EXHIBIT 10.3

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered effective
as of the 1st day of July, 2019, by and between Terra Tech Corp., a Nevada
Corporation (the “Company”) and Derek Peterson (the “Executive”) and supersedes
and replaces any prior employment agreement or employment letter between the
Parties.

 

W I T N E S S E T H:

 

WHEREAS, the Board of Directors of the Company (the “Board”) has approved the
Company entering into an employment agreement with the Executive;

 

WHEREAS, the Executive is now the Chief Executive Officer of the Company and
thus the principal executive of the Company;

 

WHEREAS, the Company and Executive would like to set forth the terms of
Executive’s continued employment;

 

NOW THEREFORE, in consideration of the recitals and the mutual agreements herein
set forth, the Company and the Executive agree as follows:

 

ARTICLE 1 

EMPLOYMENT AND TERM

 

1.1 Employment. The Company hereby employs Executive and Executive accepts
employment as Chief Executive Officer of the Company. As its Chief Executive
Officer, Executive shall render such services to the Company as are customarily
rendered by the Chief Executive Officer of comparable companies and as required
by the articles and by-laws of the Company, and such services shall be rendered
at the Company’s primary California office at least 50% of the time. Executive
accepts such employment and, consistent with fiduciary standards which exist
between an employer and an employee, shall perform and discharge the duties
commensurate with his position that may be assigned to him from time to time by
the Company.

 

1.2 Term and Renewal. The term of this Agreement shall commence on the date
first written above (the “Commencement Date”), and shall continue for a term of
three (3) years until July 1, 2022 the (“Initial Term”); provided, however, that
commencing on the third (3rd) anniversary of the Commencement Date and on each
anniversary of the Commencement Date thereafter (each, an “Extension Date”), the
term of Executive’s employment under this Agreement shall be automatically
extended for an additional one (1) year period (each, a “Renewal Term”), unless
the Company or the Executive provides the other at least ninety (90) days prior
written notice before the next Extension Date that the Initial Term or Renewal
Term, as applicable, shall not be extended (a “Non-Renewal Notice”). The period
of time between the Commencement Date and the termination of this Agreement
shall be referred to herein as the “Term.”

 

 1

  

 

1.3 Compensation and Benefits. During the Term of this Agreement, the Executive
shall be entitled to the compensation (“Compensation”) and benefits (“Benefits”)
described in Exhibit A attached hereto.

 

ARTICLE 2

TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS

 

2.1 Termination by the Company for Cause, Termination by the Executive without
Good Reason, Death, or Disability. If, during the Term, the Executive’s
employment is terminated by the Company for Cause, or if Executive’s employment
with the Company ends due to death, “permanent and total disability” (within the
meaning Section 22(e)(3) of Internal Revenue Code of 1986, as amended the
“Code”), or voluntary termination of employment by the Executive without Good
Reason, then the Executive shall only be entitled to any earned but unpaid base
salary as well as any other amounts or benefits owing to Executive under the
terms of any employee benefit plan of the Company (the “Accrued Benefits”). For
purposes of this Agreement, Accrued Benefits shall include any accrued paid time
off pursuant to the Company’s policy and practices. The Accrued Benefits shall
be payable upon Executive’s termination within the time provided by law.

 

2.2 Termination by the Company without Cause or by the Executive for Good Reason
or Non-Renewal Notice Following a Change of Control. If, during the Term: (i)
the Executive’s employment with the Company is terminated by the Company other
than for Cause, (ii) Executive resigns for Good Reason, or (iii) within one (1)
year following a Change of Control (as defined below), the Company provides a
Non-Renewal Notice (a “Qualified Termination”), then the Executive shall be
entitled to the Severance Benefits as described in Section 2.3 herein as well as
his Accrued Benefits.

 

2.3 Severance Benefits. In the event of a Qualified Termination, the Company
shall pay and provide the Executive with the following “Severance Benefits”:

 

(a) The greater of (i) the remaining compensation during the Initial Term or
(ii) two (2) times the Executive’s then current annual base salary, less any
taxes and withholding as may be necessary pursuant to law, to be paid in
accordance with the Company’s normal payroll practices, but in no event less
frequently than monthly, paid in equal installments over a two (2) month period
beginning with the first normal payroll period after the effective date of the
release referred to in Section 2.3(d) below.

 

(b) Executive shall be entitled to receive a number of shares of the Company’s
common stock (or the common stock of a successor company following Change of
Control) with an aggregate value of Two Million Dollars ($2,000,000) (the “Stock
Severance”) calculated by dividing (a) $2,000,000 by (b) the Fair Market Value
(as defined in the Company’s 2018 Equity Incentive Plan (the “Plan”)) of a share
of the Company’s common stock on the date of termination of employment.
Notwithstanding the foregoing, Executive shall not be entitled to the Stock
Severance if the total market capitalization of the Company (defined as the
number of outstanding shares multiplied by the Fair Market Value of a share of
common stock) on the date of termination of employment is less than $65 million.
The Stock Severance will only be issued if, at the time of termination of
employment and at the time of issuance of the shares, such shares may be issued
to the Executive by the Company without unreasonable expense or effort pursuant
to either (i) the Plan (or a successor equity plan), or (ii) an available
exemption from registration under the Securities Act of 1933, and any applicable
state securities “blue sky” laws. If the Stock Severance is subject to issuance
pursuant to this Section 2.3(b), the shares shall be issued to Executive no
later than 30 days after the effective date of the release referred to in
Section 2.3(d) below.

 

(c) To the extent the Executive and Executive’s dependents elect coverage under
the Company’s health insurance plan pursuant to the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”), the Company shall pay the COBRA premium payments
for a period of up to twelve (12) months after the date of Termination.

 

(d) As a condition to receiving the Severance Benefits contemplated by this
Section 2.3, within thirty (30) days after the effective date of such Qualified
Termination, Executive shall execute and deliver an irrevocable general release
(including, but not limited to, all matters relating to employment with the
Company) in favor of the Company and its affiliates in such form as the Company
shall reasonably request (the effective date of which shall be eight days after
Executive delivers the signed release to the Company). Notwithstanding anything
herein to the contrary, in the event such 30-day period falls into two (2)
calendar years, the payments contemplated in this Section 2.3 shall not commence
until the second calendar year. The Severance Benefits shall terminate
immediately upon the Executive violating any of the provisions of Article 3 of
this Agreement. The conditions set forth in this paragraph are together referred
to as the “Termination Conditions”.

 

2.4 Good Reason. For purposes of this Agreement, “Good Reason” shall mean the
occurrence of any of the following, without the Executive’s prior written
consent: (i) a material reduction in Executive’s Base Salary, (ii) a relocation
of the Executive’s primary place of employment to a location more than fifty
(50) miles from Irvine, California, (iii) any requirement that the Executive
report to anyone other than the Board, or (iv) any material breach of this
Agreement. However, none of the foregoing events or conditions will constitute
Good Reason unless: (x) the Executive provides the Company with written
objection to the event or condition within thirty (30) days following the
occurrence thereof, (y) the Company does not reverse or cure the event or
condition within thirty (30) days of receiving that written objection, and (z)
the Executive resigns his employment within ten (10) days following the
expiration of that cure period.

 

 2

  

 

2.5 Cause. For purposes of this Agreement, “Cause” shall be deemed to exist upon
any of the following events: (i) the Executive’s conviction of, or plea of nolo
contendere, to a felony, (ii) failure to substantially perform Executive’s
essential job functions; (iii) failure of Executive to adhere to directives of
the Board or Executive’s immediate supervisor, (iv) Executive’s material
misconduct or gross negligence, (v) a material violation of any Company policy,
or (vi) any material breach of this Agreement. The Board must provide thirty
(30) days written notice of its intent to terminate the Executive’s employment
for Cause and if such grounds for Cause are curable, Executive shall have thirty
(30) days following the receipt of such written notice to cure such curable
event that would otherwise constitute Cause.

 

2.6 Change of Control. As used herein, a “Change of Control” shall mean the
occurrence of any of the following events: (i) Ownership. Any “Person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the total voting power represented by the Company’s
then outstanding voting securities (excluding for this purpose any such voting
securities held by the Company, or any affiliate, parent or subsidiary of the
Company, or by any employee benefit plan of the Company) pursuant to a
transaction or a series of related transactions; or (ii) Merger/Sale of Assets.
(A) A merger or consolidation of the Company or a subsidiary of the Company or
an acquisition of assets or an entity by the Company or a subisidary of the
Company whether or not approved by the Board, other than a merger or
consolidation or acquisition of assets or an entity which would result in the
holders of the voting securities of the Company outstanding immediately prior
thereto continuing to hold (either by remaining outstanding or by being
converted into voting securities of the surviving entity or the parent of such
corporation) at least fifty percent (50%) of the total voting power represented
by the voting securities of the Company or such surviving entity or parent of
such entity, as the case may be, outstanding immediately after such merger or
consolidation; or (B) the sale or disposition by the Company of all or
substantially all of the Company’s assets; or (iii) Change in Board Composition.
A change in the composition of the Board, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent Directors” shall
mean directors who either (A) are directors of the Company as of the date of
this Agreement, or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Incumbent Directors, or by a
committee of the Board made up of at least a majority of the Incumbent
Directors, at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors).

 

2.7 Accelerated Vesting of Equity Awards. The Executive’s outstanding and
unvested stock options will accelerate and become vested in the event of a
Qualified Termination and compliance with the Termination Conditions. If the
Executive’s employment is terminated for any reason other than Cause, death, or
“permanent and total disability”, the Executive may exercise the vested portion
of any stock options until the expiration date of such option.

 

ARTICLE 3

RESTRICTIVE COVENANTS

 

3.1 Confidentiality and Nondisclosure. The Executive will not use or disclose to
any individual or entity any Confidential Information (as defined below) except
(i) in the performance of Executive’s duties for the Company, (ii) as authorized
in writing by the Company, or (iii) as required by subpoena or court order,
provided that, prior written notice of such required disclosure is provided to
the Company and, provided further that all reasonable efforts to preserve the
confidentiality of such information shall be made. As used in this Agreement,
“Confidential Information” shall mean information that (i) is used or
potentially useful in the business of the Company, (ii) the Company treats as
proprietary, private or confidential, and (iii) is not generally known to the
public. “Confidential Information” includes, without limitation, information
relating to the Company’s products or services, processing, manufacturing,
marketing, selling, customer lists, call lists, customer data, memoranda, notes,
records, technical data, sketches, plans, drawings, chemical formulae, trade
secrets, composition of products, research and development data, sources of
supply and material, operating and cost data, financial information, personal
information and information contained in manuals or memoranda. “Confidential
Information” also includes proprietary and/or confidential information of the
Company’s customers, suppliers and trading partners who may share such
information with the Company pursuant to a confidentiality agreement or
otherwise. The Executive agrees to treat all such customer, supplier or trading
partner information as “Confidential Information” hereunder. The foregoing
restrictions on the use or disclosure of Confidential Information shall continue
after Executive’s employment terminates for any reason for so long as the
information is not generally known to the public.

 

3.2 Defend Trade Secrets Act Information. Executive acknowledges that,
notwithstanding the foregoing limitations on the disclosure of trade secrets,
Executive may not be held criminally or civilly liable under any Federal or
State trade secret law for the disclosure of a trade secret that (a) is made (i)
in confidence to a Federal, State or local government official, either directly
or indirectly, or to an attorney, and (ii) solely for the purpose of reporting
or investigating a suspected violation of law, or (b) is made in a complaint or
other document filed in a lawsuit or other proceeding, if such filing is made
under seal. In addition, if Executive files a proceeding against the Company in
connection with a report of a suspected legal violation, Executive may disclose
the trade secret to the attorney representing Executive and use the trade secret
in the court proceeding, if Executive files any document containing the trade
secret under seal and does not disclose the trade secret, except pursuant to
court order.

 

 3

  

 

3.3 Non-Disparagement. The Executive will not at any time during employment with
the Company, or after the termination of employment with the Company, directly
or indirectly (i) disparage, libel, defame, ridicule or make negative comments
regarding, or encourage or induce others to disparage, libel, defame, ridicule
or make negative comments regarding, the Company, or any of the Company’s
officers, directors, employees or agents, or the Company’s products, services,
business plans or methods; or (ii) engage in any conduct or encourage or induce
any other person to engage in any conduct that is in any way injurious or
potentially injurious to the reputation or interests of the Company or any of
the Company’s, officers, directors, employees or agents.

 

The Company and its officers, directors, employees or agents will not at any
time during Executive’s employment with the Company, or after the termination of
employment with the Company, directly or indirectly (i) disparage, libel,
defame, ridicule or make negative comments regarding, or encourage or induce
others to disparage, libel, defame, ridicule or make negative comments
regarding, the Executive; or (ii) engage in any conduct or encourage or induce
any other person to engage in any conduct that is in any way injurious or
potentially injurious to the reputation or interests of the Executive.

 

3.4 Survival of Termination Covenants. Executive’s obligations under this
Agreement shall survive Executive’s termination of employment with the Company
and the termination of this Agreement.

 

3.5 Equitable Relief. Executive hereby acknowledges and agrees that the Company
and its goodwill would be irreparably injured by, and that damages at law are an
insufficient remedy for, a breach or violation of the provisions of this
Agreement, and agrees that the Company, in addition to other remedies available
to it for such breach shall be entitled to a preliminary injunction, temporary
restraining order, or other equivalent relief, restraining Executive from any
actual breach of the provisions hereof, and that the Company’s rights to such
equitable relief shall be cumulative and in addition to any other rights or
remedies to which the Company may be entitled.

 

ARTICLE 4

MISCELLANEOUS

 

4.1 Entire Agreement. This Agreement contains the entire understanding of the
Company and the Executive with respect to the subject matter hereof.

 

4.2 Prior Agreement. This Agreement supersedes and replaces any prior oral or
written employment or severance agreement between the Executive and the Company.

 

4.3 Subsidiaries. Where appropriate in this Agreement the term “Company” shall
also include any direct or indirect subsidiaries of the Company.

 

4.4 Code Sections 409A and 280G.

 

(a) In the event that the payments or benefits set forth in Article 2 of this
Agreement constitute “non-qualified deferred compensation” subject to Section
409A of the Internal Revenue Code of 1986, as amended and the regulations and
guidance promulgated thereunder (collectively, “409A”), then the following
conditions apply to such payments or benefits:

 

(i) Any termination of Executive’s employment triggering payment of benefits
under Article 2 must constitute a “separation from service” under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of
such benefits can commence. To the extent that the termination of Executive’s
employment does not constitute a separation of service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of
further services that are reasonably anticipated to be provided by Executive to
the Company at the time Executive’s employment terminates), any such payments
under Article 2 that constitute deferred compensation under Section 409A shall
be delayed until after the date of a subsequent event constituting a separation
of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg.
§1.409A-1(h). For purposes of clarification, this Section shall not cause any
forfeiture of benefits on Executive’s part, but shall only act as a delay until
such time as a “separation from service” occurs.

 

 4

  

 

(ii) Notwithstanding any other provision with respect to the timing of payments
under Article 2 if, at the time of Executive’s termination, Executive is deemed
to be a “specified employee” of the Company (within the meaning of Section
409A(a)(2)(B)(i) of the Code), then limited only to the extent necessary to
comply with the requirements of Section 409A, any payments to which Executive
may become entitled under Article 2 which are subject to Section 409A (and not
otherwise exempt from its application) shall be withheld until the first (1st)
business day of the seventh (7th) month following the termination of Executive’s
employment, at which time Executive shall be paid an aggregate amount equal to
the accumulated, but unpaid, payments otherwise due to Executive under the terms
of Article 2.

 

(iii) It is intended that each installment of the payments and benefits provided
under Article 2 of this Agreement shall be treated as a separate “payment” for
purposes of Section 409A. Neither the Company nor Executive shall have the right
to accelerate or defer the delivery of any such payments or benefits except to
the extent specifically permitted or required by Section 409A.

 

(iv) Notwithstanding any other provision of this Agreement to the contrary, this
Agreement shall be interpreted and at all times administered in a manner that
avoids the inclusion of compensation in income under Section 409A, or the
payment of increased taxes, excise taxes or other penalties under Section 409A.
The parties intend this Agreement to be in compliance with Section 409A.
Executive acknowledges and agrees that the Company does not guarantee the tax
treatment or tax consequences associated with any payment or benefit arising
under this Agreement, including but not limited to consequences related to
Section 409A.

 

(b) If any payment or benefit Executive would receive under this Agreement, when
combined with any other payment or benefit Executive receives pursuant to a
Change of Control (for purposes of this section, a “Payment”) would: (i)
constitute a “parachute payment” within the meaning of Section 280G the Code;
and (ii) but for this sentence, be subject to the excise tax imposed by Section
4999 of the Code (the “Excise Tax”), then such Payment shall be either: (A) the
full amount of such Payment; or (B) such lesser amount (with cash payments being
reduced before stock option compensation) as would result in no portion of the
Payment being subject to the Excise Tax, whichever of the foregoing amounts,
taking into account the applicable federal, state and local employments taxes,
income taxes, and the Excise Tax, results in Executive’s receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax.

 

4.5 Severability. It is mutually agreed and understood by the parties that
should any of the restrictions and covenants contained in Article 3 be
determined by any court of competent jurisdiction to be invalid by virtue of
being vague, overly broad, unreasonable as to time, territory or otherwise, then
the Agreement shall be amended retroactive to the date of its execution to
include the terms and conditions which such court deems to be reasonable and in
conformity with the original intent of the parties and the parties hereto
consent that under such circumstances, such court shall have the power and
authority to determine what is reasonable and in conformity with the original
intent of the parties to the extent that such restrictions and covenants are
enforceable. In the event any other provision of this Agreement shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Agreement, and the Agreement shall be construed and
enforced as if the illegal or invalid provision had not been included.

 

4.6 Modification. No provision of this Agreement may be modified, waived, or
discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized officer of the Company
on the Company’s behalf, or by the respective parties’ legal representations and
successors.

 

4.7 Dispute Resolution & Applicable Law. All disputes regarding this agreement
shall be resolved by arbitration to be administered by the American Association
of Arbitration. To the extent not preempted by the laws of the United States,
the terms and provisions of this agreement are governed by and shall be
interpreted in accordance with, the laws of California, without giving effect to
any choice of law principles.

 

4.8 Successors and Assigns. This Agreement shall inure to the benefit of and be
enforceable by the Company’s successors and/or assigns and shall be enforceable
by the Executive against the Company’s successors and assigns.

 

4.9 Headings/References. The headings in this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.

 

 5

  

 

4.10 Indemnification. As additional consideration for Executive’s agreement to
perform the duties outlined herein, Executive shall be indemnified and held
harmless by the Company for any and all claims, costs or expenses including
legal fees and advancement of expenses, except in the case of willful, reckless
or grossly negligent misconduct, for any activity in any suit brought against
him or the Company for actions undertaken by Executive on behalf of the Company
to the maximum extent provided by law, regardless of whether such
indemnification is specifically authorized by statute, the Company’s Articles of
Incorporation or Bylaws or any other agreement.

 

4.11 Notices. Any notice, request, instruction, or other document to be given
hereunder shall be in writing and shall be deemed to have been given: (a) on the
day of receipt, if sent by overnight courier; (b) upon receipt, if given in
person; (c) five days after being deposited in the mail, certified or registered
mail, postage prepaid, and in any case addressed as follows:

 

If to the Company:

2040 Main Street, Suite 225

Irvine, California 92614

Attn: General Counsel

 

with copy sent to the attention of the Chairman of the Board of Directors at the
same address

 

If to the Executive:

Derek Peterson

_____________________________

 

_____________________________

 

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

 

[signature page follows]

 6

  

 

IN WITNESS WHEREOF, the parties have executed this Agreement on this 1st day of
July, 2019.

 

Terra Tech Corp.

 

By: ___________________________

Name: Alan Gladstone

Title: Chairman, Compensation Committee

 

EXECUTIVE

 

______________________________

Derek Peterson, Chief Executive Officer

 

 7

  

 

EXHIBIT A

EXECUTIVE’S COMPENSATION AND BENEFITS

 

1. Base Salary: Three Hundred Nine Thousand Dollars ($309,000) (or any increased
amount approved by the Board of Directors or the Compensation Committee) paid in
accordance with the Company’s standard payroll practices for senior executives.

 

2. Performance-Based Incentive: Executive shall be eligible to receive an annual
cash bonus (the “Annual Performance Bonus”), with the target amount of such
Annual Performance Bonus equal to one hundred percent (100%) of Executive’s Base
Salary (the “Target Performance Bonus”) in the year to which the Annual
Performance Bonus relates; provided that the actual amount of the Annual
Performance Bonus may be greater or less than the Target Performance Bonus. The
Annual Performance Bonus shall be based on performance and achievement of
Company goals and objectives as defined by the Board or Compensation Committee.
The amount of the Annual Performance Bonus shall be determined by the Board or
Compensation Committee in its sole discretion, and shall be paid to Executive no
later than March 15th of the calendar year immediately following the calendar
year in which it was earned. Executive must be employed by the Company on the
date that the Annual Performance Bonus is paid to Executive in order to be
eligible for, and to be deemed as having earned, such Annual Performance Bonus.
If, during the Term: (i) the Executive’s employment with the Company is
terminated by the Company other than for Cause, or (ii) Executive resigns for
Good Reason, then Executive will receive a pro-rated bonus for the time worked
based on the percentage worked of the calendar year, which bonus will be paid
within thirty (30) days after the date of termination or resignation. The
Company shall deduct from the Annual Performance Bonus all amounts required to
be deducted or withheld under applicable law or under any employee benefit plan
in which Executive participates.

 

3. Paid Time Off: Executive shall be entitled to paid time off pursuant to the
terms and conditions of the Company’s policy and practices as applied to the
Company’s senior executives.

 

4. Health & Welfare Benefits: Executive shall be eligible to participate in all
health and welfare benefits provided generally to other employees of the
Company.

 

5. Retirement Benefits: Executive shall be eligible to participate in all
retirement benefits provided generally to other employees of the Company.

 

 8