Item 5.01. Changes in Control of Registrant.
The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.
Pursuant to the Merger Agreement, all of the directors of the Company prior to the Merger, other than Dr. Howe, resigned as directors immediately prior to the effective time of the Merger. The Board then appointed, effective as of the effective time of the Merger, seven designees selected by Private Millendo, each to serve as directors in staggered classes agreed upon by the Company and Private Millendo prior to the completion of the Merger, with two of Private Millendos designees appointed to the class whose term expires in 2019, three of the of Private Millendos designees appointed to the class whose term expires in 2020 and the other of Private Millendos designees appointed to the class whose term expires in 2021.
In accordance with the Merger Agreement, on December, 7, 2018, immediately prior to the effective time of the Merger, Richard Aldrich, Jeffrey D. Capello, Mary Fisher, Marc Kozin, Christopher Kroeger, M.D., M.B.A. and John Sexton, Ph.D. resigned from the Companys board of directors and any respective committees of the board of directors to which they belonged. Also on December 7, 2018, Dr. Howe, the sole remaining director, resigned from any committees of the board of directors to which he belonged, apart from the Audit Committee.
Effective as of the effective time of the Merger, the board of directors appointed Dr. Owens as a Class I director, whose term will expire at the 2019 annual meeting of stockholders, Dr. Gallagher as a Class III director, whose term expires at the Companys 2021 annual meeting of stockholders, Ms. Nuechterlein as a Class II director, whose term will expire at the 2020 annual meeting of stockholders, Mr. Hindman as a Class II director, whose term will expire at the 2020 annual meeting of stockholders, Dr. Whitcomb as a Class II director, whose term will expire at the 2020 annual meeting of stockholders, Mr. Dable as a Class III director, whose term expires at the Companys 2021 annual meeting of stockholders, and Dr. Hedley as a Class I director, whose term will expire at the 2019 annual meeting of stockholders. Dr. Howe remains as a Class I director, whose term will expire at the 2019 annual meeting of stockholders.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b)
In accordance with the Merger Agreement, on December 7, 2018, immediately prior to the effective time of the Merger, Mr. Aldrich, Mr. Capello, Ms. Fisher, Mr. Kozin, Dr. Kroeger and Dr. Sexton resigned from the Companys board of directors and any respective committees of the board of directors on which they served, which resignations were not the result of any disagreements with the Company relating to the Companys operations, policies or practices.
Also on December 7, 2018, immediately prior to the effective time of the Merger, Dr. Kroeger, the Companys President and Chief Executive Officer, Jonathan Gillis, the Companys Senior Vice President of Finance, and James Lillie, the Companys Chief Scientific Officer, resigned as officers of the Company.
(c)
On December 7, 2018, effective as of the effective time of the Merger, the Companys board of directors appointed Dr. Gallagher as the Chair of the Companys board of directors, Dr. Owens as the Companys President and Chief Executive Officer, Mr. Arcudi as the Companys Chief Financial Officer and Treasurer, Dr. Mohideen as the Companys Chief Medical Officer and Mr. Brinza as the Companys Secretary, Chief Administrative Officer and General Counsel, each to serve at the discretion of the Companys board of directors. There are no family relationships among any of the Companys directors and executive officers.
Julia C. Owens, Ph.D.
is one of the co-founders of Private Millendo and has served as Private Millendos President and Chief Executive Officer and as a member of Private Millendos board of directors since its inception in January 2012. From 2010 to May 2012, Dr. Owens served as the Senior Vice President of Corporate Development and Strategy at Lycera Corp., a biopharmaceutical company. Prior to that, from 2004 to 2010, Dr. Owens served in a number of business development positions at QuatRx Pharmaceuticals Co., a biopharmaceutical company, including as Head of Business Development from 2009 to 2010. From 1999 to 2004, Dr. Owens served in a number of business development positions at Tularik Inc., a biotechnology company, which was acquired by Amgen, Inc. in 2004. Prior to that, from July to October 1999, Dr. Owens served as a Licensing Officer in the Office of Technology Management at the University of California, San Francisco. Dr. Owens received a B.S. in Chemistry and a B.A. in Molecular and Cellular Biology from the University of California, Berkeley, and a Ph.D. in Biochemistry from the University of California, San Francisco.
Private Millendo entered into an employment agreement with Dr. Owens in July 2012 setting forth the terms of her employment. Dr. Owens was entitled to an initial annual base salary of $300,000, which has been subsequently increased, most recently as of January 1, 2018, to $432,600. Pursuant to the agreement, Dr. Owens was granted a stock option to
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purchase 1,108,867 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 82,499 shares of the Companys common stock) in August 2012, under which 25% of the shares underlying the option would vest after 12 months of employment, and the remaining shares underlying the option would vest in equal monthly installments over 36 months following July 25, 2013, subject to Dr. Owens continued service, all shares of which were fully vested as of July 25, 2016.
Dr. Owens was granted a stock option to purchase 2,037,648 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 151,600 shares of the Companys common stock) in January 2016, and a stock option to purchase 2,350,000 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 174,839 shares of the Companys common stock) in August 2018. Both of these options will vest and become exercisable as follows: 25% of the option will vest and become exercisable on the one-year anniversary of the applicable vesting commencement date, and the remaining shares underlying the option will vest in equal monthly installments over 36 months thereafter, subject to Dr. Owens continued service. Pursuant to Dr. Owens option awards, if Dr. Owens employment with Private Millendo (or any parent or subsidiary or successor of Private Millendo, including the Company) ends within six months prior to or within 12 months following a change in control of Private Millendo due to her resignation for good reason or her termination by Private Millendo other than for cause, death or disability, then her January 2016 and August 2018 options will accelerate in full. Dr. Owens is also eligible to receive an annual performance bonus with a target bonus of $216,300 for 2018, less applicable withholdings, with any such bonus to be determined at the sole discretion of Private Millendos board of directors. In December 2018, Dr. Owens was granted a one-time discretionary bonus of $50,000.
Pursuant to her employment agreement, if Dr. Owens employment with Private Millendo ends due to her resignation for good reason or her termination by Private Millendo other than for cause, prior to a change in control of Private Millendo or within 12 months following a change in control, she is entitled to (1) continued payment of her base salary then in effect for six months following her termination (plus an additional month of severance for each full year of employment up to a maximum of 12 months) and (2) payment of premiums for continued health benefits to her and her dependents under COBRA for six months following her termination (plus an additional month of vesting for each full year of employment up to a maximum of 12 months of vesting). In addition, pursuant to her employment agreement, if Dr. Owens employment with Private Millendo ends due to her resignation for good reason or her termination by Private Millendo other than for cause, (a) Dr. Owens vesting of outstanding stock options will accelerate up to such number of shares subject to her option as would have vested had her employment continued for an additional six months (plus an additional month of vesting for each full year of employment, up to a maximum of 12 months) and (b) upon or within 12 months following a change in control, she is entitled to aforementioned payments, as well as 100% of her unvested stock that will vest, provided, that, her option is assumed or an equivalent option is substituted by Private Millendo or its successor, following a change in control. Dr. Owens benefits are conditioned, among other things, on her complying with her post-termination obligations under her employment agreement and signing a general release of claims in Private Millendos favor.
Louis J. Arcudi III
has served as the Chief Financial Officer of Private Millendo since November 2018. Mr. Arcudi brings more than 20 years of financial and operational experience to Private Millendo. From December 2007 through October 2018, he served as Senior Vice President of Operations and Chief Financial Officer at Idera Pharmaceuticals. Prior to Idera, from June 2002 to December 2007, he served as Vice President of Finance and Administration for Peptimmune, Inc. where he handled all financial business and operations. Mr. Arcudi obtained an MBA from Bryant College and a B.S. in accounting and information systems from the University of Southern New Hampshire.
Pursuant to Mr. Arcudis November 2018 offer letter with Private Millendo, during his employment with Private Millendo, Mr. Arcudi has the customary duties applicable to his position as Chief Financial Officer. Mr. Arcudi receives an annual base salary of $350,000 and is eligible to receive an annual performance bonus of up to 40% of such base salary, less applicable withholdings, to be determined at the sole discretion of Private Millendos Board. During his employment, Mr. Arcudi is eligible to participate in Private Millendos applicable benefit plans as offered to other similarly situated employees. Subject generally to Mr. Arcudis continued employment as Private Millendos Chief Financial Officer (including continued service as the Companys Chief Financial Officer), Mr. Arcudi was granted a stock option to purchase 74,400 shares of the Companys common stock under the Companys 2012 Plan, as amended, in December 2018, which will vest and become exercisable as follows: 25% of the option will vest and become exercisable after 12 months of employment, and the remaining shares underlying the option would vest in equal monthly installments over 36 months following November 1, 2019, subject to Mr. Arcudis continued service.
If Mr. Arcudis employment with Private Millendo (or any parent or subsidiary or successor of Private Millendo, including the Company) ends within three months prior to or within 12 months following a change in control of Private Millendo due to his resignation for good reason or his termination by Private Millendo other than for cause, death or disability, then his options will accelerate in full.
Pursuant to his offer letter, if, three months prior to a change in control of Private Millendo or within 12 months following a change in control, Mr. Arcudis employment with Private Millendo ends due to his resignation for good reason, his termination by Private Millendo other than for cause or as a result of his death or disability, he is entitled to (1) continued payment of his base salary then in effect for twelve months following his termination and (2) payment of premiums for continued health benefits to him and his dependents under COBRA for up to 12 months following his termination. Mr. Arcudis benefits are conditioned, among other things, on his complying with his post-termination obligations under his offer letter, signing a general release of claims in Private Millendos favor and resigning from all positions that he holds with Private Millendo.
Pharis Mohideen, M.D.
has served as the Chief Medical Officer of Private Millendo since October 2014. Prior to that, from June 2012 to October 2014, Dr. Mohideen served as the Vice President of Clinical Development at Shionogi Inc., a pharmaceutical company. From 2008 to June 2012, Dr. Mohideen served as an Executive Director of Novartis Oncology, a business unit of Novartis International AG, a pharmaceutical company (NYSE: NVS), and from 2006 to 2008, served as a Senior Director of Novartis International AG. Dr. Mohideen received a B.A. in Biology from the University of Hawaii, an M.S. in Clinical Investigation from Vanderbilt University, an M.D. from the University of Hawaii and an M.S. in Human Physiology from the University of Hawaii.
Private Millendo entered into an offer letter with Dr. Mohideen in October 2014 setting forth the terms of his employment. Dr. Mohideen was entitled to an initial annual base salary of $330,000, which has been subsequently increased, most recently as of January 1, 2018, to $367,602. Pursuant to the agreement, Dr. Mohideen was granted a stock option to purchase 358,845 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 26,698 shares of the Companys common stock) in December 2014, under which 25% of the shares underlying the option would vest after 12 months of employment, and the remaining shares underlying the option would vest in equal
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monthly installments over 36 months following October 27, 2015, subject to Dr. Mohideens continued service.
Dr. Mohideen was granted a stock option to purchase 503,847 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 37,485 shares of the Companys common stock) in January 2016, and a stock option to purchase 550,000 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 40,919 shares of the Companys common stock) in August 2018. Both of these options will vest and become exercisable as follows: 25% of the option will vest and become exercisable on the one-year anniversary of the applicable vesting commencement date, and the remaining shares underlying the option will vest in equal monthly installments over 36 months thereafter, subject to Dr. Mohideens continued service. Pursuant to Dr. Mohideens option awards, if Dr. Mohideens employment with Private Millendo (or any parent or subsidiary or successor of Private Millendo, including the Company) ends within six months prior to or within 12 months following a change in control of Private Millendo due to his resignation for good reason or his termination by Private Millendo other than for cause, death or disability, then his January 2016 and August 2018 options will accelerate in full. Dr. Mohideen is also eligible to receive an annual performance bonus, with a target bonus of $128,660 for 2018, less applicable withholdings, with any such bonus to be determined at the sole discretion of Private Millendos board of directors.
Pursuant to his offer letter, if, immediately prior to a change in control of Private Millendo or within 12 months following a change in control, Dr. Mohideens employment with Private Millendo ends due to his resignation for good reason, his termination by Private Millendo other than for cause or as a result of his death or disability, he is entitled to (1) continued payment of his base salary then in effect for six months following his termination and (2) acceleration of 100% of his outstanding and unvested stock options. Dr. Mohideens benefits are conditioned, among other things, on his complying with his post-termination obligations under his offer letter, signing a general release of claims in Private Millendos favor and resigning from all positions that he holds with Private Millendo.
Jeffery M. Brinza, J.D.
has served as the Chief Administrative Officer and General Counsel of Private Millendo since March 2018. Prior to that, Mr. Brinza served as Private Millendos Senior Vice President, Administration and General Counsel since August 2015. From March 2014 until December 2017, Mr. Brinza also served as Secretary and a member of the board of directors of ENT Biotech Solutions, Inc., a medical device company. From 2009 to August 2015, Mr. Brinza served as the General Counsel, Secretary and Chief Compliance Officer at RGIS LLC, an inventory service provider. From 2005 to 2009, Mr. Brinza served as the General Counsel at QuatRx Pharmaceuticals Co., a biopharmaceutical company. Mr. Brinza received a B.A. in Computer and Communications Sciences and Economics from the University of Michigan and a J.D. from the University of Michigan Law School.
Private Millendo entered into an offer letter with Mr. Brinza in July 2015 setting forth the terms of his employment. Mr. Brinza was entitled to an initial annual base salary of $255,000, which has been subsequently increased, most recently as of January 1, 2018, to $310,000. Pursuant to the agreement and as subsequently determined by Private Millendos board of directors, Mr. Brinza was granted a stock option to purchase 666,800 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 49,609 shares of the Companys common stock)
in January 2016. Mr. Brinza was granted a stock option to purchase 600,000 shares of Private Millendo Common Stock (which converted into options to purchase an aggregate of 44,639 shares of the Companys common stock) in August 2018. Both of these options will vest and become exercisable as follows: 25% of the option will vest and become exercisable on the one-year anniversary of the applicable vesting commencement date, and the remaining shares underlying the option will vest in equal monthly installments over 36 months thereafter, subject to Mr. Brinzas continued service. Pursuant to Mr. Brinzas option awards, if Mr. Brinzas employment with Private Millendo (or any parent or subsidiary or successor of Private Millendo, including the Company) ends within six months prior to or within 12 months following a change in control of Private Millendo due to his resignation for good reason or his termination by Private Millendo other than for cause, death or disability, then his January 2016 and August 2018 options will accelerate in full. Mr. Brinza is also eligible to receive an annual performance bonus, with a target bonus of $108,500 for 2018, less applicable withholdings, with any such bonus to be determined at the sole discretion of Private Millendos board of directors. In November 2018, Mr. Brinza was granted a one-time discretionary bonus of $16,000.
As disclosed in Item 1.01 of this Current Report on Form 8-K, each of Dr. Owens, Dr. Mohideen, Mr. Arcudi, and Mr. Brinza entered into an indemnification agreement with the Company on December 7, 2018, immediately following the Merger.
Please see the section of the Registration Statement entitled Matters Being Submitted to a Vote of OvaScience Stockholders Proposal No. 4: Approval of an Amendment to the OvaScience 2012 Stock Incentive Plan Summary of the 2012 Plan for information regarding the the Companys 2012 Plan, as amended, which such information is incorporated herein by reference.
(d)
The information set forth in Item 5.01 of this Current Report on Form 8-K with respect to the appointment of directors to the Companys board of directors pursuant to and in accordance with the Merger Agreement is incorporated by reference into this Item 5.02(d).
Audit Committee
On December 7, 2018, Mr. Hindman, Dr. Whitcomb and Dr. Howe were appointed to the audit committee of the Companys board of directors, and Mr. Hindman was appointed as the chair of the audit committee.
Compensation Committee
On December 7, 2018, Dr. Gallagher, Mr. Dable and Dr. Whitcomb were appointed to the compensation committee of the Companys board of directors, and Dr. Gallagher was appointed as the chair of the compensation committee.
Nominating and Corporate Governance Committee
On December 7, 2018, Dr. Hedley and Ms. Nuechterlein were appointed to the nominating and corporate governance committee of the Companys board of directors, and Dr. Hedley was appointed as the chair of the nominating and corporate governance committee.
Affiliations with 5% Stockholders
Dr. Gallagher currently serves as a member of the Companys board of directors and serves as a Partner at New Enterprise Associates, Inc., which is the general partner of New Enterprise Associates 15, L.P. and NEA Ventures 2015, L.P. (collectively, the
NEA Entities
) which, in the aggregate, currently hold more than 5% of the Companys outstanding common stock. As a result of the Merger, the NEA Entities received, in the aggregate, approximately 1,766,779 shares (as
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adjusted for the Reverse Stock Split) of Company common stock in exchange for the shares of Private Millendo common stock the NEA Entities held immediately prior to the Merger.
Ms. Nuechterlein currently serves as a member of the Companys board of directors and serves as a Head at Roche Venture Fund, which is an affiliate of Roche Finance Ltd., which, in the aggregate, currently holds more than 5% of the Companys outstanding common stock. As a result of the Merger, Roche Finance Ltd. received approximately 755,847 shares (as adjusted for the Reverse Stock Split) of Company common stock in exchange for the shares of Private Millendo common stock Roche Finance Ltd. held immediately prior to the Merger.
As further described in Item 1.01 above, each of Dr. Howe, Dr. Gallagher, Ms. Nuechterlein, Mr. Hindman, Dr. Whitcomb, Mr. Dable, and Dr. Hedley entered into the Companys standard form of indemnity agreement with the Company on December 7, 2018, immediately following the Merger.
The Company expects to review its non-employee director cash and equity compensation policies and such policies may be subject to change.
(e)
On December 7, 2018, pursuant to the Merger Agreement, the Company assumed the Private Millendo Plan, which was amended in November 2018 to establish a sub plan (the
Sub Plan
), which will govern awards of stock options intended to qualify for favorable French income and social tax treatment granted to our non-employee directors and employees who are either French resident taxpayers and/or subject to the French social security scheme in France. The Sub Plan was adopted under the Private Millendo Plan. Subject to the general limits under the Private Millendo Plan, the total number of shares subject to outstanding options under the Sub Plan will never cover shares exceeding one-third of the Companys outstanding capital stock at any time. Please see the section of the Registration Statement entitled Management Following the Merger Employment Benefits Plan Equity Incentive Plans 2012 Equity Incentive Plan for information regarding the Private Millendo Plan, which such information is incorporated herein by reference.
The foregoing description of the Sub Plan is not complete and is subject to and qualified in its entirety by reference to the Sub Plan, a copy of which is attached as Exhibit 10.5 hereto and is incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
(a)
To the extent required by Item 5.03 of Form 8-K, the information contained in Item 2.01 and Item 3.03 of this Current Report on Form 8-K is incorporated by reference herein.
Item 8.01. Other Events.
On December 7, 2018, the Company issued a press release announcing the completion of the Merger. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(a)
Financial Statements of Businesses Acquired.
The financial statements required by Item 9.01(a) were previously filed with the SEC as part of the definitive proxy statement filed on November 6, 2018 and the Form 8-K filed on November 26, 2018 and, pursuant to General Instruction B.3 of Form 8-K, are not required to be filed herewith.
(b) Pro Forma Financial Information.
The pro forma financial information required by Item 9.01(b) were previously filed with the SEC as part of the definitive proxy statement filed on November 6, 2018 and the Form 8-K filed on November 26, 2018 and, pursuant to General Instruction B.3 of Form 8-K, are not required to be filed herewith.
(d) Exhibits
Exhibit
No.
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Description
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2.1*
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Agreement and Plan of Merger and Reorganization, dated as of August 8, 2018, by and among the registrant, Orion Merger Sub, Inc. and Millendo Therapeutics, Inc. (incorporated by reference from Exhibit 2.1 to Amendment No. 1 to the Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on November 1, 2018, File No. 333-227547).
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2.2*
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First Amendment to Agreement and Plan of Merger and Reorganization, dated as of August 8, 2018, by and among the registrant, Orion Merger Sub, Inc. and Millendo Therapeutics, Inc., dated as of September 25, 2018 (incorporated by reference from Exhibit 2.2 to Amendment No. 1 to the Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on November 1, 2018, File No. 333-227547).
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2.3*
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Second Amendment to Agreement and Plan of Merger and Reorganization, dated as of August 8, 2018, by and among the registrant, Orion Merger Sub, Inc. and Millendo Therapeutics, Inc., dated as of November 1, 2018 (incorporated by reference from Exhibit 2.3 to Amendment No. 1 to the Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on November 1, 2018, File No. 333-227547).
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