Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b)Departure of Officer
On March 24, 2023, Tahir Mahmood departed from his position as the Company’s Chief Executive Officer. Consistent with the terms of the Company’s Senior Executive Change in Control and Severance Policy, Dr. Mahmood will be eligible to receive (i) a lump sum payment equal to 100% of his base salary and (ii) an upfront payment equal to twelve months of premiums for COBRA continuation coverage or, if providing such payment would violate applicable law, a taxable payment for an equivalent amount in lieu thereof. The payment of these severance amounts will be contingent on Dr. Mahmood signing a customary separation and release agreement that will release the Company from any potential claims by Dr. Mahmood. The foregoing description of the separation and release agreement is only a summary of its material terms, does not purport to be complete, and is qualified in its entirety by reference to the final separation and release agreement, a copy of which will be filed with the Company’s public filings after execution. Dr. Mahmood shall remain on the Company’s Board of Directors. The Company intends to enter into a consulting agreement with Dr. Mahmood, subject to mutual agreement of terms in the near future.
The Company is very grateful for Dr. Mahmood’s valuable contributions to the Company over the years.
(c)Appointment of Executive Officer
On March 21, 2023, the Board approved the appointment of Shawn Cross, age 55, as Chief Executive Officer of the Company and Chair of the Board. Each of the foregoing appointments are effective as of March 24, 2023 (“Effective Date”). Mr. Cross currently serves as the Company’s President and Chief Operating Officer.
In connection with Mr. Cross’ new position as Chief Executive Officer, Mr. Cross’ annual base salary has been increased to $580,000 and his annual target cash incentive payment has been increased to 55% of his base salary. As of the Effective Date, Mr. Cross was also granted an option to purchase 668,000 shares of common stock under the Company’s 2020 Equity Incentive Plan. Fifty-percent (50%) of the shares subject to the option will vest immediately upon grant, with the remaining 50% of the grant to vest in equal monthly installments over the following 24 months, subject to Mr. Cross’ continuous service on each vesting date.
Mr. Cross has served as the Company’s President and Chief Operating Officer since May 2022, and served as the Company’s Chief Financial Officer from March 2020 to May 2022. Prior to joining the Company, Mr. Cross was at JMP Securities LLC where he was Managing Director and Co-Head Healthcare Investment Banking and a member of the Investment Banking Management Committee from September 2018 to March 2020. Prior to JMP Securities LLC, Mr. Cross worked at GT BioPharma, Inc., a clinical stage immuno-oncology company, where he was President and Chief Operating Officer from November 2017 to February 2018 and Chairman of the board of directors and Chief Executive Officer from February 2018 to July 2018. Mr. Cross was Managing Director, Healthcare Investment Banking at Deutsche Bank Securities from November 2015 to November 2017 and Managing Director, Healthcare Investment Banking at Wells Fargo Securities from November 2010 to August 2015. He has served on the board of directors of BioPlus Acquisition Corp since December 2021. Mr. Cross holds a B.S. in Kinesiology from the University of California, Los Angeles and an M.B.A. from Columbia Business School.
(d)Election of New Directors.
To the extent required by Item 5.02(d), the information contained in Item 5.02(b) is incorporated by reference herein.
On March 21, 2023, the Board appointed Mr. Cross to serve as a Class I director on the Board for a term expiring at the 2024 annual meeting of the Company’s stockholders. Mr. Cross’ Board appointment is effective March 24, 2023.
Mr. Cross has the prior experience described above under the subheading “(c) Appointment of Executive Officer”.
The selection of Mr. Cross to serve as Chief Executive Officer, Chair, and Director was not pursuant to any arrangement or understanding with respect to any other person. There are no family relationships between Mr. Cross and any director or executive officer of the Company, and Mr. Cross has no direct or indirect material interest in any “related party” transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with Mr. Cross’ appointment to the Board, the Board increased the size of the board from six members to seven.
As an employee director, Mr. Cross will not receive any additional compensation for his service as a director pursuant to the Company’s director compensation policy.