Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Directors and Officers
On April 8, 2020, Srini Akkaraju, Jay Shepard, Robert Hoffman and Rekha Hemrajani resigned as directors of the Company and Ms. Hemrajani resigned as the Company’s Chief Executive Officer and President. These resignations were not a result of any disagreement between the Company and the directors on any matter relating to the Company’s operations, policies or practices.
Appointment of Directors and Officers
Effective April 8, 2020, Fredric N. Eshelman, Pharm.D., age 71, was appointed to the Company’s Board as a Class III director up for re-election in 2021 and non-executive Chairman of the Board. Fred Eshelman is the Founder of Eshelman Ventures, LLC, an investment company primarily interested in healthcare companies. Previously, he founded and served as Chairman and Chief Executive Officer of Pharmaceutical Product Development, Inc. (PPDI) prior to the sale of the company to private equity interests. After PPD, he served as founding chairman and was the largest shareholder of Furiex Pharmaceuticals, Inc. (FURX), a company which in-licensed and rapidly developed new medicines. Furiex was sold to Forest Laboratories Inc. (which was later acquired by Actavis) in 2014. His career has also included positions as SVP development and board member of the former Glaxo, Inc., as well as management positions with Beecham Laboratories and Boehringer Mannheim Pharmaceuticals. He is currently chairman of several biotechs, and previously was chairman of The Medicines Company (MDCO) and was on the board of Bausch Health (BHC). Dr. Eshelman has served on the executive committee of the Medical Foundation of North Carolina and was appointed by the North Carolina General Assembly to serve on the Board of Governors for the state's multi-campus university system (chair of audit committee), as well as the North Carolina Biotechnology Center. In addition, he chairs the board of visitors for the School of Pharmacy at University of North Carolina at Charlotte (UNC-CH). The school was named the UNC Eshelman School of Pharmacy in recognition of his many contributions to the school and the profession.
He has received many awards including the Davie and Distinguished Service Awards from UNC, outstanding alumnus from both the UNC and University of Cincinnati schools of pharmacy, Life Science Leadership Award (CED) and the North Carolina Biotech Hall of Fame. Dr. Eshelman received the doctor of pharmacy from the University of Cincinnati, completed a residency at Cincinnati General Hospital, and received a BS Pharm from UNC-CH. He completed the OPM program at Harvard Business School. Dr. Eshelman also received an honorary doctor of science from UNC-CH.
Effective April 8, 2020, Dr. Gail McIntrye, age 57, was appointed as the Company’s Chief Executive Officer and President and member of the Company’s Board as a Class II director, up for re-election in 2020. Dr. McIntyre has served as the Company’s Chief Scientific Officer since February 2019. Dr. McIntyre also served as the Company’s Senior Vice President of Research and Development from October 12, 2018, when the Company, then known as Versartis, Inc., and Aravive Biologics, Inc. (“Private Aravive”), completed a merger and reorganization (the “Merger”), pursuant to which Private Aravive survived as the Company’s wholly owned subsidiary, until February 2019 and served as Private Aravive’s Senior Vice President of Research and Development from January 2017 to October 2018 and a consultant to Private Aravive from August 2016 until January 2017. Having brought multiple drugs to market, Dr. McIntyre has more than 25 years of experience in drug development, strategic business development, licensing and M&A activities. Dr. McIntyre has served as a principal at IntelliDev Consulting, LLC providing consulting services to several biotechnology companies for three years, while also serving as Vice President of Development for Meryx, Inc. from January 2014 until January 2016. Prior to that, Dr. McIntyre held the position of Senior Vice President of Research at Furiex Pharmaceuticals, Inc. and previously served as head of PPD’s compound partnering business. At both Furiex and PPD, she strategized and managed all preclinical and clinical activities for drug development programs and was responsible for identification of new partnering opportunities and technical due diligence for both in-licensing opportunities and new business acquisitions. At PPD, she led the partnering and the in-licensing of Alogliptin from Syrrx, Inc. at pre-IND stage and the licensing to Takeda at Phase 2. She was instrumental to the licensing of Dapoxetine to what is currently Johnson & Johnson and then The Menarini Group. She played a pivotal role in the $1.1 billion acquisition of Furiex by Allergan in 2014 and successfully negotiated with the FDA’s Controlled Substance Staff on scheduling for Viberzi, in addition to driving all aspects of development. Dr. McIntyre has authored more than 30 regulatory submissions and is a board-certified toxicologist. Her experience covers multiple therapeutic areas including oncology (including immune-oncology), infectious diseases, central nervous system, gastrointestinal, and metabolic/endocrine as well as various therapies including small drugs, treatment vaccines, antibodies, immunoconjugates and peptide mimetics. Dr. McIntyre is also board certified in Clinical Pathology (hematology and clinical chemistry) by the American Society of Clinical Pathology. Dr. McIntyre received her B.A. in Biology from Merrimack College. She earned M.S. and Ph.D. degrees in Biochemistry and Biophysics from the University of North Carolina at Chapel Hill.
Dr. Eshelman has executed the Company’s standard form of indemnification agreement, a copy of which has been filed as Exhibit 10.10 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File No. 333-193997) filed with the Securities and Exchange Commission on March 6, 2014, and such exhibit is incorporated by reference herein.
The size of the Company’s board of directors was set at five, and Dr. Eshelman and Dr. Raymond Tabibiazar were appointed to serve, along with the current remaining members of each committee, on the audit committee and nominating and corporate governance committee and Dr. Amato Giaccia was appointed to serve on the Compensation Committee.
There are no family relationships among any of the Company’s directors or executive officers. In addition, none of the directors or officers is a party to any transaction, or series of transactions, required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Compensatory Arrangements of Certain Directors and Officers.
Effective as of April 8, 2020, the Company entered into an amendment (the “Amendment”) to the Offer Letter (the “Offer Letter”) that it had entered into with Dr. McIntyre on March 26, 2020. The Amendment provides, among other things, (i) that Dr. McIntyre will serve as the Company’s Chief Executive Officer,(ii) an annual base salary of $415,000 for such service; (iii) a target bonus equal to 45% of Dr. McIntyre’s annual base salary; (iv) up to 12 months of salary continuation and reimbursement of COBRA coverage and a pro-rated portion of her year-end target bonus contingent upon corporate goals being met, if terminated for any reason other than Cause or Permanent Disability and not in connection with a Change in Control (as such terms are defined in the Offer Letter”). Dr. McIntyre was also granted an option to purchase 80,000 shares of common stock vesting pro rata on a monthly basis over a four year period.
The Company entered into an agreement (the “Option Agreement”) with each of Srini Akkaraju, Jay Shepard and Robert Hoffman to extend the period for which each of them has the right to exercise vested options from three months to one year from the date of resignation. In addition, the agreements with Mr. Hoffman and Dr Akkaraju provide for full accelerated vesting of all options granted to each of them and the agreement with Mr. Shepard provides for acceleration of vesting of the options and restricted stock units granted to him that would have otherwise vested on or before the twelve month anniversary of the resignation date. In addition, the Company and Ms. Hemrajani entered into a separation agreement (the “Separation Agreement”) providing for a payment to her of her base salary and reimbursement of COBRA payments for a period of six months in addition to the extension of the period for which she has the right to exercise vested options from three months to one year and accelerated vesting of 25% of the options and restricted stock units granted to her. The separation agreement contains a non-disparagement obligation on both parties and a standard release of claims on the part of Ms. Hemrajani.
The disclosure in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
The foregoing descriptions of the Option Agreements, Separation Agreement and Amendment do not purport to be complete and are qualified in their entirety by reference to the Option Agreement and Separation Agreement, which are filed as Exhibits 10.3, 10.4, 10.5, 10.6 and 10.7 hereto and are incorporated herein by reference.