exh10-3_0609.htm


    Exhibit
10.3

    

     

     

    June
24, 2009

    


    Re:  Terms
of Employment

    


    Mr.
Thomas H. Stoner, Jr.

    


    Dear
Mr. Stoner:

    


    We are pleased to confirm the offer we
have discussed with you for the position of President & CEO of Evergreen
Energy Inc. (“Evergreen”).  Effective June 22, 2009, you were
appointed to the Evergreen Board of Directors.  Please review the
following terms of your employment offer:

    


    
      
        
          	
                  Positions:

                	
                  President,
      Chief Executive Officer and Director of Evergreen.

                
	 
      	 
      
	
                  Start
      Date:

                	
                  June
      24, 2009 for the positions of President & Chief Executive
      Officer.

                
	 
      	 
      
	
                  Base
      Pay:

                	
                  Three
      Hundred Thousand Dollars ($300,000) spread out over 26 pay periods,
      subject to applicable tax withholding and payroll taxes.  For
      the first year of employment, you will receive 1/3 of the base pay in
      Evergreen stock and 2/3’s in cash.

                
	 
      	 
      
	
                  Benefits:

                	
                  Twenty
      seven (27) days per year of Paid Time off (vacation and sick leave
      combined) will be offered on an accrual basis.  Your PTO will
      accrue 8.31 hours per pay period beginning with your date of hire, which
      was May 7, 2009. You will be eligible for medical, dental and vision
      insurance beginning the first of the month following 30 days of employment
      or July 1, 2009.

                
	 
      	 
      
	
                  Initial
      Equity Award:

                	
                  500,000
      options, priced at the close of business on June 24, 2009 and a term of
      five (5) years.  Upon termination, Mr. Stoner shall have twelve
      (12) months from the date of termination to exercise all or part of the
      Initial Equity Award.  Upon Mr. Stoner’s death, his estate shall
      also have twelve (12) months from his death to exercise all or part of the
      Initial Equity Award.

                
	 
      	 
      
	
                  Performance
      based

                	 
      
	
                  Equity
      Awards:

                	
                  The
      Equity Awards set forth below have a term of four (4) years from the date
      hereof to meet the specific requirements set for below and vest or each
      traunche not vested shall terminate and have not further force or
      effect.

                
	 
      	 
      
	 
      	
                  1,000,000
      shares when the Evergreen share price closes at or above $1.50 per share
      for 60 consecutive days.

                
	 
      	 
      
	 
      	
                  500,000
      shares when the Evergreen share price closes at or above $2.00 per share
      for 60 consecutive calendar days.

                
	 
      	 
      
	 
      	
                  500,000
      shares when the Evergreen share price closes at or above $2.50 per share
      for 60 consecutive calendar
days.

                


        

      

    

    
 

     

    
      
        
          
            


            
              Evergreen
Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado 80202 │
Tel: (303) 293-2992 │ Fax: (303) 293-8430

            

          

           


        

        
           


          
            

          

        

        
          

        

         

         

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	 
      	
                                                      500,000
      shares when the Evergreen share price closes at or above $3.00 per share
      for 60 consecutive calendar days.

                                                    
	 
      	 
      
	 
      	
                                                      500,000
      shares when the Evergreen share price closes at or above $4.00 per share
      for 60 consecutive calendar days.

                                                    
	 
      	 
      
	
                                                      Inducement
      Grants:

                                                    	
                                                      All
      equity awards provided for herein are inducement grants and the grants
      shall not be awarded for any of Evergreen’s equity incentive stock
      plans.

                                                    
	 
      	 
      
	
                                                      Performance
      based

                                                    	 
      
	
                                                      Cash
      Award:

                                                    	
                                                      A
      variable annual performance award targeted at 50% of base pay based upon
      meeting individual and company objectives.  For the remainder of
      2009, the targeted bonus award will be $150,000 even though it is for a
      less than one year period.  All compensation awards are
      contingent on Evergreen Board of Director’s approval.

                                                    
	 
      	 
      
	
                                                      Adjustments
      for Stock

                                                    	 
      
	
                                                      Split,
      Stock Dividend,

                                                    	 
      
	
                                                      Etc.:

                                                    	
                                                      If
      Evergreen shall at any time increase or decrease the number of its
      outstanding shares of stock or change in any way the rights and privileges
      of such shares by means of the payment of a stock dividend or any other
      distribution upon such shares payable in stock, or through a stock split,
      subdivision, consolidation, combination, reclassification or
      recapitalization involving the stock, then in relation to the stock that
      is affected by one or more of the above events, the numbers, rights,
      vesting requirements and privileges of the following shall be increased,
      decreased or changed in like manner.

                                                    
	 
      	 
      
	
                                                      Tax
      Obligations:

                                                    	
                                                      Evergreen
      assumes no obligation in assisting Mr. Stoner with any tax issues he
      assumes, including if and when vesting occurs on the Equity Based
      Performance Awards.

                                                    
	 
      	 
      
	
                                                      No
      Early Vesting:

                                                    	
                                                      Without
      Evergreen’s Board of Directors approval, there will be no early vesting or
      granting of Performance Based Equity or Cash Awards for any reason,
      including Mr. Stoner’s termination with or without cause or for a change
      of control of the Board of Directors; provided however, that if a merger
      or acquisition occurs which includes substantially all of Evergreen’s
      assets or shares and the price per share of such transaction exceeds a
      vesting target price, then early vesting for the traunche(s) below the
      transaction share price will occur without the requirement of the 60 day
      condition being satisfied.

                                                    
	 
      	 
      
	
                                                      Other
      Conditions:

                                                    	
                                                      You
      have previously executed Evergreen’s standard Non-Disclosure Agreement and
      Information Verification Agreement.  This offer assumes that you
      have no desire to alter or change your execution of those
      documents.  Evergreen can request that anyone be drug tested
      based on reasonable suspicion and Evergreen can do random drug site tests
      at any time.  Your employment is at will and either you or
      Evergreen may terminate the relationship at any
  time.

                                                    


                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    



    
      
        
          
            


            Evergreen
Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado 80202 │
Tel: (303) 293-2992 │ Fax: (303) 293-8430

          

           


        

        
           


          
            

          

        

        
           


        

        

         

         

      

    

     

    If
the foregoing is in accordance with your understanding, please indicate so by
signing below and returning to me.

    


    


    


    Evergreen
Energy Inc.

    


    


    /s/
M. Richard Smith

    M.
Richard Smith

    Chairman
of the Board of Directors

    


    


    


    Approved
and accepted this 24th day of
June, 2009

    


    


    /s/
Thomas H. Stoner, Jr.

    Thomas
H. Stoner, Jr.

     

     

     

    
      Evergreen
Energy Inc. │ 1225 Seventeenth Street │ Suite 1300 │ Denver, Colorado 80202 │
Tel: (303) 293-2992 │ Fax: (303) 293-8430