Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.19.1
Subsequent Events
3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events
11. Subsequent Events
On April 1, 2019, Steven C. Gilman, Ph.D. resigned as President and Chief Executive Officer and Chairman of the Board of Directors (the “Board”) of the Company, effective as of April 2, 2019. The Board appointed Roger J. Pomerantz, M.D., F.A.C.P. to succeed Dr. Gilman as the Company’s President and Chief Executive Officer and Chairman of the Board. Dr. Gilman continues to serve as a director of the Company, and was appointed to serve as Vice Chairman of the Board and as Chairman of the Science and Technology Committee.
 
On April 2, 2019, in connection with his appointment as President and Chief Executive Officer, Dr. Pomerantz entered into an employment agreement (the “Employment Agreement”) with the Company pursuant to which Dr. Pomerantz is entitled to receive an annual base salary of $550,000, subject to periodic review and adjustment by the Board, and an annual target bonus opportunity of 80% of his annual base salary. In addition, the Board has granted Dr. Pomerantz a stock option under its 2014 Plan to purchase 3,200,000 shares of the Company’s common stock, which will vest as to 25% of the underlying shares on the first anniversary of Dr. Pomerantz commencing employment with the Company and as to an additional 6.25% of the underlying shares upon Dr. Pomerantz’s completion of each three months of continuous service to the Company thereafter.
If Dr. Pomerantz’s employment is terminated by the Company without Cause or Dr. Pomerantz resigns his employment for Good Reason, within the meaning of and under the Employment Agreement, he will be entitled to receive (i) an amount equal to 1.5 times the sum of his annual base salary and his target annual bonus for the year of termination, payable in the form of salary continuation in regular installments over 18 months, (ii) any unpaid annual bonus earned during the previous fiscal year as determined by the Board, (iii) payment of the premiums to continue coverage under the Company’s group health plans, if elected, for 18 months following his employment termination or, if earlier, until the date Dr. Pomerantz becomes no longer eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) or becomes eligible to receive comparable coverage from a subsequent employer and (iv) accelerated vesting of equity awards that would otherwise vest based solely on Dr. Pomerantz’s continued service or employment during the 18 months following termination of his employment. The Employment Agreement provides that, upon any such termination within 60 days prior to or 12 months following a change in control of the Company, in addition to the benefits described in the previous sentence, Dr. Pomerantz is entitled to, without duplication, full accelerated vesting of equity awards that would otherwise vest based solely on Dr. Pomerantz’s continued service or employment.
Dr. Pomerantz’s rights to receive termination payments and benefits are conditioned upon executing a general release of claims in the Company’s favor. Dr. Pomerantz has agreed to refrain from disclosing the Company’s confidential information during or at any time following his employment with the Company and from competing with the Company or soliciting its employees or consultants for 18 months following termination of his employment.
As a result of his appointment as President and Chief Executive Officer, Dr. Pomerantz is no longer eligible to receive compensation for his service on the Board and its committees in accordance with the Company’s non-employee director compensation program.
On April 2, 2019, in connection with his resignation, Dr. Gilman entered into a separation agreement and release (the “Separation Agreement”) with the Company pursuant to which Dr. Gilman will receive (i) an amount in cash equal to 25% of the annual bonus that Dr. Gilman would have earned for the 2019 calendar year had he remained continuously employed, as determined by the Board based on actual performance, which amount, if any, shall be paid to Dr. Gilman in a lump sum at the same time in 2020 as annual performance bonuses for 2019 are paid to the Company’s actively employed executive officers and (ii) payment of the premiums to continue coverage under the Company’s group health plans, if elected, pursuant to COBRA, until December 31, 2019 or, if earlier, the date Dr. Gilman becomes no longer eligible for COBRA or becomes eligible to receive comparable coverage from a subsequent employer. As a result of his resignation as President and Chief Executive Officer, Dr. Gilman is eligible to receive compensation for his service on the Board and its committees in accordance with the Company’s non-employee director compensation program. Dr. Gilman’s service on the Board will also constitute his continued service to the Company for purposes of the vesting and post-termination exercise period of each option to purchase shares of the Company’s common stock held by Dr. Gilman as of his resignation.