Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Board Chair and CEO Leadership Transition; Director Resignation
Effective October 5, 2023 (the “Transition Date”), the Board of Directors (the “Board”) of Akili, Inc. (the “Company”) approved a leadership transition of W. Edward Martucci II, Ph.D., one of the Company’s co-founders, from Chief Executive Officer of the Company to Chair of the Board and an advisor to the Company, and the appointment of Matthew Franklin, the Company’s President and Chief Operating Officer, to President and Chief Executive Officer and principal executive officer of the Company, effective as of the Transition Date.
On the Transition Date, the Board also elected Mr. Franklin as a member of the Board, effective as of the Transition Date, filling the director vacancy resulting from Chamath Palihapitiya’s resignation from the Board (and from his role as Chair of the Board). Mr. Palihapitiya informed the Board of his resignation, effective immediately, on October 4, 2023 and his resignation was not due to any disagreement with the Company.
Mr. Franklin will serve as a Class III director on the Board, and his initial term as a director will expire at the Company’s 2025 annual meeting of stockholders. As an executive officer of the Company, Mr. Franklin is not independent under the Nasdaq Marketplace Rules and the Company’s criteria for determining director independence.
Mr. Franklin, 50, served as our President and Chief Operating Officer from August 2022 to the Transition Date. Mr. Franklin served in the same capacity at legacy Akili from June 2022 until August 2022. Prior to joining us, from January 2021 to June 2022, Mr. Franklin served as General Manager of the Precision Oncology business unit at Exact Sciences Corp., a publicly traded molecular diagnostics company. From March 2020 to January 2021, Mr. Franklin served as Chief Commercial Officer of Thrive Earlier Detection Corp., a healthcare company, where he led the go-to-market strategy development for their multi-cancer early detection assay. From August 2018 to January 2020, Mr. Franklin served as Chief Business Officer of ArcherDX Inc., a growth-stage molecular diagnostics company, where he was responsible for establishing and scaling the global sales, customer support, marketing, market access, business development and corporate development teams. From March 2015 to July 2018, Mr. Franklin served as Senior Vice President of Global Marketing and Clinical Product Strategy of Foundation Medicine Inc., a molecular insights company which was acquired by Roche Holdings, Inc. in 2018. Mr. Franklin holds a B.A. in English Literature from Northwestern University and an MBA from the University of Michigan, Ann Arbor.
There are no arrangements or understandings between Mr. Franklin and any other person pursuant to which he was selected as a director of the Company. Mr. Franklin previously entered into an indemnification agreement on the Company’s standard form, a copy of which was filed with the Securities and Exchange Commission (the “SEC”) as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40558) on August 23, 2022. Other than Mr. Franklin’s employment arrangement with the Company, there have been no related party transactions between the Company and Mr. Franklin that would be reportable under Item 404(a) of Regulation S-K. Mr. Franklin has no family relationship with any of the executive officers or directors of the Company. As an executive of the Company, Mr. Franklin will not be eligible for any additional compensation as part of his service as a director.
Franklin Employment Arrangement
In connection with Mr. Franklin’s appointment as the Company’s President and Chief Executive Officer, Mr. Franklin will receive an annual base salary of $550,000 and will be eligible for an annual target bonus opportunity equal to 60% of his annual base salary, each effective as of the Transition Date.
In addition, the Board approved a grant to Mr. Franklin, effective as of October 12, 2023 (the “Option Grant Date”), of a stock option to purchase up to 1,057,180 shares (the “Option”) of common stock of the Company (“Common Stock”) at an exercise price equal to the closing price of the Common Stock on the Nasdaq Capital Market on the Option Grant Date. The shares of Common Stock underlying the Option will vest in eight (8) equal semiannual installments over a four (4)-year period following the Option Grant Date, subject to Mr. Franklin’s continued service on each such vesting date.