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): January 25, 2005
PARADIGM MEDICAL INDUSTRIES, INC.
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(Exact name of registrant as specified in this Charter)
Delaware 0-28498 87-0459536
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2355 South 1070 West, Salt Lake City, Utah 84119
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (801) 977-8970
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Does Not Apply
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(Former name or former address, if changed since last report)
ITEM 8.01 Other Events.
On January 25, 2005, Paradigm Medical Industries, Inc. (the "Company")
entered into a written settlement agreement to settle the lawsuit that
Innovative Optics, Inc. and Barton Dietrich Investments, L.P. brought against
the Company and its former executive officers, Thomas F. Motter, Mark R. Miehle
and John W. Hemmer. The lawsuit was filed on July 10, 2003 in the Third District
Court for Salt Lake County, State of Utah.
Under the terms of the settlement, U.S. Fire Insurance Company, which
issued a Directors and Officers Liability and Company Reimbursement Policy to
the Company for the period from July 10, 2002 to July 10, 2003, has agreed to
pay Innovative Optics, Inc. and Barton Dietrich Investments, L.P. the sum of
$367,500. Payment of this amount by U.S. Fire is contingent, however, upon the
settlement of a federal class action lawsuit and a state class action lawsuit
against the Company and its former executive officers.
The federal class action lawsuit was originally filed on May 14, 2003
by Richard Meyer, individually and on behalf of all others similarly situated,
against the Company and its former executive officers in the United States
District Court for the District of Utah, which was consolidated into a single
action on June 28, 2004 with two other class action lawsuits -- the class action
lawsuit filed by Michael Marone on June 2, 2003 and the class action lawsuit
filed by Lidia Milian on July 21, 2003 against the Company and its former
executive officers in the same court. The consolidated action is captioned: In
re: Paradigm Medical Industries Securities Litigation, with lead plaintiffs Rock
Solid Investments of Miami, Inc., Brito & Brito Accounting, Inc. and Joseph
Savanjo. The state class action lawsuit was filed on October 14, 2003 by Albert
Kinzinger, Jr., individually and on behalf of all others similarly situated,
against the Company and its former executive officers in the Third District
Court for Salt Lake County, State of Utah.
Verbal agreements have been made to settle the federal class action
lawsuit and the state class action lawsuit. The Company and U.S. Fire Insurance
Company and their respective counsel are in the process of completing written
settlement agreements to settle the federal and state class action lawsuits.
As a condition to the settlement agreement with Innovative Optics, Inc.
and Barton Dietrich Investments, L.P., the courts in the federal class action
lawsuit and the state class action lawsuit must have entered orders granting
final approval of the settlements reached in those respective actions, and such
orders must have become final and non-appealable. In addition, the Company and
its former executive officers agree to execute a policy release in favor of U.S.
Fire Insurance Company. The policy release is to be in a form agreed to by the
parties.
As a further condition, the settlement agreement provides that U.S.
Fire Insurance Company must not have exercised its option to terminate the
settlement agreement. U.S. Fire has the option to terminate the settlement
agreement if the cumulative dollar value of the claims held by individuals or
entities that "opt out" of the federal and state class action lawsuits exceeds
$250,000. If such "opt outs" exceed $250,000, however, plaintiffs in the federal
and state class action lawsuits will have five days to cure by reducing the
amount of "opt outs" to less than $250,000.
If U.S. Fire exercises its option to terminate the settlement
agreement, then all parties to the settlement agreement will be restored to
their respective positions in the various actions as of the date of the
settlement agreement. Moreover, the terms and provisions of the settlement
agreement will have no further force and effect on the various parties and will
be deemed null and void in their entirety.
ITEM 9.01. Financial Statements and Exhibits
(c) Exhibits
10.1 Settlement Agreement among Paradigm Medical Industries, Inc.,
Thomas Motter, Mark Miehle, John Hemmer, Mackey Price & Thompson,
Innovative Optics, Inc., Barton Dietrich Investments, L.P. and
United States Fire Insurance Company.
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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.
PARADIGM MEDICAL INDUSTRIES, INC.
(Registrant)
Date: January 26, 2005. By: /s/ John Y. Yoon
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John Y. Yoon
President and Chief Executive Officer
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