ZYMEWORKS INC. ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
Appointment of President and Chief Executive Officer
On
There are no arrangements or understandings between
In connection with
Pursuant to the Galbraith Employment Agreement,
• An annual base salary of$600,000 , with eligibility to earn an annual discretionary bonus of up to 60% of his annual base salary, based upon the achievement of certain Company goals determined by the Board. • Options to purchase 500,000 of the Company's common shares at an exercise price per share equal to the fair market value on the date of grant (the "Inducement Options"). 25% of the Inducement Options will vest and become exercisable on the one-year anniversary of the date of grant, and thereafter 1/36 of the remaining Inducement Options will vest on the last day of each month, until all of the Inducement Options have vested, subject toMr. Galbraith's continued service. The Inducement Options will be granted as an "inducement" grant pursuant to theNew York Stock Exchange ("NYSE") Listed CompanyManual Rule 303A.08 and without shareholder approval. The Inducement Option grant will be made under the recently adoptedZymeworks Inc. Inducement Stock Option and Equity Compensation Plan, further described below. The terms and conditions of the Inducement Options are substantially similar to options granted pursuant to the Company's Amended and Restated Stock Option and Equity Compensation Plan (the "Equity Compensation Plan"), but with such other terms and conditions intended to comply with the NYSE inducement award exception. In accordance with NYSE Listed CompanyManual Rule 303A.08, inducement awards may only be made as a material inducement to individuals being hired by the Company (or being rehired after a bona fide period of interruption of employment). A copy of the form of inducement option grant agreement is attached as a schedule to the Inducement Plan (as defined below), which is attached hereto as Exhibit 10.4 and incorporated by reference herein. • Eligibility to participate in the Company's employee benefit plans, policies and arrangements that, in the aggregate, are reasonably consistent with other executive officers generally. • Enrollment in a qualifying pension scheme under theUK Pensions Act 2008. • Reimbursement of relocation expenses up to a maximum gross amount of$300,000 , grossed up for the impact of any taxable withholding, for reasonable moving expenses incurred byMr. Galbraith and his immediate family during relocation fromMr. Galbraith's primary residence to theVancouver, British Columbia orSeattle, Washington area during the first eighteen months of employment. The total amount reimbursed shall be repaid to the Company ifMr. Galbraith's employment terminates within two years following the effective date of employment. 2
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• Temporary housing through the earlier of
date that is 18 months following the effective date of employment, grossed up
for the impact of any tax withholding.
• A tax equalization payment if
other taxation outside of the United Kingdom during the period of his
employment, grossed up for the impact of any tax withholding, and tax
preparation services.
• If the Company terminates
be eligible to receive twelve months of notice or the equivalent of twelve
months of base salary as of the date notice is given, or any combination
thereof that totals twelve months of combined notice and base salary. If such
termination of employment or resignation occurs on or after the fourth year
of employment, Mr. Galbraith will be eligible to receive an additional one
month of notice or the equivalent of one month of base salary as of the date
notice is given, or any combination thereof, for each additional completed
year of service, up to a total maximum of eighteen months. Mr. Galbraith will
also be eligible for continuation of group health and dental benefits through
the applicable notice period to the extent permitted by any applicable
benefit plan.
• In the event of termination on death or disability, as defined in the
Company's long-term disability plan or policy then in effect with respect to
him, Mr. Galbraith , or his estate, will receive (x) a lump sum payment equal
to the difference between (1) eighteen months of base salary plus target
annual cash bonus as of the date of death or disability and (2) the amount
that Mr. Galbraith or his estate will receive as a result of death or
disability under the Company's applicable insurance policies in effect as of
the date of termination, (y) group extended health and dental benefits
continuation for his surviving family members for eighteen months (or lump
sum payment for the premium costs of such benefits in lieu thereof), and
(z) full vesting acceleration of all unvested and outstanding stock options
or other equity grants made to Mr. Galbraith as of the date of death or
disability.
• If
within twelve months following, or within three months prior to, a Change of
Control (as defined in the Galbraith Employment Agreement), Mr. Galbraith
will be eligible to receive (x) a lump sum payment of eighteen months of base
salary and 100% of target annual cash bonus as of the date of termination,
(y) group extended health and dental benefits continuation as of the date of
termination for eighteen months (or lump sum payment for the premium costs of
such benefit plans in lieu thereof) and (z) full vesting acceleration of all
unvested and outstanding stock options or other equity grants as of the date
of termination. Such payments will be subject to Mr. Galbraith entering into
a valid settlement agreement with the Company.
• In addition, the Galbraith Employment Agreement requires
other things, not to compete, either directly or indirectly, with the Company
while employed by the Company and for up to six months following the
termination of his employment with the Company. The Galbraith Employment
Agreement also requires
ITEM 8.01 OTHER EVENTS.
On
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits Exhibit No. Description 10.1 Employment Agreement by and between the Company andKenneth Galbraith , datedJanuary 5, 2022 . 10.2 Separation Agreement and Release by and between the Company andAli Tehrani , datedJanuary 5, 2022 . 10.3 Promotion Letter from the Company toNeil Klompas , datedJanuary 5, 2022 . 10.4Zymeworks Inc. Inducement Stock Option and Equity Compensation Plan. 99.1 Press Release datedJanuary 5, 2022 . 99.2 Material Change Report datedJanuary 5, 2022 . 104 Cover Page Interactive Data File (embedded as Inline XBRL document). 5
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