Exhibit 10.1
 
EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of December 28, 2009
(the “Effective Date”) between WINDTAMER CORPORATION, a New York corporation
(the “Company”), and Mr. Adeeb Saba (“Mr. Saba” or “Executive”).

R E C I T A L S:

WHEREAS, the Company is in the business of developing, manufacturing, licensing
and selling wind turbines;

WHEREAS, the Company desires to engage Mr. Saba as its Vice President of
Operations on the terms and conditions set forth herein;

             WHEREAS, amounts paid pursuant to this Agreement are intended to
qualify as performance-based compensation under Section 162(m) of the Internal
Revenue Code (“Code”); and

              WHEREAS, Saba desires to accept such employment on the terms and
conditions set forth herein.

P R O V I S I O N S:

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties agree as follows:

1.           Employment; Duties.
 
(a)           The Company hereby agrees to employ Mr. Saba as its Vice President
of Operations.  Mr. Saba hereby accepts such employment.  Mr. Saba will report
to the Company’s President until April 15, 2010, after which Mr. Saba shall
report to the Company’s Chief Executive Officer.  Mr. Saba will perform those
duties and have such authority and powers as are customarily associated with his
position of Vice President of Operations and such other duties as the President
of the Company may reasonably request from time to time.
 
 
(b)           Mr. Saba shall be employed on a full time basis and shall devote
substantially all of his professional business time to the performance of his
duties.
 
2.           Term.                      The term (the “Term”) of this Agreement
shall commence on December 28, 2009 (the “Start Date”), and shall continue for
three (3) years from the Start Date unless otherwise terminated as provided
herein (together with any Renewal Term, as hereafter defined, shall be referred
to as the “Term”).   This Agreement shall automatically be extended for
successive one (1) year terms pursuant to the terms and conditions of this
Agreement (each, a “Renewal Term”), unless otherwise terminated by written
notice from one party to the other no less than sixty (60) days prior to the end
of the Term or any subsequent Renewal Term.
 
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3.           Compensation.
 
(a)           Annual Salary.  In consideration for the services rendered by Mr.
Saba on behalf of the Company during the Term, the Company shall pay Mr. Saba,
commencing on the Start Date, an annual salary of $175,000 (the “Base Salary”),
payable in accordance with the Company’s regular payroll practices.  All forms
of compensation referred to in this Agreement are subject to withholding for
applicable federal, state and local taxes.
 
(b)           Bonus.   In addition to his Base Salary, Mr. Saba shall be
entitled to receive bonus payments as follows: four percent (4%) of all sales of
the Company up to $2.5 million and one percent (1%) of all sales of the Company
between $2.5 million and $10 million recorded during calendar year 2010.  Bonus
payments shall be paid to Mr. Saba on a quarterly basis via the Company’s
regular payroll within two weeks after the Company releases its financial
results on Form 10-Q or Form 10-K for the applicable quarter.  Notwithstanding
anything to the contrary contained herein, in no event shall any quarterly bonus
payment paid to Mr. Saba pursuant to this Section 3(b) be greater than $43,750;
provided, however, that any earned but unpaid bonus payable pursuant to this
Section 3(b) shall carry forward to the next calendar quarter subject to the
maximum bonus payable set forth in the first sentence of this Section 3(b).  The
bonus structure of Mr. Saba for calendar year 2011 and beyond shall be mutually
agreed to in writing by Mr. Saba and the Chief Executive Officer of the Company.
 
(c)           Stock Options. On the Start Date, Mr. Saba shall be issued
pursuant to the Company’s 2008 Equity Incentive Plan stock options to purchase
400,000 shares of the Company’s Common Stock with an exercise price equal to the
last trade of the common stock on the Effective Date, which shall vest 200,000
shares on the first anniversary of the Start Date, 100,000 on the second
anniversary of the Start Date and 100,000 on the third anniversary of the Start
Date

4.           Benefits.  In addition to the compensation set forth above, the
Company shall provide Mr. Saba with the following benefits during the Term:
 
(a)           Mr. Saba shall be entitled to four (4) weeks of vacation during
each calendar year (pro-rated for any partial calendar year) that he is employed
hereunder during which vacation his annual salary shall be paid in full.  Any
vacation not taken by Mr. Saba shall not carryover into the succeeding
year.  All unused and accrued vacation shall be paid to Mr. Saba (or his estate)
upon Mr. Saba’ termination of employment.  Such vacation may only be taken at
such time or times as are not inconsistent with the reasonable business needs of
the Company.
 
(b)           The Company shall provide Mr. Saba with up to 5 days of paid sick
leave each calendar year (pro-rated for any partial calendar year); unused sick
days shall not carryover into the succeeding year.  The Company also shall
provide Mr. Saba with holiday pay as provided by the Company to its other
executives.
 
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(c)            The Company shall make available family medical insurance for Mr.
Saba under the medical insurance plan provided to other executives of the
Company or a substantially similar plan. In addition, Mr. Saba and his
dependents shall be entitled to participate in such other benefits as may be
extended to active employees of the Company and their dependents including
retirement, profit-sharing, 401(k), group insurance, hospitalization, medical or
other benefits made available by the Company to its employees
generally.  Further, in the event that the Company desires to obtain “key man”
life insurance on the life of Mr. Saba during the Term, Mr. Saba shall cooperate
with the Company in obtaining such insurance.
 
                5.           Expenses.  Mr. Saba will be entitled to be paid or
reimbursed according to Internal Revenue Service ("IRS") guidelines for all
expenses reasonably incurred by him in connection with Mr. Saba's
responsibilities to the Company, including, without limitation, for travel,
lodging, food, and entertainment.
 
6.           Confidential Information. Mr. Saba shall not, during the Term or at
anytime during the five (5) years after termination of his employment, disclose,
except as required or necessary in the course of his employment by the Company
or as otherwise authorized by the Company, any Confidential Information (as
defined herein).  “Confidential Information” shall mean any information existing
as of the date of this Agreement, or thereafter developed, in which the Company
has a proprietary interest, including, but not limited to, information relating
to its patents, technology, research and development, technical data, trade
secrets, know-how, products, services, finances, operations, sales and
marketing, customers and customer information, licenses, orders for the purchase
or sale of products, personnel matters and/or other information relating to the
Company, whether communicated orally, electronically or in writing, or otherwise
obtained by Mr. Saba as a result of his employment, or through observation or
examination of the Company’s business.

7.           Non-Competition Covenant; Non Solicitation Covenant.
 
(a)           During the Term and for a period of one year thereafter, Mr. Saba
agrees that he will not, directly or indirectly (including, without limitation,
whether as consultant, an officer, employee or director), engage in any business
that manufactures, sells, designs, develops or distributes wind turbines capable
of generating a maximum of 100 kilowatts or less per unit or any business
competing directly with the business in which the Company or those businesses
operated or provided by the Company at such time.
 
(b)           Notwithstanding anything herein to the contrary, Mr. Saba shall
not be prevented or limited from (i) investing in the stock or other securities
of any corporation whose stock or securities are publicly owned and regularly
traded on any public exchange, (ii) serving as a director, officer or member of
professional, trade, charitable and civic organizations, or (iii) passively
investing (not to exceed being a beneficial owner of more than 1% of the
outstanding Common Stock) his assets in such a form and manner as will not
conflict with the terms of this Agreement and will not require services (whether
as consultant, an officer, employee or director) on the part of Mr. Saba in the
operation of the business of the entities in which such investments are made.
 
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(c)           In furtherance of the foregoing, Mr. Saba shall not, during the
aforesaid period of non-competition as provided in Section 7(a), directly or
indirectly, in connection with any business involved in the manufacture, sale,
design, development or distribution of wind turbines capable of generating a
maximum of 100 kilowatts or less per unit, or any business competing directly
with the business in which the Company was engaged, or in the process of
developing during Mr. Saba’s tenure with the Company, or solicit any customer or
employee of the Company who was a customer or employee of the Company during the
tenure of his employment.
 
(d)           Mr. Saba agrees that the prohibitions contained herein are
reasonable and valuable to the Company, and are express conditions of the
Company’s decision to employ him. If any court shall hold that the duration,
scope or any other provision of non-competition or any other restriction
contained in this Section 7 is unenforceable, it is our intention that same
shall not thereby be terminated but shall be deemed amended to delete therefrom
such provision or portion adjudicated to be invalid or unenforceable or, in the
alternative, such judicially substituted term may be substituted therefore.

8.           Termination of Agreement.  This Agreement shall terminate upon the
occurrence of the following events:

(a)           This Agreement shall terminate upon Executive’s death.
 
(b)           The Company may terminate this Agreement upon Executive’s “total
disability” (“Disability”), which shall mean incapacity due to physical or
mental illness or disability, which renders him absent, or unable to perform his
duties hereunder on a full time basis for a period of six (6) months, whether
consecutive or cumulative, within any twelve (12) month period.
 
(c) The Company may terminate this Agreement for “Good Cause” (as defined below)
upon thirty (30) days prior written notice to Executive, subject to any
applicable time to cure, which notice shall specify the reason(s) for
termination.  For purposes of this Agreement, “Good Cause” means (i) willful
disobedience by the Executive of a material and lawful instruction of the Board
of Directors or the Chief Executive Officer of the Company; (ii) conviction of
the Executive of any misdemeanor involving fraud or embezzlement or similar
crime or any felony; (iii) an order is entered by the Securities and Exchange
Commission, a state regulatory agency or an exchange on which the Company’s
securities are traded finding that Executive has violated the securities laws;
(iv) breach by the Employee of any material term, condition or covenant of this
Agreement; (v) excessive absences from work, other than for illness or
Disability.  In the case of any breach of Sections 8 (c) (i), (iv) or (v) which
is capable of being cured, termination will not occur unless the breach is not
cured within thirty (30) days after Company has provided Executive with written
notice thereof.

(d) Executive may terminate this Agreement upon thirty (30) days prior written
notice to the Company.
 
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(e) This Agreement may be terminated upon the mutual agreement of Company and
Executive.

9.  
Obligations Following Termination of Agreement.

 
(a) If this Agreement is terminated pursuant to Section 8, the Company shall
have no obligation to pay any Severance Payments (as defined below) or benefits
to Executive; provided, however, Company shall be obligated to pay Executive (or
in the case of his death, his spouse, estate or representative) all unpaid
salary, earned bonuses, vacation and other benefits accrued through the date of
termination of this Agreement and shall provide such other benefits, such as
health insurance continuation in the manner required by Section 4980B of the
Code or other applicable law (“COBRA Coverage”).

(b) If this Agreement is terminated by Company without “Good Cause” as defined
in Section 8:

(i) Executive shall be paid all unpaid salary, earned bonuses, vacation and
other benefits accrued through the date of termination and shall receive such
other benefits, as may be required by statute, such as health insurance
continuation coverage under COBRA;
 
(ii) Executive shall receive as severance payment an amount equal to the
Executive’s annual salary at the rate in effect as of the date of Executive’s
termination for the remainder of the Term; provided, however, the aggregate
amount of such severance payments shall not be less than two times the
Executive’s annual salary.  Any severance payments are payable on normal pay
dates during the remainder of the Term in accordance with the Company’s pay
policies in effect prior to termination date.  In addition, for the twelve (12)
month period immediately after the termination of this Agreement, Company shall
continue to provide and pay the premium for the health insurance provided to
Executive (and his family, if applicable) immediately prior to the termination
of this Agreement and the Company shall take such actions as are necessary to
cause such COBRA Coverage not to be offset by the provision of benefits under
this Section 9(b)(ii) and to cause the period of COBRA Coverage under the
Company’s health insurance to commence at the end of the twelve (12) month
period. The Executive shall be responsible for the payment of any COBRA premium
during the subsequent continuation period (collectively, the payments under this
clause (ii) are referred to as “Severance Payments”);

(iii) Executive shall not be required to mitigate damages of the amount of any
salary continuation payments provided for under this Section by seeking other
employment or otherwise, nor shall the amount of any payments provided for under
this Section be reduced by any compensation earned by Executive as a result of
employment by another employer or by any self employment after the date of
termination;
 
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(iv) All options for Company capital stock and restricted stock granted to
Executive pursuant to the Company’s 2008 Equity Incentive Plan including,
without limitation, those granted pursuant to Section 3(c) hereof, or otherwise,
that remain unvested shall immediately vest, and Executive shall have a period
of 120 days following termination to exercise his vested options, subject to the
provisions of the Company’s 2008 Equity Incentive Plan and applicable IRS
regulations (provided that any delays in payment or settlement set forth in such
grant or award agreements that are required under Section 409A of the Code shall
remain effective).

(c) Upon the termination of this Agreement for any reason, any and all
restrictions (other than restrictions which are the result of applicable Federal
securities laws and regulations and those restrictions which Executive has
entered into with a third party on a contractual basis) on the transfer of
shares of Company’s capital stock then owned by Executive (which shall include
any and all option shares unvested at the time of the termination) shall be
terminated as of the date of termination of this Agreement.

(d) All of the obligations of the Company set forth in this Section 9 are
contingent upon the Executive complying with the provisions of section 6
(Confidential Information) and Section 7 (Non-Competition Covenant; Non
Solicitation Covenant).  In the event that Executive does not comply with the
aforementioned sections of this Agreement, then Company shall not be obligated
to provide Executive with any of the benefits set forth in this Section 9.  In
the case of any breach of Sections 6 or 7 which is capable of being cured,
termination of Severance Payments will not occur unless the breach is not cured
within thirty (30) days after Company has provided Executive with written notice
specifying the breach.

(e) Notwithstanding the foregoing provisions of this Section 9 or anything in
this Agreement to the contrary, the Medical Benefits that are not non-taxable
medical benefits, “disability pay” or “death benefit” plans within the meaning
of Treasury Regulation Section 1.409A-1(a)(5) shall be provided and administered
in a manner that complies with Treasury Regulation Section 1.409A-3(i)(1)(iv),
which requires that (i) the amount of such benefits provided during one taxable
year shall not affect the amount of such benefits provided in any other taxable
year, except that to the extent such benefits consist of the reimbursement of
expenses referred to in Section 105(b) of the Code, a maximum, if provided under
the terms of the plan providing such Medical Benefit, may be imposed on the
amount of such reimbursements over some or all of the period in which such
benefit is to be provided to the Executive, as described in Treasury Regulation
Section 1.409A-3(i)(iv)(B), (ii) to the extent that any such benefits consist of
reimbursement of eligible expenses, such reimbursement must be made on or before
the last day of the Executive’s taxable year following the taxable year in which
the expense was incurred and (iii) no such benefit may be liquidated or
exchanged for another benefit.
 
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10.           Indemnification. The Company shall, to the maximum extent
permitted by law, indemnify and hold harmless Mr. Saba against any and all
damages, liabilities and expenses, including, without limitation, reasonable
attorneys’ fees, judgments, fines, expenses, fees, losses, claims, settlements,
and other amounts actually and reasonably incurred in connection with any actual
or threatened action, suit or proceeding, whether civil, criminal,
arbitrational, administrative or investigative, arising by reason of Mr. Saba’s
employment by, or provision of services to, the Company other than the willful
violation of law by Mr. Saba.  The Company agrees to obtain Directors and
Officers Liability insurance, and to include Mr. Saba in the coverage of this
policy during the term of this Agreement and for a period of two (2) years
thereafter.  The Company shall promptly advance, prior to the final disposition
of any proceeding, promptly following request therefor, all fees and expenses
incurred by Executive in connection with such action, suit or proceeding upon
receipt of an undertaking by or on behalf of Executive to repay said amounts if
it shall be determined ultimately that Executive is not entitled to be
indemnified under the provisions of this Agreement.
 
11.           Work-for Hire.  Except as otherwise may be agreed by the Company
in writing, in consideration of the employment of Mr. Saba by the Company, and
free of any additional obligations of the Company to make additional payment to
him, Mr. Saba agrees to irrevocably assign to the Company any and all
inventions, software, manuscripts, documentation, improvements or other
intellectual property whether or not protected by any state or federal laws
relating to the protection of intellectual property, relating to the present or
future business of the Company that are developed by Mr. Saba prior to the
termination of his employment with the Company, either alone or jointly with
others, and whether or not developed during normal business hours or arising
within the scope of his/her duties of employment.  Mr. Saba agrees that all such
inventions, software, manuscripts, documentation, improvement, trade secrets or
other intellectual property shall be and remain the sole and exclusive property
of the Company and shall be deemed the product of work for hire.  Mr. Saba
hereby agrees to execute such assignments and other documents as the Company may
consider appropriate to vest all right, title and interest therein to the
Company and hereby appoints the Company as Mr. Saba’s attorney-in-fact with full
powers to execute such document itself in the event Mr. Saba fails or is unable
to provide the Company with such signed documents.  This provision does not
apply to an invention for which no equipment, supplies, facility, or
intellectual property or trade secret information of the Company was used and
which was developed entirely on Mr. Saba’ own time, unless (a) the invention
relates (i) to the business of the Company, or (ii) to the Company’s actual or
demonstrably anticipated research or development, or (b) the invention results
from any work performed by Mr. Saba for the Company.

12.           Miscellaneous.

(a)           This Agreement:
 
(i)           shall constitute the entire agreement between the parties hereto
and supersedes all prior agreements, written or oral, concerning the subject
matter herein between the Company and the Mr. Saba and there are no oral
understandings, statements or stipulations bearing upon the effect of this
Agreement which have not been incorporated herein;

(ii)           may be modified or amended only by a written instrument signed by
each of the parties hereto;

(iii)           shall bind and inure to the benefit of the parties hereto and
their respective heirs, successors and assigns;
 
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(iv)           may not be assigned by either party without a written agreement
signed by all parties hereto.  Any assignment not signed by all parties is null
and void; and
 
(b)           If any provision of this Agreement shall be held invalid or
unenforceable by competent authority, such provision shall be construed so as to
be limited or reduced to be enforceable to the maximum extent compatible with
the law as it shall then appear.  The total invalidity or unenforceability of
any particular provision of this Agreement shall not affect the other provisions
hereof and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
 
(c)           This Agreement shall be construed in accordance with and governed
by the laws of the State of New York without reference to conflict of laws
principles.  Any litigation involving this Agreement shall be adjudicated in a
court with jurisdiction located in Monroe County, New York and the parties
irrevocably consent to the personal jurisdiction and venue of such court.
 
(d)           All notices and other communications under this Agreement must be
in writing and must be given by personal delivery or first class mail, certified
or registered with return receipt requested, or by overnight currier service and
will be deemed to have been duly given upon receipt if personally delivered,
five (5) days after mailing, if mailed, or upon delivery if sent by overnight
courier service, to the respective persons named below:

If to the Company:

WindTamer Corporation
Attn:  Chief Executive Officer
156 Court Street
Geneseo, NY 14454

If to Mr. Saba:

7644 Creekwood Estates
Ontario, NY 14519

Any party may change such party’s address for notices by notice duly given
pursuant to this Section.

(e)           This Agreement may be executed simultaneously in one or more
counterparts, each one of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  The parties may execute
this Agreement by facsimile signature.
 
(f)           Failure of either party at any time to require performance of any
provision of this Agreement shall not limit the party’s right to enforce the
provision, nor shall any waiver of any breach of any provision be a waiver of
any succeeding breach of any provision or a waiver of the provision itself for
any other provision.
 
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(g)           If any provision of this Agreement, or the application of such
provision to any person or circumstance, shall be held invalid, the remainder of
this Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid, shall not be affected thereby.

(h)           THE PARTIES ACKNOWLEDGE THAT MR. SABA AND THE COMPANY HAVE EACH
BEEN ADVISED THAT IT IS IMPORTANT FOR EACH OF THEM TO SEEK SEPARATE LEGAL ADVISE
AND REPRESENTATION IN THIS MATTER.

[Signature Page Follows]
 
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.

WINDTAMER CORPORATION

By:        /s/  Gerald Brock         
Name: Gerald Brock
      Title:   Chief Executive Officer

/s/  Adeeb Saba               
Adeeb Saba   
 
 
 
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