| Item
5.02 |
Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Directors; Compensatory Arrangements of Certain Officers. |
On
February 22, 2022, the board of directors (the “Board”) of PAVmed Inc. (the “Company”) appointed Shaun O’Neil
as the Company’s Chief Operating Officer.
Mr.
O’Neil, 39, has been serving as the Company’s Chief Commercial Officer and Executive Vice President of Business Development
since July 2018, and has also served as the Chief Commercial Officer of Lucid Diagnostics Inc. (NASD: LUCD), the Company’s majority
owned subsidiary, since July 2018. Previously, from June 2011 to July 2018, Mr. O’Neil served in various roles of increasing responsibility
for AngioDynamics (NASD: ANGO), first as Product Manager, then as Senior Product Manager and finally as Regional Business Manager. Before
joining AngioDynamics, from October 2005 to June 2011, Mr. O’Neil served as a Product Manager and Sales and Service Engineer
for Aycan Medical Systems. Mr. O’Neil earned his bachelor’s degree in business administration from Alfred University in 2004
and his master’s degree in business administration from Rochester Institute of Technology in 2011. Mr. O’Neil has not engaged
in any transactions with the Company that are required to be reported pursuant to Item 404(a) of Regulation S-K.
On
February 22, 2022, in connection with Mr. O’Neil’s appointment, the Company entered into an employment agreement (an “Employment
Agreement”) with him.
The
Employment Agreement provides for an initial term that expires on February 22, 2025, which will automatically renew for additional one-year
terms, unless either the Company or Mr. O’Neil provides notice of non-renewal at least 60 days prior to the end of the then-current
term. The Employment Agreement provides for an annual base salary of $325,000 and an annual performance bonus of up to 50% of his base
salary in the preceding fiscal year, upon meeting certain objectives as determined by the Board or the compensation committee of the
Board.
In
accordance with the Employment Agreement, the Company granted Mr. O’Neil a stock option award (the “Option”) to acquire
300,000 shares (the “Option Shares”) of the Company’s common stock under the Company’s 2014 Long-Term Incentive
Plan. The Option has an exercise price of per share of $1.48, equal to the closing price of the Company’s common stock as of the
date immediately prior to the date of the grant. The Option shall become exercisable as to 1/12 of the Option Shares on March
31, 2022 and shall become exercisable as to 1/12 of the Option Shares on the last day of each successive fiscal quarter for the following
11 fiscal quarters.
The
Company may terminate Mr. O’Neil’s employment with “cause” (as such term is defined in the Employment Agreement)
or without cause upon 30 days’ notice. Mr. O’Neil may terminate his employment with “good reason” (as such term
is defined in the Employment Agreement) or without good reason upon 30 days’ notice to the Company. If Mr. O’Neil’s
employment is terminated by the Company without cause or by him with good reason, he is entitled to receive his base salary through the
date of termination and for a period of 12 months thereafter, a pro rata portion of his current year target bonus amount, all valid expense
reimbursements, health insurance coverage for up to 12 months, and all accrued but unused vacation pay. If Mr. O’Neil’s employment
is terminated due to his death or disability, he is entitled to his base salary through the date of termination, a pro rata portion of
any current year target bonus amount, all earned but unpaid prior year annual bonuses, all valid expense reimbursements, and all accrued
but unused vacation pay. If Mr. O’Neil’s employment is terminated by the Company with cause or by him without good reason,
he will be entitled only to his base salary through the date of termination, all valid expense reimbursements and certain accrued but
unused vacation pay.
The
Employment Agreement contains provisions protecting the Company’s confidential information and contains provisions restricting
Mr. O’Neil’s ability to compete with the Company during his employment and for a period of one year (or two years in the
case of a change of control) thereafter. The non-compete provisions generally impose restrictions on (i) employment by, rendering services
to, engaging in, or owning an interest in any competing business, (ii) employing or retaining employees or service providers of the Company
and (iii) soliciting or accepting business from the Company’s customers or business partners for the benefit of a competing business,
subject to certain conditions and limitations.
The
Company also entered into its standard form of indemnification agreement with Mr. O’Neil.
The
foregoing description of the Employment Agreement is not complete and is qualified in its entirety by reference to full text of the Employment
Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.