Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of President and Chief Executive Officer
On May 20, 2022, OraSure Technologies, Inc. (the “Company”) entered into an employment agreement with Carrie Eglinton Manner, and in connection therewith, the board of directors (the “Board”) of the Company will appoint Ms. Eglinton Manner as the Company’s President and Chief Executive Officer, effective June 4, 2022 (the “Effective Date”). In addition, the Board intends to increase the size of the Board by one seat, and in connection therewith, Ms. Eglinton Manner will be appointed by the Board to serve as a Class I director on the Board as of the Effective Date. Ms. Eglinton Manner will succeed Dr. Nancy J. Gagliano, who has served as the Company’s Interim Chief Executive Officer following the termination of Dr. Stephen S. Tang on March 31, 2022, as previously disclosed. In connection with Ms. Eglinton Manner’s appointment as Chief Executive Officer, Dr. Gagliano will resign, effective June 4, 2022, from her position as the Company’s interim Chief Executive Officer.
Ms. Eglinton Manner, age 48, joins the Company with years of leadership experience across multiple disciplines. Prior to joining the Company, Ms. Eglinton Manner served as Senior Vice President, Advanced & General Diagnostic and Clinical Solutions at Quest Diagnostics since January 2017. Prior to Quest, Ms. Eglinton Manner spent over 20 years in various leadership roles in healthcare businesses at GE Healthcare. From 2009 through 2016, she served as President & CEO of four distinct GE Healthcare global businesses in the areas of diagnostic imaging, lab services and medical devices. She has served as a director of Repligen Corporation since June 2020. Ms. Eglinton Manner holds a B.S. in mechanical engineering from the University of Notre Dame.
In connection with the appointment of Ms. Eglinton Manner as the Company’s President and Chief Executive Officer, the Company and Ms. Eglinton Manner entered into an employment agreement dated May 20, 2022 (the “Employment Agreement”). Pursuant to the Employment Agreement, Ms. Eglinton Manner’s initial annual base salary will be $700,000 and she will participate in the Company’s annual incentive plan with a target annual incentive amount of at least 100% of her annual base salary. The Employment Agreement also provides that the Company will reimburse Ms. Eglinton Manner for reasonable car service fees incurred to commute between her home and the Company’s offices and, subject to the Company’s policies, other reasonable and necessary expenses incurred in the course of her employment.
As an inducement for Ms. Eglinton Manner to enter into employment with the Company, the Employment Agreement provides that Ms. Eglinton Manner will receive the following equity awards upon her commencement of employment:
(i) a restricted stock (or restricted stock unit) award for a number of shares of the Company’s common stock determined by dividing $4,000,000 by the average closing price of the Company’s common stock for the 20 trading days immediately preceding the grant date (the “Trailing Average Price”), which award will vest on the second anniversary of the Effective Date and is intended to replace compensation from her prior employer that Ms. Eglinton Manner will forfeit to accept employment with the Company;
(ii) a restricted stock (or restricted stock unit) award for a number of shares of the Company’s common stock determined by dividing $1,600,000 by the Trailing Average Price, which award will vest in three equal annual installments, on the first three anniversaries of the Effective Date; and
(iii) a performance-based restricted stock unit award for a target number of shares of the Company’s common stock determined by dividing $1,600,000 by the Trailing Average Price, which award will be subject to the same vesting and performance conditions as are applicable to the 2022 performance-based restricted stock unit awards granted to the Company’s other executive officers.
The foregoing awards will be granted in reliance on the employment inducement exemption provided under Nasdaq Listing Rule 5635(c)(4).
For 2023 and subsequent calendar years, Ms. Eglinton Manner will be eligible to receive annual equity awards under the Company’s long-term incentive policy or plan, as in effect from time to time. It is the Company’s current intention that Ms. Eglinton Manner’s 2023 annual equity awards will be at least equal in value to the awards described in clauses (ii) and (iii) above, and be equally weighted between time- and performance-based components.
The Employment Agreement also provides that, if Ms. Eglinton Manner’s employment with the Company ceases due to a termination by the Company without cause or resignation by her with good reason, in either case not proximate to a change of control (as defined in the Employment Agreement) of the Company, then she will receive: (i) a lump sum cash payment equal to 18 months of her then-current annual base salary, (ii) a lump sum cash payment equal to 150% of her target bonus amount for the year of termination; (iii) subsidized COBRA continuation coverage for up to 18 months, (iv) accelerated vesting of 50% of any outstanding and otherwise unvested time-based awards (other than the Mark Whole Award, which (if not already vested) will then vest in full); and (v) 50% of any outstanding performance-based awards will remain outstanding and vest (or be forfeited) based on actual performance through the end of the applicable performance period.
However, if Ms. Eglinton Manner’s employment with the Company ceases due to a termination by the Company without cause or resignation by her with good reason (as defined in the Employment Agreement), in either case within 60 days prior or 18 months following a change of control of the Company, then in lieu of the severance benefits described above, she will receive: (i) a lump sum cash payment equal
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