SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Under to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 19, 1996
Commission File Number: 1-10013
Larson Davis Incorporated
(Exact Name of Registrant as Specified in its Charter)
Nevada 87-0429944
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1681 West 820 North, Provo, Utah 84601
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(801) 375-0177
N/A
(Former name, former address, and formal fiscal year, if changed since
last report)
Page 1 of 8 consecutively numbered pages, including exhibits.
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ITEM 5. OTHER EVENTS
Larson Davis Incorporated (the "Company") has expanded its board of
directors to four individuals, and appointed William E. Hosker to fill
the vacancy created thereby. Mr. Hosker has extensive experience and
background in the chemical industry, both as a chemist and corporate
executive. Mr. Hosker was employed by Hercules, Inc., for 35 years prior
to his retirement in 1995. Mr. Hosker began his career at Hercules in
1960 as an organic chemist in the Hercules Research Center and later
served in several high level executive positions in product development
and marketing within the Paper Chemicals Group. By 1985, Mr. Hosker was
serving as the Vice-President of the Paper Chemicals Group and, in 1987,
became the Corporate Vice-President of International Operations,
Subsidiaries, and Ventures. In 1990, Mr. Hosker was appointed as
Vice-President and General Manager of the Resins Group of Hercules, a
division with approximately $600 million in annual revenues. Mr. Hosker
received his bachelor's of science degree in biochemistry from Brown
College in 1960.
Concurrently with the appointment of William E. Hosker as a member of the
board of directors, the Company entered into an agreement with STAT
Associates, Inc., a company controlled by Mr. Hosker, for the provision
by STAT Associates of consulting services to the Company regarding the
development of a business strategy and operational plan for bringing
products to market based on the Company's chemical technology, identifying
potential markets for such products, and developing market contacts and a
marketing plan for the Company. STAT Associates will be assisted by
Brian Finkel, an independent consultant, in connection with the performance
of its services under the terms of the contract. Under the agreements,
the Company has agreed to pay an aggregate of $100,000 to STAT Associates
over a six-month period and reimburse it for its reasonable expenses
incurred in connection with performing the services. Mr. Finkel will
receive $32,000 over an eight month period, together with options to
purchase an aggregate of 100,000 shares of common stock of the Company,
to be issued in lots of 25,000 each two months during the eight month
term of his consulting agreement. The options will vest on issuance
and have an exercise price equal to the fair market value of the
underlying common stock on the date of issuance.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Page
1 10 Consulting Agreement between
Larson Davis Incorporated and
STAT Associates, Inc., dated
March 19, 1996 4
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SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange of 1934, as amended, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 25, 1996 LARSON DAVIS INCORPORATED
By /s/ Dan J. Johnson
Dan J. Johnson, Vice-President
Secretary/Treasurer
(Principal Financial and
Accounting Officer)
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is entered into effective
March 19, 1996, by and between LARSON DAVIS INCORPORATED, a Nevada
corporation ("Larson Davis"), and STAT ASSOCIATES, INC., a Delaware
corporation ("Consultant"), based on the following:
Premises
A. Larson Davis owns or has rights to a group of technologies related to
the development, design, and manufacture of chemical sensing devices and
chemical analysis devices, including Larson Davis' "CrossCheck"
Technology, Time of Flight Mass Spectrometers, and other related
instruments and technologies (collectively, the "Sensar Technology").
Larson Davis is in the process of completing the development of certain
products based on the Sensar Technology, identifying markets for existing
and potential products, and developing plans for the marketing of such
products.
B. Consultant is engaged in the business of providing business consulting
and has experience and expertise in developing marketable products from
technology, bringing new products to market, identifying and penetrating
potential markets, and developing operational plans and implementation
strategies for all of the foregoing.
C. Larson Davis wishes to engage Consultant as a business consultant to
assist it in its goals with respect to the Sensar Technology and
Consultant wishes to accept such engagement, all on the terms and
conditions contained herein.
Agreement
NOW, THEREFORE, based on the foregoing premises, which are incorporated
into this Agreement by this reference, and in consideration of the mutual
covenants and agreements hereinafter set forth and the benefit to the
parties to be derived therefrom, it is hereby agreed as follows:
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1. Engagement. During the term of this Agreement, Larson Davis will
engage the Consultant to provide to Larson Davis advisory and consulting
services. Consultant shall (a) undertake a study and analysis of the
business, operations, and financial condition of Larson Davis, as related
to the Sensar Technology; (b) develop a strategy and operational plan
for reducing the Sensar Technology to marketable products; (c) identify
markets for products based on the Sensar Technology; (d) identify and
qualify market contacts; (e) develop a strategy and operational plan for
marketing products based on the Sensar Technology and the penetration of
markets identified by Consultant; and (f) provide such other advisory and
consulting services as may be reasonably requested by Larson Davis for
the development and marketing of the Sensar Technology. Such services
shall be rendered, to the extent reasonably practicable, at times and
places mutually agreeable to Larson Davis and Consultant. Consultant
agrees that it will use its best efforts to deal effectively with all
matters submitted to it and further, through its advice and services,
the business goals of Larson Davis. Consultant shall have the right to
perform services for other business and companies, subject to the
provisions of this Agreement.
2. Term. The term of this Agreement shall commence on the date set
forth above and shall end on the date six months from the date set
forth above, unless terminated earlier in accordance with the
provisions of this Agreement.
3. Compensation. In consideration of the performance of the services
set forth above, Larson Davis shall pay Consultant a monthly fee of
$16,667, commencing on the date of this Agreement, for total
compensation for services rendered hereunder of $100,000.
4. Expenses. Larson Davis will reimburse Consultant for actual and
reasonable third-party expenses incurred by Consultant in connect with
the business of Larson Davis, including expenses for entertainment,
telephone, and travel incurred for the direct benefit of Larson Davis,
on Consultant's periodic presentation of an itemized account of such
expenses, together with supporting documentation.
5. Independent Contractor Status. This Agreement is intended to
secure the consulting services of Consultant as an independent contractor
and nothing herein shall be construed as creating an employer/employee
relationship, a partnership, joint venture or other joint interest
between Larson Davis and the Consultant. Except as expressly provided
herein, the Consultant has no right or authority to act for or on behalf
of Larson Davis or to assume or to create any obligation or
responsibility, express or implied, in behalf of or in the name of
Larson Davis, or to bind Larson Davis in any manner whatsoever without
the express written approval of Larson Davis. Consultant shall be solely
liable for the payment of any federal or state self-employment, income
or other taxes imposed or arising out of the payment of fees and other
compensation to the Consultant by Larson Davis as set forth in this
Agreement and there shall be no responsibility for withholding of taxes
or other participation by Larson Davis. Consultant understands that it
will not be treated as an employee with respect to its consulting
services under this Agreement for any purpose whatsoever.
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6. Confidential Information; Noncompetition.
(a) Access to Information. In connection with the Consultant's
engagement, Consultant will have access to certain non-public information
concerning Larson Davis and the Sensar Technology. Consultant agrees to
hold such information in confidence in accordance with the provisions of
the following subsection. In addition, Consultant agrees that neither it,
nor its officers, directors, employees, or representatives, will purchase
or sell shares of Larson Davis stock while in possession of non-public
information that might be material to a decision to buy or sell securities
and that neither it, nor its officers, directors, employees, or
representatives, will make such non-public information available to any
other person or entity, whether individually or as a group, which may
purchase or sell stock while in possession of such non-public information.
Consultant shall not make any public announcements or releases concerning
this Agreement, its work performed or to be performed under this Agreement,
or the Sensar Technology and products based on the Sensar Technology,
without the express prior written authority of Larson Davis.
(b) Covenants Respecting Confidential Information. For purposes of this
Agreement, the term "Confidential Information" shall mean (i) all
information regarding Larson Davis and the Sensar Technology disclosed to
or known to the Consultant as a direct or indirect consequence of the
engagement of Consultant by Larson Davis pursuant to this Agreement and
not generally known to the public and (ii) all reports, plans, strategies,
and similar material developed by Consultant for Larson Davis under the
terms of this Agreement. Consultant agrees that it will treat in
confidence all documents, materials and other Confidential Information
which it shall have obtained in the course of performance of its duties
under this Agreement. In consideration of the appointment of the
Consultant as a business consultant and in consideration of the
compensation to be paid to the Consultant during the term of this
Agreement, the Consultant hereby agrees that it will not, during the term
of this Agreement or at any time after termination hereof, irrespective
of the time, manner, or cause of termination, use, disclose, copy, or
assist any other person or firm in the use, disclosure, or copying of
any Confidential Information. All files, records, documents, drawings,
equipment, and similar items relating to the business of Larson Davis and
the Sensar Technology, whether prepared by the Consultant or otherwise
coming into its possession, shall remain the exclusive property of Larson
Davis and shall not be removed from the premises of Larson Davis, except
where necessary in carrying out the business of Larson Davis, without
the prior written consent of Larson Davis. Upon termination of this
Agreement, the Consultant agrees to deliver to Larson Davis all
Confidential Information and all copies thereof, along with any and all
other property belonging to Larson Davis whatsoever. Consultant agrees
to obtain the written agreement of every officer, director, employee,
representative, or consultant of Consultant who receives or has access
to the Confidential Information to be bound by the provisions of this
subsection 6(c) or a separate agreement to substantially similar effect.
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(c) Non-Confidential Information. The obligation of Consultant to treat
the Confidential Information in confidence shall not apply to any
information which (i) is or becomes available to Consultant from a source
with the right to disclose such information, other than Larson Davis or
its insiders and affiliates, (ii) becomes public knowledge, other than
as a result of disclosure by Consultant in breach of this Agreement, or
(iii) is required to be disclosed under applicable law or judicial
process, but only to the extent it must be disclosed.
(d) Noncompetition. During the term of this Agreement, Consultant
agrees that it and its officers, directors, employees, and
representatives will not engage, directly or indirectly, in any business
or activity, whether as an employee, director, equity owner, or partner,
of any corporation or association that competes directly in any
geographic market with Larson Davis or its affiliates. Consultant
further agrees that it will not undertake any consulting engagement
from any corporation or association that competes directly in any
geographic market with Larson Davis or its affiliates.
(e) Enforcement. The following provisions shall apply to the covenants
of Consultant contained in this section:
(i) Without limiting the right of Larson Davis to pursue all other
legal and equitable remedies available for a violation by Consultant
of the covenants contained in this section, it is expressly agreed that
remedies other than injunctive relief cannot fully compensate Larson
Davis for a violation of the covenants contained in this section and
that Larson Davis shall be entitled to injunctive relief to prevent
any such violation or continuing violation thereof.
(ii) It is the intent and understanding of each party hereto that if,
in any action before any court or agency legally empowered to enforce
the covenants contained in this section, any term, restriction,
covenant, or promise contained therein is found to be unreasonable
and for that reason unenforceable, then such term, restriction,
covenant, or promise shall be deemed modified to the extent necessary
to make it enforceable by such court or agency.
7. Termination of Engagement. Either party may terminate this Agreement
on 30 days written notice to the other party. Larson Davis may terminate
this Agreement at any time if (a) Consultant willfully fails to perform
or habitually neglects the duties validly assigned to it hereunder and
fails to cure such failure or neglect within 10 days after notice from
Larson Davis to Consultant of such failure or neglect; or (b) Consultant
engages in conduct involving a defalcation or fraud as to the Company.
The obligations of Consultant to provide services and the obligations
of Larson Davis to compensate Consultant shall not extend beyond such
termination. The provisions of sections 6, 7, and 12 shall survive any
termination of this Agreement for any reason and shall remain binding
on the parties.
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8. Assignment. Consultant shall not sell, assign, transfer, convey,
delegate or encumber its duties and obligations hereunder or any rights
or interests herein.
9. Governing Law. This Agreement shall be governed by, interpreted,
and enforced in accordance with the laws of the state of Utah.
10. Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement, or condition of this
Agreement or to exercise any right or remedy consequent upon a breach
hereof shall constitute a waiver of any such breach or of any covenant,
agreement, term, or condition.
11. Notices. All notices or demands to parties shall be in writing and
shall be delivered personally, by facsimile transmission, telegraphically,
overnight delivery, or by express or certified mail to the following
addresses or facsimile numbers:
If to Larson Davis, to: Larson Davis Incorporated
Attention: Brian G. Larson
1681 West 820 North
Provo, Utah 84601
Facsimile Transmission: (801) 375-0182
Confirmation: (801) 375-0177
If to Consultant, to: STAT Associates, Inc.
709 Haldane Drive
Kennett Square, Pennsylvania 19348
Facsimile Transmission: (___) ___-____
Telephone: (610) 388-2013
12. Indemnification. The parties shall each indemnify the other for
any claims, damages, costs, or expenses incurred by the non-indemnifying
party arising out of or based upon the breach of the covenants,
warranties, obligations, or agreements of the indemnifying party
under the terms of this Agreement, including reasonable attorneys'
fees.
13. Validity of Provisions and Severability. If any one or more of
the provisions contained in this Agreement shall for any reason be held
to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect the validity and
enforceability of any other provisions hereof. Further, should any
provisions within this Agreement ever be reformed or rewritten by a
judicial body, those provisions as rewritten shall be binding upon
Larson Davis and the Consultant.
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14. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties pertaining to the subject matter
of this Agreement. This Agreement supersedes all prior agreements, if
any, and any prior or contemporaneous understandings, negotiations, and
discussions, whether oral or written. No supplement, modification, or
waiver of this Agreement shall be binding unless executed in writing by
the party to be bound thereby.
15. Multiple Counterparts. This Agreement may be executed in a number
of identical counterparts, each of which for all purposes is to be
deemed an original, and all of which constitute, collectively, one
agreement.
AGREED AND ENTERED INTO as of the date first above written.
Larson Davis:
LARSON DAVIS INCORPORATED
By /s/ Brian G. Larson
Brian G. Larson, President
Consultant:
STAT ASSOCIATES, INC.
By /s/ Bill Hosker
Bill Hosker, President
