ULGX Urologix Inc (CE)

 

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 (date of earliest event reported):  March 17, 2015

 

Urologix, Inc.

(Exact name of Registrant as Specified in its Charter)

 

Minnesota

(State Or Other Jurisdiction Of Incorporation)

 

000-28414	41-1697237
(Commission File Number)	(I.R.S. Employer Identification No.)
14405 21st Avenue North Minneapolis, MN	55447
(Address Of Principal Executive Offices)	(Zip Code)

 

(763) 475-1400

Registrant’s Telephone Number, Including Area Code

 

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 (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Items under Sections 1 through 4 and 6 through 8 are not applicable and are therefore omitted.

 

ITEM 5.02

DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

 

On March 17, 2015, Urologix, Inc. (the “Company”) and Scott M. Madson entered into a letter agreement (the “offer letter”) pursuant to which Mr. Madson agreed to serve as the Company’s Chief Financial Officer effective as of April 1, 2015. The Company announced Mr. Madson’s appointment as Chief Financial Officer by the press release attached hereto as Exhibit 99.1.

 

Prior to agreeing to join the Company, Mr. Madson, age 54, provided finance and accounting management consulting services through his company, Madson Consulting LLC. The services he provided to clients included forecasting, capital planning, budgeting, financial close, monthly financial reporting and benchmarking, tax and audit management guidance, revenue recognition analysis, insurance program renewal, board material design and preparation, and compensation plan design. From 2006 to June 2012, Mr. Madson was Vice President, Controller and Chief Accounting Officer of Universal Hospital Services, Inc., a leading nationwide provider of health care technology management and service solutions to the health care industry. During his service to Universal Hospital Services, which is an SEC reporting company, Mr. Madson was responsible for supervising accounting staff and had responsibilities in the areas of accounting, external and internal reporting, fixed asset management, and tax matters. He was also involved in mergers and acquisitions, financings and strategic initiatives. Mr. Madson is a Certified Public Accountant (inactive) and received a Bachelor of Science degree in Business with a major in Accounting from the University of Minnesota.

 

Under the terms of the offer letter, Mr. Madson will receive annual base compensation of $150,000, payable according to the Company’s regular payroll practices. In the Company’s fiscal year 2015 that ends on June 30, 2015, Mr. Madson’s target bonus will be $20,000, with the exact amount determined by achievement as determined by the Company’s Compensation Committee of individual performance goals approved by the Compensation Committee. In the Company’s fiscal year 2016, Mr. Madson will be eligible for a cash bonus of 30% of his base salary at the target level based on achievement of specific performance goals to be determined by the Company’s Compensation Committee under a fiscal year 2016 incentive plan adopted by the Compensation Committee. Mr. Madson will also participate in the Company’s health, dental and life insurance benefit plans on the same basis as other employees of the Company.

 

Pursuant to the offer letter, on the first day of his employment Mr. Madson will be granted an incentive stock option to purchase 150,000 shares of the Company’s common stock under the Company’s 2012 Stock Incentive Plan (the “ Plan”). The options will have an exercise price equal to the fair market value of the Company’s common stock as of the grant date, as determined under the Plan. The option will vest with respect to 25% of the shares underlying the option on the first anniversary of the date of grant and, thereafter, as to 1/36 of the shares underlying the option on the monthly anniversary of the date of grant for each of the next 36 months.

 

 

In connection with his employment, Mr. Madson entered into the Company’s current form of change of control letter agreement (the “letter agreement”). The letter agreement dated March 17, 2015 between the Company and Mr. Madson is attached hereto as Exhibit 10.2. Except with respect to this letter agreement, Mr. Madson’s employment with the Company is “at will.” Under the letter agreement, if a Change in Control occurs and Mr. Madson’s employment is terminated without Cause, or by Mr. Madson for Good Reason, within twelve months of a Change in Control, the Company will pay Mr. Madson a severance payment in cash in a single sum within sixty days of the date of termination equal to 50% of the sum of his annual target compensation (base salary and bonus) in effect on such date. In addition, the Company will continue Mr. Madson’s health, dental and life insurance benefits for a period of six months, with Mr. Madson obligated to pay the employee’s share of the premiums for such benefits. Capitalized terms used in this paragraph have the meaning ascribed to them in the letter agreement. Mr. Madson also entered into the Company’s standard agreement with employees governing assignment of inventions, confidential information and non-competition.

 

The Compensation Committee of the Board of Directors recommended, and the Board of Directors approved, the compensation to Mr. Madson under the offer letter.

 

The foregoing summary of the offer letter and the letter agreement do not purport to be complete and are subject to and qualified in their respective entirety by reference to the offer letter and letter agreement, which are attached hereto as Exhibit 10.1 and Exhibit 10.2 to this Form 8-K, respectively, and are incorporated by reference into this Item 5.02.

 

ITEM 9.01	FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No.	Description
10.1	Letter Agreement dated March 17, 2015 Regarding Offer of Employment by Urologix, Inc. and Scott M. Madson
10.2	Letter Agreement Regarding Change In Control Benefits between Urologix, Inc. and Scott M. Madson dated March 17, 2015
99.1	Press Release Issued by Urologix, Inc. on March 23, 2015

 

 

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, thereunto duly authorized.

 

Date:  March 23, 2015	UROLOGIX, INC.
	By:	/s/ Gregory J. Fluet
		Gregory J. Fluet Chief Executive Officer

 

 

 

		March 17, 2015	EXHIBIT 10.1
		Mr. Scott Madson
		Re:  Offer of Employment
		Dear Scott:
		On behalf of Urologix, Inc. (the “Company”), I am pleased to offer you the position of Chief Financial Officer.  In this position, you would also serve as Urologix’ principal financial officer and principal accounting officer as those terms are defined under the rules of the Securities and Exchange Commission.  We would like you to begin serving in this role on April 1, 2015.
		This is a full-time position and you will be expected to devote all of your working time and ability to the performance of your duties.  Any outside business activities will require prior authorization by the Chief Executive Officer.  You will report to the Company’s Chief Executive Officer.
		You will be paid a base annual salary of $150,000 (less taxes and applicable withholdings) according to the Company’s normal payroll practices and policies.  The statement of annual salary does not imply a guarantee of employment for any specific length of time.  If your employment terminates, you will be paid a prorated amount through your actual last day of employment.
		In fiscal year 2015 (ending June 30, 2015), your target bonus will be $20,000, with the exact amount determined by achievement as determined by the Urologix Compensation Committee of MBOs approved by the Compensation Committee.  In fiscal year 2016 (which begins July 1, 2015), you will be eligible for a cash bonus of 30% of your base salary at the target level based on achievement of specific performance goals to be determined by the Urologix Compensation Committee under a fiscal year 2016 incentive plan adopted by the Compensation Committee.  The performance goals and targeted amounts of the performance goals will be based upon a Board-approved fiscal year 2016 plan.  As an executive officer of Urologix, Urologix is willing to enter into an agreement with you (“Change in Control Agreement”), a copy of which is attached to this letter.  Your employment is “at will” and may be terminated by you or Urologix at any time for any reason, subject to the benefits of the Change in Control Agreement.
		I am also pleased to inform you that as part of your employment offer, you will be granted on the first day of your employment an incentive stock option to purchase 150,000 shares of the Company’s common stock at an exercise price determined by the closing market price of the stock on the date of grant.  These options shall vest as follows:  25% of the shares shall vest on the first anniversary of the grant date; and thereafter 1/36th of the shares underlying the option will vest on the monthly anniversary of the date of grant for each of the next 36 months.  The stock option grant will be evidenced by an agreement and will be subject in all respects to the terms and conditions of the Urologix, Inc. 2012 Stock Incentive Plan.
		4405 NORTH 21st AVENUE, MINNEAPOLIS, MN 55447-2000 Phone · 763.475.1400      Fax · 763.475.1443      Toll Free · 800.475.1403      www.urologix.com

 

 

		You will be eligible for the full range of Company benefits.  Urologix offers medical, dental, life, flexible spending account, 401(k), AD&D, short-term and long-term disability coverage.  The costs of benefits will vary depending upon the coverage you elect.  You will be eligible to participate in our medical and dental, life, AD&D, short-term and long-term disability and flexible spending programs on the first of the month following your date of employment.  You will be eligible to participate in our 401(k) program following an initial 90-day waiting period.  If you have any questions on benefits, please feel free to contact Greg Fluet.  You will be entitled to accrue up to 160 hours of vacation annually.
		All necessary and reasonable business travel expenses you incur will be reimbursed in accordance with the Urologix Business Travel Policy.
		As a condition of your employment and for purposes of federal immigration law, you are required to provide the Company documentary evidence of your identity and eligibility for employment in the United States.  In order to ensure timely processing of your paycheck, such documentation must be provided to us within three business days of your date of employment.
		You will also be required to sign a Urologix, Inc. Agreement Regarding Employment, Inventions, Confidential Information and Non-Competition (copy attached) as a condition of your employment.  This letter, along with the foregoing agreement relating to proprietary rights, confidentiality and non-competition and the Change in Control Agreement, sets forth the terms of your employment with the Company and supersedes any prior representations or agreements between us, whether written or oral.  This letter may not be modified or amended except by a written agreement signed by the Chief Executive Officer and by you.
		This offer of employment will expire March 18, 2015, if not formally accepted.  If the provisions of this offer are acceptable to you, please sign one copy of this offer letter and return it to me at your earliest convenience (along with a signed copy of the Urologix, Inc. Agreement Regarding Employment, Inventions, Confidential Information and Non-Competition and the Change in Control Agreement).  The second original copy is for your personal files.
		In the meantime, please feel free to contact me if you have any questions.
		Sincerely,
		/s/  Gregory J. Fluet
		Gregory J. Fluet Chief Executive Officer
		14405 NORTH 21st AVENUE, MINNEAPOLIS, MN 55447-2000 Phone · 763.475.1400      Fax · 763.475.1443      Toll Free · 800.475.1403      www.urologix.com

 

 

		I have read and understand the terms of this offer of employment by Urologix, Inc.  I accept the offer of employment by Urologix, Inc. and agree to be bound by these terms of employment.
		/s/  Scott Madson
		Scott Madson
		Dated:  March 17, 2015
		14405 NORTH 21st AVENUE, MINNEAPOLIS, MN 55447-2000 Phone · 763.475.1400      Fax · 763.475.1443      Toll Free · 800.475.1403      www.urologix.com

 

EXHIBIT 10.2

14405 21^st Avenue South
Minneapolis, MN 55447

 

March 17, 2015

 

 

Dear Scott:

Although your employment is “at will” and may be terminated by you or Urologix at any time for any reason, Urologix has agreed to provide you with a particular severance pay benefit following a Change in Control in the event your employment is terminated without Cause, or by you for Good Reason. Terms not otherwise defined in this letter (the “Letter Agreement”) shall have the meaning given such terms on Schedule 1, which is incorporated herein by reference.

Specifically, we have agreed as follows:

1.                   Change in Control.  If a Change in Control shall occur and your employment is terminated without Cause, or by you for Good Reason, within twelve months of a Change in Control, Urologix shall pay you a severance payment in cash in a single sum sixty (60) days of the date of termination equal to 50% of the sum of your annual target compensation (base salary and bonus) in effect on such date. In addition, Urologix shall continue the health, dental and life insurance benefits substantially similar to those you are receiving or are entitled to receive prior to your termination for a period of six (6) months. You must pay the employee’s share of the premiums for such benefits.

2.                   Arbitration.  All disputes or claims arising out of or in any way related to this Letter Agreement, including the making of this Letter Agreement, shall be submitted to and determined by final and binding arbitration under the Rules of the American Arbitration Association. Arbitration proceedings may be initiated by either of us upon notice to the other and to the American Arbitration Association, and shall be conducted by three arbitrators under the Rules of the American Arbitration Association in Minneapolis, Minnesota. The American Arbitration Association will deliver to us a list of proposed arbitrators and unless we agree upon the persons to serve as arbitrators within 30 days from the date the list is delivered, then, at the request of either of us, the three arbitrators will be selected at the discretion of the American Arbitration Association.

3.                   Entire Agreement.  This Letter Agreement constitutes our entire agreement and supersedes all prior discussions, understandings and agreements with respect to the severance benefits which Urologix has agreed to provide to you. This Letter Agreement shall be governed and construed by the laws of the State of Minnesota and may be amended only in writing signed by both of us.

March 17, 2015

Page 2

 

 

 

4.                   Successors.  This Letter Agreement shall not be assignable, in whole or in part, by you. This Letter Agreement shall be binding upon and inure to the benefit of Urologix and its successors and assigns and upon any person acquiring, by merger, consolidation, purchase of assets or otherwise, all or substantially all of the assets and business of Urologix, and the successor shall be substituted for Urologix under this Letter Agreement.

5.                   Compliance with Code §409A.  For purposes of this Letter Agreement, “termination of employment” shall be interpreted consistent with the term “separation from service” within the meaning of Treas. Reg. §1.409A-1(h). It is the intention of the parties that this Letter Agreement be exempt from Code §409A to the greatest extent possible. Accordingly, all provisions herein shall be construed and interpreted consistent with that intent, but that, to the extent any payment constitutes nonqualified deferred compensation, Urologix shall amend any such provision pertaining to such payment to comply with Code §409A and the regulations thereunder, in the least restrictive manner necessary without any diminution in the value of the payments to you. Notwithstanding the foregoing, if on the date of your “separation from service” (within the meaning of Treas. Reg. §1.409A-1(h)), you are a “specified employee” within the meaning of Treas. Reg. §1.409-1(i), then payment of any amount under this Agreement that constitutes nonqualified deferred compensation shall be delayed until: (i) the later of: (A) the first day of the seventh month following your separation from service, and (B) the first date on which such payment would not be non-deductible as a result of Section 162(m) of the Code, or (ii) your death, if earlier. In the event any such payment is so delayed, the amount of the first payment shall be increased for interest earned on the delayed payment based upon interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the date the payment should otherwise have been provided.

If this Letter Agreement accurately sets forth our agreement and understanding in regard to these matters, will you please sign this Letter Agreement where indicated below and return the executed letter to me for our files. A separate copy is enclosed for your records.

 

 

 

UROLOGIX, INC.
By:	/s/  Gregory J. Fluet
Its:	Chief Executive Officer
READ AND AGREED:
/s/  Scott Madson
Scott Madson

 

 

 

SCHEDULE 1

Definition of “Cause”:

1.                  The failure by you to use your best efforts to perform the material duties and responsibilities of your position or to comply with any material policy or directive Urologix has in effect from time to time.

2.                   Any act on your part which is harmful to the reputation or business of Urologix, including, but not limited to, conduct which is inconsistent with federal or state law respecting harassment of, or discrimination against, any Urologix employee.

3.                  A material breach of your fiduciary or other legal responsibilities to Urologix, such as embezzlement or misappropriation of Urologix funds or properties or any material breach of an agreement between you and Urologix (including any non-disclosure and non-competition agreement).

4.                  Your indictment for, conviction of, or guilty plea or nolo contendere plea to a felony or any crime involving moral turpitude, fraud or misrepresentation.

Definition of “Change in Control”:

Change in Control of Urologix shall mean a change in control which would be required to be reported in response to Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not Urologix is then subject to such reporting requirement, including without limitation, if:

 

(a)

any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of Urologix representing 20% or more of the combined voting power of Urologix’ then outstanding securities;

(b)

there ceases to be a majority of the Board of Directors comprised of (A) individuals who, on the date of this Letter Agreement, constituted the Board of Directors of Urologix; and (B) any new director who subsequently was elected or nominated for election by a majority of the directors who held such office prior to a Change in Control; or

(c)

Urologix disposes of at least 75% of its assets, other than to an entity owned 50% or greater by Urologix or any of its subsidiaries.

Definition of “Good Reason”:

Good Reason shall mean, without your express written consent, any of the following:

 

(a)

a material diminution of your authority, duties or responsibilities with respect to your position immediately prior to the Change in Control;

(b)

a material reduction in your base compensation as in effect immediately prior to the Change in Control;

(c)

a material reduction in the authority of the person to whom you report (or a change in your reporting directly to the Board of Directors, if applicable);

 

(d)

a material change in the geographic location at which you must perform services for Urologix; or

(e)

any other action or inaction that constitutes a material violation of this Agreement by Urologix;

provided that no such termination for Good Reason shall be effective unless: (i) you provide written notice to the Chair of the Board of Directors of the existence of a condition specified in paragraphs (a) through (e) above within 90 days of the initial existence of the condition; (ii) Urologix does not remedy such condition within 30 days of the date of such notice; and (iii) you terminate your employment within 90 days following the last day of the remedial period described above.

 

 

 

 

 

 

 

EXHIBIT 99.1

March 23, 2015

For Immediate Release

 

Urologix Announces Hiring of Chief Financial Officer

MINNEAPOLIS - March 23, 2015 - Urologix, Inc. (OTCQB:ULGX), the leading provider of in-office procedures for the safe, durable and effective treatment of BPH, today announced the appointment of Scott M. Madson as its Chief Financial Officer effective April 1, 2015. Mr. Madson brings over 30 years of both public and private company financial leadership experience to his new role, having most recently provided finance and accounting management consulting services through his company, Madson Consulting LLC. Previously, Scott was Vice President, Controller and Chief Accounting Officer for Universal Hospital Services, Inc, one of the nation’s largest providers of mobile medical equipment and healthcare technology management services.

Mr. Madson will report to the Company's Chief Executive Officer, Greg Fluet. "We are excited to welcome Scott to the management team at Urologix," stated Mr. Fluet. "In addition to his broad range of skills and experience, his background in mobile healthcare solutions complements both our operations and long-term growth objectives. We are confident that Scott’s financial leadership will provide a positive impact on Urologix’s ability to execute our plan with operating and financial efficiency.”

During his service to Universal Hospital Services, which is an SEC reporting company, Mr. Madson was responsible for supervising accounting staff and had responsibilities in the areas of accounting, external and internal reporting, fixed asset management, and tax matters. He was also involved in mergers and acquisitions, financings and strategic initiatives. Prior to UHS, Scott held finance positions in companies including Nextel Partners and RBC Wealth Management. He began his career in public accounting at Deloitte in Minneapolis. Mr. Madson is a Certified Public Accountant (inactive) and received a Bachelor of Science degree in Business with a major in Accounting from the University of Minnesota.

About Urologix

Urologix, Inc., based in Minneapolis, develops, manufactures, markets and distributes minimally invasive medical products for the treatment of obstruction and symptoms due to Benign Prostatic Hyperplasia (BPH). Urologix's Cooled ThermoTherapy™ produces targeted microwave energy combined with a unique cooling mechanism to protect healthy tissue and enhance patient comfort. The Prostiva® RF Therapy System delivers radio frequency energy directly into the prostate destroying prostate tissue, reducing constriction of the urethra, and thereby relieving BPH symptoms. Both therapies provide safe, effective and lasting relief of the symptoms and obstruction due to BPH. Prostiva is a registered trademark of Medtronic, Inc., used under license. All other trademarks are the property of Urologix.

 

If you’d like more information on this topic, please contact Greg Fluet at (763) 475-1400 or investor-relations@urologix.com. To learn more about Urologix and its products and services, visit their website at www.urologix.com.

The Urologix, Inc. logo is available at www.urologix.com/clinicians/resource-library.php

CONTACTS:

Urologix Media Contact

Susan Overby

(763) 745-1540

soverby@urologix.com

 

Urologix Investor Relations Contact

Greg Fluet

(763) 475-1400

gfluet@urologix.com