Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
In
connection with the Reorganization Plan described under Item 1.01 of this Form 8-K, the Company appointed Manual Iglesias as the
Chief Executive Officer of the Company, effective April 13, 2018. In addition, Mr. Iglesias and Mr. Richard Fox were appointed
to serve as members of the Board of Directors of the Company, effective April 13, 2018, for a period of one year, or until the
next annual stockholders’ meeting where their successor is elected and qualified, or their earlier removal.
Business
Experience
Manual
E. Iglesias
(age 63) was elected Chief Executive Officer and member of the Board of Directors of the Company effective April
13, 2018. In 2007, Mr. Iglesias founded Hygea Holdings Corp. and up until April 2018, served as its Chief Executive Officer. From
1988 to 2007, Mr. Iglesias served as the Chairman of the Board of Directors of Management and Business Associates, LLC, a management
company based in Coral Gables, FL. He earned an MBA and JD from the University of Chicago in 1981 and 1979, respectively, and
a B.S. in International Affairs from Georgetown University in 1976.
Richard
C. Fox
(age 83) was appointed as a member of the Board of Directors of the Company effective April 13, 2018. Mr. Fox has been
engaged in the practice of law since 1961, with occasional breaks when he has served as a corporate officer. Since 1997 Mr. Fox
has practiced as the principal of Fox Law Offices, P.A., with a practice focused on corporate, securities and business law. He
is a retired member of the Pennsylvania Bar and an active member of the Florida Bar and is a graduate of the University of Chicago
Law School (J.D. 1961).
Resignations
of Messrs. A. Mitrani, Bothwell and M. Mitrani
In
addition, in connection with the Reorganization Plan described under Item 1.01 of this Form 8-K, as of the Effective Date:
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Manual
Iglesias replaced Albert Mitrani as the Chief Executive Officer of the Company;
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Ian
Bothwell resigned from the Board of Directors of the Company; and
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Maria
Mitrani resigned from the Board of Directors of the Company.
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Albert
Mitrani and Ian Bothwell and Maria Mitrani Employment Agreement Terminations and Release Agreements
Effective
April 13, 2018, in connection with Reorganization Plan described under Item 1.01 of this Form 8-K, Albert Mitrani, Ian Bothwell,
and Maria Mitrani, each agreed to terminate their respective employment agreements, dated November 4, 2016, as amended, in favor
of New Employment Agreements under the terms described below. In addition, in connection with the termination of the aforementioned
agreements, Albert Mitrani, Ian Bothwell and Maria Mitrani each agreed to release the Company for all amounts owing to them for
unpaid salaries through the Effective Date and advances and/or expenses incurred prior to December 31, 2017.
Material
Plans, Contracts or Arrangements
On
April 23, 2018, the Company entered into new employment agreements, effective as of April 13, 2018 (the “
New Employment
Agreements
”), with each of Albert Mitrani, Ian Bothwell and Maria Mitrani (each, an “
Executive
”).
A form copy of the New Employment Agreement is filed as an exhibit to this Form 8-K and incorporated by reference herein.
Pursuant
to the Albert Mitrani’s New Employment Agreement, Mr. Mitrani shall serve as the Company’s President. Mr. Mitrani’s
base annual salary is $162,500, which shall accrue commencing Effective Date and shall be payable in equal semi-monthly installments,
commencing May 1, 2018, in arrears. The base salary shall be reviewed at least annually by the Board and the Board may, but shall
not be required to, increase the base salary during the Employment Term.
Pursuant
to Ian Bothwell’s New Employment Agreement, Mr. Bothwell shall continue to serve as the Company’s Chief Financial
Officer. Mr. Bothwell’s base annual salary is $125,000, which shall accrue commencing Effective Date and shall be payable
in equal semi-monthly installments, commencing May 1, 2018, in arrears. The base salary shall be reviewed at least annually by
the Board and the Board may, but shall not be required to, increase the base salary during the Employment Term.
Pursuant
to Maria Mitrani’s New Employment Agreement, Dr. Mitrani shall continue serving as the Company’s Chief Science Officer.
Dr. Mitrani’s base annual salary is $162,500, which shall accrue commencing Effective Date and shall be payable in equal
semi-monthly installments, commencing May 1, 2018, in arrears. The base salary shall be reviewed at least annually by the Board
and the Board may, but shall not be required to, increase the base salary during the Employment Term.
Term
The
term of each New Employment Agreement commences as of the Effective Date and continues until December 31, 2020 or December 31,
2023 (“
Initial Term
”), unless terminated earlier pursuant to the terms of the New Employment Agreement;
provided
that
, on such expiration of the Initial Term, and each annual anniversary thereafter (such date and each annual anniversary
thereof, a “
Renewal Date
”), the agreement shall be deemed to be automatically extended, upon the same terms
and conditions, for successive periods of one year, unless either party provides written notice of its intention not to extend
the term of the Agreement at least 90 days’ prior to the applicable Renewal Date. The period during which the Executive
is employed by the Company hereunder is hereinafter referred to as the “
Employment Term
.”
Unpaid
Advances
All
unpaid advances by the Executive to the Company prior to January 1, 2018 and all unreimbursed expenses of Executive incurred prior
to January 1, 2018 are forgiven and shall be written off by Executive. The Company shall repay the unpaid advances subsequent
to December 31, 2017 and the unreimbursed expenses incurred subsequent to December 31, 2017 on May 15, 2018.
Fringe
Benefits and Perquisites
During
the Employment Term, each Executive shall be entitled to fringe benefits and perquisites consistent with the practices of the
Company, and to the extent the Company provides similar benefits or perquisites (or both) to similarly situated executives of
the Company.
Termination
The
Company may terminate the New Employment Agreement at any time for good cause, as defined in the New Employment Agreement, including,
the Executive’s death, disability, Executive’s willful and international failure or refusal to follow reasonable instructions
of the Company’s Board of Directors, reasonable and material policies, standards and regulations of the Company’s
Board of Directors or management.