paceth_8k.htm
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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December
11,
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
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000-21467
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41-2170618
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(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) John
T. Miller is to cease to be Acting Chief Financial Officer of Pacific Ethanol,
Inc. (the “Company”) effective as of January 2, 2008.
(c) (1) On
December 11, 2007, Joseph W. Hansen was appointed as Chief Financial Officer
of
the Company effective as of January 2, 2008.
(2) Joseph
W. Hansen, 59, was appointed as Chief Financial Officer of Pacific
Ethanol effective as of January 2, 2008. Before joining Pacific
Ethanol, Mr. Hansen was employed as Chief Financial Officer at Joseph Scott
Properties, Inc. d/b/a Joseph Scott Financial from December 2005 through June
2007. Prior to that time, Mr. Hansen was Chief Financial Officer of
National RV Holdings, Inc. from April 2004 through May 2005. Prior to
joining National RV Holdings, Inc., Mr. Hansen served in various capacities,
including Chief Financial Officer and Executive Vice President, at Zacky Farms
Company from October 1996 to August 2003. Mr. Hansen received a
Certified Public Accountant certificate from the State of Wisconsin and also
holds a Wisconsin bar license. Mr. Hansen has a B.B.A. degree in
Accounting from the University of Wisconsin, Madison, a J.D. degree from Tulane
University School of Law and an L.L.M. degree in Taxation from the New York
University Graduate School of Law.
(3) (A)
Employment Agreement dated December 11, 2007 between Pacific Ethanol,
Inc.
and Joseph W. Hansen
On
December 11, 2007, the Company entered into an Executive Employment Agreement
with Joseph W. Hansen (“Executive”) in connection with the appointment of
Executive as Chief Financial Officer of the Company. Executive’s
appointment as Chief Financial Officer is effective as of January 2, 2008.
The
Executive Employment Agreement is included as Exhibit 10.1 to this Current
Report on Form 8-K.
Executive
is to receive a base salary of $250,000 per year and is eligible to receive
an
annual discretionary cash bonus of up to 50% of his base salary, to be paid
based upon performance criteria set by the board of directors.
Executive
shall be issued an aggregate of 52,650 shares of the Company’s common stock
pursuant to a restricted stock purchase agreement that will vest as to 10,530
shares on the 90th day following
Executive’s first day of employment and as to an additional 10,530 shares on
each October 4th, beginning
October
4, 2008 and continuing thereafter for three additional years through October
4,
2011, provided that Executive remains employed by the Company.
The
Executive Employment Agreement provides for at-will employment.
Executive
is entitled to participate in the Company’s executive relocation assistance
program, which will cover real estate fees up to 6% of the sale price of
Executive’s residence, reasonable closing costs, moving expenses for usual and
customary household goods from Executive’s residence to Sacramento, California
plus a $10,000 lump sum payment for incidentals related to Executive’s
relocation.
Upon
termination by the Company without cause, resignation by Executive for good
reason or upon the disability of Executive, Executive is entitled to receive
(i)
severance equal to twelve months of base salary, (ii) continued health insurance
coverage for twelve months and, (iii) if Executive has been employed for
one full year or longer, accelerated vesting of 25% of all shares or options
subject to any equity awards granted to Executive prior to Executive’s
termination which are unvested as of the date of
termination. Notwithstanding the foregoing, if Executive is
terminated without cause or resigns with good reason within three months before
or twelve months after a change in control, Executive is entitled to (a)
severance equal to eighteen months of base salary, (b) continued health
insurance coverage for eighteen months, and (c) accelerated vesting of 100%
of
all shares or options subject to any equity awards granted to Executive prior
to
Executive’s termination that are unvested as of the date of
termination.
The
term
“for good reason” is defined in the Executive Employment Agreement as (\) the
assignment to Executive of any duties or responsibilities that result in the
material diminution of Executive’s authority, duties or responsibility, (ii) a
material reduction by the Company in Executive’s annual base salary, except to
the extent the base salaries of all other executive officers of the Company
are
accordingly reduced, (iii) a relocation of Executive’s place of work, or the
Company’s principal executive offices if Executive’s principal office is at such
offices, to a location that increases Executive’s daily one-way commute by more
than thirty-five miles, or (iv) any material breach by the Company of any
material provision of the Executive Employment Agreement.
The
term
“cause” is defined in the Executive Employment Agreement as (i) Executive’s
indictment or conviction of any felony or of any crime involving dishonesty;
or
(ii) Executive’s participation in any fraud or other act of willful misconduct
against the Company; or (iii) Executive’s refusal to comply with any lawful
directive of the Company; (iv) Executive’s material breach of Executive’s
fiduciary, statutory, contractual, or common law duties to the Company; or
(v)
conduct by Executive which in the good faith and reasonable determination of
the
Board demonstrates gross unfitness to serve; provided, however, that in the
event that any of the foregoing events is reasonably capable of being cured,
the
Company shall, within twenty days after the discovery of such event, provide
written notice to Executive describing the nature of such event and Executive
shall thereafter have ten business days to cure such event.
A
“change
in control” of the Company is 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 Securities Exchange Act of 1934
(“Exchange Act”)), or persons acting as a group, 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 a majority of the
combined voting power of the Company, (ii) there is a merger, consolidation
or
other business combination transaction of the Company with or into another
corporation, entity or person, other than a transaction in which the holders
of
at least a majority of the shares of voting capital stock of the Company
outstanding immediately prior to such transaction continue to hold (either
by
such shares remaining outstanding or by their being converted into shares of
voting capital stock of the surviving entity) a majority of the total voting
power represented by the shares of voting capital stock of the Company (or
the
surviving entity) outstanding immediately after such transaction, or (iii)
all
or substantially all of the Company’s assets are sold.
(B) Indemnification
Agreement dated as of January 2, 2008 between Pacific Ethanol, Inc. and Joseph
W. Hansen
The
Company entered into an Indemnification Agreement dated as of January 2, 2008
with Joseph W. Hansen (“Indemnitee”) in connection with the appointment of
Indemnitee as Chief Financial Officer of the Company. Indemnitee’s
appointment as Chief Financial Officer is effective as of January 2, 2008.
The
Indemnification Agreement is included as Exhibit 10.2 to this Current Report
on
Form 8-K.
Under
the
Indemnification Agreement, the Company has agreed to indemnify Indemnitee to
the
fullest extent permitted by the Delaware General Corporation Law if (a)
Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any proceeding, or (b) if Indemnitee is a party to or threatened
to
be made a party to or otherwise involved in any proceeding by or in the right
of
the Company to procure a judgment in its favor against any and all expenses
actually and reasonably incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any such
proceeding.
The
indemnification obligations of the Company set forth in the preceding paragraph
are subject to the following exceptions: (a) the Company shall not be
obligated to indemnify Indemnitee on account of any proceeding with respect
to
(i) remuneration paid to Indemnitee if it is determined by final judgment
or other final adjudication that such remuneration was in violation of law;
(ii) a final judgment rendered against Indemnitee for an accounting,
disgorgement or repayment of profits made from the purchase or sale by
Indemnitee of securities of the Company against Indemnitee or in connection
with
a settlement by or on behalf of Indemnitee to the extent it is acknowledged
by
Indemnitee and the Company that such amount paid in settlement resulted from
Indemnitee’s conduct from which Indemnitee received monetary personal profit,
pursuant to the provisions of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or other provisions of any federal, state or local statute
or rules and regulations thereunder; (iii) a final judgment or other final
adjudication that Indemnitee’s conduct was in bad faith, knowingly fraudulent or
deliberately dishonest or constituted willful misconduct (but only to the extent
of such specific determination); or (iv) on account of conduct that is
established by a final judgment as constituting a breach of Indemnitee’s duty of
loyalty to the Company or resulting in any personal profit or advantage to
which
Indemnitee is not legally entitled; (b) the Company shall not be obligated
to
indemnify or advance expenses to Indemnitee with respect to proceedings or
claims initiated or brought by Indemnitee against the Company or its directors,
officers, employees or other agents and not by way of defense, except (i) with
respect to proceedings brought to establish or enforce a right to
indemnification under the Indemnification Agreement or under any other
agreement, provision in the Company’s Bylaws or
Certificate of Incorporation or applicable law, or (ii)
with respect to any other proceeding initiated by Indemnitee that is either
approved by the Board of Directors or Indemnitee’s participation is required by
applicable law; (c) the Company shall not be obligated to indemnify Indemnitee
for any amounts paid in settlement of a proceeding effected without the
Company’s written consent; and (d) the Company shall not be obligated to
indemnify Indemnitee or otherwise act in violation of any undertaking appearing
in and required by the rules and regulations promulgated under the Securities
Act of 1933, as amended (the “Act”), or in any registration statement filed with
the Securities and Exchange Commission under the Act.
“Expenses”
shall be broadly construed and shall include, without limitation, all direct
and
indirect costs of any type or nature whatsoever (including, without limitation,
all attorneys’, witness, or other professional fees and related disbursements,
and other out-of-pocket costs of whatever nature), actually and reasonably
incurred by Indemnitee in connection with the investigation, defense or appeal
of a proceeding or establishing or enforcing a right to indemnification under
the Indemnification Agreement, the Delaware General Corporation Law or
otherwise, and amounts paid in settlement by or on behalf of Indemnitee, but
shall not include any judgments, fines or penalties actually levied against
Indemnitee for such individual’s violations of law. The term “expenses” shall
also include reasonable compensation for time spent by Indemnitee for which
he
is not compensated by the Company or any subsidiary or third party (i) for
any
period during which Indemnitee is not an agent, in the employment of, or
providing services for compensation to, the Company or any subsidiary; and
(ii)
if the rate of compensation and estimated time involved is approved by the
directors of the Company who are not parties to any action with respect to
which
expenses are incurred, for Indemnitee while an agent of, employed by, or
providing services for compensation to, the Company or any
subsidiary.
If
Indemnitee requests the Company to pay the expenses of any proceeding, the
Company, if appropriate, shall be entitled to assume the defense of such
proceeding or to participate to the extent permissible in such proceeding,
with
counsel reasonably acceptable to Indemnitee. Upon assumption of the
defense by the Company, the Company shall not be liable to Indemnitee for any
fees of counsel subsequently incurred by Indemnity with respect to the same
proceeding.
In
addition, the Company is required to advance expenses on behalf of the
Indemnitee in connection with Indemnitee’s defense in any such proceeding;
provided, that the Indemnitee undertakes in writing to repay such amounts to
the
extent that it is ultimately determined that the Indemnitee is not entitled
to
indemnification by the Company.
To
the
extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company
or of any subsidiary, Indemnitee shall be covered by such policy or policies
in
accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy
or
policies.
(d) Not
applicable.
(e) The
Company entered into Amended and Restated Executive Employment Agreements dated
as of December 11, 2007 with each of the following executive officers, each
of
which Amended and Restated Executive Employment Agreements is substantially
the
same as the Executive Employment Agreement described in Item 5.02(c)(3) above
for Joseph W. Hansen, the description of which is incorporated herein by
reference, except as follows:
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Neil
M. Koehler is employed as the Company’s President and Chief Executive
Officer and is to receive a base salary of $300,000 per year and
is
eligible to receive an annual discretionary cash bonus of up to 70%
of his
base salary, to be paid based upon performance criteria set by the
board
of directors and an additional cash bonus not to exceed 50% of the
net
free cash flow of Kinergy Marketing, LLC (defined as revenues of
Kinergy
Marketing, LLC, less Mr. Koehler’s salary and performance bonus, less
capital expenditures and all expenses incurred specific to Kinergy
Marketing, LLC), subject to a maximum of $300,000 in any given year;
provided, that such bonus will be reduced by ten percentage points
each
year, commencing in 2005, such that 2009 will be the final year of
such
bonus at 10% of net free cash flow. Kinergy Marketing, LLC is a
wholly-owned subsidiary of the Company. Mr. Koehler’s Amended
and Restated Executive Employment Agreement does not provide for
any
particular additional equity compensation grants but Mr. Koehler
is
eligible for future equity compensation grants in the sole discretion
of
the compensation committee of the Company’s board of directors. Mr.
Koehler’s Amended and Restated Executive Employment Agreement does not
provide for any relocation assistance. Mr. Koehler’s Amended
and Restated Executive Employment Agreement is included as Exhibit
10.3 to
this Current Report on Form 8-K.
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·
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John
T. Miller is employed as the Company’s Chief Operating Officer and is to
receive a base salary of $250,000 per year and is eligible to receive
an
annual discretionary cash bonus of up to 50% of his base salary,
to be
paid based upon performance criteria set by the board of directors.
Mr.
Miller’s Amended and Restated Executive Employment Agreement does not
provide for any particular additional equity compensation grants
but Mr.
Miller is eligible for future equity compensation grants in the sole
discretion of the compensation committee of the Company’s board of
directors. Mr. Miller’s Amended and Restated Executive Employment
Agreement does not provide for any relocation assistance. Mr.
Miller’s Amended and Restated Executive Employment Agreement is included
as Exhibit 10.4 to this Current Report on Form
8-K.
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·
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Christopher
W. Wright is employed as the Company’s Vice President, General Counsel and
Secretary and is to receive a base salary of $225,000 per year and
is
eligible to receive an annual discretionary cash bonus of up to 50%
of his
base salary, to be paid based upon performance criteria set by the
board
of directors. Mr. Wright’s Amended and Restated Executive Employment
Agreement does not provide for any particular additional equity
compensation grants but Mr. Wright is eligible for future equity
compensation grants in the sole discretion of the compensation committee
of the Company’s board of directors. Mr. Wright’s Amended and Restated
Executive Employment Agreement does not provide for any relocation
assistance. Mr. Wright’s Amended and Restated Executive
Employment Agreement is included as Exhibit 10.5 to this Current
Report on
Form 8-K.
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The
disclosures included in Item 5.02(c)(3) above are incorporated herein by
reference.
Item
9.01.
Financial
Statements and Exhibits.
(a) Financial
statements of businesses acquired.
Not
applicable.
(b) Pro
forma financial information.
Not
applicable.
(c) Shell
company transactions.
Not
applicable.
(d) Exhibits.
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10.1
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Executive
Employment Agreement dated December 11, 2007 by and between Pacific
Ethanol, Inc. and Joseph W. Hansen
(*)
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10.2
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Indemnification
Agreement dated as of January 2, 2008 by and between Pacific Ethanol,
Inc.
and Joseph W. Hansen (*)
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10.3
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Amended
and Restated Executive Employment Agreement dated December 11, 2007
by and
between Pacific Ethanol, Inc. and Neil M. Koehler
(*)
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10.4
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Amended
and Restated Executive Employment Agreement dated December 11, 2007
by and
between Pacific Ethanol, Inc. and John T. Miller
(*)
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10.5
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Amended
and Restated Executive Employment Agreement dated December 11, 2007
by and
between Pacific Ethanol, Inc. and Christopher W. Wright
(*)
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* Filed
herewith.
SIGNATURES
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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Date: December
13, 2007
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PACIFIC
ETHANOL, INC.
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By:
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/s/ CHRISTOPHER
W.
WRIGHT |
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Christopher
W. Wright, |
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Vice
President, General Counsel
& Secretary |
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EXHIBITS
FILED WITH THIS REPORT
| Number |
Description |
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| 10.1 |
Executive
Employment Agreement dated December 11, 2007 by and between Pacific
Ethanol, Inc. and Joseph W. Hansen |
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| 10.2 |
Indemnification
Agreement dated as of January 2, 2008 by and between Pacific Ethanol,
Inc.
and Joseph W. Hansen |
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| 10.3 |
Amended
and Restated Executive Employment Agreement dated December 11, 2007
by and
between Pacific Ethanol, Inc. and Neil M. Koehler |
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| 10.4 |
Amended
and Restated Executive Employment Agreement dated December 11, 2007
by and
between Pacific Ethanol, Inc. and John T. Miller |
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| 10.5 |
Amended
and Restated Executive Employment Agreement dated December 11, 2007
by and
between Pacific Ethanol, Inc. and Christopher W.
Wright |
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