Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Financial Officer
On November 6, 2019, Kaleido Biosciences, Inc. (the “Company”), issued a press release announcing the decision of the Board of Directors (the “Board”) to appoint William Duke as Chief Financial Officer, effective November 25, 2019. Mr. Duke will also serve as the Company’s principal financial officer and principal accounting officer. A copy of this press release is furnished as Exhibit 99.1 to this report on Form8-K.
In connection with Mr. Duke’s appointment as Chief Financial Officer, the Company and Mr. Duke will enter into an employment agreement (the “Employment Agreement”). Pursuant to the terms of the Employment Agreement, Mr. Duke will receive an annual base salary of $420,000 and be eligible for an annual bonus, with a target bonus of 40% of his base salary, based on achievement of performance goals and business conditions at the Company. Mr. Duke is also eligible to receive aone-time bonus of $100,000, based on the achievement of performance goals related to raising capital, which will be subject to repayment by Mr. Duke in the event Mr. Duke’s employment is terminated “for cause” (as determined by the Company) or voluntarily by Mr. Duke during the first twelve months of his employment. Mr. Duke will be granted an option to purchase 270,000 shares of the Company’s common stock, at an exercise price equal to the fair market value of such shares on the date of grant (the “Equity Award”). Twenty-five percent of the Equity Award will vest and become exercisable on theone-year anniversary of Mr. Duke’s start date, and the balance of the Equity Award will vest in equal installments over the next twelve quarters thereafter, subject to Mr. Duke’s continued employment. Mr. Duke is also eligible to participate in the Company’s employee benefit plans available to its employees, subject to the terms of those plans.
In the event that Mr. Duke is terminated by the Company without cause or resigns for good reason, Mr. Duke will be entitled to (i) cash severance payments in an amount equal to twelve months of Mr. Duke’s base salary existing at the time of his termination plus an amount equal to the incentive compensation paid to Mr. Duke during the prior year, (ii) an extension of the period during which Mr. Duke may exercise any of his vested options until the first anniversary of the date of termination; and (iii) continuation of COBRA coverage paid by the Company through twelve months following the date of termination, all of which shall be paid out in substantially equal installments.
In the event that Mr. Duke is terminated without cause or he resigns for good reason within fifteen months following a “change in control” (as defined in the Employment Agreement), Mr. Duke will be entitled to (i) cash severance payments in an amount equal to one and a half times the sum of twelve months of Mr. Duke’s salary existing at the time of his termination plus the target incentive compensation established for Mr. Duke in the fiscal year of termination (or if no such target has been established, the target incentive compensation for the prior year), paid in one lump sum payment; (ii) the acceleration of vesting of all unvested equity awards held by him immediately prior to such termination; and (iii) continuation of COBRA coverage paid by the Company through eighteen months following the date of termination.
The foregoing description of the Employment Agreement is a summary only and is qualified in its entirety by reference to the full text of the Employment Agreement.
Departure and Appointment of Principal Accounting Officer
On November 4, 2019, Rick Scalzo, the principal accounting officer of the Company, submitted notice to the Company of his resignation, effective as of November 29, 2019.
Item 9.01 Exhibits
