3. COMPENSATION.
(a) Base Salary. In consideration of the services to be rendered hereunder, the Company hereby agrees to pay the Executive an annual base salary of $180,000, commencing the date the Company receives full DEC approval, payable in equal semimonthly installments in accordance with the usual practice of the Company (the “Base Salary”). The Base Salary shall be subject to an annual review by the Board and may be renegotiated based on criteria to be determined by the Board. The Executive will be responsible for his own income tax payable to relevant federal and state authorities in the United States. The Executive's Base Salary shall be subject to annual review by the Board (or a committee thereof).
(b) Stock Options. Subject to the terms and conditions provided in this Agreement, the Company agrees to grant the Executive stock options to purchase a maximum of 250,000 shares of the common stock of the Company in the following manner.
1. The first tranche of 100,000 options at an exercisable at a price of $4.89 and become fully vested on the Effective Date.
2. The second tranche of 75,000 options carrying an exercise price of $4.89, and vesting upon the completion of 5 fully operational Plastic 2 Oil (“P2O”) processors.
3. The third tranche of 75,000 options carrying an exercise price of $4.89, and vesting when the Company’s market capitalization exceeds $500,000,000 as determined by the Company’s independent accounting firm.
