Under the terms of Mr. Johnsons employment agreement, if the Company terminates
Mr. Johnsons employment without cause, or Mr. Johnson terminates his employment for good reason, in each case, in accordance with the terms of his employment agreement, subject to Mr. Johnsons execution of a release of
claims, Mr. Johnson is entitled to receive from the Company (i) an amount equal to one and
one-half
times his then annual base salary and target annual bonus (provided, such multiple will be equal to
two, if the date of such termination occurs within three months prior to or twelve months following a change in control), payable in equal installments over eighteen months in accordance with the Companys payroll practices (provided, such
amount will be paid in a lump sum if the date of such termination occurs within three months prior to or twelve months following a change in control); (ii) a
pro-rata
bonus for the year in which the
termination occurs based on actual performance; (iii) reimbursement for a portion of his COBRA expenses for up to eighteen months (provided, such reimbursement period will be increased to up to twenty-four months, if permitted under applicable
law, if such termination occurs within three months prior to or twelve months following a change in control); and (iv) accelerated vesting of any then outstanding equity awards held by Mr. Johnson (provided, that if such termination is by
Mr. Johnson for good reason, such acceleration will be limited to the portion of the then unvested equity awards that would have vested during the eighteen month period immediately following such termination of employment).
In addition, under the terms of Mr. Johnsons employment agreement, if his employment is terminated on account of his death or
disability, subject to Mr. Johnsons (or his estates or legal representatives) execution of a release of claims, Mr. Johnson is entitled to receive from the Company (i) an amount equal to one and
one-half
times his then annual base salary and target annual bonus, payable in equal installments over eighteen months in accordance with the Companys payroll practices; (ii) a
pro-rata
bonus for the year in which the termination occurs based on actual performance; (iii) reimbursement for a portion of his COBRA expenses for up to eighteen months; and (iv) accelerated vesting of
the then unvested equity awards that would have vested during the eighteen month period immediately following such termination of employment.
Under his employment agreement, Mr. Johnson reaffirmed his obligations pursuant to that certain Employee Noncompetition, Nondisclosure
and Developments Agreement, a copy of which was filed as an exhibit to the Current Report on Form
8-K
filed with the SEC on October 24, 2018, which is incorporated by reference into this Item 5.02,
pursuant to which he is subject to customary confidentiality restrictions that apply during his employment and indefinitely thereafter, an invention assignment provision, a covenant not to compete while employed with the Company and for twenty-four
months following any termination of employment, and a covenant not to solicit the Companys employees or customers while employed with the Company and for eighteen months thereafter.
The foregoing descriptions of Mr. Johnsons employment agreement do not purport to be complete and are qualified in their entirety
by reference to the complete text of the employment agreement, which is attached hereto as Exhibit 10.2 to this Current Report on
Form 8-K and
is incorporated by reference into this Item 5.02.
Erin Duffy, Ph.D.
Effective
March 15, 2019, Erin Duffy will depart from her position as the Companys Chief Scientific Officer and an Executive Vice President. The Company thanks Dr. Duffy for her service to the Company and wishes her continued success in future
endeavors.
In connection with Dr. Duffys termination of employment, the Company expects to enter into a separation and release
agreement with Dr. Duffy that will reflect the terms of her existing severance agreement and such other terms as may be mutually agreed upon between the Company and Dr. Duffy. A copy of such separation and release agreement will be filed
as an exhibit by the Company with its Quarterly Report on Form
10-Q
for the period ending March 31, 2019.
Adoption of Amended and Restated 2018 Stock Incentive Plan
As previously reported, at the Special Meeting of Stockholders held on February 19, 2019 (the Special Meeting), the stockholders
of the Company, upon recommendation of the Compensation Committee of the Board of Directors of the Company, approved (i) an amendment to the Companys 2018 Stock Incentive Plan to increase the number of shares reserved and available for
issuance by 2,000,000 shares specifically for issuance to the Chief Executive Officer and (ii) an amendment to the Companys 2018 Stock Incentive Plan to increase the number of shares reserved and available for issuance by 3,000,000 shares for
general issuances under the amended 2018 Stock Incentive Plan. The amendments to the Companys 2018 Stock Incentive Plan are described in greater detail in the Companys proxy statement for the Special Meeting, filed with the Securities
and Exchange Commission (SEC) on January 29, 2019, under the caption Proposal No. 4A and 4B: Approval of Amendments to the 2018 Plan to Increase the Number of Shares Reserved and Available for Issuance under the 2018
Plan, which disclosure is incorporated herein by reference. The description of the amendments to the Companys 2018 Stock Incentive Plan contained in such proxy statement is qualified in its entirety by reference to the full text of the
Amended and Restated 2018 Stock Incentive Plan, which is attached as Annex D thereto and is incorporated herein by reference.
Item 5.03
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Amendments to Charter and Bylaws.
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The information set forth under Item 3.03 is incorporated in this Item 5.03 by reference.
Item 9.01.
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Financial Statements and Exhibits.
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