Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As previously disclosed on Form 8-K filed with the Securities and Exchange
Commission on July 30, 2019, (the "July 2019 Form 8-K") on July 25, 2019, John
McDonough notified T2 Biosystems, Inc. (the "Company") of his resignation as
President and Chief Executive Officer ("CEO") of the Company, effective as of
the date on which his successor commences employment with the Company or such
earlier date as determined by the Board of Directors of the Company (the
"Board"). On January 8, 2020, the Board appointed John Sperzel to serve as the
Company's CEO, effective immediately, and accepted Mr. McDonough's resignation,
effective January 8, 2020 (the "Separation Date"). As previously disclosed and
in accordance with the terms of his employment agreement with the Company, as
amended, Mr. McDonough will be entitled to receive the separation payments and
benefits described in the July 2019 Form 8-K if he timely executes a general
release of claims in the Company's favor. Mr. McDonough is expected to continue
to provide services to the Company after the Separation Date as non-executive
Chairman of the Board.
On January 8, 2020, the Board appointed John Sperzel to serve as the Company's
President and CEO, effective immediately. Prior to joining the Company,
Mr. Sperzel, 56, was the Chief Executive Officer, President and a member of the
Board of Directors of Chembio Diagnostics, Inc., a point-of-care diagnostics
company focused on infectious diseases from March 2014 to January 2020. From
September 2011 to December 2013, Mr. Sperzel was the Chief Executive Officer and
President of International Technidyne Corporation, a developer of point-of-care
cardiovascular diagnostic testing solutions. Mr. Sperzel received his Bachelor
of Science degree in Business Administration/Management from Plymouth State
College.
On January 8, 2020, the Board also appointed Mr. Sperzel as a Class II Director,
to service on the Board until the 2022 Annual Meeting of Stockholders and until
his successor is duly elected and qualified, or until his earlier death,
resignation or removal.
In connection with his appointment as President and CEO, the Company entered
into an employment agreement with Mr. Sperzel. Under the terms of Mr. Sperzel's
employment agreement, he will receive an initial annual base salary of $500,000
and will be eligible to receive an annual cash bonus award targeted at 75% of
his annual base salary, subject to the attainment of Company and individual
performance goals. Effective as of January 8, 2020, the Board granted
Mr. Sperzel an option under the T2 Biosystems, Inc. Inducement Award Plan to
purchase 3,000,000 shares of common stock of the Company at an exercise price
per share equal to the stock's closing price on the NASDAQ market on the grant
date. The option vests in 48 substantially equal monthly installments over the
four years following the date the options were granted, subject to Mr. Sperzel's
continued service with the Company through the applicable vesting date.
If Mr. Sperzel's employment is terminated by the Company without cause or by
Mr. Sperzel for good reason, in each case, other than on or within 12 months
following the date of a change of control (with the terms "cause," "change of
control" and "good reason" as defined in the employment agreement referenced
above), subject to his signing and not revoking a general release of claims in
the Company's favor, to receive:
• an amount equal to his annual base salary, payable over a 12-month
period following the date of termination, plus a pro-rata portion of
his target annual cash bonus for the calendar year in which the
termination occurs (based on the number of calendar days elapsed prior
to the effective date of such termination), payable at such time as
such year's annual bonus would have been paid had his employment not
terminated, and
• reimbursement for a portion of the COBRA premiums (based on the
then-current cost-sharing rates for active employees) for continued
medical coverage for up to 12 months following his termination.
If Mr. Sperzel's employment is terminated by the Company without cause or by
Mr. Sperzel for good reason on or within 12 months following the date of a
change of control, Mr. Sperzel will be entitled, subject to his signing and not
revoking a general release of claims in the Company's favor, to receive:
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• an amount equal to 1.5 times his annual base salary, payable over an
18-month period following the date of termination, plus a pro-rata
portion of his target annual cash bonus for the calendar year in which
the termination occurs (based on the number of calendar days elapsed
prior to the effective date of such termination), payable at such time
as such year's annual bonus would have been paid had his employment
not terminated;
• reimbursement for a portion of the COBRA premiums (based on the
then-current cost-sharing rates for active employees) for continued
medical coverage for up to 18 months following his termination; and
• accelerated vesting of all of his outstanding unvested equity and
equity-based awards.
A complete copy of Mr. Sperzel's employment agreement is filed herewith as
Exhibit 10.1 and incorporated herein by reference. The above description of the
employment agreement does not purport to be complete and is qualified in its
entirety by reference to such exhibit.
Mr. Sperzel has also entered into a non-compete,non-disclosure and invention
assignment agreement with the Company pursuant to which he has agreed to refrain
from disclosing the Company's confidential information indefinitely and from
competing with the Company or soliciting the Company's employees or consultants
for 12 months following termination of his employment.
On January 8, 2020, the Board approved an amendment and restatement of the
Company's Inducement Award Plan (as amended and restated, the "Plan"), which was
adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of
the Nasdaq Stock Market LLC listing rules ("Rule 5635(c)(4)"), to reserve an
additional 4,000,000 shares of the Company's common stock for issuance under the
Plan. In accordance with Rule 5635(c)(4), awards under the Plan may only be made
to a newly hired employee who has not previously been a member of the Board, or
an employee who is being rehired following a bona fide period of non-employment
by the Company or a subsidiary, as a material inducement to the employee's
entering into employment with the Company or its subsidiary.
A complete copy of the Plan, as amended, and the forms of stock option
agreement, restricted stock agreement and the restricted stock unit agreement to
be used thereunder are filed herewith as Exhibit 10.2 and incorporated herein by
reference. The above description of the Plan does not purport to be complete and
is qualified in its entirety by reference to such exhibit.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Employment Agreement, dated as of January 8, 2020, by and
between the Company and John Sperzel.
10.2 T2 Biosystems, Inc. Inducement Award Plan, as amended, and
forms of award agreements thereunder
99.1 Press Release dated January 9, 2020
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