EXHIBIT 10.02
COMPOSITE
TECHNOLOGY
CORPORATION Innovative Solutions for the Power Industry
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January 9, 2006
X. Xxxx XxXxxxxxx III
0000 Xxxxxx Xxxxxx Xxxxx,
Xxxxx 000,
Xxxxxx 00000
Dear Xxxx:
Concerning: Letter Agreement
We are extremely pleased that you (herein referred to as the "Director") have
agreed to accept to become more closely involved with Composite Technology
Corporation. We would very much like to have your commitment to become a member
of our Board of Directors and assist us to the growth of our company.
This letter is intended to formalize the terms of your participation as a member
of the Board of Directors of Composite Technology Corporation, a Nevada
Corporation (the "Corporation").
The term of your role as a member of the Board of Directors for the Corporation
will be one (1) year or until the annual general meeting at which new directors
are selected. You agree that the terms set out in the present letter agreement
will also govern any extension of such initial period by your reelection as a
member of the Board of Directors at any future annual general meetings at which
directors are selected on the same terms as those set out herein, for a period
of up to two (2) additional terms (for a total of up to three (3) years).
As compensation for your good faith efforts to promote the business interests of
the Corporation, the Corporation will grant you a monthly payment of four
thousand dollars ($4,000), provided, that you are still participating as a
Corporation Board Member as of each month end ("Remuneration").
In addition, the Corporation will grant you 325,000 options to purchase shares
of the Corporation's common stock at the price of the Corporation's common stock
at the market close on that market-trading day immediately preceding the date of
the Board decision granting such options (the "Granted Options"). The Granted
Options will vest in 12 equal portions (with any fraction vesting with the last
to vest of such portions). The first portion of the Granted Options shall vest
on that date three (3) months following the date of the initial Board grant and
each successive portion shall thereafter vest at intervals of three (3) month.
You shall also be entitled, in accordance with the Corporation's applicable
policies and rules in force, to reimbursement of reasonable expenses which are
incurred (i) in traveling to meetings more than 1 hour away and (ii) in
performing your responsibilities hereunder to the extent that incurring such
expenses is pre-approved by the Corporation. The Corporation will also provide
you with the benefit of liability insurance as a member of the Corporation's
Board of Directors.
0000 XxXxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000 Tel: 000.000.0000
Fax: 000.000.0000 xxx.xxxxxxxxxxxxxxxxx.xxx
Since the legislation and practice governing the attitudes, roles and
responsibilities of directors is evolving constantly, you are required to read
and to understand the duties and obligations that are incumbent on members of
the Board of Directors of the Corporation on an on going basis to keep up to
date.
Your responsibilities as a member of the Board shall include but are not limited
to:
o Attend a minimum of four (4) quarterly meetings per calendar
year and one (1) meeting held immediately following the annual
general meeting. The Corporation shall give appropriate
advance notice of the scheduling of the quarterly meetings;
and
o Attend the Annual General Meeting of the Shareholders; and
o Report in a timely fashion any and all matters required to be
reported in accordance with applicable legislation including
without limitation any dealing in the Corporation's shares;
and
o Promote the interests of the Corporation through raising its
profile, making introductions to generate new business
opportunities; and
o Introduce potential full time executives and employees and
strengthening the Board of Directors and investor base of the
Corporation; and
o As requested by the Board of Directors, serve on designated
subcommittees of the Board of Directors including the audit
committee, compensation committee, corporate governance
committee, etc.
In addition, the Corporation is required to take a number of routine and urgent
decisions by written resolution in particular pursuant to Section 78.315 of the
Nevada General Corporation Law. In this respect it is your responsibility to
respond in timely fashion to requests to review, agree on an acceptable text and
execute such resolutions.
In performing your services on the Board of Directors, you will be an
independent contractor and not an employee of the Corporation. You will not be
entitled to any additional compensation or participate in any benefit plans of
the Corporation in connection with your services hereunder. You may not bind the
Corporation or act as a principal or agent thereof.
You represent and agree that you are accepting the Remuneration for your own
account and not with a view to or for sale in connection with any distribution
thereof. You understand that such Remuneration will be subjected to the
restrictions in the Corporation's Charter and Bylaws and will not be freely
transferable and you represent that you either have a preexisting personal or
business relationship with the Corporation or its Board of Directors or
controlling persons or, by reason of your business or financial experience, have
the capacity to protect your own interest in connection with receiving any
Remuneration as compensation. You further represent that you were not solicited
by publication of any advertisement in connection with the receipt of such
Remuneration and that you have consulted tax counsel as needed regarding such
Remuneration.
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Composite Technology Corporation - Director's Letter Agreement
(File: Exhibit 10.02.doc) Page 2 of 3
Notwithstanding anything to the contrary, your participation on the
Corporation's Board of Directors may be terminated at any time for any or no
reason by you or the Corporation upon written notice to the other party,
provided, however that in the event of your seeking to terminate your
directorship such resignation must be accepted by the Board of Directors in
accordance with the terms of Section 3.12 of the Corporations Bylaws. Upon such
termination, the right to compensation hereunder will terminate subject to the
Corporation's obligation to reimburse you any approved expenses already
incurred, and your right to retain the Granted Options to the extent such
Options have vested prior to such termination or the compensation committee
shall allow any accelerated vesting.
While serving as a director, you will acquire and have access to confidential or
proprietary information about the Corporation, for as long as you are a director
of the Corporation and for a period after you cease to be a Director you shall
maintain the confidentiality of any and all such information in accordance with
the terms of your "Proprietary Rights Agreement" signed concurrently herewith
("PAA"). The terms of the PAA are incorporated herein and form a part of your
duties and obligations as a director.
Execution of the signature block (which may be in counterparts) below shall
indicate agreement to the terms outlined above. This letter is to be construed
and enforced in accordance with the internal laws of the State of Nevada and
contains the entire agreement of the parties with respect to the subject mater
hereof. This letter may not be assigned by either party.
FOR: Composite Technology Corporation FOR: X. Xxxx XxXxxxxxx III
(the Corporation) (the Director)
By: /s/Xxxxxx X Xxxxxxxx By: /s/X. Xxxx XxXxxxxxx XXX
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Xxxxxx X Xxxxxxxx Name: X. Xxxx XxXxxxxxx III
Chief Executive Officer Representing himself personally
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Composite Technology Corporation - Director's Letter Agreement
(File: Exhibit 10.02.doc) Page 3 of 3
