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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
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(c) On June 23, 2020, Avid
Bioservices, Inc., a Delaware corporation (the “Company”), announced that the Board of Directors (“Board”)
has appointed Mr. Nicholas S. Green, age 56, as the Company’s president and chief executive officer effective July 30, 2020,
to succeed Mr. Richard Hancock who has served as the Company’s interim president and chief executive officer since May 2019.
Mr. Green has more
than 30 years of experience in the global pharmaceutical and healthcare services industry with significant expertise in the contract
manufacturing of novel pharmaceutical products, having most recently served since April 2011 as the president and chief executive
officer of Therapure Biopharma, a Canada-based biopharmaceutical company which includes Therapure Biomanufacturing. In this role,
he oversaw the growth of Therapure’s CDMO business, while also leading the creation of Therapure’s proprietary plasma
protein business, named Evolve. Prior to Therapure, Mr. Green held a number of senior management roles, most notably managing director
of Nipa Laboratories Ltd., head of the life science division of Clariant International Ltd. in the USA, president and CEO of Rhodia
Pharma Solutions Ltd. and president of Codexis, Inc.’s pharma division. Mr. Green holds a bachelor’s degree in chemistry
from Queen Mary College in London and an MBA from the University of Huddersfield.
There are no family
relationships between Mr. Green and any director or executive officer of the Company. Mr. Green has not engaged in any related
person transaction (as defined in Item 404(a) of Regulation S-K) with the Company.
Pursuant to his offer
letter, Mr. Green’s initial base salary is $550,000 per annum. Mr. Green is also eligible to participate in the annual discretionary
bonus plan for executive officers, with a target bonus percentage of up to one hundred percent (100%) of his annual base salary
(prorated for the current fiscal year ending April 30, 2021) based on the Company’s attainment of annual performance goals
and his attainment of individual goals, each as approved by the Compensation Committee of the Board. In addition, effective on
his start date of July 30, 2020, Mr. Green will be granted a stock option to purchase 75,000 shares of the Company’s common
stock at an exercise price equal to the closing price of the Company’s common stock on July 30, 2020, and awarded a restricted
stock unit (“RSU”) for 150,000 shares, both of which shall be awarded from the Company’s 2018 Omnibus Incentive
Stock Plan. The stock option and RSU each will vest in equal annual installments over a four (4) year period.
Mr. Green is eligible
to participate in all benefits plans or arrangements which are currently, or may in the future be, offered by the Company from
time to time to its executive management employees, including accrued paid-time-off covering vacation and sick time benefits.
The Company has agreed
to provide Mr. Green with up to $50,000 to cover the costs associated with his relocation to Orange County, California. This amount
will not be grossed up for federal or California income tax purposes. In the event that Mr. Green terminates his employment (i)
within six months following such relocation, he will be required to return to the Company one hundred percent (100%) of the relocation
payment, or (ii) during months seven (7) through twenty-four (24) following such relocation, he will be required to return a pro-rata
portion of the relocation payment. In addition, the Company will pay for temporary accommodations in Orange County, California
and a rental car, each for up to a period of ninety (90) days while Mr. Green arranges for permanent housing.
In the event that Mr.
Green’s employment is terminated by the Company without cause or by Mr. Green for good reason (as cause and good reason are
customarily defined in the Company’s employment agreements with its executive officers), Mr. Green shall be entitled to receive
a severance payment equal to twelve (12) months’ base salary and continuation of benefits for a period of twelve (12) months
following such termination.
The Company and Mr.
Green intend to enter into a formal employment agreement providing for the above, as well as terms and conditions as are customary
for other executive officers of the Company.
(d) Also
on June 25, 2020, the Board, acting pursuant to its Amended and Restated Bylaws, adopted a resolution to increase the number of
authorized directors of the Company from six to seven directors and, following the recommendation of the Corporate Governance Committee
of the Board, adopted a resolution appointing Nicholas S. Green to the Board effective July 30, 2020, to fill the vacancy created
thereby.
The information contained
in Item 5.02(c) of this Current Report regarding Mr. Green’s business experience is hereby incorporated by reference into
this Item 5.02(d).
The Corporate Governance
Committee determined that Mr. Green is qualified to serve on the Board of Directors due to his global pharmaceutical and healthcare
services industry with significant expertise in the contract manufacturing of novel pharmaceutical products.
There was no arrangement
or understanding pursuant to which Mr. Green was elected director.