Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Brian M. Stuglik as Chief Executive Officer
On July 29, 2019, Verastem, Inc. (the “Company”) appointed Brian M. Stuglik, age 60, as Chief Executive Officer of the Company and entered into an employment agreement (the “Agreement”) between the Company and Mr. Stuglik, governing the terms of Mr. Stuglik’s employment for an indefinite term.
Mr. Stuglik has more than three decades of experience in U.S. and International pharmaceutical development, product strategy and commercialization, with a focus on Oncology. Mr. Stuglik spent 33 years at Eli Lilly and Company, from 1982 to 2016, in positions of increasing responsibility, culminating in his role as Global Vice President and Chief Marketing Officer, Oncology Global Marketing – a position he held beginning in 2009. Upon retiring from Eli Lilly and Company, Mr. Stuglik founded and served as Principal of Proventus Health Solutions LLC, which specializes in guiding pharmaceutical and biotechnology companies in the oncology field through various aspects of the drug development and commercialization processes. Additionally, Mr. Stuglik has served as a member of the Company’s Board of Directors since September 2017, and in May of this year took on a strategic oversight and advisory role with respect to the Company’s commercial organization. Mr. Stuglik holds a Bachelor of Pharmacy (BPharm) from Purdue University.
Under the Agreement, Mr. Stuglik will receive an initial annual base salary of $600,000 and is eligible for an annual bonus target of 65% of his base salary. Pursuant to the terms of the Agreement, on July 29, 2019 (the “Grant Date”), the Company granted Mr. Stuglik an incentive stock option to purchase 500,000 shares of its common stock at an exercise price equal to $1.43 per share, the closing price of the Company’s common stock as reported by the Nasdaq Global Market on the Grant Date. Shares of the stock option will vest at the rate of thirty-three and one-third percent (33 1/3%) on the one-year anniversary of the Grant Date and an additional 8.33% of the shares will vest at the end of each successive three-month period following the first anniversary of the Grant Date until the third anniversary of the Grant Date. This award is subject to Mr. Stuglik’s continuing service with the Company at the time of vesting.
The Company also granted Mr. Stuglik an incentive stock option to purchase 200,000 shares of its common stock at an exercise price equal to $1.43 per share, the closing price of the Company’s common stock as reported by the Nasdaq Global Market on the Grant Date. 100,000 shares of the stock option will vest upon achievement of $20 million in “net product revenues” of duvelisib and the remaining 100,000 shares will vest upon the achievement of $75 million in “net product revenues” of duvelisib. These awards are subject to Mr. Stuglik’s continuing service with the Company at the time of vesting.
The Company also granted Mr. Stuglik 270,000 restricted stock units, to vest as to thirty-three and one-third percent (33 1/3%) on the one-year anniversary of the Grant Date, and as to an additional 8.33% of the shares at the end of each successive three-month period following the first anniversary of the Grant Date until the third anniversary of the Grant Date. This award is subject to Mr. Stuglik’s continuing service with the Company at the time of vesting.
Under the Agreement and subject to the execution and effectiveness of a release of claims at such time, Mr. Stuglik would be entitled to severance payments if the Company terminates his employment without Cause, as defined in the Agreement, or if Mr. Stuglik terminates his employment with the Company for Good Reason, as defined in the Agreement.
The foregoing summary of the Agreement is qualified in its entirety by the copy of such agreement filed as Exhibit 10.1 hereto and incorporated herein by this reference. A press release announcing Mr. Stuglik’s employment is filed as Exhibit 99.1 hereto.