HOENIX--(BUSINESS WIRE)--Feb. 11, 1998--The board of directors of Gum Tech International Inc. (Nasdaq:GUMM
- news) Wednesday announced that the company accepted the resignation of Chairman, Chief Executive Officer and
President Gerald Kern, prior to a scheduled review of Kern's performance at yesterday's board meeting.
The board announced the appointment of Gary Kehoe as interim president, and Bruce Jorgenson, M.D., as chairman of the
board, elected one new director, William Arthur Yuan, and accepted the resignation of directors Jack Kessler and Paul
Peckman.
Kehoe, director and chief operating officer, has been with Gum Tech since 1995, and is largely responsible for developing
the company's state-of-the-art, registered over-the-counter manufacturing plant. Jorgenson has more than 20 years of
medical experience and owns a pediatrics practice in Utah. Yuan has an extensive investment background with Merrill
Lynch, Smith Barney and Goldman Sachs.
Speaking on behalf of the board, Jorgenson said: ''We are extremely confident in Gary's abilities, and we are equally
confident that we have negotiated a settlement with Mr. Kern that is in the very best interest of Gum Tech and its
shareholders. Now, we look forward to getting back to what we do best.''
Under the terms of the severance package, Kern will receive a payment of $200,000. The buyout amount includes $50,000
held in trust for 120 days and is subject to a mutual non-disparagement clause. The company will also forgive $116,000 of
debt and officer's advances owed by Kern to the company. Additionally, Kern will receive 100,000 shares of Gum Tech
stock options, exercisable up to one year at $5.81 per share.
''The past few months have been difficult ones for me as I found myself more and more in disagreement with the will of
the board and with the direction certain shareholders would like to see the company take,'' Kern said. ''It became
abundantly clear to me that this would be a good time to move on and look for new challenges. I wish Gum Tech and its
employees well, and I have no doubt that the company will continue down the path of success.''
Gum Tech distributes its nutrient and therapeutic chewing gum products to many of the nation's top chain drugstores, food
stores and mass merchandisers. Gum Tech has headquarters at 4205 North 7th Ave., Suite 300, Phoenix, 85013.
Gum Tech's future results of operations and other forward-looking statements contained in this document, in particular
statements concerning plant efficiencies and capacities, capital spending, research and development and other expenses
involve a number of risks and uncertainties. In addition to the factors discussed above, among the other factors that could
cause actual results to differ materially are the following: business conditions and the general economy; competitive factors,
such as rival gum manufacturers' pricing and marketing efforts; availability of third-party material products at reasonable
prices; unused barter credits, if any; risk of nonpayment of accounts receivable; risks of inventory obsolescence due to
shifts in market demand; timing of product introductions; and litigation involving product liabilities and consumer issues. |
