Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Chief Executive Officer
On May 30, 2017, Gemphire Therapeutics Inc. (the
“Company”
) announced that Mina Sooch is leaving the Company, effective as of May 23, 2017 (the “
Separation Date
”).
Pursuant to a Separation and Release Agreement entered into between the Company and Ms. Sooch on May 30, 2017 (the
“Separation Agreement”
), Ms. Sooch will no longer serve as President and Chief Executive Officer and a Director of the Company effective as of May 23, 2017. In connection with Ms. Sooch’s resignation from the Board of Directors (the
“Board”
) of the Company, the Board has reduced its size from seven directors to six directors.
Ms. Sooch will receive certain benefits that she is entitled to receive under her Employment Agreement dated April 15, 2016 in connection with Ms. Sooch exercising her termination rights for good reason. Accordingly, under the Separation Agreement, the Company has agreed (1) to pay Ms. Sooch a lump sum equal to $534,375, which includes Ms. Sooch’s $450,000 annual base salary plus a $84,375 pro rata bonus for 2017, (2) that all of Ms. Sooch’s outstanding stock options will (a) vest as if Ms. Sooch was employed by the Company through August 4, 2019 and (b) remain exercisable until the final termination date of such option awards under the applicable award agreement, (3) to pay $2,200, the monthly cost of premiums for continued health insurance coverage during the twelve-month period following Ms. Sooch’s separation from the Company, provided Ms. Sooch does not qualify for health care coverage from another employer during that period and (4) to reimburse Ms. Sooch for reasonable expenses incurred through the separation date that are reviewed and approved according to Company policy. Through the end of the period that is two years from the Separation Date, Ms. Sooch has agreed not to engage in certain customary standstill restrictions.
Appointment of Interim President and Chief Executive Officer
Effective as of May 23, 2017, the Board of the Company appointed Dr. Steven Gullans as the Company’s Interim President and Chief Executive Officer. Dr. Gullans will continue to serve as a director of the Company.
Dr. Gullans, age 64,
has served as a member of our Board since April 2016. He is a Managing Director at Excel Venture Management, LLC (
“Excel”
), one of our greater than 5% stockholders. Excel is a Boston-based venture capital firm which he co-founded and where he has been employed since February 2008. At Excel, he focuses on investing in life science technology companies with a particular interest in disruptive platforms that can impact multiple industries. Prior to Excel, Dr. Gullans co-founded RxGen, Inc., a pharmaceutical services company where he served as chief executive officer from January 2004 to February 2008. Dr. Gullans is currently a director at Cleveland HeartLab, Inc., a cardiovascular diagnostics company that spun out of the Cleveland Clinic; Molecular Templates, Inc., a clinical stage biotechnology company; N-of-One, Inc., an oncology diagnostics company; and Orionis Biosciences LLC, a drug development company. He was previously a board member of Activate Networks, Inc. which was acquired by Decision Resource Group; BioTrove, Inc. which was acquired by Life Technologies Corporation; Biocius Life Sciences, Inc. which was acquired by Agilent Technologies Inc.; nanoMR Inc. which was acquired by DNA Electronics Ltd; and Tetraphase Pharmaceuticals, Inc. which went public in 2013. Previously Dr. Gullans was a faculty member at Harvard Medical School and Brigham and Women’s Hospital for almost 20 years. Dr. Gullans holds a B.S. from Union College and a Ph.D. from Duke University. He is a Fellow of the American Heart Association and the American Association for the Advancement of Science.
In connection with the appointment of Dr. Gullans as the Company’s Interim President and Chief Executive Officer, the Board removed Dr. Gullans from the Compensation Committee and the Nominating and Corporate Governance Committee.
Pursuant to the offer letter entered into with Dr. Gullans, in consideration for Dr. Gullan’s service as Interim President and Chief Executive Officer, he will receive an option to purchase 60,000 shares of common stock vesting monthly in equal increments over a 12 month period, subject to acceleration upon the appointment of a replacement Chief Executive Officer. The compensation he currently receives as a member of the Board will remain unchanged. Dr. Gullans will be able to participate in the benefit programs and arrangements to the extent available to Company
2