Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Glynn
Employment Agreement
On
February 19, 2021, Hancock Jaffe Laboratories, Inc., a Delaware corporation (the “Company”), entered into an employment
agreement (the “Employment Agreement”) with Craig Glynn in connection with Mr. Glynn’s recent elevation
to full time Chief Financial Officer (Mr. Glynn has also been appointed treasurer and secretary of the Company). The Employment
Agreement, which is effective as of January 1, 2021, is not for a definite time period, but rather, will continue until terminated
in accordance with its terms. Pursuant to the Employment Agreement, Mr. Glynn will earn $225,000 per year. In addition, Mr. Glynn
received stock options to purchase 324,000 shares of common stock of the Company at an exercise price of $8.20 per shares (the
closing price of the Company’s common stock on February 18, 2021). The stock options vest in equal quarterly installments
over a three year period with a six month cliff, however the stock options may only become exercisable following receipt
by the Company of stockholder approval to increase the size of the Company’s Amended and Restated 2016 Omnibus Incentive
Plan, as amended (the “Plan”), sufficiently to permit the exercise in full of such stock options under the Plan (if
the Company’s stockholders do not approve an increase in the size of the Plan, the options will be void). The Employment
Agreement further provides that Mr. Glynn is entitled to participate in any employee benefit plans that the Company has adopted
or may adopt.
The
Employment Agreement is terminable due to Mr. Glynn’s disability or death, for “Cause” (as defined in the Employment
Agreement) or without “Cause” by the Company, and for “Good Reason” (as defined in the Employment Agreement)
or voluntarily by Mr. Glynn. In the event of Mr. Glynn’s death or disability, or termination for “Cause” by
the Company or without “Good Reason” by Mr. Glynn, Mr. Glynn (or his estate) is entitled to receive any unpaid base
salary through the termination date, reimbursement for unreimbursed business expenses, accrued but unused vacation time in accordance
with the Company’s policy and any other payments or benefits that Mr. Glynn as entitled to in accordance with any Company
benefit plans (collectively, the “Accrued Benefits”). Upon termination without “Cause” (other than by
reason of death or disability) or resignation for “Good Reason,” Mr. Glynn will be entitled to three months of severance
for each year Mr. Glynn is employed up to one year of severance, in addition to all Accrued Benefits. Any outstanding unvested
securities owned by Mr. Glynn on the termination date will vest (or terminate) in accordance with the terms of such grant.
The
Employment Agreement contains standard covenants related to confidentiality, non-solicitation and non-disparagement.
The
foregoing summary of the Employment Agreement is qualified in its entirety by reference to the text of the Employment Agreement,
a copy of which will be attached as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2020.
Other
Compensation Disclosures
On
February 18, 2021, the Company’s board of directors approved option grants to each of Robert Berman, the Chief Executive
Officer of the Company, and Marc H. Glickman, M.D., Senior Vice President and Chief Medical Officer of the Company. The stock
options are to purchase 838,000 shares of common stock and 406,000 shares of common stock, respectively, at an exercise price
of $8.20 per shares (the closing price of the Company’s common stock on February 18, 2021). The stock options vest in equal
quarterly installments over a two year period, however the stock options may only become exercisable following receipt by the
Company of stockholder approval to increase the size of the Plan sufficiently to permit the exercise in full of such stock options
under the Plan (if the Company’s stockholders do not approve an increase in the size of the Plan, the options will be void).