Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 30, 2021, iBio, Inc. (the "Company") entered into a new employment
agreement, dated as of April 30, 2021, with Thomas F. Isett, the Company's Chief
Executive Officer (the "New Employment Agreement") in order to further enhance
corporate governance and better align its compensation arrangements with current
best practices. The New Employment Agreement, which was approved by the
Company's Compensation Committee, replaces in its entirety the Amended and
Restated Executive Employment Agreement, dated as of April 21, 2020, by and
between Mr. Isett and the Company (the "Prior Agreement") and removed certain
legacy contractual obligations, including an uncapped transaction bonus of 4.5%
to be paid in connection with a Change of Control (as defined in the Prior
Agreement), which were not viewed by the Company's Compensation Committee as
best governance practices or as being aligned with the Company's goals.
Pursuant to the terms of the New Employment Agreement, Mr. Isett will serve as
the Company's Chief Executive Officer for a term of two years, subject to
extensions for one-year periods. Mr. Isett will receive an annual base salary of
$650,000 and he is still eligible to receive a target bonus of 60% of his base
salary based upon the Compensation Committee's assessment of his performance and
the performance of the Company during the prior fiscal year.
In addition, pursuant to the terms of the New Employment Agreement, the Company
issued Mr. Isett an award of nonqualified stock options to purchase 3,000,000
shares of the Company's common stock (the "Option Shares"), which will be issued
pursuant to the Company's 2020 Omnibus Equity Incentive Plan (the "Plan"). The
Option Shares vest as follows: 25% of the Option Shares granted will vest on the
one-year anniversary of the grant date and after the one-year anniversary of the
grant date, 6.25% of the Option Shares will vest for each additional three (3)
months of employment, subject to the conditions of the Plan and the stock option
grant agreement. The New Employment Agreement also provides that the
Compensation Committee will establish certain performance criteria and
thereafter Mr. Isett will receive a grant of 5,000,000 performance restricted
stock units ("RSUs"), which will also vest subject to achievement of pre-defined
performance criteria to be established by the Compensation Committee.
Mr. Isett will also be entitled to continue to receive certain benefits that he
is currently entitled to under the Prior Agreement (participation in standard
benefit Company plans, reimbursement for certain car expenses, continuing
education expenses, directors and officers liability insurance, relocation
expenses) in addition to up to a maximum of $500 per month for the cost of any
life insurance policy procured by Mr. Isett while he remains employed by the
Company and up to $2,000 per month toward the cost of any long term disability
policy procured by Mr. Isett while he remain employed by the Company.
Under the terms of the New Employment Agreement, if the Company and Mr. Isett
mutually agree to terminate Mr. Isett's employment, he is entitled to receive
(i) accrued and unpaid base salary; (ii) any unreimbursed expenses; (iii) any
earned but unpaid annual bonus from a prior fiscal year; and (iv) any amounts
payable under any of the benefit plans of the Company in which Mr. Isett was a
participant in accordance with applicable law and the terms of those plans
("Standard Termination Benefits").
If the Company terminates Mr. Isett's employment without Cause (as defined in
the New Employment Agreement), provided he executes and does not revoke a
separation agreement in a form mutually acceptable to the parties, he is
entitled to receive, in addition to the Standard Termination Benefits, (i) an
amount equal his base salary for twenty-four (24) months; (ii) an amount equal
to a pro rata share of his target bonus for the fiscal year in which his
separation occurs; (iii) an amount equal to the target bonus for the twenty-four
(24) month severance period; and (iv) provided that he elects continuation
coverage for health insurance under the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"), the Company will pay the full cost of this
benefit for up to eighteen (18) months or if he has not obtained alternative
employer-provided health coverage by the end of the eighteen (18) month COBRA
subsidy period, the Company shall provide him with a lump sum cash payment equal
to six times the monthly amount paid by the Company for the COBRA subsidy.
If Mr. Isett's employment is terminated by the Company without Cause within
twelve (12) months after a "Change in Control," as defined in the Plan, or if
Mr. Isett terminates his employment with the Company for Good Reason (as defined
in the New Employment Agreement) within twelve (12) months after a "Change of
Control", provided he executes and does not revoke a separation agreement in a
form acceptable to the parties, he is entitled to receive in addition to the
Standard Termination Benefits, (i) a lump sum payment equal to twenty-four (24)
months of his then current base salary; (ii) an amount equal to a pro rata share
of any target bonus for the fiscal year in which his separation occurs; (iii)
vesting of any unvested time-based equity awards held by him at such time; (iv)
an amount equal to two hundred percent (200%) of his target bonus for the year
of employment termination; and (v) provided he elects continuation coverage for
health insurance under COBRA, the Company will pay the full cost of this benefit
for up to eighteen (18) months, and if he has not obtained alternative
employer-provided health coverage by the end of the eighteen (18) month COBRA
subsidy period, the Company shall provide him with a lump sum cash payment equal
to six (6) times the monthly amount paid by the Company for the COBRA subsidy.
The New Employment Agreement also contains certain restrictive covenants
including confidentiality provisions, a non-compete, non-disparagement and
non-solicitation provisions as well as assignment of inventions.
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The foregoing description of Mr. Isett's New Employment Agreement is qualified
in its entirety by the text of the New Employment Agreement, a copy of which is
attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On May 6, 2021, the Company issued a press release announcing results of the
Company's COVID-19 vaccine IND-enabling toxicology studies and an update to its
next-generation COVID-19 vaccine program.
The information in this Item 7.01 and in the press release attached as Exhibit
99.1 to this Current Report on Form 8-K shall not be deemed to be "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2)
of the Securities Act of 1933, as amended. The information contained in this
Item 7.01 and in the press release attached as Exhibit 99.1 to this Current
Report on Form 8-K shall not be incorporated by reference into any filing with
the U.S. Securities and Exchange Commission made by the Company, whether made
before or after the date hereof, regardless of any general incorporation
language in such filing.
The press release attached as Exhibit 99.1 to this Current Report on Form 8-K
includes "safe harbor" language pursuant to the Private Securities Litigation
Reform Act of 1995, as amended, indicating that certain statements contained
therein are "forward-looking" rather than historical.
The Company undertakes no duty or obligation to update or revise the information
contained in this Current Report on Form 8-K, although it may do so from time to
time if its management believes it is appropriate. Any such updating may be made
through the filing of other reports or documents with the Securities and
Exchange Commission, through press releases or through other public disclosures.
Item 8.01 Other Events
The Company today announced that IBIO-201, the Company's vaccine candidate
combining antigens derived from the spike protein ("S protein") fused with
iBio's patented LicKM™ booster molecule, recently completed IND-enabling
toxicology studies. The studies identified no adverse effects at low or high
doses.
The Company also reported on development of IBIO-202, a subunit vaccine
candidate that targets the nucleocapsid protein ("N protein") of SARS-CoV-2.
Using its plant-based FastPharming® System, the Company reported that it has
successfully expressed N protein antigens and has initiated both intramuscular
and intranasal preclinical studies to identify favorable antigen-adjuvant
combinations. Results are expected in early Q1 FY2022.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is filed with this Current Report on Form 8-K.
Exhibit
Number Exhibit Description
10.1 Employment Agreement, dated as of April 30, 2021, by and between
iBio, Inc. and Thomas F. Isett
99.1 Press Release Dated May 6, 2021
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