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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “ Agreement
”) is made and entered into as of the 2
nd day of June, 2008, by and between
Grant Bettingen, Inc. , a California corporation
(“GBI”) (and a wholly owned subsidiary of Rubicon
Financial, Inc., a Delaware corporation (“Rubicon”)),
and Grant Bettingen (“Bettingen”).
W I T N E S S E T H:
WHEREAS , the officers,
managers and/or directors of GBI are of the opinion that Bettingen
has education, experience and/or expertise which is of value to GBI
and its owners, and
WHEREAS , GBI and
Bettingen desire to enter into this Employment Agreement, pursuant
to which Bettingen shall be employed by GBI, to set forth the
respective rights, duties and obligations of the parties
hereto.
NOW THEREFORE , in
consideration of the promises and covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency
of which the parties hereto acknowledge, GBI and Bettingen agree as
follows:
1. EMPLOYMENT. GBI hereby agrees to
employ Bettingen and Bettingen hereby accepts such employment, upon
the terms and conditions hereinafter set forth.
2. TERM
. For purposes of this
Agreement, “ Term
” shall mean the original term (as defined
in Section 2.1 below), if Renewal Term is initiated, then “Term”
shall mean the renewal term period.
2.1 Original
Term: The Term of this Agreement
shall commence on June 2 nd , 2008 and expire on June 1,
2013, unless sooner terminated pursuant to the terms and provisions
herein stated.
2.2 Renewal
Term(s): This Agreement shall
automatically be extended for additional two (2) year renewal terms
unless earlier terminated in accordance with the provisions of
Section 6 below.
3. COMPENSATION.
3.1 Salary: GBI shall pay Bettingen a
base annual salary of Ten Thousand Dollars ($10,000) per month,
payable in accordance with GBI’s normal policies but in no
event less often than semi-monthly (the “
Salary ”).
Effective January 1 st for each successive year this
Agreement is in effect, compensation shall be adjusted by the Board
of Directors of GBI in an amount equal to ten percent (10%)
increase of the Salary. The Board of Directors shall have the right
to increase the Salary more often than annually at its sole
discretion.
3.2 Incentive
Compensation: GBI shall also pay to
Bettingen incentive compensation in accordance with
Addendum A , Employee
Incentive Compensation Plan, attached hereto and made a part hereof
by this reference. Incentive Compensation shall be paid not less
frequently than annually, and prorated as applicable.
3.3 Stock
Options: GBI parent, Rubicon, shall
grant to Bettingen, as a signing bonus, Stock Option Certificates
to purchase 500,000 common shares of Rubicon at an exercise price
of $1.00 per share. The certificates shall be valid for five (5)
years from the date of grant. The Certificates shall vest
immediately upon the
start of employment and shall be assignable, include piggyback
registration rights.
3.4 Stock Option
Plan/Stock Purchase Plan: Bettingen
shall be eligible to participate in Rubicon’s Stock Option
Plan and Stock Purchase Plan during the term of
employment.
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4. EMPLOYEE
BENEFITS.
4.1 General
Benefits: Bettingen shall be entitled
to receive or participate in all benefit plans and programs of GBI
and Rubicon currently existing or hereafter made available to
executives or senior management of GBI and Rubicon (which shall be
at least equivalent to the current benefit plans of Grant
Bettingen, Inc.), including but not limited to, dental and medical
insurance, including coverage for dependents of Bettingen, pension
and profit sharing plans, 401(k) plans, incentive savings plans,
stock option plans, group life insurance, salary continuation
plans, disability coverage and other fringe benefits.
4.2 Life
Insurance: GBI or Rubicon shall pay
for and maintain Life Insurance for the Term of this Agreement,
including any Renewal Term(s), in the face amount of One Million
($1,000,000) Dollars, insuring the life of Bettingen, the proceeds
of such insurance shall be payable to Bettingen’s estate.
Notwithstanding the foregoing, if the cost of such policy for
Bettingen exceeds the average cost of such policies for all other
GBI and Rubicon executives by more than 20%, then GBI may in lieu
of maintaining such a policy pay to Bettingen an amount equal to
the average cost of such policies plus 20% on the same payment
schedule that it pays for the policy premiums.
4.3 Disability
Insurance: If available to other
Rubicon and GBI executives and available on commercially reasonable
terms, GBI or Rubicon shall pay for and maintain Disability
Insurance for the Term of this Agreement, including any Renewal
Term(s), sufficient to pay Bettingen an amount equal to at least
75% of his base salary for the period of incapacity.
4.4 Director and
Officer Insurance: Rubicon shall use
commercially reasonable efforts to purchase and maintain a
Directors and Officers liability insurance policy on terms and
conditions deemed acceptable by the Board of Directors, acting in
good faith, which policy shall cover Bettingen at all times during
his employment Term, including any Renewal Term(s). Such liability
insurance shall be at a value of a minimum of One Million dollars
($1,000,000).
4.5 Business
Expense: Bettingen shall be provided
with American Express and/or Visa/Master Card credit cards issued
in the name of GBI or Rubicon, for purposes of paying business
expenses, including without limitation, business travel,
entertainment, lodging and similar activities. Additionally,
Bettingen shall be entitled to receive proper reimbursement for all
reasonable out-of-pocket expenses incurred directly by Bettingen in
performing Bettingen’s duties and obligations under this
Agreement. GBI shall reimburse Bettingen for such expenses on a
monthly basis, upon submission by Bettingen of appropriate
receipts, vouchers or other documents in accordance with
GBI’s policy.
4.6 Automobile
Expenses: GBI shall provide Bettingen
with an automobile allowance in the amount of $1,000.00 per month,
for payment of expenses relating to Bettingen’s operation and
use of an automobile in the course of performing duties and
obligations under this Agreement.
4.7 Cellular
Telephone: GBI shall provide
Bettingen with a cellular telephone for use on GBI’s and
Rubicon’s business and GBI shall be responsible for all costs
and expenses incurred in connection with the operation and use of
such cellular telephone, including but not limited to, monthly
service charges and maintenance; provided , however , that Rubicon shall not be
responsible for costs and expenses incurred for personal use of
Bettingen.
4.8 Assistance: GBI shall furnish
Bettingen with an office and a dedicated full time administrative
assistant, together with portable computer and office equipment and
such other facilities and services as are deemed by the Board of
Directors of GBI to be suitable for his position and adequate for
the performance of his duties and obligations under this Agreement.
GBI shall also provide Bettingen with the necessary communications
and computer gear, and related communications service cost and
computer supplies, to support a working home office;
provided ,
however , that
this Section 4.5 shall in no way be construed to obligate GBI to provide
Bettingen with office furnishings for such working home office or
to reimburse Bettingen for home office use unless a separate
written agreement is entered into between GBI and
Bettingen.
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4.9 Vacation: Bettingen shall be
entitled during each twelve (12) month period during the Term of
this Agreement to a vacation of three (3) weeks during which time
Bettingen’s compensation will be paid in full. Unused days of
vacation will be compensated in accordance with GBI’s policy
as established by GBI from time to time. Bettingen may take the
vacation periods at any time during the year as long as Bettingen
schedules time off as to not create hardship on Rubicon. In
addition, Bettingen shall have such other days off as shall be
determined by Rubicon and shall be entitled to paid sick leave and
paid holidays in accordance with GBI’s policy.
5. DUTIES/SERVICE
5.1 Position: Bettingen is employed
as Managing Director of Investment Banking and as Chairman of the
Board of Directors and shall perform such
services and duties as are defined in Addendum B(1) and B(2) , Job
Description, attached hereto, and as are normally associated with
such positions, subject to the direction, supervision and rules and
regulations of GBI. The terms of this Agreement shall apply as long
as Bettingen is employed in one or both of these
positions.
5.2 Place of
Employment: The place of
Bettingen’s employment and the performance of
Bettingen’s duties will be at the corporate headquarters of
GBI (to be renamed Grant Bettingen, Inc.), or at such location as
agreed upon by GBI and Bettingen.
5.3 Extent of
Services: Bettingen shall at all
times and to the best of his ability perform his duties and
obligations under this Agreement in a reasonable manner consistent
with the interests of GBI. The precise services of Bettingen may be
extended or curtailed, from time to time at the discretion of GBI,
and Bettingen agrees to render such different and/or additional
services of a similar nature as may be assigned from time to time
by GBI. However, GBI shall not materially alter Bettingen’s
title, duties, obligations or responsibilities or transfer
Bettingen outside of the Orange County, California area without
Bettingen’s prior written consent.
5.3.1 Except as
otherwise agreed by GBI and Bettingen in writing, it is expressly
understood and agreed that Bettingen’s employment is fulltime
and of a critical nature to the success of GBI and is therefore
exclusive. Bettingen may not be employed by other entities, except
for subsidiaries of Rubicon, or otherwise perform duties and
undertakings on behalf of others or for his own interest unless
pre-approved by the Board of Directors. GBI acknowledges that
Bettingen presently, or may in the future, serve on the Board of
Directors of other companies and such action shall not be a breach
of this section; provided
, however
, that such companies either: (a) are listed
on Addendum C ,
attached hereto; or (b) do not compete with GBI or Rubicon or
interfere with the performance of Bettingen’s duties pursuant
to this Agreement, as determined in the reasonable judgment of the
Board of Directors. Unless otherwise agreed by GBI and Bettingen in
writing, employment of Bettingen at less than full time shall not
affect the five (5) year exercise term for the Option Shares
granted pursuant to this Agreement.
5.3.2 Additionally, GBI
recognizes that Bettingen has, or may have in the future,
non-passive equity positions in other companies, which either: (a)
are listed on Addendum C
attached hereto; or (b) do not compete with GBI or
Rubicon in the reasonable judgment of the Board of Directors. GBI
recognizes that such equity positions may occasionally require some
limited attention from Bettingen during normal business hours.
However, Bettingen agrees that if such time is considered excessive
by the Board of Directors, Bettingen shall be so advised and
noticed by GBI and Bettingen shall be required to make appropriate
adjustments to ensure his duties and obligations under this
Agreement are fulfilled.
6. TERMINATION. The Term of this
Agreement shall end upon its expiration pursuant to
Section 2 hereof,
provided that this Agreement shall terminate prior to such date:
(a) upon Bettingen’s resignation, death or permanent
disability or incapacity; or (b) by Rubicon at any time for
“ Cause ” (as defined in Section
6.4 below) or without Cause.
6.1 By
Resignation .
If Bettingen resigns with “
Good Reason ” (as
defined below), this Agreement shall terminate but: (a) Bettingen
shall continue to receive, through the end of the Term of this
Agreement, Incentive Compensation in accordance with the terms and
conditions of Addendum A
and
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Bettingen’s Salary payable in periodic
installments on GBI’s regular paydays, at the rate then in
effect; (b) continued coverage for Bettingen and his dependants
under GBI’s health insurance plan and continued life
insurance benefit under 4.2 above, (c) all of
Bettingen’s “ Option
Shares ” (as such term is defined
in this Agreement) shall remain exercisable by Bettingen for the
entire five (5) year term, and (d) all non-compete agreements
Bettingen has entered into with GBI or Rubicon shall terminate and
be of no further force or effect. For purposes of this Agreement,
“ Good Reason ” shall mean: (i) the assignment to Bettingen of duties
substantially and materially inconsistent with the position and
nature of Bettingen’s employment, the substantial and
material reduction of the duties of Bettingen which is inconsistent
with the position and nature of Bettingen’s employment, or
the change of Bettingen’s title indicating a substantial and
material change in the position and nature of Bettingen’s
employment; (ii) a reduction in compensation and benefits that
would substantially diminish the aggregate value of
Bettingen’s compensation and benefits without
Bettingen’s written consent; (iii) failure of Rubicon to
maintain Directors and Officers Insurance Policy at a minimum value
of one million dollars; (iv) the failure by GBI to obtain from any
successor, an agreement to assume and perform this Agreement; or
(v) a corporate “ Change In
Control ” (as defined below). For
purposes of this Agreement, “ Change
In Control ” shall mean (1) a
merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of either
GBI’s or Rubicon’s outstanding securities are
transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction in a
transaction approved by the stockholders, or the sale, transfer, or
other disposition of more than fifty percent (50%) of the total
combined voting power of GBI’s or Rubicon’s outstanding
securities to a person or persons different from the persons
holding those securities immediately prior to such transaction; or
(2) the sale, transfer or other disposition of all or substantially
all of GBI’s or Rubicon’s assets in complete
liquidation or dissolution of GBI or Rubicon other than in
connection with a transaction described in Section 6.1(1) above. If
Bettingen resigns without Good Reason, Bettingen shall be entitled
to receive Bettingen’s Salary and Incentive Compensation only
through the date of such resignation and Bettingen’s Option
Shares shall be deemed owned by Bettingen.
6.2 By Reason Of
Incapacity Or Disability: If
Bettingen becomes so incapacitated by reason of accident, illness,
or other disability that Bettingen is unable to carry on
substantially all of the normal duties and obligations of Bettingen
under this Agreement for a continuous period of one-hundred-twenty
(120) days (the “ Incapacity
Period ”), this Agreement shall
terminate but: (a) Bettingen shall continue to receive, through the
end of the fiscal year, Incentive Compensation in accordance with
the terms and conditions of Addendum
A ; (b) Bettingen shall receive, during
the Incapacity Period and for the six (6) month period thereafter
(the “ Extended Period
”), Bettingen’s Salary payable in
periodic installments on GBI’s regular paydays, at the rate
then in effect, reduced only by the amount of any payment(s)
received by Bettingen pursuant to any disability insurance policy
proceeds; and (c) Bettingen’s Option Shares shall be deemed
owned by Bettingen. For purposes of the foregoing,
Bettingen’s permanent disability or incapacity shall be
determined in accordance with GBI’s disability insurance
policy, if such a policy is then in effect, or if no such policy is
then in effect, such permanent disability or incapacity shall be
determined by Rubicon’s Board of Directors in its good faith
judgment based upon Bettingen’s inability to perform normal
and reasonable duties and obligations.
6.3 By Reason Of
Death: If Bettingen dies during the
Term of this Agreement, GBI shall: (a) pay to the estate of
Bettingen, through the end of the fiscal year, Bettingen’s
Incentive Compensation in accordance with the terms and conditions
of Addendum A ;
(b) pay to the estate of Bettingen, for a period of six (6) months
beginning on the date of death (the “ Extended Period ”),
Bettingen’s Salary payable in periodic installments on
GBI’s regular paydays, at the rate then in effect; and (c)
Bettingen’s Option Shares shall be deemed owned by Bettingen.
Other death benefits will be determined in accordance with the
terms of GBI’s benefit plans and programs.
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