falseATHERSYS, INC / NEW000136814800013681482021-02-262021-02-26
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): February 26, 2021
Athersys, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware
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001-33876
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20-4864095
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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3201 Carnegie Avenue,
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Cleveland,
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Ohio
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44115-2634
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (216) 431-9900
(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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ATHX
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The NASDAQ Stock Market LLC
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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.
On February 26, 2021, the Athersys, Inc. (the “Company”) entered into retention agreements with each of Mr. William Lehmann, Jr., its Interim Chief Executive Officer, Dr. John Harrington, its Executive Vice President and Chief Scientific Officer, Mr. Ivor Macleod, its Chief Financial Officer, and Ms. Laura Campbell, its Senior Vice President of Finance. Each retention agreement provides for a cash retention award and a stock option award, with vesting in each case tied to a continued service requirement.
The cash retention awards are in the following amounts: Mr. Lehmann, $286,743, Dr. Harrington, $503,287, Mr. Macleod, $211,150, and Ms. Campbell, $156,456. Vesting of the cash retention awards requires continued service through May 1, 2022, except in the case of Dr. Harrington, whose award vests in five installments over a multi-year period concluding on July 1, 2023. Vesting of retention award would be accelerated upon a termination without cause of the applicable executive officer’s employment, subject to the executive officer’s execution and non-revocation of a release of claims in the Company’s favor.
The stock options were granted on March 1, 2021 in the following amounts: Mr. Lehmann, 500,000, Dr. Harrington, 750,000, Mr. Macleod, 250,000, and Ms. Campbell, 100,000. Each stock option has an exercise price equal to the closing price on the date of grant and will vest 1/3 on May 1, 2022 and 2/3 on May 1, 2023, subject to the applicable executive officer’s continued service through the applicable vesting date. Vesting of the stock options would be accelerated upon a termination without cause of the applicable executive officer’s employment, subject to the executive officer’s execution and non-revocation of a release of claims in the Company’s favor.
The retention letter with Mr. Lehmann additionally provides for a supplemental base salary of $10,000 per month for so long as he is serving as Interim Chief Executive Officer, and for a target bonus for 2021 equal to 60% of his base salary actually earned in 2021, inclusive of any such supplemental base salary.
The foregoing summary does not purport to be complete and is qualified in its entirety by the full text of the retention agreements, copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4 and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
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Exhibit No.
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Description
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Retention Letter, dated as of February 26, 2021 between Athersys, Inc. and Mr. William Lehmann, Jr.
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Retention Letter, dated as of February 26, 2021 between Athersys, Inc. and Dr. John Harrington
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Retention Letter, dated as of February 26, 2021 between Athersys, Inc. and Mr. Ivor Macleod
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Retention Letter, dated as of February 26, 2021 between Athersys, Inc. and Ms. Laura Campbell
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104
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
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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: March 2, 2021
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ATHERSYS, INC.
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By:
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/s/ Ivor Macleod
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Name: Ivor Macleod
Title: Chief Financial Officer
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February 26, 2021
Dear William:
The following letter agreement memorializes our recent discussions concerning your service as interim Chief Executive Officer (“Interim CEO”) of Athersys, Inc. (the “Company”).
Interim CEO. While you are serving as Interim CEO, you will receive a supplemental base salary payment at a rate of $10,000/month. For 2021, your annual bonus target will be 60% of the actual base salary earned during 2021 (inclusive of supplemental base salary actually paid pursuant to the preceding sentence) and your annual bonus determination will be based 100% upon Company performance. You acknowledge that the Company may remove you from the Interim CEO position at any time, and that neither such removal nor the cessation of the supplemental base salary described above shall constitute a basis for a Good Reason termination under the Employment Agreement between you and the Company, dated as of January 1, 2004, as amended, or otherwise result in any entitlement to severance.
Retention Awards. As you know, the Company views your continued service, leadership and commitment as critical to the Company’s success during this period of transition. Accordingly, you are being awarded a retention bonus (the “Retention Bonus”) in the amount of $286,743 and a one-time special stock option grant under the Athersys 2019 Equity and Incentive Compensation Plan (the “2019 Plan”), in each case subject to the terms set forth below.
Retention Bonus. The Retention Bonus will vest on May 1, 2022 (the “Vesting Date”), subject to your continued employment with the Company and its affiliates through the Vesting Date. Payment of the Retention Bonus, to the extent earned, will be made within 30 days of the Vesting Date. If your employment with the Company is terminated by the Company other than for Cause (as defined below), you will receive, subject to your execution within 45 days of your termination of employment (and non-revocation) of a release of claims in a form satisfactory to the Company (the “Release”), accelerated vesting and payment of the Retention Bonus. The Retention Bonus will be paid within 10 days of the date the Release becomes irrevocable.
Stock Options. In addition, on March 1, 2021, the Company will grant you stock options with respect to 500,000 shares of Company common stock pursuant to the 2019 Plan. The exercise price of the stock options will be the fair market value of the shares subject to the stock options on the date of grant. One-third of such stock options will vest (rounded to the nearest whole share) on May 1, 2022 and the remainder of such stock options will vest on May 1, 2023, in each case subject to your continued employment with the Company and its affiliates through the applicable vesting date, provided that if your employment with the Company is terminated by the Company other than for Cause (as defined below), the stock options will, subject to your execution and non-revocation of the Release, vest on the date the Release becomes irrevocable. Except as provided in the preceding sentence, the stock options shall be
subject to the standard terms applicable to grants of Company stock options under the 2019 Plan, as determined by the Company in its good faith discretion.
Miscellaneous. For purposes of this letter agreement, Cause shall have the meaning ascribed to it in any employment or similar individual agreement between you and the Company that defines such term, or, if no such agreement exists, Cause shall mean your (i) commission of an act of fraud, embezzlement, theft or other criminal act constituting a felony, (ii) willful or wanton disregard of the rules or policies of the Company that results in a material loss, damage or injury to the Company or its affiliates, (iii) repeated failure to perform duties consistent with your position or to follow or comply with the reasonable directives of the Company’s or its affiliates’ Board of Directors or of your superiors, after having being given notice thereof (e.g., your insubordination), or (iv) material breach of any provision contained in a written non-competition, confidentiality or non-disclosure agreement between you and the Company or any of its affiliates. Any determination of Cause will be made by the Company in its good faith discretion.
Any amounts payable hereunder will be subject to all applicable tax withholding. The Retention Bonus is independent of the Company’s annual incentive and other compensation programs, and shall not be taken into account for purposes of any calculation under any compensatory or employee benefit plan of the Company and its affiliates (including any such severance or retirement plan). You and the Company acknowledge that your employment is “at will” and may be terminated by either you or the Company at any time and for any reason. As we have discussed, the Company is reviewing its employment agreements and severance policies and anticipates providing you with a proposed amended version of your current employment agreement.
This letter agreement will be governed by and construed in accordance with the laws of the State of Delaware, without reference to conflict of laws principles. This letter agreement shall be interpreted to comply with, or be exempt from, Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, it being understood that the letter agreement is intended to be exempt from Section 409A.
This letter agreement constitutes the complete understanding between you and the Company regarding the Retention Bonus and special stock option grant described above and supersedes any and all prior written and/or oral agreements or understandings, no matter their form, concerning this subject matter. This letter agreement may not be modified except by written document, signed by you and the Company. If any provision of this letter agreement is ruled invalid or unenforceable, that provision will be deemed excised, and the remainder of the letter agreement will remain valid and enforceable.
Please indicate your agreement with and acceptance of the terms and conditions of this letter agreement, by signing and dating the enclosed copy of this letter agreement in the space provided below. Please keep a copy for your records and return the original to me no later than February 28, 2021.
Sincerely yours,
/s/ Ismail Kola_______
Ismail Kola,
Chairman
Agreed to and Accepted:
/s/ William Lehmann
William Lehmann
Date: February 26, 2021
February 26, 2021
Dear John:
Athersys, Inc. (the “Company”) views your continued service and commitment to the Company as critical to its success during this period of leadership transition. Accordingly, you are being awarded a retention bonus (the “Retention Bonus”) in the amount of $503,287 and a one-time special stock option grant under the Athersys 2019 Equity and Incentive Compensation Plan (the “2019 Plan”), in each case subject to the terms set forth below.
Retention Bonus. The Retention Bonus will vest in five installments, with $50,000 vesting on the 30th day following the date hereof, $45,329 vesting on September 1, 2021, $45,329 vesting on January 1, 2022, $135,986 vesting on May 1, 2022, and $226,643 vesting on July 1, 2023 (each, a “Vesting Date”), in each case subject to your continued employment with the Company and its affiliates through the applicable Vesting Date. Payment of each installment of the Retention Bonus, to the extent vested, will be made within 30 days of the applicable Vesting Date. If your employment with the Company is terminated by the Company other than for Cause (as defined below), you will receive, subject to your execution within 45 days of your termination of employment (and non-revocation) of a release of claims in a form satisfactory to the Company (the “Release”), then any unpaid portion of the Retention Bonus, will immediately vest and will be paid within 10 days of the date the Release becomes irrevocable.
Stock Options. In addition, on March 1, 2021, the Company will grant you stock options with respect to 750,000 shares of Company common stock pursuant to the 2019 Plan. The exercise price of the stock options will be the fair market value of the shares subject to the stock options on the date of grant. One-third of such stock options will vest (rounded to the nearest whole share) on May 1, 2022 and the remainder of such stock options will vest on May 1, 2023, in each case subject to your continued employment with the Company and its affiliates through the applicable vesting date, provided that if your employment with the Company is terminated by the Company other than for Cause (as defined below), the stock options will, subject to your execution and non-revocation of the Release, vest on the date the Release becomes irrevocable. Except as provided in the preceding sentence, the stock options shall be subject to the standard terms applicable to grants of Company stock options under the 2019 Plan, as determined by the Company in its good faith discretion.
Miscellaneous. For purposes of this letter agreement, Cause shall have the meaning ascribed to it in any employment or similar individual agreement between you and the Company that defines such term, or, if no such agreement exists, Cause shall mean your (i) commission of an act of fraud, embezzlement, theft or other criminal act constituting a felony, (ii) willful or wanton disregard of the rules or policies of the Company that results in a material loss, damage or injury to the Company or its affiliates, (iii) repeated failure to perform duties consistent with your position or to follow or comply with the reasonable directives of the Company’s or its affiliates’ Board of Directors or of your superiors, after having being given
notice thereof (e.g., your insubordination), or (iv) material breach of any provision contained in a written non-competition, confidentiality or non-disclosure agreement between you and the Company or any of its affiliates. Any determination of Cause will be made by the Company in its good faith discretion.
Any amounts payable hereunder will be subject to all applicable tax withholding. The Retention Bonus is independent of the Company’s annual incentive and other compensation programs, and shall not be taken into account for purposes of any calculation under any compensatory or employee benefit plan of the Company and its affiliates (including any such severance or retirement plan). You and the Company acknowledge that your employment is “at will” and may be terminated by either you or the Company at any time and for any reason. As we have discussed, the Company is reviewing its employment agreements and severance policies and anticipates providing you with a proposed amended version of your current employment agreement.
This letter agreement will be governed by and construed in accordance with the laws of the State of Delaware, without reference to conflict of laws principles. This letter agreement shall be interpreted to comply with, or be exempt from, Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, it being understood that the letter agreement is intended to be exempt from Section 409A. For purposes of Section 409A, any installment payments hereunder shall be treated as separate payments.
This letter agreement constitutes the complete understanding between you and the Company regarding the Retention Bonus and special stock option grant described above and supersedes any and all prior written and/or oral agreements or understandings, no matter their form, concerning this subject matter. This letter agreement may not be modified except by written document, signed by you and the Company. If any provision of this letter agreement is ruled invalid or unenforceable, that provision will be deemed excised, and the remainder of the letter agreement will remain valid and enforceable.
Please indicate your agreement with and acceptance of the terms and conditions of this letter agreement, by signing and dating the enclosed copy of this letter agreement in the space provided below. Please keep a copy for your records and return the original to me no later than February 28, 2021.
Sincerely yours,
/s/ William Lehmann______
William Lehmann,
Interim Chief Executive Officer
Agreed to and Accepted:
/s/ John Harrington
John Harrington
Date: February 27, 2021
February 26, 2021
Dear Ivor:
Athersys, Inc. (the “Company”) views your continued service and commitment to the Company as critical to its success during this period of leadership transition. Accordingly, you are being awarded a retention bonus (the “Retention Bonus”) in the amount of $211,150 and a one-time special stock option grant under the Athersys 2019 Equity and Incentive Compensation Plan (the “2019 Plan”), in each case subject to the terms set forth below.
Retention Bonus. The Retention Bonus will vest on May 1, 2022 (the “Vesting Date”), subject to your continued employment with the Company and its affiliates through the Vesting Date. Payment of the Retention Bonus, to the extent earned, will be made within 30 days of the Vesting Date. If your employment with the Company is terminated by the Company other than for Cause (as defined below), you will receive, subject to your execution within 45 days of your termination of employment (and non-revocation) of a release of claims in a form satisfactory to the Company (the “Release”), accelerated vesting and payment of the Retention Bonus. The Retention Bonus will be paid within 10 days of the date the Release becomes irrevocable.
Stock Options. In addition, on March 1, 2021, the Company will grant you stock options with respect to 250,000 shares of Company common stock pursuant to the 2019 Plan. The exercise price of the stock options will be the fair market value of the shares subject to the stock options on the date of grant. One-third of such stock options will vest (rounded to the nearest whole share) on May 1, 2022 and the remainder of such stock options will vest on May 1, 2023, in each case subject to your continued employment with the Company and its affiliates through the applicable vesting date, provided that if your employment with the Company is terminated by the Company other than for Cause (as defined below), the stock options will, subject to your execution and non-revocation of the Release, vest on the date the Release becomes irrevocable and remain exercisable until the first to occur of the third anniversary of such termination of employment or expiration of the term of such stock options. Except as provided in the preceding sentence, the stock options shall be subject to the standard terms applicable to grants of Company stock options under the 2019 Plan, as determined by the Company in its good faith discretion.
Miscellaneous. For purposes of this letter agreement, Cause shall have the meaning ascribed to it in any employment or similar individual agreement between you and the Company that defines such term, or, if no such agreement exists, Cause shall mean your (i) commission of an act of fraud, embezzlement, theft or other criminal act constituting a felony, (ii) willful or wanton disregard of the rules or policies of the Company that results in a material loss, damage or injury to the Company or its affiliates, (iii) repeated failure to perform duties
consistent with your position or to follow or comply with the reasonable directives of the Company’s or its affiliates’ Board of Directors or of your superiors, after having being given notice thereof (e.g., your insubordination), or (iv) material breach of any provision contained in a written non-competition, confidentiality or non-disclosure agreement between you and the Company or any of its affiliates. Any determination of Cause will be made by the Company in its good faith discretion.
Any amounts payable hereunder will be subject to all applicable tax withholding. The Retention Bonus is independent of the Company’s annual incentive and other compensation programs, and shall not be taken into account for purposes of any calculation under any compensatory or employee benefit plan of the Company and its affiliates (including any such severance or retirement plan). You and the Company acknowledge that your employment is “at will” and may be terminated by either you or the Company at any time and for any reason. As we have discussed, the Company is reviewing its employment agreements and severance policies and anticipates providing you with a proposed amended version of your current employment agreement.
This letter agreement will be governed by and construed in accordance with the laws of the State of Delaware, without reference to conflict of laws principles. This letter agreement shall be interpreted to comply with, or be exempt from, Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, it being understood that the letter agreement is intended to be exempt from Section 409A.
This letter agreement constitutes the complete understanding between you and the Company regarding the Retention Bonus and special stock option grant described above and supersedes any and all prior written and/or oral agreements or understandings, no matter their form, concerning this subject matter. This letter agreement may not be modified except by written document, signed by you and the Company. If any provision of this letter agreement is ruled invalid or unenforceable, that provision will be deemed excised, and the remainder of the letter agreement will remain valid and enforceable.
Please indicate your agreement with and acceptance of the terms and conditions of this letter agreement, by signing and dating the enclosed copy of this letter agreement in the space provided below. Please keep a copy for your records and return the original to me no later than February 28, 2021.
Sincerely yours,
/s/ William Lehmann_____
William Lehmann,
Interim Chief Executive Officer
Agreed to and Accepted:
/s/ Ivor Macleod
Ivor Macleod
Date: February 26, 2021
February 26, 2021
Dear Laura:
Athersys, Inc. (the “Company”) views your continued service and commitment to the Company as critical to its success during this period of leadership transition. Accordingly, you are being awarded a retention bonus (the “Retention Bonus”) in the amount of $156,456 and a one-time special stock option grant under the Athersys 2019 Equity and Incentive Compensation Plan (the “2019 Plan”), in each case subject to the terms set forth below.
Retention Bonus. The Retention Bonus will vest on May 1, 2022 (the “Vesting Date”), subject to your continued employment with the Company and its affiliates through the Vesting Date. Payment of the Retention Bonus, to the extent earned, will be made within 30 days of the Vesting Date. If your employment with the Company is terminated by the Company other than for Cause (as defined below), you will receive, subject to your execution within 45 days of your termination of employment (and non-revocation) of a release of claims in a form satisfactory to the Company (the “Release”), accelerated vesting and payment of the Retention Bonus. The Retention Bonus will be paid within 10 days of the date the Release becomes irrevocable.
Stock Options. In addition, on March 1, 2021, the Company will grant you stock options with respect to 100,000 shares of Company common stock pursuant to the 2019 Plan. The exercise price of the stock options will be the fair market value of the shares subject to the stock options on the date of grant. One-third of such stock options will vest (rounded to the nearest whole share) on May 1, 2022 and the remainder of such stock options will vest on May 1, 2023, in each case subject to your continued employment with the Company and its affiliates through the applicable vesting date, provided that if your employment with the Company is terminated by the Company other than for Cause (as defined below), the stock options will, subject to your execution and non-revocation of the Release, vest on the date the Release becomes irrevocable. Except as provided in the preceding sentence, the stock options shall be subject to the standard terms applicable to grants of Company stock options under the 2019 Plan, as determined by the Company in its good faith discretion.
Miscellaneous. For purposes of this letter agreement, Cause shall have the meaning ascribed to it in any employment or similar individual agreement between you and the Company that defines such term, or, if no such agreement exists, Cause shall mean your (i) commission of an act of fraud, embezzlement, theft or other criminal act constituting a felony, (ii) willful or wanton disregard of the rules or policies of the Company that results in a material loss, damage or injury to the Company or its affiliates, (iii) repeated failure to perform duties consistent with your position or to follow or comply with the reasonable directives of the Company’s or its affiliates’ Board of Directors or of your superiors, after having being given
notice thereof (e.g., your insubordination), or (iv) material breach of any provision contained in a written non-competition, confidentiality or non-disclosure agreement between you and the Company or any of its affiliates. Any determination of Cause will be made by the Company in its good faith discretion.
Any amounts payable hereunder will be subject to all applicable tax withholding. The Retention Bonus is independent of the Company’s annual incentive and other compensation programs, and shall not be taken into account for purposes of any calculation under any compensatory or employee benefit plan of the Company and its affiliates (including any such severance or retirement plan). You and the Company acknowledge that your employment is “at will” and may be terminated by either you or the Company at any time and for any reason. As we have discussed, the Company is reviewing its employment agreements and severance policies and anticipates providing you with a proposed amended version of your current employment agreement.
This letter agreement will be governed by and construed in accordance with the laws of the State of Delaware, without reference to conflict of laws principles. This letter agreement shall be interpreted to comply with, or be exempt from, Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, it being understood that the letter agreement is intended to be exempt from Section 409A.
This letter agreement constitutes the complete understanding between you and the Company regarding the Retention Bonus and special stock option grant described above and supersedes any and all prior written and/or oral agreements or understandings, no matter their form, concerning this subject matter. This letter agreement may not be modified except by written document, signed by you and the Company. If any provision of this letter agreement is ruled invalid or unenforceable, that provision will be deemed excised, and the remainder of the letter agreement will remain valid and enforceable.
Please indicate your agreement with and acceptance of the terms and conditions of this letter agreement, by signing and dating the enclosed copy of this letter agreement in the space provided below. Please keep a copy for your records and return the original to me no later than February 28, 2021.
Sincerely yours,
/s/ William Lehmann_____
William Lehmann,
Interim Chief Executive Officer
Agreed to and Accepted:
/s/ Laura Campbell
Laura Campbell
Date: February 27, 2021