SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) MARCH 30, 2005
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PACIFIC ETHANOL, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 000-21467 41-2170618
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5711 N. WEST AVENUE, FRESNO, CALIFORNIA 93711
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (559) 435-1771
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ACCESSITY CORP., 3300 UNIVERSITY DRIVE, SUITE 201, CORAL SPRINGS, FLORIDA 33065
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Effective as of March 30, 2005, the Company entered into an Indemnification
Agreement with William "Bill" Jones (the "Indemnitee") in connection with Mr.
Jones' service as a member of the Board of Directors of the Company. Mr. Jones
was appointed as a member of the Board of Directors of the Company on March 30,
2005. The Indemnification Agreement is included as Exhibit 10.1 to this Report
on Form 8-K.
Under the Indemnification Agreement, the Company has agreed to indemnify
the Indemnitee in connection with any third-party proceeding or threatened
proceeding against the Indemnitee or in connection with a proceeding or
threatened proceeding by or in the right of the Company, such as a stockholder
derivative suit, by reason of the fact that the Indemnitee is or was an officer
and/or director of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise, against
all expenses, damages, judgments, amounts paid in settlement, fines, penalties
and ERISA excise taxes actually and reasonably incurred by the Indemnitee in
connection with the defense or settlement of any such proceeding, to the fullest
extent permitted by the Delaware General Corporation Law, whether or not the
Indemnitee was the successful party in any such proceeding; provided, however,
that any settlement of a third-party proceeding must be approved in writing by
the Company, and any settlement of a proceeding by or in the right of the
Company is settled with the approval of a court of competent jurisdiction or
indemnification of such amounts is otherwise ordered by a court of competent
jurisdiction in connection with such proceeding.
In addition, the Company is required to advance expenses on behalf of the
Indemnitee in connection with Indemnitee's defense in any such proceeding;
provided, that the Indemnitee undertakes in writing to repay such amounts to the
extent that it is ultimately determined that the Indemnitee is not entitled to
indemnification by the Company.
No indemnification payments or payments for expenses may be made by the
Company under the agreements (i) to indemnify or advance expenses to the
Indemnitee with respect to actions initiated or brought voluntarily by the
Indemnitee and not by way of defense, except with respect to actions brought to
establish or enforce a right to indemnification or advancement of expenses under
the agreement or any other statute or law or otherwise as required under the
Delaware General Corporation Law, but such indemnification or advancement of
expenses may be provided by the Company in specific cases if approved by the
Board of Directors by a majority vote of a quorum thereof consisting of
directors who are not parties to such action, (ii) to indemnify the Indemnitee
for any expenses, damages, judgments, amounts paid in settlement, fines,
penalties or ERISA excise taxes for which payment is actually made to the
Indemnitee under a valid and collectible insurance policy, except in respect of
any excess beyond the amount paid under such insurance, (iii) to indemnify the
Indemnitee for any expenses, damages, judgments, amounts paid in settlement,
fines, penalties or ERISA excise taxes for which the Indemnitee has been or is
indemnified by the Company or any other party otherwise than pursuant to the
agreement, or (iv) to indemnify the Indemnitee for any expenses, damages,
judgments, fines or penalties sustained in any proceeding for an accounting of
profits made from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder or similar
provisions of any federal, state or local statutory law.
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The Company is also required under the agreement, at the Indemnitee's
request, to maintain in full force and effect, at its sole cost and expense,
directors' and officers' liability insurance by an insurer, in an amount and
with a deductible reasonably acceptable to the Indemnitee covering the period
during which the Indemnitee is serving in any one or more of the capacities
covered by the agreement and for so long thereafter as the Indemnitee shall be
subject to any possible claim or threatened, pending or completed proceeding by
reason of the fact that the Indemnitee is serving in any of the capacities
covered by the agreement; provided, that the Company shall have no obligation to
maintain such insurance if the Company determines, in good faith, that (i) such
insurance cannot be obtained on terms which are commercially reasonable, (ii)
the premium costs for such insurance is significantly disproportionate to the
amount of coverage provided, (iii) the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or (iv) the
Company, after using best efforts, is otherwise unable to obtain such insurance.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) On March 30, 2005, the Board of Directors of Pacific Ethanol, Inc.
(the "Company") appointed William "Bill" Jones as a member and as Chairman of
the Board of Directors of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Please note that many of the Certain Relationships and Related Transactions
set forth below are with regard to Pacific Ethanol, Inc., a California
corporation ("PEI California"), which became a wholly-owned subsidiary of the
Company in connection with a share exchange transaction that occurred on
March 23, 2005 pursuant to which the shareholders of PEI California and the
holders of the equity interests of certain other entities exchanged their shares
of common stock of PEI California and other equity interests in such other
entities for shares of common stock of the Company (the "Share Exchange
Transaction").
PEI California sold various cattle feed products in 2003 totaling $109,698,
at market rates, to a business owned by Mr. Jones, who was a principal
shareholder of PEI California and is now a principal shareholder of the Company
and who is the father-in-law of Ryan Turner, who is also a member of the Board
of Directors of the Company and is Chief Operating Officer and Secretary of the
Company.
PEI California reimbursed Mr. Jones an aggregate of $200,000 during 2003
for expenses paid on behalf of PEI California.
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On June 20, 2003, Mr. Jones executed a Continuing Guaranty in favor of
Lyles Diversified, Inc. personally guaranteeing up to $1.0 million of a $5.1
million loan made by Lyles Diversified, Inc. to PEI California. On March 30,
2005, Mr. Jones and Lyles Diversified, Inc. executed a Termination Agreement
pursuant to which Mr. Jones' guarantee obligations under such Continuing
Guaranty were terminated.
On October 27, 2003, William and Maurine Jones, Ryan and Wendy Turner and
Andrea Jones entered into an agreement with Southern Counties Oil Co., a former
shareholder of PEI California, of which Frank P. Greinke, a director of PEI
California and of the Company, is the owner and CEO, to sell 1,500,000 shares of
common stock of PEI California personally held by them at $1.50 per share for
total proceeds of $2,250,000. In connection with the sale of the shares, the
parties entered into a Voting Agreement under which William and Maurine Jones,
Ryan and Wendy Turner and Andrea Jones agreed to vote a significant number of
their existing shares of common stock of PEI California in favor of Mr. Greinke
to be elected to the board of directors of PEI California or any
successor-in-interest to PEI California, including the Company.
Barry Siegel, on the one hand, and William and Maurine Jones, Ryan and
Wendy Turner and Andrea Jones, on the other, negotiated the terms of a stock
purchase agreement that provided for, among other things, the sale of an
aggregate of 250,000 shares of common stock of PEI California to Mr. Siegel for
an aggregate purchase price of $25.00.
PEI California entered into a consulting agreement with Ryan Turner for
consulting services at $6,000 per month. During 2004, PEI California paid Mr.
Turner a total of $72,000 pursuant to such consulting contract.
On December 28, 2004, January 10, 2005, and February 22, 2005 Mr. Jones
made short-term advances to PEI California in the amounts of $20,000, $60,000
and $20,000, respectively. PEI California repaid each of these amounts to Mr.
Jones on March 24, 2005.
On March 23, 2005, in connection with the Share Exchange Transaction, the
Company entered into an Executive Employment Agreement with Ryan Turner. On
March 23, 2005, also in connection with the Share Exchange Transaction, the
Company entered into an Indemnification Agreement with Ryan Turner in connection
with his services as an executive officer and member of the Board of Directors
of the Company.
In connection with the Share Exchange Transaction, the Company entered into
a Confidentiality, Non-Competition and Non-Solicitation Agreement dated March
23, 2005 with Mr. Jones. The agreement provides for certain standard
confidentiality protections in favor of the Company prohibiting Mr. Jones, from
disclosure or use of confidential information of the Company. The agreement also
provides that Mr. Jones is prohibited from competing with the Company for a
period of five years. In addition, during the period during which Mr. Jones is
prohibited from competing, he is also prohibited from soliciting customers,
employees or consultants of the Company and is further prohibited from making
disparaging comments regarding the Company, its officers or directors, or its
other personnel, products or services.
Effective as of March 30, 200, the Company entered into an Indemnification
Agreement with Mr. Jones in connection with his appointment as a member of the
Board of Directors of the Company. This agreement is described above, and the
disclosures contained in Item 1.01 of this Report on Form 8-K are incorporated
herein by reference.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
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Not applicable.
(b) Pro Forma Financial Information.
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Not applicable.
(c) Exhibits.
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Number Description
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10.1 Form of Indemnification Agreement between the Company and
each of its Executive Officers and Directors (1)
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(1) Filed with the Securities and Exchange Commission on
March 29, 2005 as an exhibit to the Company's Report on
Form 8-K and incorporated herein by reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 5, 2005 PACIFIC ETHANOL, INC.
By: /S/ NEIL KOEHLER
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Neil Koehler, President and CEO
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