SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 19, 2007
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PARAGON TECHNOLOGIES, INC.
(Exact Name of Issuer as Specified in Charter)
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DELAWARE 1-15729 22-1643428
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification Number)
600 KUEBLER ROAD, EASTON, PENNSYLVANIA 18040
(Address of Principal Executive Offices)
(610) 252-3205
(Registrant's Telephone Number, Including Area Code)
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K 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
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
This Current Report on Form 8-K is filed by Paragon Technologies, Inc., a
Delaware corporation ("Paragon" or the "Company"), in connection with the
matters described herein.
Item 1.01 Entry into a Material Definitive Agreement
As disclosed below in Item 5.02 of this Current Report on Form 8-K, on February
20, 2007, Paragon announced that Joel L. Hoffner, a member of Paragon's board of
directors, and its President and Chief Executive Officer, has indicated his
intention to retire, effective March 1, 2007. As part of Mr. Hoffner's
retirement, Paragon and Mr. Hoffner entered into that certain Separation and
Mutual Release Agreement (the "Separation Agreement"). The full text of the
Separation Agreement is filed as Exhibit 10.39 to this Current Report on Form
8-K and is incorporated herein by reference. The following discussion provides a
summary of the material terms of the Separation Agreement, which discussion is
qualified in its entirety by reference to the entire text of the Separation
Agreement.
Under the terms of the Separation Agreement, provided that Mr. Hoffner does not
fail to comply with the terms of the Separation Agreement, Mr. Hoffner shall
continue to receive his regular salary and all employee benefits, including a
monthly auto allowance and compensation for accrued unused vacation, until March
31, 2007. In consideration of the foregoing, Mr. Hoffner releases Paragon from
all claims with respect to matters arising out of his employment with Paragon,
or the termination thereof, except for claims for indemnification under
Paragon's Bylaws, if applicable.
In addition, Paragon and Mr. Hoffner have entered into a Consulting Agreement
(the "Consulting Agreement"), pursuant to which Mr. Hoffner will be engaged in
providing certain consulting services to Paragon when requested by Paragon's
board of directors or its Chief Executive Officer from time to time. The full
text of the Consulting Agreement is filed as Exhibit 10.40 to this Current
Report on Form 8-K and is incorporated herein by reference. The following
discussion provides a summary of the material terms of the Consulting Agreement,
which discussion is qualified in its entirety by reference to the entire text of
the Consulting Agreement.
Under the terms of the Consulting Agreement, Paragon will pay Mr. Hoffner (i)
$5,000 per month and (ii) $800 per day for each day Mr. Hoffner provides
consulting services to Paragon for the period commencing on April 1, 2007 and
ending December 31, 2007 (the "Term"). In addition, Paragon will reimburse Mr.
Hoffner for all normal and reasonable expenses incurred by him on behalf of
Paragon, provided that such expenses are documented and submitted to Paragon in
accordance with Paragon's reimbursement policies as in effect from time to time.
In consideration of the foregoing, during the Term and for a period of one year
thereafter Mr. Hoffner agrees not to solicit or recruit any employees, customers
or third-parties with whom Paragon does business.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers
(b) On February 20, 2007, Paragon announced that Joel L. Hoffner, a member of
Paragon's board of directors, and its President and Chief Executive Officer, has
indicated his intention to retire, effective March 1, 2007. Paragon entered into
a Separation Agreement with Mr. Hoffner. Mr. Hoffner's retirement is not as a
result of any disagreement with the Company on any matter relating to the
Company's operations, policies or practices.
(c) On February 20, 2007, Paragon announced the appointment of Leonard S.
Yurkovic as the acting Chief Executive Officer of Paragon and William J. Casey
as the President and Chief Operating Officer of SI Systems, Paragon's materials
handling business, effective March 1, 2007.
Mr. Yurkovic, age 69, joined Paragon as Vice President of Finance in 1979.
Throughout the 1980s, Mr. Yurkovic was appointed to several executive-level
positions at Paragon, including Chief Operating Officer in 1985, Managing
Director of European Operations in 1987 and then President and Chief Executive
Officer in 1988. Mr. Yurkovic retired as Paragon's Chief Operating Officer and a
member of Paragon's board of directors in 1999. However, Mr. Yurkovic re-joined
Paragon in 2003 and served as its President and Chief Executive Officer until
December 31, 2005. Mr. Yurkovic currently serves as a member of Paragon's board
of directors.
Mr. Casey, age 63, whose career with the Company spans 39 years, rejoined the
Company on December 29, 2003 as Vice President of SI Systems Production &
Assembly. Mr. Casey was appointed Executive Vice President of the Company and
President of SI Systems Production & Assembly on October 14, 2005. From July
2001 to December 2003 Mr. Casey held an executive position with The Casey Group,
an information technology firm specializing in providing Enterprise Services in
IT management, integration, and outsourcing. Previously (1965-2001), Mr. Casey
held a variety of senior management positions at Paragon Technologies including
Executive Vice President, Vice President Sales and Marketing, and Director of
Sales. A member of the Conveyor Equipment Manufacturers Association (CEMA) for
over 25 years, acting as Board President in 2002-2003, Mr. Casey has served on
its Board of Directors since 1997 and chaired numerous committees.
A copy of the press release announcing the retirement of Mr. Hoffner and the
appointment of Messrs. Yurkovic and Casey is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
The following exhibits are filed with this Form 8-K:
(c) Exhibit No. Description
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10.39 Separation and Mutual Release Agreement dated
February 20, 2007, by and between Paragon
Technologies, Inc. and Joel Hoffner.
10.40 Consulting Agreement dated February 20, 2007, by and
between Paragon Technologies, Inc. and Joel Hoffner.
99.1 Press Release of Paragon Technologies, Inc. dated
February 20, 2007.
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.
PARAGON TECHNOLOGIES, INC.
Date: February 20, 2007 By: /s/ Joel L. Hoffner
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Joel L. Hoffner
President and CEO
Index of Exhibits
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(c) Exhibit No. Description
10.39* Separation and Mutual Release Agreement dated February
20, 2007, by and between Paragon Technologies, Inc. and
Joel Hoffner.
10.40* Consulting Agreement dated February 20, 2007, by and
between Paragon Technologies, Inc. and Joel Hoffner.
99.1* Press Release of Paragon Technologies, Inc. dated
February 20, 2007.
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* Filed herewith