Zafgen, Inc. (NASDAQ:ZFGN) 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.
Appointment of Brian P. McVeigh as Chief Business Officer
On May25, 2018, the Board of Directors (the “Board”) of Zafgen, Inc. (the “Company”) appointed Brian P. McVeigh as the Chief Business Officer of the Company (the “CBO”) effective as of May29, 2018.
Mr.McVeigh, 45, served as Vice President of World Wide Business Development (“WWBD”), Transactions and Investment Management of GlaxoSmithKline plc in Pharmaceuticals Research and Development from October 2011 until November 2017. From November 2008 to October 2011, Mr.McVeigh was Vice President in a variety of positions including WWBD Transactions, Commercial Alliances and Mergers and Acquisitions (“M&A”), and Deal Finance and M&A. Prior to those roles, Mr.McVeigh was the Director of M&A Strategy and Transactions, and Business Development Transactions and Ventures from September 2006 to November 2008 and from September 2004 to September 2006, respectively. From May 1992 through September 2004, McVeigh was promoted through a variety of roles of increasing responsibility at GlaxoSmithKline plc. Most recently, Mr.McVeigh was the Chief Executive Officer and on the Board of Directors of KBP Biosciences from December 2017 until April 2018.
There are no arrangements or understandings between Mr.McVeigh and any other person to which he was appointed as the CBO, and there are no transactions between Mr.McVeigh and the Company that would require disclosure under Item404(a) of Regulation S-K.
The Company also entered into an at-will employment offer letter agreement with Mr.McVeigh, effective as of May29, 2018, to which Mr.McVeigh shall serve as the CBO. Mr.McVeigh is entitled to receive an annual base salary of $400,000 and is eligible to receive an annual performance bonus, with a target bonus amount of 40% of his annual base salary. Mr.McVeigh’s base salary is subject to adjustment to the Company’s employee compensation policies in effect from time to time.
Further, as a material inducement to Mr.McVeigh’s acceptance of employment with the Company, the Board approved the grant to Mr.McVeigh effective on May29, 2018 of an option to purchase 225,000 shares of the Company’s common stock, with 25% of the option shares vesting on the first anniversary of Mr.McVeigh’s employment start date and the balance vesting in equal monthly installments over the next three years, subject to his continued service with the Company through each vesting date. The grant is being made to a stand-alone inducement award agreement outside of the 2014 Stock Option and Incentive Plan as a material inducement to Mr.McVeigh’s acceptance of employment with the Company in accordance with NASDAQ Listing Rule 5635(c)(4).
In connection with Mr.McVeigh’s Offer Letter, the Company also entered into a Severance and Change in Control Agreement with Mr.McVeigh. In the event that Mr.McVeigh terminates his employment with “good reason” or is terminated without “cause,” he is eligible to receive 9 months of base salary continuation and 9 months of COBRA continuation medical benefits subsidized by the Company, provided that he executes and does not revoke a separation agreement and release of the Company and its affiliates. In the event that Mr.McVeigh’s employment is terminated without “cause” or Mr.McVeigh terminates his employment for “good reason” within 12 months of a “change of control,” Mr.McVeigh is eligible to receive 12 months of base salary continuation, 12 months of COBRA continuation medical benefits subsidized by the Company, and all options and other stock-based awards held by him shall immediately accelerate and become fully exercisable or non-forfeitable as of the date of termination, provided that he executes and does not revoke a separation agreement and release of the Company and its affiliates.
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For purposes of the Severance and Change in Control Agreement, “cause” means:
| • | the commission by the executive of any felony, any crime involving the Company, or any crime involving fraud or dishonesty; |
| • | any unauthorized use or disclosure of the Company’s proprietary information by the executive; |
| • | any intentional misconduct or gross negligence on the executive’s part which has a materially adverse effect on the Company’s business or reputation; or |
| • | the executive’s repeated and willful failure to perform the duties, functions and responsibilities of the executive’s position after a written warning from the Company. |
For purposes of the Severance and Change in Control Agreement, “good reason” means:
| • | a material diminution in the executive’s title, responsibilities, authority or duties; |
| • | a material diminution in the executive’s base salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; |
| • | a breach by the Company of the material terms of the severance and change in control agreement or any other written agreement between the Company and the executive; or |
| • | a 50 mile or greater change in the geographic location at which the executive is required to provide services to the Company, not including business travel and short-term assignments. |
For purposes of the Severance and Change in Control Agreement, a “change in control” shall be deemed to have occurred upon the occurrence of any one of the following events:
| • | the sale or exclusive out-license (even as to the Company) of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity; |
| • | a merger, reorganization or consolidation to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power or fair market value of the stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction; |
| • | the sale of all of the stock of the Company to an unrelated person, entity or group thereof acting in concert; or |
| • | any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company. |
The foregoing summary of Mr.McVeigh’s Offer Letter and Severance and Change in Control Agreement does not purport to be complete and is qualified in its entirety by reference to the complete Offer Letter and Severance and Change in Control Agreement, which are attached as Exhibits 10.1 and 10.2 hereto and incorporated herein by reference.
Item 5.02 Other Events.
On May30, 2018, the Company issued a press release announcing the matters discussed in Item 5.02 above. A copy of the press release is filed herewith as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.
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Item 5.02 Financial Statements and Exhibits.
(d) Exhibits
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ZAFGEN, INC. ExhibitEX-10.1 2 d595223dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 175 Portland Street,…To view the full exhibit click here
About Zafgen, Inc. (NASDAQ:ZFGN)
Zafgen, Inc. is a biopharmaceutical company. The Company is focused on improving the health and well-being of patients affected by obesity and complex metabolic disorders. The Company’s lead product candidate, Beloranib, is a twice-weekly subcutaneous injection being developed for the treatment of multiple indications, including severe obesity in rare diseases, such as Prader-Willi syndrome (PWS) and hypothalamic injury-associated obesity (HIAO), including craniopharyngioma-associated obesity. Beloranib is in Phase III stage of development for PWS. It is also developing ZGN-839, a liver-targeted methionine aminopeptidase 2 (MetAP2) inhibitor, for the treatment of nonalcoholic steatohepatitis (NASH) and abdominal obesity, as well as other second-generation MetAP2 inhibitors for the treatment of severe obesity. It is also evaluating additional MetAP2 inhibitors beyond Beloranib as a development candidate for the treatment of severe obesity in the general population.
