Document:

ex10-1.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into and effective on May 3, 2011 (the "Effective Date"), by and between Texas Rare Earth Resources Corp., a Nevada corporation (the "Company"), and Marc LeVier ("Employee").

WHEREAS, the Company wishes to employ Employee and Employee wishes to be employed by the Company; and

WHEREAS, the Company and Employee desire to enter into an agreement reflecting the terms of the employment relationship, including the termination thereof;

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and agreements contained herein, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Employment. The Company hereby employs Employee, and Employee will hereby be employed by the Company, on the terms and conditions set forth in this Agreement. The Company will establish, maintain and pay for an office in the greater Denver metropolitan area, including the provision of necessary computer equipment and other facilities’ equipment.

2. Term of Employment. Subject to the provisions for earlier termination provided in this Agreement, the term of this Agreement shall begin on May 3, 2011 and shall terminate on May 3, 2014.  The Term shall be extended for additional 1-year periods for two consecutive years (the initial Term, together with each one-year extension shall be referred to as the “Term”), provided that neither the Company nor Employee notify the other on or prior to 90 days before the expiration of such Term that either party does not intend to extend this Agreement.

3. Employee’s Duties. During the Term, Employee shall serve as Chief Executive Officer, working in or near the Denver, Colorado metropolitan area, with such duties and responsibilities as may from time to time be assigned to him by the board of directors of the Company (the “Board”), provided that such duties are consistent with the customary duties of such position. During the Term, Employee shall serve as a member of the Board. Employee agrees to devote his business time, skill and attention to the business and affairs of the Company and to use reasonable best efforts to perform faithfully and efficiently his duties and responsibilities. Employee shall not, either directly or indirectly, enter into any business or employment with or for any person, firm, association or corporation other than the Company during the Term; provided, however, that Employee shall not be prohibited from (i) engaging in charitable activities, educational mentoring, and community affairs, (ii) serving, with the prior approval of the Company’s Board, on the boards of a reasonable number of business entities, trade associations and charitable organizations, (iii)  managing his personal investments and affairs related to another business or companies (either as a principal, partner, shareholder, or member of such business), or (iv) any other such activity approved by the Board; provided that such activities do not either individually or in the aggregate materially interfere with the performance of his duties hereunder. Employee shall at all times observe and comply with all lawful directions and instructions of the Board.

  

  

  

4. Compensation.

(a) Stock Options.  As an inducement to Employee to enter into this Agreement, the Company will issue Employee 10-year options to purchase up to 2,500,000 shares of Company restricted common stock at an exercise price of $2.50 per share (“Options”), pursuant to a form of option agreement attached hereto as Exhibit A, which Options shall vest on a quarterly basis over a three-year period.

(b) Base Compensation. For services rendered by Employee under this Agreement, the Company shall pay to Employee a base salary of $225,000 per annum (“Base Compensation”). The Base Compensation is payable in accordance with the Company’s customary payroll practices and subject to customary withholdings, including share withholdings as described in Section 14(b) hereof. The amount of Base Compensation shall be reviewed by the Board on an annual basis as of the close of each 12-month period of this Agreement and may be increased as the Board may deem appropriate. In the event the Board (or, if established, the compensation committee thereof) deems it appropriate to increase Employee’s annual base salary, said increased amount shall thereafter be the “Base Compensation.” Employee’s Base Compensation, as increased from time to time, may not thereafter be decreased unless agreed to by Employee. Nothing contained herein shall prevent the Board from paying additional compensation to Employee in the form of bonuses or otherwise during the Term.

5. Bonus. With respect to each full 12-month period during the Term, the Board in its sole discretion will grant the Employee a bonus (“Bonus”) equal to up to 50% of the Base Compensation during such 12-month period, upon satisfaction of milestones to be developed by the Board of Directors and Employee within 90 days from the date hereof, payable in shares of restricted common stock.

6. Additional Benefits. In addition to the Base Compensation provided for in Section 5 herein, Employee shall be entitled to the following:

(a) Expenses. The Company shall, in accordance with any rules and policies that it may establish from time to time for executive officers, reimburse Employee for business expenses reasonably incurred in the performance of his duties. It is understood that Employee is authorized to incur reasonable business expenses for promoting the business of the Company, including reasonable expenditures for travel, lodging, meals and client or business associate entertainment. Request for reimbursement for such expenses must be accompanied by appropriate documentation, and shall be reimbursed in accordance with the Company’s rules and policies as in effect from time to time and as set forth in Section 8(k)(iii) below.

(b) Vacation. Employee shall be entitled to six weeks of vacation per year, without any loss of compensation or benefits. Employee shall not be entitled to compensation for, or to carry forward, any unused vacation time.

(c) General Benefits. Employee shall be entitled to participate in the various employee benefit plans or programs, if any, provided to the officers of the Company in general, including but not limited to, health and dental, subject to the eligibility requirements with respect to each of such benefit plans or programs, and such other benefits or perquisites as may be approved by the Board during the Term. Nothing in this paragraph shall be deemed to prohibit the Company from making any changes in any of the plans, programs or benefits described in this Section 6, provided the change similarly affects all executive officers of the Company similarly situated.

  

  

  

(d) Corporate Change. Upon the occurrence of a “Corporate Change” as hereinafter defined, Employee shall be considered as immediately and totally vested in any and all Options or other similar equity or equity-based awards previously made to Employee by the Company or its subsidiaries under a “Long Term Incentive Plan” or other grant duly adopted by the Board or the Compensation Committee thereof (such Options or similar awards are hereinafter collectively referred to as “Awards”); provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A. For purposes of this Agreement, a “Corporate Change ” shall occur if (i) the Company (A) shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously wholly-owned subsidiary of the Company) or (B) is to be dissolved and liquidated, and as a result of or in connection with such transaction, the persons who were directors of the Company before such transaction shall cease to constitute a majority of the Board, or (ii) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of 50% or more of the outstanding shares of the Company’s voting stock (based upon voting power), and as a result of or in connection with such transaction, the persons who were directors of the Company before such transaction shall cease to constitute a majority of the Board, or (iii) the Company sells all or substantially all of the assets of the Company to any other person or entity (other than a wholly-owned subsidiary of the Company) in a transaction that requires shareholder approval pursuant to applicable corporate law; or (iv) during a period of two consecutive calendar years, individuals who at the beginning of such period constitute the Board, and any new director(s) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office, who either were directors at the beginning of the two (2) year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; or (v) any other event that a majority of the Board, in its sole discretion, shall determine constitutes a Corporate Change hereunder.

(e) Health Club Dues. The Company shall pay up to $300 per month for Employee’s health club dues.

7. Confidential Information. Employee, during the Term, will have access to and become familiar with confidential information, secrets and proprietary information concerning the business and affairs of the Company, its controlled subsidiaries and other controlled entities, including customer information, and other technical information, resource valuations and reports, business strategies and pricing information, and other confidential and/or proprietary information (collectively, “Confidential Information”). Confidential Information shall not include any information that is or becomes generally available to the public other than as a result of Employee’s improper or unauthorized disclosure of such information in violation of this Agreement. As to such Confidential Information, Employee agrees as follows:

(a) During the Term or at any time following the termination of this Agreement, Employee will not, directly or indirectly, without the prior written consent of the Company (1) disclose or permit the disclosure of any such Confidential Information, or (2) use, reproduce or distribute, or make or permit any use, reproduction or distribution of, directly or indirectly, any such Confidential Information, except for any disclosure, use, reproduction or distribution that is required in the course of his employment with the Company, its controlled subsidiaries or other controlled entities.

  

  

  

(b) If, during the Term or at any time following the termination of this Agreement, Employee is requested or required (by oral question or request for information or documents, in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information, Employee agrees to notify the Company immediately in writing of the request or requirement so that the Company may seek an appropriate protection order or waive compliance with the provisions of this Section. If, in the absence of a protective order or the receipt of a waiver under this Agreement, Employee is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or else stand liable for contempt, Employee may disclose such Confidential Information to the tribunal; provided, however, that Employee shall use his commercially reasonable best efforts to obtain a court order or other assurance that confidential treatment will be accorded to such Confidential Information.

(c) Upon termination of employment of Employee, for whatever reason, Employee shall surrender to the Company any and all documents, manuals, correspondence, reports, records and similar items then or thereafter coming into the possession of Employee which contain any Confidential Information of the Company or its controlled subsidiaries or other controlled entities.

(d) Employee recognizes and acknowledges that the obligations of Employee contained in Section 7 of this Agreement are reasonable and necessary to protect the legitimate business interests of the Company, and that any breach or violation of any of the provisions of such Section is likely to result in irreparable injury to the Company for which the Company would have no adequate remedy at law. Employee agrees that if Employee shall breach or violate Section 7 of this Agreement, the Company shall be entitled, if it so elects, to institute and prosecute proceedings at law or in equity, including, but not limited to, a proceeding seeking injunctive relief, to obtain damages with respect to such breach or violation, to enforce the specific performance of Section 7 this Agreement by Employee, or to enjoin Employee from engaging in any activity in violation of Section 7 of this Agreement. Employee acknowledges that in the event of any such breach or violation, the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and to an equitable accounting of all earnings, profits, and other benefits arising from any such breach or violation, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. Employee agrees that in the event of any such violation, an action may be commenced for preliminary or permanent injunctive relief and other equitable relief in any federal or state court of competent jurisdiction.  Employee agrees that effective service of process may be made upon Employee under the notice provisions contained in Section 11 of this Agreement.

8. Termination. This Agreement may be terminated prior to the end of the Term as set forth below:

(a) Resignation (other than for Good Reason). Employee may resign, including by reason of retirement, his position at any time by providing written notice of resignation to the Company in accordance with Section 11 hereof. In the event of such resignation, except in the case of resignation for Good Reason (as defined below), this Agreement shall terminate and Employee shall not be entitled to further compensation pursuant to this Agreement other than payment for (i) any unpaid Base Compensation or unpaid Bonus accrued hereunder as of Employee’s employment termination date, and (ii) any unpaid reasonable business expenses incurred prior to Employee’s employment termination date, subject to the Company’s expense reimbursement rules and policies as in effect from time to time (the “Accrued Amounts”). Accrued Amounts, if any, shall be paid to Employee in accordance with the Company’s customary payroll practices as in effect from time to time, but in no event later than fifteen (15) days following Employee’s termination of employment.

  

  

  

(b) Death. If Employee’s employment is terminated due to his death, this Agreement shall terminate and the Company shall have no obligations to Employee or his estate, beneficiaries or legal representatives with respect to this Agreement other than payment of the Accrued Amounts, if any. Accrued Amounts, if any, shall be paid to Employee in accordance with the Company’s customary payroll practices as in effect from time to time but in no event later than 15 days following Employee’s termination of employment on account of death. Notwithstanding the foregoing, in the event of his death, Employee shall be considered as immediately and totally vested in any and all outstanding Awards previously granted to Employee by Company or its subsidiaries; provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A.

(c) Discharge.

(i) The Company may terminate Employee’s employment in the event of Employee’s Misconduct or Disability (both as defined below) only upon written notice thereof delivered to Employee in accordance with Section 8(f) and Section 11 hereof. In the event that Employee’s employment is terminated during the Term by the Company for any reason other than his Misconduct or Disability (both as defined below), then, except as provided in Section 8(j)(i) below, (A) the Company shall pay in lump sum in cash to Employee, within fifteen (15) days following the expiration of the revocation period for the Release (as defined below), but in no event later than the fifteenth (15th) day of the third month following the year in which the Date of Termination occurs, an amount equal to the greater of (i) one year of the then Employee Base Compensation as of the Termination Date and (ii) the remaining Employee Base Compensation owed to Employee during the balance of the Term, and (B) for six months following the expiration of the revocation period for the Release, the Company, at its cost, shall provide or arrange to provide Employee (and, as applicable, Employee’s dependents) with accident and group health insurance benefits substantially similar to those which Employee (and Employee’s dependents) were receiving immediately prior to Employee’s termination (if any); provided, however, the benefits otherwise receivable by Employee pursuant to this clause (B) shall be reduced to the extent comparable benefits are actually received by Employee (and/or Employee’s dependents) during such period under any other employer’s plan(s) or program(s), with Employee being obligated to promptly disclose to the Company any such comparable benefits; and provided, further, however, that for the avoidance of doubt, the COBRA continuation period shall run concurrently with the period set forth in this Clause (B).  In addition to the aforementioned compensation and benefits, Employee shall be considered as immediately and totally vested in any and all Awards previously granted to Employee by Company or its subsidiaries; provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A.  With respect to benefits set forth under Clause (B) above, all insurance premiums and/or benefits payments made by the Company with respect to such benefits shall be made so as to be exempt from Section 409A of the Code and, for purposes thereof, and either each such payment shall be treated as a separate payment under Section 409A of the Code, or such payments shall be treated as medical benefits under a separation pay plan, as described under Treasury Regulation Section 1.409A-1(b)(9)(v)(B). To the extent any such payments are not exempt from Section 409A of the Code (i.e., they constitute “nonqualified deferred compensation” subject to Section 409A of the Code), such payments shall be paid by the Company according to a fixed schedule consisting of monthly installment payments. If the Company’s pre-tax payment of the premiums for such benefits would cause the Executive to be taxed on the Company’s actual cost of providing such accident and group health insurance benefits because such benefits are “self-insured,” the Company will instead pay such premiums on an after-tax basis so the premium amounts are included in the Employee’s taxable income. With respect to any such benefits that are taxable and not otherwise excluded from deferred compensation under Code Section 409A, any amount reimbursable and paid in one tax year shall not affect the amount to be reimbursed or paid in another tax year, all reimbursements shall be paid no later than the end of the Executive’s taxable year following the tax year in which such expenses were incurred and the reimbursements under this Section cannot be substituted for any other benefit. The Company’s obligation to make the payments and provide the benefits described in this Section 8(c)(i) is conditioned expressly on Employee’s executing (and not revoking) a general release of any and all claims arising out of or relating to Employee’s employment and termination of employment in a form reasonably satisfactory to the Company (the “Release”). If Employee fails to execute a Release within forty-five (45) days following the later of (i) the Date of Termination or (ii) the date Employee actually receives an execution copy of such Release (which shall be delivered to Employee no later than five (5) business days following Date of Termination), or if Employee revokes such Release within seven (7) days following execution, Employee shall forfeit all payments and benefits described hereunder.

(ii) In the event Employee is terminated because of Misconduct, the Company shall have no obligations pursuant to this Agreement after the Date of Termination other than for payment of the Accrued Amounts, if any. As used herein, “Misconduct” means (A) the continued failure by Employee to substantially perform his duties with the Company (other than any such failure resulting from Employee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination by Employee for Good Reason), after a written demand for substantial performance is delivered to Employee by the Board, which demand specifically identifies the manner in which the Board believes that Employee has not substantially performed his duties, and the Employee fails to cure such failure within fifteen (15) days after receipt of such demand, (B) the engaging by Employee in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise (other than such conduct resulting from Employee’s incapacity due to physical or mental illness or any such actual or anticipated conduct after the issuance of a Notice of Termination by Employee for Good Reason), (C) Employee’s conviction for the commission of a felony or (D) action by Employee toward the Company involving dishonesty. Anything contained in this Agreement to the contrary notwithstanding, the Board shall have the sole power and authority to terminate the employment of Employee on behalf of the Company.

  

  

  

(d) Disability. If Employee shall have been absent from the full-time performance of Employee’s duties with the Company for ninety (90) consecutive calendar days as a result of Employee’s incapacity due to physical or mental illness, Employee’s employment may be terminated by the Company for “Disability” and Employee shall not be entitled to further compensation pursuant to this Agreement, other than for payment of the Accrued Amounts, if any. Notwithstanding the foregoing, in the event that Employee’s employment is terminated by the Company due to Disability, Employee shall be considered as immediately and totally vested in any and all Awards previously granted to Employee by the Company or its subsidiaries; provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A.

(e) Resignation for Good Reason. Employee shall be entitled to terminate his employment for Good Reason as defined herein. If Employee terminates his employment for Good Reason, he shall be entitled to the compensation and benefits provided in Section 8(c)(i) hereof in accordance with the terms therein, including, without limitation, the requirement that Employee execute and not revoke the Release contemplated in Section 8(c)(i). “Good Reason” shall mean the occurrence of any of the following circumstances without Employee’s express written consent; provided, that, Employee has provided a Notice of Termination to the Company within fifteen (15) days after the initial occurrence of any such circumstance of Employee’s intention to terminate Employee’s employment for Good Reason, and the Company has failed to cure, to the extent curable, such circumstance within fifteen (15) days of receipt of the Notice of Termination given in respect hereof:

(i) the material breach of any of the Company’s obligations under this Agreement without Employee’s express written consent; or

(ii) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 14 hereof.

In addition, the occurrence of a Corporate Change, shall constitute “Good Reason” hereunder, but only if Employee terminates his employment within ninety (90) days following the effective date of such Corporate Change.

(f) Notice of Termination. Any purported termination of Employee’s employment by the Company under Sections 8(c)(ii) (Misconduct) or 8(d) (Disability), or by Employee under Section 8(e) (Good Reason), shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which, if by the Company and is for Misconduct or Disability, shall set forth in reasonable detail the reason for such termination of Employee’s employment, or in the case of resignation by Employee for Good Reason, said notice must specify in reasonable detail the basis for such resignation. A Notice of Termination given by Employee pursuant to Section 8(e) shall be effective even if given after the receipt by Employee of notice that the Board has set a meeting to consider terminating Employee for Misconduct. Any purported termination for which a Notice of Termination is required which is not effected pursuant to this Section 8(f) shall not be effective.

  

  

  

(g) Date of Termination. “Date of Termination” shall mean the date specified in the Notice of Termination, provided that the Date of Termination shall be at least fifteen (15) days following the date the Notice of Termination is given; provided, however, that in the case of Employee’s resignation for Good Reason, Date of Termination shall mean the close of business on the last day on which the Company may cure any circumstance alleged by Employee to give rise to a Good Reason termination. Notwithstanding the foregoing, in the event Employee is terminated for Misconduct, the Company may refuse to allow Employee access to the Company’s offices (other than to allow Employee to collect his personal belongings under the Company’s supervision) prior to the Date of Termination. Notwithstanding anything herein to the contrary, for purposes of this Agreement, “termination of employment” shall mean Employee’s “separation from service” from the Company and its “affiliates” as defined in Code Section 409A and Final Treasury Regulations Section 1.409A-1(h), including the default presumptions thereof. For purposes of this Agreement, “affiliate” shall mean (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Board, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise; provided, however, with respect to any payment or benefit subject to Section 409A of the Code, the term “affiliate” shall mean any member of the Company’s control group within the meaning of Final Treasury Regulations Section 1.409A-1(h)(3), as such may be modified or amended from time to time, by applying the “at least 50 percent” provisions thereof.

(h) Mitigation. Employee shall not be required to mitigate the amount of any payment provided for in this Section 8 by seeking other employment or otherwise, nor (except as set forth in Section 8(c)(i)(B)) shall the amount of any payment provided for in this Agreement be reduced by any compensation earned or benefits received by Employee as a result of employment by another employer, except that any severance amounts payable to Employee pursuant to the Company’s severance plan or policy for employees in general shall reduce the amount otherwise payable pursuant to Sections 8(c)(i) or 8(e).

(i) Excess Parachute Payments. Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit received or to be received by Employee hereunder in connection with the termination of Employee’s employment would, as determined by tax counsel selected by the Company, constitute an “Excess Parachute Payment” (as defined in Section 280G of the Internal Revenue Code), the Company shall fully “gross-up” such payment so that Employee is in the same “net” after-tax position he would have been if such payment and gross-up payments had not constituted Excess Parachute Payments, and such “gross-up” payment shall be made no later than the end of Employee’s taxable year next following Employee’s taxable year in which he remits the taxes to which such gross-up payment relates. The Company shall reimburse any costs and expenses incurred by Employee, including without limitation, attorneys’ fees due to a tax audit or litigation in connection with any excise tax (including penalties and interest or other excise taxes thereon) under Code Section 4999 or Code Section 280G and any such reimbursement shall be made by the end of the Employee’s tax year following the tax year in which such taxes that are subject to the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, by the end of the Employee’s tax year following the tax year in which the audit is completed or there is a final nonappealable settlement or other resolution of the litigation. The Employee’s right to payment or reimbursement pursuant to this Section 8(i) shall not be subject to liquidation or exchange for any other benefit.

  

  

  

(j) Resignation from Board. In the event Employee’s employment by the Company is terminated for any reason (other than Employee’s death), Employee shall immediately resign as a member of the Board and the board of directors of any of the Company’s subsidiaries. Nothing herein shall be deemed to limit the power of the shareholders of the Company to at any time remove any director, including, without limitation, Employee, in accordance with applicable law. All payments to Employees pursuant to this Agreement shall be conditioned upon Employee’s compliance with his obligations under this Section 8(j).

(k) Code Section 409A. Notwithstanding any provision of this Section 8 to the contrary, if all or any portion of the benefits provided in this Section 8 is determined to be “nonqualified deferred compensation” subject to Code Section 409A, and the Company determines that Employee is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance issued thereunder, then such benefits (or portion thereof) shall be accumulated and paid on the first day of the seventh month following Employee’s termination of employment. For purposes of this Agreement, whether Employee is a “specified employee” will be determined in accordance with the written procedures adopted by the Board.

(i) This Agreement is intended to comply with the provisions of Section 409A of the Code, and shall be interpreted and construed accordingly. The Company shall have the discretion and authority to amend this Agreement at any time to satisfy any requirements of Code Section 409A or guidance published thereunder; provided, however, any such amendment shall maintain the economic terms of this Agreement for the Employee. However, in no event will the Company have any liability for any failure of the Agreement to satisfy Code Section 409A, and the Company does not guarantee that the Agreement complies with Code Section 409A.

(ii) The Company shall promptly reimburse Employee for eligible expenses under this Agreement that Employee incurs and properly reports to the Company in accordance with its expense reimbursement rules and policies. Notwithstanding anything herein to the contrary or otherwise, all reimbursements shall be made so as to be exempt from Section 409A of the Code and to the extent not exempt: (A) the amount of expenses eligible for reimbursement or in-kind benefits provided during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other calendar year, (B) the reimbursements for expenses for which Employee is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred and (C) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Employee’s continuing or future participation in any benefit, bonus, incentive, or other plan or program provided by the Company or any of its affiliated companies and for which Employee may qualify, nor shall anything herein limit or otherwise adversely affect such rights as Employee may have under any Awards with the Company or any of its affiliated companies.

  

  

  

10. Assignability. The obligations of Employee hereunder are personal and may not be assigned or delegated by him or transferred in any manner whatsoever, nor are such obligations subject to involuntary alienation, assignment or transfer. The Company shall have the right to assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole or in part, to any parent, affiliate, successor or subsidiary organization or company of the Company, so long as the obligations of the Company under this Agreement remain the obligations of the Company.

11. Notice. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the Company at its principal office address, directed to the attention of the Board with a copy to the Secretary of the Company, and to Employee at Employee’s residence address on the records of the Company or to such other address as either party may have furnished to the other in writing in accordance herewith except that notice of change of address shall be effective only upon receipt.

12. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

13. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Employee to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used herein, the term “Company” shall include any successor to its business and/or assets as aforesaid which executes and delivers the Agreement provided for in this Section 13 or which otherwise becomes bound by all terms and provisions of this Agreement by operation of law.

(b) This Agreement and all rights of Employee hereunder shall inure to the benefit of and be enforceable by Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee should die while any amounts would be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee, or other designee or, if there be no such designee, to Employee’s estate.

  

  

  

14. Withholding Taxes.

(a) Tax Withholding. The Company shall have the power and the right to deduct or withhold from any benefits payable under this Agreement an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld.

(b) Share Withholding. With respect to tax withholding required upon the upon the lapse of restrictions on any restricted common stock, or upon any other taxable event arising as a result of any stock awards pursuant to this Agreement, Employee may elect, to satisfy the withholding requirement, in whole or in part, by having the Company withhold shares having a fair market value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All such elections shall be made in writing, signed by the Employee, and shall be subject to any restrictions or limitations that the Company, in its discretion, deems appropriate. Any fraction of a share required to satisfy such obligation shall be disregarded and the Employee shall instead pay the amount due in cash.

15. No Restraints. As an inducement to the Company to enter into this Agreement, Employee represents and warrants that he is not a party to any other agreement or obligation for personal services, and that there exist no impediments or restraints, contractual or otherwise, on Employee’s powers right or ability to enter into this Agreement and to perform his duties and obligations hereunder.

16. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officer as may be specifically authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement is an integration of the parties’ agreement; no agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party, except those which are set forth expressly in this Agreement. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

18. Arbitration. Either party may elect that any dispute or controversy arising under or in connection with this Agreement be settled by arbitration in Houston, Texas in accordance with the Employment Rules of the American Arbitration Association then in effect. If the parties cannot mutually agree on an arbitrator, then the arbitration shall be conducted by a three arbitrator panel, with each party selecting one arbitrator and the two arbitrators so selected selecting a third arbitrator. The findings of the arbitrator(s) shall be final and binding, and judgment may be entered thereon in any court having jurisdiction. The findings of the arbitrator(s) shall not be subject to appeal to any court, except as otherwise provided by applicable law. The arbitrator(s) may, in his or her (or their) own discretion, award legal fees and costs to the prevailing party.

[Signature Page Follows]

 

  

  

  

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

 

TEXAS RARE EARTH RESOURCES CORP.

By: /s/ Dan Gorski                           

Dan Gorski, Executive Officer

MARC LEVIER:

 

/s/ Marc LeVier                                

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Exhibit A

 

STOCK OPTION AGREEMENT

(Pursuant to the Company’s Amended and Restated 2008 Stock Option Plan)

Texas Rare Earth Resources Corp., a Nevada corporation (the “Company”), desiring to afford an opportunity to the Grantee named below to purchase certain shares of the Company’s common stock (the “Stock”) to provide Grantee with an added incentive as an employee of the Company or one or more of its subsidiaries, hereby grants to Grantee, and Grantee hereby accepts, an option (the “Option”) to purchase the number of shares of Stock specified below, exercisable upon the fixed date and at the Option exercise price specified below, subject to, in all respects, the vesting requirements set forth in Section 2 “VESTING SCHEDULE AND EXPIRATION.”

1.           IDENTIFYING PROVISIONS.  As used in this Stock Option Agreement (the “Agreement” or “Option Agreement”), the following terms shall have the following respective meanings:

(1) Grantee:  Marc Le Vier, Chief Executive Officer of the Company

(2) Effective Date of grant:                 May 3, 2011                                                                                                

(3) Number of shares optioned*:          2,500,000 common shares

	
(4)  

	
Option exercise price per share: $2.50.

2.           VESTING SCHEDULE AND EXPIRATION.  The Option Shares shall vest in equal 1/12th installments on the last day of each of the 12 calendar quarters (March 31st, June 30th, September 30th, December 31st) following the Effective Date (each such date being a “Scheduled Vesting Date”), provided that Grantee remains employed continuously with the Company from the date hereof through each such Schedule Vesting Date.  Each portion of the Option scheduled to vest on each separate Schedule Vesting Date shall be a separate “Tranche” and shall be deemed to be a separate payment under Code Section 409A.  Vesting may accelerate upon the occurrence of any of the conditions set forth in that certain Employment Agreement between Grantee and the Company, dated May 3, 2011 (the “Employment Agreement”).

3.           TERMINATION OF UNVESTED OPTION SHARES.  Upon Optionee’s cessation of employment for any reason (death, Disability (as defined below), Separation From Service (as defined below)), this Option shall terminate immediately with respect to any Option Shares that are then unvested (after giving effect to any accelerated vesting required as a result of such cessation pursuant to the Employment Agreement).

  

  

  

4.           ESTABLISHMENT OF AUTOMATIC EXERCISE EVENT FOR EACH TRANCHE.  Each Tranche of the Option shall be separately exercisable solely upon the soonest to occur of the following events (such soonest event shall be the “Automatic Exercise Event” for the Tranche):

	
  

	
(a)

	
Scheduled Vesting Date.  If the Scheduled Vesting Date for the Tranche occurs prior to any of the other events set forth in this Section 4, the Scheduled Vesting Date shall be the Automatic Exercise Event for the Tranche and the Tranche may be exercised in whole or in part by Grantee at any time in the calendar year following the calendar year in which the Scheduled Vesting Date occurs.  The Tranche shall terminate in its entirety as of the end of the period described in the preceding sentence.

	
  

	
(b)

	
Grantee’s Separation from Service.  If Grantee’s Separation From Service occurs prior to any of the other events set forth in this Section 4, Grantee’s Separation From Service shall be the Automatic Exercise Event for the Tranche and the vested portion of the Tranche (if any) may be exercised in whole or in part by Grantee on the date that is six months and one day following the date of Grantee’s Separation From Service (the “Six-Month Delay Date”) or, to the extent permitted by Code Section 409A, on any date thereafter on or prior to December 31st of the year in which the Six-Month Delay Date occurs.  The Tranche shall terminate in its entirety as of the end of the period described in the preceding sentence.  For purposes of this Agreement, Separation From Service shall have the meaning set forth in Final Treasury Regulation Section 1.409A-1(h).

	
  

	
(c)

	
Grantee’s Death.  If Grantee dies prior to any of the other events set forth in this Section 4, Grantee’s death shall be the Automatic Exercise Event for the Tranche and the vested portion of the Tranche (if any) may be exercised in whole or in part by Grantee’s legal representative or representatives or the persons entitled to do so under the Grantee’s last will and testament or under applicable interstate laws at any time in the calendar year following the calendar year in which the Grantee’s death occurs.  The Tranche shall terminate in its entirety as of the end of the period described in the preceding sentence.

	
  

	
(d)

	
Grantee’s Disability.  If Grantee becomes Disabled prior to any of the other events set forth in this Section 4, Grantee’s Disability shall be the Automatic Exercise Event for the Tranche and the vested portion of the Tranche may be exercised in whole or in part by Grantee (or Grantee’s guardian or legal representative or representatives) at any time in the calendar year following the calendar year in which the Grantee becomes Disabled.  The Tranche shall terminate in its entirety as of the end of the period described in the preceding sentence.  For purposes of this Agreement, Disability shall have the meaning set forth in Final Treasury Regulation Section 1.409A-3(i)(4).

  

  

  

	
  

	
(e)

	
Corporate Change that Qualifies as a Change in Control Event.  If a Corporate Change (as defined in the Employment Agreement) that is also a Change in Control Event of the Company occurs prior to any of the other events set forth in this Section 4, such Corporate Change/Change in Control Event shall be the Automatic Exercise Event for the Tranche and the vested portion of the Tranche may be exercised in whole or in part by Grantee on the date of the Corporate Change/Change of Control Event or, to the extent permitted by Code Section 409A, on any date thereafter on or prior to December 31st of the year in which the Corporate Change/Change in Control Event occurs.  The Tranche shall terminate in its entirety as of the end of the period described in the preceding sentence.  For purposes of this Agreement, Change in Control Event shall have the meaning set forth in Final Treasury Regulation Section 1.409A-3(i)(5).

	
  

	
Notwithstanding anything to the contrary in this Section, in no event shall any successor to the Company be required to assume this Option or substitute a new award for this Option, in full or in part, except as set forth in the Plan or as may be required to ensure that Grantee has the opportunity to exercise the Option (or Tranche thereof) or successor award (or receive payment in respect thereof) at the applicable time or times set forth in Sections 4(a) – (e).

5.           RESTRICTIONS ON TRANSFERABILITY OF OPTION.  This Option may not be transferred by the Grantee other than by will or the laws of descent and distribution and may be exercised during the Grantee’s lifetime only by the Grantee or the Grantee’s guardian or legal representative subject to the limitations herein.

 

 

6.           ADJUSTMENTS AND CORPORATE REORGANIZATIONS.  If the outstanding shares of stock of the class then subject to this Option are increased or decreased, or are changed into or exchanged for a different number or kind of shares or securities or other forms of property (including cash) or rights, as a result of one or more reorganizations, recapitalization, spin-offs, stock splits, reverse stock splits, stock dividends or the like, appropriate adjustments shall be made in the exercise price and number of Shares pursuant to the Plan.

7.           EXERCISE, PAYMENT FOR AND DELIVERY OF STOCK.  This Option may be exercised by the Grantee or other person then entitled to exercise it by giving written notice of exercise to the Company specifying the number of shares to be purchased and the total purchase price, accompanied by payment of the purchase price in any form then permitted by the Texas Rare Earth Resources Corp. Amended and Restated 2008 Stock Option Plan (the “Plan”).

8.           RIGHTS IN STOCK BEFORE ISSUANCE AND DELIVERY.  No person shall be entitled to the privileges of stock ownership in respect of any shares issuable upon exercise of this Option, unless and until such shares have been issued to such person as fully paid shares.

  

  

  

9.           REQUIREMENTS OF LAW.  By accepting this Option, the Grantee represents and agrees for himself or herself and his or her transferees by will or the laws of descent and distribution that, unless a registration statement under the Securities Act of 1933 is in effect as to shares purchased upon any exercise of this Option, (a) any and all shares so purchased shall be acquired for his or her personal account and not with a view to or for sale in connection with any distribution, and (b) each notice of the exercise of any portion of this Option shall be accompanied by a representation and warranty in writing, signed by the person entitled to exercise the same, that the shares are being so acquired in good faith for his or her personal account and not with a view to or for sale in connection with any distribution.  No certificate or certificates for shares of stock purchased upon exercise of this Option shall be issued and delivered unless and until, in the opinion of legal counsel for the Company, such securities may be issued and delivered without causing the Company to be in violation of or incur any liability under any federal, state or other securities law or any other requirement of law or of any regulatory body having jurisdiction over the Company

10.           TEXAS RARE EARTH RESOURCES CORP. PLAN.  This Option is subject to, and the Company and the Grantee agree to be bound by, all of the terms and conditions of the Plan, as the same may be amended from time to time in accordance with its terms, provided that no such amendment shall deprive the Grantee, without the Grantee’s consent, of this Option or of any rights hereunder.  Pursuant to the Plan, the Board of Directors of the Company or its Committee established for such purposes is vested with conclusive authority to interpret and construe the Plan and this Option Agreement, and is authorized to adopt rules and regulations for carrying out the Plan.  A copy of the Plan in its present form has been previously provided to Grantee and is available for inspection or copying during the business hours of the Company by the Grantee or other persons entitled to exercise this Option at the Company’s principal office.

11.           NOTICE.  Any notice to be given to the Company shall be addressed to the Company in care of its Corporate Secretary at its principal office, and any notice to be given to the Grantee shall be addressed to the Grantee at the address set forth beneath the Grantee’s signature hereto or at such other address as the Grantee may hereafter designate in writing to the Company.  Any such notice shall be deemed duly given five (5) business days after enclosed in a properly sealed envelope addressed as aforesaid, registered or certified mail, return receipt requested, and deposited, postage and registry or certification fees prepaid, in a post office or branch post office regularly maintained by the United States Postal Service.  Notice shall also be deemed given if in writing when received by the party to whom notice is intended by hand delivery, courier service, facsimile or by electronic means subject to the receipt and retention by the party giving notice of evidence of its delivery.

12.           TAX WITHHOLDING.  The Company or any Affiliate shall have the right to deduct from payments of any kind otherwise due to Grantee, any federal, state, local or foreign taxes of any kind required by law to be withheld upon the issuance of any shares of Stock or payment of any kind upon the exercise of this Option.  Subject to the prior approval of the Committee, which may be withheld by the Committee, in its sole discretion, Grantee may elect to satisfy the minimum statutory withholding obligations, in whole or in part, (i) by having the Company withhold shares of Stock otherwise issuable to Grantee or (ii) by delivering to the Company shares of Stock already owned by Grantee.  The shares delivered or withheld shall have an aggregate Fair Market Value not in excess of the minimum statutory total tax withholding obligations.  The Fair Market Value of the shares used to satisfy the withholding obligation shall be determined by the Company as of the date that the amount of tax to be withheld is to be determined.  Shares used to satisfy any tax withholding obligation must be vested and cannot be subject to any repurchase, forfeiture, or other similar requirements.  Any election to withhold shares shall be irrevocable, made in writing, signed by Grantee, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

  

  

  

13.           RULES OF CONSTRUCTION.  This Agreement has been executed and delivered by the Company in Texas and shall be construed and enforced in accordance with the laws of said State, other than any choice of law rules calling for the application of laws of another jurisdiction.  Should there be any inconsistency or discrepancy between the provisions of this Option and the terms and conditions of the Company’s Plan under which this Option is granted, the provisions in the Plan shall govern and prevail.  The receipt of this Option does not give the Grantee any right to continued employment by the Company or a subsidiary for any period, nor shall the granting of this Option or the issuance of shares on exercise thereof give the Company or any subsidiary any right to the continued services of the Grantee for any period.

14.           SECTION 409A.  This Agreement is intended to comply with the provisions of Section 409A of the Code and shall be interpreted and construed accordingly.  The Company shall have the discretion and authority to amend this Agreement at any time to satisfy any requirements of Code Section 409A or guidance published thereunder; provided, however that any such amendment shall seek to maintain as closely as possible the economic terms of this Agreement for Grantee.  However, in no event shall the company have any liability for any failure of the Agreement to satisfy Code Section 409A, and the Company does not guarantee that the Agreement complies with Code Section 409A.

 

 

 

 

 

 

 

 

 

  

  

  

  
*Hereinafter referred to as the “Shares” or the “Option Shares”.

 

IN WITNESS WHEREOF, the Company has granted this Option on the date of grant specified above.

	
“GRANTEE”

	
“COMPANY”

	  	  
	  	
Texas Rare Earth Resources Corp.

	  	  
	  	  
	
By: /s/ Marc LeVier

	
By: /s/ Dan Gorski

	
Marc Le Vier

	
Dan Gorski

	  	  
	  	  
	
Address For Notice:

	
Address for Notice:

	  	  
	
_____________________

	
_____________________

	
_____________________

	
_____________________ex10-2.htm

Exhibit 10.2

 

DIRECTOR’S AGREEMENT

 

This Director’s Agreement (this “Agreement”) is made and entered into as of the 27th day of April, 2011, (the “Effective Date”), by and between James J. Graham (hereinafter referred to as “Director”) and Texas Rare Earth Resources Corp. (“Company”).

 

WITNESSETH:

 

WHEREAS, the Board of Directors (the “Board”) of the Company wish to elect Director to serve on the Board of the Company, and Director has agreed to serve at the pleasure of the Board and on the terms and conditions below;

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1. Appointment as Director

 

Company shall appoint Director to the Board of the Company, and, upon such appointment, Director agrees that Director will devote the amount of time, skill, and efforts during the term of this Agreement to the affairs of the Company as may be reasonably requested and required of Director and in accordance with the duties and obligations imposed upon directors of corporations by applicable law.

 

2. Compensation

 

As compensation for serving as a member of the Board of the Company, Company agrees upon the execution and delivery of this Agreement to grant to Director a five-year option to purchase 60,000 shares of restricted common stock of the Company, at an exercise price of $4.00 per share.  Upon each anniversary of this Agreement, the board of directors will consider additional equity awards to be issued to Director.  Company will reimburse Director for all reasonable costs associated with attending meetings and otherwise fulfilling his services hereunder.

3. Confidential and Proprietary Information; Documents

 

3.1           Director recognizes and acknowledges that Director will have access to certain information of the Company that is confidential and proprietary and constitutes valuable and unique property of the Company. Director agrees that Director will not at any time, either during or subsequent to the term of this Agreement, disclose to others, use, copy or permit to be copied, except in pursuance of Director’s duties on behalf of the Company, its successors, assigns or nominees, or as required by the order of any tribunal having jurisdiction or by mandatory provisions of applicable law, any confidential information or know-how of the Company without the prior written consent of the Board of the Company. Director further agrees to maintain in confidence any confidential information of third parties received as a result of Director’s relationship with the Company.

3.2           Director further agrees to deliver to the Company promptly after his resignation, removal or failure to be nominated or elected as a member of the Board, all materials correspondence, memoranda, notes, records, plans, or other documents and all copies thereof (all of which are hereafter referred to as the “Documents”), made, composed or received by Director, solely or jointly with others, and which are in Director’s possession, custody, or control at such date and which are related in any manner to the past, present, or anticipated business of the Company.

  

  

  

3.3           In the event of a breach or threatened breach of any of the provisions of Section 3, or any breach by Director of his fiduciary obligation to the Company and its shareholders, Company shall be entitled to an injunction ordering the return of such Documents and any and all copies thereof and restraining Director from using or disclosing, for Director’s benefit or the benefit of others, in whole or in part, any confidential information.

4. Conflicts of Interest

 

4.1           In keeping with Director’s fiduciary duties to the Company, Director agrees that Director shall not, directly or indirectly, become involved in any conflict of interest, or upon discovery thereof, allow such a conflict to continue.  Moreover, Director agrees that Director shall promptly disclose to the Board of the Company any facts which might involve any reasonable possibility of a conflict of interest as the Company is currently and in the future configured and practicing business.

4.2           It is agreed that any direct or indirect interest in, connection with, or benefit from any outside activities, particularly commercial activities, which interest might in any way adversely affect the Company or any of its subsidiaries or affiliates, involves a possible conflict of interest. Circumstances in which a conflict of interest on the part of Director would or might arise, and which should be reported immediately by Director to an officer of the Company, include, without limitation, the following: (a) ownership of a material interest in, acting in any capacity for, or accepting directly or indirectly any payments, services or loans from a supplier, contractor, subcontractor, customer or other entity with which the Company does business; (b) misuse of information or facilities to which Director has access in a manner which will be detrimental to the Company’s interest; (c) disclosure or other misuse of information of any kind obtained through the Director’s connection with the Company; (d) acquiring or trading in, directly or indirectly, other properties or interests adjacent to the properties and by the Company; (e) the appropriation to the Director or the diversion to others, directly or indirectly, of any opportunity in which it is known or could reasonably be anticipated that the Company would be interested unless the Company is precluded from or chooses not to pursue such opportunity; and (f) the ownership, directly or indirectly, of a material interest in an enterprise in direct competition with the Company or acting as a director, officer, partner, consultant, Director or agent of any enterprise which is in direct competition with the Company.

5. Remedies

 

Director and the Company agree that, because damages at law for any breach or nonperformance of this Agreement by Director, while recoverable, are and will be inadequate, this Agreement may be enforced in equity by specific performance, injunction, accounting or otherwise.

  

  

  

6. Miscellaneous

 

6.1           This Agreement is made and entered into as of the Effective Date and the rights and obligations of the parties hereto shall be binding upon the heirs and legal representatives of the Director and the successors and assigns of the Company.  This Agreement may be assigned by the Company (including assignment by operation of law to any successor to the business of the Company by merger, consolidation or other business combination) without the consent of Director but is personal to the Director and no rights, duties, and obligations of Director hereunder may be assigned without the consent of the Company or its assigns, which may be granted or withheld in its sole discretion.

6.2           No waiver or non-action with respect to any breach by the other party of any provision of this Agreement, nor the waiver or non-action with respect to any breach of the provisions of similar agreements with other Directors shall be construed to be a waiver of any succeeding breach of such provision, or as a waiver of the provision itself.

6.3            Should any portions hereof be held to be invalid or wholly or partially unenforceable, such holding shall not invalidate or void the remainder of this Agreement.  The portions held to be invalid or unenforceable shall be revised and reduced in scope so as to be valid and enforceable, or, if such is not possible, then such portions shall be deemed to  have been wholly excluded with the same force and effect as it if had never been included herein.

6.4           Director’s obligations with regards Section 3 of this Agreement to the Company shall survive Director’s resignation, removal or failure to be nominated or elected as a member of the Board of the Company.

6.5           This Agreement supersedes, replaces and merges any and all prior and contemporaneous understandings, representations, agreements and discussions relating to the same or similar subject matter as that of this Agreement between Director and the Company and constitutes the sole and entire agreement between the Director and the Company with respect to the subject matter of this Agreement.

6.6           The laws of the State of Texas, excluding any conflicts of law rule or principle that might otherwise refer to the substantive law of another jurisdiction, will govern the interpretation, validity and effect of this Agreement without regard to the place of execution or the place for performance thereof, and the Company and Director agree that the state and federal courts in Harris county, Texas, shall have personal jurisdiction and venue over the Company and Director to hear all disputes arising under this Agreement.  This Agreement is to be at least partially performed in Harris County, Texas.

  

  

  

6.7           All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be deemed to have given when mailed by registered mail or certified mail, return receipt requested, as follows:

If to the Company, to:

Mr. Dan Gorski

Texas Rare Earth Resources Corp.

3 Riverway, Suite 1800

Houston, TX  77056

If to Director, to:

James J. Graham

5489 East Long Place

Centennial, CO  80122-3807

or to such other addresses as either party may designate by notice to the other party hereto in the manner specified in this section.

6.8           This Agreement may not be changed or terminated orally, and no change, termination or waiver of this Agreement or of any of the provisions herein contained shall be binding unless made in writing and signed by both parties, and in the case of the Company, by an authorized officer of the Company.  Any change or changes, from time to time, in Director’s compensation shall not be deemed to be, a change, termination or waiver of this Agreement or of any of the provisions herein contained.

 

IN WITNESS WHEREOF, the undersigned have hereby caused this Agreement to be effective as of the date first written above.

Texas Rare Earth Resources Corp.

	
By: /s/ Dan Gorski

	
/s/ James J. Graham

	
Dan Gorski, CEO

	
James J. Graham

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