Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) and (c)
Effective April 24, 2020, the board of directors (the "Board") of Cerecor Inc.
(the "Company") appointed Christopher Sullivan to Interim Chief Financial
Officer. Mr. Sullivan will serve as the Company's "principal financial officer"
and "principal accounting officer" for SEC filing purposes.
Mr. Sullivan, age 36, brings to the Company his strong technical and SEC
reporting background, along with his wealth of financial knowledge, including
experience with multiple forms of capital raises, based on leading accounting
and finance functions at various health sciences, biotech and pharmaceutical
companies. Prior to being named the Company's Interim Chief Financial Officer,
Mr. Sullivan was the Vice President of Finance at the Company and served various
other escalating roles since joining the Company in April 2018. Prior to joining
the Company, Mr. Sullivan was the Corporate Controller for Sucampo
Pharmaceuticals, Inc. (NASDAQ: SCMP) from August 2017 through April 2018, when
it was merged with Mallinckrodt in a $1.2 billion transaction. From November
2015 through August 2017, Mr. Sullivan was the Corporate Controller for OpGen
Inc. (NASDAQ: OPGN), a microbial genetics analysis company, and prior to that
was a Senior Manager at Ernst & Young, LLP where he was employed from August
2005 through October 2015. Mr. Sullivan received his B.S. degrees in Accounting
and Finance from the University of Maryland, College Park and is a Certified
Public Accountant.
Mr. Sullivan has no familial relationships with any executive officer or
director of the Company. There have been no transactions in which the Company
has participated and in which Mr. Sullivan had a direct or indirect material
interest that would be required to be disclosed under Item 404(a) of Regulation
S-K.
Prior to his appointment to Interim Chief Financial Officer, Mr. Sullivan was
party to an employment agreement, dated September 26, 2019 (the "Employment
Agreement").
Mr. Sullivan is eligible to participate in the Company's other employee benefit
plans as in effect from time to time on the same basis as are generally made
available to other senior executives of the Company.
In the event that the Employment Agreement is terminated by the Company without
"Cause" or by Mr. Sullivan for "Good Reason" (each as defined in the Employment
Agreement), in each case subject to Mr. Sullivan entering into and not revoking
a separation agreement in a form acceptable to the Company, Mr. Sullivan will be
eligible to receive:
• accrued benefits under the Employment Agreement through the termination date;
• severance payments equal to his then-current base salary for a period
of 12 months, as well as a prorated annual bonus earned in the year in
which the termination occurs;
• vesting of all time-based equity grants; and
• if he timely elects and remains eligible for continued coverage under
COBRA, the COBRA premiums necessary to continue the health insurance
coverage in effect for Mr. Sullivan and his covered dependents prior to
the date of termination, until the earliest of (x) 12 months after Mr.
Sullivan's termination; (y) expiration of Mr. Sullivan's continuation
coverage under COBRA; or (z) the date when Mr. Sullivan is eligible for
substantially equivalent health insurance from another employer.
In the event that Mr. Sullivan's employment is terminated by the Company without
"Cause" by a successor company following a change in control, Mr. Sullivan will
be eligible to receive:
• accrued benefits under the Employment Agreement through the termination
date; and
• severance payments equal to his then-current base salary for a period
of 12 months, as well as a prorated annual bonus earned in the year in
which the termination occurs.
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Subject to any termination, Mr. Sullivan will be subject to a confidentiality
covenant, a 6-month non-competition covenant, and a 12-month non-solicitation
and non-interference covenant.
In connection with Mr. Sullivan's appointment to Interim Chief Financial
Officer, the Company and Mr. Sullivan entered into a Letter Agreement dated
April 23, 2020 (the "Letter Agreement"). Pursuant to the Letter Agreement, Mr.
Sullivan's base salary was increased to $250,000 per year, subject to review and
adjustment by the Board from time to time. Mr. Sullivan will also receive a
$125,000 retention bonus, payable at the six-month anniversary of the date of
his appointment to Interim Chief Financial Officer.
Effective April 24, 2020 (the "Separation Date"), the Company's Chief Financial
Officer, Joseph Miller, resigned in his capacity of Chief Financial Officer of
the Company. Mr. Miller was serving as the Company's principal financial officer
and principal accounting officer. Mr. Miller's resignation was not related to
any disagreement with the Company on any matter relating to the Company's
operations, policies or practices. Simultaneously with his resignation, Mr.
Miller was appointed to serve on the Company's Board of Directors, as disclosed
below.
(d)
On April 24, 2020, the Board of the Company appointed Suzanne Bruhn, Ph.D. and
Joseph Miller to the Board, effective immediately. Dr. Bruhn and Mr. Miller will
serve as directors until the 2020 Annual Meeting of Stockholders (the "2020
Meeting") or until her or his successor is duly elected and qualified.
Dr. Bruhn, 56, brings to the Company her extensive experience in the
biopharmaceutical industry, including her expertise in the development,
commercialization and partnering of products for the treatments for serious and
rare diseases. Dr. Bruhn currently serves as the President and Chief Executive
Officer, and as a director of Tiaki Therapeutics, Inc., a private biotechnology
company. Prior to that she served as the President and Chief Executive Officer,
and as a director of Proclara Biosciences, Inc., a clinical-stage biotechnology
company, or Proclara, from April 2017 to September 2018. Prior to joining
Proclara, from May 2012 to November 2015, Dr. Bruhn served as President and
Chief Executive Officer and as a director of Promedior Inc. She served as a
member of the board of directors of Raptor Pharmaceuticals Corp., a
publicly-traded commercial-stage biopharmaceutical company focused on rare
diseases, from April 2011 until it was acquired by Horizon Pharma plc in October
2016. She served as a member of the board of directors of Novelion Therapeutics
Inc., a publicly traded commercial-stage company focused on rare diseases, from
October 2017 until January 2020. Previously, Dr. Bruhn served in a number of
roles of increasing responsibility at Shire plc, a publicly-traded
biopharmaceutical company, from December 1998 until February 2012, most recently
as Senior Vice President, Strategic Planning and Program Management. Dr. Bruhn
currently also serves on the board of directors of Aeglea BioTherapeutics, Inc.,
a publicly-traded biotechnology company focused on the treatment of rare genetic
diseases and cancer, Retrophin, Inc., a publicly-traded biopharmaceutical
company focused on identifying, developing and delivering life-changing
therapies to people living with rare diseases, and Pliant Therapeutics, Inc., a
private biotechnology company. Dr. Bruhn received her B.S. degree in Chemistry
from Iowa State University and her Ph.D. in Chemistry from Massachusetts
Institute of Technology.
Mr. Miller, age 46, brings over 20 years of experience and a wealth of financial
knowledge as a senior executive with extensive hands-on experience in managing
financial operations and supporting enterprise growth across the health
sciences, biotech and pharmaceutical sectors. Mr. Miller served as the Company's
Chief Financial Officer and principal financial officer from July 2018 until
April 2020. Mr. Miller served as the Company's principal executive officer from
April 2019 to February 2020. Prior to joining Cerecor, Mr. Miller was the Vice
President of Finance at Sucampo Pharmaceuticals, Inc. (NASDAQ: SCMP) from 2015
through April 2018 where he was responsible for building out the finance
organization to effectively support the company's rapid growth, ultimately
resulting in the $1.2 billion merger with Mallinckrodt in early 2018. From 2006
through 2015, Mr. Miller was the Senior Director of Accounting at QIAGEN and
from 2002 to 2006 he served as Vice President of Finance and Chief Financial
Officer of Eppendorf-5Prime. Mr. Miller began his career at KPMG LLP. Mr. Miller
holds a B.S. degree in accounting from Villanova University and is a Certified
Public Accountant.
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There are no arrangements or understandings between Dr. Bruhn or Mr. Miller and
any other person pursuant to which she or he was selected as a director of the
Company, and there is no family relationship between Dr. Bruhn or Mr. Miller and
any of the Company's other directors or executive officers. Dr. Bruhn and Mr.
Miller will be eligible for Board compensation pursuant to the Company's
Non-Employee Director Compensation Plan.
There are no related party transactions between Dr. Bruhn and the Company or Mr.
Miller and the Company, and the Board believes that Dr. Bruhn satisfies the
independence requirements of Rule 5605(a)(2) of the NASDAQ Stock Market listing
rules and Rule 10A-3 under the Securities Exchange Act of 1934, as amended.
(e)
On April 24, 2020, the Company and Simon Pedder entered into a Separation
Agreement (the "Separation Agreement"). Pursuant to the Separation Agreement,
Dr. Pedder resigned as a Company employee effective April 24, 2020 (the
"Termination Date"). Dr. Pedder will remain on the Board until the 2020 Meeting,
at which point, he will not stand for re-election. Effective April 24, 2020, the
Company appointed Sol Barer, a current Company director, to Chairman of the
Board. Pursuant to the Separation Agreement, Dr. Pedder will serve as a special
advisor to the Board for a period of up to 18 months following the 2020 Meeting
(the "Consulting Period").
Pursuant to the Separation Agreement, Dr. Pedder will receive, from the
Termination Date through the end of the Consulting Period, (i) continued vesting
of his Restricted Stock Award and Time-Based Options, as those terms are defined
in the Separation Agreement; and (ii) cash and equity payments in accordance
with the Company's non-employee director compensation policy. As of the
Termination Date, Dr. Pedder will forfeit other stock options previously granted
to him with vesting based on the share price of the Company's stock.
At the end of the Consulting Period, Dr. Pedder will receive: (i) payments equal
to $840,000, payable over 18-months; (ii) 18 months' expedited vesting of all
time-based equity grants that would have vested within 18 months after the end
of the Consulting Period; and (iii) an extension of the term of exercise for all
outstanding equity grants to two years following the end of the Consulting
Period.
The foregoing summaries of the material terms of the Employment Agreement, the
Letter Agreement and the Separation Agreement are qualified in their entirety by
reference to the complete text of the agreements, copies of which are filed
respectively as Exhibits 10.1, 10.2 and 10.3 hereto and are incorporated herein
by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Employment Agreement, dated September 26, 2019, by and between
Cerecor Inc. and Christopher Sullivan.
10.2 Letter Agreement, dated April 23, 2020, by and between Cerecor Inc.
and Christopher Sullivan.
10.3 Separation Agreement, dated April 24, 2020, by and between Cerecor
Inc. and Simon Pedder.
99.1 Press release dated April 24, 2020.
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