0001674416
false
00-0000000
0001674416
2024-05-23
2024-05-23
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 23, 2024
CRISPR THERAPEUTICS AG
(Exact name of Registrant as Specified in Its Charter)
Switzerland 001-37923 Not Applicable
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
Baarerstrasse 14
6300 Not Applicable
Zug
,
Switzerland
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
41 (0)41
561 32 77
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Name of each exchange on which registered
Symbol(s)
Common Shares, nominal value CHF 0.03 CRSP The Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)/230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)/240.12b-2
of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
-------------------------------------------------------------------------------
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Julianne Bruno as Chief Operating Officer
On May 23, 2024, CRISPR Therapeutics AG (the "Company") announced the
promotion of Julianne Bruno, currently the Company's Senior Vice President and
Head of Programs & Portfolio, to be the Company's Chief Operating Officer
effective as of May 23, 2024.
Since March 2023, Ms. Bruno, aged 38, has served as the Company's Senior Vice
President and Head of Programs & Portfolio Management. Ms. Bruno joined the
Company in April 2019 and has held several positions with increasing
responsibilities, including leading the hemoglobinopathy partnership program
with Vertex Pharmaceuticals Incorporated from the early clinical stage to the
present day. In addition, Ms. Bruno has also been responsible for overseeing
the Company's immuno-oncology trials and program management function, which
spans across all of the program areas (hemoglobinopathies, immuno-oncology,
regenerative medicine,
in vivo
) and partnerships. Before joining the Company in April 2019, Ms. Bruno worked
at McKinsey & Company from August 2015 to March 2019 where she was a leader in
the biotech practice and served a number of biotechnology companies on a wide
range of commercial topics. Ms. Bruno received her M.B.A. from The Wharton
School and also holds an A.B. from Princeton University.
Employment Agreement with Ms. Bruno
In connection with Ms. Bruno's appointment to the position of Chief Operating
Officer, the Company's wholly owned subsidiary, CRISPR Therapeutics, Inc
("CRISPR Inc."), entered into an Employment Agreement with Ms. Bruno (the
"Employment Agreement"), dated May 23, 2024.
Under the Employment Agreement, Ms. Bruno will receive an annual salary of
$460,000 and she will be eligible to participate in the Company's annual bonus
program, with a target bonus of 45% of her annual base salary. Ms. Bruno's
bonus for 2024 will be pro-rated to reflect the effective date of her
promotion. Ms. Bruno will also be eligible to participate in the Company's
2018 Stock Option and Incentive Plan, and in connection with her promotion to
Chief Operating Officer, she will receive a one-time grant of 20,000
restricted stock units corresponding to an equivalent number of the Company's
common shares (the "RSU Award"). Twenty-five percent of the RSU Award will
vest on the first, second, third and fourth anniversary of the grant date of
such award, subject, in each case, to Ms. Bruno's continued service with
CRISPR Inc., the Company or any other subsidiary of the Company. Ms. Bruno
will be eligible to participate in the Company's 401(k) plan, health plans and
other benefits on the same terms as all other Company employees.
Under the Employment Agreement, in the event CRISPR Inc. terminates her
employment without Cause, or Ms. Bruno resigns for Good Reason (both as
defined in the Employment Agreement), the terminating party will be required
to give six months' notice (the "Notice Period"). During the Notice Period,
Ms. Bruno shall continue to be entitled to all compensation under the
Employment Agreement, and all stock options and equity-based awards shall
continue to vest from the date notice of termination is given until the last
day of the Notice Period. In addition, Ms. Bruno will be entitled to receive a
pro-rated bonus for the duration of the Notice Period.
No later than 15 days following the delivery of notice by CRISPR Inc. to Ms.
Bruno of a termination without Cause or the delivery of a notice of
resignation by Ms. Bruno for Good Reason, Ms. Bruno will be placed on
"administrative leave." During this period of administrative leave, Ms. Bruno
may enter into consulting arrangements and accept board positions with other
companies and will be allowed to engage in other employment, so long as that
employment does not interfere with her obligations under the Employment
Agreement. However, Ms. Bruno will continue to be entitled to all compensation
under the Employment Agreement through the administrative leave period, which
terminates at the end of the Notice Period.
If Ms. Bruno's employment is terminated by CRISPR Inc. without Cause or by Ms.
Bruno for Good Reason, in each case, within 12 months following a Change in
Control (as defined in the Employment Agreement), the Notice Period will
become 12 months and all equity awards held by Ms. Bruno on such date that the
notice of termination or resignation is delivered will vest, or similar other
restrictions will expire, and such awards will become exercisable or
nonforfeitable, subject to her execution of a release of any claims in favor
of CRISPR Inc. However, in the event that CRISPR Inc. determines at the time
of the Change in Control, in its sole discretion and in reliance on opinion of
counsel, that the acceleration described in the preceding sentence is not
permissible under applicable law, all stock options and stock-based awards
held by Ms. Bruno as of the date of the Change in Control, shall vest and
become exercisable or nonforfeitable as of the date of the Change in Control.
There are no transactions between Ms. Bruno and the Company subject to
disclosure pursuant to Item 404(a) of Regulation S-K and there is no
arrangement or understanding between Ms. Bruno and any other persons or
entities pursuant to which Ms. Bruno was appointed as officer of the Company.
There are no family relationships between Ms. Bruno and any of our directors
or executive officers.
-------------------------------------------------------------------------------
The foregoing description of the material terms of Ms. Bruno's employment
arrangement does not purport to be complete and is subject to, and qualified
in its entirety by, the full text of the Employment Agreement, a copy of which
is filed hereto as Exhibit 10.1 and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit
No. Description
10.1* Employment Agreement, dated May 23, 2024, by and between CRISPR Therapeutics, Inc. and Julianne Bruno
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith.
-------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRISPR Therapeutics AG
Date: May 23, 2024 By: /s/ Samarth Kulkarni
Samarth Kulkarni, Ph.D.
Chief Executive Officer
-------------------------------------------------------------------------------
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (
Agreement
) is made as of the 23
rd
day of May, 2024 between CRISPR Therapeutics, Inc., a Delaware corporation
(the
Company
), and Julianne Bruno (the
Executive
and, together with the Company, the
Parties
or each individually, a
Party
).
WHEREAS, this Employment Agreement shall become effective upon the later of
the (i) full execution by both Parties; or (ii) ten (10) business days after
the Company provided Executive with notice of this Agreement and the Exhibits
(the
Effective Date
).
WHEREAS, the Company is a wholly owned subsidiary of CRISPR Therapeutics AG (
Parent
or
CRISPR AG
);
WHEREAS, Parent and the Company are each subject to the Swiss Ordinance act
against excessive compensation in listed companies as a result of the of
listing of the common shares of Parent on the Nasdaq Global Market; and
WHEREAS, the Company and the Executive are parties to that certain offer
letter dated on or about February 11, 2019 (such agreement, as in effect, is
referred to as the
Prior Agreement
).
NOW, THEREFORE,
in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1.
Position and Duties
. The employment of the Executive by the Company will commence on the date
hereof. The Executive will serve as the Chief Operating Officer of the
Company. The Executive shall have responsibilities and duties consistent with
such position and such other responsibilities and duties as may from time to
time be prescribed by the Chief Executive Officer of the Company (the
CEO
) which are not inconsistent with the Executives skills and experience or
Executives ability to discharge Executives responsibilities in the positions
noted above. The Executive shall devote the Executives full working time and
efforts to the business and affairs of the Company except as otherwise
permitted under Section 3(b)(i). Notwithstanding the foregoing, the Executive
may engage in trade association, advisory, board business, charitable or other
community activities, as long as such services and activities are disclosed to
the Board of Directors of Parent (the
Board
) and do not materially interfere with the Executives performance of the
Executives duties to the Company as provided in this Agreement. During the
period which the Executive is employed pursuant to this Agreement (the
Employment Period
), the Executives principal place of employment will be in the Greater Boston,
Massachusetts area; however, the Company may require the Executive to travel
temporarily to other locations in connection with the Companys business.
-------------------------------------------------------------------------------
2.
Compensation and Related Matters
.
(a)
Base Salary
. During the Employment Period, the Company shall pay the Executive, as
compensation for the performance of the Executives duties and obligations
under this Agreement, an annual base salary of $460,000 payable in a manner
that is consistent with the Companys usual payroll practices for senior
executives. The Executives base salary shall be reviewed annually by each of
the Compensation Committee of the Board or any successor to such committee (the
Committee
) and the Board or for adjustment. Such adjustment, if any, shall be within
the sole discretion of the Board. The annual base salary in effect at any
given time is referred to herein as Base Salary. The Base Salary shall not be
reduced at any time without the express written consent of the Executive.
(b)
Annual Bonus
. During the Employment Period, the Executive shall be eligible to receive an
annual target bonus (a
Bonus
) if, as reasonably determined by the Board or, to the extent delegated by the
Board, the Committee one or more of the performance targets annually
determined by the Board or the Committee (
Performance Targets
) is achieved. If all of the Performance Targets are achieved, the Bonus will
equal not less than (and may exceed) forty-five percent of the Executives Base
Salary (the
Target Bonus
). In the event that less than all of the Performance Targets are met by
Executive, the Bonus paid in respect of this paragraph may be less than the
Target Bonus. Except as set forth in Sections 4 and 5(a) hereof, the Executive
must be employed by the Company on the day any such earned Bonus is paid which
shall be not later than 21/2 months after the end of each calendar year. The
Executives target bonus opportunity as a percentage of Base Salary may be
reviewed periodically and adjusted in the sole discretion of the Board. After
any such adjustment, the term Target Bonus shall refer to the increased
amount. The Target Bonus shall not be reduced at any time without the express
prior written consent of the Executive.
(c)
Equity Compensation
. The Executive shall be eligible to participate in Parents equity incentive
plan according to its terms and conditions, as defined by Parent from time to
time in its sole discretion. Both entitlement to any equity awards and the
amount shall be determined by Parent in its sole discretion.
(d)
Expenses
. During the Employment Period, the Executive shall be entitled to receive
reimbursement for all reasonable expenses incurred by Executive in performing
services hereunder, in accordance with the policies and procedures then in
effect and established by the Company for its senior executive officers.
(e)
Other Benefits
. During the Employment Period, the Executive shall be entitled to participate
in or receive benefits under any employee benefit plan or arrangement
currently maintained or which may, in the future, be made available by the
Company generally to its executives and key management employees, subject to
and on a basis consistent with the terms, conditions and overall administration
of such plan or arrangement. Any payments or benefits payable to the Executive
under a plan or arrangement referred to in this Section 2(e) in respect of any
calendar year during which the Executive is employed by the Company for less
than the whole of such year shall, unless otherwise provided in the applicable
plan or arrangement, be prorated in accordance with the number of days in such
calendar year during which the Executive is so employed. Should any such
payments or benefits accrue on a fiscal
2
-------------------------------------------------------------------------------
(rather than calendar) year, then the proration in the preceding sentence
shall be on the basis of a fiscal year rather than calendar year.
(f)
Vacations
. The Executive shall be entitled to accrue up to 20 paid vacation days in
each year, which shall be accrued ratably. In other respects, the Companys
vacation policy as the same may then be in effect shall apply to vacations.
(g)
Approval by Shareholders Meeting and Mandatory Law
. Any compensation (including bonus, equity awards and fringe benefits) to be
paid under this Agreement, is, to the extent required by Swiss laws and the
Parents Article of Association, subject to approval by the general meeting of
shareholders of Parent. In the event of a conflict between this Agreement and
applicable mandatory Swiss law, the Company shall have the right to
unilaterally modify the Agreement to the extent necessary to comply with
mandatory law with immediate effect.
(h)
Indemnification and D&O Insurance
. CRISPR AG shall indemnify the Executive (including the advance of expenses)
to the maximum extent permitted by applicable law and shall provide directors
and officers insurance coverage on the same basis as all other directors and
officers of CRISPR AG and its affiliates.
(i)
Non-US Taxes
. If the Executive is subject to taxes outside the United States in connection
with any compensatory payments made to the Executive for services performed
under this Agreement, the Company will pay on the Executives behalf the costs
of professional tax preparation in the applicable jurisdiction by a nationally
recognized firm experienced in preparing personal income tax returns in the
applicable non-U.S. jurisdiction and in the United States (the
Tax Professional
) selected by the Company and acceptable to the Executive (such acceptance not
to be unreasonably withheld, conditioned or delayed) for each year during
which the Executive is subject to such non-U.S. taxes. The Company will
further pay the Executive an amount sufficient to leave the Executive in a net
after-tax position equivalent to what the Executive would experience if the
Executive were subject only to U.S. Federal, state and local income taxes and
had not provided the services of the Tax Professional during any such year (an
Equalization Payment
). The Company will engage the Tax Professional at the Companys cost to
determine the amount of any Equalization Payment due to the Executive. Any
Equalization Payment will be made as soon as reasonably promptly following
such determination but in any event not later than the end of the year
following the year in which the Executive pays the relevant taxes.
3.
Termination
.
(a)
General
. The Executives employment shall continue until it is terminated in
accordance with this Agreement. Upon service of a Notice of Termination (as
defined below), the Executive shall resign from all offices and functions
assumed in relation to this Agreement effective upon first request of the
Company.
(b)
Termination by the Company without Cause or by Executive for Good Reason;
Notice Period
. In the event that the Company elects to terminate the Executives employment
without Cause (as defined below) or the Executive elects to resign from
Executives employment with Good Reason (as defined below) (in either case an
Involuntary Departure
),
3
-------------------------------------------------------------------------------
the Party electing to end the employment relationship shall provide the other
Party with a Notice of Termination (as defined below) of the Involuntary
Departure specifying a notice period (the
Notice Period
) of six (6) months, effective as per the end of a calendar month; provided
that, in the case that the Notice of Termination of an Involuntary Departure
is provided within the 12 month period following a Change in Control (the
Change in Control Period
or
CIC Period
), then the Notice Period shall be 12 months.
(i)
During the Notice Period following a Notice of Termination of an Involuntary
Departure, the Executive shall continue to be available to provide services to
the extent requested by the Company or the Board, provided at any time during
the Notice Period the Company may replace the Executives position and/or
direct the Executive to perform other or reduced work; provided further that,
upon the 15
th
day following such Notice of Termination (or such earlier date as the Company
shall determine in its sole discretion), the Company shall release the
Executive from the Executives working obligations pursuant to Section 3(b)(i)
(except to the extent the parties otherwise agree) and place the Executive on
administrative leave for the remainder of the Notice Period (
Administrative Leave
). During such Administrative Leave, the Executive (A) may enter into
consulting arrangements and accept board positions provided such outside
business activities do not interfere with Executives obligations under this
Agreement including without limitation, pursuant to Section 7 and (B) shall be
free to engage in other employment provided that such employment does not
interfere with Executives obligations under this Agreement including without
limitation, pursuant to Section 7. The Company shall be prohibited during the
Administrative Leave from reducing any compensation to which the Executive is
entitled to receive during the remainder of the Notice Period pursuant to
Section 3(b)(ii).
(ii)
With respect to compensation during the Notice Period following a Notice of
Termination of an Involuntary Departure, and subject to (i) the Executive
signing, within 30 days following the date that the Notice of Termination is
given, a Release of Claims in a form reasonably required by the Company
containing, among other provisions, a general release of claims in favor of
the Company and related persons and entities (subject to customary exclusions
including Executives rights under this Agreement, rights relating to
outstanding equity awards granted under the various equity plans maintained by
CRISPR AG, rights under the Companys 401(k) plan, rights to indemnification
and D&O insurance as described in Section 2(i) above and claims that cannot be
waived as a matter of law), confidentiality, return of property and
non-disparagement, a reaffirmation of all of the Executives Continuing
Obligations and, in the Companys sole discretion, a one-year post-employment
noncompetition agreement as set forth in Section 7(c) below, and shall provide
that if the Executive breaches any of the Executives Continuing Obligations,
all payments under this Agreement shall immediately cease (the
Release
) and (ii) Section 6, the Executive: (A) shall continue to receive the Base
Salary (without regard to any reduction in Base Salary that would provide a
basis for the Executive to resign for Good Reason) and employee benefits
consistent with the Companys then existing benefits plans and programs; (B)
shall be entitled to receive an amount equal to the Target Bonus (without
regard to any reduction in Target Bonus that would provide a basis for the
Executive to resign for Good Reason) with respect to the Notice Period (i.e.,
a prorated Target Bonus based upon the number of
4
-------------------------------------------------------------------------------
days in the applicable Notice Period), which amount shall be payable no more
than 60 days after the Notice of Termination (provided that if the 60-day
period begins in one calendar year and ends in a second calendar year, such
Target Bonus shall be paid in the second calendar year); (C) shall continue to
vest through the last day of the Notice Period in any time-based equity awards
outstanding as of the date the Notice of Termination is given; provided, and
notwithstanding the foregoing, Section 5(a) may apply if the Notice of
Termination of an Involuntary Departure occurs during a CIC Period, and (D)
shall not continue to accrue vacation under Section 2(f).
(iii)
If during the Notice Period following a Notice of Termination of an
Involuntary Departure, the Company terminates the Executives employment for
Cause, then the Company shall provide a restated Notice of Termination and the
Notice Period shall end on the earlier date set forth in the restated Notice
of Termination.
(c)
Death
. The Executives employment hereunder shall terminate upon Executives death.
(d)
Disability
. The Company may terminate the Executives employment if the Executive is
disabled and unable to perform the essential functions of the Executives then
existing position or positions with or without reasonable accommodation for a
period of 180 days (which need not be consecutive) in any 12-month period. If
any question shall arise as to whether during any period the Executive is
disabled so as to be unable to perform the essential functions of the
Executives then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Company shall,
submit to the Company a certification in reasonable detail by a physician
selected by the Company to whom the Executive or the Executives guardian shall
have no reasonable objection as to whether the Executive is so disabled or how
long such disability is expected to continue, and such certification shall for
the purposes of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to
submit such certification, the Companys determination of such issue shall be
binding on the Executive. Nothing in this Section 3(d) shall be construed to
waive the Executives rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. (s)2601
et seq
. and the Americans with Disabilities Act, 42 U.S.C. (s)12101
et seq.
(e)
Termination by Company for Cause
. The Company may terminate the Executives employment hereunder for Cause.
(f)
Termination by the Executive Without Good Reason
. The Executive may terminate Executives employment hereunder at any time
without Good Reason.
(g)
Definitions
:
(i)
Cause
. For purposes of this Agreement,
Cause
shall mean: (i) the Executives commission of any felony or commission of any
crime involving fraud, dishonesty or moral turpitude; (ii) the Executives
commission or attempted commission of or participation in a fraud or act of
dishonesty against the Company; (iii) the
5
-------------------------------------------------------------------------------
Executives material breach of any contract or agreement between the Executive
and the Company or the Executives material breach of any legal duty Executive
owes to the Company; (iv) conduct by the Executive that constitutes
insubordination, incompetence or neglect of duties; (v) the Executives failure
to perform the duties, functions and responsibilities of the Executives
position; or (vi) the Executives failure to cooperate with a bona fide
internal investigation or an investigation by regulatory or law enforcement
authorities, after being instructed by the Company to cooperate, or the
willful destruction or failure to preserve documents or other materials known
to be relevant to such investigation or the inducement of others to fail to
cooperate or to produce documents or other materials in connection with such
investigation; provided, however, the actions or conduct described in clauses
(iv) and (v) above shall only constitute Cause if the Company provides the
Executive with written notice thereof and the Executive has not, within 30
days of receipt such written notice, discontinued the cited conduct or
remedied the failure to perform and further provided that lawful actions taken
by the Executive in the exercise of Executives rights under the United States
Constitution shall not constitute a breach of subsection (vi) above.
(ii)
Good Reason
. For purposes of this Agreement,
Good Reason
shall mean that the Executive has complied with the
Good Reason Process
(hereinafter defined) following the occurrence of any of the following events:
(i) a material diminution in the Executives responsibilities, authority and
function, an adverse change to Executives job title, or a change in Executives
reporting relationship that results in the Executive no longer reporting
directly to the CEO; (ii) a material reduction in Base Salary except pursuant
to a salary reduction program affecting substantially all of the employees of
the Company, provided that it does not adversely affect the Executive to a
greater extent than other similarly situated employees; (iii) a material
change in the principal geographic location at which the Executive provides
services to the Company outside of the Greater Boston, Massachusetts area; or
(iv) the material breach of this Agreement by the Company (each a
Good Reason Condition
). Good Reason Process shall mean that (i) the Executive reasonably determines
in good faith that a Good Reason Condition has occurred; (ii) the Executive
notifies the Company in writing of the first occurrence of the Good Reason
Condition within 60 days of the occurrence of such condition; (iii) the
Executive cooperates in good faith with the Companys efforts, for a period not
less than 30 days following such notice (the
Cure Period
), to remedy the Good Reason Condition; (iv) notwithstanding such efforts, the
Good Reason condition continues to exist; and (v) the Executive terminates
employment within 60 days after the end of the Cure Period. If the Company
cures the Good Reason Condition during the Cure Period, Good Reason shall be
deemed not to have occurred.
(iii)
Notice of Termination
. Except for termination as specified in Section 3(c), any termination of the
Executives employment by either the Company or the Executive shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a
Notice of Termination
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon.
(iv)
Date of Termination
. For purposes of this Agreement, Date of Termination shall mean: (i) if the
Executives employment is terminated by death, the
6
-------------------------------------------------------------------------------
date of death; (ii) if the Executives employment is terminated on account of
disability under Section 3(d) or by the Company for Cause under Section 3(e),
the date on which Notice of Termination is given; (iii) if the Executives
employment terminates as a result of an Involuntary Departure under Section
3(b), the last day of the Notice Period; (iv) if the Executives employment is
terminated by the Executive under Section 3(f) without Good Reason, 30 days
after the date on which a Notice of Termination is given (unless the Company
waives all or part of the thirty (30) day period).
4.
Compensation Upon Termination
. If the Executives employment with the Company is terminated for any reason,
the Company shall pay or provide to the Executive (or to the Executives
authorized representative or estate) (i) any Base Salary earned through the
Date of Termination; (ii) unpaid expense reimbursements (subject to, and in
accordance with Section 2(d) of this Agreement); (iii) subject to Section
3(b)(ii)(D), unused vacation that accrued through the Date of Termination; and
(iv) any vested benefits the Executive may have under any employee benefit
plan of the Company through the Date of Termination, which vested benefits
shall be paid and/or provided in accordance with the terms of such employee
benefit plans (together, the
Accrued Benefit
) on or before the time required by law but in no event more than 30 days
after the Executives Date of Termination.
5.
Change in Control
.
(a)
Acceleration of Vesting
. In the event a Notice of Termination of an Involuntary Termination occurs
during the CIC Period, and subject to the Executive signing, within 60 days
following the Notice of Termination, a Release and the Release becoming
effective and non-revocable within such 60-day period, all time based stock
options and time based stock-based awards held by the Executive as of the date
of the Notice of Termination, shall vest and become exercisable or
nonforfeitable. Notwithstanding the foregoing, if, at the time of a Change in
Control, the Company determines in its sole discretion, in reliance upon an
opinion of counsel in form and substance satisfactory to the Company, that the
acceleration in the prior sentence would not be permissible under applicable
law, then in lieu of the acceleration in the prior sentence, all time based
stock options and time based stock-based awards held by the Executive as of
the date of such Change in Control, shall vest and become exercisable or
nonforfeitable as of the date of such Change in Control.
(b)
Excise Tax
.
(i)
Anything in this Agreement to the contrary notwithstanding, in the event that
any compensation, payment or distribution by the Company to or for the benefit
of the Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (the
Parachute Payments
), would be subject to the excise tax imposed by Section 4999 of the Code (the
Excise Tax
), the following provisions shall apply:
(A)
If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2)
the total of the Federal, state, and local income and employment taxes payable
by the Executive on the amount of the Parachute Payments which are in excess
of the Threshold Amount, are greater than or equal
7
-------------------------------------------------------------------------------
to the Threshold Amount, the Executive shall be entitled to the full benefits
payable under this Agreement.
(B)
If the Threshold Amount is less than (x) the Parachute Payments, but greater
than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and
(2) the total of the Federal, state, and local income and employment taxes on
the amount of the Parachute Payments which are in excess of the Threshold
Amount, then the Parachute Payments shall be reduced (but not below zero) to
the extent necessary so that the sum of all Parachute Payments shall not
exceed the Threshold Amount. In such event, the Parachute Payments shall be
reduced in the following order: (1) cash payments not subject to Section 409A
of the Code; (2) cash payments subject to Section 409A of the Code; (3)
equity-based payments and acceleration; and (4) non-cash forms of benefits. To
the extent any payment is to be made over time (
e.g.
, in installments, etc.), then the payments shall be reduced in reverse
chronological order.
(ii)
For the purposes of this Section 5(c), Threshold Amount shall mean three times
the Executives base amount within the meaning of Section 280G(b)(3) of the
Code and the regulations promulgated thereunder less one dollar ($1.00); and
Excise Tax shall mean the excise tax imposed by Section 4999 of the Code, and
any interest or penalties incurred by the Executive with respect to such
excise tax.
(iii) All calculations and determinations under Sections 5(c)(i) and 5(c)(ii)
shall be made by an independent accounting firm or independent tax counsel
appointed by the Company (the
Tax Counsel
) whose determinations shall be conclusive and binding on the Company and the
Executive for all purposes. For purposes of making the calculations and
determinations required by Sections 5(c)(i) and 5(c)(ii), the Tax Counsel may
rely on reasonable, good faith assumptions and approximations concerning the
application of Section 280G and Section 4999 of the Code. The Company and the
Executive shall furnish the Tax Counsel with such information and documents as
the Tax Counsel may reasonably request in order to make its determinations
under Sections 5(c)(i) and 5(c)(ii). The Company shall bear all costs the Tax
Counsel may reasonably incur in connection with its services.
(c)
Definitions
. For purposes of this Agreement, Change in Control shall mean any of the
following:
(i)
any person, as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the
Act
) (other than Parent, any of its subsidiaries, or any trustee, fiduciary or
other person or entity holding securities under any employee benefit plan or
trust of Parent or any of its subsidiaries), together with all affiliates and
associates (as such terms are defined in Rule 12b-2 under the Act) of such
person, shall become the beneficial owner (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, of securities of Parent
representing 50 percent or more of the combined voting power of the Companys
then outstanding securities having
8
-------------------------------------------------------------------------------
the right to vote in an election of the Board (
Voting Securities
) (in such case other than as a result of an acquisition of securities
directly from Parent); or
(ii)
the date a majority of the members of the Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by
a majority of the members of the Board before the date of the appointment or
election; or
(iii)
the consummation of (A) any consolidation or merger of Parent where the
stockholders of Parent, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate more than 50 percent of the voting shares
of the company issuing cash or securities in the consolidation or merger (or
of its ultimate parent corporation, if any), or (B) any sale or other transfer
(in one transaction or a series of transactions contemplated or arranged by
any party as a single plan) of all or substantially all of the assets of
Parent.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by Parent which, by reducing the number of shares of
Voting Securities outstanding, increases the proportionate number of Voting
Securities beneficially owned by any person to 50 percent or more of the
combined voting power of all of the then outstanding Voting Securities;
provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from
Parent) and immediately thereafter beneficially owns 50 percent or more of the
combined voting power of all of the then outstanding Voting Securities, then a
Change in Control shall be deemed to have occurred for purposes of the
foregoing clause (i). For the avoidance of doubt, a migratory merger of Parent
for the principal purpose of redomiciling Parent shall not constitute a Change
in Control.
6.
Section 409A
.
(a)
Anything in this Agreement to the contrary notwithstanding, if at the time of
the Executives separation from service within the meaning of Section 409A of
the Code, the Company determines that the Executive is a specified employee
within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent
any payment or benefit that the Executive becomes entitled to under this
Agreement on account of the Executives separation from service would be
considered deferred compensation subject to the 20 percent additional tax
imposed pursuant to Section 409A(a) of the Code as a result of the application
of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and
such benefit shall not be provided until the date that is the earlier of (A)
six months and one day after the Executives separation from service, or (B)
the Executives death. If any such delayed cash payment is otherwise payable on
an installment basis, the first payment shall include a catch-up payment
covering amounts that would otherwise have been paid during the six-month
period but for the application of this provision, and the balance of the
installments shall be payable in accordance with their original schedule.
Solely for purposes of Section 409A of the Code, each installment payment
under this Agreement is considered a separate payment.
9
-------------------------------------------------------------------------------
(b)
All in-kind benefits provided and expenses eligible for reimbursement under
this Agreement shall be provided by the Company or incurred by the Executive
during the time periods set forth in this Agreement. All reimbursements shall
be paid as soon as administratively practicable, but in no event shall any
reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred. The amount of in-kind benefits
provided or reimbursable expenses incurred in one taxable year shall not
affect the in-kind benefits to be provided or the expenses eligible for
reimbursement in any other taxable year. Such right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another benefit.
(c)
To the extent that any payment or benefit described in this Agreement
constitutes non-qualified deferred compensation under Section 409A of the
Code, and to the extent that such payment or benefit is payable upon the
Executives termination of employment, then such payments or benefits shall be
payable only upon the Executives separation from service. The determination of
whether and when a separation from service has occurred shall be made in
accordance with the presumptions set forth in Treasury Regulation Section
1.409A1(h).
(d)
The parties intend that this Agreement will be administered in accordance with
Section 409A of the Code. To the extent that any provision of this Agreement
is ambiguous as to its compliance with Section 409A of the Code, the provision
shall be read in such a manner so that all payments hereunder comply with
Section 409A of the Code. The parties agree that this Agreement may be
amended, as reasonably requested by either party, and as may be necessary to
fully comply with Section 409A of the Code and all related rules and
regulations in order to preserve the payments and benefits provided hereunder
without additional cost to either party.
(e)
The Company makes no representation or warranty and shall have no liability to
the Executive or any other person if any provisions of this Agreement are
determined to constitute deferred compensation subject to Section 409A of the
Code but do not satisfy an exemption from, or the conditions of, such Section.
7.
Proprietary Information, Noncompetition and Cooperation
.
(a)
Confidentiality and Assignment Agreement.
The Executive has entered into the Proprietary Information and Inventions
Agreement (the
Confidentiality and Assignment Agreement
), attached hereto as
Exhibit A
, the terms of which are incorporated by reference as material terms of this
Agreement. For purposes of this Agreement, the obligations in this Section 7
and those that arise in the Confidentiality and Assignment Agreement, and any
other agreement relating to confidentiality, assignment of inventions, or
other restrictive covenants shall collectively be referred to as the
Continuing Obligations.
(b)
Non-Solicitation
.
In order to protect the Companys proprietary information and good will, during
the Executives employment with the Company and for a period of twelve (12)
months following the (i) the delivery of a Notice of Termination, in the case
of an Involuntary Departure or (ii) the termination of the Executives
employment for any other reason (the
Restricted Period
,) the Executive will not, directly or indirectly, in any
10
-------------------------------------------------------------------------------
manner, other than for the benefit of the Company (i) divert or take away
customers of the Company or any of its suppliers; and/or (ii) solicit, entice,
attempt to persuade any other employee or consultant of the Company to leave
the Company for any reason (other than the termination of subordinate
employees undertaken in the course of the Executives employment with the
Company). The Executive acknowledges and agrees that if the Executive violates
any of the provisions of this paragraph 7(b), the running of the Restricted
Period will be extended by the time during which the Executive engages in such
violation(s).
(c)
Noncompetition
. The Executive acknowledges and agrees that in consideration and as a
condition of the Executives promotion by the Company and in exchange for,
among other things, the benefits contained in this Agreement, including
without limitation the opportunity to receive enhanced post-employment
severance benefits, which the Executive acknowledges and agrees is fair and
reasonable consideration that is independent from the continuation of the
Executives employment, during the Restricted Period the Executive will not
directly or indirectly, whether as owner, partner, shareholder, director,
manager, consultant, agent, employee, co-venturer or otherwise, engage,
participate or invest in any Competing Business anywhere in the world. For
purposes hereof, the term
Competing Business
shall mean any entity engaged in the discovery, development or commercialization
of gene editing technology for human therapeutics. Notwithstanding anything
to the contrary in this Agreement, nothing contained hereinabove or
hereinbelow shall be deemed to prohibit the Executive from (i) acquiring,
solely as an investment, shares of capital stock (or other interests) of any
corporation (or other entity) not exceeding 2% of such corporations (or other
entitys) then outstanding shares of capital stock (or equity interest), or
(ii) working for a line of business, division or unit of a larger entity that
competes with the Company as long as the Executives activities for such line
of business, division or unit do not involve work by the Executive on matters
that are directly competitive with the Companys business. Notwithstanding the
foregoing, this Section 7(c) shall not be enforceable during the post-employment
portion of the Restricted Period if the Executive is terminated by the
Company without Cause, is laid off from employment or if the Company elects to
waive the restrictions set forth in this Section 7(c). If Section 7(c) is
enforced during the post-employment portion of the Restricted Period, the
Company shall pay the Executive at the rate of 50% of the highest annualized
base salary paid to the Executive within the two year period preceding the
last day of Executives employment (the Garden Leave Pay) during the
post-employment portion of the Restricted Period. During the Restricted Period
Executive will promptly (and immediately upon request) notify the Company of
any change in address and each subsequent employer or business activity
including the name and address of employer or other post-Company plans and the
nature of Executives activities. The Companys election not to provide
post-employment Garden Leave Pay shall be deemed a waiver of Executives
post-employment noncompetition obligations under this Section 7(c). In no
event will Garden Leave Pay be duplicative of other pay and the Executive
agrees that any Garden Leave Pay received pursuant to this Section 7(c) shall
reduce (and shall not be in addition to) any other pay that the Executive may
be entitled to receive during the post-employment portion of the Restricted
Period. The Executive acknowledges having been advised by the Company of the
right to consult with counsel regarding the noncompetition restrictions
contained in this Section 7(c) prior to executing this Agreement.
(d)
Litigation and Regulatory Cooperation
. During and after the Executives employment, the Executive shall use
reasonable efforts to cooperate with the Company in the
11
-------------------------------------------------------------------------------
defense or prosecution of any claims or actions now in existence or that may
be brought in the future against or on behalf of the Company that relate to
events or occurrences that transpired while the Executive was employed by the
Company. The Executives cooperation in connection with such claims or actions
shall include, but not be limited to, being available to meet with counsel to
prepare for discovery or trial and to act as a witness on behalf of the
Company at mutually convenient times. During and after the Executives
employment, the Executive shall use reasonable efforts to cooperate with the
Company in connection with any investigation or review of any federal, state
or local regulatory authority as any such investiga
tion or review relates to events or occurrences that transpired while the
Executive was employed by the Company. The Company shall reimburse the
Executive for any reasonable outofpocket expenses incurred in connection with
the Executives performance of obligations pursuant to this Section 7(d) and
pay the Executive an hourly rate based on the Executives annual base salary
rate in effect immediately prior to the Executives last day of employment with
the Company. In no event shall the services under this Section exceed five (5)
hours per month or 20 hours in any year and in no event shall the Executive be
required to provide such services beyond the second anniversary of Executives
last day of employment with the Company.
(e)
Injunction
. The Executive agrees that it would be difficult to measure any damages
caused to the Company that might result from any breach by the Executive of
the promises set forth in this Section 7 and the Confidentiality and
Assignment Agreement, and that in any event money damages would be an
inadequate remedy for any such breach. Accordingly, subject to Section 8 of
this Agreement, the Executive agrees that if the Executive breaches, or
proposes to breach, any portion of this Agreement and the Confidentiality and
Assignment Agreement, the Company shall be entitled, in addition to all other
remedies that it may have, to an injunction or other appropriate equitable
relief to restrain any such breach without showing or proving any actual
damage to the Company.
(f)
Protected Reporting; Defend Trade Secrets Act Immunity
. Nothing in this Agreement or the Confidentiality and Assignment Agreement,
and nothing in any policy or procedure, in any other confidentiality,
employment, separation agreement or in any other document or communication
from the Company limits the Executives ability to file a charge or complaint
with any government agency concerning any acts or omissions that the Executive
may believe constitute a possible violation of federal or state law or making
other disclosures that are protected under the whistleblower provisions of
applicable federal or state law regulation or affects the Executives ability
to communicate with any government agency or otherwise participate in any
investigation or proceeding that may be conducted by a government agency,
including by providing documents or other information, without notice to the
Company. In addition, for the avoidance of doubt, pursuant to the federal
Defend Trade Secrets Act of 2016, the Executive shall not be held criminally
or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that (i) is made (A) in confidence to a federal,
state, or local government official, either directly or indirectly, or to an
attorney; and (B) solely for the purpose of reporting or investigating a
suspected violation of law; or (ii) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal.
8.
Arbitration of Disputes
. Any controversy or claim arising out of or relating to this Agreement or the
breach thereof or otherwise arising out of the Executives employment or the
termination of that employment (including, without limitation, any claims of
unlawful
12
-------------------------------------------------------------------------------
employment discrimination whether based on age or otherwise) shall, to the
fullest extent permitted by law, be settled by arbitration in any forum and
form agreed upon by the parties or, in the absence of such an agreement, under
the auspices of the American Arbitration Association (
AAA
) in Boston, Massachusetts in accordance with the Employment Arbitration Rules
of the AAA, including, but not limited to, the rules and procedures applicable
to the selection of arbitrators. In the event that any person or entity other
than the Executive or the Company may be a party with regard to any such
controversy or claim, such controversy or claim shall be submitted to
arbitration subject to such other person or entitys agreement. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. This Section 8 shall be specifically enforceable.
Notwithstanding the foregoing, this Section 8 shall not preclude either party
from pursuing a court action for the sole purpose of obtaining a temporary
restraining order or a preliminary injunction in circumstances in which such
relief is appropriate; provided that any other relief shall be pursued through
an arbitration proceeding pursuant to this Section 8.
9.
Consent to Jurisdiction
. To the extent that any court action is permitted consistent with or to
enforce Section 8 of this Agreement, the parties hereby agree that the
Middlesex County Superior Court of The Commonwealth of Massachusetts shall
have exclusive jurisdiction of such dispute, provided that the Company and the
Executive agree that all civil actions related to Section 7(c) of this
Agreement shall be brought in the county of Suffolk, Massachusetts and that
the superior court or the business litigation session of the superior court
shall have exclusive jurisdiction. Accordingly, with respect to any such court
action, the Executive submits to the personal jurisdiction of such courts.
10.
Integration
. This Agreement and the Confidentiality and Assignment Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, including the Prior Agreement,
between the Parties concerning such subject matter.
11.
Withholding
. All payments made by the Company to the Executive under this Agreement shall
be net of any tax or other amounts required to be withheld by the Company
under applicable law.
12.
Successor to the Executive
. This Agreement shall inure to the benefit of and be enforceable by the
Executives personal representatives, executors, administrators, heirs,
distributees, devisees and legatees. In the event of the Executives death
after Executives termination of employment but prior to the completion by the
Company of all payments due Executive under this Agreement, the Company shall
continue such payments to the Executives beneficiary designated in writing to
the Company prior to Executives death (or to Executives estate, if the
Executive fails to make such designation).
13.
Enforceability
. If any portion or provision of this Agreement (including, without
limitation, any portion or provision of any section of this Agreement) shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion
13
-------------------------------------------------------------------------------
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
14.
Survival
. The provisions of this Agreement and the Confidentiality and Assignment
Agreement shall survive the termination of this Agreement and/or the
termination of the Executives employment to the extent necessary to effectuate
the terms contained herein.
15.
Waiver
. Except as otherwise provided in Section 7(c), no waiver of any provision
hereof shall be effective unless made in writing and signed by the waiving
party. The failure of any party to require the performance of any term or
obligation of this Agreement, or the waiver by any party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach.
16.
Notices
. Any notices, requests, demands and other communications provided for by this
Agreement shall be sufficient if in writing and delivered in person or sent by
a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to the Executive at
the last address the Executive has filed in writing with the Company or, in
the case of the Company, at its main offices, attention of the CEO and a copy
of such notice shall be sent to CRISPR AG, Attention: General Counsel, at the
main offices of CRISPR AG.
17.
Amendment
. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized representative of the Company.
18.
Governing Law
. This is a Massachusetts contract and shall be construed under and be
governed in all respects by the laws of the Commonwealth of Massachusetts,
without giving effect to the conflict of laws principles of such Commonwealth.
With respect to any disputes concerning federal law, such disputes shall be
determined in accordance with the law as it would be interpreted and applied
by the United States Court of Appeals for the First Circuit.
19.
Counterparts
. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be taken to be an original; but such
counterparts shall together constitute one and the same document.
20.
Assignment and Transfer by the Company
. The Company will have the right to assign and/or transfer this Agreement to
its affiliates, successors and assigns. The Executive expressly consents to be
bound by the provisions of this Agreement for the benefit of the Company or
any parent, subsidiary or affiliate to whose employ the Executive may be
transferred without the necessity that this Agreement be re-signed at the time
of such transfer.
[Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
14
-------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
date and year first above written.
CRISPR THERAPEUTICS, INC.
By:
/s/ Megan Menner
Megan Menner
Head of Human Resources
EXECUTIVE
/s/ Julianne Bruno
Julianne Bruno
15
-------------------------------------------------------------------------------
EXHIBIT A
Confidentiality and Assignment Agreement
16
-------------------------------------------------------------------------------
{graphic omitted}
{graphic omitted}