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Exhibit
10.1
EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”) is entered into
August 31, 2007 and effective as of the Effective Time (as
defined below), by and between NaturalNano, Inc., a Nevada
corporation (the “Company”), and
Kent
A. Tapper (“Employee”).
Conditioned
on the execution of the Company's standard confidential
information and non-complete agreements, the date of any such
execution or September 4, 2007, whichever first occurs, being
the "Effective Time"
and
in consideration of the mutual covenants and conditions set forth
herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1.
Employment .
The Company hereby employs Employee in the capacity of Chief
Financial Officer reporting to the President or Chief Executive
Officer. Employee accepts such employment and agrees to diligently,
conscientiously and exclusively perform such services as are
customary to such office and as shall from time to time be assigned
to him by the board of directors the Company or any duly formed
committee thereof or by the President. Employee’s employment
will be on a full-time business basis requiring the devotion of
substantially all of his productive business time for the efficient
and successful operation of the business of the
Company.
2.
Conditional Agreement; Term .
Should this Agreement become effective, the employment hereunder
shall be for a one year period commencing at the Effective Time,
unless earlier terminated as provided in Section 4 (the
“Initial Term”). This Agreement shall be automatically
renewed for successive one-year periods upon the expiration of the
Initial Term unless earlier terminated as provided in Section 4.
The parties expressly agree that designation of a term and renewal
provisions in this Agreement does not in any way limit the right of
the parties to terminate this Agreement at any time as hereinafter
provided. Reference herein to the term of this Agreement shall
refer both to the Initial Term and any successive term as the
context requires.
3.
Compensation and Benefits
3.1
Salary .
For the performance of Employee’s duties hereunder, and
commencing at the Effective Time, the Company shall pay Employee a
salary (the “Base Compensation”) at the annualized rate
of $140,000, payable in accordance with the normal payroll
practices of the Company. Prior to the end of the Initial Term and
any renewal term, Employee’s Base Compensation shall be
reviewed, taking into account the performance of Employee, the
financial condition of the Company, and such other information as
the Company shall determine is appropriate. Based upon such review,
the Company
may
increase (but not decrease) Employee’s Base Compensation,
effective upon the commencement of the immediately following
renewal term. Upon the first closing of a funding transaction
following the Effective Time that provides gross proceeds to the
Company of $5 million or more, the Employee's Base Compensation
shall be increased to $155,000.
3.2
Bonuses.
The
Employee will be eligible during the term of this Agreement for
such additional bonus payments as may be awarded to the Employee
from time to time by the Company.
3.3
Payment and Withholding .
All payments required to be made by the Company to the Employee
shall be made in accordance with the Company’s normal payroll
practices and shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Company
may reasonably determine should be withheld pursuant to any
applicable law or regulation.
3.4
Personnel Policies and Benefits .
Unless otherwise specified herein, the Employee’s employment
is subject to the Company’s personnel policies and procedures
as they may be interpreted, adopted, revised or deleted from time
to time in the Company’s sole discretion. The Employee will
be eligible to participate on the same basis as similarly situated
employees in the Company’s benefit plans in effect from time
to time during his employment. All
matters of eligibility for coverage or benefits under any benefit
plan shall be determined in accordance with the provisions of the
plan. The Company reserves the right to change, alter, or terminate
any benefit plan in its sole discretion.
3.5
Paid Vacation .
Employee shall be entitled to a minimum of twenty (20) paid
vacation days annually. Such vacation days shall be earned at a
rate of 1.67 days per month. This benefit may be amended by a
written policy which the Company may adopt from time to time with
respect to similarly situated employees, but shall not be less than
twenty days. Vacation accrual limits and annual carryover limits
shall be governed by such applicable vacation policy for similarly
situated employees as the Company may have adopted.
3.6
Stock Options .
As soon as practicable following the Effective Time, the Company
shall grant to the Employee an option to purchase up to 750,000
shares of the Company's Common Stock at a price per share equal to
the closing price on the date such grant is made (the "Initial
Grant"). The Initial Grant shall vest as to: one third on the first
anniversary of the Effective Time; one third on the second
anniversary of the Effective Time; and one third on the third
anniversary of the Effective Time. The Initial Grant shall be
governed pursuant to the NaturalNano, Inc. 2007 Incentive Stock
Option Plan.
From
time to time the Company may grant to Employee options under
the Company’s then current stock option plan to purchase
shares of the Company’s common stock at a stated
exercise price per share ("Additional Grants"). Any Additional
Grants will vest and be exercisable in accordance with a Stock
Option Agreement to be executed pursuant to the
Company’s then current stock option plan. Employee will
participate in any stock grant program established by the
Company on the same basis as similarly situated
employees.
3.7
Reimbursement of Expenses .
Employee shall be eligible to be reimbursed for all reasonable
business expenses, including but not limited to expenses for
cellular
telephone ,
BlackBerry, travel, meals and entertainment, incurred by Employee
in connection with and reasonably related to the furtherance of the
Company’s business in accordance with the Company’s
policy .
In addition, Employee will be eligible to be reimbursed for
reasonable home office expenses provided Employee receives prior
approval before incurring such expenses .
Employee shall submit expense reports and receipts documenting the
expenses incurred in accordance with Company policy.
4.
Termination
4.1
Termination Events .
The employment of the Employee and the Term of this Agreement will
terminate upon the occurrence of any of the following events
(“the Termination Event”):
(a)
The
Employee’s Death;
(b)
The
Employee’s “Disability”, defined, subject to
applicable state and federal law, as termination by the
Company because the Employee is unable to perform the
essential functions of Employee’s position (with
reasonable accommodation as such term is defined in the
Americans with Disabilities Act).
(c)
Employee
is discharged by the Company for “Cause”. As used
in this Agreement, the term “Cause” shall mean a
determination by the Company that:
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