Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On January 3, 2018, William Fairey commenced employment with
ChemoCentryx, Inc. (the Company) as the Companys Executive Vice President, Chief Operating Officer. A copy of the press release announcing Mr. Faireys appointment is attached hereto as Exhibit 99.1.
Prior to joining the Company, from 2001 to 2017, Mr. Fairey served in numerous positions with Actelion Pharmaceuticals Ltd., most
recently as President of Actelion Pharmaceuticals US (2013-2017), where he led Actelions sales, marketing, medical, access and regulatory activities. Prior to this, Mr. Fairey served as Head of Actelions Asia Pacific Region
(2008-2012) and President of Actelion Pharmaceuticals, Canada (2003-2008). Mr. Fairey started his pharmaceutical career with Parke-Davis US, where he held various positions on the commercial side of the business. Mr. Fairey received his
B.S. in Biology from the University of Oregon and his M.B.A. from Saint Marys College, California.
In connection with the
commencement of his employment, the Company entered into an employment agreement (the Employment Agreement) with Mr. Fairey, dated January 3, 2018 (the Effective Date), pursuant to which he will receive an annual
base salary of $500,000, which amount is subject to annual review by and at the sole discretion of the Compensation Committee of the Board of Directors of the Company (the Committee). Mr. Fairey will also be eligible to earn an
annual cash performance bonus equal to up to 40% of his then-current annual base salary. The annual cash performance bonus will be based upon the achievement of financial and performance objectives established by the Committee.
Pursuant to the Employment Agreement, if the Company terminates Mr. Faireys employment without cause (as defined in the Employment
Agreement) or he resigns for good reason (as defined in the Employment Agreement) (either, an Involuntary Termination) both (1) within 12 months following the Effective Date and (2) prior to a change in control (as defined in
the Employment Agreement), the Company will be obligated to pay him a lump sum severance payment equal to (A) his annual base salary in effect at the time of termination, multiplied by (B) the percentage obtained by dividing (i) the
number of days elapsed from the Effective Date to the date of such termination by (ii) 365.
In the event of Mr. Faireys
Involuntary Termination (1) prior to a change in control or more than twelve (12) months following a change in control and (2) more than 12 months following the Effective Date, the Company is obligated to pay Mr. Fairey a lump
sum severance payment equal to 18 months base salary at the rate in effect at the time of termination). Furthermore, all of Mr. Faireys outstanding stock awards will vest upon the date of termination.
In the event of Mr. Faireys Involuntary Termination within 12 months following a change in control, the Company is obligated to pay
him a lump sum severance payment equal to the sum of: (1) 18 months base salary at the rate in effect at the time of termination, plus (2) one and
one-half
times his target bonus, plus (3) 18 months
of health benefits continuation at Company expense. Furthermore, Mr. Faireys outstanding stock awards will vest upon the date of termination. The foregoing change in control severance benefits only apply so long as Mr. Fairey is
working on a full-time basis.
Pursuant to the terms of the Employment Agreement, in connection with his commencement of employment,
effective January 3, 2018, the Committee approved the grant of options to purchase 575,000 shares of the Companys common stock to Mr. Fairey. The stock options have an exercise price per share equal to the closing price of the
Companys common stock on the NASDAQ Stock Market on the grant date. The stock options will vest over a four year period, with 25% of the options vesting on the first anniversary of the date of grant and the remainder of the options vesting
monthly over the subsequent three years, subject to Mr. Faireys continued service with the Company through the applicable vesting dates. In addition, the stock options granted to Mr. Fairey will be subject to accelerated vesting as
provided in the Employment Agreement and described above. The stock options were granted under the Companys 2012 Equity Incentive Plan and have a term of ten years from the grant date.
The foregoing description of the Employment Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Employment Agreement, which is filed herewith as Exhibit 10.1, and is incorporated herein by reference.
There are no family relationships between Mr. Fairey and any director or executive officer of the Company, and he has no direct or
indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation
S-K.