AMERICAN ETHANOL, INC.
ANDREW FOSTER EMPLOYMENT AGREEMENT
This
Agreement is made by and between American Ethanol, Inc. (the
“Company”) and Andrew Foster
(“Employee”) to be effective as of May 22, 2007
(the “Effective Date”).
1.
Duties and Scope of Employment .
a.
Position; Employment Commencement Date; Duties
.
Employee’s employment with the Company pursuant to this
Agreement is effective as of October 1, 2006 (the “Employment
Commencement Date”). On and after the Employment Commencement
Date, the Company shall employ the Employee as Chief Operating
Officer of the Company reporting to the Board of Directors of the
Company.
During
the Employment Term (as defined in section 2 herein), Employee
shall render such business and professional services in the
performance of his duties as are consistent with Employee’s
position within the Company, and as shall reasonably be assigned to
him by the Board of Directors.
b.
Obligations .
During the Employment Term, Employee shall devote his full business
efforts and time to the Company. Employee agrees during the
Employment Term, not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the Board; provided,
however, that Employee may serve in any capacity with any civic,
educational or charitable organization.
2.
Employment Term. It
is intended that the employment arrangement contemplated by this
Agreement shall continue until the third anniversary of the
Effective Date, with automatic one-year extensions thereafter
unless terminated by either party on sixty days notice prior to the
end of each respective extension year (such three-year period and
any extensions being referred to herein as the “Employment
Term”). Notwithstanding the foregoing, the parties agree that
neither this Agreement nor any provision herein is intended to
guarantee the continuation of Employee’s employment for the
duration of the Employment Term. In the event that Employee’s
employment with the Company terminates prior to the expiration of
the Employment Term for any reason, the parties agree that Employee
shall be entitled to receive only those benefits that are expressly
provided by this Agreement in such circumstances.
3.
Employee Benefits .
During the Employment Term, Employee shall be eligible to
participate in the employee and fringe benefit plans maintained by
the Company that are applicable to other employees of the Company
to the full extent provided for under those plans for the position
held by the Employee.
4.
Vacation .
During the Employment Term, Employee shall have three weeks of paid
vacation per year. In the event of termination, any unused vacation
weeks shall be paid as salary continuation.
5.
Expenses .
While Employee is employed during the Employment Term, the Company
will reimburse Employee for reasonable travel, entertainment or
other expenses incurred by Employee in the furtherance of or in
connection with the performance of Employee's duties hereunder, in
accordance with the Company's expense reimbursement policy as in
effect from time to time.
6.
Compensation .
a.
Base Salary .
While employed by the Company, the Company shall pay the Employee
as compensation for his services a base salary at the annualized
rate of One Hundred Eighty Thousand ($180,000) per year (the
“Base Salary”). Such salary shall be paid periodically
in accordance with normal Company payroll practices and subject to
required withholding. Employee’s Base Salary shall be
reviewed annually by the Company for possible adjustments in light
of Employee’s performance and competitive data.
b.
Bonus .
Employee shall be entitled to receive, within 90 days after the end
of each year, an annual bonus (the “Bonus”) of up to
$50,000 based upon Employee’s performance and other criteria
to be established by the Company. Except as permitted under Section
7, Employee must be employed by the Company during the entire
applicable bonus period for the payment of the Bonus. With respect
to any subjective milestones, the determination of whether Employee
has attained the mutually agreed upon milestones for the Bonus
shall be reasonably determined by the Employee’s
supervisor.
c.
Shares/Options .
Employee shall be granted a stock option (the “Stock
Option”) to purchase a total of 300,000 shares of Company
common stock with a per share exercise price equal to the fair
market value of the shares on the date of grant. The Stock Option
shall vest as follows: 180,000 shares subject to the Stock Option
shall vest on the Employment Commencement Date, and an additional
10,000 shares subject to the Stock Option shall vest on the last
day of each calendar quarter thereafter, so as to be one hundred
percent (100%) vested on the three (3) year anniversary of the
Employment Commencement Date, conditioned upon Employee’s
continued employment or service as a director with the Company as
of each vesting date. Except as specified otherwise herein, the
Stock Option grant will be in all respects subject to the terms,
definitions and provisions of any Company Stock Plan and the
standard form of stock option agreement thereunder (the
“Option Agreement”).
d.
Severance .
i.
Involuntary Termination Other Than for Cause; Constructive
Termination .
If Employee’s employment with the Company is Constructively
Terminated or involuntarily terminated by the Company other than
for Cause (as defined below), Employee’s death,
or Employee’s Total Disability, then, subject to
Employee executing and not revoking a standard form of mutual
release of claims with the Company
, Employee
shall be entitled to receive continuing payments of severance pay
(less applicable withholding taxes) at the rate equal to
Employee’s Base Salary, as then in effect, for a period of
three (3) months from the date of such termination in accordance
with the Company’s normal payroll practices. In addition to
the foregoing severance benefits, Employee shall
receive
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