Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 22, 2019, Proteostasis Therapeutics, Inc. (“Proteostasis” or the “Company”) andPo-Shun Lee, M.D. agreed that Dr. Lee will transition from his role as Executive Vice President and Chief Medical Officer of the Company as of July 22, 2019 (“Transition Date”). On July 22, 2019, the Board of Directors of the Company (the “Board”) elected Geoffrey S. Gilmartin, M.D. M.S.Sc., the Company’s current Chief Medical Affairs Officer, to succeed Dr. Lee as the Company’s Chief Medical Officer, effective as of the Transition Date. In order to ensure a smooth transition, Dr. Lee will continue to provide consulting services to the Company.
In connection with the transition, the Company and Dr. Lee entered into a Separation Agreement and General Release dated July 22, 2019 (the “Separation Agreement’), which, among other things, provides that, Dr. Lee is entitled to the following severance benefits (i) payment of his accrued and unpaid salary and benefits, (ii) salary continuation for nine months (the “Severance Period”), (iii) payment in respect of COBRA premiums, and (iv) continued vesting of all equity awards that would have vested during the Severance Period, and in the case of each of (ii), (iii), and (iv), subject to the execution of a separation agreement and release. In connection with the execution of the Separation Agreement, the Company and Dr. Lee entered into a Consulting Agreement dated July 23, 2019 (the “Consulting Agreement’) pursuant to which Dr. Lee will provide consulting services to the Company beginning as of July 23, 2019 and shall continue thereafter unless the agreement is terminated earlier by its terms. In exchange for his consulting services, Dr. Lee will (i) receive a consulting fee of $450.00 per hour, (ii) remain eligible for a prorated annual incentive bonus for the fiscal year 2019 if the Company pays bonuses on account of such year to executives who remain employed with the Company, (iii) be eligible for certain change in control benefits, and (iv) be eligible for continued vesting of stock options following the Severance Period if he is still providing consulting services.
To be eligible for the separation benefits described above, Dr. Lee must: (a) not revoke the Separation Agreement within the seven (7) business day revocation period following the date he signed the Separation Agreement; and (b) comply with his obligations under the Separation Agreement. The Separation Agreement and Consulting Agreement terminate and supersede any prior severance and change of control agreements between the Company and Dr. Lee.
The foregoing description of the terms and conditions of the Separation Agreement and Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation Agreement and Consulting Agreement, which will be filed as exhibits to the Company’s Quarterly Reporton Form 10-Q for the period ending September 30, 2019.
