Pacific Ethanol, Inc.
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
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Date
of Report (Date of earliest event reported)
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July
18, 2007
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PACIFIC
ETHANOL, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
(State
or other jurisdiction
of
incorporation)
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000-21467
(Commission
File Number)
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41-2170618
(IRS
Employer Identification
No.)
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400
Capitol Mall, Suite 2060, Sacramento, CA
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95814
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
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(916)
403-2123
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(Former
name or former address, if changed since last
report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
(a) Not
applicable.
(b) On
July
18, 2007, Douglas Jeffries resigned as Chief Financial Officer (principal
financial and accounting officer) of Pacific Ethanol, Inc. (the “Company”)
effective immediately.
(c) (1) On
July
18, 2007, John T. Miller, Chief Operating Officer of the Company, was appointed
as Acting Chief Financial Officer (principal financial and accounting officer)
of the Company effective immediately.
(2) John
T. Miller,
61, has
served as Chief Operating Officer since June 2006 and previously served as
the
Company’s Acting Chief Financial Officer from December 2006 to June 2007. Mr.
Miller was employed at Calpine Corporation beginning in 2001 and served as
a
Senior Vice President from 2002 to 2006. At Calpine, Mr. Miller held several
roles including managing the build-out of power projects, overseeing human
resources and safety programs and leading Calpine’s strategy to centralize its
power plant and corporate activities. Prior to his tenure at Calpine, Mr. Miller
served from 1998 to 2001 as Vice President of Thermo Ecotek, a subsidiary of
Thermo Electron, and as President of Thermo Ecotek’s Power Resources Division.
Mr. Miller directed Thermo Electron’s expansion of its independent power
business in the United States, Germany and the Czech Republic. He also
represented Thermo Electron in managing the sale of the Power Resources Division
to AES Corporation. Mr. Miller also served from 1994 to 1998 as President and
Chief Executive Officer of Pacific Generation Company, a subsidiary of
PacifiCorp. Prior to that time, Mr. Miller served from 1990 to 1994 as Pacific
Generation Company’s Vice President of Business Development and from 1987 to
1990 as its Vice President of Operations. In 1995, Mr. Miller completed Harvard
University’s Managing Global Opportunities, an executive education program. Mr.
Miller has a B.S. degree in Mechanical Engineering from Oregon State University
and an M.B.A. degree from the University of Portland. Mr. Miller served in
the
United States Navy from 1967 to 1971 as a Communications
Technician.
Executive
Employment Agreement
The
Executive Employment Agreement with John T. Miller dated June 26, 2006 provides
that Mr. Miller is employed as the Company’s Chief Operating Officer for a
one-year term and automatic one-year renewals thereafter, unless either Mr.
Miller or the Company provides written notice to the other at least 90 days
prior to the expiration of the then-current term. Mr. Miller is to receive
a
base salary of $185,000 per year and is entitled to receive a cash bonus not
to
exceed 50% of his base salary to be paid based upon performance criteria
established by the Board on an annual basis. Mr. Miller is also entitled to
reimbursement of his costs associated with his relocation to the city where
the
Company’s corporate headquarters are located.
The
Company is also required to provide an office and administrative support to
Mr.
Miller and certain benefits, including medical insurance, three weeks of paid
vacation per year and participation in benefit plans on the same basis and
to
the same extent as other executives or employees. Mr. Miller is also entitled
to
reimbursement for all reasonable business expenses incurred in promoting or
on
behalf of the business of Pacific Ethanol, including expenditures for
entertainment, gifts and travel.
In
the
event that Mr. Miller is terminated by the Company without cause, except upon
the Company’s timely written notice prior to automatic renewal at the end of the
initial term of his agreement or upon his death or disability, or in the event
that Mr. Miller voluntarily resigns for good reason, he is entitled to receive
severance equal to six months of base salary. Also, in such event, Mr. Miller
is
entitled to a prorated inventive bonus, if any, for the fiscal year during
which
termination occurs, and the Company is required to maintain, at its expense,
in
full force and effect, for Mr. Miller’s continued benefit, all medical and life
insurance to which Mr. Miller was entitled immediately prior to the date of
termination (or at the election of Mr. Miller in the event of a change in
control, immediately prior to the date of the change in control) until the
earliest of (i) 12 months, and (ii) the date or dates that Mr. Miller’s
continued participation in the Company’s medical and/or life insurance plans, as
applicable, is not possible under the terms of the plans (the earliest of (i)
and (ii) is referred to herein as the “Benefits Date”). If the Company’s medical
and/or life insurance plans do not allow Mr. Miller’s continued participation in
the plan or plans, then the Company will pay to Mr. Miller, in monthly
installments, from the date on which Mr. Miller’s participation in the medical
and/or life insurance, as applicable, is prohibited until the Benefits Date,
the
monthly premium or premiums which had been payable by the Company with respect
to Mr. Miller for the discontinued medical and/or life insurance, as applicable.
In addition, if Mr. Miller is terminated other than for cause or terminates
for
good reason following, or within the 90 days preceding, any change in control,
in lieu of further salary payments to Mr. Miller, the Company may elect to
pay a
lump sum severance payment equal to the amount of his annual base salary.
The
term
“for good reason” is defined in the Executive Employment Agreement as (i) a
general assignment by the Company for the benefit of creditors or filing by
the
Company of a voluntary bankruptcy petition or the filing against the Company
of
any involuntary bankruptcy which remains un-dismissed for 30 days or more or
if
a trustee, receiver or liquidator is appointed, (ii) any material changes in
Mr.
Miller’s titles, duties or responsibilities without his express written consent,
or (iii) Mr. Miller is not paid the compensation and benefits required under
the
Executive Employment Agreement.
The
term
“for cause” is defined as (i) any intentional misapplication by Mr. Miller
of Company funds or other material assets, or any other act of dishonesty
injurious to the Company committed by Mr. Miller, (ii) Mr. Miller’s
conviction of (a) a felony, or (b) a crime involving moral turpitude, (iii)
Mr.
Miller’s use or possession of any controlled substance or chronic abuse of
alcoholic beverages, which use or possession the Company’s Board reasonably
determines renders Mr. Miller unfit to serve in his capacity as a senior
executive of the Company, or (iv) Mr. Miller’s breach, nonperformance or
nonobservance of any of the terms of his Executive Employment Agreement with
the
Company, including but not limited to his failure to adequately perform his
duties or comply with the reasonable directions of the Company’s Board. However,
the Company may not terminate Mr. Miller unless the Company’s Board first
provides him with a written memorandum describing in detail how his performance
is not satisfactory and Mr. Miller is given a reasonable period of time, but
not
less than 30 days, to remedy the unsatisfactory performance described in that
memorandum. A determination of whether Mr. Miller has satisfactorily remedied
the unsatisfactory performance shall be promptly made by a majority of the
disinterested directors of the Company’s Board, or the Company’s entire Board if
there are no disinterested directors, at the end of the period provided to
Mr.
Miller for remedy, and the Board’s determination shall be final.
A
“change
in control” of the Company will be deemed to have occurred if, in a single
transaction or series of related transactions: (i) any person (as such term
is
used in Section 13(d) and 14(d) of the Exchange Act, other than a trustee or
fiduciary holding securities under an employment benefit program is or becomes
a
“beneficial owner” (as defined in Rule 13-3 under the Exchange Act), directly or
indirectly of securities of the Company representing 51% or more of the combined
voting power of the Company, (ii) there is a merger (other than a
reincorporation merger) or consolidation in which the Company does not survive
as an independent company, or (iii) the business of the Company is disposed
of
pursuant to a sale of assets.
Restricted
Stock Grant
On
October 4, 2006, the Company granted to Mr. Miller 70,200 shares of restricted
stock, 17,550 shares of which vested immediately and 10,530 shares of which
will
vest, subject to continued employment, on each of the next five anniversaries
of
the grant date, under the Company’s 2006 Stock Incentive Plan (the “Plan”)
pursuant to a Restricted Stock Agreement dated and effective as of October
4,
2006 by and between the Company and Mr. Miller. The grant date fair value of
the
70,200 shares of restricted stock granted to Mr. Miller was $916,812 based
on
the fair market value of shares of the Company’s common stock on the grant date.
As a condition to subsequent vesting of the shares of restricted stock, Mr.
Miller must remain continuously employed by the Company on a full time basis
from the grant date through each subsequent vesting date. The interest of Mr.
Miller in the restricted stock may vest as to 100% of the unvested shares of
restricted stock upon a change in control but only in accordance with the Plan.
(3) Not
applicable.
(d) Not
applicable.
(e) In
connection with Mr. Jeffries resignation, the Company and Mr. Jeffries entered
into a Separation Agreement (“Separation Agreement”) dated July 19, 2007. The
Separation Agreement provides that the Company will pay Mr. Jeffries’ COBRA
premiums necessary to continue his current group health insurance coverage
through September 30, 2007. The Separation Agreement also provides that Mr.
Jeffries is to relinquish all 57,500 shares of restricted stock granted to
him
in connection with his employment, including 7,500 shares that vested
immediately upon his first date of employment and 50,000 shares that may have
vested in the future. Under the Separation Agreement, in connection with Mr.
Jeffries’ relinquishment of his vested shares, the Company agreed to reimburse
Mr. Jeffries for any federal or state tax liability he incurs as a direct result
of his return of the vested shares. The Separation Agreement includes other
customary terms and conditions. This description of the Separation Agreement
does not purport to be complete and is qualified in its entirety by reference
to
the Separation Agreement, which is filed as Exhibit 10.1 to this report and
incorporated by reference herein.
Item
9.01. Financial
Statements and Exhibits.
(a) Financial
Statements of Businesses Acquired.
None.
(b) Pro
Forma Financial Information.
None.
(c) Exhibits.
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10.1 |
Separation
Agreement dated July 19, 2007 between Pacific Ethanol, Inc. and Douglas
Jeffries
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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PACIFIC
ETHANOL, INC.
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| Date: July
22, 2007 |
By: |
/s/ CHRISTOPHER
W. WRIGHT |
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Christopher
W.
Wright
Vice President, General Counsel &
Secretary
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EXHIBITS
FILED WITH THIS REPORT
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10.1 |
Separation
Agreement dated July 19, 2007 between Pacific Ethanol, Inc. and Douglas
Jeffries
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