Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective as of February 23, 2021, Tausif (Tosh) Butt has been appointed Executive Vice President, Chief Operating Officer of ChemoCentryx, Inc. (the “Company”).
Prior to joining the Company, Mr. Butt served as the Senior Vice President of Latin America for AstraZeneca from 2019 to 2021 and U.S. Vice President, Respiratory from 2015 to 2018 and U.S. Vice President of Sales, Primary Care from 2014 to 2015. Prior to AstraZeneca, Mr. Butt held several marketing and sales leadership roles with GlaxoSmithKline from 2000 to 2014 and from 1990 to 1993. He also worked in sales and marketing roles at Sanofi from 1993 to 2000. Mr. Butt began his career as a retail pharmacist, having received a degree in Pharmacy from the University of Brighton in the United Kingdom. He also holds an MSc in Management from Imperial College, University of London.
In connection with the commencement of his employment, the Company entered into an employment agreement (the “Employment Agreement”) with Mr. Butt, dated December 28, 2020 (the “Effective Date”), pursuant to which he will receive an annual base salary of $575,000, which amount is subject to annual review by and at the sole discretion of the Compensation Committee of the Board of Directors of the Company (the “Committee”). Mr. Butt will also be eligible to earn an annual cash performance bonus equal to up to 50% of his then-current annual base salary. The annual cash performance bonus will be based upon the achievement of financial and performance objectives established by the Committee.
Pursuant to the Employment Agreement, if the Company terminates Mr. Butt’s employment without cause (as defined in the Employment Agreement) or he resigns for good reason (as defined in the Employment Agreement) (either, a “Separation of Service”) both (1) within 12 months following the Effective Date and (2) prior to a change in control (as defined in the Employment Agreement), the Company will be obligated to pay him a lump sum severance payment equal to his annual base salary in effect at the time of termination.
In the event of Mr. Butt’s Separation of Service (1) prior to a change in control or more than twelve (12) months following a change in control and (2) more than 12 months following the Effective Date, the Company is obligated to pay Mr. Butt a lump sum severance payment equal to 12 months’ base salary at the rate in effect at the time of termination. Furthermore, all of Mr. Butt’s outstanding service-based vesting equity awards will vest for an additional twelve months upon the date of termination.
In the event of Mr. Butt’s Separation of Service within 12 months following a change in control, the Company is obligated to pay him a lump sum severance payment equal to the sum of: (1) 12 months’ base salary at the rate in effect at the time of termination, plus (2) his target annual bonus, plus (3) 12 months of health benefits continuation at Company expense. Furthermore, Mr. Butt’s outstanding service-based vesting equity awards will vest upon the date of termination. The foregoing change in control severance benefits only apply so long as Mr. Butt is working on a full-time basis.
Pursuant to the terms of the Employment Agreement, in connection with his commencement of employment, effective February 23, 2021, the Committee approved the grant of options to purchase 87,000 shares of the Company’s common stock to Mr. Butt. The stock options have an exercise price per share equal to the closing price of the Company’s common stock on the Nasdaq Stock Market on the grant date. The stock options will vest over a four-year period, with 25% of the options vesting on the first anniversary of the date of grant and the remainder of the options vesting monthly over the subsequent three years, subject to Mr. Butt’s continued service with the Company through the applicable vesting dates. In addition, the stock options granted to Mr. Butt will be subject to accelerated vesting as provided in the Employment Agreement and described above. The stock options were granted under the Company’s 2012 Equity Incentive Plan and have a term of ten years from the grant date.