NEOS THERAPEUTICS,INC. (NASDAQ:NEOS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(1)Resignation of Vipin K. Garg as Chief Executive Officer and Director
On June27, 2018, Dr.Vipin K. Garg resigned upon mutual agreement with the Board of Directors (the “Board”) as Chief Executive Officer and President of Neos Therapeutics,Inc. (the “Company”), and as a member of the Board, each effective as of June27, 2018. Dr.Garg will remain employed as an advisor of the Company until July31, 2018 to provide certain transitional services. Dr.Garg’s resignation as Chief Executive Officer and a director of the Company is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
In connection with Dr.Garg’s resignation as the Chief Executive Officer and President, the Company entered into a Separation Agreement and Release (the “Separation Agreement”) between the Company and Dr.Garg, dated as of June27, 2018, which provides for, among other things: (i)salary continuation at Dr.Garg’s final base salary rate of $482,517 per year for 12 months plus 50% of Dr.Garg’s 2018 annual target compensation in the amount of $120,629.25, (ii)continuation of health benefit until the earlier of the end of the 12 months following the date of termination, and the end of Dr.Garg’s eligibility under COBRA for continuation coverage for healthcare, (iii)unvested portion of equity awards held by Dr.Garg (other than those issued to Dr.Garg in September2015) that would have vested had Dr.Garg remained employed by the Company through May31, 2019 shall accelerate as of the effective date of the Separation Agreement, and (iv)the extension of time on Dr.Garg’s ability to exercise any vested options (including those accelerated as contemplated by the Separation Agreement) to May31, 2019. The foregoing summary of the Separation Agreement is qualified in its entirety by reference to the full Separation Agreement filed herewith as Exhibit10.1 and incorporated by reference herein.
(2)Election of Gerald W. McLaughlin as Chief Executive Officer and Appointment to Board of Directors
On June27, 2018, the Board elected Gerald (Jerry) W. McLaughlin as Chief Executive Officer and President of the Company, effective on June27, 2018 and concurrently with Dr.Garg’s resignation as Chief Executive Officer and President. In connection with such election, the Board also appointed Mr.McLaughlin as a ClassII director of the Company, filling the vacancy created by Dr.Garg’s resignation from the Board, to serve until the Company’s 2020 annual meeting of stockholders or until his successor is duly elected and qualified.
Mr.McLaughlin, age 50, joins the Company from CNS biopharmaceutical company, AgeneBio, where he was President and Chief Executive Officer since June2014. Prior to joining AgeneBio, he served as the Senior Vice President and Chief Commercial Officer of NuPathe Inc. until the company was acquired by Teva Pharmaceuticals Industries Ltd. in 2014. Previously, Mr.McLaughlin was at Endo Pharmaceuticals from 2001 to 2007 and served in a variety of commercial leadership roles at Merck from 1990 to 2001. He holds a B.A. in Economics from Dickinson College and an M.B.A. from Villanova University.
In connection with Mr.McLaughlin’s election as Chief Executive Officer and appointment to the Board, the Company entered into an employment agreement (the “Agreement”) which provides for, among other things: (i)base salary of $500,000; (ii)target annual incentive compensation of 50% of his base salary and, for 2018 only, a target of $140,000; and (iii)additional severance and change in control benefits contingent upon Mr.McLaughlin’s agreeing to a general release of claims in favor of the Company following termination of employment as described below. If Mr.McLaughlin is terminated without cause or he resigns his employment for good reason, he will be entitled to severance as follows: continuation of base salary for twelve months and continuation of group health plan benefits for up to twelve months to the extent authorized by and consistent with COBRA. “Cause” and “good reason” are each defined in the Agreement. In the event that such termination without cause or resignation for good reason occurs within a twelve-month period following the first event constituting a change in control (as defined in the Agreement) (a “Change in Control Termination”), Mr.McLaughlin will be entitled to receive severance in an amount equal to 1.5 times his then-annual base salary plus 1.5 times his target annual performance bonus then in effect, payable in a lump sum, and certain health insurance continuation benefits. In addition, if such Change in Control Termination occurs within six months of Mr.McLaughlin’s start date, 50% of any unvested time-based awards will immediately vest and become exercisable; if such Change in Control Termination occurs after six months of Mr.McLaughlin’s start date, 50% of any unvested time-based awards will immediately vest and become exercisable.