Business Context and Reporting Period
This Form 8-K filing by MRI Interventions, Inc. (not Clearpoint Neuro, Inc.) was submitted on October 10, 2017, reporting events occurring on October 6, 2017. The filing addresses significant changes in executive leadership and board composition.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation arrangements and separation terms.
Material Changes
- Departure of CEO and Director: Francis (Frank) P. Grillo voluntarily resigned as Chief Executive Officer, President, and Board member, effective November 7, 2017. The resignation is not due to any disagreement with the Company.
- Appointment of New CEO: Joseph Michael Burnett was appointed as Chief Executive Officer and President, effective November 7, 2017. He previously served as Vice President and General Manager of Neuro Diagnostics and Therapy at Royal Philips.
- Board Election: The Board expects to elect Mr. Burnett as a director effective November 7, 2017, serving until the 2018 annual meeting.
Compensatory Arrangements and Outlook
Separation Terms for Mr. Grillo
- Transition Services: Full-time consulting for two months post-separation, followed by ad-hoc consulting.
- Compensation: Includes an annual bonus (subject to performance), 87,500 unregistered common shares, a $15,000 lump sum, and $30,000 per month for the first two months of transition.
- Equity: Extension of the option exercise period for all previously granted stock options to be coterminous with the award term.
- Conditions: Receipt of benefits is conditioned on executing a general release of claims.
Employment Terms for Mr. Burnett
- Base Salary: $360,000 annually.
- Target Bonus: 40% of base salary, subject to performance goals.
- Signing Bonus: $100,000 paid in two installments (Transition Date and 6-month anniversary).
- Relocation: Up to $50,000 in reasonable expenses over two years.
- Equity Grant: 350,000 non-qualified stock options and 200,000 restricted shares. Vesting schedule: 1/3 on the first anniversary, remainder in quarterly installments over years two and three.
- Termination Provisions:
- Without Cause/Good Reason: One year of base salary, average bonus of prior two years, $18,000, and full acceleration of unvested equity.
- Change of Control: Full acceleration of equity. If terminated within 12 months of a change of control, severance includes two times base salary and two times average bonus.
Investor Verification Checklist
- Verify the exact vesting schedule and exercise price for Mr. Burnett's 350,000 stock options and 200,000 restricted shares.
- Confirm the total number of unregistered shares issued to Mr. Grillo (87,500) and their impact on dilution.
- Review the full text of the Separation Agreement (Exhibit 10.1) and Employment Agreement (Exhibit 10.2) for specific definitions of "Cause," "Good Reason," and "Change of Control."
- Assess the financial impact of the $100,000 signing bonus and $50,000 relocation allowance on the company's cash flow.
- Monitor the transition period ending November 7, 2017, to ensure operational continuity.