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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Hypertension Diagnostics, Inc.
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(Name of Issuer)
Common Stock, $ .01 Par Value
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(Title of Class of Securities)
44914V 10 4
- --------------------------------------------------------------------------------
(CUSIP Number)
Girard P. Miller
Lindquist & Vennum P.L.L.P.
4200 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
Telephone: (612) 371-2467
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
February 14, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule
13d-7(b) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NO. 44914V 10 4 13D PAGE 2 OF 5 PAGES
--------------------- -- --
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1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Charles F. Chesney, D.V.M., Ph.D.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
NA
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF
307,046
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
307,046
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
307,046
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.7%
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14 TYPE OF REPORTING PERSON (See Instructions)
IN
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ITEM 1. Security and Issuer
This Schedule 13D relates to shares of the common stock, par value
$0.01 per share (the "Common Stock"), of Hypertension Diagnostics,
Inc., a Minnesota Corporation (the "Issuer"), whose principal executive
officers are located at 2915 Waters Road, Suite 108, Egan, MN
55121-1562.
ITEM 2. Identity and Background
(a) Name. This statement is being filed by Charles F. Chesney,
D.V.M., Ph.D.
(b) The Address of Dr. Chesney is 2915 Waters Road, Suite 108,
Eagan, Minnesota 55121-1562.
(c) Dr. Chesney is Executive Vice President and Chief Technology
Officer of the Issuer.
(d) Criminal Proceedings. None.
(e) Litigation. None.
(f) Citizenship. Charles F. Chesney is a citizen of the United
States.
ITEM 3. Source And Amount of Funds or Other Consideration
(Grant of Option)
ITEM 4. Purpose of Transaction
The Issuer granted Dr. Chesney an option to purchase 5,000 shares of
common stock on February 19, 1999 in connection with his service as a
director of the Issuer. All shares vest immediately.
ITEM 5. Interest in Securities of the Issuer
(a) Dr. Chesney is the beneficial owner of 307,046 shares of the
Issuer, representing approximately 5.7% of the outstanding
shares of the Common Stock. The calculation of the foregoing
percentage is based on 5,109,235 shares of Common Stock shown
as being outstanding on the Form 10-QSB Quarterly Report filed
by the Issuer with the Securities and Exchange Commission for
the quarter ended September 30, 1999. Of the 307,046 shares,
254,046 are deemed owned due to currently exercisable options.
(b) Dr. Chesney has sole power to vote or to direct the vote and
the sole power to dispose or to direct the disposition of the
shares.
Page 3 of 5 Pages
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(c) Except as described herein, their have been no transactions by
Dr. Chesney in the securities of the Issuer during the past
sixty days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of Issuer
None.
ITEM 7. Materials to be filed as Exhibits
7.1 Hypertension Diagnostics, Inc. 1998 Stock Option Plan
Page 4 of 5 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
February 10, 2000.
/s/ Charles F. Chesney
------------------------------------------
Charles F. Chesney, D.V.M., Ph.D.
Page 5 of 5 Pages
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EXHIBIT 7.1
HYPERTENSION DIAGNOSTICS, INC.
1998 STOCK OPTION PLAN
1. PURPOSE.
The 1998 Stock Option Plan (the "Plan") has been established by
Hypertension Diagnostics, Inc. (the "Company") (i) to attract and retain highly
qualified individuals to devote their abilities to the Company; (ii) to generate
an additional incentive to achieve long-term goals; (iii) to closely associate
the interests of participants in the Plan with those of the Company's other
shareholders through compensation that is based on the Company's common stock;
and thereby promote the future success of the Company, including the growth in
value of the Company's equity and enhancement of long-term shareholder return.
2. DEFINITIONS.
In this Plan the following definitions shall apply:
a. "Board" means the Board of Directors of the Company.
b. "Code" means the Internal Revenue Code of 1986, as amended.
c. "Committee" means the group of individuals administering the Plan,
as provided in Section 3 of the Plan.
d. "Common Stock" means the common stock of the Company or the number
and kind of shares of stock or other securities into which such Common Stock may
be changed in accordance with Section 7 of the Plan.
e. "Consultant" means any person who is engaged by the Company or a
Related Company to render consulting or advisory services as an independent
contractor and is compensated for such services.
f. "Eligible Recipients" means any Employee, Consultant or
Independent Director of the Company or a Related Company.
g. "Employee" means any officer or other employee of the Company or a
Related Company. The payment of a director's fee by itself shall not be
sufficient to constitute employment by the Company or a Related Company.
h. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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i. "Fair Market Value" means, with respect to the Common Stock, as of
any date:
(i) if the Common Stock is listed or admitted to trading on any
stock exchange or is quoted on the NASDAQ National Market System or the
NASDAQ SmallCap Market, the average of the reported high and low sale
prices of the Common Stock on such exchange or by NASDAQ as of such
date (or, if no shares were traded on such day, as of the next
preceding day on which there was such a trade); or
(ii) if the Common Stock is not so listed or admitted to trading
on a stock exchange and not quoted on the NASDAQ National Market System
or the NASDAQ SmallCap Market, the average of the closing bid and asked
prices in the over-the-counter market as of such date (or, if no shares
were traded on such day, as of the next preceding day on which there
was such a trade), as so reported by the OTC Bulletin Board (or such
comparable reporting service); or
(iii) in the absence of an established public market for the
Common Stock, such price as the Committee determines in good faith in
the exercise of its reasonable discretion.
j. "Incentive Stock Option" means a right to purchase Common Stock
that qualifies as an "Incentive Stock Option" within the meaning of Section 422
of the Code.
k. "Independent Director" means a member of the Board who is not an
Employee of the Company.
l. "Nonemployee Director" means any member of the Board who is an
"outside director" within the meaning of section 162(m) of the Code and
regulations promulgated thereunder, and who is a "nonemployee director" within
the meaning of Rule 16b-3 promulgated under the Exchange Act.
m. "Nonqualified Stock Option" means a right to purchase Common Stock
that does not qualify as an Incentive Stock Option.
n. "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
o. "Optionee" means an Eligible Recipient who receives one or more
Options under the Plan.
p. "Option Form" means the duration of the Option granted to the
Optionee.
q. "Related Company" means any company during any period in which it
is a "parent company" (as that term is defined in Code section 424(e)) with
respect to the Company, or a "subsidiary corporation" (as that term is defined
in Code section 424(f)) with respect to the Company.
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r. "Securities Act" means the Securities Act of 1933, as amended.
3. ADMINISTRATION.
a. The Plan will be administered by either the full Board or a
committee of two or more Nonemployee Directors. The committee shall be selected
by, and shall service at the discretion of the Board. As used in this Plan, the
term "Committee" will refer to the Board or to such a committee of Nonemployee
Directors, if established.
b. Subject to the provisions of the Plan, the Committee shall have
the authority and discretion to:
(i) select from among the Eligible Recipients those persons who
shall receive Options under the Plan;
(ii) determine the nature and extent of the Options to be made to
each Eligible Recipient, including the number of shares of Common Stock
to be subject to each Option, the exercise price of the Options, the
manner in which Options will vest or become exercisable;
(iii) determine the time or times when Options will be granted;
(iv) determine the duration of each Option;
(v) impose such limitations, restrictions and conditions upon
any such award as the Committee shall deem appropriate; and
(vi) interpret the Plan, adopt, amend and rescind rules and
regulations relating to the Plan, and make all other determinations and
take all other action necessary or advisable for the implementation and
administration of the Plan.
c. All decisions and interpretation made by the Committee on all
matters relating to the Plan shall be final and binding. No member of the
Committee shall be liable for any action taken or decision made in good faith
relating to the Plan or any award thereunder.
4. ELIGIBILITY FOR PARTICIPATION.
The Committee shall determine and designate, from time to time, from
among the Eligible Recipients, those persons who will be granted Options. In
making this selection and in determining the form and amount of awards under the
Plan, the Committee may take into account the individual's functions and
responsibilities, the individual's present and potential contributions to the
Company's success and such other factors as the Committee deems relevant.
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5. SHARES SUBJECT TO PLAN.
a. Shares of stock which may be issued under the Plan shall be
authorized and unissued shares of Common Stock. Subject to Section 7, the
maximum number of shares of Common Stock which may be issued under the Plan
shall be 750,000. The maximum number of shares of Common Stock which may be
available for Incentive Stock Options is 750,000.
b. For purposes of calculating the maximum number of shares of Common
Stock which may be issued under the Plan:
(i) All the shares issued (including the shares, if any, withheld
for tax withholding requirements) shall be counted when cash is used as
full payment for shares issued upon exercise of an Option;
(ii) Only the net shares issued (including the shares, if any,
withheld for tax withholding requirements) shall be counted when
previously acquired shares of Common Stock are tendered as full or
partial payment for shares issued upon exercise of an Option.
c. Any shares of Common Stock subject to an outstanding Option that
for any reason is terminated, forfeited or expired shall again be available for
issuance under the Plan.
6. OPTION GRANTS.
a. Type of Options. The Committee may from time to time, and subject
to the provisions of the Plan and such other terms and conditions as the
Committee may prescribe, grant an Option to any Eligible Recipient. The date an
Option is granted shall mean the date upon which the Committee grants an Option
to purchase a specific number of shares to an Eligible Recipient under the Plan.
Options under the Plan may be either Nonqualified Stock Options or Incentive
Stock Options, as determined in the discretion of the Committee.
b. Stock Option Price. The price per share of each Option shall be
determined by the Committee in its discretion at the time the Option is granted;
provided, however, such price shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date the Option is granted. In the case
of an Incentive Stock Option grant to an individual then owning more than 10% of
the total combined voting power of all classes of stock of the Company or a
Related Company, the price per share shall not be less than 110% of the Fair
Market Value of a share of Common Stock on the date the Option is granted.
c. Option Term. The term of an Option shall be set by the Committee
in its sole discretion; provided that no Incentive Stock Option may be exercised
after a period of ten (10) years from the date it is granted or five (5) years
after the grant date if the Incentive Stock Option is granted to an individual
then owning more than 10% of the total combined voting power of all classes of
stock of the Company or a Related Company. No Option shall be exercisable after
the expiration of its term.
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d. Exercise. Each Option shall be exercisable at such times and under
such conditions as may be determined by the Committee at the time of grant. An
Option may be exercised only by delivering to the Company a written notice of
such exercise, accompanied by full payment therefor, and otherwise in accordance
with such rules and procedures as may be established by the Committee.
e. Manner of Payment. The full purchase price for shares of Common
Stock purchased upon the exercise of any Option shall be paid at the time of
such exercise. The purchase price shall be payable in cash or by tendering
shares of Common Stock previously owned by the Optionee, or in any combination
thereof, as determined by the Committee. Any shares transferred to the Company
as payment of the purchase price shall be valued at Fair Market Value as of the
day preceding the date of exercise of such Option. In addition, the Committee
may permit an Optionee to elect to pay the purchase price upon the exercise of
an Option by authorizing a registered broker-dealer to sell shares of Common
Stock (or a sufficient portion of the shares) acquired upon the exercise of the
Option and remit to the Company a sufficient portion of the sale proceeds to pay
the entire purchase price and any tax withholding resulting from such exercise.
f. Aggregate Limitation of Stock Subject to Incentive Stock Options.
To the extent that the aggregate Fair Market Value of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by an Optionee during any calendar year (under all plans of the Company or a
Related Company) exceeds $100,000 (or such other amount as may be prescribed by
the Code from time to time), such Incentive Stock Options shall be treated as
Nonqualified Stock Options, to the extent required by section 422 of the Code.
g. Transferability. No Option granted under this Plan shall be
assignable or transferable by the Optionee, except by will or by the laws of
descent and distribution. During the life of the Optionee, such Option shall be
exercisable only by such person or by such person's guardian or legal
representative.
h. Agreement with Company. At the time of a grant of an Option under
the Plan, the Committee may require the Optionee to enter into an agreement with
the Company in a form specified by the Committee, agreeing to the terms and
conditions of the Plan and to such additional terms and conditions as the
Committee may, in its sole discretion, prescribe.
7. SHARE ADJUSTMENTS.
In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split,
recapitalization, merger, consolidation, reorganization, split-off, spin-off or
exchange of shares), the Committee may adjust the Options to preserve the
benefits or potential benefits of the Options. Actions by the Committee may
include adjustment of (i) the number and class of shares of stock which may be
delivered under the Plan, (ii) the number and class of shares of stock subject
to outstanding Options and (iii) the stock option price of outstanding Options.
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8. LIMIT ON DISTRIBUTION.
Distribution of shares of Common Stock under the Plan shall be subject
to the following:
a. Notwithstanding any provision of the Plan, the Company shall have
no liability to distribute any shares of Common Stock under the Plan unless such
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.
b. All certificates for shares of Common Stock delivered under the
Plan pursuant to an exercise of an Option shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under
applicable state and federal law or applicable rules of the Securities and
Exchange Commission and any stock exchange, and the Committee may cause a legend
to be placed on any such certificates to make appropriate reference to such
restrictions.
9. TAX WITHHOLDING.
Whenever the Company proposes or is required to distribute shares of
Common Stock under the Plan the Company may require the recipient to remit to
the Company an amount sufficient to satisfy any Federal, state or local tax
withholding requirements before delivery of any certificate for such shares or,
in the discretion of the Committee, the Company may withhold from the shares to
be delivered shares sufficient to satisfy all or a portion of such tax
withholding requirements. Whenever under the Plan payments are to be made in
cash, such payments may be net of an amount sufficient to satisfy any Federal,
state, and local tax withholding requirements.
10. AMENDMENT AND TERMINATION.
a. The Committee may, at any time, amend or terminate the Plan,
provided that, subject to Section 7:
(i) no amendment or termination may, without the approval of the
shareholders, increase the maximum number of shares of Common Stock
which may be issued under the Plan or extend the term of the Plan; and
(ii) no amendment or termination may, in the absence of written
consent to the change by the affected Optionee (or, if the Optionee is
not then living, the affected beneficiary), adversely affect the rights
of any Optionee or beneficiary under any Option granted under the Plan
before such amendment or termination is adopted by the Committee.
b. The Plan shall terminate at midnight on May 1, 2008, which is ten
years after the date the Plan was approved by the Board.
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11. LIMITATION OF IMPLIED RIGHTS.
a. The Plan does not constitute a contract of employment, and
selection as an Optionee will not give any person the right to be retained in
the employ of the Company or any Related Company, nor any right in claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Except as otherwise provided in the Plan, no Option
granted under the Plan shall confer upon the holder thereof any right as a
shareholder of the Company prior to the date on which the person fulfills all
conditions for receipt of such rights.
b. Neither an Optionee nor any other person shall, by reason of the
Plan, acquire any right or title to the assets, funds or property of the Company
or any Related Company whatsoever. An Optionee shall only have a contractual
right to the stock payable under the Plan, unsecured by any assets of the
Company or any Related Company.
12. MISCELLANEOUS.
a. The Committee's determinations under the Plan (including without
limitation determinations of the persons to receive Options, the form, amount
and timing of such Options, the terms and provisions of such Options and the
agreements evidencing same) need not be uniform and may be made by it
selectively among Eligible Recipients or Optionees whether or not such persons
are similarly situated.
b. The validity, construction, interpretation, administration and
effect of the Plan and any rules, regulations and actions relating to the Plan
will be governed by and construed exclusively in accordance with the laws of the
State of Minnesota.
13. EFFECTIVE DATE.
a. Subject to the approval of the shareholders of the Company at the
Company's 1998 special meeting of its shareholders, the Plan shall become
effective as of May 22, 1998.
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