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 15, 2007
GALES INDUSTRIES INCORPORATED
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(Exact Name of Registrant as Specified in its Charter)
Delaware 000-29245 20-4458244
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State of Commission IRS Employer
Incorporation File Number I.D. Number
1479 North Clinton Avenue, Bay Shore, NY 11706
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Address of principal executive offices
Registrant's telephone number: (631) 968-5000
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(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 (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))
Item 1.01 Entry into a Material Definitive Agreement.
On March 16, 2007. Gales Industries Incorporated (the "Company") and Michael A.
Gales executed a Separation Agreement and General Release (the "Agreement")
pursuant to which Mr. Gales resigned from his positions with the Company.
Pursuant to the Agreement, the Employment Agreement between Mr. Gales and the
Company terminated, effective March 16, 2007. In lieu of the compensation
payable to Mr. Gales pursuant to his Employment Agreement, from March 16, 2007,
to November 30, 2010, Mr. Gales will be paid $100,000 per annum; from December
1, 2010 to May 31, 2011, he will be paid $50,000. In addition, if the Company
achieves certain agreed-upon levels of performance he may receive up to an
additional $50,000.
The Agreement provides for the vesting of the balance of the 1,250,000 stock
options held by Mr. Gales and extends until March 16, 2008 the date of
expiration of such options. In addition, Mr. Gales agreed to a schedule limiting
his sale of shares of the common stock of the Company to no more than 975,000
shares prior to September 16, 2010. A copy of the Agreement is attached hereto
as Exhibit 10.1.
Item 5.02 Change in Directorship of the Company.
On March 20, 2007, the Company announced the resignation of one of its founders,
Michael A. Gales, from all positions with the Company. Mr. Gales had been
serving as Executive Chairman of the Company. James A. Brown has been appointed
Chairman of the Company's Board. A copy of the press release is attached hereto
as Exhibit 99.1.
EXHIBITS:
10.1 Separation Agreement
99.1 Press Release, dated March 20, 2007, announcing the retirement of Michael
A. Gales as Executive Chairman of the Company, and the appointment of James A.
Brown as Chairman of the Company's Board of Directors.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 20, 2007
GALES INDUSTRIES INCORPORATED
By: /s/ Peter Rettatalia
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Peter Rettatalia, President