Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 7, 2018, the Board of Directors of Net Element, Inc. (the “Company”) appointed, effective
March 8, 2018, Mr. Jon Najarian as a Director of the Company
to fill the vacancy from Mr. William Healy’s resignation on June 30, 2017 as a Director of the Company and as a member of
the Company’s Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee until the next annual
stockholders' meeting of the Company and when his successor is elected and shall qualify. Mr. Najarian, who is 60 years old, is
an accomplished financial industry veteran with more than 31 years of financial and capital markets industry experience. Mr. Najarian
is also well-versed in cryptocurrency and blockchain technologies.
Mr. Najarian is a professional
investor, money manager and media analyst. He is a co-founder of Investitue, LLC, the industry leading options education firm,
which recently launched “Crypto Basics,” a new educational course that covers the basics of cryptocurrency, blockchain
technology, altcoins and Initial Coin Offerings (ICOs). He is also a host of the International ICO Channel, a part of CoinBoost,
whose goal is to bridge the divide between blockchain and mainstream media by offering distribution to traditional financial media
outlets. In 2016, Mr. Najarian and his brother Pete co-founded Najarian Advisors, a company advising institutional investors on
options strategies. The brothers invest in and work with start-ups via Rebellion Partners, a venture consulting firm they launched
in 2015. Mr. Najarian is a cast member of CNBC’s “Halftime Report” and the “Fast Money” show. He
is also the feature of the “DRJ Report” on CBOE-TV popular webcast.
Mr. Najarian was a
linebacker for the Chicago Bears before he focused his attention to trading on the Chicago Board Options Exchange (“CBOE”).
He became a member of the CBOE, NYSE, CME and CBOT and worked as a floor trader for 25 years. In 1990, he founded Mercury Trading,
a market-making firm at the CBOE, which he sold in 2004 to Citadel, one of the world’s largest hedge funds. In 2005, Mr.
Najarian co-founded optionMONSTER and tradeMONSTER and negotiated a partnership with General Atlantic Partners in 2014 resulting
ultimately in a sale to E*Trade for $750 million in September of 2016. Mr. Najarian developed and patented trading applications
and algorithms used to identify unusual activity in stock, options, futures and cryptocurrency markets. optionMONSTER, an options
news and education site, was described by Securities Industry News as “content king of the options business.” Mr. Najarian
is a graduate of Gustavus Adolphus College with a BA degree.
The Board of Directors
of the Company concluded that Mr. Najarian should serve as a Director of the Company in light of his experience in the financial
and capital markets industry. Mr. Najarian was also appointed to serve as a member of the Company’s Audit Committee, Nominating
and Corporate Governance Committee and Compensation Committee. The Company’s Board of Directors determined that Mr. Najarian
is an independent director for purposes of the rules and regulations of the Securities and Exchange Commission and under the applicable
NASDAQ listing standards, and that he has the other qualifications required for service on the Company’s Audit Committee,
Nominating and Corporate Governance Committee and Compensation Committee.
There have been no
related party transactions between the Company and Mr. Njarian, and there were no arrangements or understandings between Mr. Najarian
and any other person pursuant to which he was selected as a director.
As a member of the
Company’s Audit Committee, Mr. Najarian will receive an annual retainer of $5,000. As a member of the Company’s Nominating
and Corporate Governance Committee, Mr. Najarian will receive an annual retainer of $2,500. As a member of the Company’s
Compensation Committee, Mr. Najarian will receive an annual retainer of $2,500. Mr. Najarian will also receive a grant of shares
of the Company’s common stock per year equal to such number of shares per each such annual award that would equal $15,000
based on the closing price of the Company’s common stock on the date of each such award, prorated for any partial calendar
year for which a director serves), which shares shall be accrued for time served as director of the Corporation and shall vest
on a quarterly basis. The Company will also reimburse Mr. Najarian for all reasonable out-of-pocket expenses incurred in connection
with his attendance at meetings of the Board of Directors and any committees thereof, including, without limitation, travel, lodging
and meal expenses.