Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
First
Amendment to General Release and Severance Agreement with Departing CEO
As previously reported, on December 9, 2019, the Company entered
into a General Release and Severance Agreement (the “Separation Agreement”) with James Barry, Ph.D.,
the chief executive officer, president and Class 3 director of the Company, pursuant to which Dr. Barry’s employment with
the Company and any subsidiary of the Company ceased, and Dr. Barry resigned from all positions and offices of the
Company, including the board of directors, effective December 31, 2019. The Separation Agreement, among other things, provided
that Dr. Barry is entitled to receive an additional lump-sum payment of $25,000 payable on the Company’s first regularly
scheduled payroll date on or next following December 17, 2019, which amount is intended to offset the costs of any executive outplacement
services or similar educational programs which may be incurred by Dr. Barry (the “Outplacement Service Payment”)
on or after December 31, 2019.
On
December 31, 2019, the Company and Dr. Barry entered into the First Amendment to the Separation Agreement providing that the Outplacement
Service Payment is payable on the Company’s first regularly scheduled payroll date occurring in 2020.
The
foregoing summary of the First Amendment to the Separation Agreement does not purport to be complete and is subject to, and qualified
in its entirety by, the full text of the First Amendment to the Separation Agreement, a copy of which is filed as Exhibit 10.1
to this Current Report on Form 8-K and is incorporated herein by reference.
First
Amendment to Employment Agreement with Newly Appointed CEO
As
previously reported, on December 9, 2019, the Company entered into an Employment Agreement with Marvin Slosman (the “Slosman
Employment Agreement”), pursuant to which Mr. Slosman will serve as the new chief executive officer and president
of the Company, commencing on January 1, 2020. The Slosman Employment Agreement provided that, among other things, (i) the Company
will grant Mr. Slosman 5% of the Company’s issued and outstanding common stock determined on a fully diluted basis as of
the date of grant (the “Equity Awards”), with 75% of the Equity Awards being granted as restricted stock
units and with the remaining 25% of the Equity Awards being granted as stock options, with the Equity Awards subject to the terms
and conditions of the Company’s 2013 Long-Term Incentive Plan (the “LTIP”) and of the award agreements
to be entered for the Equity Awards; and (ii) on or before December 31, 2020, Mr. Slosman will become eligible to receive an additional
grant of equity awards under the LTIP and the applicable award agreements up to 5% (including the Equity Awards) of the Company’s
actual outstanding shares of common stock on the date of grant (the “Potential Additional Equity Awards”),
provided that the actual amount of the grant shall be based on the achievement of certain performance/financial criteria as established
by the board of directors of the Company after consultation with Mr. Slosman, in its reasonable discretion.
On
December 31, 2019, the Company and Mr. Slosman entered into the First Amendment to the Slosman Employment Agreement providing
(i) that the Equity Awards will be granted outside of the LTIP; (ii) the definition of the phrase “fully diluted basis”
as the sum of the total shares of common stock then outstanding, the shares of common stock issuable upon the conversion of the
Company’s then outstanding shares of Series B Convertible Preferred Stock and Series C Convertible Preferred Stock and the
shares of common stock issuable upon the exercise of the Company’s then outstanding pre-funded warrants; and (iii) that
the Potential Additional Equity Awards Mr. Slosman may receive on or before December 31, 2020, shall be up to 5% (including the
Equity Awards) of the Company’s issued and outstanding shares of common stock determined on a fully diluted basis on the
date of grant calculated using the definition of the phrase “fully diluted basis” as set forth in the First Amendment
to the Slosman Employment Agreement. On January 2, 2019, the Company granted the Equity Awards to Mr. Slosman, pursuant to the
Slosman Employment Agreement, as amended.
As
previously disclosed, Mr. Slosman, 55, has served as chief operating officer for MEDCURA Inc. from May 2019 to December 2019.
From September 2017 to September 2019, Mr. Slosman served as a Business Consultant, overseeing international commercial strategy
and market development, at Integra Life Sciences, a leading innovator in orthopedic extremity surgery, neurosurgery, and reconstructive
and general surgery. From 2010 to 2014 Mr. Slosman served as President of Itamar Medical, Inc., a medical technology company focused
on cardiovascular and sleep diagnostics. Mr. Slosman also served as chief executive officer of Ovalum Vascular Ltd. from 2008
to 2010. Mr. Slosman’s qualifications to serve on the board of directors of the Company include his significant experience
in senior management positions of leading medical device companies.
The
foregoing summary of the First Amendment to the Slosman Employment Agreement does not purport to be complete and is subject to,
and qualified in its entirety by, the full text of the First Amendment to the Slosman Employment Agreement, a copy of which is
filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.