ADMA BIOLOGICS, INC. appointed new CEO

Item 5.02 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Executive Compensation


On February 26, 2024, upon the recommendation of the Compensation Committee (the "Compensation Committee") of the Board of Directors (the "Board") of ADMA Biologics, Inc. (the "Company"), the Board approved the following base salary for 2024, cash bonus attributable to 2023 performance and annual incentive awards for Adam Grossman, the Company's principal executive officer, and the cash bonus attributable to 2023 performance for Brian Lenz, the Company's principal financial officer, as set forth below:


Name

Position

2024 Base 

Salary


2023 Non-

Equity 

Incentive Compensation 

(1)


Number of

RSUs (2)(3)


Number of Shares

Underlying Stock

Options (2)(4)(5)


Adam S. Grossman

President, Chief Executive

Officer and Director

$800,000

$793,125

557,728

870,950


Brian Lenz

Executive Vice President, Chief Financial Officer


(6)


$334,875


(6)


(6)


(1)

Amount reflects a cash bonus that will be paid by the Company to Messrs. Grossman and Lenz in early March 2024. This cash bonus amount reflects the achievement of 141% of the Company's 2023 corporate goals and milestones.


(2)

Grant date was February 26, 2024.


(3)

The restricted stock units (RSUs) will vest quarterly on each three-month anniversary of the date of grant over four years in accordance with the ADMA Biologics, Inc. 2022 Equity Compensation Plan (the "Plan").


(4)

The exercise price of $5.40 reflects the per share fair market value of the Company's common stock, $0.0001 par value per share ("Common Stock"), as determined by the closing price of the Company's Common Stock on the Nasdaq Global Market on the grant date.


(5)

The option vests over four years with 25% of the shares of Common Stock underlying the option vesting on the one-year anniversary of the date of grant and the remaining 75% of such shares vesting monthly in equal installments over the next three years, becoming fully vested on February 26, 2028 in accordance with the Plan.


(6)

See Chief Financial Officer transition disclosure below.


The Compensation Committee reached its recommendation regarding the compensation and incentive awards for the principal executive officer in consultation with an independent compensation consultant. The non-equity incentive compensation and RSUs and stock option were awarded at the discretion of the Compensation Committee and were based on the Mr. Grossman's annual cash bonus and equity targets, as established by the Compensation Committee, and the Compensation Committee's evaluation of the performance of Mr. Grossman, and approved by the Board. As a part of this performance evaluation, the Compensation Committee considered the achievement of 141% of the Company's 2023 corporate goals and milestones.


Director Compensation


On February 26, 2024, upon the recommendation of the Compensation Committee, the Board approved an annual equity grant policy whereby non-employee directors will receive annual equity grants equal to $250,000 of long- term incentive value, priced at the same time as annual officer grants of equity awards and awarded 50% as RSUs and 50% as options to purchase Common Stock.


Additionally, on February 26, 2024, upon the recommendation of the Compensation Committee, the Board approved a minimum beneficial ownership guideline whereby each director of the Company will be required to own (directly) Common Stock equal to three times (3x) a director's annual cash retainer for service as a Board member, excluding retainers for committee membership and chair position, with such ownership to be achieved within five years of first becoming subject to the guidelines.


Chief Financial Officer Transition


Effective as of April 1, 2024, Brian Lenz, Executive Vice President, Chief Financial Officer & General Manager, ADMA BioCenters, will transition from these positions to a consulting role with the Company (the "CFO Transition").


In connection with the CFO Transition, on February 27, 2024 the Company and Mr. Lenz entered into a Consulting Agreement (the "Consulting Agreement"), pursuant to which Mr. Lenz will serve as a consultant to the Company. In accordance with the terms of the Consulting Agreement, Mr. Lenz will provide consulting and advisory transition services to the Company as reasonably requested by the President and Chief Executive Officer. Unless terminated earlier by Mr. Lenz upon sixty days' written notice or by the Company for Cause (as defined in the Consulting Agreement), the Consulting Agreement will automatically terminate on March 31, 2025 (the "Term").


From April 1, 2024 through December 31, 2024, the Company will pay Mr. Lenz a monthly gross amount of $52,777.77. Additionally, if Mr. Lenz is requested to work more than twenty hours per month, which must be approved in advance by the President and Chief Executive Officer (and subject to the agreement of Mr. Lenz), Mr. Lenz will submit an invoice reflecting an hourly rate of $400.00.


Mr. Lenz will also remain eligible to participate in the Company's equity incentive plans with respect to the continued vesting of his unvested and outstanding equity awards through the end of the Term. Further, Mr. Lenz will have until March 31, 2026 to exercise his outstanding stock options that are vested as of the effective date of the Consulting Agreement, together with his outstanding stock options which vest on or prior to the end of the Term.


The Company has initiated an executive search for a full-time replacement Chief Financial Officer. In the meantime, the Board has appointed Adam Grossman, President and Chief Executive Officer, as Interim Chief Financial Officer, effective as of April 1, 2024.


The foregoing summary of the Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to the copy of the Consulting Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.