Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Chief Executive Officer Transition
On June 20, 2019, Verastem, Inc. (the Company) announced the appointment of Dan Paterson, age 57, as its President and Chief Operating Officer. Mr. Paterson has served as the Companys Chief Operating Officer since 2014, having joined the Company in 2012, and will also serve as the Companys principal executive officer. In connection with his appointment as the Companys President, Mr. Paterson will receive an increase in his annual base salary to $460,000 and is eligible for an annual bonus target of 50% of his base salary. On June 21, 2019 (the Grant Date), the Company also granted Mr. Paterson an option to purchase 250,000 shares of its common stock at an exercise price equal to $1.81, the closing price of the Companys common stock as reported by the Nasdaq Global Market on the Grant Date. The shares will vest at the rate of fifty percent (50%) on the one-year anniversary of the Grant Date and as to an additional 12.5% of the shares at the end of each successive three-month period following the first anniversary of the Grant Date. These awards are subject to Mr. Patersons continuing service with the Company at the time of vesting.
On June 19, 2019, Robert Forrester resigned from his role as President and Chief Executive Officer of the Company. Mr. Forrester subsequently resigned from his position as a member of the Companys Board of Directors on June 21, 2019. On June 25, 2019, the Company and Mr. Forrester entered into a Separation Agreement (the Separation Agreement) in connection with the termination of Mr. Forresters employment with the Company, which was effective as of June 21, 2019 (the Separation Date). Pursuant to the Separation Agreement, Mr. Forrester will receive the following benefits: (i) cash payment of his monthly base salary for 13 months, and (ii) payment of his monthly COBRA premiums until the earlier of the conclusion of 13 months following the Separation Date or the date that he becomes eligible to enroll in the health plan of a new employer. Additionally, all unvested stock options granted by the Company to Mr. Forrester prior to the Separation Date, which are outstanding as of the Separation Date, and vest only based on the passage of time, by their terms, and which would have vested during the twenty-five (25) month period immediately following the Separation Date, shall, notwithstanding the terms of the stock or equity compensation plans and award agreements to which such stock options are subject, automatically become fully vested as of the date of the Separation Agreement. Further, all other unvested stock options granted by the Company to Mr. Forrester prior to the Separation Date, the vesting of which are based on individual or Company performance, and that are outstanding as of the Separation Date shall, notwithstanding the terms of the stock or equity compensation plans and award agreements to which such stock options are subject, for the twenty-five (25) month period immediately following the Separation Date, remain outstanding and eligible to vest based on the achievement of the individual or Company performance metrics to which such awards are subject. Additionally, pursuant to the terms of the Separation Agreement, all stock options that have vested as of or on July 21, 2021 shall, notwithstanding the terms of the stock or equity compensation plans and any applicable award agreements to which such stock options are subject, remain exercisable by Mr. Forrester through July 21, 2022.
The Company retained Mr. Forrester to serve in a continued advisory capacity for the Company from time to time as may be mutually agreed between the parties pursuant to a Consulting Agreement entered into between the parties on June 25, 2019 (the Consulting Agreement). The term of the Consulting Agreement ends on July 21, 2022.
Upon Mr. Forresters resignation, the Board of Directors reduced the number of authorized directors from eight to seven.