<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A No. 1
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For The Fiscal Year Ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the transition period from to
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Commission File Number: 0-19562
BIO-DYNE CORPORATION
----------------------------------------------
(Name of small business issuer in its charter)
Georgia 58-1659037
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5400 Bucknell Drive
Atlanta, Georgia 30336
- ----------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (404) 346-3100
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which registered
- ------------------------------- -------------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
(Title of Class)
Units, Common Stock and Warrants
- -------------------------------------------------------------------------------
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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.
Yes X No
__ --
*Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will 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. [ ]
Consolidated revenues were $17,648,280 for the year ended March 31, 1996.
As of July 17, 1996, 10,313,529 shares of the registrant's Common Stock were
outstanding and the aggregate market value of the Common Stock held by
nonaffiliates was approximately $3,532,619 based on the last sale price of the
Common Stock as quoted on the automated quotation system of the National
Association of Securities Dealers, Inc. on such date. (The officers and
directors of the registrant, and owners of over 10% of the registrant's Common
Stock, are considered affiliates for purposes of this calculation).
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PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the
Exchange Act.
The Directors and Executive Officers of the Company are as follows:
Term First
of Became Principal
Name Age Office(1) Director Occupation
- ----------------------------------------------------------
Timothy Holstein 38 Class A 1996 President,
and CEO of
Continental
American
Transportation
Inc.
Erik Bailey 28 Class A 1996 VP and CFO of
Continental
American
Transportation
Inc.
Brian Henninger 48 Class C 1996 Secretary and
Director of
Continental
American
Transportation
Inc.
Kenneth M. Jones 51 Class C 1989 President,
Commercial
Builders
Corporation,
Atlanta,GA
Columbus,GA
David H. York 35 Class B 1989 VP Operations,
Summit
Industries
Chicago, IL
- ------------------
(1) Class A directors' terms expire at the 1998 Annual Meeting of
Shareholders. Class B directors' terms expire at the 1996 Annual
Meeting of Shareholders. Class C directors' term expire at the 1997
Annual Meeting of Shareholders.
On May 31, 1996, five members of the Company's seven member
Board of Directors resigned, namely Edward B. Beam, Jr., Edward
B. Beam, Sr., L. Clark Brand, William C. Buck and Harvey Miller.
Edward B. Beam, Jr. also resigned as Chairman, President, Chief
Executive Officer and Chief Operating Officer, and Harvey Miller
also resigned as Executive Vice President, Chief Financial
Officer, Chief Accounting Officer, Secretary and Treasurer.
David H. York, who remains as a Director, resigned as Assistant
Secretary and Assistant Treasurer.
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In accordance with the Company's by-laws, the two remaining Board
members appointed three new Board members, namely Timothy Holstein to fill the
Board seat vacated by Edward B. Beam, Sr. as a Class A director and to serve
the remainder of his term until the 1998 Annual Meeting, Erik Bailey to fill
the Board seat vacated by William C. Buck as a Class A director and to serve
the remainder of his term until the 1998 Annual Meeting, and Brian Henninger to
fill the Board seat vacated by Harvey Miller as a Class C Director to serve the
remainder of his term until the 1997 Annual Meeting. The remaining two Board
seats remain vacant. In addition, the Board appointed Timothy Holstein as
Chairman and Chief Executive Officer, Erik Bailey as Chief Financial Officer
and Brian Henninger as Secretary and Treasurer of the Company.
Timothy Holstein is the Chairman of the Board, Chief Executive Officer
and a Class A director of the Company since May 1, 1996. Mr. Holstein has been
the President, Chief Executive Officer and a director of Continental American
Transportation, Inc. ("CAT") since June 21, 1995. Prior to joining CAT, Mr.
Holstein was the majority owner of Blue Mack Transport, Inc., a
Pennsylvania-based private trucking company which he founded in 1986.
Erik Bailey is the Chief Financial Officer and a Class A director of
the Company since May 1996. Mr. Bailey has been the Vice President, Chief
Financial Officer and a director of Continental American Transportation, Inc.
("CAT") since June 21, 1995. Prior to his appointment as a member of the Board
of Directors, Mr. Bailey was the Chief Financial Officer of Blue Mack
Transport, Inc., a Pennsylvania-based private trucking company, since April
1994. Prior to that time, Mr. Bailey served as a consultant to private and
public companies.
Brian Henninger is Secretary, Treasurer and a Class C director of the
Company since May 1996. Mr. Henninger has been the Secretary and a director of
Continental American Transportation, Inc. ("CAT") since March 27, 1995. Prior
to his appointment, Mr. Henninger served as a financial consultant to several
private companies. For the approximate ten year period prior to November 1994,
Mr. Henninger served as the comptroller for Mural Transport, Inc., a
nation-wide transportation company, which company is being liquidated under
Chapter 7 of the United States Bankruptcy Code.
Kenneth M. Jones is one of the founders of the Company and has served
as a Director since its formation. Since April 1989, Mr. Jones has been the
President and sole stockholder of Commercial Builders Corporation, a general
contracting company located in Atlanta, Georgia. From February 1974 until June
1989, Mr. Jones was the President of Interior Builders & Finishers Corporation,
a general contracting company located in Atlanta, Georgia.
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David H. York has served as a Director of the Company since
December 1989 and previously served as Chief Financial Officer
and Secretary of the Company from 1989 to 1994. He is presently
Vice President of Operations for Summit Industries, Inc., a
Chicago-based manufacturer of x-ray equipment, for which Mr. York
worked prior to joining the Company, from August 1987 until
November 1989, as Controller and Assistant Secretary. Since
1988, Mr. York has been a member of the Board of Directors of
Summit Industries, Inc. Mr. York is a Certified Public
Accountant and is a member of the American Institute of CPAs and
the Georgia Society of CPAs. Mr. York is not related to William
E. York.
The Board of Directors has established an Executive Compensation
Committee. The function of the Executive Compensation Committee is to determine
the annual compensation arrangements for the Company's officers. The Executive
Compensation Committee was composed of two of the Company's outside Directors,
Messrs. Brand and Beam, Sr. Due to their resignations, there are vacancies on
this Committee.
Directors of the Company do not receive any fees or other compensation
for services to the Company or for meetings attended in their capacity as
directors. Directors are reimbursed for travel or other expenses incurred while
attending meetings.
Key Employees
Ronald Desiderio was one of the founders of Bio-Dyne in 1979
and a principal stockholder and an officer of Bio-Dyne from 1979
to 1989. Since November 1989, Mr. Desiderio has been the
President and a stockholder of Norvek Worldwide, Ltd., an
importing/exporting company located in Atlanta, Georgia that is
currently inactive. In July 1991, Mr. Desiderio was hired by the
Company to work in the Company's product development department.
Mr. Desiderio is the designer of the Company's patented seat
slide and linear bearing system. Mr. Desiderio is also licensed
as a pharmacist in the State of New York.
Wayne W. McCarty is Vice President and Director of Sales for
Carolina Fitness Equipment, Inc., a position he has held since
1992. Mr. McCarty joined Carolina Fitness Equipment, Inc. in
1986 as Store Manager of the Greensboro, North Carolina store and
was promoted to National Sales Manager in 1988.
Jeffrey S. Bernier is Director of Sales for Home Fitness
Studios, Inc., a position he has held since he joined HFS in
1994. Mr. Bernier was Vice President of Operations for Fun N
Fitness in Phoenix, Arizona from 1989 to 1994. Mr. Bernier was a
Regional Manager for HFS from 1984 to 1989.
Steven K. Bowcutt is Director of Operations for Home Fitness
Studios, Inc. Mr. Bowcutt joined HFS in 1990 as a salesman and
became a Regional Manager in 1994, a position he held until he
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was promoted to his present position in 1994.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors and beneficial owners of more
than 10% of any class of equity securities of the Company registered pursuant
to Section 12 of the 1934 Act to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors, and
beneficial owners of more than 10 per cent of any class of equity securities of
the Company registered under the 1934 Act are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms filed. Based solely
on information to the Company in the form of forms furnished to the Company,
the Company believes that the following reporting delinquencies occurred during
the period January 1, 1995 through June 30, 1996.
Section 16(a) Reporting Delinquencies
- -------------------------------------
1. Form 3 for Timothy Holstein, Erik Bailey, Brian Henninger,
filed Form 3's late in June 1996.
2. Form 4's were filed late for (i) the month of May 1996 by
Edward B. Beam Jr., Edward B. Beam Sr., Harvey Miller, L.
Clark Brand and William C. Buck (ii) the month of April 1995
by David York, Edward B. Beam Jr. and Edward B. Beam Sr. and
(iii) the month of January 1995 by David York.
3. Form 5's were filed late for the year ended March 31, 1995 by Raymond
Wright and Carrie York. Carrie York's Form 5 was filed in lieu of a
Form 3 and Form 4 which were not filed.
Item 10. Executive Compensation.
The executive compensation program of the Company is administered by
the Executive Compensation Committee of the Board of Directors (the
"Committee"). The Committee evaluates the executive compensation program to
assure that it is reasonable, equitable and competitive.
The Committee reviews and approves salaries for the Company's
officers. Those salary levels represent a basic compensation commitment to the
Company's officers and form the foundation of the executive compensation
program. The Company's compensation program is competitive, tailored to the
goals of the Company, and aids the Company in recruiting an executive team. The
Executive Compensation Committee met twice during fiscal 1996.
5
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The following table sets forth a summary of the last three (3) fiscal
years of the compensation awarded to, earned by, or paid to the former Chief
Executive Officers of the Company and the other executive officer of the
Company who earned salary and bonuses aggregating $100,000 or more during
fiscal 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
------------------------------------------------------------- -------------
Name and Principal
Position Other Annual No. of Stock
Year Salary Bonuses Compensation Options
<S> <C> <C> <C> <C> <C>
Edward B. Beam, 1996 $102,115(1) $ - $ - -
Jr., Chief 1995 121,731(1) - - 114,000
Executive and 1994 - (1) - - 15,000
Operating Officer,
President and
Director
William E. York, 1996 10,769(2) - - -
Former Chief 1995 145,962(2) - 6,070 244,914
Executive Officer 1994 83,137(2) - 6,070 -
and Former
Director
Harvey Miller, 1996 150,000(3) - - -
Executive Vice 1995 159,100(3) - - 250,000
President, Chief 1994 - (3) - - -
Financial Officer,
Secretary and
Treasurer
=================================================================================================================================
</TABLE>
(1) Mr. Beam became an employee of the Company on April 18, 1994. During the
fiscal year ended March 31, 1995, Mr. Beam halted his salary for 5 weeks.
During the fiscal year ended March 31, 1996, he took a temporary reduction
from his contract rate of $150,000 to $90,000 for a period of 28 weeks and a
reduction to $120,000 for a period of 22 weeks. During the three fiscal
years ended March 31, 1996, Mr. Beam did not receive any stock awards or
long term incentive plan payouts.
(2) During the fiscal year ended March 31, 1995, Mr. York's base salary was
increased to $150,000 from $120,000 in accordance with the employment
agreement he entered into on April 18, 1994. In April 1995, the Company
entered into an agreement with Mr. York to terminate his employment
agreement. Such agreement provides for termination pay of $50,000 per year
which is not reflected in the table above. During the three years ended
March 31, 1996, Mr. York did not receive any stock awards or long term
incentive plan payouts.
(3) Mr. Miller became an employee on November 1, 1994, and was a consultant to
the Company prior to that date. Of the amount paid to Mr. Miller during the
fiscal year ended March 31, 1995, $62,500 was paid as base salary and
$96,600 was paid as consulting fees. During the three fiscal years ended
March 31, 1996, Mr. Miller did not receive any stock awards or long term
incentive plan payouts.
During fiscal 1996, the Company lowered the exercise price of all
options granted under the 1994 Non-Qualified Stock Option Plan for all
employees to $.125 per share; however, Edward B. Beam, Jr. refused to
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lower the price of his option. Harvey Miller has options to purchase
250,000 shares under the Plan. During fiscal 1996, no options or stock
appreciation rights were granted to any officers, directors or employees.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
The table below provides information with respect to the exercise of
stock options during the fiscal year ended March 31, 1996 by the executive
officers named in the Summary Compensation Table and the fiscal year end value
of unexercised options.
<TABLE>
<CAPTION>
==================================================================================================================================
(d) (e)
Number of Value of
Unexercised Unexercised
(b) Options at In-the-Money
Shares (c) FY-End (#) Options at
(a) Acquired on Value Exercisable/ FY-End ($)
Name Exercise (#) Realized Unexercisable Exercisable/
Unexercisable(1)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Edward B. Beam, Jr. 0 $ 0 78,000/50,000 0/0
- ----------------------------------------------------------------------------------------------------------------------------------
William E. York 361,500 103,119 244,914/0 0/0
- ----------------------------------------------------------------------------------------------------------------------------------
Harvey Miller 0 0 125,000/125,000 3,900/3,906
==================================================================================================================================
</TABLE>
(1) The aggregate dollar values in columns (c) and (e) are
calculated by determining the difference between fair market
value of the Common Stock underlying the options and the
exercise price of the options at exercise or fiscal year end,
respectively. In calculating the dollar value realized upon
exercise, the value of any payment of the exercise price is
not included. Based upon a closing bid price of 5/32 for the
Common Stock on March 28, 1996.
Employment Agreements
On November 30, 1989, the Company entered into a five-year employment
agreement with William E. York. Under the terms of this agreement, Mr. York
received annual compensation in the amount of $60,000 and was granted options
to purchase 399,000 shares of the Common Stock of the Company at a price of
approximately $.003 per share. Subsequently, the Board of Directors increased
the annual compensation to $120,000 and the option price was changed to the par
value of the Company's stock of $.01 per share. Mr. York's employment agreement
was superseded by a new three year employment agreement on April 18, 1994,
which was subsequently terminated when he left the Company in April 1995. Mr.
York was Chief Executive Officer and Chairman of the Board of the Company and
received an annual salary of $150,000 until he left in April 1995.
On April 18, 1994, the Company entered into a three-year
employment agreement with Edward B. Beam Jr. Under the terms of
this agreement, Mr. Beam Jr. was appointed President and Chief
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Operating Officer of the Company, and subsequently added the
positions of Chairman and Chief Executive Officer in April 1995.
On November 1, 1994, the Company entered into a 29 and one/half
month employment agreement with Harvey Miller. Mr. Miller's
agreement was scheduled to terminate the same date as Mr. Beam Jr.
Under the terms of this agreement, Mr. Miller was appointed
Executive Vice President and Chief Financial Officer of the
Company. Both Mr. Beam Jr. and Mr. Miller's agreements provided for
an annual salary of $150,000 and bonuses equal to 10% of base
salary if pretax profits are between $400,000 and $500,000, 25% of
base salary if pre-tax profits are between $500,000 and $600,000
and 40% of base salary if pre-tax profits exceed $600,000. During
the period December 1, 1994 to January 6, 1995, Mr. Beam Jr. took
no salary. In April 1995, at the request of the Board of Directors,
Mr. Beam Jr. reduced his salary to an annual level of $90,000 on a
temporary basis for the period April 14, 1995 through October 30,
1995 and at the annual level of $120,000 from October 31, 1995
through March 31, 1996.
Mr. Beam Jr. and Mr. Miller's agreements provide for the reimbursement
of all customary, ordinary and necessary business expenses incurred by these
officers during the term of their employment and for indemnification consistent
with the current by-laws presently in effect of the Company to the fullest
extent permitted by law. The employment agreements prohibit these officers from
competing with the Company during the term of these agreements or disclosing
any confidential information about the Company.
Edward B. Beam, Jr. and Harvey Miller entered into amendments
to their Employment Agreements on May 31, 1996, the date of their
resignations as directors and officers of the Company. The
amendments provide for the termination date of each agreement to be
changed to November 30, 1996, salary of each to be increased to
$15,000 per month from $12,500 per month and provides that each
employee must continue full time activities for the Company until
June 30, 1996. In addition, both Mr. Beam Jr. and Mr. Miller
entered into Amendments to Non-Qualified Stock Option Agreements on
May 31, 1996 under the April 1994 Stock Option Plan of the Company,
which allows both to exercise their previously granted stock
options for 36 months from May 31, 1996. Mr. Beam, Jr. holds a
grant for 100,000 stock options and Mr. Miller holds a grant for
250,000 stock options.
8
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Stock Option Plans
In November 1991 the Company adopted a stock option plan ("the 1991
Plan"), to permit employees and officers, directors and consultants to purchase
up to 100,000 shares of the Company's Common Stock. Options granted under the
plan may be Incentive Stock Options, which may be granted only to employees, or
non qualified stock options, which may be granted to any person including,
without limitation, directors and consultants. Options granted under the Plan
are exercisable under terms and conditions set by the Board of Directors, which
currently provide, among other things, that all options completely vest after
two years from the date of grant. As of March 31, 1996, options to purchase
approximately 70,200 shares had been granted and were outstanding under the
1991 plan. No options have been exercised under the plan.
In April 1994 the Company adopted a stock option plan ("the 1994
Plan") to permit the officers, directors, consultants and employees of the
Company to purchase up to 1,000,000 shares of the Company's Common Stock.
Options granted under the plan are non qualified stock options and are
exercisable under terms and conditions set by the Board of Directors, which
currently provide, among other things, that the exercise price shall not be
less than 100% of Fair Market Value of the shares of Common Stock subject to
the Option on the date of grant. Edward B. Beam Jr., William E. York and Harvey
Miller were granted options to purchase 100,000, 244,914 and 250,000 shares of
the Common Stock of the Company, respectively. As of March 31, 1996, options to
purchase 869,414 shares had been granted and were outstanding under the 1994
Plan.
In December 1995, the Company filed a Form S-8 Registration Statement
under the Securities Act to register its shares of Common Stock under both of
its stock option plan.
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Item 11. Security Ownership of Certain Beneficial Owners
and Management.
The following table sets forth certain information as of July 26, 1996
with respect to ownership of the outstanding Common Stock of the Company by (i)
all persons known to the Company to own beneficially more than five percent
(5%) of the outstanding Common Stock of the Company, (ii) each Director of the
Company, and (iii) all Directors and Officers of the Company as a group:
Amount
and Nature Approximate
Name and Address of of Beneficial Percent
Beneficial Owner * Ownership of Class (3)
- ------------------- ------------- ------------
Edward B. Beam, Jr. 1,080,414 (1) 10.6%
Timothy Holstein -0- -0-
Erik Bailey -0- -0-
Brian Henninger -0- -0-
Kenneth M. Jones 209,000 2.1
David H. York 145,000 (2) 1.4
All Officers and
Directors as a
Group (five persons) 354,000 (2) 3.4
* All addresses are Bio-Dyne Corporation, 5400 Bucknell Drive,
Atlanta, GA 30336.
(1) Includes 128,000 shares of Common Stock issuable to Mr. Beam
Jr. upon the exercise of stock Options granted to him. Edward
B. Beam Jr. disclaims any beneficial ownership of 377,138
shares of the Company's common stock owned by his parents,
Edward B. Beam Sr. and Carolyn M. Beam, or his brothers, which
shares are not included in the table above.
(2) Includes 108,180 shares of Common Stock issuable to Mr. David H. York
upon the exercise of stock options granted to him pursuant to his
former employment with the Company.
(3) Based upon 10,313,529 shares issued and outstanding on
March 31, 1996.
The Company and certain stockholders on September 26, 1991 entered
into an escrow agreement pursuant to which such Stockholders agreed to deposit
an aggregate of 150,000 shares of Common Stock (and an additional 50,000 shares
issued upon the exercise of certain options) in escrow with the Company's
transfer agent, American Stock Transfer & Trust Company (the "Escrow
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Agent"), prior to the closing of the Company's Initial public offering in
October 1991. Under the terms of the escrow agreement, if the Company has after
tax earnings per share of at least $.25 for any fiscal year ending through
March 31, 1993, then 75,000 (100,000 shares if the additional 50,000 shares
have been escrowed as described below) of the escrow shares shall be released
from escrow and returned to the Stockholders pro rata in proportion to their
contribution to the escrow shares. If the Company has after tax earnings per
share of at least $.75 for any fiscal year during the term of the escrow
agreement, all escrow shares shall be released from escrow and returned to the
Stockholders pro rata in proportion to their contribution to the escrow shares.
In addition, if prior to the fifth anniversary of the date of the escrow
agreement, the closing bid price of the Company's Common Stock, as reported on
NASDAQ, averages in excess of $11.00 during any 30 consecutive trading day
period, the Escrow Agent shall deliver all of the shares to the Stockholders
pro rata in proportion to their contribution to the escrow shares. If the
Company fails to achieve the prescribed income level for either fiscal year or
stock price level, the shares which have not been released to the Stockholders
will be transferred to the Company for cancellation. As of March 31, 1995 none
of the income or price levels have been met by the Company. The income and
stock price levels set forth above were determined by negotiation between the
Company and the Company's underwriter, Thomas James Associates, Inc., and
should not be construed to imply or predict any future earnings or performance
of the Company. The principal Stockholders have deposited in escrow the number
of shares common Stock of the Company following their respective names: William
E. York-- 105,000; David H. York-- 35,000; William C. Buck-- 12,000; Raymond M.
Wright -- 12,000; Herbert C. Woolley, III-- 12,000; L. Clark Brand --12,000;
Kenneth M. Jones -- 12,000. While the above-described shares are held in
escrow, they may be voted by the Stockholders, who are also entitled to receive
cash dividends, if any, relating to such shares.
11
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Item 12. Certain Relationships and Related Transactions.
On April 18, 1994, the Company, Bio-Dyne South Corporation, (a
recently formed wholly owned subsidiary of the Company, hereinafter
referred to as "NEWCO"), H.F.S. Acquisition Co., Inc. and the
stockholders of H.F.S. Acquisition Co., Inc. entered into an
Agreement and Plan of Merger to merge Newco into H.F.S. Acquisition
Co., Inc. As a result of the merger, the Company acquired H.F.S.
Acquisition Co., Inc. and its subsidiaries Home Fitness Studios,
Inc. and Home Fitness Studios of Florida, Inc. Following the
merger, H.F.S. Acquisition Co., Inc. changed its name to Home
Fitness Studios, Inc. and the original Home Fitness Studios, Inc.
changed its name to Home Fitness Studios North, Inc. In summary,
the final corporate structure has the Company owning 100% of Home
Fitness Studios, Inc. and Home Fitness Studios, Inc. owning 100% of
each of Home Fitness Studios of Florida, Inc. and Home Fitness
Studios North, Inc.
In connection with the Company's acquisition of the HFS subsidiaries,
the Company granted Edward B. Beam Jr. options to purchase 100,000 shares of
the Company's Common Stock at an exercise price of $1.0625 per share subject to
stockholder approval of the Company's stock option plan which was obtained on
September 30, 1994. Prior to the merger transaction, the only relationship
between the Company and the Former HFS Stockholders was that Edward B. Beam Jr.
and Edward B. Beam Sr. acted as consultants to the Company during the period
January 1, 1994 through March 31, 1994 and received options to purchase 15,000
and 40,000 shares, respectively, at an exercise price of $.01 per share until
December 31, 1994. These options were exercised in fiscal 1995.
Pursuant to a Shareholders' Agreement entered into as of April
18, 1994, which agreement was terminated on April 14, 1995 through
the mutual consent of the parties thereto, the Corporation's then
seven directors, namely, Edward B. Beam Jr., William E. York, David
H. York, Raymond M. Wright, Kenneth M. Jones, William C. Buck, and
L. Clark Brand, together with Edward B. Beam Sr. and Carolyn M.
Beam, agreed that for a period of three years (as long as Edward B.
Beam Jr. owns shares of Bio-Dyne, and thereafter, for so long as
he is employed by the Company and owns shares) to vote their shares
in favor of Edward B. Beam Jr.'s nominees as described below at any
stockholder meeting called for the election of directors or to fill
vacancies on the Board. The Shareholder's Agreement provided that
Edward B. Beam Jr. will notify the other shareholders that are a
party to the Shareholders' Agreement in writing prior to any
election of directors of the names of up to three individuals (but
not in excess of one-third of the number of directors to be elected
at such meeting) whom Edward B. Beam Jr. desired to have elected to
the Board of Directors at such meeting.
Pursuant to a Shareholders' Agreement entered into as of April 18,
1994, which agreement was terminated on April 14, 1995 through the mutual
consent of the parties thereto, the Company's then seven directors, namely,
Edward B. Beam Jr., William E. York, David H.
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York, Raymond M. Wright, Kenneth M. Jones, William C. Buck, and L. Clark Brand,
together with Edward B. Beam Sr. and Carolyn M. Beam, agreed that for a period
of three years (as long as William E. York owns shares of Bio-Dyne, and
thereafter, for so long as he is employed by the Company and owns shares) to
vote their shares in favor of William E. York's nominees as described below at
any stockholder meeting called for the election of directors or to fill
vacancies on the Board. The Shareholders' Agreement provided that William E.
York will notify the other shareholders that are a party to the Shareholders'
Agreement in writing prior to any election of directors of the names of up to
six individuals (but not in excess of two-thirds of the number of directors to
be elected at such meeting) whom William E. York desired to have elected to the
Board of Directors at such meeting.
The Company issued an aggregate of 1,200,082 shares of its Common
Stock in connection with the Agreement and Plan of Merger and agreed to utilize
its best efforts to register the aforesaid shares at the Company's expense
within six months of April 18, 1994 and to maintain the effectiveness of the
aforementioned Registration Statement for up to one year. Prior to the filing
of the Registration Statement of which this Prospectus is a part, the Company
did not register the aforesaid shares, which shares are included in this
Prospectus. In addition by virtue of the merger, certain stockholder loans in
the aggregate amount of $345,000 that were owed to the former HFS stockholders
were assigned to and assumed by the Company and these loans are secured by the
assets of HFS. At closing, the Company paid the Former HFS Stockholders a fee
equal to 3% of the face amount of all loans or an aggregate of $10,350.
Pursuant to the terms of the Company's loans with Edward B. Beam Sr., Carolyn
Beam and Edward B. Beam Jr., the Company is obligated to grant them 1,500,
18,000 and 14,000 seven year options, respectively, on a semi-annual basis
commencing on September 1, 1994 at the then current fair market value.
No specific principle was followed in determining the amount of the
consideration paid to acquire the HFS Subsidiaries. The Company and the former
HFS Stockholders negotiated the consideration to be paid by the Company in an
arm's length transaction to approximate $1,300,000 in the Company's Common
Stock.
Prior to this transaction, the only relationships between the
Company and the Former HFS Stockholders and their affiliates were
that Edward B. Beam Jr. and Edward B. Beam Sr. acted as consultants
to the Company and the Company loaned $100,000 to Home Fitness
Studios of Florida Inc. on November 2, 1993. Upon completion of
the transaction, Edward B. Beam Jr. became an executive officer and
a director of the Company. In September 1994, Edward B. Beame, Sr.
also became a director of the Company. Prior to the Company
acquiring Home Fitness Studios, Inc. ("HFS") and Carolina Fitness
Equipment, Inc. ("Carolina") on April 18, 1994 and May 26, 1994,
respectively, Carolina purchased inventory from HFS.
13
<PAGE>
In August 1994, the Company issued 468,770 shares of its
common stock to a group of officers, directors and third parties
and received net proceeds of $224,385 from the issuance of such
shares. Kenneth M. Jones, Clark L. Brand, and Edward B. Beam Jr.,
purchased 3,000 shares, 106,000 shares, and 22,500 shares,
respectively, in this private placement. Harvey Miller and Edward
B. Beam Sr. also purchased 21,200 shares and 36,328 shares,
respectively, not including 19,142 shares purchased by Carolyn M.
Beam, and 10,600 shares purchased by Edward B. Beam Sr. and Carolyn
M. Beam for the benefit of two of their children. Edward B. Beam
Jr. paid for $10,000 of his purchase by reducing the debt the
Company owes him from the purchase of HFS.
In April 1995, the Company entered into a Separation Agreement and
General Release with William E. York. Pursuant to the terms of the Agreement,
the Company and Mr. York agreed to terminate Mr. York's employment effective
immediately. Mr. York is entitled to receive a termination fee of $50,000 per
annum for a period of three years. Further, the Company agreed that Mr. York
will be entitled to exercise his options to purchase 244,914 shares granted on
April 18, 1994 for a period of eighteen months from April 14, 1995 at the fair
market value of the stock on the date of the Company's modification to his
option to give effect to the foregoing. The Company also granted him certain
"piggy back" registration rights applicable to any unregistered shares owned by
Mr. York at the time of the filing of a Registration Statement by the Company
and agreed to hold him harmless from any liability he may incur under the
Company's line of credit with the Bank of Coweta.
In 1994, the Company sold 2,001,270 shares of its Common Stock
overseas pursuant to Regulation S of the Securities Act of 1933, as amended.
In March and June 1995, the Company issued and sold 2,501,587 shares
of its Common Stock to a group of accredited investors substantially all at
exercise price of $.25 per share.
In 1995, the Company agreed to issue 150,000 shares of its Common
Stock in settlement of outstanding indebtedness of $58,000 to H.J. Meyers & Co.
(105,000 shares) and Karl Brenza (45,000 shares). These shares were issued in
the first quarter of fiscal 1997.
Incorporated by reference is certain transactions described under (i)
"Recent Developments" under Item 1 and "Executive Compensation" under Item 10.
14
<PAGE>
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) (1) Exhibits
--------
A list of exhibits required by Item 601 of Regulation S-B and an
index thereto appears as follows:
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation of the Registrant (1)
3.2 Amendment to Certificate of Incorporation (10)
3.3 Bylaws (9)
10.1 Stock Escrow Agreement dated September 26, 1991,
by and between the Registrant, the Stockholders
of the Company and American Stock Transfer &
Trust Company (3)
10.2 Warrant Agreement dated October 16, 1991 by and
between the Registrant, certain stockholders of
the company and American Stock Transfer & Trust
Company. (10)
10.3 Sale and Lease Agreement (10)
10.4 Factoring Agreement (10)
10.5 Employment Agreement between the Registrant and
Edward B. Beam, Jr.(4)
10.6 Settlement Agreement and General Release by and
between the Registrant and William E. York (5)
10.7 Employment Agreement dated July 12, 1991, by and
between the Registrant and Harvey Miller. (6)
10.8 Agreement and plan of merger, articles of merger
and promissory notes consisting of two $7,500
notes payable to Edward B. Beam, Sr.; $150,000
note payable to Edward B. Beam, Jr. and $180,000
note payable to Edward B. Beam, Sr., and Carolyn
M. Beam. (4)
10.9 Stock Purchase Agreement dated February 10, 1994
by and among Bio-Dyne North Corporation,
Carolina Fitness Equipment, Inc., Bio-Dyne
Corporation and James H. Heafner (7)
<PAGE>
10.10 Subordination Agreement dated February 10, 1994
by and between Carolina Fitness Equipment, Inc.
and James H. Heafner (7)
10.11 $1,000,000 Revolving Credit Agreement between
Bio-Dyne Corporation and Continental American
Transportation, Inc. Dated May 23, 1996. (8)
10.12 Promissory Note between Bio-Dyne North
Corporation and Continental American
Transportation, Inc. dated May 23, 1996. (8)
10.13 Security Agreement between Bio-Dyne North
Corporation, Carolina Fitness Equipment, Inc.,
Home Fitness Studios, Inc., Home Fitness Studio of
Florida, Inc., Home Fitness Studios North, Inc.
and Continental American Transportation, Inc.,
dated May 23, 1996. (8)
10.14 Amendment to Promissory Note between Bio-Dyne
North Corporation and Edward B. Beam, Sr. and
Carolyn M. Beam, dated May 31, 1996. (8)
10.15 Amendment to Promissory Note between Bio-Dyne
North Corporation and Edward B. Beam, Jr., dated
May 31, 1996. (8)
10.16 Amendment to Non-qualified Stock Option
Agreement between the Registrant and Harvey
Miller (2)
10.17 Amendment to Employment Agreement between the
Registrant and Edward B. Beam, Jr. (2)
10.18 Amendment to Employment Agreement between the
Registrant and Harvey Miller. (2)
10.19 Amendment to Non-qualified Stock Option
Agreement between the Registrant and Edward B.
Beam, Jr. (2)
11.1 Statement regarding computation of share earnings,
see Notes to Consolidated Financial Statements
23.1 Consent of Gleiberman Spears Shepherd &
Menaker, P.A. (2)
99.1 Non-Qualified Stock Option Plan dated April 18,
1994. (4)
99.2 Form of stock option agreement by and among the
Registrant and William E. York (4)
<PAGE>
99.3 Form of stock option agreement by and among the
Registrant and Edward B. Beam Jr. (4)
99.4 Securities and Exchange Commission No Action
Letter dated May 27, 1994 (7)
99.5 1991 Stock Option Plan (10)
(1) Incorporated herein by reference from the Form
S-18 Registration Statement of Registrant filed
with the Commission on June 7, 1991
(File No. 33-41106-A)
(2) Filed herewith.
(3) Incorporated here in by reference from
pre-effective Amendment No. 1 to the form S-18.
Registration Statement of Registrant filed with
the Commission on September 27, 1991.
(4) Incorporated herein by reference from the
Form 8-Ks filed with the Commission on February
10, 1994, April 18, 1994 and May 26, 1994.
(5) Incorporated herein by reference from the
Company's Annual Report on Form 10-KSB for the
fiscal year ended March 31,1995.
(6) Incorporated herein by reference from the
Company's Annual Report to Form 10-KSB/A No. 1
for the fiscal year ended March 31, 1995.
(7) Incorporated by reference from the Registrant's
Form 8-Ks filed with the Commission on February
10, 1994 and May 26, 1994.
(8) Incorporated by reference from the Registrant's
Form 8-K for dated May 31, 1996.
(9) Incorporated by reference from the Registrant's
Form S-8 Registration Statement,
File #33-80905.
(10) Incorporated by reference from the Registrant's
Form SB-2, File # 33-80909.
(11) Previously filed.
(b) Reports on Form 8-K
------------------------
No reports on Form 8-K were filed during the three months ended March
31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BIO-DYNE CORPORATION
By /s/ Tim Holstein
-----------------------------
Tim Holstein
Chairman of the Board
Chief Executive Officer
Dated: July 29, 1996
<PAGE>
EXHIBIT 10.14
AMENDMENT TO PROMISSORY NOTE
This Second Amendment to Promissory Note ("Amendment") is made this
31st day of May, 1996 by and between BIO-DYNE CORPORATION, a Georgia corporation
("Bio-Dyne"), and EDWARD B. BEAM, SR. and CAROLYN M. BEAM (collectively, the
"Lender").
W I T N E S S E T H
WHEREAS, H.F.S. Acquisition Co., Inc., n/k/a Home Fitness Studios,
Inc., a Florida corporation ("HFS"), executed that certain Promissory Note dated
May 17, 1989 (the "Note") in favor of the Lender in the original principal
amount of $200,000.00; and
WHEREAS, Bio-Dyne executed that certain Promissory Note dated April 18,
1994 (the "Note") in favor of the Lender as part of Bio-Dyne's acquisition of
HFS on April 18, 1994; and
WHEREAS, the Note was further amended by Agreement effective September
1, 1995 (the "Amendment Agreement") executed by Bio-Dyne, the Lender and Edward
B. Beam, Jr.; and
WHEREAS, the parties hereto wish to further modify said Note in
accordance with the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Section 3 of the Amendment Agreement is hereby deleted in
its entirety.
2. The outstanding principal balance of the Note is hereby
reduced to $36,146.34 (the "Outstanding Principal Balance") as a result
of the payment to the Lender on the date hereof of an amount equal to
$137,094.58 (which amount is comprised of principal in the amount of
$135,379.32 and interest in the amount of $1,715.26. The Outstanding
Principal Balance shall continue to accrue interest at the rate of 12%
per annum and the Outstanding Principal Balance, together with any and
all accrued but unpaid interest with respect to the Note (as previously
modified) shall be due and payable in its entirety on July 1, 1996.
3. The Note, as previously modified and as modified by this
Amendment, together with all prior existing notes, security agreements,
UCC filings and obligations thereunder and in connection therewith by
and between the parties hereto are all specifically acknowledged and
confirmed by the parties hereto and will remain in full force and
effect in accordance with their respective terms, and the parties
hereto hereby ratify and affirm the same. In addition, Bio-Dyne and the
Lender hereby acknowledge and agree that no default and no rights of
offset or nonpayment exist with respect to the Note, as previously
modified and as modified by this Amendment. Finally, the Note, as
modified by this Amendment, shall not constitute a novation.
4. This Amendment was approved by Bio-Dyne's Board of
Directors on May 15, 1996.
<PAGE>
IN WITNESS WHEREOF, the parties hereto execute this Amendment under
seal as of the day and year first above written.
(SEAL)
---------------------------
Edward B. Beam, Sr.
(SEAL)
---------------------------
Carolyn M. Beam
BIO-DYNE CORPORATION
By
------------------------
Harvey Miller
Secretary
[CORPORATE SEAL]
2
<PAGE>
EXHIBIT 10.15
AMENDMENT TO PROMISSORY NOTE
This Amendment to Promissory Note ("Amendment") is made this 31st day
of May, 1996 by and between BIO-DYNE CORPORATION, a Georgia corporation
("Bio-Dyne"), and EDWARD B. BEAM, JR. (the "Lender").
W I T N E S S E T H
WHEREAS, H.F.S. Acquisition Co., Inc., n/k/a Home Fitness Studios,
Inc., a Florida corporation ("HFS"), executed that certain Promissory Note dated
May 17, 1989 in favor of the Lender in the original principal amount of
$150,000.00; and
WHEREAS, Bio-Dyne executed that certain Promissory Note dated April 18,
1994 (the "Note") in favor of the Lender as part of Bio-Dyne's acquisition of
HFS on April 18, 1994; and
WHEREAS, the Note was further amended by Agreement effective September
1, 1995 (the "Amendment Agreement") executed by Bio-Dyne, the Lender and Edward
B. Beam, Sr. and Carolyn M. Beam; and
WHEREAS, the parties hereto wish to further modify said Note in
accordance with the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Section 3 of the Amendment Agreement is hereby deleted in
its entirety.
2. The outstanding principal balance of the Note is hereby
reduced to $36,146.36 (the "Outstanding Principal Balance") as a result
of the payment to the Lender on the date hereof of an amount equal to
$87,905.43 (which amount is comprised of principal in the amount of
$86,677.19 and interest in the amount of $1,228.24) The Outstanding
Principal Balance shall continue to accrue interest at the rate of 12%
per annum and the Outstanding Principal Balance, together with any and
all accrued but unpaid interest with respect to the Note (as previously
modified) shall be due and payable in its entirety on July 1, 1996.
3. The Note, as previously modified and as modified by this
Amendment, together with all prior existing notes, security agreements,
UCC filings and obligations thereunder and in connection therewith by
and between the parties hereto are all specifically acknowledged and
confirmed by the parties hereto and will remain in full force and
effect in accordance with their respective terms, and the parties
hereto hereby ratify and affirm the same. In addition, Bio-Dyne and the
Lender hereby acknowledge and agree that no default and no rights of
offset or nonpayment exist with respect to the Note, as previously
modified and as modified by this Amendment. Finally, this Note, as
modified by this Amendment, shall not constitute a novation.
<PAGE>
4. This Amendment was approved by Bio-Dyne's Board of
Directors on May 15, 1996.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto execute this Amendment under
seal as of the day and year first above written.
(SEAL)
---------------------------
Edward B. Beam, Jr.
BIO-DYNE CORPORATION
By
------------------------
Harvey Miller
Secretary
[CORPORATE SEAL]
3
<PAGE>
EXHIBIT 10.16
AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT (this
"Amendment") is executed and entered into as of this 31st day of May, 1996 by
and between Bio-Dyne Corporation, a Georgia Corporation (the "Company") and
Harvey Miller (the "Optionee").
WHEREAS, the Company and the Optionee have previously entered into the
NonQualified Stock Option Agreement pursuant to Bio-Dyne Corporation
Non-Qualified Stock Option Plan dated as of September 30, 1994 (the "Stock
Option Agreement");
WHEREAS, the Company and the Optionee have previously entered into an
Employment Agreement dated as of November 1, 1994, and the Amendment thereto
dated May 31, 1996 (the "Employment Agreement") whereby they agreed to certain
amendments to the Stock Option Agreement;
WHEREAS, the Company's Board of Directors unanimously approved reducing
the exercise price of stock options issued to employees, including Optionee, and
authorized the granting of additional stock options to certain employees; and
WHEREAS, the Company and the Optionee wish to amend the Stock Option
Agreement.
NOW THEREFORE, the Company and the Optionee hereby agree as follows:
Section 1. Amendment.
(a) Section 1(o). Section 1(o) of the Stock Option Agreement
is hereby amended by deleting the phrase "ten years from the date
hereof" appearing on the third line and in place thereof inserting
"thirty-six (36) months from May 31, 1996, notwithstanding the
cessation or termination, for any reason, of the employment or business
relationship between the Company and Optionee."
(b) Section 2. Section 2 of the Stock Option Agreement is
hereby amended by deleting the number "$.59375" appearing on the
fifth line and in place thereof inserting "$.125."
(c) Section 4(d). Section 4(d) of the Stock Option Agreement
is hereby amended by deleting it entirely.
Section 2. Full Force and Effect. The Stock Option Agreement is hereby
amended to the extent provided in this Amendment and, except as specifically
provided herein, the Stock Option Agreement shall remain in full force and
effect in accordance with its terms.
<PAGE>
Section 3. Effective Date. This Amendment to the Stock Option
Agreement shall be effective as of May 31, 1996.
Section 4. Definitions. All capitalized terms used in this Amendment
and not otherwise defined shall have the meanings set forth in the Stock Option
Agreement.
Section 5. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not have any effect for
purposes of interpretation or construction of the terms of this Amendment.
Section 6. Counterparts. This Amendment may be signed in any number
of counterpart copies, but all such copies shall constitute one and the same
instrument.
Section 7. Compliance with Agreements. The Company and the Optionee
agree, represent and warrant that this Amendment complies with the requirements
for an amendment to the Stock Option Agreement as set forth in Section 10(c) of
the Stock Option Agreement and complies with the requirements of the Employment
Agreement, as amended. The Company and the Optionee further agree, represent and
warrant that, to the extent necessary to conform to the Company's Non-Qualified
Stock Option Plan, this Amendment shall constitute the grant of a new option
from the Company to the Optionee.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered as of the date first above written.
ATTEST: "COMPANY"
BIO-DYNE CORPORATION
- ---------------------------
Name
By
---------------------------
Name
Title
(CORPORATE SEAL)
"OPTIONEE"
By
---------------------------
Harvey Miller
2
<PAGE>
EXHIBIT 10.17
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT is made and entered into as of
the 31st day of May, 1996 (the "Amendment") by and between Bio-Dyne Corp., a
Georgia corporation (hereinafter referred to as "Company" or "Employer"), and
Edward B. Beam, Jr. (hereinafter referred to as "Beam" or "Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee have previously entered into an
employment agreement dated as of April 18, 1994 (the "Agreement");
WHEREAS, in connection with a contemplated reorganization of and change
in the Board of Directors of the Company, the Company and Employee have
renegotiated the terms of the Agreement as set forth in this Amendment;
WHEREAS, this Amendment has been approved and adopted by the Company
Board of Directors; and
WHEREAS, the Company and Employee wish to amend the Agreement as set
forth herein.
NOW THEREFORE, the Company and Employee hereby amend the Agreement and
agree as follows:
Paragraph 1. Amendments.
Section 2. Employment, Duties and Agreements.
Section 2 (a). Section 2(a) is hereby amended by deleting the
phrases "as President and Chief Operating Officer of the Company" and
"in such capacity" appearing in the first sentence. Section 2(a) is
hereby further amended to delete the duties as set forth in Schedule
"A" and substituting in lieu thereof a new Schedule "A" attached
hereto. Section 2(a) is further amended by deleting the last two
sentences.
Section 3. Compensation.
Section 3(a). Section 3(a) is hereby amended by deleting the
first sentence and in place thereof inserting the following:
"Commencing upon the Effective Date of this Amendment, a guaranteed
monthly salary of Fifteen Thousand Dollars and 00/100 ($15,000.00),
which monthly base salary shall not be decreased during the term of
this Agreement ("Base Salary")."
<PAGE>
Section 3(c). Section 3(c) is hereby amended by adding after
the word "duties" the following: "consistent with the manner in which
business expenses have been reimbursed to Employee in the past. The
Company will reimburse Employee for the cost of a weekly round trip,
coach class plane ticket to commute between Employee's home in
Aventura, Florida and the Company's offices in Atlanta, Georgia,
Charlotte, North Carolina and/or New York, New York upon Employee's
periodic presentation of an itemized account of such commuting expenses
with back up documentation."
Section 3(d). Section 3(d) is hereby amended by deleting it
entirely and inserting as new section 3(d) the following: "So long as
Employee is employed full time with Company, the Company shall continue
to maintain, including the payment of rent and all utilities, for
Employee's business use the apartment located at The Parkview, 275 13th
Street, N.E., Apartment 601, Atlanta, Georgia 30309. Provided, however,
that the Employee shall retain ownership of all furnishings and
personalty owned by Employee in said apartment and Employee has full
rights to remove any and all such furnishings and personalty at
Employee's sole discretion."
Section 3(d). Section 3(e) is hereby amended by deleting it
entirely and in place thereof inserting the following: "The Company
shall reimburse Employee, so long as Employee is employed full time
with Company for all documented and reasonable expenses incurred for
use of a car, which expenses include partial lease reimbursements
currently in the amount of $382 per month."
Section 3(f). Section 3 of the Employment Agreement is hereby
amended by adding a new subsection (f) as follows: "Employee shall
retain all rights, if any, pursuant to the Non-Qualified Stock Option
Agreement between Company and Employee dated April 18, 1994 (the "Stock
Option Agreement") for a maximum period of thirty-six (36) months from
the date of this Amendment. The Company agrees to modify the Stock
Option Agreement so as to provide that all options currently held by
Employee shall immediately vest in Employee to the extent not already
vested, and to permit Employee to immediately exercise Employee's
options thereunder, even though Employee's employment may be
terminated. The Company further agrees to make such modifications to
the Bio-Dyne Corporation Non-Qualified Stock Option Plan adopted by the
Board of Directors of the Company on April 18, 1994 (the "Plan") and/or
the Stock Option Agreement, as may be necessary to effectuate the
intent of this subparagraph, to the extent permitted by applicable law.
If the foregoing modifications are not made for any reason within
thirty (30) days of the execution of this Amendment, the Company shall
issue a new option fully vesting in Employee any and all options
currently held by Employee at the exercise price previously established
by the Company, said options may be exercised by Employee at any time
during the thirty-six (36) month period following execution of this
Amendment.
2
<PAGE>
Section 7. Employment Period.
Section 7. Section 7 of the Agreement is hereby amended by
deleting the phrase "18th day of April, 1997" and in place thereof
inserting "November 30, 1996."
Section 8. Termination of Agreement.
Section 8(d). Section 8(d) of the Employment Agreement is
hereby amended by deleting that section in its entirety.
Paragraph 2. Full Force and Effect.
The Agreement is hereby amended to the extent provided in this
Amendment and, except as specifically provided herein, the Agreement
shall remain in full force and in accordance with its terms.
Paragraph 3. Effective Date.
This Amendment to the Agreement shall be effective as of May
31st, 1996.
Paragraph 4. Definitions.
All capitalized terms used in this Amendment and not otherwise
defined shall have the meanings set forth in the Agreement.
Paragraph 5. Headings.
Section headings in this Amendment are included herein for
convenience of reference only and shall not have any effect for
purposes of interpretation or construction of the terms of this
Amendment.
Paragraph 6. Counterparts.
This Amendment may be signed in any number of counterpart
copies, but all such copies shall constitute one and the same
instrument.
Paragraph 7. Compliance with Agreements.
The Company and Employee agree, represent and warrant that
this Amendment complies with the requirements for an amendment to the
Agreement as set forth in Section 15 of the Agreement and complies with
the requirements of the Agreement, as amended.
3
<PAGE>
IN WITNESSETH WHEREOF, the parties or their duly authorized
representatives have set their hands and affixed their seals as of the day and
year first written above.
WITNESSES: "EMPLOYEE"
- --------------------------- ---------------------------
Name Name
- ---------------------------
Name
ATTEST: "COMPANY"
- --------------------------- BIO-DYNE CORPORATION
Name
---------------------------
- --------------------------- Name
Name Title
(CORPORATE SEAL)
4
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT is made and entered into as of
the 31st day of May, 1996 (the "Amendment") by and between Bio-Dyne Corp., a
Georgia corporation (hereinafter referred to as "Company" or "Employer"), and
Harvey Miller (hereinafter referred to as "Miller" or "Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee have previously entered into an
employment agreement dated as of November 1, 1994 (the "Agreement");
WHEREAS, in connection with a contemplated reorganization of and change
in the Board of Directors of the Company, the Company and Employee have
renegotiated the terms of the Agreement as set forth in this Amendment;
WHEREAS, this Amendment has been approved and adopted by the Company
Board of Directors; and
WHEREAS, the Company and Employee wish to amend the Agreement as set
forth herein.
NOW THEREFORE, the Company and Employee hereby amend the Agreement and
agree as follows:
Paragraph 1. Amendments.
Section 2. Employment, Duties and Agreements.
Section 2 (a). Section 2(a) is hereby amended by deleting the
phrases "as Executive Vice President and Chief Financial Officer of the
Company" and "in that capacity" appearing in the first sentence.
Section 2(a) is hereby further amended to delete the duties as set
forth in Schedule "A" and substituting in lieu thereof a new Schedule
"A" attached hereto. Section 2(a) is further amended by deleting the
last sentence.
Section 3. Compensation.
Section 3(a). Section 3(a) is hereby amended by deleting the
first sentence and in place thereof inserting the following:
"Commencing upon the Effective Date of this Amendment, a guaranteed
monthly salary of Fifteen Thousand Dollars and 00/100
<PAGE>
($15,000.00), which monthly base salary shall not be decreased during
the term of this Agreement ("Base Salary")."
Section 3(c). Section 3(c) is hereby amended by adding after
the word "duties" the following: "consistent with the manner in which
business expenses have been reimbursed to Employee in the past. The
Company will reimburse Employee for the cost of a weekly round trip,
coach class plane ticket to commute between Employee's home in New
York, New York and the Company's offices in Atlanta, Georgia,
Charlotte, North Carolina, and/or Broward County, Florida upon
Employee's periodic presentation of an itemized account of such
commuting expenses with back up documentation."
Section 3(d). Section 3(d) is hereby amended by deleting it
entirely and inserting as new section 3(d) the following: "So long as
Employee is employed full time with Company, the Company shall continue
to maintain, including the payment of rent and all utilities, for
Employee's business use the apartment located at 16485 Collins Avenue,
Apartment 438, Miami Beach, Florida. Provided, however, that the
Employee shall retain ownership of all furnishings and personalty owned
by Employee in said apartment and Employee has full rights to remove
any and all such furnishings and personalty at Employee's sole
discretion."
Section 3(d). Section 3(e) is hereby amended by deleting it
entirely and in place thereof inserting the following: "The Company
shall provide Employee, so long as Employee is employed full time with
Company, with the use of a car and reimburse Employee for all
documented and reasonable expenses incurred in connection with the use
of a car."
Section 3(f). Section 3 of the Employment Agreement is hereby
amended by adding a new subsection (f) as follows: "Employee shall
retain all rights, if any, pursuant to the Non-Qualified Stock Option
Agreement between Company and Employee dated September 30, 1994 (the
"Stock Option Agreement") for a maximum period of thirty-six (36)
months from the date of this Amendment. The Company agrees to modify
the Stock Option Agreement so as to provide that all options currently
held by Employee shall immediately vest in Employee to the extent not
already vested, and to permit Employee to immediately exercise
Employee's options thereunder, even though Employee's employment may be
terminated. The Company further agrees to make such modifications to
the Bio-Dyne Corporation Non-Qualified Stock Option Plan adopted by the
Board of Directors of the Company on April 18, 1994 (the "Plan") and/or
the Stock Option Agreement, as may be necessary to effectuate the
intent of this subparagraph, to the extent permitted by applicable law.
If the foregoing modifications are not made for any reason within
thirty (30) days of the execution of this Amendment, the Company shall
issue a new option fully vesting in Employee any and all options
currently held by Employee at the exercise price previously established
by the Company, said options may be exercised by Employee at any time
during the thirty-six (36) month period following execution of this
Amendment.
2
<PAGE>
Section 7. Employment Period.
Section 7. Section 7 of the Agreement is hereby amended by
deleting the phrase "18th day of April, 1997" and in place thereof
inserting "November 30, 1996."
Section 8. Termination of Agreement.
Section 8(d). Section 8(d) of the Employment Agreement is
hereby amended by deleting that section in its entirety.
Paragraph 2. Full Force and Effect.
The Agreement is hereby amended to the extent provided in this
Amendment and, except as specifically provided herein, the Agreement
shall remain in full force and in accordance with its terms.
Paragraph 3. Effective Date.
This Amendment to the Agreement shall be effective as of May
31, 1996.
Paragraph 4. Definitions.
All capitalized terms used in this Amendment and not otherwise
defined shall have the meanings set forth in the Agreement.
Paragraph 5. Headings.
Section headings in this Amendment are included herein for
convenience of reference only and shall not have any effect for
purposes of interpretation or construction of the terms of this
Amendment.
Paragraph 6. Counterparts.
This Amendment may be signed in any number of counterpart
copies, but all such copies shall constitute one and the same
instrument.
Paragraph 7. Compliance with Agreements.
The Company and Employee agree, represent and warrant that
this Amendment complies with the requirements for an amendment to the
Agreement as set forth in
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<PAGE>
Section 15 of the Agreement and complies with the requirements of the
Agreement, as amended.
IN WITNESSETH WHEREOF, the parties or their duly authorized
representatives have set their hands and affixed their seals as of the day and
year first written above.
WITNESSES: "EMPLOYEE"
- --------------------------- ---------------------------
Name Name
- ---------------------------
Name
ATTEST: "COMPANY"
- --------------------------- BIO-DYNE CORPORATION
Name
---------------------------
- --------------------------- Name
Name Title
(CORPORATE SEAL)
4
<PAGE>
SCHEDULE A - EMPLOYEE'S DUTIES
Employee's duties shall consist of assisting the Officers and Board of
Directors of the Company in the reorganization and transition and in managing
the Company. Additionally, Employee shall have such other duties as may be
reasonably prescribed by the Officers or the Chairman of the Board or the Board
of Directors from time-to-time. Employee shall spend Employee's full business
time and effort exclusively on behalf of the Company through at least June 30,
1996. Thereafter, Employee may, at Employee's sole option, continue working on
Company's behalf on an "as needed" basis for the remaining term of the
Agreement.
<PAGE>
AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT (this
"Amendment") is executed and entered into as of this 31st day of May, 1996 by
and between Bio-Dyne Corporation, a Georgia Corporation (the "Company") and
Edward B. Beam, Jr. (the "Optionee").
WHEREAS, the Company and the Optionee have previously entered into the
NonQualified Stock Option Agreement pursuant to Bio-Dyne Corporation
Non-Qualified Stock Option Plan dated as of April 18, 1994, as amended (the
"Stock Option Agreement");
WHEREAS, the Company and the Optionee have previously entered into an
Employment Agreement dated as of April 18, 1994 and the Amendment thereto dated
May 31, 1996 (the "Employment Agreement") whereby they agreed to certain
amendments to the Stock Option Agreement;
WHEREAS, the Company and the Optionee wish to amend the Stock Option
Agreement.
NOW THEREFORE, the Company and the Optionee hereby agree as follows:
Section 1. Amendment.
(a) Section 1(o). Section 1(o) of the Stock Option Agreement
is hereby amended by deleting the phrase "ten years from the date
hereof" appearing on the third line and in place thereof inserting
"thirty-six (36) months from May 31, 1996, notwithstanding the
cessation or termination, for any reason, of the employment or business
relationship between the Company and Optionee."
Section 2. Full Force and Effect. The Stock Option Agreement is hereby
amended to the extent provided in this Amendment and, except as specifically
provided herein, the Stock Option Agreement shall remain in full force and
effect in accordance with its terms.
Section 3. Effective Date. This Amendment to the Stock Option
Agreement shall be effective as of May 31, 1996.
Section 4. Definitions. All capitalized terms used in this Amendment
and not otherwise defined shall have the meanings set forth in the Stock Option
Agreement.
Section 5. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not have any effect for
purposes of interpretation or construction of the terms of this Amendment.
Section 6. Counterparts. This Amendment may be signed in any number
of counterpart copies, but all such copies shall constitute one and the same
instrument.
<PAGE>
Section 7. Compliance with Agreements. The Company and the Optionee
agree, represent and warrant that this Amendment complies with the requirements
for an amendment to the Stock Option Agreement as set forth in Section 10(c) of
the Stock Option Agreement and complies with the requirements of the Employment
Agreement, as amended. The Company and the Optionee further agree, represent and
warrant that, to the extent necessary to conform to the Company's Non-Qualified
Stock Option Plan, this Amendment shall constitute the grant of a new option
from the Company to the Optionee.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered as of the date first above written.
ATTEST: "COMPANY"
BIO-DYNE CORPORATION
- ---------------------------
Name
By
------------------------------
Name
Title
(CORPORATE SEAL)
"OPTIONEE"
By
------------------------------
Edward B. Beam, Jr.
2