<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1999
REGISTRATION NUMBER 33-_______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
-----------------
SMARTIRE SYSTEMS INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
BRITISH COLUMBIA, CANADA NOT APPLICABLE
- --------------------------------------------------------------------------------
State or other jurisdiction of (I.R.S. Employee I.D. Number)
incorporation or organization
SUITE 150, 13151 VANIER PLACE, RICHMOND, BRITISH COLUMBIA, CANADA, V6V 2J1
- --------------------------------------------------------------------------------
Address of Principal Executive Office, including Zip Code
MANAGEMENT AGREEMENT
- --------------------------------------------------------------------------------
Full title of the agreement(s)
Kevin A. Carlson
SmarTire Systems Inc.
Suite 150, 13151 Vanier Place
Richmond, British Columbia, Canada V6V 2J1
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
(604) 276-9884
- --------------------------------------------------------------------------------
(Telephone Number, including area code, of agent for service)
COPIES TO:
Mr. Bernard Pinsky
Clark Wilson, Barristers & Solicitors
Suite 800, 885 West Georgia Street
Vancouver, B.C., Canada, V6C 3H1
Telephone: (604) 687-5700
- --------------------------------------------------------------------------------
<PAGE> 2
2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED MAXIMUM
TITLE OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) PER SHARE PRICE FEE
------------------- ---------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock 10,000 $1.64(2) $ 16,400.00 $4.33
</TABLE>
(1) Shares issued pursuant to a certain management agreement.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c) and (h), based on the average of the high and low
prices reported on The Nasdaq Small Cap Market on December 14, 1999, a day
within 5 business days of the filing of this Registration Statement.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
PROSPECTUS FOR RESALES
The material which follows, up to but including the page beginning Part II of
this Registration Statement, constitutes a prospectus, prepared on Form S-3, in
accordance with General Instruction C to Form S-8, to be used in connection with
resales of securities acquired under a Management Agreement by an affiliate of
SmarTire Systems Inc. (the "Company"), as defined in Rule 405 under the
Securities Act of 1933, as amended.
PROSPECTUS
SMARTIRE SYSTEMS INC.
10,000 SHARES OF COMMON STOCK
This Prospectus relates to shares of Common Stock of the Company which may be
offered from time to time by the people named under "Selling Security Holders"
on The Nasdaq SmallCap Market, where the Company's Common Stock currently is
traded, or on securities exchanges, through automated quotation systems or in
other markets where the Common Stock may be traded, or in negotiated
transactions, at prices and on terms then available. The respective Selling
Security Holders will pay any brokerage fees or commissions relating to sales by
them. See "Method of Sale." The Company will receive no part of the proceeds of
any such sales. The principal executive office of the Company is located at
150-13151 Vanier Place, Richmond, British Columbia, Canada, V6V 2J1.
<PAGE> 3
3
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized to give any information or to make any
representations not contained in this Prospectus. Any information or
representation not contained herein must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell
any of the securities covered by this Prospectus by the Company or the Selling
Security Holders in any state to any person to whom it is unlawful for the
Company or the Selling Security Holders to make such offer. Neither the delivery
of this Prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in the affairs of the
Company since the date hereof or since the dates as of which information has
been incorporated herein.
The expenses of preparing and filing the Registration Statement of which this
Prospectus is a part are being borne by the Company.
The date of this Prospectus is December 17, 1999
<PAGE> 4
4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance with that Act files reports and other
information with the Securities and Exchange Commission. All reports, proxy
statements and other information filed with the Securities and Exchange
Commission by the Company can be requested from the Company's Corporate
Secretary or can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: 7 World Trade Center,
New York, New York 10048, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and 11th floor, 5670 Wilshire Boulevard, Los Angeles, California
90036. Copies of that material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a web site that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission. The address of such site is
(http://www.sec.gov).
INCORPORATION BY REFERENCE
The Company incorporates by reference into this Prospectus (a) the Company's
Annual Report on Form 10-KSB for the fiscal year ended July 31, 1999 (b) all
documents filed by the Company pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since July 31, 1999, and (c) the description of
the Company's Common Stock included in its registration statement under Section
12 of the Securities Exchange Act of 1934 relating to the Common Stock,
including any amendment or report filed for the purpose of updating such
description. All documents subsequently filed by the Company pursuant to
Sections 13(a), 14(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which de-registers all securities then
remaining unsold, will be deemed to be incorporated by reference in this
Registration Statement and to be part of it from the date of filing such
documents. Copies of all documents which are incorporated by reference will be
provided without charge to anyone to whom this prospectus is delivered upon a
written or oral request to SmarTire Systems Inc., Suite 150, 13151 Vanier Place,
Richmond, British Columbia, Canada, V6V 2J1, Attention: Corporate Secretary,
telephone number (604) 276-9884.
SELLING SECURITY HOLDERS
The Prospectus relates to possible sales by an officer and director of the
Company of shares of Common Stock granted under a Management Agreement. The name
of the Selling Securities Holder and the amounts of securiy available for
resale are as follows:
<TABLE>
<S> <C>
Kevin Carlson 10,000 Shares of Common Stock
</TABLE>
<PAGE> 5
5
METHOD OF SALE
The Company anticipates that any sales of the shares offered by this Prospectus
by the Selling Security Holder will be made to the public on The Nasdaq Small
Cap Market where the Company's Common Stock currently is traded or on securities
exchanges, through automated quotation systems or in other markets where the
Company's Common Stock may be traded, or in negotiated transactions. The Company
anticipates that sales will be at prices current when the sales take place.
Sales may involve payment of brokers' commissions by Selling Security Holders.
Sales may also be made pursuant to Rule 144 promulgated under the Securities Act
of 1933, as amended (the "Act") without delivery of this Prospectus. There is no
present plan of distribution.
SECURITIES AND EXCHANGE'S POSITION REGARDING INDEMNIFICATION
The Company's Articles provide for indemnification of officers and directors.
Insofar as indemnification for liabilities arising under the Act might be
permitted to directors, officers or persons controlling the Company under the
provisions described above, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in that Act and is therefore unenforceable.
<PAGE> 6
6
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents of the Company previously filed with the Securities and
Exchange Commission (the "Commission") by the Company are incorporated into this
Registration Statement by reference:
(a) the Company's Annual Report on Form 10-KSB for the fiscal year
ended July 31, 1999;
(b) the Company's Current Report on Form 8-K filed with the
Commission on October 8, 1999;
(c) the Company's Current Report on Form 8-K filed with the
Commission on November 29, 1999; and
(d) the description of the Company's common stock contained in the
Company's registration statement filed with the Commission under
Section 12 of the Securities Exchange Act of 1934, as amended,
including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all shares offered
hereunder have been sold or de-registers all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES
No description of the class of securities to be offered is required under this
item because the class of securities to be offered is registered under Section
12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
No such interests.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles provide, among other things, that, subject to the Company
Act (British Columbia), the Company will indemnify each and every director,
secretary or assistant secretary and each and every former director, secretary
or assistant secretary of the Company against all reasonable losses, costs,
charges and expenses properly incurred, including any amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative action or
proceeding by
<PAGE> 7
7
reason of his having been a director or secretary or assistant secretary of the
Company, if: (a) he acted honestly and in good faith, with a view to the best
interests of the Company; and (b) he had reasonable grounds for believing his
conduct was lawful.
The Company's Articles further provide that the Company may, if permitted by
law, indemnify any person who serves or has served as a director, officer,
employee or agent of the Company, or of any corporation of which the Company is
a shareholder. Further, the Company is authorized by its Articles to purchase
and maintain insurance for the benefit of any person who is or was serving as a
director, officer, employee or agent of the Company or of any corporation of
which the Company is a shareholder, against any liability which may be incurred
by him in that capacity.
Under Section 128 of the Company Act (British Columbia), any indemnity provided
by the Company to the following persons is subject to court approval:
(a) a director or former director of the Company;
(b) a director or former director of any corporation of which the
Company is or was a shareholder;
(c) the heirs and personal representatives of any person mentioned
in paragraph (a) or (b);
(d) an officer or former officer of the Company or of a corporation
of which the Company is or was a shareholder.
The Company may indemnify such person against all reasonable costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
including an amount paid to settle an action or satisfy a judgment in a civil,
criminal or administrative action or proceeding to which the person is made a
party because of being or having been a director or officer, including an action
brought by the Company or corporation. Indemnification is only possible under
Section 128 of the Company Act (British Columbia) if: (a) the person acted
honestly and in good faith with a view to the best interests of the corporation
of which the person is or was a director or officer; and (b) in the case of a
criminal or administrative action or proceeding, the person had reasonable
grounds for believing that the person's conduct was lawful.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
The following is a complete list of exhibits filed as a part of this
Registration Statement, which Exhibits are incorporated herein.
4.1 Management Agreement dated August 1, 1999 between the Company
and Kevin Carlson; and
5.1 Opinion of Clark, Wilson, Barristers & Solicitors (including
consent).
<PAGE> 8
8
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) For purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act, that is incorporated
by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
(c) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering hereof;
(d) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the offering; and
(e) To file a post-effective amendment to the registration statement
to include any financial statements required by Regulation 210
at the start of any delayed offering or throughout a continuous
offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Richmond, British Columbia, on December 17, 1999.
<PAGE> 9
9
SmarTire Systems Inc.
Per: /s/ Robert Rudman
Robert Rudman, Chairman and Chief Executive Officer
<PAGE> 10
10
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Robert Rudman CEO, Chairman December 16, 1999
- -------------------------------- and Director (Principal
Robert Rudman Executive Officer)
/s/ Mark Desmarais President, December 16, 1999
- -------------------------------- Chief Operating Officer
Mark Desmarais and Director
/s/ Kevin Carlson Chief Financial Officer December 16, 1999
- -------------------------------- and Director (Principal
Kevin Carlson Financial Officer and
Principal Accounting Officer)
/s/ John Bolegoh Vice President December 16, 1999
- -------------------------------- Operations and
John Bolegoh Director
/s/ Dana Stonerook Director December 16, 1999
- --------------------------------
Dana Stonerook
/s/ Lawrence Becerra Director December 16, 1999
- --------------------------------
Lawrence Becerra
/s/ Bernard Pinsky Director December 16, 1999
- --------------------------------
Bernard Pinsky
</TABLE>
<PAGE> 11
11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.1 Management Agreement dated August 1, 1999 between
the Company and Kevin Carlson; and
5.1 Opinion of Clark, Wilson, Barristers & Solicitors
(including consent).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
MANAGEMENT AGREEMENT
THIS AGREEMENT effective as of the 1st day of August, 1999 (the "Effective
Date").
BETWEEN:
SMARTIRE SYSTEMS INC., a company duly incorporated pursuant to
the laws of the Province of British Columbia, having an office at
150 - 13151 Vanier Place, Richmond, British
Columbia, V6V 2J1
(hereinafter referred to as the "Company")
OF THE FIRST PART
AND:
KEVIN CARLSON, businessman, of 5185 11A Avenue, Delta,
British Columbia V4M 1Z7
(hereinafter referred to as the "Manager")
OF THE SECOND PART
RECITALS
WHEREAS the Company has requested the assistance of the Manager in providing
certain management services to the Company, as hereinafter described;
WHEREAS the Manager has agreed to provide such assistance and services to the
Company in accordance with the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants set forth below, the parties hereto agree as follows:
1 DUTIES AND DEVOTION OF TIME
1.1 Duties. During the term of this Agreement the Manager
shall be responsible for the duties contained in Schedule "A" attached hereto
and incorporated herein by this reference (the "Duties").
1.2 Devotion of Time. The parties hereto acknowledge and
agree that the work of the Manager is and shall be of such a nature that regular
hours may not be sufficient and
<PAGE> 2
-2-
occasions may arise whereby the Manager shall be required to work more than
eight (8) hours per day and/or five (5) days per week. The Manager agrees that
the consideration set forth herein shall be in full and complete satisfaction
for such work and services, regardless of when and where such work and services
are performed. The Manager further releases the Company from any claims for
overtime pay or other such compensation which may accrue to the Manager.
Notwithstanding the foregoing, the Company agrees that so long as the Manager
properly discharges his duties hereunder, the Manager may devote the remainder
of his time and attention to other non-competing business and personal pursuits.
1.3 Business Opportunities the Property of the Company. The
Manager agrees to communicate immediately to the Company all business
opportunities, inventions and improvements in the nature of the business of the
Company which, during the term of this Agreement, the Manager may conceive, make
or discover, become aware of, directly or indirectly, or have presented to him
in any manner which relates in any way to the Company, either as it is now or as
it may develop, and such business opportunities, inventions or improvements
shall become the exclusive property of the Company without any obligation on the
part of the Company to make any payments therefor in addition to the salary and
benefits herein described to the Manager.
1.4 No Personal Use. The Manager shall not use any of the
work the Manager shall perform for the Company for any personal purposes without
first obtaining the prior written consent of the Company.
2 SALARY, BONUSES AND BENEFITS
2.1 Salary. In consideration of the Manager providing the
services referred to herein, the Company agrees to pay the Manager an annual
base salary (the "Annual Base Salary") of one hundred forty thousand dollars
($140,000) less applicable deductions, payable biweekly, plus incentive
compensation as set out below, subject to increase as from time to time approved
by the Board of Directors of the Company.
2.2 Benefits. The Company shall provide, maintain and pay
for:
(a) medical, dental for the Manager and his immediate family as is
provided by the Company's medical services plan or an equivalent
plan; and
(b) such extended health and other benefits for the Manager and his
immediate family as are provided to senior management employees
of the Company, subject to the eligibility of the Manager.
2.3 Incentive Compensation and Stock Options. Within one
hundred twenty (120) days of the Effective Date, the Company's Board of
Directors will approve and implement an incentive compensation plan for the
senior management of the Company and its subsidiaries, including therein a
policy regarding the granting of stock options. The Manager will participate
<PAGE> 3
-3-
as a member of the Board of Directors in approving that plan and will
participate in that plan when approved and implemented by the Company's Board of
Directors.
2.4 Payment in Cash or Shares. All payments payable by the
Company to the Manager, including the Annual Base Salary and reimbursement of
expenses under Section 4.1 hereof, shall be payable in cash or, at the election
of the Manager, and subject to the approval of the regulatory authorities, such
will be paid in whole or in part in common shares in the capital stock of the
Company ("Remuneration Shares"), issued at the 10 day average closing price (for
the 10 days prior to the Manager's election) of the Company's common shares on
any stock exchange or quotation system upon which the Company's common shares
are listed for trading.
2.5 Registration of Performance Bonus Shares. To ensure that
any shares issued to the Manager under paragraph 2.4 of this Agreement are
freely tradable, the Company shall register with the SEC any such shares issued.
Upon or as soon as is practical after the issuance of such shares, the Company
shall file a form S-8 or other appropriate form with the United States
Securities and Exchange Commission (the "SEC") to effect registration.
2.6 Incentive Stock Options. The Manager acknowledges that
prior to execution of this Agreement the Company executed an incentive stock
option agreement for the right for the Manager to purchase up to fifty thousand
(50,000) common shares in the capital of the Company, with options to acquire up
to twelve thousand five hundred (12,500) common shares vesting on execution of
the Stock Option Agreement which grants the options and on each of the first,
second, third and fourth anniversaries of such Agreement, all subject to
regulatory approval.
2.7 Signing Bonus. In consideration of the Manager entering
into this Agreement, the Company agrees to pay the Manager a signing bonus of
ten thousand (10,000) common shares (the "Signing Bonus Shares") in the capital
of the Company. The Signing Bonus Shares shall be paid within ten (10) days of
the execution of this Agreement by all parties hereto. Upon or as soon as it
practical after the issuance of such shares, SmarTire shall file a form S-8 or
other appropriate form with the United States Securities and Exchange Commission
(the "SEC") to effect registration.
3 VACATION
3.1 Entitlement to Vacation. The Company acknowledges that
the Manager shall be entitled to an annual vacation of four (4) weeks. The
Manager shall use his best efforts to ensure that such vacation is arranged with
the Company in advance such that his vacation does not unduly affect the
operations of the Company.
3.2 Increase in Vacation. The period set out in Section 3.1
above may be increased from time to time as mutually agreed to by the Manager
and the Company's Board of Directors.
<PAGE> 4
-4-
4 REIMBURSEMENT OF EXPENSES
4.1 Reimbursement of Expenses. The Manager shall be
reimbursed for all reasonable out-of-pocket expenses incurred by the Manager in
or about the execution of the Duties contained herein, including without
limiting the generality of the foregoing, all reasonable travel and promotional
expenses payable or incurred by the Manager in connection with the Duties under
this Agreement. All payments and reimbursements shall be made within two (2)
weeks of submission by the Manager of vouchers, bills or receipts for such
expenses.
5 CONFIDENTIAL INFORMATION
5.1 Confidential Information. The Manager shall not, either
during the term of this Agreement or under the provisions of section 5.3,
without specific consent in writing, disclose or reveal in any manner whatsoever
to any other person, firm or corporation, nor will he use, directly or
indirectly, for any purpose other than the purposes of the Company, the private
affairs of the Company or any confidential information which he may acquire
during the term of this Agreement with relation to the business and affairs of
the directors and shareholders of the Company, unless the Manager is ordered to
do so by a court of competent jurisdiction or unless required by any statutory
authority.
5.2 Non-Disclosure Provisions. The foregoing provision shall
be subject to the further non-disclosure provisions contained in Schedule "B"
attached hereto and incorporated hereinafter by this reference.
5.3 Provisions Survive Termination. The provisions of this
section shall survive the termination of this Agreement for a period of three
years.
6 TERM
6.1 Term. This Agreement shall remain in effect until
terminated in accordance with any of the provisions contained in this Agreement.
7 TERMINATION
7.1 Termination by Manager. Notwithstanding any other
provision contained herein, the parties hereto agree that the Manager may
terminate this Agreement, with or without cause, by giving ninety (90) days'
written notice of such intention to terminate.
7.2 Resignation or Cessation of Duties. In the event that
the Manager ceases to perform all of the Duties contained herein, other than by
reason of the Manager's death or disability, or if the Manager resigns
unilaterally and on his own initiative from all of his positions this Agreement
shall be deemed to be terminated by the Manager as of the date of such cessation
of Duties or such resignation, and the Company shall have no further obligations
under Section 2 hereof.
<PAGE> 5
-5-
7.3 Termination by Company. The Company may terminate this
agreement at any time for just cause without further obligation. In the event of
termination for any reason other than for just cause, the Company, at its
option, will either (a) continue to pay the salary under Clause 2.1 and provide
the benefits under Clauses 2.2 until one year from the date of termination or
(b) pay one year's salary under Clause 2.1 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, and may be exercised for a period of 30 days only
after the final payment.
7.4 Death. In the event of the death of the Manager during
the term of this Agreement, this Agreement shall be terminated as of the date of
such death, and the Manager's spouse, if living, or surviving children shall be
entitled to the termination allowance stated in Section 7.3 hereof.
7.5 Disability. In the event that the Manager will during
the term of this Agreement by reason of illness or mental or physical disability
or incapacity be prevented from or incapable of performing the Duties hereunder,
then the Manager shall be entitled to receive the remuneration provided for
herein at the rate specified hereinbefore for the period during which such
illness, disability or incapacity will continue, but not exceeding six (6)
successive months. If such illness, disability or incapacity continues or will
continue for a period longer than six (6) successive months, then this Agreement
may, at the option of the Directors of the Company, forthwith be terminated, and
the Manager shall be entitled to the termination allowance stated in Section 7.3
hereof.
7.6 Termination Payments. Any payments made by the Company
to the Manager upon the termination of this Agreement shall be made in cash, or,
if the Company does not have available funds, in equal monthly cash instalments
over one year, or in Remuneration Shares, or in a combination of cash and
Remuneration Shares, subject to regulatory approval. All payments required to be
made by the Company to the Manager pursuant to Section 7 hereof shall be made in
full.
8 RIGHTS AND OBLIGATIONS UPON TERMINATION
8.1 Rights and Obligations. Upon termination of this
Agreement, the Manager shall deliver up to the Company all documents, papers,
plans, materials and other property of or relating to the affairs of the
Company, other than the Manager's personal papers in regard to his role in the
Company, which may then be in the Manager's possession or under his control.
9 CLOSING
9.1 Closing Date. This Agreement shall be effective as of
August 1, 1999.
<PAGE> 6
-6-
9.2 Conditions of Closing. The parties hereto agree that it
shall be a condition of the execution of this Agreement that prior to or
contemporaneously with the execution of this Agreement:
(a) this Agreement shall be approved by the Board of Directors of
the Company.
10 NOTICES AND REQUESTS
10.1 Notices and Requests. All notices and requests in
connection with this Agreement shall be deemed given as of the day they are
received either by messenger, delivery service, or mailed by registered or
certified mail with postage prepaid and return receipt requested and addressed
as follows:
(a) if to the Company:
SmarTire Systems Inc.
150 - 13151 Vanier Place
Richmond, British Columbia
V6V 2J1
with a copy to:
CLARK, WILSON
Suite 800-885 West Georgia Street
Vancouver, British Columbia
V6C 3H1
Attention: Bernard Pinsky
(b) If to the Manager:
Kevin Carlson
5185 11A Avenue
Delta, British Columbia
V4M 1Z7
or to such other address as the party to receive notice or request so designates
by written notice to the others.
11 INDEPENDENT PARTIES
11.1 Independent Parties. This Agreement is intended solely
as a management services agreement and no partnership, agency, joint venture,
distributorship or other form of agreement is intended.
<PAGE> 7
-7-
12 AGREEMENT VOLUNTARY AND EQUITABLE
12.1 Agreement Voluntary. The parties acknowledge and declare
that in executing this Agreement they are each relying wholly on their own
judgement and knowledge and have not been influenced to any extent whatsoever by
any representations or statements made by or on behalf of any other party
regarding any matters dealt with herein or incidental thereto.
12.2 Agreement Equitable. The parties further acknowledge and
declare that they each have carefully considered and understand the provisions
contained herein, including, but without limiting the generality of the
foregoing, the Manager's rights upon termination and the restrictions on the
Manager after termination and agree that the said provisions are mutually fair
and equitable, and that they executed this Agreement voluntarily and of their
own free will.
13 CONTRACT NON-ASSIGNABLE; INUREMENT
13.1 Contract Non-Assignable. This Agreement and all other
rights, benefits and privileges contained herein may not be assigned by the
Manager.
13.2 Inurement. The rights, benefits and privileges contained
herein, including without limitation the benefits of Sections 2 and 7 hereof,
shall inure to the benefit of and be binding upon the respective parties hereto,
their heirs, executors, administrators and successors.
14 ENTIRE AGREEMENT
14.1 Entire Agreement. This Agreement represents the entire
Agreement between the parties and supersedes any and all prior agreements and
understandings, whether written or oral, among the parties. The Manager
acknowledges that he was not induced to enter into this Agreement by any
representation, warranty, promise or other statement, except as contained
herein.
14.2 Previous Agreements Cancelled. Save and except for the
express provisions of this Agreement and the Manager's continuation as a
director of the Company, any and all previous agreements, written or oral,
between the parties hereto or on their behalf relating to the services of the
Manager for the Company are hereby terminated and cancelled and each of the
parties hereby releases and further discharges the other of and from all manner
of actions, causes of action, claims and demands whatsoever under or in respect
of any such agreements.
<PAGE> 8
-8-
15 WAIVER
15.1 Waiver. No consent or waiver, express or implied, by
either party to or of any breach or default by the other party in the
performance by the other of its or his obligations herein shall be deemed or
construed to be a consent or waiver to or of any breach or default of the same
or any other obligation of such party. Failure on the part of either party to
complain of any act or failure to act, or to declare the other party in default
irrespective of how long such failure continues, shall not constitute a waiver
by such party of its or his rights herein or of the right to then or
subsequently declare a default.
16 SEVERABILITY
16.1 Severability. If any provision contained herein is
determined to be void or unenforceable in whole or in part, it is to that extent
deemed omitted. The remaining provisions shall not be affected in any way.
17 AMENDMENT
17.1 Amendment. This Agreement shall not be amended or
otherwise modified except by a written notice of even date herewith or
subsequent hereto signed by both parties.
18 HEADINGS
18.1 Headings. The headings of the sections and subsections
herein are for convenience only and shall not control or affect the meaning or
construction of any provisions of this Agreement.
19 GOVERNING LAW
19.1 Governing Law. This Agreement shall be construed under
and governed by the laws of the Province of British Columbia and the laws of
Canada applicable therein.
20 EXECUTION
20.1 Execution in Several Counterparts. This Agreement may be
executed by facsimile and in several counterparts, each of which shall be deemed
to be an original and all of which shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
26th day of November, 1999.
SMARTIRE SYSTEMS INC.
Per: /s/ ROBERT RUDMAN
------------------------
<PAGE> 9
-9-
Authorized Signatory
SIGNED by KEVIN CARLSON in the presence of: )
/s/ H. FAHEY )
- -------------------------------------- )
Name Helen Fahey ) /s/ KEVIN CARLSON
- -------------------------------------- ) ------------------------------
Address ) KEVIN CARLSON
- -------------------------------------- )
Executive Assistant )
- -------------------------------------- )
Occupation )
)
This is page 9 of Agreement dated above for reference the 1st day of August ,
1999.
<PAGE> 10
SCHEDULE "A"
MANAGER'S DUTIES
1. To create value for the Company's shareholders by managing the financial
interests of the Company and performing the functions of corporate secretary.
2. The Manager shall continue as the Chief Financial Officer and Corporate
Secretary of the Company, and the Manager shall faithfully, honestly and
diligently serve the Company and each of the Company's subsidiaries.
3. The Manager shall be responsible for managing the Company's capital and
assuring that the Company's capital is used efficiently. The Manager shall be
responsible for leading the financial policy making and contributing to
corporate planning for the Company and each of the Company's subsidiaries. The
Manager shall be responsible for corporate secretary functions, assuring that
proper procedure, filing and record keeping are followed to meet stock exchange
and corporate legal requirements. The Manager shall report to the President and
Chief Operating Officer of the Company and may be appointed to additional
responsibilities as deemed appropriate by the President.
<PAGE> 11
SCHEDULE "B"
NON-DISCLOSURE PROVISIONS
1. CONFIDENTIAL INFORMATION AND MATERIALS
(a) "Confidential Information" shall mean, for the purposes of this
Agreement, non-public information which the Company designates
as being confidential or which, under the circumstances
surrounding disclosure ought reasonably to be treated as
confidential. Confidential Information includes, without
limitation, information, whether written, oral or communicated
by any other means, relating to released or unreleased Company
software or hardware products, the marketing or promotion of any
product of the Company, the Company's business policies or
practices, and information received from others which the
Company is obliged to treat as confidential. Confidential
Information disclosed to the Manager by any subsidiary and/or
agents of the Company is covered by this Agreement.
(b) Confidential Information shall not include that information
defined as Confidential Information hereinabove which the
Manager can exclusively establish:
(i) is or subsequently becomes publicly available without
breach of any obligation of confidentiality owed to the
Company;
(ii) became known to the Manager prior to disclosure by the
Company to the Manager;
(iii) became known to the Manager from a source other than the
Company other than by the breach of any obligations of
confidentiality owed to the Company; or
(iv) is independently developed by the Manager.
(c) Confidential Materials shall include all tangible materials
containing Confidential Information, including, without
limitation, written or printed documents and computer disks or
tapes, whether machine or user readable.
2. RESTRICTIONS
(a) The Manager shall not disclose any Confidential Information to
third parties for a period of three (3) years following the
termination of this Agreement, except as provided herein.
However, the Manager may disclose Confidential Information
during bona fide execution of the Duties or in accordance with
judicial or other governmental order, provided that the Manager
shall give
<PAGE> 12
-2-
reasonable notice to the Company prior to such disclosure and
shall comply with any applicable protective order or equivalent.
(b) The Manager shall take reasonable security precautions, at least
as great as the precautions he takes to protect his own
confidential information, to keep confidential the Confidential
Information, as defined hereinabove.
(c) Confidential Information and Materials may be disclosed,
reproduced, summarized or distributed only in pursuance of the
business relationship of the Manager with the Company, and only
as provided hereunder.
3. RIGHTS AND REMEDIES
(a) The Manager shall notify the Company immediately upon discovery
of any unauthorized use or disclosure of Confidential
Information or Materials, or any other breach of this Agreement
by the Manager, and shall co-operate with the Company in every
reasonable manner to aid the Company to regain possession of
said Confidential Information or Materials and prevent all such
further unauthorized use.
(b) The Manager shall return all originals, copies, reproductions
and summaries of or relating to the Confidential Information at
the request of the Company or, at the option of the Company,
certify destruction of the same.
(c) The parties hereto recognize that a breach by the Manager of any
of the provisions contained herein would result in damages to
the Company and that the Company could not be compensated
adequately for such damages by monetary award. Accordingly, the
Manager agrees that in the event of any such breach, in addition
to all other remedies available to the Company at law or in
equity, the Company shall be entitled as a matter of right to
apply to a court of competent jurisdiction for such relief by
way of restraining order, injunction, decree or otherwise, as
may be appropriate to ensure compliance with the provisions of
this Agreement.
4. MISCELLANEOUS
(a) All Confidential Information and Materials are and shall remain
the property of the Company. By disclosing information to the
Manager, the Company does not grant any express or implied right
to the Manager to or under any and all patents, copyrights,
trademarks, or trade secret information belonging to the
Company.
(b) All obligations created herein shall survive change or
termination of any and all business relationships between the
parties for a period of three years after such termination.
<PAGE> 13
-3-
(c) The Company may from time to time request suggestions, feedback
or other information from the Manager on Confidential
Information or on released or unreleased software belonging to
the Company. Any suggestions, feedback or other disclosures made
by the Manager are and shall be entirely voluntary on the part
of the Manager and shall not create any obligations on the part
of the Company or a confidential agreement between the Manager
and the Company. Instead, the Company shall be free to disclose
and use any suggestions, feedback or other information from the
Manager as the Company sees fit, entirely without obligation of
any kind whatsoever to the Manager.
<PAGE> 1
EXHIBIT 5.1
[CLARK, WILSON LETTERHEAD]
December 9, 1999
SmarTire Systems, Inc.
150 - 13151 Vanier Place
Richmond, British Columbia
V6V 2J1
Dear Sirs:
RE: REGISTRATION STATEMENT ON FORM S-8
We are counsel to SmarTire Systems Inc. (the "Company"), a British
Columbia corporation, and have assisted in the preparation of the Registration
Statement of the Company on Form S-8 (the "Registration Statement") covering
10,000 common shares (the "Shares") in the capital of the Company granted or
issuable pursuant to a Management Agreement (the "Agreement").
We have examined originals or copies, certified or otherwise identified
to our satisfaction of the resolutions of the directors of the Company with
respect to the matters herein. We have also examined such statutes and public
and corporate records of the Company, and have considered such questions of law
as we have deemed relevant and necessary as a basis for the opinion expressed
herein. We have for the purposes of this opinion assumed the genuineness of all
signatures examined by us, the authenticity of all documents and records
submitted to us as originals and the conformity to all original documents of
all documents submitted to us as certified, photostatic or facsimile copies.
Based upon and subject to the foregoing, and subject to the qualifications
hereinafter expressed, we are of the opinion that each Share to be issued and
sold by the Company pursuant to the Registration Statement will be, when sold
and paid for pursuant to the terms of the Agreement, validly issued, fully paid
and non-assessable.
We are barristers and solicitors qualified to practice law in the Province
of British Columbia and the State of California. Our opinion expressed above is
limited to the present laws of the Province of British Columbia and of the
federal laws of Canada and the United States. This opinion is being furnished
solely in connection with the filing of the Registration Statement with the
Securities and Exchange Commission, and we hereby consent to the use of this
opinion as an exhibit to the Registration Statement. This opinion may not be
relied upon, used by or distributed to any person or entity for any other
purpose without our prior written consent.
Yours truly,
CLARK, WILSON
/s/ CLARK, WILSON
----------------------------------------
