BIOSPECIFICS TECHNOLOGIES CORP. (NASDAQ:BSTC) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02 Termination of a Material Definitive Agreement
As described in greater detail below in Item 8.01, the Company announced that it will be relocating its headquarters to Wilmington, Delaware (the Relocation). On January 7, 2020, in connection with the Relocation, the Company provided notice to 35 Wilbur Street Associates, LLC (the Lynbrook Landlord) of its intent to terminate, effective as of April 7, 2020, that certain Lease, by and among the Company, Advance Biofactures Corporation (ABC-NY and, together with the Company, the Tenant), and the Lynbrook Landlord, dated November 21, 2013 (the Original Lease), as amended by (i) that certain Lease Renewal Letter Agreement, dated August 14, 2015 (Lease Extension 1), (ii) that certain Lease Renewal Letter Agreement, dated November 1, 2016 (Lease Extension 2), (iii) that certain Lease Renewal Letter Agreement, dated November 6, 2017 (Lease Extension 3), and (iv) that certain Lease Renewal Letter Agreement, dated August 14, 2018 (Lease Extension 4 and, together with the Original Lease, Lease Extension 1, Lease Extension 2, and Lease Extension 3, the Lynbrook Lease).
to Section 4.01 of the Original Lease, #3 of Lease Extension 1, and #5 of Lease Extension 2, the Tenant has the option to cancel the Lynbrook Lease after the first year by giving three months prior written notice. Accordingly, the Company will not incur any termination penalties as a result of terminating the Lynbrook Lease.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Appointment of Chief Financial Officer
The Board of Directors of the Company (the Board) approved the appointment of Mr. Patrick C. Hutchison as Chief Financial Officer of the Company, effective as of January 6, 2020 (the Effective Date).
Mr. Hutchison, 61, served as the Chief Financial Officer of SwanBio Therapeutics (SwanBio), a private gene therapy biotech company, on a part-time basis from April 2019 through December 2019. Before SwanBio, from April 2017 to August 2018, Mr. Hutchison served as the Chief Financial Officer of Innocoll, Inc., a private biotech company. Prior to that, Mr. Hutchison served as the Chief Financial Officer of TetraLogic Pharmaceuticals (TetraLogic), a public biotech company, from April 2016 to December 2016 and as TetraLogics Vice President Finance from January 2014 to April 2016. From 2012 to 2013, Mr. Hutchison was Teleflex, Inc.s Vice President Corporate Controller and Chief Accounting Officer. Before his time at Teleflex, Inc., from 2001 to 2012, Mr. Hutchison was Vice President Group Controller of Cephalon, Inc., an international biopharmaceutical company. Mr. Hutchison received his B.S. degree in Accounting from the Wharton School of the University of Pennsylvania (UPenn); he also earned a B.A. degree in Psychology from UPenn.
In connection with his appointment as Chief Financial Officer on a part-time basis, the Company entered into a letter agreement with an effective date of January 6, 2020 with Mr. Hutchison (the Employment Agreement) setting forth the terms of his employment and compensation. to the Employment Agreement, Mr. Hutchisons base salary will be $200,000, and he will be eligible for an annual incentive cash bonus with a target amount of 20% of his annual rate of base salary. Mr. Hutchison is also eligible to participate in the employee benefits and insurance programs that are generally provided by the Company to its employees.
to the Employment Agreement, on the Effective Date, Mr. Hutchison will receive a one-time stock option grant with respect to 10,000 shares of common stock of the Company (the Option) under the Companys 2019 Omnibus Incentive Compensation Plan (the Equity Plan). The Option will have an exercise price equal to the fair market value per share on the date of grant and will vest in equal annual installments over the four-year period following the date of grant, subject to the terms and conditions established by the Board and of the Equity Plan.
If Mr. Hutchisons employment is terminated by the Company without Cause (as defined in the Employment Agreement), Mr. Hutchison will be entitled to receive any earned but unpaid base salary through the date of termination (at the rates then in effect, less standard deductions and withholdings). In addition, in such event, if Mr. Hutchison executes a waiver and general release of claims in the form provided by the Company to Mr. Hutchison, then he will be eligible to receive an aggregate amount equal to