Document:

Exhibit 10.2
    

    

    

    
    	
          
            BRAINTECH, Inc.
          

        

    

    
      CONFIDENTIAL
    

    
      Employment Agreement
    

    
      THIS AGREEMENT dated the 12th day of August , 2008.
    

    
      BETWEEN: Adil Shafi
    

    
       (the "EXECUTIVE")
    

    
      AND:
    

    
      BRAINTECH, INC.
    

    
      ("BRAINTECH")
    

    
      WHEREAS:
    

    
      A.       BRAINTECH is a robotic vision software technology company that
      is publicly traded on the NASD Over-The-Counter Bulletin Board;
    

    
      B.       The business objectives for BRAINTECH include growing and
      diversifying its existing customer base, revenue generation, technology
      development, business development and market coverage.
    

    
      C.       In order to achieve the business objectives BRAINTECH wishes to
      engage the EXECUTIVE to serve as Chief Operating Officer of Braintech
      and President of Braintech’s subsidiaries SHAFI, Inc. and SHAFI
      Innovation, Inc. on the terms and conditions set forth in this Agreement.
    

    
      IN CONSIDERATION of the mutual promises contained herein, the parties
      agree as follows:
    

    
      1.        EMPLOYMENT:  BRAINTECH,
      as of August 16, 2008, hereby employs EXECUTIVE to perform the duties
      and render the services customarily required for the position
      hereinafter set forth, and EXECUTIVE hereby accepts said employment and
      agrees faithfully to perform said duties and render said services,
      subject to the terms and conditions of this Agreement.
    

    
      2.        TERM:  The
      EXECUTIVE employment with BRAINTECH is for a three year term and will
      continue as such thereafter, upon mutual written agreement between CEO
      and EXECUTVE, as provided in this Agreement.
    

    
      3.        REPORTING: The
      EXECUTIVE shall report directly to BRAINTECH’s Chief Executive Officer
      (hereinafter referred to as the “CEO”).
    

    
      4.       DUTIES:  The
      EXECUTIVE agrees to perform such duties as required for the position and
      carry out the policies, procedures and projects independently or as
      assigned by the CEO, including without limitation (but with the
      exception of legal and financial management roles):
    

    
      
        

        

      

      
        
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      (a)           Manage
      overall technology of combined company. In this role, EXECUTIVE shall
      manage the product lines and technical personnel of BRAINTECH and SHAFI,
      Inc. and SHAFI Innovation, Inc.  BRAINTECH’s Vancouver technical teams
      and a US based technical team comprised of current and new technical
      personnel will report to EXECUTIVE. In addition, EXECUTIVE shall define
      product and personnel direction, plan product development and manage
      testing and release of all future products including synergies between
      the combined product offerings. EXECUTIVE shall work closely with
      BRAINTECH’s market oriented sales teams. EXECUTIVE shall manage
      technical documentation, the technical training of and technical support
      to BRAINTECH’s employees, partners and customers. EXECUTIVE, shall
      transition to Houghton, MI on or about September 30, 2009.
    

    
      (b)           Market access and business acceleration. In this role,
      EXECUTIVE shall use his market knowledge, contacts and business
      relationships, in cooperation with BRAINTECH’s sales teams, to create
      market access and business acceleration for BRAINTECH. This market
      access will be for all BRAINTECH vertical markets and shall leverage
      relationships with robot companies, vision companies, systems
      integrators, universities, and relevant industry organizations (e.g.,
      associations and publishing entities).
    

    
      (c)           Develop and enhance processes and practices needed to
      accomplish the company’s goals for doing business with Industrial End
      Users, Consumer End Users, Government End Users, System Integrators,
      Channel Partners and Robot Manufacturers. In this role, EXECUTIVE shall
      use his integrator development experience to create, in cooperation with
      BRAINTECH’s sales teams, a formal systems integrator program (called
      “BrainPower 1”) replete with paths for certification, exclusivity and
      continued loyalty through mutually incentivized initiatives. This
      integrator program will include classroom, hands on and web based
      training (both sales and technical), partner seminars, web based and
      linked promotion, BRAINTECH brand promotion, periodic sales reviews for
      BRAINTECH exclusive integrators and annual sales commitments.
    

    
      (d)           Develop and commercialize enhanced product offering. In
      this role, EXECUTIVE shall further his responsibilities in Paragraph
      4(a) above, to create a best of breed future product line from the
      combined products of BRAINTECH’s subsidiaries. Final decisions regarding
      the Company’s product line and branding will remain with CEO. Such
      planning shall be based on reliable and practical software engineering,
      primary market research, a competitive analysis of the marketplace, a
      capital budgeting process that justifies an acceptable return on
      investment and recommendation from BRAINTECH’s customer oriented sales
      teams. From this input, EXECUTIVE shall manage a judicious balance of
      technical resources for two equally important objectives: i) Product
      support, enhancement, training and field execution support of existing
      products for REPEAT EXISTING sales, and ii) Product development,
      testing, release, training and field execution support of new products
      for innovation leadership and competitively advantaged NEW FUTURE sales.
    

    
      (e)           Hire, manage and direct employees as required to support
      the business objectives associated with all technical activities. In
      this role, EXECUTIVE shall, with approval from BRAINTECH’s CEO, hire,
      manage and direct employees as required and allowed by BRAINTECH’s cash
      flow to further the objectives listed in Paragraphs 4(a) through 4(d)
      above. This shall include the development of a formal training and
      continued Certification Program (called “BrainPower 2”) for Third Party,
      non–competitive Support Companies, Consultants, Writers in the trade
      press, for BRAINTECH’s product line. These resources shall be managed by
      EXECUTIVE to maximize BRAINTECH’s leverage and capacity to execute many
      projects reliably in the marketplace.
    

    
      
        

        

      

      
        
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      5.        BASE SALARY:
      BRAINTECH shall pay the EXECUTIVE, in consideration for the Services an
      annual base salary of US$180,000, which shall be increased by at least
      10% at each anniversary of the EXECUTIVE’s employment and additional
      possible increase adjusted at the discretion of the CEO, based on
      performance above and beyond achieving certain milestones.
    

    
      6.        SIGNING
      BONUS: Immediately upon execution of this Agreement,
      BRAINTECH shall pay the EXECUTIVE US$15,000 of his first month of annual
      base salary in advance [August 16 2008 to September 15, 2008], and pay
      the Executive the following amounts: August 30 $3,750, September 15
      $3,750, September 30 $3,750 and thereafter biweekly payments of $7,500
      over the remaining first year period until August 15, 2009 in by-weekly
      payroll periods with direct bank deposits.
    

    
      7.        BONUS STOCK
      COMPENSATION:  The EXECUTIVE shall also be entitled to bonuses,
      based on achieving certain milestones, which will be provided in the
      form of issued restricted Common Stock (the “Bonus Stock”) of the
      Company and options to purchase Common Stock (the “Bonus Stock Options”)
      of the Company, in accordance with the Bonus Stock and Bonus Stock
      Option Incentive Plan (the “Bonus Plan”) approved by the Board of
      Directors on October 22, 2007.  The milestones and level of incentive
      compensation are detailed in the EXECUTIVE Bonus Securities Compensation
      Structure as set forth in Appendix I of this Agreement.
    

    
      8.        BONUS CASH INCENTIVE:
      The EXECUTIVE is eligible to earn an annual cash bonus at each
      anniversary of the EXECUTIVE’s employment (the "Bonus").  EXECUTIVE'S
      Bonus shall not be less than 25% and not more than 50% of EXECUTIVE'S
      annual salary based upon the extent to which revenues goals of BRAINTECH
      are achieved.  
    

    
      9.        BENEFITS:   The
      EXECUTIVE shall be entitled to the following benefits:
    

    
      (a)       Leave.  Thirty (30)
      days of paid leave per year.  This Leave may be used as vacation,
      personal leave or short-term sickness.  The (30) days of leave is vested
      immediately upon signed execution of the EXECUTIVE Employment Agreement;
    

    
      (b)       Holidays.  Ten (10)
      paid holidays, which correspond with the US Federal Government Holidays;
    

    
      (c)       Medical/Group Life
      Insurance.
    

    
      i.        BRAINTECH shall both provide to the EXECUTIVE and pay the full
      premium for a comprehensive family health insurance policy provided
      under the Company’s existing family health and group life insurance
      plan. BRAINTECH shall pay for third party family health insurance
      utilized by EXECUTIVE until BRAINTECH’s formal health insurance policy
      becomes effective after start of EXECUTIVE employment.
    

    
      ii.       BRAINTECH agrees to provide group life insurance and
      accidental death & dismemberment (AD&D) coverage in the amount of
      US$25,000 which amount is standard executive amount for company.
    

    
      10.       EXPENSE REIMBURSEMENT:
      EXECUTIVE shall be entitled to a BRAINTECH company credit card for all
      reasonable expenses approved in advance by CEO, including travel and
      entertainment, incurred by EXECUTIVE in the performance of EXECUTIVE'S
      duties.  EXECUTIVE will maintain records and written receipt as required
      by the Company policy and reasonably requested by the CEO to
      substantiate such expenses.  All non credit card expenses approved in
      advance by CEO are to be reimbursed as soon as administratively
      practicable after submission.
    

    
      11.       OTHER EXPENSE:  The
      EXECUTIVE shall be entitled to  reimbursement of following expenses:
    

    
      
        

        

      

      
        
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      (a)       Cell Phone/Data Services.  The
      EXECUTIVE shall be entitled to reimbursement of actual expenses incurred
      for cell phone and data services used to conduct business.
    

    
      (b)       Professional
      Organizations Dues. The EXECUTIVE shall be entitled to attend and
      participate in pre-approved by CEO and appropriate professional meetings
      at the local, state, and national levels with the reasonable expenses
      for such attendance to be borne by BRAINTECH, including membership fees
      and dues. The EXECUTIVE may hold offices or accept responsibilities in
      these professional organizations provided that such responsibilities are
      applicable to the EXECUTIVE position or do not interfere with the
      performance of his duties as stated herein. Specifically, BRAINTECH will
      support EXECUTIVE travel and award cost for his Frost and Sullivan award
      in San Francisco on September 15, 2008 and allow EXECUTIVE to travel and
      practice 10 hours of teaching per month at Michigan Technological
      University. During such trips, EXECUTIVE shall also monitor progress of
      HubZone and 8(a) applications for SHAFI Innovation, Inc. in Houghton to
      enable BRAINTECH to win preferential and easier to obtain Government
      contracts.
    

    
      12.       TERMINATION:
      Termination shall mean the cessation of EXECUTIVE employment by
      BRAINTECH (other than as a result of EXECUTIVE death or permanent
      disability) which is not promptly (within ten (10) business days)
      followed by re-employment of the EXECUTIVE by  BRAINTECH or any
      subsidiary of the Company.
    

    
      (a)       “Good Cause” shall mean:
    

    
      i.        the willful and continued failure by the EXECUTIVE to
      substantially perform his duties hereunder (other than due to incapacity
      from physical or mental illness);
    

    
      ii.         gross misconduct which is or could  reasonably be expected
      to become materially injurious to BRAINTECH or its business or
      reputation, including, without limitation, fraud, or misappropriation of
      Company property or unauthorized disclosure and/or non-disclosure of
      confidential information; and
    

    
      iii.      dishonesty resulting, or intending to result, directly or
      indirectly, in gain or personal enrichment at the expense of the Company;
    

    
      (b)       “Good Reason” shall mean:
    

    
      i.        any material reduction of the duties or responsibilities of
      the EXECUTIVE or assignment of any duties inconsistent with EXECUTIVE
      position as Chief Operating  Officer; or
    

    
      ii.       any material adverse change in EXECUTIVE compensation or
      employment benefits and failure by BRAINTECH, without EXECUTIVE consent,
      to pay to EXECUTIVE any portion of his earned compensation within ten
      (10) business days of the date such compensation is due or other breach
      by BRAINTECH of any of its obligations hereunder;
    

    
      iii.      any material change in the Bonus Stock and Bonus Stock Option
      Incentive Plan which forms part of this Agreement;
    

    
      iv.       any mandatory change in the geographic location of EXECUTIVE
      principal place of business without EXECUTIVE’s consent; or
    

    
      v.        any requirement for the EXECUTIVE to relocate outside of the
      MI area without EXECUTIVE’s consent;
    

    
      (c)       "Change in Control" shall mean the consummation of any of the
      following events:
    

    
      i.        a sale, lease or disposition of all or substantially all of
      the assets of the Company, or
    

    
      
        

        

      

      
        
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      ii.       a sale, merger, consolidation, reorganization,
      recapitalization, sale of assets, stock purchase, contribution or other
      similar transaction (in a single transaction or a series of related
      transactions) of the Company with or into any other corporation or
      corporations or other entity, or
    

    
      iii.      any other corporate reorganization, where the stockholders of
      the Company immediately prior to such event do not retain (in
      substantially the same percentages) beneficial ownership, directly or
      indirectly, of more than fifty percent (50%) of the voting power of and
      interest in the successor entity or the entity that controls the
      successor entity, provided, however, that no Change in Control shall be
      deemed to have occurred due to the conversion or payment of any equity
      or debt instrument of the Company which is outstanding on the date
      hereof.
    

    
      (d)       Termination By BRAINTECH.
      BRAINTECH may terminate the employment of the EXECUTIVE with 30 day
      notice for any reason.  In such event, the EXECUTIVE or the EXECUTIVE
      heirs will be entitled to all unpaid compensation and benefits, stocks
      and options earned (achieved milestones as of termination date) up to
      the termination date.   In the event BRAINTECH terminates EXECUTIVE’s
      employment for Good Cause, EXECUTIVE shall be entitled to keep all Bonus
      Stock for which the milestone conditions have been satisfied, free of
      all restrictions, escrows [after year of escrow for indemnification]or
      other conditions and to all Bonus Stock Options which are vested as of
      such time and such Bonus Stock Options may be exercised at any time
      within twenty-four (24) months of such termination.
    

    
      (e)       Termination By The
      EXECUTIVE. The EXECUTIVE may terminate this Agreement for any reason
      by giving CEO 30 day’s prior written notice. The EXECUTIVE will be
      entitled to treat his employment as having been terminated by BRAINTECH
      without Good Cause in the event of any Good Reason, provided EXECUTIVE
      has given notice of such Good Reason event or condition to BRAINTECH and
      if such event or condition is capable of being cured, BRAINTECH has
      failed to do so within 30 business days after receipt of such notice.
    

    
      (f)       Termination Due To Total
      Permanent Incapacity.  Notwithstanding any other provision in this
      Agreement, the Company may terminate the employment of the EXECUTIVE
      without notice in the event of total permanent disability or death of
      the EXECUTIVE. For the purposes of this section, “Total Permanent
      Disability” means any physical or mental incapacity, disease or
      affliction as determined by a legally qualified medical practitioner,
      which prevents the EXECUTIVE from performing his obligations as set out
      in this Agreement and which incapacity persists for a continuous period
      of six months or more.  This provision will also be subject to any duty
      to accommodate or human rights laws imposed by any government authority
      and which supersede any terms agreed to between the parties.
    

    
      (g)       Severance Pay. In
      the event of a termination of this Agreement by the Company without Good
      Cause, due to Total Permanent Disability or due to the death of the
      EXECUTIVE, or by the EXECUTIVE for Good Reason, then the EXECUTIVE or
      the EXECUTIVE heirs will be entitled to:
    

    
      i.        unpaid compensation and benefits described hereunder earned up
      to the termination date to be paid within 10 business days of
      termination; and
    

    
      ii.       a lump sum payment
      (less all deductions required by law such as income taxes) equal to the
      remainder of the then Base Salary remaining in the three year employment
      term set out in paragraph 5 to be paid within 20 business days after the
      Termination Date.  The EXECUTIVE agrees that after the Termination Date,
      but prior to payment of the severance pay and any outstanding bonus
      monies called for herein, EXECUTIVE shall execute a release, in the form
      of a severance agreement, of any and all claims he may have against the
      Company and its officers, employees, directors, parents and
      affiliates.  EXECUTIVE understands and agrees that the payment of the
      severance pay and bonus called for by this paragraph are contingent on
      his execution of the previously described release of claims. For
      avoidance of doubt, if severance is paid to EXECUTIVE then
      non-compete will be effective.
    

    
      
        

        

      

      
        
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      (h)       Severance Pay Following
      a Change in Control.  In the event a Change in Control occurs and,
      within one (1) year thereafter, the employment of the EXECUTIVE is
      terminated by the Company for a reason other than for Good Cause or by
      the EXECUTIVE for Good Reason, then the Company shall pay to the
      EXECUTIVE severance pay herein.  
    

    
      (i)       Bonus Stock and Bonus
      Stock Option.  Despite anything to the contrary set out in The Bonus
      Stock and Bonus Stock Option Incentive Plan (Schedule “A”), in the event
      of termination of EXECUTIVE’s employment hereunder, other than by
      BRAINTECH for Good Cause or by EXECUTIVE without Good Reason:
    

    
      i.        all restrictions, including escrow restrictions, satisfaction
      of milestones on Bonus Stock issued to the EXECUTIVE will cease and the
      EXECUTIVE will have clear title to the Bonus Stock subject to no further
      restrictions or contingencies, and
    

    
      ii.       all Bonus Stock Options granted as of the date of termination
      will immediately vest in the EXECUTIVE (and all milestones shall be
      deemed satisfied), and may be exercised on any date between the date of
      termination and a date which is 36 months from the date of termination.
    

    
      13.       CONFIDENTIALITY: The
      EXECUTIVE agrees to keep the terms and conditions of this Agreement
      confidential and BRAINTECH reserves the right to terminate the Agreement
      if the EXECUTIVE publicly discloses any of the terms and conditions
      contained herein without the specific written consent of BRAINTECH.  In
      consideration of the execution of this Agreement, the EXECUTIVE shall
      execute a Non-Competition Agreement in the form provided by BRAINTECH,
      with respect to, BRAINTECH, Inc., and any subsidiaries and affiliates
      thereof.
    

    
      14.       BEST EFFORTS:   The
      EXECUTIVE will, at all times and full-time, faithfully, industriously
      and to the best of his ability, experience and talents, perform the
      Services provided herein or any other duties required of or from him or
      her pursuant to the express and implied terms set forth in this
      Agreement, to the reasonable satisfaction of BRAINTECH.
    

    
      15.       AUTOMOTIVE SALES
      REVENUE and EXECUTIVE SALARY.
    

    
      (a)       DEFINITION: Sales Revenue in which End User of project
      manufactures product(s) related to automobiles.
    

    
      (b)       PURPOSE: For EXECUTIVE to receive as additional salary
      compensation for duration defined below for sales related to SHAFI
      products to Automotive customers.
    

    
      (c)       DURATION: From the date of this Agreement through March 31,
      2009 if there is no material adverse tax effect (as result of Buyer
      changing contemplated tax structure of transaction) to EXECUTIVE in
      Stock Purchase Acquisition by BRAINTECH of SHAFI, Inc. and SHAFI
      Innovation, Inc.; otherwise from the date of this Agreement through
      September 30, 2009.
    

    
      (d)       MECHANISM: Net [of all costs] Automotive Revenue received and
      collected by Buyer related to SHAFI products disbursed to EXECUTIVE at
      the next biweekly payroll date as Automotive Salary Compensation.
    

    
      
        

        

      

      
        
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      16.       SEVERABILITY: Should
      any provision of this Agreement be declared or held void, unenforceable
      or illegal for any reason, such invalidity shall not affect the validity
      or enforceability of the remainder of the Agreement, and the Agreement
      shall continue in full force and effect and be construed as if such
      Agreement had been executed without the void, unenforceable or illegal
      portion.
    

    
      17.       SUCCESSORS; BINDING
      AGREEMENT:  BRAINTECH may require any successor;
    

    
      (a)       whether direct or indirect, by purchase, merger, consolidation
      or otherwise to all or substantially all of the business and/or assets
      of BRAINTECH to expressly assume and agree to perform this Agreement in
      the same manner and to the same extent that BRAINTECH would be required
      to perform it if no such succession had taken place.  BRAINTECH as
      hereinbefore defined and any successor to its business and/or assets as
      aforesaid which executes and delivers the agreement provided for in
      paragraph 20 or which otherwise becomes bound by all the terms and
      provisions of this Agreement by operation of law.
    

    
      (b)       This Agreement and all rights of the EXECUTIVE hereunder shall
      inure to the benefit of and be enforceable by the EXECUTIVE'S personal
      or legal representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees.  If the EXECUTIVE should die while
      any amounts are payable to him hereunder all such amounts unless
      otherwise provided herein, shall be paid in accordance with the terms of
      this Agreement to the Executive's devisee, legatee, or other designee
      or, if there be no such designee, to the Executive's estate.
    

    
      18.       GOVERNING LAW:   This
      Agreement shall be governed by and construed in accordance with the
      domestic laws of the State of Delaware without giving effect to any
      choice of law or conflict of law provision or rule (whether of Delaware,
      Province of British Columbia or any other jurisdiction) that would cause
      the application of the laws of any jurisdiction other than the State of
      Delaware.
    

    
      19.       PARAGRAPH HEADINGS:  The
      titles to the paragraphs of this Agreement are solely for the
      convenience of the parties and shall not be used to explain, modify,
      simplify, or aid in the interpretation of the provisions of this
      Agreement.
    

    
      20.       COMPLETE AGREEMENT:  This
      Agreement (including the Non-Disclosure and Confidentiality Agreement
      referenced herein) contains the complete agreement concerning the
      employment arrangement between the parties and shall, as of the
      effective date hereof, supersede all other agreements between the
      parties.  The parties stipulate that neither of them has made any
      representation with respect to the subject matter of this Agreement or
      any representation including the execution and delivery of this
      Agreement except such representations as are specifically set forth in
      this Agreement and each of the parties acknowledges that [he or she] or
      it has relied on its own judgment in entering into this Agreement.
    

    
      
        

        

      

      
        
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      IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT ON
    

    
      THE 12th day of August, 2008.
    

    
      BRAINTECH, Inc.
    

    
      Per:                                                        
    

    
      Frederick Weidinger, CEO
    

    
      Per:                                                        
    

    
      Adil Shafi, EXECUTIVE
    

    
      
        

        

      

      
        
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      Employment Agreement Appendix I
    

    
      BONUS STOCK OPTION COMPENSATION STRUCTURE
    

    
      This Employment Agreement Appendix I details the stock options the
      EXECUTIVE will be entitled to as described in paragraph 7 of the
      Employment Agreement between the EXECUTIVE and BRAINTECH dated August
      12, 2008. Bonus Stock Option grants are subject to the terms and
      conditions of the Bonus Stock and Bonus Stock Option Incentive Plan,
      attached hereto as Schedule I.
    

    
      MILESTONES
    

    
      Each Milestone is comprised of Revenue and Non – Revenue Related
      Commitments. The achievement of each Revenue Related Commitment is
      contingent on the following five conditions (Revenue Related
      Conditions). A breach of any one of these Revenue Related Conditions and
      the failure to cure the same within 60 days thereafter shall void the
      requirement by EXECUTIVE to achieve his Revenue Related Commitment.
      These conditions will remain only as long as the Revenue Related
      Commitments for the below Milestones are in effect, unless modified
      through written mutual agreement between CEO and EXECUTIVE.
    

    
      Revenue Related Condition 1: Direct Hiring : Hiring by BRAINTECH
      of Elsie White and Donna Burr on or about September 1, 2008. Each
      employee shall agree to employment offer and conditions thereof.  Donna
      will work out of the to-be-selected Detroit area office unless there
      exists a hardship agreed to by CEO.  Elsie White will travel when
      necessary but will track and monitor and assist with Government Sales
      from her home in Houghton, Michigan.
    

    
      Revenue Related Condition 2: Regular Operational Execution
      Authority to EXECUTIVE : EXECUTIVE shall have direct operational
      authority for technical and sales functions (exception: the Chief
      Technology Officer and Chief Sales Officer shall report to CEO but have
      dotted line responsibility to EXECUTIVE but EXECUTIVE will have
      operational authority over each function).  EXECUTIVE shall have full
      authority to execute daily operational authority of business for the
      technology and sales of the BRAINTECH. Strategic directions of BRAINTECH
      in both respects shall be with agreement of CEO. EXECUTIVE will have
      authority to exercise disciplinary warnings and take necessary actions
      in order to direct technical and sales functions of the BRAINTECH.
      EXECUTIVE shall notify and obtain prior consent of CEO of such warnings
      and actions.
    

    
      Revenue Related Condition 3: Employee Incentive for Revenue
      Related Goals  : EXECUTIVE to develop and prepare Bonus Securities
      (bonus stock and stock options) Compensation Plan to motivate and incent
      Braintech employees to achieve revenue commitments. Such Bonus Plan
      shall be subject to approval of CEO and the Compensation Committee of
      the Board of Directors of BRAINTECH. Compensation Plan will be part of
      Sales Plan due by September 30, 2008.
    

    
      Revenue Related Condition 4: Organizational Hierarchy and
      Decisions: EXECUTIVE as Chief Operating Officer of BRAINTECH and
      President of SHAFI, Inc., and SHAFI Innovation, Inc. shall report
      directly to CEO for the duration of his three year Employment Agreement.
      EXECUTIVE to confer weekly or more frequently with CEO or upon CEO
      request.  EXECUTIVE shall be given daily operational authority regarding
      revenue and sales. Strategic sales decisions as well as marketing and
      financial sales (ROI) decisions shall be subject to consultation with
      and the consent of CEO.
    

    
      Revenue Related Condition 5: Market Oriented Communications : CEO
      (or his designee) responsible for all Public Relations and Investor
      Relations of BRAINTECH.
    

    

    

    

    
      
        

        

      

      
        
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      Milestone 1:    500,000 Bonus Stock Compensation Options shall be earned
      as of the Quarter Ending Sepember 30, 2009, provided the following goals
      and commitments are achieved during such quarter:
    

    
      Priced at Signing of Employment Agreement.
    

    
      Cash Bonus at one year Anniversary of Employment Agreement as defined
      above.
    

    
      Revenue Related Commitment : $1,750,000 in roll – up revenues from all
      products.
    

    
      Non – Revenue Related Commitment :
    

    
      •   Concept, develop and launch, in cooperation with Vice President of
      Sales and Chief Technology Officer of BRAINTECH, an enhanced product
      offering. Create a best of breed future product line from the combined
      products of BRAINTECH’s subsidiaries. Plan based on reliable and
      practical software engineering, primary market research, a competitive
      analysis of the marketplace, and BRAINTECH’s customer oriented sales
      teams.
    

    
      •   Concept, develop and launch four enhanced products by September 30,
      2009.
    

    
      •   Assist Vice President of Sales of BRAINTECH to market, promote and
      quote these four products by September 30, 2009.
    

    

    

    

    
      Milestone 2:    500,000 Bonus Stock Compensation Options shall be earned
      as of the Quarter Ending December 31, 2009, provided the following goals
      and commitments are achieved during such quarter:
    

    
      Priced at Signing of Employment Agreement.
    

    
      Revenue Related Commitment : $1,950,000 in roll – up revenues from all
      products.
    

    
      Non – Revenue Related Commitment :
    

    
      •   Manage a judicious balance of technical resources for two equally
      important objectives: i) Product support, enhancement, training and
      field execution support of existing products for repeat EXISTING sales,
      and ii) Product development, testing, release, training and field
      execution support of new products for innovation leadership and
      competitively advantaged NEW future sales.
    

    
      •   Create training, documentation and certification for internal
      engineering teams for current products by December 31, 2009.
    

    
      •   Create training, documentation and certification for internal
      engineering teams for four new products by December 31, 2009.
    

    
      INCENTIVE BONUS SUMMARY
    

    
    	
          
            Milestones
          

        	
          
            Bonus Stock
          

        	
          
            Bonus Stock Options
          

        
	
          
            Milestone 1:
          

        	
           
        	
          
            500,000
          

        
	
          
            Milestone 2:
          

        	
           
        	
          
            500,000
          

        
	
          
            Total
          

        	
           
        	
          
            1,000,000
          

        

    

    
      10EXHIBIT 10.3
    

    
      NON-COMPETITION AGREEMENT
    

    
      THIS NON-COMPETITION AGREEMENT (this “Agreement”)
      is being executed and delivered as of August 12, 2008, by ADIL SHAFI
      (the “Seller”) in favor of, and for the benefit of
      BRAINTECH, INC., a Nevada corporation (“Buyer”), SHAFI,
      INC., a Michigan corporation (“SI”), and SHAFI INNOVATION,
      INC., a Michigan corporation (“SII”)(SI and SII are also
      referred to herein each, as a “Company” and together, the “Companies”),
      and each of the Buyer’s and each Company’s present and future Affiliates
      (as defined below), successors and direct and indirect subsidiaries
      (including the Buyer and the Companies, collectively, the “Covered
      Parties” and each a “Covered Party”).  
    

    
      RECITALS
    

    
      A.        As the sole stockholder, director and officer of each
      of the Companies, the Seller has obtained extensive and valuable
      knowledge and confidential information concerning the business of the
      Companies and has contributed to the value of the Companies.
    

    
      B.        Pursuant to a Share Purchase Agreement dated of even
      date herewith, by and among the Buyer, the Companies, and the Seller
      (the “Purchase Agreement”), the Seller is selling to the
      Buyer, and the Buyer is purchasing, all of the issued and outstanding
      capital stock of SI and 80% of the outstanding capital stock of SII (the
      “Transaction”).
    

    
      C.        In connection
      with the Transaction (and as a condition to the consummation of such
      Transaction), and to enable the Buyer to secure more fully the benefits
      of such Transaction, including the protection and maintenance of the
      Company’s goodwill and confidential information, the Buyer has required
      that the Seller enter into this Agreement.
    

    
      D.        The Seller is
      entering into this Agreement in order to induce the Buyer to consummate
      the transactions contemplated by the Purchase Agreement, pursuant to
      which the Seller will receive a material benefit.
    

    
      AGREEMENT
    

    
               In order to induce the Buyer to consummate the Transaction and
      the other transactions contemplated by the Purchase Agreement, and for
      other good and valuable consideration, the receipt and sufficiency of
      which is hereby acknowledged, the Seller agrees as follows:
    

    
      1.        Restriction on Competition.
    

    
                          (a)       Certain
      Definitions.  
    

    
                                    (i)       The SHAFI Companies are engaged
      in the Machine Vision Software industry (the “Business”).
    

    
                                    (ii)      The term “Person”
      means an individual, a corporation, an association, a partnership,
      limited liability company, joint stock company, an estate, a trust or
      any other entity or organization.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
                                    (iii)     As used herein “Affiliate”
      means any person or entity that, directly or indirectly, Controls, is
      Controlled by, or is under common Control with or of, such entity.  The
      term “Control” (including, with correlative meaning, the terms
      “Controlled by” and “under common Control with”), as used with respect
      to any entity, means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management and policies of
      such entity, whether through the ownership of voting securities, by
      contract or otherwise.    
    

    
                          (b)       Non-Competition.  For
      a period commencing upon the date hereof and ending upon the later of
      three (3) years from the date hereof or one (1) year from the date
      Seller’s employment with Buyer terminates (the “Restricted
      Period”), Seller shall not directly or indirectly (whether as an
      employee, operator, agent, independent contractor, consultant, owner,
      director, officer, shareholder, investor, general or limited partner,
      joint venturer, guarantor or any other relationship similar to the
      foregoing, except for Passive Investments), anywhere in North America or
      Europe:
    

    
                                    (i)       engage in or assist any other
      person or entity to engage in any business which competes with the
      Business or any business in which any Covered Party is engaged at any
      time during the twelve (12) months prior to the termination of Seller’s
      employment with Buyer (collectively, the “Restricted Business”);
      or
    

    
                                    (ii)      provide to any other entity that
      was a client or prospective client of any Covered Party as of the date
      of termination of Seller’s employment with Buyer or during the twelve
      (12) months prior to such termination, products or services directly or
      indirectly competitive with the Restricted Business;
    

    
      provided, however, that Seller may purchase or otherwise acquire up to
      two percent (2%) of any class of the securities of any Person (but may
      not otherwise participate or assist in the activities of such Person)
      engaged in the Restricted Business if such securities are listed on any
      national or regional securities exchange or have been registered under
      Section 12(g) of the Securities Exchange Act of 1934 (“Passive
      Investments”).
    

    
      2.        No Solicitation; No Disparagement.  
    

    
                          (a)       No
      Solicitation.  Unless otherwise agreed in writing, during the
      Restricted Period Seller shall not directly or indirectly engage in the
      following:
    

    
                                    (i)       Solicit or knowingly encourage
      any employee or independent contractor of any Covered Company to leave
      such employment or service (except for the termination of employees or
      independent contractors in the performance of Seller’s duties to Buyer)
      provided that any general solicitation of employment or service,
      directly or indirectly by  Seller through newspapers, periodicals, or
      trade publications not specifically directed at any employee or
      independent contractor of any Covered Company shall not constitute a
      breach of his non-solicitation obligation under this clause (a)(i); or
    

    
                                    (ii)      Knowingly hire any person within
      less than one (1) year after that person has voluntarily terminated his
      employment or service as an independent contractor with any Covered
      Company.
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
                          (b)       Non-Disparagement.  The
      Seller agrees that, during the Restricted Period, the Seller will not
      knowingly engage in any conduct that involves the making or publishing
      of written or oral statements or remarks (including, without limitation,
      the repetition or distribution of derogatory rumors, allegations,
      negative reports or comments) that are disparaging, deleterious or
      damaging to the integrity, reputation or good will of one or more
      Covered Parties or their respective management, officers, employees,
      independent contractors or consultants.  This provision is not
      applicable to truthful testimony obtained through subpoena or to any
      truthful information provided pursuant to investigation by any
      governmental body.
    

    
      3.        Early Termination of Restricted Period.  If,
      and only if, Seller’s employment with Buyer pursuant to that certain
      Employment Agreement between Buyer and Seller, dated of even date
      herewith (the “Employment Agreement”), is terminated by
      Buyer without “Good Cause” (as defined in the Employment Agreement) or
      by Seller for “Good Reason” (as defined in the Employment Agreement) in
      either case as contemplated by Section 12(g) thereof, and Buyer fails to
      satisfy its obligations to pay the severance pay required under said
      Section 12(g), the Restricted Period shall end on the date that is
      thirty (30) days after the effective date of such termination.        
    

    
      4.        Representations and Warranties.  The
      Seller represents and warrants, to and for the benefit of the Covered
      Parties, that: (a) the Seller has full power and capacity to execute and
      deliver, and to perform all of the Seller’s obligations under, this
      Agreement; and (b) neither the execution and delivery of this Agreement
      nor the performance of the Seller’s obligations hereunder will result
      directly or indirectly in a violation or breach of any agreement or
      obligation by which the Seller is bound.
    

    
      5.        Injunctive Relief.  The
      Seller agrees that, in the event of any breach or threatened breach by
      the Seller of any covenant or obligation contained in this Agreement,
      each applicable Covered Party will be entitled (in addition to any other
      remedy at law or in equity that may be available, including monetary
      damages) to obtain an injunction restraining such breach or threatened
      breach, without the necessity of proving actual damages or posting bond
      or security, which Seller expressly waives, and the Seller hereby
      consents to any such remedy in connection with any such breach.
    

    
      6.        Integration and Non-Exclusivity.  This
      Agreement and the Purchase Agreement and the documents referenced herein
      and therein contain the entire agreement between the Seller and the
      Covered Parties concerning their subject matter and no other
      representations, promises, agreements or understandings, written or
      oral, concerning such subject matter will be of any force or
      effect.  Notwithstanding the foregoing, the rights and remedies of the
      Covered Parties under this Agreement are not exclusive of or limited by
      any other rights or remedies which they may have, whether at law, in
      equity, by contract or otherwise, all of which will be cumulative (and
      not alternative).  Without limiting the generality of the foregoing, the
      rights and remedies of the Covered Parties, and the obligations and
      liabilities of the Seller, under this Agreement, are in addition to
      their respective rights, remedies, obligations and liabilities (i) under
      the laws of unfair competition, misappropriation of trade secrets, or
      other requirements of statutory or common law, or any applicable rules
      and regulations and (ii) conferred by contract, including the Purchase
      Agreement and any other written agreement between the Seller and any of
      the Covered Parties.  Nothing in the Purchase Agreement will limit any
      of the obligations, liabilities, rights or remedies of any party under
      this Agreement, nor will any breach of the Purchase Agreement or any
      other agreement between the Seller and any of the Covered Parties limit
      or otherwise affect any right or remedy of the Covered Parties under
      this Agreement.  If any term or condition of the Non-Disclosure
      Agreement or any other agreement between the Seller and any of the
      Covered Parties conflicts or is inconsistent with the terms and
      conditions of this Agreement, the more restrictive terms will control.
    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    
      7.        Severability; Reformation.
    

    
      (a)                          If
      any provision of this Agreement, or any part thereof, is found or held
      to be invalid or unenforceable in any jurisdiction, then (i) such
      provision or part thereof will be deemed amended to conform to
      applicable laws so as to be valid and enforceable to the fullest
      possible extent, (ii) the invalidity or unenforceability of such
      provision or part thereof will not affect the validity or enforceability
      of such provision or part thereof under any other circumstances or in
      any other jurisdiction, and (iii) the invalidity or unenforceability of
      such provision or part thereof will not affect the validity or
      enforceability of the remainder of such provision or the validity or
      enforceability of any other provision of this Agreement.  Each provision
      and part thereof of this Agreement is separable from every other
      provision and part thereof of this Agreement.
    

    
      (b)                          If
      any court of competent jurisdiction determines that any part hereof is
      unenforceable because of the duration, geographic area covered, scope of
      such provision, or otherwise, such court will have the power to reduce
      the duration, geographic area covered or scope of such provision, as the
      case may be, and, in its reduced form, such provision will then be
      enforceable.  The Seller will, at the Buyer’s request, join the Buyer in
      requesting that such court take such action.
    

    
      8.        Governing Law; Jurisdiction; Venue; Waiver of Jury Trial.  
    

    
      (a)                          This
      Agreement will be construed, enforced and governed by the laws of the
      State of Michigan without regard to its conflicts of law provisions.
    

    
      (b)                          The
      parties agrees that any legal action or other legal proceeding arising
      out of or relating to this Agreement may be brought in the state or
      federal court of proper jurisdiction in the State of Michigan (or in any
      court in which appeal from such courts may be taken).  The parties:
    

    
      (i)                                    agree
      that any state and federal court in the State of Michigan will be deemed
      to be a convenient forum;
    

    
      (ii)                                   after
      valid service of process has been effected, agrees not to assert (by way
      of motion, as a defense or otherwise), in any such legal proceeding
      commenced in any state or federal court in the State of Michigan, any
      claim that the party is not subject to personal jurisdiction of such
      court, that such legal proceeding has been brought in an inconvenient
      forum, that the venue of such proceeding is improper or that this
      Agreement may not be enforced in or by such court; and
    

    
      
        

        

      

      
        
          4
        

        
          

        

      

      
        

        

      

    

    
      (iii)                                  KNOWINGLY,
      VOLUNTARILY AND INTENTIONALLY IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY
      JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
      UNDER, OR IN CONNECTION WITH THIS AGREEMENT.
    

    
      9.        Waiver.  Any
      delay or omission by a party in exercising its rights under this
      Agreement, or failure to insist upon strict compliance with any term,
      covenant, or condition of this Agreement will not be deemed a waiver of
      such term, covenant, condition or right, nor will any waiver or
      relinquishment of any right or power under this Agreement at any time or
      times be deemed a waiver or relinquishment of such right or power at any
      other time or times.  No waiver will be effective unless it is expressly
      set forth in a written instrument executed by the waiving party and any
      such waiver will have no effect except in the specific instance in which
      it is given.
    

    
      10.       Successors and Assigns.  This
      Agreement will be binding upon the Seller and the Seller’s estate,
      successors and assigns, and will inure to the benefit of the Covered
      Parties, and their respective successors and assigns.  Each
      Covered Party may freely assign any or all of its rights under this
      Agreement, at any time, in whole or in part, to any person or entity
      which purchases a majority of or all of the equity securities (whether
      by equity sale, merger or otherwise) or substantially all of the assets
      of such Covered Party, without obtaining the consent or approval of the
      Seller.  The Seller agrees that the obligations of the Seller under this
      Agreement are personal and will not be assigned by the Seller.
    

    
      11.       Third Party Beneficiaries.  Each
      of the Buyer’s and each Company’s present and future Affiliates,
      successors and direct and indirect subsidiaries are third party
      beneficiaries to all of the rights conferred to the Covered Parties by
      the Seller under this Agreement.
    

    
      12.       Construction.  Any
      rule of construction to the effect that ambiguities are to be resolved
      against the drafting party will not be applied in the construction or
      interpretation of this Agreement.
    

    
      13.       Survival of Obligations.  The
      expiration of the Restricted Period will not relieve the Seller of any
      obligation or liability arising from any breach by the Seller of
      this Agreement during the Restricted Period.
    

    
      14.       Amendment.  This
      Agreement may not be changed in any respect, except by a written
      agreement executed by the Seller and the Buyer (or any successor or
      assign).
    

    
      15.       Notices.  All
      notices, requests, demands and other communications pertaining to this
      Agreement or otherwise required or permitted hereunder (“Notices”)
      will be in writing addressed as follows:
    

    
      If to the Seller, to the address below the Seller’s name on the
      signature page to this Agreement; and
    

    
      If to the Buyer (or any other Covered Party):
    

    
      
        

        

      

      
        
          5
        

        
          

        

      

      
        

        

      

    

    
    	

        	
          
            BRAINTECH, INC.
          

        	

        
	

        	
          
            #102 - 930 West 1st Street
          

        	

        
	

        	
          
            North Vancouver, B.C. Canada
          

        	

        
	

        	
          
            V7P 3N4
          

        	

        
	

        	
          
            Attention: Frederick Weidinger, CEO
          

        	

        
	

        	
          
            Facsimile: (604) 988-6440
          

        	

        
	

        	

        	
           
        
	
          
            with a copy to:
          

        	
          
            Greenberg Traurig, LLP
          

        	

        
	

        	
          
            1750 Tysons Boulevard, Suite 1200
          

        	

        
	

        	
          
            McLean, Virginia 22102
          

        	

        
	

        	
          
            Attention: Jeffrey R. Houle, Esq.
          

        	

        
	

        	
          
            Facsimile: (703) 714-8336
          

        	

        

    

    
      Notices will be deemed given five (5) “Business Days”
      (which means a day, other than a Saturday or Sunday, on which commercial
      banks in the State of Michigan are open for the general transaction of
      business) after being mailed by certified or registered United States
      mail, postage prepaid, return receipt requested, or on the first
      Business Day after being sent, prepaid, by nationally recognized
      overnight courier that issues a receipt or other confirmation of
      delivery.  Notices delivered via facsimile will be deemed given when
      actually received (or refused) by the recipient, provided that by
      no later than two (2) days thereafter such notice is confirmed in
      writing and sent via one of the methods described in the previous
      sentence.  Notices delivered by personal service will be deemed given
      when actually received by the recipient.  Any party may change the
      address to which notices under this Agreement are to be sent to it by
      giving written notice of a change of address in the manner provided in
      this Agreement for giving notice.
    

    
      16.       Electronic Signature.  This
      Agreement may be executed by transfer of an originally signed document
      by facsimile, e-mail or other electronic means, any of which will be as
      fully binding as an original document.
    

    
      [Signature on following page]
    

    
      
        

        

      

      
        
          6
        

        
          

        

      

      
        

        

      

    

    
               IN WITNESS WHEREOF,
      the Seller has duly executed and delivered this Non-Competition
      Agreement as of the date first above written.
    

    
      ADIL SHAFI
    

    

    

    
      Address:                                                    
    

    

    

    
      Telephone No.:(     )                                       
    

    
      Facsimile No. :(    )                                       
    

    
      Agreed to and Acknowledged:
    

    
      BRAINTECH, INC.
    

    
      By:  _______________________
    

    
             Name:  
    

    
             Title:
    

    
      [Signature page to Non-Competition Agreement]

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