EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (this “
Agreement ”) is made and entered into as of the 1st
day of January, 2007, by and between Rubicon Financial
Incorporated, a Delaware corporation (“ Rubicon
”), and Joseph Mangiapane, Jr. (“
Mangiapane ”).
W I T N E S S E T
H:
WHEREAS , the officers, managers and/or directors of
Rubicon are of the opinion that Mangiapane has education,
experience and/or expertise which is of value to Rubicon and its
owners, and
WHEREAS , Rubicon and Mangiapane desire to enter into
this Employment Agreement, pursuant to which Mangiapane shall be
employed by Rubicon, 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, Rubicon and Mangiapane agree as
follows:
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1.
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EMPLOYMENT.
Rubicon hereby agrees to employ
Mangiapane and Mangiapane hereby accepts such employment, upon the
terms and conditions hereinafter set forth.
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2.
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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.
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2.1
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Original Term:
The Term of this Agreement shall
commence on January 1, 2007 and expire on December 31, 2010, unless
sooner terminated pursuant to the terms and provisions herein
stated.
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2.2
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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.
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3.1
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Salary:
Rubicon shall pay Mangiapane a base
annual salary of Nine Thousand Dollars ($9,000) per month, payable
in accordance with Rubicon’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 Rubicon; provided , however , that
the adjustment shall be the greater of a) if Rubicon
is public, CEO base salary equivalent to the eighty-fifth (85th)
percentile for public companies (listed on Nasdaq, Amex or NYSE for
year
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ending the prior December 31 or
later) in similar or like industries or of comparable revenue size
and/or EBITDA for companies in lieu of comparable industry
benchmarks or b) 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.
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3.2
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Incentive
Compensation: Rubicon
shall also pay to Mangiapane 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.
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3.3
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Stock Options:
Rubicon shall grant to Mangiapane,
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.
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3.4
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Stock Option Plan/Stock
Purchase Plan: Mangiapane shall be eligible to participate in
Company’s Stock Option Plan and Stock Purchase Plan during
the term of employment.
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4.1
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General
Benefits: Mangiapane
shall be entitled to receive or participate in all benefit plans
and programs of Rubicon currently existing or hereafter made
available to executives or senior management of Rubicon, including
but not limited to, dental and medical insurance, including
coverage for dependents of Mangiapane, 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.
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4.2
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Life Insurance:
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 Mangiapane The proceeds of such
insurance shall be payable to Mangiapane’s estate.
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4.3
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Disability
Insurance: Rubicon
shall pay for and maintain Disability Insurance for the Term of
this Agreement, including any Renewal Term(s), sufficient to pay
Mangiapane an amount equal to at least 75% of his base salary for
the period of incapacity.
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4.4
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Director and Officer
Insurance: Rubicon
shall use commercially reasonable efforts to purchase and maintain
a Directors and Officers
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liability insurance policy on terms
and conditions deemed acceptable by the Board of Directors, acting
in good faith, which policy shall cover Mangiapane 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).
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4.5
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Business
Expense: Mangiapane
shall be provided with American Express and/or Visa/Master Card
credit cards issued in the name of Rubicon, for purposes of paying
business expenses, including without limitation, business travel,
entertainment, lodging and similar activities. Additionally,
Mangiapane shall be entitled to receive proper reimbursement for
all reasonable out-of-pocket expenses incurred directly by
Mangiapane in performing Mangiapane’s duties and obligations
under this Agreement. Rubicon shall reimburse Mangiapane for such
expenses on a monthly basis, upon submission by Mangiapane of
appropriate receipts, vouchers or other documents in accordance
with Rubicon’s policy.
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4.6
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Automobile
Expenses: Rubicon
shall provide Mangiapane with an automobile allowance in the amount
of $1,000.00 per month, for payment of expenses relating to
Mangiapane’s operation and use of an automobile in the course
of performing duties and obligations under this
Agreement.
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4.7
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Cellular
Telephone: Rubicon
shall provide Mangiapane with a cellular telephone for use on
Rubicon’s business and Rubicon 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 Mangiapane.
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4.8
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Assistance:
Rubicon shall furnish Mangiapane
with an office, together with a portable computer and office
equipment and such other facilities and services as are deemed by
the Board of Directors of Rubicon to be suitable for his position
and adequate for the performance of his duties and obligations
under this Agreement. Rubicon shall also provide Mangiapane 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 Rubicon
to provide Mangiapane with office furnishings for such working home
office or to reimburse Mangiapane for home office use unless a
separate written agreement is entered into between Rubicon and
Mangiapane.
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4.9
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Vacation:
Mangiapane shall be entitled during
each twelve (12) month period during the Term of this Agreement to
a vacation of three (3) weeks
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during which time Mangiapane’s
compensation will be paid in full. Unused days of vacation will be
compensated in accordance with Rubicon’s policy as
established by Rubicon from time to time. Mangiapane may take the
vacation periods at any time during the year as long as Mangiapane
schedules time off as to not create hardship on Rubicon. In
addition, Mangiapane 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 Rubicon’s policy.
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5.1
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Position:
Mangiapane is employed as Chief
Executive Officer and a nominated Member of the Board of Directors
and shall perform such services and duties as are defined in
Addendum B , Job Description, attached hereto, and as are
normally associated with such position, subject to the direction,
supervision and rules and regulations of Rubicon.
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5.2
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Place of
Employment: The
place of Mangiapane’s employment and the performance of
Mangiapane’s duties will be at Rubicon’s corporate
headquarters and at Mangiapane’s home office or at such
location as agreed upon by Rubicon and Mangiapane.
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5.3
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Extent of
Services: Mangiapane
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 Rubicon. The precise services of
Mangiapane may be extended or curtailed, from time to time at the
discretion of Rubicon, and Mangiapane agrees to render such
different and/or additional services of a similar nature as may be
assigned from time to time by Rubicon. However, Rubicon shall not
materially alter Mangiapane’s title, duties, obligations or
responsibilities or transfer Mangiapane outside of the Orange
County, California area without Mangiapane’s prior written
consent.
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5.3.1 Except as
otherwise agreed by Rubicon and Mangiapane in writing, it is
expressly understood and agreed that Mangiapane’s employment
is fulltime and of a critical nature to the success of Rubicon and
is therefore exclusive. Mangiapane 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. Rubicon acknowledges
that Mangiapane 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 Rubicon or interfere
with the performance of Mangiapane’s duties pursuant to this
Agreement, as determined in the reasonable judgment of the Board
of
Directors. Unless otherwise agreed
by Rubicon and Mangiapane in writing, employment of Mangiapane 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,
Rubicon recognizes that Mangiapane 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 Rubicon in the reasonable judgment of the Board of
Directors. Rubicon recognizes that such equity positions may
occasionally require some limited attention from Mangiapane during
normal business hours. However, Mangiapane agrees that if such time
is considered excessive by the Board of Directors, Mangiapane shall
be so advised and noticed by Rubicon and Mangiapane shall be
required to make appropriate adjustments to ensure his duties and
obligations under this Agreement are fulfilled.
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6.
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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
Mangiapane’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.
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6.1
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BY RESIGNATION
. If Mangiapane resigns with “ Good
Reason ” (as defined below), this Agreement shall
terminate but: (a) Mangiapane 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
Mangiapane’s Salary payable in periodic installments on
Rubicon’s regular paydays, at the rate then in effect; and
(b) all of Mangiapane’s “ Option Shares ”
(as such term is defined in this Agreement) shall remain
exercisable by Mangiapane for the entire five (5) year term. For
purposes of this Agreement, “ Good Reason ”
shall mean: (i) the assignment to Mangiapane of duties
substantially and materially inconsistent with the position and
nature of Mangiapane’s employment, the substantial and
material reduction of the duties of Mangiapane which is
inconsistent with the position and nature of Mangiapane’s
employment, or the change of Mangiapane’s title indicating a
substantial and material change in the position and nature of
Mangiapane’s employment; (ii) a reduction in compensation and
benefits that would substantially diminish the aggregate value of
Mangiapane’s compensation and benefits without
Mangiapane’s written consent; (iii) the failure by Rubicon to
obtain from any successor, an agreement to assume and perform this
Agreement; or (iv) 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 Rubicon’s
outstanding securities are
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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
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 the Rubicon’s
assets in complete liquidation or dissolution of Rubicon other than
in connection with a transaction described in
Section 6.1(1) above. If Mangiapane resigns without
Good Reason, Mangiapane shall be entitled to receive
Mangiapane’s Salary and Incentive Compensation only through
the date of such resignation and Mangiapane’s Opt
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