UNITED STATES
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): August 18, 2006
METROPOLITAN HEALTH NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of incorporation)
0-28456 65-0635748
(Commission file number) (I.R.S. Employer Identification No.)
250 Australian Avenue South, Suite 400
West Palm Beach, FL 33401
(Address of principal executive offices, including zip code)
(561) 805-8500
(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:
|_| 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))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On August 18, 2006 (the "Execution Date"), Metropolitan Health Networks,
Inc. (the "Company") entered into a transition and severance agreement (the
"Transition Agreement") with David S. Gartner, the Company's Chief Financial
Officer ("CFO"). The Transition Agreement will become effective seven days
following the Execution Date (the "Effective Date") unless revoked by Mr.
Gartner prior to the Effective Date.
Under the terms of the Transition Agreement, the Company and Mr. Gartner
have agreed to terminate their employment relationship and provide for an
orderly CFO succession. This termination of the employment relationship did not
involve any disagreements between Mr. Gartner and the Company. The Company
expects Mr. Gartner will continue to serve in his current position of CFO for a
transition period until October 16, 2006 (the "Separation Date"). During the
transition period, Mr. Gartner will continue to receive compensation and
benefits pursuant to his current amended and restated employment agreement,
dated January 3, 2005 ("Prior Employment Agreement").
The Transition Agreement provides, among other things, that following the
Separation Date:
o the vesting on all outstanding and unvested stock options held by
Mr. Gartner as of the Separation Date will immediately accelerate
and Mr. Gartner will be entitled to exercise any or all of his stock
options during a three month period following the Separation Date;
o Mr. Gartner will be entitled to receive his base salary for fifteen
months following the Separation Date (the "Continuation Payments");
and
o Mr. Gartner will be entitled to participate in certain of the
Company's benefit programs for fifteen months following the
Separation Date (the "Continuation Benefits").
In the event Mr. Gartner resigns or is terminated for cause prior to the
Separation Date, Mr. Gartner will only be entitled to receive the Continuation
Payments and Continuation Benefits for a twelve month period.
Under the Transition Agreement, Mr. Gartner has agreed to be bound by
restrictive covenants regarding, among others things, non-competition with the
Company for a one year period, non-solicitation of the Company's employees for a
two-year period and confidentiality. Mr. Gartner has also provided a general
release of claims in favor of the Company and related parties.
The Transition Agreement terminates the Prior Employment Agreement.
The foregoing does not constitute a complete summary of the terms of the
Transition Agreement, and reference is made to the complete text of the
Agreement, which is attached hereto as Exhibit 10.1.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
As discussed in Item 1.01 above, which is incorporated herein by
reference, the Prior Employment Agreement was terminated upon the execution of
the Transition Agreement.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
10.1 Transition and Severance Agreement, dated as of August 18,
2006, by and between David S. Gartner and Metropolitan Health Networks, Inc.
99.1 Press Release dated August 18, 2006
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.
Date: August 18, 2006
METROPOLITAN HEALTH NETWORKS, INC.
By: /s/ Roberto Palenzuela
---------------------------------
Roberto Palenzuela
Secretary and General Counsel