Item 5.02. Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 11, 2020, CorMedix Inc. (the “Company”
or “we”) announced the appointment of Dr. Matt David as the Company’s Executive Vice President and Chief Financial
Officer, effective May 11, 2020.
Dr. David joins CorMedix after serving as
Head of Strategy at Ovid Therapeutics Inc, a late-stage clinical biopharmaceutical company focused on developing treatments for
rare neurological disorders, where he was responsible for financing strategy and investor relations, and joined in October 2018.
Prior to Ovid, Dr. David was a Strategic Advisor to Frequency Therapeutics, advising on financing, investor relations and strategic
initiatives from 2017 to early 2019. Prior to Frequency, Dr. David spent the majority of his career as an investment banker specialized
in the life sciences sectors, including at Piper Jaffray, Thomas Weisel Partners, Ferghana Partners and most recently at Bank of
America Merrill Lynch. As part of his experience as an investment banker, Dr. David has advised on a broad range of capital raising
and strategic transactions. Earlier in his career, Dr. David was part of the equity research team at Lehman Brothers, focusing
on Large Pharma. Dr. David began his career as a surgical resident at Beth Israel Hospital, after receiving an M.D. from NYU School
of Medicine. Dr. David earned his Bachelor of Arts degree in Chemistry, magna cum laude, from Dartmouth College.
In connection with his appointment, the Company
and Dr. David entered into an employment agreement for an initial three-year term. Thereafter, 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.
Pursuant to the agreement, Dr. David will
receive an annual salary of $330,000, 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 Dr. David’s salary may be no greater than 25%. Dr. David will be eligible for an annual bonus, which may equal up to 30%
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. Dr. David must be employed through December 31 of a given year to be eligible to earn that year’s annual bonus.
In connection with Dr. David’s employment,
we will grant Dr. David, on his first day of employment with the Company, stock options to purchase 250,000 shares of our common
stock. 166,000 of the options will vest over four years in four equal annual installments beginning one year after the date of
grant and continuing on each of the next three anniversaries of the applicable date of grant, subject to Dr. David’s continued
employment with the Company (the “Time Options”). The remaining 84,000 options will vest based on achievement of performance
milestones for Dr. David and subject to Dr. David’s continued employment with the Company through the applicable vesting
date (the “Milestone Options”). The exercise price of 83,000 Time Options and 42,000 Milestone Options will be $5.63
per share, or if higher, the closing price of the Company’s common stock on the New York Stock Exchange (the “Fair
Market Value”) on the applicable date of grant. The exercise price of the remaining Time Options and Milestone Options will
be the Fair Market Value on the applicable date of grant.
Each year during the term, commencing in
2021, we will make an annual equity grant to Dr. David, 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 Dr. David’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 outstanding equity awards and all outstanding stock options then held by Dr. David 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 Dr. David’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), Dr. David 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 held by Dr. David 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 or stock options whose vesting requirements
have not been successfully met as of the date of termination of employment or resignation with Good Reason 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 Dr. David’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.
For purposes of the agreement,
“Cause” is defined as: (i) the willful failure, disregard, or refusal by Dr. David 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 Dr. David having the effect of materially
injuring (whether financially or otherwise) our business or reputation or any of our affiliates; (iii) Dr. David’s conviction
of any felony involving moral turpitude (including entry of a guilty or nolo contendere plea); (iv) Dr. David’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 Dr. David 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 Dr. David of our or our affiliates’ property (whether or not a misdemeanor or
felony); or (vii) material breach by Dr. David 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 Dr. David’s
duties, responsibilities, or authority; or (iii) a material reduction in Dr. David’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 Dr. David’s salary and/or total compensation is no greater than 25%;
or (v) a material reduction in Dr. David’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 Dr. David’s target bonus level
reduction is no greater than 25%.
If Dr. David 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, Dr. David 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 Dr. David’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 Dr. David contains a non-compete
provision that provides that during the term of the agreement and the 12-month period immediately following Dr. David’s separation
from employment for any reason, Dr. David 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 foregoing description of the employment
agreement is not complete and is qualified in its entirety by reference to the text of the employment agreement, which will be
filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2020.