AMERICAN ETHANOL, LLC WILLIAM MAENDER EXECUTIVE EMPLOYMENT AGREEMENT
AMERICAN
ETHANOL, LLC
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ EXECUTIVE EMPLOYMENT AGREEMENT
This
Agreement is made by and between American Ethanol, LLC, a California limited
liability corporation (the “Company”), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“Executive”) to be
effective as of January 12, 2006 (the “Effective Date”).
1. Duties
and Scope of Employment.
(a) Position;
Employment Commencement Date; Duties.
Executive’s employment with the Company pursuant to this Agreement is effective
as of January 12, 2006 (the “Employment Commencement Date”). On and after the
Employment Commencement Date, the Company shall employ the Executive as the
Chief Financial Officer of the Company reporting to the Board of Directors
of
the Company (the “Board”). During
the Employment Term (as defined in section 2 herein), Executive shall render
such business and professional services in the performance of his duties as
are
consistent with Executive’s position within the Company, and as shall reasonably
be assigned to him by the Board.
(b) Obligations.
During
the Employment Term, Executive shall devote his full business efforts and time
to the Company. Executive agrees, during the Employment Term, not to actively
engage in any other employment, occupation or consulting activity for any direct
or indirect remuneration without the prior approval of the Board; provided,
however, that Executive may serve in any capacity with any civic, educational
or
charitable organization, or as a member of corporate boards of directors or
committees thereof.
2. Employment
Term.
It is
intended that the employment arrangement contemplated by this Agreement shall
continue until the third anniversary of the Effective Date (such three year
period being referred to herein as the “Employment Term”). Notwithstanding the
foregoing, the parties agree that neither this Agreement nor any provision
herein is intended to guarantee the continuation of Executive’s employment for
the duration of the Employment Term. In the event that Executive’s employment
with the Company terminates prior to the expiration of the Employment Term
for
any reason, the parties agree that Executive shall be entitled to receive only
those benefits that are expressly provided by this Agreement in such
circumstances.
3. Employee
Benefits.
During
the Employment Term, Executive shall be eligible to participate in the employee
and fringe benefit plans maintained by the Company that are applicable to other
senior management to the full extent provided for under those plans for the
position held by the Executive.
4. Vacation.
During
the Employment Term, Executive shall have three weeks of paid vacation per
year.
The Company’s vacation policy may be revised from time to time by action of the
Board of Directors. In the event of termination, any unused vacation weeks
shall
be paid as salary continuation.
1
5. Expenses.
While
Executive is employed during the Employment Term, the Company will reimburse
Executive for reasonable travel, entertainment or other expenses incurred by
Executive in the furtherance of or in connection with the performance of
Executive's duties hereunder, in accordance with the Company's expense
reimbursement policy as in effect from time to time.
6. Compensation.
(a) Base
Salary.
While
employed by the Company, the Company shall pay the Executive as compensation
for
his services a base salary at the annualized rate of One Hundred Eighty Thousand
($180,000) per year (the “Base Salary”). Such salary shall be paid periodically
in accordance with normal Company payroll practices and subject to required
withholding.
(b) Bonus.
Executive shall be entitled to receive, within 90 days after the end of each
year, an annual bonus (the “Bonus”) of up to $50,000 based upon Executive’s
performance and the Company’s attainment of objectives established by the
Compensation Committee of the Board. Except as permitted under Section 7,
Executive must be employed by the Company during the entire applicable bonus
period for the payment of the Bonus. With respect to any subjective milestones,
the determination of whether Executive has attained the mutually agreed upon
milestones for the Bonus shall be reasonably determined by the Compensation
Committee.
(c) Unit
Repurchase.
The
Company hereby acknowledges that Executive purchased 200,000 units of the
Company on January 12, 2006 at a purchase price of $0.01 per unit (the “Units”).
As of January 12, 2006, the Company and Executive have entered into a Restricted
Unit Purchase Agreement (the “Repurchase Agreement”) pursuant to which the
Company will have the right, in the event of the termination of the Executive’s
employment with the Company, to repurchase the Units at a purchase price of
$0.01 per Unit on the terms and conditions set forth in the Repurchase
Agreement.
(d) Severance.
(i) Involuntary
Termination Other Than for Cause; Constructive Termination Prior to Change
of
Control.
If,
prior to a Change of Control, Executive’s employment with the Company is
Constructively Terminated or involuntarily terminated by the Company other
than
for Cause (as defined below), Executive’s death, or Executive’s Total
Disability, then, subject to Executive executing and not revoking a standard
form of mutual release of claims with the Company,
Executive
shall be entitled to receive continuing payments of severance pay (less
applicable withholding taxes) at the rate equal to Executive’s Base Salary rate,
as then in effect, for a period of 6 months from the date of such termination
in
accordance with the Company’s normal payroll practices. In addition to the
severance benefits set forth in subsection (i) and (ii) above, Executive shall
receive at the Company’s expense 100% of Company-paid health, dental and vision
insurance benefits at the same level of coverage as was provided to Executive
immediately prior to the termination of Executive’s employment with the Company
(“Company-Paid Coverage”). If such coverage included Executive’s dependents
immediately prior to Executive’s termination, such dependents shall also be
covered at the Company’s expense. Company-Paid Coverage shall continue until the
earlier of (i) 6 months following the date of the termination of Executive’s
employment (the “Benefits Termination Date”), or (ii) the date upon which
Executive, or if such coverage includes Executive’s dependents, Executive and
Executive’s dependents, become covered under another employer’s group health,
dental and vision insurance benefit plans. In addition to the severance benefits
set forth above, the Company’s right to repurchase the Units pursuant to the
Repurchase Agreement shall lapse.
2
(ii) Involuntary
Termination Other Than for Cause; Constructive Termination On or Following
Change of Control.
If, on
or following a Change of Control, Executive’s employment with the Company is
Constructively Terminated or involuntarily terminated by the Company other
than
for Cause, Executive’s death, or Executive’s Total Disability, then, subject to
Executive executing and not revoking a standard form of mutual release of claims
with the Company, the Company shall forgo its rights under the Repurchase
Agreement.
(1)
(iii) Cause
Definition.
For the
purposes of this Agreement, “Cause” means (1)
Executive’s material, willful and continuing breach of his obligations to the
Company set forth in the employment agreement after thirty (30) days
written notice from the Company specifying the nature of Executive’s breach and
demanding that such breach be remedied (unless such breach by its nature cannot
be cured, in which case notice and an opportunity to cure shall not be
required); (2) Executive’s conviction of a felony that is injurious to the
Company or its business; or (3) act or acts of dishonesty by Executive that
are injurious to the Company or its business.
(iv) Constructive
Termination Definition.
For the
purposes of this Agreement,
“Constructive Termination” means, without Executive’s written consent, (i) a
material reduction in Executive’s salary or benefits; provided, however, that a
reduction in Executive’s salary or benefits will not constitute a Constructive
Termination if it is part of and proportional to an Executive team reduction
in
salary or benefits, (ii) a material diminution of Executive’s officer title,
duties, authority or responsibilities as in effect immediately prior to such
diminution.
(v) Change
of Control Definition.
For the
purposes of this Agreement, “Change of Control” means, in one or a series of
transactions: (1) any reorganization, merger or other transaction in which
the unitholders of the Company immediately prior to such transaction own less
than fifty percent (50%) of the voting power of the surviving or continuing
entity or the entity controlling the surviving or continuing entity; (2) a
sale of all or substantially all of the assets of the Company; (3) a change
in the majority of the Board not approved by at least two-thirds of the
Company’s directors in office prior to such change; or (4) the adoption of
any plan of liquidation providing for the distribution of all or substantially
all of the Company’s assets. Notwithstanding the foregoing, an equity
transaction the primary purpose of which is capital raising shall not constitute
a Change of Control for purposes of this Agreement.
(vi) Total
Disability Definition.
For the
purposes of this Agreement, “Total Disability” shall mean Executive’s mental or
physical impairment which has or is likely to prevent Executive from performing
the responsibilities and duties of his position for three (3) months or more
in
the aggregate during any six (6) month period. Any question as to the existence
or extent of Executive’s disability upon which the Executive and the Company
cannot agree shall be resolved by a qualified independent physician who is
an
acknowledged expert in the area of the mental or physical impairment, selected
in good faith by the Board and Executive (or his personal
administrator).
3
(vii) No
Mitigation.
Except
as specifically provided herein, the Executive shall not be required to mitigate
the value of any severance benefits contemplated by this Agreement, nor shall
any such benefits be reduced by any earnings or benefits that the Executive
may
receive from any other source.
(viii) Voluntary
Termination other than pursuant to a Constructive Termination; Involuntary
Termination for Cause.
If,
during the Employment Term, the Executive's employment is terminated by the
Company for Cause, or by Executive for any reason, other than death, Total
Disability or pursuant to a Constructive Termination, then the Company shall
have the right to repurchase the Units as set forth in the Repurchase Agreement
and all payments of compensation by the Company to Executive hereunder will
terminate immediately (except as to amounts already earned).
(ix) Involuntary
Termination on Death. If, during the Employment Term, the Executive's employment
is terminated by the Company as a result of Executive’s death, then the
Company’s rights under the Repurchase Agreement shall terminate as to 50% of the
Units repurchasable at the time of Executive’s death.
7. Assignment.
This
Agreement shall be binding upon and inure to the benefit of (a) the heirs,
beneficiaries, executors and legal representatives of Executive upon Executive’s
death and (b) any successor of the Company. Any such successor of the
Company shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, “successor” shall include any
person, firm, corporation or other business entity which at any time, whether
by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company.
8. Notices.
All
notices, requests, demands and other communications called for hereunder shall
be in writing and shall be deemed given if (i) delivered personally or by
facsimile, (ii) one (1) day after being sent by Federal Express or a
similar commercial overnight service, or (iii) three (3) days after being
mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors in interest at the following
addresses, or at such other addresses as the parties may designate by written
notice in the manner aforesaid:
|
If
to the Company:
|
American
Ethanol, LLC
|
|
Attn:
▇▇▇▇ ▇▇▇▇▇▇, Chairman
|
|
|
▇▇▇▇▇
▇. ▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
|
|
|
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
If
to Executive:
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇.
|
|
|
▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Fax:
|
|
| or at the last residential address known by the Company. | |
4
9. Proprietary
Information Agreement.
Executive agrees to enter into the Company’s standard Employment, Confidential
Information and Invention Assignment Agreement (the “Proprietary Information
Agreement”) upon commencing employment hereunder.
10. Entire
Agreement.
This
Agreement, the option agreement, the Repurchase Agreement (if applicable),
the
employee benefit plans referred to in Section 3 and the Proprietary
Information Agreement represent the entire agreement and understanding between
the Company and Executive concerning Executive’s employment relationship with
the Company, and supersede and replace any and all prior agreements and
understandings concerning Executive’s employment relationship with the
Company.
11. No
Oral Modification, Cancellation or Discharge.
This
Agreement may only be amended, canceled or discharged in writing signed by
Executive and the Chairman of the Board (or in the event that Executive is
Chairman, then a duly authorized representative of the majority of the members
of the Board).
12. Withholding.
The
Company shall be entitled to withhold, or cause to be withheld, from payment
any
amount of withholding taxes required by law with respect to payments made to
Executive in connection with his employment hereunder.
13. Governing
Law.
This
Agreement shall be governed by the laws of the State of California without
reference to rules relating to conflict of law.
5
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of January
12,
2006:
|
AMERICAN
ETHANOL, LLC
|
|
/s/
▇▇▇▇ ▇▇▇▇▇▇
|
|
▇▇▇▇
▇▇▇▇▇▇
|
|
Chairman/CEO
|
|
EXECUTIVE
|
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
6