Item 5.02.
Departure of Certain Officers; Appointment of Certain Officers; and Compensatory Arrangements of Certain Officers.
Appointment and Compensation of President and Chief Executive Officer
On June 21, 2017 Osiris Therapeutics, Inc. (the “Company”) appointed Linda Palczuk, age 55, to serve as President and Chief Executive Officer, effective July 10, 2017. She will be nominated for election to the Board of Directors at the next shareholder meeting. Ms. Palczuk has had an extensive and successful 30 year career with AstraZeneca Pharmaceuticals and its legacy companies, serving in senior level commercial and general management roles, including Vice President, Mature Brands and Vice President Global Commercial Excellence from January 2012 until March 2015, Vice President Sales & Marketing from March 2009 to December 2011, and Vice President Sales from April 2006 to February 2009. Since June 2015, Ms. Palczuk was an independent consultant providing business expertise within the pharmaceutical sector.
Ms. Palczuk holds a BA in Biology from Franklin & Marshall College and a Master of Business Administration from the University of Delaware.
On June 24, 2017, Ms. Palczuk entered into an employment agreement with the Company. The agreement provides that Ms. Palczuk will be paid a base salary of four hundred fifty thousand dollars ($450,000). Her base salary will be reviewed annually and any increases will be in the sole discretion of the Compensation Committee and the Board of Directors.
Ms. Palczuk will be eligible for an annual performance-based bonus of up to 44.44% of her base salary. Ms. Palczuk will receive an initial stock option grant of 25,000 shares. Ms. Palczuk shall also be entitled to participate in the Company’s long term cash/equity incentive plan to be designed by the Compensation Committee by or before December 31, 2017. She will be entitled to participate in other benefit plans generally available to other executives.
The employment agreement renews each year at December 31, until December 31, 2020 when the Agreement expires. Either Ms. Palczuk or the Company can elect not to renew the agreement by giving written notice at least 30 days in advance of the renewal date. Ms. Palczuk will be entitled to severance in certain circumstances. If she terminates the agreement for “good reason” (as defined in the agreement) or if the Company terminates her employment without “cause” (as defined in the agreement), she will be entitled to a severance payment equal to 12 months of her base salary plus a pro-rated annual bonus. Ms. Palczuk will also be entitled to a severance payment equal to 12 months of her base salary plus a pro-rated annual bonus if the Company decides not to enter into an amendment to extend the agreement or enter into a new agreement with her after the employment agreement expires on December 31, 2020. The severance payment equal to 12 months of her base salary is shortened to six months in two circumstances: (i) if the termination occurs within the first year (July 10, 2018), or (ii) she is terminated and has not received a performance-based annual bonus for two consecutive years.
Ms. Palczuk also entered into the Company’s employee confidentiality, noncompetition and invention agreement which provides, among other restrictions, that for 12 months after her termination of employment, Ms. Palczuk will not solicit employees or customers of the Company and will not, directly or indirectly become employed by or affiliated with any company in a division or business line which is competitive with the business of the Company. The 12 month restricted period would be reduced to six months under the circumstances where Ms. Palczuk would receive a severance payment equal to six months of her base salary described in the immediately preceding paragraph.
The foregoing descriptions of the employment agreement and the employee confidentiality, noncompetition and invention agreement are summaries of the material terms and are qualified in their entirety by reference to the employment agreement and the employee confidentiality, noncompetition and invention agreement, attached hereto as Exhibits 10.1 and 10.2, and incorporated herein by reference.
Interim Chief Executive Officer
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Upon Ms. Palczuk’ s appointment on June 21, 2017, David A. Dresner is no longer serving as the Interim President and Chief Executive Officer of the Company. Until Ms. Palczuk’s arrival on July 10, 2017, Jason Keefer, age 45, the Company’s Vice President of Marketing will temporarily assume the role of Interim President and Chief
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