Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective as of January 11, 2023, Biostage, Inc. (the Company) entered into an Amended and Restated Employment Agreement (the Amended Agreement) with David Green, the Chief Executive Officer of the Company, to remove the Interim designation from his Chief Executive Officer title effective immediately, and also amend certain terms of Mr. Green’s existing Employment Agreement.
The Amended Agreement has a commencement date of January 11, 2023 (the Commencement Date) and an initial term of one year, which such term shall automatically be extended for one additional year on each anniversary of the end of the term then in effect unless proper notice of non-renewal is timely provided under the Amended Agreement. Pursuant to the Amended Agreement, Mr. Green’s initial compensation as Chief Executive Officer will include base salary, incentive compensation and the nonqualified stock option grants described below. Mr. Green shall also be eligible to participate in such incentive compensation plans as the Board or a Committee thereof shall determine from time to time for employees of the same status within the hierarchy of the Company.
Mr. Green’s annual base salary is set at $300,000, and is subject to annual review, provided that such base salary shall not be decreased without Mr. Green’s consent. In addition and in lieu of additional cash salary, on the earlier to occur of: (i) the first trading day after the closing of the Company’s first public offering after the Commencement Date or (ii) February 28, 2023 (the Grant Date), Mr. Green will receive a nonqualified stock option to purchase a share amount determined based on Black-Scholes value of $200,000 as of the Grant Date, which subject to continued employment, shall vest monthly on each monthly anniversary of the Grant Date for twelve months following the Grant Date, with the first vesting to be in an amount equal to 1/4 of the aggregate share amount and then the remaining amount to vest in eleven substantially equal amounts thereafter. Thereafter, following each anniversary of the Commencement Date so long as Mr. Green continues to be employed as Chief Executive Officer, the Company will grant Mr. Green on the first trading day following such anniversary an option to purchase shares of Common Stock in a share amount determined based on Black-Scholes value of $200,000 as of the grant date. Subject to continued employment, each such additional annual grant shall vest monthly in twelve substantially equal monthly installments on each monthly anniversary of the respective grant date. In the event that Mr. Green’s base salary is increased during the term of employment, the grant amount of $200,000 shall be reviewed by the Company’s Board of Directors to determine if such amount shall be adjusted as determined in its discretion.
Mr. Green is also eligible to receive cash incentive compensation on an annual basis of up to a one hundred percent (100%) of his Base Salary upon meeting objectives as determined by the Board of Directors of the Company or the Compensation Committee thereof.
In addition, on the Grant Date, Mr. Green will also receive the following: (I) as additional compensation in recognition of past performance, a nonqualified stock option to purchase a share amount determined based on Black-Scholes value of $200,000 as of the Grant Date, which such option shall be fully vested as of the Grant Date, and (II) as a long term incentive grant, a nonqualified stock option to purchase shares of Common Stock (the LTI Grant) in a share amount equal to six percent (6%) of the then outstanding shares of Common Stock of the Company as of the Grant Date, which subject to continued employment, the LTI Grant shall vest monthly in thirty-six substantially equal monthly installments on each monthly anniversary of the Grant Date.
