Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Elanco Animal Health Incorporated (the Company) announced the appointment of Todd S. Young as Executive Vice President and Chief Financial Officer of the Company effective November 1, 2018. He will serve as the Companys principal financial officer.
Mr. Young joins Elanco from ACADIA Pharmaceuticals, a biopharmaceutical company, where he served as Executive Vice President and Chief Financial Officer since August 2016. From 2015 to 2016, Mr. Young served as Senior Vice President and Treasurer for Baxalta Incorporated, a global biopharmaceutical company. Prior to Baxalta, Mr. Young worked for over 14 years at Baxter International, Inc., a global diversified healthcare company, holding multiple leadership roles, including Corporate Vice President and Treasurer from 2013 to 2015.
The Company entered into an employment offer letter with Mr. Young (the Offer Letter), as well as a Retention Bonus Agreement (the Bonus Agreement). The following description of the terms of Mr. Youngs employment is qualified in its entirety by reference to the complete terms and conditions of the Offer Letter and the Bonus Agreement, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K.
Mr. Young will receive an annual base salary of $550,000. He will be eligible for an annual cash performance bonus with a bonus target of 70% of his base salary and for annual equity awards under Elanco 2018 Stock Plan with a target award value of $1,200,000. The terms of the annual equity awards are expected to be consistent with the annual award program for other senior executives. Mr. Young will be eligible to participate in the Companys benefit plans, all in accordance with the Companys customary terms and policies and consistent with other executives.
In connection with the commencement of Mr. Youngs employment, he will receive two one-time sign-on awards consisting of a $200,000 cash retention bonus that would be earned over a three-year period, and a restricted stock unit award valued at $300,000 that will vest in equal installments on each of the first two anniversaries of the grant date, expected to be in December 2018. Mr. Young will also be reimbursed for relocation costs.
There are no material arrangements or understandings between Mr. Young and any other person pursuant to which he was appointed as an officer of the Company. Mr. Young does not have any family relationship with any director or officer of the Company or any person nominated or chosen by the Company to become a director or executive officer, and there are no transactions in which Mr. Young has an interest requiring disclosure under Item 404(a) of Regulation S-K.
Concurrent with the effective date of the appointment of Mr. Young, Lucas Montarce will cease performing his day-to-day activities as Interim Chief Financial Officer of the Company and will transition responsibilities to Mr. Young while returning to Eli Lilly & Company as vice president and CFO of Lillys International Business Unit.