Exhibit 10.11


 


TERAWULF INC.


 


November 4, 2021


 


Nazar Khan


khan@terawulf.com


 


Dear Nazar:


 


This letter agreement (this “Agreement”)
sets forth our mutual understanding and agreement concerning your employment with TeraWulf Inc., a Delaware corporation (together with
any of its subsidiaries and affiliates as may employ you from time to time, and any and all successors thereto, the “Company”).


 


Term; Effectiveness. The period of
your employment under this Agreement (the “Term”) will commence as of May 1, 2021 (the “Effective Date”),
and will continue until the first anniversary of the Effective Date (the “Initial Term”). The Initial Term will be
automatically extended for successive one-year periods (each such one-year period, a “Renewal Term”), unless either
party provides written notice that the Term will not be so extended to the other party at least sixty (60) days prior to the last day
of the then current term (e.g., Initial Term or Renewal Term, as applicable).


 


Position, Authority, Duties and Responsibilities.
During the Term, you will be employed in the position of Chief Operating Officer and Chief Technology Officer of the Company and will
have such authority, duties and responsibilities as are customary for such positions. You will report to the Chief Executive Officer of
the Company. If requested by the Board of Directors of the Company (the “Board”) or the Chief Executive Officer of
the Company, you will also serve as an officer of subsidiaries or affiliates of the Company. Except as otherwise provided herein, you
will not be entitled to any additional compensation for your service for other positions or titles you may hold with any subsidiaries
or affiliates of the Company to the extent you are so appointed. Notwithstanding the preceding, you will be permitted to be involved with
the businesses set forth on Annex I attached hereto or as otherwise approved in writing by the Chief Executive Officer of the Company.


 


You agree to observe and comply with the Company’s
rules and policies as adopted from time to time by the Company. You will devote substantially all of your business time, skill, attention
and best efforts to the performance of your duties hereunder; provided, however, that you will be entitled to (i) serve
on civic, charitable, and religious boards and (ii) manage your personal and family investments, in each case, to the extent that
such activities do not materially interfere with the performance of your duties and responsibilities hereunder, are not in conflict with
the business interests of the Company or its subsidiaries or affiliates and do not otherwise compete with the business of the Company
or any of its subsidiaries or affiliates.


 


Annual Base Salary. During
the Term, for all services rendered under this Agreement, you will receive an annual base salary of $450,000, payable in accordance with
the Company’s applicable payroll practices.


 






    	 	 



     


    

 


Annual Bonus. During the Term, you
will be eligible to earn an annual fiscal year performance-based bonus (the “Annual Bonus”), with a target of 100%
of your annual base salary, based upon both objective and/or subjective factors set annually by the Compensation Committee of the Board
(the “Compensation Committee”), as applicable, and communicated to you at the beginning of the relevant year. Each
such Annual Bonus will be payable on such date as is determined by the Compensation Committee, but in any event within the period required
by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), such that it qualifies as a “short-term
deferral” pursuant to Section 1.409A-1(b)(4) of the Department of Treasury Regulations (or any successor thereto). Notwithstanding
the foregoing, no Annual Bonus will be payable with respect to any calendar year unless you remain continuously employed with the Company
on the date of payment.


 


Equity Compensation.  During
the Term, you shall be eligible to receive equity-based compensation awards under the Company’s 2021 Omnibus Incentive Plan (or
its successor plan) from time to time, as determined by the Board (or a subcommittee thereof) in its sole discretion.


 


Benefits. During the Term, you will
be entitled to participate in the Company’s benefit plans and programs generally made available from time to time for its employees
generally, including, but not limited to medical, 401(k), and paid time off, subject to the terms and conditions of such plans and programs.
The Company reserves the right to amend, modify or terminate any of its benefit plans or programs at any time and for any reason. The
Company will reimburse you for your reasonable expenses incurred in connection with performing your duties hereunder, in accordance with
its then prevailing policies and procedures for expense reimbursement.


 


At-Will Employment; Termination.
Your employment with the Company will be “at will,” such that the Company may terminate your employment at any time, with
or without reason and with or without notice. You agree to provide the Company with at least sixty (60) days advance written notice of
any voluntary resignation of your employment hereunder, and, in such event, the Company in its sole discretion may elect to accelerate
the effective date of termination. The Company reserves the right to require that you not be in the offices of the Company or any of its
affiliates and/or not undertake all or any of your duties and/or not contact clients, colleagues or advisors of the Company or any of
its affiliates (unless otherwise instructed) during all or part of any period of notice of your termination of service (in which case
you will be referred to hereunder as being on “garden leave”). During any period of garden leave, your terms and conditions
of service and duties of fidelity and confidentiality to the Company will remain in full force and effect and, during any such period,
you will remain a service provider to the Company and will not be employed or engaged in any other business.


 


Upon termination of your employment for any reason,
you agree to resign, as of the date of termination or such other date requested by the Company, from all positions and offices that you
then hold with the Company and its subsidiaries and affiliates.


 


Following the termination of your employment with
the Company by either party and for any reason, all obligations of the Company to pay or provide you with compensation and benefits will
cease, except (i) for the payment of any unpaid base salary or any unreimbursed expenses, in each case accrued or incurred through
the effective date of the termination of your employment (the “termination date”), which will be payable as soon as
practicable and in all events within 30 days following the termination date, (ii) as explicitly set forth in any other benefit plans
or arrangements applicable to terminated employees in which you participate and (iii) as otherwise expressly required by applicable
law (collectively, the “Accrued Obligations”). For the avoidance of doubt, except as described in Exhibit A
attached hereto, any bonus for the year of termination of employment is forfeited if your employment is terminated for any reason. In
addition, if your employment with the Company is terminated in certain circumstances, you (or your estate) will be entitled to receive
certain payments and benefits as described in Exhibit A attached hereto, and subject to the conditions set forth therein.


 






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Certain Covenants. As a condition
of your employment, you agree to be bound by the restrictive covenants set forth in the Restrictive Covenant Agreement (the “Restrictive
Covenant Agreement”), attached hereto as Exhibit B, which will be in addition to, and not supersede, any restrictive
covenant obligations to which you may otherwise be subject. The Restrictive Covenant Agreement will be executed contemporaneously with
this Agreement.


 


Clawback. Any amounts payable hereunder
are subject to any policy (whether currently in existence or later adopted) established by the Company providing for clawback or recovery
of amounts that were paid to you. The Company will make any determination for clawback or recovery in its sole discretion and in accordance
with any applicable law or regulation.


 


Indemnification. During your employment
and service as an officer and at all times thereafter during which you may be subject to liability, you will be entitled to indemnification
set forth in the Company’s governing documents to the maximum extent allowed under the laws of the State of Delaware and you will
be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its directors and
officers against all costs, charges and expenses incurred or sustained by you in connection with any action, suit, or proceeding to which
you may be made a party by reason of you being or having been a director, officer or employee of the Company or any of its subsidiaries
(other than any dispute, claim or controversy arising under or relating to this Agreement). Notwithstanding anything to the contrary herein,
your rights under this paragraph will survive the termination of your employment for any reason and the expiration of this Agreement for
any reason.


 


Cooperation. You agree that
during and after your employment with the Company, you will assist the Company and its subsidiaries and affiliates in the defense of any
claims or potential claims that may be made or threatened to be made against the Company or any of its subsidiaries and affiliates in
any action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise, that are not adverse to you (each,
an “Action”), and will assist the Company and its subsidiaries and affiliates in the prosecution of any claims that
may be made by the Company the Company and its subsidiaries and affiliates in any Action, to the extent that such claims may relate to
your employment or the period of your employment by the Company and its subsidiaries and affiliates. You agree, unless precluded by law,
to promptly inform the Company if you are asked to participate (or otherwise become involved) in any such Action. You also agree, unless
precluded by law, to promptly inform the Company if you are asked to assist in any investigation (whether governmental or otherwise) of
the Company and its subsidiaries and affiliates (or their Actions) to the extent that such investigation may relate to your employment
or the period of the your employment by the Company, regardless of whether a lawsuit has then been filed against the Company and its subsidiaries
and affiliates with respect to such investigation. The Company or one of its subsidiaries or affiliates will reimburse you for all of
your reasonable out-of-pocket expenses incurred in connection with such cooperation.


 


Certain Representations. You represent
and warrant that as of the date hereof: (i) you have the full right, authority and capacity to enter into this Agreement and perform
your obligations hereunder; (ii) you are not bound by any agreement that conflicts with or prevents or restricts the full performance
of your duties and obligations to the Company hereunder; and (iii) the execution and delivery of this Agreement will not result in
any breach or violation of, or a default under, any existing obligation, commitment or agreement to which you are subject. You acknowledge
and agree that the Company shall not have any obligation to reimburse or indemnify you for any losses arising from any breach of the foregoing
representations.


 






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Tax Withholding. The Company may
deduct and withhold from any amounts payable under this Agreement such Federal, state, local, non-U.S. or other taxes as are required
or permitted to be withheld pursuant to any applicable law or regulation.


 


Assignment. Without the prior written
consent of the Company, you may not assign this Agreement, except that you may assign by will or the laws of descent and distribution
your accrued rights to payment, and any assignment in violation of this Agreement will be void. This Agreement will be binding on you
and the Company and their respective heirs, legal representatives, successors and permitted assigns (including, without limitation, successors
by merger, consolidation, sale or similar transaction and in the event of your death, your estate and heirs in the case of any payments
due to you hereunder); provided that the Company may assign its rights and obligations under this Agreement without the consent of you
in the event that the Company shall hereafter affect any internal reorganization of the Company’s corporate structure, consolidation
or merger. This Agreement shall be automatically assigned to HoldCo, upon the consummation of the transactions contemplated in that certain
Agreement and Plan of Merger, dated on or about June 24, 2021, by and among IKONICS Corp., a Minnesota corporation (“Parent”),
Telluride Holdco, Inc., a Delaware corporation and direct wholly owned subsidiary of Parent (“HoldCo”), Telluride
Merger Sub I, Inc., a Minnesota corporation and direct wholly owned subsidiary of HoldCo (“Merger Sub I”), Telluride
Merger Sub II, Inc., a Delaware corporation and direct wholly owned subsidiary of HoldCo, and the Company (the “Merger Agreement”),
without any further action by any person and Holdco shall assume all of the obligations under this Agreement as of such date. The immediately
preceding sentence will be deemed inoperative without any action on the part of any person and be void ab initio if the transactions contemplated
by the Merger Agreement are abandoned or the Merger Agreement is terminated. For the avoidance of doubt, following such assignment all
references to “the Company” or “TeraWulf Inc.” will be deemed to be references to “Telluride Holdco, Inc.”
(to be renamed TeraWulf Inc. following the transactions contemplated by the Merger Agreement).


 


Governing Law. This Agreement
shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to principles of conflicts of
laws thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction
other than the State of Delaware.


 


Dispute Resolution; Consent to Jurisdiction.
You and the Company agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out
of or in connection with, this Agreement (whether brought by any party or any of its affiliates or against any party or any of its affiliates)
shall be brought in the United States federal and state courts in Wilmington, Delaware, and each of the parties hereby irrevocably consents
to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within
or without the jurisdiction of any such court.


 


Amendment; Entire Agreement. No provisions
of this Agreement may be amended, except by a written document signed by you and a duly authorized officer of the Company (other than
you). This Agreement constitutes the entire agreement and understanding between the Company and you with respect to the subject matter
hereof and supersedes all prior agreements and understandings (whether written or oral), between you and the Company, relating to such
subject matter. This Agreement is intended to and hereby supersedes any prior agreements or understandings, whether formal or informal,
between you and the Company or any of its subsidiaries or affiliates.


 






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IRC Section 409A.  The
parties hereto acknowledge and agree that, to the extent applicable, this Agreement will be interpreted in accordance with, and incorporate
the terms and conditions required by, Section 409A of the Code and the Department of Treasury Regulations and other interpretive
guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective
Date (“Section 409A”). Notwithstanding any provision of this Agreement to the contrary, in no event whatsoever
will the Company or any of its subsidiaries or affiliates be liable for any additional tax, interest or penalties that may be imposed
on you as a result of Section 409A or any damages for failing to comply with Section 409A. Any payments to be made under this
Agreement upon a termination of employment that are “nonqualified deferred compensation” shall only be made upon a “separation
from service” within the meaning of Section 409A. For purposes of Section 409A, your right to receive installment payments
pursuant this Agreement will be treated as a right to receive a series of separate and distinct payments. To the extent that any reimbursement
of expenses or in-kind benefits constitutes “nonqualified deferred compensation” under Section 409A, such reimbursement
or benefit will be provided no later than December 31 of the year following the year in which the expense was incurred. The amount
of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind
benefits provided in one year will not affect the amount of in-kind benefits provided in any other year. Notwithstanding any other provision
of this Agreement, if any payment or benefit provided to you in connection with termination of employment is determined to constitute
 “nonqualified deferred compensation” within the meaning of Section 409A and you are determined to be a “specified
employee” as defined in Section 409A(a)(2)(b)(i) of the Code, then such payment or benefit shall not be paid until the
first payroll date to occur following the six-month anniversary of your termination date (the “Specified Employee Payment Date”)
or, if earlier, on the date of your death. The aggregate of any payments that would otherwise have been paid before the Specified Employee
Payment Date shall be paid to you in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be
paid without delay in accordance with their original schedule.


 


Counterparts. This Agreement
may be executed in multiple counterparts, which together shall constitute one and the same agreement. Facsimile, pdf and other true and
accurate copies of this Agreement shall have the same force and effect as originals hereof.


 


[Signature Page Follows]


 






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This Agreement is executed and delivered by the
Company and you as of the date first set forth above.


 


	 	Sincerely,
	 
	 	TERAWULF INC.
	 
	 	By:	/s/
    Paul Prager         
	 	Name:	Paul Prager
	 	Title:	Chief Executive Officer
	 
	Accepted and Agreed:	 
	 	 
	/s/ Nazar Khan	 
	Nazar Khan	 




 


[Signature Page to
Employment Agreement]


 






    	 	 



     


    

 


ANNEX I


 


Permitted Activities


 


		1.	Continued involvement in:



 


		a.	The Bitcoin mining business in Hardin, MT, that is in existence as of the date of this Agreement, on behalf of Beowulf Energy LLC
in connection with its building and operation of a data center for Marathon Digital Holdings Inc.;



 


		b.	The asset management, operations and management consulting with respect to Rijnmond Power Holding B.V. as well as its wholly owned
810 MW combined cycle gas turbine Rijnmond power generation facility near Rotterdam, the Netherlands, on behalf of Beowulf Energy LLC
and Beowulf Energy Europe LLC;



 


		c.	The asset management, operations, financing, redevelopment, disposition and/or restructuring of all or a portion of the portfolio
of domestic power generation assets owned by Heorot Power Holdings LLC and located in California, Montana, Colorado, Massachusetts and
New York (the “Power Generation Assets”) by or on behalf of Beowulf Energy LLC; and



 


		d.	The acquisition, disposition, operation, redevelopment or wind-down of one or more of the Power Generation Assets by or on behalf
of Beowulf Energy LLC or its commonly controlled affiliates.



 


		2.	You shall be permitted to raise a fund to invest in crypto currencies other than Bitcoin, mine crypto currencies other than Bitcoin,
invest in crypto-related equipment and engage in financing arrangements associated with those activities.



 






    	 	 



     


    

 


EXHIBIT A


 


1.            Termination
without Cause, Company Non-Renewal of the Term or Resignation for Good Reason. Subject to your continued compliance with the covenants
contained in the Restrictive Covenant Agreement attached as Exhibit B to the Agreement, if your employment is terminated (i) by
the Company without Cause, (ii) due to the Company’s non-renewal of the Term or (iii) your resignation from employment
for Good Reason then, in addition to the Accrued Obligations, the Company will:


 


(a)            pay
you a lump-sum cash payment on the sixtieth (60th) calendar day following the termination date in an aggregate amount equal to the annual
base salary that would have been paid to you during the twelve (12)-month period following the termination date (the “Severance
Period”), less applicable taxes and withholdings (the “Severance Payment”); provided that, in the
event the Company determines that you have materially violated any covenant contained in the Restrictive Covenant Agreement, you will
be required to disgorge to the Company a prorated portion of the Severance Payment, determined on a daily basis from the date of such
breach through the last day of the Severance Period;


 


(b)            continue
to provide coverage during the Severance Period (or until you become eligible for comparable coverage under the medical health plans of
a successor employer, if earlier) for you and any eligible dependents under all Company health and welfare plans in which you and any
such dependents participated immediately prior to the termination date, subject to any active-employee cost-sharing or similar provisions
in effect for you thereunder as of immediately prior to the termination date; provided that such coverage will not be provided
in the event the Company would be subject to any excise tax under Section 4980D of the Code or other penalty or liability pursuant
to the provisions of the Patient Protection and Affordable Care Act of 2010 (as amended from time to time), and in lieu of providing the
coverage described above, the Company will instead pay to you a fully taxable monthly cash payment in an amount such that, after payment
by you of all taxes on such payment, you retain an amount equal to the applicable premiums for such month, with such monthly payment being
made on the last day of each month for the remainder of the Severance Period. For the avoidance of doubt, your health benefit coverage
from the Company during the Severance Period shall run concurrent with the health continuation coverage period mandated by Section 4980B
of the Code;


 


(c)            pay
you a prorated portion of the Annual Bonus payable with respect to the fiscal year in which such termination occurs determined on a daily
basis, based on target level of achievement of the applicable performance goals for such year, payable on the sixtieth (60th) calendar
day following the termination date;


 


(d)            pay
you any previously earned Annual Bonus payable to you for any fiscal year of the Company completed on or before the termination date that
has not been paid to you as of the termination date, payable on the sixtieth (60th) calendar day following the termination date; and


 


(e)            treat
all outstanding equity awards held by you in accordance with the terms of the applicable equity plan and award agreements; provided
that, with respect to awards that vest (i) solely based on continued service with the Company, you will vest in any tranche scheduled
to vest in accordance with the applicable award agreement during the Severance Period and (ii) based on the achievement of performance
criteria, based on the actual achievement of such performance criteria that occurs during the Severance Period.


 






    	 	 



     


    

 


2.            Termination
due to Disability or Death. Subject to your continued compliance with the covenants contained in Exhibit B, if your
employment terminates due to your Disability or death, then, in addition to the Accrued Obligations, the Company will:


 


(a)            pay
you (or your estate) a pro-rata Annual Bonus for the year of termination, determined on a daily basis, based on actual performance for
the full year, payable in the same manner and the same time as provided in the “Annual Bonus” section of this Agreement; and


 


(b)            pay
you (or your estate) any previously earned Annual Bonus payable to you for any fiscal year of the Company completed on or before the termination
date that has not been paid to you as of the termination date, payable on the sixtieth (60th) calendar day following the termination date.


 


3.            Release.
Notwithstanding anything herein to the contrary, the amounts set forth in this Exhibit A will be contingent upon and subject
to your (or your estate’s, if applicable) execution and non-revocation of a general waiver and release of claims agreement in the
Company’s customary form (the “Release”) (and the expiration of any applicable revocation period), on or prior
to the sixtieth (60th) day following the date of termination.


 


4.            Definitions.
For purposes of this Agreement:


 


(a)            “Cause”
will mean your (i) having engaged in material misconduct in providing services to the Company or its affiliates; (ii) having
engaged in conduct that you knew or reasonably should have known would be materially injurious to the Company or its affiliates; (iii) having
been convicted of (after all appeals have been exhausted), or having entered a plea bargain or settlement admitting guilt for, (x) a
felony or (y) any other criminal offense involving fraud or, in the course of the performance of your service to the Company, material
dishonesty; (iv) unlawful use or possession of illegal drugs on the Company’s premises or while performing your duties and
responsibilities to the Company; or (v) commission of an act of fraud, embezzlement or misappropriation, in each case against the
Company or any affiliate. The determination of whether Cause exists shall be made by the Compensation Committee in good faith in its sole
discretion upon, or within 60 days following, termination of your employment or service based on information available to the Compensation
Committee through such 60-day period. Notwithstanding the foregoing, Cause shall not exist unless you have first received a written notice
from the Company which sets forth in reasonable detail the circumstances giving rise to Cause and you will have a period of 30 days to
cure (if capable of cure).


 


(b)            “Disability”
will mean your disability caused by any physical or mental injury, illness or incapacity as a result of which you have been unable to
effectively perform the essential functions of your duties for a continuous period of more than 120 days or for any 180 days (whether
or not continuous) within a 365-day period, as determined by the Board in good faith. If any question will arise as to whether a Disability
exists, you may, and at the request of the Company will, submit to a medical examination by a physician selected by the Company to determine
whether a Disability exists and such determination will for the purposes of this Agreement be conclusive of the issue. If such question
will arise and you will fail to submit to such medical examination, the Company’s determination of the issue will be binding on
you.


 






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(c)            You
will have “Good Reason” to resign from your employment in the event that any of the following actions are taken by
the Company without your prior written consent: (i) a material reduction in your annual base salary; (ii) a material reduction
in your Annual Bonus target opportunity; (iii) any material diminution of your duties, responsibilities, authority, positions or
titles, other than any changes in duties, responsibilities, authority, positions or titles that result solely from the Company’s
ceasing to be a stand-alone public corporation; (iv) a material change in your reporting line, which for the avoidance of doubt will
include no longer reporting directly to the individual who serves as the Chief Executive Officer of the Company as of the Effective Date
as a result of such individual’s involuntary termination of employment (e.g., a termination by the Company without “cause”
or a resignation by such individual for “good reason”); or (v) any material breach by the Company of any material term
or provision of the Agreement; provided, however, that none of the events described in the foregoing clauses shall constitute
Good Reason unless you have notified the Company in writing describing the events that constitute Good Reason within thirty (30) calendar
days following the first occurrence of such events and then only if the Company fails to cure such events within thirty (30) calendar
days after the Company’s receipt of such written notice, and you have actually terminated your employment with the Company promptly
following the expiration of such cure period.


 






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EXHIBIT B


 


Restrictive Covenant Agreement


 


[Filed as a separate exhibit.]