SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant ___
Check the appropriate box:
__ Preliminary Proxy Statement
__ Confidential, for Use of the Commission Only (as permitted by
Rule 14A-6(e)(2))
|X| Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to ss.240.14a-12
SOUTHWEST IOWA RENEWABLE ENERGY, LLC
------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than
the Registrant)
Payment of Filing Fee (Check the appropriate box)
|X| No fee required
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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: _____________________________________________.
___ Fee paid previously with preliminary materials
___ 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:___________________________________.
|  |
2101 42nd Avenue, Council Bluffs, IA 51501-8409
March 14, 2008
To the Members of Southwest Iowa Renewable Energy, LLC:
The Annual Meeting of Members of our Company will be held on April 3rd,
2008, at 1:00 p.m. Central Daylight Time at the Mid-America Center, One Arena
Way, Council Bluffs, IA 51501.
A Notice of the meeting, a Proxy and Proxy Statement containing information
about matters to be acted upon are enclosed. In addition, the Southwest Iowa
Renewable Energy, LLC Annual Report for the fiscal year ended September 30,
2007, is enclosed and provides information regarding the financial results of
the Company for the year. Holders of Series A, B and C Units are entitled to
vote at the Annual Meeting on the basis of one vote for each Unit held, though
only the holders of Series A Units may vote to elect the Series A Director
nominated to be elected at the 2008 Annual Meeting. If you attend the Annual
Meeting in April, you retain the right to vote in person even though you
previously mailed the enclosed Proxy.
By resolution dated March 10, 2008, the Company's Board of Directors
authorized voting on the matters described in the attached Proxy Statement to be
made via the enclosed proxy card.
It is important that your Units be represented at the meeting whether or
not you are personally in attendance, and I urge you to review carefully the
Proxy Statement and sign, date and return the enclosed Proxy at your earliest
convenience. I look forward to meeting you and, together with our Directors and
Officers, reporting our activities and discussing the Company's business and its
prospects. I hope you will be present.
Very truly yours,
|  |
Mark Drake
President and Chief Executive Officer
| |
2101 42nd Avenue, Council Bluffs, IA 51501-8409
NOTICE OF ANNUAL MEETING OF MEMBERS
TO BE HELD APRIL 3, 2008
To the Members of Southwest Iowa Renewable Energy, LLC:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Members of Southwest
Iowa Renewable Energy, LLC, an Iowa limited liability company (the "Company"),
will be held on April 3rd, 2008, at 1:00 p.m. Central Daylight Time at the
Mid-America Center, One Arena Way, Council Bluffs, IA 51501, for the following
purposes:
1. To elect one Series A Director to serve until the 2012 Annual Member
Meeting or until his successor shall be elected and qualified; and
2. To transact such other business as may properly come before the meeting
and any adjournment thereof.
Only holders of Units of the Company of record at the close of business on
March 10, 2007, will be entitled to notice of, and to vote at, the meeting and
any adjournment thereof. Only holders of Series A Units will be entitled to vote
for the Series A Director nominated for election at the 2008 Annual Meeting.
By Order of the Board of Directors |  |
Karol King
Chairman
Your Officers and Directors desire that all Members be present or
represented at the Annual Meeting. Even if you plan to attend in person, please
date, sign and return the enclosed proxy in the enclosed envelope at your
earliest convenience so that your Units may be voted. If you do attend the
meeting in April, you retain the right to vote even though you mailed the
enclosed proxy. The proxy must be signed by each registered holder exactly as
the Unit is registered.
| |
2101 42nd Avenue, Council Bluffs, IA 51501-8409
PROXY STATEMENT
FOR ANNUAL MEETING OF MEMBERS
TO BE HELD APRIL 3, 2008
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Southwest Iowa Renewable Energy, LLC, an Iowa limited
liability company (the "Company"), of proxies to be voted at the Annual Meeting
of Members to be held on April 3rd, 2008, or any adjournment thereof (the "2008
Annual Meeting"). The date on which this Proxy Statement and the enclosed form
of proxy are first being sent or given to Members of the Company is on or about
March 14, 2008.
PURPOSES OF THE MEETING
The 2008 Annual Meeting is to be held for the purposes of:
(1) To elect one Series A Director to serve until the 2012 Annual Member
Meeting or until his successor shall be elected and qualified; and
(2) To transact such other business as may properly come before the meeting
and any adjournment thereof.
The Board of Directors unanimously recommends that the Series A Members
vote FOR the election as Series A Director of the person named under ELECTION OF
SERIES A DIRECTOR.
1
VOTING AT THE MEETING
The record date for holders of Units entitled to notice of, and to vote at,
the 2008 Annual Meeting is the close of business on March 10, 2008 (the "Record
Date"). As of the Record Date, the Company had outstanding and entitled to vote
at the 2008 Annual Meeting 8,805 Series A Units, 3,334 Series B Units, and 1,000
Series C Units. Unless there is other business to be presented for action at the
2008 Annual Meeting, the only Units to be voted will be those held by Series A
Members.
The presence, in person or by proxy, of the holders of at least twenty-five
percent (25%) of the Units outstanding and entitled to vote at the 2008 Annual
Meeting is necessary to constitute a quorum. Abstentions and Units held by
brokers, banks, other institutions and nominees that are voted on any matter at
the 2008 Annual Meeting are included in determining the presence of a quorum for
the transaction of business at the commencement of the 2008 Annual Meeting and
on those matters for which the broker, nominee or fiduciary has authority to
vote. In deciding all questions, a Member shall be entitled to one vote, in
person or by proxy, for each Unit, regardless of class, held in the Member's
name at the close of business on the Record Date (though only Series A Members
may vote for the election of the Series A Director).
To be elected a Director, the Series A Director nominee under PROPOSAL 1
must receive the favorable vote of a majority of the Series A Units entitled to
vote and represented in person or by proxy at the 2008 Annual Meeting.
Each Proxy delivered to the Company representing Series A Units, unless the
Series A Member otherwise specifies therein, will be voted:
>> FOR the election as Series A Director of the person named under
ELECTION OF SERIES A DIRECTOR.
In each case where the Member has appropriately specified how the Proxy
is to be voted, it will be voted in accordance with this specification. As to
any other matter or business which may be brought before the 2008 Annual
Meeting, a vote may be cast pursuant to the accompanying Proxy in accordance
with the judgment of the person or persons voting the same, but neither the
Company's management nor the Board of Directors knows of any such other matter
or business. Any Member has the power to revoke his proxy at any time insofar as
it is then not exercised by giving notice of such revocation, either personally
at the meeting or in writing, to the Secretary of the Company or by the
execution and delivery to the Company of a new Proxy dated subsequent to the
original Proxy.
2
PROPOSAL 1
ELECTION OF SERIES A DIRECTOR
One Series A Director is to be elected at the 2008 Annual Meeting. The
Series A Director nominee elected at the 2008 Annual Meeting will serve until
the 2012 Annual Meeting of Members or until his successor shall be elected and
qualified.
The persons named in the accompanying form of Proxy intend to vote such
Proxy for the election of the nominee named below as Series A Director of the
Company to serve until the 2012 Annual Meeting of Members or until his successor
shall be elected and qualified, unless otherwise properly indicated on such
Proxy. If the nominee shall become unavailable for any reason, the persons named
in the accompanying form of Proxy are expected to consult with the Board of
Directors in voting the Units represented by them at the 2008 Annual Meeting.
The Board of Directors has no reason to doubt the availability of the nominee
and no reason to believe the nominee will be unable or unwilling to serve the
entire term for which election is sought.
Proxies may not be voted for more than the one Series A Director nominee
set forth below. To be elected a Series A Director, the nominee must receive the
favorable vote of the majority of Series A Units entitled to vote and
represented in person or by proxy at the 2008 Annual Meeting. The name of the
Series A Director nominee, along with certain information concerning him, is set
forth below.
Series A Director Nominee
The Series A Director nominee to be elected to serve a four-year term is
Mr. Ted Bauer, aged 55. Mr. Bauer holds the following positions with the
Company: Series A Director, Secretary and Treasurer. Mr. Bauer has been a
Director and Officer of the Company since March, 2005. His current term as
Series A Director expires in 2008.
Mr. Bauer has been the owner and operator of a farming operation and
hunting preserve near Audubon, Iowa, since 1977. He is a co-founder of Templeton
Rye Spirits LLC and served as a director on its board from 2005 to 2007. Mr.
Bauer is also a Board Member of Iowa Quality Producers Alliance (since 2003) and
served as Vice President of West Central Iowa Rural Water from 2002 to 2007. Mr.
Bauer has an Ag Business degree from Iowa State University and is a graduate of
the Texas A&M TEPAP program.
Mr. Bauer meets the "independent director" standards applicable to
companies listed on the Nasdaq Capital Market (though the Company's Units are
not listed on any exchange or quotation system). Mr. Bauer does not serve as a
director of any other company having a class of securities registered under
section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or subject to section 15(d) of the 1934 Act, nor does he serve as a
director of a registered investment company under the Investment Company Act of
1940, as amended (the "Investment Company Act"). Mr. Bauer's address is 2101
42nd Avenue, Council Bluffs, Iowa 51501-8409.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SERIES A MEMBERS
VOTE FOR THE ELECTION OF MR. TED BAUER AS SERIES A DIRECTOR FOR A FOUR-YEAR
TERM.
OTHER BUSINESS
The Board of Directors knows of no other business to be presented for
action at the 2008 Annual Meeting. If any matters do come before the 2008 Annual
Meeting on which action can properly be taken, it is intended that the proxies
shall vote in accordance with the judgment of the person or persons exercising
the authority conferred by the proxy at the 2008 Annual Meeting.
3
ADDITIONAL INFORMATION
Unit Ownership
As of December 31, 2007, there were 8,805 Series A Units, 3,334 Series B
Units, and 1,000 Series C Units issued and outstanding. The following table sets
forth certain information as of December 31, 2007, with respect to the Unit
ownership of: (i) those persons or groups (as that term is used in Section
13(d)(3) of the Exchange Act who beneficially own more than 5% of any Series of
Units, (ii) each Director of the Company, and (iii) all Officers and Directors
of the Company, nine in number, as a group. Unless otherwise provided, the
address of those in the following table is 2101 42nd Avenue, Council Bluffs,
Iowa 51501-8409. Messrs. Drake and Bauer and Ms. Patterson serve in the capacity
of executive officers. Except as noted below, the persons listed below possess
sole voting and investment power over their respective Units.
Amount and Nature of Beneficial
Title of Class Name of Beneficial Owner Ownership Percent of Class
Series A Ted Bauer 36 Units(1) 0.41%
Series A Hubert Houser 39 Units(2) 0.44%
Series A Karol King 20 Units(3) 0.23%
Series A Brad Petersburg 62 Units 0.70%
Series A Michael Guttau 12 Units(4) 0.14%
-- Mark Drake -0- --
-- Cindy Patterson -0- --
-- Bailey Ragan -0- --
-- Michael Scharf -0- --
-- Greg Krissek -0- --
Series B Bunge North America, Inc. 3334 Units 100%
Series C ICM, Inc. 1000 Units 100%
Series A All Officers and Directors as a Group 169 Units 1.92%
- ------------------------------------
(1) These Series A Units are owned jointly by Mr. Bauer and his wife, Donna
Bauer.
(2) These Series A Units are owned jointly by Mr. Houser and his wife, Paula
Houser.
(3) These Series A Units are owned jointly by Mr. King and his wife, Rozanne
King.
(4) These Series A Units are owned jointly by Mr. Guttau and his wife, Judith
Guttau.
Certain Relationships and Related Transactions, and Director Independence
Our founders and original directors acted as our promoters and provided our
seed capital in our offering commencing in October 2005, in which we issued 285
Units at $2,000 per Unit, resulting in gross proceeds of $570,000. Those
promoters include David Denne, Don Harris, McGraw Brothers Farm, Ted Bauer,
Billie Wilson, Hubert and Paula Houser, Jim Anderson, Bill and Karen Johnson,
Marvin and Roberta Reents, Doug Beckman, Craig Becker, Brent Bierbaum, Harold
Hoffman, Joseph, Hoye, Liljedahl Farms, David Rydberg, Scotch Hills, Inc., Randy
and Jill Euken, and Greg Zellmer.
Bunge North America, Inc.
On October 13, 2006, in consideration of its agreement to invest
$20,004,000 in the Company, Bunge North America, Inc., a New York corporation
("Bunge"), purchased the only Series B Units of the Company under an arrangement
whereby the Company would (i) enter into various agreements with Bunge or its
affiliates discussed below for management, marketing and other services to the
Company, and (ii) have the right to elect a number of Series B Directors which
are proportionate to the number of Series B Units owned by Bunge, as compared to
all
4
Units. Bunge elected Bailey Ragan and Michael Scharf as the Series B Directors
on November 1, 2006. Under the Company's Amended and Restated Operating
Agreement dated as of March 7, 2008 (the "Operating Agreement"), the Company may
not, without Bunge's approval (i) issue additional Series B Units, (ii) create
any additional Series of Units with rights which are superior to the Series B
Units, (iii) modify the Operating Agreement to adversely impact the rights of
Series B Unit holders, (iv) change the Company's status from one which is
managed by managers, or change back to manager management in the event the
status is changed to member management, (v) repurchase or redeem any Series B
Units, (vi) cause the Company to take any action which would cause a bankruptcy,
or (vii) approve a transfer of Units allowing the transferee to hold more than
17% of the Company's Units or to a transferee which is a direct competitor of
Bunge.
Additionally, Bunge has caused its bank to issue a letter of credit (the
"Bunge LC") in an amount equal to 76% of the amount borrowed by the Company
under a bridge loan in the maximum principal amount of $36,000,000 (the "Bridge
Loan") from Commerce Bank, N.A. (the "Bridge Lender") in favor of the Bridge
Lender as security for the Bridge Loan. The Bunge LC will expire on March 16,
2009, and the Bridge Lender will only draw against the Bunge LC to the extent
that we default under the Bridge Loan or if we have not repaid the Bridge Loan
in full by March 1, 2009. In the event the Bridge Lender draws against the Bunge
LC, the amounts drawn will be in proportion to Bunge's ownership of the
Company's Units which are not Series A--currently 76%. As part of the foregoing
arrangement with Bunge, the Company entered into a Series E Unit Purchase
Agreement on March 7, 2008 (the "Series E Agreement"), pursuant to which the
Company has agreed (i) to pay Bunge a fee for the issuance of the Bunge LC equal
to 6% per annum of the undrawn face amount of the Bunge LC and (ii) to reimburse
Bunge with Series E Units in the event that the Bunge LC is drawn upon or if
Bunge makes any payment to the Bridge Lender that reduces amounts owed by the
Company under the Bridge Loan (each, a "Bridge Loan Payment"), as further
described below.
Under the Series E Agreement, if Bunge makes a Bridge Loan Payment, the
Company will immediately issue Series E Units to Bunge based on a Unit price
that is equal to the lesser of $3,000 or one half (1/2) of the lowest purchase
price paid by any party for a Unit who acquired (or who has entered into any
agreement, instrument or document to acquire) such Unit as part of any offering
of Units after the date of the Series E Agreement but prior to the date of any
Bridge Loan Payment made by Bunge. The Series E Agreement further provides that
Bunge will have the right to purchase its pro rata share of any Units issued by
the Company at any time after the date of the Series E Agreement.
To the extent that the Company issues Series E Units to Bunge pursuant to
the Series E Agreement, the Company's Operating Agreement provides (i) that
Bunge, as a Series E Member, is entitled to elect one additional director (to
the extent that Bunge owns between 21% and 29% of the total Units issued and
outstanding) two additional directors (to the extent that Bunge owns between 30%
and 39% of the total Units issued and outstanding) or three additional directors
(to the extent that Bunge owns 40% or more of the total Units issued and
outstanding); and (ii) that the Company may not, without Bunge's approval (a)
issue additional Series E Units, (b) create any additional Series of Units with
rights which are superior to the Series E Units, (c) modify the Operating
Agreement to adversely impact the rights of Series E Unit holders, (d) change
the Company's status from one which is managed by managers, (e) repurchase or
redeem any Series E Units, (f) cause the Company to take any action which would
cause a bankruptcy, or (g) approve a transfer of Units allowing the transferee
to hold more than 15% of the Company's Units or to a transferee which is a
direct competitor of Bunge.
The Company and Bunge entered into a Distiller's Grain Purchase Agreement
on October 13, 2006 (the "DG Agreement"). The DG Agreement provides that Bunge
will purchase all of the Distillers Grains produced by us over a term of 10
years, beginning when the Company commences production of Distillers Grains,
with automatic renewals for three-year terms unless a party provides six months'
notice. Bunge will pay the Company for the Distillers Grains, but retain amounts
for transportation costs, rail lease charges and marketing fees. The Company has
agreed to pay a minimum annual marketing fee to Bunge in the amount of $150,000.
After the third year of the DG Agreement, the parties may make adjustments to
the prices.
The Company and Bunge entered into an Agreement on October 13, 2006
respecting the use of Bunge's grain elevator in Council Bluffs, Iowa (the
"Elevator Agreement"). The Elevator Agreement does not require the payment by
the Company of any moneys and otherwise did not involve the payment of any
consideration by either party; rather, it imposes restrictions on the use and
possible disposition by Bunge of its grain elevator located in Council
5
Bluffs, Iowa, including a right of first refusal in favor of the Company. The
parties entered into the Elevator Agreement as part of their overall arrangement
under which Bunge initially agreed to invest in the Company.
The Company and a company in which Bunge holds a membership interest,
AGRI-Bunge, LLC, entered into the Agency Agreement on October 13, 2006. Under
the Agency Agreement, we agreed to pay an agency fee to A-B for corn delivered,
subject to an annual minimum fee of $225,000, for A-B's service of procuring all
grain requirements for our plant. The Agency Agreement will commence when we
first require corn, presently projected to be in the fourth quarter of 2008, and
will then continue for 10 years with automatic renewals for three year periods
unless a party provides notice to not renew within six months of the
then-current term. After three years from the commencement of the Agency
Agreement, the annual minimum payment may be adjusted.
The Company and a company in which Bunge holds a membership interest,
AGRI-Bunge, LLC ("A-B"), entered into a Grain Feedstock Agency Agreement on
October 13, 2006 (the "Agency Agreement"). Under the Agency Agreement, the
Company agreed to pay an agency fee to A-B for corn delivered, subject to an
annual minimum fee of $225,000, for A-B's service of procuring all grain
requirements for the Company's plant. The Agency Agreement will commence when
the Company first requires corn, presently projected to be in the fourth quarter
of 2008, and will then continue for 10 years with automatic renewals for three
year periods unless a party provides notice to not renew within six months of
the then-current term. After three years from the commencement of the Agency
Agreement, the annual minimum payment may be adjusted.
On June 25, 2007, we entered into a Railcar Sublease Agreement ("Railcar
Agreement") with Bunge for the sub-lease of 320 ethanol cars and 300 DDGS cars
which will be used in the delivery and marketing of ethanol and DDGS. We will be
responsible for all maintenance and mileage charges as well as the monthly lease
expense and certain railcar modification expenses. Under the Railcar Agreement,
we will lease railcars for terms lasting 120 months and continuing on a month to
month basis thereafter. The Railcar Agreement will terminate upon the expiration
of all railcar leases.
ICM, Inc.
In consideration of its agreement to invest $6,000,000 in the Company, ICM,
Inc., a Kansas corporation ("ICM"), became the sole Series C Member of the
Company. As part of ICM's agreement to invest in the Company's Series C Units,
the Company's Operating Agreement provides that it will not, without ICM's
approval (i) issue additional Series C Units, (ii) create any additional Series
of Units with rights senior to the Series C Units, (iii) modify the Operating
Agreement to adversely impact the rights of Series C Unit holders, or (iv)
repurchase or redeem any Series C Units. Additionally, ICM, as the sole Series C
Unit owner, is afforded the right to elect one Series C Director to the Board so
long as ICM remains a Series C Member. Greg Krissek was elected as the Series C
Director by ICM on November 1, 2006.
Additionally, ICM has caused its bank to issue a letter of credit in an
amount equal to 24% of the amount borrowed under the Bridge Loan in favor of the
Bridge Lender as security for the Bridge Loan (the "ICM LC"). The ICM LC will
expire on March 16, 2009, and the Bridge Lender will only draw against the ICM
LC to the extent that we default under the Bridge Loan or if we have not repaid
the Bridge Loan in full by March 1, 2009. In the event the Bridge Lender draws
against the ICM LC, the amounts drawn will be in proportion to ICM's ownership
of the Company's Units which are not Series A--currently 24%. As part of the
foregoing arrangement with ICM, the Company entered into a Series C Unit
Issuance Agreement on March 7, 2008 (the "Series C Agreement"), pursuant to
which we have agreed (i) to pay ICM a fee for the issuance of the ICM LC equal
to 6% per annum of the undrawn face amount of the ICM LC and (ii) to reimburse
Bunge with additional Series C Units to the extent that ICM makes a Bridge Loan
Payment, as further described below.
Under the Series C Agreement, if ICM makes a Bridge Loan Payment, the
Company will immediately issue Series C Units to ICM based on a Unit price that
is equal to the lesser of $3,000 or one half (1/2) of the lowest purchase price
paid by any party for a Unit who acquired (or who has entered into any
agreement, instrument or document to acquire) such Unit as part of any offering
of Units after the date of the Series C Agreement but prior to the date of any
Bridge Loan Payment made by ICM. The Series C Agreement further provides that
ICM will have the right to purchase its pro rata share of any Units issued by
the Company at any time after the date of the Series C Agreement.
6
On September 25, 2006, the Company entered into a Design-Build Agreement
(the "ICM Agreement") with ICM, under which ICM has contracted to construct a
110 million gallon per year dry mill ethanol plant. The ICM Contract contains a
lump-sum price of $118,000,000. Under the ICM Contract, the Company was required
to make a down payment of 10% of the original contract price, of which
$2,000,000 was paid at the delivery of the parties' letter of intent, an
additional $2,000,000 was paid in November 2006 when the Company broke escrow,
and the remaining $7,800,000 was paid when the Company delivered to ICM a notice
to proceed on January 23, 2007.
Rural Development Associates
Brad Petersburg, who served as a Series A Director from November 2005 until
March 2007, is a principal of Rural Development Associates ("RDA"). The Company
entered into a verbal agreement with RDA on September 19, 2005, which was
executed on October 11, 2005 (the "2005 RDA Agreement"), under which RDA
provided project development services to the Company for a monthly fee of
$10,000, plus actual travel and other approved expenses. Additionally, the
Company agreed to pay RDA up to $1,600,000 upon completion of debt financing to
partially finance a 110 million gallon per year plant. One half of this amount
was to be made in cash with the other half to be made through the issuance of
Series A Units based upon the price the Series A Units were sold in the
Company's third round of equity financing, which was $6,000 per Unit. In July,
2006, the Company and RDA entered into a second agreement (the "2006 RDA
Agreement;" and, together with the 2005 RDA Agreement, the "RDA Agreements") to
explore the feasibility and viability of expanding the Company's ethanol
facility to a 220 million gallon facility. In September 2006, the Company and
RDA agreed to suspend the 2006 RDA Agreement and to continue under the 2005 RDA
Agreement to develop the project on a month-to-month basis, which arrangement
continued until the 2005 RDA Agreement was terminated in May, 2007. On May 3,
2006, in lieu of the payment to RDA under the 2005 RDA Agreement and at RDA's
request, the Company issued 45 Series A Units each to RDA's principals (Ron
Saak, Brad Petersburg and Steve Baker) directly in satisfaction of the Company's
equity issuance obligations under the 2005 RDA Agreement. As of the end of the
Company's fiscal year 2006, the Company had incurred expenses of $132,545 under
the RDA Agreements. In its fiscal year ended September 30, 2007 ("Fiscal Year
2007"), the Company paid RDA $1,669,947, which includes the issuance of 135
Series A Units for $810,000, as part of the success fee payable under the 2005
RDA Agreement.
The Company does not presently have any policies finalized and adopted by
the Board governing the review or approval of related party transactions.
Directors
The chart below lists the Directors whose terms continue after the 2008
Annual Meeting and who are not standing for re-election at the 2008 Annual
Meeting. The Directors listed below under "Independent Directors" meet the
"independent director" standards applicable to companies listed on the Nasdaq
Capital Market (though the Company's Units are not listed on any exchange or
quotation system) ("Independent Directors"). Contrariwise, "Interested
Directors" are those listed below who do not meet the "independent director"
standards applicable to companies listed on the Nasdaq Capital Market (though
the Company's Units are not listed on any exchange or quotation system). The
address for all Directors is 2101 42nd Avenue, Council Bluffs, Iowa 51501-8409.
With the exception of Mr. Scharf, who serves on the Board of Directors of
Patriot Coal Corporation, none of the Directors listed below have served on the
board of directors of any other company having a class of securities registered
under Section 12 of the Exchange Act or subject to the requirements of Section
15(d) of the Exchange Act, nor have any of our Directors served as directors of
an investment company registered under the Investment Company Act. Under the
Company's Operating Agreement, the Series A Directors' terms are staggered such
that one Director will be up for election every year.
7
Independent Directors
Term of
Name Office and
and Age Position(s) Held Length of Principal Occupation(s)
with the Company Time Served During Past 5 Years
Hubert Houser, Series A Director Term expires Lifetime owner of farm and
65 2010, cow-calf operation located
Director near Carson, Iowa. Mr.
since 2005 Houser has served in the
Iowa Legislature since
1993, first in the House of
Representatives and
currently in the Senate.
Mr. Houser also served on
the Pottawattamie County
Board of Supervisors from
1979 to 1992, director of
the Riverbend Industrial
Park, and was a founder of
the Iowa Western
Development Association and
Golden Hills RC&D.
Michael K. Series A Director Term expires Vice Chairman (since 2004),
Guttau, 61 2011, Chairman, Audit Committee
Director (2004 - 2006) and Chairman,
since 2007 Risk Management Committee
(since 2007), Federal Home
Loan Bank of Des Moines
since 1972, various
positions with Treynor
State Bank, currently
President, CEO and Chairman
of the Board;
Superintendent of Banking,
Iowa Division of Banking,
1995 - 1999; Director, Iowa
Bankers Association, Iowa
Bankers Mortgage
Corporation, Iowa Student
Loan Liquidity Corp., Iowa
Business Development
Finance Corp. and Iowa Seed
Capital Liquidation Corp.;
President, Southwest Iowa
Bank Administration
Institute. Mr. Guttau
received his B.S., Farm
Operation, from Iowa State
University in 1969, and
completed numerous U.S.
military education programs
in 1969, 1970 and 1978.
Karol King, 61 Series A Term expires Corn and soybean farmer
Director and 2009, near Mondamin, Iowa, since
Chairman Director 1967; President, King Agri
since Sales, Inc. (marketer of
November, chemicals, fertilizer and
2006 equipment) since 1995;
President, Kelly Lane
Trucking, LLC, since 2007.
Mr. King attended Iowa
State University and has
served on the Harrison
County Farm Bureau Board,
the Iowa Corn Growers
Board, the Iowa Corn
Promotion Board, the US
Feed Grains Council Board,
the National Gasohol
Commission, and the
National Corn Growers
Association Board.
Interested Directors
Name Position(s) Term of Office+
and Age Held with the and Length of Principal Occupation(s)
Company Time Served During Past 5 Years
Bailey Ragan, Series B Since November Various positions with
52++ Director 1, 2006 Bunge North America, Inc.
for more than 25 years,
currently Vice President
and General Manager, Bunge
Grain.
Michael Series B Since November Senior Vice President and
Scharf, 60++ Director 1, 2006 CFO, Bunge North America,
Inc., since 1989.
8
Name Position(s) Term of Office+
and Age Held with the and Length of Principal Occupation(s)
Company Time Served During Past 5 Years
Greg Krissek, Series C Since November Director of Governmental
44++ Director 1, 2006 Affairs, ICM, Inc., since
2006; Director of Marketing
and Governmental Affairs,
United Bio Energy, from
2003 to 2006; Chairman,
National Ethanol Vehicle
Coalition, since 2007;
Secretary-Treasurer of the
Board, Ethanol Promotion
and Information Council
since 2004; director,
Kansas Association of
Ethanol Processors since
2004; Kansas Energy
Council, since 2004 prior
Director of Operations,
Kansas Corn Commission;
Assistant Secretary, Kansas
Department of Agriculture,
1997 to 2000. Mr. Krissek
represents ICM on the
boards of eight additional
private ethanol companies.
Mr. Krissek received his
B.A. in Economics from
Rockhurst University in
Kansas City and his Juris
Doctor and MBA from the
University of Denver.
+ The Interested Directors' terms do not have a specified number of years, as
these Directors are nominated by the Series B Member and the Series C Member, as
discussed further above under "Certain Relationships and Related Transactions,
and Director Independence."
++ The information provided above under "Certain Relationships and Related
Transactions, and Director Independence," respecting the election of Messrs.
Ragan, Scharf and Krissek as Directors, is incorporated herein by reference.
Executive Officers of the Company
The table below lists all of the Company's executive officers. The address
for all of the Company's officers is 2101 42nd Avenue, Council Bluffs, Iowa
51501-8409. There are no arrangements or understandings between any of the
Company's officers and any other persons pursuant to which he or she was
selected as an officer. None of the Officers listed below have served on the
board of directors of any other company having a class of securities registered
under Section 12 of the Exchange Act or subject to the requirements of Section
15(d) of the Exchange Act, nor have any of our Officers served as directors of
an investment company registered under the Investment Company Act.
Term of
Office and
Name Position(s) Held Length of Business Background
And Age with the Company Time Served During Past 5 Years
Mark Drake, 48 President and Since Global Sales and Marketing
Chief Executive January, 2007 Manager - Ethanol, Phibro
Officer Animal Health Corporation
(global manufacturer of
antimicrobials) from 2004 -
2006; Corporate Account
Manager, Novozymes North
America (global biotech
manufacturer of food an
industrial enzymes) from
2002 -2004; Marketing
Manager, Chief Ethanol
Fuels, Inc. (fuel grade
ethanol manufacturer) from
2001 - 2002. Mr. Drake
received his Associate of
Science, Chemistry degree
from the College of Lake
County.
Cindy Chief Financial Since July, Controller, Golden Triangle
Patterson, 48 Officer 2007 Energy, L.L.C. (ethanol
producer) from 2000 - 2007;
auditor, Profit Management
Consultants, 1995 - 1999;
staff accountant, Mitchell
Williams, 1994 - 1995. Ms.
Patterson received her BBA
degree from the University
of Georgia, a Post
Baccalaureate in Accounting
from Southern Indiana
University and an MBA in
Management from Golden Gate
University.
9
Term of
Office and
Name Position(s) Held Length of Business Background
And Age with the Company Time Served During Past 5 Years
Ted Bauer, 55 Series A Term expires Director, Secretary and
Director, 2008, Treasurer of the Company
Secretary Director and from March 2005; Owner and
and Officer since operator of a farming
Treasurer March 2005 operation and hunting
preserve near Audubon,
Iowa, since 1977;
Co-Founder, and from 2005
to 2007, Director,
Templeton Rye Spirits LLC;
Director, Iowa Quality
Producers Alliance, since
2003; Vice President, West
Central Iowa Rural Water,
from 2002 to 2007. Mr.
Bauer has an Ag Business
degree from Iowa State
University and is a
graduate of the Texas A&M
TEPAP program.
Compensation of Directors and Executive Officers
Compensation of Directors
The Company does not provide its Directors with any equity or equity option
awards, nor any non-equity incentive payments or deferred compensation.
Similarly, the Company does not provide its Directors with any other
perquisites, "gross-ups," defined contribution plans, consulting fees, life
insurance premium payments or otherwise. Following recommendation by the
Corporate Governance/Compensation Committee and subsequent approval by the Board
on March 16, 2007, the Company pays its Directors the following amounts
(collectively, the "Compensation Policy"): (i) each Director receives an annual
retainer of $12,000, (ii) each Director receives $1,000 per Board meeting
attended (whether in person or telephonic), and (iii) once the Company's plant
is operational, each Director will receive $3,000 per Board meeting attended
(whether in person or telephonic), provided that the foregoing amounts in (i) -
(iii) shall not exceed $24,000 per Director in any calendar year. Additionally,
the following amounts are paid to Directors for specified services: (i) the
Chairman of the Board is paid $7,500 per year, (ii) the Chairman of the Audit
Committee and Audit Committee Financial Expert is paid $5,000 per year, (iii)
the Chairmen of all other Committees are paid $2,500 per year, and (iv) the
Secretary of the Board is paid $2,500 per year.
Independent Directors
The following table lists the compensation the Company paid in Fiscal Year
2007 to its Independent Directors.
Fees Earned or Paid Equity or Non-Equity
Name in Cash All Other Compensation incentives Total
Ted Bauer $24,708 $0 $0 $24,708
Hubert Houser $23,250 $0 $0 $23,250
Karol King $28,875 $0 $0 $28,875
Michael Guttau $16,917 $0 $0 $16,917
10
Interested Directors
The following table lists the compensation the Company paid in Fiscal Year
2007 to its Interested Directors:
Fees Earned or Paid Equity or Non-Equity
Name in Cash All Other Compensation incentives Total
Bailey Ragan+ $24,292 $0 $0 $24,292
Michael M. Scharf+ $22,292 $0 $0 $22,292
Greg Krissek $21,000 $0 $0 $21,000
Brad Petersburg++ $0 $0 $0 $0
+ The Directors fees payable to Messrs. Ragan and Scharf are paid directly to
Bunge at such Directors' request, and Messrs. Ragan and Scharf do not receive
any compensation from the Company for their service as Directors.
++ Mr. Petersburg's term as Director concluded in March, 2007.
Compensation of Executive Officers
The Company does not currently provide any Unit options, Unit appreciation
rights, non-equity incentive plans, non-qualified deferred compensation or
pension benefits to its executive officers. The Governance Committee is
responsible for designing, reviewing and overseeing the administration of the
Company's executive compensation program. As a development stage company,
certain elements of the Company's executive compensation system have not yet
been established. Pursuant to the Corporate Governance/Compensation Committee
Charter (the "Compensation Committee Charter"), the Corporate
Governance/Compensation Committee approved the compensation terms for Mr. Drake
and Ms. Patterson when they were hired in 2007.
The compensation of the Company's two senior executives is designed to
achieve the following objectives: (i) support the Company's business goals of
completing construction of its ethanol facility and commencing operations; (ii)
align the interests of executive officers and the Company's Unit holders; (iii)
attract, retain and motivate high caliber executive officers; and (iv) pay for
performance by linking a significant amount of executive compensation to
individual contribution to selected metrics of our business plan.
As described below, in addition to cash compensation, the Company intends
to develop an equity-based compensation opportunity for its key executives.
While the equity compensation plan has not yet been developed, certain aspects
of the equity compensation program are outlined in the Company's agreements with
the two executives. The Company intends to provide our executives with a level
of benefits that is competitive with benefits of similar executive positions in
the Company's geographic region for the biofuels and agribusiness sector in
which the Company competes. To this end, the Committee anticipates developing
the following compensation plans for our executives: annual cash incentives,
long-term equity-based incentives and retirement and welfare benefits.
The following discusses the main elements of compensation under our
agreements with our two senior officers.
o Base Salary: A portion of annual cash compensation is paid as base salary
to provide a level of security and stability. Mr. Drake is paid $150,000 in
base salary under his employment agreement, and Ms. Patterson is paid
$90,000 in base salary under her employment agreement. Base salaries will
be reviewed on an annual basis.
o Annual Cash Incentive: The Company expects that a significant portion of
the annual cash compensation paid to the executive officers will be
directly related to the achievement of individual performance goals and
contributions. Awards would first be available for 2008, payable in the
following year. The Corporate Governance/Compensation Committee has not yet
established the incentive criteria generally or the specific details for
the Company's two current executive officers. For the Company's CEO, it is
anticipated that the minimum target for cash incentive compensation is 25
percent of annual salary.
o Long-Term Incentive Compensation: The Company intends to develop a
long-term incentive compensation program for its senior executives, which
will include an equity component.
11
o Retirement and Welfare Benefits: The Company anticipates that it will
implement a 401(k) Plan, a tax qualified retirement plan, but has not yet
done so. The Company has implemented a basic benefits plan for all full
time employees, including medical, dental, life insurance and disability
coverage.
o Relocation and other Benefits: Mr. Drake received a relocation allowance
of $30,000, which was intended to defray costs associated with moving to
Council Bluffs and transition expenses. Ms. Patterson will be reimbursed
for moving expenses, up to a maximum of $5,000 and also received a $25,000
signing bonus. Mr. Drake is provided with the use of a company vehicle.
o Severance and Change-in-Control Benefits: Mr. Drake is entitled to
receive six-months of base salary and target bonus in circumstances
including a change of control of the Company.
Summary Compensation Table
The following table provides all compensation paid to the Company's CEO
and CFO in Fiscal Year 2007. None of the Company's officers received any bonus,
stock or option awards, non-equity incentive plan compensation, or nonqualified
deferred compensation in Fiscal Year 2007.
Non-Equity
Incentive Nonqualified
Name and Stock Option Plan Deferred All Other
Principal Fiscal Bonus Awards Awards Compensation Compensation Compensation Total
Position Year Salary ($) ($) ($) ($) ($) Earnings ($) ($) ($)
Mark Drake,
President and
CEO 2007 $150,000 $0 $0 $0 $0 $0 $37,080+ $187,080
Cindy
Patterson, CFO 2007 $90,000 $0 $0 $0 $0 $0 $25,000++ $115,000
+ This amount constitutes reimbursements for the officer's relocation expenses
in the amount of $30,000 and the cost of providing the officer with a vehicle in
the approximate amount of $7,080 for fiscal year 2007.
++ This amount is a signing bonus for the officer.
Board Meetings and Committees
During Fiscal Year 2007, 30 meetings of the Board of Directors were held.
In addition, 8 meetings of the Audit Committee, 4 meetings of the Corporate
Governance/Compensation Committee and one meeting of the Nominating Committee
were held. Each incumbent Director attended at least 75% of the aggregate
meetings of the Board of Directors and the meetings held by the committees of
the Board of Directors on which each Director served during Fiscal Year 2007,
except for Mr. Scharf who attended 73% of these meetings.
The Company strongly encourages its Directors to attend all annual
meetings, and all Directors, other than Messrs. Scharf and Ragan, attended the
Company's 2007 Annual Meeting of Members.
Audit Committee
The Company has a separately-designated standing Audit Committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act, which
operates under a written charter (the "Audit Committee Charter") and currently
consists of Michael Guttau (Chair), Ted Bauer and Karol King. All of the members
of the Audit Committee meet the "independent director" standards applicable to
companies listed on the Nasdaq Capital Market (though the Company's Units are
not listed on any exchange or quotation system). The Board of Directors has
determined that Michael Guttau is an "audit committee financial expert" as that
term is defined in Item 401(h) of Regulation S-K under the Exchange Act. Among
other things, the Audit Committee has the authority for appointing and
supervising the Company's independent registered public accounting firm and is
primarily responsible for approving the services performed by the Company's
independent registered public accounting firm and for reviewing and evaluating
the Company's accounting principles and system of internal accounting controls.
A copy of the Audit Committee charter is available on the Company's website at
www.sireethanol.com.
12
Nominating Committee
The Nominating Committee operates under a written charter (the "Nominating
Committee Charter"), which is available on the Company's website,
www.sireethanol.com. The Nominating Committee Charter provides that the
Nominating Committee will identify individuals qualified to become Board members
for election by holders of the Company's Series A units, to recommend to the
Board persons to fill Board vacancies or to stand for election by members and to
recommend to the Board nominees for each Board committee, including a financial
expert to serve on the Company's Audit Committee. Presently, the Nominating
Committee's membership consists of Ted Bauer, Hubert Houser and Karol King, all
of whom meet the "independent director" standards applicable to companies listed
on the Nasdaq Capital Market (though the Company's Units are not listed on any
exchange or quotation system).
The Nominating Committee believes that having directors with relevant
experience in business and industry, government, finance and other areas is
beneficial to the Board as a whole. Directors with such backgrounds can provide
a useful perspective on significant risks and competitive advantages and an
understanding of the challenges the Company faces. With respect to nominating
existing directors, the Nominating Committee reviews relevant information
available to it, including the latest Board evaluations for such persons, if
any, and assess their continued ability and willingness to serve as a director.
The Nominating Committee will also assess such persons' contributions in light
of the mix of skills and experience the Committee has deemed appropriate for the
Board. With respect to nominations of new directors, the Committee will conduct
a thorough search to identify candidates based upon criteria the Committee deems
appropriate and considering the mix of skills and experience necessary to
complement existing Board members. The Committee will then review selected
candidates and make a recommendation to the Board. The Committee may seek input
from other Board members or senior management in identifying candidates.
The Nominating Committee Charter provides that the Nominating Committee
will consider director candidates recommended by Unit holders the same way it
evaluates other individuals for nomination as a new director, provided that must
be made in accordance with the Company's Operating Agreement and other policies
to be considered. Under the Company's Operating Agreement, Members may nominate
persons for election as Directors of the same Series. In the case of Series A
Directors, Series A Members must notify the Secretary of the Company in writing
not less than 120 days prior to the one year anniversary of the date on which
the Company first mailed its proxy materials for the prior year's annual
meeting.
Corporate Governance / Compensation Committee
The Corporate Governance/Compensation Committee operates under the
Compensation Committee Charter, which is available on the Company's website,
www.sireethanol.com. The Compensation Committee Charter provides that the
Corporate Governance/Compensation Committee will annually review and approve the
Company's compensation program for its Directors, officers and managers. The
Compensation Committee Charter does not exclude from the Corporate
Governance/Compensation Committee's membership Directors who also serve as
officers or Interested Directors. Presently, the Governance Committee's
membership consists of Messrs. Scharf (Chair), Bauer, Houser and King. As
further described below, Mr. Scharf is considered an Interested Director.
Messrs. Bauer and King, who also serve as officers of the Company, participated
in recommending to the Board Company's Compensation Policy. The Compensation
Committee Charter provides that the Corporate Governance/Compensation Committee
may form and delegate its responsibilities to subcommittees, and the
Compensation Committee Charter does not contemplate (nor does it prohibit) the
use of compensation consultants to assist the Corporate Governance/Compensation
Committee in its determination of Director, officer and managers' compensation.
Audit Committee Report
The Audit Committee has reviewed and discussed the audited financial
statements for Fiscal Year 2007 with management and discussed other matters
related to the audit with the independent auditors. Management represented to
the Audit Committee that the Company's consolidated financial statements were
prepared in accordance with accounting principles generally accepted in the
United States of America. The Audit Committee
13
met with the independent auditors, with and without management present, and
discussed with the independent auditors matters required to be discussed by
Statement on Auditing Standards No. 61, as amended (Communication with Audit
Committees). The independent auditors also provided to the Audit Committee the
written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent auditors the firm's independence.
Based upon the Audit Committee's discussions with management and the
independent auditors, and the Audit Committee's review of representations of
management and the report of the independent auditors to the Audit Committee,
the Audit Committee recommended that the Company's Board of Directors include
the audited financial statements in the Company's Annual Report to Members for
Fiscal Year 2007.
AUDIT COMMITTEE:
Michael K. Guttau, Chair
Ted Bauer
Karol King
Independent Public Accountant Fees and Services
The following table presents fees paid for professional services
rendered by the Company's independent public accountants for Fiscal Year 2007
and for the Company's fiscal year ended September 30, 2006 ("Fiscal Year 2006"):
Fee Category Fiscal Year 2007 Fees Fiscal Year 2006 Fees
- ----------------------------------- ---------------------------- ----------------------------
$82,055 $0
Audit Fees
$0 $0
Audit-Related Fees
$21,273 $0
Tax Fees
$0 $0
All Other Fees
---------------------------- ----------------------------
$103,328 $0
Total Fees
Audit Fees are for professional services rendered by McGladrey & Pullen LLP
("McGladrey") for the audit of the Company's annual financial statements and
review of the interim financial statements included in quarterly reports and
services that are normally provided by McGladrey in connection with statutory
and regulatory filings or engagements. In Fiscal Year 2007, these fees included
the audit of the Company's annual financial statements for Fiscal Year 2007, the
re-audit of the Company's annual financial statements for Fiscal Year 2006 and
assistance in connection with the Company's Registration Statement on Form 10
filed with the SEC.
Audit-Related Fees are for assurance and related services that are
reasonably related to the performance of the audit or review of the Company's
financial statements and are not reported under "Audit Fees." These services
include accounting consultations in connection with acquisitions, consultations
concerning financial accounting and reporting standards. The Company did not pay
any fees for such services in Fiscal Year 2007 or Fiscal Year 2006.
Tax Fees are for professional services rendered by RSM McGladrey, Inc., an
affiliate of McGladrey, for tax compliance, tax advice and tax planning and
include preparation of federal and state income tax returns, and other tax
research, consultation, correspondence and advice.
All Other Fees are for services other than the services reported above. The
Company did not pay any fees for such other services in Fiscal Year 2007 or
Fiscal Year 2006.
The Audit Committee has concluded the provision of the non-audit services
listed above is compatible with maintaining the independence of McGladrey.
14
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors
The Audit Committee pre-approves all audit and permissible non-audit
services provided by the Company's independent auditors. These services may
include audit services, audit-related services, tax services and other services.
Pre-approval is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services and is generally
subject to a specific budget. The independent auditors and management are
required to periodically report to the Audit Committee regarding the extent of
services provided by the independent auditors in accordance with this
pre-approval, and the fees for the services performed to date. The Audit
Committee may also pre-approve particular services on a case-by-case basis.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors voted in favor of the appointment of McGladrey to
serve as the Company's independent public accountants for the Company's fiscal
year ending September 30, 2008. A representative of McGladrey is expected to be
present at the 2008 Annual Meeting with an opportunity to make a statement, and
will be available to respond to appropriate questions.
MEMBER PROPOSALS FOR THE 2009 ANNUAL MEETING
Under the Company's Operating Agreement, Members may nominate persons for
election as Directors of the same Series, but in the case of Series A Directors,
Series A Members must notify the Secretary of the Company in writing not less
than 120 days prior to the one year anniversary of the date on which the Company
first mailed its proxy materials for the prior year's annual meeting.
Accordingly, Members desiring to nominate a Director for election at the 2009
Annual Meeting of Members must give written notice of the nomination to the
Secretary of the Company not later than November 14, 2008. As the Board may
provide by resolution, the Company's proxies will have discretionary authority
to vote with respect to any matter that may be presented at an annual meeting
which does not comply with these notice requirements. Members' nomination
notices must contain the specific information set forth in Section 5.3(d) of the
Company's Operating Agreement. A copy of the Company's Operating Agreement will
be furnished to Members without charge upon written request to the Secretary of
the Company.
In the event a Member wishes to propose any other matter for consideration
at a meeting of the Members, under the Company's Operating Agreement, Members
representing an aggregate of not less than thirty percent (30%) of all of the
Units may demand that the Board of Directors call a meeting of Members.
15
MEMBER COMMUNICATION
Any Member wishing to communicate with any of the Company's Directors
regarding matters related to the Company may provide correspondence to the
Director in care of Secretary, Southwest Iowa Renewable Energy, LLC, 2101 42nd
Avenue, Council Bluffs, IA 51501-8409. The Chairman of the Corporate
Governance/Compensation Committee will review and determine the appropriate
response to questions from shareholders, including whether to forward
communications to individual Directors. The Independent Directors review and
approve the Member communication process periodically to ensure effective
communication with Members.
EXPENSES OF SOLICITATION OF PROXIES
In addition to the use of the mails, proxies may be solicited by personal
interview and telephone by directors, officers and other employees of the
Company, who will not receive additional compensation for such services. The
Company has not employed any party to solicit proxies for the 2008 Annual
Meeting. The costs of this solicitation will be borne by the Company.
PERIODIC REPORTS
The Company's financial statements and related financial information are
contained in the Company's Annual Report to Members for Fiscal Year 2007. The
Annual Report accompanies this Proxy Statement, but is not deemed a part of the
proxy soliciting material.
Please date, sign and return the proxy at your earliest convenience in the
enclosed envelope. No postage is required for mailing in the United States. A
prompt return of your proxy will be appreciated as it will save the expense of
further mailings and telephone solicitations.
By Order of the Board of Directors
|  |
Ted Bauer,
Secretary
Council Bluffs, Iowa
March 14, 2008
