EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (this “Agreement”)
is
entered into as of the 20th
day of
March, 2008 (the “Effective
Date”),
by
and between Global Clean Energy Holdings, Inc., a Utah
corporation (the “Company”),
and
Xxxxx X. Xxxxxx (hereinafter, “Executive,”
and
collectively with the Company, the “Parties”).
W
I T N E S S E T H:
WHEREAS,
Executive has expertise in the financial management of public
companies.
WHEREAS,
the Company desires to employ Executive, and Executive desires to accept such
employment with the Company.
WHEREAS,
the Company and Executive agree to a ninety (90) day initial probation
period.
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the
parties hereto agree as follows:
ARTICLE
I
EMPLOYMENT;
TERM; DUTIES
1.1 Employment.
Pursuant to the terms and conditions hereinafter set forth, the Company hereby
employs Executive, and Executive hereby accepts such employment. Until March
30,
2008, Executive shall be employed as an employee to provide accounting and
financial planning and analysis services. Effective April 1, 2008, Executive
shall be appointed as the Executive Vice President and Chief Financial Officer
(“CFO”)
of the
Company and shall thereafter provide all services set forth herein.
1.2 Term.
Unless
otherwise terminated earlier in accordance with the provisions of this
Agreement, Executive’s employment with the Company shall commence on the
Effective Date, and shall continue for a period of two (2) consecutive one-year
terms from the Effective Date (the foregoing two-year period is herein referred
to as the “Initial Employment Term”). Upon expiration of the Initial Employment
Term, the
Term
shall automatically renew for successive one-year periods every year thereafter
(“Successive Terms”) on the same terms and conditions set forth herein unless
either Party provides the other with written notice of its intention not to
renew the Term at least sixty (60) days prior to the end of the then-current
term. Notwithstanding the foregoing, either Party may terminate this Agreement
for any reason or no reason, without liability to the other, effective on the
first anniversary of this Agreement by giving the other Party written notice
no
less than 30 days prior to the first anniversary.
1.3 Probation
Period.
The
Company and Executive
agree to an initial ninety (90) day probation period, beginning on the Effective
day. At any time during and up to the end of the ninetieth (90th)
day
following the Effective Date, either Executive or the Company may terminate
this
Agreement without any cause or reason and the entire Agreement will be null
and
void. If this Agreement is terminated by either Party during the initial ninety
(90) day probation period, Executive will have no on-going obligation to the
Company and the Company will have no on-going obligation to Executive, and
all
Initial and Incentive Stock Options (as defined below) will be
cancelled.
1.4 Duties
and Responsibilities.
Executive, as CFO, shall perform such duties and functions as are customarily
performed by a CFO of a public corporation the size and nature of the Company,
including SEC reporting, financial planning, budgeting, treasury, accounting
and
reporting activities, assisting in acquisition efforts (including involvement
in
the due diligence process and negotiations), integration of acquired companies,
involvement in strategic decision making and business plan execution, assisting
in the management of personnel and oversight of certain technology and systems
development, and such other duties and functions from time to time assigned
to
him by the Company’s Chief Executive Officer that are consistent with such title
and position. In addition, Executive agrees to serve, if requested by the
Company’s Board of Directors (the “Board”), as an officer of any other direct or
indirect subsidiary of the Company, at no additional compensation. However,
Executive will only be required to serve as an officer of any direct or indirect
subsidiary of the Company if (i) Executive will be indemnified by the Company
and (ii) director’s and officers’ liability insurance, in an amount deemed
adequate by Executive, is available to cover Executive’s services for that
entity.
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1.5 Exclusive
Employment.
Executive
agrees to devote the necessary amount of Executive’s business time, energy and
efforts to the business of the Company (and its subsidiaries if and when
directed by the Board), and to use Executive’s best efforts and abilities
faithfully and diligently to promote the business interests of the Company
(and
its subsidiaries if and when directed by the Board).
1.6 Other
Obligations.
The
Company and Executive acknowledge that Executive is currently a Director of
several other businesses, including M-Wave, Inc., MetroPacific Bank and Newport
Bay Hospital (the “Other Positions”). Executive represents that his obligations
to the Other Positions will not impinge on or conflict with his duties and
obligations to Company under this Employment Agreement.
1.7 Indemnification
and Insurance.
The
Company agrees to indemnify the Executive and maintain directors’ and officers’
liability insurance covering Executive for services rendered to the Company
(and
its subsidiaries if and when directed by the Board) covering the period that
Executive is an officer of the Company.
Executive will be indemnified and will be covered by the Company’s officer and
director liability insurance policies to the same extent, and in the same
amounts, as the CEO.
1.8 Covenants
of Executive
1.8.1 Best
Efforts.
Executive
shall report directly to the Chief Executive Officer and will have a direct
reporting responsibility to the Board for certain functions requested by the
Board. Executive shall devote his best efforts to the business and affairs
of
the Company (and its subsidiaries if and when directed by the Board). Executive
shall perform his duties, responsibilities and functions to the Company
hereunder to the best of his abilities in a diligent, trustworthy, professional
and efficient manner and shall comply, in all material respects, with
all
rules, regulations of the Company (and special instructions of the Board, if
any) and all other rules, regulations, guides, handbooks, procedures and
policies applicable to the Company and its business in connection with his
duties hereunder.
1.8.2 Records.
Executive shall use his best efforts and skills to truthfully, accurately,
and
promptly prepare, maintain, and preserve all records and reports that the
Company may, from time to time, request or require, fully account for all money,
records, equipment, materials, or other property belonging to the Company of
which he may have custody, and promptly pay and deliver the same whenever he
may
be directed to do so by the Chief Executive Officer or the Board.
1.8.3 Compliance.
Executive shall use his best efforts to maintain
the Company’s compliance with all SEC rules, regulations and reporting
requirements for publicly traded companies, including, without limitation,
overseeing, and preparing and filing with the SEC all
periodic reports the Company is required to file under the Act and the Exchange
Act of 1934 (as amended, the “Exchange
Act”).
Executive shall at
all
times comply, and cause the Company to comply, with the then-current good
corporate governance standards and practices as prescribed by the SEC, any
exchange on which the Company’s capital stock or other securities may be traded
and any other applicable governmental entity, agency or
organization.
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1.8.4 Code
of Conduct.
For
such period as when Executive is employed hereunder, Executive shall at all
times conduct himself with the highest ethical standards, and shall at all
times
adhere to Code of Conduct attached hereto as Exhibit
A
or such
other code of ethics that the Company may, from time to time,
adopt.
1.8.5 Opportunities.
Executive shall make available to the Company and present to the Board all
business opportunities of which he becomes aware, which are relevant to the
business of the Company (and its subsidiaries), and to no other person or entity
or to himself individually.
ARTICLE
II
COMPENSATION
AND OTHER BENEFITS
2.1 Base
Salary.
For the
duration of the Term, for all services rendered by Executive hereunder and
all
covenants and conditions undertaken by the Parties pursuant to this Agreement,
the Company shall pay, and Executive shall accept, as compensation, an annual
base salary (“Base
Salary”)
of
$175,000. The Base Salary shall be payable in regular installments in accordance
with the normal payroll practices of the Company, in effect from time to time,
but in any event no less frequently than on a monthly basis. Beginning on the
first anniversary of the commencement of Executive’s employment with the
Company, and on each anniversary thereafter during the Term, the Base Salary
shall be increased by the amount of the Consumer Price Index (“CPI”),
for
the immediately prior 12-month period, as published in the Wall Street
Journal.
2.2 Bonus
Compensation.
For
each year during the Term, Executive will be eligible to earn an annual bonus
(the “Bonus”),
which
Bonus shall be based on Executive’s achievement of certain performance criteria
established by the Compensation Committee of the Board (“Compensation
Committee”)
and
provided to Executive as soon as practicable following the commencement of
each
such year. The target amount, and maximum amount, of the Bonus for any given
employment year, assuming that all of the target milestones are met, shall
be an
amount equal to one hundred percent (100%) of the Base Salary in effect for
the
applicable year. In connection with the award of any Bonus pursuant to this
Section 2.2, Executive’s performance will be reviewed by the Compensation
Committee on no less than an annual basis. Notwithstanding anything herein
to
the contrary, the Parties hereby acknowledge and agree that the Compensation
Committee shall, in accordance with NASDAQ rules and regulations for publicly
traded companies, comprise independent directors of the Board only. In
the
event that the Company has not established a Compensation Committee, the
independent directors of the Board shall establish the annual target amount
of
any Bonus to be awarded hereunder and shall determine whether the target
milestones have been satisfied.
2.3 Initial
Options.
Concurrently
with the execution of this Agreement, the Company shall grant Executive an
option (the “Initial
Option”)
to
purchase 2,000,000 shares of the Company’s common stock at an exercise price
equal to the fair market price of the Company’s common stock on the Effective
Date. The Initial Option shall vest according to the schedule set forth below,
and will expire ten (10) years after the date of grant. If Executive is still
employed by the Company under this Agreement on the following dates, options
for
the purchase of 500,000 shares (25% of the Initial Options, as appropriately
adjusted for stock splits, stock dividends, etc) shall vest and become
exercisable:
2.3.1 Upon
the
expiration of the ninety (90) day initial probation period, and;
3
2.3.2 Nine
(9)
months after the Effective Date, and;
2.3.3 Fifteen
(15) months after the Effective Date, and;
2.3.4 At
the
end of the Initial Employment Term.
2.4 Incentive
Option.
Concurrently
with the execution of this Agreement, the Company shall grant Executive an
option (the “Incentive
Option”)
to
purchase 2,500,000 shares of the Company’s common stock at an exercise price
equal to the fair market price of the Company’s common stock on the Effective
Date. Executive must be an Employee of the Company at the time of the Market
Capitalization event which will allow for vesting. The Incentive Option shall
vest according to the schedule set forth below, and will expire five (5) years
after the Effective Date:
2.4.1 When
the
Company’s Market Capitalization reaches $75 million, the Incentive Option shall
vest with respect to 1,250,000 shares (such shares, the “First
Tranche”)
of the
Company’s common stock subject thereunder; and
2.4.2 When
the
Company’s Market Capitalization reaches or exceeds $120 million, the Incentive
Option shall vest with respect to the remaining 1,250,000 (such shares, the
“Second
Tranche”)
shares
of the Company’s common stock subject thereunder.
For
purposes of the Agreement, the term “Market
Capitalization”
shall
mean the product of the number of shares of common stock issued and outstanding
at the time Market Capitalization is calculated, multiplied by the average
closing price of the common stock for the thirty (30) consecutive trading days
prior to the date of calculation of Market Capitalization as reported on the
principal securities trading system on which the Company’s common stock is then
listed for trading, including the Pink Sheets, the NASDAQ Stock Market, the
OTC
Bulletin Board, or any other applicable stock exchange.
2.5 Business
Expenses.
During
the Initial Term and all Successive Terms thereafter, the Company shall
reimburse Executive for all reasonable, out-of-pocket business expenses incurred
in the performance of his duties hereunder consistent with the Company’s
policies and procedures, in effect from time to time, with respect to travel,
entertainment and other business expenses customarily reimbursed to senior
executives of the Company in connection with the performance of their duties
on
behalf of the Company. Such reimbursement shall be made by Company to Executive
no later than fifteen (15) days after submission of written expense reports
by
Executive to Company.
2.6 Other
Benefits.
During
the term of Executive’s employment with the Company, Executive shall be entitled
to the following benefits:
2.6.1 Executive
shall be entitled to participate in the Company’s employee stock option plan,
life, health, accident, disability insurance plans, pension plans and retirement
plans, in effect from time to time, to the extent and on such terms and
conditions as the Company customarily makes such plans available to its senior
executives; and
2.6.2 Executive
shall be entitled to receive coverage
for services rendered to the Company (and
its
subsidiaries if and when directed by the Board) while
Executive is a director or officer of the Company under any director and officer
liability insurance policy(s) maintained by the Company from time to time;
and
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2.6.3 Company
shall pay on behalf of Executive the full cost of Executive’s and Executive’s
family health insurance plan. Until a Company plan is established, or a
replacement plan is put in place, the Company shall pay towards Executive’s
policy premium up to $1,000.00 per month.
2.7 Vacation.
Executive shall be entitled to two weeks vacation time with full pay in his
first year of employment and four (4) weeks vacation time for every calendar
year thereafter, with full pay.
2.8 Withholding.
The
Company may deduct from any compensation payable to Executive (including
payments made pursuant to this Article II or in connection with the termination
of employment pursuant to Article III of this Agreement) amounts sufficient
to
cover Executive’s share of applicable federal, state and/or local income tax
withholding, social security payments, state disability and other insurance
premiums and payments.
ARTICLE
III
TERMINATION
OF EMPLOYMENT
3.1 Termination
of Employment
Executive’s
employment pursuant to this Agreement shall terminate on the earliest to occur
of the following:
3.1.1 upon
the
death of Executive;
3.1.2 upon
the
delivery to Executive of written notice of termination by the Company if
Executive shall suffer a physical or mental disability which renders Executive,
in the reasonable judgment of the Board, unable to perform his duties and
obligations under this Agreement for either 90 consecutive days or 180 days
in
any 12-month period;
or
3.1.3 upon
the
expiration of the Initial Term (or, if the Initial Term has been extended,
upon
the expiration of the then-current Successive Term);
or
3.1.4 upon
delivery to Executive of written notice of termination by the Company for
Cause;
or
3.1.5 upon
delivery of written notice from Executive to the Company for Good
Reason.
3.2 Certain
Definitions.
For
purposes of this Agreement, the following terms shall have the following
meanings:
3.2.1 In
connection with Paragraph 3.1 herein, “Cause”
shall
mean any of the following:
(a) Executive
materially breaches any obligation, duty, or covenant under this Agreement,
which breach is not cured or corrected within thirty (30) days of receipt
by Executive of written notice thereof from the Company (except for breaches
of
Article IV of this Agreement, which cannot be cured and for which the Company
need not give any opportunity to cure); or
5
(b) Executive
commits any act of misappropriation of funds or embezzlement; or
(c) Executive
commits any act of fraud; or
(d) Executive
is convicted of, or pleads guilty or nolo
contendere
to any
charge of theft, fraud, a crime involving moral turpitude, or a felony under
federal or state law; or
(e) Executive
breaches the Company’s Code
of
Conduct attached hereto as Exhibit
A
or code
of ethics as in effect from time to time.
3.2.2 In
connection with Paragraph 3.1 herein, “Good
Reason”
shall
mean: (a) without Executive’s consent, the Company changes Executive’s position
or duties to such an extent that his duties are no longer consistent with the
positions of CFO of the Company, or (b) Company materially breaches any term
of
this Agreement which breach continues uncured following thirty (30) days written
notice by Executive to the Company of such breach.
3.2.3 “Termination
Date”
shall
mean the date on which Executive’s employment with the Company hereunder is
terminated.
3.3 Effect
of Termination
3.3.1 If
Executive’s employment is terminated by Executive for Good Reason or by Company
other than for Cause, Executive shall be entitled to
the
following (the “Severance
Payments”):
(a) If
the
Company terminates the Employment of Executive pursuant to Section 1.2 effective
on the first anniversary of this Agreement, the Employee will receive three
(3)
additional months salary following the date of his termination; or
(b) If
the
Company terminates Executive before the first anniversary date of this Agreement
(other than pursuant to Section 1.2 on the first anniversary of this Agreement),
(i) the Company shall, on date of termination, pay Executive an amount equal
to
his unpaid salary through the first anniversary of this Agreement, plus
fifty
percent (50%) of the target Bonus in effect on the Termination
Date, and (ii) fifty
percent (50%) of the Incentive Options granted to Executive pursuant to Section
2.3 shall vest; or
(c) If
employment is terminated after the first anniversary, then Executive shall
be
paid an amount equal to the salary he would have received through the end of
the
Term, and all Initial Options granted under Section 2.3 shall fully vest, to
the
extent not already vested.
At
such
time when Executive’s employment with the Company is terminated, and as a
condition to Executive’s right to receive any benefits pursuant to this Section
3.3.1, Executive shall execute and deliver to the Company a written release
in a
form mutually acceptable to the Company and Executive.
3.3.2 Notwithstanding
the reason for termination of Executive’s employment, Executive shall be
entitled to:
(a) all
benefits payable under applicable benefit plans in which Executive is entitled
to participate pursuant to Section 2.5 hereof through the Termination Date,
subject to and in accordance with the terms of such plans; and
6
(b) any
accrued but unused vacation earned by Executive through the Termination Date
pursuant to Section 2.6 hereof, paid out in accordance with legal requirements;
and
(c) reimbursement
for any business expenses incurred by Executive prior to Termination Date in
accordance with Section 2.4 of this Agreement.
If
Executive’s employment is terminated for death, disability, by Executive other
than for Good Reason or by the Company for Cause, Executive shall be entitled
to
no severance or other post-employment benefits (including, without limitation,
the Severance Payments) except as provided in Section 3.3.2 of this Agreement.
3.3.3 Executive
hereby acknowledges that in the event of termination of his employment for
any
reason, Executive shall not be entitled to any severance, payment or other
compensation from the Company except as specifically provided in this Section
3.3.
ARTICLE
IV
INVENTIONS;
CONFIDENTIAL/TRADE SECRET INFORMATION AND RESTRICTIVE
COVENANTS
4.1 Inventions.
All
processes, technologies and inventions relating to the business of the Company
(and its subsidiaries) (collectively, “Inventions”),
including new contributions, improvements, ideas, discoveries, trademarks and
trade names, conceived, developed, invented, made or found by Executive, alone
or with others, during his employment by the Company, whether or not patentable
and whether or not conceived, developed, invented, made or found on the
Company’s time or with the use of the Company’s facilities or materials, shall
be the property of the Company and shall be promptly and fully disclosed by
Executive to the Company. Executive shall perform all necessary acts (including,
without limitation, executing and delivering any confirmatory assignments,
documents or instruments requested by the Company) to assign or otherwise to
vest title to any such Inventions in the Company and to enable the Company,
at
its sole expense, to secure and maintain domestic and/or foreign patents or
any
other rights for such Inventions.
4.2 Confidential/Trade
Secret Information/Non-Disclosure.
4.2.1 Confidential/Trade
Secret Information Defined.
During
the course of Executive’s employment, Executive will have access to various
Confidential/Trade Secret Information of the Company and information developed
for the Company (including information developed by Mobius in its capacity
as a
consultant to the Company). For purposes of this Agreement, the term
“Confidential/Trade
Secret Information”
is
information that is not generally known to the public and, as a result, is
of
economic benefit to the Company in the conduct of its business, and the business
of the Company’s subsidiaries. Executive and the Company agree that the term
“Confidential/Trade
Secret Information”
includes but is not limited to all information developed or obtained by the
Company, including its affiliates, and predecessors, and comprising the
following items, whether or not such items have been reduced to tangible form
(e.g., physical writing, computer hard drive, disk, tape, etc.): all methods,
techniques, processes, ideas, research and development, product designs,
engineering designs, plans, models, production plans, business plans, add-on
features, trade names, service marks, slogans, forms, pricing structures, menus,
business forms, marketing programs and plans, layouts and designs, financial
structures, operational methods and tactics, cost information, the identity
of
and/or contractual arrangements with suppliers and/or vendors, accounting
procedures, and any document, record or other information of the Company
relating to the above. Confidential/Trade Secret Information includes not only
information directly belonging to the Company which existed before the date
of
this Agreement, but also information developed by Executive for the Company,
including its subsidiaries, affiliates and predecessors, during the term of
Executive’s employment with the Company. Confidential/Trade Secret Information
does not include any information which (a) was in the lawful and unrestricted
possession of Executive prior to its disclosure to Executive by the Company,
its
subsidiaries, affiliates or predecessors, (b) is or becomes generally available
to the public by lawful acts other than those of Executive after receiving
it,
or (c) has been received lawfully and in good faith by Executive from a third
party who is not and has never been an executive of the Company, its
subsidiaries, affiliates or predecessors, and who did not derive it from the
Company, its subsidiaries, affiliates or predecessors.
7
4.2.2 Restriction
on Use of Confidential/Trade Secret Information.
Executive agrees that his use of Confidential/Trade Secret Information is
subject to the following restrictions for an indefinite period of time so long
as the Confidential/Trade Secret Information has not become generally known
to
the public:
(a) Non-Disclosure.
Executive agrees that he will not publish or disclose, or allow to be published
or disclosed, Confidential/Trade Secret Information to any person without the
prior written authorization of the Company unless pursuant to or in connection
with Executive’s job duties to the Company under this Agreement.
(b) Non-Removal/Surrender.
Executive agrees that he will not remove any Confidential/Trade Secret
Information from the offices of the Company or the premises of any facility
in
which the Company is performing services, except pursuant to his duties under
this Agreement. Executive further agrees that he shall surrender to the Company
all documents and materials in his possession or control which contain
Confidential/Trade Secret Information and which are the property of the Company
upon the termination of this Agreement, and that he shall not thereafter retain
any copies of any such materials.
4.2.3 Prohibition
Against Unfair Competition/ Non-Solicitation of Customers.
Executive agrees that at no time after his employment with the Company will
he
engage in competition with the Company while making any use of the
Confidential/Trade Secret Information, or otherwise exploit or make use of
the
Confidential/Trade Secret Information. Executive agrees that during the twelve
month period following the Termination Date, he will not directly or indirectly
accept or solicit, in any capacity, the business of any customer of the Company
with whom Executive worked or otherwise had access to the Confidential/Trade
Secret Information pertaining to the Company’s business with such customer
during the last year of Executive’s employment with the Company, or solicit,
directly or indirectly, or encourage any of the Company’s customers or suppliers
to terminate their business relationship with the Company, or otherwise
interfere with such business relationships.
4.3 Non-Solicitation
of Employees.
Employee agrees that during the twelve month period following the Termination
Date, he shall not, directly or indirectly, solicit, directly or indirectly,
or
otherwise encourage any employees of the Company to leave the employ of the
Company, or solicit, directly or indirectly, any of the Company’s employees for
employment.
4.4 Non-Solicitation
During Employment.
During
his employment with the Company, Executive shall not: (a) interfere with the
Company’s business relationship with its customers or suppliers, (b) solicit,
directly or indirectly, or otherwise encourage any of the Company’s customers or
suppliers to terminate their business relationship with the Company, or (c)
solicit, directly or indirectly, or otherwise encourage any employees of the
Company to leave the employ of the Company, or solicit any of the Company’s
employees for employment.
8
4.5 Conflict
of Interest.
During
Executive’s employment with the Company, Executive must not engage in any work,
paid or unpaid, that creates an actual conflict of interest with the Company.
4.6 Breach
of Provisions.
If
Executive breaches any of the provisions of this Article IV, or in the event
that any such breach is threatened by Executive, in addition to and without
limiting or waiving any other remedies available to the Company at law or in
equity, the Company shall be entitled to immediate injunctive relief in any
court, domestic or foreign, having the capacity to grant such relief, to
restrain any such breach or threatened breach and to enforce the provisions
of
this Article IV.
4.7 Reasonable
Restrictions.
The
Parties acknowledge that the foregoing restrictions, as well as the duration
and
the territorial scope thereof as set forth in this Article IV, are under all
of
the circumstances reasonable and necessary for the protection of the Company
and
its business.
4.8 Special
Definition.
For
purposes of this Article IV, the term “Company”
shall
be deemed to include any subsidiary of the Company.
ARTICLE
V
MISCELLANEOUS
5.1 Binding
Effect; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective legal representatives, heirs, distributees, successors and
assigns. Executive may not assign any of his rights and obligations under this
Agreement. The Company may assign its rights and obligations under this
Agreement to any successor entity.
5.2 Notices.
Any
notice provided for herein shall be in writing and shall be deemed to have
been
given or made (a) when personally delivered or (b) when sent by telecopier
and
confirmed within 48 hours by letter mailed or delivered to the party to be
notified at its or his/hers address set forth herein; or three (3) days after
being sent by registered or certified mail, return receipt requested, (or by
equivalent xxxxxxx with delivery documentation such as FEDEX or UPS) to the
address of the other party set forth or to such other address as may be
specified by notice given in accordance with this section 5.2:
|
If
to the Company:
|
0000
X. Xxxxxxx Xxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Phone:
000-000-0000
Fax:
000-000-0000
|
|
With
a copy (which shall not constitute notice) to:
|
Xxxx
& Xxxxx
0000
Xxxxxxx Xxxx Xxxx, 00xx
Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxx Xxxxx, Esq.
Telecopy
No.: (000) 000-0000
|
|
If
to Executive:
|
Xxxxx
X. Xxxxxx
00
Xxxxxxx
Xxxxxx,
XX 00000
Phone:
000-000-0000
|
9
5.3 Severability.
If any
provision of this Agreement, or portion thereof, shall be held invalid or
unenforceable by a court of competent jurisdiction, such invalidity or
unenforceability shall attach only to such provision or portion thereof, and
shall not in any manner affect or render invalid or unenforceable any other
provision of this Agreement or portion thereof, and this Agreement shall be
carried out as if any such invalid or unenforceable provision or portion thereof
were not contained herein. In addition, any such invalid or unenforceable
provision or portion thereof shall be deemed, without further action on the
part
of the parties hereto, modified, amended or limited to the extent necessary
to
render the same valid and enforceable.
5.4 Waiver.
No
waiver by a party hereto of a breach or default hereunder by the other party
shall be considered valid, unless expressed in a writing signed by such first
party, and no such waiver shall be deemed a waiver of any subsequent breach
or
default of the same or any other nature.
5.5 Entire
Agreement.
This
Agreement sets forth the entire agreement between the Parties with respect
to
the subject matter hereof, and supersedes any and all prior agreements between
the Company and Executive, whether written or oral, relating to any or all
matters covered by and contained or otherwise dealt with in this Agreement.
This
Agreement does not constitute a commitment of the Company with regard to
Executive’s employment, express or implied, other than to the extent expressly
provided for herein.
5.6 Amendment.
No
modification, change or amendment of this Agreement or any of its provisions
shall be valid, unless in writing and signed by the Parties.
5.7 Authority.
The
Parties each represent and warrant that it/he has the power, authority and
right
to enter into this Agreement and to carry out and perform the terms, covenants
and conditions hereof.
5.8 Attorneys’
Fees.
If
either party hereto commences an arbitration or other action against the other
party to enforce any of the terms hereof or because of the breach by such other
party of any of the terms hereof, the prevailing party shall be entitled, in
addition to any other relief granted, to all actual out-of-pocket costs and
expenses incurred by such prevailing party in connection with such action,
including, without limitation, all reasonable attorneys’ fees, and a right to
such costs and expenses shall be deemed to have accrued upon the commencement
of
such action and shall be enforceable whether or not such action is prosecuted
to
judgment.
5.9 Captions.
The
captions, headings and titles of the sections of this Agreement are inserted
merely for convenience and ease of reference and shall not affect or modify
the
meaning of any of the terms, covenants or conditions of this
Agreement.
5.10 Governing
Law.
This
Agreement, and all of the rights and obligations of the Parties in connection
with the employment relationship established hereby, shall be governed by and
construed in accordance with the substantive laws of the State of California
without giving effect to principles relating to conflicts of law.
5.11 Arbitration.
5.11.1 Scope.
To the
fullest extent permitted by law, Executive and the Company agree to the binding
arbitration of any and all controversies, claims or disputes between them
arising out of or in any way related to this Agreement, the employment
relationship between the Company and Executive and any disputes upon termination
of employment, including but not limited to breach of contract, tort, ,
constitutional claims; and any claims for violation of any local, state or
federal law, statute, regulation or ordinance or common law, excluding any
claim
for wages under the California Labor Code ,or any claim relating to the
Company’s failure to pay wages. For the purpose of this agreement to arbitrate,
references to “Company” include all subsidiaries or related entities and their
respective executives, supervisors, officers, directors, agents, pension or
benefit plans, pension or benefit plan sponsors, fiduciaries, administrators,
affiliates and all successors and assigns of any of them, and this agreement
to
arbitrate shall only apply to them to the extent Executive’s claims arise out of
or relate to their actions on behalf of the Company.
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5.11.2 Arbitration
Procedure.
To
commence any such arbitration proceeding, the party commencing the arbitration
must provide the other party with written notice of any and all claims forming
the basis of such right in sufficient detail to inform the other party of the
substance of such claims. In no event shall this notice for arbitration be
made
after the date when institution of legal or equitable proceedings based on
such
claims would be barred by the applicable statute of limitations. The arbitration
will be conducted in Los Angeles, California, by a single neutral arbitrator
and
in accordance with the then-current rules for resolution of employment disputes
for Judicial Arbitration and Mediation Services (“JAMS”). The Arbitrator is to
be selected by the mutual agreement of the Parties. If the Parties cannot agree,
the Superior Court will select the arbitrator. The parties are entitled to
representation by an attorney or other representative of their choosing. The
arbitrator shall have the power to enter any award that could be entered by
a
judge of the trial court of the State of California, and only such power, and
shall follow the law. The award shall be binding, and the Parties agree to
abide
by and perform any award rendered by the arbitrator. The arbitrator shall issue
the award in writing, and therein state the essential findings and conclusions
on which the award is based. Judgment on the award may be entered in any court
having jurisdiction thereof. In the event Company initiates the arbitration
proceeding, Company shall bear the total cost of the arbitration filing, hearing
fees, and the cost of the arbitrator. In the event Executive initiates the
arbitration proceeding, Executive shall bear the total cost of the arbitration
filing, hearing fees, and the cost of the arbitrator.
5.12 Survival.
The
termination of Executive’s employment with the Company pursuant to the
provisions of this Agreement shall not affect Executive’s obligations to the
Company hereunder which by the nature thereof are intended to survive any such
termination, including, without limitation, Executive’s obligations under
Article IV of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
|
a
Utah corporation
|
||
| |
|
|
| By: | ||
|
Name: Xxxxxxx Xxxxxx |
||
| Title: President & Chief Executive Officer | ||
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|
Xxxxx
X. Xxxxxx
|
12
EXHIBIT
A
CODE
OF CONDUCT
Honesty
and Integrity
Our
business is based on mutual trust, honesty and integrity in all of our affairs,
both internally and externally. This philosophy must be respected at all times.
Each of us must be truthful in our business dealings with each other, and with
our auditors, legal counsel, regulators and loan review and compliance staffs.
Illegal, dishonest and fraudulent acts are grounds for termination. Making
false
statements or otherwise misleading internal or external auditors, attorneys,
regulators or loan review and compliance personnel is prohibited. You must
never
withhold or fail to communicate fully information that is requested in
connection with an appropriately authorized investigation or review. Any
concealment of information is a violation of your employment agreement, which
may result in termination of your employment with the Company and could
constitute a criminal act.
Protecting
Corporate Assets
You
are
responsible for safeguarding the assets of the Company. Company assets must
not
be used for personal benefit. The Company’s assets include, but is not limited
to, all of its properties, including intellectual properties, business
information, cash, and securities. Misappropriation of Company assets is a
violation of your employment agreement, which may result in termination of
your
employment with the Company and could constitute a criminal act.
Accuracy
of Company Records and Reports
The
Company is committed to maintaining records, data and information that are
accurate and complete so as to permit the Company to make timely and accurate
disclosures to its regulators and to its shareholders. You are personally
responsible for the integrity of the information, reports and records under
your
control. Records must be maintained in sufficient detail so as to reflect
accurately the Company’s transactions and activities. Our financial statements
must be prepared in accordance with generally accepted accounting principles
(“GAAP”) and fairly present, in all material respects, the financial condition
and results of the Company. To accomplish full, fair, and accurate reporting,
you must ensure that financial reports issued by the Company are timely,
accurate, understandable, and complete.
Compliance
With Laws
The
Company’s activities shall always be in full compliance with all applicable laws
and regulations. When such laws or regulations are ambiguous or difficult to
interpret, you should seek advice from the Company’s outside legal counsel.
Conflicts
Of Interest
You
must
conduct
your
private, business, and personal activities in a manner that avoids conflict
with, or even the appearance of conflict with, your ability to act solely in
the
interests of the Company. A conflict of interest arises if you have interests
of
any nature that compromise your ability to act objectively and in the best
interests of the Company. Conflicts can arise directly or through your family
members or through business or other entities in which you or your family
members have an interest. At no time may you, on behalf of the Company, transact
personal business, the business of an immediate family member, or the business
of a for profit entity in which you or a member of your immediate family has
an
interest (other than an interest not exceeding 1% in a publicly traded company
(a “Permitted Public Company Interest”)), with the Company. In all such
situations, you must disqualify yourself from involvement with any transaction
or relationship between that person and the Company except as set forth in
Section 1.6 herein.
13
Business
Ventures with Customers
You
may
not enter into or participate with the Company’s customers in business ventures
without the approval of a majority of the Governance & Compliance Committee
of the Board.
Acting
as a Fiduciary
Officers
may not assume the responsibility of executor, administrator, trustee, guardian,
custodian, attorney-in-fact under a power of attorney, or any other fiduciary
capacity (except with respect to matters involving direct family relationships)
without the approval of a majority of the Governance & Compliance Committee
of the Board.
Company
Opportunities
You
must
not take for yourself any opportunity that belongs to the Company. Whenever
the
Company has been seeking a particular business opportunity, or the opportunity
has been offered to the Company, or the Company’s funds, facilities or personnel
have been used in developing the opportunity, that opportunity rightfully
belongs to the Company and not to its employees.
Investments
in Customers or Suppliers
Because
investments are an area in which conflicts of interest can very easily develop,
you should obtain prior approval from a majority of the Governance &
Compliance Committee of the Board before investing directly or indirectly in
the
business of a customer or supplier of the Company, other than a Permitted Public
Company Interest, as defined above. Under no circumstances should you acquire
an
equity interest in a company that is a customer or supplier at a price which
is
more favorable than the price offered to the general public. If you own a direct
or indirect interest in a business or other entity that becomes a customer
or
supplier, you should notify a majority of the Governance & Compliance
Committee of the Board of the Board as soon as the underlying facts are known
to
you.
Business
Expenses
You
must
have all business-related expenses approved by the Chairman of the Board of
Directors or the Chief Executive Officer of the Company. You must carefully
observe expense account regulations and guidelines. Falsification of an expense
account is considered to be a misappropriation of corporate funds and
constitutes grounds for dismissal.
Bequests
from Customers
You
may
not accept a bequest or legacy from a customer, unless the customer is your
immediate family member. However, there may be an occasional instance when
a
bequest from a non-relative customer is based upon a relationship other than
the
normal business relationship, which arises between you and a customer. In such
a
situation, full consideration by a majority of disinterested members of the
Governance & Compliance Committee of the Board, will be given to approving
receipt of the bequest.
Gifts
from Customers
You
shall
not solicit or accept for yourself, or for a third party, anything of value
in
return for, or in connection with, any business, service, or activity of the
Company. You shall not accept a gift in circumstances in which it could appear
that his or her business judgment was influenced by such gift. You shall not
allow an immediate family member or business associate to accept a gift,
services, loans or preferential treatment in exchange for a past, current,
or
future business relationship with the Company.
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Disclosure
of Potential Conflicts of Interest
You
shall
immediately disclose to a majority of disinterested members of the Governance
& Compliance Committee of the Board all situations that possess a potential
for conflict of interest.
Political
Donations
You
are
prohibited from making any contribution to political candidates on behalf of
the
Company. You also may not make any contributions of anything of value in
connection with any federal, state or local candidate’s election. The Company
makes, and discloses fully, contributions in state and local elections for
the
purpose of supporting ballot propositions that are in the interests of the
Company and its several constituencies. Any proposal for political contributions
on behalf of the Company or a group of Company employees should be referred
for
approval to a majority of disinterested members of the Governance &
Compliance Committee of the Board.
Confidential
Information
You
shall
not use confidential and nonpublic information in any manner for personal
advantage or to provide advantage to others.
Xxxxxxx
Xxxxxxx
You
must
at all times comply with all laws and regulations concerning xxxxxxx xxxxxxx.
In
general, you are prohibited by applicable law from trading in the securities
of
any company while in possession of material, nonpublic information (also known
as “inside information”) regarding that company. This prohibition applies to the
Company’s securities as well as to the securities of other companies, including
the Company’s customers and suppliers, and to transactions for any account of
the Company, client account or personal account. It is also illegal to “tip” or
pass on inside information to any other person if you know or reasonably suspect
that the person receiving such information from you will misuse such information
by trading in securities or passing such information on further, even if you
do
not receive any monetary benefit.
Investment
Prudence
You
must
not use your position at the Company to obtain leverage with respect to any
investment, including investments in publicly traded securities, and should
not
accept preferential treatment of any kind based on your position with the
Company in connection with your investments.
Cross
- Selling Services/Tying Restrictions.
“Tying”
arrangements, whereby customers are required to purchase or provide one product
or service as a condition for another being made available, are unlawful in
certain instances. You should consult the Company’s outside legal counsel for
advice on tying restrictions. The Company prohibits any such unlawful
requirements.
Anti
- Competitive Practices.
The
Company is subject to complex laws (known as “antitrust laws”) designed to
preserve competition among enterprises and to protect consumers from unfair
business arrangements and practices. You should avoid discussion of
competitively sensitive topics, such as prices, pricing policies, costs and
marketing strategies (except as reasonably required by your job duties).
Anti
- Money Laundering Compliance.
Money
laundering is the process of converting illegal proceeds so that funds are
made
to appear legitimate, and it is not limited to cash transactions. The Company
is
obligated by law to join with governments, international organizations and
members of the financial services industry to help prevent money laundering.
You
must follow all of anti-money laundering policies and procedures.
15
Nondiscrimination.
The
Company endeavors to make all decisions responsibly, constructively and
equitably without bias as to race, color, creed, religion, national origin,
sex,
marital status, age, veteran’s status or membership in any other protected class
or receipt of public assistance. Failure to do so is against Company
policy.
Misleading
Statements.
You
shall
not make false or misleading remarks about suppliers, customers, or competitors,
or their products and services.
Corporate
Gifts to Others.
You
must
use care in connection with gifts to others. If a gift could be viewed as
consideration for business, you should not make the gift.
Entertainment.
Legitimate
entertainment of reasonable value is an accepted practice to the extent that
it
meets all standards of ethical
business
conduct
and
involves no element of concealment.
Other
Remuneration.
In
the
conduct
of the
Company’s business, no bribes, kickbacks or similar remuneration or
consideration of any kind are to be given or offered to any individual or
organization for any reason whatsoever.
Equal
Employment Opportunity.
The
Company is an equal opportunity employer and you are expected to comply with
all
laws concerning discriminatory employment practices. Advancement at the Company
is based on talent and performance. In addition, retaliation against individuals
for raising claims of discrimination is prohibited.
Harassment
and Intimidation.
The
Company prohibits sexual or any other kind of harassment or intimidation by
any
Employee, Officer, or Director of the Company. Harassment, whether based on
a
person’s race, gender, religion, national origin, disability, sexual
orientation, or socioeconomic status, is completely inconsistent with our
tradition of providing a respectful, professional workplace. You must never
use
company systems to transmit or receive electronic images or text of a sexual
nature or containing ethnic slurs, racial epithets or any other material of
a
harassing, offensive or lewd nature.
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