SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 12, 1996
Date of Report
(Date of earliest event reported)
CELLULAR PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
New York
(State of Incorporation)
0-12782 16-1183105
(Commission File Number) (I.R.S. Employer Identification Number)
872 Main Street, Buffalo, New York
(Address of principal executive offices)
(716) 882-0920
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Resignations of Registrant's Directors.
By consent to action in lieu of a special meeting of the
Board of Directors of Registrant, dated as of July 12, 1996, and in
accordance with Registrant's By-laws, Jeffrey N. Meshulam, sole
director, appointed James C.D. Hengst and Michael S. Durski to fill
vacancies on Registrant's Board of Directors.
Subsequently, and by the terms of a certain Separation
Agreement with Registrant, dated of even date, Mr. Meshulam
resigned as a director, and from all positions held by him with
Registrant, including the office of President.
By consent to action in lieu of a special meeting of the
Board of Directors, dated as of July 15, 1996, the newly appointed
members of the Board of Directors appointed the following persons
to the positions set opposite their names:
<TABLE>
NAME POSITION
<S> <C> <C>
James C.D. Hengst, Ph.D. President and Chief
Operating Officer
Michael S. Durski Chief Financial Officer,
Vice President, and
Treasurer
</TABLE>
The ages and employment histories of Messrs. Hengst and Durski
for the past five years are as follows:
James C.D. Hengst, Ph.D., age 42, has been a Vice President in
charge of Research and Development at the Registrant from August,
1993 to November, 1994, and in charge of Research, Development and
Operations from November, 1994 until July 15, 1996. Prior to
August, 1993 he was Director of Biochemicals Research and
Development in the Research and Development Division of Boehringer
Mannheim Corporation.
Michael S. Durski, age 46, has been Vice President, Chief
Financial Officer and Treasurer of the Registrant from January 1995
until the present. During 1994, he was a management consultant and
prior thereto was Executive Vice President and Treasurer of
Treibacher Schleifmittel Corporation, an abrasives manufacturer.
<PAGE>
Item 7. Financial Statements and Exhibits
7(c) Exhibits
Exhibit Number:
10. Separation Agreement dated July 12, 1996 between the
Registrant and Jeffrey N. Meshulam.
99. Press release dated July 17, 1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CELLULAR PRODUCTS, INC.
By: /s/ Michael S. Durski
__________________________
Michael S. Durski
Vice President and
Chief Financial Officer
Exhibit 10
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT ("Agreement") is made this 12th
day of July, 1996, by and between Cellular Products, Inc., a New
York corporation with offices at 872 Main Street, Buffalo, New York
14202 ("CPI") and Jeffrey N. Meshulam, 68 Rolling Meadows, East
Amherst, New York ("Meshulam").
WHEREAS, Meshulam has heretofore been employed by CPI and
has served as Executive Vice President pursuant to that certain
Employment Agreement dated September 1, 1993, as amended on
November 22, 1994 ("Employment Agreement") and also as President
and as a member of CPI's Board of Directors; and
WHEREAS, CPI and Meshulam wish to terminate said
employment on mutually satisfactory terms;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, CPI and Meshulam agree as follows:
1. Resignations. Meshulam agrees to and does hereby
resign as an Officer, Director and employee of CPI effective
immediately and upon the complete execution of this Agreement by
Meshulam and CPI. CPI acknowledges that Meshulam has been working
on CPI's behalf, and has credited CPI for any sums earned, at the
Institute of Human Virology, in Baltimore, Maryland.
2. Scope of Agreement. Meshulam agrees to accept any
sums to be paid pursuant to the terms of this Agreement in lieu of
any and all compensation, severance and other benefits to be paid
or provided by CPI to Meshulam or to be received by Meshulam from
CPI as an Officer, Director or employee of CPI, or pursuant to law.
3. Health Benefits. Meshulam agrees to accept, in
full satisfaction of any and all rights to health and any other
benefits under any law, rule or regulation (other than pursuant to
COBRA), a contribution towards Meshulam's health insurance under
CPI's health insurance plan of $312/month by CPI for a period of
six months, commencing July, 1996 and terminating December, 1996.
Any health benefit expenses in excess of CPI's contribution shall
be paid by Meshulam.
4. Cooperation. Meshulam shall execute such other
documents as shall reasonably be required from time to time by CPI
to effectuate the purposes of this Agreement and shall from time to
time upon the reasonable request of CPI, consult and confer with
and exchange information with CPI regarding CPI's Chapter 11
proceeding, or any conversion thereof, as well as any matter within
his knowledge or experience concerning the business, books, records
and documents of CPI. Meshulam shall cooperate to the extent
reasonably required by CPI in the defense of any litigation or
regulatory proceedings involving matters which took place during
the period Meshulam served as an Officer, Director or employee of
CPI. CPI shall pay Meshulam $2,100.00/month for a period of three
months commencing July 12, 1996, for any services rendered at the
request of CPI pursuant to this paragraph. CPI shall also
reimburse Meshulam for reasonable out-of-pocket expenses incurred
at the request of CPI pursuant to this paragraph, upon submission
of receipts evidencing same.
5. Release From Meshulam. Meshulam does for himself,
his heirs, executors and administrators hereby remise, release and
forever discharge CPI, its affiliates, and its and their officers,
directors, and shareholders, and their successors and assigns, both
jointly and severally, of and from all suits, debts, covenants,
contracts, agreements, claims, demands, damages, judgments and
causes of action, at law or in equity, which Meshulam ever had, now
has, or shall or may have against CPI, its affiliates, officers,
directors and shareholders, both jointly and severally, by reason
of any cause or thing whatsoever, but excluding: (i) obligations of
CPI as specifically set forth in this Agreement; and (ii)
obligations of CPI evidenced by that certain Demand Promissory
Note, dated November 30, 1995, and secured by CPI's accounts
receivable, in the current outstanding principal amount of
$46,500.00 ("Secured Note").
6. Release From CPI. CPI does for itself and its
assigns hereby remise, release and forever discharge Meshulam and
his heirs, executors and administrators, of and from all suits,
debts, covenants, contracts, agreements, claims, demands, damages,
judgments and causes of action, at law or in equity, which CPI ever
had, now has, or shall or may have against Meshulam, his heirs,
executors and administrators, both jointly and severally by reason
of any cause or thing whatsoever, but excluding the
representations, agreements and obligations of Meshulam as
specifically set forth in this Agreement.
7. Indemnification.
(a) CPI shall indemnify Meshulam to the
fullest extent authorized or permitted by law in the event Meshulam
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason
of the fact that he, his testator or intestate, is or was a
director, officer, employee or agent of CPI, or is or was serving
at the request of CPI as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best
interests of CPI, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.
(b) For purposes of paragraph (a) of this
Section 7, the termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of guilty
or nolo contendere or its equivalent, shall not, of itself, create
a presumption that any person did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to,
the best interests of CPI, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(c) Expenses incurred in defending a civil or
criminal action, suit or proceeding shall be paid by CPI in advance
of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of the director, officer,
employee or agent, to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by CPI under
Section 7; provided, however, that no such indemnification shall be
made if a determination is made by independent legal counsel,
mutually acceptable to both parties, in a written opinion that
indemnification is not proper in the circumstances because he has
not met the applicable standard of conduct set forth in paragraph
(a) of this Section 7.
8. Confidentiality.
(a) "Confidential Information" shall include
information received or developed by Meshulam during his employment
by CPI which concerns the financial or other affairs of CPI, which
information is not generally known in the industry in which CPI is
engaged, and regarding CPI's products, processes and services,
including information relating to research, development, invention,
manufacture, purchasing, accounting, engineering, marketing,
merchandising, and selling. "Inventions" shall include all
discoveries, concepts, ideas and improvements, processes, methods,
formulas, organisms, software programs and techniques, as well as
data and know how concerning any past, present or prospective
activities of CPI with which Meshulam has become acquainted as a
result of his employment by CPI.
(b) Meshulam shall hold all Confidential
Information and Inventions in confidence and trust and shall use
all reasonable precautions to assure that said Confidential
Information and Inventions are never disclosed to any person, firm
or corporation without the prior approval in writing of CPI. In no
event shall any such Confidential Information or Inventions be used
to the detriment of CPI.
(c) Meshulam has delivered to CPI all
documents, records, notebooks, tangible research materials and
similar repositories of or containing Confidential Information or
Inventions, including copies thereof, in the possession or under
the control of Meshulam as of the date of this Agreement whether
prepared by him or others.
9. Employment Agreement - Termination. The
Employment Agreement between the parties is hereby terminated,
without any notice or further restriction or further liability on
the part of either party.
10. CPI Property. Meshulam acknowledges and agrees
that he has in his possession the following property of CPI and
that he will return same to CPI, and/or stop using same, on or
before the date on which this Agreement is executed by him:
(a) American Express Credit Card;
(b) Sanitrol Security Card;
(c) AT&T Long Distance Access Number;
(d) Toshiba Laptop Computer, Printer and accessories;
(e) Skytel Beeper (unless Meshulam completes an
assignment and assumption of liability therefor);
and
(f) Building keys.
11. Legal Advice. Meshulam acknowledges that he has
been afforded the opportunity to obtain independent legal advice in
connection with this Agreement and acknowledges that he has read,
understands and agrees to be bound by all the terms and conditions
contained herein.
12. Contracts, Claims, Regulatory Compliance.
12.1 Meshulam represents that he has no
knowledge of any:
(a) suit or action or legal, administrative,
arbitration, or other proceeding or investigation by a governmental
body or self-regulatory organization, pending or threatened,
relating to CPI, its directors, officers or employees or of any
basis for any such suit, action, proceeding or investigation;
(b) violation or contravention of any law,
rule or regulation governing the business or operations of CPI
committed by CPI or any of its directors, officers or employees;
(c) employment agreement, or any contract or
commitment involving payment by CPI of amounts aggregating in
excess of $1,000, except such employment agreements, contractors or
commitments as have been approved by the Board of Directors of CPI.
12.2 Meshulam represents that he has not
committed or obligated CPI to any employment agreement, contract or
commitment involving payment of CPI of amounts aggregating in
excess of $1,000 or involving any transfer, license or encumbrance
of any of the assets of CPI except such employment agreements,
contracts, commitments, obligations, transfers and encumbrances as
have been approved by the Board of Directors of CPI.
13. Compensation and Other Terms.
13.1 Meshulam shall be entitled to receive the
following sums from CPI upon the execution of this Agreement, all
subject to such deductions as may be required by law:
(a) The sum of $17,123.12 on account of
accrued vacation;
(b) The sum of $46,500.00, plus interest
accruing thereon at the rate of 6% per
annum, with respect to the repayment of
principal and interest on the Secured
Note, until the Secured Note is paid in
full, provided that nothing contained in
this Section 13 shall limit Meshulam's
rights to demand payment of the Secured
Note in accordance with its terms.
CPI shall repay Meshulam as set forth on Exhibit A, attached hereto
and made a part hereof, until the obligations listed in this
Section 13.1 are repaid in full to Meshulam. Meshulam shall be
responsible for all taxes and filings with respect to such
payments.
13.2 Meshulam shall repay to CPI upon the
execution of this Agreement:
(a) $792.66 with respect to an outstanding
loan from CPI;
(b) $2,969.23 on account of wages offset; and
(c) $2,935.82 on account of condominium
expenses.
13.3 Meshulam shall be entitled to
reimbursement by CPI for all reasonable expenses actually incurred
by him on behalf of CPI, and not previously reimbursed, upon
submission to CPI of paid invoices for such expenses. Meshulam
shall promptly reimburse CPI for any expenses incurred by him not
on behalf of CPI but for which CPI has paid or may be liable.
13.4 All sums required to be paid between the
parties pursuant to this Section 13 may be offset against each
other so that only the net amount remaining payable to Meshulam
shall be required to be tendered by CPI.
13.5 CPI shall provide Meshulam with such
financial reports as he may reasonably require with respect to the
Secured Note.
14. Public Announcements. Neither party shall make
any announcement or communication of the transactions contemplated
by this Agreement without the prior written consent of the other,
which consent shall not be unreasonably withheld.
15. Survival of Representations and Agreements. All
covenants, agreements, and representations made by CPI and Meshulam
in this Agreement shall survive the consummation of the
transactions contemplated by this Agreement and the termination of
the Employment Agreement.
16. Non-Waiver. The waiver of, or failure to take
action with regard to, any breach of any term or condition of this
Agreement shall not be deemed to constitute a continuing waiver or
a waiver of any other breach of the same or any other term or
condition.
17. Miscellaneous. The section and other headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. If any provision of this Agreement or the application
thereof to any person or circumstances is held invalid, the
remainder of this Agreement and the application of such provision
to the other person and circumstances shall not be affected
thereby. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York. The benefits of
this Agreement may not be assigned by Meshulam.
18. Entire Agreement, Counterparts. This document
contains the entire agreement of the parties with respect to its
subject matter and supersedes and replaces any prior agreement or
understanding, and no amendment, modification or waiver of any
provision hereof shall be valid unless it be in writing and signed
by CPI and Meshulam. This Agreement may be executed in
counterparts, by original or telephonic facsimile signature, with
each fully executed counterpart being deemed an original, and all
such counterparts being deemed one and the same document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
CELLULAR PRODUCTS, INC.
By: /s/ J.C.D. Hengst VP/RDO
_________________________
Authorized Officer
By: /s/ Jeffrey N. Meshulam
__________________________
Jeffrey N. Meshulam
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Unpaid Salary
Date From 7/6 - 7/12 Vacation Consulting Loan Total
<S> <C> <C> <C> <C> <C>
7/26 $ 1484.64 $4,892.32 $2,100.00 $2,000.00 $10,476.96
8/9 4,892.32 2,000.00 6,892.32
8/23 4,892.32 2,100.00 2,000.00 8,992.32
9/6 2,446.16 4,000.00 6,446.16
9/30 2,100.00 4,000.00 6,000.00
10/4 4,000.00 4,000.00
10/18 4,000.00
11/1 4,000.00
11/15 4,000.00
11/29 4,000.00
12/13 4,000.00
12/27 4,000.00
1/10 4,000.00
1/24 500.00 plus Interest Earned
</TABLE>
[Cellular Products, Inc. Logo]
Exhibit 99
News Release
"For Immediate Release"
July 17, 1996
Company Contact: Mr. Michael S. Durski
Vice President/CFO (716) 882-0920
BUFFALO, NEW YORK, July 17, 1996 - Cellular Products, Inc.
(NASDAQ:CELP), announced today that Mr. Jeffrey N. Meshulam, the
Company's co-founder, President and director has resigned from his
position and from the Board of Directors. Mr. Meshulam has
accepted a position working with Dr. Robert Gallo at the Institute
of Human Virology in Baltimore, Maryland.
The Company also announced that James C.D. Hengst, Ph.D. has
been appointed President, Chief Operating Officer and a director,
formerly Vice President, Research, Development and Operations. Mr.
Michael S. Durski has been appointed Vice President, Chief
Financial Officer, Treasurer and a director.
Cellular Products, Inc. is engaged in the development and
marketing of biotechnology products for research purposes.
