Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of David Hering, M.B.A. as Chief Executive Officer and Director
On July 5, 2022 (the "Effective Date"), the Board of Directors (the "Board") of
Adagio Therapeutics, Inc. (the "Company") appointed David Hering, M.B.A., age
47, as the Company's Chief Executive Officer. In connection with his appointment
as Chief Executive Officer of the Company, the Board also appointed Mr. Hering
as a Class III director with his term expiring at the Company's 2024 annual
meeting of stockholders.
Mr. Hering served as the Company's Interim Chief Executive Officer from February
2022 until the Effective Date, and as Chief Operating Officer from June 2021
until the Effective Date. Prior to joining the Company, Mr. Hering served as the
Head of the mRNA Global Franchise Business of Pfizer, Inc., a pharmaceutical
company, from April 2021 to June 2021, the President of North America Vaccines
of Pfizer, Inc. from December 2018 to April 2021 and the Vaccines Commercial
Officer of Pfizer, Inc. from June 2015 to December 2018. Before joining Pfizer
in 2015, Mr. Hering spent seven years at Novartis Vaccines, a pharmaceutical
company, where he held the position of Head of the North America Region.
Mr. Hering received an M.B.A. from Harvard Business School and a B.S. in
Operations Research and Industrial Engineering from Cornell University.
In connection with Mr. Hering's appointment, the Company entered into a new
employment agreement (the "Employment Agreement") with Mr. Hering, which
Employment Agreement superseded Mr. Hering's previous employment agreement,
dated August 5, 2021, and all amendments thereto in its entirety. The Employment
Agreement provides that Mr. Hering's employment will continue until either the
Company or Mr. Hering terminates Mr. Hering's employment in accordance with the
terms of the Employment Agreement. In addition, the Company and Mr. Hering had
previously entered into an Employee Proprietary Information and Inventions
Assignment Agreement, which, among other things, prohibits him from competing
with the Company, soliciting the Company's employees and customers and
disclosing confidential information during the term of his employment and for a
specified time thereafter.
Pursuant to the Employment Agreement, Mr. Hering is entitled to receive an
annual base salary of $600,000, which will be reviewed at least annually and
will be subject to adjustment from time to time, as determined by the Board or
the Compensation Committee of the Board (the "Compensation Committee"). In
addition, pursuant to the Employment Agreement, Mr. Hering is eligible to
receive an annual cash bonus, which is based on the achievement of certain
performance goals and objectives as reasonably determined by the Compensation
Committee, calculated as a percentage of his annual base salary, and which will
be determined by the Compensation Committee. Mr. Hering's initial target annual
bonus is 60% of his annual base salary. Mr. Hering's annual bonus in respect of
calendar year 2022 will be calculated based upon a blended rate of base salary,
which factors in Mr. Hering's base salary rates in effect during calendar year
2022 for his service as Chief Operating Officer, Interim Chief Executive Officer
and Chief Executive Officer, pro-rated based on the portion of calendar year
2022 during which he served in each such position.
In addition, the Company granted Mr. Hering a stock option to purchase 2,000,000
shares of the Company's common stock at an exercise price equal to the closing
sales price for the Company's common stock as quoted on the Nasdaq Stock Market
on the Effective Date (the "Option Grant"). The Option Grant will vest monthly
in equal installments over 48 months, commencing on the Effective Date. The
Option Grant was made pursuant to the Company's 2021 Equity Incentive Plan (the
"Plan") and the Company's form of option award agreement (the "Award
Agreement"). Mr. Hering is also eligible to receive an additional stock option
to purchase up to 1,000,000 shares of the Company's common stock (the
"Additional Option Grant"), if certain goals approved by the Board on the
recommendation of the Compensation Committee are achieved on or prior to
December 31, 2022, with such achievement to be determined by the Board upon the
recommendation of the Compensation Committee. If such performance goals are
partially achieved on or prior to December 31, 2022, then Mr. Hering may receive
a partial amount of the Additional Option Grant, with such partial amount to be
determined by the Board in its sole and absolute discretion. The Additional
Option Grant would have an exercise price equal to the fair market value of the
Company's common stock on the applicable grant date, would vest monthly in equal
installments over a 48-month period commencing on the applicable grant date and
would be made pursuant to the Plan.
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The Employment Agreement provides for standard benefits, such as paid time off,
reimbursement of business expenses, and participation in the Company's employee
benefit plans and programs. In the event that Mr. Hering's employment ends upon
death or a disability, he will be entitled to accrued obligations and payment of
any unpaid annual bonus earned based on achievement of the applicable
performance goals and objectives so long as his employment terminates after the
completion of the calendar year but prior to the date of payment of the bonus
(the "Earned Bonus"). In the event that Mr. Hering's employment is terminated,
other than during the period commencing on the earlier of (x) the signing of a
definitive agreement that, if closed, would result in a "change in control" (as
defined in the Plan) and (y) the date that is three months prior to the closing
of a change in control and ending on the date that is 12 months following a
change in control (the "Change in Control Period"), by the Company without
"cause" or by him for "good reason" (each as defined in the Employment
Agreement), and subject to the delivery to the Company of a separation agreement
that includes a general release of claims, Mr. Hering will receive cash
severance equal to the sum of 12 months of his base salary and his target bonus
for the year of termination, payable in a lump sum, as well as the Earned Bonus,
if applicable, outplacement services and 12 months continuation of benefits. In
addition, the portion of any outstanding equity awards held by Mr. Hering as of
the date of termination that would have become vested during the 12-month period
following his date of termination would automatically vest as of the date of
termination and remain exercisable for 180 days following such date of
termination.
In the event that Mr. Hering's employment is terminated by the Company without
cause or by him for good reason, in either case, during the Change in Control
Period, and subject to his delivery to the Company of a separation agreement
that includes a general release of claims, Mr. Hering will receive cash
severance equal to the sum of 12 months of his base salary and his target bonus
for the year of termination, payable in a lump sum, as well as the Earned Bonus,
if applicable, outplacement services and 12 months continuation of benefits. In
such case, Mr. Hering will also be entitled to immediate acceleration and full
vesting of any equity awards, as if his employment continued until the later of
the date of termination (or, if later, the change in control) or the effective
date of the separation agreement, and remain exercisable for 180 days following
such date.
Mr. Hering previously entered into an indemnification agreement in the form
previously approved by the Board, which form is filed as Exhibit 10.4 to the
Company's Registration Statement on Form S-1/A, filed with the U.S. Securities
and Exchange Commission on August 2, 2021 (the "Indemnification Agreement").
Other than with respect to the Employment Agreement, the Employee Proprietary
Information and Inventions Assignment Agreement, the Award Agreement and the
Indemnification Agreement, there are no arrangements or understandings between
Mr. Hering and any other persons pursuant to which Mr. Hering was appointed as
Chief Executive Officer of the Company or as a director. There are also no
family relationships between Mr. Hering and any director or executive officer of
the Company and Mr. Hering has no direct or indirect interest in any transaction
or proposed transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
The description of the Employment Agreement does not purport to be complete and
is qualified in its entirety by reference to the complete text of the Employment
Agreement, which is filed herewith as Exhibit 10.1 and is incorporated by
reference in this Item 5.02.
Item 8.01. Other Events
On July 1, 2022, the Company issued a press release announcing the results of
its annual meeting of stockholders and certain changes to the Company's Board. A
copy of the press release is filed herewith as Exhibit 99.1 and is incorporated
by reference in this Item 8.01.
On July 5, 2022, the Company issued a press release announcing Mr. Hering's
appointment as Chief Executive Officer and as a director of the Company. A copy
of the press release is filed herewith as Exhibit 99.2 and is incorporated by
reference in this Item 8.01.
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Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit
No. Description
10.1 Employment Agreement, dated July 5, 2022, by and between Adagio
Therapeutics, Inc. and David Hering, M.B.A.
99.1 Press Release, dated July 1, 2022
99.2 Press Release, dated July 5, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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