Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Departure of Kevin Appelbaum as President, Chief Executive Officer and Director
On June 7, 2022, Better Therapeutics, Inc. (the "Company") and Kevin Appelbaum
agreed that Mr. Appelbaum shall cease serving as President and Chief Executive
Officer of the Company and as a member of the Company's Board of Directors (the
"Board") effective as of July 5, 2022 (the "Effective Date").
The Company also entered into a Separation Agreement and Release (the
"Separation Agreement") with Mr. Appelbaum, pursuant to which, following the
Effective Date, Mr. Appelbaum will be eligible to receive the following, subject
to the execution of an effective release of claims against the Company and its
affiliates and continued compliance with applicable restrictive covenants: (i)
12 months' base salary continuation, (ii) monthly payments equal to the monthly
employer contribution that the Company would have made to provide health
insurance to Mr. Appelbaum had he remained employed by the Company for up to 12
months from the Effective Date and (iii) immediate vesting of certain
outstanding stock-based equity awards, in each case beginning on the Effective
Date.
The foregoing summary of the Separation Agreement does not purport to be
complete and is qualified in its entirety by reference to the complete
agreement, which is attached as Exhibit 10.1 hereto and incorporated herein by
reference.
Appointment of Frank Karbe as President, Chief Executive Officer and Director
On June 7, 2022, the Company entered into an employment agreement with Frank
Karbe (the "Karbe Employment Agreement") to appoint him as President and Chief
Executive Officer of the Company effective as of July 5, 2022. In addition, on
June 8, 2022, the Board appointed Mr. Karbe as a Class II director to the Board
effective as of the Effective Date, to fill the vacancy created by
Mr. Appelbaum's departure and to hold office until the 2023 annual meeting of
stockholders, or until his earlier resignation or removal.
Mr. Karbe, 54, previously served as the Principal Financial and Accounting
Officer of Myovant Sciences Ltd. from September 2016 to August 2021. Mr. Karbe
was appointed as Myovant Sciences, Inc.'s Chief Financial Officer in April 2017
and was subsequently appointed as President and Chief Financial Officer in
February 2020. From September 2014 to July 2016, Mr. Karbe served as President
of The Color Run, a global mass participation events platform, where he was
responsible for leading the operational and financial functions. From January
2004 to June 2014, Mr. Karbe was the Executive Vice President and Chief
Financial Officer of Exelixis, Inc., a biotechnology company. During his tenure
at Exelixis, Mr. Karbe was responsible for leading the finance organization,
internal and external communications, business development, information
technology, corporate strategy and various other operational functions. Prior to
joining Exelixis in 2004, Mr. Karbe worked as an investment banker for Goldman
Sachs & Co., where he served most recently as Vice President in the healthcare
group advising clients on corporate finance and mergers and acquisitions. Prior
to joining Goldman Sachs in 1997, Mr. Karbe held various positions in the
finance department of The Royal Dutch/Shell Group in Europe. Mr. Karbe has
served as a director of Aduro Biotech, Inc. from April 2019 to October 2020 and
Arbutus Biopharma Corporation from 2010 to 2018, and currently serves as a
director of Phantom Pharmaceuticals, Inc. Mr. Karbe received his Diplom-Kaufmann
from the WHU-Otto Beisheim Graduate School of Management, Koblenz, Germany.
There are no arrangements or understandings between Mr. Karbe and any other
person pursuant to which he was appointed as a director, President, Chief
Executive Officer and principal executive officer, and there are no transactions
between Mr. Karbe and the Company that would require disclosure under Item
404(a) of Regulation S-K.
Pursuant to the Karbe Employment Agreement, Mr. Karbe is entitled to receive an
initial annual base salary of $500,000 and is eligible to receive an annual
performance bonus with a target annual bonus amount of 50% of his annual base
salary. Mr. Karbe's bonus for 2022 will be pro-rated based on the Effective Date
and length of Mr. Karbe's employment with the Company during 2022.
Further, the Board approved the grant to Mr. Karbe as of the Effective Date of
(i) a time-based option to purchase 472,200 shares of the Company's common
stock, $0.0001 par value per share ("Common Stock"), with 25% of the option
shares vesting on the first anniversary of the Effective Date and the balance
vesting in equal monthly
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installments over the next three years, subject to his continued employment with
the Company through each vesting date, (ii) a performance-based option to
purchase 708,300 shares of Common Stock, vesting upon the satisfaction of both a
time-based vesting condition and certain performance-based vesting conditions,
and (iii) a performance-based option to purchase 472,200 shares of Common Stock,
vesting upon the achievement of certain performance milestones (the
"Supplemental Performance Option"). Upon a "change in control", as defined in
the Karbe Employment Agreement, subject to Mr. Karbe's continued employment
through such date, all unvested and outstanding performance-based equity awards
(other than the Supplemental Performance Option) will immediately accelerate and
become fully vested and exercisable as of such date, and the Supplemental
Performance Option shall be immediately forfeited as of such date.
In addition, pursuant to the Karbe Employment Agreement, if (i) Mr. Karbe's
employment is terminated without "cause", or (ii) he resigns for "good reason",
in each case outside of the "change in control period", as each term is defined
in the Karbe Employment Agreement, Mr. Karbe will be entitled to receive the
following severance benefits, subject to his execution of an irrevocable
separation agreement and release within 60 days after the date of termination:
(A) continuation of his then current base salary for a period of 12 months
following his termination of employment, (B) his full target bonus for the
then-current year, payable over 12 months, (C) monthly payments equal to the
monthly employer contribution that the Company would have made to provide health
insurance to Mr. Karbe had he remained employed by the Company for up to 12
months and (D) acceleration of vesting of 25% of his then-outstanding and
unvested time-based equity awards and vesting of any performance-based awards
for which performance milestones or conditions are achieved within six months of
such termination date.
If (1) Mr. Karbe's employment is terminated without "cause" or (2) he resigns
for "good reason", in each case within the "change in control period", in lieu
of the benefits described above, Mr. Karbe will be entitled to receive the
following severance benefits, subject to his execution of an irrevocable
separation agreement and release within 60 days after the date of termination:
(a) a lump sum payment equal to two times his then current annual base salary,
(b) a lump sum payment equal to two times his full then-current target annual
bonus opportunity for the then-current year (or his target bonus in effect
immediately prior to the change in control, if higher), (c) monthly payments
equal to the monthly employer contribution that the Company would have made to
provide health insurance to Mr. Karbe had he remained employed by the Company
for up to 24 months and (d) 100% acceleration of vesting of then-outstanding and
unvested equity awards (other than the Supplemental Performance Option).
The foregoing summary of the Karbe Employment Agreement does not purport to be
complete and is qualified in its entirety by reference to the complete
agreement, which is attached as Exhibit 10.2 hereto and incorporated herein by
reference.
Item 5.07. Submission of Matters to a Vote of Security Holders.
The 2022 annual meeting of stockholders (the "Annual Meeting") of the Company
was held in a virtual-only format on June 9, 2022 at 9:00 a.m., Pacific Time via
live webcast. Proxies were solicited pursuant to the Company's proxy statement
filed on April 27, 2022 with the Securities and Exchange Commission under
Section 14(a) of the Securities Exchange Act of 1934, as amended. As of
April 14, 2022, the record date for the Annual Meeting, the number of shares of
Common Stock outstanding and entitled to vote at the Annual Meeting was
23,606,693. The number of shares of Common Stock present or represented by valid
proxy at the Annual Meeting was 16,388,754, representing 69% of the total number
of shares of Common Stock entitled to vote at the Annual Meeting. Each share of
Common Stock was entitled to one vote with respect to matters submitted to the
Company's stockholders at the Annual Meeting.
At the Annual Meeting, the Company's stockholders were asked (i) to elect two
Class I director nominees to the Board, each to hold office until the 2025
annual meeting of stockholders and until his successor is duly elected and
qualified, or until his earlier resignation or removal, and (ii) to ratify the
selection of Elliott Davis, LLC as the Company's independent registered public
accounting firm for the fiscal year ending December 31, 2022.
The voting results reported below are final.
The following is a summary of the matters voted on at the Annual Meeting.
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Proposal 1 - Election of Directors
Dr. Richard Carmona and David Perry were duly elected to the Company's Board as
Class I directors. The results of the election were as follows:
BROKER
CLASS I DIRECTOR NOMINEE FOR WITHHELD NON-VOTES
Dr. Richard Carmona 13,352,365 1,784,704 1,251,685
David Perry 13,952,649 1,184,420 1,251,685
Proposal 2 - Ratify the Selection of Independent Registered Public Accounting
Firm
The selection of Elliott Davis, LLC as the Company's independent registered
public accounting firm for the fiscal year ending December 31, 2022 was
ratified. The results of the ratification were as follows:
FOR AGAINST ABSTAIN
16,344,147 38,683 5,924
No other matters were submitted to or voted on by the Company's stockholders at
the Annual Meeting.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Separation Agreement and Release by and among Better Therapeutics,
Inc., Better Therapeutics OpCo, Inc., Kevin Appelbaum and other
parties listed thereto, effective as of July 5, 2022
10.2 Employment Offer Letter by and among Better Therapeutics, Inc.,
Better Therapeutics OpCo, Inc., and Frank Karbe, effective as of
July 5, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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