Exhibit 10.1

 

Date this agreement provided to Joseph Lancia: November 30, 2012

 

AGREEMENT OF SEPARATION, WAIVER, AND RELEASE

 

WHEREAS, Joseph Lancia (hereinafter the “Employee”) has been employed by Scio
Diamond Technology Corporation (hereinafter the “Company”) as President and CEO,
pursuant to that Amended and Restated Offer of Employment Effective as of
November 29, 2011 (the “Employment Agreement”); and

 

WHEREAS, Employee and the Company are also parties to the following agreements:
the Change in Control Agreement dated August 3, 2012 (the “Change in Control
Agreement”); the two Qualified Stock Option Grant Agreements dated May 7, 2012,
as amended on November 6, 2012 (the “May 7 Option Grants”); and the Qualified
Stock Option Grant Agreement dated August 3, 2012, as amended on November 6,
2012 (the “August 3 Option Grant”); and

 

WHEREAS, the parties hereto now wish to terminate that employment relationship
and to resolve any and all claims and disputes that might exist between them.

 

NOW THEREFORE, FOR AND IN CONSIDERATION of the mutual promises contained in this
Agreement of Separation, Waiver, and Release (this “Agreement”), the receipt and
sufficiency of which are hereby acknowledged, Employee and the Company agree as
follows:

 

1.                                      Employee’s employment with the Company
is terminated effective at the close of business on November 30, 2012.    Except
as provided in this Agreement, the Company’s obligation to pay salary, bonus or
provide other benefits terminates on November 30, 2012.  Employee also resigns
from the Board of Directors of the Company effective as of November 30, 2012.

 

2.                                      In consideration for this Agreement and
the release contained herein, the Company will pay to Employee the following
amounts:

 

a.                                      The gross amount of Two Hundred Twenty
Five Thousand Dollars ($225,000.00);

 

b.                                      Payment for any accrued and unused
vacation and/or personal leave days due to Employee as of November 30, 2012, up
to a maximum of ten (10) days;

 

c.                                       The gross amount of Twelve Hundred
Dollars ($1,200.00) per month for each of the twelve consecutive months
commencing with December 2012; provided, however, that such payments shall cease
in the first such month in which Employee is employed in a position that gives
him the right or option to obtain health insurance reasonably comparable to that
provided him by the Company during his Employment, and such payments shall not
thereafter recommence.

 

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The payments provided for in items a. and c. above will be paid to Employee in
equal installments over the twelve-month period commencing in December 2012,
subject to normal and required withholdings, and in accordance with the
Company’s normal payroll practices and timing.  Any payment under item b. shall
be made in a lump sum payable on or before December 14, 2012, and subject to
normal and required withholdings.  No payment will be made until after the
expiration of the revocation period provided for in paragraph 25(g) below.

 

3.                                      Upon execution of this Agreement, the
Company will also pay up to $3000.00 of Employee’s actual and documented
attorneys’ fees in connection with the negotiation and execution of this
Agreement.

 

4.                                      Employee currently holds 2,000,000
shares of Common Stock of the Company, $0.001 par value (“Common Stock”).  As
part of this Agreement, Employee agrees to promptly transfer ownership of
1,000,000 shares of such Common Stock to the Company, for no consideration other
than the provisions of this Agreement.  In addition, Employee agrees to take all
such actions and execute and deliver any documents reasonably required to
effectuate the foregoing transfer.  Employee confirms and agrees that Employee
has full ownership of the remaining 1,000,000 shares of such Common Stock in his
name (the “Lancia Shares”); provided, that (a) Employee shall not be able to
transfer, sell, assign or dispose of 50% of the Lancia Shares for a period of
one (1) year from the date of this Agreement, and (b) Employee hereby
irrevocably constitutes and appoints, for the duration of that one-year period,
Edward S. Adams as his attorney-in-fact and proxy, with full power of
substitution, to vote and otherwise act (by written consent or otherwise) with
respect to 50% of the Lancia Shares which Employee would otherwise be entitled
to vote at any meeting of stockholders of the Company (whether annual or special
and whether or not at an adjourned or postponed meeting) or consent to vote in
lieu of any such meeting or otherwise, on any matter coming before the
stockholders for a vote.  Employee intends and agrees that the proxy granted
hereby is coupled with an interest and shall be irrevocable during said one-year
period, and Employee hereby revokes any and all previous proxies or powers of
attorney with respect to 50% of the Lancia Shares and shall not during said
one-year period purport to grant any other proxy or power of attorney with
respect to 50% of the Lancia Shares, pledge 50% of the Lancia Shares as security
for a loan, deposit 50% of the Lancia Shares into a voting trust, or enter into
any agreement (other than this Agreement), arrangement or understanding with any
person, directly or indirectly, to vote, grant any proxy or give instructions
with respect to the voting 50% of the Lancia Shares.  With respect to 50% of the
Lancia Shares that are not subject to the one-year restriction, the Company
shall reasonably cooperate and promptly, as requested by Employee or his
representative, provide all documents, instructions and opinions reasonably
required (at the Company’s sole expense) so that Employee may freely trade such
shares following the effective date hereof.

 

5.                                      Pursuant to the May 7 Option Grants,
Employee was granted options for the purchase of up to 3,000,000 shares of
Common Stock at an exercise price of $0.70 cents per share.  In accordance with
the November 6, 2012 amendment to the May 7 Option Grants, the options to
purchase

 

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3,000,000 shares of Common Stock pursuant to the May 7 Option Grants shall be
immediately canceled and may not now or hereafter be exercised.

 

6.                                      Pursuant to the August 3 Option Grant,
Employee was granted options for the purchase of up to 500,000 shares of Common
Stock at an exercise price of $0.80 cents per share.  In accordance with the
November 6, 2012 amendment to the August 3 Option Grants, the options to
purchase 500,000 shares of Common Stock pursuant to the August 3 Option Grant
shall be immediately canceled and may not now or hereafter be exercised.

 

7.                                      Employee recognizes and agrees that
Employee is solely responsible for any federal, state, or other tax obligations,
including but not limited to all reporting and payment obligations that could
arise as a consequence of Employee’s receipt of any payments or benefits
pursuant to this Agreement, and with respect to any other transfer or
transaction provided for herein, including but not limited to transfers of
shares of Common Stock and the cancellation or exercise of options to purchase
Common Stock.  The Company shall cooperate and provide any documents to Employee
reasonably necessary for Employee to comply with tax obligations in connection
with this Agreement.

 

8.                                      Employee hereby releases and waives all
claims Employee may have against the Company and the parties identified in this
paragraph as Released Parties who are connected with the Company.  This means
that, in consideration of the promises made by the Company herein, Employee, for
Employee and for Employee’s heirs, executors, administrators, personal
representatives, successors, and assigns, does hereby release, waive, and
forever discharge the Company and its related entities, their respective benefit
plans, officers, directors, employees, representatives, agents, successors and
assigns, and the respective heirs, executors, administrators, personal
representatives, successors and assigns of the foregoing (collectively, the
“Released Parties”), from any claim Employee may have against them.  This
release, and the term “claim” or “claims” as used in this Agreement, includes
all benefits, grievances, proceedings, investigations, hearings, charges,
complaints, claims, demands, actions, causes of action, and suits of whatever
nature, whether known or unknown, fixed, absolute or contingent, matured or
unmatured, foreseeable and unforeseeable, past, present, and future, asserted or
unasserted, however arising or by reason of any matter, cause or thing
whatsoever done, omitted or suffered to be done, and whether legal, equitable,
or administrative except for claims arising out of this Agreement.  Employee
understands and agrees that in exchange for the benefits provided herein,
Employee is giving up all such claims against the Released Parties.

 

This release also includes, but is not limited to, claims arising under federal,
state, or local statute, ordinance, common law, regulation, equity or other
sources including, but not limited to, any and all claims of disability, race,
color, sex, age, national origin, ancestry, religion, or other discrimination,
retaliation, or harassment, and claims arising under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq.; the Civil Rights Act of 1866,
1871, and 1964, as amended; the Employee Retirement Income Security Act (ERISA),
29 U.S.C. §§ 1001 et seq.; Section 1981 of Title 42 of the U.S. Code; the
Americans with Disabilities Act, §§ 29

 

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U.S.C. 12101 et seq.; the Family and Medical Leave Act, 29 U.S.C. §§ 2601, et
seq.; the Age Discrimination in Employment Act; claims arising under the
statutory or common laws of the State of South Carolina or any other state, and
claims asserting breach of contract (whether express or implied), promissory
estoppel, wrongful termination, defamation, failure to pay wages or commissions,
failure to provide benefits, breach of implied covenant of good faith and fair
dealing, promissory estoppel, invasion of privacy, injury to credit, outrage,
negligent or intentional infliction of emotional distress, retaliation,
interference with contract, fraud, distress, extortion, humiliation, loss of
standing and prestige, personal injury, loss of consortium, negligence, tort, or
other common law causes of action, including, but not limited to, those related
in any way to Employee’s employment by the Company, the terms of the Employment
Agreement, the May 7 Option Grants, the August 3 Option Grant and the Change in
Control Agreement, benefits or wages provided in connection with that
employment, severance or other post-termination pay or benefits, and/or the
termination of that employment.  Employee does not waive any rights or claims
that arise from events occurring after execution of this Agreement by Employee. 
Except as provided in this Agreement, the released claims include, but are not
limited to, any claims for back pay, front pay, benefits of any sort, severance
pay, damages, expenses, court costs, attorneys’ fees, special damages, punitive
damages, treble or other multiple damages, statutory or other penalties,
reinstatement or any other monetary or equitable relief.  It is the parties
intent to release all claims that can legally be released but no more than that.

 

9.                                      The Company does hereby release and
forever discharge Employee in his capacity as an officer, employee and director
of the Company from any and all manner of causes, causes of action, claims,
demands, losses, expenses, damages, special damages, punitive damages,
attorney’s fees, court costs, remedies and rights to payment of every kind and
nature, legal and equitable, known or unknown, foreseeable and unforeseeable,
past, present, and future, upon, resulting from, or by reason of any matter,
cause, or thing whatsoever done, omitted or suffered to be done from the date of
Employee’s employment with the Company through the effective date of this
Agreement.  It is the parties intent to release all claims that can legally be
released but no more than that.

 

10.                               Employee acknowledges that if Employee sues
the Company or any other Released Party in violation of this Agreement, Employee
may be directed to pay some or all costs and expenses incurred by the Company or
the Released Party in defending the suit, including reasonable attorneys’ fees,
to the extent provided by law and determined by the court.  The Company
acknowledges that if the Company sues Employee in violation of this Agreement,
the Company may be directed to pay some or all costs and expenses incurred by
the Employee in defending the suit, including reasonable attorneys’ fees to the
extent provided by law and determined by the court.

 

11.                               Each party agrees not to claim, receive, or
accept any monies, damages, or relief in conflict with this Agreement and each
party’s waiver of rights, and not to pursue any of the claims released in this
Agreement.  Employee shall waive any right to, and will not accept, any

 

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remedy obtained through the efforts of any other individual or agency, state or
federal, relating to Employee’s employment with the Company.  This Agreement
does not affect Employee’s ability or responsibility to participate in or
cooperate with any future legal or other investigation, whether conducted by the
Company or any governmental agency.

 

12.                               Employee represents and warrants that Employee
has not made a claim for worker’s compensation related to Employee’s employment
with the Company, and that Employee is currently unaware of any injury or
illness that would support such a claim.

 

13.                               Following any transition period provided in
paragraph 19 hereof, Employee agrees to return to the Company all property of
the Company, including but not limited to company data and information, records,
files and lists (in each case, whether hard copy or electronic) in his
possession, including but not limited to, any confidential information, trade
secrets, or any Company information not otherwise available to the general
public or shareholders of the Company.  Employee agrees not to access and not to
attempt to gain access to any aspect of the Company’s computer, electronic or IT
systems, except as expressly allowed by the Company on conjunction with
Employee’s cooperation in transition after the date hereof, as provided in
paragraph 19 hereof.

 

14.                               Employee represents and warrants that Employee
has not assigned, transferred, or conveyed to any individual or entity not a
party to this Agreement any alleged right, claim or cause of action of any kind
which is included within the above releases.  Employee further represents and
warrants that Employee is executing this Agreement knowingly and voluntarily,
without any duress, coercion or undue influence by the Company, its
representatives or any other person.

 

15.                               Employee acknowledges and agrees that neither
the Company nor any of the Released Parties owes Employee any wages, salary,
bonus, cost reimbursement, vacation pay, commissions, or other compensation in
any amount whatsoever other than as expressly agreed to herein.  The
consideration being paid for this Agreement encompasses any such amounts
Employee might claim.  The Company’s only obligation is to pay the amounts
provided herein.  Employee further acknowledges that neither the Company nor any
of the Released Parties compelled Employee to execute this Agreement as a
condition to the payment of any amounts previously and admittedly due to
Employee.

 

16.                               The parties hereto recognize and agree that
the Change in Control Agreement is terminated as of the date hereof and shall be
of no further force and effect.  Without loss of generality of the foregoing, no
payment is or will become due to Employee under the Change in Control Agreement,
and the Restrictive Covenants contained in paragraph 4 of the Change in Control
Agreement shall not apply to Employee.

 

17.                               Employee shall have no further right under any
agreement or plan to receive any grant of shares of Common Stock or options or
other rights to purchase shares of Common Stock.

 

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18.                               The parties hereto confirm and agree that the
following agreements between them continue to govern their relationships to the
extent applicable: Paragraphs 8 and 9 of the Employment Agreement, headed
respectively “Confidentiality, Non-Competition and Invention Assignment
Agreement” and “Prior Apollo Patents,”  as well as the Proprietary Information
and Inventions Agreement that is incorporated into the Employment Agreement by
paragraph 8 of the Employment Agreement and attached to the Employment
Agreement, to the extent that the Proprietary Information and Inventions
Agreement provides (in its paragraph 8) that it survives termination. 
Notwithstanding the foregoing, Employee’s obligation under Section 7 of the
Proprietary Information and Inventions Agreement (“Non-Compete”), shall cease at
such time as the Company commits a material breach of this Agreement.  In
addition, 50% of the Lancia Shares shall be subject to the transfer restrictions
and irrevocable proxy as set forth in paragraph 4 of this Agreement.

 

19.                               For a period of six (6) months after the date
of this Agreement, Employee agrees to provide such information, advice,
consultation, and assistance (the “Transition Assistance”) as may be reasonably
needed and requested by the Company for the purpose of effecting a smooth
transition between Employee and any successor CEO of the Company.  The
Transition Assistance shall include but not be limited to the execution of
documents reasonably desirable or necessary to effect Employee’s departure and
the installation of Employee’s successor.  Employee shall not be entitled to any
additional compensation or consideration for the Transition Assistance beyond
the amounts provided for herein, except that the parties may mutually agree on
the reimbursement of reasonable costs incurred by Employee in connection with
the Transition Assistance.

 

20.                               Until this Agreement is disclosed or described
in a filing with the SEC, Employee and the Company agree to keep confidential
the terms of this Agreement and not to discuss or disclose the terms of this
Agreement by any means whatsoever, including but not limited to social media
posting or other electronic means.  Notwithstanding the foregoing, either party
may share this Agreement with and disclose the terms hereof to his or its
attorney or tax advisor, and Employee may disclose it to members of Employee’s
immediate family, provided those persons also undertake to keep such information
confidential.  Either party may also disclose such information regarding this
Agreement as required by a validly issued subpoena or court order, or as
otherwise required by law or in accordance with SEC requirements.

 

21.                               a.  Employee agrees not to directly or
indirectly make any statements, written or verbal, or cause or encourage others
to make any statements, written or verbal, including but not limited to any
statements made via social media, on websites or blogs, that defame, disparage
or in any way criticize the personal or business reputation, practices, or
conduct of the Company, or any of the Released Parties. Employee acknowledges
and agrees that this prohibition extends to statements, written or verbal, made
to anyone, including but not limited to the news media, competitors, vendors,
employees (past and present), volunteers and clients.  Employee agrees not to
directly or indirectly attempt to, or assist in any attempt to, takeover the
Company (or the Board of Directors of the Company) or effectuate a change in
control of the Company (or in the

 

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Board of Directors of the Company).  In addition, Employee agrees not to
directly or indirectly assist with any litigation or claim against the Company
or any Released Party, except as required or protected by law.  Employee further
understands and agrees that this paragraph is a material provision of this
Agreement and that any breach of this paragraph shall be a material breach of
this Agreement, and that the Company would be irreparably harmed by violation of
this provision.

 

b.  The Company agrees to direct its officers and directors not to disparage
Employee to future employers of the Employee or to any third parties and agrees
that its officers and directors will not send, or direct any other third party
to send, false or slanderous information about Employee.  Nothing herein
prevents disclosure, in the sole discretion of the Company and its management,
of this Agreement and discussion of Employee’s employment with and separation of
employment from the Company and the circumstances regarding his separation from
the Company (i) by and among employees, representatives and agents of the
Company and the Released Parties as required by securities or other applicable
laws; or (iii) to or in response to any governmental entity or other legal
request.

 

22.                               Employee agrees that Employee will not seek
reinstatement, reemployment or a contract with the Company after the execution
of this Agreement.

 

23.                               This Agreement is entered solely to effect an
amicable separation and avoid the expense of any future dispute, and nothing
contained herein is to be construed as an admission by the Company (or any
Released Party) or by the Employee of any wrongdoing.

 

24.                               There is no other agreement between the
parties hereto related to the subject matter of this Agreement that is not set
forth herein.  This Agreement constitutes the entire agreement of the parties
hereto with respect to its subject matter.  Neither this Agreement nor any
provision herein shall be amended, modified, waived or discharged orally or by
course of conduct, but only by a written agreement executed and delivered by the
parties hereto.

 

25.                               To comply with the Older Workers Benefits
Protection Act of 1990, the Company has advised Employee of the legal
requirements of that Act and this Agreement fully incorporates those legal
requirements by reference and as follows:

 

a.                                      This Agreement is written in layman’s
terms, and Employee hereby represents to the Company that Employee understands
and comprehends its terms;

 

b.                                      Employee is hereby advised to consult an
attorney to review this Agreement prior to executing it;

 

c.                                       This Agreement specifically refers to
rights and claims arising under the Age Discrimination in Employment Act;

 

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d.                                      Employee does not waive any rights or
claims that result from events occurring after the date this Agreement is
executed by Employee;

 

e.                                       Employee hereby acknowledges that
Employee is receiving consideration beyond anything of value to which Employee
already is entitled;

 

f.                                        Employee has twenty-one days from his
receipt hereof to consider this proposed Agreement.  Employee’s failure to
accept this proposed Agreement by close of business on the twenty-first day
following Employee’s receipt of this Agreement may be deemed rejection of its
terms;

 

g.                                       Employee has the right to revoke this
Agreement for seven days following Employee’s signing of this Agreement, and
after the expiration of that seven days the executed Agreement shall be of full
validity, force, and effect.  Employee shall provide notice of such revocation
in writing to Ted Gentry; such notice shall be delivered to the office of Wyche,
P.A., 44 East Camperdown Way, Greenville, South Carolina 29601 before the end of
the revocation period in order to be effective.

 

26.                               Notwithstanding anything contained herein to
the contrary, nothing contained herein shall be deemed to release the Company of
any indemnity obligations that it may have to Employee or any rights, benefits
or claims that Employee may have under any of the Company’s applicable directors
and officers’ insurance policy or any other applicable Company insurance policy.

 

27.                               Notwithstanding anything contained herein to
the contrary, Employee shall not be prohibited from cooperating as required and
requested by any regulatory or law enforcement authorities whatsoever with
respect to any legal action or possible action against the Company or any
Released Parties.  Notwithstanding anything contained herein to the contrary,
the Company shall not be prohibited from cooperating as required and requested
by any regulatory or law enforcement authorities whatsoever with respect to any
legal action or possible action against Employee.

 

28.                               All communications in connection with this
Agreement shall be in writing and by any one or more of the following means: 
(i) if mailed by prepaid certified mail, return receipt requested, such notice
shall be deemed to have been received on the date shown on the receipt; (ii) if
delivered by hand, such notice shall be deemed effective when delivered; or
(iii) if delivered by national overnight courier, such notice shall be deemed to
have been received on the next business day following delivery to such courier. 
All communications under this Agreement shall be given to the parties hereto at
the following addresses:

 

If to the Company:

 

Attn: Edward S. Adams

60 South Sixth Street

Suite 2540

 

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Minneapolis, MN 55402

 

With a copy to:

 

David Anna

Wyche, P.A.

44 E. Camperdown Way

Greenville, S.C. 29607

 

If to Employee:

 

Joe Lancia

109 Thornblade Blvd.

Greer, SC  29650

 

With a copy to:

 

Betty O. Temple

Womble Carlyle Sandridge & Rice, LLP

550 South Main Street

Greenville, SC 29690

 

29.                               Employee has read and fully understands this
Agreement and the terms and release contained herein, and has had an opportunity
to seek advice and counsel before executing this Agreement.  Employee enters
this Agreement of Employee’s own free will.

 

30.                               This Agreement shall be governed in all
respects by the laws of the State of South Carolina and federal law as
applicable, without regard to choice of law principles.  Venue for any action
arising under or relating to this Agreement shall lie exclusively in the
appropriate state or federal court in South Carolina.

 

31.                               The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision or part thereof in
such jurisdiction and shall not in any manner affect such clause or provision in
this Agreement in any other jurisdiction.

 

32.                               This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement.  Delivery of an executed
counterpart of this Agreement by facsimile or other electronic means shall have
the same force and effect as the delivery of an original executed counterpart of
this Agreement.

 

*****

 

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READ CAREFULLY BEFORE SIGNING.

 

THIS AGREEMENT ENDS ALL CLAIMS AGAINST THE COMPANY AND THE RELEASED PARTIES
IDENTIFIED HEREIN.

 

Witnesses:

 

Scio Diamond Technology Corporation

 

 

 

/s/ Witness

 

By:

/s/ Edward S. Adams

 

 

Name: Edward S. Adams

 

 

Title: Chairman of the Board of Directors

 

 

 

/s/ Witness

 

 

 

 

December 4, 2012

 

 

Date

 

 

 

 

 

 

Witnesses:

 

 

 

 

 

/s/ Witness

 

/s/ Joseph Lancia

 

 

Joseph Lancia

 

 

 

/s/ Witness

 

December 4, 2012

 

 

Date of Execution by Joseph Lancia

 

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