UNITED
STATES
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: May 26, 2010
(Date of
earliest event reported)
LECTEC
CORPORATION
(Exact
name of registrant as specified in its charter)
Commission
File Number: 0–16159
_____________________________________
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Minnesota
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41–1301878
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification No.)
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1407
South Kings Highway, Texarkana, Texas 75501
(Address
of principal executive offices, including zip code)
(903)
832–0993
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8–K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a–12 under the Exchange Act (17
CFR 240.14a–12)
o Pre-commencement
communications pursuant to Rule 14d–2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e–4(c) under the Exchange Act
(17 CFR 240.13e–4(c))
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Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
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On May
26, 2010, LecTec Corporation (the “Company”) announced that Judd
A. Berlin is stepping down as the Company’s Chief Executive Officer and Chief
Financial Officer, effective June 1, 2010. Mr. Berlin is continuing
as Chairman of the Company’s Board of Directors and has been engaged as an
advisor to the Company to evaluate business opportunities in Asia and to further
support the Company’s efforts regarding the development of its intellectual
property portfolio and protection thereof. Mr. Berlin’s advisory
services agreement with the Company (the “Advisory Services Agreement”)
entitles him to: (a) compensation of $11,000 per month; (b) reimbursement for
reasonable travel and other business expenses; and (c) reimbursement in the
amount of $30,000 if, during any calendar year, his service to the Company
requires him to be physically present in the United States for more than 30 days
within such year and consequently he is required to forfeit the benefit of the
Foreign Earned Income Exclusion under the U.S. Internal Revenue Code of
1986.
The
Advisory Services Agreement and the rights and obligations of the Company and
Mr. Berlin thereunder will terminate immediately upon the occurrence of any of
the following events: (a) Mr. Berlin’s death; (B) Mr. Berlin becomes physically
or mentally disabled such that he is unable to adequately perform the services
under the Advisory Services Agreement for a continuous period of thirty (30)
days; (C) Mr. Berlin is convicted of any crime (excluding traffic violations or
other minor offenses), or engages in any activity that constitutes a material
violation of normal standards of business ethics; (d) Mr. Berlin willfully
refuses to comply with or implement reasonable policies established by the
Company; (e) either party is in breach of the Advisory Services Agreement and
has failed to cure such breach within fifteen (15) days of the receipt of
written notice of breach from the non–breaching party; or (f) for any reason by
either party upon thirty (30) days’ written notice to the other
party. If the Advisory Services Agreement is terminated by Mr. Berlin
pursuant to item (e) above or by the Company pursuant to item (f) above, and Mr.
Berlin thereafter provides services to the Company, including, without
limitation, attending, testifying at or otherwise assisting the Company at any
trial in the Company’s medicated patch patent infringement litigation, then Mr.
Berlin will be compensated for such services at the rate of $250 per hour,
subject to maximums of $3,000 per day and $10,000 per week. The
foregoing description of the Advisory Services Agreement is qualified in its
entirety by reference to the Advisory Services Agreement, which is filed as
Exhibit 10.1 to this Current Report on Form 8–K and is incorporated herein by
reference.
On May 26, 2010, the Company’s Board of
Directors determined that, as of June 1, 2010, Gregory G. Freitag will begin
serving as the Company’s Chief Executive Officer and Chief Financial Officer on
an “at will” basis and will become a member of the Company’s Board of
Directors. In connection with his appointment as the Company’s Chief
Executive Officer and Chief Financial Officer, Mr. Freitag will be: (1) paid an
annual base salary of $150,000, but will not be paid any additional compensation
for serving as a member of the Company’s Board of Directors; (b) reimbursed for
reasonable travel and other business–related expenses incurred by Mr. Freitag in
the ordinary course of performing his duties as the Company’s Chief Executive
Officer and Chief Financial Officer; and (c) granted an option (the “Option”) to purchase 125,000
shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), at a price of
$3.50 per share, which is equal to the May 26, 2010 closing price of the Common
Stock, pursuant to the terms and conditions set forth in a Non–Plan
Non–Qualified Stock Option Agreement (the “Option
Agreement”). The Option becomes exercisable in five equal
installments on September 3, 2010, December 2, 2010, March 2, 2011, May 31, 2011
and August 29, 2011. If, however, there is a Change in Control (as
defined in the Option Agreement) of the Company and Mr. Freitag’s employment by
the Company is terminated within 15 months following such Change in Control for
any reason other than (i) Mr. Freitag’s death, (ii) by the Company for Cause (as
defined in the Option Agreement) or (iii) by Mr. Freitag other than for Good
Reason (as defined in the Option Agreement), the entire Option will vest and
become immediately exercisable. The foregoing description of the
Option Agreement is qualified in its entirety by reference to the Option
Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8–K and
is incorporated herein by reference.
Mr. Freitag, 48, has worked for FreiMc,
LLC, a consulting and advisory firm founded by Mr. Freitag, which provides
strategic guidance and business development advisory services, from May 2009 to
the present. Mr. Freitag also founded and currently works for
EmployRx. Inc., a business which provides services to self–insured employers
relating to prescription drug benefits. Prior to founding FreiMc, LLC
and EmployRx, Inc., Mr. Freitag was the Director of Business Development at
Pfizer Health Solutions, a former subsidiary of Pfizer, Inc., from January 2006
to May 2009. From July 2005 to January 2006, Mr. Freitag worked for
Guidant Corporation in their business development group. Prior to
joining Guidant Corporation, Mr. Freitag was the chief executive officer of HTS
Biosystems, a biotechnology tools start–up company, from March 2000 until its
sale in early 2005. Mr. Freitag was the chief operating officer,
chief financial officer and general counsel of Quantech, Ltd., a public point of
care diagnostic company, from December 1995 to March 2000. Prior to
that time, Mr. Freitag practiced corporate law in Minneapolis,
Minnesota. Mr. Freitag has a J.D. and is a certified public
accountant. The Company believes that Mr. Freitag’s experience in
senior leadership at life science companies, both large and small, and his
significant experience in business operations and business transactions, which
includes experience in collaborations, finance, licensing, co–development,
supply arrangements, mergers and acquisition and business formation, makes Mr.
Freitag well suited to serve as the Company’s chief executive officer and chief
financial officer and as a member of the Company’s Board of
Directors.
There are no other arrangements or
understandings between Mr. Freitag and any other persons pursuant to which Mr.
Freitag was selected as a director. Other than owning an option to
purchase shares of Common Stock, Mr. Freitag does not have a direct or indirect
material interest in any currently proposed transaction to which the Company is
to be a party in which the amount involved exceeds $120,000, nor has Mr. Freitag
had a direct or indirect material interest in any such transaction since the
beginning of the Company’s last fiscal year. Mr. Freitag has no
family relationships with any member of the Company’s Board of Directors or any
other executive officer of the Company.
Item
8.01. Other Events.
In July 2008, the Company filed a
complaint for patent infringement against Chattem, Inc. (“Chattem”) and four other
defendants in the U.S. District Court for the Eastern District of
Texas. On May 20, 2010, the U.S. District Court issued Orders in
regard to such patent infringement litigation against Chattem. The
first Order was based on the Company’s motion to strike an exhibit from
Chattem’s Opposition Brief, in which Order the motion to strike was granted by
the U.S. District Court. A second Order denied Chattem’s motion
request for leave to file for summary judgment as to non–infringement, but
granted the request for leave to file for summary judgment as to invalidity of
patents. The U.S. District Court also issued its Markman ruling
interpreting certain terms of the Company’s patents.
A press release published by the
Company on May 26, 2010 announcing the events described in Item 5.02 and this
Item 8.01 is filed with this Current Report on Form 8–K as Exhibit 99.1 and is
incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
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10.1
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Advisory
Services Agreement between LecTec Corporation and Judd A.
Berlin
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10.2
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Non–Plan
Non–Qualified Stock Option Agreement between LecTec Corporation and
Gregory G. Freitag
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99.1
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LecTec
Corporation Press Release, dated May 26,
2010.
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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.
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LECTEC
CORPORATION
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By:
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/s/
Gregory G. Freitag
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Gregory
G. Freitag
Chief
Executive Officer and Chief Financial
Officer
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Date:
June 2, 2010
EXHIBIT
INDEX
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Exhibit
Number
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Description
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10.1
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Advisory
Services Agreement between LecTec Corporation and Judd A.
Berlin
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10.2
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Non–Plan
Non–Qualified Stock Option Agreement between LecTec Corporation and
Gregory G. Freitag
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99.1
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LecTec
Corporation Press Release, dated May 26,
2010.
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