| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Michael Sherman’s Retirement as President and Chief Executive
Officer
(b) On June 27, 2023, Chimerix,
Inc. (the “Company”) issued a press release announcing that Michael Sherman intends to retire as the Company’s President
and Chief Executive Officer, and that the Board of Directors (the “Board”) of the Company had appointed Michael Andriole,
age 50, to succeed Mr. Sherman as the Company’s President and Chief Executive Officer, effective August 1, 2023 (the “Transition
Date”). A copy of the press release announcing the retirement of Mr. Sherman and the appointment of Mr. Andriole is attached hereto
as Exhibit 99.1. Mr. Sherman and the Company entered into a letter agreement with respect to the transition of his employment, a copy
of which is attached hereto as Exhibit 99.2.
Appointment of Michael Andriole as President and Chief Executive
Officer
(c) Prior to his appointment
as the Company’s President and Chief Executive Officer, Mr. Andriole served as the Company’s Chief Business Officer and Chief
Financial Officer since 2019. Prior to joining the Company, Mr. Andriole served as Chief Financial Officer of Endocyte, Inc., a clinical-stage
biotechnology company developing targeted treatments for prostate and other cancers. Prior to joining Endocyte, Mr. Andriole spent 16
years at Eli Lilly and Company in a range of financial, marketing and global business development roles. Mr. Andriole earned a BSBA from
Xavier University’s Williams College of Business and an MBA from Indiana University’s Kelley School of Business.
In connection with his appointment as the Company’s
President and Chief Executive Officer, Mr. Andriole entered into an amended offer letter (the “CEO Offer Letter”) with the
Company dated June 27, 2023. Pursuant to the CEO Offer Letter, Mr. Andriole will be entitled to receive a base salary of $600,000 per
year and will be granted a stock option to purchase up to 150,000 shares of the Company’s common stock (the “CEO Option”),
25% of which will vest on the first anniversary of the Transition Date, and the remainder of which will vest in equal monthly installments
thereafter over three years, subject to Mr. Andriole’s continued service. The CEO Option will have an exercise price equal to the
closing price of the Company’s common stock on the Transition Date. Mr. Andriole will also be granted time-based restricted stock
unit awards (the “RSUs”) to purchase 25,000 shares of the Company’s common stock, which will vest in equal annual installments
over a four-year period commencing on the Transition Date, subject to Mr. Andriole’s continued service. In addition, Mr. Andriole
will be entitled to a discretionary annual performance-based cash bonus, with a target bonus equal to 55% of his base salary.
Furthermore, as Chief Executive Officer, Mr. Andriole
will be entitled to the following severance benefits under the Company’s Officer Change in Control Severance Benefit Plan:
| · | upon a covered termination that does not occur within thirty days prior to or thirteen months following a change of control transaction,
Mr. Andriole will be entitled to (i) payments equal to 15 months of base salary, (ii) accelerated vesting of all outstanding time-based
stock options and other time-based stock awards as if Mr. Andriole had completed service for an additional 15 months, and (iii) payment
of COBRA benefits for a period of 15 months; and |
| · | upon a covered termination that occurs within the thirty days prior to or thirteen months following a change of control transaction,
Mr. Andriole will be entitled to (i) payments equal to 18 months of base salary, (ii) payment of COBRA benefits for a period of 18 months,
(iii) a lump sum payment equal to his target bonus for the year of termination, and (iv) 100% vesting of all outstanding stock options
and other stock awards. |
A copy of the CEO Offer Letter is attached hereto
as Exhibit 99.3.
Mr. Andriole previously entered into the Company’s
standard form of indemnification agreement for executive officers and directors.
Michael Andriole’s Election as Director, Michael Sherman’s
Appointment as Chair of the Board, and Martha J. Demski’s Appointment as Lead Independent Director
(d) Effective as of the Transition
Date, the Board appointed Mr. Andriole to serve as a Class I director of the Company. Additionally, effective as of the Transition Date,
the Board appointed Mr. Sherman as Chair of the Board to succeed Martha J. Demski in that role and appointed Ms. Demski to serve as Lead
Independent Director.
In accordance with the Company’s non-employee
director compensation policy, as amended, Mr. Sherman will be entitled to receive a $35,000 annual chair service retainer for his service
as Chair of the Board, and Ms. Demski will be entitled to receive a $35,000 annual lead independent director service retainer for her
service as Lead Independent Director, respectively, in addition to each receiving a $40,000 annual board service retainer.
A copy of the Company’s non-employee director
compensation policy, as amended, is attached hereto as Exhibit 99.4.
Each of Mr. Sherman and Ms. Demski previously entered
into the Company’s standard form of indemnification agreement for executive officers and directors.