SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required).
For the fiscal year ended June 30, 1995 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from ___________to __________.
Commission File No. 1-8680
HIGH PLAINS CORPORATION
(Exact name of registrant as specified in its charter)
Kansas 48-0901658
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 W. Douglas, Suite #820, Wichita, Kansas 67202
(Address and zip code of principal executive offices)
(316) 269-4310
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12 (b) of the Act:
NONE
Securities Registered Pursuant to Section 12 (g) of the Act:
Common Stock, $0.10 par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve (12)
months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past ninety (90) days.
YES X NO
<PAGE>
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
As of September 29, 1995, the aggregate market value of shares
of High Plains Corporation Common Stock held by nonaffiliates
was approximately $82,167,448.
Documents Incorporated by Reference:
Portions of the Registrant's definitive Proxy Statement for the
1995 Annual Meeting of Stockholders (the "Proxy Statement") to
be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, which definitive proxy statement is anticipated to
be filed within 120 days after the end of the Registrant's
fiscal year end are incorporated by reference in Part III.
Portions of the Registrant's 1995 Annual Report to Stockholders
for the fiscal year ended June 30, 1995 (the "Annual Report") to
be filed pursuant to Rule 14a-3(c) promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934, which Annual Report is anticipated to be filed within 120
days after the end of the Registrant's fiscal year end are
incorporated by reference in Parts I, II and IV.
<PAGE>
PART I
Item 1 BUSINESS
High Plains Corporation (the "Company") was incorporated under
the laws of the State of Kansas on February 28, 1980. The
Company's principal offices are located at 200 W. Douglas, Suite
820, Wichita, Kansas 67202 and its telephone number is (316)
269-4310. (Financial information concerning the Company's
operations is incorporated by reference from Management's
Discussion and Analysis of financial condition and results of
operations (Management's Discussion and Analysis) and the
Financial Statements and Notes thereto in the Company's Annual
Report.)
The Company manufactures and sells ethanol for blending with
gasoline as a motor fuel. The Company believes it is currently
the sixth largest ethanol producer in the United States.
Ethanol increases the oxygen level in gasoline, reducing
pollutants, including carbon monoxide and hydrocarbon
particulate emissions. The Company operates two ethanol
production facilities, one located in Colwich, Kansas and the
other in York, Nebraska. Industry sources estimate that 1.4
billion gallons of ethanol were used to oxygenate United States
fuel supplies in 1994.
Over the last five years, Ethanol production capacity at the
Colwich plant has increased from 13.0 million gallons in fiscal
1991 to 17.8 million gallons in fiscal 1995. Production at the
York facility began on a test basis in November, 1994, resulting
in total production of 15.7 million gallons for this facility in
fiscal 1995.
The Company's production process depends upon a substantial
uninterrupted supply of natural gas. The Company has contracted
with NORAM Energy Services, Inc. to provide natural gas to the
Colwich plant and with Peoples Natural Gas to provide natural
gas to the York plant and believes these supplies will be
sufficient for its production at the two plants. Other
materials used in the production of ethanol are readily
available from numerous suppliers.
In addition, the Company is dependent on rail transportation to
ship its ethanol and distillers grain (DDG) to its customers.
Any interruption of rail transportation due to a rail strike or
any other circumstance would have a significant detrimental
effect on the Company's operations.
During fiscal 1995 and in prior years, the Company has
maintained sufficient grain storage for three to five days of
production. In times when grain prices were believed to be at a
temporary low, with increases expected in the near future, the
Company not only attempted to keep onsite storage nearly full
and buy and store grain in offsite leased storage facilities,
<PAGE>
but also attempted to contract grain at lower current prices for
delivery in the future. The Company believes that the exclusive
grain supply agreement entered into with Farmland Industries,
Inc., during fiscal 1995 will eliminate the need to buy and
store grain offsite and allow the Company to minimize grain
inventory levels onsite. (Also see discussion of raw materials
in Management's Discussion and Analysis in the Company's Annual
Report, which is incorporated by reference herein.)
The maximum finished ethanol inventory attempted to be kept in
stock equals approximately four to five days of production.
Also, typical payment terms in the industry are "Net 10 days
from delivery". As such, low quantities of finished goods and
quick payment terms from customers help to minimize the working
capital needs of the Company.
The market price of ethanol is not related to grain prices, but
has historically been determined by the price of gasoline and
federal tax incentives. Therefore, High Plains is generally not
able to compensate for increases in the cost of grain feedstock
through adjustments in prices charged for its ethanol. (For
information regarding the seasonality of the Company's business
see "Seasonality" discussion in Management's Discussion and
Analysis in the Company's Annual Report which is incorporated by
reference herein.)
For the year ended June 30, 1995, the Company's sales of ethanol
to three customers represented in the aggregate approximately
50.6% of the Company's total sales.In April, 1994, the Company
began direct marketing of its DDG. However, in January, 1995,
the Company entered into an exclusive agreement with ICM, Inc.,
to broker virtually all of the Company's DDG production. This
exclusive agreement will automatically renew for successive 90
day periods unless written notice of termination is issued 90
days prior to the end of a term. The primary market for the
Company's DDG continues to be feed manufacturers of animal and
pet foods, and direct consumers such as feedlots and dairies.
The Company is in direct competition with other ethanol
producers, many of which have greater resources than the
Company. The largest ethanol producers include Archer Daniels
Midland, Pekin Energy Co., and New Energy Co. of Indiana which
are capable of producing approximately 700 million, 100 million,
and 75 million gallons of ethanol per year, respectively. In
addition, there are several other competitors of a similar size
and with similar resources to the Company. Recent estimates
place total domestic ethanol production capacity at 1.5 billion
gallons per year. Plans to construct new plants and the
expansion of existing plants have been announced by various
third parties. However, the Company is unable to accurately
predict the number and production capacity of the plants which
ultimately may be constructed, or the effect of resulting
production, upon the demand or price for ethanol.
<PAGE>
The Company competes with the other ethanol producers on the
basis of price and, to a lesser extent, delivery and service.
High Plains believes that it is able to compete favorably with
other ethanol producers due to its proximity to ample grain
supplies and the efficiencies of the plants. The Company also
believes that its locations offer an advantage over other
ethanol producers in that the Company has ready access by rail
to growing ethanol markets, which reduces its cost of sales.
The Company is also in competition with producers of MTBE, a
petrochemical derived from methanol which costs less to produce
than ethanol. Many major oil companies produce MTBE, and
because it is petroleum based, its use is strongly supported by
such oil companies. These companies have significantly greater
resources than the Company to market MTBE and to influence
legislation and public perception of MTBE. These companies also
have sufficient resources to begin production of ethanol should
they choose to do so.
The Company is subject to extensive environmental regulation at
the federal, state and local level. Air quality at the Colwich
plant is regulated by the Environmental Protection Agency and
the Division of Environment of the Kansas Department of Health
and Environment (the "KDHE"). The KDHE regulates emission of
volatile organic compounds into the air. Volatile organic
compound emissions are checked on a monthly basis, and the
Company must submit semi-annual reports to the KDHE. The
Company is required to obtain an air operating permit from the
KDHE and must obtain KDHE approval to make plant alterations
that could change the emission levels. The KDHE also regulates
the water usage, waste water discharge and hazardous waste at
the Colwich plant under Kansas water pollution control and
hazardous waste laws. Water usage and waste water effluent
quality are checked daily and monthly reports are filed with the
KDHE. The Company is also required to submit periodic reports
pursuant to the Kansas and federal Emergency Planning Community
Right-to-Know Act. At the local level, the Company files
semi-annual reports with the Sedgwick County Community Health
Department regarding air quality at the Colwich plant.
The York facility is subject to similar environmental
regulations at the federal, state and local level. Air quality
at the York plant is regulated by the Environmental Protection
Agency and the Nebraska Department of Environmental Quality
(NDEQ). The Company submits various reports routinely
throughout the year concerning emissions of volatile compounds.
The Company was required to obtain an air operating permit from
the NDEQ and must obtain approval to make any plant alterations
that could change the emission levels. The NDEQ also regulates
waste water discharge at the York Plant. Waste water effluent
quality is tested daily, and monthly reports are filed. The
York facility is also required to submit periodic reports
pursuant to the Nebraska and Federal Emergency Planning
Community Right-to-Know Act. The Company has received air
quality, water discharge permits, and all other permits required
for operations at the York location.
<PAGE>
At June 30, 1995, the Company employed 127 persons. These
included 42 employees at the Colwich, Kansas plant, 77 employees
at the York, Nebraska plant, and 8 employees in the Wichita,
Kansas corporate office.
Item 2 PROPERTIES
The Company's principal executive offices at 200 W. Douglas,
Suite 820, Wichita, Kansas are leased and cover approximately
2,800 square feet.
The Company presently owns the approximately 70 acres of land
and the improvements thereon which comprise its Colwich, Kansas
plant. Bank One, Indianapolis, N. A. holds a mortgage on this
land, as well as the ethanol production plant as security for
its loan to the Company.
The Company presently owns approximately 142 acres of land
northeast of York, Nebraska that it purchased on September 13,
1993. Approximately 59 acres were required for the ethanol
facility that was completed in November, 1994. Bank One,
Indianapolis, N. A. holds a mortgage on approximately 59 acres
used by the ethanol facility as well as the ethanol production
plant as security for its loan to the Company.
The Company presently owns approximately 28 acres outside of New
Iberia, Louisiana. This land and equipment does not serve as
collateral for any Company debt and is being offered for sale.
Item 3 LEGAL PROCEEDINGS
Commodity Specialist Company, (CSC) is a distributor of
agricultural products which, from 1988 until April 1994,
marketed and sold DDG produced by the Company. A dispute
developed between the Company and CSC after the termination of
the contract under which CSC sold the Company's DDG. In early
September 1995, the Company filed suit in the U.S. District
Court for the District of Kansas, against CSC in an attempt to
collect approximately $110,000 which the Company believes is
owed by CSC for DDG sold but not paid for by CSC. Subsequently,
CSC filed a suit in the U.S. District Court for the District of
Minnesota, Fourth Division, against the Company claiming damages
in excess of $1.2 million for lost profits, costs and expenses
allegedly resulting from the termination of the contract and
from the Company's delivery of contaminated DDG to CSC for
re-sale. No reserves have been made for fiscal 1994 or fiscal
1995 for any amounts which may be payable to CSC; although for
accounting purposes, a receivable of approximately $100,000 due
from CSC to the Company was provided for in fiscal 1994. The
Company has made a claim against its product liability insurance
carrier to defend the action, although the insurance carrier has
initially indicated that its policy may not cover the claims
made by CSC. The Company intends to pursue the issue of
insurance coverage, and to vigorously defend the action filed by
CSC. The Company believes that the ultimate resolution of this
dispute will not have a material adverse effect on the Company's
financial condition.
<PAGE>
Item 4 SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS
No matters were submitted to a vote of the stockholders of the
Company during the fourth quarter of the fiscal year ended June
30, 1995.
PART II
Item 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED SECURITY HOLDER MATTERS
The Company's Common Stock is traded on the NASDAQ National
Market System under the symbol HIPC.
The number of holders of record of the Company's common stock as
of September 29, 1995, was approximately 8,580 determined by an
examination of the Company's transfer book and through broker
search.
The Company has not declared or paid any cash dividends on its
Common Stock since its organization in 1980. The Company did
not declare or pay any dividends related to the Company's 11
1/2% Cumulative Preferred Stock during fiscal 1995.
The Company is currently restricted by loan covenants from
paying dividends on its capital stock until the York, Nebraska
facility has been in continuous operation for a period of
eighteen months. Thereafter the Company is restricted from
paying dividends if an event of default or unmatured event of
default has occurred and continues or would occur by reason of
payment of any such dividend.
The Company does not intend to declare or pay any cash dividends
in the foreseeable future. The payment and rate of future cash
dividends on the Company's Common Stock, if any, would be
subject to review by the Board of Directors in light of the
Company's financial condition, results of operations, capital
requirements and other factors deemed relevant at that time.
Additional information relating to this item is hereby
incorporated by reference from the "Market For Registrant's
Common Equity" section of the 1995 High Plains Corporation
Annual Report to Stockholders for the year ended June 30, 1995
which is anticipated to be filed pursuant to Rule 14a-3(c)
within 120 days after the end of the Company's fiscal year ended
June 30, 1995.
<PAGE>
Item 6 SELECTED FINANCIAL DATA
The information relating to this item is hereby incorporated by
reference from the "Five Year Summary of Selected Financial
Data" in the 1995 High Plains Corporation Annual Report to
Stockholders for the year ended June 30, 1995 which is
anticipated to be filed pursuant to Rule 14a-3(c) within 120
days after the end of the Company's fiscal year ended June 30,
1995.
Item 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information relating to this item is hereby incorporated by
reference from the "Management's Discussion and Analysis" in the
1995 High Plains Corporation Annual Report to Stockholders for
the year ended June 30, 1995 which is anticipated to be filed
pursuant to Rule 14a-3(c) within 120 days after the end of the
Company's fiscal year ended June 30, 1995.
Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information relating to this item with the exception of the
financial statement schedules is hereby incorporated by
reference from the Financial Statements and Notes thereto in the
1995 High Plains Corporation Annual Report to Stockholders for
the year ended June 30, 1995 which is anticipated to be filed
pursuant to Rule 14a-3(c) within 120 days after the end of the
Company's fiscal year ended June 30, 1995.
Item 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10 DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT
The information relating to this item is hereby incorporated by
reference from the High Plains Corporation definitive Proxy
Statement for the "Directors and Executive Officers" section of
the 1995 Annual Meeting of Stockholders, which is anticipated to
be filed pursuant to Regulation 14A within 120 days after the
end of the Company's fiscal year ended June 30, 1995.
Item 11 EXECUTIVE COMPENSATION
The information relating to this item is hereby incorporated by
reference from the "Executive Compensation" section of the High
Plains Corporation definitive Proxy Statement for the 1995
Annual Meeting of Stockholders, which is anticipated to be filed
pursuant to Regulation 14A within 120 days after the end of the
Company's fiscal year ended June 30, 1995.
<PAGE>
Item 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information relating to this item is hereby incorporated by
reference from the "Security Ownership of Certain Beneficial
Owners and Management" section of the High Plains Corporation
definitive Proxy Statement for the 1995 Annual Meeting of
Stockholders, which is anticipated to be filed pursuant to
Regulation 14A within 120 days after the end of the Company's
fiscal year ended June 30, 1995.
Item 13 CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
The information relating to this item is hereby incorporated by
reference from the "Certain Relationships and Related
Transactions" section of the High Plains Corporation definitive
Proxy Statement for the 1995 Annual Meeting of Stockholders,
which is anticipated to be filed pursuant to Regulation 14A
within 120 days after the end of the Company's fiscal year ended
June 30, 1995.
PART IV
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) Documents Filed as a Part of This Report
(1) Financial Statements
Statements of Operations - Years Ended
June 30, 1995, 1994, and 1993 *
Statements of Stockholder's Equity - Years
Ended June 30, 1995, 1994, and 1993 *
Balance Sheets - June 30, 1995 and 1994 *
Statements of Cash Flows - Years
Ended June 30, 1995, 1994, and 1993 *
Notes to Financial Statements *
Independent Auditors' Report on Financial Statements *
*Incorporated by reference from the Company's 1995 Annual
Report to Stockholders for the year ended June 30, 1995
which is anticipated to be filed pursuant to Rule 14a- 3(c)
within 120 days after the end of the Company's fiscal year
ended June 30, 1995.
<PAGE>
(2) Financial Statement Schedules
Independent Auditors' Report on Financial Statements
Schedules
Financial Statement Schedules:
V -Property, Plant and Equipment
VI -Accumulated Depreciation on Property,
Plant and Equipment
X -Supplementary Income Statement Information
(3) Exhibits
See Index to Exhibits attached hereto and incorporated by
reference herein.
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the fourth
quarter of the fiscal year ended June 30, 1995.
(c) Exhibits
Exhibits are listed in Item 14(a)(3) and filed as part of
this report.
(d) Financial Statement Schedules
The financial statement schedules listed in Item 14(b) are
filed as part of this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized in Wichita, Kansas on the 3rd day of
October, 1995.
HIGH PLAINS CORPORATION
By: /Stanley E. Larson/
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on the behalf of the Registrant and in the capacities and on the
date indicated.
Signature Title Date
President, Chairman
of the Board and a
Director (Principal
/Stanley E. Larson/ Executive Officer) October 3, 1995
/H. Tom Ritchie/ Director/Secretary October 3, 1995
/Roger D. Skaer/ Director/Treasurer October 3, 1995
/John F. Chivers/ Director October 3, 1995
/Daniel O. Skolness/ Director October 3, 1995
/Donald M. Wright/ Director October 3, 1995
Executive Vice President
/Raymond G. Friend/ Chief Financial Officer October 3, 1995
<PAGE>
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENT SCHEDULES
The Board of Directors and Stockholders
High Plains Corporation
We have audited the financial statements of High Plains
Corporation as of June 30, 1995 and 1994, and for each of the
three years in the period ended June 30, 1995, and have issued
our report thereon dated August 11, 1995; such financial
statements and report are included in your 1995 annual Report to
Stockholders and are incorporated herein by reference. Our
auditors also included the financial statement schedules of High
Plains Corporation listed in Item 14. These financial statement
schedules are the responsibility of the Corporation's
management. Our responsibility is to express an opinion based
on our audits. In our opinion, such financial statement
schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material
respects the information set forth therein.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
August 11, 1995
<PAGE>
<TABLE>
SCHEDULE V
HIGH PLAINS CORPORATION
PROPERTY, PLANT AND EQUIPMENT
Years Ended June 30, 1995, 1994, and 1993
<CAPTION>
Other
Balance, Changes Balance,
Description Beginning Additions Retire- Adds End of
of Year at Cost ments (Deduct) Year
<S> <C> <C> <C> <C> <C>
Year ended June 30, 1995:
Land and improvements 177,783 -- ( 35,500) -- 142,283
Ethanol plant 37,502,487 695,690 ( 1,076,199) 35,265,299 72,387,277
Other facilities and
equipment 249,662 68,209 ( 17,661) -- 300,210
Office equipment 248,983 87,787 ( 105,486) -- 231,284
Leasehold improvements 43,798 4,204 -- -- 48,002
Construction-in-progr 19,105,781 16,159,518 -- (35,265,299) --
57,328,494 17,015,408 ( 1,234,846) -- 73,109,056
Year ended June 30, 1994:
Land and improvements 177,783 -- -- -- 177,783
Ethanol plant 36,563,646 1,191,367 ( 252,526) -- 37,502,487
Other facilities and
equipment 231,974 17,688 -- -- 249,662
Office equipment 173,122 75,861 -- -- 248,983
Leasehold improvements 14,833 28,965 -- -- 43,798
Construction-in-progre 3,030,044 16,075,737 -- -- 19,105,781
40,191,402 17,389,618 ( 252,526) -- 57,328,494
Year ended June 30, 1993:
Land and improvement 181,893 -- ( 4,110) -- 177,783
Partially completed
fluorocarbon plant 1,017,342 -- -- (1,017,342) --
Ethanol plant 32,710,690 2,835,614 -- 1,017,342 36,563,646
Other facilities and
equipment 632,971 81,813 ( 482,810) -- 231,974
Office equipment 114,931 58,191 -- -- 173,122
Leasehold improvements 4,030 14,833 ( 4,030) -- 14,833
Construction-in-progress -- 3,030,044 -- -- 3,030,044
34,661,857 6,020,495 ( 490,950) -- 40,191,402
<FN>
Depreciation:
The estimated lives on which the depreciation provision was
based are as follows:
Prior to
1995 1995
Land improvements 20 yrs 20 yrs
Ethanol plant 5 - 40 yrs 20 yrs
Other facilities and equipment 5 - 10 yrs 5 - 20 yrs
Office equipment 3 - 10 yrs 3 - 10 yrs
Leasehold improvements 5 yrs 3 - 5 yrs
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI
HIGH PLAINS CORPORATION
ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
Years Ended June 30, 1995, 1994, and 1993
Other
Balance, Changes Balance,
Beginning Retire- Add End of
Description of Year Provision ments (Deduct) Year
<S> <C> <C> <C> <C> <C>
Year ended June 30, 1995:
Ethanol plant $12,672,908 $1,915,625 $(115,848) $( 4,413) $14,468,272
Other facilities and
equipment 144,267 42,034 ( 3,699) 4,413 187,015
Office equipment 123,453 28,322 ( 19,215) -- 132,560
Leasehold improvements 8,760 9,810 -- -- 18,570
$12,949,388 $1,995,791 $(138,762) $ -- $14,806,417
Year ended June 30, 1994:
Ethanol plant $10,683,654 $2,016,474 $ -- $ -- $12,672,908
Other facilities and
equipment 106,817 37,450 (27,220) -- 144,267
Office equipment 95,638 27,815 -- -- 123,453
Leasehold improvements -- 8,760 -- -- 8,760
$10,886,109 $2,090,499 $ (27,220) $ -- $12,949,388
Year ended June 30, 1993:
Partially completed
fluorocarbon plant $ 109,497 $ 5,859 $ -- $ (115,356) $ --
Ethanol plant 8,802,078 1,766,220 -- 115,356 10,683,654
Other facilities and
equipment 176,373 31,632 (101,188) -- 106,817
Office equipment 81,390 14,248 -- -- 95,638
Leasehold improvements 4,030 -- (4,030) -- --
$ 9,173,368 $1,817,959 $(105,218) $ -- $10,886,109
</TABLE>
<PAGE>
SCHEDULE X
HIGH PLAINS CORPORATION
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Years Ended June 30, 1995, 1994 and 1993
Year ended June 30, 1995:
Maintenance and repairs . . . . . . . . . . . . . $ 1,004,573
Amortization of intangible assets . . . . . . . . 65,857
Taxes, other than payroll and income taxes. . . . 382,073
Year ended June 30, 1994:
Maintenance and repairs . . . . . . . . . . . . . $ 1,020,319
Amortization of intangible assets . . . . . . . . --
Taxes, other than payroll and income taxes. . . . 207,789
Year ended June 30, 1993:
Maintenance and repairs . . . . . . . . . . . . . $ 358,209
Amortization of intangible assets . . . . . . . . --
Taxes, other than payroll and income taxes. . . . 139,160
<PAGE>
Page 1 of 4
Index to Exhibits
3-1 Articles of Incorporation of the Company dated February
28, 1980. (incorporated by reference from Exhibit 3-1 to the
Company's Registration Statement on Form S-1, dated February 9,
1993).
3-2 Certificate of Amendment to Articles of Incorporation of
the Company, dated May 5, 1980 (incorporated by reference from
Exhibit 3-2 to the Company's Registration Statement on Form S-1,
dated February 9, 1993).
3-3 Certificate of Amendment to Articles of Incorporation of
the Company, dated August 4, 1983. (incorporated by reference
from Exhibit 3-3 to the Company's 1983 Annual Report on Form
10-K).
3-4 Certificate of Amendment to Articles of Incorporation of
the Company, dated December 16, 1986. (incorporated by reference
from Exhibit 3-4 to the Company's Registration Statement on
Form S-1, dated April 18, 1988).
3-5 Amended Bylaws of the Company, dated January 15, 1981.
(incorporated by reference from Exhibit 3-5 to the Company's
Registration Statement on Form S-1, dated April 18, 1988).
3-6 Amendment to Article III, Sections 1 and 2 of Bylaws of
the Company. (incorporated by reference from Exhibit 3-6 to the
Company's Registration Statement on Form S-1, dated April 18,
1988).
3-7 Certificate of Amendment to Articles of Incorporation of
the Company dated October 14, 1994, increasing the number of
shares which the Company may issue to fourteen million shares of
Common Stock and twenty-five thousand shares of Preferred Stock.
3-8 Certificate of Amendment to Articles of Incorporation of
the Company dated November 22, 1994 increasing the number of
shares which the Company may issue to fifty million shares of
Common Stock and five million shares of Preferred Stock.
<PAGE>
Page 2 of 4
4-1 Form of Common Stock Certificate (incorporated by
reference from Exhibit 4-1 to the Company's Registration
Statement on Form S-1, dated April 18, 1988).
10-1 Ethanol production credit agreement with the State of
Nebraska Department of Revenue dated October 9, 1992
(incorporated by reference from Exhibit 10-7 to the Company's
annual filing on Form 10-K, dated June 30, 1994).
10-2 High Plains Corporation 1990 Stock Option Plan
(incorporated by reference from Exhibit 10-8 to the Company's
Registration Statement on Form S-1, dated February 9, 1993).
10-3 High Plains Corporation 1992 Stock Option Plan
(incorporated by reference from Exhibit 10-14 to the Company's
Registration Statement on Form S-1, dated February 9, 1993).
10-4 Gas Sales Contract dated September 1, 1989, between the
Company and Arkla General Supply Company, a division of Arkla
Energy Marketing Company (the "Arkla Agreement") (incorporated
by reference from Exhibit 10-15 to the Company's Registration
Statement on Form S-1, dated February 9, 1993).
10-5 Lease dated April 12, 1993 between High Plains
Corporation and Garvey Center L.C. (incorporated by reference
from Exhibit 10-8 to the Company's annual filing on Form 10-K,
dated June 30, 1994).
10-6 Gas Sales Contract dated May 13, 1994, between the
Company and Peoples Natural Gas Company (incorporated by
reference from Exhibit 10-10 to the Company's annual filing on
Form 10-K, dated June 30, 1994).
10-7 Letter Agreement dated August 15, 1994 between NorAm
Energy Services, Inc. (formerly Arkla Energy Marketing Company),
amending the Arkla Agreement (incorporated by reference from
Exhibit 10-16 to the Company's Registration Statement on Form
S-1, dated February 9, 1993).
<PAGE>
Page 3 of 4
10-8 Letter of Agreement dated September 14, 1994, between
Peoples Natural Gas, Division of Utili-Corp United, Inc. and the
Company regarding transportation costs on natural gas usage
(incorporated by reference from Exhibit 10-12 to the Company's
annual filing on Form 10-K, dated June 30, 1994).
10-9 Exchange and Release Agreements dated October 18, 1994,
providing conversion rights for the 11 1/2% Cumulative Preferred
Stock to Common Stock (incorporated by reference from Exhibit
10-2 to the Company's quarterly filing on Form 10-Q, dated
September 30, 1994).
10-10 Promissory Note, converting construction loan to term
loan dated October 31, 1994, between Bank One, Indianapolis,
N.A., and the Company (incorporated by reference from Exhibit
10-3 to the Company's quarterly filing on Form 10-Q dated
September 30, 1994).
10-11 Amendment to the Company's 1990 Stock Option Plan,
dated November 18, 1994, increasing the number of shares
available under the plan and granting of additional options to
replace certain options when exercised.
10-12 Amendment to the Company's 1992 Stock Option Plan,
dated November 18, 1994, increasing the number of shares
available under the plan and granting of additional options to
replace certain options when exercised.
10-13 Real Estate Installment Agreement dated January 19,
1995, between David J. Vander Griend and the Company, regarding
sale of certain real estate (incorporated by reference from
Exhibit 10-5 to the Company's filing on Form 8-K dated January
19, 1995).
10-14 Asset Purchase Agreement dated January 19, 1995,
between ICM, Inc. and the Company, regarding sale of various
tangible and intangible property (incorporated by reference from
Exhibit 10-6 to the Company's filing on Form 8-K dated January
19, 1995).
10-15 Consulting and Services Agreement dated January, 19,
1995, between ICM, Inc. and the Company, regarding minimum
guaranteed services to be provided (incorporated by reference
from Exhibit 10-7 to the Company's filing on Form 8-K dated
January 19, 1995).
<PAGE>
Page 4 of 4
10-16 Agreement between the Company and ICM for purchase of
Wet Distiller's Grains with Solubles, Dried Distiller's Grains
with Solubles, and Solubles, dated January 19, 1995
(incorporated by reference from Exhibit 10-8 to the Company's
filing on Form 8-K dated January 19, 1995).
10-17 Employment Agreement dated April 1, 1995, between the
Company and Stanley E. Larson, for the continuation of
employment through July 1, 2000.
10-18 Employment Agreement dated April 1, 1995, between the
Company and Raymond G. Friend, for the continuation of
employment through July 1, 2000.
10-19 Agreement between Farmland Industries, Inc., and the
Company, commencing July 1, 1995, for the exclusive supply of
grain feedstock.
11-1 Statement on Computation of Per Share Earnings
(incorporated by reference from the Company's 1995 Annual Report
to Stockholders for the fiscal year ended June 30, 1995 which is
anticipated to be filed pursuant to Rule 14a-3(c) within 120
days after the end of the Company's fiscal year ended June 30,
1995).
18-1 Accountants Letter re: Change in Accounting Principals
(incorporated by reference from Exhibit 18-1 to the Company's
quarterly filing on Form 10-Q dated September 30, 1994).
24-1 Consent of Allen, Gibbs, and Houlik, L.C., independent
certified public accountants.
27-1 Financial Data Schedule.
Exhibit 3-7
Page 1 of 4
STATE OF KANSAS
[SEAL: STATE OF KANSAS]
OFFICE OF
SECRETARY OF STATE
BILL GRAVES
To all to whom these presents shall come, Greetings:
I, Bill Graves, Secretary of State of the State of Kansas, do
hereby certify that the attached is a true and correct copy of
an original on file and of record in this Office.
[SEAL: PAT KETTLER, REGISTER OF DEEDS
JAN 23, 1995]
In testimony whereof:
I hereto set my hand and cause to be affixed my official seal. Done at the City
ofTopeka on the date below:
Dec. 30, 1994
[SEAL: SECRETARY OF STATE
STATE OF KANSAS]
BILL GRAVES
SECRETARY OF STATE
<PAGE>
Exhibit 3-7
Page 2 of 4
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION
OF
HIGH PLAINS CORPORATION
We, Stanley E. Larson, President, and Hale Thompson Ritchie II,
Secretary, of High Plains Corporation, a corporation organized
and existing under the laws of the State of Kansas, do hereby
certify that at a meeting of the Board of Directors of the
corporation the board adopted a resolution setting forth the
following amendments to the Fourth, Eighth, Ninth, Tenth and
Eleventh Articles of the Articles of Incorporation and declared
its advisability, to-wit:
FOURTH: The total number of shares which the Corporation may
issue shall be fourteen million twenty-five thousand
(14,025,000) comprised of:
(a) Fourteen million (14,000,000) shares of Common Stock, par
value $.10 per share; and
(b) Twenty-five thousand (25,000) shares of Preferred Stock,
no par value per share.
Authority is expressly granted to the Board of Directors of this
Corporation to fix by resolution or resolutions thereof any
voting powers, designations, preferences, rights,
qualifications, limitations or restrictions of any class or of
any series of such authorized shares which are not in conflict
with the provisions hereof.
EIGHTH: In furtherance and not in limitation of the powers
conferred by the laws of the state of Kansas, the Board of
Directors of the Corporation is authorized and empowered to
adopt, alter, amend and repeal the bylaws of the Corporation in
any manner not inconsistent with the laws of the state of Kansas.
NINTH: The Corporation shall, to the fullest extent permitted by
Section 17-6305 of the Kansas General Corporation Code, or any
successor provision, as presently in effect or as hereafter may
be amended, indemnify all persons whom it may indemnify pursuant
thereto and shall advance expenses of litigation to directors
and officers in accordance with the procedures and limitations
set forth in the bylaws.
TENTH: Notwithstanding anything contained in these Articles of
Incorporation to the contrary, the affirmative vote of the
holders of at least seventy-five percent (75%) of the
outstanding shares of each class of securities then entitled to
be voted thereon shall be required for approval of any merger or
consolidation, or any sale, lease, exchange, transfer or other
disposition of all, or substantially all, of the assets
<PAGE>
Exhibit 3-7
Page 3 of 4
of the Corporation, unless such merger, consolidation, sale,
lease, exchange, transfer or disposition is with a subsidiary
whoily-owned by the Corporation.
The affirmative vote of the holders of at least seventy-five
percent (75%) of the shares of the Corporation then entitled to
be voted in an election of directors shall be required to amend
or repeal, or to adopt any provision inconsistent with this
Article TENTH. For purposes of this Article TENTH, shares not
voting shall count as votes against any such proposed amendment,
repeal or adoption of such inconsistent provision.
ELEVENTH: No stockholder shall have any preemptive right to
subscribe to an additional issue of stock of the Company of any
class or series thereof, or to any security of the Company
convertible into such stock.
We further certify that thereafter, pursuant to the resolution
and in accordance with the bylaws of the corporation and the
laws of the State of Kansas, the Board of Directors called a
meeting of stockholders for consideration of the proposed
amendment, and thereafter, pursuant to notice and in accordance
with the statutes of the State of Kansas, the stockholders
convened and considered the proposed amendment.
We further certify that at the meeting a majority of the
stockholders entitled to vote voted in favor of the proposed
amendment.
We further certify that the amendment was duly adopted in
accordance with the provisions of K.S.A. 17-6602, as amended.
In Witness Whereof, we have hereunto set our hands and affixed
the seal of the corporation this 14th day of October, 1994.
Stanley E. Larson, President
Hale Thompson Ritchie II, Secretary
<PAGE>
Exhibit 3-7
Page 4 of 4
STATE OF KANSAS )
)ss.
COUNTY OF SEDGWICK )
Be it remembered that before me, a Notary Public in and for
the aforesaid county and state, personally appeared Stanley E.
Larson, President, and Hale Thompson Ritchie II, Secretary, of
the corporation named in this document, who are known to me to
be the same persons who executed the foregoing certificate and
duly acknowledged its execution of the same this 14 day of
October, 1994.
[SEAL: DIANA L. VERBLE
NOTARY PUBLIC
STATE OF KANSAS]
Diana L. Verble
Notary Public
My appointment or commission expires:
4/8/98
Exhibit 3-8
Page 1 of 5
STATE OF KANSAS
[SEAL: STATE OF KANSAS]
OFFICE OF
SECRETARY OF STATE
RON THORNBURGH
To all to whom these presents shall come, Greetings:
I, Ron Thornburgh, Secretary of State of the State of Kansas, do
hereby certify that the attached is a true and correct copy of an
original on file and of record in this office.
[SEAL: PAT KETTLER, REGISTER OF DEEDS
APRIL 18, 1995]
In testimony whereof:
I hereto set my hand and cause to
be affixed my official seal. Done
at the City of Topeka on the
date below:
Apr 12, 1995
[SEAL: SECRETARY OF STATE
STATE OF KANSAS]
RON THORNBURGH
SECRETARY OF STATE
<PAGE>
Exhibit 3-8
Page 2 of 5
CERTIFICATE OF AMENDMENT TO ARTICLES OFINCORPORATION
OF
HIGH PLAINS CORPORATION
We, Stanley E. LArson, President, and Hale Thompson Ritchie
II, Secretary, of High Plains Corporation, a corporation and
existing under the laws of the State of Kansas, do hereby
certify that at a meeting of the Board of Directors of the
Corporation the board adopted a resolution setting forth the
following amendments to the Fourth Article of the Articles of
Incorporation and declared its advisability, to-wit:
FOURTH: The total number of shares which the Corporation may
issue shall be fifty-five million (55,000,000) comprised of:
(a) Fifty million (50,000,000) shares of Common Stock, par value
$.10 per share; and
(b) Five million (5,000,000) shares of Preferred Stock, no par
value per share.
Authority is expressly granted to the Board of Directors of this
Corporation to fix by resolution or resolutions thereof any
voting powers, designations, preferences, rights,
qualifications, limitations, or restrictions of any class or of
any series of these preferred shares which are not in conflict
with the provisions hereof.
We further certify that thereafter, pursuant to the
resolution and in accordance with the bylaws of the Corporation
and the laws of the State of Kansas, the Board of Directors
called a meeting of stockholders for consideration of the
proposed amendment, and thereafter, pursuant to notice and in
accordance with the statutes of the State of Kansas, the
stockholders convened and considered the proposed amendment.
We further certify that at the meeting a majority of the
stockholders entitled to vote voted in favor of the proposed
amendment.
We further certify that the amendment was duly adopted in
accordance with the provisions of K.S.A. 17-6602, as amended.
In Witness Whereof, we have hereunto set our hands and
affixed the seal of the corporation this 22 day of November,
1994.
Stanley E. Larson, President
Hale Thompson Ritchie II, Secretary
<PAGE>
Exhibit 3-8
Page 3 of 5
STATE OF KANSAS
)ss.
COUNTY OF SEDGWICK )
Be it remembered that before me, a Notary Public in and for
the aforesaid county and state, personally appeared Stanley E.
Larson, President, and Hale Thompson Ritchie II, Secretary, of
the Corporation named in this document, who are known to me to
be the same persons who executed the foregoing certificate and
duly acknowledged its execution of the same this 7 day of
December, 1994.
[SEAL: DIANA L. VERBLE
NOTARY PUBLIC
STATE OF KANSAS]
Diana L. Verble
Notary Public
My appointment or commission expires:
4/8/98
<PAGE>
Exhibit 3-8
Page 4 of 5
STATEMENT OF UNANIMOUS CONSENT
TO ACTION TAKEN IN LlEU OF A
SPECIAL MEETING OF THE BOARD OF DIRECTORS
OF
HIGH PLAINS CORPORATION
In lieu of a special meeting of the Board of Directors of
High Plains Corporation, a Kansas corporation, the undersigned,
being all of the directors of the Corporation, do hereby consent
to the adoption of, and do hereby adopt, the following
resolution.
BE IT RESOLVED, by the Board of Directors of High Plains
Corporation, that it is necessary and advisable that Article
FOURTH of the Articles of Incorporation by amended so as to read
as follows:
FOURTH: The total number of shares which this Corporation may
issue shall be fifty-five million (55,000,000) composed of:
(a) Fifty million (50,000,000) shares of Common Stock, par
value $.10 per share; and
(b) Five million (5,000,000) shares of Preferred Stock, no par
value per share; and
Authority is expressly granted to the Board of Directors of this
Corporation to fix by resolution or resolutions thereof any
voting powers, designations, preferences, rights,
qualifications, limitations or restrictions of any class or of
any series of these preferred shares which are not in conflict
with the provisions herein.
BE IT FURTHER RESOLVED, that such amendment to the Articles of
Incorporation be submitted to the annual meeting of stockholders
of the Corporation to be held on November 18, 1994 at the
principal office of the Corporation, or at such other designated
location, as deemed necessary, and that the Secretary be
instructed to give notice to all stockholders in the manner
provided in the By-laws.
Dated: 11/22, 1994
Stanley E. Larson
Hale Thompson Ritchie II
Daniel O. Skolness
<PAGE>
Exhibit 3-8
Page 5 of 5
Roger D. Skaer
Donald M. Wright
Jack F. Chivers
Exhibit 10-11
Page 1 of 1
Amendment #1 to the High Plains Corporation
1990 Stock Option Plan (the "Plan")
November 18, 1994
The 1990 Plan is hereby amended to reflect the following changes:
Section C.
The number of shares of Common Stock that may be optioned or
sold under the Plan is one million, two hundred thousand
(1,200,000). Such number reflects stock splits that have
occurred since the inception of the Plan through November 18,
1994.
Section E.
In addition to the method for granting options described in
Section E. of the Plan, any person holding unexercised options
granted under the Plan shall, upon exercise of each of those
options and payment of the exercise price, be granted an option
to purchase the like quantity of Common Shares as those
exercised in order to replace their options. This provision
shall only apply to the Plan options that were issued other than
under this Amendment (the "Original Options").
Section F.
The option price of any options granted under this Amendment
shall be equal to the closing sales price of Company Common
Stock (appropriately adjusted for any stock split, stock
dividend, combination or exchange) as reported in the NASDAQ
National Market System on the day the Original Options granted
under the Plan are exercised.
Section G.
The exercise period for options granted pursuant to this
Amendment shall expire, and any such options granted shall be no
longer exercisable, on the later to occur of (i) the expiration
date of the originally surrendered option or (ii) one year from
the date of grant of such option.
Section G.
Any option granted pursuant to this Amendment shall vest
immediately.
section M.
The termination date of the Plan is eliminated
Exhibit 10-12
Page 1 of 1
Amendment to the High Plains Corporation
1992 Stock Option Plan (the "Plan")
November 18, 1994
The 1992 Plan is hereby amended to reflect the following changes:
Article III, Section 8.
The number of options available under the Plan is three million
(3,000,000). Such number reflects stock splits that have
occurred since the inception of the Plan through November 18,
1994.
Article II, Section 3; Article III, Section 10 and 11.
In addition to the other methods for granting options as
specified in the Plan, any person holding unexercised options
granted under the Plan shall, upon exercise of each of those
options and payment of the exercise price, be granted an option
to purchase the like quantity of Common Shares as those
exercised in order to replace their options. This provision
shall only apply to the Plan options that were issued other than
under this Amendment (the "Original Options").
Article III, Section 15.
The option price of any options granted under this Amendment
shall be equal to the closing sales price of Company Common
Stock (appropriately adjusted for any stock split, stock
dividend, combination or exchange) as reported in the NASDAQ
National Market System on the day the Original Options granted
under the Plan are exercised.
Article III, Section 15.
The exercise period for options granted pursuant to this
Amendment shall expire, and any such options granted shall be no
longer exercisable, on the later to occur of (i) the expiration
date of the originally surrendered option or (ii) one year from
the date of grant of such option.
Other Matters.
Any option granted pursuant to this Amendment shall vest
immediately.
The formula Plan provision as set out in this Amendment may not
be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code, ERISA, or the
rules thereunder. Each such amendment requires stockholder
approval.
Exhibit 10-17
page 1 of 13
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and
entered into as of April 1, 1995, by and between High Plains
Corporation, a Kansas corporation (the "Company") and Stanley E.
Larson (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company believes it to be in its best interest
to provide for continuity of management and to provide
protection for its valuable trade secrets and confidential
information;
WHEREAS, the Company and the Employee entered into that
certain Employment Agreement dated April 1, 1993 (the "Prior
Employment Agreement");
WHEREAS, the Company and the Employee desire to replace the
Prior Employment Agreement with this Agreement to provide
long-term executive salary protection during a critical
corporate expansion period and to create a meaningful
compensation incentive program based on corporate profitability
for present and future executive officers;
WHEREAS, the Company desires to employ the Employee and the
Employee is willing to render his services to the Company on the
terms and conditions with respect to such employment hereinafter
set forth.
NOW, THEREFORE, in consideration of the promises, terms and
conditions hereof, the Company and the Employee hereby agree as
follows:
1. Employment. The Company hereby employs the
Employee and the Employee hereby accepts employment with the
Company upon the terms and conditions hereinafter set forth.
2. Exclusive Services. The Employee shall devote all
necessary working time, ability and attention to the business of
the Company during the term of this Agreement and shall not,
directly or indirectly, render any services of a business,
commercial, or professional nature to any other person,
corporation, or organization whether for compensation or
otherwise, without the prior knowledge of the Board of Directors
of the Company (the "Board").
3. Duties. The Employee is hereby employed as
President and Chief Executive Officer of the Company and shall
render his services either from his home in Tucson, Arizona, or
at
<PAGE>
Exhibit 10-17
page 2 of 13
such other company offices as he may deem appropriate from time
to time. The Employee shall have such authority and shall
perform such duties as are reasonably requested by the Board and
commensurate with Employee's title and position, as well as such
other duties as are specified by the bylaws of the Company for
the office of President; subject, however, to such limitations,
instructions, directions, and control as the Board may specify
from time to time in its discretion.
4. Term. This Agreement shall terminate on July 1,
2000, subject to earlier termination as hereinafter provided.
5.Compensation. As compensation for his services
rendered under this Agreement, the Employee shall be entitled to
receive the following:
a. Base Salary. Subject to applicable withholding taxes, the
Employee shall initially be paid a base salary of $127,308 per
year (the "Base Salary"), payable in equal bi-weekly
installments during the term of this Agreement, prorated for any
partial employment month. The Base Salary shall be increased by
three percent (3%) each year as a cost of living increase and
may be increased by the Board in its sole discretion to reflect
merit increases in addition to such cost of living increase.
b. Bonus Pool. Beginning with the fourth fiscal quarter of
the 1995 fiscal year and during the term of this Agreement, the
Company agrees to establish and fund a bonus pool (the "Bonus
Pool") for the key employees of the Company. The Company
shall contribute five and one-half percent (5 1/2%) of its
Net Profits (as defined below) earned during each fiscal quarter
of each fiscal year to the Bonus Pool. The Employee shall
receive thirty-six and 36/100 percent (36.36%) of the amount
contributed by the Company to the Bonus Pool as his incentive
bonus payment (the "Incentive Bonus Payment") and such Incentive
Bonus Payment shall be calculated and distributed, subject to
applicable withholding taxes, to the Employee as follows:
(1) within thirty (30) days following the end of the first
fiscal quarter of each fiscal year, the Company shall calculate,
based on its Net Profits for such quarter, the amount of the
Company's contribution to the Bonus Pool and shall pay to the
Employee eighty percent (80%) of the Employee's Incentive Bonus
Payment for such quarter;<PAGE>
Exhibit 10-17
<PAGE>
page 3 of 13
2) within thirty (30) days following the end of the
second fiscal quarter of each fiscal year, the Company shall
calculate, based on its Net Profits for such quarter, the amount
of the Company's contribution to the Bonus Pool and shall pay to
the Employee eighty percent (80%) of the Employee's Incentive
Bonus Payment for such quarter; provided, however, that the
Employee's Incentive Bonus Payment for such quarter shall not
exceed the amount, if any, that (x) the Employee's Incentive
Bonus Payment as calculated on the basis of the fiscal
year-to-date Net Profits for such fiscal year exceeds (y) the
sum of all prior Incentive Bonus Payments made to the Employee
during such fiscal year;
(3) within thirty (30) days following the end of the third
fiscal quarter of each fiscal year, the Company shall calculate,
based on its Net Profits for such Bonus Pool and shall pay to
the Employee eighty percent (80%) of the Employee's Incentive
Bonus Payment for such quarter; provided, however, that the
Employee's Incentive Bonus Payment for such quarter shall not
exceed the amount, if any, that (x) the Employee's Incentive
Bonus Payment as calculated on the basis of the fiscal
year-to-date Net Profits for such fiscal year exceeds (y) the
sum of all prior Incentive Bonus Payments made to the Employee
during such fiscal year; and
(4) within thirty (30) days following the receipt by the
Company of the Company's audited financial statements for each
fiscal year, the Company shall calculate, based on its Net
Profits for such fiscal year, the amount of the Company's
contribution to the Bonus Pool for such fiscal year and shall
pay to the Employee one hundred percent (100%) of the amount, if
any, that (x) the Employee's Incentive Bonus Payment as
calculated on the basis of the fiscal year net Profits for such
fiscal year exceeds (y) the sum of all prior Incentive Bonus
Payments made to the Employee during such fiscal year.
Notwithstanding the foregoing, for the fourth
fiscal quarter of the 1995 fiscal year, the Employee shall
receive one hundred percent (100%) of his Incentive Bonus
Payment based on the Company's Bonus Pool contribution for such
fiscal quarter.
"Net Profits" shall be the net earnings of the
Company as disclosed in its reports filed pursuant to Section 13
of
<PAGE>
Exhibit 10-17
page 4 of 13
the Securities Exchange Act of 1934, as amended, for the fiscal
period in question, determined in accordance with generally
accepted accounting principles.
6. Benefits. In addition to the compensation to be
paid to the Employee pursuant to Paragraph 5 hereof, during the
term of this Agreement, the Employee shall further be entitled
to receive the following:
a. Participation in Employee Plans. The Employee shall be
entitled to participate in any health, disability group term
life insurance, pension, retirement or profit sharing plan, or
any other fringe benefits which may be extended generally from
time to time to employees or executive officers of the Company,
including, but not limited to, annual paid vacation.
b. Disability Salary Continuation. If the Employee becomes
disabled during the term of this Agreement, the Company shall
continue to pay the Employee his Base Salary during the first
ninety (90) day period of such disability, and additionally, but
only to the extent the Employee is not paid by disability
insurance available through the Company, shall continue to pay
the Employee, but at the rate of sixty percent (60%) of his Base
Salary (not to exceed $6,000 per month), for the period of such
disability, not to exceed the remaining term of this Agreement.
"Disability" as used herein shall mean any physical, emotional
or mental, injury, illness or incapacity, other than death,
which renders the Employee unable to perform the duties required
of him under this Agreement. The existence of any disability
shall be determined to exist in the sole discretion of the Board
which shall not be arbitrarily exercised. All payments under
this Paragraph shall cease upon the expiration of other
termination of this Agreement or of the Employee's employment.
7. Reimbursement of Expenses. Subject to such rules
and procedures as from time to time are specified by the
Company, the Company shall reimburse the Employee on a monthly
basis for reasonable business expenses necessarily incurred in
the performance of his duties under this Agreement.
8. Key Man Insurance. At Company's option, Company
and Employee agree to cooperate in obtaining a life insurance
policy on the Employee during the term of this agreement in an
amount at the Company's discretion, to be purchased and owned by
the Company, and payable to the benefit of the Company.
Employee agrees to participate in any examinations or tests
required for the issuance
<PAGE>
Exhibit 10-17
page 5 of 13
of such policy as is determined to be necessary by the insurer.
9. Confidentiality/Trade Secrets. The Employee
acknowledges that his position with the Company is one of the
highest trust and confidence both by reason of his position and
by reason of his access to and contact with the trade secrets
and confidential and proprietary business information of the
Company. Both during the term of this Agreement and thereafter,
the Employee covenants and agrees as follows:
a. he shall use his best efforts and exercise utmost diligence
to protect and safeguard the trade secrets and confidential and
proprietary information of the Company including but not limited
to the identity of its customers and suppliers, its arrangements
with customers and suppliers, and its technical and financial
data, records, compilations of information, processes, recipes
and specifications relating to its customers, suppliers,
products and services;
b. he shall not disclose any of such trade secrets and
confidential and proprietary information, except as may be
required in the course of his employment with the Company or by
law; and
c. he shall not use, directly or indirectly, for his own
benefit or for the benefit of another, any of such trade secrets
and confidential and proprietary information.
All files, records, documents, drawings,
specifications, memoranda, notes, or other documents relating to
the business of the Company, whether prepared by the Employee or
otherwise coming into his possession, shall be the exclusive
property of the Company and shall be delivered to the Company
and not retained by the Employee upon termination of his
employment for any reason whatsoever, or at any other time upon
request of the Board.
The Employee further acknowledges that, although the
policies set forth in this paragraph nine have not been strictly
enforced by the Company in the past, the provisions of this
paragraph are an integral part of the consideration for this
Employment Agreement, and will be strictly enforced by the
Company in the future.
10. Discoveries. The Employee covenants and agrees
that he will fully inform the Company of and disclose to the
Company all inventions, designs, improvements, discoveries and
processes ("Discoveries") which he has now or may hereafter have
during his employment with the Company and which pertain or
relate to the business of the Company or to any experimental
work, products,
<PAGE>
Exhibit 10-17
page 6 of 13
services or processes of the Company in progress or planned for
the future, whether conceived by the Employee alone or with
others, and whether or not conceived during regular working
hours or in conjunction with the use of any Company assets. All
such Discoveries shall be the exclusive property of the Company
whether or not patent or trademark applications are filed
thereon. The Employee shall assist the Company, at any time
during or after his employment, in obtaining patents on all such
Discoveries deemed patentable by the Company and shall execute
all documents and do all things necessary to obtain letters
patent, vest the Company with full and exclusive title thereto,
and protect the same against infringement by others. If such
assistance takes place after his employment is terminated the
Employee shall be paid by the Company at a reasonable rate for
any time actually spent in rendering such assistance at the
request of the Company.
11. Non-Competition. The Employee covenants and
agrees that, during the period of his employment, he shall not,
without the prior written consent of the Board, directly or
indirectly, as an employee, employer, consultant, agent,
principal, partner, shareholder, corporate officer, director, or
through any other kind of ownership (other than ownership of
securities of publicly held corporations of which the Employee
owns less than five percent (5%) of any class of outstanding
securities) or in any other representative or individual
capacity, engage in or render any services to any business in
competition with the business then being conducted by the
Company, or any subsidiary thereof, at any place in which the
Company has owned an ethanol production plant, sold alcohol or
transacted any business within the two (2) year period prior to
the incident or event of competition in question. In the event
that the Employee terminates his employment with the Company
pursuant to Paragraph 14(a) or is terminated by the Company
pursuant to Paragraph 14(c) (and except as provided in Paragraph
15, below) the Employee agrees that such covenant against
competition shall continue for a period of two (2) years from
the end of the month in which such termination becomes
effective. If at any time the foregoing provisions shall be
deemed to be invalid or unenforceable by reason of being vague
or unreasonable as to duration or place of performance, this
Paragraph 11 shall be considered divisible and shall become and
be immediately amended to include only such time and such areas
as shall be determined to be reasonable and enforceable by a
court of competent jurisdiction; and the Company and the
Employee expressly agree that this Paragraph 11, as so amended,
shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
<PAGE>
Exhibit 10-17
page 7 of 13
12. Solicitation of Employees. The Employee covenants
and agrees that, during the period of his employment and for a
two (2) year period following termination of his employment, he
shall not, without the prior written consent of the Board,
directly or indirectly, solicit, engage or hire for employment
or employ an employee of the Company, or its affiliates, for
himself or any other person or entity.
13. Remedies for Breach of Covenants of the Employee.
The Covenants set forth in Paragraphs 9, 10, 11 and 12 of this
Agreement shall continue to be binding upon the Employee,
notwithstanding the termination of his employment with the
Company for any reason whatsoever. Such covenants shall be
deemed and construed as separate agreements independent of any
other provisions of this Agreement and any other agreement
between the Company and the Employee. The existence of any
claim or cause of action by the Employee against the Company,
whether predicated on this Agreement of otherwise, shal not
constitute a defense to the enforcement by the Company of any or
all of such covenants. It is expressly agreed that the remedy
at law for the breach of any such covenant is inadequate and
injunctive relief shall be available to prevent the breach or
any threatened breach thereof.
14. Termination. This Agreement (other than
Paragraphs 9, 10, 11 and 12 hereof which shall survive any
termination hereof) may be terminated as follows:
a. By the Employee. The Employee may terminate this Agreement
at any time during the term of this Agreement by giving thirty
(30) days prior written notice of termination to the Board. The
Employee shall receive any Base Salary and Incentive Bonus
Payment accrued on the date of termination and shall not be
entitled to any Base Salary or Incentive Bonus Payments beyond
the date of termination under this Subparagraph a of Paragraph
14, and any unvested stock options shall be subject to the terms
and conditions of the Company's 1992 Stock Option Plan.
b. By the Company Without Cause. The Board, without cause,
may terminate this Agreement at any time during the term of this
Agreement upon thirty (30) days prior written notice to the
Employee. In the case of a termination under this Subparagraph
b or Paragraph 14, the Company shall continue to pay to the
Employee an amount equal to his then current Base Salary and the
regularly scheduled Incentive Bonus Payments, which would have
been payable as calculated under Paragraph 5(b), for the
remainder of the term of this Agreement or any extensions
thereof. In addition, (i) the Employee shall be entitled to
continuation of coverage for the
<PAGE>
Exhibit 10-17
page 8 of 13
remainder of the term of this Agreement under all Company
paid or partially paid health, disability, or group life
insurance plans or any retirement, pension, or profit sharing
plans, in each case at such level as had been available to the
Employee immediately prior to the termination, subject to the
coverage, terms and conditions or such plans, and (ii) any
unvested portion of any stock options held by the Employee as of
the day immediately preceding such termination shall immediately
vest and become exercisable, and (iii) the right to complete the
purchase of any shares of stock which the Employee has elected
to purchase pursuant to any Employee Stock Purchase Plan adopted
by the Company shall immediately vest and become exercisable
upon full payment for the stock in accordance with the terms of
the plan.
c. By the Company with Cause. The Board may, upon written
notice effective immediately, terminate this Agreement at any
time during the term of this Agreement for cause, which
includes but is not limited to the following:
(1) If the Employee should be convicted of a felony;
(2) The inability of the Employee to meet any requirements
set forth by the United States Bureau of Alcohol, Tobacco and
Firearms to maintain the licenses required by the Company to
operate its business; and
(3) If the Employee should willfully breach or habitually
neglect his duties which he is required to perform under this
Agreement or otherwise fail to comply with the terms and
conditions of this Agreement specifically including, but not
limited to, the covenants set forth in Paragraphs 9, 10, 11 and
12 hereof, and fails to cure any such breach or failure within
the (10) days after written notice thereof given by the Company
to the Employee.
The Employee shall receive any Base Salary and
Incentive Bonus Payment accrued on the date of termination and
shall not be entitled to any Base Salary or Incentive Bonus
Pay-ments beyond the date of termination under this Subparagraph
c or paragraph 14, and any unvested stock options shall be
subject to the terms and conditions of the Company's 1992 Stock
Option Plan.
<PAGE>
Exhibit 10-17
page 9 of 13
d. Upon Death or Disability. This Agreement shall terminate
and the Company shall, upon such termination, pay to the
Employee or the Employee's beneficiaries, estate or legal
representative a one-time payment in an amount equal to (i) one
hundred percent (100%) of the Employee's then current annual
Base Salary and (ii) fifty percent (50%) of the amount of the
Employee's total Incentive Bonus Payments for the most recently
completed fiscal year, if either of the following conditions
exist:
(1) If the Employee becomes disabled as defined in
Paragraph 6(b) of this Agreement for a period of more than one
hundred eighty (180) consecutive days; or
(2) If the Employee should die.
15. Termination After Change in Control. In the event
of a change in Control, as defined below, any termination of the
Employee's employment with the Company within the remainder of
the term of this Agreement following such Change in Control,
whether by the Employee or by the Company and whether with our
without cause, the following shall occur:
a. The provisions of Paragraphs 11 and 12 shall
not apply and shall be void;
b. The Company shall continue to pay the Employee an amount
equal to his then current Base Salary and the regularly
scheduled Incentive Bonus Payments, which would have been
payable as calculated under Paragraph 5(b), during the remainder
of the term of this Agreement or any extensions thereof, with
the exception that, for purposes of this paragraph fifteen only,
"Net Profits" as defined in paragraph five shall not ever be
computed to be less than 15% of the Company's gross revenues for
the fiscal period in question;
c. The Employee shall be entitled to continuation of coverage
during the remainder of the term of this Agreement under all
Company paid or partially paid health, disability, or group life
insurance plans or any retirement, pension, or profit sharing
plans, in each case at such level as had been available to the
Employee immediately prior to the Change in Control, subject to
the coverage, terms and conditions or such plans; and
d. Any unvested portion of all stock options held by the
Employee, and the right to complete the purchase of any shares
of stock which the Employee has elected to purchase
<PAGE>
Exhibit 10-17
page 10 of 13
pursuant to any stock option plan adopted by the Company,
as of the day immediately preceding the effective date of such
termination, shall immediately vest and become exercisable and,
for purposes of such options, such termination shall be deemed
to be a termination by the Company without cause.
16. Definitions Related to Change of Control.
a. "Change of Control" means any one of the following: (i)
Continuing Directors (as defined below) no longer constitute at
least 60% of the Board of Directors; (ii) any person or group of
persons (as defined in Rule 13d-5 under the Securities Exchange
Act of 1934), together with its affiliates, become the
beneficial owner, directly or indirectly, of 35% or more of the
Company's then outstanding Common Stock or 35% or more of the
voting power of the Company's then outstanding securities
entitled generally to vote for the election of the Company's
Directors; (iii) the approval by the Company's stockholders of
the merger or consolidation of the Company with any other
corporation, the sale or substantially all of the assets of the
Company or the liquidation or dissolution of the Company,
unless, in the case of a merger or consolidation, the then
Continuing Directors in office immediately prior to such merger
or consolidation will constitute at least 60% of the Board of
Directors of the surviving corporation of such merger or
consolidation and any parent (as such term is defined in Rule
12b-2 under the Securities Exchange Act of 1934) of such
corporation; or (iv) at least 60% of the then Continuing
Directors in office immediately prior to any other action
proposed to be taken by the Company's stockholders or by the
Company's Board of Directors determine that such proposed
action, if taken, would constitute a change of control of the
Company and such action is taken.
b. "Continuing Director" means any individual who either (i)
was a member of the Company's Board of Directors on the date
hereof, or (ii) was designated (before initial election as a
Director) as a Continuing Director by a majority of the then
Continuing Directors.
17. Arbitration of Disputes. Except for Paragraphs
9-12, any dispute or claim arising out of or relating to this
Agreement or any termination of the Employee's employment shall
be settled by arbitration in Wichita, Kansas in accordance with
the then current rules of the American Arbitration Association
pertain-ing to employment disputes, and judgment upon any award
rendered therein may be entered in any court having proper
jurisdiction.
<PAGE>
Exhibit 10-17
page 11 of 13
18. Notices. Any notices to be given hereunder by
either party to the other may be effected either by personal
delivery in writing or by mail, registered or certified, postage
prepaid, with return receipt requested. Mailed notices shall be
addressed as follows:
a. If to the Company:
High Plains Corporation
200 W. Douglas, Suite #820
Wichita, Kansas 67202
b. If to the Employee:
Stanley E. Larson
8524 N. Nobb Hill Dr.
Tucson, Arizona 85741
Either party may change its address for notice by giving notice
in accordance with the terms of this Paragraph 18.
19. Termination of Prior Employment Agreement. The
Company and the Employee hereby agree that the terms and
conditions contained in this Agreement are intended to replace
the terms and conditions of the Prior Employment Agreement, and
that the Prior Employment Agreement and all terms and conditions
therein shall terminate upon the execution of this Agreement.
20. Indemnity. Subject to the provisions and
limitations of the Articles of Incorporation, as amended, of the
applicable law, the Company shall (i) indemnify the Employee and
hold him harmless for all acts or decisions made by him in good
faith while performing services for the Company; (ii) use its
best efforts to obtain coverage for him under any insurance
policy now in force or hereinafter obtained during the term of
this Agreement covering the officers, directors or other key
management of the Company against lawsuits; and (iii) pay all
expenses, including attorneys' fees, actually and necessarily
incurred by the Employee in connection with the defense of such
act, suit or proceeding and in connection with any related
appeal including the cost of court settlements.
21. General Provisions.
a. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas.
<PAGE>
Exhibit 10-17
page 12 of 13
b. Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable, such provision
shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof and the remaining
provisions hereof shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and still be legal, valid or
enforceable.
c. Attorney Fees. If any action at law or in equity,
including an action for declaratory relief or under the
arbitration provisions of Paragraph 17, is brought to enforce or
interpret the provisions of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees from the
other party. These fees shall be in addition to any other
relief that may be awarded.
d. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements
or understandings, whether written or oral, with respect to the
subject matter hereof. No terms, Conditions, warranties, other
than those contained herein, and no amendments or modifications
hereto shall be binding unless made in writing and signed by the
parties hereto.
e. Binding Effect. This Agreement shall extend to and be
binding upon and insure to the benefit of the parties hereto,
their respective heirs, representatives, successors and assigns.
This Agreement may not be assigned by the Employee.
f. Waiver. The waiver by either party hereto of a breach of
any term or provision of this Agreement shall not operate or be
construed as a waiver of a subsequent breach of the same
provision by any party or of the breach of any other term or
provision of this Agreement.
g. Titles. Titles of the paragraphs herein are used solely
for convenience and shall not be used for interpretation or
construing any work, clause, paragraph, or provision of this
Agreement.
<PAGE>
Exhibit 10-17
page 13 of 13
h. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original,
but which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the date and year first above
written above.
EMPLOYEE: HIGH PLAINS CORPORATION
Stanley E. Larson By: Raymond G. Friend
Title: Executive V.P.
Exhibit 10-17
page 1 of 13
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and
entered into as of April 1, 1995, by and between High Plains
Corporation, a Kansas corporation (the "Company") and Raymond G.
Friend (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company believes it to be in its best interest
to provide for continuity of management and to provide
protection for its valuable trade secrets and confidential
information;
WHEREAS, the Company and the Employee entered into that
certain Employment Agreement dated April 1, 1993 (the "Prior
Employment Agreement");
WHEREAS, the Company and the Employee desire to replace the
Prior Employment Agreement with this Agreement to provide
long-term executive salary protection during a critical
corporate expansion period and to create a meaningful
compensation incentive program based on corporate profitability
for present and future executive officers;
WHEREAS, the Company desires to employ the Employee and the
Employee is willing to render his services to the Company on the
terms and conditions with respect to such employment hereinafter
set forth.
NOW, THEREFORE, in consideration of the promises, terms and
conditions hereof, the Company and the Employee hereby agree as
follows:
1. Employment. The Company hereby employs the
Employee and the Employee hereby accepts employment with the
Company upon the terms and conditions hereinafter set forth.
2. Exclusive Services. The Employee shall devote all
necessary working time, ability and attention to the business of
the Company during the term of this Agreement and shall not,
directly or indirectly, render any services of a business,
commercial, or professional nature to any other person,
corporation, or organization whether for compensation or
otherwise, without the prior knowledge of the Board of Directors
of the Company (the "Board").
3. Duties. The Employee is hereby employed as
Executive Vice President of the Company and shall render his
services at the various offices of the Company, as such may be
<PAGE>
Exhibit 10-18
page 2 of 13
located from time to time. The Employee shall have such
authority and shall perform such duties as are reasonably
requested by the Board and commensurate with Employee's title
and position, as well as such other duties as are specified by
the bylaws of the Company for the office of Vice-President;
subject, however, to such limitations, instructions, directions,
and control as the Board may specify from time to time in its
discretion.
4. Term. This Agreement shall terminate on July 1,
2000, subject to earlier termination as hereinafter provided.
5. Compensation. As compensation for his services
rendered under this Agreement, the Employee shall be entitled to
receive the following:
a. Base Salary. Subject to applicable withholding
taxes, the Employee shall initially be paid a base salary of
$127,308 per year (the "Base Salary"), payable in equal
bi-weekly installments during the term of this Agreement,
prorated for any partial employment month. The Base Salary
shall be increased by three percent (3%) each year as a cost of
living increase and may be increased by the Board in its sole
discretion to reflect merit increases in addition to such cost
of living increase.
b. Bonus Pool. Beginning with the fourth fiscal
quarter of the 1995 fiscal year and during the term of this
Agreement, the Company agrees to establish and fund a bonus pool
(the "Bonus Pool") for the key employees of the Company. The
Company shall contribute five and one-half percent (5 1/2%)
of its Net Profits (as defined below) earned during each fiscal
quarter of each fiscal year to the Bonus Pool. The Employee
shall receive thirty-six and 36/100 percent (36.36%) of the
amount contributed by the Company to the Bonus Pool as his
incentive bonus payment (the "Incentive Bonus Payment") and such
Incentive Bonus Payment shall be calculated and distributed,
subject to applicable withholding taxes, to the Employee as
follows:
(1) within thirty (30) days following the end
of the first fiscal quarter of each fiscal year, the Company
shall calculate, based on its Net Profits for such quarter, the
amount of the Company's contribution to the Bonus Pool and shall
pay to the Employee eighty percent (80%) of the Employee's
Incentive Bonus Payment for such quarter;
(2) within thirty (30) days following the end
of the second fiscal quarter of each fiscal year,
<PAGE>
Exhibit 10-18
page 3 of 13
the Company shall calculate, based on its Net Profits
for such quarter, the amount of the Company's contribution to
the Bonus Pool and shall pay to the Employee eighty percent
(80%) of the Employee's Incentive Bonus Payment for such
quarter; provided, however, that the Employee's Incentive Bonus
Payment for such quarter shall not exceed the amount, if any,
that (x) the Employee's Incentive Bonus Payment as calculated on
the basis of the fiscal year-to-date Net Profits for such fiscal
year exceeds (y) the sum of all prior Incentive Bonus Payments
made to the Employee during such fiscal year;
(3) within thirty (30) days following the end
of the third fiscal quarter of each fiscal year, the Company
shall calculate, based on its Net Profits for such Bonus Pool
and shall pay to the Employee eighty percent (80%) of the
Employee's Incentive Bonus Payment for such quarter; provided,
however, that the Employee's Incentive Bonus Payment for such
quarter shall not exceed the amount, if any, that (x) the
Employee's Incentive Bonus Payment as calculated on the basis of
the fiscal year-to-date Net Profits for such fiscal year exceeds
(y) the sum of all prior Incentive Bonus Payments made to the
Employee during such fiscal year; and
(4) within thirty (30) days following the
receipt by the Company of the Company's audited financial
statements for each fiscal year, the Company shall calculate,
based on its Net Profits for such fiscal year, the amount of the
Company's contribution to the Bonus Pool for such fiscal year
and shall pay to the Employee one hundred percent (100%) of the
amount, if any, that (x) the Employee's Incentive Bonus Payment
as calculated on the basis of the fiscal year net Profits for
such fiscal year exceeds (y) the sum of all prior Incentive
Bonus Payments made to the Employee during such fiscal year.
Notwithstanding the foregoing, for the fourth
fiscal quarter of the 1995 fiscal year, the Employee shall
receive one hundred percent (100%) of his Incentive Bonus
Payment based on the Company's Bonus Pool contribution for such
fiscal quarter.
"Net Profits" shall be the net earnings of the
Company as disclosed in its reports filed pursuant to Section 13
of the Securities Exchange Act of 1934, as amended, for the
fiscal period in question, determined in accordance with
generally accepted accounting principles.
<PAGE>
Exhibit 10-18
page 4 of 13
6. Benefits. In addition to the compensation to be
paid to the Employee pursuant to Paragraph 5 hereof, during the
term of this Agreement, the Employee shall further be entitled
to receive the following:
a. Participation in Employee Plans. The Employee shall be
entitled to participate in any health, disability group term
life insurance, pension, retirement or profit sharing plan, or
any other fringe benefits which may be extended generally from
time to time to employees or executive officers of the Company,
including, but not limited to, annual paid vacation.
b. Disability Salary Continuation. If the Employee becomes
disabled during the term of this Agreement, the Company shall
continue to pay the Employee his Base Salary during the first
ninety (90) day period of such disability, and additionally, but
only to the extent the Employee is not paid by disability
insurance available through the Company, shall continue to pay
the Employee, but at the rate of fifty percent (50%) of his Base
Salary, for the second ninety (90) day period of such
disability. "Disability" as used herein shall mean any
physical, emotional or mental, injury, illness or incapacity,
other than death, which renders the Employee unable to perform
the duties required of him under this Agreement. The existence
of any disability shall be determined to exist in the sole
discretion of the Board which shall not be arbitrarily
exercised. All payments under this Paragraph shall cease upon
the expiration of other termination of this Agreement or of the
Employee's employment.
7. Reimbursement of Expenses. Subject to such rules
and procedures as from time to time are specified by the
Company, the Company shall reimburse the Employee on a monthly
basis for reasonable business expenses necessarily incurred in
the performance of his duties under this Agreement.
8. Key Man Insurance. At Company's option, Company
and Employee agree to cooperate in obtaining a life insurance
policy on the Employee during the term of this agreement in an
amount at the Company's discretion, to be purchased and owned by
the Company, and payable to the benefit of the Company.
Employee agrees to participate in any examinations or tests
required for the issuance of such policy as is determined to be
necessary by the insurer.
9. Confidentiality/Trade Secrets. The Employee
acknowledges that his position with the Company is one of the
highest trust and confidence both by reason of his position and
by
<PAGE>
Exhibit 10-18
page 5 of 13
reason of his access to and contact with the trade secrets and
confidential and proprietary business information of the
Company. Both during the term of this Agreement and thereafter,
the Employee covenants and agrees as follows:
a. he shall use his best efforts and exercise utmost diligence
to protect and safeguard the trade secrets and confidential and
proprietary information of the Company including but not limited
to the identity of its customers and suppliers, its arrangements
with customers and suppliers, and its technical and financial
data, records, compilations of information, processes, recipes
and specifications relating to its customers, suppliers,
products and services;
b. he shall not disclose any of such trade secrets and
confidential and proprietary information, except as may be
required in the course of his employment with the Company or by
law; and
c. he shall not use, directly or indirectly, for his own
benefit or for the benefit of another, any of such trade secrets
and confidential and proprietary information.
All files, records, documents, drawings,
specifications, memoranda, notes, or other documents relating to
the business of the Company, whether prepared by the Employee or
otherwise coming into his possession, shall be the exclusive
property of the Company and shall be delivered to the Company
and not retained by the Employee upon termination of his
employment for any reason whatsoever, or at any other time upon
request of the Board.
The Employee further acknowledges that, although the
policies set forth in this paragraph nine have not been strictly
enforced by the Company in the past, the provisions of this
paragraph are an integral part of the consideration for this
Employment Agreement, and will be strictly enforced by the
Company in the future.
10. Discoveries. The Employee covenants and agrees
that he will fully inform the Company of and disclose to the
Company all inventions, designs, improvements, discoveries and
processes ("Discoveries") which he has now or may hereafter have
during his employment with the Company and which pertain or
relate to the business of the Company or to any experimental
work, products, services or processes of the Company in progress
or planned for the future, whether conceived by the Employee
alone or with others, and whether or not conceived during
regular working hours or in conjunction with the use of any
Company assets. All such
<PAGE>
Exhibit 10-18
page 6 of 13
Discoveries shall be the exclusive property of the Company
whether or not patent or trademark applications are filed
thereon. The Employee shall assist the Company, at any time
during or after his employment, in obtaining patents on all such
Discoveries deemed patentable by the Company and shall execute
all documents and do all things necessary to obtain letters
patent, vest the Company with full and exclusive title thereto,
and protect the same against infringement by others. If such
assistance takes place after his employment is terminated the
Employee shall be paid by the Company at a reasonable rate for
any time actually spent in rendering such assistance at the
request of the Company.
11. Non-Competition. The Employee covenants and
agrees that, during the period of his employment, he shall not,
without the prior written consent of the Board, directly or
indirectly, as an employee, employer, consultant, agent,
principal, partner, shareholder, corporate officer, director, or
through any other kind of ownership (other than ownership of
securities of publicly held corporations of which the Employee
owns less than five percent (5%) of any class of outstanding
securities) or in any other representative or individual
capacity, engage in or render any services to any business in
competition with the business then being conducted by the
Company, or any subsidiary thereof, at any place in which the
Company has owned an ethanol production plant, sold alcohol or
transacted any business within the two (2) year period prior to
the incident or event of competition in question. In the event
that the Employee terminates his employment with the Company
pursuant to Paragraph 14(a) or is terminated by the Company
pursuant to Paragraph 14(c) (and except as provided in Paragraph
15, below) the Employee agrees that such covenant against
competition shall continue for a period of two (2) years from
the end of the month in which such termination becomes
effective. If at any time the foregoing provisions shall be
deemed to be invalid or unenforceable by reason of being vague
or unreasonable as to duration or place of performance, this
Paragraph 11 shall be considered divisible and shall become and
be immediately amended to include only such time and such areas
as shall be determined to be reasonable and enforceable by a
court of competent jurisdiction; and the Company and the
Employee expressly agree that this Paragraph 11, as so amended,
shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
12. Solicitation of Employees. The Employee
covenants and agrees that, during the period of his employment
and for a two (2) year period following termination of his
employment, he shall not, without the prior written consent of
the Board, directly or indirectly, solicit, engage or hire for
employment or employ an employee of the Company, or its
affiliates, for himself or any
<PAGE>
Exhibit 10-18
page 7 of 13
other person or entity.
13. Remedies for Breach of Covenants of the Employee.
The Covenants set forth in Paragraphs 9, 10, 11 and 12 of this
Agreement shall continue to be binding upon the Employee,
notwithstanding the termination of his employment with the
Company for any reason whatsoever. Such covenants shall be
deemed and construed as separate agreements independent of any
other provisions of this Agreement and any other agreement
between the Company and the Employee. The existence of any
claim or cause of action by the Employee against the Company,
whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any or
all of such covenants. It is expressly agreed that the remedy
at law for the breach of any such covenant is inadequate and
injunctive relief shall be available to prevent the breach or
any threatened breach thereof.
14. Termination. This Agreement (other than
Paragraphs 9, 10, 11 and 12 hereof which shall survive any
termination hereof) may be terminated as follows:
a. By the Employee. The Employee may terminate this Agreement
at any time during the term of this Agreement by giving thirty
(30) days prior written notice of termination to the Board. The
Employee shall receive any Base Salary and Incentive Bonus
Payment accrued on the date of termination and shall not be
entitled to any Base Salary or Incentive Bonus Payments beyond
the date of termination under this Subparagraph a of Paragraph
14, and any unvested stock options shall be subject to the terms
and conditions of the Company's 1992 Stock Option Plan.
b. By the Company Without Cause. The Board, without cause,
may terminate this Agreement at any time during the term of this
Agreement upon thirty (30) days prior written notice to the
Employee. In the case of a termination under this Subparagraph
b or Paragraph 14, the Company shall continue to pay to the
Employee an amount equal to his then current Base Salary and the
regularly scheduled Incentive Bonus Payments, which would have
been payable as calculated under Paragraph 5(b), for the
remainder of the term of this Agreement or any extensions
thereof. In addition, (i) the Employee shall be entitled to
continuation of coverage for the remainder of the term of this
Agreement under all Company paid or partially paid health,
disability, or group life insurance plans or any retirement,
pension, or profit sharing plans, in each case at such level as
had been available to the Employee immediately prior to the
termination, subject to the coverage, terms and conditions or
such plans, and (ii) any unvested
<PAGE>
Exhibit 10-18
page 8 of 13
portion of any stock options held by the Employee as of the
day immediately preceding such termination shall immediately
vest and become exercisable, and (iii) the right to complete the
purchase of any shares of stock which the Employee has elected
to purchase pursuant to any Employee Stock Purchase Plan adopted
by the Company shall immediately vest and become exercisable
upon full payment for the stock in accordance with the terms of
the plan.
c. By the Company with Cause. The Board may, upon written
notice effective immediately, terminate this Agreement at any
time during the term of this Agreement for cause, which includes
but is not limited to the following:
(1) If the Employee should be convicted of a felony;
(2) The inability of the Employee to meet any requirements
set forth by the United States Bureau of Alcohol, Tobacco and
Firearms to maintain the licenses required by the Company to
operate its business; and
(3) If the Employee should willfully breach or habitually
neglect his duties which he is required to perform under this
Agreement or otherwise fail to comply with the terms and
conditions of this Agreement specifically including, but not
limited to, the covenants set forth in Paragraphs 9, 10, 11 and
12 hereof, and fails to cure any such breach or failure within
the (10) days after written notice thereof given by the Company
to the Employee.
The Employee shall receive any Base Salary and
Incentive Bonus Payment accrued on the date of termination and
shall not be entitled to any Base Salary or Incentive Bonus
Pay-ments beyond the date of termination under this Subparagraph
c or paragraph 14, and any unvested stock options shall be
subject to the terms and conditions of the Company's 1992 Stock
Option Plan.
d. Upon Death or Disability. This Agreement shall terminate
and the Company shall, upon such termination, pay to the
Employee or the Employee's beneficiaries, estate or legal
representative a one-time payment in an amount equal to (i) one
hundred percent (100%) of the Employee's then current annual
Base Salary and (ii) fifty percent (50%) of the amount of the
Employee's total Incentive Bonus Payments for the most recently
completed fiscal year, if either of the following conditions
exist:
<PAGE>
Exhibit 10-18
page 9 of 13
(1) If the Employee becomes disabled as defined in
Paragraph 6(b) of this Agreement for a period of more than one
hundred eighty (180) consecutive days; or
(2) If the Employee should die.
15. Termination After Change in Control. In the
event of a change in Control, as defined below, any termination
of the Employee's employment with the Company within the
remainder of the term of this Agreement following such Change in
Control, whether by the Employee or by the Company and whether
with our without cause, the following shall occur:
a. The provisions of Paragraphs 11 and 12 shall not apply and
shall be void;
<PAGE>
Exhibit 10-18
page 10 of 13
b. The Company shall continue to pay the Employee an amount
equal to his then current Base Salary and the regularly
scheduled Incentive Bonus Payments, which would have been
payable as calculated under Paragraph 5(b), during the remainder
of the term of this Agreement or any extensions thereof, with
the exception that, for purposes of this paragraph fifteen only,
"Net Profits" as defined in paragraph five shall not ever be
computed to be less than 15% of the Company's gross revenues for
the fiscal period in question;
c. The Employee shall be entitled to continuation of coverage
during the remainder of the term of this Agreement under all
Company paid or partially paid health, disability, or group life
insurance plans or any retirement, pension, or profit sharing
plans, in each case at such level as had been available to the
Employee immediately prior to the Change in Control, subject to
the coverage, terms and conditions or such plans; and
d. Any unvested portion of all stock options held by the
Employee, and the right to complete the purchase of any shares
of stock which the Employee has elected to purchase pursuant to
any stock option plan adopted by the Company, as of the day
immediately preceding the effective date of such termination,
shall immediately vest and become exercisable and, for purposes
of such options, such termination shall be deemed to be a
termination by the Company without cause.
16. Definitions Related to Change of Control.
a. "Change of Control" means any one of the following: (i)
Continuing Directors (as defined below) no longer constitute at
least 60% of the Board of Directors; (ii) any person or group of
persons (as defined in Rule 13d-5 under the Securities Exchange
Act of 1934), together with its affiliates, become the
beneficial owner, directly or indirectly, of 35% or more of the
Company's then outstanding Common Stock or 35% or more of the
voting power of the Company's then outstanding securities
entitled generally to vote for the election of the Company's
Directors; (iii) the approval by the Company's stockholders of
the merger or consolidation of the Company with any other
corporation, the sale or substantially all of the assets of the
Company or the liquidation or dissolution of the Company,
unless, in the case of a merger or consolidation, the then
Continuing Directors in office immediately prior to such merger
or consolidation will constitute at least 60% of the Board of
Directors of the surviving corporation of such merger or
consolidation and any parent (as such term is defined in Rule
12b-2 under the
<PAGE>
Exhibit 10-18
page 11 of 13
Securities Exchange Act of 1934) of such corporation; or
(iv) at least 60% of the then Continuing Directors in office
immediately prior to any other action proposed to be taken by
the Company's stockholders or by the Company's Board of
Directors determine that such proposed action, if taken, would
constitute a change of control of the Company and such action is
taken.
b. "Continuing Director" means any individual who either (i)
was a member of the Company's Board of Directors on the date
hereof, or (ii) was designated (before initial election as a
Director) as a Continuing Director by a majority of the then
Continuing Directors.
17. Arbitration of Disputes. Except for Paragraphs
9-12, any dispute or claim arising out of or relating to this
Agreement or any termination of the Employee's employment shall
be settled by arbitration in Wichita, Kansas in accordance with
the then current rules of the American Arbitration Association
pertaining to employment disputes, and judgment upon any award
rendered therein may be entered in any court having proper
jurisdiction.
18. Notices. Any notices to be given hereunder by
either party to the other may be effected either by personal
delivery in writing or by mail, registered or certified, postage
prepaid, with return receipt requested. Mailed notices shall be
addressed as follows:
a. If to the Company:
High Plains Corporation
200 W. Douglas, Suite #820
Wichita, Kansas 67202
b. If to the Employee:
Raymond G. Friend
38 Mission Rd.
Wichita, Kansas 67206
Either party may change its address for notice by giving notice
in accordance with the terms of this Paragraph 18.
19. Termination of Prior Employment Agreement. The
Company and the Employee hereby agree that the terms and
conditions contained in this Agreement are intended to replace
the terms and conditions of the Prior Employment Agreement, and
that the Prior Employment Agreement and all terms and conditions
therein shall terminate upon the execution of this Agreement.
<PAGE>
Exhibit 10-18
page 12 of 13
20. Indemnity. Subject to the provisions and
limitations of the Articles of Incorporation, as amended, of the
applicable law, the Company shall (i) indemnify the Employee and
hold him harmless for all acts or decisions made by him in good
faith while performing services for the Company; (ii) use its
best efforts to obtain coverage for him under any insurance
policy now in force or hereinafter obtained during the term of
this Agreement covering the officers, directors or other key
management of the Company against lawsuits; and (iii) pay all
expenses, including attorneys' fees, actually and necessarily
incurred by the Employee in connection with the defense of such
act, suit or proceeding and in connection with any related
appeal including the cost of court settlements.
21. General Provisions.
a. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas.
b. Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable, such provision
shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof and the remaining
provisions hereof shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and still be legal, valid or
enforceable.
c. Attorney Fees. If any action at law or in equity,
including an action for declaratory relief or under the
arbitration provisions of Paragraph 17, is brought to enforce or
interpret the provisions of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees from the
other party. These fees shall be in addition to any other
relief that may be awarded.
d. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements
or understandings, whether written or oral, with respect to the
subject matter hereof. No terms, conditions, warranties, other
than those contained herein, and no amendments or modifications
hereto shall be binding unless made in writing and signed by the
parties hereto.
<PAGE>
Exhibit 10-18
page 13 of 13
e. Binding Effect. This Agreement shall extend to and be
binding upon and insure to the benefit of the parties hereto,
their respective heirs, representatives, successors and assigns.
This Agreement may not be assigned by the Employee.
f. Waiver. The waiver by either party hereto of a breach of
any term or provision of this Agreement shall not operate or be
construed as a waiver of a subsequent breach of the same
provision by any party or of the breach of any other term or
provision of this Agreement.
g. Titles. Titles of the paragraphs herein are used solely
for convenience and shall not be used for interpretation or
construing any work, clause, paragraph, or provision of this
Agreement.
h. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original,
but which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the date and year first above
written above.
EMPLOYEE: HIGH PLAIN CORPORATION
Raymond G. Friend By: Stanley E. Larson
Title: Chair of Board & C.E.O.
Exhibit 10-19
Page 1 of 4
EXCLUSIVE GRAIN SUPPLY AGREEMENT
AGREEMENT made this ___ day of June, 1995, by and between
Farmland Industries, Inc., a Kansas corporation having its
principal offices at 3315 N. Oak Trafficway, Kansas City,
Missouri ("Farmland") and High Plains Corporation, 412 N. First
St., Box 427, Colwich, Kansas 67030 ("High Plains").
WHEREAS, Farmland is a seller of grain in the States of Kansas
and Nebraska; and
WHEREAS, High Plains is a purchaser of grain for use at its
Colwich, Kansas and York, Nebraska plants; and
WHEREAS, both Farmland and High Plains desire to enter into an
exclusive supply agreement for the sale of grain by Farmland to
High Plains for use at the Colwich, Kansas and York, Nebraska,
plants.
NOW, THEREFORE, in consideration of the mutual agreements and
other good and valuable consideration hereinafter set forth, the
parties agree as follows:
1. SALE OF PRODUCTS. This Agreement applies to all grain
purchased by High Plains for use at its Colwich, Kansas and
York, Nebraska, plants (the "Grain"). High Plains agrees to buy
all of its requirements of Grain from Farmland for the term of
this Agreement. Farmland agrees to sell, subject to
availability, such Grain to High Plains for the term of this
Agreement. Farmland and High Plains agree that such purchases
will be at terms, conditions and price as agreed upon quarterly
or as otherwise necessary depending on High Plains' demand
during the term of this Agreement. At each quarter, Farmland, at
a minimum, will price Grain at 90 days supply for High Plains'
consideration and, at High Plains' option, will price an
additional 120 days supply. Farmland agrees to provide to High
Plains up to five million bushels warehouse receipts at tariff
storage rates.
2. FORECAST INFORMATION. Farmland agrees to provide High Plains
with quarterly feedgrain analyses and other forecast information
available from third-parties to assist High Plains in its
purchase decisions. However, regardless of any price or purchase
recommendations or forecasts provided by Farmland, High Plains
remains solely responsible for its purchasing decisions and any
gains or losses resulting from those decisions. FARMLAND
PROVIDES NO WARRANTY AS TO ANY PRIClNG INFORMATION, FORECASTS OR
PURCHASE RECOMMENDATIONS.
3. PRICE. Farmland agrees to sell to High Plains at a fixed
price, F.O.B. Colwich, Kansas or York, Nebraska. Farmland will
absorb the costs of all hedges, commissions, freight,
transportation, and inventory carry charges prior to delivery.
4. PAYMENT. Payment for purchases under this Agreement are due
weekly. Farmland agrees to accept a demand letter of credit in
lieu of cash for a period of 30 days.
5. TERM. This Agreement shall commence on July 1, 1995 and
continue for one year. After the first year, the Agreement shall
automatically renew for one-year terms. However, either party
may terminate this Agreement at any time upon giving the other
party thirty (30) days notice of termination in writing. This
Agreement may be terminated immediately by Farmland if (i) High
<PAGE>
Exhibit l0-19
Page 2 of 4
Plains' financial responsibility becomes impaired, (ii) it makes
an assignment or arrangement for benefit of creditors or (iii)
it files a petition in bankruptcy or has such petition filed
against it.
Upon expiration, termination, or cancellation of this Agreement,
neither party shall have any rights or obligations or liability
to the other party with respect to this Agreement except for (a)
the obligation to make full payment of any outstanding monetary
obligations owed to the other party which monetary obligation
was incurred prior to the date of such expiration, termination
or cancellation, and (b) obligations under any Grain contract
which existed prior to such expiration, termination or
cancellation of this Agreement.
6. EMPLOYEES Each party shall be solely responsible for the acts
and inactions of its employees acting within the course and
scope of their employment by such party and each party shall be
solely responsible for the salary, wages and payroll taxes for
its employees and shall maintain Workers' Compensation Insurance
on its employees as required by applicable state law. The
parties shall have no joint employees as a result of this
Agreement and neither party shall incur any responsibility or
liability whatsoever with respect to, or for the acts or
inactions of, the employees of the other party as a result of
this Agreement.
7. INDEMNIFICATION. Farmland shall indemnify and hold High
Plains, and its affiliates, subsidiaries, parents, directors,
officers, employees and agents harmless from and against any and
all claims, losses, awards, judgments, settlements, fines,
penalties, liabilities, damages, costs or expenses (including
attorneys' fees) alleged or incurred on account of any injury or
death of persons or damages to property or any other claim to
the extent caused by or arising out of the negligent acts or
omissions of Farmland, its officers, agents or employees, or any
breach by Farmland, its officers, agents or employees, of any of
the terms of this Agreement, or any representations by Farmland
which are not authorized pursuant to this Agreement or pursuant
to specific instructions given to Farmland by High Plains.
High Plains shall indemnify and hold Farmland, and its
affiliates, subsidiaries, parents, directors, officers,
employees and agents harmless from and against any and all
claims, losses, awards, judgments, settlements, fines,
penalties, liabilities, damages, costs or expenses (including
attorneys' fees) alleged or incurred on account of any injury or
death of persons or damages to property or any other claim to
the extent caused by or arising out of the negligent acts or
omissions of High Plains, its officers, agents or employees, or
any breach by High Plains, its officers, agents, or employees,
of any of the terms of this Agreement, or any representations by
High Plains which are not authorized pursuant to this Agreement
or pursuant to specific instructions given to High Plains by
Farmland.
8. FORCE MAJEURE. Neither party shall be liable for failure to
perform or for delay in performing this Agreement, other than
for all existing debt, where such failure or delay is occasioned
by (a) fire, explosion, breakdown of plant, failure of
machinery, strike, lock-out, labor dispute, casualty or
accident, or lack or failure in whole or in part of
transportation facilities, (b) storm, flood or drought, (c) lack
or failure in whole or in part of the sources of supply (other
than Grain), labor, or power or other utilities, (d) acts of God
or of the public enemy, war, riots, police action, or civil
commotion, (e) any law, regulation, ordinance, demand, judgment,
injunction, arbitral award, or other requirement or regulation
of any government or government agency or instrumentality or (f)
any other act whatsoever, whether similar or dissimilar to those
above-enumerated, beyond the reasonable control of the party
suffering such event of force majeure. The party asserting that
an event of force majeure has occurred shall send the other
party notice thereof
<PAGE>
Exhibit 10-19
Page 3 of 4
by cable, telecopy or telex no later than three (3) days after
the beginning of such claimed event setting forth a description
of the event of force majeure, an estimate of its effect upon
the party's ability to perform its obligations under this
Agreement and the duration thereof. The notice shall be
supplemented by such other information or documentation as the
party receiving the notice may reasonably request. As soon as
possible after the cessation of any event of force majeure, the
party which asserted such event shall give the other party
written notice of such cessation. Whenever possible, each party
shall give the other party notice of any threatened or impending
event of force majeure.
9. ALTERNATE DISPUTE RESOLUTION. This contract is subject to the
National Grain and Feed Association Grain Trade Rules and
Arbitration Rules. Any controversy arising out of, or relating
to, the Agreement between the parties or any modification or
extension thereof, including any claim for damages or
rescission, or both, shall be settled by arbitration in
accordance with those rules unless the parties should agree
otherwise in writing. The parties further agree that arbitration
proceedings must be instituted within one year after the
occurrence of the claimed breach, and that the failure to
institute arbitration proceedings within such time period shall
constitute an absolute bar to the institution of any proceedings
and a waiver of all claims. All fees for such arbitration will
be divided equally between the parties except that each party
shall pay its own attorney's fees and the costs associated with
producing documents and other information.
10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State
of Missouri without giving affect to the choice of law rules
thereof. The parties consent to the jurisdiction of the Courts
of the State of Missouri and of the United States District Court
for the Western District of Missouri for all purposes in
connection with the above arbitration.
11. NOTICES. All notices, consents and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person or deposited in
the United States mail (registered or certified), postage
prepaid or deposited with a reputable overnight delivery
service, with delivery charges prepaid, in each case addressed
or transmitted to the appropriate address as follows (or as
otherwise designated by a party as to itself by notice to the
other party given in accordance with this section):
If to Farmland: Farmland Industries, Inc.
10100 N. Executive Hills Blvd.
Kansas City, Missouri 64153
Attn: Vice President Grain
If to High Plains: High Plains Corporation
412 N. First St.
Box 427
Colwich, Kansas 67030
Attn: _______________________
12. INSURANCE. The parties shall maintain the following
insurance at all times while this Agreement is in effect:
a. Statutory Worker's Compensation and Employer's Liability
Insurance in compliance with the laws of the states
where the work is being performed.
<PAGE>
Exhibit 10-19
Page 4 of 4
b. Comprehensive General Liability Insurance as follows:
i. Bodily injury liability in an amount of not less than
$1,000,000 for injuries, including death, in any one
occurrence.
ii. Property damage liability in an amount of not less
than $1,000,000 covering damage to or destruction
of property in any one occurrence.
iii.Automotive public liability insurance in an amount of
not less than $1,000,000 for bodily injuries, including death, in
any one occurrence, and in an amount of not
less than $1,000,000 covering damage to property
in any one occurrence.
The foregoing liability insurance coverage shall include
coverage for contractual liability under this Agreement. The
insurance requirements set forth herein are minimum coverage
requirements and are not to be construed in any way as a
limitation on liability under this Agreement.
13. WARRANTIES. EXCEPT AS SET FORTH ABOVE, FARMLAND BY THIS
AGREEMENT MAKES NO WARRANTIES, EXPRESS OR IMPLIED BY OPERATION
OF LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
14. ASSIGNMENT. This Agreement shall not be assigned by either
party without the written consent of the other party, and any
attempted assignment without such consent shall be ineffective.
15. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties and supersedes all previous
agreements either oral or written, between the parties hereto,
and no modifications hereof shall be valid unless made in
writing and signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals the day and year above written.
THIS CONTRACT CONTAINS A BINDING ARBlTRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
HIGH PLAINS CORPORATION
By: Stanley E. Larson
Title: President, C.E.O.
FARMLAND INDUSTRIES, INC.
By: Bryce Wells
Title: Director Grain Division
Exhibit 24-1
Report and Consent of Independent Certified Public Accountants
The Stockholders and Board of Directors
High Plains Corporation
We hereby consent to the incorporation by reference in this
annual report on Form 10-K of High Plains Corporation and
Subsidiary for the year ended June 30, 1995 of our report dated
August 11, 1995 which appears in the annual report to
shareholders for the year ended June 30, 1995.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
October 9, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 600,381
<SECURITIES> 0
<RECEIVABLES> 3,948,761
<ALLOWANCES> 110,000
<INVENTORY> 2,645,277
<CURRENT-ASSETS> 7,675,969
<PP&E> 73,109,056
<DEPRECIATION> 14,806,417
<TOTAL-ASSETS> 67,517,301
<CURRENT-LIABILITIES> 8,161,803
<BONDS> 19,052,272
<COMMON> 1,555,735
0
0
<OTHER-SE> 38,747,491
<TOTAL-LIABILITY-AND-EQUITY> 67,517,301
<SALES> 48,751,223
<TOTAL-REVENUES> 52,769,014
<CGS> 43,698,552
<TOTAL-COSTS> 43,698,552
<OTHER-EXPENSES> 1,519,615
<LOSS-PROVISION> 68,487
<INTEREST-EXPENSE> 1,268,354
<INCOME-PRETAX> 6,213,784
<INCOME-TAX> 141,377
<INCOME-CONTINUING> 6,072,407
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,072,407
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
</TABLE>
