PROPOSAL 1- ELECTION OF DIRECTORS

Introduction

The Board consists of eleven members and is divided into three groups. One group of directors is elected at each annual meeting of shareholders for a three-year term. Each year a different group of directors is elected on a rotating basis. Todd Becker, Thomas Manuel, Brian Peterson and Alain Treuer are up for reelection at the Annual Meeting (to serve until the 2024 annual meeting or until their respective successors shall be elected and qualified). The terms of James Crowley, Gene Edwards and Gordon Glade expire at the 2022 annual meeting. The terms of Jim Anderson, Wayne Hoovestol, Ejnar Knudsen and Kimberly Wagner expire at the 2023 annual meeting.

 

 

Director Nomination Process

The Board is responsible for approving nominees for election as directors. To assist in this task, the Nominating and Governance Committee is responsible for reviewing and recommending nominees to the Board. This committee is comprised solely of independent directors as defined by the rules of the NASDAQ and the SEC.

The Board has a policy of considering director nominees recommended by our shareholders. A shareholder who wishes to recommend a prospective board nominee for the Nominating and Governance Committee’s consideration can write to the Nominating and Governance Committee, c/o Michelle S. Mapes, Corporate Secretary, Green Plains Inc., 1811 Aksarben Drive, Omaha, NE 68106. In addition to considering nominees recommended by shareholders, our Nominating and Governance Committee also considers prospective board nominees recommended by current directors, management and other sources. Our Nominating and Governance Committee evaluates all prospective board nominees in the same manner regardless of the source of the recommendation.

As part of the nomination process, our Nominating and Governance Committee is responsible for reviewing with the Board periodically the appropriate skills and characteristics required of directors in the context of the current make-up of the Board. This assessment includes issues of judgment, diversity, experience and skills. In evaluating prospective nominees, including nominees recommended by shareholders, our Nominating and Governance Committee looks for the following minimum qualifications, qualities and skills:

 

◾

highest personal and professional ethics, integrity and values;

 

◾

outstanding achievement in the individual’s personal career;

 

◾

breadth of experience;

 

◾

ability to make independent, analytical inquiries;

 

◾

ability to contribute to a diversity of viewpoints among board members;

 

◾

willingness and ability to devote the time required to perform board activities adequately (in this regard, the committee will consider the number of other boards of directors on which the individual serves); and

 

◾

ability to represent the total corporate interests of our company (a director will not be selected to, nor will he or she be expected to, represent the interests of any particular group).

As set forth above, our Nominating and Governance Committee considers diversity as one of a number of factors in identifying nominees for director. The Committee adopted a policy in 2017 specifically addressing gender diversity whereby it resolved to ensure that when a vacancy arises on the Board, it will ensure the candidate pool always contains at least one diverse candidate specifically with respect to gender. Based on shareholder comments, the Committee evaluated ways to address gender diversity in particular and after completing a search process, in October, 2020 the Board appointed Ms. Wagner to the Board of Directors. The Committee also views diversity broadly to include diversity of experience, skills and viewpoint as well as traditional diversity concepts such as race, national origin and gender.

 

11

Shareholders who wish to submit a proposal for inclusion of a nominee for director in our proxy materials must also comply with the deadlines and requirements of our bylaws and of Rule 14a-8 promulgated by the SEC. Please see “Additional Information” in this Proxy Statement for more information regarding the procedures for submission by a shareholder of a director nominee or other proposals.

Set forth below is the age, principal occupation and certain other information for each of the nominees for election as a director.

Nominees for Election at the 2021 Annual Meeting

TODD BECKER, 55, who has served as President and Chief Executive Officer since January 2009, was appointed as a director in March 2009. Mr. Becker has also served as President and Chief Executive Officer, as well as a director, of the general partner of Green Plains Partners LP since March 2015. Mr. Becker served as our President and Chief Operating Officer from October 2008 to December 2008. He served as Chief Executive Officer of VBV LLC from May 2007 to October 2008. Mr. Becker was Executive Vice President of Sales and Trading at Global Ethanol from May 2006 to May 2007. Prior to that, he worked for ten years at ConAgra Foods, Inc. in various management positions including Vice President of International Marketing for ConAgra Trade Group and President of ConAgra Grain Canada. Mr. Becker has over 30 years of related experience in various commodity processing businesses, risk management and supply chain management, along with extensive international trading experience in agricultural markets. Mr. Becker served on the board of directors, including its Audit and Compensation Committees, for Hillshire Brands Company from 2012 to 2014. Mr. Becker has a master’s degree in Finance from the Kelley School of Business at Indiana University and a Bachelor of Science degree in Business Administration with a Finance emphasis from the University of Kansas. Mr. Becker is qualified to serve as a director because he provides an insider’s perspective about our business and strategic direction to Board discussions. His extensive commodity experience and leadership make him an essential member of the Board.

THOMAS MANUEL, 74, a director since May 2015, also serves on the Compensation and the Nominating and Governance Committees. Mr. Manuel serves as Chief Executive Officer and Founder of Nu-Tek Food Science LLC, a food ingredients processing company, a position he has held since August 2011. Prior to that, he served as Chief Executive Officer of Aventine Renewable Energy, Inc., an ethanol producer from March 2010 to August 2011. From May 2002 to August 2011, Mr. Manuel served as Managing Director of International Strategy Advisors, LLC, providing transaction advisory services to private equity investors in the agribusiness and food industries. From 1977 until 2002, Mr. Manuel held various senior management positions with ConAgra Foods, Inc. including trading in domestic and international food ingredients, grain and energy, and grain and meat processing of various types. Mr. Manuel has a Bachelor of Science degree in Business Administration from the University of Minnesota. Mr. Manuel is qualified to serve as a director because of his experience in grain, meat and poultry processing, trading, and commodity and energy merchandising, providing a veteran perspective to Board discussions.

BRIAN PETERSON, 57, a director since May 2005, also serves as Chairman of the Nominating and Governance Committee. Mr. Peterson currently serves as President and Chief Executive Officer of Whiskey Creek Enterprises. Mr. Peterson served as our Executive Vice President in charge of site development from 2005 to October 2008. Mr. Peterson was the sole founder and owner of Superior Ethanol LLC, which was acquired by us in 2006. For over twenty years, he has owned and operated grain farming entities which now includes acreages in Iowa, Arkansas and South Dakota. Additionally, he built, owns and operates a cattle feedlot in northwest Iowa. Mr. Peterson has a Bachelor of Science degree in Agricultural Business from Dordt College. In addition, he is an investor in several other ethanol companies. Mr. Peterson is qualified to serve as a director because of his ethanol and grain industry experience, which serves as an important resource to the Board.

ALAIN TREUER, 48, a director since October 2008, who has served as Vice Chairman of the Board since August 2015, also serves on the Nominating and Governance Committee and as Chairman of the Compensation Committee. Mr. Treuer was a founder of VBV LLC, a joint venture formed in 2006 to develop and expand ethanol production in a vertical manner in the U.S. VBV LLC and Green Plains merged in 2008. Mr. Treuer had served as Trivon’s (VirginConnect/ VirginConnect Mobile) Chairman of the Board’s Compensation Committee since 2006. Mr. Treuer has also served since 2005 as Chairman and Chief Executive Officer of Tellac Reuert Partners (TRP SA), a global investment firm. Prior to joining TRP SA, he was Chairman and Chief Executive Officer of TIGC, a global telecommunications company that he founded in 1992 and sold in 2001. Mr. Treuer has approximately 30 years of experience as an entrepreneur in various industries around the globe. Mr. Treuer has a master’s degree in Business Administration from the Graduate School of Business at Columbia University in New York, a Bachelor of Economics degree from the University of St. Gallen in Switzerland and is an active member of the Young Presidents Organization. Mr. Treuer is qualified to serve as a director because his business experiences, combined with his education and global acumen, allow him to provide unique operational insights to the Board.

Set forth below is the age, principal occupation and certain other information for each of our directors not currently up for election.

Continuing Directors with Terms Expiring in 2022

JAMES CROWLEY, 74, a director since October 2008, also serves as Chairman of the Audit Committee. Mr. Crowley has been Chairman and Managing Partner of Old Strategic, LLC since July 2006. His previous experience includes service as Chairman and Managing Partner of Strategic Research Institute, President of Global Investment and Merchant Banking at Prudential Securities, and investment banking at Smith Barney Harris Upham & Co. He currently serves on the board and is Chairman of the Nominating and Governance Committee of Core Molding Technologies, and previously served on its Audit Committee as Chairman. He has also served on a number of educational and not-for-profit boards. Mr. Crowley has a master’s degree in Business Administration from the Wharton Graduate School of Business at the University of Pennsylvania and a Bachelor of Science degree in Business Administration from Villanova University. He has also been awarded a certificate in corporate governance at the Harvard Business School, and has completed various corporate governance programs at the Stanford

 

12

Graduate Business School, Stanford Law School and Northwestern University. Mr. Crowley is qualified to serve as a director because he possesses the requisite education and business acumen to serve as an audit committee financial expert along with having served on other boards and as an audit committee chairman of another company.

GENE EDWARDS, 64, a director since June 2014, also serves on the Audit and Compensation Committees. Mr. Edwards served as Executive Vice President and Chief Development Officer of Valero Energy Corporation until his retirement in April 2014. He began his 32-year career at Valero as an analyst in Planning and Economics and spent his tenure with Valero in various managerial positions in Planning and Economics, Refinery Operations, Business Development, and Marketing. Mr. Edwards was a key driver in Valero’s entry into the ethanol business and helped the segment become a successful part of its overall business. He served on the board of directors of CST Brands, Inc. from May 2013 to December 2013. Mr. Edwards holds a Bachelor of Science degree in Chemical Engineering from Tulane University and a master’s degree in Business Administration from the University of Texas at San Antonio. Mr. Edwards is qualified to serve as a director because of his extensive energy, including ethanol, industry experience, providing the Board with valued industry experience.

GORDON GLADE, 50, a director since December 2007, also serves on the Audit and the Nominating and Governance Committees. Mr. Glade was formerly a shareholder of Amur Equipment Financing (formerly AXIS Capital Inc.), a commercial equipment leasing company, for which he had also served as its President and Chief Executive Officer from 1996 to 2016. In addition, he is a current investor in several other ethanol companies. Mr. Glade also serves as Vice President and a director of the Edgar and Frances Reynolds Foundation, Inc. and as a director of Heartland Agriculture, LLC and the Brunswick State Bank. Mr. Glade has a Bachelor of Science degree in both Accounting and Finance from Texas Christian University. Mr. Glade is qualified to serve as a director because his business experience, including his experience as an investor in other ethanol companies, provides the Board with valuable perspective.

Continuing Directors with Terms Expiring in 2023

JIM ANDERSON, 63, a director since October 2008, also serves on the Audit and Compensation Committees. Mr. Anderson is currently the Chief Executive Officer of Moly-Cop, a position he has held since November 2017. Previously, he served as Managing Director and Operating Partner at CHAMP Private Equity. In addition, he served The Gavilon Group, LLC as its President and Chief Executive Officer from October 2014 until February 2016 as well as its Chief Operating Officer, Fertilizer, since February, 2010. From September 2006 to February 2010, he served as Chief Executive Officer and member of the board of directors at United Malt Holdings, a producer of malt for use in the brewing and distilling industries. Prior to that, beginning in April 2003, Mr. Anderson served as Chief Operating Officer / Executive Vice President of CT Malt, a joint venture between ConAgra Foods, Inc. and Tiger Brands of South Africa. Mr. Anderson’s experience in the agricultural processing and trading business includes serving as Senior Vice President and then President of ConAgra Grain Companies. His career also includes association with the firm Ferruzzi USA and as an Operations Manager for Pillsbury Company. He has also served as a Board Member of the North American Export Grain Association and the National Grain and Feed Association. Mr. Anderson holds a Bachelor of Arts degree with a Finance emphasis from the University of Wisconsin - Platteville. Mr. Anderson is qualified to serve as a director because of his commodity experience and agribusiness knowledge, which provides the Board with a relevant depth of understanding of our operations.

WAYNE HOOVESTOL, 62, a director since March 2006, has served as Chairman of the Board since October 2008. Mr. Hoovestol served as our Chief Operating Officer from January 2007 to February 2007, Chief Executive Officer from February 2007 to December 2008, and Chief Strategy Officer from March 2009 to November 2009. Mr. Hoovestol no longer is an employee of the company. Mr. Hoovestol began operating Hoovestol Inc., a trucking company, in 1978. He is also President of Lone Mountain Truck Leasing, which he founded in 2005. Mr. Hoovestol became involved with the ethanol industry as an investor in 1995, and has served on the boards of two other ethanol companies. Mr. Hoovestol also served on the board of CapSource Financial, Inc., a truck trailer sales and leasing company, from May 2005 to March 2007. Mr. Hoovestol is qualified to serve as a director because of his former leadership as Chief Executive Officer, as well as the business perspective he brings to the Board through his ownership of other entities and investments in other ethanol companies.

EJNAR KNUDSEN, 52, joined the company as a director in May 2016. Mr. Knudsen is the founder and CEO of AGR Partners, and oversees the firm’s strategy with investments totaling over $400 million in food processors, manufacturers and agribusinesses. From 2009 to 2012, Mr. Knudsen was co-portfolio manager of Passport Capital’s Agriculture Fund. Prior to Passport Capital, Mr. Knudsen served as EVP of Western Milling, a grain and feed milling company that grew from a small California startup to over $1 billion in sales. Mr. Knudsen also spent 10 years with Rabobank, in its New York office, managing a loan portfolio and venture capital investments as well as providing corporate advisory services. Mr. Knudsen is a director of Opal Foods, Ridley Corp. (RIC.ASX), and Materra Farming. Mr. Knudsen received his B.S. from Cornell University and is a CFA charter holder. Mr. Knudsen is qualified to serve as a director because of his operating company and finance experience, as well as his agribusiness industry network and knowledge, which provides the Board with a relevant depth of understanding of our operations.

KIMBERLY WAGNER, 57, joined the company as a director in October 2020. Ms. Wagner is the founder of TBGD Partners, a boutique firm providing expertise to early and mid-stage ventures in the agribusiness, food/nutrition and life sciences sectors. She has been a Venture Partner at Flagship Pioneering and President and Chief Operating Officer of CIBO Technologies, a Flagship VentureLabs company. Prior to that she was a Partner at McKinsey & Co. and a Senior Partner and Managing Director at The Boston Consulting Group, Inc. Her accomplishments in client service have been acknowledged through multiple awards including being named a Women Leader in Consulting by Consulting magazine in 2012. Ms. Wagner serves on the boards of several not-for-profit organizations with agricultural, sustainability and/or educational missions and is an active member of several national and international scientific societies. She holds a PhD in Biological Chemistry and Molecular Pharmacology from Harvard University, an Master of Science in Animal Science from Texas A&M University, and a Bachelor of Science with distinction in Biology and Animal Science from Cornell University. Ms. Wagner is qualified to serve as a director because of her extensive agribusiness and food/nutrition experience which provides the Board with a relevant depth of understanding of our operations.

 

13

Required Vote

To be elected, each nominee for director must receive plurality of all votes cast (assuming a quorum is present) with respect to that nominee’s election. Abstentions and broker “non-votes” will not be counted as a vote cast with respect to a nominee.

Recommendation of the Board

The Board recommends that stockholders vote “FOR” each of the nominees set forth in Proposal 1.

OUR MANAGEMENT

Executive Officers and Directors

Our executive officers and directors, their ages and their positions as of March 26, 2021, are as follows. Our executive officers serve at the discretion of the Board.

 

NAME		AGE		TITLE
Wayne Hoovestol		62		Chairman of the Board
Todd A. Becker		55		President and Chief Executive Officer (and Director)
George P. (Patrich) Simpkins Jr.		59		Chief Financial Officer
Walter S. Cronin		58		Chief Commercial Officer
Paul E. Kolomaya		55		Chief Accounting Officer
Michelle S. Mapes		54		Chief Legal and Administration Officer and Corporate Secretary
Mark A. Hudak		61		Executive Vice President – Human Resources
Jim Anderson (1) (2) (4)		63		Director
James Crowley (1) (4)		74		Director
Gene Edwards (1) (2) (4)		64		Director
Gordon Glade (1) (3)		50		Director
Ejnar Knudsen		52		Director
Thomas Manuel (2) (3)		74		Director
Brian Peterson (3)		57		Director
Alain Treuer (2) (3)		48		Director and Vice Chairman of the Board
Kimberly Wagner		57		Director

 

(1)

Member of the Audit Committee.

(2)

Member of the Compensation Committee.

(3)

Member of the Nominating and Governance Committee.

(4)

In accordance with requirements of the SEC and the NASDAQ listing requirements, the Board has designated each as an Audit Committee financial expert.

Biographical information for Todd Becker, who also serves as one of our directors, is provided above in this Proxy Statement. Since March 2015, all of the executive officers listed serve the general partner of GPP in the same capacity as noted below. Under an operational services and secondment agreement, we are reimbursed by GPP for certain compensation of our employees, including executive officers, who serve in management, maintenance and operational functions in support of its operations. Mr. Simpkins has also served as a director of the general partner of GPP since June 2015.

PATRICH SIMPKINS has served as Chief Financial Officer since May 2019, Chief Development Officer since October 2014, and prior to that as Chief Risk Officer from October 2014 through August 2016. Prior to joining Green Plains in May 2012 as Executive Vice President – Finance and Treasurer, Mr. Simpkins was Managing Partner of GPS Capital Partners, LLC, a capital advisory firm serving global energy and commodity clients. From February 2005 to June 2008, he served as Chief Operating Officer and Chief Financial Officer of SensorLogic, Inc., and as Executive Vice President and Global Chief Risk Officer of TXU Corporation from November 2001 to June 2004. Prior to that, Mr. Simpkins served in senior financial and commercial executive roles with Duke Energy Corporation, Louis Dreyfus Energy, MEAG Power Company and MCI Communications. Mr. Simpkins has a Bachelor of Business Administration degree in Economics and Marketing from the University of Kentucky.

WALTER CRONIN has served as Chief Commercial Officer since January 2020 and prior to that as Executive Vice President – Commercial Operations since August 2015. Mr. Cronin served as Chief Investment Officer of Green Plains Asset Management LLC, previously a wholly owned subsidiary of Green Plains, from November 2011 to August 2015. Mr. Cronin served as Executive Vice President and trading principal of County Cork Asset Management from April 2010 to November 2011, and as a consultant to Bunge Limited from September 2004 to March 2010. Prior to that, he gained over 28 years of commodity trading experience working at a number of firms, including R.J. O’Brien & Associates LLC and Continental Grain Company. Mr. Cronin has a Bachelor of Arts degree from the University of Santa Clara.

 

14

PAUL KOLOMAYA has served as Chief Accounting Officer since May 2019 and prior to that as Executive Vice President – Commodity Finance since February 2012. Prior to joining Green Plains in August 2008 as Vice President – Commodity Finance, Mr. Kolomaya was employed by ConAgra Foods, Inc. from March 1997 to August 2008 in a variety of senior finance and accounting capacities, both domestic and international. Prior to that, he was employed by Arthur Andersen & Co. in both the audit and business consulting practices. Mr. Kolomaya holds chartered accountant and certified public accountant certifications and has a Bachelor of Commerce (Honours) degree from the University of Manitoba.

MICHELLE MAPES has served as Chief Legal and Administration Officer and Corporate Secretary since January 2018 and prior to that as Executive Vice President – General Counsel and Corporate Secretary since November 2009. Prior to joining Green Plains in September 2009 as General Counsel, Ms. Mapes was a Partner at Husch Blackwell LLP, where for three years she focused her legal practice nearly exclusively in renewable energy. Prior to that, she was Chief Administrative Officer and General Counsel for HDM Corporation. Ms. Mapes served as Senior Vice President – Corporate Services and General Counsel for Farm Credit Services of America from April 2000 to June 2005. Ms. Mapes holds a Juris Doctorate, a master’s degree in Business Administration and a Bachelor of Science degree in Accounting and Finance, all from the University of Nebraska – Lincoln.

MARK HUDAK has served as Executive Vice President – Human Resources since November 2013. Prior to joining Green Plains in January 2013 as Vice President – Human Resources, Mr. Hudak served as Senior Director, Global Human Resources for Bimbo Bakeries from November 2010 to January 2013. Prior to that, Mr. Hudak was Vice President, Global Human Resources / Compliance and Ethics Officer at United Malt Holdings from September 2006 to November 2010. He held several senior level positions at ConAgra Foods, Inc. from December 2000 to September 2006. Mr.  Hudak has a Bachelor of Science degree in Business Administration from Bellevue University.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

		Page
EXECUTIVE OVERVIEW		15
COMPENSATION PROGRAM OBJECTIVES AND PHILOSOPHY		21
ROLES OF COMPENSATION COMMITTEE, MANAGEMENT AND INDEPENDENT CONSULTANTS		22
USE OF PEER COMPANIES IN SETTING EXECUTIVE COMPENSATION AND MEASURING PERFORMANCE		23
MIX OF SALARY AND INCENTIVE AWARDS (AT TARGET)		24
COMPONENTS OF FISCAL 2020 EXECUTIVE COMPENSATION PROGRAM		24

The following discussion and analysis contains statements regarding future individual and company performance targets and goals. These targets and goals are disclosed in the limited context of our company’s compensation programs and are not statements of management’s expectations or estimates of results or other guidance.

Our Compensation Discussion and Analysis describes the key features of our executive compensation program and the Compensation Committee’s approach in deciding fiscal 2020 compensation for our named executive officers (NEOs):

 

 

NAME		TITLE
Todd A. Becker		President and Chief Executive Officer (and Director)
George P. (Patrich) Simpkins Jr.		Chief Financial Officer
Walter S. Cronin		Chief Commercial Officer
Paul E. Kolomaya		Chief Accounting Officer
Michelle S. Mapes		Chief Legal and Administration Officer and Corporate Secretary

Executive Overview

The NEOs’ payouts under the 2020 annual incentive program considered the company’s financial results, safety performance, achievement of key strategic initiatives and individual performance in 2020. As described further in the CD&A, the executive compensation program, through the use of equity-based awards, aligns the NEOs’ realizable compensation with the performance of our stock price.

RESPONSE TO SAY ON PAY ADVISORY VOTE

At our 2017 annual meeting, 76% of our shareholders approved our say on pay proposal. While we were gratified by the passing vote, we recognized that the approval percentage was not at a level we deemed acceptable. As a result, management engaged with two proxy advisory firms and the feedback received was strongly supportive of the changes to our executive compensation program that had been made for 2017. The committee, with input from its independent compensation consultant, further considered the 2017 vote results and current market practices and introduced additional changes for 2018.

At our 2020 annual meeting, our shareholders approved our NEOs’ compensation, with approximately 97% of the votes cast in favor of our say on pay proposal.

 

15

The committee and the Board value input from our shareholders and will carefully consider the results of the say on pay vote, and will continue to seek direct feedback from shareholders.

Compensation Program Improvements

In response to the results of previous say on pay votes and shareholder and proxy advisor feedback, our NEO compensation program was significantly amended to enhance alignment between executive compensation and the interests of our shareholders, as follows:

SIGNIFICANT ACTIONS TAKEN IN RESPONSE TO SAY ON PAY VOTES AND INVESTOR FEEDBACK

 

WHAT WE HEARD		ACTIONS TAKEN		EFFECTIVE STARTING
Special Awards
◾  Special awards should be reserved for limited circumstances		✓  Special awards may be made to compensate new hires for equity they forfeit at their former employer or for targeted retention for critical and at risk executives. Where special performance-based or retention awards are granted, they will generally vest over a longer period of time.		FY 2018
Plan Design
◾  A meaningful portion of the executive officers’ LTIP should vest based on performance		✓  Beginning in 2018, one half of annual awards to executive officers under the LTIP will be in the form of performance share units (PSUs) which vest based on the attainment of pre-established performance goals.		FY 2018
◾  Market preference toward forward-looking performance measurement for LTIP		✓  We have shifted from a backward-looking/trailing performance measurement to a forward-looking performance measurement for our LTIP, with PSUs earned at the end of a three year performance period. The 2018 and 2019 PSUs vest 50% based on total shareholder return relative to a performance peer group and 50% based on the company’s return on net assets (RONA). The 2020 PSUs vest based on achievement of key long-term measures associated with the transformation to Green Plains 2.0.
◾  Eliminate excise tax gross-up provisions		✓  Mr. Becker agreed to an amendment to his employment agreement to eliminate the excise tax gross-up provision regarding change in control benefits that had been in his agreement for a number of years.
◾  Adopt a clawback policy		✓  We adopted a compensation recovery (clawback) policy to allow the Board to recover annual or long-term incentive awards in connection with a material financial restatement resulting from executive misconduct.
◾  Market preference toward consideration of total shareholder return (TSR) in incentive payouts		✓  We granted PSUs in 2018 and 2019, which utilize a relative TSR measure, weighted 50%, to further align our NEOs’ interests with shareholder interests and expectations.
◾  Separate metrics in incentive plans		✓  We adopted separate metrics for our annual incentive bonus and LTIP programs.
◾  Support for financial performance metrics that can be reconciled to peers easily and align pay for performance vs. peer group		✓  We adopted RONA as a measure for our 2018 and 2019 PSUs, given the importance of our returns to long-term shareholder value creation.
◾  Peer group update		✓  We re-evaluated our compensation benchmarking peer group to better align with our company following the completion of acquisitions and business evolution and introduced a new performance peer group for use with PSU awards.		FY 2016, FY 2018 and FY 2020
◾  No immediate vesting of equity awards under LTIP		✓  We eliminated the immediate vesting of 25% of equity awards under our LTIP. Restricted share awards (RSAs) granted in 2018 and 2019 vest 1/3 on each of the first, second and third anniversaries of the grant date or in the case of “cliff vesting” RSAs on the third anniversary of the grant date, and PSUs, if earned, cliff vest at the end of a three year performance period. For the 2020 long-term incentive (LTI) awards, all RSAs granted cliff vest on the third anniversary of the grant date.		FY 2015
◾  Stock ownership guidelines		✓  We have stock ownership guidelines and we have always prohibited stock pledging, as well as hedging, transactions, unless the Board grants an exception.		FY 2011

 

16

WHAT WE HEARD		ACTIONS TAKEN		EFFECTIVE STARTING
CEO Compensation
◾  Concern with level of CEO target and maximum bonus opportunity		✓  We moved towards a more typical compensation mix beginning in 2018, increasing the CEO’s base salary, but maintaining a below market median salary and reducing his target annual incentive to 200% of salary and maximum annual incentive to 1.5x the target bonus.			FY 2018
Proxy Design
◾  Provide an executive summary in the Proxy Statement and discuss responsiveness to shareholder feedback		✓  We have improved our proxy disclosures by including a proxy summary and an executive summary at the beginning of the Compensation Discussion and Analysis section of the Proxy Statement.   ✓  We have expanded disclosures on our shareholder input, practices, governance and ESG matters.			FY 2017

We will continue to solicit shareholder feedback on our executive compensation program by holding an advisory say on pay vote on an annual basis and will take the results of this process into account in evaluating the program and making future compensation decisions for the NEOs.

BEST PRACTICES AND GOOD GOVERNANCE

In addition to the significant changes made in response to the 2017 say on pay vote, the committee also made several other changes to the 2018 and 2019 executive compensation programs after reviewing trends in executive compensation and pay-related governance policies. These changes follow several years of executive compensation program enhancements by the committee as summarized in the table above.

COMPANY PERFORMANCE HIGHLIGHTS

Our Business

Green Plains is an Iowa corporation, founded in June 2004 as a producer of low carbon fuels and has grown to be one of the leading corn processors in the world. Fiscal 2020 has been a transformative year for the company as we transform to Green Plains 2.0. We continue the transition from a commodity-processing business to a value-add agricultural technology company focused on creating additional diverse, non-cyclical, higher margin feed ingredients, specialty alcohols and renewable feedstocks for the emerging renewable diesel industry. In addition, we are currently undergoing a number of project initiatives to improve our operating margins. Through our Project 24 initiative, we anticipate reductions in operating expense per gallon across our non-ICM plants. USP upgrades and planned GNS upgrades are expected to provide additional improvements to our financial results. Additionally, through our Ultra-High Protein initiative, we expect to produce various Ultra-High Protein and novel feed ingredients targeting the pet, dairy and aquaculture industries further increasing margin per gallon.

We recently completed the purchase of a majority interest in Fluid Quip Technologies, LLC. The acquisition capitalizes on the core strengths of each company to develop and implement proven, value-added agriculture, food and industrial biotechnology systems and rapidly expand installation and production across Green Plains facilities, as well as offer these technologies to partnering biofuel facilities.

Additionally, we have taken advantage of opportunities to divest certain assets in recent years to reallocate capital toward our current growth initiatives. We are focused on generating stable operating margins through our business segments and risk management strategy and expanding our focus on specialty alcohols and high value protein ingredients. We own and operate assets throughout the ethanol value chain: upstream, with grain handling and storage; through our ethanol production facilities; and downstream, with marketing and distribution services to mitigate commodity price volatility.

We formed Green Plains Partners LP, a master limited partnership, to be our primary downstream storage and logistics provider since its assets are the principal method of storing and delivering the ethanol we produce. The partnership completed its initial public offering on July 1, 2015. As of December 31, 2020, we own a 48.9% limited partner interest, a 2.0% general partner interest and all of the partnership’s incentive distribution rights. The public owns the remaining 49.1% limited partner interest. The partnership is consolidated in our financial statements.

We group our business activities into the following four operating segments to manage performance:

 

•

Ethanol Production.  Our ethanol production segment includes the production of ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein and corn oil at 12 ethanol plants in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee. At capacity, our facilities are capable of processing approximately 354 million bushels of corn per year and producing approximately 1.0 billion gallons of ethanol, 2.5 million tons of distillers grains and 276 million pounds of industrial grade corn oil, making us one of the largest ethanol producers in North America.

 

•

Agribusiness and Energy Services.  Our agribusiness and energy services segment includes grain procurement, with approximately 38.1 million bushels of grain storage capacity, and our commodity marketing business, which markets,

 

17

sells and distributes ethanol, distillers grains and corn oil produced at our ethanol plants. We also market ethanol for a third-party producer as well as buy and sell ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein, corn oil, grain, natural gas and other commodities in various markets.

 

•

Food and Ingredients.  Our food and ingredients segment currently includes our food-grade corn oil operations. Fleischmann’s Vinegar, one of the world’s largest producers of food-grade industrial vinegar, was also included in the food and ingredients segment until its sale on November 27, 2018. On September 1, 2019, we formed a joint venture and sold 50% of our cattle feeding operations which has the capacity to support approximately 355,000 head of cattle and grain storage capacity of approximately 24.1 million bushels. The assets and liabilities and results of operations of GPCC prior to its divesture have been reclassified as discontinued operations for all periods presented. Our continued investment in GPCC was accounted for under the equity method of accounting until its disposition in October 2020.

 

•

Partnership.  Our master limited partnership provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses. The partnership’s assets include 31 ethanol storage facilities, six fuel terminal facilities and approximately 2,480 leased railcars.

 

2020 PERFORMANCE HIGHLIGHTS

Achievements

 

◾

Acquired a majority interest in Fluid Quip Technologies, LLC which capitalizes on the core strengths of each company to develop and implement proven, value-added agriculture, food and industrial biotechnology systems and rapidly expand installation and production of Ultra-High Protein across Green Plains facilities, as well as offer these technologies to partnering biofuel facilities;

 

◾

Completed the sale of the ethanol plant located in Hereford, Texas, and certain related assets from subsidiaries, for the sale price of $39.0 million, plus working capital;

 

◾

Completed various Project 24 upgrades with better than expected outcomes;

 

◾

Modified processes at the ethanol plant at York, Nebraska to enable it to produce FCC grade alcohol in response to pandemic;

 

◾

Modified the ethanol plant at Wood River, Nebraska to produce FCC grade alcohol;

 

◾

Successfully launched the Ultra-High protein production at Shenandoah;

 

◾

Sold our remaining 50% joint venture interest in our cattle operations for $80.5 million in cash plus closing adjustments; and

 

◾

Entered into a delayed draw loan agreement for $75.0 million maturing on September 1, 2035.

Pay for Performance

The committee has designed our executive compensation program to deliver pay in alignment with corporate, business unit and individual performance primarily based on the following three factors, which in turn are expected to align executive pay with returns to shareholders over time:

 

◾

Expansion of our company, both organically and through acquisitions, as our scale creates the platform for future growth and influences the stability of our company’s earnings;

 

◾

Achievement of key financial, operational and strategic objectives; and

 

◾

The performance of our common stock.

The following chart details our CEO’s realizable compensation compared to his target compensation for each of the years ended 2018, 2019 and 2020. We believe this chart demonstrates that our CEO’s compensation is, as intended, largely at risk and closely and appropriately linked to performance, including the performance of our stock price.

 

18

 

 

(1)

Target compensation is defined as (i) base salary, (ii) the target annual incentive opportunity for the year, and (iii) the value as of grant date of RSAs and PSUs granted during each year (or in the case of the 2020 awards, the intended grant value).

(2)

Realizable compensation is defined as (i) base salary, (ii) the actual annual incentive earned for the year, and (iii) the value as of December 31, 2020 of RSAs and PSUs (at target) granted during each year. The realizable value of RSAs and PSUs is based on our closing stock price on December 31, 2020 of $13.17 per share.

The committee believes that our executive compensation program effectively aligns pay with performance based on the key factors discussed above, thereby aligning executive pay with returns to shareholders and creating a growth-oriented, long-term value proposition for our shareholders.

EXECUTIVE COMPENSATION HIGHLIGHTS

The committee has designed our executive compensation program to deliver pay in alignment with corporate, business unit and individual performance. A large portion of total direct compensation is “at-risk” through long-term equity awards and annual cash incentive awards. These awards are linked to actual performance and include a significant portion of equity. See charts on pages 4 and 24 for more information regarding the target annual compensation mix for our CEO and other NEOs.

Ongoing Monitoring of Compensation Best Practices and Programs in a Dynamic Environment—Overview

Our company has undergone diversification in the business over the last several years. As a result, and in response to our 2017 say on pay vote, the committee conducted an in-depth analysis of our compensation and governance practices, including an enhanced shareholder outreach process and a thorough review of all aspects of our compensation strategies and program. This analysis resulted in significant changes to our compensation programs for fiscal 2018 (discussed above under Compensation Program Improvements at page 16). The committee engaged in an ongoing review of our compensation practices and governance policies in 2020, and the solicitation of advice from the committee’s compensation consultant, Meridian Compensation Partners, LLC (Meridian).

Fiscal 2020 Compensation Actions at a Glance

The following summarizes the key compensation decisions for the NEOs for fiscal 2020:

 

☐	Base salary: The annual rate of base salaries of the CEO and other NEOs were not adjusted in 2020.

 

☐

Annual Incentive Bonus: For fiscal 2020, the Compensation Committee awarded annual bonuses ranging from 93% to 108% of each NEO’s target bonus. In addition, the Compensation Committee awarded a discretionary bonus to Messrs. Simpkins and Cronin in view of the company’s performance in 2020, the company’s progress as we transform to Green Plains 2.0 and each of the executive’s significant contributions to our achievements. See the section entitled Annual Incentive Compensation for a complete discussion of our performance measures, targets and performance for 2020 and annual bonuses awarded by the Committee for the year.

 

☐

Long-Term Incentive Awards: In March 2020, each of the NEOs was granted a combination of PSUs and RSAs that cliff vest on the third anniversary of the grant date. Moreover, the PSUs granted in March 2020 are subject to performance goals aligned with the company’s strategic objectives and shareholder interests. In addition, in March 2020, the Compensation Committee awarded a special cash-based incentive to the CEO and other executives (including the NEOs) based on the achievement of key operating objectives tied to the transformation to Green Plains 2.0.

 

19

These compensation decisions are discussed in more detail in this Compensation Discussion and Analysis and shown in the Summary Compensation Table and Grants of Plan-Based Awards Table that follows.

Annual Incentive Program

The annual incentive program advances our pay-for-performance philosophy by providing participants with annual bonus opportunities linked to the achievement of specific performance goals. The annual incentive program is designed to:

 

•

Reinforce the company’s goal-setting and strategic planning process;

•

Recognize the efforts of its management in achievement key financial, operational and strategic objectives; and

•

Aid in attracting and retaining executive management, thus ensuring the long-range success of the company.

The Compensation Committee sets objective performance measures for the company as a whole and establishes corresponding performance goals for each participant under the annual incentive program, including our NEOs. In structuring the performance measures and goals, the Compensation Committee sets targets for achieving those goals:

 

•

Minimum threshold before any annual performance bonus can be earned;

•

Target goal to incentivize a specific desired performance level; and

•

Maximum goal which requires an appropriate level of stretch for a maximum bonus to be earned.

After the end of the fiscal year, the Compensation Committee determines whether the performance goals have been attained and approves any cash payment amount based upon the level of achievement of the annual performance goals. The Compensation Committee also evaluates each executive’s performance for the year and determines their overall cash performance bonus based on an assessment of their performance, among other things, against the following objectives:

 

•

Leadership and company strategy;

•

Business performance and development;

•

Accomplishment of strategic objectives;

•

Commitment to development of management;

•

Growth initiatives; and

•

Financial and operational objectives.

Chief Executive Officer (CEO)

The Board and Compensation Committee determined the CEO met the aforementioned objectives with the following accomplishments:

 

•

Successfully executed on the acquisition of Fluid Quip Technologies LLC and the strategic partnership with Ospraie;

•

Lead the implementation of additional Project 24 implementations, lower operating costs at a number of our biorefineries;

•

Successfully lead implementation of the protein initiative at our Shenandoah facility, the marketing of the protein and solidified strategies around repositioning the company around the protein initiative;

•

Successfully lead the execution of disposition of the cattle business and the Hereford plant, strengthening the balance sheet of the company; and

•

Provided effective and strong leadership through COVID-19, executing on risk management, operational, financial and transformative strategies.

Chief Financial Officer (CFO)

The Board and Compensation Committee determined the CFO met the aforementioned objectives with the following accomplishments:

 

•

Completed successful disposition of remaining 50% interest of cattle operations;

•

Completed successful disposition of Hereford plant;

•

Completed refinancing of GPP $135 million credit facility with numerous counterparties during COVID-19;

•

Completed new $75 million financing associated with protein initiatives;

•

Worked with management team to develop strategy and execution plan for protein initiative; and

•

Maintained an active investor relations program for GPI and GPP. Coordinated proactive responses to the company’s transformation, earnings reports, and financial strategy questions.

Chief Commercial Officer (CCO)

The Board and Compensation Committee determined the CCO met the aforementioned objectives with the following accomplishments:

 

•

Successful negotiation of various partnerships and joint ventures related to Optimal Aqua;

•

Development of strategic relationships with various high-end consumer product companies;

•

Led completion of outward facing farmer tool;

•

Assisted with implementation of the design of the protein initiative at our Shenandoah facility; and

•

Completed negotiations of off-take arrangements for 2020 and 2021 high protein at the Shenandoah facility.

 

20

Chief Accounting Officer (CAO)

The Board and Compensation Committee determined the CAO met the aforementioned objectives with the following accomplishments:

 

•

Managed all SEC filings to maintain compliance with regulations, including filing annual Proxy Statement, completing Form 8-K pro-forma financial statements and moved the annual meeting to virtual forum due to COVID-19;

•

As a result of COVID-19, moved offices to work from home while maintaining an effective control environment;

•

Provided support and financial oversight regarding various transactions;

•

Reviewed modifications to the Income Tax code related to the Cares Act and filed preliminary 2019 income tax return to obtain $56 million refund; and

•

Implemented numerous automation and improvement projects.

Chief Legal and Administration Officer

The Board and Compensation Committee determined the Chief Legal and Administration Officer met the aforementioned objectives with the following accomplishments:

 

•

Successfully assisted with the negotiations and legal aspects of the company’s various sale transactions;

•

Successful assisted with the acquisition of Fluid Quip Technologies LLC;

•

Handled all legal requirements proactively and efficiently with various strategic financings;

•

Pursued and settled various legal claims and insurance recoveries;

•

Lead establishment of the company’s ESG initiatives;

•

Provided effective and timely counsel through COVID-19 on business and strategy matters; and

•

Grew Political Action Committee and assisted in the raise of initial contributions.

Compensation Program Objectives and Philosophy

The committee has designed our executive compensation program to serve several key objectives:

 

◾

attract and retain superior employees in key positions, with compensation opportunities that are competitive relative to the compensation paid to executives at companies similar to us by generally setting target levels of annual total direct compensation opportunity for the NEOs within a competitive range of the median of our Pay Levels Peer Group;

 

◾

reward the achievement of specific annual, long-term and strategic goals;

 

◾

align the interests of our NEOs with those of our shareholders by placing a significant portion of total direct compensation at risk, through the use of equity-based LTIP awards and a share ownership and retention policy; and

 

◾

reward performance that exceeds that of our peer companies with the ultimate objective of improving shareholder value over time.

In the chart below, we have summarized how the executive compensation program supports these executive compensation program objectives.

 

OBJECTIVE		PROGRAM DESIGN
Attract and retain superior employees in key positions, with compensation opportunities that are competitive relative to the compensation offered to similarly-situated executives at companies similar to us.		◾  Designed the executive compensation program to provide a mix of base salary, target annual cash incentive awards and target LTIP award values that are aligned with the program’s principles and objectives and are competitive with the target compensation levels offered by our Pay Levels Peer Group.
Reward the achievement of specific annual, long-term and strategic goals.		◾  Provided approximately 85% of CEO 2020 annual target total compensation in incentive compensation and on average, approximately 69% of all other NEOs annual target compensation at risk, incentive compensation.
		◾  Provided sufficiently challenging upside opportunities on annual and long-term incentive compensation for exceeding target goals, balanced with reductions from target opportunities for performance below target goals.
		◾  Tied payouts under the annual incentive plan to key financial objectives, as well as strategic, operational and individual performance, to focus executives on areas over which they have the most direct impact, while continuing to motivate decision-making that is in the best interests of our company as a whole.
		◾  Based annual incentive awards primarily on quantifiable performance goals established by the committee, with payouts determined after the committee reviews and certifies performance results. ◾  PSUs granted as part of LTIP are tied to three-year, forward looking performance with vesting based on actual performance measured against performance goals established at the beginning of the performance period.

 

21

OBJECTIVE		PROGRAM DESIGN
Align the interests of our NEOs with those of our shareholders by rewarding strong company performance through the use of equity-based awards and a share ownership and retention policy, with the ultimate objective of improving shareholder value over time.		◾  Tied payout of PSUs granted to our NEOs as part of LTIP to three-year, forward-looking performance based on performance goals consistent with the company’s objectives. ◾  Robust stock ownership guidelines.

ROLES OF COMPENSATION COMMITTEE, MANAGEMENT AND INDEPENDENT CONSULTANTS

Compensation Committee

The committee has primary responsibility for overseeing our executive compensation program. The Board appoints the members of the committee. Additionally, the Board has determined that each member of the committee meets the applicable requirements for independence established by applicable SEC rules and the listing standards of the NASDAQ. The committee:

 

◾

oversees our various compensation plans and programs and makes appropriate design decisions;

 

◾

retains responsibility for monitoring our executive compensation plans and programs to ensure that they continue to adhere to our company’s compensation philosophy and objectives; and

 

◾

determines the appropriate compensation levels for all executives, including the NEOs.

The committee meets on a regular basis and has an executive session without members of management present at each regular committee meeting. The committee’s duties and responsibilities are described in its charter, which can be found on our website at http://investor.gpreinc.com/corporate-governance. The committee and the Board periodically review and, as appropriate, revise the charter.

As provided by its charter and discussed in greater detail below, the committee engages an independent compensation consultant to advise it on the design of our executive compensation program. The committee has engaged Meridian to advise it in connection with the executive compensation program design since 2017. To determine the appropriate compensation levels, the committee considers, in conjunction with recommendations from its independent compensation consultant:

 

◾

Total compensation paid to the NEOs;

 

◾

Our company’s long-term and short-term incentive program design and alignment with strategic and financial objectives;

 

◾

Our company’s performance, the industry in which we operate, the current operating environment, our relative total shareholder return performance and market compensation for similarly-situated executives; and

 

◾

How to balance short-term and long-term compensation to provide fair near-term compensation, to align executive pay with long-term shareholder value, and to avoid structures that would encourage excessive risk taking.

The committee periodically reviews our executive compensation program to ensure that it remains competitive and provides the proper balance between cash and equity, and between short-term and long-term incentive compensation. The committee’s regular analysis and refinement of the compensation program ensures continuing alignment of the elements of the compensation program with our company’s business strategy and shareholder interests. During this process, the committee:

 

◾

Evaluates the design of our compensation program to align pay and performance;

 

◾

Evaluates the executive compensation program to ensure a continued nexus between executive compensation and the creation of shareholder value;

 

◾

Seeks to ensure that our company’s compensation programs remain competitive, including comparing the total direct compensation paid by our company with that of our Pay Levels Peer Group;

 

◾

Considers feedback received from our shareholders;

 

◾

Consults as needed with its independent compensation consultant to review and refine the elements of our compensation programs to ensure that our executive compensation meets our stated objectives and is consistent with the company’s compensation philosophy; and

 

◾

Takes into consideration appropriate corporate transactions, if any, and the resulting impact on the size and complexity of our company’s business.

In addition to its responsibilities for executive compensation plans and programs, the committee also evaluates and makes recommendations to the Board regarding our management and director compensation plans, policies and programs, and reviews benefit plans for management and other employees.

 

22

Role of Chief Executive Officer

The committee evaluates the performance of the Chief Executive Officer who, in turn, on an annual basis, reviews the performance of his direct reports, which include each of the NEOs other than himself. The Chief Executive Officer presents his conclusions and recommendations with respect to performance and pay, including recommendations with respect to base salary adjustments and incentive award amounts, to the committee. The committee considers this information and then exercises its judgment in adopting or modifying any recommended adjustments or awards to be made to the NEOs.

Use of an Independent Compensation Consultant

The Compensation Committee’s charter allows the committee to engage an independent compensation consultant to advise the committee on the design of our executive compensation. The committee has engaged Meridian, an independent executive compensation consulting firm, since 2017 to provide advice to the committee on our executive compensation program design.

Meridian is engaged directly by, and is fully accountable to, the committee and does not provide advice to management. The committee has determined that Meridian is independent based on the independence factors provided by the SEC and the NASDAQ.

Use of Peer Companies in Setting Executive Compensation and Measuring Performance

Purpose

The committee uses peer groups for the following purposes:

 

◾

To assess executive compensation opportunities (the “Pay Levels Peer Group”); and

 

◾

For the 2018 and 2019 LTI awards, to assess the company’s long-term performance, and in particular, to assess relative total shareholder return for purposes of determining payouts for a portion of the PSU awards (the “Performance Peer Group”).

As discussed in more detail below, our company has a unique product offering that makes it difficult to establish a group of peer companies for evaluating the competitiveness of our NEOs’ compensation opportunities and for measuring our relative business performance. In particular, it is challenging to identify appropriate peers for our business performance among companies in our S&P 8-digit and 6-digit Global Industry Classification Standard (GICS) codes, as many of the companies in those GICS codes that are of roughly similar size manufacture, market, and distribute food for human consumption. These companies typically use agricultural commodities as ingredients in their products, and as a result these companies would typically experience reduced performance when these commodity prices rise. In contrast, our products are not generally for human consumption and our product prices generally track the performance of an identified group of agricultural commodities. As those agricultural commodities prices rise, our financial performance will generally improve, and conversely, as those commodities prices fall, our financial performance will generally be negatively impacted. As a result, our company tends to operate in opposite economic cycles from many of the other food or agricultural-related companies in our general GICS codes.

The Compensation Committee, in consultation with Meridian, selected companies for the Pay Levels Peer Group that have one or more of the following characteristics: (i) similar in size and financial performance to us, (ii) within a relevant industry group (including companies engaged in the production of ethanol, alternative fuels or gasoline oxygenates as well as the marketing and distribution of such fuels and companies engaged in the production of agriculture products), (iii) considered competitors to us according to analysts and advisory firms and other selection criteria. The composition of the peer group is periodically reviewed and, if appropriate, updated to ensure continued relevancy and to account for mergers, acquisitions, divestures or other business-related changes that may occur.

The following companies comprised the Pay Levels Peer Group used to inform 2020 pay decisions:

Alto Ingredients, Inc. (1) / The Andersons, Inc. / Calumet Specialty Products Partners, L.P. / Clean Energy Fuels Corporation / Denbury Resources Inc. / EP Energy Corporation / H.B. Fuller Company / Koppers Holdings Inc. / Par Pacific Holdings, Inc. / Renewable Energy Group, Inc. / REX American Resources Corporation / SM Energy Company

 

(1)

In January 2021, Pacific Ethanol, Inc changed its name to Alto Ingredients, Inc.

The committee believes that it is appropriate to use companies that are generally similar in size to our company for pay comparisons. For performance comparisons, however, the committee believes it is appropriate to use a broader peer group that is not limited by size or location to set the standards for long-term incentive awards, as company size and location do not materially influence performance comparisons. Although the committee is referencing two different peer groups, there is a substantial overlap of companies in the two peer groups.

The committee uses competitive pay information derived from the Pay Levels Peer Group to generally inform its compensation decisions, but does not formulaically benchmark based on this data. The committee generally sets target levels of annual total direct compensation for the NEOs within a competitive range of the market median at the Pay Levels Peer Group. The committee considers each executive’s experience, responsibilities, performance and internal equity when setting compensation opportunities. Where company performance is strong, executives have the opportunity to earn above median compensation. Where company performance is weaker, compensation will be below the market median.

 

23

Performance Peer Group

To better reflect the company’s operating segments of Feed, Food, and Fuel and the companies we compete with for employee talent and capital, the Performance Peer Group was established for purposes of evaluating our performance under the 2018 and 2019 PSU awards. In selecting the Performance Peer Group constituents, which are summarized in the table below, the Committee considered the following criteria: (i) industry, (ii) business operations similar to those of the company, focused on feed, food, and/or fuel, (iii) the extent to which operations were global, (iv) company size, as measured by revenues and market capitalization, and (v) availability of publicly-disclosed financial information.

 

Alto Ingredients, Inc.		Anadarko Petroleum		The Andersons		Apache Corporation
Archer-Daniels-Midland Company		Bunge Limited		Carrizo Oil & Gas		Concho Resources
ConocoPhillips		Darling Ingredients		Delek US Holdings		Devon Energy
EOG Resources Inc.		Forum Energy Technologies, Inc.		Halliburton Company		Helmerich & Payne
Hess Corporation		Marathon Oil		Matador Resources		Methanex Corp.
MGP Ingredients		Murphy Oil		Nabors Industries		Noble Energy, Inc.
Oasis Petroleum Inc.		Patterson-UTI Energy		Renewable Energy Group		REX American Resources
SM Energy		SunOpta Inc.		Superior Energy Services		Valero Energy
Westlake Chemical		Whiting Petroleum		WPX Energy, Inc.

Mix of Salary and Incentive Awards (at Target)

The following charts illustrate the mix of total direct compensation elements for our NEOs at target performance. These charts demonstrate our executive compensation program’s focus on variable, performance-based cash and equity-based compensation, through long-term equity awards and annual cash incentive awards.

 

Components of Fiscal 2020 Executive Compensation Program

BASE SALARY

Our company provides NEOs with a base salary to compensate them for services rendered during each fiscal year. Base salary ranges for NEOs are determined for each executive based on the executive’s position and responsibility by using market data supplied by the committee’s independent compensation consultant. Base salary is designed to be competitive when compared with similar positions within the Pay Levels Peer Group. The committee periodically reviews base salaries of senior executives, including the NEOs, to determine if adjustment is necessary based on competitive practices and economic conditions. Base salary for senior executives will also be reviewed and adjustment may be made based on individual performance and the individual’s skills, experience and background.

 

24

The chart below summarizes the annual base salary of our NEOs for fiscal 2020 and 2019.

 

NAME		FISCAL 2019                  ANNUAL SALARY				FISCAL 2020                  ANNUAL SALARY				PERCENTAGE                          INCREASE
Mr. Becker			$            700,000				$            700,000			0%
Mr. Simpkins			$            400,000				$            400,000			0%
Mr. Cronin			$            300,000				$            300,000			0%
Mr. Kolomaya			$            280,000				$            280,000			0%
Ms. Mapes			$            350,000				$            350,000			0%

ANNUAL INCENTIVE COMPENSATION

Overview

To motivate performance and reward the achievement of critical objectives, each of our NEOs was provided with an annual incentive award opportunity for fiscal 2020.

Annual Incentive Award Opportunities

In early 2020, the Compensation Committee established target annual incentive award opportunities for the NEOs for 2020, as summarized in the table below:

Fiscal 2020 Target Bonus Opportunities

 

Executive		Target Cash Bonus as a              Percent of Base Salary		Potential Award Range as a              Percent of Base Salary
Mr. Becker		200%		0 - 300%
Mr. Simpkins		80%		0 - 200%
Mr. Cronin		80%		0 - 200%
Mr. Kolomaya		80%		0 - 200%
Ms. Mapes		80%		0 - 200%

Annual Incentive Award Formula

In 2020, the Compensation Committee approved the following performance measures, weighting and goals, and corresponding payouts, for use in determining payouts under the 2020 annual incentive program:

 

Objective		Weighting		Threshold Performance           / 50% Payout		Target Performance /           100% Payout		Maximum Performance /           200% Payout (1)
Ethanol EBITDA		25%		($70 million)		$-		³ $70 million
Non- Ethanol EBITDA (2)		25%		$90 million		$100 million		³ $120 million
Protein EBITDA (3)		5%		$3 million		$6 million		$9 million
Safety (4)		5%		86 points		90 points		³ 94 points
Opex/Gal (5)		6%		$0.25/gal		$0.24/gal		$0.23/gal
Wood River Protein Completion		5%		60%		70%		80%
Protein Partnership/JVs		3%		1		2		3
Operating Initiatives (6)		16%		Earned on an individual project basis
MBOs / Individual Performance		10%		Earned through MBO Attainment

 

(1)

Maximum potential payout for each measure (as a % of the weighting at target) is 200% of target.

(2)

Non-ethanol EBITDA is calculated using the EBITDA from the agribusiness & energy services, food and ingredients, partnership segments as well as EBITDA from the cattle operations.

(3)

Protein EBITDA is calculated using an estimated April 2020 startup.

(4)

The plant safety goal is comprised of 11 different safety metrics inclusive of lost time, timeliness of incident reporting, safety training, completion of safety drills, environmental plan review and training, environmental incident, third party audit close outs, process safety management compliance, development of standard operating procedures (SOPs), for maintenance, and for rail, SOP training, other on the job training requirements and compliance with the Food Safety Modernization Act. Safety is measured on a point basis with a base line score of 100 with deductions for not meeting safety objectives.

(5)

Opex or operating expenses represents the ongoing costs of production of ethanol.

(6)

Operating initiatives includes completion of Project 24, successful extension of GPP credit facility, development and deployment of a customer facing application and completion of the monetization of the balance of cattle.

Each measure is separately weighted and if performance falls between the specified performance levels, the payout earned will be determined using straight-line interpolation (for those measures with threshold, target and maximum performance goals).

 

25

The performance levels, aggregate performance required to earn a payout at each level and corresponding payouts for the NEOs are summarized in the table below:

 

		Payout as a % of the Target Bonus
Level of Attainment		All NEOs
Threshold		50%
Target		100%
Maximum (1)		200%

 

(1)

Maximum payout for CEO is capped at 300% of salary.

Determination of Payouts

Following the end of 2020, the Compensation Committee assessed the company’s performance on the measures above and each of the NEOs individual performance, and determined the payout earned.

 

Objective		Weighting		Threshold           Performance		Target           Performance		Maximum           Performance (1)		Actual Performance (2)
Ethanol EBITDA		25%		($70 million)		$-		³ $70 million		($32.9 million)
Non- Ethanol EBITDA		25%		$90 million		$100 million		³ $120 million		$109.8 million
Protein EBITDA		5%		$3 million		$6 million		³ $9 million		$5.5 million
Safety (3)		5%		86 points		90 points		³ 94 points		95 points
Opex/Gal		6%		$0.25/gal		$0.24/gal		$0.23/gal		$0.255/gal
Wood River Protein Completion		5%		60%		70%		80%		66%
Protein Partnership/JVs		3%		1		2		3		2
Operating Initiatives		16%		Assessed by the Compensation Committee on a project basis
MBOs / Individual Performance		10%		Assessed by the Compensation Committee

 

(1)

Maximum potential payout for each measure (as a % of the weighting at target) is 200% of target.

(2)

EBITDA calculation for payout determination excludes certain corporate selling, general and administrative costs.

(3)

Due to a work-related fatality, the Compensation Committee exercised discretion under the Annual Incentive Plan to reduce the payout for the safety metric from 200% to 100% of target.

The Compensation Committee determined, after consultation with its independent compensation consultant, that based on company performance as described above, as well as strong performance on Operating Initiatives, and the NEOs’ contributions and achievement of their individual objectives as described on pages 20 and 21 above, to award the following bonuses for 2020, which ranged from 93% to 108% of each NEO’s 2020 target bonus, as illustrated in the table below:

 

EXECUTIVE		FISCAL 2020 TARGET BONUS OPPORTUNITY				2020 BONUS				PAYOUT AS A   PERCENT OF   TARGET
Mr. Becker		$	1,400,000			$	1,309,718			93.6%
Mr. Simpkins		$	320,000			$	344,000			107.5%
Mr. Cronin		$	240,000			$	258,000			107.5%
Mr. Kolomaya		$	224,000			$	211,000			94.2%
Ms. Mapes		$	280,000			$	259,284			92.6%

Notably, in the case of our Chief Executive Officer, the annual bonus awarded (93.6% of his target bonus) is below his target payout. The Committee also believes that the 2020 bonuses properly reflect the company’s performance and each executive’s contributions during the year and are consistent with our compensation philosophy and objectives.

Discretionary Bonus

In view of the company’s performance in 2020, the company’s progress as we transform to Green Plains 2.0 and each of the executive’s significant contributions to our achievements, our Chief Executive Officer recommended and the committee approved, after consultation with its independent compensation consultant, an additional one-time discretionary bonus for Mr. Simpkins and Cronin in the amount of $112,000 and $198,000, respectively.

 

26

LONG-TERM INCENTIVE COMPENSATION

Overview

Each of our NEOs was provided with long-term incentive award opportunities for fiscal 2020 that were tied to our performance. The principal objectives of the LTI awards are to (i) motivate our NEOs to drive sustained long-term shareholder value creation, (ii) grant award opportunities that are based on the competitive market, but then adjusted for our performance, and (iii) provide the NEOs with equity ownership opportunities that will further enhance their alignment with our shareholders’ interests. The Committee believes that providing long-term equity-based awards incentivizes executives to balance short- and long-term decisions, which helps to mitigate excessive risk-taking by our executives.

Grants are generally made in the first quarter of each year; however, in limited, special situations, long-term incentive awards may be granted at other times to attract new executives and to retain existing executives.

Long-Term Incentive Awards

After reviewing trends in executive compensation and pay-related governance policies and in response to the results of our 2017 say on pay vote, the Committee made the following changes to the company’s LTI awards, beginning with the 2018 annual awards:

 

◾

As illustrated in the chart below, a shift was made from granting solely service-based RSAs based on an assessment of the prior-year’s results to annual grants of (i) PSUs tied to three-year, forward-looking performance and (ii) service-based RSAs.

 

◾

One-half of the NEOs LTI opportunity is granted in PSUs and RSAs, respectively.

 

		Year 1		Year 2		Year 3		Year 4
RSAs		Grant		-		-		Vests
PSUs		Performance Period						Earned

For 2020, the NEOs’ awards were granted 50% in PSUs, with the balance in service-based RSAs, which vest on the third anniversary of the grant date.

Fiscal 2020 Long-Term Incentive Awards

For 2020, the NEOs’ awards were granted 50% in PSUs, with the balance in service-based RSAs, all of which vest on the third anniversary of the grant date.

 

◾

The performance levels and corresponding payouts established for the company’s Performance Goals described below with respect to the 2020 PSU awards are summarized in the table below.

 

Performance Level		Payout % of Target Number of   PSUs Earned
Maximum		200%*
Target		100%
Below Target		0%

*Three executives, the company’s CEO, CFO and CCO, have a maximum opportunity of 300% of the target number of PSUs with further stretch Performance Goals necessary for achievement of such levels, as described below. If performance falls between the specified performance levels, payouts will be interpolated as determined by the Committee in its discretion.

The Performance Goals for the 2020 LTI awards set by the Compensation Committee are as follows:

 

•

100% vesting:

o

Incremental value achieved from the company’s protein initiative of a specified cents per gallon;

o

A specified number of gallons of annual production; and

o

With a return on investment, defined as EBITDA /capital cost (“ROI”) of a specified percentage.

•

200% vesting:

o

Incremental value achieved from company’s protein initiative that exceeds the 100% vesting target per gallon by 75%;

o

A specified amount of gallons of annual production that exceeds the 100% vesting gallon target by 150%; and

o

ROI that exceeds the 100% vesting ROI target by 50%.

And for those executives with a 300% Performance Goal as follows:

 

•

300% vesting:

o

Incremental value achieved from the company’s protein initiative that exceeds the 100% vesting target per gallon by 125%;

 

27

o

A specified amount of gallons of annual production that exceeds the 100% vesting gallon target by 400%, or substantially all of the company’s production, as approved by the Board; and

o

ROI that exceeds the 100% vesting ROI target by 114%.

The Compensation Committee views these performance goals to be aligned with the objectives of motivating and rewarding executives for performance on key long-term measures, while also promoting retention of executive talent.

Additional detail with respect to the design of PSUs is provided below.

Performance Share Unit Awards. PSUs are tied to our company’s long-term strategic objectives to ensure that our NEOs’ compensation is directly linked to the achievement of sustained long-term operating performance and expected, resulting stock price performance. Reflective of the desire to align the NEOs with achievement of our business strategy and Green Plains 2.0, the committee determined that 2020 PSU awards would be earned based on achievement of key initiatives (as described on pages 20 and 21 of the proxy) for a three-year performance period. Shares not earned in a given performance period expire and are forfeited. PSUs are also subject to potential forfeiture if an executive terminates their employment prior to vesting.

The 2020 RSA awards and PSU awards granted to the NEOs are summarized in the tables below:

 

EXECUTIVE		NUMBER OF     RSAs				AWARD     VALUE     (1)				AWARD AS A % OF   ANNUAL BASE SALARY
Mr. Becker			122,180			$	1,300,000			186%
Mr. Simpkins			28,195			$	300,000			75%
Mr. Cronin			26,316			$	280,000			93%
Mr. Kolomaya			12,641			$	134,500			48%
Ms. Mapes			21,617			$	230,000			66%

 

EXECUTIVE		NUMBER OF     PSUs				AWARD     VALUE     (1)				AWARD AS A % OF   ANNUAL BASE SALARY
Mr. Becker			122,180			$	1,300,000			186%
Mr. Simpkins			28,195			$	300,000			75%
Mr. Cronin			26,316			$	280,000			93%
Mr. Kolomaya			12,641			$	134,500			48%
Ms. Mapes			21,617			$	230,000			66%

 

(1)

Based on the volume weighted average trading price for the 30 trading days prior to March 12, 2020 of $10.64/share.

Special Long-Term Incentive Award to Support Transformation to Green Plains 2.0

In March 2020, the Compensation Committee approved a special, one-time long-term incentive award for the CEO and other executives (including the NEOs) to further drive the company’s transformation to Green Plains 2.0. Under the award, the executives can collectively earn up to $3.0 million, payable in cash, subject to the attainment of the following two equally weighted performance goals:

 

●

Closing of the Fluid Quip Technologies transaction on favorable terms; and

 

●

Achievement of operating cost reduction targets.

Performance will be evaluated by the Compensation Committee following the end of a two year performance period against pre-established goals. Allocations to individual executives from the earned bonus pool, if any, will be determined by the Compensation Committee based upon the recommendation of the CEO (other than for his own award). The CEO’s award may not exceed $2.0 million. Any awards earned will be payable as soon as practicable following the determination of payouts by the Compensation Committee.

The Compensation Committee believes this special award is appropriate as it provides an additional incentive for the achievement of operating targets critical to the successful transformation to Green Plains 2.0 and the creation of shareholder value.

 

28

RETIREMENT BENEFITS AND PERQUISITES

Retirement Benefits

Our company offers a 401(k) plan to all of its eligible U.S.-based salaried employees. The 401(k) plan includes an employer contribution ranging from 1% of a participant’s base salary, and a matching contribution of 100% of a participant’s contributions, up to 4% of a participant’s base salary.

We do not provide special or supplemental retirement benefits to our NEOs.

Perquisites and Other Personal Benefits

The company provides limited perquisites to the NEOs. Consistent with the benefits offered to all other eligible employees, the company provides our NEOs with (i) choice of various health care plans (ii) a matching contribution to the company’s 401(k) Plan, up to a maximum of $11,400 in 2020, as well as (iii) company paid life insurance. In addition, in accordance with his employment agreement, Mr. Becker also receives additional insurance and disability benefits as well as a tax gross-up payment to cover the taxes associated with these benefits, the details of which are set forth below.

EMPLOYMENT AND SEVERANCE AGREEMENTS

Our company has entered into Employment Agreements with Messrs. Becker and Simpkins and Ms. Mapes that provide for, among other things, potential payments and other benefits upon termination of employment for a variety of reasons.

See “Employment Agreements” and “Potential Payments upon Termination or Change-in-Control” included elsewhere in this Proxy Statement for a description of these agreements, including the severance benefits thereunder.

The Committee believes that these severance arrangements are an important part of overall compensation for our NEOs and an important recruitment and retention tool as most of our competitors have implemented similar arrangements for their senior employees. Certain of these agreements include Committee approved change of control provisions to provide reasonable protection to our senior executives in the context of an actual or potential change of control of our company. The committee views these arrangements as preventing management distraction during the critical periods prior to and immediately following a change of control. The Compensation Committee may adjust base salary, bonus percentage or long-term incentives to levels that exceed the initial terms of the executive officers’ employment agreements based on its periodic review of compensation data.

STOCK OWNERSHIP AND RETENTION POLICY

The Board has adopted stock ownership guidelines to further align the interests of our non-employee directors and NEOs with those of our shareholders. The guidelines require our NEOs and non-employee directors to maintain an investment in our Common Stock at the following levels:

 

●

Chief Executive Officer, six times his annual base salary;

●

Chief Financial Officer, four times his annual base salary;

●

All other NEOs, three times their base salary; and

●

Non-Employee Directors, five times their annual cash retainer.

POLICY AGAINST HEDGING AND PLEDGING COMPANY STOCK

In addition, the company has a policy that prohibits any director or officer, at all times, or employee of the company who is aware of material nonpublic information relating to the company from (A) engaging in (i) short-term trading (generally defined as selling company securities within six months following the purchase), (ii) short sales, (iii) transactions involving derivatives, (iv) hedging transactions or (v) any other contractual derivative transactions, such as total return swaps and (B) holding company securities in a margin account or pledging company securities as collateral for a loan, unless granted an exception by the Board. Two directors have shares currently pledged and have been granted a Board exception.

COMPENSATION RECOVERY (CLAWBACKS)

In early 2018, we adopted a compensation recovery policy that goes beyond the policies currently required by law. Specifically, the policy requires each executive officer to reimburse the company for all or a portion of any annual or long-term incentive compensation paid to the executive officer based on achievement of financial results that were subsequently the subject of a restatement due to the executive’s misconduct, to the extent determined by the Board of Directors. The Board of Directors may also determine to require the forfeiture of unvested awards, reduce future compensation or take other disciplinary actions (including termination of employment). The Committee believes that this compensation recovery policy enhances our governance practices by creating direct financial costs to NEOs whose misconduct leads to a material financial restatement.

In addition, as required by the Sarbanes-Oxley Act of 2002, upon restatement of our company’s financial statements, the Chief Executive Officer and Chief Financial Officer would be required to reimburse us for any (i) bonuses, (ii) other incentive or equity-based compensation, and/or (iii) profits from stock sales, received in the 12-month period following the filing of financial statements that were later required to be restated due to their misconduct. Our company will also implement the incentive compensation “clawback” provisions mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in accordance with the requirements of that Act as the method of their implementation becomes finalized by the stock exchanges.

 

29

TAX CONSIDERATIONS

Section 162(m) of the Internal Revenue Code places a limit of $1 million on compensation the company may deduct for federal income tax purposes in any one year with respect to any of certain covered officers employed by the company. Prior to the enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) in December 2017, compensation that was “performance-based” was excluded from this $1 million limitation and was deductible by the company. Under the TCJA, the performance-based exception has been repealed generally for tax years beginning after December 31, 2017. A limited exception applies to certain compensation that qualifies as performance-based compensation under pre-TCJA IRC Section 162(m), provided it is paid pursuant to a written binding contract in effect on November 2, 2017 and which has not been modified in any material respect on or after that date.

Although the committee considers tax deductibility in making its compensation decisions, the committee does not believe that compensation decisions should be determined solely by the amount of compensation that is deductible for federal income tax purposes. As a result, the Committee reserves the right to award compensation that may not be deductible.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on that review and those discussions, the Compensation Committee recommends to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated into the Form 10-K for the year ended December 31, 2020.

Respectfully submitted,

Alain Treuer, Chairman

Jim Anderson

Gene Edwards

Thomas Manuel

 

30

Summary Compensation Table

The following table sets forth certain information with respect to the total compensation paid or earned by each of our named executive officers for our fiscal years 2020, 2019 and 2018.

 

NAME AND PRINCIPAL POSITION		YEAR				SALARY    ($)				BONUS    ($)				STOCK    AWARDS    ($) (1)				NON-EQUITY    INCENTIVE    PLAN COMP.    ($) (2)				ALL OTHER    COMP.    ($) (3)				TOTAL    ($)
Todd Becker (4)			2020				700,000				-				977,440				1,309,717				94,460				3,081,617
President and Chief Executive Officer			2019				700,000				-				2,857,278				1,250,000				90,780				4,898,058
			2018				670,833				-				2,910,877				900,000				90,646				4,572,356
Patrich Simpkins (4)			2020				400,000				112,000				225,560				344,000				17,074				1,098,634
Chief Financial Officer			2019				363,636				-				509,512				237,500				5,639				1,116,287
			2018				300,000				-				438,368				240,000				5,533				983,900
Walter Cronin (4)			2020				300,000				198,000				210,528				258,000				6,440				972,968
Chief Commercial Officer			2019				300,000				-				359,658				220,000				6,427				886,085
			2018				300,000				-				358,368				240,000				2,457				900,825
Paul Kolomaya (4) (5)			2020				280,000				-				101,128				211,000				17,740				609,868
Chief Accounting Officer			2019				260,000				-				279,727				191,937				13,550				745,214
Michelle Mapes (4)			2020				350,000				-				172,936				259,284				16,605				798,825
Chief Legal and Administration Officer and Corporate Secretary			2019				319,129				-				459,556				200,000				15,533				994,218
			2018				300,000				-				442,904				240,000				15,427				998,331

 

(1)

Amounts for “Stock Awards” reflect a grant date fair value of $4.00/share in 2020, $15.34/share in 2019 and $18.15/share in 2018, computed in accordance with ASC 718. Restricted stock awards granted in 2020 vest three years following the date of grant. A portion of restricted stock awards granted in 2019 and 2018 vest ratably, annually over the three-year period following the date of grant and a portion of restricted stock awards granted in 2019 vest three years following the date of the grant. Performance share unit awards were granted to all NEOs in March 2020 which cliff-vest in March 2023 based on achievement of a variety of key initiatives related to Green Plains 2.0. Performance share unit awards are included in the Stock Awards column above and presented as the fair value at the date of the grant based on both the Monte Carlo valuation model for the TSR factor (for 2019 and 2018 performance share unit awards) and the company’s closing stock price for other metrics. The grant date fair value of the 2020 restricted stock awards, as well as, the target and maximum potential fair value of the performance share unit awards are also provided below. See Compensation Discussion and Analysis for additional information.

 

						PSUs
NAME		RSAs ($)				TARGET ($)				MAXIMUM ($)
Mr. Becker			488,720				488,720				1,466,160
Mr. Simpkins			112,780				112,780				338,340
Mr. Cronin			105,264				105,264				315,792
Mr. Kolomaya			50,564				50,564				101,128
Ms. Mapes			86,468				86,468				172,936

 

(2)

The column for “Option Awards” has been omitted from this table because no compensation is reportable thereunder. “Non-equity incentive plan compensation” amounts were paid pursuant to the Incentive Plan.

(3)

“All Other Compensation” generally consists of our match to the executive officer’s 401(k) retirement plan, up to a maximum of $11,400 per employee for 2020, $11,000 per employee for 2019 and 2018, and imputed income on company-paid life insurance. In addition:

a.

For Mr. Becker, the amounts also include insurance and disability premiums paid by us of $44,784 and a gross-up to cover the taxes on this benefit of $35,691. See Employment Arrangements below for further information on our employment agreement with Mr. Becker.

(4)

Messrs. Becker, Simpkins, Cronin and Kolomaya and Ms. Mapes were also named executive officers for GPP in 2020. Pursuant to the operational services and secondment agreement, Mr. Becker’s salary, bonus, stock awards, non-equity incentive plan compensation and all other compensation allocated to GPP for 2020 was $31,609, $0, $117,403, $59,140 and $4,265, for 2019 was $32,302, $0, $131,850, $57,682 and $4,189, and for 2018 was $27,538, $0, $119,495, $36,946 and $3,721 respectively; Mr. Simpkins salary, bonus, stock awards, non-equity incentive plan compensation and all other compensation allocated to GPP for

 

31

2020 was $18,062, $5,057, $27,093, $15,533 and $771, and for 2019 was $16,780, $0, $23,512, $10,959 and $260, respectively; Mr. Cronin’s salary, bonus, stock awards, non-equity incentive plan compensation and all other compensation allocated to GPP for 2020 was $13,547, $8,941, $25,287, $11,650 and $291 respectively; Mr. Kolomaya’s salary, bonus, stock awards, non-equity incentive plan compensation and all other compensation allocated to GPP for 2020 was $12,643, $0, $12,147, $9,528 and $801 respectively and Ms. Mapes’ salary, bonus, stock awards, non-equity incentive plan compensation and all other compensation allocated to GPP for 2020 was $15,804, $0, $20,771, $11,708 and $750, and for 2019 was $14,726, $0, $21,206, $9,229 and $717 respectively. The above amounts reflect the years in which the named individuals were NEOs for GPP.

(5)

Mr. Kolomaya became a NEO in 2019. As a result, only compensation paid or earned for 2020 and 2019 are reported above.

Grants of Plan-Based Awards

The following table sets forth certain information with respect to the plan-based awards granted to the named executive officers during the fiscal year ended December 31, 2020.

 

		ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS (2)								ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS						ALL OTHER STOCK AWARDS:		GRANT DATE FAIR VALUE OF
NAME (1)		GRANT   DATE		THRESHOLD ($)		TARGET  ($)		MAXIMUM  ($)		THRESHOLD  (#)		TARGET  (#)		MAXIMUM  (#)		NUMBER OF SHARES  OF STOCK OR UNITS  (#)		STOCK AWARDS  ($)
Todd Becker				700,000		1,400,000		2,100,000								-		-
		3/18/20(3)		-		-		-								122,180		488,720
		3/18/20(4)		-		-		-		61,090		122,180		366,540				488,720
Patrich Simpkins				160,000		320,000		800,000								-		-
		3/18/20(3)		-		-		-								28,195		112,780
		3/18/20(4)		-		-		-		14,098		28,195		84,585				112,780
Walter Cronin				120,000		240,000		600,000								-		-
		3/18/20(3)		-		-		-								26,316		105,264
		3/18/20(4)		-		-		-		13,158		26,316		78,948				105,264
Paul Kolomaya				112,000		224,000		560,000								-		-
		3/18/20(3)		-		-		-								12,641		50,564
		3/18/20(4)		-		-		-		6,321		12,641		25,282				50,564
Michelle Mapes				140,000		280,000		700,000								-		-
		3/18/20(3)		-		-		-								21,617		86,468
		3/18/20(4)		-		-		-		10,809		21,617		43,234				86,468

 

(1)

Columns for “All other option awards: number of securities underlying options” and “Exercise or base price of option awards” have been omitted from this table because no compensation is reportable thereunder.

(2)

As outlined on Page 28, the Compensation Committee approved a special, one-time long-term incentive award for the CEO and other executives, including the NEOs, related to the transformation to Green Plains 2.0. Executives can collectively earn up to $3.0 million payable in cash, of which the CEO’s portion may not exceed $2.0 million, subject to attainment of certain weighted performance goals. The actual amounts granted are subject to the discretion of the Compensation Committee and, as such, do not have calculable threshold, target or maximum estimated payouts. See Compensation Discussion and Analysis for additional information about the Annual Incentive Plan.

(3)

Represents restricted stock awards granted in March 2020 which cliff vest on the third anniversary of the grant date.

(4)

Represents performance share unit awards granted in March 2020 which cliff vest in March 2023 based on various performance criteria. Performance share unit awards are presented at the fair value on the date of grant. See footnotes of the Summary Compensation Table for target and maximum performance share unit values.

 

32

Employment Agreements

Mr. Becker. Effective October 16, 2008, we entered into an employment agreement with Mr. Becker to serve as our President and Chief Operating Officer. Mr. Becker was named President and Chief Executive Officer on January 1, 2009. Mr. Becker’s employment agreement was amended in December 2009 to provide for a tax gross-up payment in the event of any tax payments on fringe benefits. Mr. Becker’s agreement was subsequently amended in March 2018 to remove the excise tax gross-up provision. The terms of the employment agreement provide that Mr. Becker will receive the following: (i) an annual base salary, currently at $700,000, (ii) an annual target bonus as a percentage of base salary based on performance objectives set by the Board’s Compensation Committee, (iii) annual awards of long-term incentive benefits of a type and level that is competitive with long-term incentive plan benefits provided to chief executive officers of public companies of comparable size in similar industries, and (iv) a fully exercisable option to acquire 150,000 shares at an exercise price equal to $10 per share. Mr. Becker’s employment is at-will and may be terminated at any time, by either party, for any reason whatsoever. If employment is terminated without cause or for good reason, Mr. Becker will receive one year of base salary plus the greater of his maximum annual cash bonus for that year or the average bonus paid for the prior two years, up to one year of continued health and dental coverage (which ceases upon acceptance of a comparable position within such period) and certain relocation assistance if he relocates beyond 50 miles within six months of termination. In addition, all shares acquired upon exercise of options granted therein would then be released from certain lock-up restrictions, and all outstanding options and other equity awards would fully vest. See Potential Payments upon Termination or Change in Control for additional information.

Mr. Simpkins. Effective May 7, 2012, we entered into an employment agreement with Mr. Simpkins. The terms of the employment agreement provide that Mr. Simpkins will receive (i) an annual base salary, currently at $400,000, (ii) an annual target bonus as a percentage of base salary based on performance objectives set by the Board’s Compensation Committee, (iii) participation in the long-term incentive program developed by the company, (iv) equity incentive compensation grants totaling 50,000 shares, and (v) other benefits that are generally available to company employees. Mr. Simpkins’ employment is “at-will” and may be terminated at any time, by either party, for any reason whatsoever. If employment is terminated without cause or for good reason, Mr. Simpkins will receive six months base salary and all outstanding equity awards shall fully vest. If such termination occurs following a change of control, he will receive twelve months base salary, a pro-rata bonus for the year of termination the amount of which should not be less than the annual target bonus and all outstanding equity awards would fully vest. See Potential Payments upon Termination or Change in Control for additional information.

Ms. Mapes. Ms. Mapes joined the company in 2009 and entered into an employment agreement with us effective February 3, 2020. The agreement provides for (i) an annual base salary, currently at $350,000, (ii) an annual target bonus as a percentage of base salary based on performance objectives set by the Board’s Compensation Committee, (iii) participation in a long-term incentive program developed by us, and (iv) participation in our benefit plans. Ms. Mapes’ employment is at-will and may be terminated at any time, by either party, for any reason whatsoever. If employment is terminated without cause or for good reason, Ms. Mapes will receive six month’s base salary and all outstanding equity awards would fully vest provided however if such termination occurs following a change of control, she will receive twelve months base salary and all outstanding equity awards would fully vest. See Potential Payments upon Termination or Change in Control for additional information.

Mr. Cronin and Mr. Kolomaya. Mr. Cronin and Mr. Kolomaya have not entered into an employment agreement with Green Plains. The company has provided Mr. Cronin and Mr. Kolomaya with an offer letter setting forth the terms of their “at-will” employment, which may be terminated at any time, by either party, for any reason whatsoever. See Potential Payments upon Termination or Change in Control for additional information.

See Compensation Discussion and Analysis for further details on 2020 performance objectives.

 

33

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information with respect to stock awards and equity incentive plan awards for each named executive officer that have not vested and are outstanding as of December 31, 2020:

 

		STOCK AWARDS
		RESTRICTED STOCK AWARDS										PERFORMANCE SHARE UNITS (1)
NAME							NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)					MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) (2)					EQUITY INCENTIVE PLAN AWARDS: NUMBER OF SHARES OR    UNITS OF     STOCK THAT HAVE NOT VESTED (#)					EQUITY INCENTIVE PLAN AWARDS: MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) (2)
Todd Becker		3/19/18(3)					40,312					530,909					80,716					1,063,030
		2/19/19(4)					69,970					921,505					93,220					1,227,707
		3/18/20(5)					122,180					1,609,111					122,180					1,609,111
Patrich Simpkins		3/19/18(3)					12,763					168,089					6,887					90,702
		2/19/19(4)					15,428					203,187					16,623					218,925
		3/18/20(5)					28,195					371,328					28,195					371,328
Walter Cronin		3/19/18(3)					8,356					110,049					6,887					90,702
		2/19/19(4)					9,995					131,634					11,734					154,537
		3/18/20(5)					26,316					346,582					26,316					346,582
Paul Kolomaya		3/19/18(3)					8,953					117,911					5,372					70,749
		2/19/19(4)					8,257					108,745					9,126					120,189
		3/18/20(5)					12,641					166,482					12,641					166,482
Michelle Mapes		3/19/18(3)					9,825					129,395					8,815					116,094
		2/19/19(4)					13,255					174,568					14,993					197,458
		3/18/20(5)					21,617					284,696					21,617					284,696

 

(1)

Reflects the target number of performance share units granted. Performance share awards granted in 2020 cliff-vest three years following the grant date based on attainment of performance goals while the 2019 and 2018 cliff-vest three years following the grant date based on both the percentile ranking of the company’s TSR relative to the Performance Peer Group and the company’s average annual RONA.

(2)

The closing stock price of our Common Stock on December 31, 2020 of $13.17 was used to calculate the market value of shares and units that have not vested.

(3)

A portion of the March 19, 2018 restricted stock awards vest in equal installments on the first, second and third anniversaries of the date of grant and a portion of restricted stock awards cliff vest three years following the date of grant. The PSUs cliff vest three years following the date of grant, subject to attainment of performance goals.

(4)

A portion of the February 19, 2019 restricted stock awards vest in equal installments on the first, second and third anniversaries of the date of grant and a portion of restricted stock awards cliff vest three years following the date of grant. The PSUs cliff vest three years following the date of grant, subject to attainment of performance goals.

(5)

The March 18, 2020 restricted stock awards cliff vest three years following the date of grant. The PSUs cliff vest three years following the date of grant, subject to attainment of performance goals.

 

34

Option Exercises and Stock Vested

The following table lists the number of shares acquired and the value realized as a result of option exercises by the named executive officers during the fiscal year ended December 31, 2020, and the value of any restricted stock that vested during the fiscal year ended December 31, 2020.

 

		OPTION AWARDS				STOCK AWARDS
NAME		NUMBER OF SHARES          ACQUIRED ON          EXERCISE          (#)		VALUE REALIZED          ON EXERCISE           ($)		NUMBER OF SHARES          ACQUIRED ON VESTING          (#)		VALUE REALIZED ON            VESTING            ($)
Todd Becker (1)		-		-		87,656		966,283
Patrich Simpkins (2)		-		-		9,614		104,130
Walter Cronin (3)		-		-		10,208		112,141
Paul Kolomaya (4)		-		-		8,216		90,258
Michelle Mapes (5)		-		-		10,800		114,383

 

(1)

Value is determined based on the closing prices of our Common Stock on the vesting date multiplied by the number of shares that vested on such dates. On February 19, 2020, the company withheld 10,466 shares of the 23,251 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 2, 2020, the company withheld 19,605 shares of the 44,203 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 19, 2020, the company withheld 10,447 shares of the 20,202 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations.

(2)

Value is determined based on the closing prices of our Common Stock on the vesting date multiplied by the number of shares that vested on such dates. On February 19, 2020, the company withheld 594 shares of the 1,195 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 2, 2020, the company withheld 2,931 shares of the 6,123 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 19, 2020, the company withheld 1,019 shares of the 2,296 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations.

(3)

Value is determined based on the closing prices of our Common Stock on the vesting date multiplied by the number of shares that vested on such dates. On February 19, 2020, the company withheld 864 shares of the 1,739 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 2, 2020, the company withheld 2,996 shares of the 6,173 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 19, 2020, the company withheld 1,019 shares of the 2,296 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations.

(4)

Value is determined based on the closing prices of our Common Stock on the vesting date multiplied by the number of shares that vested on such dates. On February 19, 2020, the company withheld 432 shares of the 870 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 2, 2020, the company withheld 2,759 shares of the 5,555 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 19, 2020, the company withheld 795 shares of the 1,791 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations.

(5)

Value is determined based on the closing prices of our Common Stock on the vesting date multiplied by the number of shares that vested on such dates. On February 19, 2020, the company withheld 864 shares of the 1,739 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 2, 2020, the company withheld 2,935 shares of the 6,123 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations. On March 19, 2020, the company withheld 1,304 shares of the 2,938 shares of restricted stock that vested on that date to satisfy the NEO’s tax withholding obligations.

Potential Payments upon Termination or Change of Control

Employment Agreement for Mr. Becker

We have an employment agreement with Mr. Becker. See Employment Agreements above for additional information. Upon termination without cause or for good reason, Mr. Becker is entitled to (a) one year of base salary plus the greater of his maximum annual cash bonus for that year or the average bonus paid for the prior two years, (b) up to one year of continued health and dental coverage (which ceases upon acceptance of a comparable position within such period) and (c) certain relocation assistance if he relocates beyond 50 miles within six months of termination. In addition, all shares acquired upon exercise of options granted therein would then be released from certain lock-up restrictions and all outstanding options and other equity awards would fully vest, including PSUs which settle at target.

For such purposes, cause is defined as one of the following: (a) a material breach by the executive of the terms of this agreement, not cured within thirty (30) days from receipt of notice from the Board of such breach, (b) conviction of, or plea of guilty or no contest to, a felony; (c) willful misconduct or gross negligence in connection with the performance of executive’s duties; or (d) willfully engaging in conduct that constitutes fraud, gross negligence or gross misconduct that results in material harm to us. For purposes of this definition, no act, or failure to act, on the executive’s part shall be considered willful unless done, or omitted to be done, by the executive in knowing bad faith and without reasonable belief that his action or omission was in, or not opposed to, our best interests. Notwithstanding the foregoing, the executive shall not be deemed to have been terminated for cause unless and until the executive has received a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting called and held for such purpose (after reasonable notice to

 

35

the executive and an opportunity for the executive, together with his counsel, to be heard by the Board), finding that, in the good faith opinion of the Board, the executive is guilty of the conduct set forth above in (a), (b), (c) or (d) of this definition and specifying the particulars thereof in detail.

For such purposes, good reason is defined as any of the following if the same occurs without the executive’s express written consent: (a) a material diminution in executive’s base salary as described in the employment agreement; (b) a material diminution in executive’s authority, duties, or responsibilities; (c) a material diminution in the authority, duties, or responsibilities of the person to whom the executive is required to report; (d) a material change in the geographic location at which the executive must perform the services (for this purpose, any relocation of more than 50 miles is deemed a material change); (e) any material reduction or other adverse change in the executive’s benefits under any applicable and properly approved compensation plan or arrangement without the substitution of comparable benefits; or (f) any other action or inaction that constitutes a material breach by us under the employment agreement. To terminate for good reason, the executive must incur a termination of employment on or before the second anniversary of the initial existence of the condition.

Employment Agreement for Mr. Simpkins

On May 7, 2012, we entered into an employment agreement with Mr. Simpkins. See Employment Agreements above for additional information. Upon termination without cause or for good reason, he will receive an amount equal to six months base salary and all outstanding equity awards will fully vest, including PSUs which settle at target. The definitions for cause and good reason are the same as described above for Mr. Becker, except that the definition of good reason for Mr. Simpkins does not specify the distance for an applicable relocation.

Employment Agreement for Ms. Mapes

On February 3, 2020, we entered into an employment agreement with Ms. Mapes. See Employment Agreements above for additional information. Upon termination without cause or for good reason, she will receive an amount equal to six months base salary and all outstanding equity awards will fully vest, including PSUs which settle at target. The definitions for cause and good reason are the same as described above for Mr. Becker.

Equity Acceleration

2009 and 2019 Equity Incentive Plans. Awards outstanding under the 2009 and 2019 Equity Incentive Plans will fully vest upon a change in control (a) if not fully converted and assumed, or (b) if the awards are converted and assumed, after a qualifying termination. Qualifying termination is defined as a termination of employment within twenty-four months following a change in control (i) by us other than for cause, gross negligence, or deliberate misconduct which demonstrably harms us or (ii) by the participant for good reason, if it is defined in the applicable award agreement or employment agreement. A change in control shall be deemed to have occurred if in a single transaction or series of related transactions:

(a) any person (as such term is used in Section 13(d) and 14(d) of the Exchange Act), or persons acting as a group, other than a trustee or fiduciary holding securities under an employment benefit program, is or becomes a beneficial owner (as defined in Rule 13-3 under the Exchange Act), directly or indirectly of securities representing 51% or more of our combined voting power;

(b) there is a merger, consolidation, or other business combination transaction with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the company (or surviving entity) outstanding immediately after such transaction;

(c) during any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who entered into an agreement with us to effect a transaction described in (a) or (b) above) whose election by the Board or nomination for election by our shareholders was approved by a vote of at least two-thirds of the directors still in office, who either were directors at the beginning of the two-year period or whose election or nomination for election was previously approved, cease for any reason to constitute a majority thereof; or

(d) all or substantially all of our assets are sold.

 

36