Blueprint
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): January 30, 2017
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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))
Item 5.02.
Departure of Directors or Certain Officers; Appointment of Certain
Officers; Compensatory Arrangements of Certain
Officers.
On
January 30, 2017, we entered into employment agreements, each
effective February 1, 2017, with Robert Cook to serve as our Chief
Financial Officer and with Judith Abrams to serve as our Chief
Medical Officer. Unless renewed pursuant to the terms thereof, each
agreement will expire on January 31, 2020. After the initial
three-year term of each 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. The agreements are identical except as to the
performance milestones for certain options granted to each
executive, discussed below.
Mr.
Cook most recently served as Chief Financial Officer of Bioblast
Pharma Ltd. from January 2016 to July 2016. His prior pharma
experience includes: Executive Vice President and Chief Financial
Officer at Strata Skin Sciences, Inc. from April 2014 to January
2016; Senior Vice President and Chief Financial Officer at Immune
Pharmaceuticals, Inc. from August 2013 to March 2014, and its
predecessor EpiCept Corporation from April 2004 to August 2013,
including one year as Interim President and CEO of EpiCept in which
he completed the reverse merger of EpiCept into Immune. Previously
he served as CFO of publicly-held Pharmos Corporation. Mr. Cook
began his career in financial services at Chase Manhattan and he
also held a position as a Vice President in the Healthcare Group at
General Electric Capital Commercial Finance. Mr. Cook holds a B.S.
in Finance, magna cum
laude, from The American University, in Washington,
DC.
Most
recently, Dr. Abrams served as Head of Celgene Corporation’s
Otezla (Apremilast) Global Clinical Submission Team, from January
2012 to January 2017, where she led all clinical activities
supporting the global submission through approval and launch of
Otezla. Previously, Dr. Abrams has held positions of increasing
responsibility managing the clinical development of a portfolio of
products across all phases of clinical development, including Vice
President, Medical & Science Inflammation at Novo Nordisk, Inc.
from October 2010 to January 2012, and positions at NPS
Pharmaceuticals, Inc., Johnson & Johnson PRD, Novartis
Pharmaceuticals Corporation, Amgen Inc., and Bristol-Myers Squibb
PRI. Dr. Abrams received her M.D. and completed fellowships in
Internal Medicine and Rheumatology at the University of Toronto
Faculty of Medicine. She completed a post-doctoral research
fellowship at Stanford University School of Medicine, Division of
Immunology where she subsequently became a member of the clinical
faculty. Dr. Abrams is Adjunct Associate Professor, Department of
Medicine, New York University School of Medicine.
In
exchange for their service as our Chief Financial Officer and Chief
Medical Officer, respectively, each executive will receive an
annual base salary of $350,000, 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
executive’s salary may be no greater than 25%. Each executive
will be eligible for an annual bonus, which may equal up to 30% of
his or her 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 our Chief
Executive Officer and approved by the Board or compensation
committee, and specified personal objectives, predetermined by the
Board and each executive. For fiscal year 2017, each
executive’s bonus will be prorated, contingent upon him or
her meeting performance objectives established by the Board and the
executive. Each executive must be employed through December 31 of a
given year to earn that year’s annual bonus.
In
connection with executive’s employment, we granted each
executive stock options to purchase 350,000 shares of our common
stock, with 185,000 of the options vesting in four equal annual
installments on the first four anniversaries of the grant date. The
remaining 165,000 options are split into three tranches, which
become exercisable upon the achievement of specified performance
milestones for that executive, provided that these options will be
forfeited if the milestones are not achieved within their
respective time periods, the earliest of which is December 31, 2017
and the latest of which is December 31, 2019 in the case of Mr.
Cook and the earliest of which is December 31, 2019 and the latest
of which is June 30, 2020 in the case of Dr. Abrams. In each case,
executive must be an employee of ours or consultant to us on the
applicable vesting date.
Mr.
Cook and Dr. Abrams will each receive up to $5,000 to cover legal
fees and other expenses associated with negotiating their
respective employment agreement.
Each
executive is eligible to participate in all employee benefits
available to our senior executives from time-to-time. Pursuant to
the agreement, each executive is eligible for up to four weeks of
paid vacation per year and may be reimbursed for specified
business-related expenses.
If we terminate executive’s employment for
Cause (as defined below), executive will be entitled to receive
only the accrued compensation due to him or her as of the date of
such termination, rights to
indemnification and directors’ and officers’ liability
insurance, and as otherwise required by law. All unvested equity
awards then held by executive will be forfeited to us as of such
date.
If we terminate executive’s employment other
than for Cause, death or disability, other than by notice of
nonrenewal, or if executive resigns for Good Reason (as defined
below), executive 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 or her base
salary and benefits for a period of nine months following the
effective date of the termination of employment; (iii) payment on a
prorated basis for any target bonus for the year of termination
based on the actual achievement of the specified bonus objectives;
(iv) if executive timely elects continued health insurance coverage
under COBRA, then we will pay the premium to continue such coverage
for him or her and his or her eligible dependents in an amount
equal to the portion paid for by us during executive’s
employment until the conclusion of the time when he or she is
receiving continuation of base salary payments or until he or she
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 executive and instead pay him or her 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 unvested time-based stock options held by
executive 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 executive 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.
If we terminate executive without Cause or if
executive resigns for Good Reason within 24 months after a change
in control (as defined in our 2013 Stock Incentive Plan), executive
will receive the following benefits: (i) payment of any accrued
compensation, 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 or her base
salary and full target bonus for a period of nine months following
the effective date of the termination of employment; (iii) payment
on a prorated basis for any partial bonus earned by executive based
on the actual achievement of the specified bonus objectives; (iv)
if executive timely elects continued health insurance coverage
under COBRA, then we will pay the entire premium necessary to
continue such coverage for him or her and his or her eligible
dependents until the conclusion of the time when he or she is
receiving continuation of base salary payments or until he or she
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 executive and instead pay him or her 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 unvested stock options held by
executive shall be accelerated
and deemed to have vested as of the termination date and all
options that have vested (including upon such acceleration) will
remain exercisable until the earlier of 12 months following such
termination or the expiration date of the respective options. The
separation benefits set forth above are conditioned upon executive
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 executive to perform
his or her material duties or obligations under the agreement
(other than as a result of executive’s mental incapacity or
illness, as confirmed by medical evidence provided by a physician
selected by us) that is not cured, to the extent subject to cure,
by executive to our reasonable satisfaction within 30 days after we
gave written notice thereof to executive; (ii) any willful,
intentional or grossly negligent act by executive having the effect
of materially injuring (whether financially or otherwise) our
business or reputation or any of our affiliates; (iii)
executive’s conviction of any felony involving moral
turpitude (including entry of a guilty or nolo contendere plea);
(iv) executive’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 executive engaged in some form of harassment or discrimination
prohibited by law (including, without limitation, harassment on the
basis of age, sex or race) unless executive’s actions were
specifically directed by the Board; (vi) any material
misappropriation or embezzlement by executive of our property or
our affiliates (whether or not a misdemeanor or felony); or (vii)
material breach by executive of the agreement that is not cured, to
the extent subject to cure, by executive to our reasonable
satisfaction within 30 days after we gave written notice thereof to
executive.
For purposes of the agreement, “Good
Reason” is defined as: (i) any material breach of the
agreement by us; (ii) any material diminution by us of
executive’s duties, responsibilities, or authority; (iii) a
material reduction in executive’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; (iv) a required relocation
of the primary place of performance of executive’s duties to
a location more than 50 miles from our current location in
Bedminster, New Jersey, provided that a change in the location of
the primary place of performance of executive’s duties will
not constitute Good Reason if such change occurs prior to a change
in control and we only require executive to physically work at that
new location two days or less per workweek and provide
reimbursement of executive’s reasonable travel expenses in
commuting to such new location; or (v)
a material reduction in executive’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.
If executive terminates his or her employment by
written notice of termination or if executive or we terminate his
or her employment by providing a notice of nonrenewal at least 90
days before the agreement is set to expire, executive 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
executive’s employment is terminated as a result of his or
her death or disability, we will pay him or her or his or her
estate, as applicable, any accrued compensation.
During
the term of each agreement and the 12-month period immediately
following executive’s separation from employment for any
reason, executive 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 or her
employment.
There
are no family relationships between either of Mr. Cook or Dr.
Abrams 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 either
of Mr. Cook or Dr. Abrams has an interest requiring disclosure
under Item 404(a) of Regulation S-K.
The
description of Mr. Cook’s and Dr. Abrams’s employment
agreements provided above are qualified in their entirety by
reference to the full and complete terms of each agreement, which
we intend to file as exhibits to our Annual Report on Form 10-K for
the year ended December 31, 2016.
A
copy of the press release announcing the appointment of Mr. Cook
and Dr. Abrams is attached hereto as Exhibit 99.1 and incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits.
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Exhibit
No.
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Description
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Press release dated
as of February 1, 2017.
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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: February 1,
2017
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By:
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/s/
Khoso
Baluch
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Name: Khoso
Baluch
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Title: Chief
Executive Officer
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