UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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Date of report (Date of earliest event reported): April 17, 2020
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AMERICAN SHARED HOSPITAL SERVICES
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(Exact name of registrant as specified in charter)
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California
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1-08789
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94-2918118
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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Two Embarcadero Center, Suite 410
San Francisco, CA
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94111
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code 415-788-5300
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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American Shared Hospital Services Common Stock, No Par Value
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AMS
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NYSE AMERICAN
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
American Shared Hospital Services (the “Company”) today announced the retirement of Ernest A. Bates, M.D., as the Company’s President and Chief Executive Officer, effective May 4, 2020. Dr. Bates will continue as the Company’s Executive Chairman of the Board of Directors (the “Board”) through December 31, 2020. In that role he will provide advice to management and the Board relating to strategic initiatives as well as transitioning his long-standing relationships with key stakeholders and customers of the Company. Dr. Bates will not be involved in day-to day operations. In his new role, Dr. Bates will be paid a cash salary of $12,500 per month.
The Company also announced today the appointment of Raymond C. Stachowiak as the Company’s Interim President and Chief Executive Officer. Mr. Stachowiak, 62, has been a member of the Company’s Board since 2009. He previously served as President and Chief Executive Officer of Shared Imaging, a preferred independent provider of CT, MRI and PET/CT equipment and services, from its inception in December 1991 until his retirement in March 2013. In 2008, Mr. Stachowiak sold 50% of his interest in Shared Imaging to Lubar Equity Fund and remains a 50% owner of Shared Imaging. Mr. Stachowiak is the sole owner of RCS Investments, Inc., and owner-manager of Stachowiak Equity Fund, both of which are private equity funds. He serves on the board of directors of Nano Gas Technologies, Inc. Mr. Stachowiak received a B.S. in Business and an M.B.A. from Indiana University. He is a Certified Public Accountant (inactive), Certified Internal Auditor (inactive) and holds a Certification in Production and Inventory Management.
Mr. Stachowiak is not currently engaged, and has not been engaged during the last fiscal year, in any related person transaction with the Company within the meaning of Item 404(a) of Regulation S-K.
Mr. Stachowiak and the Company have signed an Offer Letter, effective May 4, 2020 (the “Offer Letter”), which provides that Mr. Stachowiak will serve as Interim President and Chief Executive Officer until his successor is appointed. He will earn a monthly cash salary of $12,500. In addition, Mr. Stachowiak will be granted restricted stock units for 50,000 of the Company’s common shares that will vest in full upon the earlier of August 3, 2020 and the appointment of his successor. In the event he continues to serve as the Company’s Interim President and Chief Executive Officer after August 3, 2020, Mr. Stachowiak will be granted additional restricted stock units for 10,000 of the Company’s common shares, which will vest in full at the end of each 30-day period after August 3, 2020.
Effective as of this appointment, Mr. Stachowiak will cease to receive compensation for his service as a non-employee director.
The foregoing is only a summary of the terms of the Offer Letter, and is qualified in its entirety by reference to the Offer Letter that is filed as Exhibit 99.1 hereto.
Item 8.01 Other Events.
On April 22, 2020, the Company issued a press release announcing the retirement of Dr. Bates as the Company’s President and Chief Executive Officer and the appointment of Mr. Stachowiak as the Company’s Interim President and Chief Executive Officer. The full text of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a)Exhibits.
Exhibit 99.1 Offer Letter between the Company and Mr. Stachowiak, dated April 22, 2020
Exhibit 99.2 Press Release, dated April 22, 2020
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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American Shared Hospital Services
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Date:
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April 22, 2020
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By:
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Name:
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Craig K. Tagawa
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Title:
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Senior Vice President
Chief Operating and Financial Officer
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Exhibit 99.1
Raymond C. Stachowiak c/o American Shared Hospital Services
Two Embarcadero Center, Suite 410
San Francisco, CA 94111
April 22, 2020
RE: Offer of Employment
Dear Ray,
We are pleased to offer you employment on the executive team of American Shared Hospital Services, Inc. (the “Company”). This letter (the “Offer Letter”) provides the terms of our offer:
You will serve as Interim President and Chief Executive Officer and report to the Board of Directors of the Company (the “Board”). During your employment, you will continue to be re-nominated to the Board upon the expiration of your current and each successive term.
Your employment will start on May 4, 2020 (the “Start Date”). We do not expect you to change your current place of residence in Illinois. We understand that you intend to spend a significant amount of time in the Company’s San Francisco headquarters as you deem appropriate to perform your duties.
You will have duties, responsibilities and authority commensurate with your position. Whenever required, you will also perform other reasonable and equivalent responsibilities as directed by the Board that are consistent with your qualifications.
You agree to devote a substantial amount of your professional time and attention to the Company, its subsidiaries and affiliates (collectively, the “Company Group”), provided, however, you may engage in other professional, charitable, investment and business activities, in each case to the extent that such activities do not interfere with the performance of your duties and responsibilities or the business and affairs of the Company Group and are not in violation of your any or all other obligations in this Offer Letter.
During your employment, you will receive a monthly base salary of $12,500 (the “Base Salary”), payable in accordance with the Company’s payroll practices, subject to applicable withholding and deductions. Your Base Salary may be reviewed and adjusted by the Board from time to time. You will be reimbursed for your reasonable business expenses incurred in connection with your duties, subject to the terms and conditions of the Company’s expense reimbursement policy.
In connection with the commencement of your employment, you will receive an award of 50,000 restricted stock units under the Company’s Incentive Compensation Plan, which will vest in full upon the earlier of August 3, 2020 and the date on which your successor is appointed. In addition, in the event you continue to serve as the Company’s interim President and Chief Executive Officer for longer than 90 days, then you will receive an award of 10,000 restricted stock units for each 30 days of such service thereafter that will vest at the end of each such 30-day period.
In the event that you are made a party to a proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that you are or were an executive officer of the Company, you will be indemnified and held harmless by the Company to the maximum permitted under the applicable law from all liabilities arising in respect of defending such proceeding to the extent and in accordance with the terms of the existing indemnification agreement between you and the Company.
You hereby represent to the Company that you are not subject to any notice requirement, garden leave provision, non-competition covenant or any similar requirement, provision or covenant (each such requirement, provision or covenant, an “Employment Restriction”) that would prevent you from accepting this offer of employment with the Company, commencing such employment or remaining an employee of the Company or that would adversely impact your ability to perform your duties to the Company. The Company acknowledges that you are the 50% owner and a director and manager of Shared Imaging.
Your employment with the Company and this Offer Letter are expressly contingent on (i) your ability to start employment with the Company on the Start Date without breaching any Employment Restriction and (ii) your timely submission to the Company of evidence of your valid work authorization.
This Offer Letter will be governed by and construed in accordance with the laws of the State of California, without regard to its choice of law provisions.
This Offer Letter embodies the entire agreement and understanding of the Company and you in respect of the subject matter contained herein and supersedes all prior conflicting or inconsistent agreements, consents and understandings relating to such subject matter. This Offer Letter may only be modified pursuant to a written agreement signed by the Company and you.
Your employment with the Company will be “at-will” and nothing in this Offer Letter will be deemed to be construed as a contract for a term of employment.
[Signature Page Follows]
Please sign below to acknowledge your acceptance of the terms of this Offer Letter. The members of the Board are all excited about the prospect of your contributions to the Company as our Interim President and Chief Executive Officer.
Sincerely,
American Shared Hospital Services
By: ___/s/ Daniel G. Kelly, Jr. ________
Name: Daniel G. Kelly, Jr.
Title: Lead Independent Director and Chair, Compensation Committee
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Accepted and Agreed:
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By:
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/s/ Raymond C. Stachowiak
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April 22, 2020
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Raymond C. Stachowiak
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Date
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Exhibit 99.2
American Shared Hospital Services Announces Retirement of Ernest A. Bates and Appointment of Raymond C. Stachowiak
San Francisco, CA – April 22, 2020 – American Shared Hospital Services (NYSE American: AMS) (the “Company”), a leading provider of turnkey technology solutions for advanced radiosurgical and radiation therapy services, today announced that effective on May 4, 2020, Ernest A. Bates, M.D., will retire as President and Chief Executive Officer of the Company. Dr. Bates will continue as the Company’s Executive Chairman of the Board of Directors (the “Board”) until December 31, 2020. Raymond C. Stachowiak, a member of the Board since 2009, has been appointed Interim President and Chief Executive Officer effective upon Dr. Bates’ retirement and will continue to serve on the Board.
Dr. Bates founded the Company in 1977 as President and Chief Executive Officer. He transformed it into a provider of advanced medical technologies for the treatment of cancer, expanding into new markets and becoming an international provider of Gamma Knife, Image Guided Radiation Therapy and Proton Beam Radiation Therapy equipment in 15 medical centers in 14 states, as well as in one foreign country.
“It has been a tremendous honor and privilege to have served American Shared over the years,” stated Dr. Bates, Chairman, President and Chief Executive Officer. “I founded the Company with a goal of bringing advanced technology to patients and medical professionals and I am pleased that we have been able to improve the lives of thousands of people. In addition to my continuing duties at American Shared, I intend to spend more time on my many civic, charitable and non-profit activities. I have the utmost confidence in Ray and the leadership team to see through our mission.”
“We appreciate Dr. Bates’ incredible dedication to the Company as its founder and as President and CEO for the last four decades. The Company has benefited tremendously from his leadership and vision. Dr. Bates deserves extraordinary recognition and appreciation for all that he has accomplished and we are very pleased that he will continue to actively serve the Company as Executive Chairman. We also thank Ray for his willingness to serve as Interim President and CEO in order to ensure a smooth transition to new leadership at American Shared,” said Daniel G. Kelly, Jr., the Company’s lead independent director.
“I want to add my profound thanks to Dr. Bates for his vision as both a pioneer in the diagnostic imaging industry and his strategic foresight in guiding the Company’s transformation into a leading provider of advanced radiosurgery technology. I am looking forward to this opportunity to keep moving the Company forward,” said Mr. Stachowiak.
About AMS
American Shared Hospital Services provides turnkey technology solutions for advanced radiosurgical and radiation therapy services. AMS is the world leader in providing Gamma Knife radiosurgery equipment, a non‑invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia (facial pain). The Company also offers proton therapy, and the latest IGRT and IMRT systems.
Safe Harbor Statement
This press release may be deemed to contain certain forward-looking statements with respect to the financial condition, results of operations and future plans of American Shared Hospital Services (including statements regarding the expected continued growth of the Company’s business and the planned transition of the Company’s President and Chief Executive Officer), which involve risks and uncertainties including, but not limited to, the risks of variability of financial results between quarters, the risks of the Gamma Knife and radiation therapy businesses, the risks of developing The Operating Room for the 21st Century program, the risks of changes to CMS reimbursement rates or reimbursement methodology, the risks of the timing, financing, and operations of the Company’s proton therapy business, the risks of the COVID-19 outbreak and its effect on the Company’s business operations and financial condition, the risk that the intended executive officer changes will not occur as currently expected, the risk that the Company will be unable to conduct an effective executive search and the risk that the Company will be unable to identify and attract a permanent successor to the Company’s President and Chief Executive Officer. Further information on potential factors that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included in the filings of the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10 K for the year ended December 31, 2019.
Contacts:
American Shared Hospital Services
Craig K. Tagawa
Chief Operating Officer and Chief Financial Officer
P: (415) 788-5300
ctagawa@ashs.com
PCG Advisory Group, Investor Relations
Stephanie Prince
P: (646) 762-4518
sprince@pcgadvisory.com