| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 5, 2022, Ventyx Biosciences, Inc. (the “Company”) appointed William J. Sandborn, M.D., to serve as the Company’s President and Chief Medical Officer, effective May 9, 2022 (the “Effective Date”). On May 5, 2022, Jörn Drappa, M.D., Ph.D., who has served as the Company’s Chief Medical Officer since September 2021, ceased to be Chief Medical Officer.
Dr. Sandborn, 59, previously served as Chairman of the Clinical Advisory Board of the Company. Dr. Sandborn is a co-founder and has served as the Chief Medical Officer at Shoreline Biosciences, Inc., a biotechnology company, since July 2020. Previously, he was a co-founder of Santarus, Inc. Prior to his time at Shoreline Biosciences, Dr. Sandborn served as a professor of medicine and chief of the division of Gastroenterology at University of California, San Diego – School of Medicine from January 2011 to April 2021. Dr. Sandborn currently continues to teach as a professor of medicine in the division of Gastroenterology at University of California, San Diego – School of Medicine. Prior to UCSD, Dr. Sandborn served as a Professor of Medicine and Vice Chair, Division of Gastroenterology and Hepatology, from March 1993 to December 2010. Dr. Sandborn completed medical school and an internal medicine residency at Loma Linda University in Loma Linda, California. Dr. Sandborn also completed a gastroenterology fellowship at the Mayo Clinic in Rochester, Minnesota. He has a BA degree in Chemistry from Southern College, in Collegedale, Tennessee.
In connection with his appointment as President and Chief Medical Officer of the Company, Dr. Sandborn signed an employment letter with the Company on May 5, 2022 (the “Employment Letter”), which provides that Dr. Sandborn will receive an annual base salary of $500,000. Dr. Sandborn will also receive a one-time lump sum signing bonus of $175,000 payable in cash, less any applicable withholdings, within 10 days of the Effective Date (the “Signing Bonus”). If Dr. Sandborn voluntarily terminates his employment with the Company or the Company terminates his employment for cause, in either case within the first year following the Effective Date, Dr. Sandborn will be obligated to repay to the Company 100% of the Signing Bonus. If Dr. Sandborn voluntarily terminates his employment with the Company or the Company terminates his employment for cause, in either case after the first year following the Effective Date, but before the end of the second year following the Effective Date, Dr. Sandborn will be obligated to repay to the Company 50% of the Signing Bonus.
Following the end of each fiscal year, Dr. Sandborn will also be eligible for a cash bonus equal 45% of his base salary then in effect (the “Cash Bonus”). Such Cash Bonus will be discretionary, subject to Board and/or committee approval and will be based on Dr. Sandborn’s individual performance.
In addition, in connection with his employment, the Company has agreed to grant Dr. Sandborn an option to purchase 700,000 shares of its common stock pursuant to its 2021 Equity Incentive Plan at an exercise price per share equal to the fair market value of the stock on the date of the grant, which will be the closing price of the Company’s common stock as reported on The Nasdaq Global Select Market on the Effective Date. The shares subject to the option award will vest as follows, subject to Dr. Sandborn’s continued service through the applicable vesting date: 25% of the shares subject to the option will vest on the one year anniversary of the Effective Date, and 1/48th of the shares subject to the option will vest ratably each month thereafter.
The Employment Letter also provides that Dr. Sandborn will be a participant under the Company’s Executive Change in Control and Severance Plan (the “Severance Plan”), at the same level as the Company’s other senior executives, effective as of the Effective Date. For a description of the Severance Plan, see “Executive Compensation - Potential Payments upon Termination or Change of Control” in the definitive proxy statement for Company’s 2022 Annual Meeting of Stockholders, filed with the SEC on April 27, 2022, which disclosure is incorporated herein by reference.
Additionally, Dr. Sandborn will execute the Company’s standard form of indemnification agreement, a copy of which was filed as Exhibit 10.1 of the 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 24, 2022.
