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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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On February 14, 2021,
the board of directors (the “Board”) of iBio, Inc., a Delaware corporation (the “Company”) appointed
Robert Lutz as the Company’s Chief Financial & Business Officer and Principal Accounting Officer. In addition, on February
15, 2021, the Company entered into an agreement (the “Lutz Employment Agreement”), effective March 4, 2021 with Mr.
Lutz to serve as the Company’s Chief Financial & Business Officer and Principal Accounting Officer. In addition, upon
the appointment of Mr. Lutz, John Delta submitted his resignation as the Company’s Principal Accounting Officer, effective
upon Mr. Lutz assuming his position.
Mr. Lutz, 52, has
served as the Chief Financial Officer of Strongbridge Biopharma plc (“Strongbridge”), a global, commercial-stage
biopharmaceutical company, since September 2019. He previously served as the Chief Business Officer of Strongbridge from October
2014 to September 2019. Prior to joining Strongbridge, Mr. Lutz worked from December 2004 to April 2014 at Shire Plc, a publicly
traded specialty biopharmaceutical company prior to being purchased by Takeda Pharmaceutical Company Ltd., where he most recently
served as Vice President and held key leadership positions in the Specialty Pharmaceutical division. Prior to Shire Plc, Mr. Lutz
worked in a variety of roles, including Vice President of Finance, for Cinergy Corp., an electric and gas utility company. Mr. Lutz
also worked as a Senior Analyst at Alan B. Slifka and Co., a hedge fund, after having started his career at Goldman Sachs
Group Inc., where he served as a Financial Analyst in its principal investment area. He holds a B.A. in economics and computer
science from Amherst College and an M.B.A. from the Kellogg School of Management
As stated above, on
February 15, 2021, the Company entered into the Lutz Employment Agreement which becomes effective on March 4, 2021 (the “Effective
Date”), provided that certain pre-employment procedures, including, but not limited to a background check, are satisfactorily
completed.
Mr. Lutz
is entitled to an annual base salary of $425,000, which will accrue starting on the Effective Date. Mr. Lutz is eligible for a
target bonus of 40% of the base salary paid to him during the prior fiscal year based upon the Compensation Committee’s assessment
of his performance and the performance of the Company during the prior fiscal year.
The
Lutz Employment Agreement also provides for an initial grant of options to purchase 350,000 shares of the Company’s common
stock (the “Lutz Option”) to Mr. Lutz pursuant to the iBio, Inc. 2020 Omnibus Equity Incentive Plan, as amended
(the “2020 Plan”), with an exercise price at the fair market value on the date of grant, as determined by the Company’s
Board of Directors. The Lutz Option vests ratably as follows: (1) 25% of the options granted will vest after one year of employment
with the Company; and (2) after one year of employment with the Company, 6.25% of the options granted will vest for each additional
three (3) months of employment, subject to the conditions of the 2020 Plan and the stock option grant agreement thereunder. Mr.
Lutz will also receive an initial grant of 232,000 restricted stock units (“RSUs”). Such RSUs will vest in even increments
on the first three anniversaries of the grant date, subject to the 2020 Plan and the RSU grant agreement. Mr. Lutz will also be
eligible for additional grants of equity compensation from time to time, in a similar manner to other similarly situated executives,
subject to the Company grant policy and applicable approvals of grants.
Mr. Lutz
may participate in benefit plans for which he is eligible as may be established from time to time by the Company for its executive
employees, including the cost of medical and dental benefits provided to Mr. Lutz and his family as well as paid time off.
The Company will also provide Mr. Lutz with directors’ and officers’ liability insurance.
Mr. Lutz’s
employment is on an “at will” basis and may be terminated at any time by Mr. Lutz or the Company. If Mr. Lutz
separates from employment for any reason or no reason, he is entitled to receive his accrued and unpaid base salary, any unpaid
annual bonus earned from a prior year, any unreimbursed expenses accrued through the termination date and any amounts accrued through
the termination date payable under any of the benefit plans in which he was a participant (the “Standard Termination Benefits”).
If Mr. Lutz is terminated by the Company without Cause or Mr. Lutz resigns for Good Reason (as such terms are defined in the Lutz
Employment Agreement), and provided that he executes and does not revoke a separation agreement in form acceptable to the Company,
he will receive the following severance: (1) an amount equal to his base salary for nine months; (2) a pro-rata share of any target
bonus for which he would have been eligible during the Company’s fiscal year in which he was terminated; and (3) if he elects
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), payment of the full
cost of benefit for a period of 9 months following the termination.
If
Mr. Lutz’s employment is terminated without Cause within twelve months after a Change of Control (as defined in the
2020 Plan), or if Mr. Lutz terminates his employment with the Company for Good Reason within twelve months after a Change of Control,
provided he executes and does not revoke a separation agreement in a form acceptable to the Company, Mr. Lutz will receive, in
addition to the Standard Termination Benefits: (1) an amount equal to his base salary for twelve months; (2) an amount, payable
within thirty days of his execution of the separation agreement, equal to the target bonus for which he would have been eligible
during the Company’s fiscal year in which he was terminated; (3) vesting of any unvested time-vested equity awards held by
Mr. Lutz ta such time, and (4) if he elects continuation coverage under COBRA, payment of the full cost of benefit for a period
of 9 months following the termination.
Mr. Lutz
also has assigned, and agreed to assign, to the Company all of his rights in any Inventions, including all Intellectual Property
Rights (as such terms are defined in the Lutz Employment Agreement) that are made, conceived or reduced to practice, in whole or
in part, alone or with others, by him during his employment with the Company and has agreed to certain non-compete and non-solicitation
terms. The Lutz Employment Agreement further provides that in consideration of his employment hereunder, Mr. Lutz has agreed that
during his employment by the Company and for a period of 1 year thereafter, he will not (and will cause any entity controlled by
him to), be engaged in or have any financial interest in any business competing with or which may compete with the business of
the Company within any state within the United States.
Except
as set forth herein, there are no understandings or arrangements between Mr. Lutz and any other person pursuant to which Mr. Lutz
was appointed Chief Financial & Business Officer and Principal Accounting Officer of the Company. In
addition, there are no family relationships between Mr. Lutz and any director or executive officer of the Company,
and except as set forth herein, Mr. Lutz does not have any direct or indirect material interest in any transaction required to
be disclosed pursuant to Item 404(a) of Regulation S-K.
The
description of the Lutz Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the
Lutz Employment Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein
by reference.