Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As previously announced, Zai Lab Limited (the "Company") appointed Joshua Smiley
as the Company's Chief Operating Officer, effective on August 1, 2022, following
the completion of his leave with his former employer. Mr. Smiley, aged 53, began
his career at Eli Lilly and Company in 1995 holding leadership positions across
the organization, including serving as Senior Vice President and Chief Financial
Officer. Mr. Smiley earned his bachelor's degree in history from Harvard College
in 1993.
In connection with Mr. Smiley's appointment, Zai Lab (US) LLC, a wholly owned
subsidiary of the Company, entered into a written employment agreement (the
"Agreement") with Mr. Smiley. The Agreement provides Mr. Smiley with an annual
base salary of $600,000 per year, pro-rated for his period of service as Chief
Operating Officer in 2022. Mr. Smiley is also eligible to participate in our
annual bonus program, with a target annual bonus opportunity of 50% of his base
salary. The actual bonus award amounts will be determined by the Board of
Directors of the Company (or the Compensation Committee thereof) based on
Mr. Smiley's performance and the Company's performance against goals established
by the Board of Directors (or the Compensation Committee thereof). In addition,
the Agreement provides Mr. Smiley with a cash sign-on bonus of $400,000 to be
paid in two installments: $250,000 in August 2022 and $150,000 in August 2023,
with the second installment contingent upon Mr. Smiley relocating to the Boston
area by such time. The Company will also grant to Mr. Smiley in August 2022 an
option to purchase up to 139,000 American Depositary Shares of the Company
("ADSs") with an exercise price per share equal to the fair market value of an
ADS on the date of the grant (the "Option") and restricted share units
representing 79,500 ADSs (the "Restricted Share Units"), each under and subject
to the terms and conditions of the Zai Lab Limited 2022 Equity Incentive Plan
(the "Plan"). The Option and Restricted Share Units will each vest annually over
five years, subject to the terms of the Plan and the applicable Option and
Restricted Share Unit agreements and Mr. Smiley's continued employment with the
Company.
In accordance with the Company's customary practice, the Company has entered
into an indemnification agreement with Mr. Smiley, which requires the Company to
indemnify Mr. Smiley against certain liabilities that may arise in connection
with his status or service as an executive officer.
The foregoing description of the indemnification agreement does not purport to
be complete and is qualified in its entirety by the full text of the form of
indemnification agreement, which is filed as Exhibit 10.25 to the Company's
Annual Report on Form 10-K filed on March 1, 2022 and which is incorporated
herein by reference.
There are no arrangements or understandings between Mr. Smiley and any other
person pursuant to which he was appointed as Chief Operating Officer, nor are
there any transactions between Mr. Smiley and the Company that would be
reportable under Item 404(a) of Regulation S-K. There are no family
relationships between Mr. Smiley and any of our directors or executive officers.
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