Item
5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On
September 13, 2019, the Board of Directors (the “Board”) of Hancock Jaffe Laboratories, Inc. (the “Company”)
appointed, upon the recommendation of the Nominating Committee of the Board, Matthew Jenusaitis and Robert Gray to fill two vacancies
on the Board. Mr. Jenusaitis has been appointed to fill the vacancy on the Board left by
Marc Robins, who passed away in April, and Mr. Gray has been appointed to fill the vacancy on the Board left by Yury Zhivilo,
who resigned from the Company at the end of May. Each of the new directors qualifies as “independent” under Nasdaq
Stock Market rules.
Mr. Jenusaitis, who has
been appointed as a Class II director and will serve as a member of our Audit, Compensation and Nominating and Corporate Governance
Committees, has over 30 years of health care experience
with an emphasis on building and selling companies that develop medical devices to treat vascular diseases. Since March 2015,
Mr. Jenusaitis has been the Chief of Staff and Chief of Innovation and Transformation
for the UC San Diego Health System. From June 2009 to March 2015, Mr. Jenusaitis was President and CEO of OCTANe Foundation
for Innovation, a non-profit focused on the development of innovation in Orange County, CA. Over the course of his career,
Mr. Jenusaitis has been on the board of directors of Pulsar Vascular (2008-2017), which was sold to Johnson and
Johnson, Creagh Medical (2008-2015), which was sold to SurModics, and Precision Wire Components (2009-2014),
which was sold to Creganna Medical. Mr. Jenusaitis was also a Senior Vice President at
ev3 (April 2006 to July 2008), which was sold to Covidian and later purchased by Medtronics. In addition, Mr.
Jenusaitis was the President of the Peripheral Division at Boston Scientific (July 2003 to August 2005) and was an Executive
in Residence at Warburg Pincus (September 2005 to March 2006). Mr. Jenusaitis has an MBA from the University of California,
Irvine, a Masters Degree in Biomedical Engineering from Arizona State University, and a Bachelors Degree in Chemical Engineering
from Cornell University.
Mr. Gray, who has been
appointed as a Class III director, has also been appointed to the Audit Committee of the Board as its Chairman and will also serve
as a member of our Compensation Committee, had a 20-year
career at Highmark, Inc., one of America’s largest health insurance organizations,
which serves over 20 million subscribers, and includes Highmark Blue Cross Blue Shield Pennsylvania, Highmark Blue Cross Blue
Shield Delaware, and Highmark Blue Cross Blue Shield West Virginia, which he retired from in 2008. While at Highmark, Mr.
Gray helped increase revenues to $12.3 billion from $6.9 billion, and helped generate an operating gain of $375 million from an
operating loss of $91 million. In addition to being the Board Chairman, CEO, and President of several of Highmark’s subsidiaries
and affiliated companies, Mr. Gray was the Chief Financial Officer of Highmark’s parent company and was the primary contact
to Highmark’s board of directors for Highmark’s audit, investment and compensation (incentive plans) committees. His
many responsibilities at Highmark included rate setting and reimbursement negotiations. Following Highmark, Mr. Gray co-founded
U.S. Holdings LLC (U.S. Implants LLC.), a national distributor of orthopedic implants, and has served as Vice President since
2009. Since 2011, Mr. Gray has also been self-employed as a strategy and financial consultant. Mr. Gray engaged in
Postgraduate Studies at the University of North Carolina–Chapel Hill and has an undergraduate degree from Bucknell University.
In
connection with their appointment as directors and consistent with prior practice of the Company, each of Messrs. Jenusaitis and
Gray have been granted (i) an option to purchase 60,000 shares of the Company’s common stock which vests quarterly in equal
amounts over a three year period with an exercise price of $2.00 per share and (ii) $75,000 of restricted stock units which vests
annually in equal amounts over a three year period.
There
are not any arrangements or understandings between the new directors and any other persons pursuant to which such director was
selected as a director.
There
are no related-party transactions in which either of the new directors or any of their immediate family members has an interest
that would require disclosure under Item 404(a) of Regulation S-K.
Following the appointment
of Messrs. Jenusaitis and Gray, the Company received a letter on September 16, 2019 from the
Listing Qualifications Department (the “Staff”) of
The NASDAQ Stock Market LLC (“Nasdaq”) confirming that the Company has regained compliance with Nasdaq Listing Rule
5605(c)(2). The Company has now regained compliance with each of the Nasdaq rules identified in the letter received by the Company
from the Staff on April 26, 2019 due to the vacancy on the Board caused by the passing away of Marc Robins in April.