| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 3, 2022, the Board of Directors (the “Board”) of Fulcrum Therapeutics, Inc. (the “Company”) appointed Esther Rajavelu as the Company’s Chief Financial Officer and Treasurer, effective immediately. In connection with her appointment, Ms. Rajavelu will serve as the Company’s principal financial officer.
As a result of Ms. Rajavelu’s appointment, Peter Thomson, the Company’s Vice President, Finance and Accounting, will cease to serve as principal financial officer. Mr. Thomson will continue to serve as Vice President, Finance and Accounting.
Ms. Rajavelu, age 43, served as a Senior Equities Research Analyst at UBS Securities, an investment bank (“UBS”), from June 2020 to December 2021. Prior to joining UBS, Ms. Rajavelu served as a Senior Equities Research Analyst at Oppenheimer & Co. Inc., an investment bank (“Oppenheimer”) from June 2018 to June 2020. Prior to joining Oppenheimer, Ms. Rajavelu served as an Equities Research Analyst at Deutsche Bank, an investment bank (“Deutsche Bank”), from June 2014 to June 2018. Prior to joining Deutsche Bank, she served as Vice President, Life Sciences M&A and Capital & Debt Advisory at Ernst & Young Capital Advisors, LLC, a brokerage firm (“EY Capital”) from 2011 to 2014. Prior to joining EY Capital, she worked at Bank of America Merrill Lynch, an investment bank, as Vice President, Healthcare Investment Banking from 2010 to 2011 and as an Associate, Healthcare Investment Banking from 2006 to 2009. Ms. Rajavelu received a MBA from The Wharton School of the University of Pennsylvania and a BA in Economics and International Relations from Wesleyan University.
On January 3, 2022, Ms. Rajavelu entered into an employment agreement with the Company (the “Employment Agreement”). Pursuant to the Employment Agreement, Ms. Rajavelu will be paid an annual base salary of $435,000. She will receive a cash signing bonus of $150,000 (the “Signing Bonus”). In the event that Ms. Rajavelu is terminated for cause or resigns during the first 12 months of her employment, she will be obligated to reimburse the Company for the Signing Bonus, and should she be terminated for cause or resign within 12 to 24 months of the commencement of her employment, she would be obligated to reimburse the Company for 50% of the Signing Bonus. Following the end of each calendar year, Ms. Rajavelu will be eligible to receive an annual discretionary performance bonus with a target of 40% of her then annual base salary based upon the Board’s assessment of her performance and the Company’s attainment of goals as set by the Board in its sole discretion. On January 3, 2022 (the “Effective Date”), the Board of the Company granted Ms. Rajavelu an option to purchase 200,000 shares of the Company’s common stock (the “Option”). The Option was granted outside of the Company’s 2019 Stock Incentive Plan as an inducement material to Ms. Rajavelu’s entry into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The Option has an exercise price of $17.82 per share, equal to the closing price of the Company’s common stock on the Effective Date. The Option vests as to 25% of the shares underlying the Option on the first anniversary of the Effective Date and as to additional 6.25% of the shares in equal quarterly installments over the twelve successive quarters following the first anniversary of the Effective Date.
In the event of the termination of Ms. Rajavelu’s employment by us without cause, or by her for good reason, prior to or more than 12 months following a “change in control” (as change in control is defined in the Employment Agreement), Ms. Rajavelu would be entitled to her base salary that has accrued and to which she is entitled as of the termination date and other accrued benefits, collectively, the accrued obligations. In addition, she is entitled to (1) continued payment of her base salary, in accordance with our regular payroll procedures, for a period of 9 months and (2) provided she is eligible for and timely elects to continue receiving group medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by us of the portion of health coverage premiums we pay for similarly situated, active employees who receive the same type of coverage, for a period of up to 9 months following her date of termination.
In the event of the termination of Ms. Rajavelu’s employment by us without cause, or by her for good reason, within 12 months following a change in control, Ms. Rajavelu is entitled to the accrued obligations. In addition, she is entitled to (1) continued payment of her then-current base salary (or, if higher, her base salary in effect immediately prior to the change in control), in accordance with our regular payroll procedures, for a period of 12 months, (2) provided she is eligible for and timely elects to continue receiving group medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by us of the portion of health coverage premiums we pay for similarly-situated, active employees who receive the same type of coverage, for a period of up to 12 months following her date of termination, (3) a lump sum payment equal to 100% of her target bonus for the year in which her employment is terminated or, if higher, her target bonus immediately prior to the change in control and (4) full vesting acceleration of her then-unvested equity awards that vest solely based on the passage of time, such that her time-based equity awards become fully exercisable and non-forfeitable as of the termination date.
In addition, pursuant to the Company’s standard form of indemnification agreement Ms. Rajavelu entered into in connection with her employment as Chief Financial Officer, the form of which was filed with the Securities and Exchange Commission as Exhibit 10.15 to the Company’s Registration Statement on Form S-1 (File No. 333-232260) on June 21, 2019, the Company may be required, among other things, to indemnify Ms. Rajavelu for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts actually and reasonably incurred by her in any action or proceeding arising out of her service as an officer or director of the Company.
