AND EXCHANGE COMMISSION
to Section 13 or 15(d) of the
Exchange Act of 1934
Report (Date of earliest event reported): June 29, 2010
Center For Wound Healing, Inc.
name of registrant as specified in its charter)
or other jurisdiction of
Plains Road, Suite 200
of principal executive offices)
telephone number, including area code (914) 372-3150
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
communications pursuant to Rule 425 under the Securities Act (17 CFR
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Appointment of
Certain Officers; Compensatory Arrangements of Certain
(b) Resignation of
Director. By letter dated June 29, 2010, Louis Bissette resigned as a
director of The Center For Wound Healing, Inc. (the “Company”). Mr. Bissette
also served as a member of the Audit Committee of the Board of
(c) Election of Chief Financial
and Chief Accounting Officer. At a meeting held on June 29, 2010, the
Company’s Board of Directors of Company elected Michael J. Jakolat, age 50, to
the positions of Chief Financial Officer and Chief Accounting Officer. Mr.
Jakolat has served as Vice President, Finance of the Company since July 1, 2009.
Prior to joining the Company, Mr. Jakolat founded the BeaconView Group, a
boutique advisory firm serving a number of middle market public and private
companies, including the Company, since 2001. Prior to founding the BeaconView
Group, Mr. Jakolat was Vice President and Chief Financial Officer of Life
Fitness, an upper-middle-market manufacturer of high-end consumer and commercial
fitness equipment. At Life Fitness, Mr. Jakolat was responsible for global
financial and information technology operations.
of Directors determined to elect Mr. Jakolat to the positions of Chief Financial
Officer and Chief Accounting Officer after giving due consideration to Mr.
Jakolat’s performance as Vice President, Finance of the Company, including his
effectiveness at improving the Company’s accounts receivable management
processes and general accounting procedures.
Employment Agreement with
Michael J. Jakolat. The Company employs Mr. Jakolat pursuant to an
Employment Agreement dated July 1, 2009. The text of Mr. Jakolat’s Employment
Agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K. The
description of Mr. Jakolat’s Employment Agreement set forth below is qualified
in its entirety by reference to the text of such Employment
Jakolat’s Employment Agreement provides that he is to be employed by the Company
as Vice President-Finance. No changes were made to Mr. Jakolat’s Employment
Agreement in connection with his election to the positions of Chief Financial
Officer and Chief Accounting Officer of the Company.
initial term of Mr. Jakolat’s Employment Agreement is for two years, commencing
July 1, 2009 and ending June 30, 2011, and will be automatically renewed for an
additional 12 months unless either Mr. Jakolat or the Company provides written
notice to the other of intent not to renew on or before January 1, 2011.
Following such initial 12 month renewal term, Mr. Jakolat’s employment shall be
automatically renewed for successive 12 month periods unless either Mr. Jakolat
or the Company has provided written notice to the other of intent not to renew
prior to the expiration of the prior renewal term.
Jakolat’s annual base salary is $260,000, subject to review and possible
increase by the Company’s Chief Executive Officer at least annually. In
addition, Mr. Jakolat is eligible to receive an annual cash performance bonus
for each fiscal year during the term of his employment if he remains employed by
the Company on the last day of the applicable fiscal year, such bonus to be
based upon the annual earnings before interest, taxes, depreciation and
amortization (“EBITDA”) and accounts receivable days sales outstanding
(“Accounts Receivable DSO”) targets set forth in the Company’s Business Plan.
The amount of Mr. Jakolat’s cash bonus, if any, shall be established by the
Company’s Chief Executive Officer following the close of the applicable fiscal
Jakolat was granted options to purchase a total of 400,000 shares of Common
Stock, par value $0.001 per share, of the Company (“Common Stock”) under the
Company’s 2006 Stock Option Plan, at an exercise price of $1.05 per share. Such
options are exercisable for a term of five years. Options to purchase 250,000
shares were fully vested at the time of grant, and the options to purchase the
remaining 150,000 shares will vest as follows: If the Company achieves the
annual EBITDA and Accounts Receivable DSO targets set forth in the Company’s
business plan for the fiscal year ending June 30, 2010, then Mr. Jakolat’s
option to purchase 100,000 shares of Common Stock shall vest as of the last day
of the applicable quarter. If the Company achieves the annual EBITDA and
Accounts Receivable DSO targets set forth in the Company’s business plan for the
fiscal year ending June 30, 2011, then Mr. Jakolat’s option to purchase 50,000
shares of Common Stock shall vest as of the last day of the applicable quarter.
All of Mr. Jakolat’s options will become fully vested upon a Change in Control
(as defined in Mr. Jakolat’s Employment Agreement). Mr.
Jakolat also holds options, exercisable for five years, to purchase a total of
280,000 shares of Common Stock at an exercise price of $1.05 per share that were
granted as partial consideration for consulting services rendered prior to his
full-time employment by the Company.
event of the termination of Mr. Jakolat’s employment by the Company without
cause or after the Company notifies Mr. Jakolat in writing of its intent not to
renew the term of Mr. Jakolat’s Employment Agreement, or by Mr. Jakolat for
“Good Reason” (as defined in Mr. Jakolat’s Employment Agreement), or by Mr.
Jakolat following a Change in Control, then Mr. Jakolat is entitled to
continuation of his base salary then in effect for a period of 12 months after
the termination of his active employment, accrued but unpaid base salary and any
annual bonus earned for any prior years, accrued employment benefits (including
accrued vacation) and continued participation at the Company’s expense for six
months in the Company’s employee benefit plans and programs (or reimbursement
for costs incurred by Mr. Jakolat to procure continuation coverage if he is not
then eligible to participate in such plans). All unvested stock options granted
to Mr. Jakolat also shall immediately vest.
Jakolat’s Employment Agreement, the Company also agrees to indemnify Mr. Jakolat
under the Company’s Articles of Incorporation and By-Laws, to cover Mr. Jakolat
pursuant to the terms of the Company’s standard indemnification agreement, and
to provide directors and officers’ liability insurance coverage in amounts
appropriate for the Company’s size for a period during the term of Mr. Jakolat’s
employment and for a period of three years thereafter.
(d) Election of Director.
At a meeting held on June 29, 2010, the Company’s Board of Directors elected
Peter S. Macdonald, age 51, a director of the Company and a member of the Audit
Committee of the Board of Directors, filling the vacancy on the Board of
Directors and the Audit Committee of the Board of Directors created by reason of
Mr. Bissette’s resignation.
Macdonald is a general partner of Bison Capital (“Bison Capital”). Mr. Macdonald
joined Bison Capital in 2009. Prior to joining Bison Capital, Mr. Macdonald was
a Managing Director of BlackRock Kelso Capital Management from 2006 to 2009.
From 1994 until 2006, Mr. Macdonald was a Partner of Windward Capital Partners,
LP. Prior to co-founding Windward, Mr. Macdonald was a member of the Mergers
& Acquisitions Group of CS First Boston.
Capital Equity Partners II-A, L.P. and Bison Capital Equity Partners II-B, L.P.
(collectively, “Bison”), investment funds affiliated with and managed by Bison
Capital, hold approximately $23.9 million aggregate principal amount of senior
secured promissory notes of the Company and warrants to purchase a total of
7,941,926 shares of Common Stock pursuant to a Securities Purchase Agreement
dated as of March 31, 2008 between Bison and the Company (“Securities Purchase
Agreement”) and related documents, all as amended from time to time. The
Securities Purchase Agreement and related documents (including the Voting
Agreement described below) were filed as exhibits to the Company’s Current
Report on Form 8-K dated March 31, 2008.
terms of a Voting Agreement dated as of March 31, 2008, among Bison, the Company
and certain stockholders of the Company parties thereto, Bison is entitled to
designate two individuals (“Bison Representatives”) to serve as directors of the
Company. Mr. Macdonald replaces Mr. Bissette as one of the two Bison
Representatives. The Board of Directors elected Mr. Macdonald as a director in
accordance with the terms of the Voting Agreement. Mr. Douglas B. Trussler is
the other Bison Representative. The Voting Agreement was filed as Exhibit 4.7 to
the Company’s Current Report on Form 8-K dated March 31, 2008, and is
incorporated herein by reference.
9.01 Financial Statements
following exhibit is filed herewith:
Description of Exhibit
Agreement dated July 1, 2010 between The Center For Wound Healing, Inc.,
and Michael J. Jakolat
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
CENTER FOR WOUND HEALING, INC.
/s/ Andrew G. Barnett