Item
2.02. Results
of Operations and Financial Condition.
On
May 9,
2007, Pacific Ethanol, Inc. issued a press release announcing certain results
of
operations for the three months ended March 31, 2007. A copy of the press
release is furnished (not filed) as Exhibit 99.1 to this Current Report
on Form
8-K and is incorporated herein by reference.
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 will cease to be Acting Chief Financial Officer effective as of
May 29,
2007.
(c) (1) On
May 4,
2007, Douglas Jeffries was appointed as Chief Financial Officer of the
Company
effective as of May 29, 2007.
(2) Douglas
Jeffries,
51, was
appointed as Chief Financial Officer of Pacific Ethanol effective as of
May 29,
2007. Before joining Pacific Ethanol, Mr. Jeffries was employed at
eBay Inc. from December 2003 to May 2007, most recently as Vice President
and Chief Accounting Officer with responsibility for controllership and
financial reporting, tax planning and compliance, treasury operations,
risk
management, strategic sourcing and financial systems. Prior to joining
eBay, Mr. Jeffries was Vice President and Corporate Controller of GenCorp
Inc.
from July 2002 to December 2003 and prior thereto he was Chief Operating
Officer
of Red Herring Communications, Inc. from July 1999 to May 2002. Mr.
Jeffries began his career at Price Waterhouse and is a certified public
accountant. He holds an MBA from the University of Southern California and
a B.S. degree in Accounting from California State University,
Chico.
(3) (A)
Employment
Agreement dated May 4, 2007 between Pacific Ethanol, Inc. and Douglas
Jeffries
On
May 4,
2007, Pacific Ethanol, Inc. (the “Company”) entered into an Executive Employment
Agreement with Douglas Jeffries (“Executive”) in connection with the appointment
of Mr. Jeffries as Chief Financial Officer of the Company. Mr. Jeffries’
appointment as Chief Financial Officer will be effective as of May 29,
2007. 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 $240,000 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 57,500 shares of the Company’s common stock
pursuant to a restricted stock purchase agreement that will vest as to
7,500
shares immediately and as to an additional 10,000 shares on each October
4,
beginning October 4, 2007 and continuing thereafter for four additional
years,
provided that Executive remains employed by the Company.
The
Executive Employment Agreement provides for at-will employment.
Upon
termination by the Company without cause, resignation by Executive for
good
reason or upon the disability of Executive, Executive is entitled to receive
(a)
severance equal to twelve months of base salary, (b) continued health insurance
coverage for twelve months and, (c) 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 (x) severance equal to eighteen months of base salary, (y) continued
health
insurance coverage for eighteen months and (z) accelerated vesting of 100%
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.
The
term
“for good reason” is defined in the Executive Employment Agreement as (i) the
assignment to Executive of any duties or responsibilities which 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 51% or more 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 May 29, 2007 between Pacific Ethanol, Inc. and Douglas
Jeffries
On
May 4,
2007, the Company entered into an Indemnification Agreement, effective
as of May
29, 2007, with Douglas Jeffries (“Indemnitee”) in connection with the
appointment of Mr. Jeffries as Chief Financial Officer of the Company.
Mr.
Jeffries’ appointment as Chief Financial Officer will be effective as of May 29,
2007. 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
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.
|
None.
|
|
(b) |
Pro
Forma Financial Information.
|
None.
|
|
10.1 |
Executive
Employment Agreement dated as of May 4, 2007 by and between Pacific
Ethanol, Inc. and Douglas Jeffries
(*)
|
|
|
10.2 |
Indemnification
Agreement dated as of May 29, 2007 between Pacific Ethanol, Inc.
and
Douglas Jeffries (*)
|
|
|
99.1 |
Press
Release dated May 9, 2007 (*)
|
_______________
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.
|
Date:
May 9, 2007
|
PACIFIC
ETHANOL, INC.
|
By:
/S/
CHRISTOPHER W. WRIGHT
Christopher
W. Wright,
Vice
President, General Counsel & Secretary
EXHIBITS
FILED WITH THIS REPORT
|
|
10.1 |
Executive
Employment Agreement dated as of May 4, 2007 by and between Pacific
Ethanol, Inc. and Douglas Jeffries
|
|
|
10.2 |
Indemnification
Agreement dated as of May 29, 2007 between Pacific Ethanol, Inc.
and
Douglas Jeffries
|
|
|
99.1 |
Press
Release dated May 9, 2007
|