ITUS CORPORATION (NASDAQ:ITUS) 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 May 8, 2018, the compensation committee (the “Committee”) of the Board of Directors of ITUS Corporation (the “Company”) approved the following for the compensation of Dr. Amit Kumar, the President, Chief Executive Officer and Chairman of the Board of Directors of the Company. Dr. Kumar’s base salary will be increased from $360,000 per year to $450,000 per year, such increase to be effective retroactively as of January 1, 2018, and Dr. Kumar will receive a cash bonus of $200,000. In addition, Dr. Kumar will receive two stock option grants and a restricted stock award to the ITUS Corporation 2018 Share Incentive Plan (the “Plan”). The stock option grants are to purchase 600,000 shares of common stock of the Company (the “Common Stock” and such option grant, the “Time Based Option Grant”) and 1,500,000 shares of Common Stock (such option grant, the “Performance Based Option Grant”), respectively, at an exercise price of $3.70 (the closing price of the Common Stock on the Nasdaq Capital Market on May 8, 2018). The Time Based Option Grant has a 10 year term and vests on a monthly basis over three years beginning on May 31, 2018. If Dr. Kumar is terminated other than for cause within 12 months following a change of control, the Time Based Option Grant will automatically vest in its entirety and Dr. Kumar will have 90 days to exercise such grant. If Dr. Kumar’s employment is terminated other than for cause unrelated to a change of control, for cause, or he retires or otherwise resigns, the Time Based Option Grant will cease vesting and Dr. Kumar will have 90 days to exercise the vested portion of such grant. The Performance Based Option Grant has a 10 year term and vests as follows: (i) 500,000 shares vest if during any 20 trading day period on or before May 31, 2021, the average closing stock price of the Common Stock is at least $5.00, (ii) 500,000 shares vest if during any 20 trading day period on or before May 31, 2021, the average closing stock price of the Common Stock is at least $7.00, and (iii) 500,000 shares vest if during any 20 trading day period on or before May 31, 2021, the average closing stock price of the Common Stock is at least $8.00. If Dr. Kumar’s employment is terminated or he resigns, the Performance Based Option Grant will cease vesting and Dr. Kumar will have 90 days to exercise the vested portion of such grant. Dr. Kumar also received a restricted stock award (the “RSA”) of 1,500,000 shares of Common Stock. The RSA vests in its entirety if during any 20 trading day period on or before May 31, 2021 in which Dr. Kumar is employed by the Company, the average closing stock price of the Common Stock is at least $11.00.
The Committee’s determination to increase Dr. Kumar’s compensation is the result of a direct negotiation between the Committee and Dr. Kumar following Dr. Kumar’s tendering of a resignation letter to the Company on April 20, 2018, which letter was subsequently withdrawn. In its negotiation with Dr. Kumar, the Committee hired a third party compensation consultant for advice. The Committee and Dr. Kumar agreed to make the major portion of the equity compensation tied to performance milestones so that Dr. Kumar’s incentives are aligned with creation of shareholder value.
The Committee also approved a stock option grant to Michael J. Catelani, the Chief Operating Officer and Chief Financial Officer of the Company, to the Plan. Mr. Catelani will receive a stock option to purchase 500,000 shares of Common Stock at an exercise price of $3.70 (the closing price of the Common Stock on the Nasdaq Capital Market on May 8, 2018). The stock option grant has a 10 year term and vests on a monthly basis over three years beginning on May 31, 2018. If Mr. Catelani is terminated other than for cause within 12 months following a change of control, the option grant will automatically vest in its entirety and Mr. Catelani will have 90 days to exercise such grant. If Mr. Catelani’s employment is terminated other than for cause unrelated to a change of control, for cause, or he retires or otherwise resigns, the option grant will cease vesting and Mr. Catelani will have 90 days to exercise the vested portion of such grant.
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About ITUS CORPORATION (NASDAQ:ITUS)
ITUS Corporation is engaged in developing a diagnostic platform called Cchek, for the early detection of tumor-based cancers. The Cchek cancer detection platform measures a patient’s immune response to a malignancy by detecting the presence, absence and quantity of certain immune cells that exist in and around a tumor and that enter the blood stream. Instead of seeking to alter or boost the body’s immune system and its ability to destroy cancer cells, the Company has developed techniques and protocols for measuring the subtle immunological changes that occur in the blood stream during tumor development. Through its protocols, the Company has detected the biomarkers in the peripheral blood of biopsy verified cancer patients, and in distinguishing the blood of healthy patients from the blood of cancer patients.
