Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On April
17, 2020, CorMedix Inc. (the “Company” or “we”) entered into an employment agreement with John L. Armstrong,
Jr., our Executive Vice President, Technical Operations. After the initial three-year term of the employment agreement, the agreement
will automatically renew for additional successive one-year periods, unless either party notifies the other in writing at least
90 days before the expiration of the then current term that the agreement will not be renewed. The employment agreement is similar
to and replaces the prior agreement with Mr. Armstrong that we entered into in March 2017 and which had a term of three years.
Pursuant
to the agreement, Mr. Armstrong will receive an annual salary of $325,000, which cannot be decreased unless all officers and/or
members of our executive management team experience an equal or greater percentage reduction in base salary and/or total compensation,
provided that any reduction in Mr. Armstrong’s salary may be no greater than 25%. Mr. Armstrong will be eligible for an annual
bonus, which may equal up to 35% of his base salary then in effect, as determined by our Board of Directors or the Compensation
Committee thereof. In determining such bonus, our Board or the Compensation Committee will take into consideration the achievement
of specified company objectives, established by the Board or the Compensation Committee, and such other factors as the Board or
the Compensation Committee deems appropriate. Mr. Armstrong must be employed through December 31 of a given year to be eligible
to earn that year’s annual bonus.
Each year
during the term, we will make an annual equity grant to Mr. Armstrong, which may include restricted stock, restricted stock units
or stock options, with time-based or performance-based vesting, in such amounts and on such terms as the Board or the Compensation
Committee deems appropriate.
If we terminate
Mr. Armstrong’s employment for Cause (as defined below), he will be entitled to receive only the accrued compensation due
to him as of the date of such termination, rights to indemnification and directors’ and officers’ liability insurance,
and as otherwise required by law. All unvested equity awards and all unvested stock options then held by Mr. Armstrong that were
granted before the effective date of his employment agreement will be forfeited to us as of such date. All outstanding equity awards
and all outstanding stock options then held by Mr. Armstrong that are granted on or after the effective date of his employment
agreement, whether or not vested, will be forfeited to us as of such date.
If we terminate Mr.
Armstrong’s employment other than for Cause, death, disability, or by notice of nonrenewal, or if he resigns for Good Reason
(as defined below), including in each case within 24 months of a Corporate Transaction (as defined in the agreement and which is
the same definition as in our 2019 Omnibus Stock Incentive Plan), Mr. Armstrong will receive the following benefits: (i) payment
of any accrued compensation and any unpaid bonus for the prior year, as well as rights to indemnification and directors’
and officers’ liability insurance and any rights or privilege otherwise required by law; (ii) payment of his base salary
for a period of 9 months following the effective date of the termination of employment; (iii) payment on a prorated basis
for any target bonus for the year of termination based on the actual achievement of the specified bonus objectives; (iv) if he
timely elects continued health insurance coverage under COBRA, payment of the premium to continue such coverage for him and his
eligible dependents in an amount equal to the portion paid for by us during his employment until the conclusion of the time
when he is receiving continuation of base salary payments or until he or she becomes eligible for group health insurance coverage
under another employer’s plan, whichever occurs first; (v) except as provided in (vii) below, all equity awards and stock
options that are scheduled to vest on or before the next succeeding anniversary of the date of termination shall be accelerated
and deemed to have vested as of the termination date, provided that any performance-based equity awards and stock options whose
vesting requirements have not been successfully met as of the date of termination will not accelerate; (vi) except as provided
in (vii) below, vested stock options will be exercisable for 90 days following termination of employment or, if earlier, the expiration
date of the stock option, and (vii) in the event of a Corporate Transaction, all equity awards and stock options shall become fully
vested and exercisable, and the stock options will remain exercisable for 12 months following such termination or resignation or,
if earlier, the expiration date of the stock option. The separation benefits set forth above are conditioned upon Mr. Armstrong’s
executing a release of claims against us, our parents, subsidiaries, and affiliates, and each such entities’ officers, directors,
employees, agents, successors, and assigns in a form acceptable to us, within a time specified therein, which release is not revoked
within any time period allowed for revocation under applicable law.
1
For purposes of
the agreement, “Cause” is defined as: (i) the willful failure, disregard, or refusal by Mr. Armstrong to perform his
material duties or obligations under the agreement (other than as a result of his mental incapacity or illness, as confirmed by
medical evidence provided by a physician selected by us); (ii) any willful, intentional, or grossly negligent act by Mr. Armstrong
having the effect of materially injuring (whether financially or otherwise) our business or reputation or any of our affiliates;
(iii) Mr. Armstrong’s conviction of any felony involving moral turpitude (including entry of a guilty or nolo contendere
plea); (iv) Mr. Armstrong’s qualification as a “bad actor,” as defined by 17 CFR 230.506(a); (v) the good faith
determination by the Board, after a reasonable and good-faith investigation by us that Mr. Armstrong engaged in some form of harassment
or discrimination prohibited by law (including, without limitation, harassment on the basis of age, sex or race) unless his actions
were specifically directed by the Board; (vi) any material misappropriation or embezzlement by Mr. Armstrong of our or our
affiliates’ property (whether or not a misdemeanor or felony); or (vii) material breach by Mr. Armstrong of the agreement
that is not cured, to the extent subject to cure, by him to our reasonable satisfaction within 20 days after we give written notice
thereof to him.
For purposes
of the agreement, “Good Reason” is defined as: (i) any material breach of the agreement by us; (ii) any material
diminution by us of Mr. Armstrong’s duties, responsibilities, or authority; or (iii) a material reduction in Mr. Armstrong’s
annual base salary unless all officers and/or members of our executive management team experience an equal or greater
percentage reduction in annual base salary and/or total compensation and any reduction in Mr. Armstrong’s salary and/or
total compensation is no greater than 25%; or (v) a material reduction in Mr. Armstrong’s target bonus level unless all officers
and/or members of our executive management team experience an equal or greater percentage reduction related to target bonus levels
and Mr. Armstrong’s target bonus level reduction is no greater than 25%.
If Mr.
Armstrong terminates his employment by written notice of termination or if he or we terminate his employment by providing
a notice of nonrenewal at least 90 days before the agreement is set to expire, Mr. Armstrong will not be entitled to receive any
payments or benefits other than any accrued compensation, any unpaid prior year’s bonus, rights to indemnification and
directors’ and officers’ liability insurance, and as otherwise required by law.
If Mr.
Armstrong’s employment is terminated as a result of his death or disability, we will pay him or his estate, as applicable,
any accrued compensation and any unpaid prior year’s bonus.
Our agreement
with Mr. Armstrong contains a non-compete provision that provides that during the term of the agreement and the 12-month period
immediately following Mr. Armstrong’s separation from employment for any reason, Mr. Armstrong is prohibited from engaging
in any business involving the development or commercialization of a preventive anti-infective product that would be a direct
competitor of Neutrolin or a product containing taurolidine or any other product being actively developed or produced by us anywhere
in the world on the date of termination of his employment.
The employment
agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing description
of the employment agreement is not complete and is qualified in its entirety by reference to Exhibit 10.1.