Document:

altair_10q-ex1002.htm

EXHIBIT 10.2

    

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

   

THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is entered into as of March  15, 2010 by and among Altairnano, Inc., a Nevada corporation (the "Company"), Altair Nanotechnologies Inc., a Canadian corporation ("Parent"), and C. Robert Pedraza, an individual ("Employee"),

   

RECITALS

A. Employee, the Company and Parent have previously entered into that certain Employment Agreement dated as of June 16, 2008, as amended by the First Amendment to Employment Agreement dated November 24, 2008 (the "Employment Agreement").

 

B. Employee, the Company and Parent now desire to extend the initial term of the Employment Agreement by six months.

 

NOW, THEREFORE, in consideration of this Amendment and of the covenants and conditions contained in this Amendment, the parties hereto agree as follows:

 

1.   Section 2 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

 

2.   Term. The term of this Agreement (the "Term") shall commence on the date first set forth above (the "Effective Date"). The Term shall terminate upon the earlier to occur of (i) the Expiration Date (as defined below), and (ii) the termination of Employee's employment with all of the Consolidated Companies. The initial Expiration Date shall be December 16, 2010. Unless the Company or Employee provides the other with at least ninety (90) days advance written notice prior to the initial Expiration Date (and each Expiration Date thereafter) of its intention not to renew this term of Agreement following the then-current Expiration Date, the Expiration Date shall automatically be changed to the two-year anniversary of the then-current Expiration Date. Notwithstanding anything in this Agreement to the contrary, Sections 7 and 8 shall survive termination of this Agreement and expiration of the Term for the time periods set forth therein, and this sentence and all provisions related to the interpretation or enforcement of, and disputes under, this Agreement shall survive until the expiration of the last applicable statute of limitations.

 

2.   All other provisions of the Employment Agreement are confirmed in their entirety, provided, however, that any provision of the Employment Agreement inconsistent with this Amendment shall be considered amended and revised to conform to the provisions of this Amendment.

 

3.    This Agreement may be executed in multiple counterparts, all of which taken together shall form a single Agreement. A facsimile copy of this Agreement or any counterpart thereto shall be valid as an original.

  

  

  

IN WITNESS WHEREOF, Employee has signed this Amendment personally, and the Company and Parent have caused this Amendment to be executed by their duly authorized representatives.

 

 

	 	
COMPANY:

 

ALTAIRNANO, INC.

a Nevada corporation

 

By: /s/ Terry Copeland

Name: Terry Copeland

Title: President and CEO

 

 

PARENT:

 

ALTAIR NANOTECHNOLOGIES INC,

a Canadian corporation

 

By: /s/ Terry Copeland

Name: Terry Copeland

Title: President and CEO

 

 

EMPLOYEE:

 

/s/ C. Robert Pedraza

C. Robert Pedraza, an individual

 

 

 

2altair_10q-ex1007.htm

EXHIBIT 10.7

 

Certain Portions of this exhibit have been omitted pursuant to Rule 24b-2 and are subject to a confidential treatment request. Copies of this exhibit containing the omitted information have been filed separately with the Securities and Exchange Commission. The omitted portions are marked with a ***.

Altairnano 2010 Incentive Bonus

Plan Document

Purpose – The annual Incentive Bonus is intended to compensate all regular employees for achieving pre-determined individual (for Level 2 - 6 employees only) and corporate goals. The Bonus is a key element of the Company’s total compensation plan for all employees. This document outlines the scope and administration of the 2010 Incentive Bonus Plan.

Eligibility – All regular employees are included in the plan. The extent of their participation is based on their actual earned covered compensation for 2010. A participant must be an employee on the date the bonus is paid to receive a bonus award. We do not consider a bonus under this plan to be earned until the date it is paid. This plan is not a contract and may be amended, eliminated or replaced at Altairnano’s sole discretion.  Under all circumstances, payment of bonus is at the sole discretion of the Board of Directors.

Overview of Plan

The 2010 Incentive Bonus Plan is based upon the Individual Employee and Total Company Performance, equally weighted for Levels 2 – 6, 50% of Incentive Bonus Opportunity based on Individual Employee Performance and 50% of Incentive Bonus Opportunity based on Company Performance. The Incentive Bonus for Levels 7 –13 is based on 100% on Company Weighted Performance.

The Company Weighted Performance has four components:

	
Component

	 	
Target

	 	
Weighting

	  	 	  	 	  
	
Total  Revenue

	 	
$ *** million

	 	
40%

	  	 	  	 	  
	
Order Backlog

	 	

$ *** million

	 	
30%

	  	 	  	 	  
	
Current Assets at Year End (less short-term investments in available for sale securities)

	 	

$ *** million

	 	
25%

	  	 	  	 	  
	
Safety

	 	
*** OSHA Incidence Rate

	 	
5%

The Incentive Bonus is triggered when Employee Performance meets or exceeds 100% of the individual objectives and when Company Weighted Performance is at least 100%.  (No Bonus will be paid for the Employee Performance unless the Company Weighted performance is

  

  

  

100%, or greater).  The Incentive Bonus for Company Weighted Performance is triggered when 100% of target performance is achieved, as well. The multiplier achieved increases linearly from 100% to 150% for 100% to 125% Performance, as illustrated in Chart 1. The Company Weighted bonus and Employee bonus multipliers are each capped at 150%.

 

 

The amount of the Incentive Bonus varies by Employee Level (Chart 2):

	
 

Employee Level

	
Incentive Bonus Opportunity

(% of Employee Salary)

	
Opportunity

	
Cash Payout

	
Stock  Payout

	
2 to 6

	
15%

	
100%

	
0%

	
7 to 8

	
25%

	
60%

	
40%

	
9 to 10

	
40%

	
60%

	
40%

	
11 to 12

	
60%

	
60%

	
40%

	
13

	
80%

	
60%

	
40%

Bonus Generation – The Bonus Pool is determined after year-end when the audited financial results are made available. The calculation of bonus will be made by the CFO or his designee, confirmed by the independent auditor and approved by the Board Compensation, Nominating and Corporate Governance Committee before distribution.

The four weighted components of the Company Performance are defined as:

 

	  	
Total Revenue –

	
The total revenues recorded for 2010 in accordance with GAAP as reported on the audited financial statements.

	  	  	  
	  	
Order Backlog –

	
The amount any customer is firmly committed to purchase during 2011 or thereafter as set forth in any signed PO or contract, customer collaboration or grant, measured at year-end in accordance with GAAP and SEC reporting standards.

	  	  	  
	  	
Current Assets at Year End –

	
Total Current Assets reported on the audited financial statements at year end 2010, net of: (1) Investments (available for sale securities); and (2) any cash raised from the sale or exercise of options, warrants and new issuance of shares in excess of the budgeted net raise of $13-million.

	  	  	  
	  	
Safety –

	
The OSHA incidence rate for the Company for 2010 as reported by EH&S.

  

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Bonus Payout – There are target payouts for each Level (Chart 2). Each employee may receive more or less than the target payout for their Level. (However, the total bonus pool award earned by the Company is not affected by these adjustments.)

Employees for Levels 2 – 6 receive a cash payment; employees at Levels 7 – 13 (including all executive officers) will receive payment as 60% cash and 40% ALTI stock grant. The Compensation, Nominating and Corporate Governance Committee must approve the overall Plan award and the individual awards for all executive officers.

The number of shares issued is determined using the volume weighted average price (VWAP) of ALTI shares during the bonus earnings period of January – December 2010.  The Grant Date establishes the taxable value of the bonus stock to the employee, regardless of the award date. An example follows.

  Chart 3 -  Payout Example – Assuming $25,000 bonus for a level 7 employee

 

Bonus Calculation 

	
Cash Allocation at 60%

	 	$	15,000	 
	
Stock Allocation at 40%

	 	$	10,000	 
	
Total

	 	$	25,000	 
	  	 	 	 	 
	
Stock Allocation

	 	$	10,000	 
	
Divided by VWAP Price  (estimate)

	 	$	2.00	 
	
Equals Number of Shares Granted

	 	 	5,000	 

Calculation for Stock Grant Earnings 

	
Taxable Shares Granted

	 	 	5,000	 
	
Closing Price on day prior to Grant Date (estimate)

	 	$	x   1.50	 
	
Taxable Stock Value

	 	$	7,500	 

Reported Earnings (W2) 

	
Gross Cash Distribution

	 	$	15,000	 
	
Taxable Stock Value

	 	$	7,500	 
	
Total Taxable Bonus Value

	 	$	22,500	 

(note – tax withholding on both earnings elements will be deducted from the cash portion)

Discretionary Bonus & Adjustments – The Compensation, Nominating and Corporate Governance Committee may also make discretionary bonuses from time to time if it determines, after considering the total base salary, annual incentive bonus and equity-based compensation to an employee(s), that the total compensation otherwise earned by the employee(s) underrepresented the value or contribution of the employee(s) during the year. Conversely, an employee may receive less than the target payout for his or her level if the value or contribution of the employee during the year was inadequate or inferior to what was expected from an employee in his or her position.

  

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Recoupment –  The Compensation, Nominating and Corporate Governance Committee has the sole and absolute authority, to the full extent permitted by applicable law, to require that each executive officer agree to reimburse the Company for all or any portion of any  Incentive Bonus if:

(1)  the payment was predicated upon the achievement of certain financial results that were subsequently the subject of a material financial restatement,

(2)  in the view of the Compensation, Nominating and Governance Committee, the executive engaged in fraud or misconduct that caused or partially caused the need for a material financial restatement by the Company, and

(3)  a lower payment would have occurred based upon the restated financial results.

In each such instance, the Company will, to the extent practicable and allowable under applicable laws, require reimbursement of any bonus in the amount by which the executive officer’s annual Incentive Bonus for the relevant period exceeded the lower payment that would have been made based on the restated financial results, provided that the Company will not seek to recover Incentive Bonuses paid more than one year prior to the date the need for such material financial restatement is determined.

Disability, FMLA and Workers’ Comp – The intent of the Incentive Bonus Plan is to reward individual performance and company performance contributions per the stated rules and procedures in this document. If an eligible employee is absent from their regular position due to FMLA, workers' compensation or disability, they are still eligible for an earned award based on the pro-rata number of actual days worked and the resultant covered compensation. Amounts of funds received from Workers’ Compensation, disability insurance benefits or other sources are not to be included in the calculation of earned covered compensation.

 

Extraordinary Events – In the event of a merger, consolidation, plan of exchange, acquisition of property or stock, split-up, split-off, spin-off, reorganization or liquidation to which Altair Nanotechnologies Inc. or the subsidiary for which employee primarily provides services is a party, any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of Altair Nanotechnologies Inc. or the subsidiary for which employee primarily provides services, or the transfer by one or more shareholders, in one transfer or several related transfers, of 50% of more of the common shares outstanding on the date of such transfer (or the first of such related transfers) to persons, other than wholly-owned subsidiaries or family trusts,  who were not shareholders of the Altair Nanotechnologies Inc. prior to the first such transfer (each, a “Transaction”), the Board of Directors shall, in its sole discretion and to the extent possible under the structure of the Transaction, select, prior to the consummation of the Transaction, one of the following alternatives for treating this incentive bonus plan: (a) this incentive bonus plan shall remain in effect in accordance with its terms; (b) this incentive bonus plan shall remain in effect in accordance with its terms but shall be assumed (in total and/or with respect to employees who primarily provide services to transferred subsidiaries or business units) by the surviving corporation of any Transaction (including, if applicable, the purchaser of a business unit or its assets); or (c) any future accruals under this incentive bonus plan shall terminate as of the consummation of the Transaction and all bonus components, target bonuses and other aspects of this incentive bonus plan shall be pro-rated based upon the number of days that have elapsed in the calendar year.

Example Scenarios – Several example scenarios of Bonus Award calculation are illustrated as Chart 4.

 

  

4

  

CHART 4 

Scenario 1 – All Target components are met at 100%

	
 

Criteria

	 	
Objective

($ in millions)

	 	
Actual

($ in millions)

	 	

%

Performance

	 	
 

Weighting

	 	
Weighted 

Performance %

	  	 	  	 	  	 	  	 	 	  	 	 	  	 
	
Total Revenue (meet or exceed)

	 	
***

	 	
***

	 	
100.0

	%	 	
40.0

	%	 	
40.0

	%
	
Order Backlog (meet or exceed)

	 	
***

	 	
***

	 	
100.0

	%	 	
30.0

	%	 	
30.0

	%
	
Cash at year end (meet or exceed)

	 	
***

	 	
***

	 	
100.0

	%	 	
25.0

	%	 	
25.0

	%
	
Safety (meet or less than)

	 	
***

	 	
***

	 	
100.0

	%	 	
5.0

	%	 	
5.0

	%
	  	 	  	 	  	 	  	 	 	  	 	 	
100.0

	%

	  
	
Payout %                               =              100.0%    

	  

 

 

	 	 	 	 	 	 	 	 	 
	
Employee at level 2-6 with 100% individual performance:

	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	  	  	 	
Weighting

	 	
Results %

	 	
%Target

	 
	  	  	 	  	 	  	 	  	 
	
Company performance

	  	 	
50.0%

	 	
100.0%

	 	
50.0%

	 
	
Individual performance

	
100.0%

	 	
50.0%

	 	
100.0%

	 	
50.0%

	 
	  	  	 	  	 	  	 	
100.0%

	 
	
 

	              Opportunity level	 	
15.0%

	 	  	 
	
Total Bonus as % of earned compensation

	 	
15.0%

	 
	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	
Employee at level 7-13 would earn their Opportunity % at

	 	 	 	 	
100.0%

	 
	 	 	 	 	 	 	 	 	 

 

  

5

  

CHART 4 (continued) 

Scenario 2 – Individual Performance meets Target, Company Weighted performance below 100%

	
 

Criteria

	 	
Objective

($ in millions)

	 	
Actual

($ in millions)

	 	

%

Performance

	 	
 

Weighting

	 	
Weighted 

Performance %

	  	 	  	 	  	 	  	 	 	  	 	 	  	 
	
Total Revenue (meet or exceed)

	 	
***

	 	
***

	 	
100.0

	% 	 	
40.0

	%	 	
40.0

	%
	
Order Backlog (meet or exceed)

	 	
***

	 	
***

	 	
75.0

	%	 	
30.0

	%	 	
22.5

	%
	
Cash at year end (meet or exceed)

	 	
***

	 	
***

	 	
100.0

	%	 	
25.0

	%	 	
25.0

	%
	
Safety (meet or less than)

	 	
***

	 	
***

	 	
100.0

	%	 	
5.0

	%	 	
 5.0

	%
	  	 	  	 	  	 	  	 	 	  	 	 	
92.5

	%

 

	  
	
Payout %                               =              100.0%    

	  

 

 

	 	 	 	 	 	 	 	 	 
	
Employee at level 2-6 with 100% individual performance:

	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	  	  	 	
Weighting

	 	
Results %

	 	
%Target

	 
	  	  	 	  	 	  	 	  	 
	
Company performance

	  	 	
50.0%

	 	

0%

	 	

0%

	 
	
Individual performance

	
100.0%

	 	
50.0%

	 	
100.0%

	 	
50.0%

	 
	  	  	 	  	 	  	 	

50.0%

	 
	 	  	 	  	 	 	 	  	 
	
Total Bonus as % of earned compensation

	 	

0%

	 
	 	 	 	 	 	 	 
	
(Individual Performance not earned unless Company Weighted Performance equal to or greater than 100%.)

	 
	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	
Employee at level 7-13 would earn their Opportunity % at    

	 	 	 	 	
  0%

	 
	 	 	 	 	 	 	 	 	 

 

  

6

  

CHART 4 (continued) 

Scenario 3 – Company Performance Exceeds Targets

	
 

 

Criteria

	 	
 

Objective

($ in millions)

	 	
 

Actual

($ in millions)

	 	
 

%

Performance

	 	
Weighting

	 	
Weighted Performance %

	  	 	  	 	  	 	  	 	 	  	 	 	  	 
	
Total Revenue (meet or exceed)

	 	
***

	 	
***

	 	
109.3

	%	 	
40.0

	%	 	
43.7

	%
	
Order Backlog (meet or exceed)

	 	
***

	 	
***

	 	
111.2

	%	 	
30.0

	%	 	
33.4

	%
	
Cash at year end (meet or exceed)

	 	
***

	 	
***

	 	
109.5

	%	 	
25.0

	%	 	
27.4

	%
	
Safety (meet or less than)

	 	
***

	 	
***

	 	
110.4

	%	 	
5.0

	%	 	
 5.5

	%
	  	 	  	 	  	 	  	 	 	  	 	 	
110.0

	%

 

	  
	
Payout %                               =              120.0%    

	  

 

	 	 	 	 	 	 	 	 	 
	
Employee at level 2-6 with 100% individual performance:

	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	  	  	 	
Weighting

	 	
Results %

	 	
%Target

	 
	  	  	 	  	 	  	 	  	 
	
Company performance

	  	 	
50.0%

	 	

120.0%

	 	
60.0%

	 
	
Individual performance

	
100.0%

	 	
50.0%

	 	
100.0%

	 	
50.0%

	 
	  	  	 	  	 	  	 	
110.0%

	 
	
Opportunity level

	 	
15.0%

	 	  	 
	
Total Bonus as % of earned compensation

	 	

16.5%

	 
	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	
Employee at level 7-13 would earn their Opportunity % at

	 	 	 	 	

120.0%

	 
	 	 	 	 	 	 	 	 	 

 

	 	 
	
Payout % Calculation

	 
	  	  	  	  	 
	
Payout % = mx + b

	
m = Incentive Multiplier delta) (Performance delta)`

	
2.00

	 
	  	
x = (Weighted Performance % results)`

	
See scenarios above

	 
	  	
b = ((Incentive Multiplier base) –m*(Performance Base))`

	
(1.00)

	 
	  	  	  	  	 
	
Note:  Both Individual Employee Performance and Company Performance are identical.

	  	 
	
Incentive Multiplier base

	
100.0%

	
Performance base

	
100.0%

	 
	
Incentive Multiplier maximum

	
150.0%

	
Performance maximum

	
125.0%

	 
	
Incentive Multiplier delta (change)

	
   0.50

	
Performance delta (change)

	
    0.25  %

	 
	  	  	  	  	 
	  	
Scenario 1

	
Scenario 2

	
Scenario 3

	 
	  	  	  	  	 
	
Weighted performance % is as calculated

	
100.0%

	
50%

	
110%

	 
	  	  	  	  	 
	
Payout % calculation

	
100.0%

	
 0%

	
120%

	 
	 	 	 	 	 

 

Note – Nothing in this Plan Document should be construed as a contract of employment or otherwise alter the at-will nature of each participant’s employment with the Company.

 

  

7

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