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): May 31, 2005
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Zynex Medical Holdings, Inc.
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(Exact name of Registrant as specified in its charter)
Nevada 33-26787-D 87-0403828
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
8100 South Park Way, Suite A-9, Littleton, CO 80120
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 703-4906
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Total pages: 3
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
On May 31, 2005, Zynex Medical Holdings, Inc. entered into a compensation
agreement with Peter J. Leveton, the Company's Chief Financial Officer to be
effective as of April 18, 2005 (the "Effective Date"). The agreement provides
for a monthly salary of $2,250 per month. It also provides for an increase in
the monthly salary of an additional $4,000 per month (the "First Raise") in the
event (a) the Company obtains a line of credit of at least $250,000, or (b) the
Company receives third party equity or debt investment of at least $1,000,000,
or (c) the Company has annual audited "positive net cash provided by operating
activities" of at least $500,000 , or (d) the Company undergoes a liquidity
event with a valuation of at least $10,000,000 (items (b) through (d) shall be
referred to as "Raise Events"). The agreement also provides for an additional
increase in the monthly salary of $5,000 per month (the "Second Raise") in the
event the Company undergoes a Raise Event. The First Raise and Second Raise,
once earned and vested shall be paid in arrears with respect to each month of
employment beginning as of the Effective Date through the month of vesting, then
shall be paid currently through the date Mr. Leveton's employment terminates. If
one of the events listed above occurs and Mr. Leveton played an active and
integral role in accomplishing such event, but, Mr. Leveton's employment
terminated voluntarily within 30 days prior to such event or involuntarily
within 120 days of such event, then Mr. Leveton shall be entitled to receive an
amount equal to the First Raise and/or the Second Raise for each month of his
employment with the Company beginning with the Effective Date and ending as of
the date of his termination. Under the agreement, Mr. Leveton is required to
work no less than twenty hours per week and eighty hours per month.
Mr. Leveton is also entitled to receive stock options to purchase up to
350,000 shares of the Company's Common Stock. Such options shall have a ten year
term, and an exercise price equal to the fair market value of the Common Stock
on the date of grant, April 18, 2003. Such options are subject to vesting as
follows: 100,000 shares vest on the date of grant; 25,000 shares vest on June
30, 2005, provided that Mr. Leveton is employed as of such date; and 25,000
shares vest as of the last day of each full calendar quarter beginning as of
July 1, 2005 through March 31, 2007, provided that Mr. Leveton is employed as of
such date; and 50,000 shares vest upon a Raise Event if Mr. Leveton is employed
as of such date, or if Mr. Leveton played an active, integral and key role in
accomplishing such event, and such event occurred within 30 days of voluntary
termination or within 90 days of involuntary termination. All unvested quarterly
options immediately vest and become exercisable upon a liquidity event with a
valuation of at least $10,000,000; provided the liquidity event occurs during
Mr. Leveton's employment or if Mr. Leveton played an active, integral and key
role in accomplishing such event, within 90 days of involuntary termination.
Except in the case of a liquidity event as described above, all unvested options
will expire upon the voluntary or involuntary termination of employment.
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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 as its behalf by the
undersigned hereunto duly authorized.
Zynex Medical Holdings, Inc.
(Registrant)
Date: June 1, 2005 By: /s/ Thomas Sandgaard
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Thomas Sandgaard
President and Chief Executive Officer
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