Document:

Exhibit 10.3

 

ADDENDUM # 1

TO THE EMPLOYMENT AGREEMENT

DATED December 5, 2006 

BETWEEN CASPIAN SERVICES, INC. AND MR. JOHN BAILE 

 

This Addendum # 1 (“Addendum # 1) dated April 28, 2008 is made between CASPIAN SERVICES, INC., a Nevada registered corporation (the “Company” or the “Employer”) and Mr. John Baile (the “Executive Employee” or the “Employee”) with the intention to modify the terms and conditions of the Employment Agreement dated December 5, 2006 between the Company and the Executive Employee. 

 

RECITALS

 

	
             
 	
            WHEREAS:
 

 

 (A)         The Company and the Executive Employee entered into Employment Agreement, dated December 5, 2006 (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 68,813 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 Baile.

 

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
 	
            68,813 
 	
            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
 	
            22,938

 

 
 	
            $.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: ______________Exhibit 10.4

 

CASPIAN SERVICES, INC.

RESTRICTED STOCK AGREEMENT

 

This Restricted Stock Agreement, entered this date ____________ by and between Caspian Services, Inc. a Nevada corporation (the “Company”), and ________ (referred hereinafter as the “Participant”), and jointly referred to as the Parties or Party.

 

	
             
 	
            1.
 	
            GRANT OF STOCK
 

 

Effective on the date of this Agreement (the “Grant Date”) and subject to the terms and condition set forth herein, the Company hereby grants to Participant a total of ________ (<__>) shares of Restricted Stock, said number of shares being determined at market value on the Grant Date.

 

	
             
 	
            2.
 	
            ISSUANCE OF STOCK
 

 

a) As soon as practicable, the Company shall cause the shares of Restricted Stock to be issued in the Participant’s name.  The Restricted Stock shall be subject to the restrictions described herein.  The Restricted Stock shall bear appropriate legends with respect to the restrictions described herein. The Participant agrees that the shares of Restricted Stock shall be deposited with the Company, or such other custodian or escrow holder as the Company may appoint, to be held until the vesting and other applicable conditions of this Restricted Stock Grant are satisfied.  

 

b) Subject to the applicable vesting schedule and upon expiration of the applicable Period of Restriction, a certificate or certificates representing the shares to which the Period of Restriction has so lapsed shall be delivered to the Participant by the Company, subject to satisfaction of any tax obligations the Company may have in connection with such Grant; provided, however, that such Shares may nevertheless be evidenced on a non-certificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

 

	
             
 	
            3.
 	
            VESTING
 

 

a) The interest of the Participant in the Restricted Stock shall vest as follows: (i) 50% of the Restricted Stock Grant shall vest immediately following the date of the Grant; (ii) an additional 25% of the Restricted Stock Grant will vest on the date of the first year anniversary of the Grant; and (iii) the remaining 25% will vest on the date of the second year anniversary of the Grant.

 

b) Any portion of the Restricted Stock that shall have become vested on the date of this Restricted Stock Agreement and upon which the Period of Restriction has lapsed shall be delivered to the Participant promptly following execution of this Restricted Stock Agreement. 

 

c) Any portion of the Restricted Stock that is not vested as of the date of this Restricted Stock Agreement or/and upon which the Period of Restriction has not yet elapsed shall be deposited with the Company in accordance with the Section 2 above. 

 

	
             
 	
            4.
 	
            RESTRICTIONS
 

 

(a) No portion of the Restricted Stock or rights granted hereunder may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of by the Participant or his successor or trustee until such portion of the Restricted Stock becomes vested in accordance with Section 3 of this Agreement and before Six-Month Holding Period described below has elapsed (the “Period of Restriction”). 

 

(b) Required Six-Month Holding Period.  No portion of the Restricted Stock, whether vested or not, may be sold prior to six months from the date of such portion becomes vested or prior to six months from the date of this Restricted Stock Agreement, whichever occurs later. 

 

(c) Except for termination for “Cause” or when the Participant resigns, with the exception of Voluntary or Involuntary Termination as described in the Employment Agreement, all outstanding Restricted Stock granted under this Restricted Stock Agreement shall continue to vest in accordance with the vesting schedule during the twelve (12) month period following the Participant’s date of termination.

 

d) For the avoidance of doubts and unless otherwise determined in accordance with Employment Agreement for purpose of this Section 4 “Cause” shall mean:

 

 (1)  the Participant’s material fraud, malfeasance, gross negligence, or wilfull misconduct with respect to business affairs of the Company that is directly or materially harmful to the business or reputation of the Company or any subsidiary of the Company, or 

 

 (2) the Participant’s conviction of or failure to contest prosecution for a felony or a crime involving moral turpitude.

 

	
             
 	
            5.
 	
            PARTICIPANT SHAREHOLDER RIGHTS
 

 

During the Restriction Period, the Participant shall have all the rights of a shareholder with respect to the Restricted Stock except the right to transfer the Restricted Stock, as set forth in Section 4 of this Agreement. Accordingly, the Participant shall have the right to vote the Restricted Stock and to receive any cash dividends paid to or made with respect to the Restricted Stock, provided, however, that dividends paid, if any, with respect to that Restricted Stock which has not vested at the time of the dividend payment shall be held in the custody of the Company and shall be subject to the same restrictions that apply to the corresponding Restricted Stock.

 

	
             
 	
            6.
 	
            CHANGES IN STOCK
 

 

 (a) In the event of any stock dividend, stock split, capital reorganization or reclassification of the Stock of the Company, the Participant in his capacity as owner of the unvested shares of Restricted Stock which have been awarded to him (the “Prior Stock”) shall be entitled to as many new or additional or different shares, securities or assets, equal to the amount of new or additional or different shares, securities or assets, as if the Prior Stock had been fully vested Stock, such new or additional or different shares, securities, assets shall thereupon be considered to be unvested Restricted Stock and shall be subject to all of the conditions and restrictions which were applicable to the Prior Stock pursuant to this Agreement.

 

	
             
 	
            7.
 	
            TAXES
 

 

a) The Participant shall be liable for any and all taxes, including withholding taxes, arising out of this grant or the vesting of Restricted Stock hereunder. The Participant on its sole discretion may elect to satisfy such withholding tax obligation by having the Company retrain Restricted Stock having a fair market value equal to the Company’s minimum withholding obligation.

 

b) Regardless of any action the Company takes with respect to any or all tax withholding (including social insurance contribution obligations, if any), the Executive Participant acknowledges that the ultimate liability for all such taxes is and remains the Participant’s responsibility (or that of the his or her beneficiary), and that the Company does not: (i) make any representations or undertakings regarding the treatment of any tax withholding in connection with any aspect of the Restricted Stock, including the grant or vesting thereof, the subsequent sale of Shares and the receipt of any dividends; or (ii) commit to structure the terms of the Restricted Stock or any aspect of the Restricted Stock to reduce or eliminate the Participant’s (or his or her beneficiary’s) liability for such tax. 

 

	
             
 	
            8.
 	
            MISCELLANEOUS
 

 

(a) The Company shall not be required (i) to transfer on its books any shares of Restricted Stock which shall have been sold or transferred in violation of any of the provisions set forth in this Agreement, or (ii) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been so transferred.

 

(b) The parties agree to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Agreement.

 

(c) Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon delivery to the Participant at his address then on file with the Company.

 

(d) This Agreement shall not be construed so as to grant the Participant any right to remain in the employ of the Company or any of its Subsidiaries.

 

(e) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. 

 

(f) This Agreement shall be constructed in accordance with the laws of the State of Nevada without regard to the principles of conflict of laws.

 

 

9. SIGNATURES

 

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

 

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

 

	
            NAME:  
 	
            _____________________
 

 

	
            TITLE:
 	
            _____________________
 

 

	
            SIGNATURE:
 	
            _____________________ DATE SIGNED: _________________
 

 

 

 

PARTICIPANT:

 

	
            SIGNATURE:
 	
            _____________________ DATE SIGNED: _________________
 

 

 

	
            PRINT NAME:
 	
            ____________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]