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 (Date of Earliest Event Reported): August 8, 2005
SmarTire Systems Inc.
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(Exact name of registration as specified in its charter)
Yukon Territory, Canada 0-29248 N/A
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
#150 - 13151 Vanier Place
Richmond, British Columbia, Canada V6V 2J1
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (604) 276-9884
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:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On August 8, 2005, the Company entered into a management agreement with David
Warkentin appointing him Vice President of Sales and Marketing. During 2004 and
2005, Mr. Warkentin was the Vice President Sales of Intrinsyc Software, a
company that provides engineering services to wireless mobile device makers as
well as licensable software for the wireless telephone handset market. From 2000
until 2004, Mr. Warkentin was the Director of Sales for Silent Witness
Enterprises, a company that manufactures security cameras and digital video
recorders targeted to the financial, educational and corrections markets. Also
during 2000, Mr. Warkentin was the North American Sales Manager for Digital
Dispatch Systems, and was responsible for a sales team selling mobile dispatch
hardware and software solutions directly to end-users.
Mr. Warkentin's current management agreement, dated as of August 8, 2005, calls
for payment of a base salary of CDN$130,000 (approximately U.S. $107,000) per
annum subject to increase from time to time plus 2,000,000 stock options
pursuant to the Company's 2004 Stock Incentive Plan (Non-U.S). Such options will
vest over two years at an exercise price per share equal to $0.16 per share.
Fifty percent of the options granted will vest one year from the date of the
option agreement and the remaining fifty percent will vest two years from the
date of the option agreement. The options will terminate, to the extent not
previously exercised, five years after the date of the option agreement.
In the event of Mr. Warkentin's termination for any reason other than for just
cause after three months and within six months of the effective date of the
management agreement, we must either continue to pay Mr. Warkentin's salary and
provide benefits until three months from the date of termination or pay three
months' salary in lieu of notice. In the event of termination for any reason
other than for just cause six months after the effective date of the management
agreement, but within twelve months of the effective date of the management
agreement, we must either continue to pay Mr. Warkentin's salary and provide the
benefits until six months from the date of termination or pay six months' salary
in lieu of notice. In the event of termination for any reason other than for
just cause twelve months after the effective date of the management agreement,
but within twenty-four months of the effective date of the management agreement,
we must either continue to pay Mr. Warkentin's salary and provide the benefits
until nine months from the date of termination or pay nine months' salary in
lieu of notice. In the event of termination for any reason other than for just
cause twenty-four months after the effective date of the management agreement,
we must either continue to pay Mr. Warkentin's salary and provide the benefits
until twelve months from the date of termination or pay twelve months' salary in
lieu of notice. Any stock options that have been granted but that have not yet
vested shall immediately terminate, and vested options may be exercised for a
period of 30 days only after the final payment.
Notwithstanding anything else in the management agreement, in the event that Mr.
Warkentin's employment is terminated within eighteen months of an acquisition, a
hostile takeover or a merger and the termination is without cause, we must
either continue to pay the salary under the management agreement and provide
benefits until the termination date or pay upon termination an amount equal to
the salary payable to the termination date in lieu of notice. Any stock options
that have been granted but that have not yet vested shall immediately vest at
the date of the final payment of termination amounts, and may be exercised for a
period of 30 days only after the final payment.
The management agreement is attached to this Form 8-K as Exhibit 10.1.
A copy of the press release issued August 9, 2005 announcing this development is
attached to this Form 8-K as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number Description
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10.1 Management agreement - David Warkentin
99.1 Press release issued August 9, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
SMARTIRE SYSTEMS INC.
Date: August 12, 2005 By: /s/ Jeff Finkelstein
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Jeff Finkelstein
Chief Financial Officer