Attached files
| file | filename |
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| EX-10.15 - NUGEN HOLDINGS, INC. | v174836_ex10-15.htm |
| EX-10.11 - NUGEN HOLDINGS, INC. | v174836_ex10-11.htm |
| EX-10.12 - NUGEN HOLDINGS, INC. | v174836_ex10-12.htm |
| EX-10.13 - NUGEN HOLDINGS, INC. | v174836_ex10-13.htm |
| EX-10.16 - NUGEN HOLDINGS, INC. | v174836_ex10-16.htm |
| EX-10.14 - NUGEN HOLDINGS, INC. | v174836_ex10-14.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): February 9, 2010
INOVACHEM,
INC.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State or
Other Jurisdiction of Incorporation)
|
000-52865
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26-1946130
|
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
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44645 Guilford Drive, Suite
201,
Ashburn, Virginia 20147
(Address
of Principal Executive Offices, Zip Code)
(703)
858-0036
(Registrant's
Telephone Number, Including Area Code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
1
The
descriptions of the letters, agreements, documents and transactions described in
this Current Report on Form 8-K do not purport to be complete and are qualified
in their entirety by reference to such documents which are filed as exhibits
hereto and incorporated herein by reference.
Section
1 - Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive Agreement.
Employment
Agreements with Messrs. Takamura and Pritzker
On
February 9, 2010, InovaChem Inc. entered into agreements pursuant to which we
employed Eric
Takamura
as our Executive Chairman and Chief Executive Officer and Alan Pritzker as our
Chief Financial Officer. Mr. Takamura’s annual base salary is $180,000 and he is
entitled to a signing bonus of $30,000 and Mr. Pritzker’s annual base salary is
$120,000 and he is entitled to a signing bonus of $10,000. The signing bonuses
are to be paid by February 19, 2010. We granted Messrs. Takamura and Pritzker,
pursuant to our 2010 Stock Option Plan described below, options to acquire
900,000 shares and 150,000 shares of our common stock, respectively, on the
terms and conditions described below. The employment agreements also provide
that they are entitled to receive such other benefits as may be made available
by us to our employees and key executive officers (and with respect life,
medical, health and death plans, such coverage is, with specified exceptions and
limitations, to be provided to the employee and his family at our expense until
the expiration of the applicable employee’s non-compete period) and, in the
discretion of our board of directors, annual bonuses. Mr. Takamura’s employment
agreement provides that it is anticipated that he will receive an annual bonus
of 100% of his base salary and Mr. Pritzker’s employment agreement provides that
it is anticipated that he will receive an annual bonus of 25% of his base
salary.
The term
of employment is, in the case of Mr. Takamura for three years, and in the case
of Mr. Pritzker, one year, in each case commencing January 1, 2010 (the
effective date of these agreements), and the term of employment is renewed
automatically for successive one year periods unless we or the employee gives
notice of non-renewal at least 90 days prior to the expiration of the applicable
term. We may terminate the employment of an employee before the stated
expiration date for “Cause” (as defined in the applicable employment agreement)
in which case we are only obligated to pay the employee his unpaid base salary
through the termination date; provided, however, if the
reason for terminating him for “Cause” is due to his material uncured breach of
his employment agreement, we must pay him his base salary (as in effect at the
time of termination) for, in the case of Mr. Takamura, nine months, and, in the
case of Mr. Pritzker, three months, following termination of
employment.
We may
also terminate either of these employees without “Cause” or either employee may,
if he determines in good faith that he has “Good Reason” (as defined below), to
terminate his employment. In either of such events, we are obligated to (A)
continue to pay the employee his base salary (as in effect at the time of such
termination) for the longer of (i) the balance of his employment term or (ii) in
the case of Mr. Takamura twelve (12) months, and in the case of Mr. Pritzker,
four months, from the date of termination , (B) pay the his pro rata share of his annual
bonus, if any, is awarded and (C) provide such employee with outplacement
services. The term “Good Reason” means (w) our failure to appoint or reappoint
the employee to his position or his removal from his office or position, (x) the
employee is assigned duties materially inconsistent with his position or his
position, authority, duties, or responsibilities are materially diminished, (y)
our uncured breach of any material provision of the employee’s employment
agreement, or (z) within twelve months following a “Change in Control” (as
defined Rule 405 promulgated under the Securities Act of 1933, as amended), a
sale of substantially all of our assets or we are merged out of existence
(collectively, a “Change of Control Event”).
2
Letter
with John Salatino
Effective
February 11, 2010, InovaChem, Inc. signed a letter with John Salatino pursuant
to which he is to serve as our VP of Engineering and Programs. The letter
contemplates that, among other things, the terms of his employment will be
formalized in an employment agreement to be entered into by April 12, 2010, he
will serve in such capacity for two years, his annual base salary will be
$160,000 and $180,000 in the first and second year of his employment,
respectively, he will receive a $20,000 signing bonus within ten days of
entering into an agreement, he will be eligible for a variable performance based
bonus plan with the envisioned annual bonus, if all our goals are met, of 25% of
his base salary, he will be entitled to other benefits provided to management
employees, in the event he is terminated, he will be entitled to severance equal
to the greater of the remaining term of his contract or six months of his annual
salary, and he will be granted an option to acquire an aggregate of 400,000
shares of our common stock at an exercise price of $0.15 per share, which option
may be exercised on a cashless basis and may be exercised until February 29,
2012. Generally, options to acquire 100,000 shares may be exercised on a
cumulative basis during the two weeks preceding August 31, 2010, February 28,
2011, August 31, 20111, and February 29, 2012 subject to accelerated exercise
upon a change in control as provided therein and the right to exercise his
remaining option in the event of the termination of his employment.
Compensation
of Mr. Toh
Henry
Toh, our Vice Chairman and Executive Vice President of Corporate Development, is
an employee at will and receives a base salary of $90,000 per year as well as
other benefits generally provided to management
Section
3 – Securities and Trading Markets
Item
3.02. Unregistered Sales of Equity Securities.
On
February 11, 2010, we closed on the private placement and accepted subscriptions
from an additional thirteen investors for a total of 6,933,334 shares of our
common stock at a purchase price of $0.15 per share. In total, we received gross
proceeds from such offering of $540,000. This offering was made solely to
“accredited investors,” as that term is defined in Regulation D under the
Securities Act. The securities sold in this offering were not registered under
the Securities Act, or the securities laws of any state, and were offered and
sold in reliance on the exemption from registration afforded by Section 4(2) and
Regulation D (Rule 506) under the Securities Act and corresponding provisions of
state securities laws, which exempt transactions by an issuer not involving any
public offering. These securities may not be offered or sold in the United
States absent registration or an applicable exemption from the registration
requirements. Certificates representing these shares will contain a legend
stating the same.
Net
proceeds received from this offering are expected to be used for working capital
and other general corporate purposes.
In
connection therewith Mr. Takamura, our chief executive officer, pledged
1,000,000 shares of common stock he owns to a representative of eleven of the
investors to secure his obligation to transfer to such investors his shares if
we issue, with certain exceptions shares of common stock or securities
convertible into, or exercisable for, common stock at a price below $0.15 per
share during the period ending August 11, 2011. We also entered into an
agreement with a representative of these eleven accredited investors confirming
that such investors have the right, but not the obligation, to purchase a
minimum of $500,000 and a maximum of $700,000 of our Class A Preferred Stock
(the “Preferred Stock”), at a price of $0.15 per share. This right is
exercisable beginning on the effective date of our registration statement until
August 10, 2010, subject to a 60 day extension if the registration statement is
not effective by August 10, 2010.The investors may exercise this right on August
10, 2010 even if the registration statement is not effective by such date. We
have not yet filed a certificate of designation designating this Preferred
Stock. When authorized, we expect that the preferred stock will be convertible
into one share of common stock, be subject to adjustment for issuances of
securities to third parties at a price less than $0.15 per share, on a
“full-ratchet basis” during the 18 months following a closing with respect to
such issuance , provide the holders have the pre-emptive right to maintain their
percentage ownership in us by buying, with specified exceptions, future
issuances of our securities and the right to designate one person to serve as a
member of our board of directors. Upon exercise of the right to purchase the
Preferred Stock, the investors will also receive options, warrants or other
similar rights to acquire our common stock equal to the total value of the
investors’ investment in the Preferred Stock, based on a share value of $0.15
per share.
3
Section
5 - Corporate Governance and Management
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
2010
Stock Option Plan
On
February 9, 2010, our board of directors adopted the 2010 Stock Option Plan (the
“Plan”). The Plan provides for the issuance of awards to our officers,
directors, employees, consultants and others who provide services to us. Awards
may take the form of options intended to qualify as incentive stock options as
contemplated by section 422 of the Internal Revenue Code of 1986), as amended
(the “Code”), and options that do not so qualify (“NQSO’s”). The total number of
shares of common stock available under this Plan equals the sum of (i)
5,000,000, plus (ii) the number of shares with respect to awards that terminate
without being exercised, are exchanged for awards that do not involve shares of
common stock, or are settled in cash in lieu of shares of common stock. The per
share exercise price of an option is, with specified exceptions, to be no less
than the fair market value (as determined in accordance with the Plan) per share
of common stock on the date of grant.
Generally,
the Plan is to be administered by a committee designated by the Board of
Directors consisting of not less than two directors (the "Committee"), each
member of which must be a "non-employee director" as defined under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), an
"outside director" for purposes of Section 162(m) of the Code and Independent
(as determined by the rules of the Nasdaq Stock Market). Subject to the terms of
the Plan, the Committee is authorized to, among other things, select eligible
persons to receive awards, determine the type and number of awards to be granted
and the number of shares of common stock to which awards will relate, specify
times at which awards will be exercisable or settleable (including performance
conditions that may be required as a condition thereof), set other terms and
conditions of awards, prescribe forms of award agreements, interpret and specify
rules and
regulations
relating to the Plan, and make other determinations that may be necessary or
advisable for the administration of the Plan. The Committee is authorized to
adjust awards in the event that a dividend or other distribution (whether in
cash, shares of Common Stock or other property), recapitalization, forward or
reverse split, reorganization, and certain other specified corporate events so
that an adjustment is equitable. The Committee is also authorized to adjust
performance conditions and other terms of Awards in response to these kinds of
events or in response to changes in applicable laws, regulations or accounting
principles.
Option
Grants to Executive Officers
On
February 9, 2010, pursuant to the Plan, we granted to the following executive
officers stock options to acquire the number of shares of our common stock set
forth next to such person’s name:
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Eric
Takamura
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900,000
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Henry
Toh
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450,000
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Alan
Pritzker
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150,000
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Subject
to vesting, these options are exercisable during the ten years from the grant
date at an exercise price of $0.45 per share. The options vest pro rata in 24 equal monthly
installments as of the last day of each fiscal month), with the first
installment vesting as of January 1, 2010. All of the options vest immediately
upon a Change of Control Event. These options terminate immediately following
the termination of such person’s employment with us for “Cause”(other than Cause
relating to the employee’s material uncured breach of his employment agreement
in which case the options terminate in accordance with their stated term) and
180 days after such person voluntarily terminates his employment other than for
“Good Reason.”
4
The
information called for by this Item 5.02 is hereby incorporated by reference
from the disclosure provided under Items 1.01 and 3.02 to the extent required to
respond to the disclosure requirements of this item 5.02.
Section
9 - Financial Statements and Exhibits
Item
9.01. Financial Statements and Exhibits
(d) Exhibits
The exhibits listed in the following
Exhibit Index are filed as part of this Current Report on Form 8-K.
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Exhibit
No.
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Description
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10.11
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Employment
Agreement dated as of January 1, 2010 by and between Eric Takamura and
InovaChem, Inc
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10.12
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Employment
Agreement dated as of January 1, 2010 by and between Alan Pritzker and
InovaChem, Inc
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10.13
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2010
Stock Option Plan
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10.14
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Letter
Agreement dated as of February [11], 2010 by and between Inovachem, Inc
and the representative of certain
investors.
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10.15
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Stock
Pledge Agreement dated as of February 11, 2010, between Eric Takamura and
Uzi Halevy
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10.16
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Letter
between InovaChem, Inc and John
Salatino
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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INOVACHEM,
INC.
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February
17, 2010
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/s/
Eric Takamura
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Name:
Eric Takamura
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Title: Chairman,
Chief Executive Officer and President
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5