Document:

Unassociated Document

    
      

      

      

      

      September
8, 2010

      

      

      Dennis
Clarke Carey

      ***

      

      Dear
Dennis:

       

      
        
          	
                  Concerning:

                	
                  Letter
      Agreement

                

        

      

       

      We are
extremely pleased that you (herein referred to as the “Director”) have agreed to
accept our offer to join the Board of Directors of Composite Technology
Corporation. We would very much like to have your commitment to become a member
of our Board of Directors and assist us to the growth of our
company.

      

      This
letter is intended to formalize the terms of your participation as a member of
the Board of Directors of Composite Technology Corporation, a Nevada Corporation
(the "Corporation").

      

      The term
of your role as a member of the Board of Directors for the Corporation will be
one (1) year or until the annual general meeting at which new directors are
selected.  You agree that the terms set out in the present letter
agreement will also govern any extension of such initial period by your
reelection as a member of the Board of Directors at any future annual general
meetings at which directors are selected on the same terms as those set out
herein, for a period of up to two (2) additional terms (for a total of up to
three (3) years).

      

      As
compensation for your good faith efforts to provide direction for the
Corporation as well as promote the business interests of the Corporation, the
Corporation will grant you a monthly payment of four thousand dollars ($4,000),
provided, that you are still participating as a Corporation Board Member as of
each month end (“Remuneration”).

      

      We
further are asking you to accept a position on the Compensation Committee, which
will be compensated by an additional $500 per month.  We are also
asking you to serve on the Audit Committee, which will be compensated by an
additional $500 per month.  Should you be selected to serve as the
Chairman of either committee, you would receive an additional $500 per
month.

      

      In
addition, the Corporation will grant you 500,000 options to purchase shares of
the Corporation’s common stock at a price of $0.35 per share (the “Granted
Options”).  The Granted Options will vest in 12 equal portions (with
any fraction vesting with the last to vest of such portions).  The
first portion of the Granted Options shall vest on that date three (3) months
following the date of the initial Board grant and each successive portion shall
thereafter vest at intervals of three (3) month.

      

      You shall
also be entitled, in accordance with the Corporation’s applicable policies and
rules in force, to reimbursement of reasonable expenses which are incurred (i)
in traveling to meetings more than 1 hour away and (ii) in performing your
responsibilities hereunder to the extent that incurring such expenses is
pre-approved
by the Corporation.  The Corporation will also provide you with the
benefit of liability insurance as a member of the Corporation’s Board of
Directors.

       

       

      
        
          	
                     2026 McGaw Avenue, Irvine, California 92614 USA   Tel:
      (949)
      428-8500  Fax: (949) 660-1533

                	 
      

        

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      Since the
legislation and practice governing the attitudes, roles and responsibilities of
directors is evolving constantly, you are required to read and to understand the
duties and obligations that are incumbent on members of the Board of Directors
of the Corporation on an on-going basis to keep up to date.

      

      Your
responsibilities as a member of the Board shall include but are not limited
to:

       

      
        Attend a
minimum of four (4) quarterly meetings per calendar year and one (1) meeting
held immediately following the annual general meeting.  The
Corporation shall give appropriate advance notice of the scheduling of the
quarterly meetings; and

        
          	
                  ·  

                	
                  Attend
      the Annual General Meeting of the Shareholders;
  and

                

        

        
          	
                  ·  

                	
                  Be
      available for special meetings of the board by telephone for decisions
      which cannot wait until the quarterly board meetings;
  and

                

        

        
          	
                  ·  

                	
                  Report
      in a timely fashion any and all matters required to be reported in
      accordance with applicable legislation including without limitation any
      dealing in the Corporation’s shares;
and

                

        

        
          	
                  ·  

                	
                  Promote
      the interests of the Corporation through raising its profile, making
      introductions to generate new business opportunities;
  and

                

        

        
          	
                  ·  

                	
                  Introduce
      potential full time executives and employees and strengthening the Board
      of Directors and investor base of the Corporation;
  and

                

        

        
          	
                  ·  

                	
                  As
      requested by the Board of Directors, serve on designated subcommittees of
      the Board of Directors including the audit committee, compensation
      committee, corporate governance committee,
etc.

                

        

         

      

      In
addition, the Corporation is required to take a number of routine and urgent
decisions by written resolution in particular pursuant to Section 78.315 of the
Nevada General Corporation Law.  In this respect it is your
responsibility to respond in timely fashion to requests to review, agree on an
acceptable text and execute such resolutions.

      

      In
performing your services on the Board of Directors, you will be an independent
contractor and not an employee of the Corporation.  You will not be
entitled to any additional compensation or participate in any benefit plans of
the Corporation in connection with your services hereunder.  You may
not bind the Corporation or act as a principal or agent thereof.

      

      You
represent and agree that you are accepting the Remuneration for your own account
and not with a view to or for sale in connection with any distribution
thereof.  You understand that such Remuneration will be subjected to
the restrictions in the Corporation's Charter and Bylaws and will not be freely
transferable and you represent that you either have a preexisting personal or
business relationship with the Corporation or its Board of Directors or
controlling persons or, by reason of your business or financial experience, have
the capacity to protect your own interest in connection with receiving any
Remuneration as compensation.  You further represent that you were not
solicited by publication of any advertisement in connection with the receipt of
such Remuneration and that you have consulted tax counsel as needed regarding
such Remuneration.

       

       

      
        
          
            	
                       2026 McGaw Avenue, Irvine, California 92614 USA   Tel:
      (949)
      428-8500  Fax: (949) 660-1533

                  	 
      

          

        

        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      Notwithstanding
anything to the contrary, your participation on the Corporation's Board of
Directors may be terminated at any time for any or no reason by you or the
Corporation upon written notice to the other party, provided, however that in
the event of your seeking to terminate your directorship such resignation must
be accepted by the Board of Directors in accordance with the terms of Section
3.12 of the Corporations Bylaws.  Upon such termination, the right to
compensation hereunder will terminate subject to the Corporation's obligation to
reimburse you any approved expenses already incurred, and your right to retain
the Granted Options to the extent such Options have vested prior to such
termination or the compensation committee shall allow any accelerated
vesting.

      

      While
serving as a director, you will acquire and have access to confidential or
proprietary information about the Corporation, for as long as you are a director
of the Corporation and for a period after you cease to be a Director you shall
maintain the confidentiality of any and all such information in accordance with
the terms of your “Proprietary Rights Agreement” signed concurrently herewith
(“PAA”). The terms of the PAA are incorporated herein and form a part of your
duties and obligations as a director.

      

      Execution
of the signature block (which may be in counterparts) below shall indicate
agreement to the terms outlined above.  This letter is to be construed
and enforced in accordance with the internal laws of the State of Nevada and
contains the entire agreement of the parties with respect to the subject matter
hereof.  This letter may not be assigned by either party.

      

      

      

      
        	
                FOR:

              	
                Composite
      Technology Corporation

              	 
      	
                FOR:

              	
                Dennis
      Carey

              
	 
      	
                (the
      Corporation)

              	 
      	 
      	
                (the
      Director)

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 	 	 	 	 
	
                By:

              	 	 	
                By:

              	 
	 
      	
                Benton
      H Wilcoxon

              	 
      	 
      	
                Dennis
      Carey

              
	 
      	
                Chairman
      and CEO

              	 
      	 
      	
                Representing
      himself personally

              

      

      

      

      

      ***
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange Commission.

      

      

      

      

      

      

      

      

      

       

    

    
      
        
          	
                     2026 McGaw Avenue, Irvine, California 92614 USA   Tel:
      (949)
      428-8500  Fax: (949) 660-1533Unassociated Document

     

    
      COMPOSITE
TECHNOLOGY CORPORATION

      STOCK
OPTION GRANT NOTICE

      2008
STOCK INCENTIVE PLAN

      

      Composite
Technology Corporation (“Company”), pursuant to its 2008 Stock Option (“Plan”)
and the 2008 Stock Option Plan Stock Option Agreement (“Master Agreement”)
previously entered into by the parties, hereby grants to the “Optionholder”
identified below an option to purchase the number of shares of the Company’s
common stock (“Shares”) set forth below.  This option is subject to
all of the terms and conditions set forth in this Stock Option Grant Notice (the
“Grant Notice”), the Master Agreement and the Plan, all of which are
incorporated herein in their entirety.  Any capitalized terms not
defined herein shall have the meaning provided to such terms in the
Plan.

      

      

      
        	
                Optionholder:
      

              	
                Dennis
      Clarke Carey

              
	
                Option
      Grant #:

              	
                ***

              
	
                Date
      of Grant (Vesting Start Date):

              	
                September
      8, 2010

              
	
                Number
      of Shares Subject to Option:

              	
                500,000

              
	
                Exercise
      Price (Per Share):

              	
                US
      $ 0.35

              
	
                Total
      Exercise Price:

              	
                US
      $ 175,000.00

              
	
                Expiration
      Date:

              	
                September
      8, 2020

              

      

      

      Type of
Grant [check one]:    o  Incentive
Stock Option1   
x Nonstatutory
Stock Option 

      

      

      Vesting
Schedule:

      

      
        	
                Portion
      Vesting

              	
                #
      of  whole Months since vesting start date

              	
                %
      of Option Grant Vesting

              	
                Accumulated
      % of Option Grant vesting

              
	
                1st
      Portion

              	
                3

              	
                8.3%

              	
                8.3%

              
	
                2nd
      Portion

              	
                6

              	
                8.3%

              	
                16.6%

              
	
                3rd
      Portion

              	
                9

              	
                8.3%

              	
                24.9%

              
	
                4th
      Portion

              	
                12

              	
                8.3%

              	
                33.2%

              
	
                5th
      Portion

              	
                15

              	
                8.3%

              	
                41.5%

              
	
                6th
      Portion

              	
                18

              	
                8.3%

              	
                49.8%

              
	
                7th
      Portion

              	
                21

              	
                8.3%

              	
                58.1%

              
	
                8th
      Portion

              	
                24

              	
                8.3%

              	
                66.4%

              
	
                9th
      Portion

              	
                27

              	
                8.3%

              	
                74.7%

              
	
                10th
      Portion

              	
                30

              	
                8.3%

              	
                83%

              
	
                11th
      Portion

              	
                33

              	
                8.3%

              	
                91.3%

              
	
                12th
      Portion

              	
                36

              	
                8.7%

              	
                100%

              

      

      

      

      
        	
                Payment:

              	
                By
      cash or check

              

      

      
        	
                 
      

              	
                Same
      day sale program (if permitted by the
Board)

              

      

      
        	
                 
      

              	
                Tender
      of Common Stock (if permitted by the
Board)

              

      

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      Additional
Terms/Acknowledgements:  The undersigned Optionholder acknowledges
receipt of, and understands and agrees that his or her Option is subject to this
Grant Notice, the Master Agreement and the Plan.  Optionholder further
acknowledges that as of the Date of Grant, this Grant Notice, the Master
Agreement and the Plan set forth the entire understanding between Optionholder
and the Company regarding the acquisition of Shares covered by this Grant Notice
and supersedes all prior oral and written agreements on that subject with the
exception of (i) options previously granted and delivered to Optionholder under
the 2002 Stock Incentive Plan, and (ii) the agreements, if any, listed
below.  To the extent that this Grant Notice varies the terms of the
Master Agreement, this Grant Notice will prevail only with respect to Options
granted pursuant to this Grant Notice.

      ______________

      1   If this is an
incentive stock option, it (plus Optionholder’s other outstanding incentive
stock options) cannot be first exercisable for more than US $100,000 in any
calendar year.  Any excess over US $100,000 is a non-statutory stock
option.

      

      

      
        
          	COMPOSITE
      TECHNOLOGY CORPORATION	 	OPTIONEE:	 
	 	 	 	 	 	 
	By:	Benton
      H Wilcoxon	 	By:	Dennis
      Clarke Carey	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	  	 	 
       	 
	Title:   	
                  Chief
      Executive Officer

                	 	 	
                   

                	 
	Date:   	
                  ___________________,
      2010

                	 	Date:   	
                  ___________________,
      2010

                	 

        

      

       

       

       

      By his or
her signature below, the spouse of the Optionee acknowledges that he or she has
read the Agreement and is familiar with the terms and provisions thereof, and
agrees to be bound by all the terms and conditions of said
Agreement.

       

       

      
        
          

        

      

       

      
        
          
            	Spouse
      of Optionee (if applicable)  	 	By:	
                  	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	 
        	 
	
                  	 	 	
                     

                  	 
	
                  	 	Date:   	
                    ___________________,
      2010

                  	 

          

        

         

      

      *** This
material has been omitted pursuant to a request for confidential treatment and
filed separately with the Securities and Exchange Commission.

       

    

    
      
        
        

      

      
        2

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