| (a) |
Entry
into Employment Agreement
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Effective
April 10, 2008, Wits Basin Precious Minerals Inc. (the “Registrant”) entered
into an employment agreement with Mark D. Dacko (the “Employment Agreement”)
relating to Mr. Dacko’s service as Chief Financial Officer of the Registrant.
The term of the Employment Agreement is for a period of three years, with
automatic one-year renewals, subject to either party’s right to terminate upon
30-day written notice. Pursuant to the Employment Agreement, Mr. Dacko is
entitled to a base salary of $11,250 per month, and is eligible for an annual
bonus at the discretion of the Registrant’s compensation committee. In the event
Mr. Dacko’s employment is terminated by the Registrant without “Cause” (as
defined in the agreement) or he voluntarily terminates his employment within
6
months following a “Change in Control” (as defined in the agreement), he will be
entitled to receive his accrued and unpaid compensation to the time of the
termination plus a severance payment equal to his base salary for 9 months,
payable in accordance with the Registrant’s normal payroll over such period. The
agreement includes standard confidentiality provisions, as well as a one-year
non-solicitation provision.
Pursuant
to the Employment Agreement, the Registrant issued to Mr. Dacko a ten-year
stock
option to purchase up to 600,000 shares of the Registrant’s common stock at an
exercise price of $0.21, the closing price of the Registrant’s common stock on
the day prior to the grant. The option shall vest in equal quarterly
installments of 50,000 shares over three years, with the first tranche vesting
on the effective date of the Employment Agreement.
A
copy of
the Employment Agreement is attached hereto as Exhibit 10.1, and is incorporated
herein by reference.
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(b)
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Changes
to Board of Directors
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On
April
10, 2008, the Registrant appointed Donald S. Stoica, age 50, to serve as a
member of Registrant’s board of directors. Mr. Stoica was appointed to fill a
vacancy. In February 1999, Mr. Stoica founded SSR Engineering, Inc., which
is a
privately held corporation based in Anaheim, California that develops high
performance radar systems for use in security, navigation, defense and related
applications. Mr. Stoica has served as President and Chief Executive Officer
of
SSR Engineering since its inception. From 1975-1998, Mr. Stoica worked at Hughes
Aircraft Company, including as Technical Director. Mr. Stoica received his
B.S.
in Electrical Engineering from California Polytechnic State University in
Pomona, California and his Masters Degree in Electrical Engineering from the
University of Southern California in Los Angeles, California.
Mr.
Stoica is a principal in Pacific Dawn Capital, a significant shareholder of
the
Registrant. In September 2007, we received a $100,000 loan from Pacific Dawn,
and in consideration issued Pacific Dawn a promissory note in the principal
amount of $100,000. The promissory note had an original maturity date of October
21, 2007, and bore interest at a rate of 5% per annum. Under the terms of the
promissory note and as additional consideration for the loan, the Registrant
reduced the exercise price relating to certain rights Pacific Dawn held to
purchase up to 1,000,000 shares of the Registrant’s common stock from $0.20 to
$0.15 per share and extended the expiration date of such rights from December
31, 2007 to December 31, 2008. In December 2007, the Registrant memorialized
an
extension to the maturity date of the promissory note from October 21, 2007
to
January 21, 2008, and in consideration provided Pacific Dawn a further price
reduction of his rights-to-purchase from $0.15 to $0.10 per share. The
promissory note was further extended to February 21, 2008, and paid in full
on
February 19, 2008.
During
2007, the Registrant paid Relevant Marketing LLC (d/b/a Lighthouse
Communications) approximately $260,000 in consideration of Relevant Marketing’s
provision of investor and public relations management consultant services.
SSR
Engineering, Inc., of which Mr. Stoica is a principal and serves as President
and Chief Executive Officer, held a majority interest of Relevant Marketing
until December 31, 2007.
In
consideration of Mr. Stoica’s agreement to serve on the board, and his future
service on the board, on April 10, 2008, the Registrant awarded Mr. Stoica
a
ten-year option to purchase up to 400,000 shares of Registrant’s common stock at
an exercise price of $0.21 per share, the closing price of the Registrant’s
common stock on the prior business day. The option vests in equal semiannual
installments of 100,000 shares each over two years, with the first installment
vesting June 30, 2008. The
board
has not yet determined upon which, if any, committees Mr. Stoica will serve.
Effective
on April 10, 2008, the Registrant received from Mark D. Dacko a notice of
resignation from the board of directors to make room on the Registrant’s board
for a non-employee director in accordance with the Registrant’s goal to increase
board independence.
| Item
9.01 |
Financial
Statements and Exhibits.
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(d)
Exhibits.
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Exhibit
No.
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Description
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10.1
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Employment
Agreement with Mark Dacko dated April 10, 2008.
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SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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Wits
Basin
Precious Minerals Inc. |
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| Date: April
14, 2008 |
By: |
/s/ Stephen
D. King |
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Stephen
D. King
Chief
Executive Officer
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