Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 18, 2020, Neos Therapeutics, Inc. (the “Company”) entered into employment agreement amendments with each of Gerald McLaughlin, the Company’s President and Chief Executive Officer, Richard I. Eisenstadt, the Company’s Chief Financial Officer, and John M. Limongelli, the Company’s Senior Vice President, General Counsel and Corporate Secretary, in order to modify the lump sum cash payments and other severance benefits that such individuals may be entitled to receive upon a termination of employment without Cause or for Good Reason within 12 months of a Change in Control of the Company, as summarized below. The terms “Cause,” “Good Reason” and “Change in Control” are each defined in the respective employment agreements for such individuals, as amended. Except as modified by such amendments, the other terms of such employment agreements remain in full force and effect.
In the event Mr. McLaughlin’s employment is terminated by the Company without Cause or he terminates his employment for Good Reason within 12 months after a Change in Control, subject to his signing, not revoking, and complying with a Separation Agreement and Release and the Separation Agreement and Release becoming fully effective, Mr. McLaughlin will be entitled to receive (i) a lump sum cash payment equal to 24 months of Mr. McLaughlin’s base salary then in effect plus two times his target annual performance bonus for the then-current year, and (ii) if Mr. McLaughlin was participating in our group health plan immediately prior to his termination, the Company will pay the monthly employer COBRA premium for the same level of group health coverage as in effect on the date of termination until the earliest of (A) 24 months following termination, (B) the date of his eligibility for group health coverage through other employment and (C) the end of Mr. McLaughlin’s COBRA health continuation period.
In the event Mr. Eisenstadt’s employment is terminated by the Company without Cause or he terminates his employment for Good Reason within 12 months after a Change in Control, subject to his signing of the Separation Agreement and Release and the Separation Agreement and Release becoming fully effective, Mr. Eisenstadt will be entitled to receive (i) a lump sum cash payment equal to 1.5 times the sum of (A) Mr. Eisenstadt’s then current base salary (or the Mr. Eisenstadt’s base salary in effect immediately prior to the Change in Control, if higher) plus (B) Mr. Eisenstadt’s target annual incentive compensation for the then-current year, and (ii) if Mr. Eisenstadt was participating in our group health plan immediately prior to his termination, the Company will pay a monthly cash payment until the earlier of 18 months following termination or the end of Mr. Eisenstadt’s COBRA health continuation period, in an amount equal to the amount that the Company would have made to provide health insurance to him had he remained employed with the Company.
In the event Mr. Limongelli’s employment is terminated by the Company without Cause or he terminates his employment for Good Reason within 12 months after a Change in Control, subject to his signing, not revoking, and complying with a Separation Agreement and Release and the Separation Agreement and Release becoming fully effective, Mr. Limongelli will be entitled to receive (i) a lump sum cash payment equal to 1.5 times the sum of (A) Mr. Limongelli’s base salary then in effect plus (B) his target annual performance bonus for the then-current year, and (ii) if Mr. Limongelli was participating in our group health plan immediately prior to his termination, the Company will pay the monthly employer COBRA premium for the same level of group health coverage as in effect on the date of termination until the earliest of (X) 18 months following termination, (Y) the date of his eligibility for group health coverage through other employment and (Z) the end of Mr. Limongelli’s COBRA health continuation period.
The foregoing description of the amendments is only a summary and is qualified in its entirety by reference to the full text of the amendments, which will be filed as exhibits to the Company’s next Quarterly Report on Form 10-Q.
