Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On August 10, 2017, Merrimack Pharmaceuticals, Inc. (the Company) entered
into an employment agreement with Jean M. Franchi (the Employment Agreement) to serve as the Companys Chief Financial Officer. Ms. Franchi will also serve as the Companys Principal Financial Officer, Principal Accounting
Officer and Treasurer. Ms. Franchi will begin her employment and assume such positions with the Company on August 21, 2017.
In connection with
entering into the Employment Agreement, effective as of August 21, 2017, (i) Richard Peters, the Companys President and Chief Executive Officer, will cease to serve in the position of Principal Financial Officer and (ii) John L.
Green, the Companys Controller, will cease to serve in the position of Principal Accounting Officer. Dr. Peters and Mr. Green have served as Principal Financial Officer and Principal Accounting Officer, respectively, on an interim
basis since June 14, 2017.
Ms. Franchi, age 50, previously served as Chief Financial Officer, Treasurer and Secretary at Dimension
Therapeutics, Inc., a biotechnology company, from August 2015 to July 2017. From February 2012 to July 2015, Ms. Franchi served as Chief Financial Officer at Good Start Genetics, Inc., a molecular genetics information company. From 1995 to
2011, Ms. Franchi held various positions at Sanofi Genzyme, a global pharmaceutical company, including Senior Vice President of Corporate Finance, Senior Vice President of Business Unit Finance, Vice President of Finance and Controller, Product
Line and International Group. Ms. Franchi holds a B.B.A. from Hofstra University and successfully completed the Uniform CPA Examination.
There is no
family relationship between Ms. Franchi and any of the Companys directors or executive officers.
The Employment Agreement continues until
December 31, 2017 and thereafter renews automatically on December 31 of each year for successive one year terms, unless either the Company or Ms. Franchi gives notice of non-renewal.
Pursuant to the terms of the Employment Agreement, Ms. Franchi will receive an annual base salary of $400,000 and is eligible for an annual bonus
percentage of up to 35% of her base salary. The Company will also pay Ms. Franchi a one-time signing bonus of $100,000. Subject to the further approval of the Board, the Company will also grant Ms. Franchi an option to purchase 450,000
shares of the Companys common stock at an exercise price per share equal to the fair market value of the Companys common stock on the date of grant. The option will vest over three years at a rate of 1/6
th
of the total number of shares on February 21, 2018 and an additional 1/12
th
of the total number of shares at the end of each successive
three month period following February 21, 2018 until fully exercisable.
Ms. Franchi is also bound by the terms of a separate non-disclosure,
developments, non-competition and non-solicitation agreement, which, among other things, prohibits Ms. Franchi, during the term of her employment and for a period of one year thereafter, from competing with the Company and soliciting or hiring
the Companys employees.
Upon execution and effectiveness of a severance agreement and release of claims, Ms. Franchi is entitled to
severance payments if the Company terminates her employment without cause (as defined in the Employment Agreement), including the Companys decision not to renew her term of employment, or if she terminates her employment with the Company for
good reason (as defined in the Employment Agreement).
If Ms. Franchis employment terminates under these circumstances, in each case prior to a
change in control (as defined in the Employment Agreement), the Company is obligated for a period of 12 months to pay Ms. Franchi her base salary and pay for coverage for her under any company sponsored medical benefit plans available to the
Companys senior management employees. In addition, the Company would be obligated to pay her a pro-rata bonus for the portion of the year in which she was employed by the Company based on her average annual bonus payments over each of the
three years prior to the year of termination, or such lesser period during which she served as one of the Companys executive officers.
If
Ms. Franchis employment terminates under these circumstances, in each case within 18 months following a change in control, the Company is obligated to pay her a lump sum amount equal to 36 months of her base salary plus a bonus equal to
three times the average of her annual bonus payments over each of the three years prior to the year of termination, or such lesser period during which she served as one of the Companys executive officers, accelerate the vesting of all
outstanding stock options, restricted stock or other equity awards granted to her and pay for coverage for her under any company sponsored medical benefit plans available to the Companys senior management employees for a period of 18 months.
If Ms. Franchi dies or the Company terminates Ms. Franchis employment due to disability, she will be eligible to receive a pro-rata bonus
for the portion of the year in which she was employed by the Company based on her average annual bonus payments over each of the three years prior to the year of termination, or such lesser period during which she served as one of the Companys
executive officers.
Item 5.07. Submission of Matters to a Vote of Security Holders.
At the Companys 2017 Annual Meeting of Stockholders held on August 11, 2017, the Companys stockholders voted as follows:
1. The stockholders elected the nominees listed below to the Companys board of directors (the Board), each for a one year term ending at the
Companys 2018 annual meeting of stockholders.
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Nominees
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For
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Withheld
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Broker Non-Votes
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Richard Peters, M.D., Ph.D.
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53,835,478
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1,086,970
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50,283,400
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Gary L. Crocker
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51,543,813
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3,378,635
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50,283,400
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John M. Dineen
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53,429,396
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1,493,052
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50,283,400
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Vivian S. Lee, M.D., Ph.D.
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53,322,813
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1,599,635
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50,283,400
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John Mendelsohn, M.D.
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51,475,170
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3,447,278
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50,283,400
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Ulrik B. Nielsen, Ph.D.
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51,720,470
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3,201,978
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50,283,400
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Michael E. Porter, Ph.D.
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50,942,721
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3,979,727
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50,283,400
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James H. Quigley
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51,520,643
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3,401,805
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50,283,400
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Russell T. Ray
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51,497,028
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3,425,420
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50,283,400
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2. The stockholders approved, on a non-binding advisory basis, the compensation of the Companys named executive
officers.
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For:
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48,089,785
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Against:
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6,305,464
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Abstain:
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527,199
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Broker Non-Votes:
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50,283,400
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3. The stockholders ratified the selection of PricewaterhouseCoopers LLP as the Companys independent registered public
accounting firm for the fiscal year ending December 31, 2017.
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For:
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102,297,763
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Against:
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2,380,037
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Abstain:
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528,048
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4. The stockholders approved an amendment to the Companys certificate of incorporation to effect a reverse stock split
of the Companys issued and outstanding common stock at a ratio of one-for-ten and a proportionate reduction in the number of authorized shares of common stock, with such reverse stock split to be effected at such time and date, if at all, as
determined by the Companys board of directors in its sole discretion.
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For:
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87,318,236
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Against:
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16,581,273
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Abstain:
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1,306,339
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