<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VIRTUAL TECHNOLOGY CORPORATION
(Exact name of Registrant as Specified in its Charter)
MINNESOTA
(State of Incorporation)
IRS EIN #41-1639011
(I.R.S. Employer Identification Number)
3100 WEST LAKE STREET, SUITE 400
MINNEAPOLIS, MN 55416
(612)915-1122
(Address, including zip code and telephone
number, including area code, or registrant's principal
executive offices)
1999 STEPHAN HEROLD CONSULTING PLAN
(Full Title of the Plan)
Messerli & Kramer P.A.
Attention: Jeffrey C. Robbins, Esq.
150 South Fifth Street, Suite 1800
Minneapolis, MN 55402
(612) 672-3600
(Name, address, including zip code and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Amount maximum maximum
Title of securities to to be offering price aggregate Amount of
be registered registered per unit offering price registration fee
------------- ---------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, 145,000 $7.187 $1,042,115 $289.70
no par value
</TABLE>
<PAGE> 2
Part II
Item 3.
The following documents are incorporated herein by reference:
(a) (1) The Form 10-K of Virtual Technology Corporation, filed with the
SEC on May 6, 1999.
(2) The Form 10-SB of Virtual Technology Corporation, filed with the SEC
on February 12, 1999.
(b) All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part of this
registration statement from the date of the filing of such reports and
documents.
(c) (i) Form of Common Stock Certificate, see Exhibit 3(a) for the Form 10-K
of Virtual Technology Corporation, filed February 12, 1999; and (ii) Form of
Stock Purchase Warrant, see Exhibit 3(b) of the Form 10-SB of Virtual Technology
Corporation, filed February 12, 1999.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The legality of the Common Stock offered hereby will be passed upon for
the Company by Messerli & Kramer P.A. of Minneapolis, Minnesota ("Messerli &
Kramer"). As of the date of this prospectus, Messerli & Kramer owns 27,500
shares of the Registrant's Common Stock.
Item 6. Indemnification of Directors and Officers.
The Bylaws of the Company and the statutes of the State of Minnesota give
the Company the power to indemnify any director, officer, employee, or agent who
was or is a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, against
certain liabilities and expenses incurred in connection with the action, suit,
or proceeding. The Bylaws of the Company provide that the Company shall
indemnify any such directors, officers, employees, or agents to the full extent
provided under applicable provisions of the Minnesota Statutes. These provisions
do not affect the availability of equitable remedies, such as an action to
enjoin or rescind a transaction involving a breach of fiduciary duty, although,
as a practical matter, equitable relief may not be available. In the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act. As a result, the above provisions may
not limit liability of the directors for violations of, or relieve them from the
necessity of complying with, the federal securities laws.
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Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
EXHIBIT NUMBER
1.* Amended and Restated Certificate of Incorporation of the Company.
2.* Amended and Restated Bylaws of the Company.
5. Opinion of Messerli & Kramer P.A.
23.1 Consent of Lurie, Besikof, Lapidus & Co., LLP.
23.2 Consent of Copeland Buhl & Co. PLLP.
23.3 Consent of Samuel T. Kantos.
24. Power of Attorney is contained on the signature pages.
99.1 Consulting Agreement
- ------
* Documents incorporated by reference from the Company's Registration
Statement on Form 10-SB, filed with the SEC on February 12, 1999.
Item 9. Undertakings.
UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
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424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement,and (iii) To include any material information
with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information
in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the issuer pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference herein.
(b) That, for the purpose of determining any liability under the
Securities Act, 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 thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 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 herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. 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.
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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 the City of Minneapolis, State of Minnesota, on May 11, 1999.
VIRTUAL TECHNOLOGY CORPORATION
/s/ Greg Appelhof
------------------------------
By: Greg Appelhof
Its: President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Greg Appelhof and Kenneth Israel and each
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE
- --------- -----
/s/ Kenneth Israel Chairman of the Board
- ------------------------
Kenneth Israel
Date: May 11, 1999
-------------------
/s/ John Harvatine Chief Financial Officer (Principal
- ------------------------ Financial and Accounting Officer)
John Harvatine
Date: May 11, 1999
-------------------
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/s/ Jeff Maynard Director
- ------------------------
Jeff Maynard
Date: May 11, 1999
-------------------
/s/ Greg Appelhof President, Chief Executive Officer and
- ------------------------ Director (Principal Executive Officer)
Greg Appelhof
Date: May 11, 1999
-------------------
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<PAGE> 1
[MESSERLI & KRAMER LETTERHEAD]
May 11, 1999
Virtual Technology Corporation
3100 West Lake Street
Minneapolis, MN 55416
RE: VIRTUAL TECHNOLOGY CORPORATION - ISSUANCE OF SECURITIES
OUR FILE NO. 11041/1
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by Virtual Technology Corporation, (the "Company") of
a Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission covering the sale of 145,000 shares of the
Company's Common Stock, no par value (the "Shares"), that will be issued
pursuant to the 1999 Consulting Agreement with Stephan Herold, ("Herold") (the
"Consulting Agreement.")
In connection with this opinion, we have examined the Registration
Statement, the Company's restated Articles of Incorporation and By-laws, and
such other documents, records, certificates, memoranda and other instruments as
we deem necessary as a basis for this opinion. We have assumed the genuineness
and authenticity of all documents submitted to us as originals, the conformity
to originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents, where due execution and delivery are a
prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that the Shares, when sold and issued in accordance with the Consulting
Agreement and the Registration Statement, will be validly issued, fully paid,
and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ MESSERLI & KRAMER P.A.
MESSERLI & KRAMER P.A.
<PAGE> 1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Virtual Technology Corporation on Form S-8 of our reports dated April 23, 1999,
appearing in the Annual Report on Form 10-K of Virtual Technology Corporation
for the year ended January 31, 1999.
/s/ LURIE, BESIKOF, LAPIDUS & CO., LLP
Minneapolis, Minnesota
May 13, 1999
<PAGE> 1
May 11, 1999
INDEPENDENT AUDITOR'S CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement of Virtual Technology Corporation on Form S-8 of our report dated
April 11, 1997, appearing in the Company's Registration Statement on Form 10-K
filed May 6, 1999.
/s/ COPELAND, BUHL & COMPANY, P.L.L.P.
Wayzata, Minnesota
<PAGE> 1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Virtual Technology Corporation on Form S-8 of our reports dated February 10,
1999 and April 23, 1999, appearing in the Registration Statement on Form 10-K
filed May 6, 1999.
/s/ SAMUEL T. KANTOS AND ASSOCIATES
Minneapolis, Minnesota
May 11, 1999
<PAGE> 1
CONSULTING AGREEMENT
THIS AGREEMENT, is made and entered into as of the 28th day of January,
1999, by and between GTI ACQUISITION CORPORATION, a Minnesota corporation
(hereinafter referred to as the "Company"), and STEPHAN G.
Herold (hereinafter referred to as "Consultant").
RECITALS:
A. The Company wishes to retain the Consultant as an independent
contractor consultant.
B. The Consultant represents and warrants that he has no prior legally
binding obligations that are in conflict with his entering into this
Consulting Agreement.
C. The Consultant is willing to be so retained on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
1. RETAINER. The Company hereby retains Consultant as an independent
contractor consultant, and Consultant hereby accepts such retainer on the terms
and conditions hereinafter set forth.
2. TERM. The term of this Consulting Agreement shall be for the period
commencing on January 28, 1999, and continuing until January 28, 2002, at which
time it shall terminate, unless terminated earlier as provided elsewhere in this
Consulting Agreement. This Consulting Agreement may be continued for a period
beyond the term by the mutual written agreement of the parties.
3. DUTIES OF CONSULTANT. The Company retains Consultant as a general
advisor and consultant to management on all matters pertaining to the business
of the Company and to assist with the contacting of customers of the Company and
with marketing of the Company's products and services. Consultant shall further
render such additional services as are pertinent and related to the foregoing
duties.
In his capacity as a general advisor and consultant to management of
the Company, Consultant shall not be required to devote his full time and
efforts to the business of the Company; provided, however, in addition to other
duties,Consultant shall be available for such periods of time as are reasonably
required to adequately perform the required tasks. Consultant shall also be
available, at the mutual convenience of the parties, to study specific matters
or problems submitted to Consultant by management of the Company.
Consultant shall render the services required in this Consulting
Agreement as an independent contractor. Deadlines in respect of the service and
functions of Consultant shall be mutually agreed upon. Consultant shall have no
authority or power of decision over any of the Company's activities or
employees.
<PAGE> 2
Consultant shall be required to provide transportation with respect to the
duties and functions of Consultant under this Consulting Agreement and the
Company shall have no responsibility to furnish supplies and/or office
availability to Consultant.
Consultant shall be responsible for all employment related taxes and
withholdings from amounts paid pursuant to this Consulting Agreement and the
Company shall not be liable or responsible for any such taxes and withholdings.
Consultant shall use his best efforts to advance the business and welfare
of the Company, and shall not intentionally take any action against the best
interests of the Company.
4. CONSIDERATION. As full and complete consideration for any and all
services (except out-of-pocket expenses approved by the Company) which
Consultant may render to the Company, the Company shall pay Consultant an
aggregate of One Million Fifteen Thousand and 00/Dollars ($1,015,000), such
amount payable solely by the issuance of a total of One Hundred Forty Five
Thousand (145,000) shares of the Company's parent company (Virtual Technology
Corporation) Common Stock upon execution of this Agreement. The public resale of
such shares will be registered on Form S-8 or other available form as soon as
reasonably practical with the Securities and Exchange Commission.
5. RESTRICTIVE COVENANT. During the term of this Consulting Agreement for
any reason whatsoever, Consultant will not, on his own account or as an
employee, consultant, partner, officer, director, or stock holder of any other
person, firm, partnership, or corporation, conduct, engage in, be connected
with, have any interest in, or aid or assist anyone else engaging in the
business conducted by the Company, except that Consultant shall be permitted to
own, for himself, shares of the common stock of any company engaged in a
business similar to that business conducted by the Company, whose shares are
regularly traded on the New York Stock Exchange or NASDAQ exchange or any other
similar exchange provided that the ownership of Consultant in such company is
not in excess of three percent (3%) of the total issued and outstanding shares
of any such company. Consultant agrees that the limitation in this Section 5 is
the minimum period of time necessary to protect the Company, its successors and
assigns, in the use or employment of the goodwill of the businesses conducted by
the Company. Consultant agrees and acknowledges that in his capacity as
Consultant, he will be contacting customers of the Company and as such, the
Company is entitled to the protection afforded by this restriction to preserve
the benefits which are to be acquired pursuant to the Agreement. In the event
this Consulting Agreement is terminated prior to the close of the anticipated
term, this restrictive covenant shall be continued for what would have been the
remaining term of this Consulting Agreement. Consultant agrees that damages
cannot compensate the Company in the event of a violation of this noncompetitive
covenant, and that injunction relief would be essential for the protection of
the Company, its successors and assigns. Consultant, therefore, agrees and
consents that in case of any such breach or violation, the Company may have such
injunctive relief, without bond, but upon due notice, in addition to such
further or other relief as may appertain at equity or law. No waiver of any
breach or violation hereof shall be implied from forbearance or failure by the
Company to take action under this Section 5. It is the desire and intent of the
parties that the provisions of this Section 5 be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular portion of this
Section 5 is determined and adjudicated to be invalid or unenforceable, this
Section 5 shall be
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deemed amended to delete therefrom that portion thus determined and adjudicated
to be invalid or unenforceable, such deletion to apply only with respect to the
operation of this Section 5 and the particular jurisdiction in which such
adjudication is made; provided, further, to the extent any provision of this
Section 5 is deemed unenforceable by virtue of its scope, but may be made
enforceable by limitation thereof, the parties agree that the same shall,
nevertheless, be enforceable to the fullest extent permissible under the laws
and public policies applied in such jurisdiction in which enforcement is sought.
6. DISCLOSURE OF INFORMATION. Consultant recognizes and acknowledges as a
result of his employment by the Company, he will have access to discover
information which is of a proprietary nature to the Company, including methods,
inventions, improvements, trade secrets, or discoveries, whether patentable or
not, and similar information relating to the Company's products. In addition,
information will or has been disclosed to Consultant, or has been discovered by
Consultant, concerning marketing plans, processes, products, apparatus,
techniques, know-how, trade secrets, strategies, customer lists, and technical
requirements of customers of the Company. Consultant agrees that he will not,
without the prior written approval of the Company, disclose any such proprietary
information of the Company to anyone not in the employ of the Company, or use
any such information other than for the purposes of this Consulting Agreement.
Consultant agrees that he will not allow any other person engaged by him to have
access to any of the proprietary information unless he first obtains such
person's agreement not to disclose or use such information, and such agreement
is binding upon the Company, Consultant, and such third person. These
obligations shall not apply, however, to information which is or becomes
generally available to the public through no fault of Consultant.
7. TERMINATION. This Agreement shall terminate:
a. On January 28, 2002.
b. At the Company's option, upon the breach by Consultant of any of
the terms and conditions contained herein.
c. At Consultant's option, upon failure of the Company to make
timely payments under paragraph 4 hereof.
d. Upon mutual written agreement of the parties hereto.
e. At Consultant's option in the event that Company is in default
under the terms and conditions of the Asset Purchase Agreement
entered into by and between the Company and Consultant of even
date herewith.
f. At Consultant's option including the Restrictive Covenant in
Section 5, in the event the Company is in default under the terms
and conditions of the promissory notes given by the Company to
Herold Marketing Associates, Incorporated d/b/a Graphics
Technology, Inc., in the principal amounts of $4,000,000 and
$3,300,000, dated of even date herewith.
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8. NOTICES. Any notice required or permitted to be given under this
Consulting Agreement shall be sufficient if in writing and personally delivered,
or if sent by certified mail, postage prepaid, to his residence in the case of
Consultant, its principal office in the case of the Company and shall be
effective upon deposit into the United States Postal Service, or in the case of
personal delivery when actually delivered.
9. WAIVER. The waiver by the Company of a breach of any provision of this
Consulting Agreement by Consultant shall not operate or be construed as a waiver
of any subsequent breach by Consultant.
10. BINDING EFFECT. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, their respective heirs, representatives,
successors, and assigns, but shall not be assignable by Consultant without the
prior written consent of the Company.
11. SEVERABILITY. If any provision of this Consulting Agreement is held to
be contrary to law, that provision shall be deemed severable from the balance of
this Consulting Agreement, and the balance of this Consulting Agreement shall
remain in force between the parties to the fullest extent permitted by law.
12. ENTIRE AGREEMENT. This Agreement shall be deemed to express, embody,
and supersede all previous understandings, agreements and commitments, whether
written or oral, between the parties hereto with respect to the subject matter
hereof and to fully and finally set forth the entire agreement between the
parties hereto. No modifications shall be binding unless stated in writing and
signed by both parties hereto with the approval of the President of the Company.
13. GOVERNING LAW/VENUE. This Agreement shall be governed by the laws of
the State of Minnesota. Any action involving or affecting this Consulting
Agreement or the services to be performed shall be determined by arbitration in
the County of Hennepin, State of Minnesota, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.
14. PRIOR AGREEMENTS. This Agreement supersedes and renders null and void
all prior written or oral agreements by and between the Company or its
affiliates and Consultant, except as provided herein or in any amendments or
addendums hereto.
15. SURVIVAL OF COVENANTS. Upon termination of this Agreement for any
reason, the covenants contained in Section 5 and Section 6 shall survive such
termination.
16. COUNTERPARTS. This Agreement may be signed in one or more counterparts
but all of which taken together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day, month and year first above written.
COMPANY:
GTI ACQUISITION CORPORATION
By: /s/ Greg Appelhof
---------------------------------
Its: President
CONSULTANT:
/s/ Stephan G. Herold
------------------------------------
Stephan G. Herold
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