Attached files
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| EX-99.1 - PRESS RELEASE - CorMedix Inc. | crmd_ex991.htm |
| EX-10.1 - EXECUTIVE ELOYMENT AGREEMENT - CorMedix Inc. | crmd_ex101.htm |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): September 27, 2016
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CORMEDIX
INC.
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(Exact
Name of Registrant as Specified in Charter)
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Delaware
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001-34673
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20-5894890
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(State
or Other Jurisdictionof Incorporation)
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(CommissionFile
Number)
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(IRS
EmployerIdentification No.)
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1430
U.S. Highway 206, Suite 200, Bedminster NJ
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07921
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
Telephone Number, Including Area Code: (908) 517-9500
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(Former
Name or Former Address, If Changed Since Last Report)
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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))
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Item
5.02.
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Departure
of Directors or Certain Officers; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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As a result of our formal search for an individual
to serve as our Chief Executive Officer, on September 27, 2016, we
entered into an employment agreement, effective October 3, 2016,
with Khoso Baluch. Unless
renewed pursuant to the terms thereof, the agreement will expire on
October 3, 2019. Mr. Baluch will also be appointed to our Board of
Directors on October 3, 2016, and we will use our best efforts to
cause Mr. Baluch to be elected to the Board of Directors throughout
the term of his employment agreement, unless there is a change of
control.
Mr.
Baluch previously served as Senior Vice President and President
Europe, Middle East & Africa EMEA of UCB, SA, or UCB, from
January 2015 to early 2016, Senior Vice President and President of
the European Region of UCB from February 2013 to December 2014, and
Senior Vice President and Chief Marketing Officer of UCB from
January 2010 to February 2013. Prior to joining UCB, Mr. Baluch
worked for Eli Lilly & Co for 24 years, holding international
positions spanning Europe, the Middle East and the United States in
general management, business development, market access and product
leadership. He has served as an independent director of Poxel SA, a
French publically traded biotech company, since 2013. Mr. Baluch
holds a BSc in Aeronautical Engineering from City University London
and a Masters of Business Administration from Cranfield School of
Management.
There
are no family relationships between Mr. Baluch and any other
director or executive officer of ours or any person nominated or
chosen by us to become a director or executive officer of ours.
There are no transactions with us in which Mr. Baluch has an
interest requiring disclosure under Item 404(a) of Regulation
S-K.
In
exchange for his service as our Chief Executive Officer, Mr. Baluch
will receive an annual base salary of $375,000, 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. Baluch’s salary may be no greater than 25%.
Mr. Baluch will be eligible for an annual bonus, which may equal up
to 80% of his base salary then in effect, as determined by our
Board or compensation committee. In determining such bonus, our
Board or compensation committee will take into consideration the
achievement of specified company objectives, predetermined by the
Board, and specified personal objectives, predetermined by the
Board and Mr. Baluch. For fiscal year 2016, Mr. Baluch’s
bonus will be prorated, contingent upon Mr. Baluch meeting
performance objectives established by the Board and Mr. Baluch. Mr.
Baluch must be employed through December 31 of a given year to earn
that year’s annual bonus.
In
connection with his employment, we granted Mr. Baluch stock options
to purchase 1,850,000 shares of our common stock, with 1,250,000 of
the options vesting in four equal annual installments on the first
four anniversaries of the grant date. Of the remaining options,
300,000, split into three equal tranches, become exercisable upon
the achievement specified performance milestones, provided that
these options will be forfeited if the milestones are not achieved
within four years of grant date and provided further that these
options will not vest before December 18, 2018. The remaining
300,000 options become exercisable upon the achievement of a
specified average closing stock price, provided that these options
will not vest before December 31, 2018 and if the specified average
closing stock price is not met on or prior to December 31, 2018,
the options will be forfeited. In each case, Mr. Baluch must be an
employee of ours or consultant to us on the applicable vesting
date.
2
Mr.
Baluch will receive up to $75,000 to cover expenses associated with
his relocation.
Mr.
Baluch is eligible to participate in all employee benefits
available to our senior executives from time-to-time. Pursuant to
the agreement, Mr. Baluch is eligible for up to four weeks of paid
vacation per year and may be reimbursed for specified
business-related expenses. After
the initial three-year term of Mr. Baluch’s 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.
If we terminate Mr. Baluch’s employment for
Cause (as defined below), Mr. Baluch 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 shares of
restricted stock then held by him will be forfeited to us as of
such date, and all unexercised options to purchase shares of our
capital stock, whether or not vested, will immediately
terminate.
If we terminate Mr. Baluch’s employment
other than for Cause, death or disability, other than by notice of
nonrenewal, or if Mr. Baluch resigns for Good Reason (as defined
below), Mr. Baluch 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) we will continue to pay his base salary and
benefits for a period of 12 months following the effective date of
the termination of his employment; (iii) payment on a prorated
basis for any partial bonus earned by Mr. Baluch based on the
actual achievement of the specified bonus objectives; (iv) if Mr.
Baluch timely elects continued health insurance coverage under
COBRA, then we will pay the premium to continue such coverage for
Mr. Baluch and his eligible dependents in an amount equal to the
portion paid for by us during Mr. Baluch’s employment until
the conclusion of the time when he is receiving continuation of
base salary payments or until he becomes eligible for group health
insurance coverage under another employer’s plan, whichever
occurs first, provided however that we have the right to terminate
such payment of COBRA premiums on behalf of Mr. Baluch and instead
pay him a lump sum amount equal to the COBRA premium times the
number of months remaining in the specified period if we determine
in our discretion that continued payment of the COBRA premiums is
or may be discriminatory under Section 105(h) of the Internal
Revenue Code of 1986, as amended; and (v) all restricted shares and
unvested stock options held by Mr. Baluch 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.
The separation benefits set forth above are conditioned upon Mr.
Baluch 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.
3
If we terminate Mr. Baluch without Cause or if Mr.
Baluch resigns for Good Reason within 24 months after a change in
control, Mr. Baluch 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) we will continue to pay his base salary and
full bonus for a period of 12 months following the effective date
of the termination of his employment; (iii) payment on a prorated
basis for any partial bonus earned by Mr. Baluch based on the
actual achievement of the specified bonus objectives; (iv) if Mr.
Baluch timely elects continued health insurance coverage under
COBRA, then we will pay the entire premium necessary to continue
such coverage for Mr. Baluch and his eligible dependents until the
conclusion of the time when he is receiving continuation of base
salary payments or until he becomes eligible for group health
insurance coverage under another employer’s plan, whichever
occurs first, provided however that we have the right to terminate
such payment of COBRA premiums on behalf of Mr. Baluch and instead
pay him a lump sum amount equal to the COBRA premium times the
number of months remaining in the specified period if we determine
in our discretion that continued payment of the COBRA premiums is
or may be discriminatory under Section 105(h) of the Internal
Revenue Code of 1986, as amended; and (v) all restricted shares and
unvested stock options held by Mr. Baluch shall be accelerated and deemed to have vested as
of the termination date. The separation benefits set forth above
are conditioned upon Mr. Baluch 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 Mr. Baluch to perform
his material duties or obligations under the agreement (other than
as a result of Mr. Baluch’s 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.
Baluch having the effect of materially injuring (whether
financially or otherwise) our business or reputation or any of our
affiliates; (iii) Mr. Baluch’s conviction of any felony
involving moral turpitude (including entry of a guilty or nolo
contendere plea); (iv) Mr. Baluch’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. Baluch engaged in some form
of harassment prohibited by law (including, without limitation,
harassment on the basis of age, sex or race) unless Mr.
Baluch’s actions were specifically directed by the Board;
(vi) any material misappropriation or embezzlement by Mr. Baluch of
our property or our affiliates (whether or not a misdemeanor or
felony); or (vii) breach by Mr. Baluch of any material provision of
the agreement that is not cured, to the extent subject to cure, by
Mr. Baluch to our reasonable satisfaction within 30 days after we
gave written notice thereof to Mr. Baluch.
For
purposes of the agreement, “Good Reason” is defined as:
(i) any material breach of the agreement by us; (ii) any material
reduction by us of Mr. Baluch’s duties, responsibilities, or
authority; (iii) a material reduction in Mr. Baluch’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; or (iv) a material
reduction in Mr. Baluch’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.
4
If Mr. Baluch terminates his employment by written
notice of termination or if Mr. Baluch or we terminate his
employment by providing a notice of nonrenewal at least 90 days
before the agreement is set to expire, Mr. Baluch 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.
Baluch’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.
During
the term of the agreement and the 12-month period immediately
following Mr. Baluch’s separation from employment for any
reason, Mr. Baluch 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 within the United States
and the European Union on the date of termination of his
employment.
The
description of Mr. Baluch’s employment agreement provided
above is qualified in its entirety by reference to the full and
complete terms of the agreement, which is filed as Exhibit 10.1 to
this Current Report on Form 8-K and incorporated herein by
reference.
A
copy of the press release announcing the appointment of Mr. Baluch
is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
As
previously disclosed in Current Reports on Form 8-K, filed with the
Securities and Exchange Commission on July 17, 2015, April 11,
2016, and May 2, 2016, our former Chief Executive Officer, Randy
Milby, has been serving as our Interim Chief Executive Officer. Mr.
Milby will resign from this role, effective 11:59 PM on October 2,
2016. Mr. Milby will receive his previously disclosed severance
benefits, a description of which may be found under the caption
“Compensation Discussion & Analysis – Employment
Agreements and Arrangements” in our Annual Report on Form
10-K/A, filed on April 29, 2016. Mr. Milby will also resign from
our Board of Directors, effective at 11:59 PM on October 2,
2016.
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Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits
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Exhibit No.
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Description
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Employment
Agreement, dated as of September 27, 2016 and effective as of
October 3, 2016, between CorMedix Inc. and Khoso
Baluch.
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Press release dated
as of October 3, 2016.
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5
SIGNATURE
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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CORMEDIX
INC.
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Date: October 3,
2016
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By:
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/s/
Cora M.
Tellez
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Cora M. Tellez |
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Chair
of the Board
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