Onconova Therapeutics,Inc. (NASDAQ:ONTX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Ramesh Kumar, Ph.D.
On January15, 2019, Ramesh Kumar, Ph.D., resigned as the Chief Executive Officer of Onconova Therapeutics,Inc. (the “Company”) and as a member of the Company’s Board of Directors (the “Board”). Dr.Kumar’s last day of employment with the Company will be February17, 2019 (the “Termination Date”), after which Dr.Kumar will serve as a consultant to the Company to a Consulting Agreement (the “Consulting Agreement”) between the Company and Dr.Kumar.
In connection with Dr.Kumar’s resignation, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Dr.Kumar, dated as of January15, 2019. Under the Separation Agreement, if the releases provided for in the Separation Agreement are effective, Dr.Kumar is entitled to the severance payments and benefits as set forth in the Separation Agreement, which supersede severance payments and benefits under Dr.Kumar’s Employment Agreement (the “Employment Agreement”) with the Company, effective as of July1, 2015. If the releases are not effective, Dr.Kumar will only be entitled to the severance payments and benefits under the Employment Agreement.
The severance payments and benefits under the Separation Agreement include, without limitation, the following:
· Severance Payments. Under severance payments provisions, which remain the same as those in the Employment Agreement, the Company will pay Dr.Kumar a severance amount equal to $933,774, which is the sum of (x) $602,435, 12 months of base salary at the rate in effect immediately prior to January15, 2019 and (y)$331,339, 55% of the base salary amount referred to in the preceding sentence. The severance amount will be paid in installments in accordance with the Company’s normal payroll practices over the 12-month period following the Termination Date.
· Stock Option Acceleration and Extension. The stock option acceleration provision remains the same as that under the Employment Agreement, and under this provision, all stock options (the “Outstanding Options”) held by Dr.Kumar will vest on the Termination Date. Dr.Kumar is also entitled to a stock option extension provision, under which the Company will amend the post-termination exercise periods set forth in the agreements reflecting the Outstanding Options such that Dr.Kumar will have until the earlier of (i)January15, 2022 and (ii)the last day of the applicable ten-year term of the applicable Outstanding Option to exercise the Outstanding Options.
· Change in Control Protection Period. The definition of “Change in Control Protection Period” as defined in the Employment Agreement, will be amended to read as follows: “‘Change in Control Protection Period’ shall mean the period that commences six (6)months prior to and ends twelve (12) months following a Change in Control.” The commencement date of the six-month period prior to a Change in Control is January15, 2019, the date on which Dr.Kumar ceased to be the Chief Executive Officer of the Company.
· Other Benefits. Dr.Kumar will also receive accrued benefits and certain health benefits; and the enhanced benefits include, among other things, a COBRA (Consolidated Omnibus Budget Reconciliation Act) reimbursement extension, under which if Dr.Kumar remains on COBRA coverage for the entire 12-month period following the Termination Date, the Company will continue to pay Dr.Kumar COBRA reimbursements for an additional six-month period following the expiration of the 12-month period, subject to certain terms and conditions.
Under the Separation Agreement, Dr.Kumar has agreed that the non-compete covenant in the Employment Agreement will apply for 24 months instead of 12 months. The foregoing description of the Separation Agreement is not complete and is qualified in its entirety by reference to the full text of the Separation Agreement, a copy of which is filed as Exhibit10.1 to this Current Report on Form8-K and is incorporated by reference herein.
Under the Consulting Agreement, during the five-month period starting on February18, 2019, at the request of the Company, Dr.Kumar will provide consulting service to the Company, and will be paid $10,000 per month for up to 20 hours of services (pro-rated for each partial calendar month during the term), and $500 per hour for each additional hour Dr.Kumar performs services in excess of 20 hours in any month (pro-rated for each partial calendar month during the term), subject to terms and conditions of the Consulting Agreement. The Company and Dr.Kumar may each terminate the Consulting Agreement by giving the other 90 days’ written notice. The Company has no obligation to request any consulting service during the term.
Appointment of Steven M. Fruchtman, M.D.
In connection with Dr.Kumar’s resignation, the Board appointed Steven M. Fruchtman, M.D., as the Chief Executive Officer. Dr.Fruchtman will continue to serve as the President of the Company.
In addition, upon recommendation of the Nominating and Corporate Governance Committee of the Board, effective as of January15, 2019, the Board appointed Dr.Fruchtman as a director of the Company.
Dr.Fruchtman’s compensation arrangements and his employment agreement remain the same.
Item 7.01. Regulation FD Disclosure.
On January15, 2019, the Company issued a press release announcing the appointment of Dr.Fruchtman as a director of the Company and as the Chief Executive Officer and successor to Dr.Kumar.
A copy of the press release is furnished as Exhibit99.1 to this Current Report on Form8-K.
The information disclosed under this Item 7.01 (including Exhibit99.1) is being furnished and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Onconova Therapeutics, Inc. Exhibit
EX-10.1 2 a19-2961_1ex10d1.htm EX-10.1 Exhibit 10.1 Execution Version SEPARATION AND RELEASE AGREEMENT This SEPARATION AND RELEASE AGREEMENT (this “Agreement”) is entered into as of January 15,…
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About Onconova Therapeutics,Inc. (NASDAQ:ONTX)
Onconova Therapeutics, Inc. is a clinical-stage biopharmaceutical company. The Company operates through the identification and development of oncology therapeutics segment. It is focused on discovering and developing small molecule drug candidates to treat cancer. The Company has created a targeted anti-cancer agents designed to work against specific cellular pathways that are important to cancer cells. It has over three clinical-stage product candidates and various preclinical programs that target kinases, cellular metabolism or cell division in preclinical development. The Company’s lead product candidate, rigosertib, is being tested in both intravenous (IV) and oral formulations as a single agent, and the oral formulation is also being tested in combination with azacitidine, in clinical trials for patients with myelodysplastic syndromes (MDS), and related cancers. Its other product candidates include Briciclib and Recilisib.
