Exhibit 10.1

 
EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into and effective on May 3,
2011 (the "Effective Date"), by and between Texas Rare Earth Resources Corp., a
Nevada corporation (the "Company"), and Marc LeVier ("Employee").

WHEREAS, the Company wishes to employ Employee and Employee wishes to be
employed by the Company; and

WHEREAS, the Company and Employee desire to enter into an agreement reflecting
the terms of the employment relationship, including the termination thereof;

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:

1. Employment. The Company hereby employs Employee, and Employee will hereby be
employed by the Company, on the terms and conditions set forth in this
Agreement. The Company will establish, maintain and pay for an office in the
greater Denver metropolitan area, including the provision of necessary computer
equipment and other facilities’ equipment.

2. Term of Employment. Subject to the provisions for earlier termination
provided in this Agreement, the term of this Agreement shall begin on May 3,
2011 and shall terminate on May 3, 2014.  The Term shall be extended for
additional 1-year periods for two consecutive years (the initial Term, together
with each one-year extension shall be referred to as the “Term”), provided that
neither the Company nor Employee notify the other on or prior to 90 days before
the expiration of such Term that either party does not intend to extend this
Agreement.

3. Employee’s Duties. During the Term, Employee shall serve as Chief Executive
Officer, working in or near the Denver, Colorado metropolitan area, with such
duties and responsibilities as may from time to time be assigned to him by the
board of directors of the Company (the “Board”), provided that such duties are
consistent with the customary duties of such position. During the Term, Employee
shall serve as a member of the Board. Employee agrees to devote his business
time, skill and attention to the business and affairs of the Company and to use
reasonable best efforts to perform faithfully and efficiently his duties and
responsibilities. Employee shall not, either directly or indirectly, enter into
any business or employment with or for any person, firm, association or
corporation other than the Company during the Term; provided, however, that
Employee shall not be prohibited from (i) engaging in charitable activities,
educational mentoring, and community affairs, (ii) serving, with the prior
approval of the Company’s Board, on the boards of a reasonable number of
business entities, trade associations and charitable organizations, (iii) 
managing his personal investments and affairs related to another business or
companies (either as a principal, partner, shareholder, or member of such
business), or (iv) any other such activity approved by the Board; provided that
such activities do not either individually or in the aggregate materially
interfere with the performance of his duties hereunder. Employee shall at all
times observe and comply with all lawful directions and instructions of the
Board.

 
 

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4. Compensation.

(a) Stock Options.  As an inducement to Employee to enter into this Agreement,
the Company will issue Employee 10-year options to purchase up to 2,500,000
shares of Company restricted common stock at an exercise price of $2.50 per
share (“Options”), pursuant to a form of option agreement attached hereto as
Exhibit A, which Options shall vest on a quarterly basis over a three-year
period.

(b) Base Compensation. For services rendered by Employee under this Agreement,
the Company shall pay to Employee a base salary of $225,000 per annum (“Base
Compensation”). The Base Compensation is payable in accordance with the
Company’s customary payroll practices and subject to customary withholdings,
including share withholdings as described in Section 14(b) hereof. The amount of
Base Compensation shall be reviewed by the Board on an annual basis as of the
close of each 12-month period of this Agreement and may be increased as the
Board may deem appropriate. In the event the Board (or, if established, the
compensation committee thereof) deems it appropriate to increase Employee’s
annual base salary, said increased amount shall thereafter be the “Base
Compensation.” Employee’s Base Compensation, as increased from time to time, may
not thereafter be decreased unless agreed to by Employee. Nothing contained
herein shall prevent the Board from paying additional compensation to Employee
in the form of bonuses or otherwise during the Term.

5. Bonus. With respect to each full 12-month period during the Term, the Board
in its sole discretion will grant the Employee a bonus (“Bonus”) equal to up to
50% of the Base Compensation during such 12-month period, upon satisfaction of
milestones to be developed by the Board of Directors and Employee within 90 days
from the date hereof, payable in shares of restricted common stock.

6. Additional Benefits. In addition to the Base Compensation provided for in
Section 5 herein, Employee shall be entitled to the following:

(a) Expenses. The Company shall, in accordance with any rules and policies that
it may establish from time to time for executive officers, reimburse Employee
for business expenses reasonably incurred in the performance of his duties. It
is understood that Employee is authorized to incur reasonable business expenses
for promoting the business of the Company, including reasonable expenditures for
travel, lodging, meals and client or business associate entertainment. Request
for reimbursement for such expenses must be accompanied by appropriate
documentation, and shall be reimbursed in accordance with the Company’s rules
and policies as in effect from time to time and as set forth in
Section 8(k)(iii) below.

(b) Vacation. Employee shall be entitled to six weeks of vacation per year,
without any loss of compensation or benefits. Employee shall not be entitled to
compensation for, or to carry forward, any unused vacation time.

(c) General Benefits. Employee shall be entitled to participate in the various
employee benefit plans or programs, if any, provided to the officers of the
Company in general, including but not limited to, health and dental, subject to
the eligibility requirements with respect to each of such benefit plans or
programs, and such other benefits or perquisites as may be approved by the Board
during the Term. Nothing in this paragraph shall be deemed to prohibit the
Company from making any changes in any of the plans, programs or benefits
described in this Section 6, provided the change similarly affects all executive
officers of the Company similarly situated.

 
 

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(d) Corporate Change. Upon the occurrence of a “Corporate Change” as hereinafter
defined, Employee shall be considered as immediately and totally vested in any
and all Options or other similar equity or equity-based awards previously made
to Employee by the Company or its subsidiaries under a “Long Term Incentive
Plan” or other grant duly adopted by the Board or the Compensation Committee
thereof (such Options or similar awards are hereinafter collectively referred to
as “Awards”); provided, however, with respect to Awards that are deferred
compensation subject to Code Section 409A, such accelerated vesting shall not
cause an acceleration of a payment or result in a change in form of payment that
would violate Code Section 409A. For purposes of this Agreement, a “Corporate
Change ” shall occur if (i) the Company (A) shall not be the surviving entity in
any merger, consolidation or other reorganization (or survives only as a
subsidiary of an entity other than a previously wholly-owned subsidiary of the
Company) or (B) is to be dissolved and liquidated, and as a result of or in
connection with such transaction, the persons who were directors of the Company
before such transaction shall cease to constitute a majority of the Board, or
(ii) any person or entity, including a “group” as contemplated by
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or
gains ownership or control (including, without limitation, power to vote) of 50%
or more of the outstanding shares of the Company’s voting stock (based upon
voting power), and as a result of or in connection with such transaction, the
persons who were directors of the Company before such transaction shall cease to
constitute a majority of the Board, or (iii) the Company sells all or
substantially all of the assets of the Company to any other person or entity
(other than a wholly-owned subsidiary of the Company) in a transaction that
requires shareholder approval pursuant to applicable corporate law; or
(iv) during a period of two consecutive calendar years, individuals who at the
beginning of such period constitute the Board, and any new director(s) whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least a majority of the directors then still in
office, who either were directors at the beginning of the two (2) year period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the Board; or (v) any other event that a
majority of the Board, in its sole discretion, shall determine constitutes a
Corporate Change hereunder.

(e) Health Club Dues. The Company shall pay up to $300 per month for Employee’s
health club dues.

7. Confidential Information. Employee, during the Term, will have access to and
become familiar with confidential information, secrets and proprietary
information concerning the business and affairs of the Company, its controlled
subsidiaries and other controlled entities, including customer information, and
other technical information, resource valuations and reports, business
strategies and pricing information, and other confidential and/or proprietary
information (collectively, “Confidential Information”). Confidential Information
shall not include any information that is or becomes generally available to the
public other than as a result of Employee’s improper or unauthorized disclosure
of such information in violation of this Agreement. As to such Confidential
Information, Employee agrees as follows:

(a) During the Term or at any time following the termination of this Agreement,
Employee will not, directly or indirectly, without the prior written consent of
the Company (1) disclose or permit the disclosure of any such Confidential
Information, or (2) use, reproduce or distribute, or make or permit any use,
reproduction or distribution of, directly or indirectly, any such Confidential
Information, except for any disclosure, use, reproduction or distribution that
is required in the course of his employment with the Company, its controlled
subsidiaries or other controlled entities.

 
 

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(b) If, during the Term or at any time following the termination of this
Agreement, Employee is requested or required (by oral question or request for
information or documents, in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any Confidential
Information, Employee agrees to notify the Company immediately in writing of the
request or requirement so that the Company may seek an appropriate protection
order or waive compliance with the provisions of this Section. If, in the
absence of a protective order or the receipt of a waiver under this Agreement,
Employee is, on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal or else stand liable for contempt, Employee may
disclose such Confidential Information to the tribunal; provided, however, that
Employee shall use his commercially reasonable best efforts to obtain a court
order or other assurance that confidential treatment will be accorded to such
Confidential Information.

(c) Upon termination of employment of Employee, for whatever reason, Employee
shall surrender to the Company any and all documents, manuals, correspondence,
reports, records and similar items then or thereafter coming into the possession
of Employee which contain any Confidential Information of the Company or its
controlled subsidiaries or other controlled entities.

(d) Employee recognizes and acknowledges that the obligations of Employee
contained in Section 7 of this Agreement are reasonable and necessary to protect
the legitimate business interests of the Company, and that any breach or
violation of any of the provisions of such Section is likely to result in
irreparable injury to the Company for which the Company would have no adequate
remedy at law. Employee agrees that if Employee shall breach or violate
Section 7 of this Agreement, the Company shall be entitled, if it so elects, to
institute and prosecute proceedings at law or in equity, including, but not
limited to, a proceeding seeking injunctive relief, to obtain damages with
respect to such breach or violation, to enforce the specific performance of
Section 7 this Agreement by Employee, or to enjoin Employee from engaging in any
activity in violation of Section 7 of this Agreement. Employee acknowledges that
in the event of any such breach or violation, the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, and to an equitable accounting of all earnings, profits, and
other benefits arising from any such breach or violation, which rights shall be
cumulative and in addition to any other rights or remedies to which the Company
may be entitled. Employee agrees that in the event of any such violation, an
action may be commenced for preliminary or permanent injunctive relief and other
equitable relief in any federal or state court of competent
jurisdiction.  Employee agrees that effective service of process may be made
upon Employee under the notice provisions contained in Section 11 of this
Agreement.

8. Termination. This Agreement may be terminated prior to the end of the Term as
set forth below:

(a) Resignation (other than for Good Reason). Employee may resign, including by
reason of retirement, his position at any time by providing written notice of
resignation to the Company in accordance with Section 11 hereof. In the event of
such resignation, except in the case of resignation for Good Reason (as defined
below), this Agreement shall terminate and Employee shall not be entitled to
further compensation pursuant to this Agreement other than payment for (i) any
unpaid Base Compensation or unpaid Bonus accrued hereunder as of Employee’s
employment termination date, and (ii) any unpaid reasonable business expenses
incurred prior to Employee’s employment termination date, subject to the
Company’s expense reimbursement rules and policies as in effect from time to
time (the “Accrued Amounts”). Accrued Amounts, if any, shall be paid to Employee
in accordance with the Company’s customary payroll practices as in effect from
time to time, but in no event later than fifteen (15) days following Employee’s
termination of employment.

 
 

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(b) Death. If Employee’s employment is terminated due to his death, this
Agreement shall terminate and the Company shall have no obligations to Employee
or his estate, beneficiaries or legal representatives with respect to this
Agreement other than payment of the Accrued Amounts, if any. Accrued Amounts, if
any, shall be paid to Employee in accordance with the Company’s customary
payroll practices as in effect from time to time but in no event later than 15
days following Employee’s termination of employment on account of death.
Notwithstanding the foregoing, in the event of his death, Employee shall be
considered as immediately and totally vested in any and all outstanding Awards
previously granted to Employee by Company or its subsidiaries; provided,
however, with respect to Awards that are deferred compensation subject to Code
Section 409A, such accelerated vesting shall not cause an acceleration of a
payment or result in a change in form of payment that would violate Code
Section 409A.

(c) Discharge.

(i) The Company may terminate Employee’s employment in the event of Employee’s
Misconduct or Disability (both as defined below) only upon written notice
thereof delivered to Employee in accordance with Section 8(f) and Section 11
hereof. In the event that Employee’s employment is terminated during the Term by
the Company for any reason other than his Misconduct or Disability (both as
defined below), then, except as provided in Section 8(j)(i) below, (A) the
Company shall pay in lump sum in cash to Employee, within fifteen (15) days
following the expiration of the revocation period for the Release (as defined
below), but in no event later than the fifteenth (15th) day of the third month
following the year in which the Date of Termination occurs, an amount equal to
the greater of (i) one year of the then Employee Base Compensation as of the
Termination Date and (ii) the remaining Employee Base Compensation owed to
Employee during the balance of the Term, and (B) for six months following the
expiration of the revocation period for the Release, the Company, at its cost,
shall provide or arrange to provide Employee (and, as applicable, Employee’s
dependents) with accident and group health insurance benefits substantially
similar to those which Employee (and Employee’s dependents) were receiving
immediately prior to Employee’s termination (if any); provided, however, the
benefits otherwise receivable by Employee pursuant to this clause (B) shall be
reduced to the extent comparable benefits are actually received by Employee
(and/or Employee’s dependents) during such period under any other employer’s
plan(s) or program(s), with Employee being obligated to promptly disclose to the
Company any such comparable benefits; and provided, further, however, that for
the avoidance of doubt, the COBRA continuation period shall run concurrently
with the period set forth in this Clause (B).  In addition to the aforementioned
compensation and benefits, Employee shall be considered as immediately and
totally vested in any and all Awards previously granted to Employee by Company
or its subsidiaries; provided, however, with respect to Awards that are deferred
compensation subject to Code Section 409A, such accelerated vesting shall not
cause an acceleration of a payment or result in a change in form of payment that
would violate Code Section 409A.  With respect to benefits set forth under
Clause (B) above, all insurance premiums and/or benefits payments made by the
Company with respect to such benefits shall be made so as to be exempt from
Section 409A of the Code and, for purposes thereof, and either each such payment
shall be treated as a separate payment under Section 409A of the Code, or such
payments shall be treated as medical benefits under a separation pay plan, as
described under Treasury Regulation Section 1.409A-1(b)(9)(v)(B). To the extent
any such payments are not exempt from Section 409A of the Code (i.e., they
constitute “nonqualified deferred compensation” subject to Section 409A of the
Code), such payments shall be paid by the Company according to a fixed schedule
consisting of monthly installment payments. If the Company’s pre-tax payment of
the premiums for such benefits would cause the Executive to be taxed on the
Company’s actual cost of providing such accident and group health insurance
benefits because such benefits are “self-insured,” the Company will instead pay
such premiums on an after-tax basis so the premium amounts are included in the
Employee’s taxable income. With respect to any such benefits that are taxable
and not otherwise excluded from deferred compensation under Code Section 409A,
any amount reimbursable and paid in one tax year shall not affect the amount to
be reimbursed or paid in another tax year, all reimbursements shall be paid no
later than the end of the Executive’s taxable year following the tax year in
which such expenses were incurred and the reimbursements under this Section
cannot be substituted for any other benefit. The Company’s obligation to make
the payments and provide the benefits described in this Section 8(c)(i) is
conditioned expressly on Employee’s executing (and not revoking) a general
release of any and all claims arising out of or relating to Employee’s
employment and termination of employment in a form reasonably satisfactory to
the Company (the “Release”). If Employee fails to execute a Release within
forty-five (45) days following the later of (i) the Date of Termination or
(ii) the date Employee actually receives an execution copy of such Release
(which shall be delivered to Employee no later than five (5) business days
following Date of Termination), or if Employee revokes such Release within seven
(7) days following execution, Employee shall forfeit all payments and benefits
described hereunder.

(ii) In the event Employee is terminated because of Misconduct, the Company
shall have no obligations pursuant to this Agreement after the Date of
Termination other than for payment of the Accrued Amounts, if any. As used
herein, “Misconduct” means (A) the continued failure by Employee to
substantially perform his duties with the Company (other than any such failure
resulting from Employee’s incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
by Employee for Good Reason), after a written demand for substantial performance
is delivered to Employee by the Board, which demand specifically identifies the
manner in which the Board believes that Employee has not substantially performed
his duties, and the Employee fails to cure such failure within fifteen (15) days
after receipt of such demand, (B) the engaging by Employee in conduct which is
demonstrably and materially injurious to the Company, monetarily or otherwise
(other than such conduct resulting from Employee’s incapacity due to physical or
mental illness or any such actual or anticipated conduct after the issuance of a
Notice of Termination by Employee for Good Reason), (C) Employee’s conviction
for the commission of a felony or (D) action by Employee toward the Company
involving dishonesty. Anything contained in this Agreement to the contrary
notwithstanding, the Board shall have the sole power and authority to terminate
the employment of Employee on behalf of the Company.

 
 

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(d) Disability. If Employee shall have been absent from the full-time
performance of Employee’s duties with the Company for ninety (90) consecutive
calendar days as a result of Employee’s incapacity due to physical or mental
illness, Employee’s employment may be terminated by the Company for “Disability”
and Employee shall not be entitled to further compensation pursuant to this
Agreement, other than for payment of the Accrued Amounts, if any.
Notwithstanding the foregoing, in the event that Employee’s employment is
terminated by the Company due to Disability, Employee shall be considered as
immediately and totally vested in any and all Awards previously granted to
Employee by the Company or its subsidiaries; provided, however, with respect to
Awards that are deferred compensation subject to Code Section 409A, such
accelerated vesting shall not cause an acceleration of a payment or result in a
change in form of payment that would violate Code Section 409A.

(e) Resignation for Good Reason. Employee shall be entitled to terminate his
employment for Good Reason as defined herein. If Employee terminates his
employment for Good Reason, he shall be entitled to the compensation and
benefits provided in Section 8(c)(i) hereof in accordance with the terms
therein, including, without limitation, the requirement that Employee execute
and not revoke the Release contemplated in Section 8(c)(i). “Good Reason” shall
mean the occurrence of any of the following circumstances without Employee’s
express written consent; provided, that, Employee has provided a Notice of
Termination to the Company within fifteen (15) days after the initial occurrence
of any such circumstance of Employee’s intention to terminate Employee’s
employment for Good Reason, and the Company has failed to cure, to the extent
curable, such circumstance within fifteen (15) days of receipt of the Notice of
Termination given in respect hereof:

(i) the material breach of any of the Company’s obligations under this Agreement
without Employee’s express written consent; or

(ii) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in
Section 14 hereof.

In addition, the occurrence of a Corporate Change, shall constitute “Good
Reason” hereunder, but only if Employee terminates his employment within ninety
(90) days following the effective date of such Corporate Change.

(f) Notice of Termination. Any purported termination of Employee’s employment by
the Company under Sections 8(c)(ii) (Misconduct) or 8(d) (Disability), or by
Employee under Section 8(e) (Good Reason), shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 11
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which, if by the Company and is for Misconduct or Disability, shall set
forth in reasonable detail the reason for such termination of Employee’s
employment, or in the case of resignation by Employee for Good Reason, said
notice must specify in reasonable detail the basis for such resignation. A
Notice of Termination given by Employee pursuant to Section 8(e) shall be
effective even if given after the receipt by Employee of notice that the Board
has set a meeting to consider terminating Employee for Misconduct. Any purported
termination for which a Notice of Termination is required which is not effected
pursuant to this Section 8(f) shall not be effective.

 
 

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(g) Date of Termination. “Date of Termination” shall mean the date specified in
the Notice of Termination, provided that the Date of Termination shall be at
least fifteen (15) days following the date the Notice of Termination is given;
provided, however, that in the case of Employee’s resignation for Good Reason,
Date of Termination shall mean the close of business on the last day on which
the Company may cure any circumstance alleged by Employee to give rise to a Good
Reason termination. Notwithstanding the foregoing, in the event Employee is
terminated for Misconduct, the Company may refuse to allow Employee access to
the Company’s offices (other than to allow Employee to collect his personal
belongings under the Company’s supervision) prior to the Date of Termination.
Notwithstanding anything herein to the contrary, for purposes of this Agreement,
“termination of employment” shall mean Employee’s “separation from service” from
the Company and its “affiliates” as defined in Code Section 409A and Final
Treasury Regulations Section 1.409A-1(h), including the default presumptions
thereof. For purposes of this Agreement, “affiliate” shall mean (i) any person
or entity that directly or indirectly controls, is controlled by or is under
common control with the Company and/or (ii) to the extent provided by the Board,
any person or entity in which the Company has a significant interest. The term
“control” (including, with correlative meaning, the terms “controlled by” and
“under common control with”), as applied to any person or entity, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person or entity, whether
through the ownership of voting or other securities, by contract or otherwise;
provided, however, with respect to any payment or benefit subject to
Section 409A of the Code, the term “affiliate” shall mean any member of the
Company’s control group within the meaning of Final Treasury Regulations
Section 1.409A-1(h)(3), as such may be modified or amended from time to time, by
applying the “at least 50 percent” provisions thereof.

(h) Mitigation. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 8 by seeking other employment or otherwise,
nor (except as set forth in Section 8(c)(i)(B)) shall the amount of any payment
provided for in this Agreement be reduced by any compensation earned or benefits
received by Employee as a result of employment by another employer, except that
any severance amounts payable to Employee pursuant to the Company’s severance
plan or policy for employees in general shall reduce the amount otherwise
payable pursuant to Sections 8(c)(i) or 8(e).

(i) Excess Parachute Payments. Notwithstanding anything in this Agreement to the
contrary, to the extent that any payment or benefit received or to be received
by Employee hereunder in connection with the termination of Employee’s
employment would, as determined by tax counsel selected by the Company,
constitute an “Excess Parachute Payment” (as defined in Section 280G of the
Internal Revenue Code), the Company shall fully “gross-up” such payment so that
Employee is in the same “net” after-tax position he would have been if such
payment and gross-up payments had not constituted Excess Parachute Payments, and
such “gross-up” payment shall be made no later than the end of Employee’s
taxable year next following Employee’s taxable year in which he remits the taxes
to which such gross-up payment relates. The Company shall reimburse any costs
and expenses incurred by Employee, including without limitation, attorneys’ fees
due to a tax audit or litigation in connection with any excise tax (including
penalties and interest or other excise taxes thereon) under Code Section 4999 or
Code Section 280G and any such reimbursement shall be made by the end of the
Employee’s tax year following the tax year in which such taxes that are subject
to the audit or litigation are remitted to the taxing authority, or where as a
result of such audit or litigation no taxes are remitted, by the end of the
Employee’s tax year following the tax year in which the audit is completed or
there is a final nonappealable settlement or other resolution of the litigation.
The Employee’s right to payment or reimbursement pursuant to this Section 8(i)
shall not be subject to liquidation or exchange for any other benefit.

 
 

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(j) Resignation from Board. In the event Employee’s employment by the Company is
terminated for any reason (other than Employee’s death), Employee shall
immediately resign as a member of the Board and the board of directors of any of
the Company’s subsidiaries. Nothing herein shall be deemed to limit the power of
the shareholders of the Company to at any time remove any director, including,
without limitation, Employee, in accordance with applicable law. All payments to
Employees pursuant to this Agreement shall be conditioned upon Employee’s
compliance with his obligations under this Section 8(j).

(k) Code Section 409A. Notwithstanding any provision of this Section 8 to the
contrary, if all or any portion of the benefits provided in this Section 8 is
determined to be “nonqualified deferred compensation” subject to Code
Section 409A, and the Company determines that Employee is a “specified employee”
as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other
guidance issued thereunder, then such benefits (or portion thereof) shall be
accumulated and paid on the first day of the seventh month following Employee’s
termination of employment. For purposes of this Agreement, whether Employee is a
“specified employee” will be determined in accordance with the written
procedures adopted by the Board.
(i) This Agreement is intended to comply with the provisions of Section 409A of
the Code, and shall be interpreted and construed accordingly. The Company shall
have the discretion and authority to amend this Agreement at any time to satisfy
any requirements of Code Section 409A or guidance published thereunder;
provided, however, any such amendment shall maintain the economic terms of this
Agreement for the Employee. However, in no event will the Company have any
liability for any failure of the Agreement to satisfy Code Section 409A, and the
Company does not guarantee that the Agreement complies with Code Section 409A.

(ii) The Company shall promptly reimburse Employee for eligible expenses under
this Agreement that Employee incurs and properly reports to the Company in
accordance with its expense reimbursement rules and policies. Notwithstanding
anything herein to the contrary or otherwise, all reimbursements shall be made
so as to be exempt from Section 409A of the Code and to the extent not exempt:
(A) the amount of expenses eligible for reimbursement or in-kind benefits
provided during any calendar year will not affect the amount of expenses
eligible for reimbursement or in-kind benefits provided in any other calendar
year, (B) the reimbursements for expenses for which Employee is entitled to be
reimbursed shall be made on or before the last day of the calendar year
following the calendar year in which the applicable expense is incurred and
(C) the right to payment or reimbursement or in-kind benefits hereunder may not
be liquidated or exchanged for any other benefit.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee’s continuing or future participation in any benefit, bonus, incentive,
or other plan or program provided by the Company or any of its affiliated
companies and for which Employee may qualify, nor shall anything herein limit or
otherwise adversely affect such rights as Employee may have under any Awards
with the Company or any of its affiliated companies.

 
 

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10. Assignability. The obligations of Employee hereunder are personal and may
not be assigned or delegated by him or transferred in any manner whatsoever, nor
are such obligations subject to involuntary alienation, assignment or transfer.
The Company shall have the right to assign this Agreement and to delegate all
rights, duties and obligations hereunder, either in whole or in part, to any
parent, affiliate, successor or subsidiary organization or company of the
Company, so long as the obligations of the Company under this Agreement remain
the obligations of the Company.

11. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Company at its principal office address, directed to the attention of the Board
with a copy to the Secretary of the Company, and to Employee at Employee’s
residence address on the records of the Company or to such other address as
either party may have furnished to the other in writing in accordance herewith
except that notice of change of address shall be effective only upon receipt.

12. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

13. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Employee to
compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if he terminated his employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used herein, the term “Company” shall include any successor to its business
and/or assets as aforesaid which executes and delivers the Agreement provided
for in this Section 13 or which otherwise becomes bound by all terms and
provisions of this Agreement by operation of law.

(b) This Agreement and all rights of Employee hereunder shall inure to the
benefit of and be enforceable by Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts would be payable to him
hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Employee’s devisee, legatee, or other designee or, if there be no such designee,
to Employee’s estate.

 
 

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14. Withholding Taxes.

(a) Tax Withholding. The Company shall have the power and the right to deduct or
withhold from any benefits payable under this Agreement an amount sufficient to
satisfy federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld.

(b) Share Withholding. With respect to tax withholding required upon the upon
the lapse of restrictions on any restricted common stock, or upon any other
taxable event arising as a result of any stock awards pursuant to this
Agreement, Employee may elect, to satisfy the withholding requirement, in whole
or in part, by having the Company withhold shares having a fair market value on
the date the tax is to be determined equal to the minimum statutory total tax
which could be imposed on the transaction. All such elections shall be made in
writing, signed by the Employee, and shall be subject to any restrictions or
limitations that the Company, in its discretion, deems appropriate. Any fraction
of a share required to satisfy such obligation shall be disregarded and the
Employee shall instead pay the amount due in cash.

15. No Restraints. As an inducement to the Company to enter into this Agreement,
Employee represents and warrants that he is not a party to any other agreement
or obligation for personal services, and that there exist no impediments or
restraints, contractual or otherwise, on Employee’s powers right or ability to
enter into this Agreement and to perform his duties and obligations hereunder.

16. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Employee and such officer as may be specifically authorized by the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto of, or in compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement is an integration of the parties’ agreement; no
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party, except
those which are set forth expressly in this Agreement. THE VALIDITY,
INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF TEXAS.

17. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

18. Arbitration. Either party may elect that any dispute or controversy arising
under or in connection with this Agreement be settled by arbitration in Houston,
Texas in accordance with the Employment Rules of the American Arbitration
Association then in effect. If the parties cannot mutually agree on an
arbitrator, then the arbitration shall be conducted by a three arbitrator panel,
with each party selecting one arbitrator and the two arbitrators so selected
selecting a third arbitrator. The findings of the arbitrator(s) shall be final
and binding, and judgment may be entered thereon in any court having
jurisdiction. The findings of the arbitrator(s) shall not be subject to appeal
to any court, except as otherwise provided by applicable law. The arbitrator(s)
may, in his or her (or their) own discretion, award legal fees and costs to the
prevailing party.

[Signature Page Follows]
 
 
 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
 
TEXAS RARE EARTH RESOURCES CORP.

By: /s/ Dan Gorski                           
Dan Gorski, Executive Officer

MARC LEVIER:
 
/s/ Marc LeVier                                

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

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Exhibit A
 
STOCK OPTION AGREEMENT
(Pursuant to the Company’s Amended and Restated 2008 Stock Option Plan)

Texas Rare Earth Resources Corp., a Nevada corporation (the “Company”), desiring
to afford an opportunity to the Grantee named below to purchase certain shares
of the Company’s common stock (the “Stock”) to provide Grantee with an added
incentive as an employee of the Company or one or more of its subsidiaries,
hereby grants to Grantee, and Grantee hereby accepts, an option (the “Option”)
to purchase the number of shares of Stock specified below, exercisable upon the
fixed date and at the Option exercise price specified below, subject to, in all
respects, the vesting requirements set forth in Section 2 “VESTING SCHEDULE AND
EXPIRATION.”

1.           IDENTIFYING PROVISIONS.  As used in this Stock Option Agreement
(the “Agreement” or “Option Agreement”), the following terms shall have the
following respective meanings:

(1) Grantee:  Marc Le Vier, Chief Executive Officer of the Company

(2) Effective Date of grant:                 May 3,
2011                                                                                                

(3) Number of shares optioned*:          2,500,000 common shares

(4)  
Option exercise price per share: $2.50.

2.           VESTING SCHEDULE AND EXPIRATION.  The Option Shares shall vest in
equal 1/12th installments on the last day of each of the 12 calendar quarters
(March 31st, June 30th, September 30th, December 31st) following the Effective
Date (each such date being a “Scheduled Vesting Date”), provided that Grantee
remains employed continuously with the Company from the date hereof through each
such Schedule Vesting Date.  Each portion of the Option scheduled to vest on
each separate Schedule Vesting Date shall be a separate “Tranche” and shall be
deemed to be a separate payment under Code Section 409A.  Vesting may accelerate
upon the occurrence of any of the conditions set forth in that certain
Employment Agreement between Grantee and the Company, dated May 3, 2011 (the
“Employment Agreement”).

3.           TERMINATION OF UNVESTED OPTION SHARES.  Upon Optionee’s cessation
of employment for any reason (death, Disability (as defined below), Separation
From Service (as defined below)), this Option shall terminate immediately with
respect to any Option Shares that are then unvested (after giving effect to any
accelerated vesting required as a result of such cessation pursuant to the
Employment Agreement).

 
 

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4.           ESTABLISHMENT OF AUTOMATIC EXERCISE EVENT FOR EACH TRANCHE.  Each
Tranche of the Option shall be separately exercisable solely upon the soonest to
occur of the following events (such soonest event shall be the “Automatic
Exercise Event” for the Tranche):

 
(a)
Scheduled Vesting Date.  If the Scheduled Vesting Date for the Tranche occurs
prior to any of the other events set forth in this Section 4, the Scheduled
Vesting Date shall be the Automatic Exercise Event for the Tranche and the
Tranche may be exercised in whole or in part by Grantee at any time in the
calendar year following the calendar year in which the Scheduled Vesting Date
occurs.  The Tranche shall terminate in its entirety as of the end of the period
described in the preceding sentence.

 
(b)
Grantee’s Separation from Service.  If Grantee’s Separation From Service occurs
prior to any of the other events set forth in this Section 4, Grantee’s
Separation From Service shall be the Automatic Exercise Event for the Tranche
and the vested portion of the Tranche (if any) may be exercised in whole or in
part by Grantee on the date that is six months and one day following the date of
Grantee’s Separation From Service (the “Six-Month Delay Date”) or, to the extent
permitted by Code Section 409A, on any date thereafter on or prior to December
31st of the year in which the Six-Month Delay Date occurs.  The Tranche shall
terminate in its entirety as of the end of the period described in the preceding
sentence.  For purposes of this Agreement, Separation From Service shall have
the meaning set forth in Final Treasury Regulation Section 1.409A-1(h).

 
(c)
Grantee’s Death.  If Grantee dies prior to any of the other events set forth in
this Section 4, Grantee’s death shall be the Automatic Exercise Event for the
Tranche and the vested portion of the Tranche (if any) may be exercised in whole
or in part by Grantee’s legal representative or representatives or the persons
entitled to do so under the Grantee’s last will and testament or under
applicable interstate laws at any time in the calendar year following the
calendar year in which the Grantee’s death occurs.  The Tranche shall terminate
in its entirety as of the end of the period described in the preceding sentence.

 
(d)
Grantee’s Disability.  If Grantee becomes Disabled prior to any of the other
events set forth in this Section 4, Grantee’s Disability shall be the Automatic
Exercise Event for the Tranche and the vested portion of the Tranche may be
exercised in whole or in part by Grantee (or Grantee’s guardian or legal
representative or representatives) at any time in the calendar year following
the calendar year in which the Grantee becomes Disabled.  The Tranche shall
terminate in its entirety as of the end of the period described in the preceding
sentence.  For purposes of this Agreement, Disability shall have the meaning set
forth in Final Treasury Regulation Section 1.409A-3(i)(4).

 
 

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(e)
Corporate Change that Qualifies as a Change in Control Event.  If a Corporate
Change (as defined in the Employment Agreement) that is also a Change in Control
Event of the Company occurs prior to any of the other events set forth in this
Section 4, such Corporate Change/Change in Control Event shall be the Automatic
Exercise Event for the Tranche and the vested portion of the Tranche may be
exercised in whole or in part by Grantee on the date of the Corporate
Change/Change of Control Event or, to the extent permitted by Code Section 409A,
on any date thereafter on or prior to December 31st of the year in which the
Corporate Change/Change in Control Event occurs.  The Tranche shall terminate in
its entirety as of the end of the period described in the preceding
sentence.  For purposes of this Agreement, Change in Control Event shall have
the meaning set forth in Final Treasury Regulation Section 1.409A-3(i)(5).

 
Notwithstanding anything to the contrary in this Section, in no event shall any
successor to the Company be required to assume this Option or substitute a new
award for this Option, in full or in part, except as set forth in the Plan or as
may be required to ensure that Grantee has the opportunity to exercise the
Option (or Tranche thereof) or successor award (or receive payment in respect
thereof) at the applicable time or times set forth in Sections 4(a) – (e).

5.           RESTRICTIONS ON TRANSFERABILITY OF OPTION.  This Option may not be
transferred by the Grantee other than by will or the laws of descent and
distribution and may be exercised during the Grantee’s lifetime only by the
Grantee or the Grantee’s guardian or legal representative subject to the
limitations herein.
 
 
6.           ADJUSTMENTS AND CORPORATE REORGANIZATIONS.  If the outstanding
shares of stock of the class then subject to this Option are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities or other forms of property (including cash) or rights, as a
result of one or more reorganizations, recapitalization, spin-offs, stock
splits, reverse stock splits, stock dividends or the like, appropriate
adjustments shall be made in the exercise price and number of Shares pursuant to
the Plan.

7.           EXERCISE, PAYMENT FOR AND DELIVERY OF STOCK.  This Option may be
exercised by the Grantee or other person then entitled to exercise it by giving
written notice of exercise to the Company specifying the number of shares to be
purchased and the total purchase price, accompanied by payment of the purchase
price in any form then permitted by the Texas Rare Earth Resources Corp. Amended
and Restated 2008 Stock Option Plan (the “Plan”).

8.           RIGHTS IN STOCK BEFORE ISSUANCE AND DELIVERY.  No person shall be
entitled to the privileges of stock ownership in respect of any shares issuable
upon exercise of this Option, unless and until such shares have been issued to
such person as fully paid shares.

 
 

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9.           REQUIREMENTS OF LAW.  By accepting this Option, the Grantee
represents and agrees for himself or herself and his or her transferees by will
or the laws of descent and distribution that, unless a registration statement
under the Securities Act of 1933 is in effect as to shares purchased upon any
exercise of this Option, (a) any and all shares so purchased shall be acquired
for his or her personal account and not with a view to or for sale in connection
with any distribution, and (b) each notice of the exercise of any portion of
this Option shall be accompanied by a representation and warranty in writing,
signed by the person entitled to exercise the same, that the shares are being so
acquired in good faith for his or her personal account and not with a view to or
for sale in connection with any distribution.  No certificate or certificates
for shares of stock purchased upon exercise of this Option shall be issued and
delivered unless and until, in the opinion of legal counsel for the Company,
such securities may be issued and delivered without causing the Company to be in
violation of or incur any liability under any federal, state or other securities
law or any other requirement of law or of any regulatory body having
jurisdiction over the Company

10.           TEXAS RARE EARTH RESOURCES CORP. PLAN.  This Option is subject to,
and the Company and the Grantee agree to be bound by, all of the terms and
conditions of the Plan, as the same may be amended from time to time in
accordance with its terms, provided that no such amendment shall deprive the
Grantee, without the Grantee’s consent, of this Option or of any rights
hereunder.  Pursuant to the Plan, the Board of Directors of the Company or its
Committee established for such purposes is vested with conclusive authority to
interpret and construe the Plan and this Option Agreement, and is authorized to
adopt rules and regulations for carrying out the Plan.  A copy of the Plan in
its present form has been previously provided to Grantee and is available for
inspection or copying during the business hours of the Company by the Grantee or
other persons entitled to exercise this Option at the Company’s principal
office.

11.           NOTICE.  Any notice to be given to the Company shall be addressed
to the Company in care of its Corporate Secretary at its principal office, and
any notice to be given to the Grantee shall be addressed to the Grantee at the
address set forth beneath the Grantee’s signature hereto or at such other
address as the Grantee may hereafter designate in writing to the Company.  Any
such notice shall be deemed duly given five (5) business days after enclosed in
a properly sealed envelope addressed as aforesaid, registered or certified mail,
return receipt requested, and deposited, postage and registry or certification
fees prepaid, in a post office or branch post office regularly maintained by the
United States Postal Service.  Notice shall also be deemed given if in writing
when received by the party to whom notice is intended by hand delivery, courier
service, facsimile or by electronic means subject to the receipt and retention
by the party giving notice of evidence of its delivery.

12.           TAX WITHHOLDING.  The Company or any Affiliate shall have the
right to deduct from payments of any kind otherwise due to Grantee, any federal,
state, local or foreign taxes of any kind required by law to be withheld upon
the issuance of any shares of Stock or payment of any kind upon the exercise of
this Option.  Subject to the prior approval of the Committee, which may be
withheld by the Committee, in its sole discretion, Grantee may elect to satisfy
the minimum statutory withholding obligations, in whole or in part, (i) by
having the Company withhold shares of Stock otherwise issuable to Grantee or
(ii) by delivering to the Company shares of Stock already owned by Grantee.  The
shares delivered or withheld shall have an aggregate Fair Market Value not in
excess of the minimum statutory total tax withholding obligations.  The Fair
Market Value of the shares used to satisfy the withholding obligation shall be
determined by the Company as of the date that the amount of tax to be withheld
is to be determined.  Shares used to satisfy any tax withholding obligation must
be vested and cannot be subject to any repurchase, forfeiture, or other similar
requirements.  Any election to withhold shares shall be irrevocable, made in
writing, signed by Grantee, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

 
 

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13.           RULES OF CONSTRUCTION.  This Agreement has been executed and
delivered by the Company in Texas and shall be construed and enforced in
accordance with the laws of said State, other than any choice of law rules
calling for the application of laws of another jurisdiction.  Should there be
any inconsistency or discrepancy between the provisions of this Option and the
terms and conditions of the Company’s Plan under which this Option is granted,
the provisions in the Plan shall govern and prevail.  The receipt of this Option
does not give the Grantee any right to continued employment by the Company or a
subsidiary for any period, nor shall the granting of this Option or the issuance
of shares on exercise thereof give the Company or any subsidiary any right to
the continued services of the Grantee for any period.

14.           SECTION 409A.  This Agreement is intended to comply with the
provisions of Section 409A of the Code and shall be interpreted and construed
accordingly.  The Company shall have the discretion and authority to amend this
Agreement at any time to satisfy any requirements of Code Section 409A or
guidance published thereunder; provided, however that any such amendment shall
seek to maintain as closely as possible the economic terms of this Agreement for
Grantee.  However, in no event shall the company have any liability for any
failure of the Agreement to satisfy Code Section 409A, and the Company does not
guarantee that the Agreement complies with Code Section 409A.

 
 
 
 
 
 
 
 
 
 
 

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*Hereinafter referred to as the “Shares” or the “Option Shares”.
 

IN WITNESS WHEREOF, the Company has granted this Option on the date of grant
specified above.

“GRANTEE”
“COMPANY”
     
Texas Rare Earth Resources Corp.
       
By: /s/ Marc LeVier
By: /s/ Dan Gorski
Marc Le Vier
Dan Gorski
       
Address For Notice:
Address for Notice:
   
_____________________
_____________________
_____________________
_____________________

 
 

 
 
 
 

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