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 July 17, 2017 AxoGen, Inc. (the “Company”) issued a press release announcing the appointment of Jon S. Gingrich as the Company's Chief Commercial Officer, effective as of July 17, 2017.
In connection with his employment and appointment as the Company's Chief Commercial Officer, Mr. Gingrich entered into an Executive Employment Agreement with AxoGen Corporation, a wholly owned subsidiary of the Company (“AC”), dated as of July 17, 2017 (the “Gingrich Employment Agreement”) that provides for at-will employment. Under the Gingrich Employment Agreement, Mr. Gingrich will receive a base salary of $320,000 (to be reviewed on an annual basis), be eligible to participate in AC's current bonus program and receive benefits afforded to other executive officers. For 2017, Mr. Gingrich’s bonus under the bonus program will be pro-rated based on his start date and he will have a target rate set at 40% of his base salary subject to conditions established by the Company’s Board of Directors. Mr. Gingrich will also receive a $25,000 signing bonus.
Mr. Gingrich was also granted a non-qualified inducement stock option (the “Option Agreement”) for 115,000 shares of the Company's common stock on July 17, 2017, such option has a ten-year term, an exercise price of $16.85 which is equal to the fair market value of the Company’s common stock based on the closing price of the Company common stock on the option grant date and is subject to the terms of the Option Agreement.Such option will vest as to 25% of the shares after one year and 12.5% every six months thereafter until fully vested; provided, however, that such option shall automatically accelerate and become fully exercisable in the event that, following a Change in Control (as defined in the Gingrich Employment Agreement), Mr. Gingrich is terminated without “Substantial Cause” (as defined in the Gingrich Employment Agreement) within 6 months of the Change of Control or he resigns for “Good Reason” (as defined in the Gingrich Employment Agreement) within 3 months of the Change of Control. In addition, Mr. Gingrich has been granted performance stock units (the “PSUs” and each, a “PSU”) representing 12,000 shares of the Company’s common stock (the “Shares”) to the Company’s 2010 Stock Incentive Plan and form of PSU agreement (the “PSU Agreement”) that will vest up to 150% based on continued service and attainment of certain gross revenue targets.On February 15, 2019, the Compensation Committee of the Board of Directors of the Company will make a determination of the total number of Shares that will vest based on the actual performance of the Company. Once the number of Shares has been determined, 33.33% will vest on each of February15, 2019 and February 15, 2020 and 33.34% will vest on February15, 2021, provided that Mr. Gingrich has been continuously employed through each vesting date as to the particular number of Shares vesting. In the event of a “Change in Control” (as defined in the PSU Agreement), the vesting of all or a portion of the PSUs shall accelerate.
In the event Mr. Gingrich’s employment is terminated without Substantial Cause or he resigns for Good Reason upon or within 90 days following a Change in Control (as defined in the Gingrich Employment Agreement), he will be entitled to a severance payment consisting of: (A) 12 months of base salary; (B) an amount equal to any bonuses paid to Mr. Gingrich during the 12-month period prior to termination of employment; and (C) continued health coverage for up to 12 months, subject to certain conditions set forth in the Gingrich Employment Agreement.
Mr. Gingrich, age 48, brings more than 20 years of global medical device and health care sales, marketing, and general management experience to the Company. From April 1, 2013 until joining AxoGen he served as Global Vice President and General Manager, Skeletal Health Solutions and Group Global Vice President, Marketing, Breast and Skeletal Health Solutions for Hologic Inc., a global health care and life science developer, manufacturer, and supplier of diagnostic, medical imaging, and surgical products. Prior to joining Hologic, he spent 15 years (July 1, 1997- December 31, 2012) with Boston Scientific, holding several commercial and international positions of increasing responsibility. From 2011-2012 Mr. Gingrich served as Vice President, International Commercialization, Cardiac Rhythm Management and as General Manager, Cardiac Rhythm Management of Japan from 2008-2011. Other Boston Scientific roles included Director, International Sales Operations and Training; Director, Marketing and Sales, Japan; Director, Sales Operations, Endoscopy; Global Marketing Product Manager, Endoscopy; and Executive Territory Sales Manager, Endoscopy.He was also in sales and marketing roles with Unilever N.V., a consumer goods companies. Gingrich earned a Bachelor of Science Degree in Business Administration (Marketing and Management) from the University of Richmond.
Mr. Gingrich does not have any family relationship with any director or executive officer, or a person nominated to be a director or executive officer of the Company or AC. Mr. Gingrich has not engaged in any transactions with