| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
As previously disclosed on Form8-K filed with the Securities and Exchange Commission on July 30, 2019, (the “July 2019 Form8-K”) on July 25, 2019, John McDonough notified T2 Biosystems, Inc. (the “Company”) of his resignation as President and Chief Executive Officer (“CEO”) of the Company, effective as of the date on which his successor commences employment with the Company or such earlier date as determined by the Board of Directors of the Company (the “Board”). On January 8, 2020, the Board appointed John Sperzel to serve as the Company’s CEO, effective immediately, and accepted Mr. McDonough’s resignation, effective January 8, 2020 (the “Separation Date”). As previously disclosed and in accordance with the terms of his employment agreement with the Company, as amended, Mr. McDonough will be entitled to receive the separation payments and benefits described in the July 2019 Form8-K if he timely executes a general release of claims in the Company’s favor. Mr. McDonough is expected to continue to provide services to the Company after the Separation Date asnon-executive Chairman of the Board.
On January 8, 2020, the Board appointed John Sperzel to serve as the Company’s President and CEO, effective immediately. Prior to joining the Company, Mr. Sperzel, 56, was the Chief Executive Officer, President and a member of the Board of Directors of Chembio Diagnostics, Inc., apoint-of-care diagnostics company focused on infectious diseases from March 2014 to January 2020. From September 2011 to December 2013, Mr. Sperzel was the Chief Executive Officer and President of International Technidyne Corporation, a developer ofpoint-of-care cardiovascular diagnostic testing solutions. Mr. Sperzel received his Bachelor of Science degree in Business Administration/Management from Plymouth State College.
On January 8, 2020, the Board also appointed Mr. Sperzel as a Class II Director, to service on the Board until the 2022 Annual Meeting of Stockholders and until his successor is duly elected and qualified, or until his earlier death, resignation or removal.
In connection with his appointment as President and CEO, the Company entered into an employment agreement with Mr. Sperzel. Under the terms of Mr. Sperzel’s employment agreement, he will receive an initial annual base salary of $500,000 and will be eligible to receive an annual cash bonus award targeted at 75% of his annual base salary, subject to the attainment of Company and individual performance goals. Effective as of January 8, 2020, the Board granted Mr. Sperzel an option under the T2 Biosystems, Inc. Inducement Award Plan to purchase 3,000,000 shares of common stock of the Company at an exercise price per share equal to the stock’s closing price on the NASDAQ market on the grant date. The option vests in 48 substantially equal monthly installments over the four years following the date the options were granted, subject to Mr. Sperzel’s continued service with the Company through the applicable vesting date.
If Mr. Sperzel’s employment is terminated by the Company without cause or by Mr. Sperzel for good reason, in each case, other than on or within 12 months following the date of a change of control (with the terms “cause,” “change of control” and “good reason” as defined in the employment agreement referenced above), subject to his signing and not revoking a general release of claims in the Company’s favor, to receive:
| | • | | an amount equal to his annual base salary, payable over a12-month period following the date of termination, plus apro-rata portion of his target annual cash bonus for the calendar year in which the termination occurs (based on the number of calendar days elapsed prior to the effective date of such termination), payable at such time as such year’s annual bonus would have been paid had his employment not terminated, and |
| | • | | reimbursement for a portion of the COBRA premiums (based on the then-current cost-sharing rates for active employees) for continued medical coverage for up to 12 months following his termination. |
If Mr. Sperzel’s employment is terminated by the Company without cause or by Mr. Sperzel for good reason on or within 12 months following the date of a change of control, Mr. Sperzel will be entitled, subject to his signing and not revoking a general release of claims in the Company’s favor, to receive:
