Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 15, 2020, the Compensation Committee of the Board of Directors of
Apollo Endosurgery, Inc., or the Company, approved a comprehensive plan to
continue to preserve the Company's liquidity given the ongoing business
disruptions resulting from the international efforts to contain the spread of
COVID-19. As part of this plan, the base salaries of all employees whose annual
base salary is at least $100,000 were capped at a pay rate equivalent to
$100,000, including the Company's Chief Executive Officer, Chief Financial
Officer and other executive officers, effective April 16, 2020.
Item 7.01 Regulation FD Disclosure
Due to the continued business disruptions from the international efforts to
contain the spread of COVID-19, the Compensation Committee of the Board of
Directors approved a comprehensive plan to preserve the Company's liquidity.
Combined with the previously implemented cost reduction measures described in
Item 9B of the Company's Annual Report on Form 10-K for the year ended December
31, 2019 filed on March 26, 2020, the liquidity preservation plan is intended to
offset the negative impacts of the ongoing COVID-19 pandemic on the Company's
cash flow and results of operations.
As part of this plan, the Company furloughed 57 U.S. employees and reduced the
employment arrangements of an additional 34 employees outside the United States,
effective April 20, 2020. The furloughed U.S. employees will continue to be
participants in the Company's benefits program and the Company will continue to
pay the employer portion of their benefits and will advance the employee
portions of their benefits until July 15, 2020. While the Company's intention is
for the furlough of employees to be temporary, the adopted furlough program does
not have a specific end date and the Company will continue to evaluate business
conditions to determine when to recall individual or groups of furloughed
employees. In addition, as part of the plan, the Company reduced pay for all
employees whose annual base salary is at least $100,000 to a pay rate equivalent
to $100,000, effective April 16, 2020. The Company's intention is for the
reductions in salary to be temporary; however, the duration of the salary
reductions is indefinite due to the uncertain duration of the current COVID-19
business disruption.
On April 3, 2020, the Company applied for a loan under the Small Business
Administration's Paycheck Protection Program, or PPP, established under the
Coronavirus Aid, Relief, and Economic Security Act. The Company has not yet been
approved for, or received any funds under, any loans under the PPP.
The disclosure set forth in Item 5.02 above is incorporated by reference into
and furnished under this Item 7.01. The information furnished under this Item
7.01 shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or subject to the liabilities of that section.
The information shall not be deemed incorporated by reference into any other
filing with the Securities and Exchange Commission made by the Company,
regardless of any general incorporation language in such filing.
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