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): March 1, 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))
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Item 1.01.
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Entry into a Material Definitive Agreement.
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On
March 1, 2017, we entered into an employment agreement with John L.
Armstrong, Jr. to serve as our Executive Vice President for
Technical Operations. Unless renewed pursuant to the terms thereof,
the agreement will expire on February 28, 2020. After the initial
three-year term of the 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.
In
exchange for his service as our Executive Vice President for
Technical Operations, Mr. Armstrong will receive an annual base
salary of $310,000, 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%. Mr. Armstrong will be eligible
for an annual bonus, which may equal up to 35% 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 our Chief Executive Officer
and approved by the Board or compensation committee, and specified
personal objectives, predetermined by the Board and the executive.
For fiscal year 2017, the executive’s bonus will be prorated,
contingent upon him meeting performance objectives established by
the Board and the executive. The executive must be employed through
December 31 of a given year to earn that year’s annual
bonus.
In
connection with the executive’s employment, we granted him
stock options to purchase 100,000 shares of our common stock, which
vest upon the achievement of designated milestones.
The
executive is eligible to participate in all employee benefits
available to our senior executives from time-to-time. Pursuant to
the agreement, the 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 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 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; and (iv) if
executive timely elects continued health insurance coverage under
COBRA, then we will pay the premium to continue such coverage for
him and his 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 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 executive 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. 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 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 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 executive 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 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 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 employment by written
notice of termination or if executive or we terminate his
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 death
or disability, we will pay him or his 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
employment.
The
description of Mr. Armstrong’s employment agreement provided
above is qualified in its entirety by reference to the full and
complete terms of the agreement, which we intend to file as an
exhibit to our Annual Report on Form 10-K for the year ended
December 31, 2016.
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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Date: March 3,
2017
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By:
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/s/
Khoso
Baluch
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Name:
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Khoso
Baluch
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Title:
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Chief Executive
Officer
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