Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment
of Certain Officers; Compensatory Arrangements of Certain Officers
Appointment of Chief Executive Officer
On October 10, 2019, the Company announced
that its Board of Directors (the “Board”) appointed J. Kevin Buchi as Chief
Executive Officer of the Company, effective as of October 8, 2019 (the
“Effective Date”). Mr. Buchi also was appointed as a member of the Board as of
the Effective Date.
Mr. Buchi, 64, served as interim president and chief
executive officer of Impax Laboratories, LLC (“Impax”) from December 2016 until
March 2017 and as a member of the Impax board from November 2016 until the
completion of the combination of Impax and Amneal Pharmaceuticals, Inc. ("Amneal") in 2018. Mr.
Buchi also served as president and chief executive officer of TetraLogic
Pharmaceuticals Corporation (“TetraLogic”) from August 2013 to December 2016. Before
TetraLogic, he served as corporate vice president of Global Branded Products at
Teva Pharmaceutical Industries Limited (“Teva”) from 2011 to May 2012. Prior to
that, Mr. Buchi was chief executive officer of Cephalon, Inc., which was
acquired by Teva in October 2011. Mr. Buchi also serves as a member of the board
of directors of Dicerna Pharmaceuticals, Inc., where he was appointed chairman
in January 2019, Amneal, and Benitec Biopharma Ltd. Mr.
Buchi previously served on the board of EPIRUS Biopharmaceuticals, Inc. from
June 2013 to July 2016, Alexza Pharmaceuticals, Inc. from January 2013 to June
2016, Forward Pharma A/S from December 2012 to May 2016, and Stemline
Therapeutics, Inc. from March 2012 to May 2016. Mr. Buchi received his B.A.
degree in Chemistry from Cornell University and a Masters of Management degree
from the J.L. Kellogg Graduate School of Management, Northwestern University.
In connection with his appointment as Chief
Executive Officer, on the Effective Date, the Company entered into an employment
agreement with Mr. Buchi (the “Employment Agreement”) setting forth the terms of
his employment and compensation. Pursuant to the Employment Agreement, Mr.
Buchi’s base salary will be $600,000, and he will be eligible for an annual
incentive cash bonus with a target amount of 60% of his annual rate of base
salary (for 2019, 15% of his annual rate of base salary), subject to Mr. Buchi’s
continued employment through the last day of the year to which such annual
incentive cash bonus relates.
Pursuant to the Employment Agreement, as soon as
practicable following the Effective Date, Mr. Buchi will receive a one-time
stock option grant with respect to 85,000 shares of common stock of the Company
(the “Option”) under the Company’s 2019 Omnibus Incentive Compensation Plan (the
“Equity Plan”). The Option will have an exercise price equal to the fair market
value per share on the date of grant and will vest in equal annual installments
over the four-year period following the date of grant, subject to the terms and
conditions established by the Board and of the Equity Plan. Mr. Buchi also will
receive an annual grant of performance stock units pursuant to the Equity Plan
(the “PSUs”) no later than each of February 1, 2020, February 1, 2021, and
February 1, 2022 (each, an “Annual PSU Grant”), subject to the terms and
conditions established by the Board and of the Equity Plan. The first and second
Annual PSU Grant will consist of 28,333 PSUs (at target) and the third Annual
PSU Grant will consist of 28,334 PSUs (at target). Each Annual PSU Grant will be
subject to the achievement of specified performance conditions measured over a
one-year performance period, with the number of PSUs that are earned based on
the achievement of the applicable performance conditions (the “Achieved PSUs”).
One-half of the Achieved PSUs will vest on December 31st of the
fiscal year of performance, and the remaining one-half of the Achieved PSUs will
vest on December 31st of the fiscal year immediately following the
fiscal year of performance, subject to Mr. Buchi’s continued employment through
the applicable vesting date. Mr. Buchi also will be eligible to participate in
the benefit plans and arrangements generally available to the Company’s
employees, including, without limitation, participation in the Company’s health,
welfare, and retirement plans, and he will be eligible for reimbursement of
commuting expenses.
If Mr. Buchi’s employment is terminated by the
Company without “Cause” or by Mr. Buchi for “Good Reason” (each as defined in
the Employment Agreement), Mr. Buchi will be entitled to receive: (a) continued
payments of base salary for one year following the termination date; (b)
reimbursement of COBRA premiums for a 12-month period; (c) accelerated vesting
of any portion of the Option that remains unvested as of the date of
termination; (d) a pro-rated portion of any unvested Achieved PSUs; (e) any
accrued, but unpaid base salary and benefits (the “Accrued Obligations”); (f)
any annual bonus earned, but unpaid (the “Accrued Annual Bonus”); and (g) any
vested, but unpaid Achieved PSUs (“Accrued PSUs”), with the amounts set forth in
clauses (a) through (d) subject to Mr. Buchi’s execution and
non-revocation of a general release in favor of the Company. In the event that
Mr. Buchi’s employment is terminated by the Company without “Cause” or by Mr.
Buchi for “Good Reason” upon or within one year following a Change of Control
(as defined in the Employment Agreement), Mr. Buchi will be entitled to receive:
(a) a lump sum cash payment equal to one times his base salary as in effect on
the date of Change of Control; (b) a lump sum cash payment equal to the target
amount of his annual bonus for the year in which the termination occurs; (c)
reimbursement of COBRA premiums for a 12-month period; (d) accelerated vesting
of any portion of the Option that remains unvested as of the date of
termination; (e) accelerated vesting of the Annual PSU Grant, if any, received
by Mr. Buchi in the fiscal year in which his employment terminates based on
target performance; (f) accelerated vesting of any unvested Achieved PSUs as of
the date of termination; (g) the Accrued Obligations; (h) the Accrued Annual
Bonus; and (i) the Accrued PSUs, with the amounts set forth in clauses (a)
through (f) subject to Mr. Buchi’s execution and non-revocation of a general
release in favor of the Company.
The Employment Agreement also contains customary restrictive covenants relating
to non-competition and non-solicitation.
Resignation of Interim Principal Executive
Officer
On the Effective Date, Dr. Ronald Law resigned as the
Company’s interim principal executive officer to resume his position as the
Company’s Senior Vice President of Business Development.