| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Appointment of New President and Chief Executive Officer
On June 27, 2019, Intersect ENT, Inc. (the “Company”) announced that Thomas A. West has been appointed as the Company’s new President and Chief Executive Officer, effective July 22, 2019 (the “Commencement Date”), and in that role will be the Company’s principal executive officer. On the Commencement Date, Kieran T. Gallahue, the Company’s Interim Chief Executive Officer and Executive Chairman of the Board of Directors of the Company, will cease to be the Company’s principal executive officer and will remain the Executive Chairman of the Board of Directors of the Company.
Mr. West, age 55, has served as division president, diagnostics at Hologic Inc. (“Hologic”), a medical technology company, since October 2014, where he was responsible for managing Hologic’s domestic and international diagnostics solutions business and the general management of Hologic’s full portfolio of businesses in Latin America. From 1992 to 2014, Mr. West worked at Johnson & Johnson in various roles of increasing responsibility. Most recently, he served as the Worldwide Vice President – Strategy and Business Development for Johnson & Johnson’s Diabetes Solutions Companies, in which role he was responsible for business strategy and development initiatives across all markets. Prior to 1992, he served as President of LifeScan North America and as President of LifeScan EMEA.
In connection with Mr. West’s appointment as President and Chief Executive Officer, Mr. West and the Company have entered into an offer letter dated June 24, 2019 (the “Offer Letter”). Under the terms of the Offer Letter, Mr. West will receive an annual base salary of $560,000, asign-on bonus of $100,000, and will be eligible for an annual target bonus equal to 75% of his base salary paid during the bonus year based on the attainment of certain individual and corporate performance objectives to be determined by Company’s compensation committee each year.
In addition, pursuant to the terms of the Offer Letter, subject to the occurrence of the Commencement Date, Mr. West will receive (1) a restricted stock unit grant to acquire shares of the Company’s common stock having a value of $3,000,000, vesting with respect to 1/3 of the shares each year for three years, (2) a stock option grant to acquire shares of the Company’s common stock having a value of $1,000,000, vesting with respect to 1/8 of the shares on the date that is six months from the date of grant, and the remainder vesting in 42 equal monthly installments thereafter, and (3) a performance-based stock option grant to acquire shares of the Company’s common stock having a value of $3,000,000 (the “Performance Based Option”) vesting with respect to all shares after three years, subject to meeting specified stock price performance metrics, in each case subject to Mr. West’s continued service with the Company.
If Mr. West’s employment is terminated by the Company without cause or if he resigns for good reason, Mr. West will be entitled to the following severance payments and benefits: (i) a cash payment in an amount equal to twelve months of his then current annual base salary; (ii) a cash payment in an amount equal to his target cash incentive award for such year, prorated for the portion of the year in which he provided service to the Company; and (iii) Company-paid COBRA premium reimbursement for up to 12 months.
If Mr. West’s employment is terminated by the Company without cause or if he resigns for good reason and provided that any such termination occurs during the period beginning with the date that is one month before the Company enters into a transaction that would result in the Company’s change of control and ending on the date 12 months following the change of control, in addition to the foregoing severance payments and benefits, Mr. West will be entitled to 100% vesting of any unvested equity awards, provided that his Performance Based Option award will accelerate vesting only to the extent that the performance metrics have been achieved as of the date of termination of employment.
Mr. West’s receipt of the foregoing severance payments and benefits is conditioned on his execution of a release of claims in favor of the Company.
Mr. West will enter into the Company’s standard form of indemnity agreement which is filed as Exhibit 10.1 to the Company’s Registration Statement on FormS-1 (file no.333-196974) as filed with the Securities and Exchange Commission on July 9, 2014.
The Offer Letter will be filed as an exhibit to the Company’s Quarterly Report on Form10-Q for the quarter ending June 30, 2019.
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