Back to 8-K [rbcf-8k_22207.htm]

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the
1st day of February, 2007, by and between Rubicon Financial Incorporated, a
Delaware corporation (“Rubicon”), and Michael Sederoff (“Sederoff”).

W I T N E S S E T H:

WHEREAS, the officers, managers and/or directors of Rubicon are of the opinion
that Sederoff has education, experience and/or expertise which is of value to
Rubicon and its stockholders, and

WHEREAS, Rubicon and Sederoff desire to enter into this Employment Agreement,
pursuant to which Sederoff shall be employed by Rubicon, to set forth the
respective rights, duties and obligations of the parties hereto.

NOW THEREFORE, in consideration of the promises and covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
the parties hereto acknowledge, Rubicon and Sederoff agree as follows:

 

1.

EMPLOYMENT. Rubicon hereby agrees to employ Sederoff and Sederoff hereby accepts
such employment, upon the terms and conditions hereinafter set forth.

 

2.

TERM. For purposes of this Agreement, “Term” shall mean the original term (as
defined in Section 2.1 below), if Renewal Term is initiated, then “Term” shall
mean the renewal term period.

 

2.1

Original Term: The Term of this Agreement shall commence on February 1, 2007 and
expire on January 31, 2008, unless sooner terminated pursuant to the terms and
provisions herein stated.

 

2.2

Renewal: At any time prior to the expiration of the Original Term, as stated
above, Rubicon and Sederoff may, by mutual written agreement, extend Sederoff’s
employment under the terms of this Agreement for such additional periods as they
may agree.

 

3.

COMPENSATION.

 

3.1

Salary:Rubicon shall pay Sederoff (i) a base salary of Five Thousand Dollars
($5,000) per month from February 1, 2007 through May 31, 2007 and (ii) a base
salary of Seven Thousand Dollars ($7,000) per month commencing on June 1, 2007
through January 31, 2008. Such salary shall be payable in accordance with
Rubicon’s normal policies but in no event less often than semi-monthly (the
“Salary”).

 

3.2

Restricted Stock Grant: Rubicon shall issue to Sederoff a signing bonus of Fifty
Thousand (50,000) shares of Rubicon’s restricted common stock, which shall be
issued as follows:

 

3.2.1

Twenty-Five Thousand (25,000) shares shall be issued within five (5) days of the
execution of this Agreement; and

 

3.2.2

Twenty-Five Thousand (25,000) shares shall be issued on January 31, 2008,
assuming Sederoff remains employed by Rubicon for the entire Term of this
Agreement. (i.e. – should Sederoff’s employment be terminated, in accordance
with Section 6 hereof, the second issuance shall be void and Sederoff will only
retain the initial Twenty-Five Thousand (25,000) shares). However, shares shall
be earned and accrue on a pro-rata basis and shall be issued accordingly.

The certificates evidencing such shares shall contain the following restrictive
legend:

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “ACT”), OR THE SECURITIES
LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD,

 

1

 

--------------------------------------------------------------------------------

TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY MANNER
UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND THE SECURITIES LAWS OR ANY
APPLICABLE JURISDICTIONS OR UNLESS PURSUANT TO ANY EXEMPTION THEREFROM.

 

3.3

Stock Option Plan/Stock Purchase Plan: Sederoff shall be eligible to participate
in Rubicon’s Stock Option Plans and Stock Purchase Plans, if any, during the
term of employment.

 

4.

SEDEROFF BENEFITS.

 

4.1

General Benefits: Sederoff shall be entitled to receive or participate in all
benefit plans and programs of Rubicon currently existing or hereafter made
available to executives or senior management of Rubicon, including but not
limited to, dental and medical insurance, pension and profit sharing plans,
401(k) plans, incentive savings plans, stock option plans, group life insurance,
and other fringe benefits.

 

4.2

Vacation: Sederoff shall be entitled during each twelve (12) month period during
the Term of this Agreement to a vacation of two (2) weeks during which time
Sederoff’s compensation will be paid in full. Unused days of vacation will be
compensated in accordance with Rubicon’s policy as established by Rubicon from
time to time. Sederoff may take the vacation periods at any time during the year
as long as Sederoff schedules time off as to not create hardship on Rubicon. In
addition, Sederoff shall have such other days off as shall be determined by
Rubicon and shall be entitled to paid sick leave and paid holidays in accordance
with Rubicon’s policy.

 

5.

DUTIES/SERVICE

 

5.1

Position: Sederoff is employed as Chief Operating Officer and Chief Financial
Officer and shall perform such services and duties as are defined in Addendum A,
Job Description, attached hereto, and as are normally associated with such
position, subject to the direction, supervision and rules and regulations of
Rubicon.

 

5.2

Place of Employment: The place of Sederoff’s employment and the performance of
Sederoff’s duties will be at Rubicon’s corporate headquarters or at such
location as agreed upon by Rubicon and Sederoff.

 

5.3

Extent of Services: Sederoff shall at all times and to the best of his ability
perform his duties and obligations under this Agreement in a reasonable manner
consistent with the interests of Rubicon. The precise services of Sederoff may
be extended or curtailed, from time to time at the discretion of Rubicon, and
Sederoff agrees to render such different and/or additional services of a similar
nature as may be assigned from time to time by Rubicon.

5.3.1       Except as otherwise agreed by Rubicon and Sederoff in writing, it is
expressly understood and agreed that Sederoff’s employment is fulltime and of a
critical nature to the success of Rubicon and is therefore exclusive. Sederoff
may not be employed by other entities or otherwise perform duties and
undertakings on behalf of others or for his own interest unless pre-approved by
the Board of Directors. Rubicon acknowledges that Sederoff presently, or may in
the future, serve on the Board of Directors of other companies and such action
shall not be a breach of this section; provided, however, that such companies
either: (a) are listed on Addendum B, attached hereto; or (b) do not compete
with Rubicon or interfere with the performance of Sederoff’s duties pursuant to
this Agreement, as determined in the reasonable judgment of the Board of
Directors. Unless otherwise agreed by Rubicon and Sederoff in writing,
employment of Sederoff at less than full time shall not affect the vesting of
the Option Shares pursuant to this Agreement.

 

 

2

 

 

--------------------------------------------------------------------------------

5.3.2        Additionally, Rubicon recognizes that Sederoff has, or may have in
the future, non-passive equity positions in other companies, which either: (a)
are listed on Addendum B attached hereto; or (b) do not compete with Rubicon in
the reasonable judgment of the Board of Directors. Rubicon recognizes that such
equity positions may occasionally require some limited attention from Sederoff
during normal business hours. However, Sederoff agrees that if such time is
considered excessive by the Board of Directors, Sederoff shall be so advised and
noticed by Rubicon and Sederoff shall be required to make appropriate
adjustments to ensure his duties and obligations under this Agreement are
fulfilled.

 

6.

TERMINATION. The Term of this Agreement shall end upon its expiration pursuant
to Section 2 hereof, provided that this Agreement shall terminate prior to such
date: (a) upon Sederoff’s resignation, death or permanent disability or
incapacity; or (b) by Rubicon at any time for “Cause” (as defined in Section 6.4
below) or without Cause.

 

6.1

BY RESIGNATION. If Sederoff resigns with “Good Reason” (as defined below), this
Agreement shall terminate but, Sederoff shall continue to receive, for a
one-month period, Sederoff’s Salary payable in periodic installments on
Rubicon’s regular paydays, at the rate then in effect. For purposes of this
Agreement, “Good Reason” shall mean: (i) the assignment to Sederoff of duties
substantially and materially inconsistent with the position and nature of
Sederoff’s employment, the substantial and material reduction of the duties of
Sederoff which is inconsistent with the position and nature of Sederoff’s
employment, or the change of Sederoff’s title indicating a substantial and
material change in the position and nature of Sederoff’s employment; or (ii) a
reduction in compensation and benefits that would substantially diminish the
aggregate value of Sederoff’s compensation and benefits without Sederoff’s
written consent. If Sederoff resigns without Good Reason, Sederoff shall be
entitled to receive Sederoff’s Salary only through the date of such resignation.

 

6.2

BY REASON OF INCAPACITY OR DISABILITY: If Sederoff becomes so incapacitated by
reason of accident, illness, or other disability that Sederoff is unable to
carry on substantially all of the normal duties and obligations of Sederoff
under this Agreement for a continuous period of thirty (30) days (the
“Incapacity Period”), this Agreement shall terminate For purposes of the
foregoing, Sederoff’s permanent disability or incapacity shall be determined in
accordance with Rubicon’s disability insurance policy, if such a policy is then
in effect, or if no such policy is then in effect, such permanent disability or
incapacity shall be determined by Rubicon’s Board of Directors in its good faith
judgment based upon Sederoff’s inability to perform normal and reasonable duties
and obligations.

 

6.3

BY REASON OF DEATH: If Sederoff dies during the Term of this Agreement, Rubicon
shall pay to the estate of Sederoff any earned Salary only through the date of
Sederoff’s death. Other death benefits, if any, will be determined in accordance
with the terms of Rubicon’s benefit plans and programs.

 

6.4

FOR CAUSE. If the Term of this Agreement is terminated by Rubicon for Cause
Sederoff shall be entitled to receive Sederoff’s Salary only through the date of
termination. However, if a dispute arises between Rubicon and Sederoff that is
not resolved within sixty (60) days and neither party initiates arbitration
proceedings pursuant to Section 11.8, Rubicon shall have the option to pay
Sederoff the lump sum of two (2) months base of Sederoff’s Salary at the time of
termination (the “Severance Payment”) rather than Sederoff’s Salary through the
date of termination. Such determination to pay the Severance Payment in lieu of
Sederoff’s Salary shall be made in the reasonable judgment of the Board of
Directors. If Rubicon elects to make a payment to Sederoff of the Severance
Payment, the parties hereto agree that such payment and the payment provided by
Section 6.6 shall be Sederoff’s complete and exclusive remedy for such a
termination for Cause. For purposes of this Agreement, “Cause” shall mean: (i)

 

3

 

 

 

--------------------------------------------------------------------------------

any act of dishonesty or fraud with respect to Rubicon; (ii) the commission by
Sederoff of a felony, a crime involving moral turpitude or other act causing
material harm to Rubicon’s standing and reputation; (iii) Sederoff’s continued
material failure to perform Sederoff’s duties to Rubicon after ten (10) days’
written notice thereof to Sederoff; or (iv) gross negligence or willful
misconduct by Sederoff with respect to Rubicon. Rubicon shall provide Sederoff,
within ten (10) days of becoming aware of a “For Cause” breach, written notice,
which shall include written documentation, if any, of the “For Cause” breach, as
defined above. Upon receipt of the written notice, Sederoff shall have ten (10)
days to respond to Rubicon’s notice and attempt to cure or resolve the “For
Cause” breach.

 

6.5

WITHOUT CAUSE. If, during the Term of this Agreement, Rubicon terminates
Sederoff’s employment without Cause, Sederoff shall be entitled to receive, for
a two-month period, Sederoff’s Base Salary, payable in periodic installments on
Rubicon’s regular paydays, at the rate then in effect.

 

7.

Trade Secrets and Confidentiality:

 

7.1

Nondisclosure. Without the prior written consent of Rubicon, Sederoff shall not,
at any time, either during or after the term of this Agreement, directly or
indirectly, divulge or disclose to any person, firm, association, or
corporation, or use for Sederoff’s own benefit, gain, or otherwise, any customer
lists, plans, products, data, results of tests and data, or any other trade
secrets or confidential materials or like information (collectively referred to
as the “Confidential Information”) of Rubicon and/or its Affiliates, as
hereinafter defined, it being the intent of Rubicon, with which intent Sederoff
hereby agrees, to restrict Sederoff from disseminating or using any like
information that is unpublished or not readily available to the general public.

 

7.1.1

Definition of Affiliate. For purposes of this Agreement, the term “Affiliate”
shall mean any entity, individual, firm, or corporation, directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common
control with Rubicon.

 

7.2

Return of Property. Upon the termination of this Agreement, Sederoff shall
deliver to Rubicon all lists, books, records, data, and other information
(including all copies thereof in whatever form or media) of every kind relating
to or connected with Rubicon or its Affiliates and their activities, business
and customers.

 

7.3

Notice of Compelled Disclosure. If, at any time, Sederoff becomes legally
compelled (by deposition, interrogatory, request for documents, subpoena, civil
investigative demand, or similar process or otherwise) to disclose any of the
Confidential Information, Sederoff shall provide Rubicon with prompt, prior
written notice of such requirement so that Rubicon may seek a protective order
or other appropriate remedy and/or waive compliance with the terms of this
Agreement. In the event that such protective order or other remedy is not
obtained, that Rubicon waives compliance with the provisions hereof, Sederoff
agrees to furnish only that portion of the Confidential Information which
Sederoff is advised by written opinion of counsel is legally required and
exercise Sederoff’s best efforts to obtain assurance that confidential treatment
will be accorded such Confidential Information. In any event, Sederoff shall not
oppose action by Rubicon to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded the Confidential
Information.

 

7.4

Assurance of Compliance. Sederoff agrees to represent to Rubicon, in writing, at
any time that Rubicon so request, that Sederoff has complied with the provisions
of this section, or any other section of this Agreement.

 

8.

RETURN OF RUBICON PROPERTY: Sederoff agrees that upon any termination of his
employment, Sederoff shall return to Rubicon within a reasonable time not to
exceed two (2)

 

4

 

 

--------------------------------------------------------------------------------

weeks, any of Rubicon’s property in his possession or under his control,
including but not limited to, computer/office automation equipment, records and
names, addresses, and other information with regard to customers or potential
customers of Rubicon with whom Sederoff has had contact or done business.

 

9.

RELATIONSHIP OF PARTIES: The parties intend that this Agreement create an
Employee-Employer relationship between the parties.

 

10.

NOTICES: All notices, required and demands and other communications hereunder
must be in writing and shall be deemed to have been duly given when personally
delivered or when placed in the United States Mail and forwarded by Registered
or Certified Mail, Return Receipt Requested, postage prepaid, or when forwarded
via reputable overnight carrier, addressed to the party to whom such notices is
being given at the following address:

 

As to Rubicon:

Rubicon Financial Incorporated

19200 Von Karman, Suite 350

Irvine, CA 92612

Attn: Chief Executive Officer

 

 

 

As to Sederoff:

Michael Sederoff

5 Summerwind

Newport Beach, CA 92663-2309

Address Change: Any party may change the address(es) at which notices to it or
him, as the case may be, are to be sent by giving the notice of such change to
the other parties in accordance with this Section 10.

11.

MISCELLANEOUS:

 

11.1

Entire Agreement. This Agreement and the Addendums hereto contain the entire
agreement of the parties. This Agreement may not be altered, amended or modified
except in writing duly executed by the parties.

 

11.2

Assignment. Neither party, without the written consent of the other party, can
assign this Agreement.

 

11.3

Binding. This Agreement shall be binding upon and inure to the benefit of the
parties, their personal representative, successors and assigns.

 

11.4

No Waiver. The waiver of the breach of any covenant or condition herein shall in
no way operate as a continuing or permanent waiver of the same or similar
covenant or condition.

 

11.5

Severability. If any provision of this Agreement is held to be invalid or
unenforceable for any reason, the remaining provisions will continue in full
force without being impaired or invalidated in any way. The parties hereto agree
to replace any invalid provision with at valid provision which most closely
approximates the intent of the invalid provision.

 

11.6

Interpretation. This Agreement shall not be construed more strongly against any
party hereto regardless of which party may have been more responsible for the
preparation of Agreement.

 

11.7

Governing Law. This Agreement shall be governed by and construed under the laws
of the State of California, without reference to the choice of law principles
thereof.

 

11.8

Arbitration.

 

5

 

 

--------------------------------------------------------------------------------

 

11.8.1

Any controversy, dispute or claim of whatever nature in any way arising out of
or relating to Sederoff’s employment with Rubicon, including, without limitation
(except as expressly excluded below in Section 11.8.2) any claims or disputes by
Sederoff against Rubicon, or by Rubicon against Sederoff, concerning, arising
out of or relating to the separation of that employment; any other adverse
personnel action by Rubicon; any federal, state or local law, statute or
regulation prohibiting employment discrimination or harassment; any public
policy; any Rubicon disciplinary action; any Rubicon decision regarding a
Rubicon policy or practice, including but not limited to Sederoff’s compensation
or other benefits; and any other claim for personal, emotional, physical or
economic injury (individually or collectively, “Covered Claims”) shall be
resolved, at the request of any party to this Agreement, by final and binding
arbitration in Santa Ana, California before Judicial Arbitration Mediation
Services (“JAMS”) in accordance with JAMS’ then-current policies and procedures
for arbitration of employment disputes.

 

11.8.2

The only claims or disputes excluded from binding arbitration under this
Agreement are the following: any claim by Sederoff for workers’ compensation
benefits or for benefits under a Rubicon plan that provides its own arbitration
procedure; and any claim by either party for equitable relief, including but not
limited to, a temporary restraining order, preliminary injunction or permanent
injunction against the other party.

 

11.8.3

This agreement to submit all Covered Claims to binding arbitration in no way
alters the exclusivity of Sederoff’s remedy under Section 6.5 in the event of
any termination without Cause or the exclusivity of Sederoff’s remedy under
Section 6.4 in the event of any termination with Cause, and does not require
Rubicon to provide Sederoff with any type of progressive discipline.

 

11.9

Titles. Titles to the sections of this Agreement are solely for the convenience
of the parties and shall not be used to explain, modify, simplify, or aid in the
interpretation of the provisions of this Agreement.

 

11.10

Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but together which shall constitute one and the
same instrument.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

{SIGNATURE PAGE TO FOLLOW}

 

 

 

6

 

 

--------------------------------------------------------------------------------

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

 

 

Rubicon:

Rubicon Financial Incorporated

a Delaware corporation

 

 

By: /s/ Joseph Mangiapane, Jr.                    

 

Joseph Mangiapane, Jr., CEO

 

 

Sederoff:

 

 

By: /s/ Michael Sederoff                              

 

Michael Sederoff

 

7

 

 

 

--------------------------------------------------------------------------------

ADDENDUM A

 

Job Description for Michael Sederoff

 

Job Title:

Chief Operating Officer and Chief Financial Officer

Department:

Executive

Reports To:

Chief Executive Officer

 

SUMMARY

 

The Chief Financial Officer (CFO) - is responsible for planning, organizing,
staffing, and managing all Rubicon’s financial functions, such as procurement,
Human Resources, accounting practice, and investment of funds. The CFO manages
Rubicon’s relationships with lending institutions, shareholders, and essential
members of the financial community and is accountable to the CEO for the results
of such functions and performance of all assigned employees -- providing such
legal documents, financial filings, reports, and information as required by
Rubicon, by its Board of Directors, or by law.

 

The Chief Operating Officer (COO) is responsible for planning, organizing,
staffing, and managing Rubicon’s daily operations. The COO develops the formal
requirements, performance specifications, and metrics for assessing the
operational effectiveness of these processes and, as directed by the CEO,
develops strategies for sustaining this effectiveness in line with corporate
goals.

 

Assists in preparing an annual business plan and budget for Rubicon’s operations
and works in cooperation with the other executives for the orderly and efficient
operation of Rubicon’s business

 

Aids CEO in formulating and administering Rubicon policies and performs the
following duties personally or through subordinate managers/employees.

 

ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may be
assigned.

 

 

•

ANALYZE, CRITIQUE AND REVIEW ALL MONTHLY, QUARTERLY AND ANNUAL   FINANCIAL
STATEMENTS. COMPLY WITH SARBANES OXLEY ACT AND SIGN OFF ON ALL CERTIFICATIONS
FOR Q’S AND K’S WITH RESPECT TO SOX

 

 

•

SPEARHEAD THE ANNUAL BUDGET AND 3,5 YEAR BUSINESS PLANS

 

 

•

ASSIST IN THE HIRING/FIRING/ DEMOTIONS AND PROMOTIONS OF KEY MANAGEMENT
PERSONNEL

 

A-1

--------------------------------------------------------------------------------

 

•

ENSURE COMPLIANCE WITH ALL STATE AND FEDERAL AGENCIES: I.E. DOI, DOC,SEC, DRE,
FTB, IRS ETC.

 

 

•

PREPARE  BOD’S AND SHAREHOLDER’S MEETINGS

 

 

•

REVIEW ALL Q’S AND K’S   FOR/ WITH ALL ATTORNEYS, AUDITORS, MANAGEMENT, BOD ETC.

 

 

•

SET UP PROPER BANK ACCOUNTS

 

 

•

SET UP PROPER PAYROLL ACCOUNTS INCLUDING ANNUAL 1099-MISC. FOR PARENT AND ALL
SUBS.

 

 

•

REVIEW THE PROCEDURES AND PREPARATION OF THE MONTHLY CONSOLIDATION REPORTS.

 

 

•

REVIEW THE PROCEDURES AND PREPARATION OF YEAR END FINANCIAL “CLOSE” FOR PARENT
AND SUBS SUBJECT TO SEC AND REPORTING AGENCIES REQUIREMENTS.

 

 

•

MONTHLY CFO LETTER TO MANAGEMENT AND BOD

 

 

•

ASSIST IN NEGOTIATIONS OF  M&A  DEALS

 

 

•

ANALYZE AND CRITIQUE FINANCIAL’S  OF POTENTIAL M&A CANDIDATES

 

 

•

MANAGE COMPLETE  OPERATIONS  OF  THE  COMPANY’S  HEADQUARTERS AND WHOLLY OWNED
SUBSIDIARIES

 

 

•

WRITE Q’S  AND K’S MD&A

 

 

•

SPEARHEAD THE  NEGOTIATIONS OF ALL  CONTRACTS

 

 

•

LEGAL ISSUES

 

 

•

OTHER RESPONSIBILITIES AND DUTIES DEEMED NECESSARY BY CEO AND BOD

 

A-2

--------------------------------------------------------------------------------

ADDENDUM B

Approved Non-Rubicon Financial Incorporated

Business Activity Exemptions

 

Description of Business Activity

 

1.

NONE

 

 

B-1