Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 14, 2017, upon the recommendation of the
Compensation Committee (the Compensation Committee) of the Board of Directors (the Board) of Savara Inc. (the Company), the Board approved changes to the compensation of the Companys executive officers,
including adjustments to their base salaries as well as implemented target bonus amounts for such executives for the year ended December 31, 2018. Savaras executive compensation program is intended to enable the Company to attract
and retain qualified executive officers and to align the interests of its executive officers with those of its stockholders by incentivizing and rewarding achievement of business objectives that Savara believes will enhance the value of the Company
and by promoting commitment to long-term success. The primary components of Savaras executive compensation program are base salary, annual performance-based cash incentives, and stock option awards.
In considering compensation changes for Savaras executive officers, the Compensation Committee considered the advice of Setren, Smallberg &
Associates, an independent executive compensation consultant engaged by the Compensation Committee (the Independent Consultant), as well as the executive officers role, responsibilities, past performance, and the compensation of
the Companys other executive officers. The Compensation Committee and the Independent Consultant also reviewed comparable data from the Radford Life Science Index as well as a peer group of comparable companies identified by the
Compensation Committee and the Independent Consultant.
The Compensation Committee also considered that the compensation arrangements for the
Companys executives prior to these adjustments had been established when such officers were employed by the private company Savara (Private Savara) prior to the Companys business combination with Mast Therapeutics Inc. which
closed in April 2017 (the Merger). Private Savara had limited cash resources prior to the Merger and, as a result of the Merger, the executive officers of Private Savara became the executive officers of the Company. However,
the compensation of the Private Savara executives was never adjusted in connection with or subsequent to the Merger. Thus, the executive compensation adjustments approved on December 14, 2017 were also intended to reflect the changes in
responsibilities and the transition of such executives to a publicly held entity.
After consideration of the foregoing matters, the Compensation
Committee recommended executive compensation adjustments to the Board and the Board discussed and approved the executive compensation adjustments described below. The Compensation Committee and the Board discussed but did not approve any equity
awards for the Companys executive officers.
Annual Base Salaries
Effective December 16, 2017, the annual base salaries for the Companys executive officers were increased to be as follows:
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Executive Officer
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Title
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Base Salary
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Rob Neville
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Chief Executive Officer
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$
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525,000
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Taneli Jouhikainen
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President and Chief Operating Officer
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$
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525,000
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Dave Lowrance
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Chief Financial Officer
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$
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365,000
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Fiscal Year 2018 Target Bonuses
The Board approved the following target bonuses for the Companys fiscal year ending December 31, 2018 for the Companys
executive officers:
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Executive Officer
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Title
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Target
Bonus
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% of Base
Salary
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Rob Neville
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Chief Executive Officer
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$
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262,000
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50%
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Taneli Jouhikainen
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President and Chief Operating Officer
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$
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262,000
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50%
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Dave Lowrance
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Chief Financial Officer
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$
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128,000
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35%
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Actual bonus amounts paid to the executive officers may be more or less than the target bonus amounts. The total bonus
opportunity will be based on the achievement of certain performance goals, and the Board has the discretion to award bonus amounts that differ for attainment of performance goals that fall above or below such goals. For Mr. Neville, the
achievement of corporate performance measures will represent 100% of his target bonus award. For each of Dr. Jouhikainen and Mr. Lowrance, the achievement of corporate performance measures represent 25% of the target bonus award,
individual performance measures represent 50% of the target bonus award and 25% of the award is determined at the discretion of the chief executive officer.
Bonus Awards
On December 17, 2017,
the Board approved the following bonus payments to the Companys executive officers for performance at the Company during 2017:
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Executive Officer
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Title
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Bonus
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Rob Neville
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Chief Executive Officer
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$
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296,662.50
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Taneli Jouhikainen
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President and Chief Operating Officer
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$
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296,662.50
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Dave Lowrance
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Chief Financial Officer
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$
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108,012.50
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Each such officer also received a bonus of $70,837.50 in 2017 for attainment of goals related to performance at Private
Savara.
Compensation for
Non-Employee
Directors
The Compensation Committee undertook an analysis similar to that for the executive officers with respect to evaluating the compensation of the
Companys
non-employee
directors. As a result of such analysis, upon the recommendation of the Compensation Committee, the Board approved the changes in
non-employee
director compensation described below.
Each
non-employee
director will receive an annual fee of $32,000 in cash for serving on the Board, as well as $2,000 for attendance at each in person meeting of the Board. There are no additional fees for Board
meetings attended by telephone or for attending individual meetings of Board committees. In addition, the chairpersons and members of the Boards three standing committees will be entitled to the following annual cash fees:
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Board Committee
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Chairperson Fee*
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Member Fee
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Audit Committee
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$
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17,500
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$
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7,500
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Compensation Committee
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$
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12,500
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$
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5,500
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Nominating and Corporate Governance Committee
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$
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7,500
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$
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3,750
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* Any
non-employee
director who serves as chairperson of a committee shall not be
entitled to a member fee for the same committee.
In addition to the cash compensation described above, beginning in 2018, each
non-employee
director will be granted an option to purchase 12,000 shares of the Companys common stock.