from the 8k filed yesterday....
On June 16, 2009, effective as of January 1, 2009, Braintech, Inc. (the “Company”) and Frederick W. Weidinger, the Company’s Chairman, President & CEO (“Weidinger”) entered into a new Employment and Retention Agreement (the “Agreement”).
While the Agreement provides for an increase in Weidinger’s salary, (i) the increase is payable in stock until the Company’s cash flow improves; (ii) separately from the Agreement, Weidinger has voluntarily agreed to take a temporary twenty percent (20%) salary reduction (from the original salary prior to the increase), and (iii) separately from the Agreement, if the Company’s cash position has not improved by the fourth quarter of 2009 he will agree to take a further temporary reduction in salary to a salary of $1 and he will agree to forego submitting business expenses to the Company for reimbursement and to pay for those expenses personally; all as described more specifically below.
The Agreement provides for an initial annual salary of $318,000 (“Base Salary”), which shall be increased by ten percent (10%) each year on January 1, 2010, 2011 and 2012, and on each January 1 thereafter, the Base Salary shall be increased based on performance at the discretion of the Board of Directors (“Board”). The $60,000 increase over his previous annual salary of $258,000 shall be paid in stock rather than cash at the rate of $5,000 per month based on the average price of the Company’s stock during the applicable month until the Company determines it has the ability to pay the increase in cash or reaches cash flow break even, whichever comes first. The Agreement is for an indefinite term, and continues until terminated in accordance with its provisions.
Further, although Weidinger has voluntarily agreed to postpone the following items, the Agreement provides that Weidinger’s earned and deferred cash bonuses totaling $90,300 for 2007 and 2008 shall be accrued on the books of the Company until paid (with interest accruing at 5%) or at the option of the executive may be converted to common stock at the average price of the common stock during the month of conversion.
Separately from the Agreement, in addition to postponing his salary increase and prior years’ cash bonuses as described above, Weidinger has voluntarily agreed to take a temporary twenty percent (20%) salary reduction (from the original $258,000 salary prior to the increase), and further, if the Company’s cash position has not improved by the fourth quarter of 2009, he will agree to take a further temporary reduction in salary to a salary of $1, and he will agree to forego submitting business expenses to the Company for reimbursement and to pay for those expenses personally.
The Agreement provides that Weidinger is eligible to earn 13,000,000 shares of the Company’s common stock (“Bonus Stock”) under the 2007 Bonus Stock and Bonus Stock Option Plan on the achievement of certain milestones as follows: 5,000,000 shares upon the successful refinance, roll-over, extension or restructure of the Company’s loan facility or a new facility with any party; 3,000,000 shares upon the attainment of $2,500,000 in revenue for any 12-month rolling period beginning in 2009; 2,500,000 shares upon the attainment of $4,500,000 in revenue for any 12-month rolling period beginning in 2010; and 2,500,000 shares upon the attainment of $7,000,000 in revenue for any 12-month rolling period beginning in 2011. Notwithstanding the foregoing milestones, all of such shares will immediately vest if any third party or parties invest at least $2,000,000 in the Company in exchange for equity or any instrument convertible into equity, including a debt instrument that has equity warrants or options attached.
The Agreement provides that Weidinger is eligible to earn an annual cash bonus on January 1, 2010 based on 2009 performance in the Board’s discretion, the target amount of which shall be up to 35% of his then-current Base Salary, and an annual cash bonus of January 1 of each year thereafter based on the previous year’s performance in the Board’s discretion, the target amount of which shall be up to 50% of his then-current Base Salary.
The Agreement provides for the ability of the Company or Weidinger to terminate Weidinger’s employment with the Company for any reason.
If the Company terminates his employment without Good Cause (as defined in the Agreement) or Weidinger terminates such employment with Good Reason (as defined in the Agreement), or his employment is terminated because of permanent incapacity or death, he will be entitled to (i) all unpaid compensation, leave and benefits, allowances and perquisites up to the termination date, (ii) a lump sum payment equal to two times the highest Base Salary during his employment with the Company, (iii) continuation of all employee benefits and executive family benefits under the Agreement for two years after the termination date. In addition, all Bonus Stock will immediately vest, and all Bonus Stock Options will immediately vest and may be exercised within 36 months of the termination date.
If Weidinger’s employment is terminated by the Company with Good Cause or by Weidinger without Good Reason, (i) he will be entitled to all unpaid compensation and benefits, stock and options earned (where the required milestones have been achieved as of the termination date) up to the termination date, (ii) all Bonus Stock Options granted as of the date of termination will immediately vest and may be exercised within 24 months, and (iii) he shall not be entitled to any further cash Bonus under paragraph 8 of the Agreement.
The description of the terms of the Employment Agreement set forth herein is qualified in its entirety to the full text of the Employment Agreement, which is filed as an exhibit hereto.
