ISON Isonics Corporation New (CE)

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

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

under certain circumstances the discretionary bonus shall become payable either immediately or within three months of the Executive’s 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 Executive’s 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 Company’s 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 Company’s 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 Executive’s 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 Executive’s 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 Executive’s duties and responsibilities with the Company, and such activities are not with persons or entities that directly compete with the Company.

3

(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 Plan’s cashless exercise provision, in shares of the Company’s common stock, or in property or in a combination of cash, shares and property and, subject to approval of the Committee.