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): | January 19, 2007 |
The Middleton Doll Company
|
| (Exact name of registrant as specified in its charter) |
Wisconsin
| 0-22663
| 39-1364345
|
| (State or other | (Commission File | (IRS Employer |
| jurisdiction of | Number) | Identification No.) |
| incorporation) |
1050 Walnut Ridge Drive, Hartland, Wisconsin 53029-8303
|
| (Address of principal executive offices, including zip code) |
(262) 369-8163
|
| (Registrant’s telephone number, including area code) |
|
| (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:
| [ ] | 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)) |
Item 8.01. Other Events.
Lee Middleton Original Dolls, Inc. (“Lee Middleton”) and License Products, Inc. (“License Products”), each a wholly owned subsidiary of The Middleton Doll Company (the “Parent”), are parties to a restated employment agreement with Craig R. Bald, dated and effective as of December 1, 2006 (the “Restated Employment Agreement”). The Restated Employment Agreement amends and restates in its entirety that certain Employment Agreement, dated and effective January 1, 2006, by and among Mr. Bald, Lee Middleton and License Products, which was filed with the Securities and Exchange Commission as Exhibit 99.1 to the Parent’s Current Report on Form 8-K dated October 5, 2006. A copy of the Restated Employment Agreement is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”) and is incorporated by reference into this Report. The following summary of the material terms of the Restated Employment Agreement is qualified in its entirety by reference to the Restated Employment Agreement.
Pursuant to the Restated Employment Agreement, each of Lee Middleton and License Products employs Mr. Bald as its Chief Financial Officer. For his services as Chief Financial Officer of Lee Middleton and License Products, effective as of January 1, 2007, Mr. Bald receives a base salary of $136,000 per year. The Board of Directors of the Parent (the “Board”) determines how Mr. Bald’s base salary is divided between Lee Middleton and License Products. Also, the Board may increase Mr. Bald’s base salary in its sole discretion, provided that Mr. Bald’s base salary will be adjusted each January 1 (beginning January 1, 2008) in proportion to the change in the Consumer Price Index over the prior one year period
In addition to Mr. Bald’s base salary, Mr. Bald: (1) is eligible to participate in any medical, health, dental, disability or any other employee benefit plans Lee Middleton and License Products generally make available to their employees, subject to Mr. Bald otherwise meeting the eligibility requirements of the plans; (2) receives the fringe benefits that Lee Middleton and License Products make available to their employees generally, including participation in their
401(k) or other profit sharing plans; and (3) may receive cash bonuses based upon the performance of Lee Middleton and License Products. If Lee Middleton and License Products achieve $1,000,000 of consolidated EBITDA (as defined below) in any fiscal year and Mr. Bald remains an employee at the end of that year, Mr. Bald will receive a cash bonus equal to 2.5% of his base salary. If Lee Middleton and License Products achieve $5,000,000 consolidated EBITDA in any fiscal year and Mr. Bald remains an employee at the end of that year, Mr. Bald will receive a cash bonus of $25,000. For purposes of the bonus calculations, “EBITDA” means the consolidated sum of the following items for Lee Middleton and License Products: (1) net income from continuing operations during the applicable fiscal year, excluding extraordinary gains and income items; (2) interest expense during the applicable fiscal year, net of interest income accrued during that year; (3) federal and state income taxes paid and accrued during the applicable fiscal year; and (4) depreciation and amortization.
The initial term of the Restated Employment Agreement terminates on November 30, 2007. However, beginning on December 1, 2006 and on each day after December 1, 2006, the term of the Restated Employment Agreement automatically renews for one additional day, such that after November 30, 2007 the term remains evergreen for a one year period unless either party gives written notice to the other to cease such renewals, in which case Mr. Bald’s employment will cease as of the end of the then current term of employment.
Under the Restated Employment Agreement, each of Lee Middleton and License Products has the right to terminate Mr. Bald’s employment at any time by giving written notice to Mr. Bald for Cause (as defined in the Restated Employment Agreement). If Lee Middleton or License Products terminates Mr. Bald’s employment prior to the expiration of the employment term other than for Cause, which definition of Cause includes death and disability, Mr. Bald continues to receive his base salary for a period equal to the remaining term of employment. Mr. Bald may terminate the Restated Employment Agreement upon forty-five days prior written notice to the Parent.
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The Restated Employment Agreement provides that during the term of the Restated Employment Agreement and for eighteen months thereafter, Mr. Bald will not engage in certain activities that are competitive with Lee Middleton or License Products and that Mr. Bald is subject to certain confidentiality provisions.
Item 9.01. Financial Statements and Exhibits.
| | (a) | Financial Statements of Business Acquired. |
| | (b) | Pro Forma Financial Information. |
| | (c) | Shell Company Transactions. |
| | (d) | Exhibits. The following exhibits are being furnished herewith: |
| | 99.1 | Restated Employment Agreement, dated December 1, 2006, by and among Lee Middleton Original Dolls, Inc., License Products, Inc. and Craig R. Bald. |
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SIGNATURES
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.
| THE MIDDLETON DOLL COMPANY |
| (Registrant) |
| By: /s/ Craig R. Bald |
| Craig R. Bald |
| Chief Financial Officer, Vice President Finance |
| and Treasurer |
Dated: January 19, 2007
Signature Page
THE MIDDLETON DOLL COMPANY
Exhibit Index to Current Report on Form 8-K dated January 19, 2007
Exhibit
Number
| 99.1 | Restated Employment Agreement, dated December 1, 2006, by and among Lee Middleton Original Dolls, Inc., License Products, Inc. and Craig R. Bald. |
Exhibit Index
