Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
(b) Departure of Timothy C. Rodell, M.D., FCCP as Director
and Chief Executive Officer
On November 3, 2020, the Company announced
the departure of Timothy C. Rodell, M.D., FCCP from his position as Chief Executive Officer of the Company, effective as of October
30, 2020 (the “Separation Date”).
In connection with Dr. Rodell’s departure,
in accordance with the terms of his Amended and Restated Employment Agreement with the Company, dated as of March 17, 2020 (the
“Rodell Employment Agreement”), and pursuant to Dr. Rodell’s Separation Agreement with the Company, entered into
as of October 30, 2020 and to be effective on November 8, 2020 (“Separation Agreement”), the Company will provide Dr.
Rodell with (1) cash severance equivalent to twelve months of Dr. Rodell’s base salary in effect as of the Separation Date,
plus a prorated portion of Dr. Rodell’s target Annual Performance Bonus (as defined in the Rodell Employment Agreement) for
2020 in the total gross amount of $92,450, subject to standard payroll deductions and withholdings, (2) the accelerated vesting
on 50% of outstanding and unvested equity awards held by Dr. Rodell as of the Separation Date, which will be deemed fully vested
and exercisable as of the Separation Date, and (3) reimbursement of COBRA healthcare
premium costs for the same level of coverage he had during employment for (i) up to twelve months, (ii) the expiration of Dr. Rodell’s
eligibility for the continuation coverage, or (iii) until the date Dr. Rodell becomes eligible for substantially equivalent healthcare
coverage through another source, starting on the Separation Date. Further, and pursuant to the Separation Agreement, Dr. Rodell
provided the Company a general release of all claims, dated October 30, 2020.
The foregoing description of the Rodell
Employment Agreement is a summary only and is qualified in its entirety by reference to the full text of the Rodell Employment
Agreement, a copy of which was filed as Exhibit 10.1 to Form 8-K filed on March 23, 2020, and the foregoing description of the
Separation Agreement is a summary only and does not purport to be complete and is qualified in its entirety by reference to the
full text of the Separation Agreement, a copy of which is filed as Exhibit 10.1 to this report and incorporated herein by reference.
(c) Appointment of Charles J. Fisher, Jr., M.D. as Chief
Executive Officer
On November 3, 2020, the Company announced
the appointment of Charles J. Fisher, Jr., M.D., the current Chairperson of the Board of Directors (the “Board”), as
the Chief Executive Officer of the Company, effective as of October 30, 2020. Pursuant to his appointment, Dr. Fisher resigned
from his role as Chairperson of the Board. Effective as of October 30, 2020, Edward Broenniman, a current member of the Board,
was appointed Chairperson of the Board.
Dr. Fisher has served as a director
of the Company and as Chairperson of the Board since November 2017. Dr. Fisher served as Executive Chairman and Chief Executive
Officer of Seastar Medical, Inc., a biotechnology company, from 2013 to July 2019. Dr. Fisher also has served as Chief Executive
Officer of Margaux Biologics, Inc., a biotechnology company, since 2010. Prior to founding Margaux Biologics, he was Chief Medical
Officer and Executive Vice President of Cardiome Pharma Corp. from 2005 to 2010, where he led the team that invented, developed
and registered vernakalant, a novel, first in class, multi-ion channel drug for atrial fibrillation, Brinavess. Dr. Fisher served
as Head, Section of Critical Care Medicine at The Cleveland Clinic Foundation, and has held Professor, Division Chief and director
positions at the University of California at Davis Medical Center, Case Western Reserve University and The Cleveland Clinic Foundation.
His research in sepsis, inflammation, host defense and endothelial dysfunction led to his recruitment to Eli Lilly & Co., where
he led the Xigris (activated Protein C) Global Product Team and successfully registered the first drug approved for the treatment
of sepsis. Previously, he was Vice President for Global Pharmaceutical Development at Abbott Laboratories where, among other accomplishments,
he guided the registration of Humira. Additionally, Dr. Fisher is a multi-tour combat veteran, with extensive military experience
in Special Operations. He has served as a member of the Defense Science Research Council and on DARPA panels, including one focused
on universal host defense.
In connection with his appointment as Chief
Executive Officer, the Board approved an employment agreement with Dr. Fisher (the “Fisher Employment Agreement”),
which provides for an initial annualized base salary of $430,000. Dr. Fisher will be eligible for an annual discretionary cash
bonus (the “Annual Performance Bonus”) to be approved by the Board, or the Compensation Committee of the Board (the
“Compensation Committee”) and to be determined in the sole discretion of the Board, or the Compensation Committee,
based upon the Company’s and Dr. Fisher’s achievement of objectives and milestones to be determined on an annual basis
by the Board, or Compensation Committee.
Under the terms of the Fisher Employment
Agreement, if Dr. Fisher is terminated by the Company without cause or resigns for good reason, he is entitled to receive (i) continued
payment of his then current base salary for the first twelve (12) months after the date of termination, paid over the Company’s
regular payroll schedule, (ii) a lump sum amount equal to Dr. Fisher’s target annual performance bonus for the year of termination,
pro-rated based on the ratio that the number of days from the beginning of the calendar year in which such termination occurs through
the date of termination bears to 365, based on actual achievement of Company goals for such bonus and such pro-rated year, as determined
by the Board in its sole discretion, (iii) accelerated vesting of 50% of Dr. Fisher’s unvested equity awards as of the date
of such termination date shall be deemed immediately vested and exercisable as of Dr. Fisher’s last day of employment, and
(iv) reimbursement of COBRA healthcare premium costs for the same level of coverage he had during employment for (i) up to twelve
months, (ii) the expiration of Dr. Fisher’s eligibility for the continuation coverage or (iii) until the date Dr. Fisher
becomes eligible for substantially equivalent healthcare coverage through another source.
In addition, in the event of a strategic
transaction, as defined in the Fisher Employment Agreement, completed within two years of Dr. Fisher’s commencement of employment
with the Company, he will receive a cash bonus equal to 50% of his then annual base salary and an additional equity grant such
that Dr. Fisher’s equity interest in the Company is then equal to three percent. The option will be subject to standard four-year
vesting, subject to full vesting if Dr. Fisher is terminated in connection with the strategic transaction. In order to earn the
cash bonus, Dr. Fisher must either: (i) remain in continuous employment with the Company through the date of the strategic transaction,
or (ii) have been terminated by the Company without cause within the sixty (60) day period immediately preceding the strategic
transaction.
The severance benefits described in the
foregoing paragraph are, in each case, subject to Dr. Fisher’s compliance with continuing obligations to the Company and
his execution of a separation agreement and general release in favor of the Company.
There are no family relationships between
Dr. Fisher and any other director or executive officer of the Company that require disclosure under Item 401(d) of Regulation S-K.
Other than with respect to the Fisher Employment Agreement, there are no transactions between Dr. Fisher or any member of his immediate
family, on the one hand, and the Company or any of its subsidiaries, on the other hand, that require disclosure under Item 404(a)
of Regulation S-K. Furthermore, there are no arrangements or understandings between Dr. Fisher and any other persons pursuant to
which Dr. Fisher was selected as the Chief Executive Officer of the Company.
The foregoing description of the Fisher
Employment Agreement applicable to Dr. Fisher is a summary only and does not purport to be complete and is qualified in its entirety
by reference to the full text of the Fisher Employment Agreement, a copy of which is filed as Exhibit 10.2 to this report and incorporated
herein by reference.
(e) Amendment to Company’s Amended and Restated
Non-Employee Director Compensation Policy
In addition, on October 29, 2020, the Board
approved an amendment to the Company’s Amended and Restated Non-Employee Director Compensation Policy to reduce the annual
Board service retainer for the chairperson of the Board (which fee is in addition to the eligible director annual service retainer)
from $60,000 to $30,000. All other Board compensation terms remain the same.