EXHIBIT 10.1


 








Pacific
Ethanol, Inc. 


 


 


EXECUTIVE EMPLOYMENT AGREEMENT 


for 


MICHAEL KANDRIS


 


This Executive Employment
Agreement (“Agreement”) by and between Michael D. Kandris (“Executive”) and Pacific Ethanol, Inc. (the
“Company”) (collectively, the “Parties”) is effective as of the last date signed by the Parties.


 


Whereas,
the Company desires to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for his services;


 


Whereas,
Executive wishes to be employed by the Company and to provide personal services to the Company in return for certain compensation
and benefits;


 


Now,
Therefore, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between
the parties hereto as follows:


 


1.                 
Employment by the Company.


 


1.1             
Position. Subject to terms and conditions set forth herein, the Company agrees to employ Executive in a senior executive
position with the title “Chief Operating Officer,” and Executive hereby accepts such employment. During the term of
Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s
business time and attention to the business of the Company, except for vacation periods and reasonable periods of illness or other
incapacities permitted by the Company’s general employment policies.


 


1.2             
Duties and Location. Executive shall serve in an executive capacity with responsibility for the operation of the Company’s
ethanol plants. Executive shall also perform such duties as are required by the Company’s Board of Directors (the “Board”)
and Chief Executive Officer. Executive shall report to the Company’s Chief Executive Officer and shall serve on the Company’s
Executive Committee. Executive’s primary office location shall be a location mutually acceptable to both the Executive and
the Company. The Company reserves the right to reasonably require Executive to perform Executive’s duties at places other
than Executive’s primary office location from time to time as agreed to by Executive, and to require reasonable business
travel.


 


1.3             
Policies and Procedures. The employment relationship between the parties shall be governed by the general employment
policies and practices of the Company, except that when the terms of this Agreement differ from or are in conflict with the Company’s
general employment policies or practices, this Agreement shall control.


 






    	 



    	 



    
 


		2.	Compensation.



 


2.1             
Salary. For services to be rendered hereunder, Executive
shall receive an annual salary at the rate of $246,000.00, paid bi-weekly in the amount of $9,461.54 (the “Base Salary”),
subject to standard payroll deductions and withholdings and payable in accordance with the Company’s regular payroll schedule.
Executive’s Base Salary shall be reviewed annually and may be increased as approved by the Board in its sole discretion.



 


2.2             
Annual Bonus. Executive will be eligible for an annual discretionary bonus of up to fifty percent (50%) of his Base
Salary (the “Annual Bonus”). Whether any Annual Bonus will be awarded, and the amount of the Annual Bonus awarded to
Executive, shall be determined by the Board in its sole discretion based upon its consideration of both the Company’s performance
and Executive’s performance. Since the Annual Bonus is intended both to reward past Company and Executive performance and
to provide an incentive for Executive to remain with the Company, Executive must remain an active employee through the date that
any such bonus is awarded to him in order to earn any such bonus. Executive will not earn any Annual Bonus (including a prorated
bonus) if Executive’s employment terminates for any reason before the Annual Bonus is awarded to him. Any Annual Bonus awarded
by the Board shall be paid within the first quarter after the end of the calendar year.


 


2.3             
Standard Company Benefits. Executive shall be entitled to participate in all employee benefit programs for which Executive
is eligible under the terms and conditions of the benefit plans which may be in effect from time to time and provided by the Company
to its employees generally; provided, however, that Executive shall not be entitled to accrued vacation pay.


 


2.4             
Restricted Stock; Options. The Executive shall be eligible for grants of restricted stock and/or stock options from
time to time as shall be determined by the Compensation Committee of the Board in its sole discretion, and shall be subject to
such vesting, exercisability, and other provisions as the Board may determine in its discretion, after reviewing the performance
of both Executive and the Company. Both the Restricted Stock and any stock options shall be governed in all respects by the terms
of the applicable restricted stock purchase agreement, stock option agreement, grant notice and plan documents.


 


		3.	Confidential Information Obligations.



 


3.1             
Confidential Information Agreement. As a condition of employment,
Executive agrees to execute and abide by the Employee Confidential Information and Inventions Agreement attached hereto as Exhibit A.


 


3.2             
Third Party Agreements and Information. Executive represents and warrants that Executive’s employment by the Company
will not conflict with any prior employment or consulting agreement or other agreement with any third party, and that Executive
will perform Executive’s duties to the Company without violating any such agreement. Executive represents and warrants that
Executive does not possess confidential information arising out of prior employment, consulting, or other third party relationships,
which would be used in connection with Executive’s employment by the Company, except as expressly authorized by that third
party. During Executive’s employment by the Company, Executive will use in the performance of Executive’s duties only
information which is generally known and used by persons with training and experience comparable to Executive’s own, common
knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the
course of Executive’s work for the Company.


 






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		4.	Outside Activities During Employment.



 


4.1             
Non-Company Business. Except with the prior written consent
of the Chief Executive Officer (in consultation with the General Counsel), Executive will not during the term of Executive’s
employment with the Company undertake or engage in any other employment, occupation or business enterprise,
other than ones in which Executive is a passive investor. Executive may engage in civic and not-for-profit activities so long as
such activities do not materially interfere with the performance of Executive’s
duties hereunder. 


 


4.2             
No Adverse Interests. Executive
agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by him to be
adverse or antagonistic to the Company, its business or prospects, financial or otherwise, except as a passive investor in mutual
or exchange traded funds.


 


		5.	Termination Of Employment.



 


5.1             
At-Will Relationship. Executive’s employment relationship
is at-will. Either Executive or the Company may terminate the employment relationship at any time, with or without Cause or advance
notice. 


 


5.2             
Termination without Cause; Resignation for Good Reason. If, at any time, the Company
terminates Executive’s employment without Cause (as defined herein), or Executive resigns with Good Reason (as defined herein),
and Executive executes and delivers the Separation Date Release of all claims set forth as Exhibit B hereto and allows such release
to become effective, then the Company will provide Executive with the following severance benefits:


 


(a)              
Cash Severance. The Company shall pay Executive severance in the form of continuation of Executive’s Base Salary
in effect on Executive’s last day of employment for a period of twelve (12) months after Executive’s termination, subject
to standard payroll deductions and withholdings and payable on the Company’s regular payroll schedule; provided, however,
that in the event the Company terminates Executive’s employment without Cause, or Executive resigns with Good Reason, within
three (3) months before or otherwise in anticipation of, or within twelve (12) months after, a Change in Control (as defined below),
then the Company shall pay Executive severance in the form of continuation of Executive’s Base Salary in effect on Executive’s
last day of employment for a period of eighteen (18) months after Executive’s termination, subject to standard payroll deductions
and withholdings and payable on the Company’s regular payroll schedule. Each payment made pursuant to this Section 5.2(a)
is intended to be a separate payment (as defined in Treasury Regulations Section 1.409A-2(b)(2)) from any other payments made pursuant
to this Section 5.2(a) for purposes of the “short term deferral rule” under Treasury Regulations Section 1.409A-1(b)(4).


 






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(b)              
Continued Health Insurance Coverage. To the extent provided by the federal COBRA law or, if applicable, state insurance
laws, and by the Company’s then-current group health insurance policies, Executive may be eligible to continue Executive’s
then-current group health insurance benefits after termination of Employment. If eligible and if Executive timely elects continued
health insurance coverage, then the Company shall pay the Company’s portion of any premiums necessary to provide coverage
for a period of twelve (12) months after the termination date; provided, however, that no such premium payments shall be
made following the effective date of Executive’s coverage by a medical, dental or vision insurance plan of a subsequent employer.
Executive shall notify the Company immediately if he becomes covered by a medical, dental or vision insurance plan of a subsequent
employer. Notwithstanding the foregoing, in the event the Company terminates Executive’s employment without Cause, or Executive
resigns with Good Reason, within three (3) months before or otherwise in anticipation of, or within twelve (12) months after, a
Change in Control (as defined below), then (if eligible and coverage elected) the Company shall pay the Company’s portion
of any premiums necessary to provide coverage for a period of eighteen (18) months after the termination date; provided, however,
that no such premium payments shall be made following the effective date of Executive’s coverage by a medical, dental
or vision insurance plan of a subsequent employer and Executive agrees to immediately notify the Company of any such coverage.


 


(c)               
Accelerated Vesting. The Company will accelerate the vesting of any equity awards granted to Executive prior to Executive’s
employment termination such that twenty-five percent (25%) of all shares or options subject to such awards which are unvested as
of the employment termination date shall be accelerated and deemed fully vested as of Executive’s last day of employment;
provided, however, that in the event the Company terminates Executive’s employment without Cause, or Executive resigns
with Good Reason, within three (3) months before or otherwise in anticipation of, or within twelve (12) months after, a Change
in Control (as defined below), then the Company will accelerate the vesting of any equity awards granted to Executive prior to
Executive’s employment termination such that one hundred percent (100%) of all shares or options subject to such awards which
are unvested as of the employment termination date shall be accelerated and deemed fully vested as of Executive’s last day
of employment.


 


5.3             
Termination for Cause; Resignation Without Good Reason. If the Company terminates Executive’s employment with
the Company for Cause, or Executive resigns without Good Reason, then Executive will not be entitled to any further compensation
from the Company (other than accrued salary, and accrued and unused vacation, through Executive’s last day of employment),
including severance pay, pay in lieu of notice or any other such compensation.


 






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5.4             
Termination Due to Death or Disability.


 


(a)Death.
This Agreement shall terminate immediately upon Executive’s death and Executive’s estate shall not be entitled to any
further compensation from the Company (other than accrued salary, and accrued and unused vacation, through Executive’s last
day of employment), including severance pay, pay in lieu of notice or any other such compensation.


 


(b)Disability.
If Executive is prevented from performing his duties as described in Section 1.1 of this Agreement by reason of any physical or
mental incapacity that results in Executive’s satisfaction of all requirements necessary to receive benefits under the Company’s
long-term disability plan due to a total disability, then, to the extent permitted by law, the Company may terminate the employment
of Executive and this Agreement at or after such time.


 


(i)                
Cash Severance. The Company shall pay Executive severance in the form of continuation of Executive’s Base Salary
in effect on Executive’s last day of employment for a period of twelve (12) months after Executive’s termination, subject
to standard payroll deductions and withholdings and payable on the Company’s regular payroll schedule.


 


(ii)              
Continued Health Insurance Coverage. To the extent provided by the federal COBRA law or, if applicable, state insurance
laws, and by the Company’s then-current group health insurance policies, Executive may be eligible to continue Executive’s
then-current group health insurance benefits after termination of Employment. If eligible and if Executive timely elects continued
health insurance coverage, then the Company shall pay the Company’s portion of any premiums necessary to provide coverage
for a period of twelve (12) months after the termination date; provided, however, that no such premium payments shall be
made following the effective date of Executive’s coverage by a medical, dental or vision insurance plan of a subsequent employer.
Executive shall notify the Company immediately if he becomes covered by a medical, dental or vision insurance plan of a subsequent
employer.


 


(iii)            
Accelerated Vesting. The Company will accelerate the vesting of any equity awards granted to Executive prior to Executive’s
employment termination such that twenty-five percent (25%) of all shares or options subject to such awards which are unvested as
of the employment termination date shall be accelerated and deemed fully vested as of Executive’s last day of employment.


 


5.5             
Deferred Compensation. Notwithstanding anything to the contrary set forth herein, any payments and benefits provided
under this Agreement (the “Severance Benefits”) that constitute “deferred compensation” within the meaning
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance
thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with
Executive’s termination of employment unless and until Executive has also incurred a “separation from service”
(as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company
reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax
under Section 409A.


 



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It is intended that each
installment of the Severance Benefits payments provided for in this Agreement is a separate “payment” for purposes
of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that payments of the Severance Benefits
set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided
under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).


 


If Executive is a “specified
employee” within the meaning of 409A(a)(2)(B)(i) of the Code, any Severance Benefit payments that are triggered by a separation
from service shall be accelerated to the minimum extent necessary so that (a) the lesser of (y) the total cash severance payment
amount, or (z) six (6) months of such installment payments are paid no later than March 15 of the calendar year following such
termination, and (b) all amounts paid pursuant to the foregoing clause (a) will constitute separate payments for purposes of Section
1.409A-2(b)(2) of the Treasury Regulations and thus will be payable pursuant to the “short-term deferral” rule set
forth in Section 1.409A-1(b)(4) of the Treasury Regulations. It is intended that if Executive is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time of such separation from service the foregoing provision
shall result in compliance with the requirements of Section 409A(a)(2)(B)(i) of the Code since payments to Executive will either
be payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations
or will not be paid until at least 6 months after separation from service.


 


Notwithstanding any other
payment schedule set forth in this Agreement, none of the Severance Benefits will be paid or otherwise delivered prior to the effective
date of the Separation Date Release of all claims set forth as Exhibit B hereto. On the first regular payroll pay day following
the effective date of the Separation Date Release of all claims, the Company will pay Executive the Severance Benefits Executive
would otherwise have received under the Agreement on or prior to such date but for the delay in payment related to the effectiveness
of the release of claims, with the balance of the Severance Benefits being paid as originally scheduled. All amounts payable under
the Agreement will be subject to standard payroll taxes and deductions.


 


5.6             
Limitation on Payments. In the event that the payments or other benefits provided for in this Agreement or otherwise
payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) would
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Executive’s benefits
under this Agreement shall be either (a) delivered in full, or (b) delivered to such lesser extent which would result in no portion
of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount
of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. If a reduction
in payments or benefits constituting “parachute payments” is necessary pursuant to the foregoing provision, reduction
shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction
of employee benefits. If acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall
be cancelled in the reverse order of the date of grant of the Executive’s stock awards.


 






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5.7             
No Mitigation. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as the result of employment
by another employer after the date of termination, or otherwise, except for health insurance benefits as set forth herein.


 


5.8             
Definitions.


 


(a)              
For purposes of this Agreement, “Cause” shall mean any one or more of the following:


 


(i)               Executive’s indictment or conviction of any felony or of any crime involving dishonesty;


 


(ii)              Executive’s
participation in any fraud or other act of willful misconduct against the Company (including any material breach of Company policy
that causes or reasonably could cause harm to the Company);


 


(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 (including any material breach of this Agreement or the Confidential Information and Inventions Agreement); 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 (20)
days after the discovery of such event, provide written notice to the Executive describing the nature of such event and Executive
shall thereafter have ten (10) business days to cure such event.


 


(b)              
For purposes of this Agreement, Executive shall have “Good Reason” for Executive’s resignation
if: (w) any of the following occurs without Executive’s consent; (x) Executive notifies the Company in writing, within twenty
(20) days after the occurrence of one of the following events that Executive intends to terminate his employment no earlier
than thirty (30) days after providing such notice; (y) the Company does not cure such condition within thirty (30) days following
its receipt of such notice or states unequivocally in writing that it does not intend to attempt to cure such condition, and (z)
the Executive resigns from employment within thirty (30) days following the end of the period within which the Company was entitled
to remedy the condition constituting Good Reason but failed to do so:


 






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(i)                
the assignment to Executive of any duties or responsibilities which result in the material diminution of Executive’s
authority, duties or responsibility; provided, however, that the acquisition of the Company and subsequent conversion of
the Company to a division or unit of the acquiring corporation will not by itself result in a 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
(35) miles; or


 


(iv)            
any material breach by the Company of any material provision of this Agreement, including but not limited to Section
7.7.


 


(c)               
For purposes of this Agreement, “Change in Control” shall be deemed to have occurred if, in a single
transaction or series of related transactions: (i) any person (as such term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934 (“Exchange Act”)), or persons acting as a group, other than a trustee or fiduciary holding securities
under an employment benefit program, is or becomes a “beneficial owner” (as defined in Rule 13-3 under the Exchange
Act), directly or indirectly of securities of the Company representing a majority (e.g., 50% plus one share) 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.


 



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6.                 
Arbitration.


 


To ensure the timely
and economical resolution of disputes that may arise in connection with Executive’s employment with the Company, Executive
and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach,
performance, negotiation, execution, or interpretation of this Agreement, Executive’s employment, or the termination of Executive’s
employment, shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single
arbitrator, in Sacramento, California, conducted by JAMS under the then applicable JAMS rules. By agreeing to this arbitration
procedure, both Executive and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative
proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and
to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s
essential findings and conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies
that Executive or the Company would be entitled to seek in a court of law. The Company shall pay all JAMS’ arbitration fees
in excess of the amount of court fees that would be required if the dispute were decided in a court of law. Nothing in this Agreement
is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending
the conclusion of any such arbitration.


 


7.                 
General Provisions.


 


7.1             
Notices. Any notices provided hereunder must be in writing
and shall be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the next day after
sending by overnight carrier, to the Company at its primary office location and to Executive at his address as listed on the Company
payroll.


 


7.2             
Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent
of the parties.


 


7.3             
Waiver. Any waiver of any breach of any provisions of this
Agreement must be in writing to be effective, and it shall not thereby be deemed to have waived any preceding or succeeding breach
of the same or any other provision of this Agreement.


 


7.4             
Complete Agreement. This Agreement, including Exhibit A,
constitutes the entire agreement between Executive and the Company and it is the complete, final,
and exclusive embodiment of their agreement with regard to this subject matter. This Agreement supersedes and replaces the Original
Employment Agreement in its entirety and the Original Employment Agreement shall have no further force or effect. It is entered
into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or
amended except in a writing signed by the Executive and a duly authorized officer of the Company.


 






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7.5             
Counterparts. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute
one and the same Agreement.


 


7.6             
Headings. The headings of the sections hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.


 


7.7             
Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors
and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder
without the written consent of the Company, which shall not be withheld unreasonably. The Company shall obtain the assumption
of this Agreement by any successor or assign of the Company.


 


7.8             
Choice of Law. All questions concerning
the construction, validity and interpretation of this Agreement will be governed by the law of the State of California. 


 


In
Witness Whereof, the parties have executed this Agreement.


 





	 	Pacific Ethanol, Inc. 	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Neil M. Koehler	 
	 	 	Neil M. Koehler	 
	 	 	President and Chief Executive Officer 	 
	 	 	 	 
	 	Date:	January 6, 2013	 
	 	 	 	 







 





Understood and Agreed: 


 


Executive 


 


 


 





	By:	/s/ Michael D. Kandris	 
	 	Michael D. Kandris	 
	 	 	 
	Date:	January 6, 2013	 







 


 


 


 






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Exhibit
A


 


CONFIDENTIAL INFORMATION
AND INVENTIONS AGREEMENT


 


 


 


 


 


 


 


 


 


 


 


 


 






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Exhibit
B


 


Separation
Date Release


 


(To be signed on or within 21 days after
the employment termination date.)


 


In exchange for the severance benefits
to be provided to me by Pacific Ethanol, Inc. (the “Company”) pursuant to the terms of my Employment Agreement (the
“Agreement”), I hereby provide the following General Release of Claims (the “Release”). I understand that,
on the last date of my employment with the Company, the Company will pay me any accrued salary to which I am entitled by law, regardless
of whether I sign this Release, but I am not entitled to any severance benefits unless I sign and return this Release to the Company
and I allow it to become effective.


 


I hereby generally and completely release
the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent
and subsidiary entities, insurers, affiliates, and assigns (collectively the “Released Parties”) of and from any and
all claims, liabilities and obligations, both known and unknown, arising out of or in any way related to events, acts, conduct,
or omissions occurring at any time prior to or at the time that I sign this Release.


 


This general release includes, but is not
limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment;
(2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership or equity interests in the Company;
(3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing
(including claims based on or arising under the Agreement); (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims
for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act
of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Family and Medical Leave Act, the California Labor Code (as amended), the California
Family Rights Act, and the California Fair Employment and Housing Act (as amended).


 


I understand that notwithstanding the foregoing,
the following are not included in the Released Claims (the “Excluded Claims”): (i) any rights or claims for indemnification
I may have pursuant to any written indemnification agreement to which I am a party, the charter, bylaws, or operating agreements
of any of the Released Parties, or under applicable law; or (ii) any rights which are not waivable as a matter of law. In
addition, I understand that nothing in this release prevents me from filing, cooperating with, or participating in any proceeding
before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and
Housing, except that I acknowledge and agree that I shall not recover any monetary benefits in connection with any such claim,
charge or proceeding with regard to any claim released herein. I hereby represent and warrant that, other than the Excluded
Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released
Claims.


 



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I acknowledge that I am knowingly and voluntarily
waiving and releasing any rights I may have under the ADEA, and that the consideration given for the waiver and release in the
preceding paragraph is in addition to anything of value to which I am already entitled. I further acknowledge that I have been
advised by this writing that: (1) my waiver and release do not apply to any rights or claims that may arise after the date I sign
this Release; (2) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not to do
so); (3) I have twenty-one (21) days to consider this Release (although I may choose voluntarily to sign it earlier); (4) I have
seven (7) days following the date I sign this Release to revoke it by providing written notice of revocation to the Company’s
Chief Executive Officer; and (5) this Release will not be effective until the date upon which the revocation period has expired,
which will be the eighth calendar day after the date I sign it provided that I do not revoke it (the “Effective Date”).


 


I UNDERSTAND THAT THIS AGREEMENT INCLUDES
A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. I acknowledge that I have read and understand Section 1542 of the California Civil Code
which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist
in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her
settlement with the debtor.”  I hereby expressly waive and relinquish all rights and benefits under that section and
any law or legal principle of similar effect in any jurisdiction with respect to my release of claims herein, including but not
limited to the release of unknown and unsuspected claims.


 


I hereby represent that I have been paid
all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am
eligible, pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise, and I have not suffered
any on-the-job injury for which I have not already filed a workers’ compensation claim. 


 


I further agree: (1) not to disparage the
Company, its parent, or its or their officers, directors, employees, shareholders, affiliates and agents, in any manner likely
to be harmful to its or their business, business reputation, or personal reputation (although I may respond accurately and fully
to any question, inquiry or request for information as required by legal process); (2) not to voluntarily (except in response to
legal compulsion) assist any third party in bringing or pursuing any proposed or pending litigation, arbitration, administrative
claim or other formal proceeding against the Company, its parent or subsidiary entities, affiliates, officers, directors, employees
or agents; and (3) to reasonably cooperate with the Company, by voluntarily (without legal compulsion) providing accurate and complete
information, in connection with the Company’s actual or contemplated defense, prosecution, or investigation of any claims
or demands by or against third parties, or other matters, arising from events, acts, or failures to act that occurred during the
period of my employment by the Company.


 





	By:	 










	 	Michael Kandris	Date