Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Amended and Restated Named Executive Officer Compensation Agreements
On May 2, 2022, Magenta Therapeutics, Inc. (the "Company") entered into amended
and restated employment agreements with its Chief Legal Officer, Thomas Beetham,
and Chief Technical Officer, David Nichols, which were approved by the
compensation committee of the Company's board of directors and/or the Company's
board of directors, as applicable.
Thomas Beetham
Mr. Beetham entered into an amended and restated employment agreement with the
Company, effective as of May 2, 2022, which superseded his prior employment
agreement and provides for the payment of an annual base salary and annual
incentive compensation, which are subject to review and redetermination by the
Company's Compensation Committee. Mr. Beetham's base salary for fiscal year 2022
is $435,000, and he is eligible to earn an annual incentive with a target amount
equal to 40% of his base salary. He is also eligible to participate in the
employee benefit plans available to the Company's employees, subject to the
terms of those plans.
Pursuant to Mr. Beetham's amended and restated employment agreement, in the
event he is terminated by the Company without "cause" (as defined in the
agreement) or he resigns for "good reason" (as defined in the agreement),
subject to the delivery of a fully effective general release of claims against
the Company and all related persons and entities, a reaffirmation of all of his
continuing obligations (as defined in the agreement) and, in the Company's sole
discretion, a one year post-employment noncompetition covenant, he will be
entitled to receive (i) a cash severance equal to 0.75 times his base salary
plus a pro-rata portion of his target annual incentive compensation, and (ii) up
to nine monthly cash payments equal to the full monthly COBRA premium for health
insurance for Mr. Beetham.
In the event Mr. Beetham is terminated by the Company's without cause or he
resigns for good reason, each during the three months before through 12 months
following a change in control (as defined in the agreement), subject to the
delivery of a fully effective release of claims, he will not be entitled to
receive the severance benefits described above, but will instead be entitled to
the following: (i) a lump sum cash severance equal to one (1) times his base
salary, plus 100% of his target annual incentive compensation, (ii) for all
outstanding time-based stock options and other time-based stock-based awards
held by Mr. Beetham, full accelerated vesting of such awards, and (iii) up to 12
monthly cash payments equal to the full monthly COBRA premium for health
insurance for Mr. Beetham.
The payments and benefits provided under Mr. Beetham's amended and restated
employment agreement in connection with a change in control may not be eligible
for federal income tax deduction for the Company pursuant to Section 280G of the
Internal Revenue Code. These payments and benefits may also be subject to an
excise tax under Section 4999 of the Internal Revenue Code. If the payments or
benefits payable to Mr. Beetham in connection with a change in control would be
subject to the excise tax imposed under Section 4999 of the Internal Revenue
Code, then those payments or benefits will be reduced if such reduction would
result in a higher net after-tax benefit to him. Furthermore, if the payments
and benefits provided under Mr. Beetham's amended and restated employment
agreement in connection with a change in control would otherwise violate any
applicable nondiscrimination rules or cause the reimbursement of claims to be
taxable under the Patient Protection and Affordable Care Act of 2010, together
with the Health Care and Education Reconciliation Act of 2010 or Section 105(h)
of the Internal Revenue Code, then the health insurance payments shall be
treated as taxable payments (subject to customary and required taxes and
employment-related deductions) and be subject to imputed income tax treatment to
the extent necessary to eliminate any discriminatory treatment or taxation. If
the Company determines that it cannot provide the health insurance payments for
Mr. Beetham without potentially violating applicable law, the Company shall
instead provide him with a taxable lump-sum payment in an amount equal to the
sum of the monthly (or then remaining) health insurance contributions described
above.
Pursuant to Mr. Beetham's amended and restated employment agreement, he is
subject to standard covenants regarding confidentiality and nondisclosure,
assignment of intellectual property work product, and post-termination
noncompetition and non-solicitation of employees, consultants and customers.
David Nichols
Mr. Nichols entered into an amended and restated employment agreement with the
Company, effective as of May 2, 2022, which superseded his prior employment
agreement and provides for the payment of an annual base salary and annual
incentive compensation, which are subject to review and redetermination by the
Company's Compensation Committee. Mr. Nichols's base salary for fiscal year 2022
is $362,000, and he is eligible to earn an annual incentive with a target amount
equal to 40% of his base salary. Mr. Nichols is also eligible to participate in
the employee benefit plans available to our employees, subject to the terms of
those plans.
Pursuant to Mr. Nichols's amended and restated employment agreement, in the
event he is terminated by the Company without "cause" (as defined in the
agreement) or he resigns for "good reason" (as defined in the agreement),
subject to the delivery of a fully effective general release of claims against
the Company and all related persons and entities, a reaffirmation of all of his
continuing obligations (as defined in the agreement) and, in the Company's sole
discretion, a one year post-employment noncompetition
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covenant, he will be entitled to receive (i) a cash severance equal to 0.75
times his base salary plus a pro-rata portion of his target annual incentive
compensation, and (ii) up to nine monthly cash payments equal to the full
monthly COBRA premium for health insurance for Mr. Nichols.
In the event Mr. Nichols is terminated by the Company without cause or he
resigns for good reason, each during the three months before through 12 months
following a change in control (as defined in the agreement), subject to the
delivery of a fully effective release of claims, he will not be entitled to
receive the severance benefits described above, but will instead be entitled to
the following: (i) a lump sum cash severance equal to one (1) times his base
salary, plus 100% of his target annual incentive compensation, (ii) for all
outstanding time-based stock options and other time-based stock-based awards
held by Mr. Nichols, full accelerated vesting of such awards, and (iii) up to 12
monthly cash payments equal to the full monthly COBRA premium for health
insurance for Mr. Nichols.
The payments and benefits provided under Mr. Nichols's amended and restated
employment agreement in connection with a change in control may not be eligible
for federal income tax deduction for the Company pursuant to Section 280G of the
Internal Revenue Code. These payments and benefits may also be subject to an
excise tax under Section 4999 of the Internal Revenue Code. If the payments or
benefits payable to Mr. Nichols in connection with a change in control would be
subject to the excise tax imposed under Section 4999 of the Internal Revenue
Code, then those payments or benefits will be reduced if such reduction would
result in a higher net after-tax benefit to him. Furthermore, if the payments
and benefits provided under Mr. Nichols's amended and restated employment
agreement in connection with a change in control would otherwise violate any
applicable nondiscrimination rules or cause the reimbursement of claims to be
taxable under the Patient Protection and Affordable Care Act of 2010, together
with the Health Care and Education Reconciliation Act of 2010 or Section 105(h)
of the Internal Revenue Code, then the health insurance payments shall be
treated as taxable payments (subject to customary and required taxes and
employment-related deductions) and be subject to imputed income tax treatment to
the extent necessary to eliminate any discriminatory treatment or taxation. If
the Company determines that it cannot provide the health insurance payments for
Mr. Nichols without potentially violating applicable law, the Company shall
instead provide him with a taxable lump-sum payment in an amount equal to the
sum of the monthly (or then remaining) health insurance contributions described
above.
Pursuant to Mr. Nichols's amended and restated employment agreement, he is
subject to standard covenants regarding confidentiality and nondisclosure,
assignment of intellectual property work product, and post-termination
noncompetition and non-solicitation of employees, consultants and customers.
The foregoing descriptions of the terms of the amended and restated employment
agreements are only summaries and are qualified in their entirety by the full
text of the amended and restated employment agreements filed as Exhibits 10.1
and 10.2 hereto and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
10.1 Amended and Restated Employment Agreement by and between the Registrant
and Thomas Beetham, effective May 2, 2022.
10.2 Amended and Restated Employment Agreement by and between the Registrant
and David Nichols, effective May 2, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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