Item 5.02 Departure of Directors or
Certain Officers; Election of Directors, Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of President and Compensatory Arrangement
On October 9, 2018, the Board of Directors
(the “Board”) of Attis Industries Inc. (the “Company”) appointed Mr. Gregory Pilewicz as the Company’s
President (“President”). The Compensation Committee of the Board also approved the compensation of Mr. Pilewicz.
J. Gregory Pilewicz, 55
Mr. Pilewicz, age 55, combines over 16 years
of experience in Energy, Healthcare, Industrial Manufacturing, Technology and Financial Services senior management. During this
time frame he held positions including President, CEO, Senior Vice President Human Resources, Vice President of Sales and a Member
of the Board. From 2009 through October 2017, Mr. Pilewicz was the President of Esmark, Inc., a privately-held company, as well
as Chief Executive Officer of Esmark Industrial Group. From 2006 to 2008, he was Senior Vice President for Esmark, Inc., a public
company (NASDAQ: ESMK) involved in the manufacturing of steel as well as a steel service center. From December 2003 to December
2006, he was Vice President of Sales, for UnitedHealth Group, a public company (NYSE: UNH), and their financial services entity,
Exante Financial Services, focusing on convergence of healthcare and financial services. From 1986 to 2003, he was Vice President
of PNC Bank, NA with responsibilities that included being a Lending Officer, and Treasury Management Sales Manager. Mr. Pilewicz
was also a member of the Board of Directors of Esmark, Inc., from 2009 to 2017. He has a Bachelor of Science Degree in Finance
from the Pennsylvania State University.
The Board believes that Mr. Pilewicz’s
extensive and directly applicable experience within the energy, healthcare, and technology industries, in particular, makes him
ideally qualified to help lead the Company towards continued growth in these business sectors.
There is no arrangement or understanding between
Mr. Pilewicz and any other persons pursuant to which Mr. Pilewicz was selected as an officer. There are no family relationships
between Mr. Pilewicz and any director, executive officer or person nominated or chosen by the Company to become a director or executive
officer of the Company within the meaning of Item 401(d) of Regulation S-K under the U.S. Securities Act of 1933 (“Regulation
S-K”). Since the beginning of the Company’s last fiscal year, the Company has not engaged in any transaction in which
Mr. Pilewicz had a direct or indirect material interest within the meaning of Item 404(a) of Regulation S-K.
In connection with his appointment as President,
Mr. Pilewicz will enter into an employment agreement (the “Pilewicz Employment Agreement”) with the Company, whereby
Mr. Pilewicz will receive an annual base salary of Two Hundred Seventy-Five Thousand Dollars ($275,000) (the “Base Salary”).
Mr. Pilewicz will be eligible for an annual bonus, payable in cash, in the amount up to fifty percent (50 %) of his Base Salary.
Mr. Pilewicz will also be issued 1.2 million options to purchase the Company’s common stock, which, pursuant to the Pilewicz
Employment Agreement, will be accrued for issuance and subject to shareholder approval of the Company’s amended 2016 Equity
and Incentive Plan (or a replacement equity and incentive plan), and vest over the course of three (3) years.
Mr. Pilewicz’s employment may be terminated
by the Company with or without “Cause”. “Cause” shall mean (i) fraud, misappropriation, embezzlement or
willful misconduct by Pilewicz; (ii) willful failure by Mr. Pilewicz to perform any of his duties after a written notification
by the Company which identifies such failure and permits ten (10) business days to rectify such failure; (iii) Mr. Pilewicz being
charged with a felony, or any crime or offense involving the Company; (iv) pleading guilty or nolo contendere or being convicted
of any other criminal act, not including minor traffic offenses; (iv) failure to follow the lawful directions of the Company, if
curable in the judgement of the Company, is not cured within ten (10) days after Mr. Pilewicz’s receipt of written notice
of his failure to follow such lawful directions; (v) a breach of the Pilewicz Employment Agreement; or (vi) a determination by
the Company that Mr. Pilewicz has violated a material written policy of the Company. If the Company terminates Mr. Pilewicz’s
employment without “Cause” the Company will continue payment of Mr. Pilewicz’s Base Salary for an additional
twelve (12) months from the date Mr. Pilewicz is terminated.
As a full-time employee of the Company, Mr.
Pilewicz will be eligible to participate in the Company’s benefit programs.
Appointment of Chief Operating Officer and Compensatory Arrangement
On October 9, 2018, the Board of the Company
appointed Mr. Mark Schifani as the Company’s Chief Operating Officer (“COO”). The Compensation Committee of the
Board also approved the compensation of Mr. Schifani.
Mark Schifani, 51
Mr. Schifani, combines over 25 years
of experience in industry management, including over three years in industry senior management. Previously, he had been involved
with four companies in the waste industry, holding positions including Region Controller, Assistant Corporate Controller and Area
Controller. From July 2014 through May 2016, Mr. Schifani was the Region Controller for Progressive Waste, Inc., a
waste services company. From December 1998 to December 2008, he was Assistant Corporate Controller for Republic Services, Inc.,
a waste services company. From December 2008 to July 2014, he was Area Controller of the Gulf Coast Area for Republic Services,
Inc., that focused on growing markets in Georgia, Alabama, Mississippi, Louisiana, Tennessee and Puerto Rico. He has
an undergraduate degree from the University of Memphis.
The Board believes that Mr. Schifani’s
extensive and directly applicable experience in industry makes him ideally qualified to help lead the Company towards continued
growth, particularly in integrating existing operations and strategic acquistions.
There is no arrangement or understanding
between Mr. Schifani and any other persons pursuant to which Mr. Schifani was selected as an officer. There are no family relationships
between Mr. Schifani and any director, executive officer or person nominated or chosen by the Company to become a director or executive
officer of the Company within the meaning of Item 401(d) of Regulation S-K. Since the beginning of the Company’s last fiscal
year, the Company has not engaged in any transaction in which Mr. Schifani had a direct or indirect material interest within the
meaning of Item 404(a) of Regulation S-K.
In connection with his appointment as COO,
Mr. Schifani will enter into an employment agreement (the “Schifani Employment Agreement”) with the Company, whereby
Mr. Schifani will receive an annual base salary of Two Hundred Seventy-Five Thousand Dollars ($275,000) (the “Base Salary”).
Mr. Schifani will be eligible for an annual bonus, payable in cash, in the amount up to fifty percent (50 %) of his Base Salary.
Mr. Schifani will also be issued 1.2 million options to purchase the Company’s common stock, which, pursuant to the Schifani
Employment Agreement, will be accrued for issuance and subject to shareholder approval of the Company’s 2016 Equity and Incentive
Plan (or a replacement equity and incentive plan), and vest over the course of three (3) years.
Mr. Schifani’s employment may be terminated
by the Company with or without “Cause”. “Cause” shall mean (i) fraud, misappropriation, embezzlement or
willful misconduct by Mr. Schifani; (ii) willful failure by Mr. Schifani to perform any of his duties after a written notification
by the Company which identifies such failure and permits ten (10) business days to rectify such failure; (iii) Mr. Schifani being
charged with a felony, or any crime or offense involving the Company; (iv) pleading guilty or nolo contendere or being convicted
of any other criminal act, not including minor traffic offenses; (iv) failure to follow the lawful directions of the Company, if
curable in the judgement of the Company, is not cured within ten (10) days after Mr. Schifani ’s receipt of written notice
of his failure to follow such lawful directions; (v) a breach of the Employment Agreement; or (vi) a determination by the Company
that Mr. Schifani has violated a material written policy of the Company. If the Company terminates Mr. Schifani’s employment
without “Cause” the Company will continue payment of Mr. Schifani’s Base Salary for an additional twelve (12)
months from the date Mr. Schifani is terminated.
As a full-time employee of the Company, Mr.
Schifani will be eligible to participate the Company’s benefit programs.
Chris Diaz Amended Employment Agreement
As previously reported by the Company, the
Company and its Chief Financial Officer, Mr. Chris Diaz, entered into an employment agreement effective as of April 3, 2017 (the
“Diaz Employment Agreement”, and together with the “Pilewicz Employment Agreement” and the “Schifani
Employment Agreement”, the “Employment Agreements”). On October 9, 2018, upon the suggestion and approval of
the Compensation Committee, the Board approved increasing Mr. Diaz’s Salary (as defined in the Diaz Employment Agreement)
from $265,000 to $275,000. Mr. Diaz will also now be eligible to receive an annual bonus, payable in cash, in the amount up to
fifty percent (50 %) of his Salary beginning in 2019. Mr. Diaz will also be issued 1.2 million options to purchase the Company’s
common stock, which, pursuant to the Diaz Employment Agreement, will be accrued for issuance and subject to shareholder approval
of the Company’s 2016 Equity and Incentive Plan (or a replacement equity and incentive plan), and vest over the course of
three (3) years.
Mr. Diaz’s employment may be terminated
by the Company with or without “Cause”. “Cause” shall mean (i) fraud, misappropriation, embezzlement or
willful misconduct by Diaz; (ii) willful failure by Mr. Diaz to perform any of his duties after a written notification by the Company
which identifies such failure and permits ten (10) business days to rectify such failure; (iii) Mr. Diaz being charged with a felony,
or any crime or offense involving the Company; (iv) pleading guilty or nolo contendere or being convicted of any other criminal
act, not including minor traffic offenses; (iv) failure to follow the lawful directions of the Company, if curable in the judgement
of the Company, is not cured within ten (10) days after Mr. Diaz’s receipt of written notice of his failure to follow such
lawful directions; (v) a breach of the Diaz Employment Agreement; or (vi) a determination by the Company that Mr. Diaz has violated
a material written policy of the Company. If the Company terminates Mr. Diaz’s employment without “Cause” the
Company will continue payment of Mr. Diaz’s Base Salary for an additional twelve (12) months from the date Mr. Diaz is terminated.
The
Company believes that Mr. Pilewicz and/or Mr. Schifani may be deemed a “Named Executive Officer” for the fiscal year
ended December 31, 2018.
The above descriptions of the Employment Agreements
do not purport to be complete.