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SECURITIES AND EXCHANGE COMMISSION
Exchange Act of 1934 (Amendment No. )
Filed by a Party other than the Registranto
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 |
þ | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: | ||
(2) | Aggregate number of securities to which transaction applies: | ||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
(4) | Proposed maximum aggregate value of transaction: | ||
(5) | Total fee paid: | ||
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: | ||
(2) | Form, Schedule or Registration Statement No.: | ||
(3) | Filing Party: | ||
(4) | Date Filed: | ||
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13238 East Aspen Road
Adams, NE 68301
NOTICE OF ANNUAL MEETING OF MEMBERS AND IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE MEMBER MEETING TO BE HELD ON FEBRUARY 1, 2008
To our Members:
The 2008 Annual Meeting of Members (the “2008 Annual Meeting”) of E Energy Adams, LLC (the “Company”) will be held on Friday, February 1, 2008, at the Holiday Inn Express Hotel and Suites, 4005 North 6th Street, Beatrice, Nebraska, 68310. Registration for the Annual Meeting will begin at 12:00 p.m. The 2008 Annual Meeting will commence at approximately 1:00 p.m. The purposes of the meeting are to:(1) Elect nine (9) Directors to our Board of Directors; (2) Approve the Amendments to the Operating Agreement; and (3) Transact such other business as may properly come before the 2008 Annual Meeting or any adjournments thereof. The Board of Directors recommends a vote FOR the election of its nominees for Directors and FOR the amendments to the Operating Agreement.
• | This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting; |
• | The proxy statement, proxy card and annual report to Members are available at www.eenergyadams.com under the “Investor Relations” tab; and |
• | If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy by calling our office at (877) 988-4655 or emailing Laurie Leners at lleners@eenergyadams.com on or before January 25, 2008, to facilitate timely delivery. |
If you have any questions regarding the information in the proxy statement or completion of the proxy card located on our website at www.eenergyadams.com under the “Investor Relations” tab, or if you need directions to attend the meeting and vote in person, please call Laurie Leners in our office at (877) 988-4655 or email her at lleners@eenergyadams.com.
Only Members listed on the Company’s records at the close of business on December 21, 2007 are entitled to notice of the Annual Meeting and to vote at the 2008 Annual Meeting and any adjournments thereof. For your proxy card to be valid, it must be received by the Company no later than 5:00 p.m. on Thursday, January 31, 2008.
All Members are cordially invited to attend the 2008 Annual Meeting in person. However, to assure the presence of a quorum, the Board of Directors requests that you promptly sign, date and return the proxy card, which is solicited by the Board of Directors, whether or not you plan to attend the meeting. The proxy card will not be used if you attend and vote at the meeting in person. You may fax the proxy card to the Company at (402) 988-5205 or mail it to us at 13238 East Aspen Road, Adams, NE 68301.
By order of the Board of Directors,
Jack L. Alderman
Chairman of the Board
Adams, Nebraska
December 21, 2007
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13238 East Aspen Road
Adams, NE 68301
Annual Meeting of Members
Friday, February 1, 2008
1:00 p.m.
Q: | Why did I receive this proxy statement? | |
A: | The Company is soliciting your proxy vote at the 2008 Annual Meeting because you were a Member of the Company at the close of business on December 21, 2007, the record date, and are entitled to vote at the meeting. | |
Q: | When and where is the 2008 Annual Meeting? | |
A: | The 2008 Annual Meeting will be held on Friday, February 1, 2008 at Holiday Inn Express and Suites, 4005 North 6th Street, Beatrice, Nebraska 68310. Registration for the meeting will begin at 12:00 p.m. The Annual Meeting will commence at approximately 1:00 p.m. | |
Q: | What am I voting on? | |
A: | You are voting on: |
• | The election of three (3) Group I Directors; | ||
• | The election of three (3) Group II Directors; | ||
• | The election of three (3) Group III Directors; and | ||
• | The approval of four (4) amendments to the Operating Agreement. |
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Q: | What is the effect of the amendments to the Operating Agreement if passed? |
Q: | How many votes do I have? | |
A: | On any matter which may properly come before the meeting, each Member entitled to vote will have one vote for each membership unit owned of record by such Member as of the close of business on December 21, 2007. However, any Member who is authorized to appoint a Director pursuant to Section 5.3(c) of the Operating Agreement is not entitled to vote for the election of any other Directors that Members are otherwise entitled to elect. Appointing Members vote on the proposed amendments to the Operating Agreement. | |
Q: | Do I have dissenters’ rights? | |
A: | Pursuant to Section 6.15 of the Operating Agreement, Members have no dissenters’ rights. | |
Q: | What is the voting requirement to elect the Directors? | |
A: | In the election of Directors, the three nominees in Group I, the three nominees in Group II and the three nominees in Group III receiving the greatest number of votes relative to the other nominees in the group will be elected. The presence (in person or by proxy or by mail ballot) of Members representing an aggregate of at least twenty-five percent (25%) of the Membership Voting Interests is required for the election of Directors. A Member who is authorized to appoint a Director pursuant to Section 5.3(c) of the Operating Agreement is not entitled to vote for the election of any other Directors that Members are entitled to elect and will not be counted in the determination of quorum regarding the election of Directors. |
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Q: | What is the voting requirement to approve the amendments to the Operating Agreement? | |
A: | Provided a quorum of at least twenty-five percent (25%) of the Membership Voting Interests is present, the affirmative vote by a majority of the Membership Voting Interests represented at the 2008 Annual Meeting (whether in person, by proxy, or by mail ballot) will result in the amendments being approved. | |
Q: | How many membership units are outstanding? | |
A: | At the close of business on December 21, 2007, there were 5,133 outstanding membership units. Five hundred and twenty (520) of the total 5,133 outstanding membership units are held by Members pursuant to Sections 5.1(a) and 5.3(c) of the Operating Agreement may not vote for Directors in the general election. | |
Q: | What is the effect of an abstention? | |
A: | Abstentions will be counted when determining whether a quorum is present. Abstentions for Director elections, however, will not be counted either for or against any nominee because Directors are elected by plurality vote, meaning that the nominees receiving the most votes relative to the other nominees in the group will be elected. Because amendments to the Operating Agreement must be approved by the affirmative vote of a majority of the Membership Voting Interests represented at the 2008 Annual Meeting, abstentions will be counted as a voteagainstthe amendments. | |
Q: | How do I vote? | |
A: | Membership units can be voted only if the holder of record is present at the 2008 Annual Meeting either in person or by proxy. You may vote using any of the following methods: |
• | Proxy Card.The enclosed proxy card is a means by which a Member may authorize the voting of his, her, its or their membership units at the 2008 Annual Meeting. The membership units represented by each properly executed proxy card will be voted at the 2008 Annual Meeting in accordance with the Member’s directions. The Company urges you to specify your choices by marking the appropriate boxes on your proxy card. After you have marked your choices, please sign and date the proxy card and mail the proxy card to the Company at 13238 East Aspen Road, Adams, NE 68301 or fax the proxy card to the Company at (402) 988-5205. In order for your vote to count, the Company must receive it by 5:00 p.m. local time on Thursday, January 31, 2008. | ||
• | In person at the 2008 Annual Meeting.All Members of record as of December 21, 2007 may vote in person at the 2008 Annual Meeting. |
Q: | What can I do if I change my mind after I vote my units? | |
A: | You may revoke your proxy by: |
• | Voting in person at the 2008 Annual Meeting; | ||
• | Giving personal or written notice of the revocation, which is received by Jack L. Alderman, Chairman of the Company’s Board of Directors, at the Company’s offices at 13238 East Aspen Road, Adams, Nebraska, 68301 by 5:00 p.m. local time on Thursday, January 31, 2008; or | ||
• | Giving personal or written notice of the revocation to the Company’s Secretary, Dennis L. Boesiger, at the commencement of the 2008 Annual Meeting. |
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Q: | What happens if I mark too few or too many boxes on the proxy card? | |
A: | If you do not mark any choices for Group I, Group II or Group III Directors on the proxy card, then your votes will be deemed abstentions. If you mark fewer than three (3) choices for Group I Directors, fewer than three (3) choices for Group II Directors, or fewer than three (3) choices for Group III Directors, the proxies will vote your units ONLY for the persons you mark as your choices. If you vote for more than three nominees in any group of nominees, then your votes will be counted as votingFORthose nominees recommended for election by the Board of Directors. | |
If you fail to mark a vote, then the proxies solicited by the Board of Directors will be voted FOR the amendment to the Operating Agreement. If you do not submit a proxy card or attend the meeting, or if you abstain from voting, your vote will be counted as a vote against the amendment. | ||
Q: | Who can attend the 2008 Annual Meeting? | |
A: | All Members as of the close of business on the record date, which is December 21, 2007 may attend the 2008 Annual Meeting. | |
Q: | What is the Record date for the 2008 Annual Meeting? | |
A: | December 21, 2007. | |
Q: | Who will count the votes? | |
A: | Laurie Leners will count the votes and the Company’s Secretary, Dennis Boesiger, will supervise the process. | |
Q: | What constitutes a quorum? | |
A: | The presence in person or by proxy of persons holding at least 25% of the issued and outstanding units is required to constitute a quorum. Because on December 21, 2007 the Company had 5,133 issued and outstanding membership units, the presence of 1,284 membership units will constitute a quorum for the approval of the amendments to the Operating Agreement. Any Member authorized to appoint a Director pursuant to Section 5.3(c) of the Operating Agreement will not be counted in the determination of quorum for the election of Directors. As a result, the presence of 1,154 membership units will constitute a quorum for the election of Directors. If you submit a proxy or appear at the meeting, then you will be considered part of the quorum. | |
Q: | Who is paying for this proxy solicitation? | |
A: | The entire cost of this proxy solicitation will be borne by the Company. The cost will include the cost of supplying necessary additional copies of the solicitation materials for beneficial owners of membership units held of record by brokers, dealers, banks and voting trustees and their nominees and, upon request, the reasonable expenses of such record holders for completing the mailing of such material and report to such beneficial owners. |
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Q: | How do I nominate a candidate for election as a Director at next year’s Annual Meeting? | |
A: | The Group I Directors will stand for election at the 2009 Annual Meeting. Nominations for Director seats are made by a nominating committee appointed by the Board of Directors. In addition, a Member may nominate a candidate for Director by following the procedures explained in this proxy statement on Page 20 and Section 5.3 of the Operating Agreement. Section 5.3 of the Operating Agreement requires that written notice of a Member’s intent to nominate an individual for Director must be given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Company not less than 60 days nor more than 90 days prior to the annual meeting of the Company. | |
Q: | What is a Member proposal? | |
A: | A Member proposal is your recommendation or requirement that the Company and/or the Board of Directors take action, which you intend to present at a meeting of the Company’s Members. Your proposal should state as clearly as possible the course of action that you believe the Company should follow. If your proposal is included in the Company’s proxy statement, then the Company must also provide the means for Members to vote on the matter via the proxy card. The deadlines and procedures for submitting Member proposals are explained below on Page 7 of this proxy statement. The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any proposal that does not comply with these and other applicable requirements. |
A: | We intend to hold our 2009 Annual Meeting on or about January 30, 2009. In order to be considered for inclusion in next year’s proxy statement, Member proposals must be submitted in writing to the Company by August 24, 2008. The Company suggests that proposals for the 2009 Annual Meeting of Members be submitted by certified mail-return receipt requested. The proposal must be in accordance with the provision of Rule 14a-8 promulgated by the Securities and Exchange Commission under the Exchange Act of 1934. | |
Members who intend to present a proposal at the 2009 Annual Meeting of Members without including such proposal in the Company’s proxy statement must provide the Company notice of such proposal no later than November 6, 2008. The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any proposal that does not comply with these and other applicable requirements. | ||
If the Company does not receive notice of a Member proposal intended to be submitted to the 2009 Annual Meeting of Members by November 6, 2008, the persons named on the proxy card accompanying the notice of meeting may vote on any such proposal in their discretion only if the Company includes in its proxy statement an explanation of its intention with respect to voting on the proposal. |
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Approval of Amendment #1 to the Operating Agreement
to Allow the Board of Directors to Change the Fiscal Year Without a Vote of the Members
Approval of Amendment #2 to the Operating Agreement
to Amend the Section 5.3(b) of the Operating Agreement regarding Director Vacancies
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Approval of Amendment #3 to the Operating Agreement
to Change the Percentage of Directors Required to Constitute a Quorum
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Approval of Amendment #4 to the Operating Agreement
to Allow for the Removal of Directors Without Cause by the
Members as well as to Allow the Directors to Remove an Elected Director for Cause.
5.23 | Removal of Directors. |
a. | By the Members. The Members may remove an elected Director without cause, by the affirmative vote of two-thirds (2/3) of the then outstanding Membership Voting Interests of the Company at a meeting called for that purpose (in person, by proxy or by mail ballot), if notice has been given that a purpose of the meeting is such removal. The Members may also remove an elected Director for cause in accordance with the procedures set forth in Section 6.10, if notice has been given that a purpose of the meeting is such removal. | ||
b. | By the Directors. A super majority of seventy-five percent (75%) of all Directors authorized to vote may remove any Director (whether elected or appointed), for cause, at a meeting called for that purpose, if proper notice has been given that a purpose of the meeting is such removal. In the case of removal of an elected Director by a super majority of seventy-five percent (75%) of all Directors authorized to vote, a majority of the remaining Directors shall appoint a new Director to fill the vacancy until the next Annual or Special Meeting of the Members. For purposes of this Section 5.23(b), the phrase “for cause” shall be interpreted to include conviction of a felony, engagement in fraudulent or dishonest conduct, or gross abuse of authority or discretion with respect to the Company. | ||
c. | Removal of an Appointed Director. In the case of the removal of an appointed Director, the Appointing Member shall appoint a replacement within 30 days in accordance with Section 5.3(c). |
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Election of Directors
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Year First Became | ||||||||||||
Name and Principal Occupation | Age | A Director | Term Expires | |||||||||
Jack L. Alderman, President of Alderman Construction, Inc., Alderman Property Management Inc. and sole proprietor of Alderman Properties | 56 | 2005 | 2008 | |||||||||
Duane Wollenburg, Owner of Swan City Farms, Inc. and President of Cooperative Railways, LLC | 54 | 2005 | 2008 | |||||||||
Dennis L. Boesiger, Vice President/General Manager/Part Owner of Midwest Livestock Systems, Inc. | 69 | 2005 | 2008 | |||||||||
Ken Brinkman, Dealer Principal of Brinkman Brothers, Inc. | 52 | 2005 | 2008 | |||||||||
Steve Dean, Farmer and Sales Representative for Pioneer Hi-Bred International | 58 | 2005 | 2008 | |||||||||
Ron Miller, Farmer and Owner/Operator of a retail farm machinery business and a commercial trucking company. | 66 | 2005 | 2008 | |||||||||
Bill Riechers, Project Coordinator and Consultant for Value Add Ventures, LLC | 55 | 2005 | 2008 | |||||||||
Tom Roode, President of Roode Packing Company and Owner or Roode Feedlot, Inc. | 61 | 2005 | 2008 | |||||||||
David Lukens, Senior Vice President of Lockton Companies, LLC | 46 | — | — |
(1) | Pursuant to Section 5.3(c) of the Operating Agreement, Ethanol Capital Partners, LLC, Series G will be appointing Scott Brittenham to the Company’s Board of Directors. Additionally, Western Ag Holdings, LLC will be appointing Lawrence Peck to the Company’s Board of Directors, pursuant to Section 5.3(c) of the Operating Agreement. |
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Amount and | ||||||||
Nature of | ||||||||
Beneficial | Percent of | |||||||
Title of Class | Name and Address of Beneficial Owner | Owner(1) | Class | |||||
Membership units | Ethanol Capital Partners LP Series G and Ethanol Capital Partners LP Series E, Rockefeller Center(1) 1230 Avenue of the Americas, 7th Floor New York, New York 10020 | 400 units | 7.78 | % | ||||
Totals: | 400 units | 7.78 | % |
(1) | Ethanol Capital Partners LP Series G is the record owner of 320 membership units. Ethanol Capital Partners LP Series E is the record owner of 80 membership units. Pursuant to Rule 13d of the Securities and Exchange Act of 1934, Ethanol Capital Partners LP Series G and Ethanol Capital Partners LP Series E are considered a “person” and thus the shares are combined to determine the amount of membership units beneficially owned by Ethanol Capital Partners LP Series G. |
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Name and Address of | Position with | Amount and Nature of | Percent of | |||||||
Title of Class | Beneficial Owner1 | E Energy Adams | Beneficial Owner | Class | ||||||
Membership units | Jack L. Alderman | Director, Chairman & President | 80 units | 1.56 | % | |||||
Membership units | Nicholas J. Cusick2 | Director | 8 units | 0.16 | % | |||||
Membership units | Dennis L. Boesiger3 | Director & Secretary | 23 units | 0.45 | % | |||||
Membership units | William L. Riechers | Director | 8 units | 0.16 | % | |||||
Membership units | Vinson W. VanEngen | Director | 20 units | 0.39 | % | |||||
Membership units | Duane H. Wollenburg | Director & Vice Chairman | 10 units | 0.19 | % | |||||
Membership units | Kenneth S. Brinkman | Director | 12 units | 0.23 | % | |||||
Membership units | Mark O. Weber | Director | 27 units | 0.53 | % | |||||
Membership units | Steven L. Dean | Director | 25 units | 0.49 | % | |||||
Membership units | Amy J. Johnson | Director | 5 units | 0.10 | % | |||||
Membership units | Gary R. Bentzinger | Director | 7 units | 0.14 | % | |||||
Membership units | Ron L. Miller4 | Director | 11 units | 0.21 | % | |||||
Membership units | Tom Roode | Director | 28 units | 0.55 | % | |||||
Membership units | David Lukens | Director Nominee | 50 units | 0.97 | % | |||||
As a Group: | 314 units | 6.13 | % |
(1) | The address of the beneficial owner is deemed to be the same address as the Company, of which he is the principal owner. | |
(2) | Mr. Cusick beneficially owns 2 units individually and 6 units through A & N Energy Investments, LLC of which Mr. Cusick is a principal owner. | |
(3) | Mr. Boesiger beneficially owns 2 units individually and 21 units through Allegro Holdings, LLC of which Mr. Boesiger is a principal owner. | |
(4) | Mr. Miller beneficially owns 6 units individually and 5 units through Miller Livestock, Inc of which Mr. Miller is a principal owner. |
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Ken Brinkman | Steve Dean | |
Ron Miller | Gary Bentzinger |
�� | ||||||||
Category | Year | Fees | ||||||
Audit Fees (1) | 2007 | $ | 79,110 | |||||
2006 | $ | 75,170 | ||||||
2005 | $ | 34,080 | ||||||
Audit-Related Fees | 2007 | — | ||||||
2006 | — | |||||||
2005 | — | |||||||
Tax Fees | 2007 | — | ||||||
2006 | — | |||||||
2005 | — | |||||||
All Other Fees | 2007 | — | ||||||
2006 | — | |||||||
2005 | — |
(1) | Audit fees also consist of review of statutory and regulatory filings and research and consultation related to such filings. |
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• | Develop a nomination process for candidates to the Board of Directors; | ||
• | Establish criteria and qualifications for membership to the Board of Directors; | ||
• | Identify and evaluate potential Director nominees; | ||
• | Fill vacancies on the Board of Directors; | ||
• | Recommend nominees to the Board of Directors for election or re-election. |
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Annual Compensation | Long Term Compensation Awards | |||||||||||||||||||
Name and Position | Fiscal Year | Salary ($) | Bonus ($) | |||||||||||||||||
Carl Sitzmann, current CEO(1) | 2007 | $ | 57,500 | $ | 0 | n/a | ||||||||||||||
Jack L. Alderman, interim CEO(2) | 2007 | $ | 0 | $ | 0 | n/a | ||||||||||||||
Sam Sacco, former CEO | 2007 | $ | 65,500 | $ | 0 | n/a | ||||||||||||||
Nicholas Stovall, current CFO(3) | 2007 | $ | $ | 0 | n/a | |||||||||||||||
Larry Brees, former CFO | 2007 | $ | 55,000 | $ | 0 | n/a | ||||||||||||||
Lance Liebergen, former Plant Manager | 2007 | $ | 69,000 | $ | 0 | n/a | ||||||||||||||
Andrew Johansen, Grain Manager(4) | 2007 | $ | 56,600 | $ | 0 | n/a |
(1) | Mr. Sitzmann is eligible for a Pre-Startup Bonus of up to $20,000 as well as an Annual Performance Bonus up to and including, but not greater than, 100% of his base salary. The amounts earned by Mr. Sitzmann under either of these bonuses are not calculable at this time and will be disclosed in a later filing on Form 8-K. In addition, the Company pays $20,000 per year into a Supplemental Executive Retirement Plan. Mr. Sitzmann is not vested in, and has not rights to, the SERP until after the fifth year of continuous employment is completed. | |
(2) | Mr. Alderman served as Interim Chief Executive Officer for the time period between Mr. Sacco’s resignation and the hiring of Mr. Sitzmann. Mr. Alderman received no compensation for such services. | |
(3) | Mr. Stovall is eligible for a Pre-Startup Bonus of $20,000 as well as an Annual Performance Bonus up to and including, but not greater than, 50% of his base salary. The amounts earned by Mr. Stovall under either of these bonuses are not calculable at this time and will be disclosed in a later filing on Form 8-K. | |
(4) | Mr. Johansen is eligible for a Pre-Startup Bonus of $20,000 as well as an Annual Performance Bonus up to and including, but not greater than, 50% of his base salary. The amounts earned by Mr. Johansen under either of these bonuses are not calculable at this time and will be disclosed in a later filing on Form 8-K. |
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DIRECTOR COMPENSATION | ||||||||||||||||
Annual Compensation | ||||||||||||||||
Fees | ||||||||||||||||
Earned | All | |||||||||||||||
Fiscal | or Paid in | Other | Total | |||||||||||||
Name | Year | Cash ($) | Compensation | Compensation | ||||||||||||
Jack L. Alderman | 2007 | $ | 1,200 | $ | 0 | $ | 1,200 | |||||||||
Gary Bentzinger | 2007 | $ | 1,125 | $ | 0 | $ | 1,125 | |||||||||
Dennis Boesiger | 2007 | $ | 1,100 | $ | 0 | $ | 1,100 | |||||||||
Kenneth Brinkman | 2007 | $ | 1,000 | $ | 0 | $ | 1,000 | |||||||||
Nicholas Cusick | 2007 | $ | 1,000 | $ | 0 | $ | 1,000 | |||||||||
Steve Dean | 2007 | $ | 1,125 | $ | 0 | $ | 1,125 | |||||||||
Amy Johnston | 2007 | $ | 1,400 | $ | 0 | $ | 1,400 | |||||||||
Ron Miller | 2007 | $ | 1,000 | $ | 0 | $ | 1,000 | |||||||||
Bill Riechers | 2007 | $ | 700 | $ | 0 | $ | 700 | |||||||||
Tom Roode | 2007 | $ | 900 | $ | 0 | $ | 900 | |||||||||
Vinson VanEngen | 2007 | $ | 1,075 | $ | 0 | $ | 1,075 | |||||||||
Mark Weber | 2007 | $ | 1,700 | $ | 0 | $ | 1,700 | |||||||||
Duane Wollenburg | 2007 | $ | 1,150 | $ | 0 | $ | 1,150 |
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CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. | Purpose |
• | Monitor the integrity of the Company’s financial reporting process and systems of internal controls regarding finance, accounting, legal and regulatory compliance; | ||
• | Appoint, compensate, retain and monitor the independence and qualifications of the Company’s independent auditors (also referred to herein as external auditors); | ||
• | Monitor the performance of the Company’s internal audit function and independent auditors; | ||
• | Provide an avenue of communication among the independent auditors, management, and the Board; and | ||
• | Prepare an Audit Committee report as required by the Securities and Exchange Commission (“SEC”) to be included in the Company’s annual proxy statement. |
II. | Authority |
• | Appoint, compensate, retain and oversee the work of the public accounting firm employed by the Company to conduct the annual audit who shall report directly to the Committee; | ||
• | Retain independent counsel and other advisers as it deems necessary in the performance of its duties; | ||
• | Resolve any disagreements between management and the independent auditor regarding financial reporting; | ||
• | Pre-approve all auditing and permitted non-audit services performed by the Company’s external audit firm; |
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• | Seek any information it requires from employees—all of whom are directed to cooperate with the Committee’s requests—or external parties; | ||
• | Meet with Company officers, external auditors, or outside counsel, as necessary; | ||
• | Delegate authority to subcommittees including the authority to pre-approve all auditing and permitted non-audit services, providing that such decisions are presented to the full Committee at its next scheduled meeting; and | ||
• | Determine appropriate funding for the payment of compensation to the independent auditors engaged for the purpose of issuing an audit report, performing other audit review or attestation services for the Company and to any advisers employed by the Committee which funding must be paid for by the Company. |
1. | Committee members’ qualifications shall meet the requirements as may be set by the Board from time to time, in addition to all applicable legal and regulatory requirements. | ||
2. | The Committee shall be comprised of at least three independent directors of the Company (as defined in subparagraph 3 of this Article III below), all in good standing, each of whom must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement, statement of members’ equity and cash flow statement. | ||
3. | A director willNOT be considered independent for purposes of this Article III, if such director: |
(a) | Receives any consulting, advisory, or other compensatory fees from the Company, other than board or committee fees and fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company (provided that such compensation is not contingent in any way on continued service); | ||
(b) | Is an “affiliated person” of the Company, the definition of which is attached hereto as Exhibit 1; | ||
(c) | Is an employee of the Company or any current subsidiary of the Company; |
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(d) | Has accepted or has a family member who has accepted payments from the Company or any of its subsidiaries in excess of $60,000, other than as compensation for board or board committee service, payments arising solely from investments in the Company’s securities, compensation paid to a family member who is a non-executive employee of the Company, benefits under a tax-qualified retirement plan, or non-discretionary compensation, or certain permitted loans; | ||
(e) | Has a family member who is employed by the Company or any of its subsidiaries as an executive officer; | ||
(f) | Is or has a family member who is a partner or controlling shareholder or an executive officer of any organization to which the Company made, or from which the Company received, payments for property or services that exceeds 5% of the recipient’s consolidated gross revenues of that year, or $200,000, whichever is more, other than payments arising solely from investments in the Company’s securities or payments under non-discretionary charitable contribution matching programs; | ||
(g) | Is or has a family member who is employed as an executive officer of another entity where any of the executive officers of the company serve on the compensation committee of such other entity; or | ||
(h) | Is or has a family member who is a current partner of the Company’s outside auditor who worked on the Company’s audit; |
4. | Committee members and a Committee chair shall be recommended and appointed by the Board. |
IV. | Meetings |
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V. | Scope of Responsibilities and Duties |
• | Significant issues regarding accounting principles, practices, audit findings, disclosures, judgments and any other requirements under accounting standards and rules; | ||
• | Complex or unusual transactions and areas in which an unusual degree of judgment must be exercised; | ||
• | The effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; and | ||
• | “Quality of earnings” of the Company from a subjective as well as objective standpoint. |
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(A) | A person will be deemed not to be in control of a specified person for purposes of this section if the person: |
1. | Is not the beneficial owner, directly or indirectly, of more than 10% of any class of voting equity securities of the specified person; and | ||
2. | Is not an executive officer of the specified person. |
(B) | The previous paragraph (Subparagraph A) of this section only creates a safe harbor position that a person does not control a specified person. The existence of the safe harbor does not create a presumption in any way that a person exceeding the ownership requirement in the previous paragraph (Subparagraph A) of this section controls or is otherwise an affiliate of a specified person. |
(A) | An executive officer of an affiliate; | ||
(B) | A director who also is an employee of an affiliate; | ||
(C) | A general partner of an affiliate; and | ||
(D) | A managing member of an affiliate. |
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OPERATING AGREEMENT
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SECTION 1: THE COMPANY | 1 | |||
1.1 Formation | 1 | |||
1.2 Name | 1 | |||
1.3 Purpose; Powers | 1 | |||
1.4 Principal Place of Business | 2 | |||
1.5 Term | 2 | |||
1.6 Title to Property | 2 | |||
1.7 Payment of Individual Obligations | 2 | |||
1.8 Independent Activities; Transactions With Affiliates | 2 | |||
1.9 Definitions | 3 | |||
SECTION 2. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS | 9 | |||
2.1 Original Capital Contributions | 9 | |||
2.2 Additional Capital Contributions; Additional Units | 9 | |||
2.3 Capital Accounts | 9 | |||
SECTION 3. ALLOCATIONS | 10 | |||
3.1 Profits | 10 | |||
3.2 Losses | 10 | |||
3.3 Special Allocations | 10 | |||
3.4 Curative Allocations | 12 | |||
3.5 Loss Limitation | 12 | |||
3.6 Other Allocation Rules | 13 | |||
3.7 Tax Allocations: Code Section 704(c) | 13 | |||
3.8 Tax Credit Allocations | 14 | |||
SECTION 4. DISTRIBUTIONS | 14 | |||
4.1 Net Cash Flow | 14 | |||
4.2 Amounts Withheld | 14 | |||
4.3 Limitations on Distributions | 14 | |||
SECTION 5. MANAGEMENT | 14 | |||
5.1 Directors | 14 | |||
5.2 Number of Total Directors | 15 | |||
5.3 Election of Directors | 15 | |||
5.4 Committees | 17 |
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5.5 Authority of Directors | 17 | |||
5.6 Director as Agent | 19 | |||
5.7 Restriction on Authority of Directors | 19 | |||
5.8 Director Meetings and Notice | 20 | |||
5.9 Action Without a Meeting | 20 | |||
5.10 Quorum; Manner of Acting | 21 | |||
5.11 Voting; Potential Financial Interest | 21 | |||
5.12 Duties and Obligations of Directors | 21 | |||
5.13 Chairman and Vice Chairman | 21 | |||
5.14 President and Chief Executive Officer | 22 | |||
5.15 Chief Financial Officer | 22 | |||
5.16 Secretary; Assistant Secretary | 22 | |||
5.17 Vice President | 22 | |||
5.18 Delegation | 22 | |||
5.19 Execution of Instruments | 22 | |||
5.20 Limitation of Liability; Indemnification of Directors | 23 | |||
5.21 Compensation; Expenses of Directors | 23 | |||
5.22 Loans | 24 | |||
SECTION 6. ROLE OF MEMBERS | 24 | |||
6.1 One Membership Class | 24 | |||
6.2 Members | 24 | |||
6.3 Additional Members | 24 | |||
6.4 Rights or Powers | 24 | |||
6.5 Voting Rights of Members | 24 | |||
6.6 Member Meetings | 25 | |||
6.7 Conduct of Meetings | 25 | |||
6.8 Notice of Meetings; Waiver | 25 | |||
6.9 Quorum and Proxies | 25 | |||
6.10 Voting; Action by Members | 25 | |||
6.11 Record Date | 25 | |||
6.12 Termination of Membership | 25 | |||
6.13 Continuation of the Company | 26 | |||
6.14 No Obligation to Purchase Membership Interest | 26 | |||
6.15 Waiver of Dissenters Rights | 26 | |||
6.16 Limitation on Ownership | 26 | |||
SECTION 7. ACCOUNTING, BOOKS AND RECORDS | 26 | |||
7.1 Accounting, Books and Records | 26 | |||
7.2 Delivery to Members and Inspection | 27 | |||
7.3 Reports | 27 | |||
7.4 Tax Matters | 27 |
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SECTION 8. AMENDMENTS | 28 | |||
8.1 Amendments | 28 | |||
SECTION 9. TRANSFERS | 28 | |||
9.1 Restrictions on Transfers | 28 | |||
9.2 Permitted Transfers | 29 | |||
9.3 Conditions Precedent to Transfers | 29 | |||
9.4 Prohibited Transfers | 30 | |||
9.5 No Dissolution or Termination | 31 | |||
9.6 Prohibition of Assignment | 31 | |||
9.7 Rights of Unadmitted Assignees | 31 | |||
9.8 Admission of Substituted Members | 31 | |||
9.9 Representations Regarding Transfers | 32 | |||
9.8 Distribution and Allocation in Respect of Transferred Units | 33 | |||
9.11 Additional Members | 33 | |||
SECTION 10. DISSOLUTION AND WINDING UP | 34 | |||
10.1 Dissolution | 34 | |||
10.2 Winding Up | 34 | |||
10.3 Compliance with Certain Requirements of Regulations; Deficit Capital Accounts | 34 | |||
10.4 Deemed Distribution and Recontribution | 35 | |||
10.5 Rights of Unit Holders | 35 | |||
10.6 Allocations During Period of Liquidation | 35 | |||
10.7 Character of Liquidating Distributions | 35 | |||
10.8 The Liquidator | 35 | |||
10.9 Forms of Liquidating Distributions | 36 | |||
SECTION 11. MISCELLANEOUS | 36 | |||
11.1 Notices | 36 | |||
11.2 Binding Effect | 36 | |||
11.3 Construction | 36 | |||
11.4 Headings | 36 | |||
11.5 Severability | 36 | |||
11.6 Incorporation By Reference | 37 | |||
11.7 Variation of Terms | 37 | |||
11.8 Governing Law | 37 | |||
11.9 Waiver of Jury Trial | 37 | |||
11.10 Counterpart Execution | 37 | |||
11.11 Specific Performance | 37 |
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OF
E ENERGY ADAMS, LLC
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(i) | the name and address of record of the Member who intends to make the nomination; | ||
(ii) | a representation that the Member is a holder of record of Units of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; | ||
(iii) | the name, age, business and residence addresses, and principal occupation or employment of each nominee; | ||
(iv) | a description of all arrangements or understandings between the Member and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the Members; | ||
(v) | such other information regarding each nominee proposed by such Member as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission; | ||
(vi) | the consent of each nominee to serve as a Director of the Company if so elected; and | ||
(vii) | a nominating petition signed and dated by the holders of at least five percent (5%) of the then outstanding Units and clearly setting forth the proposed nominee as a candidate of the Director’s seat to be filled at the next election of Directors. |
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(i) | Cause or permit the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Section 1.3 hereof; | ||
(ii) | Knowingly do any act in contravention of this Agreement or which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Agreement; | ||
(iii) | Possess Company Property, or assign rights in specific Company Property, for other than a Company purpose; or | ||
(iv) | Cause the Company to voluntarily take any action that would cause a bankruptcy of the Company. |
(i) | Merge, consolidate, exchange or otherwise dispose of at one time all or substantially all of the Property, except for a liquidating sale of the Property in connection with the dissolution of the Company; |
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(ii) | Confess a judgment against the Company in an amount in excess of $500,000; | ||
(iii) | Issue Units at a purchase price of less than $5,000 per Unit; | ||
(iv) | Issue more than an aggregate of 7,000 Units; and | ||
(v) | Cause the Company to acquire any equity or debt securities of any Director or any of its Affiliates, or otherwise make loans to any Director or any of its Affiliates. |
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(i) | to the transferor’s administrator or trustee to whom such Units are transferred involuntarily by operation of law or judicial decree, or; | ||
(ii) | without consideration to or in trust for descendants or the spouse of a Member; and |
(i) | to any Person approved by the Directors in writing, | ||
(ii) | to any other Member or to any Affiliate or Related Party of another Member; or | ||
(iii) | to any Affiliate or Related Party of the transferor. |
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By: | ||||
Jack L. Alderman, Chairman |
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Initial Membership List
Initial Capital | ||||||||
Name of Initial Members | Units | Contribution | ||||||
Jack L. Alderman | 80 | $ | 400,000 | |||||
TOTAL: | 80 | 400,000 | ||||||
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Initial Board of Directors
Initial Board of Directors | Addresses of Initial Board of Directors | |
Jack L. Alderman,Chairman, President, Secretary and Treasurer | 105 East Veterans Street, Tomah, Wisconsin 54660 |
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TO THE
OPERATING AGREEMENT OF
E ENERGY ADAMS, LLC
Individuals: | Entities: | |
Name of Individual Member (Please Print) | Name of Entity (Please Print) | |
Signature of Individual | Print Name and Title of Officer | |
Name of Joint Individual Member (Please Print) | Signature of Officer | |
Signature of Joint Individual Member |
Company and its Members:
E ENERGY ADAMS, LLC | ||||
By: | ||||
Its: | ||||
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E ENERGY ADAMS, LLC
Amendment to Section 1.9(r) | Section 1.9(r) is amended to read as follows: (r) “Fiscal Year” means (i) any twelve-month period commencing on October 1 and ending on September 30 and (ii) the period commencing on the immediately preceding October 1 and ending on the date on which all Property is distributed to the Unit Holders pursuant to Section 10 hereof, or, if the context requires, any portion of a Fiscal Year for which an allocation of Profits or Losses or a distribution is to be made.The Directors may establish a different Fiscal Year so long as the Fiscal Year chosen is not contrary to the Code or any provision of any state or local tax law. | |
Amendment to Section 5.3(b) | The last sentence of Section 5.3(b) is amended to read as follows: Whenever a vacancy occurs other than from expiration of a term of office or removal from officeby the Members in accordance with Section 5.23, a majority of the remaining Directors shall appoint a new Director to fill the vacancy |
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Amendment to Section 5.10: | Section 5.10 is amended to read as follows: 5.10Quorum. Not less than fifty percent (50%) of the | |
Amendment to Section 5 | Section 5 is amended to add the following Section 5.23: 5.23Removal of Directors. The Members may remove an elected Director without cause, by the affirmative vote of two thirds (2/3) of the then outstanding Membership Voting Interests of the Company at a meeting called for that purpose (in person, by proxy or by mail ballot), if notice has been given that a purpose of the meeting is such removal. The Members may also remove an elected Director for cause in accordance with the procedures set forth in Section 6.10, if notice has been given that a purpose of the meeting is such removal. In addition, a super majority of seventy-five percent (75%) of all Directors authorized to vote may remove any Director, for cause, at a meeting called for that purpose, if proper notice has been given that a purpose of the meeting is such removal. In the case of removal of an elected Director by a super majority of seventy-five percent (75%) of all Directors authorized to vote, a majority of the remaining Directors shall appoint a new Director to fill the vacancy until the next Annual or Special Meeting of the Members. In the case of a removal of an appointed Director, the Appointing Member shall appoint a replacement in accordance with Section 5.3(c). For purposes of this Section 5.23, the phrase “for cause” shall be interpreted to include conviction of a felony, engagement in fraudulent or dishonest conduct, or gross abuse of authority or discretion with respect to the Company. |
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CHARTER OF THE NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS
1. | New Director Candidates.The Nominating Committee will identify individuals qualified to become Board members and recommend candidates to fill new or vacant positions. In recommending such candidates, the Nominating Committee will consider such factors as it deems appropriate to assist in developing a Board and Committees that are diverse in nature and composed of experienced and seasoned advisors. |
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These factors may include judgment, skill, diversity, integrity, experience with businesses and other organizations of comparable size, the interplay of the candidate’s experience with the experience of other Board members, and the extent to which the candidates would be a desirable addition to the Board and any committees of the Board. The Nominating Committee will also review the qualifications of, and make recommendations regarding, Director nominations submitted to the Company by member owners in accordance with the Company’s Operating Agreement. | |||
2. | Incumbent Directors Evaluation.The Nominating Committee will evaluate whether an incumbent Director should be nominated for re-election to the Board or any committee of the Board upon expiration of such Director’s term. The re-nomination of existing Directors shall not be automatic. The Nominating Committee will use the same criteria established for new Director candidates to make its evaluation and will also take into account the incumbent Director’s performance on the Board and on any committee on which such Director serves, which shall include attendance at Board and committee meetings. | ||
3. | Develop Policies.To the extent that the Nominating Committee deems appropriate and prudent under the circumstances, the committee shall develop policies relating to (i) minimum Director nominee qualifications for all nominees including Director candidates nominated by members of the Company, and (ii) the process for identification and evaluation of Director nominees. These policies shall be reviewed at least annually or as business developments may dictate and each policy and policy update shall be submitted to the Board for approval. | ||
4. | Examine Board Needs.The Committee shall examine the specific needs of the existing Board relative to any particular areas of experience or knowledge needed, and any candidate so that the overall Board composition reflects a mix of talents, experience, expertise, and perspectives appropriate to the Company’s circumstances. |
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Vote by Mail or Facsimile: 1) Read the Proxy Statement 2) Check the appropriate boxes on the proxy card below 3) Sign and date the proxy card 4) Return the proxy card in the mail or via fax to (402) 988-5205 no later than 5:00 p.m. on Thursday, January 31, 2008 E ENERGY ADAMS, LLC Member Name: _____ Please Print ClearlyTelephone Number: _____ Number of Units Owned on December 21, 2007: _____ 2008 Annual Meeting — Friday, February 1, 2008 For Unit Holders as of December 21, 2007 Proxy Solicited on Behalf of the Board of Directors ELECTION OF DIRECTORS You may withhold authority to vote for any nominees by lining through or otherwise strking out the name of any nominee. Group I You may vote forthree(3) nominees, butno more than three (3)nominees. Dennis Boesiger, Incumbent —— Ron Miller, Incumbent — Kenneth Brinkman, Incumbent —Group II You may vote forthree(3) nominees, butno more than three (3)nominees. Steven Dean, Incumbent —— Tom Roode, Incumbent — David Lukens, Nominee—Group III You may vote forthree(3) nominees, butno more than three (3)nominees. Jack L. Alderman, Incumbent —— William Riechers, Incumbent — Duane Wollenburg, Incumbent —PROPOSAL — APPROVAL OF THE AMENDMENTS TO THE COMPANY’S OPERATING AGREEMENT: Please check the appropriate box: PROPOSAL: For _____ Against _____ AbstainApproval of the Amendment to the Company’s Operating Agreement to Allow the Board of Directors to Change the Fiscal Year Without a Vote of the Members Approval of the Amendment to the Company’s Operating Agreement to Amend the Section 5.3(b) regarding Director Vacancies Approval of the Amendment to the Company’s Operating Agreement to Change the Percentage of Directors Required Constituting a Quorum Approval of the Amendment to the Company’s Operating Agreement to Allow for the Removal of Directors Without Cause by the Members as well as to Allow the Directors to Remove an Elected Director for Cause Signature: Signature: Date: Date:Please sign exactly as your name appears above. When signing as attorney executor, administrator, trustee or guardian, please note that fact. |
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13238 East Aspen Road
Adams, NE 68301
For Annual Meeting, Friday, February 1, 2008