Item
5.02
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
|
On
August 7, 2018, Edward Swanson resigned from the position of director of the PolarityTE, Inc. (the “Company”), and
the Board of Directors of the Company (the “Board”) elected Rainer Erdtmann a director of the Company to fill the
Class III director vacancy left by the resignation of Dr. Swanson. The Board determined that Mr. Erdtmann is “independent”
pursuant to the definition of independence under Rule 5605(a)(2) of the Nasdaq Listing Rules. In consideration of Mr. Erdtmann’s
agreement to join the Board the Company issued to Mr. Erdtmann an option to purchase 50,000 shares of the Company’s common
stock exercisable over a term of 10 years and vests in 24 equal monthly installments commencing September 7, 2018, subject to
continued service on the Board. The option was issued under the Company’s 2017 Equity Incentive Plan (the “Plan”),
and the exercise price is $20.47 per share, which is fair value determined under the Plan. Mr. Erdtmann will also be entitled
to participate in the annual compensation package the Company provides to its non-employee directors.
On
August 7, 2018, pursuant to Article II, Section 1.B of the Company’s Bylaws the Board approved an increase in the number
of persons comprising the Board from seven to eight by adding one new director position to Class II of the Board, and the Board
elected David Seaburg a director of the Company to fill the vacancy in Class II of the Board. The Company entered into a consulting
agreement with Mr. Seaburg pursuant to which he will provide investor relations and other services to the Company over a period
of two years for a fee consisting of (a) quarter-annual cash payment of $10,000, (b) 60,000 restricted stock units issued under
the Plan that vest in four equal installments every six months during the term of the agreement subject to continued service,
and (c) an annual award under the Plan of options exercisable over a term of 10 years to purchase common stock in number equal
to the number of shares of common stock with a value of $150,000 at the time of the award based on a Black-Scholes calculation.
Rainer
Erdtmann, age 54, is a portfolio manager, general partner and co-founder of Point Sur Investors LLC, an investment advisory firm
focused on investing in biotech companies that are trying to change the standard of care. Prior to Point Sur Investors, Mr. Erdtmann
served as Senior Vice President, Investor Relations and Administration, for Pharmacyclics, Inc., a Nasdaq-listed company, from
March 2013 to May 2015, and as Vice President, Finance and Administration and Corporate Secretary for Pharmacyclics from February
2009 to September 2012. Since 2002, Mr. Erdtmann served as a managing director of Oxygen Investments, LLC, a manager of equity
and real estate funds, which he co-founded in December 2002. Since 1992, Mr. Erdtmann has served as managing director of United
Properties Immobilien & Anlagen GmbH, a German based real estate development company, where he was originally responsible
for building up the organization and overseeing its finance division. From 1998 to 2001, as well as in 2007 and 2008, Mr. Erdtmann
worked with Robert W. Duggan & Associates, a private money management company. Mr. Erdtmann began his career in investment
banking with Commerzbank in Frankfurt, Germany, and later joined Commerz International Capital Management as a portfolio manager
for international clients. He graduated with distinction from the Westfaelische Wilhelms Universitaet in Muenster, majoring in
finance and banking.
David
Seaburg, age 57, is a Managing Director and Head of Sales Trading at Cowen & Company, a diversified financial services company.
Over the course of his 20+ year career at Cowen in both Equity Sales Trading and Trading, Mr. Seaburg has advanced to increasingly
senior level roles at the firm. In 2006, Mr. Seaburg was named Head of Sales Trading and appointed to the firm’s Equity
Operating Committee. Mr. Seaburg is a CNBC Fast Money Contributor and provides regular on-air market commentary for the network.
Mr. Seaburg holds a Bachelor of Arts degree in Business Finance and Economics from Northeastern University. Mr. Seaburg is qualified
to serve as a member of the Board because of his knowledge of financial management, marketing, investor relations, acquisition
transactions, and capital markets.
The
Board has not made a decision regarding Board committee assignments for Mr. Erdtmann or Mr. Seaburg.