ADVANCED MEDICAL ISOTOPE CORP FILES (8-K) Disclosing Change in Directors or Principal Officers, Financial Statements and Exhibits
(Edgar Glimpses Via Acquire Media NewsEdge) Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
(d) The Board of Directors of Advanced Medical Isotope Corporation (the
"Company") elected Kenin M. Spivak as a director, and appointed him as
vice-chairman, effective October 11, 2013. Concurrently the Company has modified
and extended it consulting agreement with Spivak Management Inc. ("SMI").
The Board has determined that Mr. Spivak is an independent director under the
Company's independence guidelines. There are no family relationships between
Mr. Spivak and any director, executive officer or any person chosen by the
Company to become a director or executive officer. Pursuant to a consulting
agreement, dated October 8, 2013, between the Company and Spivak Management Inc.
("SMI"), an affiliate of Mr. Spivak, the Company agreed to use its best efforts
to elect Mr. Spivak to its board of directors and appoint him as vice-chairman
of the Company.
In August 2011, the Company entered into a Memorandum of Agreement for Strategic
Relationship ("MOA") pursuant to which AMIC engaged Spivak Management Inc.
("SMI") as a consultant. Effective on October 8, 2012, the Company and SMI
entered into a new consulting agreement ("Consulting Agreement") that supersedes
and replaces the MOA for a term ending December 31, 2018.
Pursuant to the Consulting Agreement, SMI will continue to provide strategic and
deal advice to the Company, and the Company agreed to use its best efforts to
elect Spivak to its board of directors and appoint him as vice-chairman of the
Company (which occurred on October 11, 2013). The Consulting Agreement provides
further that SMI's designee will purchase 7,046,666 warrants for $7,047 to be
paid over time, subject to a credit for $3,000 of unreimbursed business expenses
advanced by SMI. The warrants will be exercisable for cash or securities until
December 31, 2020 at an exercise price of $.10 per share, subject to standard
weighted average anti-dilution protection. Commencing January 1, 2015, the
Company may require exercise of the warrants if its share price exceeds $0.75
per share, adjusted proportionately for stock splits, stock dividends, stock
combinations and other similar recapitalization transactions for thirty (30)
consecutive trading days on a recognized public market.
Warrants will be forfeited as follows: (1) 3,000,000 warrants will be canceled
if the Consulting Agreement is terminated by AMIC for SMI's Uncured Cause or if
SMI terminates the Consulting Agreement, without cause, with effect prior to
January 1, 2014; (2) 1,500,000 warrants will be forfeited if the Consulting
Agreement is terminated by AMIC for SMI's Uncured Cause or if SMI terminates the
Consulting Agreement, without cause, with effect on or after January 1, 2014,
but prior to October 1, 2014; and (3) 500,000 warrants will be forfeited if the
Consulting Agreement is terminated by AMIC for SMI's Uncured Cause or if SMI
terminates the Consulting Agreement, without cause, with effect on or after
October 1, 2014, but prior to April 1, 2015. If AMIC requires a Warrant
exercise, or if the Consulting Agreement is terminated by AMIC, without SMI's
Uncured Cause, or if the Consulting Agreement is terminated by SMI by reason of
AMIC's Uncured Cause or by reason of James C. Katzaroff ceasing to be CEO of
AMIC, there will be no warrant cancellation.
--------------------------------------------------------------------------------In lieu of the compensation to be paid under the MOA, commencing on October 8,
2013, SMI will become entitled to receive one-third of the cash and stock
compensation payable to the highest compensated officer of AMIC in each year of
the term of the Consulting Agreement and a signing bonus of $50,000 payable as
mutually agreed after AMIC secures additional financing of not less than
$2,000,000. AMIC also will reimburse SMI for business expenses and the
employer's share of social security, worker's compensation, Medicare and similar
payments that would be paid by AMIC if Spivak was an individual directly
employed by AMIC, plus an additional sum equal to ten percent (10%) of the
foregoing amounts in order to reimburse these items on an estimated grossed-up
After starting his career as an attorney, Spivak joined a subsidiary of Mobil
Oil and then Merrill Lynch Investment Banking, where he led financings, mergers
and acquisitions in the United States, Europe and Asia. Spivak also served as an
officer of numerous investment partnerships established by Merrill Lynch.
Since leaving Merrill Lynch, Spivak has served as chairman, vice chairman,
president, CEO and a senior board member of numerous companies, including
serving as CEO of wireless technology pioneer Telemac Corporation; chief
operating officer of major studio MGM/UA Communications; CEO of News Corporation
affiliate Archon Communications; founding chairman of the largest cosmetology
school chain in the United States; chairman of the executive committee of
Premiere Radio Networks; vice chairman of a NYSE-listed metals trading company;
vice chairman of hair care leader John Paul Mitchell Systems; chairman of the
independent directors' committee of Metro Traffic Networks; a member of the
executive committee of Western Federal Savings & Loan; and a director of the
Seagrams/Patrón joint venture.
Spivak is a director of the prestigious RAND Corporation's corporate ethics
center, co-editor of the Knowledge Exchange Business Encyclopedia and a
patent-holder. He received an A.B., M.B.A. and J.D. from Columbia University.
The full text of the press release issued in connection with the announcement is
set forth in Exhibit 99.1 which is attached hereto and the Consulting Agreement
with SMI is set forth in Exhibit 99.2 which is attached hereto.
Item 9.01. Financial Statements and Exhibits
Exhibit Number Description
99.1 Press Release, dated October 11, 2013
99.2 Consulting Agreement with SMI
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