Document:

ex10-1.htm

     Exhibit 10.1

 

 

DEBT SETTLEMENT AGREEMENT

 

THIS AGREEMENT is made and entered into this 27 day of April, 2012, by and between TURBINE TRUCK ENGINES, INC., a Nevada corporation (“Company”), and ALPHA ENGINES CORPORATION (“Alpha”), a Delaware corporation whose address is 554 SW Mayfair Lane, Lake City, Florida 32024 (the “Agreement”):

WHEREAS, the Company is currently indebted to Alpha in the principal amount of $1,508,250, together with interest thereon (the “Debt”); and

WHEREAS, the Debt has been accrued and the Company has made an offer of settlement to Alpha, which offer was accepted; and

WHEREAS, the Company and Alpha desire to settle on the Debt, upon the terms and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, and in order to consummate the settlement of the Debt aforementioned, it is hereby agreed as follows;

 

	
  

	
1.

	
DEBT SETTLEMENT.  Subject to terms and conditions hereinafter set forth, , the Company shall cause to be delivered to the Alpha 250,000 shares of restricted common stock (the “Stock”) in Turbine Truck Engines, Inc., in full and final settlement of the Debt.

 

	
  

	
2.

	
CONSIDERATION AND PAYMENT.   Alpha agrees to accept the Stock as full and final settlement of the Debt and shall execute and deliver to the Company a Satisfaction of Debt upon receipt of the Stock.

 

                3.     LICENSE ROYALTY REDUCTION.          Upon receipt of the Stock, Alpha hereby agrees that the annual license royalty as provided for in that certain License Agreement dated 12/31/01 by and between the parties, shall be reduced  from    $250,000 per year to $25,000 per year, retroactively effective as of January 1, 2012.  The first payment of $25,000 shall be due and payable January 1, 2013.

 

	
  

	
4.

	
NO REPRESENTATIONS AND WARRANTIES. The Company makes no representations or warranties regarding TTEG.  Alpha acknowledges and agrees that it has independently reviewed TTEG and is not relying on any statement or representation by the Company or its officers or directors regarding the suitable of TTEG as an investment and it has had the opportunity to review this transaction with professionals of its own choosing.  Alpha hereby acknowledges receipt of all financial and other relevant disclosure information of TTEG that a prudent investor would deem necessary to make its investment decisions.

 

	
  

	
5.

	
GENERAL PROVISIONS

 

	
  

	
a.

	
Entire Agreement; Modifications; Waiver.  This Agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it.  This Agreement supersedes all prior and contemporaneous agreements (other than those entered into in writing simultaneously with this Agreement), representations, and understandings of the parties.  No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all the parties.  No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver.  No waiver shall be binding unless executed in writing by the party making the waiver.

 

	 Initials______	 1	Initials______ 

 

  

  

  

 

	
  

	
b.

	
Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instruments.  Facsimile execution shall be deemed originals.

 

	
  

	
c.

	
Necessary Acts.  Each party to this Agreement agrees to perform any further acts and execute and deliver any further documents that may be reasonably necessary to carry out the provisions of this Agreement. Company and Alpha represent they each have full authority to enter into this transaction.

 

	
  

	
d.

	
Attorneys’ Fees.  Should any party hereto employ an attorney for the purpose of enforcing this Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be entitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys’ fees and all reasonable costs, including but not limited to service of process, filing fees, court and court reporter costs, investigative costs, expert witness fees, and the cost of any bonds, whether taxable or not, and that such reimbursement shall be included in any judgment or final order issued in that proceeding.  The “prevailing party” means the party determined by the court to most nearly prevail and not necessarily the one in whose favor a judgment is rendered.

 

	
  

	
e.

	
Time of Essence.  Time is of the essence in the performance of all obligations under this Agreement.

 

	
  

	
f.

	
Governing Law. The parties expressly agree that the laws of the State of Florida shall govern the validity, performance and enforcement of this Agreement. Should either party institute legal suit or action for enforcement of any obligation contained herein, it is hereby agreed that the Florida courts shall have personal and in rem jurisdiction, and that venue of such suit or action shall be in the State of Florida.

 

IN WITNESS WHEREOF the parties have executed this Debt Settlement Agreement effective as of the day and year first above written.

 

 

	TURBINE TRUCK ENGINES, INC. 	 	ALPHA ENGINES CORPORATION	 
	 	 	 	 
	 	 	 	 
	Michael Rouse, CEO  	 	Robert L. Scragg, President	 
	 	 	 	 
	 	 	 	 
	 	 	Barbara J. Scragg, VP & Treasurer	 

 

 

	 Initials______	2	Initials______2012 Executive Compensation Program

 Exhibit 10.1 
 2012 Executive Compensation Program 
 Approved by CapitalSource Board of
Directors February 15, 2012 
 This compensation program for Executive Officers (comprising the CEOs of the Bank and
Parent, the Chief Financial Officer of the Parent and Bank, and each of the Chief Administrative Officer, Chief Lending Officer, and Chief Credit Officer of the Bank) is designed to reflect a comprehensive view of company performance. The Program
combines the Primary Financial Goals identified below with the discretion of the Compensation Committee of the Board of Directors (the “Committee”) to determine executive compensation. The Program will be adjusted on an annual basis, and
compensation will be paid based on the achievement of certain factors. 
 Primary Financial Goals: 

 

	 	1.	Achieve pre-tax net income for 2012 for CapitalSource Bank of [******]. 

  

	 	2.	Achieve consolidated pre-tax income of [******]. 

  

	 	3.	 Fund loan1 originations and purchases during 2012 of $2.2 billion having a weighted average risk rating at the date of origination of less than [******]. Achievement of this target will be measured by reaching both
the funded amount (which will include any loans that fund within 60 days of closings and fundings on commitment increases) and hitting the actual volume weighted blended spreads set forth in the targets as set forth in the attached Exhibit A.
For the satisfaction of the actual volume weighted, blended spread target, consideration will be given to any originations funded over and above the targeted amounts at lower spreads. 

 

	 	4.	Experience 2012 aggregate credit losses (charge offs, specific reserves and impairment of operating leases) of less than [******] of the commitment amount for all loans
and commitment increases on loans originated in 2009, 2010 and 2011. 

  

	 	5.	 Manage consolidated operating expenses2 to less than $190.9 million. 

 

	 	6.	Maintain the Bank classified asset ratio at [******] or less as of each quarter end. 

 

	 	7.	Manage the Parent classified assets to less than [******] and the consolidated classified asset ratio to less than [******] by year end. 

Bonus Targets 
 The
Compensation Committee of the Board of Directors may use its discretion to adjust – up or down – the following bonus targets and to determine whether the Primary Financial Goals have been achieved to the extent there are judgments to be
employed or mitigating factors exist. In exercising its discretion, the Committee will also consider (i) the relative importance to the Company of each of the Primary Financial Goals, (ii) the general safety and soundness of the Bank,
(iii) management’s progress in addressing the recommendations of the FDIC and the FRB made during their 2011 visitations in connection with positioning the Company to become a Bank 

 
  
 [******] Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [******].
A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. 
 1 “Loans,” as used
herein, includes loans, leases, operating leases and equity investments containing equipment subject to an operating lease. 
 2 Operating
expenses excludes the cost of REO and foreclosed assets, the provision for unfunded commitments, the cost of early debt extinguishment and depreciation from operating leases. 

 Holding Company, (iv) management’s maintenance of a culture that fosters the
Company’s ability to attract and retain talented professionals and provides opportunities for continued career development and advancement, and (v) management’s progress on refining the company’s business model such that the
consolidated return on equity grows over time toward the top of the company’s peer group. The Compensation Committee will consider input of the CEOs of both the Bank and Parent when determining bonus amounts for the other Executive Officers.

 To achieve Bonus at or above 100% of Base Salary: 

 

	 	•	 	 All of the Primary Financial Goals must be met. 

 To achieve Bonus at or above 75% of Base Salary: 
  

	 	•	 	 At least 6 of the Primary Financial Goals must be met. 

 To achieve Bonus at or above 50% of Base Salary: 
  

	 	•	 	 At least 4 of the Primary Financial Goals must be met. 

 Stock Ownership Guidelines 
 Executive Officers are
expected to accumulate and hold CSE shares3 with a value
equal to a multiple of base salary: 3x base salary for the CEO of CapitalSource and the CEO of CapitalSource Bank and 2x base salary for the other Executive Officers. Prior to meeting the guideline, Executive Officers are required to retain 50% of
the after-tax shares acquired from vesting of restricted stock, exercise of stock options, or earnout of performance shares. This “retention ratio” ensures that Executive Officers are making progress toward meeting the guideline. Executive
Officers will have five years to meet the ownership guideline starting January 2012. 
  

 
 [******] Confidential treatment has
been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [******]. A complete version of this exhibit has been filed separately with the Securities
and Exchange Commission. 
 3 CSE Shares includes shares directly owned and the in the money value on an after tax basis of vested options on
CSE shares. 

 Exhibit A 
 [******]

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