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
Date of Report: JULY 14, 1998
(Date of earliest event reported)
GENETIC LABORATORIES WOUND CARE, INC.
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(Exact name of registrant as specified in its charter)
MINNESOTA 0-16664 41-1604048
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(State or other jurisdiction of Commission (I.R.S. Employer
incorporation or organization) File No. Identification No.)
2726 PATTON ROAD
ST. PAUL, MN 55113-1136
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(Address of principal executive offices) (Zip Code)
(612) 633-0805
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(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
In May 1998, Genetic Laboratories Wound Care, Inc. (the "Company")
entered into employment agreements with Arthur A. Beisang, Chief Executive
Officer and director of the Company, H. James Thompson, President of the
Company, and Robert A. Ersek, Secretary and director of the Company. Each of the
agreements is for a term of three years. Each agreement provides for an annual
cost-of-living increase in the base salary. Additional compensation based on
pre-tax profits of the Company may be paid to executives determined by the Board
of Directors' Compensation Committee.
The agreements of Messrs. Beisang and Ersek provide that the executive may
terminate his employment upon the occurrence of any of the following events: (1)
A change in a majority ownership or control of which occurs as a result of a
merger, a sale of all or substantially all of the Company's assets; or the
acquisition of a majority of the Company's outstanding stock by a single party
or a group acting in concert; (2) Any attempted termination of such individual's
employment by the Company prior to the expiration or not in accordance with any
termination event as set forth in the agreement; or (3) Any material diminution
of, or any adverse change occurs in the terms or conditions of such individual's
employment duties, responsibilities or authority, except for any isolated,
unsubstantial, inadvertent matter not occurring in bad faith, which is remedied
by the Company within 30 days. In the event of such a termination by the
individual covered by the agreement, the Company shall immediately pay to such
individual (without discount or offset) a severance payment equal to the gross
base compensation otherwise payable to such individual over the remaining term
of the agreement.
Mr. Beisang, Dr. Ersek and Mr. Thompson are paid an annual base salary of
$70,600, $32,000 and $99,600, respectively. The agreements with Messrs. Beisang
and Ersek provide that each executive retains the right to new products or
patents which the executive develops and contain a covenant not to compete by
the executive during the employment period or for one year thereafter.
Item 7 (c). Exhibits.
10(a) Executive Agreement between Arthur A. Beisang and Genetic
Laboratories Wound Care, Inc. dated May 1, 1998
10(b) Executive Agreement between Robert A. Ersek and Genetic
Laboratories Wound Care, Inc. dated May 1, 1998
10(c) Executive Agreement between H. James Thompson and Genetic
Laboratories Wound Care, Inc. dated May 1, 1998
<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.
Dated: July 14, 1998 Genetic Laboratories Wound Care, Inc.
-------------------------------------
Registrant
By: /s/ Arthur A. Beisang
---------------------------------
Arthur A. Beisang
Chairman and
Chief Executive Officer
Exhibit 10(a)
EXECUTIVE AGREEMENT
THIS AGREEMENT IS MADE this 1st day of May, 1998 between Genetic Laboratories
Wound Care, Inc., a Minnesota Corporation (hereinafter called the "Company") and
Arthur A. Beisang (Executive and Chief Executive Officer) (hereinafter called
the "Executive").
1. DUTIES:
The Company hereby employs the Executive as Chief Executive
Officer (CEO) of the Company. His powers and duties in that
capacity to be such as may be determined by the Company's Board of
Directors are described below. During the term of this Agreement,
the Executive may also serve in such other offices of the Company
which he may be elected or appointed to by the Board of Directors.
Although the Executive will spend the majority of his working time
in the employ of the Company, the company recognizes that the
Executive is simultaneously employed by other companies, and that
the Executive has agreed to sell his interest in any
cardiovascular products developed in the future to Bio-Vascular,
Inc., for five percent (5%) royalties on the net sales of any such
product or invention. The Company shall pay to the Executive a
base salary in bi-weekly installments as set forth in Section 3
hereof.
2. TERM:
This Agreement shall be effective from the date hereof through
April 30, 2001, and may be terminated prior to said expiration
date only upon the occurrence of one or more of the following
events:
A. By mutual written agreement of the Company and the Executive;
B. By the Executive at any time upon at least 60 days' prior written
notice to the Company;
C. Immediately upon the Executive's death;
D. By the Executive, upon occurrence of any of the Material
Employment Changes events as set forth in Section 9 hereof, which
termination shall require the Company to pay the Severance Payment
set forth therein; or
E. At the Company's option upon the Executive's conviction of a
felony arising out of any acts or omissions of the Executive
committed during the term of this Agreement.
<PAGE>
3. COMPENSATION:
As his base monetary compensation for his services to the Company
during the term of this Agreement, in whatever capacity rendered,
the Company shall pay to the Executive in bi-weekly installments
the sum of $70,600 per year plus a bonus plan and deferred
compensation. This compensation may be increased annually on the
anniversary date of this Agreement during the term hereof at a
rate equal to the increase in the consumer price index issued by
the United States Department of Labor with July 1, 1996 acting as
the base index equal to 100 unless otherwise mutually agreed upon
by the Executive and the Company. Additional compensation based
upon the pre-tax profits of the Company may be paid annually to
the Executive as incentive pay, as determined by the Board of
Directors' Compensation Committee.
4. VACATION:
The Executive shall be entitled to six (6) weeks of vacation
during each year. Said vacation is to be taken at the Executive's
discretion.
5. BENEFITS:
A. The Company shall maintain a medical insurance program for all
employees and the Company shall be responsible for all premiums
for the Executive and his spouse. In the event of termination for
any reason, the Executive and his spouse shall be included in the
Company's medical and dental insurance plans by the Executive
making monthly payments equal to that incurred by the Company for
its employees in their current medical and dental insurance plan;
B. Term life insurance in an amount at least equal to and comparable
to the Executive's life insurance policy presently in force with
policy ownership and proceeds payable as the Executive shall
designate;
C. Disability insurance commensurate with such Executive insurance
presently in force, with policy ownership payable as designated by
the Executive;
D. A monthly automobile allowance to be mutually agreed upon by the
parties.
6. ARBITRATION:
Any controversy or claim arising out of, or related to this
Agreement, or the breach thereof, shall be settled by arbitration
in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered may be entered
in any court having jurisdiction thereof. This Agreement shall be
governed by and construed in accordance with the laws of the State
of Minnesota.
<PAGE>
7. NOTICE:
Any notice required to be given pursuant to the provisions of the
Agreement shall be in writing and delivered personally or by
registered or certified mail.
8. COVENANT NOT TO COMPETE:
The Executive agrees that during his employment by the Company and
for a period of one year after termination of the Employment
Period he shall not, without prior written consent of the Company,
directly or indirectly, and whether as principal or as agent,
officer, director, employee, consultant, or otherwise, alone or in
association with any other person, carry on, be engaged,
concerned, or take part in, render services to, or own, share in
the earnings of or invest in the stocks, bonds or other securities
of any company engaged in the Employer's current business or
reasonably contemplated business activities provided, however,
that the Executive may invest in stocks, bonds, or other
securities of any Similar Business (but without otherwise
participating in such Similar Business) if: (i) such stocks,
bonds, or other securities are publicly traded; (ii) his
investment does not exceed, in the case of any class of the
capital stock of any one issuer, one percent (1%) of the issued
and outstanding shares, or in the case of bonds or other
securities, one percent (1%) of the aggregate principal amount
thereof issued and outstanding; and (iii) such investment would
not prevent, directly or indirectly, the transaction of business
by the Company.
9. MATERIAL EMPLOYMENT CHANGES:
The Executive shall be entitled to terminate his employment upon
at least five days prior written notice to the Company upon the
occurrence of any of the following events: (i) a change in
majority ownership or control of the Company which occurs as the
result of a merger; a sale of all or substantially all of the
Company's assets; or the acquisition of a majority of the
Company's outstanding stock by a single party or a group acting in
concert; (ii) any attempted termination of the Executive's
employment by the Company prior to expiration or not in accordance
with any termination event as set forth in Section 2; or (iii) any
material diminution of, or any adverse change occurs in the terms
or conditions of the Executive's employment duties,
responsibilities or authority, except for any isolated,
unsubstantial, inadvertent matter not occurring in bad faith,
which is remedied by the Company within 30 days of receipt of
notice by the Executive. In the event of such termination by the
Executive, the Company shall immediately pay the Executive
(without discount or offset) a Severance Payment equal to the
gross base compensation otherwise payable to the Executive over
the remaining term of the Agreement under Section 2. The
Executive's rights under this Section 9 shall not limit any other
rights he has in the event of a breach of any provision of this
Agreement by the Company.
<PAGE>
10. RESEARCH AND INVENTIONS:
This Agreement recognizes that the Executive is simultaneously
employed by more than one company. Therefore, the Company
recognizes that the Executive is, and intends to remain, an
Executive in other public and private companies, and has entered
into other employment agreements as such. The Executive has a
history of successful medical inventions and products and the
parties agree that the Executive's base and incentive pay is
directly related to his Executive duties, and not for research
leading to the invention of new products or patents. Further, the
Executive and the Company recognize the Executive's right to sell
and assign such rights to corporate entities including the Company
and companies other than the Company.
11. ASSIGNMENT:
This Agreement shall inure to the benefit of, and shall be binding
upon the Company, its successors, or assigns. In witness whereof
the parties have hereunto executed this Agreement.
12. EXPENSES:
The Company will reimburse the Executive for reasonable business
expenses incurred on behalf of the Company.
IN WITNESS WHEREOF, THE parties have hereunto executed this Agreement.
ATTEST: GENETIC LABORATORIES WOUND
CARE, INC.
/s/Arthur A. Beisang /s/ John H. Olson
- ------------------------------------ ---------------------------------------
Arthur A. Beisang John H. Olson
Chief Executive Officer Director Compensation Committee
Member
5/1/98 5/1/98
- ------------------------------------ ---------------------------------------
Date Date
Notary
/s/ Rebecca J. Bierbalm 5/1/98
- ------------------------------------
Exhibit 10(b)
EXECUTIVE AGREEMENT
THIS AGREEMENT IS MADE this 1st day of May, 1998 between Genetic
Laboratories Wound Care, Inc., a Minnesota Corporation (hereinafter called the
"Company") and Dr. Robert A. Ersek (Medical Director) (hereinafter called the
"Executive").
1. DUTIES:
The Company hereby employs the Executive as the Medical Director
of the Company. His powers and duties in that capacity to be such
as may be determined by the Company's Board of Directors are
described below. During the term of this Agreement, the Executive
may also serve in such other offices of the Company which he may
be elected or appointed to by the Board of Directors. Although the
Executive will spend the majority of his working time in the
employ of the Company, the company recognizes that the Executive
is simultaneously employed by other companies and that the
Executive has agreed to sell his interest in any cardiovascular
products developed in the future to Bio-Vascular, Inc., for five
percent (5%) royalties on the net sales of any such product or
invention. The Company shall pay to the Executive a base salary in
bi-weekly installments set forth in Section 3 hereof.
2. TERM:
This Agreement shall be effective from the date hereof through
April 30, 2001, and may be terminated prior to said expiration
date only upon the occurrence of one or more of the following
events:
A. By mutual written agreement of the Company and the Executive;
B. By the Executive at any time upon at least 60 days prior written
notice to the Company;
C. Immediately upon the Executive's death;
D. By the Executive upon occurrence of any of the Material Employment
Changes events as set forth in Section 9 hereof, which termination
shall require the Company to pay the Severance Payment set forth
therein; or
E. At the Company's option upon the Executive's conviction of a
felony arising out of any acts or omissions of the Executive
committed during the term of this Agreement.
<PAGE>
3. COMPENSATION:
As his base monetary compensation for his services to the Company
during the term of this Agreement in whatever capacity rendered,
the Company shall pay to the Executive in bi-weekly installments
the sum of $32,000 per year plus a bonus plan and deferred
compensation. This compensation may be increased annually on the
anniversary date of this Agreement during the term hereof at a
rate equal to the increase in the consumer price index issued by
the United States Department of Labor with July 1, 1996 acting as
the base index equal to 100 unless otherwise mutually agreed upon
by the Executive and the Company. Additional compensation based
upon the pre-tax profits of the Company may be paid annually to
the Executive as incentive pay as determined by the Board of
Directors' Compensation Committee.
4. VACATION:
The Executive shall be entitled to six (6) weeks of vacation
during each year. Said vacation is to be taken at the Executive's
discretion.
5. BENEFITS:
A. Fully paid family coverage (subject to applicable deductible
amounts and limitations) under the Company's current group medical
and dental plans or such comparable coverage as may be selected in
the future;
B. Term life insurance in an amount at least equal to and comparable
to the Executive's life insurance policy presently in force with
policy ownership and proceeds payable as the Executive shall
designate as required by state and federal law;
C. Disability insurance commensurate with such Executive insurance
presently in force, with policy ownership payable as designated by
the Executive;
6. ARBITRATION:
Any controversy or claim arising out of, or related to this
Agreement, or the breach thereof, shall be settled by arbitration
in accordance with the rules of the American Arbitration
Association and judgment upon the award rendered may be entered in
any court having jurisdiction thereof. This agreement shall be
governed by and construed in accordance with the laws of the State
of Minnesota.
7. NOTICE:
Any notice required to be given pursuant to the provisions of the
Agreement shall be in writing and delivered personally or by
registered or certified mail.
<PAGE>
8. COVENANT NOT TO COMPETE:
The Executive agrees that during his employment by the Company and
for a period of one year after termination of the Employment
Period, he shall not, without prior written consent of the
Company, directly or indirectly, and whether as principal or as
agent, officer, director, employee, consultant, or otherwise,
alone or in association with any other person, carry on, be
engaged, concerned, or take part in, render services to, or own,
share in the earnings of or invest in the stocks, bonds or other
securities of any company engaged in the Employer's current
business or reasonably contemplated business activities provided,
however, that the Executive may invest in stocks, bonds, or other
securities of any Similar Business (but without otherwise
participating in such Similar Business) if: (i) such stocks,
bonds, or other securities are publicly traded; (ii) his
investment does not exceed, in the case of any class of the
capital stock of any one issuer, one percent (1%) of the issued
and outstanding shares, or in the case of bonds or other
securities, one percent (1%) of the aggregate principal amount
thereof issued and outstanding; and (iii) such investment would
not prevent, directly or indirectly, the transaction of business
by the Company.
9. MATERIAL EMPLOYMENT CHANGES:
The Executive shall be entitled to terminate his employment upon
at least five days prior written notice to the Company upon the
occurrence of any of the following events: (i) a change in
majority ownership or control of the Company which occurs as the
result of a merger; a sale of all or substantially all of the
Company's assets; or the acquisition of a majority of the
Company's outstanding stock by a single party or a group acting in
concert; (ii) any attempted termination of the Executive's
employment by the Company prior to expiration or not in accordance
with any termination event as set forth in Section 2; or (iii) any
material diminution of, or any adverse change occurs in the terms
or conditions of the Executive's employment duties,
responsibilities or authority, except for any isolated,
unsubstantial, inadvertent matter not occurring in bad faith,
which is remedied by the Company within 30 days of receipt of
notice by the Executive. In the event of such termination by the
Executive, the Company shall immediately pay the Executive
(without discount or offset)a Severance Payment equal to the gross
base compensation otherwise payable to the Executive over the
remaining term of the Agreement under Section 2. The Executive's
rights under this Section 9 shall not limit any other rights he
has in the event of a breach of any provision of this Agreement by
the Company.
10. RESEARCH AND INVENTIONS:
This Agreement recognizes that the Executive is simultaneously
employed by more than one company. Therefore, the Company
recognizes that the Executive is, and intends to remain, an
Executive in other public and private companies, and has entered
into other employment agreements as such. The Executive has a
history of successful medical inventions and products and the
parties agree that the Executive's base and incentive pay is
directly related to his Executive duties and not for research
<PAGE>
leading to the invention of new products or patents. Further, the
Executive and the Company recognize the Executive's right to sell
and assign such rights to corporate entities including the Company
and companies other than the Company.
11. ASSIGNMENT:
This Agreement shall inure to the benefit of, and shall be binding
upon the Company, its successors, or assigns. In witness whereof
the parties have hereunto executed this Agreement.
12. EXPENSES:
The Company will reimburse the Executive for reasonable business
expenses incurred on behalf of the Company.
IN WITNESS WHEREOF, THE parties have hereunto executed this Agreement.
ATTEST: GENETIC LABORATORIES WOUND
CARE, INC.
/s/ Robert A. Ersek, M.D. /s/ John H. Olson
- ------------------------------------ ---------------------------------------
Robert A. Ersek, M.D. John H. Olson
Medical Director Director Compensation Committee
Member
5/1/98 5/1/98
- ------------------------------------ ---------------------------------------
Date Date
Notary
/s/ Rebecca J. Bierbalm 5/1/98
- ------------------------------------
Exhibit 10(c)
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT IS MADE this 1st day of May, 1998 by and between Genetic
Laboratories Wound Care, Inc., a Minnesota Corporation (hereinafter called the
"Company") and H. James Thompson (President) (hereinafter called the
"Executive").
1. DUTIES:
The Company hereby employs the Executive as President of the
Company, his powers and duties in that capacity to be such as may
be determined by the Board of Directors. During the term of this
Agreement, the Executive may also serve in such other offices of
the Company to which he may be elected or appointed by the Board
of Directors. The duties of the Executive shall include: the
implementation of corporate polices and implementation of Company
contracts in the areas of manufacturing, sales, and marketing in
compliance with appropriate governmental regulatory agencies
having jurisdiction over the Company's activities worldwide.
2. COMPENSATION:
As his base monetary compensation for his executive services to
the Company during the term of this Agreement in whatever capacity
rendered, the Company shall pay to the Executive in bi-weekly
installments the sum of $99,600 per year. This compensation may be
increased annually on the anniversary date of this Agreement,
during the term hereof, at a rate equal to the increase in the
consumer price index issued by the United States Department of
Labor with July 1, 1996 acting as the base index equal to 100
unless otherwise mutually agreed upon by the Executive and the
Company. Additional compensation based upon the pre-tax profits of
the Company may be paid annually to the Executive as incentive pay
as determined by the Board of Directors' Compensation Committee.
3. TERM:
The term of this Agreement shall extend through April 30, 2001
except as hereinafter provided.
A. With cause, the Company, on three days written notice to the
Executive, may terminate this Agreement and, thereupon, the
Company shall be obligated to pay the Executive his regular
compensation up to the 30th day following the date of termination.
The term "with cause" shall be defined only as the Executive's
fraudulent activity or the commission of a felony or other offense
involving moral terpitude or immoral conduct by the Executive on
behalf of, or in connection with, Company activities.
<PAGE>
B. If the Executive is absent from his employment by reason of
illness or any other incapacity for more than six consecutive
weeks, the Company shall thereafter pay him fifty percent (50%) of
his regular base compensation until the Executive is able to
resume his duties. If his absence continues for six consecutive
months, this Agreement shall automatically terminate without
notice, but the Company shall be obligated to pay the Executive
fifty percent (50%) of his regular compensation through the date
of such termination.
C. The Executive may terminate this Agreement at anytime upon sixty
(60) days notice to the Company, and the Company shall be
obligated to pay him his regular compensation up to the date of
termination.
4. BENEFITS:
A. Fully paid family coverage (subject to applicable deductible
amounts and limitations) under the Company's current group medical
and dental plans or such comparable coverage as may be selected in
the future;
B. Term life insurance in an amount at least equal to and comparable
to the Executive's life insurance policy presently in force with
policy ownership and proceeds payable as the Executive shall
designate;
C. Disability insurance commensurate with such Executive insurance
presently in force, with policy ownership payable as designated by
the Executive;
D. A monthly automobile allowance to be mutually agreed upon by the
parties.
E. Annual funding of a deferred compensation plan mutually agreed
upon by the Executive and the Company.
5. VACATIONS:
The Executive shall be entitled to four weeks vacation during each
year. Said vacation is to be taken at the Executive's discretion.
6. EXPENSES:
The Company shall reimburse the Executive for all authorized items
of traveling, entertainment, and miscellaneous expenses incurred
while away on business from the principal office of the Company or
the office to which he is assigned, but reimbursement shall be
made only for those items on a signed itemized list of such
expenditures.
7. COVENANT NOT TO DISCLOSE:
The Executive shall not at any time during or after the
termination of the employment period knowingly reveal, divulge or
make known to any
<PAGE>
person (other than the Company), or use for his own account any
customer lists, trade secrets or formula, or secret or
confidential information used by the Company prior to or during
the term of his employment by the Company and made known (whether
with the knowledge and permission of the Company, whether
developed, devised or otherwise created in whole or in part by the
efforts of the Executive and whether a matter of public knowledge
unless as a result of authorized disclosure) to the Executive by
reason of his employment by the Company. The Executive shall
retain all such knowledge and information which he may acquire or
develop during this employment by the Company concerning such
lists, secrets, formula and information in trust for the sole
benefit of the Company.
8. COVENANT TO REPORT:
The Executive shall promptly communicate and disclose to the
Company all information concerning the business or affairs of the
Company obtained by him in the course of his employment by the
Company. All written materials, records and documents made by the
Executive or coming into possession during the employment period
concerning the business or affairs of the Company shall be the
sole property of the Company and, upon termination of the
employment period, or upon the request of the Company during the
employment period, the Executive shall promptly deliver the same
to the Company. The Executive agrees to render to the Company such
reports of the activities undertaken by the Executive or conducted
under the Executive's direction pursuant hereto during the
employment period as the Company may reasonably request.
9. LEGALITY:
The parties covenant and agree that the provisions contained
herein are reasonable and are not known or believed to be in
violation of any federal or state law or regulation. In the event
a court of competent jurisdiction finds any provision contained
herein to be illegal or unenforceable, such court may modify such
provision to make it valid and enforceable. Such modification
shall not affect the remainder of this Agreement which shall
continue at all times to be valid and enforceable.
10. ARBITRATION:
Any controversy or claim arising out of, or relating to, this
Agreement of the breach thereof, shall be settled by arbitration
in accordance with the rules then obtaining of the American
Arbitration Association, and judgment upon the award rendered may
be entered in any court having jurisdiction thereof. The Agreement
shall be governed by and construed in accordance with the laws of
the state of Minnesota.
<PAGE>
11. NOTICE:
Any notice required to be given pursuant to the provisions of the
Agreement shall be in writing and sent by registered mail to the
parties at the following addresses:
Company: Genetic Laboratories Wound Care, Inc.
2726 Patton Road
St. Paul, Minnesota 55113
Executive: H. James Thompson
13625 Henna Court
Apple Valley, Minnesota 55124
12. ASSIGNMENT:
This Agreement shall inure to the benefit of, and shall be binding
upon, the Company, its successors, or assigns.
IN WITNESS WHEREOF, THE parties have hereunto executed this Agreement.
ATTEST:
/s/ Jim Thompson /s/ Arthur A. Beisang
- ------------------------------------ ---------------------------------------
H. James Thompson Arthur A. Beisang
President Chief Executive Officer
5/1/98 5/1/98
- ------------------------------------ ---------------------------------------
Date Date
/s/ John H. Olson
---------------------------------------
John H. Olson
Director Compensation Committee
Member
5/1/98
---------------------------------------
Date
Notary
/s/ Rebecca J. Bierbalm 5/1/98
- -----------------------------------
