Item 10. Directors, Executive Officers and Corporate Governance
Executive Officers and Directors
Set forth below is certain
information with respect to the individuals who are our directors and executive officers as of April 26, 2023:
Name |
|
Age |
|
Positions |
Amro Albanna |
|
53 |
|
Chief Executive Officer, Director |
Corinne Pankovcin |
|
56 |
|
Chief Commercialization Officer |
Shahrokh Shabahang, D.D.S., MS, Ph.D. |
|
60 |
|
Chief Innovation Officer, Director |
Rowena Albanna |
|
57 |
|
Chief Operating Officer |
Thomas J. Farley |
|
50 |
|
Chief Financial Officer |
Matthew Shatzkes |
|
36 |
|
Chief Legal Officer and General Counsel |
Brian Brady |
|
44 |
|
Director |
Namvar Kiaie |
|
58 |
|
Director |
Jeffrey W. Runge, M.D. |
|
67 |
|
Director |
Amro Albanna - Chief Executive Officer
Mr.
Albanna has been our Chief Executive Officer and a Director since we were formed in 2017. He also served as our President from our inception
through September 2021. In 2010, Mr. Albanna co-founded Innovation Economy Corporation (“IEC”), formed to license and commercialize
innovations and create a group of life and health subsidiaries. From 2010 until 2017, Mr. Albanna was Chief Executive Officer and a Director
of IEC and Olfactor Laboratories, Inc., a majority-owned subsidiary of IEC. From 2010 to August 2016, he was the Chief Executive Officer
and a Director of Nano Engineered Applications, Inc., another majority-owned subsidiary of IEC. In 2003, Mr. Albanna founded Qmotions,
Inc. (subsequently renamed Deal A Day Group Corp.). He served as its Chief Executive Officer and a Director until 2011. Qmotions used
3-D spatial tracking and pattern recognition technologies to develop motion-capturing video game controllers. In 2002, Mr. Albanna was
a co-founder of Digital Angel Corporation - a company formed via the merger of three private companies (one being TTC below) into a fourth
publicly traded company (American Stock Exchange) and was placed in charge of commercializing its GPS/wireless technologies. Around that
time, Mr. Albanna co-founded an incubator for startups at the University of California, Riverside Research Park which was acquired in
2007. In 1997, he founded Timely Technology Corporation (“TTC”), which designed and developed e-commerce software for education,
retail and finance. TTC was acquired in 2000 by a Nasdaq-listed company. Mr. Albanna graduated from California State University San Bernardino
in 1991 with a B.S. in Business Administration with concentration in Computer Information Systems. He completed graduate coursework in
Computer Science and Engineering at California State University, Long Beach from 1992 to 1993. In 2019, Mr. Albanna completed coursework
in Immunology and Genetics at Harvard Medical School HMX online learning platform.
Corinne Pankovcin – Chief Commercialization
Officer
Ms.
Pankovcin has been our Chief Commercialization Officer since April 12, 2023. Ms. Pankovcin served as our President from September 2021
through April 2023. Ms. Pankovcin served as our Chief Financial Officer from July 2020 through August 2021. From December 2015 to July
2019, Ms. Pankovcin was the Chief Financial Officer and Managing Director and Treasurer of Business Development Corporation of America
(“BDCA”), a business development company. Prior thereto, from January 2011 to August 2015, Ms. Pankovcin was the Chief Financial
Officer and Treasurer of Blackrock Capital Investment Corporation (NASDAQ: BKCC), and a Managing Director of Finance at BlackRock Investment
Management LLC. Prior to joining BlackRock, Ms. Pankovcin was a senior member of Finance & Accounting of Alternative Investments and
served as Chief Financial Officer for the Global Emerging Markets products group at AIG Capital Partners. Ms. Pankovcin began her career
with PricewaterhouseCoopers LLP, where she ultimately held the role of Senior Manager of Business Assurance for Consumer Products, Manufacturing,
and Middle Market industries from 1991 to 2001. Ms. Pankovcin earned her B.S. in Accounting from Dowling College and her Master’s
Degree in Business Administration from Hofstra University. She is a Certified Public Accountant.
Shahrokh Shabahang,
D.D.S., MS, Ph.D. - Chief Innovation Officer
Dr.
Shabahang has been our Chief Innovation Officer and Director since our inception. In 2009, Dr. Shabahang co-founded Sekris Biomedical
Inc. to incubate immunotherapy technologies. He served as its Chairman of the board and Chief Executive Officer since its inception. In
2004, Dr. Shabahang joined Genelux Corporation to lead its clinical development program and to serve as board secretary. Genelux developed
an oncolytic virus technology for treatment of cancer, co-invented by Dr. Shabahang. During his tenure from 2004-2007, Genelux raised
$20M+ and obtained regulatory approval to initiate First-In-Human clinical studies in Europe with patients who had not responded to chemotherapy.
In 2001, Dr. Shabahang became the Director of the Microbiology and Molecular Biology Lab at Loma Linda University (“LLU”).
He led the research and development of an antimicrobial therapeutic agent for treatment of dental infections, which was licensed and marketed
by one of the largest dental distribution companies. Dr. Shabahang attended the University of California, Santa Barbara from 1982 to 1984
and later received his DDS from the University of Pacific in 1987. He earned his PhD in Microbiology and Molecular Genetics at LLU in
2001. During the same year, he established his laboratory at LLU to study infectious diseases and host immune responses.
Rowena Albanna - Chief Operating Officer
Ms.
Albanna has been our Chief Operating Officer since July 2020. From 2017 to immediately prior to her appointment as Chief Operating Officer,
Ms. Albanna was an independent operations consultant for the Company. Prior thereto, from 2013 to 2017, Ms. Albanna was the Chief Operating
Officer of Innovation Economy Corporation (“IEC”), formed to license and commercialize innovations and create a group of life
and health subsidiaries. From 2010 to 2013, Ms. Albanna was Senior Vice President of IEC. From 2004 to 2009, Ms. Albanna was the founder
and principal of Weezies, an online-based business focused on building and operating e-commerce stores and affiliate marketing sites.
From 2003 to 2004, Ms. Albanna was the head of Product Development and Engineering of Qmotions Inc. Qmotions used 3-D spatial tracking
and pattern recognition technologies to develop motion-capturing video game controllers. In 2002, Ms. Albanna was VP of Product Development
at Digital Angel Systems where she led the development of devices which combined GPS, wireless, and biosensing. Prior to that, Ms. Albanna
held multiple product development roles with increasing responsibilities for various technology companies in the areas of financial, medical,
telecommunications, integrated circuit layout design, and defense. Ms. Albanna is a co-inventor of two patents related to systems for
localizing, monitoring, and sensing objects. Ms. Albanna received a Bachelor of Science degree in Computer Science with a minor in Mathematics
from California State University, San Bernardino in 1988. Ms. Albanna is the wife of Amro Albanna, our Chief Executive Officer.
Thomas J. Farley, CPA - Chief Financial
Officer
Mr. Farley has been the Chief
Financial Officer since September 2021. Prior to this, Mr. Farley was the Principal Accounting Officer and Controller from October of
2020 to September 2021. From December 2015 to June 2020, Mr. Farley was the Controller of Business Development Corporation of America
(“BDCA”), a publicly listed business development company. Prior thereto, from January 2011 to August 2015, Mr. Farley was
the Senior Controller of Blackrock Capital Investment Corporation (NASDAQ: BKCC). Prior to joining BlackRock Capital Investment Corporation,
Mr. Farley was a Senior Controller for PineBridge Investments Emerging Markets practice. Mr. Farley was also an Accounting Manager for
Bessemer Venture Partners prior to his tenure at PineBridge. Mr. Farley began his career with PricewaterhouseCoopers LLP, from 1996 to
2001. Mr. Farley earned his B.S. in Accounting from Long Island University and is a Certified Public Accountant.
Matthew Shatzkes, Esq. – Chief Legal
Officer and General Counsel
Mr. Shatzkes has been the
Chief Legal Office and General Counsel of Aditxt since January 2022. Prior to this role, Mr. Shatzkes was a partner at an international
AM Law 50 law firm where he advised a wide variety of healthcare related entities, including biotech companies, on corporate, regulatory,
and strategic business matters. In his current role, Mr. Shatzkes oversees all aspects of the legal functions at Aditxt, including, providing
advice and counsel on governance, regulatory matters, strategic alliances, mergers and acquisitions, and commercial transactions.
Brian Brady - Director
Mr.
Brady has served as a Director since December 1, 2018. Mr. Brady has also been the Director of Investments at a large hospital system
since March 2016, where he is responsible for the management of investment activity related to the organization and personal investments
of the family that owns that company. From December 2011 to March 2016, Mr. Brady was the Vice President/Portfolio Manager at a wealth
advisory firm, where he served in an investment advisory role, including asset and portfolio management. Mr. Brady graduated in 2001 with
a Bachelor’s degree in Finance from the University of Illinois at Chicago and in 2014 with a Master of Business Administration degree
from the University of Chicago. We believe that Mr. Brady’s extensive experience with financial markets and management of investment
activities qualifies him to serve as a director of our Company.
Namvar
Kiaie - Director
Mr. Kiaie has served as a
director since July 2020. Mr. Kiaie has been associated with Abbott Diabetes Care since December 2005 (Director of Engineering 2005-2007;
R&D Director 2007-2010; and Senior Director of R&D 2010-present), where he is responsible for the development of diabetes management
related products and accessories, including blood glucose monitoring devices and data management software. Mr. Kiaie graduated in 1985
with a Bachelor of Science degree in Electrical Engineering and in 1986 with a Master of Science degree in Electrical Engineering, both
from the University of California Santa Barbara. We believe that Mr. Kiaie’s extensive experience leading research and development
effforts in the biotech industry qualifies him to serve as a director of our Company.
Jeffrey
W. Runge, M.D - Director
Dr. Runge has served as a director since July 2020.
From 2008 to the present, Dr. Runge has been the President and founder of Biologue, Inc., which provides consulting in biodefense, medical
preparedness and injury control. From 2001 through August of 2008, Dr. Runge served in the Bush administration, first as the head of the
National Highway Traffic Safety Administration, and, beginning in September 2005, as the Department of Homeland Security’s (DHS)
first Chief Medical Officer. Dr. Runge founded the DHS Office of Health Affairs and was confirmed by the United States Senate as DHS’
first Assistant Secretary for Health Affairs in December of 2007. Dr. Runge also served as Acting DHS Undersecretary for Science and Technology
from February through August 2006. In his role at DHS, Dr. Runge oversaw the operations of the department’s biodefense activities,
medical preparedness and workforce health protection, as well as fulfilling DHS’ responsibilities in medical countermeasure development.
Prior to his government service, Dr. Runge was Assistant Chairman and Director of Clinical Research in the Department of Emergency Medicine
at Carolinas Medical Center in Charlotte, NC, from 1984 through 2001. Additionally, Dr. Runge is a Senior Advisor at The Chertoff Group,
a firm providing advisory services in business risk management, security and homeland defense. Since 2010, Dr. Runge has served on the
boards of two public companies, including their Audit and Compensation committees, both of which underwent strategic acquisitions. He
has also served as President and CEO of a SEC-regulated startup company in the health sector. Dr. Runge earned his medical degree from
the Medical University of South Carolina and his undergraduate degree from the University of the South. We believe that Dr. Runge’s
experience in medicine, medical research, public service, business and his prior service on public corporate boards qualifies him to serve
as a director of our Company.
Board Leadership Structure and Risk
Oversight
The Board oversees our business
and considers the risks associated with our business strategy and decisions. The Board currently implements its risk oversight function
as a whole. Each of the Board committees, when established, will also provide risk oversight in respect of its areas of concentration
and reports material risks to the Board for further consideration.
Term of Office
Officers hold office until
his or her successor is elected and qualified. Directors are appointed to serve for one year until the meeting of the Board following
the annual meeting of stockholders and until their successors have been elected and qualified.
Director Independence
We use the definition of “independence”
of The Nasdaq Stock Exchange LLC (“Nasdaq”) listing rules to make this determination. Nasdaq listing rules provide that an
“independent director” is one who the board “affirmatively determines” has no “material relationship”
with the company “either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company.
Nasdaq listing rules provide that a director cannot be considered independent if:
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● |
the director is, or has been within the last three (3) years, an employee of the Company or an immediate family member of director is, or has been within the last three (3) years, an executive officer of the Company; |
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the director has received, or has an immediate family member who is an executive officer of the Company and has received, during any twelve-month period within the last three (3) years, more than $120,000 compensation directly from the Company (not including compensation received for director service, pension plan payments or deferred compensation for prior service not contingent on continued service); |
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the director or an immediate family member is a current partner of the Company’s internal or external auditor; the director is a current employee of the auditor; an immediate family member is a current employee of the auditor and personally works on the Company’s audit; or the director or an immediate family member was within the last three (3) years a partner or employee of the auditor and personally worked on the Company’s audit within that time; |
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the director or an immediate family member is, or has been within the last three (3) years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee; or |
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the director is a current employee, or an immediate family member is a current executive officer, of an organization that has made to or received from the Company payments for property or services in an amount which, in any of the last three fiscal (3) years, exceeds greater of 2% of such other company’s consolidated gross revenues or $1 million. Charitable contributions not considered “payments” for purposes of this prohibition but contributions meeting these thresholds must be disclosed on the Company’s website or in its annual proxy statement or its Annual Report on Form 10-K. |
Under such definitions, we
consider Mr. Kiaie, Mr. Brady, and Dr. Runge to be “independent.” Nasdaq listing rules permits a phase-in period of up to
one year for an issuer registering securities in an initial public offering to comply with its requirement that a majority of the board
of directors be made up of independent directors. However, our common stock is not currently quoted or listed on any national exchange
or interdealer quotation system with a requirement that a majority of our Board be independent and, therefore, the Company is not subject
to any director independence requirements. We are subject to Nasdaq’s director independence requirements and are required to structure
our board of directors accordingly.
Committees of the Board
Our board of directors has
established three standing committees: Audit, Compensation, and Nominating and Corporate Governance. Each of these standing committees
operate pursuant to its respective charter. The committee charters are reviewed annually by the Nominating and Corporate Governance Committee.
If appropriate, and in consultation with the chairs of the other committees, the Nominating and Corporate Governance Committee may propose
revisions to the charters. The responsibilities of each committee are described in more detail below.
Nasdaq listing rules permits
a phase-in period for an issuer registering securities in an initial public offering to meet the Audit Committee, Compensation Committee
and Nominating and Corporate Governance Committee independence requirements. Under the initial public offering phase-in period, only one
member of each committee is required to satisfy the heightened independence requirements at the time our registration statement becomes
effective, a majority of the members of each committee must satisfy the heightened independence requirements within 90 days following
the effectiveness of our registration statement, and all members of each committee must satisfy the heightened independence requirements
within one year from the effectiveness of our registration statement.
The composition and functions
of each committee are described below.
Name |
|
Independent |
|
Audit |
|
Compensation |
|
Nominating and
Corporate
Governance |
Amro Albanna |
|
|
|
|
|
|
|
|
Shahrokh Shabahang, D.D.S., MS, Ph.D. |
|
|
|
|
|
|
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|
Brian Brady |
|
X |
|
X* |
|
X |
|
X |
Namvar Kiaie |
|
X |
|
X |
|
X* |
|
X |
Jeffrey Runge, M.D. |
|
X |
|
X |
|
X |
|
X* |
| * | Chairman of the committee |
Audit Committee
The Audit Committee, among
other things, is responsible for:
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● |
appointing; approving the compensation of; overseeing the work of; and assessing the independence, qualifications, and performance of the independent auditor; |
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reviewing the internal audit function, including its independence, plans, and budget; |
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approving, in advance, audit and any permissible non-audit services performed by our independent auditor; |
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reviewing our internal controls with the independent auditor, the internal auditor, and management; |
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reviewing the adequacy of our accounting and financial controls as reported by the independent auditor, the internal auditor, and management; |
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overseeing our financial compliance system; and |
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overseeing our major risk exposures regarding the Company’s accounting and financial reporting policies, the activities of our internal audit function, and information technology. |
The Board has affirmatively
determined that each member of the Audit Committee meets the additional independence criteria applicable to audit committee members under
SEC rules and Nasdaq listing rules. The Board has adopted a written charter setting forth the authority and responsibilities of the Audit
Committee. The Board has affirmatively determined that each member of the Audit Committee is financially literate, and that Mr. Brady
meets the qualifications of an Audit Committee financial expert.
The Audit Committee consists
of Mr. Brady, Mr. Kiaie, and Dr. Runge. Mr. Brady chairs the Audit Committee.
Compensation Committee
The Compensation Committee
is responsible for:
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● |
reviewing and making recommendations to the Board with respect to the compensation of our officers and directors, including the CEO; |
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overseeing and administering the Company’s executive compensation plans, including equity-based awards; |
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negotiating and overseeing employment agreements with officers and directors; and |
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overseeing how the Company’s compensation policies and practices may affect the Company’s risk management practices and/or risk-taking incentives. |
The Board has adopted a written
charter setting forth the authority and responsibilities of the Compensation Committee.
The Compensation Committee
consists of Mr. Brady, Mr. Kiaie, and Dr. Runge. Mr. Kiaie serves as chairman of the Compensation Committee. The Board has affirmatively
determined that each member of the Compensation Committee meets the independence criteria applicable to compensation committee members
under SEC rules and Nasdaq listing rules.
Nominating and Corporate Governance Committee
The Nominating and Corporate
Governance Committee, among other things, is responsible for:
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reviewing and assessing the development of the executive officers and considering and making recommendations to the Board regarding promotion and succession issues; |
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evaluating and reporting to the Board on the performance and effectiveness of the directors, committees and the Board as a whole; |
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working with the Board to determine the appropriate and desirable mix of characteristics, skills, expertise and experience, including diversity considerations, for the full Board and each committee; |
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annually presenting to the Board a list of individuals recommended to be nominated for election to the Board; |
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reviewing, evaluating, and recommending changes to the Company’s Corporate Governance Principles and Committee Charters; |
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recommending to the Board individuals to be elected to fill vacancies and newly created directorships; |
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overseeing the Company’s compliance program, including the Code of Conduct; and |
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overseeing and evaluating how the Company’s corporate governance and legal and regulatory compliance policies and practices, including leadership, structure, and succession planning, may affect the Company’s major risk exposures. |
The Board of Directors has
adopted a written charter setting forth the authority and responsibilities of the Nominating and Corporate Governance Committee.
The Nominating and Corporate
Governance Committee consists of Dr. Runge, Mr. Brady, and Mr. Kiaie. Dr. Runge serves as chairman of the Nominating and Corporate Governance
Committee. The Company’s Board of Directors has determined that each member of the Nominating and Corporate Governance Committee
is independent within the meaning of the independent director guidelines of Nasdaq listing rules.
Compensation Committee
Interlocks and Insider Participation
None
of the Company’s executive officers serves, or in the past has served, as a member of the board of directors or compensation committee,
or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of the Company’s
board of directors or its compensation committee. None of the members of the Company’s compensation committee is, or has ever been,
an officer or employee of the Company.
Code of Business Conduct
and Ethics
The
Company’s board of directors adopted a code of business conduct and ethics applicable to its employees, directors and officers,
in accordance with applicable U.S. federal securities laws and the corporate governance rules of the Nasdaq Capital Market. The code of
business conduct and ethics is publicly available on the Company’s website. Any substantive amendments or waivers of the code of
business conduct and ethics or code of ethics for senior financial officers may be made only by the Company’s board of directors
and will be promptly disclosed as required by applicable U.S. federal securities laws and the corporate governance rules of the Nasdaq
Capital Market.
Corporate Governance
Guidelines
The
Company’s board of directors has adopted corporate governance guidelines in accordance with the corporate governance rules of the
Nasdaq Capital Market.
Involvement in Certain Legal Proceedings
To our knowledge, none of
our current directors or executive officers has, during the past ten years:
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been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
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had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he or she was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; |
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been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; |
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been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
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been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
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been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934, as amended (the Exchange Act)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Except as set forth above
and in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive
officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are
required to be disclosed pursuant to the rules and regulations of the SEC.
Other than as set forth below,
we are not currently a party to any legal proceedings, the adverse outcome of which, individually or in the aggregate, we believe will
have a material adverse effect on our business, financial condition or operating results.
The Company, Amro Albanna,
our Chief Executive Officer, and Dr. Shahrokh Shabahang, our Chief Innovation Officer, have been named as cross-defendants in a counterclaim
filed by Christopher Sechrist in an action entitled Shahrokh Shabahang v. Christopher Sechrist, San Bernardino County Superior Court Case
No. CIVDS1831323. In a cross-complaint, Mr. Sechrist contends that he was a partner in a dental practice with Dr. Shabahang, and that
disputes arose as between those partners. Neither the Company nor Mr. Albanna were partners in, or otherwise have an interest in, the
dental practice. Notwithstanding, and seemingly based solely on the fact that Dr. Shabahang became the Chief Innovation Officer for the
Company, Mr. Sechrist has brought claims against the Company and Mr. Albanna. Both the Company and Mr. Albanna believe that the Counterclaims
filed by Mr. Sechrist have no factual or legal merit, and they intend to vigorously defend themselves in the action and to seek a dismissal
of the case as against them as soon as possible. On May 26, 2020, Mr. Sechrist filed a request for dismissal as to the Company and Mr.
Albanna with the Superior Court of California, County of San Bernardino, San Bernardino District. The clerk of the court entered the dismissal
with prejudice on May 26, 2020.
Our Chief Executive Officer, Amro Albanna,
is a party to litigation matters unrelated to the Company or any of its properties. Such litigations relate to Innovation Economy Corporation
(IEC), a company in which Mr. Albanna served as the CEO and a Director from 2010 until 2017, and its wholly-owned subsidiaries (Innovation
Economy Corporation d/b/a ieCrowd). The first litigation (ieCrowd v. Kim, et. al, Superior Court, Riverside County) was originally commenced
by IEC and its subsidiary after Mr. Albanna was no longer affiliated with IEC, against certain third-party defendants based upon claims
related to their misconduct and mismanagement. Such defendants subsequently brought a countersuit against IEC and its subsidiary, in which
they named Mr. Albanna and others as defendants, alleging that they were misled to invest in IEC and its subsidiary based upon misrepresentations
by, among others, Mr. Albanna. The cases have now been consolidated. Mr. Albanna believes that the counteraction commenced by the third
parties against him is without merit and intends to defend himself. The second matter (Calabria v. ieCrowd) was commenced by Calabria
Ventures (the “Calabria Action”) more than 2 years after Mr. Albanna was no longer affiliated with IEC, related to uncollected
rent. Mr. Albanna believes that the action commenced against him is without merit and intends to defend himself. IEC (either directly
or through its Director and officer insurance policy) has covered all related legal costs to date. On August 5, 2020, the plaintiff in
the Calabria Action filed a request for dismissal as to Mr. Albanna with the Superior Court of California, County of Riverside. The clerk
of the court entered the dismissal without prejudice on August 5, 2020.
Item 11. Executive Compensation.
Summary Compensation Table
The following table represents information regarding
the total compensation for the named executive officers of the Company as of December 31, 2022 and 2021:
Name and Principal Position | |
Year | | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards
($) | | |
Option
Awards
($) | | |
Restricted
Stock
Units
($) | | |
All Other
Compensation
($) | | |
Total
($) | |
Amro Albanna | |
2022 | | |
| 500,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 500,000 | |
President, and Director, Former President(1) | |
2021 | | |
| 280,000 | | |
| 470,000 | | |
| 938,250 | | |
| - | | |
| - | | |
| - | | |
| 1,688,250 | |
| |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Shahrokh Shabahang, D.D.S., MS, Ph.D. | |
2022 | | |
| 325,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 325,000 | |
Chief Innovation Officer | |
2021 | | |
| 210,000 | | |
| 245,000 | | |
| - | | |
| - | | |
| 210,100 | | |
| - | | |
| 665,100 | |
| |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Corinne Pankovcin | |
2022 | | |
| 385,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 385,000 | |
Chief Commercialization Officer, Former President(2), Former Chief Financial Officer(3) | |
2021 | | |
| 250,000 | | |
| 333,250 | | |
| 505,450 | | |
| - | | |
| - | | |
| - | | |
| 1,088,700 | |
| |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Thomas J. Farley | |
2022 | | |
| 360,833 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 360,833 | |
Chief Financial Officer(4) | |
2021 | | |
| 225,000 | | |
| 297,000 | | |
| - | | |
| - | | |
| 304,850 | | |
| | | |
| 826,850 | |
| |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Matthew Shatzkes | |
2022 | | |
| 368,958 | | |
| 246,697 | | |
| | | |
| | | |
| 218,064 | | |
| | | |
| 833,719 | |
Chief Legal Officer & General Counsel(5) | |
2021 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Option awards represent granted options at the
fair market value as of the date of grant. Restricted stock units represent granted restricted stock units at the fair market value as
of the date of grant.
(1) |
Mr. Albanna served as the Company’s President through September 25, 2021 |
(2) |
In February 2023, the Company formed a wholly-owned subsidiary, Pearsanta, Inc. in order to accelerate the growth of the Company’s AditxtScore program through future strategic revenue and growth oriented transactions. In connection with the formation of Pearsanta and Corinne Pankovcin’s anticipated role in driving such strategic revenue and growth oriented transactions, Ms. Pankovcin’ s title was changed from President to Chief Commercialization Officer, effective April 12, 2023. |
|
|
(3) |
Ms. Pankovcin served as the Company’s Chief Financial Officer from July 2020 through September 25, 2021. She was appointed as our President on September 25, 2021. Ms. Pankovcin’s title was changed from President to Chief Commercialization Officer effective April 12, 2023. |
|
|
(4) |
Mr. Farley was appointed as the Company’s
Chief Financial Officer on September 25, 2021.
|
| (5) | Mr. Shatzkes joined Aditxt in January of 2022. |
Employment Agreements
Amro Albanna, Chief Executive Officer
On November 14, 2021,
the Company entered into an Amended and Restated Employment Agreement with Mr. Amro Albanna, the Chief Executive Officer of the Company
(the “Amro Employment Agreement”). Pursuant to the Amro Employment Agreement, Mr. Albanna will receive (i) a base salary at
the annual rate of $280,000 for the remainder of calendar year 2021, and effective January 1, 2022, $500,000 (prorated for any partial
year) payable in bimonthly installments (ii) the opportunity to earn an annual bonus of 2% of the Company’s earnings before interest,
taxes, depreciation, and amortization (EBITDA) with respect to an applicable year for which the bonus is payable, provided that such bonus
will not exceed two (2) times Mr. Albanna’s base salary, and (iii) eligible to earn an annual discretionary bonus as determined
by the Board or its Compensation Committee in their sole discretion. In addition, for calendar year 2021, Mr. Albanna will be eligible
to earn an additional discretionary bonus as determined by the Company.
The term of Mr. Albanna’s
engagement under the Amro Employment Agreement commences as of the Effective Date (as defined in the Amro Employment Agreement) and continues
until November 14, 2023, unless earlier terminated in accordance with the terms of the Amro Employment Agreement. The term of Mr. Albanna’s
Employment Agreement is automatically renewed for successive one (1) year periods until terminated by Mr. Albanna or the Company.
Under the Amro Employment
Agreement, termination of Mr. Albanna by the Company for “Cause,” “Death,” or “Disability,” (as such
terms are defined in the Amro Employment Agreement), or resignation by Mr. Albanna without “Good Reason” (as defined in the
Amro Employment Agreement), will not require the Company to pay severance to Mr. Albanna. Upon any such termination, Mr. Albanna will
be entitled to receive any Accrued Compensation (as defined in the Amro Employment Agreement), which in the case of termination by the
Company for Cause or resignation by Mr. Albanna for Good Reason will not include payment of pro rata bonus; provided, however,
if termination of Mr. Albanna by the Company without “Cause” or resignation by Mr. Albanna for “Good Reason,”
then under the Amro Employment Agreement will require the Company to pay severance to Mr. Albanna. Upon any such termination, Mr. Albanna
will be entitled to receive any Accrued Compensation and, subject to Mr. Albanna’s execution of an irrevocable release, receive
(i) on the sixtieth day (60th) day following termination, a lump sum amount equal to twelve (12) months base salary then in effect as
of the date of termination, less applicable taxes and withholdings; (ii) provide reimbursement to Mr. Albanna’s medical insurance
premiums for a period of twelve (12) months following the date of termination; and (iii) cause any equity awards granted prior to the
Effective Date (as defined in the Amro Employment Agreement), that are then outstanding and unvested to immediately vest and, with respect
to all options and stock appreciation rights, to become fully exercisable.
Notwithstanding the foregoing,
under the Amro Employment Agreement, termination of Mr. Albanna by the Company without Cause or resignation by Mr. Albanna for Good Reason
and a Change of Control (as defined in the Amro Employment Agreement) of the Company occurs within six (6) months after such termination,
or within twenty-four (24) months prior to such termination, the Company will pay severance to Mr. Albanna in connection to such termination.
Upon such termination, Mr. Albanna will be entitled to receive any Accrued Compensation, and subject to Mr. Albanna’s execution
of an irrevocable release, receive (i) on the sixtieth (60th) day of termination, a lump sum cash-payment equal to the product of three
times Mr. Albanna’s salary then in effect as of the date of termination, less applicable taxes and withholdings; (ii) provide reimbursement
to Mr. Albanna’s medical insurance premiums for a period of twenty-four (24) months following the date of termination; and (iii)
notwithstanding any provision of any stock incentive plan, stock option agreement, realization bonus, restricted stock agreement or other
agreement relating to capital stock of the Company, cause any equity awards granted prior to the that are then outstanding and unvested
to immediately vest and, with respect to all options and stock appreciation rights, to become fully exercisable for twenty-four (24) months
(but not later than when the award would otherwise expire).
The Amro Employment Agreement
also contains customary non-solicitation and non-competition covenants, which covenants remain in effect for twelve (12) months following
any cessation of employment with respect to Mr. Albanna. To the extent any of the payments or benefits provided for under the Amro Employment
Agreement or any other agreement or arrangement between Mr. Albanna and the Company (collectively, the “Payments”), (a) constitute
an “excess parachute payment” within the meaning of Section 280G (“Section 280G”) of the Internal Revenue Code
of 1986, as amended and restated (the “Code”), and (b) would otherwise be subject to the excise tax imposed by Section 4999
of the Code (“Section 4999”), then the Company will pay or provide the greater (whichever gives Mr. Albanna the highest net
after-tax amount) of (i) all of the Payments or (ii) the portion of Payments not in excess of the greatest amount of Payments that can
be paid that would not result in the imposition of the excise tax under Section 4999.
Corinne Pankovcin, Chief Commercialization
Officer
On November 14, 2021,
Aditxt, Inc. (the “Company”) entered into a new employment agreement (the “Pankovcin Employment Agreement”) with
the Company’s President, Corinne Pankovcin, pursuant to which Ms. Pankovcin will continue to serve as the Company’s President
and Secretary until the date upon which Ms. Pankovcin’s employment may be terminated in accordance with the terms of the Pankovcin
Employment Agreement.
The term of Ms. Pankovcin’s
engagement under the Pankovcin Employment Agreement commences as of the Effective Date (as defined in the Pankovcin Employment Agreement)
and continues until November 14, 2023, unless earlier terminated in accordance with the terms of the Pankovcin Employment Agreement. The
term of Ms. Pankovcin’s Employment Agreement is automatically renewed for successive one (1) year periods until terminated by Ms.
Pankovcin or the Company.
Pursuant to the Pankovcin
Employment Agreement, Ms. Pankovcin will receive: (i) a base salary at the annual rate of $250,000 for the remainder of calendar year
2021, and effective January 1, 2022, $385,000 (prorated for any partial year) payable in bimonthly installments and (ii) eligible to earn
an annual discretionary bonus with a target amount of 45% of Base Compensation, which is based on the achievement of performance objectives,
which will be determined by the Board and Compensation Committee. In addition, for calendar year 2021, Ms. Pankovcin shall be eligible
to earn an additional discretionary bonus as determined by the Company.
Under the Pankovcin Employment
Agreement, termination of Ms. Pankovcin by the Company for “Cause,” “Death,” or “Disability,” (as
such terms are defined in the Pankovcin Employment Agreement), or resignation by Ms. Pankovcin for “Good Reason” (as defined
in the Pankovcin Employment Agreement), will not require the Company to pay severance to Ms. Pankovcin. Upon any such termination, Ms.
Pankovcin will be entitled to receive any Accrued Compensation (as defined in the Pankovcin Employment Agreement), which in the case of
termination by the Company for Cause or resignation by Ms. Pankovcin for Good Reason will not include payment of pro rata bonus; provided,
however, if termination of Ms. Pankovcin by the Company without “Cause” or resignation by Ms. Pankovcin for
“Good Reason,” then under the Pankovcin Employment Agreement will require the Company to pay severance to Ms. Pankovcin. Upon
any such termination, Ms. Pankovcin will be entitled to receive any Accrued Compensation and, subject to Ms. Pankovcin’s execution
of an irrevocable release, receive: (i) on the sixtieth day (60th) day following termination, a lump sum amount equal to twelve (12) months
base salary then in effect as of the date of termination, less applicable taxes and withholdings; (ii) provide reimbursement to Ms. Pankovcin’s
medical insurance premiums for a period of twelve (12) months following the date of termination; and (iii) cause any equity awards granted
prior to the Effective Date (as defined in the Pankovcin Employment Agreement), that are then outstanding and unvested to immediately
vest and, with respect to all options and stock appreciation rights, to become fully exercisable.
Notwithstanding the foregoing,
under the Pankovcin Employment Agreement, termination of Ms. Pankovcin by the Company without Cause or resignation by Ms. Pankovcin for
Good Reason and a Change of Control (as defined in the Pankovcin Employment Agreement) of the Company occurs within six (6) months after
such termination, or within twenty-four (24) months prior to such termination, the Company will pay severance to Ms. Pankovcin in connection
to such termination. Upon such termination, Ms. Pankovcin will be entitled to receive any Accrued Compensation, and subject to Ms. Pankovcin’s
execution of an irrevocable release, receive (i) on the sixtieth (60th) day of termination, a lump sum cash-payment equal to the sum of
(A) the product of two times Ms. Pankovcin’s salary then in effect as of the date of termination, less applicable taxes and withholdings,
and (B) the product of two times Ms. Pankovcin’s Target Bonus; (ii) provide reimbursement to Ms. Pankovcin’s medical insurance
premiums for a period of twenty-four (24) months following the date of termination; and (iii) notwithstanding any provision of any stock
incentive plan, stock option agreement, realization bonus, restricted stock agreement or other agreement relating to capital stock of
the Company, cause any equity awards granted prior to the that are then outstanding and unvested to immediately vest and, with respect
to all options and stock appreciation rights, to become fully exercisable for twenty-four (24) months (but not later than when the award
would otherwise expire).
The Pankovcin Employment
Agreement also contains customary non-solicitation and non-competition covenants, which covenants remain in effect for twelve (12) months
following any cessation of employment with respect to Ms. Pankovcin. To the extent any of the payments or benefits provided for under
the Pankovcin Employment Agreement or any other agreement or arrangement between Ms. Pankovcin and the Company (collectively, the “Payments”),
(a) constitute an “excess parachute payment” within the meaning of Section 280G (“Section 280G”) of the Internal
Revenue Code of 1986, as amended and restated (the “Code”), and (b) would otherwise be subject to the excise tax imposed by
Section 4999 of the Code (“Section 4999”), then the Company will pay or provide the greater (whichever gives Ms. Pankovcin
the highest net after-tax amount) of (i) all of the Payments or (ii) the portion of Payments not in excess of the greatest amount of Payments
that can be paid that would not result in the imposition of the excise tax under Section 4999.
Thomas J. Farley,
Chief Financial Officer
On November 14, 2021,
Aditxt, Inc. (the “Company”) entered into a new employment agreement (the “Farley Employment Agreement”) with
the Company’s Chief Financial Officer, Thomas Farley, pursuant to which Mr. Farley will continue to serve as the Company’s
Chief Financial Officer until the date upon which Mr. Farley’s employment may be terminated in accordance with the terms of the
Farley Employment Agreement.
The term of Mr. Farley’s
engagement under the Farley Employment Agreement commences as of the Effective Date (as defined in the Farley Employment Agreement) and
continues until November 14, 2023, unless earlier terminated in accordance with the terms of the Farley Employment Agreement. The term
of Mr. Farley’s Employment Agreement is automatically renewed for successive one (1) year periods until terminated by Mr. Farley
or the Company.
Pursuant to the Farley
Employment Agreement, Mr. Farley will receive: (i) a base salary at the annual rate of $225,000 for the remainder of calendar year 2021,
and effective January 1, 2022, $355,000 (prorated for any partial year) payable in bimonthly installments and, (ii) eligible to earn an
annual discretionary bonus with a target amount of 40% of Base Compensation, which is based on the achievement of performance objectives,
which will be determined by the Board and Compensation Committee. In addition, for calendar year 2021, Mr. Farley will be eligible to
earn an additional discretionary bonus as determined by the Company.
Under the Farley Employment
Agreement, termination of Mr. Farley by the Company for “Cause,” “Death,” or “Disability,” (as such
terms are defined in the Farley Employment Agreement), or resignation by Mr. Farley without “Good Reason” (as defined in the
Farley Employment Agreement), will not require the Company to pay severance to Mr. Farley. Upon any such termination, Mr. Farley will
be entitled to receive any Accrued Compensation (as defined in the Farley Employment Agreement which in the case of termination by the
Company for Cause or resignation by Mr. Farley for Good Reason will not include payment of pro rata bonus; provided, however,
if termination of Mr. Farley by the Company without “Cause” or resignation by Mr. Farley for “Good Reason,” then
under the Farley Employment Agreement will require the Company to pay severance to Mr. Farley. Upon any such termination, Mr. Farley will
be entitled to receive any Accrued Compensation and, subject to Mr. Farley’s execution of an irrevocable release, receive (i) on
the sixtieth day (60th) day following termination, a lump sum cash-payment equal to the sum of (A) the product of two times Mr. Farley’s
salary then in effect as of the date of termination, less applicable taxes and withholdings, and (B) the product of two times Mr. Farley’s
Target Bonus (as defined in the Farley Employment Agreement); (ii) provide reimbursement to Mr. Farley’s medical insurance premiums
for a period of twelve (12) months following the date of termination; and (iii) cause any equity awards granted prior to the Effective
Date (as defined in the Farley Employment Agreement), that are then outstanding and unvested to immediately vest and, with respect to
all options and stock appreciation rights, to become fully exercisable.
Notwithstanding the foregoing,
under the Farley Employment Agreement, termination of Mr. Farley by the Company without Cause or resignation by Mr. Farley for Good Reason
and a Change of Control (as defined in the Farley Employment Agreement) of the Company occurs within six (6) months after such termination,
or within twenty-four (24) months prior to such termination, the Company will pay severance to Mr. Farley in connection to such termination.
Upon such termination, Mr. Farley will be entitled to receive any Accrued Compensation, and subject to Mr. Farley’s execution of
an irrevocable release, receive (i) on the sixtieth (60th) day of termination, a lump sum cash-payment equal to the product of two times
Mr. Farley’s salary then in effect as of the date of termination, less applicable taxes and withholdings; (ii) provide reimbursement
to Mr. Farley’s medical insurance premiums for a period of twelve (12) months following the date of termination; and (iii) notwithstanding
any provision of any stock incentive plan, stock option agreement, realization bonus, restricted stock agreement or other agreement relating
to capital stock of the Company, cause any equity awards granted prior to the that are then outstanding and unvested to immediately vest
and, with respect to all options and stock appreciation rights, to become fully exercisable (but not later than when the award would otherwise
expire).
The Farley Employment
Agreement also contains customary non-solicitation and non-competition covenants, which covenants remain in effect for twelve (12) months
following any cessation of employment with respect to Mr. Farley. To the extent any of the payments or benefits provided for under the
Farley Employment Agreement or any other agreement or arrangement between Mr. Farley and the Company (collectively, the “Payments”),
(a) constitute an “excess parachute payment” within the meaning of Section 280G (“Section 280G”) of the Internal
Revenue Code of 1986, as amended and restated (the “Code”), and (b) would otherwise be subject to the excise tax imposed by
Section 4999 of the Code (“Section 4999”), then the Company will pay or provide the greater (whichever gives Mr. Farley the
highest net after-tax amount) of (i) all of the Payments or (ii) the portion of Payments not in excess of the greatest amount of Payments
that can be paid that would not result in the imposition of the excise tax under Section 4999.
Shahrokh Shabahang,
Chief Innovation Officer
On November 14, 2021,
Aditxt, Inc. (the “Company”) entered into a new employment agreement (the “Shabahang Employment Agreement”) with
the Company’s Chief Innovation Officer, Shahrokh Shabahang, pursuant to which Mr. Shabahang will continue to serve as the Company’s
Chief Innovation Officer until the date upon which Mr. Shabahang’s employment may be terminated in accordance with the terms of
the Shabahang Employment Agreement.
The term of Mr. Shabahang’s
engagement under the Shabahang Employment Agreement commences as of the Effective Date (as defined in the Shabahang Employment Agreement)
and continues until November 14, 2023, unless earlier terminated in accordance with the terms of the Shabahang Employment Agreement. The
term of Mr. Shabahang’s Employment Agreement is automatically renewed for successive one (1) year periods until terminated by Mr.
Shabahang or the Company.
Pursuant to the Shabahang
Employment Agreement, Mr. Shabahang will receive: (i) a base salary at the annual rate of $210,000 for the remainder of calendar year
2021, and effective January 1, 2022, $325,000 (prorated for any partial year) payable in bimonthly installments, and (ii) eligible to
earn an annual discretionary bonus with a target amount of 40% of Base Compensation, which is based on the achievement of performance
objectives, which will be determined by the Board and Compensation Committee. In addition, for calendar year 2021, Mr. Shabahang will
be eligible to earn an additional discretionary bonus as determined by the Company.
Under the Shabahang Employment
Agreement, termination of Mr. Shabahang by the Company for “Cause,” “Death,” or “Disability,” (as
such terms are defined in the Shabahang Employment Agreement), or resignation by Mr. Shabahang without “Good Reason” (as defined
in the Shabahang Employment Agreement), will not require the Company to pay severance to Mr. Shabahang. Upon any such termination, Mr.
Shabahang will be entitled to receive any Accrued Compensation (as defined in the Shabahang Employment Agreement), which in the case of
termination by the Company for Cause or resignation by Mr. Shabahang for Good Reason will not include payment of pro rata bonus; provided,
however, if termination of Mr. Shabahang by the Company without “Cause” or resignation by Mr. Shabahang for
“Good Reason,” then under the Shabahang Employment Agreement will require the Company to pay severance to Mr. Shabahang. Upon
any such termination, Mr. Shabahang will be entitled to receive any Accrued Compensation and, subject to Mr. Shabahang’s execution
of an irrevocable release, receive: (i) on the sixtieth day (60th) day following termination, a lump sum cash-payment equal to the sum
of (A) the product of two times Mr. Shabahangs’s salary then in effect as of the date of termination, less applicable taxes and
withholdings, and (B) the product of two times Mr. Shabahang’s Target Bonus (as defined in the Shabahang Employment Agreement);
(ii) provide reimbursement to Mr. Shabahang’s medical insurance premiums for a period of twelve (12) months following the date of
termination; and (iii) cause any equity awards granted prior to the Effective Date (as defined in the Shabahang Employment Agreement),
that are then outstanding and unvested to immediately vest and, with respect to all options and stock appreciation rights, to become fully
exercisable.
Notwithstanding the foregoing,
under the Shabahang Employment Agreement, termination of Mr. Shabahang by the Company for without Cause or resignation by Mr. Shabahang
for Good Reason and a Change of Control (as defined in the Shabahang Employment Agreement) of the Company occurs within six (6) months
after such termination, or within twenty-four (24) months prior to such termination, the Company will pay severance to Mr. Shabahang in
connection to such termination. Upon such termination, Mr. Shabahang will be entitled to receive any Accrued Compensation, and subject
to Mr. Shabahang’s execution of an irrevocable release, receive: (i) on the sixtieth (60th) day of termination, a lump sum cash-payment
equal to the product of two times Mr. Shabahang’s salary then in effect as of the date of termination, less applicable taxes and
withholdings; (ii) provide reimbursement to Mr. Shabahang’s medical insurance premiums for a period of twenty-four (24) months following
the date of termination; and (iii) notwithstanding any provision of any stock incentive plan, stock option agreement, realization bonus,
restricted stock agreement or other agreement relating to capital stock of the Company, cause any equity awards granted prior to the that
are then outstanding and unvested to immediately vest and, with respect to all options and stock appreciation rights, to become fully
exercisable for twenty-four (24) months (but not later than when the award would otherwise expire).
The Shabahang Employment
Agreement also contains customary non-solicitation and non-competition covenants, which covenants remain in effect for twelve (12) months
following any cessation of employment with respect to Mr. Shabahang. To the extent any of the payments or benefits provided for under
the Shabahang Employment Agreement or any other agreement or arrangement between Mr. Shabahang and the Company (collectively, the “Payments”),
(a) constitute an “excess parachute payment” within the meaning of Section 280G (“Section 280G”) of the Internal
Revenue Code of 1986, as amended and restated (the “Code”), and (b) would otherwise be subject to the excise tax imposed by
Section 4999 of the Code (“Section 4999”), then the Company will pay or provide the greater (whichever gives Mr. Shabahang
the highest net after-tax amount) of (i) all of the Payments or (ii) the portion of Payments not in excess of the greatest amount of Payments
that can be paid that would not result in the imposition of the excise tax under Section 4999.
Rowena Albanna, Chief Operating Officer
On November 14, 2021,
Aditxt, Inc. (the “Company”) entered into a new employment agreement (the “Rowena Employment Agreement”) with
the Company’s Chief Operating Officer, Rowena Albanna, pursuant to which Ms. Albanna will continue to serve as the Company’s
Chief Operating Officer until the date upon which Ms. Albanna’s employment may be terminated in accordance with the terms of the
Rowena Employment Agreement.
The term of Ms. Albanna’s
engagement under the Rowena Employment Agreement commences as of the Effective Date (as defined in the Rowena Employment Agreement) and
continues until November 14, 2023, unless earlier terminated in accordance with the terms of the Rowena Employment Agreement. The term
of Ms. Albanna’s Employment Agreement is automatically renewed for successive one (1) year periods until terminated by Ms. Albanna
or the Company.
Pursuant to the Rowena
Employment Agreement, Ms. Albanna will receive: (i) a base salary at the annual rate of $210,000 for the remainder of calendar year 2021
and effective January 1, 2022, $325,000 (prorated for any partial year) payable in bimonthly installments, and (ii) eligible to earn an
annual discretionary bonus with a target amount of 40% of Base Compensation, which is based on the achievement of performance objectives,
which will be determined by the Board and Compensation Committee. In addition, for calendar year 2021, Ms. Albanna will be eligible to
earn an additional discretionary bonus as determined by the Company.
Under the Rowena Employment
Agreement, termination of Ms. Albanna by the Company for “Cause,” “Death,” or “Disability,” (as such
terms are defined in the Rowena Employment Agreement), or resignation by Ms. Albanna for “Good Reason” (as defined in the
Rowena Employment Agreement), will not require the Company to pay severance to Ms. Albanna. Upon any such termination, Ms. Albanna will
be entitled to receive any Accrued Compensation (as defined in the Rowena Employment Agreement), which in the case of termination by the
Company for Cause or resignation by Ms. Albanna for Good Reason will not include payment of pro rata bonus; provided, however,
if termination of Ms. Albanna by the Company without “Cause” or resignation by Ms. Albanna for “Good Reason” (as
such terms are defined in the Rowena Employment Agreement), then under the Rowena Employment Agreement will require the Company to pay
severance to Ms. Albanna. Upon any such termination, Ms. Albanna will be entitled to receive any Accrued Compensation and, subject to
Ms. Albanna’s execution of an irrevocable release, receive: (i) on the sixtieth day (60th) day following termination, a lump sum
amount equal to twelve (12) months base salary then in effect as of the date of termination, less applicable taxes and withholdings; (ii)
provide reimbursement to Ms. Albanna’s medical insurance premiums for a period of twelve (12) months following the date of termination;
and (iii) cause any equity awards granted prior to the Effective Date (as defined in the Rowena Employment Agreement), that are then outstanding
and unvested to immediately vest and, with respect to all options and stock appreciation rights, to become fully exercisable.
Notwithstanding the foregoing,
under the Rowena Employment Agreement, termination of Ms. Albanna by the Company without Cause or resignation by Ms. Albanna for Good
Reason and a Change of Control (as defined in the Rowena Employment Agreement) of the Company occurs within six (6) months after such
termination, or within twenty-four (24) months prior to such termination, the Company will pay severance to Ms. Albanna in connection
to such termination. Upon such termination, Ms. Albanna will be entitled to receive any Accrued Compensation, and subject to Ms. Albanna’s
execution of an irrevocable release, receive: (i) on the sixtieth (60th) day of termination, a lump sum cash-payment equal to the sum
of (A) the product of two times Ms. Albanna’s salary then in effect as of the date of termination, less applicable taxes and withholdings,
and (B) the product of two times Ms. Albanna’s Target Bonus; (ii) provide reimbursement to Ms. Albanna’s medical insurance
premiums for a period of twenty-four (24) months following the date of termination; and (iii) notwithstanding any provision of any stock
incentive plan, stock option agreement, realization bonus, restricted stock agreement or other agreement relating to capital stock of
the Company, cause any equity awards granted prior to the that are then outstanding and unvested to immediately vest and, with respect
to all options and stock appreciation rights, to become fully exercisable for twenty-four (24) months (but not later than when the award
would otherwise expire).
The Rowena Employment
Agreement also contains customary non-solicitation and non-competition covenants, which covenants remain in effect for twelve (12) months
following any cessation of employment with respect to Ms. Albanna. To the extent any of the payments or benefits provided for under the
Rowena Employment Agreement or any other agreement or arrangement between Ms. Albanna and the Company (collectively, the “Payments”),
(a) constitute an “excess parachute payment” within the meaning of Section 280G (“Section 280G”) of the Internal
Revenue Code of 1986, as amended and restated (the “Code”), and (b) would otherwise be subject to the excise tax imposed by
Section 4999 of the Code (“Section 4999”), then the Company will pay or provide the greater (whichever gives Ms. Albanna the
highest net after-tax amount) of (i) all of the Payments or (ii) the portion of Payments not in excess of the greatest amount of Payments
that can be paid that would not result in the imposition of the excise tax under Section 4999.
Matthew Shatzkes, Chief Legal Officer and General
Counsel
On January 28, 2022,
Aditxt, Inc. (the “Company”) entered into an employment agreement (the “Employment Agreement”) with Matthew Shatzkes,
the Chief Legal Officer and General Counsel of the Company. Pursuant to the Employment Agreement, Mr. Shatzkes will (i) receive a base
salary at the annual rate of $385,000 (the “Base Compensation”) payable in bimonthly installments, (ii) receive a one-time
sign-on bonus (the “Sign-on Bonus”), (iii) a minimum 2022 quarterly bonus (the “Minimum 2022 Bonus”), and (iv)
will be entitled to earn an annual discretionary bonus beginning in fiscal year 2022.
Following the first anniversary
of the Employment Agreement (the “Anniversary Date”), in addition to Mr. Shatzkes’ Base Compensation, Mr. Shatzkes will
be entitled to a minimum quarterly bonus (the “Subsequent Year Minimum Bonus”). Following the Anniversary Date, in addition
to Mr. Shatzkes’ Base Compensation and Subsequent Year Minimum Bonus, Mr. Shatzkes will also be eligible to earn an annual discretionary
bonus.
Under the Employment
Agreement, Mr. Shatzkes will also receive (i) a restricted stock unit award that will entitle Mr. Shatzkes to receive 150,000 shares of
the Company’s common stock which shall vest immediately, and (ii) a restricted stock unit award of an additional 330,000 shares
of the Company’s common stock, which shall vest ratably over eight successive equal quarterly installments over a two-year period
commencing on March 1, 2022 and ending on December 1, 2023.
The term of Mr. Shatzkes
engagement under the Employment Agreement commences on the Effective Date (as defined in the Employment Agreement) and continues until
January 16, 2024, unless earlier terminated in accordance with the terms of the Employment Agreement. The term of Mr. Shatzkes’
Employment Agreement is automatically renewed for successive one-year periods until terminated by Mr. Shatzkes or the Company.
Under the Employment
Agreement, termination of Mr. Shatzkes by the Company for “Cause,” “Death,” or “Disability,” (as such
terms are defined in the Employment Agreement), or resignation by Mr. Shatzkes without “Good Reason” (as defined in the Employment
Agreement), will not require the Company to pay severance to Mr. Shatzkes. Upon any such termination, Mr. Shatzkes will be entitled to
receive any Accrued Compensation (as defined in the Employment Agreement), which in the case of termination by the Company for Cause or
resignation by Mr. Shatzkes for Good Reason will not include payment of pro rata bonus. If, however, termination of Mr. Shatzkes by the
Company without “Cause”, resignation by Mr. Shatzkes for “Good Reason” or and a Change of Control (as defined
in the Employment Agreement) event occurs, then the Employment Agreement will require the Company to pay severance to Mr. Shatzkes. Upon
any such termination, Mr. Shatzkes will be entitled to receive any Accrued Compensation and, subject to Mr. Shatzkes’ execution
of an irrevocable release, (i) on the sixtieth day following termination, a lump sum amount equal (a) twelve months of his Base Compensation,
Sign-on Bonus and Minimum 2022 Bonus if his Employment Agreement is terminated prior to December 31, 2022, or (b) his Base Compensation
and Subsequent Year Minimum Bonus if his Employment Agreement is terminated after December 31, 2022; (ii) provide reimbursement to Mr.
Shatzkes’ medical insurance premiums for a period of twelve months following the date of termination; and (iii) notwithstanding
any provision of any stock incentive plan, stock option agreement, realization bonus, restricted stock agreement or other agreement relating
to capital stock of the Company, cause any equity awards granted prior to that termination that are then outstanding and unvested to immediately
vest and, with respect to all options and stock appreciation rights, to become fully exercisable.
To the extent any of
the payments or benefits provided for under the Employment Agreement or any other agreement or arrangement between Mr. Shatzkes and the
Company (collectively, the “Payments”), (a) constitute an “excess parachute payment” within the meaning of Section
280G (“Section 280G”) of the Internal Revenue Code of 1986, as amended and restated (the “Code”), and (b) would
otherwise be subject to the excise tax imposed by Section 4999 of the Code (“Section 4999”), then the Company will pay or
provide the greater (whichever gives Mr. Shatzkes the highest net after-tax amount) of (i) all of the Payments or (ii) the portion of
Payments not in excess of the greatest amount of Payments that can be paid that would not result in the imposition of the excise tax under
Section 4999.
Director Compensation
The Company accrued or paid compensation to its
directors for serving in such capacity, as shown in the table below.
Director | |
Year | |
Option Awards | | |
Restricted Stock Unit Awards | | |
Fees Earned or Paid in Cash | | |
Total | |
Amro Albanna | |
2022 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Shahrokh Shabahang, D.D.S., MS, Ph.D. | |
2022 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Brian Brady | |
2022 | |
$ | - | | |
$ | - | | |
$ | 15,000 | | |
$ | 15,000 | |
Namvar Kiaie | |
2022 | |
$ | - | | |
$ | - | | |
$ | 15,000 | | |
$ | 15,000 | |
Jeffrey Runge, M.D. | |
2022 | |
$ | - | | |
$ | - | | |
$ | 15,000 | | |
$ | 15,000 | |
Option awards represent granted options at the
fair market value as of the date of grant. Restricted stock unit awards represent granted restricted stock awards at the fair market value
as of the grant date.
On September 18, 2021, the Board of Directors
adopted a director compensation program for the Company’s independent directors consisting of both cash and equity compensation,
beginning in October 2021 and concluding in June 2022. The program consists of the following compensation for directors:
Cash Compensation (payable quarterly)
|
● |
Board service - $11,000 per year |
|
|
|
|
● |
Chairperson of the Audit Committee - additional $4,000 per year |
|
|
|
|
● |
Chairperson of the Compensation Committee - additional $4,000 per year |
|
|
|
|
● |
Chairperson of the Nominating and Corporate Governance Committee - additional $4,000 per year |
Equity Compensation (payable quarterly)
|
● |
Board service - 5,000 options and 5,750 restricted stock units |