Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On September 22, 2016, Navidea Biopharmaceuticals,
Inc. (the “Company”) appointed Michael M. Goldberg, M.D., age 57, as its President and Chief Executive Officer. Dr.
Goldberg will remain a member of the Board of Directors (the “Board”) of the Company, however, he will no longer serve
as the Chairman of the Board or as a member of its Audit Committee, which positions will be filled by Dr. Eric Rowinsky. Dr. Goldberg
has served as a director of the Company since November 2013 and as interim Chief Executive Officer of the Company from May to October
2014. Dr. Goldberg is currently a Managing Partner of Montaur Capital Partners since January 2007. Prior to this role, he served
as the Chairman of the Board and Chief Executive Officer of Emisphere Technologies, Inc., the pioneer in the development of oral
delivery technologies for macromolecules, from August 1990 to January 2007. Prior to Emisphere, Dr. Goldberg was a Vice President
in Investment Banking of The First Boston Corporation, where he was a founding member of the Healthcare Banking Group. Dr. Goldberg
is or has been a Director of Echo Therapeutics, Inc., AngioLight, Inc., Urigen Pharmaceuticals, Inc., Alliqua BioMedical, Inc.,
and ADVENTRX Pharmaceuticals Inc. He graduated from the accelerated six year combined BS/MD program from Rensselaer Polytechnic
Institute and the Albany Medical College in 1982, and obtained an M.B.A. from the Graduate School of Business, Columbia University,
in 1985.
In connection with his appointment, effective
as of September 22, 2016, the Company entered into an employment agreement (the “Employment Agreement”) with Dr. Goldberg.
The Employment Agreement has a one-year term (the “Term”), renewable annually by the Board. During the Term, Dr. Goldberg
will receive an annual base salary of $400,000, of which (i) $300,000 shall be payable in bi-monthly installments of $12,500, and
(ii) $100,000 shall be payable at such time as the Board determines in its sole discretion that the Company has adequate cash flow,
subject to annual review and increase by the Compensation Committee of the Board. Dr. Goldberg shall also be entitled to an annual
bonus of up to 75% of his annual base salary, based on achievement of annual target performance goals established by the Compensation
Committee. In the event that the market capitalization of the Company at the end of the calendar year during the Term is at least
$250,000,000, then the Compensation Committee of the Board may at its sole discretion increase the annual bonus to an amount equal
to up to 100% of his annual base salary. Pursuant to the Employment Agreement, Dr. Goldberg has been granted options to purchase
up to 5,000,000 shares of the Company’s common stock, $0.001 par value (“Common Stock”), at an exercise price
of $1.00 per share, to become vested and exercisable, subject to stockholder approval of the Company’s 2016 Stock Incentive
Plan (the “2016 Plan”) recently adopted by the Board, in full if the average closing price of the Common Stock over
five (5) consecutive trading days equals or exceeds $2.50 per share (subject to adjustment) (the “Vesting Conditions”);
provided, however, if stockholder approval of the 2016 Plan is not obtained at the first meeting of stockholders at which a vote
takes place, the stock options shall be deemed void
ab initio
and, for a period of five years, if the Vesting Conditions
are met, Dr. Goldberg shall be entitled to a bonus upon his written notice to the Company calculated as the per share closing price
of the Common Stock on the date of such notice minus $1.00 multiplied by 5,000,000. Dr. Goldberg is also entitled to receive options
in an amount equal to up to one percent (1%) of the ownership interest in the Company’s subsidiary, Macrophage Therapeutics,
as further described in the Employment Agreement. The Employment Agreement is designed to approximate in value the employment contract
of the Company’s prior chief executive officer.
If, during the Term, the Company terminates
Dr. Goldberg’s employment Without Cause or if he terminates his employment for Good Reason (each as defined in the Employment
Agreement), Dr. Goldberg shall be paid as severance (i) his continued base salary, as in effect at termination, payable through
the Severance Period (as defined in the Employment Agreement), (ii) a bonus equal to twelve (12) months of his then current annual
base salary plus an additional two (2) months’ base salary for every completed year of his service, and (iii) his unpaid
bonus, if any, for the year he was terminated, prorated to the date of termination.
The Employment Agreement also contains customary
non-competition and non-solicitation covenants that bind Dr. Goldberg during the Term and for a period of one year thereafter.
The preceding description of the Employment
Agreement is a summary of its material terms, does not purport to be complete, and is qualified in its entirety by reference to
the Employment Agreement, a copy of which is being filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Information required with respect to Item
404(a) of Regulation S-K is contained within the section entitled “Part III—Item 13. Certain Relationships and Related
Transactions, and Director Independence” in the Company’s Annual Report on Form 10-K for the year ended December 31,
2015 filed on March 23, 2016, which section is incorporated by reference herein.