Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
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On June 17, 2021, Christine Pellizzari notified Insmed Incorporated (the “Company”) that she will retire from her position as
the Company’s Chief Legal Officer. The Company’s Senior Vice President, General Counsel – US, Michael Smith, will be promoted to General Counsel, Senior Vice President. It is expected that Ms. Pellizzari will remain in her role until July 7, 2021
(the actual date of her retirement, the “Retirement Date”), and then continue to provide consulting services thereafter to the Company as described in the consulting agreement entered into between Ms. Pellizzari and the Company on June 21, 2021
(the “Consulting Agreement”). Ms. Pellizzari’s retirement is at her initiative and there is no disagreement between Ms. Pellizzari and the Company, its chief executive officer or its board of directors (the “Board”).
Following the Retirement Date, Ms. Pellizzari will become a consultant to the Company and be reasonably available to provide
consulting services on an as-needed basis to the Company, as mutually agreed, until January 15, 2022, subject to extension as set forth in the Consulting Agreement, or as may otherwise be agreed to in writing by Ms. Pellizzari and the Company
(such period, the “Consulting Period”).
Pursuant to and conditioned upon Ms. Pellizzari’s compliance with the Consulting Agreement, (a) Ms. Pellizzari will receive a
consulting fee of $16,000 per month during the Consulting Period and (b) Ms. Pellizzari’s outstanding equity awards will continue to vest during the Consulting Period (and in accordance with the Company’s equity incentive plans and Ms.
Pellizzari’s grant agreements, her stock options will continue to be exercisable, to the extent vested, until the earlier of the three months following the last day of her service relationship with the Company and the original 10-year expiration
date for such vested options).
As noted above, Michael Smith has been appointed as the Company’s General Counsel, Senior Vice President, effective on July 8,
2021. Mr. Smith, age 44, has served as the Company’s Senior Vice President, General Counsel – US since July 2020. Previously, Mr. Smith served as Vice President, Corporate Counsel of the Company from September 2016 to June 2020 and as Corporate
Counsel of the Company from April 2014 to August 2016. Mr. Smith holds a B.S. in Biology from Duquesne University and a J.D. from Duquesne University School of Law.
Mr. Smith will receive an annual base salary of $440,000 and will remain eligible to participate in the Company’s benefit and
compensation plans. Mr. Smith has been assigned a target bonus of 40% of his base salary. Mr. Smith will also receive an award of restricted stock units and an option to purchase shares of the Company’s common stock having an aggregate value of
$750,000. The restricted stock unit award agreement will be consistent with the Company’s standard restricted stock unit award agreement, and the restricted stock units will vest on a four-year vesting schedule, with 25% vesting on each of the
first, second, third and fourth anniversaries of the grant date, subject to Mr. Smith’s continued employment with the Company on each vesting date. The number of shares underlying the option will be determined using a Black-Scholes calculation
based upon the closing price of the Company’s common stock on the Nasdaq Global Select Market on July 8, 2021. The option award agreement will be consistent with the Company’s standard stock option award agreement, and the option will vest on a
four-year vesting schedule, with 25% of the shares subject to the option vesting on the first anniversary of the date of grant and 12.5% of the shares subject to the option vesting every six months thereafter through the fourth anniversary of the
date of grant, subject to Mr. Smith’s continued employment with the Company on each vesting date.
Mr. Smith’s employment agreement provides for payment of the following upon his death or disability: (i) any accrued
obligations; (ii) a pro-rata portion of his annual bonus based on actual performance during the year of the termination, and (iii) any insurance benefits to which he and his beneficiaries are entitled as a result of his death or disability. If
Mr. Smith’s employment is terminated by the Company without cause or by him for good reason (such a termination, a “qualifying termination”) within one year after a change in control, Mr. Smith will receive, among other things, (i) a lump sum
severance payment equal to (a) his annual base salary plus (b) any unpaid bonus for a fiscal year ending on or prior to the date of the qualifying termination plus (c) a pro-rata portion of his target bonus based on the portion of the year during
which he was employed by the Company prior to the qualifying termination, (ii) full vesting of all time-vested equity awards and (iii) reimbursement for up to 12 months of certain continued health and dental benefits for Mr. Smith and his
qualified beneficiaries.
In the event of a qualifying termination prior to a change in control or more than one year thereafter, Mr. Smith would be
eligible for similar benefits, although (i) his severance payment would be limited to one-half of his annual base salary and payable ratably over six months, (ii) any accelerated equity award vesting would be limited to stock options or other
time-based equity awards that would otherwise have vested within six months following the termination date and (iii) reimbursement of certain continued health and dental benefits for Mr. Smith and his qualified beneficiaries would be limited to
no more than six months.
There are no other arrangements or understandings between Mr. Smith and any other person pursuant to which Mr. Smith was
appointed to the position of General Counsel, Senior Vice President of the Company and Mr. Smith is not a party to any transaction that would require disclosure under Item 404(a) of Regulation S-K. There is no family relationship between Mr.
Smith and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer of the Company.