Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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): April 23, 2010
METROPOLITAN
HEALTH NETWORKS, INC.
(Exact
name of registrant as specified in its charter)
Florida
(State or
other jurisdiction of incorporation)
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0-28456
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65-0635748
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(I.R.S. Employer Identification No.) |
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250
Australian Avenue, Suite 400
West Palm
Beach, FL 33401
(Address
of principal executive offices, including zip code)
(561)
805-8500
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17
CFR230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act(17 CFR
240.13e-4(c))
Item
5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Over the
course of the last several months, certain large shareholders of the Company
informed the Board of its opinion that the Board should retain Mr. Michael
Earley as Chief Executive Officer and reconstitute the Board. After
consideration of such information, the independent directors have expressed
their views that they did not believe these actions to be in the best interests
of our shareholders as a whole and, accordingly, these large shareholders
submitted to the Company an alternative slate of directors. The independent
directors have further expressed the view that they do not believe that it is in
the shareholders’ best interests to engage in a proxy contest with the
shareholders seeking to make the changes described
above. Accordingly, Mr. David Florman, Mr. Eric Haskell, Mr. Karl
Sachs, Mr. Robert Shields and Mr. Barry Zeman (collectively, the “Prior
Directors”) resigned as members of the Board of Directors effective as of 5:00
P.M. on April 23, 2010. None of the Prior Director’s resignations are
due to any form of disagreement with our operations, policies or
practices.
Shortly
thereafter, Mr. Earley, the sole remaining director, appointed each of Mr.
Michael Cahr, Mr. Richard Franco, Mr. Casey Gunnell, Mr. Arthur Kowaloff, Mr.
Mark Stolper and Mr. John Watts, Jr. (collectively, the “New Directors”) to fill
the vacancies created by the resignation of the Prior Directors as well as the
vacancy created by the previous resignation of Dr. Martin Harrison in March
2010.
In
accordance with our Bylaws, each of the New Directors is expected to serve until
the 2010 annual meeting of shareholders, which we anticipate will be held in
July 2010. We further anticipate that at the 2010 annual meeting we
will nominate each of the New Directors as well as Mr. Earley for election to
serve on the Board until the 2011 annual meeting of shareholders and until his
successor shall have been duly elected and qualified, or until his prior death,
resignation or removal.
Listed
below are the biographies of each of the New Directors.
Michael Cahr, age 70, has
been a general partner at Focus Equity Partners, a private equity investment and
management firm that acquires middle-market companies and assists them in
reaching their performance potential, since 2003. Mr. Cahr has more than
30 years of experience as a venture capitalist, CEO and director of public
and private companies. From September 2004 to June 2006, Mr. Cahr
served as CEO of one of Focus Equity’s investments, C&M Pharmacy, a
Glenview, Illinois, specialty pharmacy company, and engineered the sale of the
company to Walgreen Co. Since October 2006, Mr. Cahr has acted as a board
member and advisor to another Focus investment, Business Only Broadband (BOB), a
premier provider of carrier-class, fixed wireless primary and co-primary data
network solutions for the business sectors in Chicago and the New York
metropolitan area. Prior to joining Focus, from 2001 to 2003, Mr. Cahr was
president of Saxony Consultants, a provider of financial and marketing
expertise, and from 1994 to 1999 served variously as president, CEO and chairman
of publicly held Allscripts, Inc., the leading developer of hand-held devices
that provide physicians with real-time access to health, drug and other critical
medical information. Prior to Allscripts, from 1987 to 1994, Mr. Cahr was
venture group manager for Allstate Venture Capital where he oversaw domestic and
international investments in technology, healthcare services, biotech and
medical services. Since January 2009, Mr. Cahr has served as a director of
MakeMusic, Inc., a NASDAQ-listed provider of music education
technology. He also has served since September 2002 as a director of
PacificHealth Laboratories, an OTCBB traded nutritional products firm that
develops and commercializes functionally unique nutritional products.
Mr. Cahr was also a director of Lifecell Corporation from 1989 to 2007
where he served as the chairman of the audit committee.
Richard A. Franco, Sr., age
68, has served as CEO and as a member of the Board of Directors of DARA
BioSciences, Inc., a NASDAQ-listed biopharmaceutical development company, since
January 2009 and as Chairman and President of DARA BioSciences since February
2009. Previously, Mr. Franco served as DARA’s Chairman of the Board from
October 2007 until March 2008, as President and CEO from January 1, 2007
until March 2008 and as President and a member of the board of directors from
2005 until March 2008. Mr. Franco has been a
leader in the pharmaceutical and medical industry for more than 35 years. Prior
to joining DARA Biosciences, Mr. Franco co-founded LipoScience, Inc., a private
medical technology and diagnostics company, and served as president, CEO and
chairman of that company, from 1997 to 2002. Prior to founding
LipoScience, Inc., Mr. Franco served as president, CEO and director of
Trimeris, Inc., a NASDAQ-listed biopharmaceutical company, from 1994 to 1997.
Mr. Franco was employed for more than a decade, from 1982 to 1994, with
Glaxo Inc. (now GlaxoSmithKline), where he served as a member of the Executive
Committee, vice president and general manager of Glaxo Dermatology and the
Cerenex Division and vice president of Commercial Development and Marketing.
Since May 2000, Mr. Franco has served as a director of Salix Pharmaceuticals,
Ltd., a NASDAQ-listed specialty pharmaceutical company. He also
serves as Chapter Director of the Research Triangle Chapter of the
National Association of Corporate Directors (NACD). Previously, he served as a
director of TriPath Imaging, EntreMed Inc and Tranzyme, Inc. Mr. Franco
earned a Bachelor of Science degree in pharmacy from St. John’s University and
did his graduate work in pharmaceutical marketing and management at Long Island
University.
Casey Gunnell, age 63, has
thirty-eight years of broad business experience in entrepreneurial, startup,
troubled and rapid growth sales based companies. Since January 2009, he has
serve as President and as a member of the Board of Directors of NeedleNurse,
Inc., a privately owned startup medical device company which he
co-founded. Since December 2005, he has also served as a
Managing Director of Cornerstone Management, LLC, a private firm providing
advisory, interim staffing and project management solutions to distressed
companies. He has also served, since April 1998, as President of
Gunnell Family Corp., a private firm focused on interim management
solutions. From May 2001 to May 2003, Mr. Gunnell served as interim
CEO, President and as a director of Holiday RV Superstores, Inc. d/b/a/
Recreation USA, a NASDAQ-listed retailer of recreational vehicles and marine
products. He also served from May 2000 to May 2001 as COO and CFO of
PNV, Inc., a NASDAQ-listed cable television, communications, broadband wireless,
ISP and portal to the trucking industry. Since April 2008, Mr.
Gunnell has served as a member of the Board of Directors of Enable Holdings,
Inc., an OTCBB-traded asset recovery solution provider. Mr. Gunnell
earned a Bachelor of Business Administration degree from Florida Atlantic
University.
Arthur Kowaloff, age 63,
served as a Managing Director of BNY Capital Markets, Inc from 1998 until his
retirement in 2003. From 1991 to 1998, he was COO and Senior Managing Director
of Patricof & Company Capital Corporation. Prior to that,
Mr. Kowaloff was an attorney at the New York City firm of Willkie
Farr & Gallagher, where he served as Senior Partner and Executive
Committee Member and specialized in corporate and securities law and mergers and
acquisitions. Mr. Kowaloff is currently President and Director of the PBP
Foundation of New York, a Director of the Orange County Capital Development
Corporation and a member of the Board of Directors of the Orange County Regional
Medical Center. Mr. Kowaloff received a Bachelor of Arts degree. from
Carleton College and holds a Juris Doctor degree from Yale Law
School. Since 2004, Mr. Kowaloff has served as a director of Sirona
Dental Systems, Inc., a NASDAQ-listed manufacturer of high-quality,
technologically advanced dental equipment.
Mark Stolper, age 38, has
served as Executive Vice President and Chief Financial Officer of RadNet, Inc.,
a NASDAQ-listed company, since
2004. RadNet is the largest owner and operator of medical diagnostic
imaging centers in the
United States. From
1999 to 2004, Mr. Stolper was a partner
at Broadstream Capital Partners and West Coast Capital, Los Angeles-based
investment and merchant
banking firms focused on
advising middle market companies engaged in financing and merger and acquisition
transactions. Mr. Stolper began his
career in 1993 as a member of the corporate finance group at Dillon, Read and
Co., Inc., executing mergers and acquisitions, public and private financings and
private equity investments with Saratoga Partners LLP, an affiliated principal
investment group of Dillon Read. From 1995 to 1998, Mr. Stolper was a
Vice President at Archon Capital Partners, which made private equity investments
in media and entertainment companies. From 1998 to 1999, Mr. Stolper
worked at Eastman Kodak, where he was responsible for business development for
Kodak’s Entertainment Imaging subsidiary ($1.5 billion in sales). Since May
2007, Mr. Stolper has served on the Board of Directors of CompuMed, Inc., a
publicly-traded medical informatics and software company. Mr. Stolper graduated magna cum laude from
the University of Pennsylvania, received a finance degree from the
Wharton School and earned a
post-graduate award in Accounting from UCLA.
John Watts, Jr., age 50, has
been a partner at John Watts Consulting, Inc. since January 2008, where he
provides management consultation, market development services and health care
system navigation support to start up and growth companies. Prior to
starting his consulting firm, Mr. Watts spent over 12 years at Wellpoint, Inc.,
one of the nation’s largest health insurers. He served in numerous
roles at Wellpoint during his tenure, including as President and CEO of
Wellpoint’s commercial and consumer business from September 2006 through
December 2007, as President and CEO of Anthem national accounts from December
2004 through September 2006 and as President and CEO of Blue Cross Blue Shield
of Georgia from 2002 through 2004. Since September 2009, Mr. Watts
has served as a member of the Board of Directors at CareCentrix, a privately
owned provider of home health benefits management services to the managed care
industry. He also served as Executive Chairman of Implantable
Provider Group, a privately owned company providing implantable device
management. from September 2008 through November 2009.
The Board
of Directors, as reconstituted, has:
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affirmatively
determined that each of the New Directors, constituting a majority of our
Board of Directors, are “independent” under the NYSE AMEX rules and has no
relationship with us, except for serving as a member of our Board of
Directors and holding our
securities;
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appointed
Mr. Earley to serve as Chairman of the
Board;
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appointed
Mr. Kowaloff to serve as Lead Independent
Director;
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appointed
each of Mr. Gunnell, Mr. Stolper and Mr. Franco to serve as members of the
Audit Committee of the Board of
Directors;
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appointed
each of Mr. Cahr, Mr. Franco and Mr. Watts to serve as members of the
Compensation Committee of the Board of Directors;
and
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appointed
each of Mr. Watts, Mr. Gunnell and Mr. Kowaloff to serve as members of the
Governance and Nominating Committee of the Board of
Directors.
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The Board
of Directors, as reconstituted, has also decided to suspend our CEO search
efforts.
There are
no family relationships among our officers and
the New Directors, nor are there any arrangements or understandings between any
of our New Directors or officers or any other person pursuant to which any
officer or director was or is to be selected as an officer or
director.
We expect
that in the coming weeks we will grant to each New Director stock options and
restricted stock in an amount to be determined. Each New Director
will also be entitled to receive cash retainer and meeting fees for their
service as Board members.
We have
entered into agreements with each of the Prior Directors which contain general
release and non-disparagement provisions in favor of both the Company and the
subject Prior Director. Each Prior Director was granted 16,829
restricted shares of common stock and options to purchase 8,414 shares of common
stock in June 2009 which are scheduled to vest in June 2010. We have
agreed with each of the Prior Directors that, notwithstanding his resignation,
these shares and options will vest as scheduled in June 2010 and the options
will be exercisable for 90 days post-vesting.
Item
9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Press
Release dated April 26, 2010
SIGNATURES
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.
Date:
April 26, 2010
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METROPOLITAN HEALTH NETWORKS,
INC. |
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By:
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/s/ Roberto
L. Palenzuela |
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Roberto
L. Palenzuela |
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Secretary
and General Counsel |
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