| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(c)
On February 28, 2022, Cullinan Oncology, Inc. (the “Company”) announced the hiring and appointment of Jeffrey Jones, M.D., MPH, MBA as the Company’s Chief Medical Officer, effective immediately.
Dr. Jones, age 51, most recently served as Vice President, Global Drug Development, Lymphoma and Myeloid Diseases, at Bristol Myers Squibb Company (“Bristol Myers”) from April 2020 to February 2022 and as Executive Medical Director, Global Clinical Research and Development from August 2017 to April 2020. Prior to his service at Bristol Myers, Dr. Jones was an Associate Professor of Internal Medicine at The Ohio State University College of Medicine from September 2006 to August 2017. Dr. Jones received his M.D. from University of Michigan Medical School in Ann Arbor, Michigan and completed his residency in internal medicine at McGill University Faculty of Medicine in Montreal and a fellowship in hematology and medical oncology at MD Anderson Cancer Center in Houston, Texas. Dr. Jones also holds an M.B.A. from The Ohio State University Fisher College of Business and an M.P.H. from the University of Texas School of Public Health.
In connection with Dr. Jones’ appointment as Chief Medical Officer, the Company and Dr. Jones entered into an employment agreement (the “Employment Agreement”), effective February 28, 2022 (the “Effective Date”). The Employment Agreement provides for “at will” employment. Pursuant to the terms of the Employment Agreement, Dr. Jones will receive an annual salary of $460,000 per year and a one-time sign-on bonus of $100,000 (the “Sign-On Bonus”), provided that if Dr. Jones resigns other than for good reason or is terminated by the Company for cause (as such terms are defined in the Employment Agreement) prior to the 18-month anniversary of the Effective Date, he shall repay the Company a prorated portion of the gross Sign-On Bonus. For fiscal year 2022, Dr. Jones shall be paid a cash incentive compensation amount, prorated for the period from the Effective Date through December 31, 2022 and is eligible for an annual incentive bonus, initially set at forty percent (40%) of his base salary.
The Employment Agreement further provides for the grant of an option to purchase 215,000 shares of the Company’s common stock (the “Option Grant”). The Option Grant will vest as to 25% of the shares underlying the stock option on February 28, 2023, with the remaining shares vesting ratably on a monthly basis over the following three years, subject to Dr. Jones’ continued employment with the Company. The Compensation Committee of the Board of Directors of the Company approved the Option Grant with an exercise price equal to $14.34 per share, which was the closing price of the common stock of the Company, as reported by the Nasdaq Global Select Market, on February 28, 2022, the date of grant. Dr. Jones 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 Dr. Jones is terminated by the Company without cause or resigns for good reason, then subject to him entering into a separation agreement and release in a form and manner satisfactory to the Company within 60 days following the date of termination or such shorter period set forth therein, Dr. Jones will be entitled to (i) cash severance payments in an amount equal to 9 months of Dr. Jones’ base salary existing at the time of his termination; (ii) a prorated bonus for the year of termination and (iii) subject to Dr. Jones’ copayment of his portion of the COBRA premiums and his proper election to receive benefits under COBRA, the Company will pay up to 9 months of a portion of each COBRA premium payment equal to the portion the Company contributed to such health insurance premium cost as of the date of termination (or until Dr. Jones becomes eligible for alternative health benefits from a subsequent employer or ineligible for COBRA, if earlier).
In the event that Dr. Jones is terminated without cause or resigns for good reason on or within 12 months following a “change in control” (as defined in the Employment Agreement), then subject to him entering into a general release of claims against the Company and all related persons and entities within 60 days following the date of termination or such shorter period set forth therein, Dr. Jones will be entitled to (i) a lump sum payment in cash equal to 12 months of his base salary existing at the time of his termination; (ii) his target bonus for the year of termination (or the target bonus in effect immediately prior to the change in control, if higher) and (iii) subject to Dr. Jones’ copayment of his portion of the COBRA premiums and his proper election to receive benefits under COBRA, the Company will pay up to 12 months of a portion of each COBRA premium payment equal to the portion the Company contributed to such health insurance premium cost as of the date of termination (or until Dr. Jones becomes eligible for alternative health benefits from a subsequent employer or ineligible for COBRA, if earlier). In addition, in the event that Dr. Jones is terminated without cause or for good reason on or within 12 months following a change in control, then all unvested time-based equity awards held by Dr. Jones on the date of termination shall immediately accelerate and become fully vested and exercisable on the date of termination.
In connection with Dr. Jones’ appointment as Chief Medical Officer, Dr. Jones will enter into the Company’s standard form of indemnification agreement for executive officers, a copy of which was filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (File No. 333-251512) filed with the SEC on December 18, 2020. Pursuant to the terms of the indemnification agreement, the Company may be required, among other things, to indemnify Dr. Jones for some expenses,
