Item 1.01. Entry into a Material Definitive Agreement.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 31, 2018, HedgePath Pharmaceuticals, Inc. (the “Company”) entered into new employment letter agreements with each of Nicholas J. Virca, the Company’s President and Chief Executive Officer (“Virca”), and Garrison J. Hasara, the Company’s Chief Financial Officer, Treasurer, Secretary and Chief Compliance Officer (“Hasara”). As used herein, the terms “Virca Agreement” means the new employment letter agreement entered into between the Company and Virca, and “Hasara Agreement” means the new employment letter agreement entered into between the Company and Hasara.
The Virca Agreement and the Hasara Agreement formalize revised terms and conditions of Virca’s and Hasara’s employment with the Company. Virca’s previously executed employment agreement with the Company, dated June 24, 2014, as amended (the “Previous Virca Agreement”), and Hasara’s previously executed employment agreement with the Company, dated September 4, 2014, as amended (the “Previous Hasara Agreement”), expired in accordance with their respective terms on December 31, 2018.
Virca Agreement
Pursuant to the Virca Agreement, Virca will continue to act as the Company’s President and Chief Executive Officer on an “at will” basis for a term beginning on January 1, 2019 and ending on June 30, 2019. If, during the term of the Virca Agreement, the Company achieves each of (i) completion of all Transfer Activities (as defined in Schedule 2 that certain Third Amended and Restated Supply and License Agreement, dated December 17, 2018, as may be subsequently amended and/or restated (the “SLA”), by and between the Company and Mayne Pharma Ventures Pty Ltd (“Mayne Pharma”)) and the resulting receipt by the Company of $3 million in Advances (as defined in Schedule 2 to the SLA) from Mayne Pharma and (ii) the filing by the Company of an Investigational New Drug Application with the U.S. Food and Drug Administration (“FDA”) related to the study of SUBA-Itraconazole for the treatment of prostate cancer (the “SUBA Prostate IND”) and the FDA’s clearance of the SUBA Prostate IND (collectively, the Milestones”), the Company will consider extending Virca’s employment and negotiating in good faith an employment agreement with Virca that would be on substantially similar terms of the Previous Virca Agreement (subject to the mutual agreement of Virca and the Company).
Pursuant to the Virca Agreement, Virca will earn a base salary of $300,000 per annum (his current salary level), payable in accordance with the regular payroll practices of the Company. Virca shall also receive a cash bonus for the fiscal year ended December 31, 2018 (payable by March 15, 2018), the amount of such bonus to be determined by the Compensation Committee of the Company’s Board of Directors (the “Committee”) in accordance with the bonus potential under the Previous Virca Agreement and the Committee’s determination of corporate objectives met. Virca is also eligible for a bonus in cash and/or equity awards for the period covered by the Virca Agreement, any such bonus to be granted at the discretion of the Company’s Board of Directors or the Committee. Pursuant the Virca Agreement, Virca shall continue to receive customary Company benefits.
The Virca Agreement may be terminated by the Company or by Virca, in each case on 30 days’ notice, and the Company may terminate the Virca Agreement immediately for Cause (as such term is defined in the Virca Agreement). The Company shall have no severance payment obligation to Virca in the event of any termination of the Virca Agreement.
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