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Exhibit 10.1
PACIFIC ETHANOL, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
for
JOSEPH W. HANSEN
This
Executive Employment Agreement (“Agreement”) by
and between Joseph W. Hansen (“Executive”) 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 Executive to
provide personal services to the Company, and wishes to provide
Executive with certain compensation and benefits in return for his
services;
Whereas , Executive wishes to be employed by the Company
and to provide personal services to the Company in return for
certain compensation and benefits; and
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 Executive
in the position of Chief Financial Officer and Executive hereby
accepts such employment. During the term of
Executive’s employment with the Company, Executive will
devote Executive’s best efforts and substantially all of
Executive’s business time and attention to the business of
the Company, except for vacation periods as set forth herein and
reasonable periods of illness or other incapacities permitted by
the Company’s general employment
policies. Executive’s first date of employment
shall be January 2, 2008.
1.2
Duties and Location. Executive shall
serve in an executive capacity and shall perform such duties as are
customarily associated with Executive’s then current title,
consistent with the bylaws of the Company and as required by the
Company’s Board of Directors (the “Board”) and
Chief Executive Officer. Executive shall report to the
Company’s Chief Executive
Officer. Executive’s primary office location shall
be in Sacramento, California, or such other location as is
acceptable to both the Executive and the Company. The
Company reserves the right to reasonably require Executive to
perform Executive’s duties at places other than
Executive’s primary office location from time to time as
agreed to by Executive, 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.
2.1
Salary. For services to be rendered
hereunder, Executive shall receive an annual salary at the rate of
$250,000.00, paid bi-weekly in the amount of $9,615.38 (the
“Base Salary”), subject to standard payroll deductions
and withholdings and payable in accordance with the Company’s
regular payroll schedule. Executive’s Base Salary
shall be reviewed annually and may be increased as approved by the
Board in its sole discretion.
2.2
Annual Bonus. Executive will be
eligible for an annual discretionary bonus of up to fifty percent
(50%) of his Base Salary (the “Annual
Bonus”). Whether any Annual Bonus will be awarded,
and the amount of the Annual Bonus awarded to Executive, shall be
determined by the Board in its sole discretion based upon its
consideration of both the Company’s performance and
Executive’s performance. Since the Annual Bonus is
intended both to reward past Company and Executive performance and
to provide an incentive for Executive to remain with the Company,
Executive must remain an active employee through the date that any
such bonus is awarded to him in order to earn any such
bonus. Executive will not earn any Annual Bonus
(including a prorated bonus) if Executive’s employment
terminates for any reason before the Annual Bonus is awarded to
him. Any Annual Bonus awarded by the Board shall be paid
within the first quarter after the end of the calendar
year.
2.3
Standard Company Benefits. Executive
shall be entitled to participate in all employee benefit programs
for which Executive is eligible under the terms and conditions of
the benefit plans which may be in effect from time to time and
provided by the Company to its employees generally;
provided, however, that Executive shall not be
entitled to accrued vacation pay.
2.4
Restricted Stock; Options. Subject to
the approval of the Board, Executive shall be granted 52,650 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: 10,530 shares shall vest on 90
th day
following Executive’s first date of employment, 10,530 shares
shall vest on October 4, 2008, 10,530 shares shall vest on October
4, 2009, 10,530 shares shall vest on October 4, 2010, and 10,530
shares shall vest on October 4, 2011; provided
that Executive remains employed by the
Company. Executive shall also be eligible for additional
grants of restricted stock and/or stock options from time to time
as shall be determined by the Compensation Committee of the Board
in its sole discretion, and shall be subject to such vesting,
exercisability, and other provisions as the Board may determine in
its discretion, after reviewing the performance of both Executive
and the Company. Both the Restricted Stock and any stock
options shall be governed in all respects by the terms of the
applicable restricted stock purchase agreement, stock option
agreement, grant notice and plan documents.
2.5
Relocation Assistance. Executive shall
be entitled to participate in the Company’s executive
relocation assistance to program, which will cover real estate fees
up to 6% of the sale price of your Wisconsin residence, reasonable
closing costs, moving expenses for usual and customary household
goods from Wisconsin and/or Southern California to Sacramento, plus
a $10,000 gross (not tax protected) lump sum payment for
incidentals related to your move.
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3.
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Confidential Information Obligations.
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3.1
Confidential Information Agreement. As
a condition of employment, Executive 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.
Executive represents and warrants that
Executive’s employment by the Company will not conflict with
any prior employment or consulting agreement or other agreement
with any third party, and that Executive will perform
Executive’s duties to the Company without violating any such
agreement. Executive represents and warrants that
Executive does not possess confidential information arising out of
prior employment, consulting, or other third party relationships,
which would be used in connection with Executive’s employment
by the Company, except as expressly authorized by that third
party. During Executive’s employment by the
Company, Executive will use in the performance of Executive’s
duties only information which is generally known and used by
persons with training and experience comparable to
Executive’s own, common knowledge in the industry, otherwise
legally in the public domain, or obtained or developed by the
Company or by Executive in the course of Executive’s work for
the Company.
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4.
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Outside Activities During Employment.
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4.1
Non-Company Business. Except with the
prior written consent of the Chief Executive Officer (in
consultation with the General Counsel), Executive will not during
the term of Executive’s employment with the Company undertake
or engage in any other employment, occupation or business
enterprise, other than ones in which Executive is a passive
investor. Executive may engage in civic and
not-for-profit activities so long as such activities do not
materially interfere with the performance of Executive’s
duties hereunder.
4.2
No Adverse Interests. Executive 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.
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5.
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Termination Of Employment.
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5.1
At-Will Relationship.
Executive’s employment relationship is
at-will. Either Executive or the Company may terminate
the employment relationship at any time, with or without Cause or
advance notice.
5.2
Termination without Cause; Resignation for Good
Reason. If, at any time, the Company
terminates Executive’s employment without Cause (as defined
herein), or Executive resigns with Good Reason (as defined herein),
and Executive 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 will provide Executive with the
following severance benefits:
(a)
Cash Severance. The Company shall pay
Executive severance in the form of continuation of
Executive’s Base Salary in effect on Executive’s last
day of employment for a period of twelve (12) months after
Executive’s termination, subject to standard payroll
deductions and withholdings and payable on the Company’s
regular payroll schedule; provided, however , that
in the event the Company terminates Executive’s employment
without Cause, or Executive resigns with Good Reason, within three
(3) months before or otherwise in anticipation of, or within twelve
(12) months after, a Change in Control (as defined below), then the
Company shall pay Executive severance in the form of continuation
of Executive’s Base Salary in effect on Executive’s
last day of employment for a period of eighteen (18) months after
Executive’s termination, subject to standard payroll
deductions and withholdings and payable on the Company’s
regular payroll schedule. Each payment made pursuant to
this Section 5.2(a) is intended to be a separate payment (as
defined in Treasury Regulations Section 1.409A-2(b)(2)) from any
other payments made pursuant to this Section 5.2(a) for purposes of
the “short term deferral rule” under Treasury
Regulations Section 1.409A-1(b)(4).
(b)
Continued Health Insurance Coverage
. To the extent provided by the federal COBRA law or, if
applicable, state insurance laws, and by the Company’s
then-current group health insurance policies, Executive may be
eligible to continue Executive’s then-current group health
insurance benefits after termination of Employment. If
eligible and if Executive timely elects continued health insurance
coverage, then the Company shall pay the Company’s portion of
any premiums necessary to provide coverage for a period of twelve
(12) months after the termination date; provided,
however, that no such premium payments shall be made
following the effective date of Executive’s coverage by a
medical, dental or vision insurance plan of a subsequent
employer. Executive shall notify the Company immediately
if he becomes covered by a medical, dental or vision insurance plan
of a subsequent employer. Notwithstanding the foregoing,
in the event the Company terminates Executive’s employment
without Cause, or Executive resigns with Good Reason, within three
(3) months before or otherwise in anticipation of, or within twelve
(12) months after, a Change in Control (as defined below), then (if
eligible and coverage elected) the Company shall pay the
Company’s portion of any premiums necessary to provide
coverage for a period of eighteen (18) months after the termination
date; provided, however, that no such premium
payments shall be made following the effective date of
Executive’s coverage by a medical, dental or vision insurance
plan of a subsequent employer and Executive agrees to immediately
notify the Company of any such coverage.
(c)
Accelerated Vesting. If Executive has
been employed by the Company for one full year or longer, then the
Company will accelerate the vesting of any equity awards granted to
Ex
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