CEMPRA, INC. (NASDAQ:CEMP) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02.
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Departure of Directors or Certain Officers; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective December9, 2016, our board appointed David Zaccardelli,
Pharm.D., one of our directors, as our Acting Chief Executive
Officer and named David Moore as our President, in addition to
his position as our Chief Commercial Officer. Simultaneously,
Dr.Prabhavathi Fernandes retired as our President and Chief
Executive Officer as well as a director of our company, effective
on December9, 2016.
In connection with the hiring of Dr.Zaccardelli, we entered into
an Executive Employment Agreement with him. The agreement will
run for three months, provided that upon the three month
anniversary of the agreement, and on each succeeding one month
anniversary, the term shall be automatically extended by an
additional month, unless either party gives at least 10 business
days prior notice of non-renewal. If requested by our board of
directors, Dr.Zaccardelli will resign as Acting Chief Executive
Officer.
Dr.Zaccardelli will remain a director of our company, but will
not receive any compensation for serving in that capacity while
employed as our Acting Chief Executive Officer. Effective with
his employment, Dr.Zaccardelli resigned as a member of our boards
Compensation Committee.
Dr.Zaccardelli will be paid a base salary at the annual rate of
$540,000 during his employment. In the event that he is still
employed by us on the six month anniversary of his employment,
our board will consider whether to adjust the base salary.
Dr.Zaccardelli will be eligible for an annual incentive bonus for
calendar years during his term, beginning in 2017, with a target
bonus equal to 60% of his base salary. This bonus will be subject
to achievement of objectives established by the board, consistent
with those established for our senior management team. In the
event that Dr.Zaccardellis employment ends during a calendar
year, he will remain eligible for a pro-rata annual incentive
bonus for the portion of the year during which he was employed,
based on actual performance.
We will grant Dr.Zaccardelli 50,000 restricted stock units with
respect to our common stock, which award will vest in full on
December9, 2017, subject to his continued employment or board
service. In addition, we will grant Dr.Zaccardelli an option to
purchase 150,000 shares of our common stock, with an exercise
price equal to the fair market value of our common stock on the
date of grant and which will vest one twelfth on the last day of
each month following his employment, subject to his continued
employment or board service. In the event that Dr.Zaccardelli
remains employed on the six month anniversary of his employment,
our board will consider whether to grant him additional awards of
equity compensation.
Prior to joining the Board of Cempra, Dr.Zaccardelli served, from
2004 until 2016, in several senior management roles at United
Therapeutics, including chief operating officer, chief
manufacturing officer and executive vice president,
pharmaceutical development and operations. Prior to joining
United Therapeutics, Dr.Zaccardelli founded and led a startup
company focused on contract pharmaceutical development services,
from 1997 through 2003.From 1988 to 1996, Dr.Zaccardelli worked
at Burroughs Wellcome Co. and Glaxo Wellcome,Inc. in a variety of
clinical research positions.He also served as director of
clinical and scientific affairs for Bausch Lomb Pharmaceuticals
from 1996 to 1997.
There were no arrangements or understandings between
Dr.Zaccardelli and any other person to which Dr.Zaccardelli was
employed as our Acting Chief Executive Officer and there are no
related party transactions between Dr.Zaccardelli and our
company.
We also entered into a Retirement and Consulting Agreement with
Dr.Fernandes whereby, for one year, subject to monthly extensions
by mutual agreement, she will provide consulting services to us
for up to 20 hours per week. For her consulting work, we will pay
Dr.Fernandes $35,000 per month. In addition, all of Dr.Fernandess
stock options will continue to vest during the consulting period.
Upon her execution and the effectiveness of a customary waiver
and release, Dr.Fernandes will be entitled to the severance
payments and benefits described in Section 10(d) of her
employment agreement and the other benefits described in Section4
of that agreement, including an amendment to the employment
agreement, which were filed as exhibits to our Current Reports on
Forms 8-K filed on August13, 2013 and October19, 2015,
respectively. In consideration of her waiver of the notice period
provided under her employment agreement, we will pay Dr.Fernandes
$45,000. In lieu of her pro-rated annual bonus due under her
employment agreement upon a termination of employment, we will
pay Dr.Fernandes an annual bonus for 2016 in the amount of
$280,260. Subject to the effectiveness of the release, we will
continue to pay Dr.Fernandes her base salary for 18 months, at
the current annual rate of $540,000. In addition, and also
subject to the effectiveness of the release, we will pay
Dr.Fernandes an amount equal to one and one half times her Target
Bonus (as defined in her employment agreement), based upon the
average percentage of achievement of target objectives for the
prior three years, which amount is $420,390, payable in 18 equal
monthly payments. Subject to the effectiveness of the release, we
will pay to Dr.Fernandes an amount equal to her applicable COBRA
premiums for 18 months. Subject to the effectiveness of the
release, upon the conclusion of the consulting period, all of
Dr.Fernandess then outstanding and unvested stock options will
become fully vested. In addition, if the consulting period ends
prior to December9, 2018, those stock option awards will remain
outstanding and exercisable until December 9, 2018,
notwithstanding the termination of her employment and consulting
services. In the event that after December 9, 2016 there occurs a
Change in Control (as defined in our 2011 Equity Incentive Plan,
filed as an exhibit to our Current Report on Form 8-K filed on
July 31, 2013), then (i) upon such Change in Control all of Dr.
Fernandess then outstanding and unvested stock options will
become immediately vested and exercisable and (ii) all unpaid
consulting fees will become immediately due and payable, within
10 business days following such Change in Control.
We also amended the non-compete provision contained in Dr.
Fernandess employment agreement to provide that, within the
Restricted Territory (as defined in Section 7(b) of the
agreement, and during the period set out in such section), Dr.
Fernandes will not engage in any business or enterprise (whether
as owner, partner, officer, director, employee, consultant,
investor, lender or otherwise) that develops, manufactures,
markets, licenses or sells any pharmaceutical antibiotic products
that either (1) involve macrolides or fusidic acid or (2) compete
with the products being sold or developed by us either during her
employment with us or during the consulting period in any
management or executive role in which she would perform duties
that are the same or substantially similar to those duties
actually performed by her for us prior to the termination of her
employment or in any position where she or such business or
enterprise would benefit from her use or disclosure of our
proprietary information.
Mr.Moore has served as our Chief Commercial Officer since January
2014. His additional appointment as our President will not result
in any increased salary of other compensation.
A copy of the press release announcing the management changes
described above is attached hereto as Exhibit 99.1 and
incorporated herein by reference. The descriptions of the
agreements with Dr.Zaccardelli and Dr.Fernandes provided above
are qualified in their entirety by reference to the full and
complete terms contained in those agreements, which will be filed
as exhibits to our Annual Report on Form 10-K for the year ending
December31, 2016.
Item9.01. |
Financial Statements and Exhibits. |
(d) |
Exhibits |
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| 99.1 | Press release dated December12, 2016. |
About CEMPRA, INC. (NASDAQ:CEMP)
Cempra, Inc. is a clinical-stage pharmaceutical company. The Company is focused on developing differentiated antibiotics for the acute care and community settings to meet medical needs in the treatment of bacterial infectious diseases, particularly respiratory tract infections and chronic staphylococcal infections. The Company’s lead product, solithromycin (CEM-101), is being developed in oral capsules, intravenous (IV), and suspension formulations, for the treatment of community-acquired bacterial pneumonia (CABP), as well as for the treatment of gonorrhea and other indications. Solithromycin has therapeutic potential and the spectrum of activity to target pathogenic bacteria. The Company also focuses on developing Taksta, which is an antibiotic known as fusidic acid, and is indicated as an oral treatment of acute bacterial skin and skin structure infections (ABSSSI). CEMPRA, INC. (NASDAQ:CEMP) Recent Trading Information
CEMPRA, INC. (NASDAQ:CEMP) closed its last trading session 00.00 at 7.70 with 1,184,449 shares trading hands.