Dave, It appears the lure of $11-12 million in cash proved to be too tempting to management. With Wilson, Logue, and Hilliou, we are paying 3 people who are not even there on a day-to-day basis. Sorry, I see Wilson's business address is BNGO's corp. HQ address - he probably got free rent there as well. It's too bad, because this one could have flown under the right direction. I've taken the liberty of copying from Edgar, the current agreements now in effect with the officers and directors.
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EMPLOYMENT AGREEMENTS--------------
The Company has entered into employment agreements with each of its executive officers. Mr. Hilliou's employment agreement terminates on April 29, 2001 and provides for a $225,000 annual base salary and a cash bonus based upon the Company's results of operations. Mr. Wilson's employment agreement terminates on September 30, 2002 and provides for a minimum $225,000 annual base
salary and a cash bonus based upon the Company's results of operations. Mr. Wilson's agreement restricts his competition with the Company during its term. Mr. Orton's employment agreement terminates on December 31, 2000 and provides for an annual base salary of $100,000 and a cash bonus based upon the Company's
results of operations. The Company and Mr. Henry are currently negotiating the termination of his employment agreement. Messrs. Mims and Harrison have employment agreements terminating on September 23, 2000 and December 18, 2000, respectively. Mr. Mim's agreement provides for an annual base salary of
$250,000, subject to adjustment. Mr. Harrison's agreement provides for an annual base salary of $125,000. Both agreements allow annual bonuses at the discretion of the Board. Messrs. Hilliou, Orton, Henry, Mims and Harrison are prohibited from disclosure of the Company's confidential information and from competing with the Company during the term of their agreements and for two years thereafter.
STOCK OPTIONS AND WARRANTS-------------
There are currently outstanding options to purchase 1,722,333 shares of Common Stock that have been granted to employees, directors, and consultants of the Company pursuant to its four employee stock option plans. These options have a weighted-average option price of $2.68, terminate between 2000 and 2005, and vest pursuant to varying schedules. Messrs. Hilliou, Wilson, Orton, and
Henry hold options to purchase 300,000, 300,000, 125,000, and 191,667 shares of Common Stock, respectively, at weighted-average option prices of $3.75, $0.96, $3.80, and $3.15, respectively. Options to purchase an additional 44,334 shares of Common Stock are available for issuance pursuant to the Company's existing
employee stock option plans. In addition, consultants to the Company and a former non-employee director hold options and warrants to purchase 468,000 shares of Common Stock at a weighted average option price of $4.63, terminating between 2000 and 2005 and vesting pursuant to varying schedules. All of these options and warrants would represent 18.6% of the total Common Stock outstanding
if they had vested and had been exercised at April 6, 1998. All options granted pursuant to the Company's employee stock option plans have been approved by the Company's shareholders.
CERTAIN TRANSACTIONS--------------
On September 24, 1997, the Company acquired Gold Strike, Inc., a South Carolina video gaming machine business, in a stock-for-stock acquisition. Michael W. Mims, the sole shareholder of Gold Strike, received 827,680 shares of Common Stock for 100% of the outstanding shares of Gold Strike. There was no cash consideration involved in the acquisition. Mr. Mims became Vice-President and a director of the Company after the closing. In November 1997, the Company advanced $60,000 to Mr. Mims at an interest rate of 8% per annum. Mr. Mims is to repay the advance to the Company beginning in 1998. On December 18, 1997, the Company acquired Darlington Music Company, Inc., a South Carolina video gaming business, in a stock-for-stock acquisition. George M. Harrison, Jr., one of three shareholders of Darlington, received 333,333 shares of Common Stock for his outstanding capital stock in Darlington. There was no cash consideration in the acquisition. Mr. Harrison became an employee of the Company after the closing and subsequently became Chairman of the Board. Prior to the transaction, Darlington advanced $140,000 to Mr.
Harrison. As a result of the acquisition, the Company assumed this receivable, which bears interest at 8% and is due by December 31, 2000.
Whew! |
