PALISADE BIO, INC. appointed new CEO

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


Resignation of Directors 

In accordance with the Merger Agreement and effective as of the Effective Time, Kenneth Carter, Ph.D. and David Mazzo, Ph.D. resigned from the Board and any respective committees of the Board of which they were members. The resignations were not the result of any disagreements with the Company relating to the Company's operations, policies or practices.

Appointment of Directors 

In accordance with the Merger Agreement and effective as of the Effective Time, the Board appointed Thomas Hallam, Ph.D., James R. Neal, Stephanie Diaz, Robert J. Trenschel, D.O. and Don Williams to the Board. Cristina Csimma, PharmD, M.H.P., Mary Ann Gray, Ph.D. and Binxian Wei, each an existing director, remained on the Board. Mr. Neal was appointed as the chair of the Board.

Other than pursuant to the Merger Agreement, there were no arrangements or understandings between the Company's newly appointed directors and any person pursuant to which they were elected. None of the Company's newly appointed directors has a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Class Designations 

Following the Merger, the classes of the Board are as follows:


· Class I Directors: Cristina Csimma, PharmD, M.H.P. and Stephanie Diaz. 


· Class II Directors: Robert J. Trenschel, D.O. and Don Williams. 


· Class III Directors: Mary Ann Gray, Ph.D., Thomas Hallam, Ph.D. and James R. Neal. 


In addition to the staggered classes, the holder of the Company's Series A 4.5% Convertible Preferred Stock has the right to appoint one member of the Board. Binxian Wei has been appointed and currently serves as such director since February 5, 2019.

Biographical information for the newly appointed directors and disclosure regarding related party transactions involving LBS and the newly appointed directors are included in the Proxy Statement under the sections titled "Management Following the Merger" and "Related Party Transactions of the Combined Company" and incorporated herein by reference.

Board Committees 

Audit Committee 

In connection with the Closing, Dr. Csimma, Ms. Diaz and Mr. Williams were appointed to the Audit Committee of the Board, with Mr. Williams appointed as the chair of the Audit Committee of the Board.

Compensation Committee 

In connection with the Closing, Dr. Csimma, Mr. Neal and Dr. Trenschel were appointed to the Compensation Committee of the Board, with Mr. Neal appointed as the chair of the Compensation Committee of the Board.

Nominating and Corporate Governance Committee 

In connection with the Closing, Ms. Diaz, Dr. Gray and Mr. Neal were appointed to the Nominating and Corporate Governance Committee of the Board, with Ms. Diaz appointed as the chair of the Nominating and Corporate Governance Committee of the Board.


Indemnification Agreements 

In connection with the Closing, each of the Company's directors and executive officers entered into the Company's standard form of Indemnification Agreement, which is attached as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

Resignation of Executive Officers and Principal Officers 

As previously disclosed in the Company's Current Report on 8-K filed with the SEC on March 18, 2021, the Company terminated Kenneth Carter, Ph.D., the Company's Executive Chairman, (ii) Dane Saglio, the Company's Chief Financial Officer, (iii) Matthew Kalnik, Ph.D., the Company's Chief Operating Officer and (iv) the Company's Senior Vice President of R&D, and Mr. Saglio entered into a consulting agreement pursuant to which Mr. Saglio would perform the duties of principal executive, financial and accounting officer of the Company until the Closing.

Appointment of Principal Officers 

In accordance with the Merger Agreement and an action of the Board taken at a meeting duly called and held on April 26, 2021, the Board appointed Thomas Hallam, Ph.D. as the Company's Chief Executive Officer (principal executive officer), J.D. Finley as the Company's Chief Financial Officer (principal financial and accounting officer) and Michael Dawson, M.D. as the Company's Chief Medical Officer, each effective as of the Closing and to serve at the discretion of the Board.

There are no family relationships among any of the Company's newly appointed principal officers. None of the Company's newly appointed principal officers has a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Biographical information for the newly appointed officers and disclosure regarding related party transactions involving LBS and the newly appointed officers are included in the Proxy Statement under the sections titled "Management Following the Merger" and "Related Party Transactions of the Combined Company" and incorporated herein by reference.

In December 2020, LBS entered into employment agreements with each of Dr. Hallam, Mr. Finley and Dr. Dawson providing for the employment of Dr. Hallam, Mr. Finley and Dr. Dawson as executive officers (the "Employment Agreements"). The Employment Agreements contain the following terms:


· an annual base salary of $490,000 for Dr. Hallam, $400,000 for Mr. Finley and $115,900 for Dr. Dawson, in each case, to be effective as of the Closing; 


· an annual target cash bonus of 50% for Dr. Hallam, 40% for Mr. Finley and 40% for Dr. Dawson, in each case, to be effective as of the Closing; 


· a bonus payment of $285,000 for Dr. Hallam, $231,000 for Mr. Finley and $66,000 for Dr. Dawson, which were paid upon the Closing; and 


· in the case of Dr. Hallam and Mr. Finley, the grant of an option to purchase 27,190 and 32,628 shares of LBS Common Stock, respectively, which were granted immediately prior to the Closing, at an exercise price per share of $17.72. 


The Employment Agreements also provide that if the Company terminates the executive's employment without "cause" or if the executive resigns his employment for "good reason," each as defined in the Employment Agreements, the executive will be entitled to receive salary continuation and COBRA premium reimbursement (for 12 months each in the case of Dr. Hallam and Mr. Finley, and nine months in the case of Dr. Dawson), up to three months of outplacement assistance, and equity vesting (12 months in the case of Dr. Hallam, nine months in the case of Mr. Finley and Dr. Dawson). In the case of a termination without cause or resignation for good reason that occurs during the period beginning three months before a "change in control" (as defined in the agreement) and ending 12 months thereafter, (a) these severance-related periods will be increased to 18 months in the case of Dr. Hallam and 12 months in the case of Mr. Finley and Dr. Dawson, (b) the equity award acceleration will apply in full to all of the executive's outstanding time-based awards and (c) the executive will receive an additional payment equal to his target bonus.

The foregoing description of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreements that were filed as Exhibits 10.21, 10.22 and 10.23 to the Proxy Statement and incorporated herein by reference.