Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)
Entry into Amended and Restated Employment
Agreement with Douglas Manion
As previously disclosed, on November 21, 2022
the board of directors (the “Board”) of Aclaris Therapeutics, Inc. (the “Company”)
appointed Douglas Manion as the Company’s Chief Executive Officer, effective as of January 1, 2023.
In
connection with Dr. Manion’s appointment as Chief Executive Officer, on January 6, 2023, the Company and Dr. Manion
entered into an amended and restated employment agreement, effective January 1, 2023 (the “Manion Employment
Agreement”). The Manion Employment Agreement has an initial term of two years and thereafter shall be automatically
renewed for successive one-year periods unless either party elects not to renew the agreement at least 90 days prior to the
expiration of the applicable term. Dr. Manion will receive an annual base salary of $600,000, which may be increased by the
Board in its sole discretion. Dr. Manion will be eligible to receive a target annual bonus equal to up to 55% of the annual
base salary, subject to the achievement of performance goals to be determined by the Board.
Under the
Manion Employment Agreement, if Dr. Manion’s employment with the Company ends due to his death or “disability”,
his resignation for “good reason” or his termination by the Company other than for “cause,” each as defined in
the Manion Employment Agreement, in either case that does not occur within three months prior to or 12 months after the effective date
of a “change of control” (as defined in the Manion Employment Agreement), he is entitled to receive (i) continuation
of his then-current base salary for a period of 12 months; (ii) a lump sum payment of any approved but unpaid bonuses or portion
thereof for the preceding year or the year of termination; and (iii) continued health benefits under COBRA for up to 12 months. Dr. Manion
would also receive the foregoing benefits in the event his employment is terminated upon non-renewal of the Manion Employment Agreement
by the Company.
In the case
Dr. Manion’s employment with the Company ends due to his death or “disability”, his resignation for “good
reason” or his termination by the Company other than for “cause,” in either case that occurs within three months prior
to or 12 months after the effective date of a “change of control”, then he is entitled to receive, in addition to the benefits
described in the preceding paragraph, (i) continuation of his then-current base salary for an additional six months; (ii) an
additional lump sum payment equal to 150% of his target bonus; (iii) continued health benefits under COBRA for up to an additional
six months; and (iv) acceleration of all unvested equity awards.
The
foregoing benefits are conditioned, among other things, on Dr. Manion’s compliance with his post-termination obligations under
the Manion Employment Agreement and his execution of a general release of claims in favor of the Company.
Dr. Manion
has previously entered into the Company’s standard form of indemnification agreement.
The
foregoing summary of the Manion Employment Agreement is not complete and is qualified in its entirety by reference to the full text of
the Manion Employment Agreement, which the Company intends to file as an exhibit to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2022.
Entry into Employment Agreement with Kevin Balthaser
As previously disclosed, on
November 21, 2022 the Board of the Company appointed Kevin Balthaser as the Company’s Chief Financial Officer, effective as
of January 1, 2023.
On December 31, 2022,
the Company entered into an employment agreement with Mr. Balthaser, effective January 1, 2023 (the “Balthaser Employment
Agreement”). The Balthaser Employment Agreement has an initial term of two years and thereafter shall be automatically renewed
for successive one-year periods unless either party elects not to renew the agreement at least 90 days prior to the expiration of the
applicable term. Mr. Balthaser will receive an annual base salary of $444,000, which may be increased by the Board in its sole discretion.
Mr. Balthaser will be eligible to receive a target annual bonus equal to up to 40% of the annual base salary, subject to the achievement
of performance goals to be determined by the Board.
Under the Balthaser Employment
Agreement, if Mr. Balthaser’s employment with the Company ends due to his death or “disability”, his resignation
for “good reason” or his termination by the Company other than for “cause,” each as defined in the Balthaser Employment
Agreement, in either case that does not occur within three months prior to or 12 months after the effective date of a “change of
control” (as defined in the Balthaser Employment Agreement), he is entitled to receive (i) continuation of his then-current
base salary for a period of 12 months; (ii) a lump sum payment of any approved but unpaid bonuses or portion thereof for the preceding
year or the year of termination; and (iii) continued health benefits under COBRA for up to 12 months. Mr. Balthaser would also
receive the foregoing benefits in the event his employment is terminated upon non-renewal of the Balthaser Employment Agreement by the
Company.
In the case Mr. Balthaser’s
employment with the Company ends due to his death or “disability”, his resignation for “good reason” or his termination
by the Company other than for “cause,” in either case that occurs within three months prior to or 12 months after the effective
date of a “change of control”, then he is entitled to receive, in addition to the benefits described in the preceding paragraph,
(i) an additional lump sum payment equal to his target bonus; and (ii) acceleration of all unvested equity awards.
The foregoing benefits are
conditioned, among other things, on Mr. Balthaser’s compliance with his post-termination obligations under the Balthaser Employment
Agreement and his execution of a general release of claims in favor of the Company.
Mr. Balthaser has also
entered into the Company’s standard form of indemnification agreement.
The foregoing description of the Balthaser Employment
Agreement is not complete and is qualified in its entirety by reference to the Balthaser Employment Agreement, which the Company intends
to file as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.