Exhibit 10.2


 


ADDENDUM # 1


TO THE EMPLOYMENT AGREEMENT


DATED March 18, 2008 


BETWEEN CASPIAN SERVICES, INC. AND MR. JOHN SCOTT 


 


This Addendum # 1 dated April 28, 2008 (“Addendum # 1) is made between CASPIAN SERVICES, INC., a Nevada registered corporation (the “Company” or the “Employer”) and Mr. John Scott (the “Executive Employee” or the “Employee”) with the intention to modify the terms and conditions of the Employment Agreement dated March 18, 2008 between the Company and the Executive Employee. 


 


RECITALS


 





	
             
 	
            WHEREAS:
 





 


 (A)         The Company and the Executive Employee entered into Employment Agreement, dated December 20, 2005 that subsequently been replaced with the Employment Agreement dated March 18, 2008 (the “Employment Agreement”); and 


 


 (B)         The Employment Agreement provides for the mandatory stock option grant to the Executive Employee; and 


 


 (C)         The Employment Agreement provides a formula for the computation of the number of such mandatory stock options to be granted; and


 


 (D)         The Employment Agreement provides for a vesting schedule of such mandatory stock options; and 


 


 (E)         As of March 31, 2008 the Executive Employee has become entitled to or been granted in accordance with his Employment Agreement a grant of a mandatory stock option to purchase 134,557 shares of common stock of the Company; and


 


 (F)          The Executive Employee and the Company wish to make certain changes to the Employment Agreement as set forth below.


 





	
             
 	
            IT IS THEREFORE, agreed by the Company and the Executive Employee as follows:
 





 


1.         Effective April 1, 2008 the title to the “Legal Fees and Governing Law” section of the Employment Agreement shall be amended by deleting the title “Legal Fees and Governing Law” and to retitle this section “Legal Fees and Arbitration”.


 


2.         Effective April 1, 2008 the “Governing Law ” subsection of the section entitled “Legal Fees and Governing Law” of the Employment Agreement shall be amended by deleting it in its entirely.  


 


3.         Effective April 1, 2008 the “Arbitration” subsection of the section entitled “Legal Fees and Governing Law” of the Employment Agreement shall be amended by deleting it in its entirety and replacing it with the following:


 


“The parties hereby specifically agree that any controversy or claim arising out of or relating  to this Employment Agreement, or the breach thereof, shall be finally resolved by arbitration administered by the American Arbitration Association  under its Employment Dispute Resolution Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction    thereof. There shall be three arbitrators, named in accordance with such rules.  Absent the agreement between the Company and Executive at the time of such dispute arbitration shall be conducted in English language in 


 









the Salt Lake City, Utah in accordance with the Unites States Arbitration Act and the arbitrators shall decide the dispute in accordance with the substantive law of the state of Utah.”   


 


4.         Effective April 1, 2008 the title to the “Stock Option Grant” section of the Employment Agreement shall be amended by deleting the title “Stock Option Grant” and to retitle this section “Other Compensation Entitlements”.


 


5.         Effective April 1, 2008 the “Stock Option Grant” section shall also be amended by deleting in its entirety and replacing it with the following:


 


“The number of mandatory stock options to be issued annually (on December 31 of each year following the first full year of employment) to Executive Employee shall be equal to the amount of the Executive Employee’s annual base salary divided by the closing market price of the Company’s common stock on the date of the grant. The exercise (or grant) price of the options shall be equal to the closing market price of the Company’s common stock on the date of such grant. 


 


Unless provided otherwise in the Notice of Stock Option Grant or other award grant, and accepted by the Executive Employee, options or other equity awards vest over three years, exercisable within five years of full vesting.


 


                                                        





	
            Number of Full Years
 	
            Percentage of Shares That May be Purchased
 
	
            Less than 1 year
 	
            0%
 
	
            1 year
 	
            33%
 
	
            2 years
 	
            67%
 
	
            3 years
 	
            100%
 





 


In lieu of any mandatory stock option grant to which the Executive Employee may become entitled under the provisions of the Employment Agreement, the Company may issue, in full or in part, a restricted stock grant, or cash payment or combination thereof as may be from time to time determined by the Compensation Committee or in the absence of a Compensation Committee by the Board of Directors.


 


If the Company, in its sole discretion, determines to issue a restricted stock grant in lieu of stock options, the Executive Employee shall be entitled to one share of restricted common stock for three stock options Executive Employee was entitled to receive in accordance with the formula described above. All restricted stock awards shall be subject to the vesting schedule described above. 


 


Should the Company, in its sole discretion, determine to make a partial or full cash payment to Executive Employee in lieu of granting stock options and/or a restricted stock grant, such cash payment shall be made on the basis of the closing market price of the Company’s common stock on the date of grant multiplied by the total number of restricted common stock determined in accordance with this Agreement.


 


At the Company’s sole discretion Executive Employee may also be considered for additional discretionary stock option grants, restricted stock grants or discretionary cash bonus or combination thereof as may, from time to time, be determined by the Compensation Committee or in the absence of a Compensation Committee by the Board of Directors.”


 


Any and all grants in accordance with this Employment Agreement shall be issued on the annual basis once a year on December 31 of each year following the first full year of Executive’s employment with the Company or any of its subsidiary.


 









6.         The Company and Executive Employee further agree that to the extent Executive Employee may currently be entitled to a stock option grant under the terms of his/her Employment Agreement, and to the extent the Company determines to issue Executive Employee restricted stock in lieu of stock options, as further detailed in the attached herein Schedule A, Executive Employee forfeits any and all stock options to which he may currently be entitled to under the terms of any employment agreement with the Company or any of its subsidiaries from the commencement date of the Executive’s employment till March 31, 2008 whether issued or not issued, vested or not vested. 


 


7.         All stock options or restricted stock grants issued to the Executive Employee in accordance with any compensation or incentive plan adopted by the Company, or any other awards shall not be affected by this Addendum.


 


IN WITNESS WHEREOF, the parties have executed and delivered this Addendum # 1 effective as of the date first written above.


 


SIGNATURES: 


 


ON BEHALF OF THE CASPIAN SERVICES, INC. SIGNED BY: 


 





	
            NAME:  
 	
            _____________________
 





 





	
            TITLE:
 	
            _____________________
 





 





	
            SIGNATURE:
 	
            _____________________ DATE SIGNED: _________________
 





 


 


 


EMPLOYEE:


 





	
            SIGNATURE:
 	
            _____________________ DATE SIGNED: _________________
 





 


 





	
            PRINT NAME:
 	
            ____________________________
 





 










SCHEDULE A


 


Attached to and forming a part of that certain Addendum # 1, dated 27 June, 2008, by and between  Caspian Services, Inc. and  Mr. John Scott.


 


STOCK OPTIONS FORFEITED:


 





	
            Stock Issuer
 	
            Class of Stock
 	
            No of Stock Options Issued become due to be issued
 	
            Date Option Issued or become due to be issued
 
	
            Caspian Services, Inc. 
 	
            common stock
 	
            134,557 
 	
            March 31, 2008 
 





 


 


RESTRICTED STOCK ISSUED: 


 





	
            Stock Issuer
 	
            Class of Stock
 	
            No of shares of Restricted Stock
 	
            Par Value
 	
            Date issued: 
 	
            Vesting
 
	
            Caspian Services, Inc.
 	
            common stock
 	
            44,852

 
 	
            $.001
 	
            May 1, 2008
 	
            50% on May 1, 2008

75% on May 1, 2009 

100% on May 1, 2010 

 
 





 


 


SIGNED BY: 


 


On behalf of Caspian Services, Inc.: 


 


Name: ________________


 


Title: _________________


 


Signature: _____________ 


 


 


Employee: 


 


Name: ________________ 


 


Signature: ______________