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International Fuel Technology, Inc. 10-Q [intl-fuel8k_1113.htm]

Exhibit 10.2

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 May 15,
2009.

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 May 15, 2009 and ending on May 14, 2012
("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 Seventy-five
Thousand Dollars ($175,000.00).  The Annual Base Salary shall be payable
bi-weekly by wire transfer to an account designated by Employee to Company.

(b)
Bonus. In addition to the Annual Base Salary, the Employee shall be eligible to
receive a bonus (the “Bonus”) at such times and in such amounts as deemed
appropriate by the Board.

(c)
Stock Options. The Employee shall be eligible to receive options to purchase
shares in the Company, with granting at the Company’s discretion.

 
 

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(d)
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; 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.

(e)
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.

(f)
Fringe Benefits. During each year of the Employment Period commencing on the
date of the Agreement, the Employee shall be entitled to up to twenty (20) 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)
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.

(b)
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, "For 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.
disclosure to any party outside the Company any of the Confidential Information
as hereinafter defined; or

 
C.
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 for any reason other
than For Cause, Death or Disability (“Without Cause”) shall be effected by
giving the Employee written notice of the termination.  Termination of
employment by the Company Without Cause shall be effective on the fifth business
day following the date when the notice 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).

(c)
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 this 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 Change in Control of the Company. For purposes of this
Agreement, "Change in Control" shall mean any one or more of the following
occurrences:

 
(1)
a merger or consolidation of the Company with or into another entity, or the
exchange of securities (other than a merger or consolidation) by the holders of
the voting securities of the Company and the holders of voting securities of any
other entity, in which the shareholders of the Company immediately before the
transaction do not own 50% or more of the combined voting power of the voting
securities of the surviving entity or its parent immediately after the
transaction;

 
(2)
a dissolution of the Company;

 
(3)
a transfer of all or substantially all of the assets of the Company in one
transaction or a series of transactions occurring within a twelve month period
to a “Person” or “Group” (as defined below);

 
(4)
a transaction or a series of transactions occurring in which a Person or Group
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s
then outstanding securities; or

 
(5)
a majority of the members of the Company’s Board is replaced during any twelve
month period by directors whose appointment or election is not endorsed by a
majority of the Company’s Board prior to the date of the appointment or election

However, a “Change in Control” shall not be deemed to have occurred if the
ownership of 50% or more of the combined voting power of the surviving
corporation, asset transferee, or Company (as the case may be), after giving
effect to the transaction or series of transactions, is directly or indirectly
held by:

 
(A)
a trustee or other fiduciary under an employee benefit plan maintained by the
Company or any Subsidiary,

 
 

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(B)
one or more of the “executive officers” of the Company that held such positions
prior to the transaction or series of transactions, or any entity, Person or
Group under their control, or

 
(C)
one or more members of  “senior management” as designated by the Chief Executive
Officer from time to time, that held such positions prior to the transaction or
series of transactions, or any entity, Person or Group under their control.

As used herein, “Person” and “Group” shall have the meanings set forth in
Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (“1934 Act”), and “executive officer” shall have the meaning set forth
in Rule 3b-7 promulgated under the 1934 Act.  “Group” shall further be
determined by the Plan Administrator to constitute “more than one person acting
as a group.”

 
(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 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.

(d)
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.

(e)
Date of Termination. The "Date of Termination" means (i) May 14, 2012; (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 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 shall be the sole and
exclusive remedy therefore.

 
 

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(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, (ii) for the six
(6) months after a determination of disability has been made or (iii) 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 the Company shall not be liable for any
payments to Employee.

(d)
Accrued Vacation Pay.  No compensation for earned but unused vacation will be
paid by the Company to the Employee upon any form of Employee termination.

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.

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 five (5) years following (i) Employee terminating his
employment other than For Good Cause Shown, or (ii) Company terminating his
employment For 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.

 
 

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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 judgment 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.

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.

 
 

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(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 (c) 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.

(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.

By:
/s/ Stuart D. Beath
   
STUART D. BEATH
 

INTERNATIONAL FUEL TECHNOLOGY, INC.
       
By:
/s/ Jonathan R. Burst
 
Name:
Jonathan R. Burst
 
Title:
Chief Executive Officer