Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On May 5, 2023, Nephros, Inc. (the "Company") entered into an employment
agreement with Robert Banks (the "Employment Agreement") pursuant to which the
Company appointed Mr. Banks as its President and Chief Executive Officer, which
appointment will become effective the business day immediately following the
date on which the Company files with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q for the period ended March 31, 2023 (the
"Effective Date"). Mr. Banks was also appointed to the Company's Board of
Directors as a Class III director as of the Effective Date.
Prior to joining the Company, Mr. Banks, 48, most recently served as Vice
President Global OEM & Strategic Accounts at Danfoss Power Solutions, a position
he held from November 2021 to May 2023. Prior to that, he was Executive Director
of Product Management at ITT Goulds Pumps from October 2018 to November 2021.
Previously, Mr. Banks was employed for 19 years at General Electric, holding
various positions of increasing responsibility, including more than 16 years
with GE Water & Process Technologies. Mr. Banks received his Bachelor of Arts in
Mechanical Engineering from the University of Delaware and his M.B.A. from the
University of Maryland University College.
Mr. Banks was not appointed pursuant to any arrangement or understanding with
any person, and Mr. Banks does not have any family relationships with any
directors or executive officers of the Company. Mr. Banks has not had a direct
or indirect material interest in any transaction with the Company since January
1, 2021, nor is any such transaction currently proposed, that would be
reportable under Item 404(a) of Regulation S-K.
In accordance with the terms of the Employment Agreement, Mr. Banks will receive
an initial base salary of $350,000. The base salary will automatically increase
to $400,000 per year at such time as the Company has achieved annual net revenue
of at least $15 million in any fiscal year, and further increase to $450,000 per
year at such time as the Company has achieved annual net revenue of at least $20
million in any fiscal year. Mr. Banks will also be eligible for an annual
performance bonus targeted at 50% of his annualized base salary, based primarily
on Company performance and other performance objectives established by the Board
of Directors. In addition, pursuant to the Employment Agreement, on May 5, 2023,
Mr. Banks received a 10-year stock option to purchase an aggregate of 357,165
shares of the Company's common stock pursuant to the Company's 2015 Equity
Incentive Plan, which option is exercisable at a price per share equal to $1.44,
the closing price of the Company's common stock on the grant date. Mr. Banks's
right to purchase the shares will vest and become exercisable, subject to his
continued employment, as to 25% of the shares on the first anniversary of the
grant date, and the remaining 75% of the shares subject to the option will
thereafter vest and become exercisable in twelve approximately equal quarterly
installments. The Employment Agreement also provides that if the Company
terminates Mr. Banks without "cause" or Mr. Banks resigns for "good reason,"
then he will be entitled to up to twelve months of continued base salary and
health benefits.
The foregoing summary of the Employment Agreement is qualified in its entirety
by reference to the complete agreement, a copy of which will be filed with the
Company's Quarterly Report on Form 10-Q for the period ended June 30, 2023.
On May 5, 2023, Andrew Astor resigned as the Company's President and Chief
Executive Officer and from the Company's Board of Directors, effective as of the
Effective Date. Mr. Astor's decision to resign was not a result of any
disagreement with the Company on any matter relating to the Company's
operations, policies or practices. Mr. Astor will remain as the Company's Chief
Financial Officer.
A copy of the press release announcing these executive changes is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 Nephros, Inc. Press Release, dated May 8, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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