RCAR RenovaCare Inc (CE)

Appointment of President and Chief Executive Officer

On November 15, 2019, RenovaCare, Inc. (the “Company”) appointed Alan L. Rubino to the position of President and Chief Executive Officer of the Company, effective November 15, 2019. Pursuant to his appointment, Mr. Rubino entered into an Employment Agreement with the Company dated November 15, 2019 (the “Employment Agreement”).

Mr. Rubino is 65 years old, and his career spans over 37 years at every level of the biopharmaceutical industry. From September 2012 until November 2019, Mr. Rubino served as the President and Chief Executive Officer of Emisphere Technologies, Inc. where he led a turnaround over the past seven years and helped to position Emisphere among the leading global oral drug delivery firms. Emisphere’s turnaround was enhanced by a new four molecule collaboration with Novo Nordisk and anchored by the recent FDA approval of Novo Nordisk’s Rybelsus which incorporated Emisphere’s carrier technology to introduce the first-ever oral GLP-1 therapeutic for the treatment of diabetes. 

From October 2010 until July 2012, he served as Chief Executive Officer and President of New American Therapeutics, Inc. where he and his team presided over a venture that was focused on the acquisition, marketing, and ultimate sale of Denavir, a leading Rx topical therapeutic for HSV-1 cold sore treatment. From February 2008 to September 2010 for a 49% IRR to investors., Mr. Rubino was CEO and President of Akrimax Pharmaceuticals, where he acquired two Rx launch products, Tirosint and NitroMist, which are actively marketed and in growth phases today with Tirosint selling over $100 million per year.

Prior to 2008, Mr. Rubino served as President and Chief Operating Officer of the Pharmos Corporation, which was a development-stage publicly-held corporation, where he led the transformation of the company through the acquisition of Vela Pharmaceuticals. 

Mr. Rubino also spent four years in senior executive leadership positions on the strategic services side at both Cardinal Health and PDI, Inc., both public companies that provided high-level outsourcing offerings to the pharmaceutical industry. 

Mr. Rubino’s distinguished career includes a successful 24 years with Hoffmann-La Roche, Genentech (a subsidiary of Roche), which is one of the world’s top 10 biopharmaceutical companies. Mr. Rubino led eight large revenue business units (over $1 billion in revenues) and launched the first biologic, Roferon-A (alfa-interferon 2a). Along with being a member of the U.S. Executive and Operating Committees of Roche, Mr. Rubino presided over 20 new product launches, ranging from dermatology, organ transplantation, oncology, infectious diseases, CNS and other therapeutic areas. In addition, he also played a leading executive role in the acquisition of Syntex Laboratories and Boehringer Mannheim.

Mr. Rubino holds a B.A. in economics from Rutgers University, along with a full minor in biology and chemistry and attended multiple executive education programs at Harvard Business School,and the University of Lausanne in Switzerland. Currently, Mr. Rubino is also on the board of directors of Vericel, Inc., Sanuwave, Inc., and Genisphere, LLC.

The Employment Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference, provides as follows:

The effective date of the Employment Agreement is November 15, 2019. The initial term of the Employment Agreement is three years, and the agreement will automatically renew for additional one-year terms unless either party provides notice of non-renewal to the other party at least 90 days prior to the end of the initial term or any renewal terms.

The Employment Agreement provides for an annual base salary of $410,000, with eligibility to receive an annual bonus of up to $205,000.

Pursuant to the Employment Agreement, Mr. Rubino received, on November 15, 2019 a qualified stock option (the “2019 Option”) to purchase up to 2,000,000 shares of the Company’s common stock (“2019 Rubino Option Shares”) in accordance with the Company’s 2013 Long Term Incentive Plan (the “2013 Plan”). The 2020 Option has a six year term. The 2019 Rubino Option Shares vest and have an associated exercise prices as follows:

The incentive stock option agreement issued to Mr. Rubino in connection with the grant of the 2019 Option reflecting these and other terms (the “Option Agreement”) is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Pursuant to the Employment Agreement, Mr. Rubino is to receive an additional qualified stock option grant on or about January 2, 2020 (the “2020 Option”) giving Mr. Rubino the right to purchase up to 620,571 shares of the Company’s common stock (the “2020 Rubino Option Shares”). The 2020 Rubino Option Shares shall have an exercise price equal to the greater of (i) closing price on the date of grant or (ii) $3.23 per share. The 2020 Option shall have a six-year term, and become vested 100% on November 15, 2022, subject to the terms and conditions of a to be executed stock option grant agreement between the Company and the Executive having terms and conditions substantially similar to the Option Agreement.

Additional benefits provided to Mr. Rubino pursuant to the Employment Agreement include participation in the Company’s other employee benefits programs made available to similarly situated employees and an automobile allowance of up to $1,000 per month.

Pursuant to the Employment Agreement, upon termination by the Company without Cause or by Mr. Rubino for Good Reason (as such terms are defined in the Employment Agreement), Mr. Rubino is entitled to (in addition to other separation benefits described in the Employment Agreement) severance payments equal to his base salary for 12 months; except, in the case of termination by the Company without Cause or termination by Mr. Rubino for Good Reason within 12 months following a Change of Control (as such terms are defined in the Employment Agreement), in which case Mr. Rubino is entitled to severance payments equal to his base salary for 18 months and the vesting of all stock option grants regardless of date or condition of vesting.

The Employment Agreement provides that the Company will use its commercially reasonable efforts to ensure that Mr. Rubino is elected as a director of the Company within a reasonable time following the execution of the Employment Agreement and that he remains a director for the duration of his employment relationship with the Company. In connection with his appointment as President and Chief Executive Officer of the Company and the contractual terms of the Employment Agreement, and based on Mr. Rubino’s relevant background and experience as discussed above, the Company’s Board of Directors (the “Board”) elected Mr. Rubino to the Board, effective as of the date of the Employment Agreement. Mr. Rubino will join the Board, with a term expiring at the next annual meeting of stockholders of the Company or his earlier resignation or removal.

Pursuant to the terms of the Employment Agreement, Mr. Rubion executed and delivered an Employee, Invention, Non-Disclosure, Non-Competition and Non-Solicitation Agreement, dated November 15, 2019 (the “Employee Invention and Non-Disclosure Agreement”).

The foregoing descriptions of the Employment Agreement, the Option Agreement and the Employee Invention and Non-Disclosure Agreement, do not purport to be complete and are qualified in their entirety by reference to Exhibits 10.1, 10.2 and 10.3 respectively.

Additional information regarding this event is set forth in the Company’s press release dated November 18, 2019, a copy of which is filed as Exhibit 99.1 hereto and incorporated by reference herein.

Resignation of Harmel S. Rayat as Chief Executive Officer

Effective November 15, 2019, Mr. Harmel S, Rayat resigned as the Chief Executive Office of the Company. Mr. Rayat will continue to serve as the Company’s Chairman of the Board.