EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (this “
Agreement ”)
is entered into as of the 20
th day
of March, 2008 (the “
Effective Date ”),
by and between Global Clean Energy Holdings, Inc., a
Utah
corporation (the “
Company ”),
and Bruce K. Nelson (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 (90
th )
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.
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.
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;
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 c overage
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
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
(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
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