Pozen acknowledges in its latest financial report than company founder and CEO John Plachetka has already been paid millions to leave the company. And he will continue to cash out for a while with scheduled bonuses, according to his separation agreement.
Here is an excerpt of the SEC filing:
1. SEPARATION. Executive hereby resigns from all of his officer positions and as a director with the Company and its subsidiaries and affiliates (i.e., Chairman, Director, President, Chief Executive Officer and Chief Scientific Officer), as of the date Executive executes this Separation Agreement (the “Signature Date”), and from his employment on the 90th day thereafter (the “Separation Date”). Executive shall be paid his full compensation and participate in full benefits through the Separation Date. Between the Signature Date and the Separation Date, Executive shall perform such special duties as assigned by the Company, but shall not have any authority to manage the affairs of the Company or otherwise take action on behalf of the Company.
2. SEPARATION BENEFITS. In consideration of the release (excluding the release of any claims under the Age Discrimination in Employment Act, as amended (“ADEA”)) and other promises contained herein, including the First Supplemental Release required under Section 9(b), and on condition that Executive fully comply with his obligations under this Separation Agreement, the Company agrees that:
(a) Salary Continuation. The Company shall pay to Executive the sum of One Million Two Hundred Fifty Six Thousand Eight Hundred and Six Dollars ($1,256,806) (less all applicable withholdings), to be paid in equal monthly installment payments on the fifth business day of each month over the twenty-four (24) month period measured from the second month following the month in which the Separation Date occurred, provided that such payments will be subject to delay under Section 19(d).
(b) Reimbursement for Costs of Continued Health Benefits. The Company shall reimburse Executive for the actual additional costs of continuation of Executive’s group health and dental insurance under the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”), at the same level in which he participated as of the Separation Date, for the eighteen (18) month period following the Separation Date, provided that Executive shall bear full responsibility for applying for COBRA coverage, and nothing herein shall constitute a guarantee of COBRA continuation coverage or benefits or a guarantee of eligibility for health benefits. Reimbursements under this Section 2(b) shall be made on a monthly basis beginning in the month after the First Supplemental General Release Agreement, required under Section 9(b), becomes effective and non-revocable. Executive shall not be entitled to a cash payment or other benefit in lieu of the reimbursements provided for herein or for amounts in excess of the actual costs of premiums for the coverages hereunder. Except for reimbursements under this Section 2(b), as of the Separation Date, Executive shall not be entitled to medical, dental, vision, life, disability, accidental death and dismemberment insurance benefits, or any other employee benefits, and shall not be a participant in the Company’s 401(k) Plan (the “401(k) Plan”) or any other plan of any type. For the avoidance of doubt, Executive will not be eligible to contribute to his 401(k) plan from any payments received under this Separation Agreement after the Separation Date, except for his regular Base Salary paid through the Separation Date. Nothing in this Agreement, however, shall be deemed to limit Executive’s continuation coverage rights under COBRA or Executive’s vested rights, if any, under the 401(k) Plan or any other Company plan, and the terms of those plans shall govern.
(c) Bonus. The Company shall pay to Executive the sum of Six Hundred Seventy Eight Thousand Three Hundred Fifty Dollars ($678,350) (less all applicable withholdings), which amount is equal to two (2) times the average of the annual bonus amounts actually paid to Executive over the previous two (2) years pursuant to Section 4(b) of the Employment Agreement. The amounts shall be paid to Executive in a lump sum within ninety (90) calendar days of the Separation Date; provided, however, that in no event shall such payment be made later than March 15 of the year following the year of Executive’s Separation Date.
(d) Long Term Incentive Plan. The Company shall pay to Executive the sum of Nine Hundred Twenty Thousand Eight Hundred Thirty Three Dollars ($920,833) (less all applicable withholdings), an amount equal to the sum of the Awards to which Executive would have been entitled to receive under Executive’s Long Term Incentive Cash Award Agreements, dated March 15, 2013, March 15, 2014 and December 31, 2014 2014 (collectively, the “LTIP Agreements”) had Executive remained employed by the Company on March 15, 2016 and January 1, 2016. Such amounts will be paid to Executive in a lump sum on the first business day following the expiration of the 409A Delay Period under Section 19(d). All remaining Awards under the LTIP Agreements that would have been payable under the LTIP Agreements had Executive remained employed, amounting to Seven Hundred Eight Thousand Three Hundred Thirty Four Dollars ($708,334), shall be forfeited (collectively, the “Forfeited LTIP Awards”).
2 (e) Equity Awards. All equity awards previously granted to Executive under the 2000 Equity Compensation Plan, as amended, and the 2010 Omnibus Equity Compensation Plan, as amended (collectively, the “Equity Plans”) (including but not limited to restricted stock units, options to purchase stock, and other performance based equity awards) that are unvested as of the Separation Date shall be deemed fully vested as of the Separation Date, subject to Executive’s execution and non-revocation of the First Supplemental General Release Agreement required under Section 9(b) of this Separation Agreement. The exercise periods for all options to purchase stock previously granted to Executive under the Equity Plans shall be extended so that all such stock options are fully exercisable during the period beginning on the Separation Date and ending on the second anniversary of the Separation Date or the date on which such options otherwise expire, whichever date is sooner. In connection with Executive’s options, Executive shall be eligible to participate in a cashless exercise program that will include share withholding from Executive’s shares as necessary to cover Executive’s taxes and any applicable exercise price. The Company and Executive will cooperate to help facilitate Executive’s sale of shares to cover his anticipated taxes, and Executive will advise the Company on the estimated number of shares Executive wishes to sell. Except as specifically provided in this Section 2(e), all equity awards to Executive under the Equity Plans shall be subject to the terms of the Equity Plans and the related agreements between Executive and the Company, as applicable. In addition, if the Company institutes a program to re-purchase underwater options that is made generally available to Company executives, then Executive will be eligible to participate in such program in accordance with its terms notwithstanding his separation from service.
(f) Additional Payment. The Company shall pay to Executive the sum of One Million Dollars ($1,000,000) (less all applicable withholdings), to be paid in a lump sum on the 90th day after the Separation Date, provided that the First Supplemental Release Agreement required under Section 9(b) of the Separation Agreement has become effective, but in no event shall it be paid after March 15, 2016.
(g) Special Performance-Based Compensation Upon FDA Approval of YOSPRALA™. In recognition of Executive’s efforts to secure approval from the U.S. Food and Drug Administration (the “FDA”) for YOSPRALA™:
i) The Company shall grant to Executive as of the Separation Date, a nonqualified stock option award with a Date of Grant fair value of $1,000,000 (or as close as possible thereto without granting an option for fractional shares) using the Black-Scholes pricing model (the “Performance Options”). The Performance Options shall have an exercise price equal to the Fair Market Value of a share of POZEN common stock on the Date of Grant; shall have an option term of ten (10) years from the Date of Grant; shall be fully vested but not exercisable as of the Date of Grant; and shall be subject to the terms of the Company’s 2010 Omnibus Equity Plan, as amended and, except with respect to the exercisability requirements provided herein, subject to the general terms of the Company’s standard stock option agreement that Executive will be required to execute as a condition of the grant. Subject to Executive’s execution and non-revocation of the Second Supplemental General Release Agreement required by Section 9(c) of this Separation Agreement, the Performance Options shall only become exercisable as follows: (aa)100% of the Performance Options will become exercisable upon YOSPRALA™ approval by the FDA by December 31, 2015; (bb) 75% of the Performance Options shall become exercisable for such approval between January 1, 2016 and March 31, 2016 with 25% of the Performance Option automatically terminating on January 1, 2016 without ever becoming exercisable; or (cc) 50% of the Performance Options shall become exercisable for such approval between April 1, 2016 and June 30, 2016 with the remaining 25% of the Performance Option automatically terminating on April 1, 2016 without ever becoming exercisable. For the avoidance of doubt, all of the Performance Options shall automatically terminate at 5:00 p.m. EDT on June 30, 2016 without ever becoming exercisable if FDA approval for YOSPRALA™ has not been obtained by said time. Under no circumstances shall the exercisability of the Performance Options accelerate.
3 ii) In addition, and subject to Executive’s execution and non-revocation of the Second Supplemental General Release Agreement required by Section 9(c) of this Separation Agreement: (aa) if YOSPRALA™ approval is obtained from the FDA by December 31, 2015, the Company shall pay Executive a cash bonus in an amount equal to Seven Hundred Eight Thousand Three Hundred Thirty Four Dollars ($708,334), which is an amount equal to 100% of the Forfeited LTIP Awards (described in Section 2(d) above); (bb) if YOSPRALA™ approval is obtained between January 1, 2016 and March 31, 2016, the Company shall pay Executive a cash bonus in an amount equal to Five Hundred Thirty One Thousand Two Hundred Fifty Dollars ($531,250), which is an amount equal to 75% of the Forfeited LTIP Awards; or (cc) ifYOSPRALA™ approval is obtained between April 1, 2016 and June 30, 2016, then the Company shall pay Executive a cash bonus in an amount equal to Three Hundred Fifty four Thousand One Hundred Sixty Seven Dollars ($354,167) , which is an amount equal to 50% of the Forfeited LTIP Awards. Executive shall not be entitled to any payment under this Section 2(g)(ii) if YOSPRALA™ approval is not obtained from the FDA by 5:00 p.m. EDT on June 30, 2016. Any amount that becomes payable to Executive under this Section 2(g)(ii), if any, shall be paid (less applicable withholdings, if any) in lump sum five (5) business days after the Second Supplemental General Release Agreement becomes effective, or thirty (30) following the date on which the FDA approves YOSPRALA™ , whichever date is later.
3. SPECIAL BENEFITS FOR ADEA RELEASE. In consideration of Executive’s agreement to, and non-revocation of, the ADEA Release (as described in Section 9(a)), and other promises contained herein, including the First Supplemental Release required under Section 9(b), and on condition that Executive fully comply with his obligations under this Separation Agreement, the Company agrees that it will pay Executive the sum of Five Hundred Thousand Dollars ($500,000) (less all applicable withholdings) in a lump sum on the 90th day after the Separation Date, provided that the First Supplemental Release Agreement required under Section 9(b) of the Separation Agreement has become effective, but in no event shall it be paid after March 15, 2016.
4. VOTING AGREEMENT. In consideration for the substantial benefits under this Separation Agreement, and the substantial consideration and benefits that Executive and his spouse expect to receive as the result of a potential transaction being considered by the Company, Executive shall execute, and ensure that any others who are necessary to effect the intent of this Section 4, execute, the Voting Agreement substantially in the form attached as Exhibit A simultaneously with the execution of this Separation Agreement.
5. EMPLOYMENT AGREEMENT. Executive acknowledges and agrees that this Separation Agreement provides him with more benefits than those to which he would be entitled under the Employment Agreement, and Executive agrees that the Employment Agreement is hereby terminated, except that Executive acknowledges and agrees that Sections 8 (Non-Disclosure, Inventions and Non-Competition) and 9 (Indemnification) of the Employment Agreement shall survive such termination. For the avoidance of doubt, Executive specifically acknowledges and agrees that he will continue to be bound by the terms of the Nondisclosure, Inventions and Non-Competition Agreement, dated July 25, 2001.
Read the full filing at:
http://www.sec.gov/Archives/edgar/data/1059790/000114036115022968/ex10_1.htm
