UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 15, 2017

 

 

CHIASMA, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-37500   76-0722250

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

275 Wyman Street, Suite 250

Waltham, MA 02451

(Address of principal executive offices, including zip code)

(617) 928-5300

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

 

 

 


Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Mamluk Appointment to the Board

On June 15, 2017, following the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of Chiasma, Inc. (the “Company”), the Board of Directors of the Company (the “Board”) appointed Roni Mamluk, Ph.D. to the Board. Dr. Mamluk will serve as a Class III director of the Company, to hold office until the date of the annual meeting of stockholders following the year ending December 31, 2017 or until her earlier death, resignation or removal.

In accordance with the Company’s Non-Employee Director Compensation Policy (the “Policy”), the Board granted Dr. Mamluk an option to purchase 26,000 shares of the Company’s common stock at an exercise price equal to the closing market price per share of the Company’s common stock on the NASDAQ Stock Market on the date of grant. The options will vest in equal annual installments over a three-year period, subject to such Dr. Mamluk’s continued service on the Board. In addition, Dr. Mamluk will receive cash compensation in accordance with the Policy and execute a customary director indemnification agreement.

Dr. Mamluk, age 50, served as the Company’s Chief Development Officer from March 2015 to March 2017 and has served as a director of Chiasma (Israel) Ltd. (“Chiasma Israel”) since April 2017. Dr. Mamluk served as Chief Executive Officer of the Company from April 2013 to March 2015 and held various roles in the Company from 2006 to April 2013, including Chief Operating Officer and Vice President, Research and Development. She also served as a member of Board from April 2013 to March 2015. Prior to joining the Company, Dr. Mamluk established and led nonclinical research and development at Adnexus Therapeutics, Inc. Dr. Mamluk received her B.A. and Ph.D. from the Hebrew University. She completed her post-doctoral fellowship at Children’s Hospital/Harvard Medical School in the field of angiogenesis.

There are no arrangements or understandings between Dr. Mamluk and any other person pursuant to which Dr. Mamluk was appointed as a member of the Board. There are no family relationships between Dr. Mamluk, on the one hand, and any director, executive officer or any other person nominated or chosen by the Company to become a director or executive officer, on the other. There are no related person transactions (within the meaning of Item 404(a) of Regulation S-K promulgated by the Securities and Exchange Commission) between Dr. Mamluk, on the one hand, and the Company, on the other.

Mamluk Services as Director of Chiasma (Israel) Ltd.

Pursuant to Dr. Mamluk’s employment agreement with Chiasma Israel, as amended, previously filed by the Company with the SEC, Dr. Mamluk’s employment as the Company’s Chief Development Officer terminated on March 31, 2017 (the “Separation Date”). In connection with the termination of her employment, on the Separation Date, Dr. Mamluk and Chiasma Israel entered into a Separation Settlement and Release (the “Separation Agreement”). Pursuant to the Separation Agreement, in exchange for a release in favor of the Company and Chiasma Israel, Dr. Mamluk was entitled to receive (i) a pro rata annual recreation payment of 1,764 NIS, (ii) payment of accrued but unused vacation totaling 139,514 NIS, (iii) 12 months of base salary and the prior year bonus in the amount equal to 1,209,600 NIS payable in July 2017, and (iv) a stay bonus of 120,960 NIS payable in July 2017. In addition, Dr. Mamluk would be appointed to the Board of Directors of Chiasma Israel on April 1, 2017.

In connection with her appointment to the Board of Directors of Chiasma Israel, Dr. Mamluk and Chiasma Israel entered into a Director Agreement on April 1, 2017 (the “Director Agreement”). Pursuant to the Director Agreement, Dr. Mamluk will devote 20% of her time to, among other things, service on the Chiasma Israel Board of Directors, active participation in senior management team meetings, strategic input on regulatory/clinical development of Mycapssa and TPE-related products or programs; and other services as reasonably requested by Chiasma Israel. For these services, Dr. Mamluk will be paid $6,825 per month. If Dr. Mamluk is terminated without Cause (as defined in the Director Agreement), the post-termination exercise period for all stock options granted to Dr. Mamluk prior to December 14, 2016 shall be extended until the earlier of two years from the date Dr. Mamluk no longer serves as a director of Chiasma Israel or the expiration date of such options.


The foregoing descriptions of the Separation Agreement and the Director Agreement are only summaries and are qualified in their entirety by reference to the full text of the agreements, copies of which have been filed hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference. In addition, a press release dated June 19, 2017 announcing Dr. Mamluk’s appointment to the Board of Directors of the Company and Chiasma Israel is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 5.07 – Submission of Matters to a Vote of Security Holders.

The following proposals were submitted to the stockholders at the Annual Meeting:

(i) The election of two Class II directors, as nominated by the Board, each to serve a three-year term expiring at the 2020 Annual Meeting of Stockholders and until his successor is duly elected and qualified, or until his earlier death, resignation or removal; and

(ii) The ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2017.

The proposals are described in detail in the Company’s Proxy Statement filed with the Securities and Exchange Commission on April 25, 2017.

The number of shares of common stock entitled to vote at the Annual Meeting was 24,359,584. The number of shares of common stock present or represented by valid proxy at the Annual Meeting was 19,183,850. All matters submitted to a vote of the Company’s stockholders at the Annual Meeting were approved and all director nominees were elected.

The number of votes cast for and against and the number of abstentions and broker non-votes with respect to each matter voted upon are set forth below:

 

  (a) Election of Class II Directors.

 

Director Nominee    Votes For      Votes Withheld  

Todd Foley

     14,023,959        862,580  

Bard Geesaman, M.D., Ph.D.

     14,170,900        715,639  

There were 4,297,311 broker non-votes regarding the election of directors.

 

  (b) Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017.

Stockholders ratified the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017. The results of the voting included 18,988,483 votes for, 178,706 votes against and 16,661 votes abstained. There were no broker non-votes regarding this proposal.

Item 9.01 – Financial Statements and Exhibits

 

  (d) Exhibits

 

Exhibit
No.

  

Description

10.1    Separation Agreement by and between Chiasma (Israel) Ltd. and Roni Mamluk, Ph.D., effective as of March 31, 2017
10.2    Director Agreement by and between Chiasma (Israel) Ltd. and Roni Mamluk, Ph.D., effective as of April 1, 2017
99.1    Press Release of Chiasma, Inc., dated June 19, 2017.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: June 19, 2017     Chiasma, Inc.
    By:  

/s/ Mark J. Fitzpatrick

      Mark J. Fitzpatrick
      President and Chief Executive Officer

Exhibit 10.1

Separation Settlement Agreement and Release

This Separation Agreement (the “Agreement” ) is entered effective as of 31 March 2017, by and between, Chiasma (Israel) Ltd., with its registered office at Golda Meir 5 Rehovot, Israel ( “Company” ) and Dr. Roni Mamluk ( “Employee” ) (each, a “Party” and collectively, the “Parties” ).

WHEREAS , the Company and Employee are parties to an Employment Agreement dated December 16, 2014 as amended on November 15, 2016 (the “First Amendment” ) and on December 14, 2016 (the “Second Amendment” ) (the Employment Agreement together with the First Amendment and the Second Amendment will be referred to hereafter as the “Employment Agreement” ); and

WHEREAS , the Employee’s employment with the Company has terminated according to the Second Amendment, on March 31, 2017; and

WHEREAS , the Parties wish to enter into a final settlement of all matters relating to all rights, payments and matters relating to the Employee’s employment with the Company and to the termination of the Employee’s employment with the Company, under the terms and conditions determined under this Agreement;

NOW THEREFORE, the Parties hereby agree as follows:

 

1. Preamble – The preamble to this Agreement constitutes an integral part hereof. The division of the terms of this Agreement into clauses and the headings of the clauses are solely for the sake of convenience and they may not be used for interpretive purposes. References in this Agreement to a particular gender shall be applicable to all genders.

 

2. The Employee’s employment with the Company and the employee-employer relations between the Employee and the Company terminated on March 31, 2017 (the “Termination Date” ).

 

3. Amending the Second Amendment – the Parties agree to revise the Second Amendment, as follows:

 

  3.1. Section 2.1(b) and Exhibit A to the Second Amendment are hereby deleted and canceled.

 

  3.2. Section 6 of the Second Amendment (Section 7 of the Employment Agreement) is revised so that all references to Employee’s service to the Company as a consultant are replaced by Employee’s appointment and service as an active director of the Company’s Board of Directors.

 

4. Termination Rights

Subject to the fulfillment of this Agreement by the Employee and subject to the Employee’s declarations under this Agreement, and as an absolute and final settlement between the Company and the Employee, the Company will grant the Employee the following:

 

  4.1. The Company shall pay the Employee a final pro-rated annual recreation payment in her favor in a total sum of 1,764 NIS.

 

  4.2. The Company shall pay the Employee a payment in lieu of unused vacation days accrued until the Termination Date in a total sum of 139,514 NIS.


  4.3. The Company shall furnish the Employee a notice of release to the insurance company of the amounts accumulated in the Manager Insurance/Pension Fund in her name, which constitute full severance payment according to the Severance Pay Law, subject to the receipt of 161A (ℵ161) form signed by the Employee and the tax authorities.

 

  4.4. The Company shall furnish the Employee with an order to the study fund to release to her all the funds accumulated in her Study Fund ( “Keren Hishtalmut” ).

 

  4.5. In July 2017, the Company shall pay the Employee a one lump-sum amount of gross 1,209,600 NIS equal to 12 months of Employee’s Salary plus Prior Year Bonus, according to Section 9.2 of the Employment Agreement (Section 8 of the Second Amendment) (the “Termination Payments” ).

 

  4.6. In July 2017, the Company shall pay the Employee the Stay Bonus, indicated in Section 6.12 of the Employment Agreement (Section 5 of the Second Amendment), in the amount of 120,960 NIS.

 

5. Subject to the the receipt of the payments and documents from the Company according to this Agreement, the Employee and/or her heirs, successors and assignees, by signing this Agreement, hereby fully, irrevocably, unconditionally and foreever releases and discharges the Company, its parents, affiliated and related entities (including without limitation, Chiasma Inc. (the “Parent” )), their respective predecessors, successors and assigns, and the current and former officers, directors, shareholders, agents, employees, attorneys and accountants of each of the foregoing in their official and personal capacities, generally from all claims, demands, debts, damages, liabilities of every name and nature, suspected and unsuspected, known or unknown, including without limitation (a) any and all matters relating to the Employee’s employment and/or the termination of her employment with the Company, and any and all claims relating to or arising out of the Employment Agreement and its termination; and (b) any and all claims for damages or other remedies of any nature, including compensatory damages, punitive damages, injunctive relief, costs and attorneys’ fees. Without derogating from the generality of the above, the Employee will have no claims regarding salary payments, vacation days and their redemption, recreation payment, notice period or payment in lieu of notice period, sickness payment, travel expenses, salary differences, overtime payment, bonuses of any kind, social allocations, payments to pensions funds and/or insurance and/or study fund, options, shares, severance payment and/or completion of severance payment and/or other rights or payments to which the Employee is entitled due to or as a result of her employment with the Company and/or to the termination of her employment, and any and all claims, rights or payments under Israeli law including but not limited to any employment laws and/ or any agreement, including the Employment Agreement; and the Employee will have no claims for any other compensation or benefits, either under the Massachusetts Wage Act, M.G.L. c. 149, §§148-150C, or otherwise.

 

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6. It is agreed that this Agreement supersedes any prior understandings, agreements or correspondences between the Parties and includes all payments and all rights the Employee will receive due to her employment and/or the termination of her employment with the Company, including without limitations all payments and rights under any agreement signed between the Parties, and that the Employee will not be entitled to any further payments and/or rights that are not explicitly mentioned under this Agreement. To avoid any doubt, as an active director of the Company under the Director Agreement between the Parties (the “ Director Agreement ”), unvested stock options that were granted to the Employee during the years of her employment with the Company will continue to vest according to the applicable stock option agreements and equity incentive plan of the Parent (“ P lan ) under which they were granted, as set forth in Section 6 of the Second Amendment (Section 7 of the Employment Agreement). In addition, all vested stock options that were granted to the Employee during her employment with the Company, will continue to be subject to the applicable stock option agreements and Plan pursuant to which such stock options were granted, during the period that the Employee will serve as an active director of the Company, as set forth in the Director Agreement.

 

7. It is agreed that if the Employee presents any demand or files any action against the Company and/or its connected companies and/or officers and/or shareholders or in the event of a breach of the Employee’s undertaking under the Employment Agreement and its Appendix and/or under this Agreement, the Employee will return immediately to the Company the Termination Payments, in the sum of gross 1,209,600 NIS, paid by the Company above its legal requirements, plus legal interest and linked to the cost of living increase interest.

 

8. Following termination of employment the Employee shall continue to be bound by the surviving provisions of the Employment Agreement which include, without limitation, obligations of confidentiality and non-competition.

 

9. On the Termination Date the Employee will deliver to the Company (and will not keep in her possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, documents relating to the Company’s accounting, other documents or property, or reproductions of any aforementioned items developed or received by the Employee pursuant to the Employee employment with the Company.

 

10. Miscellaneous

 

  10.1. The Employee shall bear all tax payments deriving from the rights and benefits granted under this Agreement. It is hereby expressed that all the amounts specified in this Agreement are gross, and statutory tax and all the other compulsory payments, including health insurance contributions and national insurance contributions, shall be deducted from them and from all the rights and benefits received by the Employee pursuant hereto.

 

  10.2. For the avoidance of any doubt, this Agreement also constitutes a compromise agreement and notice of final clearance in according with Article 29 of 1963 Severance Pay Law.

 

  10.3. In signing this Agreement the Employee represents that she reviewed and examined her rights and will be entering this Agreement voluntarily, without reservation and that it will be binding on him as a settlement agreement.

 

  10.4. This Agreement constitutes the entire agreement between the Parties hereto in respect of the subject-matter hereof. This Agreement may only be amended by a written document signed by the Parties hereto.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement effective as of the date first above written.

 

CHIASMA (ISRAEL) LTD.       Dr. Roni Mamluk
Signature:   

/s/ Mark J. Fitzpatrick

      Signature:   

/s/ Roni Mamluk

Name:    Mark Fitzpatrick       Date:   

June 14, 2017

Title:    President & CEO         
Date:   

June 15, 2017

        

 

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Exhibit 10.2

DIRECTOR AGREEMENT

This Director Agreement (this Agreemen t ) is made effective as of April 1, 2017 (the Effective Date ), by and between Chiasma (Israel) Ltd., with its registered office at Golda Meir 5 Rehovot, Israel ( Company ), and Dr. Roni Mamluk ( Director ).

 

WHEREAS   the Company wishes to engage the Director, for the purpose of serving as a member of the Company’s board of directors (the Board ) and providing certain services to the Company, all as described in this Agreement hereunder; and
WHEREAS   the Director is capable and willing to perform and to provide such services to the Company, under the terms and conditions as set forth in this Agreement hereinafter.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained herein, the parties hereto agree as follows:

 

1. The Services

 

  1.1. Subject to the terms and conditions of this Agreement, during the Term (as such term is defined below), the Company hereby engages the Director, and the Director hereby accepts such engagement.

 

  1.2. The Director’s duties and responsibilities shall include, amongst others, serving the Company as defined below and/or any other related services, as shall be agreed upon by the parties from time to time (the Services ).

 

  1.3. As a Board member, the Director will dedicate at least 20% of her time (at least 37 hours per month) and her best efforts, knowledge, skills, background, education, professional standing and stature in furthering the Company’s objectives, including, inter alia;

 

  (a) Serving as a director of the Company and as a member of the Board, taking an active part in the determination and direction of the Company’s policies;

 

  (b) Attending and participating in meetings of the Company’s Board and in senior management team meetings;

 

  (c) Strategic input on regulatory clinical development of Mycapssa and TPE-related products or programs;

 

  (d) Active participation in partnering activities;

 

  (e) Serving on Chiasma’s Disclosure Committee; and

 

  (f) Other duties as may be reasonably required from time to time.

 

2. Term and Termination

 

  2.1. This Agreement and Director’s appointment as a member of the Company’s Board shall be effective as of April 1, 2017 (the Commencement Date ) until terminated by either party (the Term ) upon ninety (90) days prior written notice to the other party (the : Notice Period ).

 

  2.2.

Notwithstanding the above, the Company shall be entitled to immediately terminate this Agreement and Director’s appointment to the Board for Cause (as such term is defined below) with immediate effect and without a Notice Period at any time, by providing Director with a written notice. For the purpose of this Agreement, a termination for Cause is a termination due to (i) a breach by the Director of her duties and obligations under any applicable law; (ii) a refusal to perform the duties associated with the Director’s position, which is not cured within 30 days following notice specifying the duties which the Company contends were willfully not performed; (iii) a breach by


  the Director of her duties and obligations under Sections 4-5 below (including Exhibit A attached hereto), including without limitation, any unauthorized use or disclosure of the Confidential Information (as defined in Exhibit A) or trade secrets of the Company (or parent or any subsidiary); (iii) a breach of trust or willful misconduct by the Director with respect to the Company or the commission of any act of fraud, embezzlement or dishonesty by the Director; (iv) the Director’s conviction of a felony or of any crime involving moral turpitude, fraud or misrepresentation (the conviction may or may not be related to the Company); (v) any other intentional misconduct by the Director adversely affecting the business or affairs of the Company (or parent or any subsidiary) in a material manner.

 

  2.3. Upon termination of this Agreement for any reason, the Director will (a) return to the Company all written material concerning the Company and any other material that Director may receive from the Company from time to time in the scope of the Services provided by her; (b) erase, at the Company’s offices and in the presence of the Company’s representative and upon scheduling in advance with the Company, all information relating to the Company or its activities which exists in the Director’s personal computer(s); and (c) assist in the transferring of matters and documents under the Director’s responsibility to whomever the Company shall determine.

 

3. Consideration

 

  3.1. The Company shall pay the Director, in consideration for the Services provided by her, a monthly gross fee of USD 6,825.00, plus business and travel expenses incurred by her in connection with her responsibilities hereunder, provided that proper invoices shall provided to the Company and subject to prior approval by the Company, according to the Company’s policies and procedures.

 

       If the Director devoted on average more than 37 hours per month during any calendar quarter as requested and authorized in advance by the President and CEO of the Company for very specific project work beyond that described in Section 1.3, the Company shall pay the Director, an amount of USD $200.00 for each hour exceeding 37 hours per month during such calendar quarter.

 

       All such consideration shall be paid in ILS based on USD rate at the time of the negotiation of such terms (i.e. $1 = 3.84NIS) (monthly gross fee - 26,208 ILS).

 

  3.2. All consideration payments shall be paid against proper invoices in accordance with applicable law and shall include V.A.T., if required by law, which shall be added to the amount set forth above.

 

  3.3. An invoice shall be provided by the Director to the Company no later than the 5th day of the following month. Each invoice shall carry an individual invoice date and a reference to this Agreement and will include specification of the Services performed and the hours devoted to the performance of the Services only if such hours exceed the 37 hours as described in Section 3.1 during the applicable month and such other information as the Company may reasonably request.

 

  3.4. So long as the Director serves as a member of the Board, Director’s unvested shares of common stock of Chiasma, Inc. (the Parent ) shall continue to vest during the Term and shall remain subject to the applicable equity incentive plan(s) of the Parent (the Plan(s ) ) and the associated stock option agreement(s) between Director and the Parent. Notwithstanding anything to the contrary in the applicable Plan or any stock option agreement, if the Director’s services are terminated without Cause, then the post-termination exercise period for all of the Specified Options (as defined in the Employment Agreement with the Company dated December 16, 2014 as amended) shall be extended until the earlier of (i) two years from the date in which the Director no longer serves as a member of the Board and (ii) the ten-year anniversary of the date the options were granted.

 

  3.5. The Director’s fee and the stock options as detailed in Sections 3.1 and 3.4, together with the reimbursement of expenses under Section 3.1, shall constitute the complete and full payment by the Company to the Director in respect of this Agreement and the Services provided by her hereunder. The Director shall not be entitled to receive any further compensation or consideration of any kind whatsoever in connection with the performance of the Services and/or her duties under this Agreement, and she does not have, nor will she have, any right to any additional payment of any kind whatsoever, whether monetary or its equivalent, unless otherwise decided by the Board of the Company and/or the Parent.

 

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4. Director’s Warrants and Undertakings

 

  4.1. The Director warrants and undertakes that there is no legal, contractual or other restriction whatsoever, which precludes or might preclude the Director from performing her obligations and Services pursuant to this Agreement.

 

  4.2. The Director undertakes to perform her duties and obligations under this Agreement in a timely manner and with the highest degree of professionalism.

 

  4.3. The Director undertakes to devote her expertise, know-how, efforts, and talents required for proper performance under this Agreement. While performing her duties and obligations hereunder, the Director warrants she shall act in complete loyalty and dedication to the Company.

 

  4.4. Without derogating from any other obligations under this Agreement (including, without limitation, under Appendix A attached hereto), Director undertakes to avoid any conflict of interest with the Company and its business, and not to use (other than for the purpose of providing the Services hereunder) any information learned by her in the course of the meetings of the Company’s Board or during providing her Services hereunder, or otherwise to derive any personal gain or business opportunity.

 

  4.5. The Director shall not without the written prior approval of the Company’s Board make any representations or guarantees concerning the Company.

 

  4.6. The Director shall perform all duties set forth herein in full compliance with all applicable laws, regulations, orders and other legal requirements to which she is subject in the conduct of her activities hereunder.

 

  4.7. The Director shall coordinate her activities under this Agreement with the Company’s Board, and shall report her activities to the Company’s Board, from time to time, as may be required by the Company.

 

  4.8. The Director represents and warrants that (i) the Director is not and has not been under investigation or subject to a pending action for civil fraud or a criminal offense related to the provision of health care items or services, (ii) the Director has not been excluded from participation in any government health care program, (iii) the Director has not been debarred under Section 306(a) or 306(b) of the Federal Food, Drug and Cosmetic Act (codified at 21 U.S.C. §§ 335a(a)-(b)), and (iv) the Director has no conviction on her record for which the Director could be so debarred. If at any time during the Term and for three (3) years thereafter, the Director becomes subject to any criminal or disciplinary findings for which a person could be debarred, excluded, or otherwise ineligible under applicable laws, rules, or regulations, the Director will immediately notify the Company of any such development. This Section 4.8 will survive the expiration or termination of this Agreement for three (3) years.

 

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5. Confidentiality, Unfair Competition and Intellectual Property Assignment

 

  5.1. The Director acknowledges that she will be exposed to confidential information related to the Company in connection with her appointment under this Agreement. Therefore, upon execution of this Agreement, the Director shall execute the Confidentiality, Non-Competition and Intellectual Property Assignment Agreement in the form attached hereto as Appendix A , which is an integral part of this Agreement.

 

6. The Nature of the Contractual Relationship

 

  6.1. It is hereby clarified that there shall be no employee-employer relationship whatsoever between the Company and the Director. The Director hereby acknowledges that she is not entitled to any direct benefits from the Company other than those expressly agreed herein. Director shall be responsible to pay all taxes, social security payments and any other applicable tax and charges in connection with the Services provided by her herein.

 

  6.2. The Director hereby denies and waives any demand, claim and/or allegation that an employment relationship of any kind has resulted from this Agreement and the Exhibits attached hereto. The Director shall indemnify the Company for any costs, expenses or liabilities incurred by or imposed on the Company in the event of any decision by a court or other competent authority that the Director is an employee of the Company. Director further declares that she acknowledges that the consideration agreed with the Company under this Agreement is based upon her declaration and the absence of employment relationship.

 

  6.3. Notwithstanding Section 6.2 above, the Director’s compensation for the performance of the Services shall be fifty five percent (55%) of her entire remuneration hereunder (as detailed in Section 3 above) (the “Reduced Compensation” ), in the event that (i) she shall claim the existence of an employer-employee relationship with the Company, and/or shall claim monies and/or rights as an employee of the Company, and/or (ii) the relationship between the Company and the Director shall be regarded or determined by any court or tribunal having jurisdiction over the matter as an employer-employee relationship. In such an event, the Director shall return to the Company all amounts paid to her exceeding the Reduced Compensation, and she shall reimburse and indemnify the Company, for any sum which shall be demanded of it in connection with such claims and/or determinations, as well as any and all expenses and/or costs incurred by the Company relating to any such claims and/or determinations.

 

  6.4. This Agreement shall not be construed to create any relationship of association, partnership or joint venture between the Company and the Director and/or anyone on her behalf.

 

  6.5. The terms of this Section 6 shall survive the expiration or termination of this Agreement.

 

7. Miscellaneous

 

  7.1. The preamble to this Agreement and the exhibits attached hereto shall form an integral part hereof. Headings of the Sections and subsections of this Agreement are intended for convenience of reference only and shall not be used for the interpretation of this Agreement.

 

  7.2. The Director shall be solely responsible for the payment of all taxes, levies, social benefits and any other payments required by applicable law to be made in connection with this Agreement.

 

  7.3. The Company shall deduct withholding tax (if imposed on the Director) from the payments referred to above, as prescribed by applicable law, unless the Director provides the Company with evidence of an exemption from tax withholding.

 

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  7.4. The Director acknowledges and confirms that all the terms of this Agreement are personal and confidential, and undertakes to keep such terms in confidence and refrain from disclosing such terms to any third party, except to the extent required by applicable laws, regulations, order of any competent authority or in the fulfilment of any duty to any competent authority, or disclosures to Director’s professional advisors (including attorneys and accountants).

 

  7.5. This Agreement together with Exhibit A set forth the entire agreement between the parties with respect to the subject matter hereof, and supersede any prior written or oral arrangements or understandings between the parties with respect to the subject matter hereof. This Agreement may not be amended or modified except in a written document signed by both parties.

 

  7.6. The Director may not assign any of her rights and obligations hereunder to another party, whether by contract, will or operation of law, without the prior written consent of the Company, and any attempt to do so shall be null and void.

 

  7.7. This Agreement shall be governed by the laws of the State of Israel. The courts of Tel Aviv-Jaffa shall have the sole and exclusive jurisdiction over any dispute or matter arising out of or in relating to this Agreement or between the parties hereto (and/or anyone in their behalf).

 

  7.8. The failure of either party at any time to enforce any right or remedy available to it under this Agreement or otherwise with respect to any breach or failure by the other party shall not be construed to be a waiver of such right or remedy with respect to that or any other breach or failure by the other party.

 

  7.9. The unenforceability or invalidity of any provision hereof will not affect the validity or enforceability of any other provision hereof and the unenforceable or invalid provision shall be deemed to be replaced by an alternative provision that complies with applicable law and achieves, to the greatest extent possible, the same effect as would have been achieved by the invalid or unenforceable provision.

 

  7.10. Any notice required or permitted hereunder shall be given in writing and deemed to have been duly given on the day of delivery, if delivered personally, by e-mail or by facsimile (subject to an approval of transmission), or within 7 (seven) days as of the date of mailing, or on receipt of a proof of delivery duly signed, if mailed by registered mail, or by an internationally recognized courier service, postage prepaid and addressed to the address indicated above.

 

  7.11. This Agreement may be executed in any number of counterparts (including, but not limited to, counterparts transmitted by facsimile or electronic mail), each of which shall be deemed to be an original, but all of which taken together shall be deemed to constitute one and the same instrument.

 

  7.12. This Section 7 shall survive the expiration or termination of this Agreement.

 

  7.13. The expiration or termination of this Agreement shall not affect the rights and obligations of the parties accrued prior to the effective expiration or termination date or any rights and obligations of the parties that by their terms survive the expiration or termination of this Agreement.

 

  7.14. This Agreement is subject to the approval of the shareholders of the Company and the Board.

[ Signature page follows ]

 

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       IN WITNESS THEREOF THE PARTIES HERETO HAVE AGREED AND SIGNED:

 

/s/ Mark J. Fitzpatrick

   

/s/ Roni Mamluk

Chiasma (Israel) Ltd .     Dr. Roni Mamluk

 

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Appendix A

Confidentiality, Non-Competition and Intellectual Property Assignment Agreement

The undersigned, Dr. Roni Mamluk (the Director ), hereby declares towards (i) Chiasma (Israel) Ltd. (the Company ) and towards (ii) its present and future parent companies, subsidiaries and affiliates and successors (all of the aforementioned entities shall be referred to collectively as the Company s Entities ), in Israel and abroad, that she is aware that during the period of providing services to the Company, Confidential Information (as hereinafter defined) shall be revealed to her and/or shall reach her knowledge, and that she is aware that the Confidential Information is one of the main and most essential assets of the Company and therefore she declares and undertakes as follows:

 

1. Confidentiality

 

  1.1. The Director will regard and retain as confidential and will not divulge to any third party, or use for any unauthorized purposes either during or after the term of Director’s service with the Company, any Confidential Information, as defined below, that the Director has acquired during her service or in connection with her service or contacts with the Company’s Entities, without the written approval consent of an authorized representative of the Company.

 

  1.2. The Director will not use the Company’s Confidential Information for any purpose whatsoever other than the performance of the services on behalf of the Company. Without limiting the scope of this duty, the Director shall only use the Confidential Information for the benefit of the Company, and only to the extent required for the performance of the services and may not disclose the Confidential Information to any other third party who is not performing the service. Without limiting the scope of this duty, the Director shall not design or manufacture or develop any products, which incorporate any Confidential Information.

 

  1.3. All Confidential Information remains the property of the Company and no license or other rights in the Confidential Information is granted hereby.

 

1. Confidential Information

 

  1.1. Confidential Information shall include, but will not be limited to, information regarding research and development related to actual or anticipated products, inventions, whether patentable or non-patentable, discoveries, innovations, designs, drawings, sketches, diagrams, formulas, computer files, computer programs, hardware, software or other products, product definitions, product research, manuals, selection processes, data, methods of manufacture, planning processes, trade secrets, business secrets, business plans, copyrights, proprietary information, customer lists, names of clients, list of suppliers, marketing plans, strategies, forecasts, business forecasts, processes, finances, costing, sales, prices, terms of payment, formulae, know-how, improvements and techniques and any other data related to the business or affairs of the Company’s Entities and/or its business partners and/or customers, including business partners and/or customers with whom the Company is negotiating.

 

  1.2. Confidential Information shall not include information that (i) has become part of public knowledge other than as a result of a breach of this undertaking; (ii) was already in the Director’s possession at the time of disclosure, as shown by my written documents dated prior to the disclosure, other than through Director’s prior employment with the Company; or (iii) is rightfully received by the Director from a third party without a duty of confidentiality, as shown by the Director in written documents. The Director shall have the burden of proof establishing that any or more of these exceptions applies.

 

  1.3. The Director undertakes to notify, disclose and bring to the Company’s knowledge any information coming to the Director’s knowledge in any way, including information being the product of any idea or development of the Director related to the Company products and or services whether it can be protected as a patent or not, whether it can be protected as a copyright or as other intellectual property rights or not, whether it can be registered or not.

 

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2. Return of Confidential Information

All materials including, but not limited to, documents, notes, memoranda, records, diagrams, blueprints, bulletins, formulas, reports, computer programs, and any other material of any kind and in any form, coming into the Director’s possession or prepared by the Director in connection with its service, are the exclusive property of the Company (hereinafter the Documents ). The Director agrees to return to the Company all such Documents upon termination of her service, unless the Director acquires the Company’s specific written consent to release any such Document.

 

3. Ownership Rights

 

  3.1. The Director agrees that the Confidential Information and all memoranda, books, notes, records, charts, formula, specifications, presentations, lists, drafts, patent applications and other documents, as well as any inventions, improvements, mask works, discoveries or works, whether or not capable of being patented or copyrighted, and any and all derivatives related thereto (together Work Products ), which the Director may conceive, make, develop, author, or work on, in whole or in part, independently or jointly with others during the term of the Director’s service with the Company or following its service with the Company, which are either (i) related to the Company’s Entities’ business or actual or demonstrably anticipated research or development; (ii) resulting directly or indirectly from any services performed by the Director for the Company; or (iii) developed in whole or in part on the Company’s time or with the use of any Company’s equipment, supplies, facilities, or trade secret, are and shall be the Company’s sole and exclusive property.

 

  3.2. Furthermore, without additional compensation or consideration, the Director hereby assigns and will in the future assign to the Company, without any consideration compensation or right to royalty, any right, title and interest the Director may have worldwide in such Work Products and any copyrights, patents, mask work rights or other intellectual property rights, including the Moral Right, insofar as the Director has or shall have such rights and any and all derivatives relating thereto and the Director shall provide any assistance required by the Company to perfect such protection. Moral Rights ) mean any rights of paternity or integrity, any right to claim authorship of an invention, to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, any invention, whether or not such would be prejudicial to her honor or reputation, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a moral right .

 

  3.3. Director warrants that the Work Products are the original works under this Agreement, and that no part of such Work Products is protected by any right of any third party. Director represents and warrants that there are no open source codes embedded within the Work Product, and agrees to indemnify and hold harmless the Company, its directors, officers, employees, agents, and shareholders for any intellectual property infringement claims which may arise as a result of the use by the Company, its affiliates or any of its customers or suppliers of the Work Products.

 

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4. Non-Competition

 

  4.1. During the term of the Director’s service with the Company and for a period of 6 months after the termination of the Director’s service with the Company by any party and for any reason, the Director will not either alone or jointly with others or as an agent, director or employee of any person, firm or company, carry on or engage in any activity or business which shall be in competition with the business of the Company’s Entities (hereinafter Competing Entities ).

 

  4.2. Without derogating from the generality of the above, for the purpose of this Agreement, Competing Entities shall include any person or entity that are engaged in development, services, production, or commercial activities similar to those of the Company’s Entities.

 

5. Non-Solicitation

 

     During the term of the Director’s service with the Company and thereafter for a period of 12 months, the Director will not solicit or encourage or cause others to solicit or encourage any employees customers, prospective customers, suppliers, vendors, consultants, and other directors of the Company’s Entities to terminate their engagment with the Company’s Entities, and the Director will not assist any of the employees customers, prospective customers, suppliers, vendors, or consultants to engage with any Competing Entities.

 

6. P rotected Disclosures and Other Activities

 

     Nothing contained in this Agreement limits Director’s ability to file a charge or complaint with any United States federal, state or local governmental agency or commission (a “ US Government Agency ”). In addition, nothing contained in this Agreement limits Director’s ability to communicate with any US Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any US Government Agency, including Director’s ability to provide documents or other information, without notice to the Company, nor does anything contained in this Agreement apply to truthful testimony in litigation. Further, for the avoidance of doubt, pursuant to the United States federal Defend Trade Secrets Act of 2016, Director understands that Director shall not be held criminally or civilly liable under any United States federal or state trade secret law for the disclosure of a trade secret that (a) is made (i) in confidence to a United States federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of United States law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal in the United States.

 

7. No Conflicting Obligations

 

     The Director will not disclose to the Company any proprietary or confidential information belonging to any third party, including any prior or current employer or contractor, unless the Director has first received the written approval of that third party and presented it to the Company. The Director undertakes not to perform any activity related to her service with the Company on the premises of any third party, or while using any equipment, materials or other resources that belong to any such third party, unless instructed to do so by the Company in writing.

 

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8. Third Party Information

 

     The Director recognizes that the Company has received and will in the future receive from third parties their confidential or proprietary information, subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Director agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or entity or to use it except as necessary in carrying out its services for the Company, consistent with the Company’s agreement with such third party.

 

9. Assignment

 

     This Agreement may be assigned by the Company. The Director may not assign or delegate its obligations under this Agreement, without the Company’s prior written approval.

 

10. Governing Law

 

     This Agreement shall be construed under the laws of the State of Israel without regard to conflict of law provisions thereof. The parties submit to the exclusive jurisdiction of the competent courts of Tel Aviv-Jaffa in any dispute related to this Agreement.

 

11. Survival

 

     Unless specifically limited under the provisions in this Agreement, the Director’s obligations under this Agreement shall remain in full force during her service with the Company and following the termination, for any reason, of the Director’s service with the Company.

 

12. Condition to Engagement

 

     The Director acknowledges that the execution of this Agreement is a condition to the Company’s engagement with it and the disclosure of any Confidential Information.

 

Signature:   

/s/ Roni Mamluk

     
Name:   Dr. Roni Mamluk     Date: June 14, 2017  

 

10

Exhibit 99.1

 

LOGO

Chiasma Appoints Roni Mamluk, Ph.D. to Board of Directors

Longtime Chiasma Executive Also Assumes Director Role with Chiasma, Ltd, its Israeli Subsidiary

WALTHAM, Mass., June  19, 2017 — Chiasma, Inc. (Nasdaq: CHMA), a clinical-stage biopharmaceutical company focused on improving the lives of patients with rare and serious chronic diseases, today announced that Roni Mamluk, Ph.D., has been re-appointed to Chiasma’s Board of Directors. Recently, she also transitioned from her position as chief development officer to a part-time role as director of Chiasma’s Israeli subsidiary.

“It has been a pleasure to work with Roni in my role as chairman since 2014,” said Dave Stack, chairman of the board of Chiasma. “For more than 10 years, she has devoted herself to this company and to the pursuit of a better quality of life for patients with acromegaly. In that time, she played a leading role in inventing our proprietary Transient Permeability Enhancer (TPE) technology platform and developing our octreotide capsules product candidate. We greatly appreciate her service and dedication, and we welcome her forthcoming contributions as she re-joins the Board.”

“I firmly believe in Chiasma’s vision of delivering increased convenience, comfort and the potential for better symptom control to patients with acromegaly,” Mamluk said. “I look forward to serving in an oversight capacity on both the Chiasma, Ltd. and Chiasma, Inc. boards of directors. We have accomplished much during my tenure with the company, and I am excited to build on those achievements in the years to come.”

In Mamluk’s new director role, she will act as head of development on a part-time basis. She will also have ongoing oversight of the company’s Israeli operations.

Mamluk previously served as Chiasma’s chief development officer from March 2015 to April 2017. She also was the company’s chief executive officer from April 2013 to March 2015. She held various roles of increasing responsibility, including chief operating officer and vice president, research and development, from 2006 through 2013. She also served as a member of Chiasma’s Board of Directors from April 2013 to March 2015. In her time with Chiasma, Mamluk has played a leading role in developing, and is one of the primary inventors of, the company’s proprietary TPE technology platform. Mamluk previously worked for Adnexus Therapeutics, where she established and led nonclinical research and development. She received her B.A. and Ph.D. from Hebrew University. She also participated in a post-doctoral fellowship at Boston Children’s Hospital / Harvard Medical School in the field of angiogenesis.


About Chiasma

Chiasma is focused on improving the lives of patients who face challenges associated with their existing treatments for rare and serious chronic diseases. Employing its Transient Permeability Enhancer (TPE®) technology platform, Chiasma seeks to develop oral medications that are currently available only as injections. The company is conducting an international Phase 3 clinical trial of octreotide capsules (conditionally trade-named “Mycapssa®”) for the maintenance treatment of adult acromegaly patients to support a potential submission of a Marketing Authorization Application to the European Medicines Agency. Chiasma received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) on April 15, 2016 regarding its New Drug Application (NDA) for Mycapssa in the United States. Chiasma is headquartered in the United States with a wholly owned subsidiary in Israel. Mycapssa and TPE are registered trademarks of Chiasma.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements in this press release are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks associated with the regulatory review and approval process generally; risks associated with Chiasma’s Phase 3 clinical trial to support regulatory approval of octreotide capsules in the E.U.; risks associated with Chiasma potentially conducting an additional randomized, double-blind and controlled Phase 3 clinical trial of octreotide capsules in accordance with the FDA’s recommendation to support regulatory approval of Mycapssa in the United States, including risks related to the enrollment, timing and associated expenses of any potential trial; risks associated with Chiasma pursuing a development pathway other than the path strongly recommended by the FDA; risks associated with the ability of the company’s suppliers to pass future regulatory inspections; risks associated with obtaining, maintaining and protecting intellectual property; risks associated with Chiasma’s ability to enforce its patents against infringers and defend its patent portfolio against challenges from third parties; the risk that octreotide capsules, if approved, will not be successfully commercialized; the risk of competition from currently approved therapies and from other companies developing products for similar uses; risks associated with Chiasma’s ability to manage operating expenses and/or obtain additional funding to support its business activities; risks associated with Chiasma’s dependence on third parties; and risks associated with defending any litigation, including the risk that we incur more costs than we expect and uncertainty involving the outcome. For a discussion of these and other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in Chiasma’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission (SEC) on March 16, 2017, and in subsequent filings with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and Chiasma undertakes no duty to update this information unless required by law.


Contact :

Andrew Blazier

Sharon Merrill Associates

(617) 542-5300

chma@investorrelations.com