Item 5.02 - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Director Resignation
Wendy L. Dixon, Ph.D. resigned from the Board as a Class II director effective 6:00 am EST on February 24, 2020. Dr. Dixon’s retirement from the Board was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
New Director Appointments
On February 24, 2020, the Board, following the recommendation of the Nominating and Corporate Governance Committee of the Board, elected Carrie Bourdow and Jason Keyes to fill vacancies on the Board. The election was effective as of February 24, 2020.
Ms. Bourdow was designated as a Class I member of the Board to serve until the 2021 annual meeting of the stockholders of the Company and thereafter until her successor has been duly elected and qualified, or until her earlier death, resignation or removal. Ms. Bourdow has been appointed as a member of the Nominating and Corporate Governance Committee of the Board.
Mr. Keyes was designated as a Class II member of the Board to serve until the 2022 annual meeting of the stockholders of the Company and thereafter until his successor has been duly elected and qualified, or until his earlier death, resignation or removal. Mr. Keyes has been appointed as a member of the Audit Committee of the Board.
There are no arrangements or understandings between Ms. Bourdow or Mr. Keyes, and any other person pursuant to which she or he was elected as a director. There are no transactions in which Ms. Bourdow or Mr. Keyes has an interest requiring disclosure under Item 404(a) of Regulation S-K of the Securities Act of 1933, as amended (the “Securities Act”). Ms. Bourdow and Mr. Keyes will be compensated in the same manner as the Company’s other non-employee directors.
Currently, the Company's non-employee directors are compensated for their services on the Board as follows:
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Compensation
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Annual Board Cash Retainer
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$40,000
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Additional Retainer for Non-Executive Chair of the Board
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$30,000
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Additional Retainers for Committee Chairs
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• Audit
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$15,000
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• Compensation
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$10,000
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• Nominating and Corporate Governance
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$8,000
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Additional Retainers for Committee Members
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• Audit
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$7,500
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• Compensation
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$5,000
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• Nominating and Corporate Governance
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$4,000
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Annual Equity Award (non-employee directors)
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59,000 shares of common stock
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Initial Equity Award (non-employee directors)
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118,000 shares of common stock
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The stock options granted to the Company's non-employee directors will have an exercise price equal to the fair market value of the Company's common stock on the date of grant and will expire ten years after the date of grant. The initial stock options granted to Company's non-employee directors will, subject to the director’s continued service on the Board, vest monthly in equal amounts over a three-year period following the grant date. The annual stock options granted to Company's non-employee directors will, subject to the director’s continued service on the Board, vest monthly in equal amounts over a one-year period following the grant date. Each annual cash fee will be payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of each payment will be prorated for any portion of a quarter that a director is not serving on the Board. Each member
of the Board will also be entitled to reimbursement for reasonable travel and other expenses incurred in connection with attending meetings of the Board and any committee on which he or she serves.
Accordingly, each of Ms. Bourdow and Mr. Keyes received upon her or his election to the Board an option to purchase 118,000 shares of common stock of the Company at an exercise price of $0.8224 per share.
In connection with her and his appointment, each of Ms. Bourdow and Mr. Keyes will enter into the Company’s standard form of Indemnification Agreement, a copy of which was filed as Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36296) filed with the SEC on August 26, 2019. Pursuant to the terms of this agreement, the Company may be required, among other things, to indemnify Ms. Bourdow and Mr. Keyes for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by her or him in any action or proceeding arising out of her or his service as one of the Company’s directors.