Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
(b) On October 3, 2016, Robert J. Mulroy, the President, Chief Executive Officer and a director of the Company, resigned from
each of such positions.
(c) Effective October 3, 2016, the Board appointed Gary Crocker, the Companys Chairman of the Board, as the interim
President and Chief Executive Officer of the Company. Mr. Crocker, age 64, has served as a member of the Board since 2004 and as Chairman of the Board since 2005. Mr. Crocker has served as President and Managing Director of Crocker
Ventures, LLC, a privately-held life science investment firm funding differentiated biotechnology and medical device companies, since 2002. Mr. Crocker has held senior executive positions or served on the board of directors of several life
science companies, including as Chairman of the Board of ARUP Laboratories, co-founder and director of Theratech, Inc. (acquired by Actavis plc) and President, Chief Executive Officer and founder of Research Medical, Inc. (acquired by Baxter
International). Mr. Crocker also served on the boards of directors of the publicly traded firms Interleuken Genetics, Inc. and The Med-Design Corporation. Mr. Crocker served as a member
of the board of the Federal Reserve Branch of San Francisco from 1999 to 2007, and currently serves as the Chairman of the University of Utahs Center for Medical Innovation and on the board
of the Sorenson Legacy Foundation. Mr. Crocker holds an M.B.A. from Harvard Business School and a B.S. from Harvard College.
Mr. Crocker is not
receiving any additional compensation for his service as interim President and Chief Executive Officer of the Company. Mr. Crocker is compensated for his service on the Board pursuant to the existing terms of the Companys director
compensation policy.
(e) On October 3, 2016, the Company and Mr. Mulroy entered into a Separation and Release of Claims Agreement (the
Separation Agreement). Pursuant to the Separation Agreement, in connection with Mr. Mulroy resigning as President, Chief Executive Officer and a director of the Company, the Company agreed to:
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commencing on the first regularly scheduled payroll date following December 2, 2016, continue paying Mr. Mulroys annual base salary of $598,689 for a period of twelve (12) months (the
Severance
Period
);
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continue paying the share of the premium for Mr. Mulroys health and dental insurance through the end of the Severance Period that it currently pays on behalf of active and similarly situated employees who receive
the same type of coverage and/or to otherwise continue to provide to Mr. Mulroy during the Severance Period all Company employee benefit plans and arrangements available to the Companys senior management employees; and
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on December 2, 2016, pay Mr. Mulroy a pro-rated bonus of $154,271.
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The Separation Agreement also included a
release of claims by Mr. Mulroy against the Company.
In addition, on October 3, 2016, the Company and Mr. Mulroy entered into a Consulting Agreement (the
Consulting Agreement), pursuant to which Mr. Mulroy will assist Mr. Crocker with the leadership transition of the Company, as directed by Mr. Crocker. Mr. Mulroy will be compensated at a rate of $300 per hour for his services under
the Consulting Agreement. The term of the Consulting Agreement continues until October 2, 2019.
Either the Company or Mr. Mulroy may terminate the
Consulting Agreement at any time, with or without cause. In the event the Company terminates the Consulting Agreement without cause (as defined therein), all unvested equity awards granted to Mr. Mulroy will immediately vest and remain
exercisable in accordance with the applicable equity plans and award agreements.