Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officer.
On January 7, 2020, Quotient Limited (the "Company" and, together with its
consolidated subsidiaries, "we", "us" and "our") announced several planned
changes to its management team:
• Christopher J. Lindop, our Chief Financial Officer, plans to retire from
the Company on May 31, 2020 (the "retirement date").
• Mr. Lindop will resign from his position as our Chief Financial Officer
and as our principal financial officer, effective as of February 5, 2020
(the "transition date").
• Peter Buhler will be appointed as our Chief Financial Officer and
principal financial officer, effective as of the transition date.
• From the transition date to the retirement date, Mr. Lindop will serve as
our Executive Vice President.
• We and Mr. Lindop have entered into a transition, separation and
consultancy agreement (the "Transition Agreement"), and we have agreed to
make certain payments to Mr. Lindop in consideration for his service to
the Company and continued employment with the Company.
• We and Mr. Buhler have entered into an employment agreement (the
"Employment Agreement"), and we have agreed to make certain inducement
awards to Mr. Buhler in connection with his appointment as our Chief
Financial Officer.
• Edward Farrell, our President, has been appointed as our Chief Operating
Officer, effective retroactively as of January 1, 2020.
• Jeremy Stackawitz, our President, has been appointed as our Chief
Commercial Officer, effective retroactively as of January 1, 2020.
Resignation and Retirement of Christopher J. Lindop as Chief Financial Officer
Mr. Lindop, our Chief Financial Officer, will resign from his position as our
Chief Financial Officer and as our principal financial officer, effective as of
the transition date. Mr. Lindop will continue to serve in his current capacity,
including as our principal financial officer, until the transition date.
Following the transition date, Mr. Lindop will serve as our Executive Vice
President until the retirement date. His decision to retire from the Company,
and his resignation from his position as our Chief Financial Officer, is not the
result of any disagreement between him and us regarding our financial
operations, policies or practices.
In connection with his planned retirement, on January 3, 2020, we and Mr. Lindop
entered into the Transition Agreement, pursuant to which, in recognition of
Mr. Lindop's service to us and for providing the services of Chief Financial
Officer through the transition date and Executive Vice President through the
retirement date, Mr. Lindop will receive a single cash payment of $420,000
(equal to twelve months base salary).
In addition, the Transition Agreement provides that all unvested options to
acquire our ordinary shares held by Mr. Lindop that are scheduled to vest within
12 months following the retirement date will remain outstanding and vest and
become exercisable on their regularly scheduled vesting dates after the
retirement date; all other unvested options will be forfeited; and all vested
options will remain exercisable until May 31, 2021. Furthermore, all unvested
restricted share units ("RSUs") held
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by Mr. Lindop that are scheduled to vest within 12 months following the
retirement date will remain outstanding and vest on their regularly scheduled
vesting dates after the retirement date; and all other unvested RSUs held by
Mr. Lindop will be forfeited. Mr. Lindop will also be entitled to receive all
accrued and vested benefits under any other Company benefit plans, and any
reimbursements to which Mr. Lindop is entitled under current policies through
the retirement date.
Mr. Lindop has also agreed to provide consulting services to us to support any
special projects that may arise during the 12 months after the retirement date.
The Transition Agreement additionally contains a release of claims arising from
Mr. Lindop's employment, and other customary provisions, including a
non-disparagement clause.
Appointment of Peter Buhler as Chief Financial Officer
On the transition date, Peter Buhler, age 50, will join the Company as our Chief
Financial Officer. As the Company's Chief Financial Officer, Mr. Buhler will be
our principal financial officer.
Mr. Buhler has over 30 years of financial experience gained through various
roles in industry and public accounting. From 2017 to 2019, Mr. Buhler served as
Group Chief Financial Officer at Zaluvida Corporate AG, a life sciences company
focused on obesity, antibiotic resistance and other global health challenges.
From 2013 to 2017, Mr. Buhler served as Group Chief Financial Officer for
Stallergenes Greer SA, a global life sciences company focused on allergy
immunotherapy, where he led a complex merger project combining a French and a
U.S. group. From 2010 to 2013, Mr. Buhler held the role of Finance Director,
EMEA for Logitech International SA, a manufacturer of computer peripherals and
software. From 2008 to 2010, Mr. Buhler held the role of Chief Financial Officer
at Anteis SA, a mid-sized medical technology company. From 2001 to 2008, Mr.
Buhler held various roles at Merck Serono, a biopharmaceutical company,
including Head of Finance Commercial Europe and Senior Director, Corporate
Strategic Development. From 1999 to 2001, Mr. Buhler held the role of Manager
General Accounting and Control for a division of Eli Lilly and Company. Prior to
that, Mr. Buhler spent over 10 years in public accounting with BDO Visura. Mr.
Buhler is a Swiss Chartered Accountant, a member of the Swiss Institute of
Certified Accountants and Tax Consultants and received an MBA from SBS Swiss
Business School.
With respect to Item 404(a) of Regulation S-K, except as described in this
Current Report, there are no other relationships or related transactions between
Mr. Buhler and the Company that would be required to be reported. With respect
to the disclosure required by Item 401(b) of Regulation S-K, there are no
arrangements or understandings between Mr. Buhler and any other person pursuant
to which he assumed the role of our principal financial officer. With respect to
the disclosure required by Item 401(d) of Regulation S-K, there are no family
relationships between Mr. Buhler and any of the Company's directors or executive
officers.
In connection with such appointment, on January 3, 2020, the Company entered
into the Employment Agreement with Mr. Buhler, which sets forth the terms and
conditions under which Mr. Buhler will serve as our Chief Financial Officer. The
Employment Agreement was approved by the Board of Directors of the Company (the
"Board") as well as the Remuneration Committee of the Board. The Employment
Agreement has no specific term and continues until terminated in accordance with
the terms therein. Mr. Buhler's current annual base salary for fiscal year 2020
will be Swiss Francs (CHF) 380,000, and he is eligible to receive employee
benefits that are customary for other senior executives of the Company located
in Switzerland. Mr. Buhler's base salary will be first reviewed in May 2021, and
thereafter on an annual basis, subject to adjustment by the Board in its sole
discretion.
The Company may terminate Mr. Buhler's employment with or without "Cause" (as
defined in the Employment Agreement). Mr. Buhler is required to provide at least
six months' advance written notice to us if he terminates his employment. If the
Company terminates Mr. Buhler's employment other than for Cause, the Company
must provide six months' advance written notice to Mr. Buhler, and he will be
entitled to receive, subject to certain conditions, the base salary and certain
employee benefits then in effect through and including the day of termination.
During the period of his employment and for a period of one year following any
termination of his employment, Mr. Buhler will be obligated to (i) refrain from
engaging in competition with the Company, its subsidiaries and its affiliates in
Switzerland and the United States; and (ii) refrain from soliciting any of the
Company's (or its subsidiaries' or affiliates') employees, suppliers or
customers.
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The Company has agreed to indemnify Mr. Buhler to the maximum extent permitted
by our organizational documents and applicable law for any acts or decisions
made in good faith while performing services for us.
Mr. Buhler is eligible for an annual discretionary bonus equal to 60% of his
base salary, subject to achievement of corporate performance goals and
individual performance goals.
In addition, in connection with the appointment of Mr. Buhler as our Chief
Financial Officer, on the transition date, the Company will grant Mr. Buhler
50,000 RSUs and 25,000 options to purchase ordinary shares at a price equal to
the closing price of the Company's ordinary shares as reported on the Nasdaq
Global Market on the date of grant (the "Share Options"). The grants, which will
be issued outside of the Company's 2014 Stock Incentive Plan, were approved by
the Board and the Remuneration Committee of the Board pursuant to the inducement
grant exception under Nasdaq Rule 5635(c)(4), as an inducement that is material
to Mr. Buhler's entering into employment with the Company. The RSUs and the
Share Options will vest in three equal installments on each first, second and
third anniversary of the grant date. The Share Options will have a term of ten
years. The Share Options will be forfeited if not exercised before the
expiration of their term. In addition, in the event Mr. Buhler's employment is
terminated, any RSUs or Share Options not vested shall be forfeited upon
termination.
On January 7, 2020, we entered into a Change of Control Agreement (the "CIC
Agreement") with Mr. Buhler. The purpose of the CIC Agreement is to establish
certain protections for Mr. Buhler upon a qualifying termination of his
employment in connection with a change of control of us.
The CIC Agreement provides that, if we terminate Mr. Buhler's employment without
"Cause" (as defined in the CIC Agreement) or Mr. Buhler terminates his
employment for "Good Reason" (as defined in the CIC Agreement) and, in either
case, such termination occurs within 24 months following a "Change of Control"
(as defined in the CIC Agreement), then, subject to Mr. Buhler executing and
delivering to the Company a release and waiver of claims, he will receive a lump
sum payment of the following:
• any accrued obligations owed to him, which include: (i) any of his annual
base salary earned through the effective date of termination that remains
unpaid; (ii) any bonus payable with respect to any fiscal year which
ended prior to the effective date of his termination of employment, which
remains unpaid; and (iii) any expense reimbursement due to him on or
prior to the date of termination which remains unpaid to him; and
• a cash payment equal to 150% of the sum of his base salary plus target
annual bonus in effect on the date of termination, without taking into
effect any reduction in his annual base salary that may constitute "Good
Reason" under the CIC Agreement.
The CIC Agreement will expire on January 7, 2023 and will automatically renew
for successive one year terms unless the Board of Directors provides written
notice of expiration of the CIC Agreement at least 90 days prior to January 7,
2023 or the applicable anniversary thereof.
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The above summary descriptions of certain terms contained in the Transition
Agreement, Employment Agreement and CIC Agreement do not purport to be complete
and are qualified in their entirety by reference to the full texts of the
Transition Agreement, Employment Agreement and CIC Agreement respectively,
copies of which are filed as Exhibits 10.1, 10.2 and 10.3 respectively, hereto.
Appointment of Edward Farrell as our Chief Operating Officer and Jeremy
Stackawitz as our Chief Commercial Officer
Effective retroactively as of January 1, 2020, Edward Farrell, our President,
has been appointed as our Chief Operating Officer, and Jeremy Stackawitz, our
President, has been appointed as our Chief Commercial Officer. We have entered
into amendments, each dated January 7, 2020, to our Service Agreement, dated
November 21, 2012, with Mr. Farrell and to our Employment Agreement, dated
March 9, 2009, with Mr. Stackawitz, in connection with these appointments.
Mr. Farrell's new annual base salary, with effect as of January 1, 2020, will be
£346,340. He will also receive a grant of 2,232 RSUs, with a grant date of
January 7, 2020, which will vest in three equal installments on each first,
second and third anniversary of the grant date.
Mr. Farrell's and Mr. Stackawitz's biographical information is set forth in the
Company's definitive proxy statement filed on July 26, 2019 (the "2019 Proxy
Statement"). That information is incorporated by reference into this Current
Report.
Relationships or related transactions between Mr. Farrell and the Company that
are required to be reported pursuant to Item 404(a) of Regulation S-K are
incorporated herein by reference to the information on that topic set forth in
the 2019 Proxy Statement. Relationships or related transactions between
Mr. Stackawitz and the Company that are required to be reported pursuant to
Item 404(a) of Regulation S-K are incorporated herein by reference to the
information on that topic set forth in the 2019 Proxy Statement. There are no
arrangements or understandings between either Mr. Farrell or Mr. Stackawitz,
respectively, and any other person pursuant to which he assumed the role of our
Chief Operating Officer or Chief Commercial Officer, as applicable. There are no
family relationships between either Mr. Farrell or Mr. Stackawitz, respectively,
and any of the Company's other directors or executive officers.
The above summary descriptions of certain terms contained in the amendments to
our Service Agreement with Mr. Farrell and our Employment Agreement with Mr.
. . .
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Number Description
10.1 Transition Agreement, dated January 3, 2020, between the Company and
Christopher J. Lindop.
10.2 Employment Agreement, dated January 3, 2020, between the Company and
Peter Buhler.
10.3 CIC Agreement, dated January 7, 2020, between the Company and Peter
Buhler.
10.4 Amendment to the Service Agreement, dated January 7, 2020, between
the Company and Edward Farrell.
10.5 Amendment to the Employment Agreement, dated January 7, 2020, between
the Company and Jeremy Stackawitz.
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