Explanatory Note
As previously reported by Adagio Therapeutics, Inc. (the “Company”) on a Current Report on Form 8-K filed with the Securities and Exchange Commission on February 23, 2022 (the “Initial Form 8-K”), the Company’s Board of Directors appointed David Hering to serve as Interim Chief Executive Officer. This Current Report on Form 8-K/A is being filed, pursuant to Instruction 2 to Item 5.02 of Form 8-K, as an amendment to the Initial Form 8-K to add information related to additional compensation that Mr. Hering received in connection with his appointment to this new position that was not determined at the time of the filing of the Initial Form 8-K.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(b), (c), (e) On February 23, 2022, Tillman U. Gerngross, Ph.D. resigned as Chief Executive Officer and President of Adagio Therapeutics, Inc. (the “Company”) and as a member of the Board of Directors (the “Board”) of the Company.
Following Dr. Gerngross’s resignation, on February 23, 2022, the Board appointed David Hering to serve as Interim Chief Executive Officer. Mr. Hering will also continue to serve as the Company’s Chief Operating Officer. There is no arrangement or understanding between Mr. Hering and any other person pursuant to which he was selected as an officer of the Company, and there is no family relationship between Mr. Hering and any of the Company’s other executive officers or directors. The Company is not aware of any transaction involving Mr. Hering requiring disclosure under Item 404(a) of Regulation S-K.
In connection with Mr. Hering’s appointment as Interim Chief Executive Officer, on March 18, 2022, the Board approved the following compensation for Mr. Hering: (i) an increase in Mr. Hering’s annual base salary to $510,000, effective as of February 23, 2022, (ii) a monthly stipend of $7,500 in addition to Mr. Hering’s base salary during his tenure as Interim Chief Executive Officer and (iii) a target bonus for 2022 reflecting a blended rate of (a) a 60% target bonus at an assumed annual base salary of $600,000 for time served as Interim Chief Executive Officer and (b) a 40% target bonus for time served solely as Chief Operating Officer.
Mr. Hering’s employment agreement (the “Employment Agreement”), which was amended and restated in connection with the Company’s initial public offering, provides that Mr. Hering is eligible for an annual target bonus of 40% of his base salary (which will be adjusted pursuant to the foregoing for time served as Interim Chief Executive Officer). The annual bonus will be determined by the Compensation Committee of the Board based on the achievement of performance goals and objectives for the calendar year. The Employment Agreement provides for standard benefits, such as paid time off, reimbursement of business expenses, and participation in the Company’s employee benefit plans and programs. In the event that Mr. Hering’s employment ends upon death or a disability, he will be entitled to accrued obligations and payment of his target bonus so long as his employment terminates after the completion of the calendar year but prior to the date of payment of the bonus (the “Earned Bonus”). In the event that Mr. Hering’s employment terminates, other than during the period commencing three months prior to or ending 12 months following a “change in control” (as defined in the Company’s 2021 Equity Incentive Plan) (the “Change in Control Period”) by the Company without “cause” or by him for “good reason” (each as defined in the Employment Agreement), and subject to the delivery to the Company of a separation agreement that includes a general release of claims, Mr. Hering will receive cash severance equal to nine months of his base salary, as well as the Earned Bonus, if applicable, and nine months continuation of benefits. Mr. Hering will also be entitled to delayed forfeiture of unvested time-based equity awards until 90 days after the date of termination. In the event that Mr. Hering’s employment is terminated by the Company without cause or by him for good reason, in either case, during the Change in Control Period, and subject to his delivery to the Company of a separation agreement that includes a general release of claims, Mr. Hering will receive cash severance equal to 12 months of his base salary, his target bonus for the year of termination, as well as the Earned Bonus, if applicable, and 12 months continuation of benefits. In such case, Mr. Hering will also be entitled to immediate acceleration and full vesting of any time-based equity awards, exercisable or nonforfeitable as if employment continued until the later of the date of termination or the effective date of the separation agreement.
The foregoing description of the Employment Agreement is only a summary and is qualified in its entirety by reference to the complete terms and conditions of the Employment Agreement, which is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Mr. Hering has also entered into an indemnification agreement in the form previously approved by the Board, which form is filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-1/A, filed with the SEC on August 2, 2021.
