Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
Appointment of Lynn Blake as Chief Financial Officer
Effective October 24, 2022, Lynn Blake will be appointed as Chief Financial
Officer of Nuwellis, Inc. (the "Company"). Ms. Blake, age 55, previously served
as a Managing Director at Growth Operators Advisory Services LLC since January
2020. Prior to that, she served as the SVP, Chief Financial Officer of Tactile
Systems Technology, Inc. (NASDAQ: TCMD) from 2016 to 2018. Earlier in her
career, she served as SVP, Chief Financial Officer of Taylor-Wharton
International LLC and as SVP, Chief Financial Officer of Analysts International
Corporation. Ms. Blake earned her Bachelor of Business Administration degree
from the University of Wisconsin-Madison, with majors in Accounting and Finance
and she earned her MBA from the University of Minnesota, Carlson School of
Management with a dual concentration in Finance and Strategic Management.
Other than her employment arrangement, there are no arrangements or
understandings between Ms. Blake and any other person with respect to the
appointment described above, and Ms. Blake has no family relationship with any
director or executive officer of the Company. Ms. Blake is not a party to any
transaction that would require disclosure under Item 404(a) of Regulation S-K
promulgated under the Securities Exchange Act of 1934, as amended.
On September 30, 2022, the Company entered into an Offer Letter with Ms. Blake
(the "Offer Letter"). The following description of the Offer Letter is not
complete and is qualified in its entirety by reference to the Offer Letter filed
as Exhibit 10.1 hereto and incorporated herein by reference. The Offer Letter
provides that Ms. Blake's employment with the Company is effective October 24,
2022, or another mutually agreed upon date ("Effective Date"), and that Ms.
Blake's employment with the Company is "at will," meaning either Ms. Blake or
the Company are entitled to terminate Ms. Blake's employment at any time for any
reason, with or without cause.
The Offer Letter entitles Ms. Blake to, among other benefits, the following
compensation:
• An annual base salary of $325,000;
• A bonus of up to 45% of Ms. Blake's base salary, for the applicable bonus
year, provided that Ms. Blake must be employed in good standing with the
Company as of the bonus payment date;
• Participation in the Company's employee stock option program, benefit programs
and arrangements that the Company makes available to its employees, including
contributory and non-contributory welfare and benefit plans;
• An annual accrual of 152 hours of personal time off; and
• Participation in the Company's 401(k) plan.
Pursuant to the Offer Letter, Ms. Blake will be granted an option to purchase a
number of the shares of common stock equal to one percent (1%) of the Deemed
Outstanding Shares (as defined in the Offer Letter) determined as of the date of
the issuance of the Initial Option Award (as defined in the Offer Letter)
subject to the terms of the Nuwellis, Inc. 2021 Inducement Plan (the "Plan").
The option award will be evidenced by a stock option grant notice and option
agreement substantially in the Company's form of Stock Option Grant Notice,
Option Agreement and Notice of Exercise under the Nuwellis, Inc. 2021 Inducement
Plan, which is attached to the Company's Current Report on Form 8-K filed with
the Securities and Exchange Commission on May 20, 2021 as Exhibit 10.2 . The
Initial Option Award shall have the following terms: (1) the exercise price per
share for the Initial Shares (as defined in the Offer Letter) shall equal the
fair market value of the Company's common stock on the date of the grant of the
Initial Option Award; (2) subject to Ms. Blake's continued employment with the
Company and the terms and conditions of the Plan, twenty-five percent (25%) of
the Initial Shares shall vest and become exercisable on the one (1) year
anniversary of the Effective Date and the balance of the Initial Shares subject
to the Initial Option Award shall vest and become exercisable in equal monthly
installments on the last day of each month over the next thirty-six (36) months;
and (3) upon the occurrence of a Change in Control (as defined in the Plan) all
of the Initial Shares subject to the Initial Option Award shall fully vest and
become exercisable immediately prior to the effectiveness of such Change in
Control, subject to Ms. Blake's continued employment with the Company as of each
such date and as further provided in the terms and conditions of the Offer
Letter, the Initial Option Award and the Plan.
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Also, in connection with Ms. Blake's appointment as Chief Financial Officer of
the Company, upon the commencement of her employment, Ms. Blake and the Company
will enter into a Change in Control Agreement (the "Change in Control
Agreement"). The following description of the Change in Control Agreement is not
complete and is qualified in its entirety by reference to the form of Change in
Control Agreement, which is attached to the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 25, 2021 ("Form
10-K") as Exhibit 10.25 . The Change in Control Agreement provides that, if a
Change in Control (as defined in the Change in Control Agreement) occurs while
Ms. Blake is actively employed by the Company, all of the unvested shares
underlying any stock option or other equity-based awards held by Ms. Blake on
the effective date of such Change in Control shall vest and become exercisable
immediately prior to the effectiveness of such Change in Control.
Pursuant to the Employee Proprietary Information, Inventions Assignment and
Non-Competition Agreement between the Company and Ms. Blake dated as of
September 30, 2022, attached as Exhibit A to the Offer Letter, Ms. Blake is
subject to certain non-solicitation and non-competition requirements.
Additionally, in accordance with the Company's customary practice, the Company
is entering into its standard form of indemnification agreement with Ms. Blake,
which will require the Company to indemnify her against certain liabilities that
may arise as result of her status or service as an officer. The description of
Ms. Blake's indemnification agreement is qualified in its entirety by the full
text of the form of indemnification agreement, which is attached to the
Company's Form 10-K as Exhibit 10.24 .
Item 5.03 Amendments to Articles of Incorporation or Bylaws? Change in Fiscal
Year.
On October 5, 2022, the board of directors of Nuwellis, Inc. (the "Company")
approved an amendment (the "Bylaws Amendment") to the Second Amended and
Restated Bylaws of the Company (the "Bylaws"), effective immediately. The Bylaws
Amendment amended Section 8 of ARTICLE III of the Bylaws to reduce the quorum
requirement for all meetings of stockholders of the Company from a majority of
the voting power of the outstanding shares of stock entitled to vote to
one-third of the voting power of the outstanding shares of stock entitled to
vote.
The foregoing description of the Bylaws Amendment is qualified in its entirety
by reference to the full text of the Bylaws Amendment, a copy of which is filed
with this Current Report on Form 8-K as Exhibit 3.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Exhibit Description
3.1 Amendment to Second Amended and Restated Bylaws of Nuwellis, Inc.
10.1 Offer Letter by and between Nuwellis, Inc. and Lynn Blake, effective as
of October 24, 2022.
104 Cover Page Interactive Data File (embedded within Inline XBRL document).
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