Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 24, 2022, Michael Friedman resigned as the Chief Executive Officer of
Innovative MedTec, Inc. (the "Company"), and the Board of Directors of the
Company appointed Merle Griff, Ph.D. the Chief Executive Officer of the Company.
Mr. Friedman will remain the President of the Company as well as member of the
Company's Board of Directors.
Merle Griff, Ph.D., age 73, is the Founder and has been the CEO of SarahCare (a
wholly owned subsidiary of the Company) since its inception approximately 35
years ago, and she is one of the leading authorities on the care of seniors in
the United States.
Dr. Griff has served on numerous national boards and task forces including being
the past Chairperson of the Board of Directors for NADSA (National Adult Day
Services Association), member of the International Advisory Board for CARF
(Commission on the Accreditation for Rehabilitation Facilities) and a task force
member for the study of adult day care in the US for the Assistant Secretary of
Program and Evaluation in the Department of Aging.
Dr. Griff began her professional career working with children and youth as a
play therapist. She developed therapeutic techniques that have been published
and used throughout the world, namely Family Play Therapy and Intergenerational
Play Therapy. As Director of the McKinley Center Intergenerational Project, she
developed many programs that brought together children from babies through
college-age with seniors.
Dr. Griff is the author of Linkages, a book based on research intergenerational
programs, and numerous book chapters and journal articles on topics such as the
role of grandparents in family systems.
In connection with Dr. Griff's appointment and Mr. Friedman's resignation, on
May 24, 2022, the Company entered into an employment agreement with Dr. Griff
(the "Employment Agreement"), as well as a consulting agreement with Mr.
Friedman's entity, Red Halo, LLC (the "Consulting Agreement"), with both
agreements considered effective as of May 2, 2022.
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Under the Employment Agreement, Dr. Griff will serve as the Chief Executive
Officer of the Company on an "at-will" basis and will be compensated as follows:
(i) Dr. Griff will receive a signing bonus consisting of non-qualified,
cashless-exercise stock options to purchase 50,000 shares of Company common
stock at an exercise price of $1.56/share, with a term of 7 years; (ii) Dr.
Griff will be paid an annual salary of $200,000 per year, and such annual salary
shall increase by an additional $50,000 per year for each $10,000,000 increase
in the Company's gross revenues over $1,000,000; (iii) within 30 days after the
end of each fiscal year beginning June 30, 2022, Dr. Griff will receive an
annual cash bonus of at least $60,000 (the precise amount to be determined by
the Company); (iv) within 30 days after the end of each fiscal year beginning
June 30, 2022, Dr. Griff will receive an equity bonus consisting of
non-qualified, cashless-exercise stock options to purchase 50,000 shares of
Company common stock at an exercise price of $1.56/share, with a term of 7
years; and (v) Dr. Griff shall be eligible to receive the following 7-year,
non-qualified, cashless-exercise stock options for each fiscal year determined
by reference to the Company's gross revenue for such fiscal year as set forth
below:
Gross Revenue Number of Options Strike Price
$5,000,000 100,000 $ 1.56
$10,000,000 150,000 $ 2.00
$20,000,000 200,000 $ 3.00
$40,000,000 250,000 $ 4.00
$75,000,000 300,000 $ 5.00
$100,000,000 350,000 $ 6.00
Under the Consulting Agreement, Mr. Friedman will provide management, financial
and operational services to the Company and continue to act as the Company's
President, and will be compensated as follows: (i) Mr. Friedman's entity, Red
Halo, LLC (the "Consultant") will receive a signing bonus consisting of
non-qualified, cashless-exercise stock options to purchase 50,000 shares of
Company common stock at an exercise price of $1.56/share, with a term of 7
years; (ii) the Consultant will be paid $150,000 in cash fees per year, upon
completion of a $6,600,000 capital raise by the Company, such annual cash fee
shall increase to $200,000 per year, and such annual cash fee shall increase by
an additional $50,000 per year for each $10,000,000 increase in the Company's
gross revenues over $1,000,000; (iii) within 90 days after the end of each
fiscal year beginning June 30, 2022, the Consultant will receive an annual cash
bonus of at least $60,000 (the precise amount to be determined by the Company)
if the Company's net income (specifically excluding any extraordinary major
shareholder-related expenses) is at or greater than $600,000 for such fiscal
year; (iv) within 90 days after the end of each fiscal year beginning June 30,
2022, if the Company's total revenue has grown at least 12% from its prior
fiscal year, the Consultant will receive an equity bonus consisting of
non-qualified, cashless-exercise stock options to purchase a minimum of 50,000
shares of Company common stock at an exercise price of $1.56/share, with a term
of 7 years; and (v) the Consultant shall be eligible to receive the following
7-year, non-qualified, cashless-exercise stock options for each fiscal year
determined by reference to the Company's gross revenue for such fiscal year as
set forth below:
Gross Revenue Number of Options Strike Price
$5,000,000 100,000 $ 1.56
$10,000,000 150,000 $ 2.00
$20,000,000 200,000 $ 3.00
$40,000,000 250,000 $ 4.00
$75,000,000 300,000 $ 5.00
$100,000,000 350,000 $ 6.00
Both the Employment Agreement and the Consulting Agreement prohibit Dr. Griff
and Mr. Friedman from engaging in competitive activity during the terms of their
agreements with the Company, and each of the agreements can be terminated by
either the Company or the counterparties, Dr. Griff and Mr. Friedman, provided
that if the agreements are terminated by the Company without "cause" or by the
counterparties for "good reason," as such terms are defined in each respective
agreement, the Company is obligated to make additional payments to Dr. Griff and
Mr. Friedman as specified in the agreements.
The foregoing descriptions of the Employment Agreement and the Consulting
Agreements do not purport to be complete and are qualified in their entirety by
reference to the full text of the Employment Agreement and the Consulting
Agreement, which are filed as Exhibits 10.1 and 10.2 to this Current Report and
are incorporated by reference herein.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Executive Employment Agreement between the Company and Dr. Merle
Griff, dated May 2, 2022
10.2 Consulting Agreement between the Company and Red Halo, LLC, dated
May 2, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
Document)
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