Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into by and
between INTERNATIONAL FUEL TECHNOLOGY, INC., a Nevada corporation (the
“Company”), and STUART D. BEATH (the “Employee”), and is dated as of July 2,
2007.
RECITALS
WHEREAS, the Chief Executive Officer (“CEO”) of Company, in consultation with
the Board of Directors, has determined that it is in the best interest of the
Company and its shareholders to employ the Employee in the position set forth
below, and the Employee desires to serve in that capacity, and;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
and promises herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and
Employee hereby agree as follows:
1. Employment Period. The Company shall employ the Employee, and the Employee
shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period commencing on June 30, 2007 and ending on June 30,
2009 (“Employment Period”).
2. Position and Duties.

(a)   The Employee shall serve as Chief Financial Officer (“CFO”) of the
Company, reporting to the Chief Executive Officer (“CEO”), with such duties,
responsibilities and authorities as are customarily assigned to such position,
and such other duties and responsibilities not inconsistent therewith as may be
assigned to him from time to time by the CEO of the Company.   (b)   During the
Employment Period, and excluding any periods of vacation and sick leave to which
the Employee is entitled, the Employee shall devote his full-time efforts to the
business and affairs of the Company and use his best efforts to carry out such
responsibilities faithfully and efficiently. It shall not be considered a
violation of the foregoing for the Employee to (i) serve on corporate, civic or
charitable boards or committees or (ii) deliver lectures or fulfill speaking
engagements so long as such activities do not interfere with the performance of
his responsibilities as an employee of the Company in accordance with this
Agreement or violate the provisions of Section 7 of this Agreement.   (c)  
Employee’s responsibilities shall include, but not be limited to, those
customarily required by the CFO of a publicly-traded company.

3. Compensation.

(a)   Base Salary. During the Employment Period the Employee shall receive an
annual base salary (the “Annual Base Salary”) at the rate of One Hundred
Thousand Dollars ($100,000.00), such base salary to be reviewed annually during
the Employment Period concomitant with a review of the performance of Employee.
The Annual Base Salary shall be payable bi-weekly by wire transfer to an account
designated by Employee to Company.   (b)   Stock Options. The Employee shall
receive options to purchase shares in the Company in accordance with the
attached Stock Option Agreement, a copy of which is attached hereto and
incorporated herein by reference.   (c)   Other Benefits. During the Employment
Period: (i) the Employee and his family shall be entitled to participate in all
benefit programs of the Company, including, but not limited to, health and
dental insurance coverage or reimbursement of the Employee’s reasonable cost to
maintain same to be added to the Annual Base Salary; and (ii) the Employee
and/or the Employee’s family, as the case may be, shall be eligible for
participation in, and shall receive all benefits under, all welfare benefit
plans, practices, policies and programs provided by the Company, including, but
not limited to any comprehensive dental plan, retirement plans and profit
sharing programs the Company may provide to any other employees from time to
time.

 

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(d)   Expenses. During the Employment Period, the Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the
Employee in carrying out the Employee’s duties under this Agreement, provided
that the Employee complies with the policies, practices and procedures of the
Company for submission of expense reports, receipts and similar documentation of
such expenses.

(e)   Fringe Benefits. During each year of the Employment Period commencing on
the date of the Agreement, the Employee shall be entitled to 25 paid days of
vacation and other fringe benefits, in each case, on such terms and conditions
as are determined by the Board of Directors of the Company.

4. Termination of Employment.

(a)   Probationary Period. Either Company or Employee may terminate the
Agreement at any time within ten (10) days after the expiration of the first
ninety (90) days of the Agreement (“Probationary Period”) by giving written
notice to the other party. If termination is by the Company, then upon the
giving of such notice, Employee shall be paid any accrued salary for the pay
period in which the notice is proffered.   (b)   Death or Disability. The
Employee’s employment shall terminate automatically upon the Employee’s death
during the Employment Period. The Company shall be entitled to terminate the
Employee’s employment because of the Employee’s Disability during the Employment
Period. “Disability” means that (i) the Employee has been unable, for a period
of 180 days to perform the Employee’s duties under this Agreement, as a result
of physical or mental illness or injury, and (ii) a physician selected by the
Company or its insurers, and acceptable to the Employee or the Employee’s
guardian or legal representative, has determined that the Employee’s incapacity
is total and permanent. A termination of the Employee’s employment by the
Company for Disability shall be communicated to the Employee by written notice,
and shall be effective on the 30th day after receipt of such notice by the
Employee (the “Disability Effective Date”), unless the Employee is able to, and
does, return to full-time performance of the Employee’s duties before the
Disability Effective Date.   (c)   By the Company.

(i)   The Company may terminate the Employee’s employment during the Employment
Period for Cause or without Cause. For the purposes of the Agreement, “Cause”
shall mean:

  A.   any fraud, embezzlement or other dishonesty of the Employee that
materially and adversely affects the Company’s business or reputation; or     B.
  the Employee’s conviction for a felony or entering into a plea of nolo
contendere with respect to a felony; or     C.   disclosure to any party outside
the Company any of the Confidential Information as hereinafter defined; or    
D.   any actions taken by Employee deemed by the Company’s CEO to be detrimental
to the well-being of the Company; or     E.   the refusal by Employee to perform
his material duties and obligations hereunder; or Employee’s willful and
intentional misconduct in the performance of his material duties and
obligations.

(ii)   A termination of employment by the Company for Cause shall be effectuated
by giving the Employee written notice (“Notice of Termination for Cause”) of the
termination. Termination of employment by the Company for Cause shall be
effective on the date when the Notice of Termination for Cause is given, unless
the notice sets forth a later date (which date shall in no event be later than
thirty (30) days after the notice is given).

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(iii)   A termination of the Employee’s employment by the Company without Cause
shall be effected by giving the Employee written notice of the termination, and
Employee shall be paid accrued salary for the pay period in which the notice is
given.

(d) By the Employee.

  (i)   The Employee may terminate employment in the event of a Good Cause
Shown. “Good Cause Shown” means:

  A.   the assignment to the Employee of any duties inconsistent in any respect
with paragraph (a) of Section 2 of the Agreement, other than actions that are
not taken in bad faith and are remedied by the Company within fifteen (15) days
after receipt of notice thereof from the Employee;     B.   any failure by the
Company to comply with any provision of Section 3 of this Agreement, other than
failures that are not taken in bad faith and are remedied by the Company within
fifteen (15) days after receipt of notice thereof from the Employee; or     C.  
the occurrence of a Non-Negotiated Change in Control of the Company. For
purposes of this Agreement, “Non-Negotiated Change in Control” shall mean any
one or more of the following occurrences:

  (I)   Any individual, corporation (other than the Company, any trustees or
other beneficiary holding securities under any employee benefit plan of the
Company, or any Company owned, directly or indirectly, by the Stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company), partnership, trust, association, pool, syndicate, or any other
entity or any group of persons acting in concert becomes the beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company possessing more than one-half (1/2) of the voting
power for the election of directors of the Company;     (II)   There shall be
consummated any consolidation, merger, or other business combination involving
the Company or the securities of the Company in which holders of voting
securities of the Company immediately prior to such consummation own, as a
group, immediately after such consummation, voting securities of the Company
(or, if the Company does not survive such transaction, voting securities of the
entity surviving such transaction) having less than one-half (1/2) of the total
voting power in an election of directors of the Company (or such other surviving
corporation); or     (III)   There shall be consummated any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company (on a
consolidated basis) to a party which is not controlled by or under common
control with the Company.

  (ii)   A termination of employment by the Employee for Good Cause Shown shall
be effectuated by giving the Company written notice (“Notice of Termination for
Good Cause Shown”) of the termination, setting forth the conduct of the Company
that constitutes Good Cause Shown. Absent a remedy or cure by Company within
applicable time frames, a termination of employment by the Employee for Good
Cause Shown shall be effective on the fifth business day following the date when
the Notice of Termination for Good Cause Shown is given, unless

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      the notice sets forth a later date (which date shall in no event be later
than thirty (30) days after the notice is given).     (iii)   A termination of
the Employee’s employment by the Employee without Good Cause Shown shall be
effected by giving the Company written notice of the termination at least sixty
(60) days prior to the termination date.

(e)   No Waiver. The failure to set forth any fact or circumstance in a Notice
of Termination for Cause or a Notice of Termination for Good Cause Shown shall
not constitute a waiver of the right to assert, and shall not preclude the party
giving notice from asserting, such fact or circumstance in an attempt to enforce
any right under or provision of this Agreement.   (f)   Date of Termination. The
“Date of Termination” means (i) June 30, 2009; (ii) the date of the Employee’s
death; (iii) the Disability Effective Date; (iv) the date on which the
termination of the Employee’s employment by the Company for Cause or by the
Employee for Good Cause Shown is effective; (v) the date on which the Company
gives the Employee notice of a termination of employment without Cause, or;
(vi) 60 days after the Employee gives the Company notice of a termination of
employment without Good Cause Shown, as the case may be.

5. Obligations of the Company upon Termination.

(a)   Other Than for Cause, Death or Disability. If, during the Employment
Period, the Company terminates the Employee’s employment, other than during the
Probationary Period, or other than for Cause, Death or Disability, or the
Employee terminates his employment for Good Cause Shown, the Company shall
(i) pay the Employee’s accrued but unpaid portion of the Annual Base Salary (the
“Accrued Obligations”) to the Employee in a lump sum in cash within thirty
(30) days after the Date of Termination, and (ii) continue to pay the Annual
Base Salary for the remainder of the Employment Period. The payments provided
pursuant to this paragraph (a) of Section 5 are intended as liquidated damages
for a termination of the Employee’s employment by the Company other than for
Cause or Disability or for the actions of the Company leading to a termination
of the Employee’s employment by the Employee for Good Cause Shown, and shall be
the sole and exclusive remedy therefore.   (b)   Death or Disability. If the
Employee’s employment is terminated by reason of the Employee’s death or
Disability during the Employment Period, the Company shall pay the Accrued
Obligations to the Employee or the Employee’s estate or legal representative, as
applicable, in a lump sum in cash within thirty (30) days after the Date of
Termination. In addition, if the Employee’s employment is terminated by reason
of Disability, the Company will continue to pay to Employee until the earlier
of: (i) expiration of the Employment Period, (iii) for the six (6) months after
a determination of disability has been made or (ii) the date of Employee’s
death, the Annual Base Salary, less any amounts received by Employee under any
disability insurance coverage maintained for Employee by the Company.   (c)  
Cause; Other than for Good Cause Shown. If the Employee’s employment is
terminated by the Company for Cause during the Employment Period, or if the
Employee terminates his employment during the Employment Period other than for
Good Cause Shown, the Company shall pay Employee the salary accrued for the pay
period in which the termination occurs, unless termination is for Cause and the
cause involves fraud, embezzlement or disclosure of Confidential Information as
hereinafter defined, in which case Company shall not be liable for any payments
to Employee.

6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
the Employee’s continuing or future participation in any plan, program, policy
or practice provided by the Company or any of its affiliated companies for which
the Employee may qualify, nor shall anything in this Agreement limit or
otherwise affect such rights as the Employee may have under any contract or
agreement with the Company or any of its affiliated companies. Vested benefits
and other amounts that the Employee is otherwise entitled to receive under any
plan, policy, practice or program of, or any contract or agreement with, the
Company or any of its affiliated companies on or after the Date of Termination
shall be payable in accordance with such plan, policy, practice, program,
contract or agreement, as the case may be, except as explicitly modified by this
Agreement.

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7. Confidential Information. During his Term of Employment, the Company will
disclose to the Employee and Employee shall have access to confidential,
proprietary commercial, business and/or technical information relating to the
Company’s technology, know-how, data, formulae, processes, designs, studies,
findings, inventions, ideas, chemical information, production information and
cost information (“Confidential Information”). The Employee shall not
communicate, divulge or disseminate Confidential Information in full or
partially in any manner, medium, shape or form at any time during the Employee’s
employment with the Company except with the prior written consent of the Company
at the Company’s sole and absolute discretion or as otherwise required by law or
legal process. This provision shall forever survive the termination of
employment of Employee for any reason whatsoever.
8. Covenant Against Competition. During the Term of Employment with the Company
and for a period of two (2) years following (i) Employee terminating his
employment other than for Good Cause Shown, or (ii) Company terminating his
employment with Cause, Employee will not, directly or indirectly, own, manage,
operate, control, be employed by, perform services for, consult with, solicit
business for, participate in, or be connected with the ownership, management,
operation, or control of any business which uses surfactant chemical technology
as an additive for fuels or lubes to improve efficiency or performance and/or
reduce emissions.
9. Covenant Against Solicitation. During the Term of Employment with the Company
and for a period of one (1) year from the Employee’s Termination of Employment
from the Company for any reason whatsoever, Employee will not, directly or
indirectly, solicit other employees of the Company for employment with,
consultants to or agents of any business which performs services or sells
products materially similar to or competitive with those provided and sold by
the Company.
10. No Mitigation. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement and such amounts
shall not be reduced, regardless of whether the Employee obtains other
employment.
11. Successors.

(a)   This Agreement is personal to the Employee and, without the prior written
consent of the Company at the sole and absolute discretion of the Company, shall
not be assignable by the Employee.   (b)   This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns.

 12.   Miscellaneous.

(a)   Arbitration: Any dispute, controversy or claim arising out of or relating
to this contract, or the breach thereof, shall be settled by arbitration. Any
arbitration shall be concluded under the Commercial Rules of the American
Arbitration Association (“AAA”) and judgement upon the award rendered by the
arbitrator shall be final and binding and may be enforced before any court
having jurisdiction. The AAA shall not be involved in the arbitration in any
manner.       The parties shall mutually agree upon an arbitrator. In the event
the parties are unable to agree, then each party shall appoint an arbitrator of
their choosing within five (5) days and the two arbitrators shall appoint the
arbitrator within ten (10) days. Such arbitrator shall arbitrate the case no
less than sixty (60) days after the failure of a mediation, if any, or the
appointment of the arbitrator. Such arbitrator shall be self administered and
conducted on an ad hoc basis.       The arbitration shall take place at a
mutually agreed upon time in St. Louis, Missouri, at the office of the
arbitrator or a location designated by the arbitrator, and shall be governed by
the laws of the State of Missouri.

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  The arbitrator shall be required to render an award in writing within thirty
(30) days after the close of the hearing or the post hearing briefs’ due date,
should either party request to file a post hearing brief, and shall state the
reasons for reaching that award.     In all matters submitted to arbitration,
each party shall bear the entire cost and expense of its own witnesses and
representation. The expenses of the arbitrator and all other expenses of
arbitration shall be shared equally. The arbitrator shall award fees and
expenses to the prevailing party, where appropriate.     Notwithstanding
anything in this Agreement to the contrary, the Company and Employee shall be
entitled to seek injunctive or similar equitable relief in any court of
competent jurisdiction in order to enforce Company’s and Employee’s obligations
hereunder.

(b)   The formation, construction, and performance of this Agreement shall be
construed in accordance with the laws of the United States of America, State of
Missouri and any action or proceeding brought in connection with the enforcement
of the terms hereof shall be brought exclusively in Saint Louis County, Missouri
or the U.S. District Court for the Eastern District of Missouri. The captions of
this Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified except by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.   (c)   All notices and other communications under this
Agreement shall be in writing and shall be given by hand delivery to the other
party, by overnight courier with addressee signature required or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

If to the Employee:
Stuart D. Beath
12229 Prince Towne Drive
St. Louis, MO 63141
If to the Company:
International Fuel Technology, Inc.
Attention: Mr. Thomas M. Powell
7777 Bonhomme, Suite 1920
St. Louis, MO 63105
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 12. Notices and communications
shall be effective when actually received by the addressee.

(d)   The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.  
(e)   Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement all federal, state, local and
foreign taxes that are required to be withheld by applicable laws or
regulations.   (f)   The failure of the Employee or the Company to insist upon
strict compliance with any provision of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.   (g)   The Employee and
the Company acknowledge that this Agreement supersedes any other agreement
between them concerning the subject matter hereof.

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(h)   This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and which together shall constitute one instrument.

IN WITNESS WHEREOF, the Employee has hereunto set the Employee’s hand and,
pursuant to the authorization of its Board of Directors, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
\s\ Stuart D. Beath                              
STUART D. BEATH
INTERNATIONAL FUEL TECHNOLOGY, INC.
By:\s\ Jonathan R. Burst                              
Name: Jonathan R. Burst
Title: President and Chief Executive Officer

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