Exhibit 10.2
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
Date of Report (Date of earliest event reported): January 12, 2016
APOLLO MEDICAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
|
Delaware (State or Other Jurisdiction of Incorporation) |
000-25809 (Commission File Number) |
46,3837784 (I.R.S. Employer Identification Number) |
700 N. Brand Blvd., Suite 1400, Glendale, CA 91203
(Address of principal executive offices) (zip code)
(818) 396-8050
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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 (see General Instruction A.2. below):
| ¨ | 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)) |
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Election of Directors
On January 12, 2016, the Board of Directors of the Company (the “Board”) appointed Mark Fawcett as a director. In connection with such appointment, the Company intends to enter into the following agreements with Mr. Fawcett: (i) a Board of Directors Agreement; (ii) a Proprietary Information Agreement; and (iii) an Indemnification Agreement. Pursuant to his Directors Agreement, Mr. Fawcett or his designee will be entitled to $1,000 per month as compensation in full for such director’s service on the Board and any committees thereof; provided that to the extent such Board services require out-of-town trips, the Company will compensate Mr. Fawcett or his designee for such additional travel time on the part of Mr. Fawcett at the rate of $1,200 per day or a pro-rated portion thereof. The Company will also reimburse Mr. Fawcett or his designee for reasonable expenses approved in advance, such approval not to be unreasonably withheld by the Company. The Indemnification Agreement with Mr. Fawcett will provide for indemnification and related rights in connection with Mr. Fawcett’s service as a director of the Company.
Mr. Fawcett has served as Senior Vice President and Treasurer of Fresenius Medical Care North America (“Fresenius”), which is listed on the New York Stock Exchange, since 2002. Fresenius is the world’s leading provider of chronic kidney failure products and services. Prior to his joining Fresenius, Mr. Fawcett was Director in Corporate Finance at BankBoston beginning in 1997. Mr. Fawcett had various positions of increasing responsibility beginning in 1988 with Merrill Lynch in New York and London then at The Bank of New York. Mr. Fawcett graduated with a B.A. in psychology from Wesleyan University and a M.B.A. from Columbia University Business School.
On January 19, 2016, the Board appointed Thomas S. Lam, M.D. as a director. In connection with such appointment, the Company entered into the following agreements with Dr. Lam: (i) a Board of Directors Agreement dated January 19, 2016; (ii) a Proprietary Information Agreement dated January 19, 2016; and (iii) an Indemnification Agreement dated January 19, 2016. Pursuant to his Directors Agreement, Dr. Lam is entitled to $1,000 per month as compensation in full for such director’s service on the Board and any committees thereof; provided that to the extent such Board services require out-of-town trips, the Company agreed to compensate Dr. Lam for such additional travel time at the rate of $1,200 per day or a pro-rated portion thereof. The Company also agreed to reimburse Dr. Lam for reasonable expenses approved in advance, such approval not to be unreasonably withheld by the Company. The Indemnification Agreement with Dr. Lam provides for indemnification and related rights in connection with Dr. Lam’s service as a director of the Company.
Dr. Lam has served as Chief Executive Officer of Network Medical Management, Inc. (“NMM”), a management service organization in the healthcare field that provides medical services to patients and healthcare management, since January 2006. Dr. Lam has also served as the Chairman of AMG Physicians Organization Inc. since January 2006. From January 2006 to September 2014, Dr. Lam was the Chairman and CEO of Allied Physicians of California IPA. Since October 2014, he has served as the Chief Administrative and Financial Officer of Allied Pacific of California IPA. Dr. Lam was the recipient of the Corporate Citizens of the Year Award from the Board of Directors of East Los Angeles College Foundation in April 2014. In February 2015, YMCA Board of Directors of West San Gabriel Valley had honored Dr. Lam as the recipient of Heart of the Community Award. Dr. Lam received his medical training from New York Medical College and gastroenterology training from Georgetown University.
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On October 14, 2015, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with NMM, pursuant to which the Company sold to NMM, and NMM purchased from the Company, in a private offering of securities, 1,111,111 investment units (the “Units”), each unit consisting of one share of the Company’s Series A Preferred Stock and a stock purchase warrant to purchase one share of the Company’s common stock at an exercise price of $9.00 per share. NMM paid the Company an aggregate $10,000,000 for the Units, the proceeds of which were used by the Company primarily to repay certain outstanding indebtedness owed by the Company and the balance for working capital. The transaction was reported in, and the Securities Purchase Agreement was previously filed as an exhibit to, the Company’s Current Report on Form 8-K filed on October 10, 2015.
A copy of the Directors Agreement with Dr. Lam (which contains the Proprietary Information Agreement and Indemnification Agreement as Exhibits A and B, respectively, thereto) is attached hereto as Exhibit 10.2, and is incorporated herein by this reference. A copy of the Directors Agreement, Proprietary Information Agreement and Indemnification Agreement with Mr. Fawcett will be filed by amendment to this Current Report on Form 8-K. The foregoing description is qualified in its entirety by reference to the respective Directors Agreements, the Proprietary Information Agreements and the Indemnification Agreements.
Compensatory Arrangements of Certain Officers
On January 12, 2016, the Company’s wholly owned subsidiary, Apollo Medical Management, Inc., entered into a First Amendment to Employment Agreement with each of Warren Hosseinion, M.D., the Company’s Chief Executive Officer and a director, and Adrian Vazquez, M.D., the Company’s Chief Medical Officer. These agreements amend the Employment Agreements dated March 28, 2014 with each such person to provide for the payment of an incentive bonus in the amount of $30,000 to Dr. Hosseinion and $15,000 to Dr. Vazquez, and to provide that unused paid time off (up to 20 days per year) will be paid in cash. A copy of the First Amendment to Employment Agreement with each of Dr. Hosseinion and Dr. Vazquez is attached hereto as Exhibit 10.3 and 10.4, respectively, and is incorporated herein by this reference. The foregoing description is qualified in its entirety by reference to such agreements.
On January 12, 2016, the Company entered into a Consulting Agreement with Flacane Advisors, Inc. (“Consultant”) of which Gary Augusta, Executive Chairman of the Board, is the sole shareholder, to replace a substantially similar Consulting and Representation Agreement that expired by its terms on December 31, 2015. Under the Consulting Agreement, the Consultant is entitled to a signing bonus of $30,000, is paid $25,000 per month, and is also eligible to receive options to purchase shares of the Company’s common stock as determined by the Board. The Consultant, through the services of Mr. Augusta, provides business and strategic services and makes Gary Augusta available to serve as the Company’s Executive Chairman of the Board.
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A copy of the Consulting Agreement is attached hereto as Exhibit 10.5 and is incorporated herein by this reference. The foregoing description is qualified in its entirety by reference to the Consulting Agreement.
Indemnification Agreement with Certain Officers
On January 14, 2016, the Company and William R. Abbott entered into an Indemnification Agreement effective as of September 21, 2015, the date that Mr. Abbott was appointed acting Chief Financial Officer of the Company upon the resignation of his predecessor. Mr. Abbott’s appointment was previously disclosed in the Company’s Current Report on Form 8-K filed on September 25, 2015. The Indemnification Agreement with Mr. Abbott provides for indemnification and related rights in connection with Mr. Abbott’s service as an executive officer of the Company.
A copy of the Indemnification Agreement with Mr. Abbott is attached hereto as Exhibit 10.6 and is incorporated herein by this reference.
Item 7.01. Regulation FD Disclosure.
On January 13, 2016 and January 19, 2016, the Company issued press releases announcing the director additions described in Item 5.02 of this Form 8-K. A copy of the Company's press releases are furnished with this Form 8-K and attached hereto as Exhibits 99.1 and 99.2, respectively. The information in Exhibits 99.1 and 99.2 shall not be deemed "filed" for purposes of Section 18 of the Exchange Act and shall not be deemed incorporated by reference into any filing under the Securities Act.
Item 9.01 Financial Statements and Exhibits .
(d) Exhibits.
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SIGNATURES
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.
| Dated: January 19, 2016 | APOLLO MEDICAL HOLDING, INC. | ||
| By | /s/ Warren Hosseinion | ||
| Warren Hosseinion | |||
| Chief Executive Officer | |||
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Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 99.1
Apollo Medical Holdings Announces the Appointment of
Mark fawcett to its Board of Directors
GLENDALE, CA − (PR Newswire) – January 13, 2016 − Apollo Medical Holdings, Inc . ("ApolloMed" or “the Company”) (AMEH), an integrated population health management company, today announced the appointment of Mark Fawcett as an independent member of its Board of Directors.
Mr. Fawcett is currently a Senior Vice President and Treasurer of Fresenius Medical Care, which he joined in 2002. As Treasurer, Mark raises capital in the bank, bond and equity-linked markets. He is also integral in mergers and acquisitions, foreign exchange and interest rate risk management. In the U.S., Mark manages all Treasury functions from cash management to joint ventures and project finance.
Prior to Fresenius, Mark was Director in Corporate Finance at BankBoston (acquired by Fleet and then by Bank of America), joining in 1997. Activities included capital raising, mergers and acquisitions, derivatives and all ancillary banking activities, including cash management, shareholder services, trust and custody.
Mr. Fawcett entered corporate banking with Bank of New York in 1993 and rose through various positions of responsibility. Prior to corporate banking, he was an investment banker with Merrill Lynch in New York and London. His role in investment banking began in 1988 and focused mainly on capital raising in public and private markets as well as mergers and acquisitions.
Mr. Fawcett graduated with a B.A. in psychology from Wesleyan University and an MBA from Columbia Business School with a dual concentration in finance and management.
“We are honored to have Mark join our Board of Directors,” stated Warren Hosseinion, MD, Chief Executive Officer of Apollo Medical Holdings. “His wealth of experience in capital raising, corporate finance and M&A will prove invaluable to us as we continue to execute on our growth strategy.”
“On behalf of the Board, we welcome Mark to the leadership team and thank Fresenius Medical Care for their continued support and partnership,” stated Gary Augusta, Executive Chairman of Apollo Medical Holdings. “Mark further advances the financial and healthcare experience of the ApolloMed Board and is another key addition as we add more leadership capabilities to support the Company’s growth.”
“I thank the Board for its confidence and look forward to helping ApolloMed move towards its bright future,” stated Mark Fawcett, Senior Vice President and Treasurer of Fresenius Medical Care.
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About Apollo Medical Holdings, Inc.
Headquartered in Glendale, California, ApolloMed is an integrated population health management company committed to providing exceptional multi-disciplinary care in the communities it serves. ApolloMed is addressing the healthcare needs of its patients by leveraging its integrated healthcare delivery platform comprised of six affiliated and complementary physician groups: ApolloMed Hospitalists, ApolloMed ACO (Accountable Care Organization), Maverick Medical Group (Independent Physician Association), AKM Medical Group (IPA), ApolloMed Care Clinics, Apollo Care Connect and Apollo Palliative Services. ApolloMed strives to improve medical outcomes with high-quality, cost-efficient care. For more information, please visit www.apollomed.net
Forward Looking Statements
This press release may contain forward-looking statements, including information about management's view of future expectations, plans and prospects for Apollo Medical Holdings, Inc. (“the Company”). In particular, when used in the preceding discussion, the words “predicts,” "believes," "expects," "intends," “seeks,” “estimates,” "plans," "anticipates," and similar conditional expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could” are intended to identify forward-looking statements. In addition, our representatives may from time to time make oral forward-looking statements. Any such statements, other than those of historical fact, about an action, event or development, are forward-looking statements. Such statements are based on the current expectations and certain assumptions of the Company’s management. Such statements are, therefore, subject to a variety of known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Company, which could cause the actual results, performance or achievements of the Company, its subsidiaries and concepts to be materially different than those that may be expressed or implied in such statements or anticipated on the basis of historical trends. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance or achievements may vary materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned, believed, sought, estimated or projected. Unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included herein are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company undertakes no obligation to update or revise these forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by the Company. You should not place undue reliance on any forward-looking statement and should consider the uncertainties and risks discussed under Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended March 31, 2015 and in any of the Company’s other subsequent Securities and Exchange Commission filings.
FOR ADDITIONAL INFORMATION
RedChip Companies
Michael Sullivan
800-733-2447 Ext. 115 or via email at Michael@redchip.com
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Exhibit 99.2
Apollo Medical Holdings Announces the Appointment of
thomas lam, m.d. to its Board of Directors
GLENDALE, CA − (PR Newswire) – January 19, 2016 − Apollo Medical Holdings, Inc. ("ApolloMed" or “the Company”) (AMEH), an integrated population health management company, today announced the appointment of Thomas Lam, M.D. to its Board of Directors.
Dr. Lam is currently Chief Executive Officer of Network Medical Management, Inc. (“NMM”) and Chief Financial Officer of Allied Pacific of California IPA (“APC”). Founded in 1994 and headquartered in Alhambra, California, NMM is a leading physician-led Management Services Organization (“MSO”) that delivers comprehensive healthcare management services to a client base consisting of health plans, independent practice associations (IPAs), hospitals, physicians and other health care networks. NMM currently is responsible for coordinating the care for over 600,000 covered patients in Southern, Central and Northern California through a network of over 12 IPAs with over 4500 contracted physicians. APC, founded in 1992, and its affiliated medical groups are one of the largest independent physician associations in California, with an enrollment of over 500,000 patients under capitation.
Dr. Lam has been on the Governing Board of Garfield Medical Center in Monterey Park, CA since 2010. He was the recipient of the Corporate Citizen of the Year Award by the Board of Directors of the East Los Angeles College Foundation in April 2014, and was also the recipient of the Heart of the Community Award by the Board of Directors of the YMCA West San Gabriel Valley chapter in February 2015.
Born in Hong Kong and raised in California, Dr. Lam is a board certified gastroenterologist who received internal medicine and gastroenterology training from New York Medical College and Georgetown University School of Medicine.
“We are thrilled to welcome Tom to our Board of Directors and look forward to our partnership with Network Medical Management, Allied Pacific IPA and Allied’s physicians,” stated Warren Hosseinion, MD, Chief Executive Officer of Apollo Medical Holdings. “He brings a wealth of industry and financial experience from his successful career as CEO and CFO of healthcare enterprises with over $500 million in revenues.”
“On behalf of the Board, we welcome Dr. Lam to the leadership team,” stated Gary Augusta, Executive Chairman of Apollo Medical Holdings. “He strengthens our breadth of capitated risk-reimbursement expertise at the Board level and furthers our relationship since Network Medical Management’s investment in ApolloMed in late 2015.”
“I am delighted to join the Board. We are excited with our partnership with ApolloMed and have begun working on multiple projects together,” stated Thomas Lam, M.D., Chief Executive Officer of Network Medical Management, Inc. “I have tremendous respect for the Company’s ability to innovate and look forward to contributing to its continued success.”
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About Apollo Medical Holdings, Inc.
Headquartered in Glendale, California, ApolloMed is an integrated population health management company committed to providing exceptional multi-disciplinary care in the communities it serves. ApolloMed is addressing the healthcare needs of its patients by leveraging its integrated healthcare delivery platform comprised of six affiliated and complementary physician groups: ApolloMed Hospitalists, ApolloMed ACO (Accountable Care Organization), Maverick Medical Group (Independent Physician Association), ApolloMed Care Clinics, Apollo Care Connect and Apollo Palliative Services. ApolloMed strives to improve medical outcomes with high-quality, cost-efficient care. For more information, please visit www.apollomed.net
Forward Looking Statements
This press release may contain forward-looking statements, including information about management's view of future expectations, plans and prospects for Apollo Medical Holdings, Inc. (“the Company”). In particular, when used in the preceding discussion, the words “predicts,” "believes," "expects," "intends," “seeks,” “estimates,” "plans," "anticipates," and similar conditional expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could” are intended to identify forward-looking statements. In addition, our representatives may from time to time make oral forward-looking statements. Any such statements, other than those of historical fact, about an action, event or development, are forward-looking statements. Such statements are based on the current expectations and certain assumptions of the Company’s management. Such statements are, therefore, subject to a variety of known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Company, which could cause the actual results, performance or achievements of the Company, its subsidiaries and concepts to be materially different than those that may be expressed or implied in such statements or anticipated on the basis of historical trends. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance or achievements may vary materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned, believed, sought, estimated or projected. Unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included herein are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company undertakes no obligation to update or revise these forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by the Company. You should not place undue reliance on any forward-looking statement and should consider the uncertainties and risks discussed under Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended March 31, 2015 and in any of the Company’s other subsequent Securities and Exchange Commission filings.
FOR ADDITIONAL INFORMATION
RedChip Companies
Michael Sullivan
800-733-2447 Ext. 115 or via email at Michael@redchip.com
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