Item 5.02 Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 29, 2021, the Board of Directors of
Ironwood Pharmaceuticals, Inc. (the “Company”) appointed Sravan K. Emany, 44, as the Company’s Senior Vice President,
Chief Financial Officer, effective December 6, 2021 (the “Effective Date”). On the Effective Date, Mr. Emany will assume the
responsibilities of the Company’s principal financial officer from Jason Rickard, who will remain the Company’s Senior Vice
President, Chief Operating Officer.
Prior to joining the Company, Mr. Emany served
as corporate vice president, commercial excellence and chief strategy officer of Integra LifeSciences Holdings Corporation, a publicly
held global healthcare company, since March 2020, and as vice president of strategy, treasury and investor relations from February 2018
to March 2020. Prior to that, Mr. Emany served in various mergers and acquisitions investment banking roles in Bank of America and BofA
Securities (formerly Bank of America Merrill Lynch) from September 2008 to February 2018, culminating in his service as managing director
in the mergers and acquisitions group where he led numerous mergers and acquisitions in the healthcare sector. Mr. Emany also served in
various other financial roles, including with Goldman Sachs Group, Deutsche Bank Securities, Lazard, and Morgan Stanley. Mr. Emany holds
a B.A. in international relations from The Johns Hopkins University and an M.A. in international relations and international economics
from The Johns Hopkins School of Advanced International Studies (SAIS).
Mr. Emany will receive a base salary of $500,000
a year and will have an individual bonus target of 50% of his base salary, subject to achievement of individual and corporate goals. Mr.
Emany will also receive a one-time bonus of $200,000 in connection with his joining the Company, which is subject to certain clawback
provisions if Mr. Emany terminates his employment with the Company for any reason or if he is terminated by the Company for cause, in
each case, within two years of the Effective Date. Mr. Emany will receive grants under the Company’s 2019 Equity Incentive Plan
of 85,000 restricted stock units (“RSUs”) that will vest as to 25% of the RSUs on each of the first four approximate anniversaries
of the date of grant and 85,000 performance-based restricted stock units (“PSUs”), the vesting terms of which will be consistent
with those applicable to the 2021 PSU awards described in the Company’s proxy statement (the “Proxy Statement”) filed
with the Securities and Exchange Commission (the “SEC”) on April 22, 2021. Each RSU and PSU represents a contingent right
to receive shares of the Company’s Class A common stock upon vesting of such awards.
In addition, the Company will enter into an indemnification
agreement and an executive severance agreement with Mr. Emany. The terms of the indemnification agreement will be consistent with the
form of indemnification agreement described in the Proxy Statement, such description being incorporated herein by reference and qualified
in its entirety by the full text of the form of indemnification agreement that was filed as Exhibit 10.12 to the Company’s Registration
Statement on Form S-1 (as amended) filed with the SEC on December 23, 2009.
The terms of the executive severance agreement
will be consistent with the Company’s revised form of severance agreement applicable to all executive officers of the Company who
have joined the Company following July 20, 2021. The executive severance agreement will provide that, in the event of a qualifying termination,
Mr. Emany would be entitled to receive the following benefits under the executive severance agreement: (i) a lump-sum payment equal to
twelve (12) months of his base salary at the rate in effect as of the date of termination of employment (or, if Mr. Emany’s termination
constitutes a Change of Control Termination, as defined in the executive severance agreement, a lump-sum payment equal to eighteen (18)
months of his base salary); (ii) a lump-sum payment equal to his actual bonus for the prior year if not yet paid as of the termination
date; (iii) a lump-sum payment equal to his target cash bonus for the year of termination, pro-rated based on the percentage of the year
worked prior to the triggering event; (iv) a lump-sum payment equal to his full target cash bonus for the year of termination (or, if
Mr. Emany’s termination constitutes a Change of Control Termination, a lump-sum payment equal to his full target cash bonus for
the year of termination, multiplied by 1.5); (v) up to twelve (12) months of subsidized COBRA coverage benefits (or, if Mr. Emany’s
termination constitutes a Change of Control Termination, eighteen (18) months of subsidized COBRA coverage benefits); and (vi) outplacement
assistance benefits. In addition, if Mr. Emany’s termination constitutes a Change of Control Termination, the executive severance
agreement will provide for the acceleration of all outstanding equity awards subject solely to time-based vesting as of the later of (1) the
termination date, or (2) the Change of Control (as defined in the agreement).
The foregoing description of Mr. Emany’s
executive severance agreement does not purport to be complete and is qualified in its entirety by the full text of the form of executive
severance agreement, which is filed as exhibit 10.1 to this Current Report on Form 8-K.
There is no arrangement or understanding between
Mr. Emany and any other person pursuant to which Mr. Emany was appointed as the Company’s Senior Vice President, Chief Financial
Officer. There is no family relationship between Mr. Emany and any director, executive officer, or person nominated or chosen by the Company
to become a director or executive officer of the Company. Mr. Emany is not, and has not been since January 1, 2020, a participant in any
transaction involving the Company, and is not a participant in any proposed transaction with the Company, required to be disclosed pursuant
to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended.