SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) March 8, 2019
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
150 Allen Road, Suite 201
Basking Ridge, NJ 07920
(Address of principal executive offices and zip code)
(Registrants 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:
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
|Item 5.02.|| |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Glenn S. Vraniak as Chief Financial Officer
On March 8, 2019, electroCore, Inc. (the Company) announced the resignation of Glenn S. Vraniak, Chief Financial Officer of the Company, to pursue other professional opportunities, with such resignation to be effective as of April 1, 2019. It is expected that Mr. Vraniak will provide transition services to the Company through August 2019. In connection therewith, the Company expects to enter into an agreement modifying the terms of Mr. Vraniaks employment with the Company as summarized below:
Mr. Vraniaks employment will terminate effective as of March 31, 2019 and Mr. Vraniak will receive termination payments consisting of (i) a cash bonus of $35,000 for his service through March 31, 2019 and (ii) six months severance as currently provided under, and subject to, the terms of the Companys Executive Severance Policy;
The vesting period for Mr. Vraniaks unvested stock options will be extended to August 31, 2019 and the exercise period for such options will be extended to December 31, 2020;
The vesting period for the unvested shares of restricted stock issued to Mr. Vraniak upon conversion of his common units into common stock in connection with the Companys initial public offering will be extended, with all such shares being fully vested on August 31, 2019, subject to Mr. Vraniaks full compliance with the terms of his agreement; and
Effective as of the date of execution of his agreement (the Grant Date), Mr. Vraniak will receive a grant of equity in the Company to be comprised of: (i) an option to purchase 18,750 shares of the Companys common stock, with an exercise price equal to the closing price of the Companys common stock on the NASDAQ stock market on the Grant Date (the Exercise Price) and an exercise period expiring on February 28, 2020; and (ii) shares of restricted stock equal in value to $25,000 divided by the Exercise Price, subject to the terms and conditions set forth in the Companys 2018 Omnibus Equity Incentive Plan and the Companys standard employee Stock Option Agreement, provided that the foregoing option and restricted stock shall both vest in full on August 31, 2019, subject to Mr. Vraniaks full compliance with the terms of his agreement.
Appointment of Brian Posner as Vice President of Finance and as Chief Financial Officer
On March 8, 2019, the Company announced the appointment of Brian Posner, 57, as Vice President of Finance of the Company, effective as of March 11, 2019, and as Chief Financial Officer of the Company, effective as of April 1, 2019.
Mr. Posner joins the Company from Cellectar Biosciences, where he most recently served as chief financial officer since April 2018. Prior to Cellectar, Mr. Posner was chief financial officer at Alliqua BioMedical from 2013 to 2018, chief financial officer at Ocean Power Technologies from 2010 to 2013 and chief financial officer at Power Medical Interventions in 2009. Before such time, Mr. Posner spent nine years at Pharmacopeia from 1999 to 2008, where he served as director of finance before serving as chief financial officer from 2006 to 2008 upon Pharmacopeias acquisition by Ligand Pharmaceuticals. Before his employment with Pharmacopeia, Mr. Posner was chief financial officer and vice president of operations at Photosynthetic Harvest, a start-up biotechnology company, and regional chief financial officer at Omnicare. Mr. Posner began his career as an audit supervisor at Coopers & Lybrand, which merged with Price Waterhouse to become PricewaterhouseCoopers. Mr. Posner earned an MBA in Managerial Accounting from Pace Universitys Lubin School of Business and a BA in Accounting from Queens College.
Pursuant to his employment agreement (the Posner Employment Agreement), Mr. Posner will be paid an annual base salary of $325,000, as the same may be adjusted in the Companys discretion. In addition, Mr. Posner is entitled to receive, subject to employment by the Company on the applicable date of bonus payout, an annual target discretionary bonus of up to 40% of his annual base salary, payable at the discretion of the Board of Directors of the Company (the Board) or the Compensation Committee of the Board. Pursuant to the Posner Employment Agreement, Mr. Posner is also eligible to receive healthcare benefits as may be provided from time to time by the Company to its employees generally, to participate in the Companys 401(k) plan and to receive paid time off annually in accordance with the Companys policies in effect from time to time.
Pursuant to the Posner Employment Agreement, Mr. Posner was granted a one-time stock option to purchase 105,000 shares of the Companys common stock, with such option vesting 25% on the one-year anniversary of March 11, 2019 and the balance vesting in equal quarterly installments over the successive three-year period, subject to Mr. Posners continued employment by the Company on the applicable vesting date. Mr. Posners option grant has an exercise price per share equal to $8.10, which was the fair market value of the Companys common stock on March 11, 2019 (based on the closing price of the Companys common stock on the Nasdaq Stock Market on such date).
Pursuant to the Posner Employment Agreement, Mr. Posner agreed to be bound by the Companys standard Employee Confidentiality and Assignment Agreement, including the non-compete and non-solicitation covenants contained therein. As additional consideration for such covenants, the Company agreed, pursuant to the Posner Employment Agreement, that Mr. Posner will be covered by the Companys Executive Severance Policy, as such policy may be in effect from time to time, provided, that, notwithstanding anything in the Companys Executive Severance Policy to the contrary, the Severance Period (as defined therein) will be 12 months instead of six months and that the Severance Multiple (as defined therein) payable to Mr. Posner shall be 1.0 instead of 0.5.
The foregoing description of the Posner Employment Agreement is qualified in its entirety by reference to the text of such agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Named Executive Officer Change
On March 8, 2019, Dr. Peter Staats, the Companys Chief Medical Officer (CMO), was appointed Senior Executive Adviser of Medical and Government Affairs with a term of office through December 31, 2019 and Dr. Tony Fiorino was appointed Chief Medical Officer of the Company, both effective as of March 22, 2019. In connection therewith, the compensation terms of Dr. Staats employment with the Company are expected to be modified as summarized below:
Effective as of the date of Dr. Staats first day of service to the Company as Senior Executive Adviser of Medical and Government Affairs (the Reference Date), Dr. Staats will be entitled to receive, subject to continued employment with the Company, (i) an annual salary of $210,000 (the Adviser Salary), and (ii) an equity grant equal in value to $270,000, with 50% of such grant vesting on the first anniversary of the Reference Date, 25% vesting on the second anniversary of the Reference Date and 25% vesting on the third anniversary of the Reference Date; and
The terms of Dr. Staats severance eligibility under the Companys Executive Severance Policy will be unchanged through December 31, 2019, with the terms thereafter being based upon the Adviser Salary for termination of employment that occurs after December 31, 2019.
|Item 9.01|| |
Financial Statements and Exhibits.
|10.1||Posner Employment Agreement|
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.
March 12, 2019
/s/ Glenn S. Vraniak
Glenn S. Vraniak
Chief Financial Officer
January 30, 2019
Mr. Brian Posner
On behalf of ElectroCore, Inc., a Delaware corporation (the Company), I am pleased to offer you a position as Vice President Finance for the Company effective as of March 11, 2019 (the Start Date); provided that effective as of April 1, 2019 you will assume the role of Chief Financial Officer. This offer and your employment are subject to the successful completion of the Companys standard background check. In this role, you will report directly to the Companys Chief Executive Officer.
This letter, when signed by you, will constitute our agreement (the Agreement) concerning your role as an employee of the Company.
1. Duties; Termination. During the term of this Agreement, you hereby agree to serve in the capacities noted above (or such other capacity as we shall mutually hereafter agree) and to perform such services as are customarily required of such positions and as are assigned to you by the Companys Chief Executive Officer or Board of Director.
As of the Start Date, and through the remainder of your term of employment with the Company, you shall devote your full business time to your duties to the Company or its affiliates and you shall not engage in any other business activities without the prior written consent of the Company. Either party may terminate this Agreement at any time by providing the other with written notice of such termination.
2. Compensation. As full compensation for your service to the Company hereunder and in consideration of the other covenants contained herein, you shall receive:
(a) during the term of your employment, an annual salary of $325,000, less applicable withholding taxes and other deductions, paid semi-monthly in accordance with the Companys customary payroll practices (as such amount may be adjusted from time to time at the Companys discretion);
(b) during the term of your employment, an annual target discretionary bonus of 40% of your annual base salary payable at the discretion of the Companys Board of Directors or Compensation Committee thereof. You must be employed with the Company at the time of the payout date in order to receive any such bonus payout;
(c) during the term of your employment, healthcare benefits as may be provided from time to time by the Company to its employees generally; participation in the Companys 401(k) plan; and paid time off (PTO) annually in accordance with the Companys policies in effect from time to time. A package describing certain of these benefits will be provided to you; and
(d) subject to the approval by the Compensation Committee of the Companys Board of Directors, a one-time grant of a stock option to purchase 105,000 shares of the Companys common stock, such options to vest 25% on the one year anniversary of your Start Date and the balance to vest in equal quarterly installments over the succeeding three year period (subject to your being employed by the Company on any applicable vesting date). Such option grant will be made pursuant to the Companys standard Stock Option Agreement (a copy of which will be provided to you after grant and which you will be required to execute as a condition to such grant) and its Omnibus Equity Incentive Plan and have an exercise price per share equal to the fair market value of the Companys common stock on the Start Date (based on the closing price of the Companys common stock on the Nasdaq Stock Market or such other national market on which the Companys stock then trades).
3. At-Will Employment. You acknowledge and agree that your employment with the Company is at will, meaning that either you or the Company (acting through its Board of Directors or an officer expressly authorized to so act) may terminate your employment with the Company at any time and for any reason (or no reason) upon notice to the other party.
4. Confidential Information and IP Assignment; Executive Severance Policy. You hereby agree to execute and be bound by the Companys standard Employee Confidentiality and Assignment Agreement, a copy of which has been provided to you. You acknowledge that such agreement contains certain post-employment restrictions, including a non-compete and non-solicitation agreement. As additional consideration for such covenants, the Company agrees that you shall be covered by the Companys Executive Severance Policy, as such policy may be in effect from time to time (the Severance Policy); provided, that, notwithstanding anything in the Severance Policy to the contrary, the Severance Period for all purposes of Section 2.24 of the Severance Policy as it applies to you shall be 12 months (and not 6 months) and the Severance Multiple payable to you for all purposes of Section 4.01 of the Severance Policy shall be 1.0 (instead of 0.5). A copy of the such policy, as currently in effect, has been provided to you. You acknowledge and agree that the Company reserves the right to amend such policy from time to time or to terminate such policy; provided, that no such amendment or termination shall reduce the amount of severance benefits payable to you upon an involuntary termination of employment without your prior consent.
5. Miscellaneous. This Agreement, together with the documents referred to herein, contains the entire agreement of the parties with respect to the subject matter hereof and may be amended only by a written instrument signed by you and the Company. Because of the personal nature of the services to be rendered by you under this Agreement, you may not assign this agreement without the prior written consent of the Company. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
6. Governing Law; Jurisdiction. This Agreement shall be governed in accordance with the laws of the State of New Jersey. The parties hereto consent to the jurisdiction of the courts of the State of New Jersey for all disputes arising pursuant to this Agreement.
If you agree with the foregoing terms, please indicate such agreement by signing the enclosed duplicate original of this letter in the space provided and returning it to the Company.
Very truly yours,
|By:||/s/ Francis R. Amato|
Name: Francis R. Amato
Title: Chief Executive Officer
|Acknowledged and Agreed:|
|/s/Brian M. Posner|
|Brian M. Posner|
Employee Confidentiality and Assignment Agreement
In consideration and as a condition of my employment or continued employment by electroCore, Inc. and its affiliates (collectively, the Company), I agree as follows:
I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. BY SIGNING BELOW, I CERTIFY THAT I HAVE READ IT CAREFULLY AND AM SATISFIED THAT I UNDERSTAND IT COMPLETELY.
IN WITNESS WHEREOF, the undersigned has executed this agreement as a sealed instrument as of the date set forth below.
|Signed:||/s/ Brian M. Posner|
|Brian M. Posner|
|Date:||January 30, 2019|