EMPLOYMENT AGREEMENT For Bryon McGregor
Exhibit
10.1
For
Xxxxx
XxXxxxxx
This
Employment Agreement (“Agreement”) by and between Xxxxx XxXxxxxx (“Employee”)
and Pacific Ethanol, Inc. (the “Company”) (collectively, the “Parties”) is
effective as of the last date signed by the Parties.
WHEREAS, the Company desires to employ Employee
to provide personal services to the Company, and wishes to provide Employee with
certain compensation and benefits in return for his services;
WHEREAS, Employee wishes to be employed by the
Company and to provide personal services to the Company in return for certain
compensation and benefits; and
WHEREAS, the Parties entered into an Offer
Letter on or about June 5, 2008 setting forth certain terms of Employee's
employment with the Company the "Offer Letter" and now seek to supersede and
replace the Offer Letter;
NOW, THEREFORE, in consideration of the
mutual promises and covenants contained herein, it is hereby agreed by and
between the parties hereto as follows:
1. EMPLOYMENT BY
THE COMPANY.
1.1 Position. Subject to terms and
conditions set forth herein, the Company agrees to employ Employee in the
position of Vice President, Finance and Employee hereby accepts such employment.
During the term of Employee's employment with the Company, Employee will devote
Employee's best efforts and substantially all of Employee's business time and
attention to the business of the Company.
1.2 Duties and Location. Employee
shall perform such duties as are customarily associated with Employee's then
current title. Employee's primary office location shall be a location mutually
acceptable to both the Employee and the Company. The Company reserves the right
to reasonably require Employee to perform Employee's duties at places other than
Employee's primary office location from time to time as agreed to by Employee,
and to require reasonable business travel.
1.3 Policies and
Procedures. The employment relationship between the parties
shall be governed by the general employment policies and practices of the
Company, except that when the terms of this Agreement differ from or are in
conflict with the Company’s general employment policies or practices, this
Agreement shall control.
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2. COMPENSATION.
2.1 Salary. For
services to be rendered hereunder, Employee shall receive an annual salary at
the rate of $185,000, paid bi-weekly in the amount of $7,115.38 (the “Base
Salary”), subject to standard payroll deductions and withholdings and payable in
accordance with the Company’s regular payroll schedule. Employee’s
Base Salary shall be reviewed annually and may be increased as approved by the
Company’s Board of Directors (the “Board”) in its sole discretion.
2.2 Annual Bonus. Employee will be
eligible for a annual discretionary bonus with a target of thirty percent (30%)
of his Base Salary (the "Annual Bonus"). Whether any Annual Bonus will be
awarded, and the amount of the Annual Bonus awarded to Employee, shall be
determined by the Board in its sole discretion based upon its consideration of
both the Company's performance and Employee's performance. Employee will be
guaranteed a minimum annual bonus of 540,000 for the performance year of 2008 to
be paid concurrent with the bonus process for the rest of the company. Since the
Annual Bonus is intended both to reward past Company and Employee performance
and to provide an incentive for Employee to remain with the Company, Employee
must remain an active employee through the date that any such Annual Bonus is
paid to him in order to earn any such bonus. Employee will not earn any Annual
Bonus (including a prorated bonus) if Employee's employment terminates for any
reason before the Annual Bonus is paid to him.
2.3 Standard Company Benefits.
Employee shall be entitled to participate in such of the Company's benefit and
compensation plans and programs as may be made available to employees of the
Company including, without limitation, the Company's Long Term Incentive Plan,
subject in each case to: (i) the generally applicable terms and conditions of
the applicable plan or program and to the determinations of the Board or other
person administering such plan or program, (ii) determinations by the Board or
any such person as to whether and to what extent Employee shall so participate
or cease to participate, and (iii) amendment, modification or termination of any
such plan or program in the sole and absolute discretion of the
Board.
2.4 Restricted Stock,
Options. The employee shall be granted 5,000 shares of restricted Company
stock (the "Restricted Stock'). The Restricted Stock shall vest according to a
vesting schedule set forth in the governing restricted stock purchase agreement
which shall be: 2,500 shares shall vest one-year after the employee's first date
of employment; the remaining 2,500 shares shall vest on the two-year anniversary
date of employment; provided that employee employed by the Company.
2.5 Relocation
Assistance. Employee shall be entitled to participate in the
Company’s relocation assistance program, which will cover: (i) one
(1) house hunting/familiarization trip up to four (4) days for the Employee and
his family; (ii) 6 weeks of temporary housing, and (iii) a relocation lump sum
of $20,000 to be paid on the first full pay date after
employment. Employee’s relocation assistance is conditional as
Employee must repay all sums received by Employee pursuant to the program if he
resigns before completing 12 months of employment. The Company shall
be entitled to offset against sums otherwise owed Employee in order to recoup
amounts owed by Employee pursuant to the preceding sentence.
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3. CONFIDENTIAL
INFORMATION OBLIGATIONS
3.1 Confidential Information
Agreement. As a condition of employment, Employee agrees to
execute and abide by the Employee Confidential Information and Inventions
Agreement attached hereto as Exhibit A.
3.2 Third Party
Agreements and Information. Employee represents and
warrants that Employee's employment by the Company will not conflict with any
prior employment or consulting agreement or other agreement with any third
party, and that Employee will perform Employee's duties to the Company without
violating any such agreement. Employee represents and warrants that Employee
does not possess confidential information arising out of prior employment,
consulting, or other third party relationships, which would be used in with
Employee's employment by the Company, except as expressly authorized by that
third party. During Employee's employment by the Company, Employee will use in
the performance of Employee's duties only information which is generally known
and used by persons with training and experience comparable to Employee's own,
common knowledge in the industry, otherwise legally in the public domain, or
obtained or developed by the Company or by Employee in the course of Employee's
work for the Company.
4. OUTSIDE
ACTIVITIES DURING EMPLOYMENT.
4.1 Non-Company Business. Except with the
prior written consent of the Chief Executive Officer (in consultation with the
General Counsel), Employee will not during the term of Employee's employment
with the Company undertake or engage in any other employment, occupation or
business enterprise, other than ones in which Employee is a passive investor.
Employee may engage in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of Employee's duties
hereunder.
4.2 No
Adverse Interests. Employee agrees not to acquire, assume or
participate in, directly or indirectly, any position, investment or interest
known by him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise, except as a passive investor in mutual or
exchange traded funds.
5. TERMINATION
OF EMPLOYMENT.
5.1 At-Will
Relationship. Employee’s employment relationship is
at-will. Either Employee or the Company may terminate the employment
relationship at any time, with or without Cause or advance notice.
5.2 Termination
without Cause. If, at any time, the Company
terminates Employee’s employment without Cause (as defined herein)
and Employee executes and delivers the Separation Date Release of all claims set
forth as Exhibit B hereto and allows such release to become effective, then the
Company shall pay Employee severance in the form of Employee’s Base Salary in
effect on Employee’s last day of employment (the “Separation Date”) for a period
of 6 months after Employee’s termination. This severance shall be
paid in substantially equal installments on the Company’s regular payroll
schedule (subject to standard deductions and withholdings) over the 6 month
period following the Separation Date; provided, however, that no payments will
be made prior to the effective date of the release of
claims.
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5.3 Termination
for Cause; Resignation. If the Company terminates Employee’s
employment with the Company for Cause, or Employee resigns for any reason
whatsoever, then Employee will not be entitled for any further compensation from
the Company (other than accrued salary, and accrued and unused vacation, through
Employee’s Separation Date), severance pay, pay in lieu of notice or any other
such compensation.
5.4
Termination Due to Death or Disability.
(a) Death. This
Agreement shall terminate immediately upon Employee's death and Employee's
estate shall not be entitled to any further compensation from the Company (other
than accrued salary, and accrued and unused vacation, through Employee's
Separation Date), including severance pay, pay in lieu of notice or any other
such compensation.
(b) Disability. If
Employee is incapacitated by accident, sickness or otherwise such that Employee
is incapable of performing the services set forth in Section 1.1 herein, and
such incapacity is certified by a qualified medical doctor, then this Agreement
shall terminate. In such an event, and if Employee or someone authorized to act
on his behalf executes and delivers the Separation Date Release of all claims
set forth as Exhibit B hereto and allows such release to become effective, then
the Company shall pay Employee severance in the form of continuation of
Employee's Base Salary in effect on Employee's Separation Date for a period of 6
months after Employee's termination. This severance shall be paid in
substantially equal installments on the Company's regular payroll schedule
(subject to standard deductions and withholdings) over the 6 month period
following the Separation Date: provided, however, that no payments will be made
prior to the effective date of the release of claims. On the
first payroll date following the date of the release, the Company will pay
Employee the payments that Employee would have received on or prior to such date
in a lump sum under the original schedule but for the delay in effectiveness of
the release, with the balance of the cash severance being paid as originally
scheduled. The severance benefits provided for in this Section 5.4
shall be reduced by any amounts provided to Employee by any federal or state
disability insurance payments or benefits, and any private insurance disability
payments or benefits, provided to Employee.
5.5 Health
Insurance. To the extent provided by the
federal continuation of coverage law or, if applicable, state laws of
similar effect (collectively, “COBRA”), and by the Company’s then-current group
health insurance policies, Employee may be eligible to continue Employee’s
then-current group health insurance benefits at Employee’s own expense after the
termination of Employee’s employment. Employee will be provided with
a separate notice describing Employee’s rights and obligations under the
applicable state and/or federal COBRA laws on or after the Separation
Date.
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5.6 Section 409A Compliance. The parties intend that the severance
benefits provided under Section 5.2 or 5.4 above, as applicable (the
“Severance”), satisfy, to the greatest extent possible, the exemptions from the
application of Section 409A of the Internal Revenue Code (together with any
state laws of similar effect, (“Section 409A”) provided under Treasury
Regulations 1.409A-1(b)(4) and 1.409A1(b)(9)(iii). Notwithstanding the foregoing, if the
Company (or, if applicable, the successor entity thereto) determines that the
Severance constitutes "deferred compensation" under Section 409A, and if
Executive is a "specified employee" of the Company or any successor
entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) (a
“Specified
Employee"), then, solely to the extent necessary to avoid the incurrence
of the adverse personal tax consequences under Section 409A, the timing of the
Severance shall be delayed as follows: on the earlier to occur of (i) the date
that is six months and one day after the date of separation of service or (ii)
the date of Executive's death (such earlier date, the "Delayed Initial
Payment Date"), the Company (or the successor entity thereto, as
applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the
Severance that Executive would
otherwise have received through the Delayed Initial Payment Date if the
commencement of the payment of the Severance had not been delayed pursuant to
this paragraph and (B) commence paying the balance of the Severance in
accordance with the payment schedule set forth above. It is intended that each
payment made pursuant to Section 5.2 or 5.4, as applicable, is a separate
payment (as defined in Treasury Regulations Section 1.409A- 2(b)(2)) from any
other payments made pursuant to this Agreement for purposes of the "short term
deferral rule" under Treasury Regulations Section 1.409A- I (b)(4).
5.7 No Mitigation.
Employee shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be reduced by any
compensation earned by Employee
as the result of employ
..ment by another employer after the date of termination, or
otherwise.
5.8 Definition of "Cause." For purposes of this Agreement,
"Cause"
shall
mean any one or more of the following:
(a) Employee's indictment
or conviction of any felony or of any crime involving dishonesty;
(b) Employee's
participationin any fraud or other act of willful misconduct against the Company
(including any material breach of Company policy that causes or reasonably could
cause harm to the Company);
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(c) Employee’s
refusal to comply with any lawful directive of the Company;
(d) Employee’s
material breach of Employee’s fiduciary, statutory, contractual, or common law
duties to the Company (including any material breach of this Agreement or the
Confidential Information and Inventions Agreement); or
(e) Conduct by Employee
which in the good faith and reasonable determination of the Board demonstrates
gross unfitness to serve.
Provided, however, that in the event that any
of the foregoing events is reasonably capable of being cured, the Company shall,
within twenty (20) days after the discovery of such event, provide written
notice to the Employee describing the nature of such event and Employee shall
thereafter have ten (10) business days to cure such event.
6. ARIBITRATION.
To ensure
the timely and economical resolution of disputes that may arise in connection
with Employee's employment with the Company, Employee and the Company agree that
any and all disputes, claims, or
causes of action arising from or relating to the enforcement, breach,
performance, negotiation, execution, or interpretation of this Agreement,
Employee's employment, or the termination of Employee's employment, shall be
resolved to the fullest extent permitted by law by final, binding and
confidential arbitration, by a single arbitrator, in Sacramento, California,
conducted by JAMS under the then applicable JAMS rules. By agreeing to this arbitration
procedure, both Employee and the Company waive the right to
resolve any such dispute through a trial by jury or judge or administrative
proceeding. The arbitrator shall: (a) have the authority to compel
adequate discovery for the resolution of the dispute and to award such relief as
would otherwise be permitted by law; and (b) issue a written arbitration
decision, to include the arbitrator's essential findings and conclusions and a
statement of the award. The arbitrator shall he authorized to award any or all
remedies that Employee or the Company would be entitled to seek in a court of
law. The Company shall pay all JAMS' arbitration fees in excess of the amount of
court fees that would be required if the dispute were decided in a court of law.
Nothing in this Agreement is intended to prevent either Employee or the Company
from obtaining injunctive relief in court to prevent irreparable harm pending
the conclusion of any such arbitration.
7.
GENERAL PROVISIONS.
7.1 Notices. Any
notices provided hereunder must be in writing and shall be deemed effective upon
the earlier of personal delivery (including personal delivery by fax) or the
next day after sending by overnight carrier, to the Company at its primary
office location and to Employee at his address as listed on the Company
payroll.
7.2 Severability. Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but it any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not effect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
to the extent possible in keeping with the intent of the parties.
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7.3 Waiver. Any
waiver of any breach of any provisions of this Agreement must be in writing to
be effective, and it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this
Agreement.
7.4 Complete
Agreement. This Agreement, Exhibit A, constitutes the entire
agreement between- Employee and the Company and it is the complete, final, and
exclusive embodiment of their agreement with regard to this subject matter. This
Agreement supersedes and replaces the Offer Letter dated on or about June 5,
2008 in its entirety and said Offer Letter shall have no further force or
effect. It is entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be modified or
amended except in a writing signed by the Employee and a duly authorized officer
of the Company.
7.5 Counterparts.
This Agreement may be executed in separate counterparts, any one of which need
not contain signatures of more than one party, but all of which taken together
will constitute one and the same Agreement.
7.6 Headings.
The headings of the sections hereof are inserted for convenience only and shall
not be deemed to constitute a part hereof nor to affect the meaning
thereof.
7.7 Successors
and Assigns. This Agreement is intended to bind and inure to the benefit
of and be enforceable by Employee and the Company, and their respective
successors, assigns, heirs, executors and administrators, except that Employee
may not assign any of his duties hereunder and he may not assign any of his
rights hereunder without the written consent of the Company, which shall not be
withheld unreasonably. The Company shall obtain the assumption of this Agreement
by any successor or assign of the Company.
7.8 Choice
of Law. All questions concerning the construction, validity and
interpretation this Agreement will be governed by the law of the
California.
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IN WITNESS WHEREOF, the parties have
executed this Agreement.
|
By: /s/ Xxxx X.
Xxxxxxx
Xxxx
X. Xxxxxxx
President
and Chief Executive Officer
Date:
12.19.08
|
Understood
and Agreed:
Employee
By: /s/ Xxxxx
XxXxxxxx
Xxxxx
XxXxxxxx
Date: 12/22/08
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