Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Appointment of William “Trey” Martin, III as Chief Executive Officer
On September 30, 2022, William “Trey” Martin, III was appointed Chief Executive Officer of Maravai LifeSciences Holdings, Inc. (the “Company” or “Maravai”). Mr. Martin, age 48, comes to Maravai most recently from Danaher Corporation, a global science and technology company, where he served as Senior Vice President, New Business – Genomic Medicine from July 2021 to July 2022. Martin joined Danaher in 2018 in connection with its acquisition of Integrated DNA Technologies (“IDT”), a supplier of custom nucleic acids, where he served as President of the IDT business under Danaher’s ownership from April 2018 to July 2021. Prior to the acquisition, Mr. Martin served in a variety of roles at IDT since March 1994 and was Chief Operating Officer at the time of the acquisition by Danaher. Mr. Martin holds a Bachelor’s degree in biochemistry from the University of Iowa.
In connection with his appointment, the Company entered into an employment agreement with Mr. Martin (the “Employment Agreement”), effective as of September 30, 2022 (the “Effective Date”). The Employment Agreement continues until Mr. Martin’s resignation, death, disability or termination of employment with or without cause. The Employment Agreement provides for an annualized base salary of $750,000; an annual bonus with a target amount equal to $937,500 for 2022 and 125% of base salary in subsequent years, provided that the final determination regarding the amount of the annual bonus, if any, will be made by the Board of Directors (or a committee thereof) (the “Board”) based on criteria previously established by the Board; and a one-time cash bonus of $470,000, which is required to be repaid to the Company if Mr. Martin’s employment is terminated due to his resignation without “good reason” (as defined in the Employment Agreement) before the one-year anniversary of the Effective Date. The Employment Agreement also provides for reimbursement of reasonable business expenses and eligibility to participate in the Company’s health and welfare benefit programs generally.
The Employment Agreement further provides that, following the Effective Date, the Board will grant Mr. Martin the following equity awards pursuant to, and subject to the terms of, the Company’s 2020 Omnibus Incentive Plan and associated award agreements (collectively, the “Equity Awards”): (i) restricted stock units (“RSUs”) with an approximate grant date fair value of $2,500,000 (which RSUs shall vest 50% annually over a two-year period), (ii) non-qualified stock options with an approximate grant date fair value of $4,750,000 (which options shall vest over a four-year period, with 25% vesting on the first anniversary of the grant date and the remaining portion vesting monthly over the three-year period thereafter), (iii) additional RSUs with an approximate grant date fair value of $4,750,000 (which RSUs shall vest one-third annually over a three-year period, and (iv) performance stock units (“PSUs”) with an approximate grant date fair value of $5,000,000 that will vest 50% in the event the 60-trading day volume-weighted average stock price of the Company’s Class A common stock equals or exceeds $60 (as adjusted for stock splits, stock dividends and other similar events) on the third anniversary of the grant date and 50% in the event the 60-day volume-weighted average stock price of the Company’s Class A common stock equals or exceeds $100 (as adjusted for stock splits, stock dividends and other similar events) on the third anniversary of the grant date, provided that in the event of a Change in Control (as defined in the 2020 Omnibus Incentive Plan) prior to the third anniversary of the grant date, the PSUs will convert to time-based RSUs that will vest 100% on the third anniversary of the grant date. Vesting of the Equity Awards is generally subject to Mr. Martin’s continued employment through each vesting date. The award agreements for the RSU and stock option grants described in clauses (i) through (iii) above, and any time-based RSUs issued upon conversion of the PSUs in connection with a Change in Control, as described in clause (iv) above, will also each provide for accelerated vesting of the awards upon an involuntary termination without “cause” (as defined in the Employment Agreement) or a voluntary resignation for good reason within the one-year period following a Change in Control. Consistent with its standard practice for equity awards granted to newly-hired employees, the Company will grant these awards to Mr. Martin on the 15th day of the month following the date of hire (or the first trading day thereafter in the event the 15th is not a trading day, which is October 17, 2022).
In the event of a resignation by Mr. Martin for good reason or a termination of his employment by the Company without cause, the Employment Agreement provides for severance payments equal to 100% of base salary plus a prorated target bonus and subsidized health plan continuation coverage premiums for up to 12 months, subject to Mr. Martin’s execution and non-revocation of a release of claims. If during the 12-month period following a change in control of the Company, Mr. Martin resigns for good reason or his employment is terminated by the Company
without cause, the Employment Agreement provides for (i) severance payments equal to 200% of base salary plus target annual bonus and (ii) subsidized health plan continuation coverage premiums for up to 24 months.
The Employment Agreement also contains confidentiality and assignment of inventions provisions and certain restrictive covenants, including a non-competition covenant covering the period during which Mr. Martin is employed by the Company and a non-solicitation covenant covering the period during which Mr. Martin is employed by the Company and for one year thereafter.
The foregoing description of the material terms of the Employment Agreement and the Equity Awards is not complete and is qualified in its entirety by reference to the full text of the Employment Agreement and the forms of award agreements, copies of which are included as Exhibits 10.1 and Exhibits 10.2 through 10.5, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Transition of Carl W. Hull from Chief Executive Officer to Executive Chairman
On September 30, 2022, concurrently with the appointment of Mr. Martin as Chief Executive Officer, Carl W. Hull ceased to serve as Chief Executive Officer of the Company. Mr. Hull will continue to serve as Executive Chairman of the Board and, in such capacity shall have the normal duties, responsibilities and authority implied by such position, which shall include leadership of the Board and its strategic priorities, and assisting the new Chief Executive Officer with the transition, subject in each case to the power of the Board to expand, limit or otherwise alter such duties, responsibilities, positions and authority and to otherwise override actions of the Company’s officers.
In connection with this transition, the Company amended its employment agreement with Mr. Hull, effective as of September 30, 2022 (the “Amendment”). Commencing on the Effective Date, Mr. Hull’s annualized base salary will decrease to $500,000, his target annual bonus amount for 2022 will remain $725,000, and his target annual bonus amount will equal 100% of base salary in subsequent years. Except as amended pursuant to the Amendment, all of the other terms of Mr. Hull’s employment with the Company remain unchanged and are as set forth in Mr. Hull’s original employment agreement with the Company, dated as of November 24, 2020.
The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.6 and incorporated herein by reference.