| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On December 5, 2022, the Board of Directors (the “Board”) of 23andMe Holding Co. (the “Company”) approved the adoption of the 23andMe Holding Co. Change in Control Separation Plan (the “CIC Plan”), to be effective as of December 5, 2022. Pursuant to the CIC Plan, the Company’s “Officers” (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and certain key employees (each, a “Participant” and collectively, the “Participants”) designated by the Board, the Compensation Committee of the Board, or, with respect to employees who are not Officers, the Chief Executive Officer, will be entitled to receive certain separation benefits if such Participant’s employment is terminated in connection with a Change in Control (as defined in the CIC Plan). Specifically, a Participant will be entitled to the Separation Benefits (as defined below) if (i) a Change in Control occurs and, (ii) within the period beginning 30 days before and ending 12 months after such Change in Control, such Participant’s employment is terminated either (a) by the Company or a subsidiary of the Company without Cause (as defined in the CIC Plan) or (b) by such Participant for Good Reason (as defined in the CIC Plan) (the occurrence of (i) and (ii), a “Double-Trigger Event”).
Subject to a Participant’s execution of a release of claims in favor of the Company, a Participant will be entitled to the following separation benefits (collectively, the “Separation Benefits”) upon the occurrence of a Double-Trigger Event:
| | • | | a lump sum cash payment equal to six months of the Participant’s annual base salary (either in effect on the date of termination or in effect on the date of the Change in Control, whichever is higher) plus one-half of the Participant’s target annual bonus under the Company’s Annual Incentive Plan for the year of termination; |
| | • | | a lump sum cash payment equal to the cost of six months of COBRA continuation of the medical, dental, and vision coverage in effect for the Participant on the date of termination; and |
| | • | | the acceleration of all of the Participant’s outstanding unvested equity awards granted under the 23andMe Holding Co. 2021 Incentive Equity Plan. |
Notwithstanding the foregoing, the Separation Benefits will be reduced by any separation payments or benefits received by the Participant under any offer letter, employment agreement, or contract with the Company or its subsidiaries or any payments required by applicable law as a result of the termination of the Participant’s employment. The Separation Benefits may also be subject to adjustment if any Separation Benefits constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The Separation Benefits will not affect any other accrued or vested or earned but deferred compensation rights or other benefits which may be owed to a Participant following the termination, including, but not limited to, accrued vacation or sick pay amounts or benefits payable under any bonus or other compensation plan, stock purchase plan, life insurance plan, health plan, disability plan, or similar or successor plan.
The CIC Plan may be terminated or amended by the Board until a Change in Control has occurred. Upon the occurrence of a Change in Control, the CIC Plan may not be amended or terminated.
As the CIC Plan provides that the Company’s Officers are Participants, each of Anne Wojcicki (the Company’s principal executive officer), Joseph Selsavage (the Company’s interim principal financial officer), Kathy Hibbs, Kenneth Hillan, and Paul Johnson (each a named executive officer of the Company) will be entitled to receive Separation Benefits under the CIC Plan in the event of a Double-Trigger Event.
