| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Between May 18, 2020 and May 21, 2020, the Company entered into Executive Change in Control and Severance Agreements (“CiC Agreements”) with each of Casey C. Lynch, Michael Detke, M.D., Stephen S. Dominy, M.D., Leslie Holsinger, Ph.D., Christopher Lowe and Caryn McDowell (each an “Executive Officer” and collectively, the “Executive Officers”), which provide for certain payments and benefits in connection with certain terminations of an Executive Officer’s employment with the Company, including terminations that occur in connection with a change in control (as defined in the CiC Agreements), subject to the Executive Officer’s execution andnon-revocation of a general release of claims in a form prescribed by the Company.
Under the CiC Agreements, if within the period beginning 3 months prior to, and ending 18 months following, a change in control of the Company (the “CiC Period”), the Company terminates an Executive Officer’s employment without “cause” or an Executive Officer resigns for “good reason” (each as defined in the CiC Agreements), the Executive Officer will be eligible to receive the following:
| | • | | 18 months of base salary in the case of Ms. Lynch and 12 months of base salary in the case of the other Executive Officers; |
| | • | | an amount equal to 150% of the Executive Officer’s target annual bonus opportunity for the year in which the termination occurs in the case of Ms. Lynch and 100% in the case of the other Executive Officers; |
| | • | | a cash payment equal to 18 months of COBRA premiums in the case of Ms. Lynch and 12 months of COBRA premiums in the case of the other Executive Officers; and |
| | • | | full vesting acceleration of any then-outstanding unvested equity awards that are subject to time-based vesting and vesting at 100% of target levels of any then-outstanding unvested equity awards that are subject to performance-based vesting. |
In addition, the CiC Agreements provide that if the Company terminates an Executive Officer’s employment without cause outside of the CiC Period, the Executive Officer will be eligible to receive the following:
| | • | | (i) 12 months of base salary in the case of Ms. Lynch and (ii) for the other Executive Officers, base salary for a severance period equal to a specified number of months based on the Executive Officer’s length of employment, as follows: (a) 3 months if the Executive Officer was employed by the Company for less than 12 months, (b) 6 months if the Executive Officer was employed by the Company for less than 24 months but more than 12 months, and (c) 9 months if the Executive Officer was employed by the Company for more than 24 months; and |
| | • | | a cash payment equal to COBRA premiums for the applicable severance period delineated above. |
In addition, if any of the payments or benefits provided to an Executive Officer constitutes a parachute payment under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the payments or benefits may be reduced so that no portion of the payment is subject to the excise tax imposed under Section 4999 of the Code.
The foregoing description of the CIC Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Form of Executive Change in Control and Severance Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form8-K and is incorporated herein by reference.
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