for administering
and enforcing state’s air pollution control laws, N.D.C.C. ch. 23-25 and N.D.
Admin. Code art. 33-15, and has the authority to enter into this Administrative
Consent Agreement under N.D.C.C. chs. 23-25 and 28-32.

 

II.                                                             Under § 110 of the Clean Air Act, 42 U.S.C. § 7410, North
Dakota’s operating permit program was submitted to and approved by the
Environmental Protection Agency (EPA). See Clean Air Act Full Approval
of Operating Program; State of North Dakota, 64 Fed. Reg. 32433 (June 17,
1999).  Under EPA’s approval of North
Dakota’s operating permit program and other EPA delegations of authority,
certain air permits issued by North Dakota are federally enforceable.  Such permits are also enforceable by the
Department under N.D.C.C. §§ 23-25-03(12), 23-25-04.1(2), and 23-25-10.

 

III.                                                         Respondent owns and operates a sugar beet processing factory
or facility (“facility”) located near Hillsboro, North Dakota.

 

1

 

IV.                                                         The parties enter this Agreement to avoid the expense of
litigation and ensure prompt compliance with the state’s air pollution control
laws.  The Agreement is in the public
interest, will result in air quality improvements in the area where the
facility is located, and has been chosen as the most appropriate means of
resolving this matter that was addressed in Notice of Violation, Case No.
10-001 APC, dated February 26, 2010.

 

BACKGROUND

 

V.                                                             Respondent is a “person” within the meaning of N.D.C.C. ch.
23-25.  N.D.C.C. § 23-25-01(13).

 

VI.                                                         Respondent is subject to the requirements of N.D.C.C. ch.
23-25, and its implementing rules, N.D. Admin. Code art. 33-15.

 

VII.                                                     On June 11, 1997, the Department issued Respondent’s Air
Pollution Control Permit to Construct for a new Promill pulp dryer, with a
maximum process weight rate of 107.7 tons/hr consisting of pressed pulp and
sold fuel, to replace an existing pulp dryer that had been permitted under Air
Pollution Control Permit to Operate No. X75001. 
The particulate matter (PM) emission limit was specified in the permit
and was determined by a formula based on the process weight rate at the time of
testing.

 

VIII.                                                 Under N.D.C.C. § 23-25-04.1(1), Respondents must operate the
facility in compliance with the conditions of the permit.

 

IX.                                                        On December 3, 1998, Respondent tested the pulp dryer for
compliance with the PM emission limit of 50.2 lbs/hr while operating at a
process weight rate of 90.2 tons/hr. 
Compliance was demonstrated with an emission rate of 28.9 lbs/hr.

 

X.                                                            On May 6, 1999, the Department issued Respondent’s first
Title V Permit to Operate No. T5-X75001 which incorporated the new pulp 

 

2

 

dryer and the applicable
provisions from the Permit to Construct issued on June 11, 1997.

 

XI.                                                        On November 25, 2003, the Department issued Permit to
Construct No. 03024 which increased the maximum process weight rate of the pulp
dryer to 122.3 tons/hr.

 

XII.                                                    On October 8, 2007, Respondent tested the pulp dryer for
compliance with the PM emission limit of 51.8 lbs/hr while operating at a
process weight rate of 104.4 tons/hr. 
Compliance was demonstrated with an emission rate of 42.1 lbs/hr.

 

XIII.                                                On December 12, 2008, Respondent tested the pulp dryer for
compliance with the PM emission limit of 52.0 lb/hr while operating at a
process weight rate of 112.3 tons/hr.

 

XIV.                                                On February 12, 2009, the Department received a copy of the
official test report directly from the testing firm on behalf of Respondent.
The report showed that the pulp dryer failed to demonstrate compliance with the
PM emission limit of 52.0 lb/hr when tested on December 12, 2008.  The emission rate during the test was 71.0
lb/hr and exceeded the emission limit by 19.0 lb/hr.

 

XV.                                                    On February 23, 2009, according to Respondent, the dryer was
shut down for inspections.  During this
timeframe significant maintenance work was completed and included replacing
scrubber nozzles prior to conducting another test.

 

XVI.                                                On February 26, 2009, Respondent informed the Department by
letter stating that after several attempts to retest the dryer, the decision
was made to abort the compliance test. 
The decision was based on difficulties in maintaining the desired pulp
dryer throughput due to variations in coal supply and unsteady slice rates in
addition  to adverse weather conditions
of ice and snow.  The weather also posed
a safety concern for the testing firm employees accessing the stack with a 30 

 

3

 

below wind-chill factor.  Respondent requested approval from the
Department to delay retesting of the pulp dryer until the fall of 2009.  Respondent agreed to operate the dryer at a
process weight rate of less than or equal to 110.1 tons/hr until compliance
could be demonstrated at a higher process weight rate.  The 110.1 tons/hr rate was based on the
results of a satisfactory compliance test conducted in October 2007.

 

 XVII.                                         On March 3, 2009, the Department sent a letter to the
Respondent giving approval to delay retesting of the pulp dryer for PM
emissions and stating that the test must be conducted no later than November
15, 2009.  The letter also included a
process weight rate limit of 110.1 tons/hr that was not be exceeded pending
retesting at a higher process weight rate.

 

XVIII.                                        Respondent has indicated that the Hillsboro factory operated
the pulp dryer within the process weight rate limit of 110.1 tons/hr, and
Respondent believes that operating at the lower rate likely resulted in lower
emissions.

 

 XIX.                                            On October 20, 2009, Respondent tested the pulp dryer for
compliance with the PM emission limit of 51.5 lbs/hr while operating at a
process weight rate 102.7 tons/hr.

 

XX.                                                   On January 6, 2010, Respondent sent a letter to Department
enclosing a copy of the test report for the October 20, 2009 test and indicated
if there were any questions to contact Respondent.  The letter did not mention that the pulp
dryer failed to demonstrate compliance with the PM emission limit, and the
letter did not indicate any actions that Respondent would take to demonstrate
compliance.

 

XXI.                                               On January 8, 2010, the Department sent an email to
Respondent indicating that the test on October 20, 2009 showed that the pulp
dryer failed to demonstrate compliance. 
The PM emission limit of 51.5 lb/hr was exceeded by 14.5 lb/hr with an
emission rate of 66.0 lb/hr.  The 

 

4

 

email also indicated that a
Notice of Violation would be recommended for issuance by the Department to
Respondent.

 

XXII.                                           On February 19, 2010, Respondent sent an email to the
Department, followed by a letter dated February 22, 2010 outlining plans to
shut down the pulp dryer on March 3, 2010, to inspect furnace, cyclones and the
scrubber internals, and to replace all of the scrubber nozzles.  An engineering test would be conducted during
the week of March 8, 2010 to determine internally what adjustments should be
made to the operating plan to achieve compliance.  Plans were made with a testing firm to
conduct compliance testing during the week of March 29, 2010.

 

XXIII.                                       On March 3, 2010, according to Respondent, extensive work on
the pulp dryer was completed; the corrective action plan was implemented prior
to scheduled engineering tests and future compliance testing.

 

XXIV.                                       On March 30, 2010, Respondent tested the pulp dryer for
compliance with the PM emission limit of 51.3 lbs/hr while operating at a
process weight of 100.37 tons/hr. 
Compliance was demonstrated with an emission rate of 22.15 lb/hr.

 

VIOLATIONS

 

XXV.                                           Respondent’s failure to comply with the pulp dryer PM emission
limit of 52.0 lbs/hr specified in Condition 3 of Title V Permit to Operate No.
T5-X75001 during a failed compliance test on December 12, 2008, violated
N.D.C.C. § 23-25-04.1(1).

 

 XXVI.                                    Respondent’s failure to comply with the pulp dryer PM
emission limit of 51.5 lbs/hr specified in Condition 3 of Title V Permit to
Operate No. T5-X75001 during a failed compliance test on October 20, 2009,
violated N.D.C.C. § 23-25-04.1(1).

 

5

 

SETTLEMENT TERMS

 

NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants and conditions in this Agreement, and
desiring to be legally bound, the Parties agree as follows:

 

XXVII.                                   Respondent agrees to pay an administrative penalty of One
Hundred Three Thousand, One Hundred Eighty-One Dollars ($103,181) to the
Department not later than September 30, 2010. 
Payment shall be in a check made payable to the State of North Dakota,
Department of Health, shall reference Case No. 10-001 APC, and shall be
directed to the attention of L. David Glatt, Environmental Health Section
Chief, 918 E. Divide Ave., Bismarck, ND 58501-1947.

 

XXVIII.                               Respondent agrees to test the pulp dryer not later than
November 30, 2010, for compliance with the PM emission limit specified in
Condition 3 of Permit to Operate No. T5-X75001.

 

ADDITIONAL TERMS

 

XXIX.                                      Respondent agrees that it was properly notified of the
violations listed herein.

 

XXX.                                          Respondent acknowledges that, with regard to violations
listed herein, it is knowingly and voluntarily waiving the rights and
procedures that would otherwise protect it and that it would have in any formal
administrative adjudicatory proceeding or any civil action in a court of law,
including the right to the filing of a notice of intent, to present evidence and
witnesses on their behalf, to cross-examine Department’s witness, to a jury
trial, and to administrative and judicial review.

 

XXXI.                                      Respondent agrees that an administrative order may be
entered incorporating the Agreement’s terms, and agrees that such an order may
be enforced by a court of competent jurisdiction.  Respondent agrees that it will not contest
Department’s jurisdiction to compel compliance with such an order in any
subsequent enforcement 

 

6

 

proceedings.  Nothing herein shall be construed as limiting
Department’s right to seek penalties for violations of such an order.

 

XXXII.                                  Any judicial action brought by either party to enforce or
adjudicate any of the Agreement’s terms, or an order incorporating the
Agreement’s terms, shall be brought in the Burleigh County Court in the State
of North Dakota (South Central Judicial District).

 

XXXIII.                              If any term of this Agreement is declared by a court having
jurisdiction to be illegal or enforceable, the validity of the remaining terms
will not be affected and, if possible, the rights and obligations of the
parties are to be construed and enforced as if the Agreement did not contain
that term.

 

XXXIV.                              The Agreement shall constitute full settlement of the violations
listed herein, but does not limit Department from taking enforcement action
concerning other violations.

 

XXXV.                                  No failure by Department to enforce any of the Agreement’s
terms after any breach or default will be deemed as a waiver of its rights with
regard to that breach or default, nor will such failures be construed as a
waiver of the right to enforce all of the Agreement’s terms on any further
breach or default.

 

XXXVI                                 This Agreement constitutes the entire agreement between the
parties.  Except as otherwise provided in
the Agreement, no amendment, alteration, or addition to the Agreement shall be
binding unless reduced to writing and signed by both parties.

 

XXXVII.                          The Agreement shall apply to, and be binding on, the
parties, their officers, agents, servants, employees, successors, and assigns.

 

XXXVIII.                      No change in ownership of any property covered by the
Agreement shall in any way alter, diminish, or otherwise affect Respondent’s
obligations and responsibilities under the Agreement.

 

7

 

XXXIX.                             Each party shall bear its own costs incurred in this action,
including attorney fees.

 

XXXX.                                 Respondent enters into the Agreement freely and voluntarily.

 

XXXXI.                             The Agreement becomes effective when signed by both parties.

 

	
  DEPARTMENT OF HEALTH

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ L. David Glatt  P.E.

  	
   

  	
  September 7, 2010

  	
   

  
	
  By:

  	
  L. David Glatt, P.E.

  	
   

  	
  Date

  	
   

  
	
   

  	
  Environmental Chief

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE OF NORTH DAKOTA

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
   

  	
   

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  

 

The foregoing instrument was
acknowledged before me this on this
           day of
                            ,
2010, by L. David Glatt.

 

	
   

  	
   

  	
   

  	
  (Seal)

  
	
  Notary Public

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  AMERICAN CRYSTAL SUGAR COMPANY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Joseph J. Talley

  	
   

  	
  September 1, 2010

  	
   

  
	
  By:

  	
  Joseph J. Talley

  	
   

  	
  Date

  	
   

  
	
   

  	
  COO

  	
   

  	
   

  	
   

  
								

 

8

 

	
  STATE OF MINNESOTA

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF CASS

  	
  )

  	
   

  

 

The foregoing instrument was
acknowledged before me on this
              day
of                           ,
2010, by                                     ,
                                    of
American Crystal Sugar Company, a Minnesota cooperative association, on behalf of
the cooperative association.

 

 

	
   

  	
   

  
	
  Notary Public

  	
   

  
	
  My commission expires on

  	
   

  

 

9

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