EXHIBIT 10.6
THIS EMPLOYMENT CONTRACT (the "Agreement") is entered into on June 26, 2007
BETWEEN:
Braintech Canada, Inc. a Canadian Company, incorporated in the
Province of British Columbia and having a business office at Suite 102
- 000 Xxxx 0xx Xxxxxx, Xxxxx Xxxxxxxxx, XX X0X-0X0
AND
Braintech, Inc. an United States Entity, incorporated in the State of
Nevada and having a business office at Suite 102 - 000 Xxxx 0xx
Xxxxxx, Xxxxx Xxxxxxxxx, XX X0X-0X0
(herein together referred to as the "Company")
AND
Xxxxx Xxxxxx
0000 Xxxxxx Xxxxx
Xxxxx Xxxxxxxxx, XX
X0X 0X0
(herein referred to as the "Executive")
WHEREAS:
A. The Company is engaged in the business of developing and selling robot
vision software globally; and
B. In order to achieve its corporate and business objectives, the Company
desires to continue to employ The Executive as a senior executive on the
terms contained in this Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions:
(a) "Good Reason" shall be specifically limited to the occurrence of any
of the following without the Executive's written consent:
(i) A reduction of the Executive's Base Salary, and/or Founder's
Contribution Bonus and/or CTO Performance Bonus;
(ii) A significant change in the Executive's Titles and/or Duties as
defined in Section 4; or
(iii) The Company or any of its subsidiaries relocating the Executive
to any place other than the location at which he reported for work on
a regular basis or a place within the Greater Vancouver, B.C. area,
except for required travel on the Company's or a subsidiary's business
to an extent substantially consistent with the Executive's
obligations.
(b) "Just Cause" shall have the following meaning:
(i) A repeated and demonstrated failure on the part of the Executive
to perform the material duties of the Executive's position in a
competent manner and where the Executive fails to substantially remedy
the failure within a reasonable period of time after receiving written
notice of such failure from the Company;
(ii) The Executive is convicted of (1) fraud, felonious conduct or
dishonesty or (2) misconduct or negligence in the performance of his
duties hereunder, which determination shall be in the sole and
absolute judgment of the Company;
(iii) The Executive or any member of his family makes any personal
profit arising out of or in connection with a transaction to which the
Company is a party or with which it is associated without making
disclosure to and obtaining the prior consent of the Company;
(iv) The Executive fails to honour his fiduciary duties to the
Company, including the duty to act in the best interest of the
Company;
(v) The Executive disobeys reasonable instructions given in the course
of employment by the Chairman or the Board of Directors of the Company
that are not inconsistent with the Executive's management position and
not remedied by the Executive within a reasonable period of time after
receiving written notice of such disobedience; or
(vi) The Executive's breach of any material provision of this
Agreement where such breach is not cured by the Executive within a
twenty-one (21) day period after notice by the Company
(c) eVF
eVF is the brand name for a Braintech software application.
2. Term.
This Agreement shall be for a period of three (3) years, beginning with the
signing of this Agreement, unless terminated on the date on which the first
of the following occurs:
(a) Termination of the Executive's employment by the Company for Just
Cause;
(b) Termination of the Executive's employment by the Company without Just
Cause;
(c) Resignation of employment by the Executive for Good Reason;
(d) Resignation of employment by the Executive for personal reasons; or
(e) Death of the Executive.
After the expiry of the initial Term, this Agreement may be extended, upon
the mutual consent of the parties, on an annual basis for a maximum of up
to ten years, provided the Executive gives the Company, and the Company
gives the Executive no less than 180 days written notice of their
intentions to extend.
Such notice requirement shall apply to each and every annual extension in
which the Company and the Executive wishes to exercise their options to
extend.
In the event the Company chooses not to extend the Agreement, the Executive
is entitled to termination benefits as specified in Section 3.1(a) to
3.1(g).
In the event the Executive chooses not to extend the Agreement, the
Executive is entitled to resignation benefits as specified in Section 3.3.
3. Termination.
3.1 In the case of termination by the Company without Just Cause or
resignation by the Executive for Good Reason, the Company will provide the
Executive the following severance:
(a) The Company shall pay to the Executive after termination, the
aggregate of the following amounts (less any deductions required by
law):
(i) if not already paid within ten days, the Executive's Base Salary
plus Performance Bonuses owing at the time of termination;
(ii) as partial compensation for the Executive's loss of employment,
an amount equal to the greater of twenty-four (24) months Salary or
the remainder of the contract in place within ten days;
iii) as partial compensation for the Executive's loss of employment,
an amount equal to the greater of Performance Cash bonus calculated
pursuant to Section 6(c)(i) for the following twenty-four (24) months
or the remainder of the contract in place;
iv) as partial compensation for the Executive's loss of employment, an
amount equal to the greater of Performance Stock bonus calculated
pursuant to Section 6(c)(ii) for the following twenty-four (24) months
or the remainder of the contract in place.
(b) All outstanding stock options granted to the Executive pursuant to
this or any other agreement will immediately vest and, regardless of
any documentation to the contrary, the exercise period of all
outstanding stock options will extend to and expire on a date that is
thirty-six (36) months from the date of termination;
(c) The Company shall continue to provide health and dental benefits that
exist form time-to-time for all Braintech employees, for a period of
twenty-four (24) months from the date of termination;
(d) The Company shall pay to the Executive all outstanding and accrued
regular vacation pay to the date of termination;
(e) The Company shall provide a letter of recommendation satisfactory to
the Executive;
(f) The Executive shall not be prohibited in any manner whatsoever from
obtaining employment with or otherwise forming or participating in a
business competitive to the business of the Company or otherwise to
the extent allowed by this agreement, by the Company without Just
Cause or resignation by the Executive of his employment for Good
Reason;
(g) The Company shall pay, to the full extent provided by law, without
requiring the Executive first to pay such fees and expenses, all legal
fees and expenses that the Executive, the Executive's legal
representatives or the Executive's family may reasonably incur or face
arising out of or in connection with this Agreement (but this
Agreement only), including any litigation concerning the validity or
enforceability of, or liability under, any provision of this Agreement
or any action by the Executive, the Executive's legal representatives
or the Executive's family to enforce his or their rights under the
Agreement (but this Agreement only), provided that the Executive
prevails in such litigation, and the Company agrees to pay interest,
compounded quarterly, on the total unpaid amount payable under this
Agreement, such interest to be calculated at a rate equal to 2% in
excess of the prime commercial annual lending rate for Canadian dollar
demand loans announced from time to time by the Royal Bank of Canada
during the period of such non-payment.
3.2 The Company may terminate this Agreement for Just Cause. Upon the
occurrence of what the Company believes to be Just Cause as defined in
Section 1(b), the Company shall give the Executive written notice of the
reason or cause for discharge twenty-one (21) days prior to the proposed
date of discharge, which shall be effective on such date. The Executive
will only be entitled to salary, vacation pay, options and bonuses earned
up to the date of such termination.
3.3 The Executive may terminate this Agreement for any reason by giving one
hundred and eighty (180) days prior written notice to the Company. The
Executive will be only entitled to salary, vacation pay, options and
bonuses earned up to the date of such resignation.
4. Titles and Duties.
The Executive shall be the Chief Technology Officer for Braintech, Inc and
President for Braintech Canada, Inc. and shall report to and be subject to the
direction of the Chief Executive Officer of Braintech, Inc. In connection with
the foregoing, the Executive shall have those duties and responsibilities that
are customary for the chief technology officer of a publicly held corporation
including, but not limited to:
a) managing and directing the Company's research and development direction and
operations
b) managing the Company's research and development plans and budgets that
drive and support all and any efforts to meet R&D goals
c) supporting all fundraising initiatives approved by the Company's Board of
Directors
d) promoting and publishing the Company and its activities by means of
building and sustaining relationships with customers, suppliers, partners
and organizations important to the Company and its potential for growth
e) providing leadership and direction for the Company while establishing a
positive work environment for all employees f) reviewing all capital
equipment requests and controlling the approval process; and g) reporting
results of operating activities to the Board of Directors
5. Compensation.
(a) Base Salary
During the term of his employment, the Executive will be paid a base
salary on the first and fifteenth day of each month at an annual rate
of CDN$120,000.00 (the "Base Salary"), subject to increase from time
to time by the Board of Directors of the Company. In addition, The
Executive will be entitled to the following bonuses:
(b) Founder's Contribution Bonus:
Options to purchase 750,000 common shares of Braintech Inc.
exercisable at a price equal to the closing price of the Braintech
Inc.'s common shares upon the signing and public dissemination of this
Agreement, herein after referred to as (the "Date of Option Grant").
Such options shall vest in four equal tranches, with 25% vesting on
the Date of Option Grant and 25% every six months thereafter.
All outstanding stock options granted to date to the Executive
pursuant to any existing agreements will immediately vest and
regardless of any documentation to the contrary, the exercise period
of all outstanding stock options will extend to and expire at the
expiration of this Agreement inclusive of all extensions herein.
The above prices and vesting schedules for the foregoing options shall
be subject to approval of any stock exchange on which the shares of
Braintech Inc. are listed and any other regulatory body with
jurisdiction over Braintech Inc.
(c) CTO Performance Bonus:
(i) Cash: The Executive shall be eligible for an annual performance
cash bonus equal to: two percent (2%) of the Company's annual revenues
commencing with the 2007 calendar year from eVF software related sales
in excess of $2,500,000 on an annual basis to a maximum $8,500,000 on
an annual basis and, thereafter one percent (1%) from the next
$12,000,000 of eVF software related sales on an annual basis. Bonus to
be paid on annual basis on or before January 31st of the following
year.
(ii) Stock: The Executive shall be eligible for an annual performance
stock bonus of 10,000 shares of the Company's Common stock for the
first US$1,000,000 of non-eVF software annual revenues, commencing
with the 2007 calendar year, thereafter 2,000 shares for each
US$1,000,000 of non-eVF software annual revenues up to a maximum of
US$10,000,000 of said annual revenues derived from non-eVF software
sales which software was developed under the management and direction
of the Executive. The Company reserves the right to substitute an
equivalent amount of cash in lieu of stock. Bonus to be paid on annual
basis on or before January 31st of the following year.
6. Expenses
The Company shall reimburse the Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to
time with respect to travel, entertainment and other business expenses,
subject to the Company's customary requirements with respect to reporting
and documentation of such expenses.
7. Benefits
The Executive shall be entitled to participate in all of the Company's
employee benefit and incentive programs including medical insurance for
which senior executive employees of the Company are generally eligible,
such benefit programs are subject to change from time to time.
8. Vacation.
The Executive shall be entitled to a vacation period each year of six
weeks, during which time his compensation shall continue to be paid in
full.
9. Death and Disability
The Company shall have the right to terminate this Agreement upon the
Executive's death or total permanent disability, as defined herein. For the
purposes of this Agreement, the phrase "total permanent disability" shall
mean the inability of the Executive to perform his duties hereunder for a
continuous period of more than six months, such determination to be made by
the Company in its sole discretion.
10. Confidential Information
The Executive shall not disclose or appropriate for his own use, or for the
use of any third party, at any time before or after termination of this
Agreement, any confidential information (the "Confidential Information") of
the Company or any of the Company's affiliates or subsidiaries of which the
Executive becomes informed while engaged by the Company, whether or not
developed by the Executive, except as strictly required in connection with
the Executive's performance of his employment duties, or as required by a
governmental authority. Confidential Information shall include, but not be
limited to, information pertaining to customer lists, pricing, contract
terms, products, services, production and operating methods and procedures,
and financial information. Upon termination of this Agreement, the
Executive shall promptly deliver to the Company all manuals, letters,
notes, notebooks, reports, disks and all other materials containing the
Confidential Information or the Executive's analysis of same that are under
his control.
11. Intellectual Property
The Company shall own all title, intellectual property rights, copyright,
moral rights, trademarks and patents in and to all work, product,
conceived, produced or worked on, by the Executive (collectively the "Work
Product") for, or in relation to, the business of the Company or any
affiliate or subsidiary while employed by the Company. The Executive hereby
waives and assigns to the Company any and all intellectual property rights
including moral rights, copyright, trademarks, and patent rights at law or
otherwise that the Executive has in the Work Product. The Executive will in
no event be entitled to claim title or ownership interest in the Work
Product. Further, the Executive will execute any documentation reasonably
required by the Company to memorialize the Company's existing and continued
ownership or rights to the Work Product.
12. Inventions and Discoveries
The Executive shall disclose promptly to the Company, any and all
inventions, discoveries and improvements conceived or made by the Executive
while employed by the Company and related to the business or activities of
the Company or any of its subsidiaries or affiliates, and hereby assigns
and agrees to assign all his interest therein to the Company or its
nominee. Whenever requested to do so by the Company, the Executive shall
execute any and all applications, assignments or other instruments which
the Company shall deem necessary to apply for and obtain Letters Patent of
the United States, Canada, or any foreign country or to protect otherwise
the Company's interest therein.
13. Non-Solicitation of Employees.
The Executive shall not, during the twenty-four (24) month period following
the termination of this Agreement, regardless of the reason therefore,
solicit any person then employed by the Company or appointed as a
representative of the Company to join the Executive as a partner,
co-venturer, employee, investor or otherwise, in any substantial business
activity whatsoever.
14. Non-Solicitation of Clients.
The Executive shall not, during the twenty-four (24) month period following
the termination of this Agreement, regardless of the reason therefore,
solicit, induce, aid or suggest to any customer of the Company to leave or
terminate its customer relationship as may exist during such the
twenty-four (24) month period. Furthermore, the Executive shall not, within
the twenty-four (24) month period following the termination of this
Agreement, directly contract any client of the Company to perform tasks
which are in competition with the services and products provided to that
client by the Company.
15. Non-Competition.
While this Agreement is in effect and for a period of the twenty-four (24)
months after the termination of this Agreement by the Company with Just
Cause or resignation by the Executive for personal reasons, the Executive
shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer,
director, or in any other individual or representative capacity, own,
operate, control, assist, or participate in any business that is in direct
competition with the business of the Company world-wide. The foregoing
prohibitions shall not apply to ownership by the Executive of less than
five percent (5%) of the issued or outstanding stock of any company whose
shares are listed for trading over any public exchange or the
over-the-counter market provided that the Executive does not control, work
in or for any such company in any capacity.
16. Injunctive Relief.
The Executive expressly agrees and acknowledges that any breach or
threatened breach by him including, but not limited to, Sections 10, 11 12,
13, 14, and 15 herein, and each of them, will cause irreparable damage to
the Company, for which the payment of money will not be an adequate remedy,
and that the damages flowing from such breach are not readily susceptible
to being measured in monetary terms. Accordingly, in addition to all of the
Company's rights and remedies under this Agreement, including, but not
limited to, the right to recovery of monetary damages from the Executive,
the Company shall be entitled to seek an issuance by any court of competent
jurisdiction of temporary, preliminary and permanent injunctions, without
bond, enjoining any such breach or threatened breach by the Executive.
17. Change in Control and/or Structure.
The Company is actively considering a change in senior management or
structure, to facilitate growth. The Executive agrees to sign-off on
changes to this agreement that may be required by the Company within 7 days
of such request, provided however that such change does not diminish the
Executive's compensation, surety or rights contained in this agreement.
18. Reasonable Terms.
The Company has bargained for the covenants set forth in this Agreement in
consideration for the experience, knowledge and information the Executive
will gain and the substantial compensation the Executive will earn under
this Agreement. The Executive acknowledges that the covenants set forth in
this Agreement will not in any way preclude the Executive, upon termination
of this Agreement, from engaging in a lawful profession, trade or business.
19. Place of Performance.
It is contemplated that the Executive shall perform his principal duties in
the greater Vancouver B.C. area, except for temporary or emergency
assignments.
20. Company Reputation.
The Executive agrees that he will at no time take any action or make any
statement that could discredit the reputation of the Company or its
products or services. Further, the Executive will use his reasonable
commercial best efforts in performing the terms of this Agreement and will
act in a loyal and trustworthy manner.
21. Governing Law.
This Agreement shall be subject to and governed by the laws applicable in
the Province of British Columbia, irrespective of the fact that the
Executive may become a resident of a different Province or State.
22. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
Company and the Executive and their respective heirs, legal
representatives, executors, administrators, successors and assigns.
23. Severability.
If any portion or portions of this Agreement shall be, for any reason,
invalid or unenforceable, the remaining portion or portions shall
nevertheless be valid, enforceable and carried into effect, unless to do so
would clearly violate the present legal and valid intention of the parties
hereto.
24. Survival.
This Agreement shall survive in its entirety and continue in full force in
accordance with the terms and provisions contained herein, notwithstanding
any termination of this Agreement.
25. Headings.
The headings of this Agreement are inserted for convenience only and are
not to be considered in construction of the provisions hereof.
26. Assignment.
This Agreement is personal between the Company and the Executive, and may
not be assigned by either party, except the Company shall have the right to
assign this Agreement, and all of the rights under it, to any subsidiary or
affiliate of the Company.
27. Indemnification.
The company will indemnify the Executive in accordance with any terms for
the indemnification of directors or officers of the Company. The Company
will also enter into an indemnification agreement with the Executive in a
form substantially similar to any form of indemnification agreement entered
into between the Company and its other directors or officers of the company
at such times as any other directors or officer of the Company enter into
such indemnification agreement or agreements.
28. Entire Agreement.
This Agreement contains the entire understanding of the parties with
respect to the subject matter herein and supersedes all prior agreements or
understandings, written, verbal or otherwise, including, without
limitation, agreements or understandings between the Executive and the
Company or the Executive and a subsidiary of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first written above.
Witnessed by: | The Executive
| |
| |
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| Xxxxx Xxxxxx
June 26, 2007
Braintech, Inc.
Per:
-----------------------------------
Authorized Signatory
Braintech Canada, Inc.
Per:
-----------------------------------
Authorized Signatory
