FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is executed in Tulsa,
Oklahoma on this 12th
day of
October, 2008, to be effective as of the 1st
day of
May, 2008 (the “Amendment Effective Date”) by 3DIcon
Corporation,
an
Oklahoma corporation, (“3DIcon”), with its principal place of business located
in Tulsa, Oklahoma, and
Xxxxx Xxxxxx,
a
resident of California (“Employee”).
WHEREAS,
3DIcon
and Employee entered an Employment Agreement, effective May 1, 2007, (the
“Employment Agreement”) and the term of employment renewed on May 1, 2008; and
WHEREAS,
3DIcon
and Employee desire to enter this Amendment to the Employment Agreement and
to
amend the employment relationship on the terms and conditions set forth
herein.
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements hereinafter contained
and
in the Employment Agreement, and subject to the conditions set forth herein,
3DIcon and Employee hereby agree to amend the Employment Agreement as
follows:
1. Agreement. Except
as
expressly amended by this Amendment, the Employment Agreement shall remain
in
effect as written. Terms defined in the Employment Agreement shall have the
meanings set forth therein unless otherwise defined in this
Amendment.
2. Section
2: Compensation,
in the
Employment Agreement is hereby amended to read as follows:
2. Compensation.
As
compensation for the services to be rendered by Employee to 3DIcon pursuant
to
this Employment Agreement, as amended, Employee shall receive the following
compensation and other benefits:
(a) Salary.
3DIcon
shall pay Employee an annual salary of $300,000.00, earned and payable in
twenty-four equal semi-monthly installments in arrears; provided, that while
the
$50,000 per year increase shall begin to accrue on May 1, 2008, 3DIcon shall
have the option to defer payment of any or all of the increase until the end
of
the term, April 30, 2009, at which time 3DIcon may elect to pay the unpaid
balance of the increase, without interest, in cash or to convert said balance
to
3DIcon S-8 stock at a 25% discount from the April 30, 2009, closing stock price.
(b) Bonus.
The
bonus provision is deleted.
(c) Stock
Options.
On this
12th
day of
October, 2008, 3DIcon hereby grants to Employee the following incentive stock
options to purchase shares of 3DIcon’s common stock (the “Options”) under the
Amended Incentive Stock Plan adopted by 3DIcon. The Options are in addition
to
the options granted in the Employment Agreement. The Options shall vest and
be
fully exercisable, as provided in this Amendment, provided Employee is at the
time of each vesting an employee of 3DIcon, on the following
schedule:
(i)
1,000,000 options @ $.055/share shall vest on October 12, 2008; and
(ii)
a
total of 5,000,000
incentive stock options @ $.055/share
shall
vest at the rate of 125,000 options per calendar quarter, on the last trading
day of each quarter during the ten-year period commencing
October 12, 2008; provided, that such vesting schedule shall be accelerated
on
the following schedule upon the stated conditions:
a. On
the
first trading day after the
first
time 3DIcon’s stock has traded for at
least
$.50/share at any time during each of the immediately preceding thirty
consecutive trading days: 1,000,000
options less the number of options which have vested on the above quarterly
vesting schedule to said date @ $.055/share; and
b. On
the
first trading day after the
first
time 3DIcon’s stock has traded for at
least
$1.00/share at any time during each of the immediately preceding thirty
consecutive trading days: 2,000,000
options less the sum of the number of options which have vested on the above
quarterly vesting schedule to said date plus the options which have vested
under
subsection (ii)a above, @ $.055/share; and
c. On
the
first trading day after the
first
time 3DIcon’s stock has traded for at
least
$1.50/share at any time during each of the immediately preceding thirty
consecutive trading days: 3,000,000
options less the sum of the number of options which have vested on the above
quarterly vesting schedule to said date plus the options which have vested
under
subsections (ii)a and (ii)b above, @ $.055/share; and
d. On
the
first trading day after the
first
time 3DIcon’s stock has traded for at
least
$2.00/share at any time during each of the immediately preceding thirty
consecutive trading days: 4,000,000
options less the sum of the number of options which have vested on the above
quarterly vesting schedule to said date plus the options which have vested
under
subsections (ii)a and (ii)b and (ii)c above, @ $.055/share; and
e.On
the
first trading day afterthe
first
time 3DIcon’s stock has traded for at
least
$3.00/share at any time during each of the immediately preceding thirty
consecutive trading days: 5,000,000
options less the sum of the number of options which have vested on the above
quarterly vesting schedule to said date plus the options which have vested
under
subsections (ii)a and (ii)b and (ii)c and (ii)d above, @ $.055/share;
provided,
that the aggregate number of options available to Employee under this section
(c) (ii) shall not exceed 5,000,000 under any circumstance;
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and
further provided that all of the Options shall have a ten year term and,
regardless of the forgoing vesting schedule or the vesting schedule set forth
in
the Employment Agreement, all of the Options as well as the options granted
in
the Employment Agreement, shall, subject to the remaining terms and conditions
relating to the options therein, vest upon the occurrence of a “Change of
Control”, as defined herein, of 3DIcon. A Change of Control shall occur when:
(i) 3DIcon sells or otherwise transfers all or substantially all of its assets
to an entity in which 3DIcon does not own or control a majority interest; or
(ii) the holders of greater than 50% of the issued and outstanding 3DIcon stock
sell or otherwise transfer their shares, in any three month period, to an entity
in which 3DIcon does not own or control a majority interest or to a person
or
group of persons, none of whom are on the Board of Directors on the date this
Amendment is signed by 3DIcon; or (iii) Golden Gate Investors, Inc., or an
entity controlled by, under the same or substantially similar control or
ownership as, or related to, Golden Gate Investors, Inc., or any person who
owns
or controls Golden Gate Investors, Inc., owns or controls the voting power
of
greater than 50% of the issued and outstanding 3DIcon stock; or (iv) 3DIcon
issues shares in any single transaction or series of transactions which, when
issued, would represent 50% or more of the issued and outstanding stock of
3DIcon; or (v) 3DIcon enters into a merger, consolidation or combination of
3DIcon into or with any other company, if the holders of the outstanding voting
shares of 3DIcon prior to such merger, combination or consolidation do not
retain a majority of the voting power of the surviving company; provided that,
in such instance, the exchanges of securities of the surviving company for
securities of 3DIcon shall be deemed to constitute a merger or consolidation
of
3DIcon.
The
additional terms and conditions of the Options, and of the options granted
in
the Employment Agreement, are set forth in the Incentive Stock Option Agreement
attached to this Amendment as Exhibit A (the “Option Agreement”), which Employee
and 3DIcon will execute on or about the date this Amendment is executed, and
in
the 2007 Incentive Stock Plan (as amended from time to time by 3DIcon’s Board of
Directors, the “Plan”) adopted by 3DIcon’s Board of Directors on or about August
7, 2007, and in amended form, approved by the shareholders on May 17, 2008,
a
copy of which Plan has been provided to Employee. Employee acknowledges that
all
such terms and conditions are subject to amendment by 3DIcon’s Board of
Directors from time to time.
Employee
further acknowledges:
(i) that
the
Options granted by 3DIcon do not represent a particular present or future value
or percentage of the current or future outstanding shares of 3DIcon; and that
3DIcon is not in any manner restricted by this Amendment or by the Employment
Agreement from issuing more shares of its common stock, or other securities
related thereto, from increasing the number of shares it is authorized to issue
in a particular class of stock, or from increasing the number of classes of
stock 3DIcon may issue;
(ii) that,
because certain conditions exist with respect to the Options, it is possible
that Employee may never receive the options; and
(iii) that
Employee is an accredited
investor
under
federal and state securities laws.
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(d) Benefits.
Employee shall be eligible to participate, to the extent he may be eligible,
in
any group medical and hospitalization insurance, disability insurance, profit
sharing, retirement, life insurance, and each other employee benefit plan or
program maintained or later instituted by 3DIcon. Employee acknowledges that:
(i) participation in 3DIcon benefit programs and plans may require payroll
deductions and contributions from Employee; and (ii) such benefit programs
and
plans are subject to amendment and termination at the discretion of
3DIcon.
(e) Withholdings.
All
compensation payments to Employee shall be made subject to normal deductions
therefrom, including federal and state social security and withholding
taxes.
3. Section
4: Personal
Time Off,
is
hereby
amended to provide:
4: Personal
Time Off. During
each year of employment (May 1 - April 30), Employee shall be entitled to
thirty-five business days, in the aggregate, for vacation, sick leave and
personal time off (collectively, “PTO”). Such PTO shall be deemed earned and
usable on the first day of employment during the employment term. The seventeen
days of PTO which Employee intends to take in November of 2008 shall be
considered carried over from the prior employment year (May - April) and shall
not count against Employee’s thirty-five days for the 2008-2009 employment term.
Employee shall be entitled to carry over up to one-half his unused PTO from
any
calendar year to the next calendar year; provided, that Employee shall not
be
paid for any PTO which has not been used as of the date of his voluntary or
involuntary separation from employment for any reason.
4. Section
7: Term;
Termination; Severance,
subsection
(c) in the Employment Agreement, is hereby amended to provide as
follows:
(c) Severance
Pay. 3DIcon
shall pay Employee severance pay only under the terms and conditions of this
Section 7(c).
(i) In
the
event Employee separates from employment with 3DIcon by Employee’s voluntary
notice under Section 7(iii) or by 3DIcon’s decision under Section 7(iv),
Employee shall be entitled to no severance pay or benefits
hereunder.
(ii) In
the
event Employee separates from employment with 3DIcon under Sections 7(i) or
7(ii), or by 3DIcon’s voluntary notice under Section 7(iii) or by Employee’s
timely decision due to the actual occurrence of one or more of the grounds
stated in Section 7(v), Employee shall, upon execution of 3DIcon’s standard form
separation agreement (which includes but is not limited to a General Release
of
3DIcon and its officers, directors and agents, from any claims Employee might
have against any of them), be entitled to severance pay hereunder as follows:
during a period equal to the greater of the number of months remaining on the
one-year employment Term then in effect, or six months from the termination
date, 3DIcon shall pay Employee an amount per month, on 3DIcon’s regular paydays
and subject to mandatory withholdings, equal to Employee’s regular monthly
salary at the time of separation.
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(iii)
In
the event Employee’s employment terminates because 3DIcon is liquidated or
ceases doing business, and Employee is not, for any reason, otherwise receiving
severance payments for a period of at least three months following the date
on
which the employment terminates, 3DIcon shall pay Employee an amount per month,
on 3DIcon’s regular paydays and subject to mandatory withholdings, equal to
Employee’s regular monthly salary at the time of separation for a period of
three months following the termination of employment; provided, that such period
shall not be in addition to other severance payments for the same period.
4. This
Amendment shall take effect as of the Amendment Effective Date and this
Amendment, the Employment Agreement and the Option Agreement contain the entire
understanding and agreement of Employee and 3DIcon with regard to Employee’s
employment with 3DIcon.
IN
WITNESS WHEREOF,
3DIcon
and the Employee have duly executed this Amendment to be effective as of the
day
and year first above written.
| 3DICON CORPORPATION | ||
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| By: |
/s/
Xxxxxx Xxxxxxx,
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Xxxxxx
Xxxxxxx,
Chairman
and CEO
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EMPLOYEE:
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/s/
Xxxxx Xxxxxx
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Xxxxx
Xxxxxx
President
and COO
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