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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-KSB/A
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended September 30, 1998
/ / Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from _____ to _____
Commission file number 0-18785
OXBORO MEDICAL INTERNATIONAL, INC.
(Name of small business issuer in its charter)
Minnesota 41-1391803
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
13828 Lincoln Street N.E.
Ham Lake, Minnesota 55304
(Address of principal executive offices) (Zip Code)
(612) 755-9516
(Issuer's Telephone Number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: Common
Stock, par value $.01 per share
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
/X/Yes / / No
Check if no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. / /
State issuer's revenues for its most recent fiscal year. $5,002,489.
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Based upon the closing price of the issuer's Common Stock as reported by
The Nasdaq SmallCap Market, the aggregate market value of such Common Stock held
by nonaffiliates of the issuer as of December 11, 1998, was approximately
$2,112,774.
As of December 11, 1998 there were 2,438,578 shares of the issuer's Common
Stock outstanding.
2
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The purpose of this Amendment to Report on Form 10-KSB for the year ended
September 30, 1998, which was originally filed on December 29, 1998, is to add
Part III, Item 9, amend Part III, Item 13(a) by submitting additional exhibits
and correcting Exhibit 10.16, and include the Exhibit Index, which was
inadvertently omitted from the original filing.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Information regarding directors is contained in the Company's Proxy
Statement being distributed in connection with the 1999 Annual Shareholders'
Meeting under the heading "Election of Directors."
Certain information regarding the officers of the Company is set forth
below:
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NAME POSITION
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Christopher J. Turnbull Interim President
Richard Ulvenes Interim Chief Financial Officer
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Christopher J. Turnbull, 42, has served as the interim President of
Oxboro Medical International, Inc. since September 1998. Mr. Turnbull has
been the sole shareholder and President of Critical Care Anesthetists, P.A.
since 1987. Critical Care Anesthetists, P.A. provides certified registered
nurse anesthetists services to hospitals and ambulatory health care
facilities. Since September 1993, Mr. Turnbull has served as the Chairman of
the Board of Directors, Director and CEO of St. Paul Medical, Inc., which
provides a needleless medication delivery technology known as the Key-Lok-TM-
system. In January 1999, Mr. Turnbull was elected as a Director of Cardia,
Inc., a publicly-held company that develops and sells catheter-delivered
occlusive devices for the repair of intra-cardiac abnormalities.
Richard Ulvenes, 54, has served as interim Chief Financial Officer of
Oxboro Medical International, Inc. since September 1998. Since 1986, Mr.
Ulvenes has been President of Adam Management Corporation ("AMC"), which
provides services as outside Chief Financial Officer and financial consulting
for various development stage companies (medical devices, gas sterilization,
computer brokerage, and computer disaster recovery). His experience includes
financial consulting for a medical venture group, valuations of businesses,
merger and acquisition assistance, income tax planning and executive
financial planning.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See "Exhibit Index" for list of Exhibits filed with this Report.
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SIGNATURE
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
duly caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.
OXBORO MEDICAL INTERNATIONAL, INC.
Dated: January 27, 1999 By /s/ Christopher J. Turnbull
-----------------------------------------
Christopher J. Turnbull
President
5
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EXHIBIT INDEX
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3.1 Articles of Incorporation as restated effective July 27, 1994 [i]
3.2 Amended and Restated Bylaws effective February 23, 1995 [i]
*10.1 Transfer of Technology Agreement by and between Project Heart [ii]
Limited Partnership and LexTen, Inc., effective September 30,
1997
*10.2 Termination of Stock Award Agreement effective September 30, 1997, [ii]
between Registrant and Larry A. Rasmusson
*10.3(a) Exclusive License Agreement between the Registrant and Larry [iii]
Rasmusson dated April 1, 1990
*10.3(b) First Amendment to Exclusive License Agreement effective November [i]
8, 1995
*10.3(c) Second Amendment to Exclusive License Agreement effective (2-1)**
September 1, 1998
*10.4(a) Employment Agreement between the Registrant and Larry A. Rasmusson [iv]
dated April 1, 1993
*10.4(b) First Amendment to Employment Agreement effective December 21, [i]
1993
*10.4(c) Second Amendment to Employment Agreement effective October 1, 1997 [ii]
*10.4(d) Third Amendment to Employment Agreement effective February 25, [v]
1998
*10.5(a) Exclusive License and Royalty Agreement between Oxboro Outdoors, [iv]
Inc. and Larry Rasmusson dated April 17, 1993
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*10.5(b) First Amendment to Exclusive License and Royalty Agreement [i]
effective December 21, 1993
*10.5(c) Second Amendment to Exclusive License and Royalty Agreement [i]
effective November 8, 1995
*10.5(d) Third Amendment to Exclusive License and Royalty Agreement [v]
effective February 25, 1998
*10.5(e) Fourth Amendment to Exclusive License and Royalty Agreement (3-1)**
effective September 1, 1998
*10.6(a) Consulting Agreement effective November 1, 1995, by and between [i]
the Registrant and Larry Rasmusson
*10.6(b) First Amendment to Consulting Agreement effective October 1, 1997 [ii]
*10.6(c) Second Amendment to Consulting Agreement effective September 1, (4-1)**
1998
*10.7(a) Stock Option Agreement effective August 17, 1995, by and between [i]
the Registrant and Larry A. Rasmusson
*10.7(b) Stock Option Exercise and Loan Agreement for the purchase of [vi]
20,356 shares of Common Stock of the Company, between
Registrant and Larry A. Rasmusson dated January 15, 1998
*10.7(c) Secured Promissory Note in the amount of $30,546 to Registrant [vi]
from Larry A. Rasmusson dated January 15, 1998
*10.7(d) Instruments Security Agreement between Registrant and Larry A. [vi]
Rasmusson dated January 15, 1998
*10.7(e) First Amendment to August 17, 1995 Stock Option Agreement by and (5-1)**
between the Registrant and Larry A. Rasmusson effective
September 1, 1998
*10.8(a) Current Stock Option Agreement effective October 1, 1997, by and [ii]
between the Registrant and Larry A. Rasmusson
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ii
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*10.8(b) Deferred Stock Option Agreement effective October 1, 1997, by and [ii]
between the Registrant and Larry A. Rasmusson
*10.8(c) Stock Option Exercise and Loan Agreement for the purchase of [vi]
200,000 shares of Common Stock of the Company, between
Registrant and Larry A. Rasmusson dated January 15, 1998
*10.8(d) Secured Promissory Note in the amount of $200,000 to Registrant [vi]
from Larry A. Rasmusson dated January 15, 1998
*10.8(e) Instruments Security Agreement between Registrant and Larry A. [vi]
Rasmusson dated January 15, 1998
*10.8(f) First Amendment to October 1, 1997 Current Stock Option Agreement (6-1)**
by and between the Registrant and Larry A. Rasmusson effective
September 1, 1998
*10.9 Mutual Release and Noncompetition Agreement by and between (7-1)**
Registrant and Larry A. Rasmusson effective September 1, 1998
*10.10 Product Development and Incentive Agreement effective [i]
November 8, 1995, by and between the Registrant and Harley Haase
*10.11 Royalty Sharing Agreement effective November 21, 1995, by [i]
and between the Registrant, Oxboro Outdoors, Inc., Larry
Rasmusson and Harley Haase
*10.12 Settlement Agreement and Mutual Release of Claims by and [vii]
between Harley Haase and the Registrant dated June 13, 1997
*10.13(a) Stock Option Exercise and Loan Agreement for the purchase of [viii]
40,000 shares of Common Stock of the Company between
Registrant and Dennis L. Mikkelson dated January 15, 1998
*10.13(b) Secured Promissory Note in the amount of $45,000 to Registrant [viii]
from Dennis L. Mikkelson dated January 15, 1998
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*10.13(c) Instruments Security Agreement between Registrant and [viii]
Dennis L. Mikkelson dated January 15, 1998
*10.14(a) Stock Option Agreement effective June 19, 1997 by and [ii]
between the Registrant and John Walter
*10.14(b) Stock Option Exercise and Loan Agreement for the purchase [ix]
of 40,000 shares of Common Stock of the Company between
Registrant and John Walter dated January 15, 1998
*10.14(c) Secured Promissory Note in the amount of $43,200 to [ix]
Registrant from John Walter dated January 15, 1998
*10.14(d) Instruments Security Agreement between Registrant and John [ix]
Walter dated January 15, 1998
*10.15 Stock Option Agreement effective January 28, 1998, by and (8-1)**
between the Registrant and Robert S. Garin
*10.16 Stock Option Agreement effective February 20, 1998, by and ***
between the Registrant and John Sayer
*10.17 Temporary Services Agreement effective September 8, 1998 ***
by and between the Registrant and Critical Care
Anesthetists, P.A. and Christopher J. Turnbull
*10.18 Temporary Services Agreement effective September 17, 1998 ***
by and between the Registrant and Richard L. Ulvenes
21 The Registrant has two subsidiaries, Oxboro Medical, Inc.
and Oxboro Outdoors, Inc., both of which are
incorporated in the State of Minnesota
27 Financial Data Schedule (10-1)**
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* Denotes management contract or compensatory plan or arrangement.
** Filed with original filing on December 29, 1998.
*** Filed herewith.
iv
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[i] Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the year ended September 30, 1995
[ii] Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the year ended September 30, 1997
[iii] Incorporated by reference to the Registrant's Annual Report on Form
10-K for the year ended September 30, 1990
[iv] Incorporated by reference to the Registrant's Annual Report on Form
10-KSB for the year ended September 30, 1993
[v] Incorporated by reference to Amendment No. 1 to Schedule 13D filed
March 18, 1998 on behalf of Larry A. Rasmusson
[vi] Incorporated by reference to Schedule 13D filed on February 13,
1998 on behalf of Larry A. Rasmusson
[vii] Incorporated by reference to the Registrant's Quarterly Report on
Form 10-QSB for the quarter ended June 30, 1997
[viii] Incorporated by reference to Schedule 13D filed on February 13,
1998 on behalf of Dennis L. Mikkelson
[ix] Incorporated by reference to Schedule 13D filed on February 17,
1998 on behalf of John Walter
v
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OXBORO MEDICAL INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
February 20, 1998
Dear Mr. Sayer:
At the direction of the Board of Directors of Oxboro Medical International,
Inc. (the "Company"), you are hereby notified that the Board has granted to you
a Stock Option ("Option") to purchase 40,000 shares of Common Stock ("Stock") of
the Company at a price of $2.00 per share. The date of grant of this Option is
the date of this notice, and it is the determination of the Board of Directors
that on this date the fair market value of the Company's Common Stock does not
exceed $2.00 per share.
You are not required to exercise this Option. This Option must be
exercised, if at all and to the extent exercised, on or before February 21,
2003.
Your Option is in all respects limited and conditioned by the following:
a. Your Option is immediately exercisable in full.
b. The purchase price of any Stock purchased pursuant to exercise of this
Option may be paid in cash or by certified or cashier's check or by delivery to
the Company of shares of Stock owned by you for at least six months prior to
delivery in an amount equal in fair market value to the purchase price of the
shares of Stock being purchased pursuant to this Option. In addition, such
purchase price may be paid by a loan from the Company upon such terms as the
Board of Directors may establish from time to time.
c. Your Option may be exercised by you, but only by you, at any time
during your lifetime prior to six (6) months after the date of the termination
of your service as a member of the Board of Directors of the Company, but only
to the extent you were entitled to exercise your Option at the date of such
termination and only if your Option has not expired. In no event will your
Option be exercisable after the expiration of five (5) years from the date such
Option is granted.
d. In the event of your death while you are a director of the Company,
your Option may be exercised at any time within six (6) months following the
date of your death by your estate or by a person who acquired the right to
exercise your Option by will or the laws of descent and distribution. In either
case, such Option may be exercised only to the extent you were entitled to
exercise the Option at the time of your death. In the event of your death
within ninety (90) days after termination of your service as a director, then
the Option may be exercised at any time within three (3) months following the
date of your death by your estate or by a person who acquired the right to
exercise your Option by will or by the laws of descent and distribution, but
only to the extent you were entitled to exercise the Option at the time of such
termination.
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e. You may not transfer, sell, pledge, assign, or otherwise dispose of
your Option, other than at death by will or the laws of descent and
distribution, and your Option during your lifetime is exercisable only by you.
f. The shares of Stock you may acquire upon exercise of your Option are
subject to restrictions against transfer.
g. Unless a registration statement under the Securities Act of 1933 (and
applicable state securities laws) is in effect with respect to this Option or
Stock to be purchased pursuant to this Option, you agree with, and represent to,
the Company that you are acquiring the Option and Stock for the purpose of
investment and not with a view to transfer, sell, or otherwise dispose of the
Option or Stock, except as may be permitted under applicable securities laws.
The Company may require an opinion of counsel satisfactory to it prior to the
transfer of any Stock to or by you to assure at all times that such transaction
will be in compliance with applicable federal and state securities laws.
As a condition to the issuance of shares of Stock under this Option, you
agree to remit to the Company at the time of any exercise of this Option any
taxes required to be withheld by the Company under federal, state, or local law
as a result of your exercise of this Option. At your option, such taxes may be
paid by delivery to the Company of shares of Stock already owned by you or
withholding of shares issuable upon exercise of this Option, in either case in
an amount equal in fair market value to the taxes owed.
OXBORO MEDICAL INTERNATIONAL, INC.
By /s/ Larry A. Rasmusson
-----------------------------------
Larry A. Rasmusson
Its Chief Executive Officer
ACCEPTANCE
I hereby accept the terms and provisions of the above Nonqualified Stock
Option Agreement and agree to be bound by its terms. I also agree to accept as
binding, conclusive, and final all decisions or interpretations of the Company's
Board of Directors upon any questions arising under the Option.
Dated effective Feb. 20, 1998.
/s/ John Sayer
------------------------------------
John Sayer
2
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NOTICE OF EXERCISE OF STOCK OPTION
AND RECORD OF STOCK TRANSFER
I hereby exercise the Stock Option granted by Oxboro Medical International,
Inc., effective February 20, 1998, subject to all terms and provisions thereof,
and notify you of my desire to purchase _______ shares of Common Stock of the
Company (the "Shares"), offered to me pursuant to said Option. Enclosed is my
check in the sum of $_________________ in full payment for the Shares.
[This paragraph is applicable if the Shares are not registered under the
Securities Act of 1933.] I hereby represent that the Shares are being acquired
by me as an investment and not with a view to, or for resale in connection with,
the distribution of any shares of the Company. I understand that the Shares are
not registered under the Securities Act of 1933, as amended (the "Act"), or
applicable state securities laws, that the Shares may not be sold or otherwise
transferred except pursuant to an effective registration statement under the Act
and said laws unless the Company has received an opinion of counsel satisfactory
to it that such transfer or disposition does not require registration under the
Act or said laws and, for any sales under Rule 144 of the Act, such evidence as
it shall request for compliance with that rule or applicable state securities
laws, and that the certificate representing the Shares may contain a legend
referring to such restrictions.
I agree that I am responsible for any taxes payable as a result of the
exercise of the option or the sale of the shares issued upon such exercise. I
agree that if the Company is required to withhold any taxes as a result of my
exercise of the option, I will remit any required amount to the Company as a
condition to the issuance to me of the Shares.
Dated: _______________, 19__.
_____________________________________
Optionee's Signature
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RECEIPT
RECEIPT is hereby acknowledged of the delivery to me by Oxboro Medical
International, Inc., on ____________, 19__, of stock certificate no.
____________ for _________ shares of Common Stock purchased by me pursuant to
the terms and conditions of a stock option granted to me effective February 20,
1998.
_____________________________________
Optionee
4
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OXBORO MEDICAL INTERNATIONAL, INC.
TEMPORARY SERVICES AGREEMENT
This Agreement is made and entered into as of the 8th day of September,
1998 by and between OXBORO MEDICAL INTERNATIONAL, INC., a Minnesota corporation,
("OXBORO") and CRITICAL CARE ANESTHETISTS, P.A. ("CRITICAL CARE") and
CHRISTOPHER J. TURNBULL ("TURNBULL").
WHEREAS, OXBORO is engaged in the business of developing, manufacturing,
marketing and selling disposable medical devices and supplies;
WHEREAS, OXBORO OUTDOORS, INC. ("OUTDOORS"), a wholly owned subsidiary of
OXBORO, is engaged in the business of developing manufacturing, marketing and
selling outdoor recreational products consisting primarily of hunting and
fishing related products;
WHEREAS, CRITICAL CARE has agreed to provide OXBORO with TURNBULL's
services as a temporary President to perform such duties as may from time to
time be directed by the Board of Directors of OXBORO;
WHEREAS, OXBORO and CRITICAL CARE wish to describe certain terms and
conditions of that agreement, intending to be legally bound by them;
WHEREAS, CRITICAL CARE and TURNBULL have entered into this Agreement in
consideration of OXBORO's offer of temporary employment, and of being given
access to confidential business information, and;
WHEREAS, certain terms of this Agreement are designed, in large part, to
prevent TURNBULL's or CRITICAL CARE's disclosure or use of such confidential
business information to or on behalf of anyone else other than OXBORO and
OUTDOORS and to protect OXBORO's and OUTDOORS' ability to maintain its exclusive
method of operation and good will without unduly impairing TURNBULL's right to
work elsewhere.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants, terms and
conditions herein contained, it is hereby agreed by and between the parties
hereto as follows:
1. DEFINITIONS. The parties agree to the following definitions:
a. "Products" means any product, product line or device (including
any component thereof or research to develop information useful
in connection with OXBORO's and OUTDOORS' products or service)
that are being designed, developed, manufactured, assembled,
marketed, sold, or serviced by TURNBULL or under TURNBULL's
supervision, during the course of TURNBULL's employment with
OXBORO.
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b. "Competitive Products" means any products or services that are
being designed, developed, manufactured, assembled, marketed,
sold or serviced by anyone other than OXBORO and/or OUTDOORS and
are used for the same or similar purposes as the Products.
c. "Solicit sales" means to encourage the purchase or use of
products or services or to provide advice or assistance in
connection with such purchase or use.
d. "OXBORO" means OXBORO MEDICAL INTERNATIONAL, INC. and all of its
subsidiaries, affiliate corporations or operating divisions.
e. "OUTDOORS" means OXBORO OUTDOORS, INC, a wholly owned subsidiary
of OXBORO, and all of its subsidiaries, affiliate corporations or
operating divisions.
f. "CRITICAL CARE" means Critical Care Anesthetists, P.A., a
profession association, located at 5325 Dominick Drive,
Minnetonka, Minnesota 55343.
g. "Confidential Information" means any information or compilation
of information having to do with OXBORO and OUTDOORS that
CRITICAL CARE or TURNBULL learn of or develop during the course
of TURNBULL's employment with OXBORO that derives independent
economic value from not being generally known, or readily
ascertainable by proper means, by other persons who can obtain
economic value from its disclosure or use. Confidential
Information includes, but is not limited to, trade secrets and
such matters as sales and marketing plans and information,
research and development of products and services, manufacturing
processes, customer names, contacts and lists, supplier lists,
products and pricing, and management systems and techniques.
2. CONSIDERATION. The consideration being provided by OXBORO to CRITICAL
CARE for these undertakings includes anything of value provided in connection
with the signing of the Agreement, including but not limited to, the offer of
temporary engagement of TURNBULL as President of Oxboro, the compensation paid
and to be paid for such temporary engagement, access to confidential
information, or the obligations of OXBORO described in this Agreement.
3. COMPENSATION. Compensation for the engagement period will be a base
fee of $8,000 per month paid on receipt at the end of each month. This fee
covers at least three (3) full-time days each week. TURNBULL will continue to
provide medical practice services through and for CRITICAL CARE the remaining
two (2) workdays each week and will, to the extent possible, provide partial
days of service for Oxboro on such days. No benefits, such as medical, dental,
life or disability insurance, vacation pay or sick leave pay will be provided
during the employment period.
2
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CRITICAL CARE will receive an option to purchase 1,000 shares of stock for
each month of temporary engagement TURNBULL provides OXBORO. Regardless of the
number of months of this Agreement, a minimum of 5,000 shares are available to
exercise. This option may be assigned by CRITICAL CARE to TURNBULL and may not
otherwise be assigned. This option is exercisable from the date the option is
granted and expires three (3) years thereafter at an exercise price of $1.50 per
share.
CRITICAL CARE and TURNBULL will also be reimbursed for reasonable business
expenses that they may incur in fulfilling their obligations under this
Agreement subject to review and approval by the Chief Financial Officer and/or
the Board of Directors. Reasonable business expense will include necessary
travel and automobile and telephone expenses.
4. ENGAGEMENT. OXBORO agrees to contract with CRITICAL CARE for
TURNBULL's services as the President pursuant to the terms and conditions of
this Agreement. CRITICAL CARE agrees to provide TURNBULL to be engaged by
OXBORO pursuant to the terms and conditions of this Agreement and TURNBULL
agrees to faithfully and diligently exert his best efforts to perform the duties
and responsibilities as President, promote the interest and welfare of OXBORO
and its business, be familiar with and abide by OXBORO policies that relate to
TURNBULL's duties and to abide by these policies, and do nothing which may cause
loss or damage to OXBORO, OUTDOORS, its business, or its business reputation and
good will. CRITICAL CARE and TURNBULL further agree to comply with all
reasonable rules, regulations, orders and directions of OXBORO and to abide by
all federal, state and local statutes, ordinances, rules and regulations.
5. CONFIDENTIAL INFORMATION AND CONFIDENTIALITY AGREEMENT. CRITICAL CARE
and TURNBULL acknowledge that TURNBULL shall have access to and be furnished
certain materials and property essential to the performance of TURNBULL's and
CRITICAL CARE's duties, including but not limited to products and pricing, sales
analysis reports, sales aids, brochures, financial statements, customer names
and contacts, vendor names and other related materials and properties, some of
which is defined and deemed to be Confidential Information and all of which are
herein agreed to be the property of OXBORO. Upon termination of this Agreement,
all materials and properties, including all copies thereof, shall be immediately
returned to OXBORO.
It is understood and agreed by and between the parties hereto that the
nature of the engagement is such that CRITICAL CARE and TURNBULL will acquire
Confidential Information about OXBORO. CRITICAL CARE and TURNBULL agree not to
use or disclose such Confidential Information directly or indirectly, for any
purpose whatsoever other than in the performance of TURNBULL's and CRITICAL
CARE's duties and responsibilities in TURNBULL's engagement with, and on behalf
of, OXBORO during the term of this Agreement or at any time after the
termination thereof. It is further understood that disclosure of such
Confidential Information would result in irreparable harm to OXBORO for which it
may have no other adequate remedy at law by way of damages or otherwise.
Further, the engaging by TURNBULL or CRITICAL CARE in the same or similar
businesses in competition with OXBORO during the term of this Agreement or
within a one year period after termination
3
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thereof, as provided in greater detail by Section 8 of this Agreement, by virtue
of the knowledge, information and experience required by CRITICAL CARE or
TURNBULL during this Agreement will result in irreparable harm to OXBORO for
which it may have no adequate remedy at law by way of damages or otherwise.
Because of the foregoing, it is hereby agreed that a breach by TURNBULL or
CRITICAL CARE of any of the covenants contained in this Agreement shall entitle
OXBORO to:
a. Seek and obtain an injunction against CRITICAL CARE and/or TURNBULL;
b. Recover from CRITICAL CARE and/or TURNBULL reasonable attorney's fees
and cost incidental to the enforcement of the Agreement; and
c. Pursue damages and any other remedy or relief to which OXBORO may be
entitled to recover from CRITICAL CARE and/or TURNBULL under this
Agreement and/or under law.
6. TERM AND NOTICE OF TERMINATION. This Agreement shall continue on a
month to month basis. OXBORO and CRITICAL CARE may terminate the Agreement with
or without reason or cause, provided that:
This Agreement may be terminated by either party without cause, for any
reason or for no reason, at any time upon thirty (30) days written notice to the
other party. OXBORO may terminate this Agreement immediately for Cause without
prior notice to CRITICAL CARE. "Cause" shall mean the following:
(i) Conviction or judicial determination of a violation of a
standard of conduct of an officer as set forth in MSA Section 302A.361 or
of a conviction of a violation of securities laws or regulations, which
violations have a material adverse effect on OXBORO, or a conviction of a
felony for an act or failure to act outside of the scope of TURNBULL's
duties and/or for an act or failure to act within the scope of TURNBULL's
duties which act or failure to act has not been disclosed to the Board of
Directors of OXBORO as of the date of this Agreement;
(ii) Failure or refusal by TURNBULL to perform a material requirement
of a specific duty or duties which specific duty or duties have been
determined by a unanimous resolution of the Board of Directors, after
receipt by CRITICAL CARE or TURNBULL of written notice thereof specifying
in detail the failure or refusal, and a reasonable time in which to
perform;
(iii) TURNBULL's (a) death or (b) disability (by reason of physical or
mental disease, defect, accident or illness) such that TURNBULL is or, in
the unanimous opinion of two independent physicians, one selected by OXBORO
and one by CRITICAL CARE or their representative, for purposes of making
this determination, will be unable for an aggregate of 30 or more days
during any continuous 2-month period to render the services required of him
in his then current position(s) with OXBORO.
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<PAGE>
With respect to subparagraph (ii) above, OXBORO shall give CRITICAL CARE
written notice of such failure, refusal or breach, and CRITICAL CARE shall have
thirty (30) days to cure such failure, refusal or breach. If such failure,
refusal or breach is not cured within said thirty (30) day period, "Cause" shall
be deemed to exist.
7. NOTICE. Whenever written notice is required hereunder, it may be
given by certified mail to respective parties or by personal service on the
respective parties at the following addresses:
Employer: OXBORO MEDICAL INTERNATIONAL, INC.
13828 Lincoln Street N.E.
Ham Lake, MN 55304
Critical Care: CRITICAL CARE ANESTHETISTS, P.A.
5325 Dominick Drive
Minnetonka, MN 55343
Telephone: (612) 938-7821
Notice shall be effective as of the date of receipt.
8. POST TERMINATION RESTRICTIONS. Recognizing that an important element
of business success is the information, training and exclusive method of
cooperation entrusted to its employees, it is agreed that during the period of
this Agreement and for a period of one year thereafter, CRITICAL CARE and
TURNBULL shall not directly or indirectly, under any circumstances whatsoever,
for itself or himself, or for or with any person, firm, corporation or party,
either in the capacity of an individual, partner, shareholder, director,
officer, employee, agent, trustee, consultant, investor, professional
association or in any other capacity, engage in, participate in, or assist in
the conduct of any business like that of OXBORO or in the distribution of
Competitive Products, nor solicit sales or attempt to take away customers of
OXBORO.
9. EFFECTIVE BREACHES OF OTHER OBLIGATIONS. The obligation of the
parties to perform the terms of this Agreement is unconditional and does not
depend on the performance or nonperformance of any terms, duties or obligations
not specifically recited in this Agreement. The waiver of or acquiescence to
the terms and conditions of this Agreement by OXBORO or CRITICAL CARE or
TURNBULL shall not be a waiver of or acquiescence to additional or subsequent
defaults.
10. GOVERNING LAW. The validity and enforceability, construction and
interpretation of this Agreement shall be governed by the laws of Minnesota.
11. SEVERABILITY. In the event that any provision of this Agreement is
unenforceable under applicable law, that finding shall not effect the validity
or enforceability of the remaining provisions. To the extent that any provision
of this Agreement is unenforceable because it is overbroad, such provision shall
be amended to the extent required by applicable law and enforced as so amended.
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<PAGE>
12. TRANSFERABILITY. The right and obligations of OXBORO hereunder may be
transferred to its successors and assigns. CRITICAL CARE or TURNBULL may not,
however, transfer or assign their rights or obligations under this Agreement.
13. WRITING. This Agreement supersedes all prior Agreements and
understandings between the parties and may not be changed or terminated orally,
and no change, termination or attempted waiver of any of the provisions hereof
shall be binding unless in writing and signed by the party against whom the same
is sought to be enforced.
IN WITNESS WHEREOF, OXBORO has caused this Agreement to be executed in its
corporate name of the corporation, and CRITICAL CARE has hereunto executed this
Agreement by an authorized officer, and TURNBULL has executed this Agreement the
day and year first above written.
CRITICAL CARE ANESTHETIST, P.A. OXBORO MEDICAL INTERNATIONAL, INC.
By /s/ Christopher J. Turnbull By /s/ Kenneth W. Brimmer
------------------------------- ---------------------------------
Its: President Its:Director
-------------------------- -----------------------------
/s/ Christopher J. Turnbull
-------------------------------
TURNBULL
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<PAGE>
OXBORO MEDICAL INTERNATIONAL, INC.
EMPLOYMENT AGREEMENT
This Agreement is made and entered into this 17 September 1998 by and
between OXBORO MEDICAL INTERNATIONAL, INC., a Minnesota corporation, ("OXBORO")
and Richard L. Ulvenes ("ULVENES").
WHEREAS, OXBORO is engaged in the business of developing, manufacturing,
marketing and selling disposable medical devices and supplies;
WHEREAS, OXBORO OUTDOORS, INC. ("OUTDOORS"), a wholly owned subsidiary of
OXBORO, is engaged in the business of developing manufacturing, marketing and
selling outdoor recreational products consisting primarily of hunting and
fishing related products;
WHEREAS, ULVENES has been hired by OXBORO as Chief Financial Officer to
perform such duties as may from time to time be directed by the Board of
Directors of OXBORO, it's President, or ULVENES's Supervisor for OXBORO and
OUTDOORS;
WHEREAS, OXBORO and ULVENES wish to describe certain terms and conditions
of that employment, intending to be legally bound by them;
WHEREAS, ULVENES has entered into this Agreement in consideration of
OXBORO's offer of employment, and of being given access to confidential business
information, and;
WHEREAS, the terms of this Agreement are designed, in large part, to
prevent ULVENES's disclosure or use of such confidential business information to
or on behalf of anyone else other than OXBORO and OUTDOORS and to protect
OXBORO's and OUTDOORS' ability to maintain its exclusive method of operation and
good will without unduly impairing ULVENES's right to work elsewhere.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants, terms and
conditions herein contained, it is hereby agreed by and between the parties
hereto as follows:
1. DEFINITIONS. The parties agree to the following definitions:
a. "Products" means any product, product line or
device (including any component thereof or
research to develop information useful in
connection with OXBORO's and OUTDOORS'
products or service) that are being designed,
developed, manufactured, assembled, marketed,
sold, or serviced by ULVENES or under
ULVENES's supervision, during the course of
ULVENES's employment with OXBORO.
b. "Competitive Products" means any products or services that are
being designed, developed, manufactured, assembled, marketed,
sold or serviced
<PAGE>
by anyone other than OXBORO and/or OUTDOORS are used for the same
or similar purposes as the Products.
c. "Solicit sales" means to encourage the purchase or use of
products or services or to provide advice or assistance in
connection with such purchase or use.
d. "OXBORO" means OXBORO MEDICAL INTERNATIONAL, INC. and all of its
subsidiaries, affiliate corporations or operating divisions.
e. "OUTDOORS" means OXBORO OUTDOORS, INC, a wholly owned subsidiary
of OXBORO, and all of its subsidiaries, affiliate corporations or
operating divisions.
f. "Confidential Information" means any information or compilation
of information having to do with OXBORO and OUTDOORS that ULVENES
learns or develops during the course of ULVENES's employment with
OXBORO that derives independent economic value from not being
generally known, or readily ascertainable by proper means, by
other persons who can obtain economic value from its disclosure
or use. Confidential Information includes, but is not limited
to, trade secrets and such matters as sales and marketing plans
and information, research and development of products and
services, manufacturing processes, customer names, contacts and
lists, supplier lists, products and pricing, and management
systems and techniques.
2. CONSIDERATION. The consideration being provided by OXBORO to ULVENES
for these undertakings includes anything of value provided in connection with
the signing of the Agreement, including but not limited to, the offer of
employment, the compensation paid and to be paid for such employment, access to
confidential information, or the obligations of OXBORO described in this
Agreement.
3. COMPENSATION. Compensation for the employment period will be a base
salary of $6,000 per month paid on the first of the month. This salary covers
the first eighty (80) hours of each month. Sixty (60) of these hours must be
provided during normal business hours (8 a.m. to 5 p.m.) An hourly rate of $50
per hour will be paid for each hour worked in excess of eighty (80) hours per
month. No benefits, such as medical, dental, life or disability insurance,
vacation pay or sick leave pay will be provided during the employment period.
ULVENES will receive an option to purchase 1,000 shares of stock for each
month of employment with OXBORO. Regardless of the number of months employed, a
minimum of 5,000 shares are available to exercise. This option is exercisable
from the date the option is granted and expires five years thereafter at an
exercise price of $1.50 per share.
4. EMPLOYMENT. OXBORO agrees to employ ULVENES as the Chief Financial
Officer pursuant to the terms and conditions of this Agreement. ULVENES agrees
to be
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<PAGE>
employed by OXBORO pursuant to the terms and conditions of this Agreement and to
faithfully and diligently exert his best efforts to perform the duties and
responsibilities of employment, promote the interest and welfare of OXBORO and
its business, be familiar with and abide by OXBORO policies that relate to
ULVENES's duties and to abide by these policies, and do nothing which may cause
loss or damage to OXBORO, OUTDOORS, its business, or its business reputation and
good will. ULVENES further agrees to comply with all reasonable rules,
regulations, orders and directions of OXBORO and to abide by all federal, state
and local statutes, ordinances, rules and regulations.
5. CONFIDENTIAL INFORMATION AND CONFIDENTIALITY AGREEMENT. ULVENES
acknowledges that as an employee for OXBORO, ULVENES shall have access to and be
furnished certain materials and property essential to the performance of
ULVENES's duties, including but not limited to products and pricing, sales
analysis reports, sales aids, brochures, financial statements, customer names
and contacts, vendor names and other related materials and properties, some of
which is defined and deemed to be Confidential Information and all of which are
herein agreed to be the property of OXBORO. Upon termination, all materials and
properties, including all copies thereof, shall be immediately returned to
OXBORO.
It is understood and agreed by and between the parties hereto that the
nature of the employment is such that ULVENES will acquire Confidential
Information about OXBORO. ULVENES agrees not to use or disclose such
Confidential Information directly or indirectly, for any purpose whatsoever
other than in the performance of ULVENES's duties and responsibilities in
ULVENES's job with, and on behalf of, OXBORO during employment or at any time
after the termination of employment with OXBORO. It is further understood that
disclosure of such Confidential Information would result in irreparable harm to
OXBORO for which it may have no other adequate remedy at law by way of damages
or otherwise. Further, the engaging by the ULVENES in the same or similar
businesses in competition with OXBORO during employment or within a one year
period after termination of ULVENES's employment, as provided in greater detail
by Section 8 of this Agreement, by virtue of the knowledge, information and
experience required by the ULVENES during his employment will result in
irreparable harm to OXBORO for which it may have no adequate remedy at law by
way of damages or otherwise. Because of the foregoing, it is hereby agreed that
a breach by the ULVENES of any of the covenants contained in this Agreement
shall entitle OXBORO to:
a. Seek and obtain an injunction against ULVENES;
b. Recover from ULVENES reasonable attorney's fees and cost incidental to
the enforcement of the Agreement; and
c. Pursue damages and any other remedy or relief to which OXBORO may be
entitled to recover from ULVENES under this Agreement and/or under
law.
6. TERM AND NOTICE OF TERMINATION. The employment hereunder shall
continue at the will of OXBORO and ULVENES and may be terminated by either with
or without reason or cause, provided that:
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<PAGE>
This Agreement may be terminated by either party without cause, for any
reason or for no reason, at any time upon thirty (30) days written notice to the
other party. OXBORO may terminate this Agreement immediately for Cause without
prior notice to ULVENES. "Cause" shall mean the following:
(i) Conviction or judicial determination of a violation of a
standard of conduct of an officer as set forth in MSA Section 302A.361 or
of a conviction of a violation of securities laws or regulations, which
violations have a material adverse effect on OXBORO, or a conviction of a
felony for an act or failure to act outside of the scope of ULVENES's
employment and/or for an act or failure to act within the scope of
ULVENES's employment which act or failure to act has not been disclosed to
the Board of Directors of OXBORO as of the date of this Agreement;
(ii) Failure or refusal by ULVENES to perform a material requirement
of a specific duty or duties which specific duty or duties have been
determined by a unanimous resolution of the Board of Directors, after
receipt by ULVENES of written notice thereof specifying in detail the
failure or refusal, and a reasonable time in which to perform;
(iii) ULVENES's (a) death or (b) disability (by reason of physical or
mental disease, defect, accident or illness) such that ULVENES is or, in
the unanimous opinion of two independent physicians, one selected by OXBORO
and one by ULVENES or his representative, for purposes of making this
determination, will be unable for an aggregate of 30 or more days during
any continuous 2-month period to render the services required of him in his
then current position(s) with OXBORO.
With respect to subparagraph (ii) above, OXBORO shall give ULVENES written
notice of such failure, refusal or breach, and ULVENES shall have thirty (30)
days to cure such failure, refusal or breach. If such failure, refusal or
breach is not cured within said thirty (30) day period, "Cause" shall be deemed
to exist.
7. NOTICE. Whenever written notice is required hereunder, it may be
given by certified mail to respective parties or by personal service on the
respective parties at the following addresses:
Employer: OXBORO MEDICAL INTERNATIONAL, INC.
13828 Lincoln Street N.E.
Ham Lake, MN 55304
Employee: Richard L. Ulvenes
Home Address: 6719 Sherman Lake Road
Lino Lakes, MN 55038
Telephone: (612) 426-9620
Notice shall be effective as of the date of receipt.
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<PAGE>
8. POST TERMINATION RESTRICTION ON EMPLOYMENT. Recognizing that an
important element of business success is the information, training and exclusive
method of cooperation entrusted to its employees, it is agreed that during the
period of employment and for a period of one year thereafter, ULVENES shall not
directly or indirectly, under any circumstances whatsoever, for himself or for
or with any person, firm, corporation or party, either in the capacity of an
individual, partner, shareholder, director, officer, employee, agent, trustee,
consultant, investor or in any other capacity, engage in, participate in, or
assist in the conduct of any business like that of OXBORO or in the distribution
of Competitive Products, nor solicit sales or attempt to take away customers of
OXBORO.
9. EFFECTIVE BREACHES OF OTHER OBLIGATIONS. The obligation of the
parties to perform the terms of this Agreement is unconditional and does not
depend on the performance or nonperformance of any terms, duties or obligations
not specifically recited in this Agreement. The waiver of or acquiescence to
the terms and conditions of this Agreement by OXBORO or ULVENES shall not be a
waiver of or acquiescence to additional or subsequent defaults.
10. GOVERNING LAW. The validity and enforceability, construction and
interpretation of this Agreement shall be governed by the laws of Minnesota.
11. SEVERABILITY. In the event that any provision of this Agreement is
unenforceable under applicable law, that finding shall not effect the validity
or enforceability of the remaining provisions. To the extent that any provision
of this Agreement is unenforceable because it is overbroad, such provision shall
be amended to the extent required by applicable law and enforced as so amended.
12. TRANSFERABILITY. The right and obligations of OXBORO hereunder may be
transferred to its successors and assigns. ULVENES may not, however, transfer
or assign his rights or obligations under this Agreement.
13. WRITING. This Agreement supersedes all prior Agreements and
understandings between the parties and may not be changed or terminated orally,
and no change, termination or attempted waiver of any of the provisions hereof
shall be binding unless in writing and signed by the party against whom the same
is sought to be enforced.
IN WITNESS WHEREOF, OXBORO has caused this Agreement to be executed in its
corporate name by an authorized officer of the corporation, and ULVENES has
hereunto executed this Agreement the day and year first above written.
OXBORO MEDICAL INTERNATIONAL, INC.
/s/ Richard L. Ulvenes By /s/ Christopher J. Turnbull
- ------------------------------- --------------------------------------
ULVENES Its President
-----------------------------------
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