Isonics Corp - Current report filing (8-K)
13 February 2008 - 8:31AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
February 6, 2008
ISONICS
CORPORATION
(Name of small business issuer as specified in its charter)
California
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001-12531
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77-0338561
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State of
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Commission File
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IRS Employer
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Incorporation
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Number
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Identification No.
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5906 McIntyre Street, Golden, Colorado 80403
Address of
principal executive offices
303-279-7900
Telephone number,
including Area code
Not applicable
Former name or
former address if changed since last report
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
o
Written communications pursuant to Rule 425
under the Securities Act
o
Soliciting material pursuant to Rule 14a-12
under the Exchange Act
o
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act
o
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act
Item 1.01 Entry Into a Material
Definitive Agreement
As described in
Item 5.02 below, on February 6, 2008 Isonics Corporation (the Company)
entered into employment agreements with the following executive officers: 1) the Chief Executive Officer; 2) the
President, Chief Operating Officer and Secretary; and 3) the Chief Financial
Officer, Vice President Finance, and Treasurer.
Item 1.02 Termination of a
Material Definitive Agreement
On
February 6, 2008 we entered into an employment agreement with our Chief
Executive Officer, Christopher Toffales (the Toffales Agreement). Previously, on February 16, 2007 the
Company entered into an employment agreement with Mr. Toffales pursuant to
which he had been serving as our chairman of the board of directors (the 2007
Agreement). The material terms of the
2007 Agreement are described in a current report on Form 8-K dated February 13,
2007, and filed with the Securities and Exchange Commission on February 20,
2007. The Toffales Agreement provides
that the 2007 Agreement, and all prior employment agreements and understandings
between Mr. Toffales and the Company related to Mr. Toffales
employment, are cancelled and are of no further force or effect.
Item 5.02 Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
(a) On February 6,
2008, the Company entered into employment agreements with: 1) Christopher Toffales, our Chief Executive
Officer; 2) John Sakys, our President, Chief Operating Officer and Secretary
(the Sakys Agreement); and 3) Gregory Meadows, our Chief Financial Officer
and Vice President Finance and Treasurer (the Meadows Agreement). The
employment agreements are sometimes collectively referred to herein as the Employment
Agreements, and Christopher Toffales, John Sakys and Gregory Meadows are
sometimes collectively referred to herein as the Executive. The Employment
Agreements were effective as of February 6, 2008.
Each of the Employment Agreements has an initial term of one year and
thereafter will be renewed automatically for successive one year terms unless
either party provides sixty days notice prior to the expiration of the current
term that the Employment Agreement is being terminated. The Employment Agreements provide that Mr. Toffales
will receive an annual base salary of $250,000, Mr. Sakys will receive an
annual base salary of $240,000, and Mr. Meadows will receive an annual
base salary of $180,000.
Under the Employment Agreements, each of Mr. Toffales, Mr. Sakys
and Mr. Meadows are eligible for a discretionary cash bonus and are
entitled to participate in all Company equity-based compensation plans. Discretionary cash bonuses and equity-based
compensation will be based on the achievement of performance goals, and if none
are formally established, paid or granted in the discretion of the Compensation
Committee of the Board of Directors. Additionally, the Company has agreed to
pay each Executive a one-time discretionary bonus: with Mr. Toffales being
entitled to a $70,000 bonus, Mr. Sakys a $60,000 bonus and Mr. Meadows
a $50,000 bonus. These one-time
discretionary bonuses are, in part, in recognition of the operational
improvements accomplished by the Company since February 2007. The Employment Agreements provide that these
one-time discretionary bonuses will not be paid until the Company has
sufficient working capital that is not committed for operations to allow the
Company to pay all or a portion of the bonus.
If the Employment Agreements are terminated
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under certain circumstances the discretionary bonus shall become
payable either immediately or within three months of the Executives
termination.
The Company may terminate the Executives employment with or without cause
(as defined in the Employment Agreements). If the Company terminates employment
for cause, the Executive will have no rights to any unvested benefits or any
other compensation or payments after the termination date. The Company may also
terminate employment without cause by providing the Executive at least sixty
days advance notice. The Employment
Agreements provide that if the Executive is terminated by the Company without
cause the Executive is entitled to a severance payment equal to twelve months
of Executives current annual salary and payable in a lump sum at termination.
The Employment Agreements also provide that the Executive may terminate
the Employment Agreement upon the occurrence of any of the following events by
providing the Company at least three business days notice: 1) the Company making a general assignment
for the benefit of its creditors, filing a voluntary bankruptcy petition,
filing a petition or an answer seeking reorganization, liquidation, dissolution
or similar relief; 2) the sale by the Company of substantially all of its
assets; 3) a decision by the Company to terminate its business and liquidate
its assets; 4) the holder of any convertible debenture issued by the Company
prior to the date of the Employment Agreements declaring a default or
accelerating any obligation under the terms of such debentures; or 5) a
material breach of the Employment Agreement by the Company except to the extent
such breach results directly or indirectly from the Companys lack of funding
to cure any material breach. If the
Employment Agreements are terminated by the Executive for any of these reasons
the Executive is due a severance payment equal to twelve months of his current
annual salary payable in a lump sum payment within three months of the
termination of the Employment Agreement.
The Sakys Agreement and Meadows Agreement also provide that if the
Companys corporate offices are moved from the Denver metropolitan area each
Executive may terminate their respective Employment Agreement and each shall be
entitled to a severance payment equal to twelve months of their current annual
salary and payable in a lump sum payment within three months of the Executives
termination.
Upon a change of control (which is defined in the Employment
Agreements), each Executive may terminate their Employment Agreement and will
be entitled to receive a severance payment equal to twelve months of his
current annual salary, and payable in a lump sum within three months of the
Executives termination.
The Employment Agreements contain non-competition and non-solicitation
provisions. However, each Executive may
engage in certain business activities so long as such activities do not
interfere with the Executives duties and responsibilities with the Company,
and such activities are not with persons or entities that directly compete with
the Company.
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(b) On February 6, 2008 our Board of Directors
adopted the Isonics Corporation 2008 Equity Plan (the Plan) and reserved
25,000,000 shares of common stock for issuance under the Plan upon the exercise
of options and grant of stock bonuses.
The Plan was adopted to compensate new, continuing, and existing
employees, officers, consultants, and advisors of the Company and its
controlled, affiliated and subsidiary entities.
Going forward the Plan will be the only equity compensation the Company
will utilize to grant options or stock bonuses.
To date no options or stock bonuses have been granted or issued under
the Plan.
The Plan is administered by the Compensation
Committee of the Board of Directors (the Committee). The Plan does not require shareholder
approval and therefore none of the options granted under the Plan will qualify
as incentive stock options under Section 422 of the Internal Revenue Code. The exercise price of the options granted
under the Plan must be 100% of the fair market value (which is defined in the
Plan) of our common stock on the date of grant, and the exercise period for
options granted under the Plan cannot exceed ten years from the date of
grant. The Plan provides that an option
may be exercised through the payment of cash, in accordance with the Plans
cashless exercise provision, in shares of the Companys common stock, or in
property or in a combination of cash, shares and property and, subject to
approval of the Committee.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
10.1 Executive
Employment Agreement dated February 6, 2008 between Isonics Corporation
and Christopher Toffales
10.2 Executive
Employment Agreement dated February 6, 2008 between Isonics Corporation
and John Sakys
10.3 Executive
Employment Agreement dated February 6, 2008 between Isonics Corporation
and Gregory Meadows
10.4 Isonics
Corporation 2008 Equity Plan
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 12th day of February 2008.
Isonics
Corporation
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By:
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/s/ John Sakys
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John Sakys
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President and Chief Operating Officer
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