Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 19, 2017, Vermillion, Inc. (the “Company”) announced the appointment of Robert Beechey as its Chief Financial Officer, effective as of December 18, 2017. Prior to joining the Company, Mr. Beechey, age 54, served in numerous
financial and operational
leadership roles.
From 2015 to 2017
, he
served as
Vice President and General Manager
, BioAnalytical
and ADME
Laboratories at Q
2
Solutions, a
clinical trials laboratory
joint venture between
IQVIA Holdings Inc. (NYSE:IQV)
and Quest Diagnostics
Incorporated (NYSE:DGX). From 2015 to 2016, Mr. Beechey served as
Chief Financial Officer
at Q
2
Solutions, and from 2013 to 2015, Mr. Beechey served
as Vice President Finance
,
Global Laboratories
at
Quintiles Transnational
Corporation (formerly NYSE:Q), a company that provided a
full range of integrated product development and commercial development solutions
to the
pharmaceutical, biotechnology and medical device industries
. From 2011 to 2013,
Mr. Beechey served as Vice President of Internal Audit
at Quintiles
. Prior to joining Quintiles, Mr. Beechey was Vice President Finance
, Laboratory Consumables Division
at ThermoFisher Scientific
(NYSE:TMO)
. Mr. Beechey also held various financial leadership roles at Eastman Kodak Company. Mr. Beechey started his career at Arthur Andersen LLP
,
where he was a Senior Manager.
There are no family relationships
, as defined in Item 401 of Regulation S-K,
between Mr. Beechey and any of the Company’s directors or executive officers, and there is no arrangement or understanding between Mr. Beechey and any other person pursuant to which he was
appointed
as an officer of the Company. Mr. Beechey does not have any direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K.
Pursuant to the terms of an employment agreement, executed on December 14, 2017 (the “Employment Agreement”), between the Company and Mr. Beechey, the Company will pay Mr. Beechey an annual base salary of $280,000, beginning on December 18, 2017 (the “Effective Date”). In addition, Mr. Beechey will be eligible for a bonus of up to forty percent (40%) of his base salary (prorated for partial years) for achievement of reasonable performance-related goals to be defined by the Company’s Chief Executive Officer or Board of Directors. The Employment Agreement provides that on the Effective Date, the Company will grant Mr. Beechey options to purchase 150,000 shares of Company common stock with a per share exercise price equal to the closing price per share of Company common stock on the date of grant. The
stock options vest 25% on each of the
first
four anniversaries of the grant date
, subject to Mr. Beechey’s continued employment with the Company. If Mr. Beechey is terminated without cause or resigns for good reason (as these terms are defined in the Employment Agreement)
at any time following the date
that
is six (6) months following the Effective Date,
and provided that he complies with certain requirements (including signing a standard separation agreement
release and complying with the non-competition provision in
the Employment Agreement
), under the Employment Agreement: (i) he will be entitled to continued payment of his base salary as then in effect for a period of nine
(9)
months following the date of termination; (ii) he will be entitled to continued health and dental benefits through COBRA premiums paid by the Company until the earlier of nine
(9)
months after termination or the time that he obtains employment with reasonably comparable or greater health and dental benefits and (iii) he will have a 12-month period after termination to exercise any and all of his vested options to purchase Company common stock (subject to earlier expiration at the end of the option’s original term). Additionally, the Employment Agreement provides that if Mr. Beechey’s employment is terminated without cause or for good reason within the 12-month period following a change of control (as such term is defined in the Employment Agreement), then, in addition to the
benefits
above, 100% of any then-unvested options to purchase Company common stock previously granted by the Company will vest upon the date of such termination (subject to earlier expiration at the end of the option’s original term).
Additionally, upon his relocation,
Mr. Beechey
will receive a $30,000 relocation bonus, which is subject to reimbursement to the Company if Mr. Beechey is terminated by the Company with cause or resigns for good reason within one year of his relocation date.
The Employment Agreement also contains a non-solicitation provision that applies until 12 months after the termination of the Employment Agreement.
Mr. Beechey succeeds Eric Schoen, the
Company’s Senior Vice President, Finance and Chief Accounting Officer, as the principal financial officer and principal
accounting officer
of the Company. As
of December 18, 2017
, Mr. Schoen stepped down from these roles and transitioned
to a consulting role at the Company.
In connection with the transition, the
Company and Mr. Schoen entered into a consulting agreement dated as of December 18, 2017 (the “Consulting Agreement”). Pursuant to the terms of the Consulting Agreement, Mr. Schoen will assist the Company
,
as needed, providing accounting and finance services as directed by the Chief Financial Officer or Chief Executive Officer of
the Company
including
,
but not limited to
,
assistance in transition of financial leadership
. The Company will pay
Mr. Schoen
$150 per hour
for such consulting services, plus reimbursement for reasonable expenses
. Mr. Schoen will also
remain
eligible for payout under the
Company’s
2017 Corporate Incentive Plan as determined by the Compensation Committee of the Board of Directors
,
provided that
Mr. Schoen
continues to render satisfactory services to the Company through
the earlier of
(1)
(a) the date of
the filing of
the Company’s
2017
Annual Report on
Form 10
-
K
with the Securities and Exchange Commission and (b) the date
of the
Company’s
implementation of ASC Topic 606 (new revenue recognition rules)
and
(
2
)
the date Mr. Schoen
is otherwise released from service at the Company’s option prior to
the completion of the items described in the preceding clause (1)
.
The Consulting Agreement has an initial term of up to (5) months, after which it may be renewed by mutual agreement of the Company and Mr. Schoen.
The foregoing
descriptions
of the Employment Agreement
and
the Consulting Agreement
do
not purport to be complete and
are
qualified in
their
entirety by reference to the full text of the
agreements
, which
are
filed herewith as Exhibit
10.1 and Exhibit
10.2
, respectively,
and
are
incorporated herein by reference.