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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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In September 2019, the Compensation Committee of the Board of Directors of Axovant Gene Therapies Ltd. (the "Registrant") approved a new form of employment agreement for our executive officers following a benchmarking analysis of life science company employment agreements. On November 4, 2019, we, through our wholly owned subsidiary, Axovant Sciences Inc. ("ASI"), entered into new employment agreements (the "Employment Agreements"), with each of Pavan Cheruvu, M.D., our Principal Executive Officer and the Chief Executive Officer of ASI, Gavin Corcoran, M.D., our Executive Vice President, Research and Development of ASI, and David Nassif, our Principal Financial and Accounting Officer and the Chief Financial Officer of ASI (the “Officers”) using the new form.
Apart from certain terms of severance and change in control benefits, the Employment Agreements do not change the terms of employment for each of the Officers as previously disclosed under “Executive Compensation” in our Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on July 16, 2019 and our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2019.
Under the Employment Agreements, each Officer is eligible for the following severance and change in control benefits, conditioned upon delivering a release of claims in our favor:
•If we terminate the Officer’s employment without cause or the Officer resigns for good reason either prior to a change in control or more than one year after the change in control, then we will pay to the Officer a one-time cash payment equal to the sum of (i) his annual base salary, (ii) the prorated amount of his annual bonus target opportunity (based on the number of days that have elapsed in such fiscal year through the date of the change in control) and (iii) any unpaid annual bonus amount for the prior fiscal year. We will also reimburse the Officer for continued medical coverage for one year if he timely elects such continued coverage.
•If we terminate the Officer’s employment without cause or the Officer resigns for good reason upon a change in control or within one year after a change in control, then we will pay the Officer a one and one-half time cash payment equal to the sum of (i) his annual base salary (and for Dr. Cheruvu only, two times his annual base salary), (ii) his full annual bonus target opportunity and (iii) any unpaid annual bonus amount for the prior fiscal year. We will also reimburse the Officer for continued medical coverage for 18 months if he timely elects such continued coverage.
•If any Officer is subject to excise tax pursuant to Sections 280G and 4999 of the Internal Revenue Code, he will either have his payments cut back so that the excise tax does not apply, or he will receive the full payments and benefits and be subject to the excise tax, whichever puts him in a better after-tax position.
The definitions of “cause,” “good reason” and “change in control” are set forth in the Employment Agreements.
In addition, pursuant to the Officers’ stock option agreements, if any Officer is employed by us immediately prior to a change in control (as defined in our 2015 Equity Incentive Plan), then all unvested common shares underlying such Officer’s outstanding options will accelerate and vest in full upon such change in control.
The foregoing summary of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the Employment Agreements attached hereto as Exhibits 10.1, 10.2 and 10.3, each of which is incorporated herein by reference.