UNITES
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): February 13, 2017
NEPHROS,
INC.
(Exact
name of Registrant as Specified in its Charter)
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Delaware
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001-32288
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13-3971809
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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41
Grand Avenue, River Edge, New Jersey 07661
(Address
of principal executive offices, including ZIP code)
(201)
343-5202
(Registrant’s
telephone number, including area code)
Not
Applicable
(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:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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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
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
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On
February 13, 2017 (the “Effective Date”), Nephros, Inc. (the “Company”) appointed Andrew Astor as its
Chief Financial Officer, effective immediately. Mr. Astor, age 60, is a technology and business executive with 30 years of financial
and operating experience. Mr. Astor was most recently President and Chief Financial Officer at Open Source Consulting Group, a
growth stage services firm. Previously, he was a Managing Director at Synechron, a global consulting organization, from 2013 to
2015. From 2009 to 2013, he served as Vice President at Asurion, a large, privately-held insurance company. Mr. Astor was co-founder
of the software company EnterpriseDB, and served as its CEO from 2004 to 2008. Mr. Astor was Vice President, Strategic Solutions
at webMethods, a software firm, from 2002 to 2004 and Vice President of Transactional Products at Dun & Bradstreet from 1998
to 2001. Prior to 1998, Mr. Astor held various roles at American Management Systems, SHL/MCI Systemhouse, and Ernst & Young.
Mr. Astor received his Bachelor of Arts in Mathematics from Clark University, and his MBA from The Wharton School at the University
of Pennsylvania.
The
terms of Mr. Astor’s employment with the Company are set forth in letter agreement dated as of February 10, 2017 (the “Agreement”).
The Agreement provides that Mr. Astor’s employment will be at-will and will initially be at 50% time, but after approximately
six to nine months, the Company expects to consider increasing the position to full time. Pursuant to the Agreement, Mr. Astor
will initial receive a salary of $10,000 per month, which the Company would expect to increase to an annualized base salary of
$250,000 if the position transitions to full-time. Mr. Astor is also eligible for up to a 25% annual bonus, based primarily on
Company performance.
In
addition, Mr. Astor was granted a 10-year stock option to purchase an aggregate of 579,571 shares of the Company’s common
stock pursuant to the Company’s 2015 Equity Incentive Plan. The option is exercisable at a price of $0.4599 per share,
which represents the closing sale price of the Company’s common stock on the Effective Date. Mr. Astor’s right to
purchase the shares vests, subject to his continued employment, as follows:
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12.5%
of the shares subject to the option vest on the first anniversary of the Effective Date;
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37.5%
of the shares subject to the option vest in twelve equal quarterly installments, with the first installment vesting three
months following the first anniversary of the Effective Date;
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20%
of the shares subject to the option will vest, if ever, upon approval of listing of the Company’s common stock on the
NASDAQ Stock Market, New York Stock Exchange or such other national securities exchange approved by the Board;
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10%
of the shares subject to the option will vest, if ever, on the February 1
st
following the Company’s first
completed fiscal year in which annual revenue exceeds $6,000,000; and
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20%
of the shares subject to the option will vest, if ever, on the February 1
st
following the Company’s first
completed fiscal year in which annual revenue exceeds $10,000,000.
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The
Agreement provides that if the Company terminates Mr. Astor without “cause” (as defined in the Agreement), then, if
such termination occurs prior to the second anniversary of the Effective Date, he shall be entitled to continuation of his base
salary and health benefits for a period of three months, or, if such termination occurs following the second anniversary of the
Effective Date, continuation of his base salary and health benefits for a period of six months.
Effective
upon Mr. Astor’s appointment as Chief Financial Officer, Daron Evans no longer serves as Acting Chief Financial Officer.
The
foregoing descriptions of the material terms of the Agreement are qualified in their entirety by reference to the full text of
the Agreement, a copy of which is attached as Exhibit 10.1 to this report and incorporated herein by reference. A copy of the
Company’s press release issued February 14, 2016, announcing Mr. Astor’s appointment is attached hereto and incorporated
by reference herein as Exhibit 99.1
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
Exhibits
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Exhibit
No.
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Description
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10.1
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Letter
Agreement dated February 10, 2017, between Andrew Astor and Nephros, Inc.
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99.1
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Press
Release of Nephros, Inc. dated February 14, 2017.
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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.
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Nephros,
Inc.
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Dated:
February 14, 2017
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By:
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/s/
Daron Evans
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Daron
Evans
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President
& Chief Executive Officer
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NEHPROS,
INC.
FORM
8-K
INDEX
TO EXHIBITS FILED WITH THIS REPORT
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Exhibit
No.
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Description
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10.1
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Letter
Agreement dated February 13, 2017, between Andrew Astor and Nephros, Inc.
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99.1
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Press
Release of Nephros, Inc. dated February 14, 2017.
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February
10, 2017
Andrew
Astor
1350
West Fullerton Ave., Apt 501
Chicago,
IL 60614
Re:
Employment Offer
Dear
Andy,
On
behalf of the Board of Directors of Nephros, Inc., I am pleased to offer you the position of Chief Financial Officer, reporting
to the Chief Executive Officer. Initially, the position is 50% time. After approximately 6 to 9 months following your start date,
we expect to consider increasing your position to full time. Although you will be primarily based at your homes in the Chicago,
Illinois and San Francisco, California areas, we expect that you will travel to and work from the Company’s New Jersey offices
approximately half of the time you are working.
As
CFO, your primary responsibility will be to manage the administrative, financial, and risk management operations of the company,
including developing and tracking financial and operational strategies, and support the ongoing development and monitoring of
control systems designed to preserve company assets and to report accurate financial results. Additionally, you will be expected
to represent the Company in communications with investors, bankers, and analysts. During the initial part-time phase of your employment,
your responsibilities will necessarily be more limited, and will be mutually agreed between you and the CEO.
The
initial base monthly compensation for this position will be $10,000 per month. Following the transition to full-time, we expect
to increase your base annual compensation to $250,000. You will be eligible for up to a 25% annual bonus, based primarily on company
performance.
Subject
to approval of the Company’s board of directors, you will be granted a stock option to purchase a number of shares of the
Company’s common stock equivalent to 1% of the Company’s fully diluted outstanding shares to be priced and granted
at the next board meeting. Your right to exercise the stock option will vest partially on a time-basis, and partially on achieving
certain corporate goals.
Benefits
:
The Company currently provides its employees with the following benefit package, as described more fully below:
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Health
plan - up to 90% premium company paid
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Flexible
Spending Account - Can be used for healthcare related and certain dependent care.
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Dental
Plan - company paid
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Vision
Plan - company paid
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Life
Insurance - up to 100% base salary
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Long
Term Disability Plan - company paid
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Short
Term Disability Plan - company paid
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SIMPLE
IRA Savings Plan with up to 3% company match
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Paid
Holidays - Ten (10) Designated Company Holidays
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Insurance:
Based upon your start date listed below, all insurance coverage periods will take effect between thirty (30) and sixty (60)
days after your start date, depending on the health plan timing restrictions.
PTO:
Following the transition to full time, you will have 20 PTO days annually, with prior approval of your manager. During the
initial 50% time phase of employment, 50% pro rata PTO will be granted. Nephros employs a “use it or lose it” policy
where it is lawful.
Termination
Benefit:
Following one year of employment, you will be entitled to three months of base salary and three months of continued
health benefits in the event your employment is terminated by the Company without cause. Following two years of employment, you
will be entitled to six months base salary and six months of health benefits in the event you are terminated without cause. Any
such health insurance benefits provided to you post-termination will be on the terms and conditions then in effect for the Company’s
employees. For purposes of this paragraph, “cause” means (i) your substantial failure to perform your job duties,
including any failure or refusal to follow a reasonable and lawful direction of the Company’s Board or CEO, provided that
if such failure or refusal is capable of being remedied, the Company will provide written notice to you specifying the nature
of your failure or refusal and demanding that such failure or refusal be remedied within 14 days (and if so remedied, no “cause”
shall be deemed to exist); (ii) your conviction of a crime involving fraud, dishonesty or moral turpitude; (iii) your material
breach of a fiduciary obligations to the Company, provided that if such breach is capable of being remedied, the Company will
provide you with written notice specifying the nature of such breach and demanding that such breach be remedied within 14 days
(and if so remedied, no “cause” shall be deemed to exist); (iv) any intentional wrongdoing or fraudulent conduct committed
by you in the scope of your employment with the Company; (v) the intentional breach by you of the Company’s policies and
procedures in effect from time to time.
Please
note, that as set forth in the Company’s Personnel Policies and Procedures, the employee benefits provided to you by the
Company are subject to change by the Company, in its sole discretion, at any time and from time to time.
Start
Date:
Your employment shall start on February 13, 2017.
Even
though some provisions of this letter refer to future dates, they are merely reference points for certain events that are scheduled
for as long as you are employed by the Company. Your employment with the Company is for an indefinite term and nothing in this
letter modifies your at-will employment relationship with the Company. Further, your employment will also be subject to the Company’s
“2007 Personnel Policies and Procedures,” your entry into a Confidentiality, Invention Assignment and Non-Competition
Agreement in the form separately provided to you, and Nephros’ general satisfaction with your work performance. You may
terminate your employment with the company for any reason with a written notice. Additionally, Nephros may terminate your employment,
for any reason, upon written notice.
If
you have any questions regarding the details of this offer, please feel free to contact me. We are very excited about having you
on our team! If you agree to the conditions that have been outlined, please sign, date, scan and return by e-mail at your earliest
convenience.
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Respectfully,
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Daron
Evans
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President
& CEO
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Accepted:
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/s/
Andrew Astor
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Andrew
Astor
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PRESS
RELEASE
Nephros
Announces Appointment of Andrew Astor as Chief Financial Officer
Technology
Industry Veteran Andrew Astor Hired to Support Growth and Business Momentum
RIVER
EDGE, NJ, February 14, 2017 /Market Wire/ — Nephros, Inc. (OTCQB:NEPH) (the “Company”), a commercial stage medical
device company that develops and sells high performance liquid purification ultrafilters and an on-line mid-dilution hemodiafiltration
system for use with a hemodialysis (HD) machine for the treatment of patients with End Stage Renal Disease (ESRD), announced today
that it had hired Andrew Astor as Chief Financial Officer.
“We
are very pleased to have Andy join the Nephros team,” said Daron Evans, Chief Executive Officer of Nephros. “Andy
brings a wealth of financial and strategic acumen to Nephros. I believe his experience will contribute significantly to our efforts
to maximize the Company’s value for shareholders.”
“I
am excited to join Nephros during a period of momentum,” said Mr. Astor. “Daron has done an excellent job of positioning
the company for success by expanding the product lines to meet customer demands. I look forward to working with Daron to manage
the Company’s growth and capitalize on business opportunities.”
Andrew
Astor is a technology and business executive with 30 years of financial and operating experience. Mr. Astor was most recently
President and Chief Financial Officer at Open Source Consulting Group, a growth stage services firm. Previously, he was a Managing
Director at Synechron, a global consulting organization, from 2013 to 2015. From 2009 to 2013, he served as Vice President at
Asurion, a large, privately held insurance company. Mr. Astor was co-founder of the software company EnterpriseDB, and served
as its CEO from 2004 to 2008. Mr. Astor was Vice President, Strategic Solutions at webMethods (ETR: SOW), a software firm, from
2002 to 2004. Mr. Astor was Vice President of Transactional Products at Dun & Bradstreet (NYSE: DNB) from 1998 to 2001. Prior
to 1998, Mr. Astor held various roles at American Management Systems, SHL/MCI Systemhouse, and Ernst & Young. Mr. Astor received
his Bachelor of Arts in Mathematics from Clark University, and his MBA from The Wharton School at the University of Pennsylvania.
About
Nephros, Inc.
Nephros
is a commercial stage medical device company that develops and sells high performance liquid purification filters, as well as
a hemodiafiltration system for the treatment of patients with End Stage Renal Disease. Nephros filters or ultrafilters are used
primarily in medical applications in various settings. These ultrafilters are used by dialysis centers for assisting in the added
removal of biological contaminants from the water and bicarbonate concentrate supplied to hemodialysis machines and the patients.
Additionally, Nephros ultrafilters are used in hospitals and medical clinics for added protection in retaining bacteria (i.e.
Legionella, Pseudomonas), virus and endotoxin from water. These ultrafilters provide barriers that assist in improving infection
control with showers, sinks, and ice machines.
For
more information about Nephros, please visit the company’s website at www.nephros.com.
Forward-Looking
Statements
This
release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements
regarding the Company’s strategy, future operations, outlook, milestones, future financial position, future financial results,
plans and objectives, and other statements that are not historical facts, including statements which may be accompanied by the
words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,”
“projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,”
“potential” or similar words. Actual results could differ materially from those described in these forward-looking
statements due to certain factors, including uncertainty in clinical outcomes, potential delays in the regulatory approval process,
changes in business, economic and competitive conditions, the availability of capital when needed, our dependence on third party
manufacturers and researchers, regulatory reforms, uncertainties in litigation or investigative proceedings, and the availability
of financing. These and other risks and uncertainties are detailed in Nephros Inc.’s reports filed with the U.S. Securities
and Exchange Commission, including with respect to Nephros, its Annual Report on Form 10-K for the year ended December 31, 2015.
Nephros, Inc. does not undertake any responsibility to update the forward-looking statements in this release.
Contact:
Investor:
PCG
Advisory Group
Kirin
M. Smith, Chief Operating Officer
Direct:
646-863-6519
www.pcgadvisory.com