Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Christian Weyer, M.D., M.A.S, Appointed Executive Vice President
of Research & Development
On November 27, 2017, Intercept Pharmaceuticals,
Inc. (the “Company”) announced the appointment of Christian Weyer, M.D., M.A.S, as the Company’s Executive Vice
President of Research & Development. Dr. Weyer commenced his employment with us on November 27, 2017.
Dr. Weyer, age 48, brings more than 20 years
of experience in metabolic drug development to the Company. Prior to joining the Company, from 2015-2017, Dr. Weyer served
as President and Chief Development Officer of ProSciento, a clinical research and development service provider focused on diabetes,
obesity, nonalcoholic fatty liver disease and NASH. From 2012 to 2015, Dr. Weyer served as President, CEO and a director of Fate
Therapeutics, Inc. (“Fate”), a publicly traded, clinical stage cellular therapeutics company. Prior to joining Fate,
Dr. Weyer had a 12-year tenure with Amylin Pharmaceuticals, Inc. (“Amylin”), a biopharmaceutical company, where he
held leadership roles of increasing responsibility, including Senior Vice President of Research and Development, until the completion
of Amylin's acquisition by Bristol-Myers Squibb in August 2012. Before joining Amylin, he spent three years, from 1997 to 2000,
with the National Institutes of Health, NIDDK, in Phoenix, Arizona, where he conducted clinical research on the pathogenesis of
obesity and Type 2 diabetes. Dr. Weyer holds an M.D. from the University of Düsseldorf, Germany, and a postdoctoral M.A.S.
degree in clinical research from the University of California, San Diego.
In connection
with his appointment as
Executive Vice President of Research & Development
, Dr. Weyer and
the Company entered into an employment agreement (the “Weyer Employment Agreement”) which sets forth the terms and
conditions of Dr. Weyer’s employment with the Company. The Weyer Employment Agreement, which has an initial one-year term
with automatic renewal each year thereafter unless terminated as set forth below, provides that Dr. Weyer shall (i) receive a base
salary of $460,000 (“Base Salary”); (ii) be eligible for an annual cash bonus of up to 50% of his Base Salary; (iii)
be granted on the Commencement Date an option to purchase 25,000 shares of the Company's common stock under the Company’s
2012 Equity Incentive Plan (the “2012 Plan”), at a per share exercise price equal to the closing price of the common
stock on the date of grant; and (iv) be granted a restricted stock award for 16,500 shares of the Company’s common stock
under the 2012 Plan.
In the event that the Company does not renew
Dr. Weyer’s employment at the end of his employment term, Dr. Weyer is terminated by the Company without cause, as defined
in the Weyer Employment Agreement, or he resigns with good reason, as defined in the Weyer Employment Agreement, Dr. Weyer will
be entitled to receive (i) 12 months of his base salary (paid in accordance with the Company’s payroll) and (ii) continued
participation in the Company’s group health and/or dental plan and the payment of his premiums for 12 months (or the cost
of COBRA coverage for such period) for him and his dependents covered under the Company’s group health and/or dental plan
prior to termination. In the event that Dr. Weyer does not renew his employment at the end of the employment term, is terminated
for cause, is terminated due to death or disability, or terminates his employment without good reason, Dr. Weyer will not be entitled
to severance payments unless mutually agreed upon in writing.
If the Company does not renew the employment
of Dr. Weyer at the end of his respective employment term, Dr. Weyer is terminated by the Company without cause or he resigns with
good reason, all of Dr. Weyer’s equity awards and stock options that would have vested within one year of the termination
date will vest upon effectiveness of a release of claims in the Company’s favor and all vested stock options will be exercisable
for up to one year from the effective date of termination unless the stock plan pursuant to which the option is granted requires
earlier termination.
In the event that Dr. Weyer is terminated
by the Company for cause, by Dr. Weyer by reason of non-renewal of the Weyer Employment Agreement, or by Dr. Weyer without good
reason, all unvested equity awards and stock options granted will immediately be forfeited and all vested options will be exercisable
for up to 90 days following termination unless the stock plan pursuant to which the option is granted requires earlier termination.
In the event of the termination of Dr. Weyer’s
employment, in anticipation of, and/or within 12 months following, a change in control (i) by the Company by reason of non-renewal
of the Weyer Employment Agreement, (ii) by Dr. Weyer for good reason or (iii) by the Company without cause, Dr. Weyer will be entitled
to receive (a) an amount equal to 12 months of his then-current monthly base salary payable as a single lump sum and (b) continuation
of participation in the Company’s group health and/or dental plan and the payment of his premiums for 12 months (or the cost
of COBRA coverage for such period) for Dr. Weyer, his spouse and any dependents covered under our group health and/or dental plan
prior to termination. In such instances of termination all of Dr. Weyer’s unvested equity awards and stock options will,
upon effectiveness of a release of claims in the Company’s favor, become fully vested and all of his vested stock options
will be exercisable for a period of one year following the effective date of termination unless the stock plan pursuant to which
the option is granted requires earlier termination.
Receipt of the severance benefits described
above is conditioned upon Dr. Weyer, as the case may be, entering into a release of claims with the Company and the release becoming
effective and irrevocable within 60 days after termination. Dr. Weyer has acknowledged and agreed that the timing of payments may
be modified by the Company to comply with Section 409A of the Internal Revenue Code of 1986.
This description of the Weyer Employment
Agreement is qualified in its entirety by reference to the full text of the Weyer Employment Agreement, a copy of which is attached
as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
David Shapiro, M.D., Employment Agreement
As previously announced, on July 31, 2017,
the role of David Shapiro, M.D., the Company’s Chief Medical Officer, was bifurcated into two separate roles; with Dr. Shapiro
continuing to lead the Company’s research and development organization until the Company filled the position of head of research
and development.
In connection
with the appointment of Dr. Weyer as
Executive Vice President of Research & Development
,
Dr. Shapiro and the Company entered into an employment agreement (the “Shapiro Employment Agreement”) which sets forth
the terms and conditions of Dr. Shapiro’s employment with the Company as its Chief Medical Officer. The Shapiro Employment
Agreement, which has an initial one-year term with automatic renewal each year thereafter unless terminated as set forth below,
provides that Dr. Shapiro shall (i) receive a base salary of $489,300 (“Base Salary”); (ii) be eligible for an annual
cash bonus of up to 50% of his Base Salary; and (iii) receive a monthly automobile allowance in the amount of $1,000.
In the event that the Company does not renew
Dr. Shapiro’s employment at the end of his employment term, Dr. Shapiro is terminated by the Company without cause, as defined
in the Shapiro Employment Agreement, or he resigns with good reason, as defined in the Shapiro Employment Agreement, Dr. Shapiro
will be entitled to receive (i) 12 months of his base salary (paid in accordance with the Company’s payroll) and (ii) continued
participation in the Company’s group health and/or dental plan and the payment of his premiums for 12 months (or the cost
of COBRA coverage for such period) for him and his dependents covered under the Company’s group health and/or dental plan
prior to termination. In the event that Dr. Shapiro does not renew his employment at the end of the employment term, is terminated
for cause, is terminated due to death or disability, or terminates his employment without good reason, Dr. Shapiro will not be
entitled to severance payments unless mutually agreed upon in writing.
If the Company does not renew the employment
of Dr. Shapiro at the end of his respective employment term, Dr. Shapiro is terminated by the Company without cause or he resigns
with good reason, all of Dr. Shapiro’s equity awards and stock options that would have vested within one year of the termination
date will vest upon effectiveness of a release of claims in the Company’s favor and all vested stock options will be exercisable
for up to one year from the effective date of termination unless the stock plan pursuant to which the option is granted requires
earlier termination.
In the event that Dr. Shapiro is terminated
by the Company for cause, by Dr. Shapiro by reason of non-renewal of the Shapiro Employment Agreement, or by Dr. Shapiro without
good reason, all unvested equity awards and stock options granted will immediately be forfeited and all vested options will be
exercisable for up to 90 days following termination unless the stock plan pursuant to which the option is granted requires earlier
termination.
In the event of the termination of Dr. Shapiro’s
employment, in anticipation of, and/or within 12 months following, a change in control (i) by the Company by reason of non-renewal
of the Shapiro Employment Agreement, (ii) by Dr. Shapiro for good reason or (iii) by the Company without cause, Dr. Shapiro will
be entitled to receive (a) an amount equal to 12 months of his then-current monthly base salary payable as a single lump sum and
(b) continuation of participation in the Company’s group health and/or dental plan and the payment of his premiums for 12
months (or the cost of COBRA coverage for such period) for Dr. Shapiro, his spouse and any dependents covered under our group health
and/or dental plan prior to termination. In such instances of termination all of Dr. Shapiro’s unvested equity awards and
stock options will, upon effectiveness of a release of claims in the Company’s favor, become fully vested and all of his
vested stock options will be exercisable for a period of one year following the effective date of termination unless the stock
plan pursuant to which the option is granted requires earlier termination.
Receipt of the severance benefits described
above is conditioned upon Dr. Shapiro, as the case may be, entering into a release of claims with the Company and the release becoming
effective and irrevocable within 60 days after termination. Dr. Shapiro has acknowledged and agreed that the timing of payments
may be modified by the Company to comply with Section 409A of the Internal Revenue Code of 1986.
This description of the Shapiro Employment
Agreement is qualified in its entirety by reference to the full text of the Shapiro Employment Agreement, a copy of which is attached
as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.