Form 8-K
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) August
2, 2006
Nephros,
Inc.
(Exact
Name of Registrant as Specified in Charter)
Commission
File Number: 001-32288
|
Delaware
|
|
13-3971809
|
|
(State
or other Jurisdiction of
Incorporation)
|
|
(I.R.S.
Employer Identification No.)
|
3960
Broadway, New York, New York 10032
(Address
of Principal Executive Offices)
(Zip
Code)
(212)
781-5113
(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:
o
Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement
On
August
2, 2006, Nephros, Inc. (the “Company”) entered into an employment agreement (the
“Employment Agreement”) with William J. Fox, engaging Mr. Fox to serve as the
Company’s Executive Chairman, effective as of July 1, 2006, for a term of two
years ending on June 30, 2008 (the “Initial Term”). After the Initial Term, the
Employment Agreement will automatically be extended for one or more additional
annual periods unless Mr. Fox or the Company gives the other party written
notice at least 60 days prior to the end of the Initial Term or any extension
thereof (the “Term”) of such party’s election not to renew the Employment
Agreement. The Employment Agreement provides that Mr. Fox will receive a
starting base salary of $277,500 per year (subject to annual adjustment
beginning with July 1, 2007, based on the New York area Consumer Price Index),
and will be eligible to receive an annual bonus based on the extent to which
individual and Company-wide performance goals established by the Board of
Directors for each year have been met. The Employment Agreement also provides
that the Company shall grant Mr. Fox an option to purchase 450,000 shares of
the
Company’s common stock at an exercise price equal to the closing share price of
the common stock on the American Stock Exchange as of the date of grant pursuant
to the Company’s 2004 Stock Incentive Plan and a Non-Qualified Stock Option
Agreement (the “Option Agreement”). Pursuant to the Option Agreement, the option
will vest in equal quarterly installments of 56,250 shares each beginning on
September 30, 2006 until the option fully vests on June 30, 2008, subject to
certain conditions.
Mr.
Fox’s
Employment Agreement provides, among other things, that if his employment is
terminated by him or the Company prior to the end of the Term for any reason
or
upon nonrenewal of the Employment Agreement by either party, he is entitled
to
(i) any accrued but unpaid base salary; (ii) any performance bonus not yet
paid
for the year of termination; (iii) any vacation accrued to the date of
termination; (iv) any accrued but unpaid business expenses or monthly cash
payments; and (v) any benefits he may be entitled to receive under the Option
Agreement or any other plans or programs referred to in the Employment
Agreement. If Mr. Fox is terminated by the Company “without cause” or Mr. Fox
leaves the Company for “good reason” (in each case as defined in the Employment
Agreement) or the Company gives written notice of its election not to renew
the
Employment Agreement, then, among other things, he would be entitled to receive
(i) a prorated portion of the performance bonus, if any, for the year of
termination; and (ii) his base salary for a period of twelve months after
termination.
Mr.
Fox’s
Employment Agreement restricts Mr. Fox’s outside business activities during the
period of his employment with the Company, while permitting him to manage
personal investments and affairs; serve on a board he is currently a member
as
well as additional boards provided he provides the Company with prior written
notice; and provide consulting services approved in writing by the Company,
provided those activities do not conflict or unreasonably interfere with his
position as Executive Chairman.
The
Employment Agreement also provides that, among other things, for the duration
of
Mr. Fox’s employment thereunder and for a period of one year after the date of
termination of his employment for any reason, he will be subject to
non-competition and non-solicitation restrictions. The Employment Agreement
also
contains covenants imposing contractual obligations on Mr. Fox with regard
to
proprietary information and confidentiality.
In
connection with his appointment as Executive Chairman, Mr. Fox will remain
on
the Board of Directors of the Company but will resign as a member of each of
the
Audit and Nominating and Corporate Governance Committees of the Board.
The
foregoing does not constitute a complete summary of the terms of the Employment
Agreement, which is attached hereto as Exhibit 10.1. The description of the
terms of the Employment Agreement is qualified in its entirety by reference
to
such exhibit.
Item
8.01. Other Events.
On
August
4, 2006, the Company issued a press release announcing the appointment of Mr.
Fox as Executive Chairman and the appointment of Eric A. Rose, M.D. as Lead
Director of the Board of Directors.. The full text of this press release is
attached hereto as Exhibit 99.1. The information in this Item 8.01 shall not
be
deemed to be “filed” for the purposes of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liability of that Section.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits
| |
10.1
|
Employment
Agreement between Nephros, Inc. and William J. Fox, entered into
on August
2, 2006.
|
99.1
Press
Release issued by Nephros, Inc. dated August 4, 2006.
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.
Date:
August 4, 2006
NEPHROS,
INC.
By:
/s/
Mark W.
Lerner
Mark
W.
Lerner
Chief Financial Officer
(Principal
Financial Officer and
Principal Accounting Officer)