Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b), (c) and (e)
Chief Financial Officer Transition
On March 1, 2021, Cerecor Inc. (the “Company”) announced the appointment of Schond L. Greenway as Chief Financial Officer, effective March 1, 2021. Prior to such announcement, the Company and Mr. Greenway entered into an employment agreement for him to serve in such position, and as such he will serve as the Company’s principal financial officer and Treasurer. Chris Sullivan, who has served as the Company’s Interim Chief Financial Officer, principal financial officer, and principal accounting officer since April 2020, will continue with the Company as its principal accounting officer.
Mr. Greenway comes to the Company with over 20 years’ experience in investment banking, finance and corporate advisory and investment analysis in the life sciences and financial services industries. Mr. Greenway joins the Company from Mesoblast Limited (“Mesoblast”), an allogeneic cellular medicines company, where he served as Vice President, Investor Relations since April 2016. At Mesoblast, Mr. Greenway led investor relations activities and successfully concluded several strategic corporate finance transactions and capital markets initiatives. Prior to Mesoblast, from November 2013 to January 2016, he served as Executive Director, Strategy & Investor Relations at Halozyme Therapeutics, Inc. Prior to that, Mr. Greenway has served in positions of increasing responsibility at investment banking firms and healthcare companies such as Morgan Stanley, Barclays Capital and DURECT Corporation, predominantly focused on healthcare and technology. Mr. Greenway received a B.S. from Florida A&M University and an M.B.A. from the Darden Graduate School of Business – University of Virginia.
Mr. Greenway is 49 years old and has no familial relationships with any executive officer or director of the Company. There have been no transactions in which the Company has participated and in which Mr. Greenway had a direct or indirect material interest that would be required to be disclosed under Item 404(a) of Regulation S-K. Mr. Greenway has served in no other Company positions and there is no arrangement or understanding between Mr. Greenway and any other person pursuant to which he was selected to serve as Chief Financial Officer.
Pursuant his employment agreement with the Company, Mr. Greenway commenced full-time employment with the Company on March 1, 2021 at an initial base salary of $350,000 per year, subject to annual review beginning in 2022 and with certain limitations on decrease. In connection with the appointment of Mr. Greenway and in accordance with the terms of his employment agreement with the Company, the Company’s independent Compensation Committee and its Board of Directors both unanimously approved the grant to Mr. Greenway of a non-qualified stock option awarded to purchase 500,000 shares of its common stock, vesting over four (4) years, with a twelve-month cliff, such that the first 25% will vest on the first anniversary following Mr. Greenway’s start date with the Company, and the remainder will vest in equal monthly installments over the following three (3) years, in each case, subject to continued employment with the Company through the applicable vesting date. The stock option was granted on March 1, 2021 as an inducement material to Mr. Greenway becoming an employee of the Company in accordance with NASDAQ Listing Rule 5635(c)(4). The option has an exercise price equal to $3.73 per share, which was the closing price of the Company’s common stock on The Nasdaq Capital Market on March 1, 2021. The option is subject to the terms and conditions of the related stock option agreement, dated March 1, 2021, by and between the Company and Mr. Greenway, covering the grant (the “Inducement Award Agreement”).
Mr. Greenway will be eligible for a discretionary annual bonus that may consist of cash, grants of equity awards of the Company, or both, with a target bonus of up to 50% of his then current base salary (as pro-rated for the 2021 calendar year). Mr. Greenway will also be eligible to participate in the Company’s other employee benefit plans as in effect from time to time on the same basis as are generally made available to other employees of the Company.
If Mr. Greenway’s employment is terminated by the Company without “Cause” or by Mr. Greenway for “Good Reason” (each as defined in his employment agreement), in each case subject to Mr. Greenway timely entering into and not revoking a general release of claims in a form acceptable to the Company, Mr. Greenway will be eligible to receive:
▪certain Accrued Benefits (as defined in his employment agreement);
▪any earned but unpaid annual bonus in respect of the fiscal year preceding the year in which such termination occurs;
▪continued payment of his then current base salary for twelve consecutive months;
▪a prorated annual bonus earned in the year in which the termination occurs, payable when such annual bonuses are paid to other executive employees of the Company;
▪accelerated vesting of any unvested stock options that are solely subject to time-based vesting criteria equal to what would have vested had Mr. Greenway remained employed for twelve (12) additional months following the termination date; and
▪if he timely elects and remains eligible for continued coverage under federal COBRA law or, if applicable, state insurance laws, the Company will pay Mr. Greenway’s COBRA or state continuation health insurance premiums until the earliest of (x) the first anniversary of his termination, (y) expiration of his continuation coverage under COBRA, or (z) the date when Mr. Greenway is eligible for group health insurance; in each case subject to certain specified payment practices.
Subsequent to any termination, Mr. Greenway will be subject to a confidentiality covenant, a one-year non-competition covenant, and a one-year non-solicitation and non-interference covenant.
The foregoing summaries of the material terms of the employment agreement, dated February 10, 2021, by and between the Company and Mr. Greenway, and the Inducement Award Agreement are qualified in their entirety by reference to the complete text of such agreements, copies of which are filed as Exhibits 10.1 and 10.2 hereto and are incorporated herein by reference.