| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On July 21, 2023, upon the recommendation of its Nominating and Corporate Governance Committee (the “NCG Committee”), the Board of Directors (the “Board”) of Cabaletta Bio, Inc. (the “Company”) appointed Shawn Tomasello to join the Board, effective as of July 21, 2023 (the “Effective Date”), to fill the newly created vacancy on the Board resulting from an increase in the size of the Board from five (5) to six (6) directors. Ms. Tomasello will serve as a Class I director until her term expires at the 2026 annual meeting of stockholders of the Company at which time she will stand for election by the Company’s stockholders. The Board determined that Ms. Tomasello is independent under the applicable listing standards of The Nasdaq Stock Market (“Nasdaq”).
On the Effective Date, Ms. Tomasello was also appointed to the Compensation Committee of the Board (the “Compensation Committee”). The Board has determined that Ms. Tomasello meets the requirements for independence of compensation committee members under the applicable listing standards of Nasdaq and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, effective as of the Effective Date: (i) Catherine Bollard, M.D. resigned as a member and Chair of the Compensation Committee, (ii) Mark Simon was appointed as the new Chair of the Compensation Committee and also resigned as Chair of the NCG Committee, and (iii) Scott Brun, M.D. was appointed as the new Chair of the NCG Committee.
In addition, on the Effective Date, the Board approved the formation of the Science and Technology Committee of the Board (the “S&T Committee”) to assist with the Board’s oversight of the Company’s research and development, manufacturing and technical operations and to advise the Board with respect to the Company’s scientific, pre-clinical and clinical activities. The newly created S&T Committee is composed of Dr. Bollard, Dr. Brun and Ms. Tomasello, with Dr. Bollard serving as the Chair of the S&T Committee.
As of the Effective Date, the Board’s committee composition is as follows:
| | • | | Audit Committee: Richard Henriques (Chair), Mark Simon and Scott Brun, M.D. |
| | • | | Compensation Committee: Mark Simon (Chair), Shawn Tomasello and Richard Henriques. |
| | • | | NCG Committee: Scott Brun, M.D. (Chair), Catherine Bollard, M.D. and Mark Simon. |
| | • | | S&T Committee: Catherine Bollard, M.D. (Chair), Scott Brun, M.D. and Shawn Tomasello. |
In connection with the formation of the S&T Committee, the Board approved the Company’s Second Amended and Restated Non-Employee Director Compensation Policy (the “Second A&R Director Compensation Policy”), effective as of the Effective Date, in order to establish compensation for the S&T Committee. Under the Second A&R Director Compensation Policy, the Company will pay a cash retainer of $7,500 per year to the members of the S&T Committee and a cash retainer of $15,000 to the Chair of the S&T Committee. No further changes were made to the terms of the Company’s existing amended and restated non-employee director compensation policy. The foregoing description of the terms of the Second A&R Director Compensation Policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Second A&R Director Compensation Policy which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.
As a non-employee director, Ms. Tomasello will receive cash compensation for her Board and committee service in accordance with the Second A&R Director Compensation Policy. In addition, under the Second A&R Compensation Policy, upon her election as a director on the Effective Date, Ms. Tomasello was granted an option to purchase 44,000 shares of the Company’s common stock at an exercise price per share of $13.48. This option shall vest in substantially equal quarterly installments over three years from the Effective Date, provided, however, that all vesting shall cease if the director ceases to have a service relationship, unless the Board determines that the circumstances warrant continuation of vesting. Ms. Tomasello is not a party to any transaction with the Company that would require disclosure under Item 404(a) of Regulation S-K, and there are no arrangements or understandings between Ms. Tomasello and any other persons pursuant to which she was selected as a director. In addition, Ms. Tomasello entered into an indemnification agreement with the Company consistent with the form of indemnification agreement entered into between the Company and its existing non-employee directors, a copy of which was filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (File No. 333-234017) filed with the Securities and Exchange Commission on September 30, 2019. Pursuant to the terms of this agreement, the Company may be required, among other things, to indemnify Ms. Tomasello for some expenses, including attorneys’ fees, judgments, fines and settlement amounts respectively incurred by her in any action or proceeding arising out of her respective service as one of the Company’s directors.
