AXOGEN, INC. (NASDAQ:AXGN) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On September 4, 2018, the Company announced that Angelo G. Scopelianos, Ph.D.will become the Company's Vice President of Research and Development, effective as of such date.
In connection with his employment and appointment as the Company's Vice President of Research and Development, Dr. Scopelianos entered into an Executive Employment Agreement with AxoGen Corporation, a wholly owned subsidiary of the Company ("AC"), dated as of September 4, 2018 (the "Scopelianos Employment Agreement"). Under the Scopelianos Employment Agreement, Dr.Scopelianos' employment is at-will. In the event Dr.Scopelianos is terminated without "Substantial Cause" (as defined below) either prior to a "Change of Control" (as defined below") or within 180 days following a Change in Control, he is entitled to a severance payment consisting of: (A) twelve months of base salary; and (B) an amount equal to any bonuses paid to Dr.Scopelianos during the twelve-month period prior to termination of employment. Dr.Scopelianos is also entitled to such severance if he leaves AxoGen for “Good Reason" (as defined below) within 90 days following a Change of Control. Upon a Change in Control, any stock options held by Dr.Scopelianos shall automatically accelerate and become fully exercisable. If within twelve months following the Change of Control he is terminated without cause or leaves for Good Reason, and so long as the Company or AC are subject to federal COBRA and Dr.Scopelianos timely elects continuation coverage under COBRA, the Company or AC shall pay the premiums for twelve months or until Dr.Scopelianos obtains new employment with comparable health care coverage, whichever is shorter.
For purposes of the Scopelianos employment agreement, Change of Control means the occurrence of any of the following events: (i) any person who holds less than 20% of the combined voting power of the securities of AC or the Company, becomes the beneficial owner, directly or indirectly, of securities of AC or the Company, representing 50% or more of the combined voting power of the securities of AC or the Company then outstanding; (ii) during any period of 24 consecutive months, individuals whoat the beginning of such period constitute all members of the Company's Board of Directors cease, for anyreason, toconstituteatleastamajorityoftheCompany'sBoardofDirectors, unlesstheelectionof each director who was not a director at the beginning of the period was either nominated for election by, or was approved by a vote of, at least two-thirds of the directors then still in office who were directors at the beginning of the period; (iii) AC or the Company consolidates or merges with another company and AC or the Company is not the continuing or surviving corporation, provided, however, that any consolidation or merger whereby the Company continues as the majority holder of AC securities or a merger or consolidation of AC and the Company will not constitute a Change in Control; (iv) shares of AC's or the Company's commonstock are converted into cash, securities, or other property (other than by a merger set forth in (iii) above) in which the holders of AC's or the Company's common stock immediately prior to the merger have the same proportionate ownership of common shares of the surviving corporation as immediately after the merger; (v) AC or the Company sells,leases,exchanges, orotherwisetransfersallorsubstantiallyallofitsassets(inonetransaction or in a series ofrelated transactions)provided, however, that any such transactionrelated to AC where the Company continues as the majority holder of AC common stock or the Company is the sole other partytothetransactionwillnotconstitute aChangeinControl;or(vi)theholders ofsharesofAC'sor the Company's common stock approve a plan or proposal for the liquidation or dissolution of AC or the Company.
For purposes of the Scopelianos Employment Agreement, Substantial Cause means: (A) the commission by Dr. Scopelianos of any act of fraud, theft, or embezzlement; (B) any material breach by Dr. Scopelianos of the Scopelianos Employment Agreement, provided that AC shall have first delivered to Dr. Scopelianos written notice of the alleged breach, specifying the exact nature of the breach in detail, and provided, further, that Dr. Scopelianos shall have failed to cure or substantially mitigate such breach within ten days after receiving such written notice; provided, however, that if such breach is not susceptible of cure or substantial mitigation within ten (10) days, Employee shall have a reasonable time thereafter to cure or substantially mitigate such breach; (C) commission or conviction of any felony, or of any misdemeanor involving moral turpitude, or entry of a plea of guilty or nolo contendere to any felony or misdemeanor; (D) material failure to adhere to AC's or the Company corporate codes, policies or procedures which have been adopted in good faith for a valid business purpose as in effect from time to time; or (E) failure to meet reasonable performance standards as determined by AC or the Company.