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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of July 21,
2008, between TERRA ENERGY & RESOURCE TECHNOLOGIES, INC., a
Delaware corporation ("Employer"), and Alexandre Agaian, an
individual ("Employee").
WITNESSETH:
WHEREAS, Employer desires to retain the services of Employee and
Employee desires to be employed by Employer upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the agreements herein
contained, the parties hereto agree as follows:
1. EMPLOYMENT. Employer
hereby employs Employee, and Employee hereby agrees to serve, as
President of Employer and as a director and/or executive of any of
the Employer’s subsidiaries, for the Term of Employment (as
defined in Section 2). Employee agrees to perform such services as
are customary for such offices. Employee further agrees to use
Employee’s best efforts to promote the interest of Employer
and to devote such of Employee’s full business time and
energies as are reasonably required during normal business hours to
the business and affairs of Employer during the Term of
Employment.
2. TERM OF EMPLOYMENT. The
employment hereunder shall commence as of July 21, 2008 and shall
continue for a period of three years from the date of this
Agreement (the "Term of Employment"), unless earlier terminated:
(a) upon death of Employee; (b) at the option of Employer upon 30
days’ prior written notice to Employee, in the event
Employee, by reason of physical injury or illness, is unable to
materially perform his duties hereunder for a continuous period of
120 days and has no expectation of returning to work within a
reasonable time thereafter; (c) on three months’ prior
written notice at the option of either Employee or the Employer
without cause; or (d) upon the discharge of Employee by the Board
of Directors of Employer for "cause" (as defined in Section 8 of
this Agreement).
3. COMPENSATION.
(a) Base Salary. As compensation for the services to
be provided hereunder and in consideration of Employee’s
agreement not to compete as set forth in Section 4, during the
first year of employment, Employer shall pay Employee an annual
salary, payable bi-weekly, at the rate of Two Hundred Thousand
Dollars ($200,000), less all applicable withholdings and payroll
taxes, and thereafter for the reminder of the Term of Employment,
Employer shall pay Employee an annual salary, payable bi-weekly, at
the rate of Two Hundred Forty Thousand Dollars ($240,000), less all
applicable withholdings and payroll taxes..
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(b) Performance Based Bonus. Employee shall be
eligible for a cash bonus in an amount of up to 200% of the Base
Salary, payable upon achievement of performance targets and
thresholds to be established by the Board of Directors, such as
achievement of certain market price, business performance, or other
criteria, determined by the Board of Directors in its reasonable
discretion. Upon achievement of 100%-120% of the performance
target, the Employer shall pay Employee a bonus equal to 100% of
the Base Salary. Upon achievement of more than 120% of the
performance target, the Employer shall pay Employee a bonus up to,
in the discretion of the Board of the Directors, 200% of the Base
Salary. No performance bonus will be payable in connection with
achievement of less than 100% of the performance target.
(c) Employee Benefits. Notwithstanding anything to
the contrary in this Agreement, Employee shall be entitled to an
annual performance bonus or other bonus and an annual increase in
salary as determined by the Board of Directors from time to time.
Employee shall be entitled to the following fringe benefits: (i)
family medical and dental insurance (assuming eligibility) under
such group medical and dental insurance policies with insurance
premiums not exceeding $14,000 per year; (ii) twelve (12) sick days
per year; (iii) three (3) weeks vacation in each year fully worked;
(iv) 10 holidays; and (v) participation in Employer’s 401(k)
plan or such other plan as Employer may adopt.
(d) Payment Upon Early Termination.
(i) In the event of early termination of employment for
reason specified in Section 2 clause (d) of Section 2, Employer
shall no longer be obligated to make any payments of compensation
to Employee or Employee’s estate under this Agreement;
provided, however, any compensation, salary and/or bonus earned
and/or vested for prior periods, but not yet paid, shall be paid by
Employer to Employee or Employee’s estate within 5 business
days of such termination; and further provided that no bonus
pursuant to Section 3(b) of this Agreement shall be payable if
Employee was terminated for "cause" in accordance with Section 8 of
this Agreement.
(ii) If Employer terminates Employee’s employment
during the Term of Employment for any reason other than those
specified in clause (d) of Section 2 or Section 8 i) Employer
shall pay Employee the amounts due to the Employee hereunder as of
the termination becomes effective within ten business days of
termination. In addition, subject to the above, all fringe benefits
provided for herein, shall continue for three (e) months from the
effective date of termination of the employment of Employee;
ii) the options to be vested on the next anniversary date
following the date of termination shall be vested.
(iii) Following service of a notice during the Term of
Employment by either party for the reason specified in clause (c)
of Section 2, Employer shall have the right to require the Employee
not to perform any services for the Employer until the termination
becomes effective, subject to payment to the Employee of the salary
for 3 months.
(e) Stock Options. Upon execution of this Agreement,
Employer shall issue to Employee stock options to purchase an
aggregate of five million (5,000,000) shares of Employer’s
common stock (the "Options"), subject to vesting and exercisability
as follows:
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(1) 2,000,000 options shall vest upon receipt by the
Employer of third party financing (in debt or equity) in the amount
of at least $10 million during the first year of the Term of the
Employment Agreement, and such options shall be exercisable at
$0.20 per share and shall expire on the fourth year anniversary
date of this Agreement;
(2) 1,000,000 options shall vest on the first year
anniversary date of this Agreement, and shall be exercisable at
$0.40 per share and shall expire on the fourth year anniversary
date of this Agreement;
(3) 1,000,000 options shall vest on the second year
anniversary date of this Agreement, and shall be exercisable at
$0.60 per share and shall expire on the fifth year anniversary date
of this Agreement; and
(4) 1,000,000 options shall vest on the third year
anniversary date of this Agreement, and shall be exercisable at
$0.90 per share and shall expire on the sixth year anniversary date
of this Agreement.
The vesting schedule is subject to the Employee’s
continued employment at the time of each vesting period subject to
clause 3(d)(ii). The Company intends to file a registration
statement covering the shares underlying all employee options, and
will include the Employee’s Options in such filing.
(f) If Employee dies during the Term of Employment,
Employer shall pay to Employee’s estate the compensation that
would otherwise be payable to Employee pursuant to
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