Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 14, 2020, the Board of Directors (the “Board”) of Agile Therapeutics, Inc. (the “Company”) entered into amended and restated employment agreements with each of Alfred Altomari, Robert Conway, Geoffrey Gilmore, and Dennis Reilly (each, an “Amended Employment Agreement” or collectively the “Amended Employment Agreements”). The Amended Employment Agreements supersede each executive’s prior employment agreement (collectively the “Prior Agreements”). Pursuant to the Amended Employment Agreements, (a) the base salary and target bonus amount were updated to reflect each executive’s current salary and target bonus, (b) severance amounts payable upon an involuntary termination were increased, and (c) the restricted periods for purposes of the restrictive covenants were revised to reflect the increased severance period, as described below. The Amended Employment Agreements also include certain administrative and legal updates as determined appropriate by the Company.
Base Salary and Target Annual Bonus
Under the Amended Employment Agreements, Mr. Altomari is entitled to a base salary of $563,900, Mr. Conway is entitled to a base salary of $300,100, Mr. Gilmore is entitled to a base salary of $413,000, and Mr. Reilly is entitled to a base salary of $382,200. Under the Amended Employment Agreements, each executive continues to be eligible to participate in the Company’s annual bonus plan. The target annual bonus is 55% of base salary for Mr. Altomari, 40% of base salary for Mr. Conway, 40% of base salary for Mr. Gilmore, and 40% of base salary for Mr. Reilly.
Severance
Each Amended Employment Agreement continues to provide for payments in the event the Company terminates the executive’s employment without “reasonable cause” or if the executive resigns for “good reason,” or if the executive’s employment is terminated due to “disability,” each as defined in each Amended Employment Agreement, provided that the executive executes and does not revoke a release of claims (each, a “Qualifying Termination”).
Severance upon Termination Unrelated to a Change of Control
If a Qualifying Termination occurs prior to, or more than 12 months following, a change of control of the Company (as defined in each Amended Employment Agreement), the Company agrees to provide the executive with the following severance benefits:
•base salary continuation for a period of 12 months following the date of termination (the “Severance Period”); and
•reimbursement of the executive’s health insurance premiums for the Severance Period or until the executive obtains other employment, whichever is sooner.
Prior to the Amended Employment Agreements, the Prior Agreements provided that the Severance Period would be 12 months for Mr. Altomari, 3 months for Mr. Conway, 6 months for Mr. Gilmore, and from 6 to 12 months for Mr. Reilly (depending on his date of termination).
Severance Upon Termination Related to a Change of Control
In the event of a change of control following the executive’s Qualifying Termination, any base salary continuation payments still due to the executive will be paid in full upon the change of control.
If a Qualifying Termination occurs on the date of, or within 12 months following, a change of control of the Company, in lieu of the severance benefits set forth above, the Company agrees to provide the executive with the following severance benefits:
