| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective June 10, 2024 (the “Separation Date”), Christopher Krawtschuk will depart bluebird bio, Inc. (the “Company”) and cease serving as Chief Financial Officer and principal accounting officer. Mr. Krawtschuk’s departure is not the result of any disagreement between Mr. Krawtschuk and the Company on any matters relating to the Company’s accounting policies or business strategy.
On May 28, 2024, the Board of Directors (the “Board”) appointed O. James Sterling as Chief Financial Officer of the Company and designated Mr. Sterling as principal accounting officer, effective as of the date Mr. Sterling commences employment with the Company, which is expected to be June 10, 2024 (the “Transition Date”).
Mr. Sterling, 53, has served as Chief Financial Officer of Renalytix plc, a diagnostics company focused on clinical management of kidney disease, where he leads the finance department, since November 2018. From 2015 to 2018, Mr. Sterling served as managing partner of Renwick Capital LLC. Prior to that, he served as a managing director at investment banks Brock Capital Group LLC and Aleutian Capital Group. Mr. Sterling is currently a director of Star Mountain Lower Middle-Market Capital Corp. Mr. Sterling received his B.A. from Boston University and an MBA from Columbia Business School.
In connection with Mr. Sterling’s appointment as Chief Financial Officer, the Company has entered into an employment agreement with Mr. Sterling, effective as of June 10, 2024 (the “Employment Agreement”), which provides for an annual base salary of $500,000, a one-time sign on bonus in the amount of $100,000 (subject to repayment in the event Mr. Sterling resigns not for “good reason” or is terminated for “cause” within one year of his start date), a target annual bonus opportunity of 45% of his annual base salary and an initial equity grant consisting of 300,000 stock options, restricted stock units with respect to 100,000 shares and, subject to stockholder approval of an increase to the aggregate shares authorized for issuance under the Company’s 2023 Incentive Award Plan at the Company’s 2024 annual meeting of stockholders, performance-vesting restricted stock units with respect to 50,000 shares (at target). The stock option award vests with respect to 25% of the shares on the first anniversary of the grant date, with the remaining shares vesting in 36 equal installments on each monthly anniversary thereafter. The restricted stock unit award vests with respect to 25% of the shares on each of the first four anniversaries of the grant date, and the performance-vesting restricted stock units vest, to the extent earned based on the achievement of certain total shareholder return performance metrics, on the third anniversary of the grant date.
In the event of a termination of employment by the Company without “cause” or by Mr. Sterling for “good reason” (each as defined in the Employment Agreement), subject to his execution and non-revocation of a separation agreement and release of claims and his continued compliance with the applicable restrictive covenants, Mr. Sterling will be entitled to receive (i) an amount equal to one times his annual base salary, payable in ratable installments over 12 months, and (ii) a monthly COBRA subsidy for the continuation of group health coverage for 12 months or Mr. Sterling’s COBRA health continuation period, whichever ends earlier; provided, that if such termination occurs within 12 months of a Change in Control (as defined in the Employment Agreement), Mr. Sterling will instead be entitled to (i) an amount equal to one times the sum of (A) his annual base salary and (B) his target annual bonus, payable in a lump sum, (ii) a monthly COBRA subsidy for the continuation of group health coverage for 12 months or Mr. Sterling’s COBRA health continuation period, whichever ends earlier, and (iii) acceleration of all equity awards granted after the date of the Employment Agreement (with any applicable performance metrics deemed to be earned at the greater of actual and target performance levels).
The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the actual Employment Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
In connection with Mr. Krawtschuk’s separation from the Company, subject to, among other things, his execution and non-revocation of a separation agreement and release of claims and his continued compliance with his applicable restrictive covenant obligations, he will be eligible for cash severance consistent with the terms of his previously disclosed employment agreement with the Company, consisting of an amount equal to one times his annual base salary, payable in ratable installments over 12 months.
