SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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):
July 20, 2005
PHASE III MEDICAL, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Delaware
--------
(State or other jurisdiction of incorporation)
0-10909 22-2343568
----------------------------------------------------------
Commission File Number IRS Employer
Identification No.
330 SOUTH SERVICE ROAD, SUITE 120, MELVILLE, NEW YORK 11747
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
631-574-4955
------------
Registrant's Telephone Number
-------------------------------------------
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2 below): N/A
Item 8.01 Other Events
On July 20, 2005, the Company held its annual meeting of stockholders.
At the meeting the following actions were taken:
The stockholders elected each of the current directors of the Company,
Mark Weinreb, Joseph Zuckerman and Wayne Marasco, to hold office until the next
annual meeting of stockholders.
The stockholders approved the increase in the number of shares of the
Company's authorized common stock, $.001 par value from 250,000,000 shares to
500,000,000 shares.
The stockholders approved (a) an amendment to the 2003 Equity
Participation Plan (the "EPP") increasing the number of shares covered by the
Plan from 15 million to 50 million, (b) amendments to the employment agreements
described below, and (c) the grant of 3 million shares of restricted stock to
Mark Weinreb, the President and Chief Executive Officer.
The stockholders ratified the appointment of Holtz Rubenstein Reminick
LLP as the Company's independent certified public accountants for the fiscal
year ending December 31, 2005.
The common stockholders approved an amendment to the certificate of
designations for the Company's series A preferred stock, which would result in
the conversion of the series A preferred stock and the right to receive accrued
dividends into shares of common stock, subject to requisite approval of the
series A preferred shareholders. A quorum of the series A preferred shareholders
was lacking on July 20, so the meeting was adjourned and the polls kept open
with respect to the series A amendment proposal only. The Company intends to fix
a new record date and reconvene the adjourned meeting was purposes of voting on
the series A preferred stock amendment proposal in the near future. Shareholders
will receive notice of any such adjournment.
Pursuant to authority granted by the shareholders at the Company's
annual meeting held on July 20, 2005, the Company and certain of its executive
officers will now enter into amendments of their employment arrangements,
subject to preparation of definitive documentation.
The employment agreement for the President and Chief Executive Officer,
Mark Weinreb will be amended to (a) extend the expiration date thereof from
February 2006 to December 2008; (b) change Mr. Weinreb's annual base salary of
$217,800 (with an increase of 10% per annum) to an annual base salary of
$250,000 (with no increase per annum); (c) grant Mr. Weinreb 3,000,000 shares of
common stock, 1,000,000 shares of which shall vest on each of the date of grant
and the first and second anniversaries of the date of grant; (d) amend the
severance provision of the existing employment agreement to provide that in the
event of termination without cause (subject to certain exceptions), Mr. Weinreb
will be entitled to receive a lump sum payment equal to his then base salary and
automobile allowance for a period of one year; (e) commencing in August 2006,
increase Mr. Weinreb's annual bonus from $20,000 to $25,000; (f) in August 2005,
pay Mr. Weinreb $15,000 to cover costs incurred by him on behalf of the Company;
and (g) in 2006, provide for the reimbursement of all premiums in an annual
aggregate amount of up to $18,000 payable by Mr. Weinreb for life and long term
care insurance covering each year during the remainder of the term of his
employment. Mr. Weinreb was also granted options to purchase 4,000,000 shares of
common stock under the Company's EPP at $.06 per share (which was greater than
the fair market value on July 20, 2005).
-2-
Mr. Aholt's employment agreement with the Company will be amended to
(a) replace the provision of Mr. Aholt's existing employment agreement pursuant
to which he is compensated in shares of common stock with a provision pursuant
to which he will be compensated solely in cash, effective as of September 30,
2005; (b) replace the provision of Mr. Aholt's existing employment agreement
pursuant to which his compensation accrues on a monthly and/or quarterly basis
with a provision pursuant to which his compensation will be paid in accordance
with the Company's normal payroll practices, effective as of September 30, 2005;
and (c) provide for a minimum annual bonus of $12,000, payable in January of
each year during the term of his employment, commencing in January 2006. Mr.
Aholt was also granted options to purchase 1,500,000 shares of common stock
under the Company's EPP at $.06 per share (which was greater than the fair
market value on July 20, 2005).
Dr. Marasco's letter agreement with the Company will be amended to (a)
extend the term of the letter agreement from August 2007 to August 2008; (b)
provide for an annual salary of $110,000, $125,000 and $150,000 for the years
ended August 2006, 2007 and 2008, payable in each such year during the term; (c)
provide for a minimum annual bonus of $12,000, payable in January of each year
during the term, commencing in January 2006; (d) eliminate Dr. Marasco's right
under his existing letter agreement to receive 5% of all collected revenues
derived from the Company's royalty or other revenue sharing agreements (which
right was subject to the limitation that the amount of such additional cash
compensation and Dr. Marasco's annual salary could not exceed, in the aggregate,
$200,000 per year); and (e) permit Dr. Marasco to begin receiving all accrued
but unpaid cash compensation under his letter agreement upon the Company's
consummation of any financing, whether equity or otherwise, pursuant to which
the Company raises $1,500,000. Dr. Marasco was also granted options to purchase
2,500,000 shares of common stock under the Company's EPP at $.06 per share
(which was greater than the fair market value on July 20, 2005).
SIGNATURE
---------
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.
PHASE III MEDICAL, INC.
By: /s/ Mark Weinreb
----------------
Mark Weinreb
President and CEO
Dated: July 26, 2005
-3-