Exhibit 10.7

EXECUTIVE EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the 15th day
of October, 2018 (the “Effective Date”), by and between Global Clean Energy
Holdings, Inc. (“GCEH” or  “Company”), and Richard Palmer (hereinafter,
“Executive,” and collectively with the Company, the “Parties”).  

W I T N E S S E T H:

WHEREAS, the Company and Executive are currently party to an Employment
Agreement between the Parties dated December 31st , 2014. the (“Employment
Agreement”); and

WHEREAS, the Parties wish modify the terms and conditions of Executive’s
employment with the Company and supersede and replace the Employment Agreement
in its entirety; and

WHEREAS, the Company desires to continue to employ Executive, and Executive
desires to continue such employment with the Company under the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties hereto agree as follows:

ARTICLE I

EMPLOYMENT; TERM; DUTIES

1.1Employment.  Pursuant to the terms and conditions hereinafter set forth, the
Company hereby continues to employ Executive as Chief Executive Officer and
President of the Company.  

1.2Term.  Executive’s Term of employment with Company shall be five (5) years
from the date of execution of this agreement.  Company shall not terminate
Executive’s employment for any reason other than those stated in paragraph 3.1
herein, which reasons shall constitute cause.  Any failure of Company to comply
with the express terms of this agreement shall constitute a material breach and
shall entitled Executive to all remedies provided in law or equity. The Term
provided for herein shall not be amended except by a writing executed both by
Company and by Executive. 

1.3Duties and Responsibilities.  Executive shall perform such administrative,
managerial and executive duties for the Company (and its subsidiaries if and
when directed by the Board of Directors of the Company (the “Board”)) as are
prescribed by applicable job specifications for the CEO and the Bylaws of the
Company, such tasks and responsibilities as are customarily vested in and
incidental to such positions, and such other duties, consistent with the
Company’s Bylaws, as may be assigned to him from time to time in writing, by the
Board. 

1.4Exclusive Employment.  Executive shall devote all of Executive’s business
time, attention, skill, and best efforts to the performance of Executive’s
duties under this Agreement and shall not engage in any other business, board
membership or occupation without the prior written consent of the Board (which
shall not be unreasonably withheld), including, without limitation, any activity
that (x) conflicts with the interests of the Company, (y) interferes with the
proper and efficient performance of Executive’s duties for the Company, or
(z) interferes with Executive’s exercise of judgment in the Company’s best
interests. As of the date of this Agreement, Executive has sought and received
the consent of the Board to operate his personal investment company JTBH
Investments, Inc. and the Center  

 

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for Sustainable Energy Farming (CfSEF) so long as such service does not conflict
with any of Executive’s other obligations to Company as set forth in this
Agreement.  Notwithstanding the foregoing, nothing in this Agreement shall
prevent Executive from engaging in activities for Executive’s personal
investments, residing on boards of other companies, religious, charitable,
community or non-for-profit activities that do not conflict or interfere with
his ability to fulfill his duties and responsibilities to the Company

1.5Board of Directors.  The Board shall nominate Executive to be elected to
serve on the Board at each meeting of the Company’s shareholders held to elect
directors, consistent with the provisions of Bylaws and Articles of
Incorporation of the Company, as amended and in effect from time to time.
Executive understands and agrees that his nomination and continued position as a
member of the Company’s Board is expressly conditioned on his continued
employment or ownership of more than 10% of the outstanding shares of Company
Should Executive’s employment as CEO of the Company terminate, and, Executive’s
ownership of outstanding shares of Company fall below 10%, Executive will be
deemed to have resigned his position as a member of the Company’s Board of
Directors and Executive will voluntarily take all steps necessary to effectuate
his resignation from the Company’s Board. 

1.6Indemnification and Insurance.  The Company agrees to indemnify the Executive
for his role as President, CEO and Board Member.  A separate indemnity agreement
will be executed to fulfil this requirement. The Company will also obtain and
maintain directors’ and officers’ liability insurance covering the Executive 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.  The Company
will procure a Directors and Officers Insurance Tail Policy in the amount of no
less than Two Million Dollars ($2,000,000) insuring past actions of the
Company’s director and officers to fully cover the period when previous coverage
lapsed, to provide continuous coverage.  

1.7Covenants of Executive   

1.7.1Best Efforts.  Executive shall report directly to the Board and 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. 

1.7.2Records.  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, in writing, by the Board. 

1.7.3Compliance.  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, or as otherwise recommended by SEC counsel, any exchange
on which the Company’s capital stock or other securities may be traded and any
other applicable governmental entity, agency or organization. 

 

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1.7.4Code 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. 

1.7.5Opportunities.  The 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

2.1Base 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 $300,000.  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.  

2.2Past Compensation.  The Company and Executive hereby acknowledge and agree
that Executive is owed deferred compensation less applicable taxes and
withholdings for past services rendered to the Company. Executive represents
that except as provided in this Section 2.2, as of the Effective Date, Executive
has been paid all compensation and benefits due and owing to Executive by the
Company and Executive has no outstanding claims for compensation, benefits or
other causes of action against the Company up to the Effective Date of this
Agreement. 

2.3Bonus Compensation.   

2.3.1 Annual Bonus - Executive will be eligible to earn an annual bonus (the
“Bonus”) based on Executive’s achievement of certain bonus objectives
(Objectives”) established by the Executive subject to the approval of the
Compensation Committee of the Board (“Compensation Committee”).  It shall be the
joint obligation of the Executive and the Compensation Committee to develop and
agree to written achievable Objectives within the first forty five (45) days of
the applicable bonus year.  Any annual Bonus and any Bonus to be awarded, if
any, will be solely based upon achievement of the written Objectives. The sole
responsibility of the Compensation Committee with regard to Executive’s bonus is
to determine whether the written objectives have been met. The target amount of
the Bonus for any given employment year, assuming that all of the target
milestones are met, shall be an amount equal to fifty percent (50%) of the Base
Salary in effect for the applicable year.  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 determine whether the Objectives have
been satisfied. The amount of the annual bonus, if any, shall be determined by
the Compensation Committee, based upon a pre- established formula based upon
Executive’s achievement of the Objectives. In order to be eligible to receive
the full amount of any annual bonus, Executive must be employed by the Company
on the last day of the year in which the annual bonus is earned. The annual
bonus, if any, shall be paid in the calendar year following the calendar year
for which the annual bonus is due, but in any event no later than March 15 of
such year, provided that if  

 

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the Company’s annual financial statements have not been audited and approved by
the Board prior to such date, and if an audit later determines that the
Objectives were not achieved at the levels on which the bonus was paid to
Executive, then within five (5) business days after such determination,
Executive shall return any overpaid sums to Company. If the Company is unable to
pay any Bonus or other Compensation from the execution date of this Agreement,
the outstanding amount will accrue simple interest at the rate of (five) 5% per
annum..

2.3.2 Equity Incentive Option.  Concurrently with the execution of this
Agreement, the Company shall grant Executive an option (the “Equity Incentive
Option”) to purchase 110 million shares of the Company’s common stock at an
exercise equal to the fair market price of the Company’s common stock on the
Effective Date.  The Equity Incentive Option shall vest according to the
schedule set forth below, and will expire five (5) years after the Effective
Date:

a.When the Company’s Market Capitalization reaches $7 million, the Equity
Incentive Option shall vest with respect to 30 million shares (such shares, the
“First Tranche”) of the Company’s common stock subject thereunder; and 

b.When the Company’s Market Capitalization reaches $15 million, the Equity
Incentive Option shall vest with respect to 40 million shares (such shares, the
“Second Tranche”) of the Company’s common stock subject thereunder; and 

c.When the Company’s Market Capitalization reaches or exceeds $25 million, the
Equity Incentive Option shall vest with respect to the remaining 40 million
shares (such shares, the “Third 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.

2.4Business Expenses.  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.  

2.5Other Benefits.  During Executive’s employment with the Company, Executive
shall be entitled to the following benefits: 

2.5.1Executive 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 

 

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2.5.2Executive shall be entitled to receive coverage 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 

2.5.3Company shall pay for, or on behalf of Executive, or reimburse the
Executive, the full cost of Executive’s and Executive’s family health insurance
plan. Nothing contained herein shall be construed to limit the Company’s ability
to amend, suspend, or terminate any employee benefit plan or policy at any time
to the extent permissible by law without providing Executive notice, and the
right to do so is expressly reserved. 

2.6Vacation.  Executive shall be entitled to four (4) weeks vacation time each
calendar year with full pay. Any unused vacation leave as of December 31st of
the calendar year will be either be paid in cash compensation at the same rate
as the Executives base salary or the unused vacation time can be rolled forward
to the following year(s), at the Executives option. If taken as cash
compensation, such payment shall be made to Executive by January 15th of the
following calendar year. 

2.7Withholding.  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

3.1Termination of Employment 

Executive’s employment pursuant to this Agreement shall terminate on the
earliest to occur of the following:

3.1.1upon the death of Executive; or 

3.1.2upon 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 

3.1.3upon delivery to Executive of written notice of termination by the Company
for Cause; or 

3.1.4upon delivery of written notice from Executive to the Company for Good
Reason. 

3.2Certain Definitions. For purposes of this Agreement, the following terms
shall have the following meanings: 

3.2.1In connection with Paragraph 3.1 herein, “Cause” shall mean any of the
following: 

 

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(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 

(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. 

3.2.2In 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
President and CEO of the Company, or (b) Company materially breaches any term of
this Agreement; provided that, in each case, “Good Reason” shall not exist
unless Executive first provides the Company with written notice of the acts or
omissions constituting the grounds for “Good Reason” within ninety (90) days of
the initial existence of the grounds for “Good Reason” and such acts or
omissions are not cured within thirty (30) days following the Company’s receipt
of such notice.  

3.2.3“Termination Date” shall mean the date on which Executive’s employment with
the Company hereunder is terminated.  

3.3Effect of Termination 

3.3.1If Executive’s employment is terminated  for Good Reason , in addition to
Company’s payment of all outstanding sums due and owing to Executive at the time
of separation, the Company shall pay Executive an amount equal to twelve (12)
months of Executive’s then-current Base Salary in the form of salary
continuation (the “Severance Payments”), plus payment of Executive’s and
Executive’s family medical insurance premium.  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, shall be
conditioned upon Executive’s execution, delivery to the Company, and
non-revocation of the Release of Claims (and the expiration of any revocation
period contained in such Release of Claims) within sixty (60) days following the
date of Executive’s separation from service hereunder. The Release of Claims
shall specifically exclude all unpaid wages (and bonus payments) due and owing
to Executive as of the date of separation. If Executive fails to execute the
Release of Claims in such a timely manner so as to permit any revocation period
to expire prior to the end of such sixty (60) day period, or timely revokes
Executive’s acceptance of such release following its execution, Executive shall
not be entitled to any of the Severance Payments.  Further, to the extent that
any of the Severance Payments constitutes “nonqualified deferred compensation”
for purposes of Section 409A of the Code, any payment of any amount or provision
of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day
following the date of Executive’s separation from service hereunder, but for the
condition on executing the Release of Claims as set forth herein, shall not be
made until the first regularly scheduled payroll date following such sixtieth
(60th) day, after which any remaining Severance Payments shall thereafter be
provided to Executive according to the applicable schedule set forth herein. In
the event Executive executes a Release of Claims pursuant to this paragraph and,
thereafter, Company fails to pay  

 

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any sum due and owing to Executive under this paragraph 3.3.1, then the
Executive shall have the right, but not the obligation to convert outstanding
sums due to Executive to GCEH Corporate stock at the then market price of the
stock.

3.3.2Notwithstanding 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 

(b)any accrued but unused vacation earned by Executive through the Termination
Date pursuant to Section 2.6 hereof,  paid out in accordance with legal
requirements; and 

(c)reimbursement for any business expenses incurred by Executive prior to
Termination Date in accordance with Section 2.4 of this Agreement.  

3.3.3If Executive’s employment is terminated for death or disability Executive
or Executive’s estate shall be entitled to all severance benefits (including,
without limitation, the Severance Payments) under this Agreement as well as
retaining any options vested as of the date of termination.  

 

ARTICLE IV

INVENTIONS; CONFIDENTIAL/TRADE SECRET INFORMATION AND RESTRICTIVE COVENANTS

4.1Inventions.  All processes, technologies and inventions relating to the
business of the Company (and its subsidiaries) (collectively, “Inventions”),
including new contributions, improvements, ideas, discoveries, trademarks and
trade names, conceived, developed, invented, made or found by the Executive,
alone or with others, during his employment by the Company, whether or not
patentable and whether or not conceived, developed, invented, made or found on
the Company’s time or with the use of the Company’s facilities or materials,
shall be the property of the Company and shall be promptly and fully disclosed
by Executive to the Company.  The Executive shall perform all necessary acts
(including, without limitation, executing and delivering any confirmatory
assignments, documents or instruments requested by the Company) to assign or
otherwise to vest title to any such Inventions in the Company and to enable the
Company, at its sole expense, to secure and maintain domestic and/or foreign
patents or any other rights for such Inventions.  

4.2Confidential/Trade Secret Information/Non-Disclosure. 

4.2.1Confidential/Trade Secret Information Defined.  During the course of
Executive’s employment, Executive will have access to various Confidential/Trade
Secret Information of the Company and information developed for the Company.
 For purposes of this Agreement, the term “Confidential/Trade Secret
Information” is information that is not generally known to the public and, as a
result, is of economic benefit to the Company in the conduct of its business,
and the business of the Company’s subsidiaries.  Executive and the Company agree
that the term “Confidential/Trade Secret Information” includes but is not
limited to all information developed or obtained by the Company, including its
affiliates, and predecessors, and comprising the following items, whether or not
such items have been reduced to tangible form (e.g., physical writing, computer
hard drive, disk, tape, etc.):  all methods, techniques, processes, ideas,
research and development, product designs, engineering designs,  

 

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plans, models, production plans, business plans, add-on features, trade names,
service marks, slogans, forms, pricing structures, menus, business forms,
marketing programs and plans, layouts and designs, financial structures,
operational methods and tactics, cost information, the identity of and/or
contractual arrangements with suppliers and/or vendors, accounting procedures,
and any document, record or other information of the Company relating to the
above.  Confidential/Trade Secret Information includes not only information
directly belonging to the Company which existed before the date of this
Agreement, but also information developed by Executive for the Company,
including its subsidiaries, affiliates and predecessors, during the term of
Executive’s employment with the Company.  Confidential/Trade Secret Information
does not include any information which (a) was in the lawful and unrestricted
possession of Executive prior to its disclosure to Executive by the Company, its
subsidiaries, affiliates or predecessors, (b) is or becomes generally available
to the public by lawful acts other than those of Executive after receiving it,
or (c) has been received lawfully and in good faith by Executive from a third
party who is not and has never been an executive of the Company, its
subsidiaries, affiliates or predecessors, and who did not derive it from the
Company, its subsidiaries, affiliates or predecessors.

4.2.2Restriction on Use of Confidential/Trade Secret Information.  Executive
agrees that his/her use of Confidential/Trade Secret Information is subject to
the following restrictions for an indefinite period of time so long as the
Confidential/Trade Secret Information has not become generally known to the
public: 

(a)Non-Disclosure.  Executive agrees that he will not publish or disclose, or
allow to be published or disclosed, Confidential/Trade Secret Information to any
person without the prior written authorization of the Company unless pursuant to
or in connection with Executive’s job duties to the Company under this
Agreement. 

(b)Non-Removal/Surrender.  Executive agrees that he will not remove any
Confidential/Trade Secret Information from the offices of the Company or the
premises of any facility in which the Company is performing services, except
pursuant to his duties under this Agreement.  Executive further agrees that he
shall surrender to the Company all documents and materials in his possession or
control which contain Confidential/Trade Secret Information and which are the
property of the Company upon the termination of this Agreement, and that he
shall not thereafter retain any copies of any such materials. 

4.2.3Prohibition Against Unfair Competition/ Non-Solicitation of Customers.
Executive agrees that at no time after his employment with the Company will he
engage in competition with the Company while making any use of the
Confidential/Trade Secret Information, or otherwise exploit or make use of the
Confidential/Trade Secret Information.  Executive agrees that during the twelve
month period following the Termination Date, he will not directly or indirectly
accept or solicit, in any capacity, the business of any customer of the Company
with whom Executive worked or otherwise had access to the Confidential/Trade
Secret Information pertaining to the Company’s business with such customer
during the last year of Executive’s employment with the Company, or solicit,
directly or indirectly, or encourage any of the Company’s customers or suppliers
to terminate their business relationship with the Company, or otherwise
interfere with such business relationships. 

4.3Non-Solicitation of Employees.  Executive agrees that during the twelve month
period following the Termination Date, he shall not, directly or indirectly,
solicit, directly or indirectly, or otherwise encourage any employees of the
Company to leave the employ of the Company, or solicit, directly or indirectly,
any of the Company’s employees for employment. 

4.4Non-Solicitation During Employment.  During his employment with the Company,
Executive shall not: (a) interfere with the Company’s business relationship with
its customers or  

 

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suppliers, (b) solicit, directly or indirectly, or otherwise encourage any of
the Company’s customers or suppliers to terminate their business relationship
with the Company, or (c) solicit, directly or indirectly, or otherwise encourage
any employees of the Company to leave the employ of the Company, or solicit any
of the Company’s employees for employment.

4.5Conflict of Interest.  During Executive’s employment with the Company,
Executive must not engage in any work, paid or unpaid, that creates an actual
conflict of interest with the Company.  

4.6Breach of Provisions.  If Executive breaches any of the provisions of this
Article IV, or in the event that any such breach is threatened by Executive, in
addition to and without limiting or waiving any other remedies available to the
Company at law or in equity, the Company shall be entitled to immediate
injunctive relief in any court, domestic or foreign, having the capacity to
grant such relief, to restrain any such breach or threatened breach and to
enforce the provisions of this Article IV.   

4.7Reasonable Restrictions.  The Parties acknowledge that the foregoing
restrictions, as well as the duration and the territorial scope thereof as set
forth in this Article IV, are under all of the circumstances reasonable and
necessary for the protection of the Company and its business. 

4.8Special Definition.  For purposes of this Article IV, the term “Company”
shall be deemed to include any subsidiary of the Company. 

ARTICLE V

MISCELLANEOUS

5.1Section 409A.  Notwithstanding anything herein to the contrary, this
Agreement is intended to be interpreted and applied so that the payment of the
benefits set forth herein either shall either be exempt from the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or
shall comply with the requirements of such provision.  Notwithstanding anything
in this Agreement or elsewhere to the contrary, distributions upon termination
of Executive’s employment may only be made upon a “separation from service” as
determined under Section 409A of the Code.  Each payment under this Agreement or
otherwise shall be treated as a separate payment for purposes of Section 409A of
the Code.  In no event may Executive, directly or indirectly, designate the
calendar year of any payment to be made under this Agreement or otherwise which
constitutes a “deferral of compensation” within the meaning of Section 409A of
the Code.  All reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Section 409A of
the Code.  To the extent that any reimbursements pursuant to this Agreement or
otherwise are taxable to Executive, any reimbursement payment due to Executive
shall be paid to Executive on or before the last day of Executive’s taxable year
following the taxable year in which the related expense was incurred; provided,
that, Executive has provided the Company written documentation of such expenses
in a timely fashion and such expenses otherwise satisfy the Company’ expense
reimbursement policies.  Reimbursements pursuant to this Agreement or otherwise
are not subject to liquidation or exchange for another benefit and the amount of
such reimbursements that Executive receives in one taxable year shall not affect
the amount of such reimbursements that Executive receives in any other taxable
year.  Notwithstanding any provision in this Agreement to the contrary, if on
the date of his termination from employment with the Company Executive is deemed
to be a “specified employee” within the meaning of Code Section 409A and the
Final Treasury Regulations using the identification methodology selected by the
Company from time to time, or if none, the default methodology under Code
Section 409A, any payments or benefits due upon a termination of Executive’s
employment under any arrangement that constitutes a “deferral of compensation”
within the meaning of Code Section 409A shall be delayed and paid or provided
(or commence, in the case of installments) on the first payroll date on or  

 

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following the earlier of (i) the date which is six (6) months and one (1) day
after Executive’s termination of employment for any reason other than death, and
(ii) the date of Executive’s death, and any remaining payments and benefits
shall be paid or provided in accordance with the normal payment dates specified
for such payment or benefit.  Notwithstanding any of the foregoing to the
contrary, the Company and its respective officers, directors, employees, or
agents make no guarantee that the terms of this Agreement as written comply
with, or are exempt from, the provisions of Code Section 409A, and none of the
foregoing shall have any liability for the failure of the terms of this
Agreement as written to comply with, or be exempt from, the provisions of Code
Section 409A.

5.2Binding Effect; Assignment.  This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective legal representatives, heirs,
distributees, successors and assigns.  Executive may not assign any of his
rights and obligations under this Agreement. The Company may assign its rights
and obligations under this Agreement to any successor entity.  

5.3Notices.  Any notice provided for herein shall be in writing and shall be
deemed to have been given or made (a) when personally delivered or (b) when sent
by telecopier and confirmed within 48 hours by letter mailed or delivered to the
party to be notified at its or his/hers address set forth herein; or three (3)
days after being sent by registered or certified mail, return receipt requested,
(or by equivalent currier with delivery documentation such as FEDEX or UPS) to
the address of the other party set forth or to such other address as may be
specified by notice given in accordance with this section 5.2:
 

If to the Company:

Global Clean Energy Holdings, Inc.

2790 Skypark Drive, Suite 105

Torrance, CA 90505

Attention:  David R. Walker

 

With a copy (which shall not constitute notice) to:  

 

Troy & Gould

1801 Century Park East, 26th Floor

Los Angeles, CA 90067

Attention: Istvan Benko, Esq.

Telecopy No.:  (310) 789-1490

 

If to Executive:

 

Richard Palmer

3806 Newton Street

Torrance, CA  90505

Telephone:  (310) 373-2603

Facsimile:  (310) 373-2603

 

With a copy (which shall not constitute notice) to:  

 

Eileen Darroll, Esq.

PO Box 1293

Torrance, CA 90505

Tele:   (310) 480-3124

 

 

 

5.4Severability.  If any provision of this Agreement, or portion thereof, shall
be held invalid or unenforceable by a court of competent jurisdiction, such
invalidity or unenforceability shall attach only to such provision or portion
thereof, and shall not in any manner affect or render invalid or unenforceable
any other provision of this Agreement or portion thereof, and this Agreement
shall be carried out as if any such invalid or unenforceable provision or
portion thereof were not contained herein.  In addition, any  

 

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such invalid or unenforceable provision or portion thereof shall be deemed,
without further action on the part of the parties hereto, modified, amended or
limited to the extent necessary to render the same valid and enforceable.

5.5Waiver.  No waiver by a party hereto of a breach or default hereunder by the
other party shall be considered valid, unless expressed in a writing signed by
such first party, and no such waiver shall be deemed a waiver of any subsequent
breach or default of the same or any other nature. 

5.6Entire Agreement.  This Agreement sets forth the entire agreement between the
Parties with respect to the subject matter hereof, and supersedes any and all
prior agreements between the Company and Executive, whether written or oral,
relating to any or all matters covered by and contained or otherwise dealt with
in this Agreement.  This Agreement does not constitute a commitment of the
Company with regard to Executive’s employment, express or implied, other than to
the extent expressly provided for herein. 

5.7Amendment.  No modification, change or amendment of this Agreement or any of
its provisions shall be valid, unless in writing and signed by the Parties. 

5.8Authority.  The Parties each represent and warrant that it/he has the power,
authority and right to enter into this Agreement and to carry out and perform
the terms, covenants and conditions hereof. 

5.9Attorneys’ Fees.  If either party hereto commences an arbitration or other
action against the other party to enforce any of the terms hereof or because of
the breach by such other party of any of the terms hereof, the prevailing party
shall be entitled, in addition to any other relief granted, to all actual
out-of-pocket costs and expenses incurred by such prevailing party in connection
with such action, including, without limitation, all reasonable attorneys’ fees,
and a right to such costs and expenses shall be deemed to have accrued upon the
commencement of such action and shall be enforceable whether or not such action
is prosecuted to judgment. 

5.10Captions.  The captions, headings and titles of the sections of this
Agreement are inserted merely for convenience and ease of reference and shall
not affect or modify the meaning of any of the terms, covenants or conditions of
this Agreement. 

5.11Governing Law.  This Agreement, and all of the rights and obligations of the
Parties in connection with the employment relationship established hereby, shall
be governed by and construed in accordance with the substantive laws of the
State of California without giving effect to principles relating to conflicts of
law. 

5.12Arbitration. 

5.12.1Scope.  To the fullest extent permitted by law, Executive and the Company
agree to the binding arbitration of any and all controversies, claims or
disputes between them arising out of or in any way related to this Agreement,
the employment relationship between the Company and Executive and any disputes
upon termination of employment, including but not limited to breach of contract,
tort, , constitutional claims; and any claims for violation of any local, state
or federal law, statute, regulation or ordinance or common law, excluding any
claim for wages under the California Labor Code ,or any claim relating to the
Company’s failure to pay wages.  For the purpose of this agreement to arbitrate,
references to “Company” include all subsidiaries or related entities and their
respective executives, supervisors, officers, directors, agents, pension or
benefit plans, pension or benefit plan sponsors, fiduciaries, administrators,
affiliates and all successors and assigns of any of them, and this agreement to
arbitrate  

 

11

 

shall only apply to them to the extent Executive’s claims arise out of or relate
to their actions on behalf of the Company.

5.12.2Arbitration Procedure.  To commence any such arbitration proceeding, the
party commencing the arbitration must provide the other party with written
notice of any and all claims forming the basis of such right in sufficient
detail to inform the other party of the substance of such claims.  In no event
shall this notice for arbitration be made after the date when institution of
legal or equitable proceedings based on such claims would be barred by the
applicable statute of limitations.  The arbitration will be conducted in Los
Angeles, California, by a single neutral arbitrator and in accordance with the
then-current rules for resolution of employment disputes for Judicial
Arbitration and Mediation Services (“JAMS”). The Arbitrator is to be selected by
the mutual agreement of the Parties.  If the Parties cannot agree, the Superior
Court will select the arbitrator.  The parties are entitled to representation by
an attorney or other representative of their choosing.  The arbitrator shall
have the power to enter any award that could be entered by a judge of the trial
court of the State of California, and only such power, and shall follow the law.
 The award shall be binding, and the Parties agree to abide by and perform any
award rendered by the arbitrator.  The arbitrator shall issue the award in
writing, and therein state the essential findings and conclusions on which the
award is based.  Judgment on the award may be entered in any court having
jurisdiction thereof.  In the event either the Company or Executive initiates
the arbitration proceeding, Company shall bear the total cost of the arbitration
filing, hearing fees, and the entire cost of the arbitrator.   

5.13Survival.  The termination of Executive’s employment with the Company
pursuant to the provisions of this Agreement shall not affect Executive’s
obligations to the Company hereunder which by the nature thereof are intended to
survive any such termination, including, without limitation, Executive’s
obligations under Article IV of this Agreement. 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 

GLOBAL CLEAN ENERGY HOLDINGS, INC.,

 

 

By: /s/ DAVID R. WALKER  

Name:  David R. Walker

Title:  Chairman of the Board

 

 

 

 

 

 

 

/s/ RICHARD PALMER  

Richard Palmer

 

 

 

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EXHIBIT A

 

CODE OF CONDUCT

 

Honesty and Integrity

Our business is based on mutual trust, honesty and integrity in all of our
affairs, both internally and externally.  This philosophy must be respected at
all times.  Each of us must be truthful in our business dealings with each
other, and with our auditors, legal counsel, regulators and loan review and
compliance staffs.  Illegal, dishonest and fraudulent acts are grounds for
termination.  Making false materials statements or otherwise material misleading
internal or external auditors, attorneys, regulators or loan review and
compliance personnel is prohibited.  You must never intentionally withhold or
fail to communicate material information that is requested in connection with an
appropriately authorized investigation or review.  Any concealment of material
information is a violation of your employment agreement, which may result in
termination of your employment with the Company.

 

Protecting Corporate Assets

You are responsible for safeguarding the assets of the Company.  Company assets
must not be used for personal benefit.  The Company’s assets include, but are
not limited to, all of its properties, including intellectual properties,
business information, cash, and securities.  Misappropriation of Company assets
is a violation of your employment agreement, which may result in termination of
your employment with the Company.

 

Accuracy of Company Records and Reports

The Company is committed to maintaining records, data and information that are
materially accurate and complete so as to permit the Company to make timely and
accurate disclosures to its regulators and to its shareholders.  You are
responsible for the integrity of the information, reports and records under your
control.  Records must be maintained in sufficient detail so as to reflect
accurately the Company’s transactions and activities.  Company’s financial
statements must be prepared in accordance with generally accepted accounting
principles (“GAAP”) and fairly represent, in all material respects, the
financial condition and results of the Company.  To accomplish full, fair, and
accurate reporting, you must use your best efforts to ensure that financial
reports issued by the Company are timely, accurate, understandable, and
complete.

 

Compliance With Laws

The Company’s activities shall be in full compliance with all applicable laws
and regulations.  When such laws or regulations are ambiguous or difficult to
interpret, you should seek advice from the Company’s outside legal counsel.

 

Conflicts Of Interest

You must conduct your private, business, and personal activities in a manner
that avoids conflict with your ability to act solely in the interests of the
Company.  A conflict of interest may arise if you have interests of any nature
that compromise your ability to act objectively and in the best interests of the
Company.  Conflicts may arise directly or through your family members or through
business or other entities in which you or your family members have an interest.
   In situations where a conflict is present, you must seek Board approval for
the perceived conflict or you must disqualify yourself from direct involvement
with the transaction or relationship between that person and the Company where
the conflict exists, except as set forth in Section 1.6 herein.  

 

Business Ventures with Customers

You may not enter into or participate with the Company’s customers in business
ventures without the approval of a majority of the Governance & Compliance
Committee of the Board.

 

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Acting as a Fiduciary

Officers may not assume the responsibility of executor, administrator, trustee,
guardian, custodian, attorney-in-fact under a power of attorney, or any other
fiduciary capacity (except with respect to matters involving direct family
relationships) without the approval of a majority of the Governance & Compliance
Committee of the Board.

 

Company Opportunities

You must not take for yourself any opportunity that belongs to the Company.
 Whenever the Company has been seeking a particular business opportunity, or the
opportunity has been offered to the Company, or the Company’s funds, facilities
or personnel have been used in developing the opportunity, that opportunity
rightfully belongs to the Company and not to its employees.

 

Investments in Customers or Suppliers

Because investments are an area in which conflicts of interest can very easily
develop, you should obtain prior approval from a majority of the Governance &
Compliance Committee of the Board before investing directly or indirectly in the
business of a customer or supplier of the Company, other than a Permitted Public
Company Interest, as defined above.  Under no circumstances should you acquire
an equity interest in a company that is a customer or supplier at a price which
is more favorable than the price offered to the general public.  If you own a
direct or indirect interest in a business or other entity that becomes a
customer or supplier, you should notify a majority of the Governance &
Compliance Committee of the Board of the Board as soon as the underlying facts
are known to you.

 

Business Expenses

You must have all business-related expenses approved by the Chairman of the
Board of Directors and the Chief Financial Officer of the Company.  You must
carefully observe expense account regulations and guidelines.  Falsification of
an expense account is considered to be a misappropriation of corporate funds and
may constitute grounds for disciplinary action, and depending on the severity,
dismissal.

 

Bequests from Customers

You may not accept a bequest or legacy from a customer, unless the customer is
your immediate family member.  However, there may be an occasional instance when
a bequest from a non-relative customer is based upon a relationship other than
the normal business relationship, which arises between you and a customer.  In
such a situation, full consideration by a majority of disinterested members of
the Governance & Compliance Committee of the Board, will be given to approving
receipt of the bequest.

 

Gifts from Customers

You shall not solicit or accept for yourself, or for a third party, anything of
material value in return for, or in connection with, any business, service, or
activity of the Company.  You shall not accept a gift in circumstances where his
or her business judgment was influenced by such gift.  You shall not allow an
immediate family member or business associate to accept a gift, services, loans
or preferential treatment in exchange for a past, current, or future business
relationship with the Company.

 

Disclosure of Potential Conflicts of Interest

You shall immediately disclose to a majority of disinterested members of the
Governance & Compliance Committee of the Board all situations that possess a
potential for conflict of interest.

 

Political Donations

You are prohibited from making any contribution to political candidates on
behalf of the Company, without the approval of the Board of Directors.  You also
may not make any contributions of anything of value in connection with any
federal, state or local candidate’s election without the approval of the Board

 

14

 

of Directors.  The Company makes, and discloses fully, contributions in state
and local elections for the purpose of supporting ballot propositions that are
in the interests of the Company and its several constituencies.  Any proposal
for political contributions on behalf of the Company or a group of Company
employees should be referred for approval to a majority of disinterested members
of the Governance & Compliance Committee of the Board.

 

Confidential Information

You shall not use confidential and nonpublic information in any manner for
personal advantage or to provide advantage to others.

 

Insider Trading

You must at all times comply with all laws and regulations concerning insider
trading.  In general, you are prohibited by applicable law from trading in the
securities of any company while in possession of material, nonpublic information
(also known as “inside information”) regarding that company.  This prohibition
applies to the Company’s securities as well as to the securities of other
companies, including the Company’s customers and suppliers, and to transactions
for any account of the Company, client account or personal account.  It is also
illegal to “tip” or knowingly pass on inside information to any other person if
you know or reasonably suspect that the person receiving such information from
you will misuse such information by trading in securities or passing such
information on further, even if you do not receive any monetary benefit.

 

Investment Prudence

You must not use your position at the Company to obtain leverage with respect to
any investment, including investments in publicly traded securities, and should
not accept preferential treatment of any kind based on your position with the
Company in connection with your investments.

 

Cross - Selling Services/Tying Restrictions.

“Tying” arrangements, whereby customers are required to purchase or provide one
product or service as a condition for another being made available, are unlawful
in certain instances.  You should consult the Company’s outside legal counsel
for advice on tying restrictions.  The Company prohibits any such unlawful
requirements.

Anti - Competitive Practices.

The Company is subject to complex laws (known as “antitrust laws”) designed to
preserve competition among enterprises and to protect consumers from unfair
business arrangements and practices.  You should avoid discussion of
competitively sensitive topics, such as prices, pricing policies, costs and
marketing strategies (except as reasonably required by your job duties).

Anti – Money Laundering Compliance.

Money laundering is the process of converting illegal proceeds so that funds are
made to appear legitimate, and it is not limited to cash transactions.  The
Company is obligated by law to join with governments, international
organizations and members of the financial services industry to help prevent
money laundering.  You must follow all of anti-money laundering policies and
procedures.

Nondiscrimination.

The Company endeavors to make all decisions responsibly, constructively and
equitably without bias as to race, color, creed, religion, national origin, sex,
marital status, age, veteran’s status or membership in any other protected class
or receipt of public assistance.  Failure to do so is against Company policy.

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Misleading Statements.

You shall not make knowingly false or misleading remarks about suppliers,
customers, or competitors, or their products and services.

Corporate Gifts to Others.

You must use care in connection with gifts to others.  If a gift could be viewed
as consideration for business, you should not make the gift.

Entertainment.

Legitimate entertainment of reasonable value is an accepted practice to the
extent that it meets all standards of ethical business conduct and involves no
element of concealment.

Other Remuneration.

In the conduct of the Company’s business, no bribes, kickbacks or similar
remuneration or consideration of any kind are to be given or offered to any
individual or organization for any reason whatsoever.

Equal Employment Opportunity.

The Company is an equal opportunity employer and you are expected to comply with
all laws concerning discriminatory employment practices.  Advancement at the
Company is based on talent and performance.  In addition, retaliation against
individuals for raising claims of discrimination is prohibited.

Harassment and Intimidation.

The Company prohibits sexual or any other kind of harassment or intimidation by
any Employee, Officer, or Director of the Company.  Harassment, whether based on
a person’s race, gender, religion, national origin, disability, sexual
orientation, or socioeconomic status, is completely inconsistent with our
tradition of providing a respectful, professional workplace.  You must never use
company systems to transmit or receive electronic images or text of a sexual
nature or containing ethnic slurs, racial epithets or any other material of a
harassing, offensive or lewd nature.

 

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