Exhibit 4.7
DIRECTORS' COMPENSATION ON TERMINATION AGREEMENT
THIS AGREEMENT dated the 3rd day of February, 2005 (the "Agreement Date")
BETWEEN:
XXXXXX XXXXXX, businessman, of 0000 Xxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx, XXX, 00000
(the "Director")
OF THE FIRST PART
AND:
SMARTIRE SYSTEMS INC., a company duly incorporated pursuant to the
laws of the Province of British Columbia, having an office at 150 -
13151 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
("SmarTire" or the "Company")
OF THE SECOND PART
A. The Director was elected or appointed as a director of SmarTire on or
about February 3, 2003;
B. SmarTire has a current policy on board remuneration under which the
director is being remunerated; C. SmarTire and the Director wish to ensure the
Director is properly remunerated in the event of certain circumstances as set
forth herein.
THEREFORE, in consideration of the mutual covenants and premises contained
herein, and payment of $10, the receipt and sufficiency of which is hereby
acknowledged, the parties covenant and agree as follows:
1. DEFINITIONS
1.1 In this Amendment Agreement, the following terms have the meaning as
ascribed below:
(a) "Acquisition" means an acquisition of substantially all of SmarTire
or of substantially all assets of SmarTire by a party not an
Affiliate of SmarTire prior to completion of the acquisition;
-1-
(b) "Affiliate" means a director, officer, wholly or partially owned
subsidiary or 10% or greater shareholder of SmarTire, or a company
controlled by such person or any party acting in conjunction with
such person;
(c) "Hostile Takeover" means a Takeover that the directors of SmarTire
recommend to shareholders to reject in a management circular;
(d) "Merger" means a merger by SmarTire with a corporation that was not
an Affiliate prior to completion of the merger;
(e) "Reorganization Date" means the date the Reorganization Event is
approved by shareholders or completed, whichever is earlier;
(f) "Reorganization Event" means an Acquisition, Hostile Takeover or
Merger;
(g) "Takeover" means a successful tender offer (as that term is
determined by reference to the United States Securities Exchange Act
of 1934) or takeover bid (as that term is defined in the Securities
Act (British Columbia)) that has been made by a party who was not an
Affiliate prior to the completion of the tender offer or takeover.
2. TERMINATION PROVISIONS
2.1 In the event that the Director puts his/her name forward for
re-election but is not re-elected as a director of SmarTire at an Annual General
Meeting of Shareholders held within twelve (12) months of a Reorganization Event
(or at a meeting of shareholders convened to approve such Reorganization Event),
the Company, will pay to the Director upon termination of such directorship an
amount equal to two and one half (2.5) times the total remuneration paid or
accrued to pay to the director in the twelve month period prior to and including
the Reorganization Date. Any stock options that have been granted but that have
not yet vested shall immediately vest at the date of the final payment, and may
be exercised for a period of 30 days only after the final payment."
3. GENERAL
3.1 In all other respects, the terms of reference of remuneration for the
director shall remain in full force and effect.
3.2 This Agreement will enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
3.3 This Agreement will be governed by and construed in accordance with
the laws of British Columbia.
-2-
3.4 This Agreement may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together constitute one
and the same instrument.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date first
above written.
SIGNED, SEALED and DELIVERED by XXXXXX XXXXXX in the )
presence of: )
)
/s/ Xxxxxx X. Xxxxxxx, Jr. )
-------------------------- )
Signature )
Xxxxxx X. Xxxxxxx, Jr. ) /s/ Xxxxxx Xxxxxx
---------------------- ) -----------------
Print Name ) XXXXXX XXXXXX
00 Xxxxxxxx Xxxxxx )
------------------ )
Address )
Xxxxxxxx, XX 00000 )
-------------------- )
)
Accountant )
---------- )
Occupation )
SMARTIRE SYSTEMS INC.
Per: /s/ Xxxx Xxxxxxxxxxx
--------------------
Authorized Signatory
Title: Chief Financial Officer
-3-
