Updated: good long read — covering the Chagas deal, from the perspective of the CEO of Savant. Do go read it. I think Hurst was snowed by Shkreli, but it all turned out okay in the end: Shkreli got perp walked, and bounced.
Additional update: I will cross post the very cogent comments below, by PathoPhila, related to the story above, on the Shkreli sub-site.
[End, updated portion.]
First, don’t misunderstand: the newly disclosed agreement for Dr. Durrant, along with his over a million share incentive stock option — vesting in 12 equal quarterly (not
monthly — thanks, Anon. commenter below!) installments, beginning in December 2016, makes sound business sense. It is not out-sized in any sense, given the risks he takes, by trying to bring that ever-elusive PVR to New KaloBios, via the Savant Chagas partnership. [The related SEC Form 4, on it is here.]
It was also disclosed that Morgan Lam will move to chief science officer, from chief commercial officer.
Now, we wait for the current Forms 10-Q, which are required to disclose the full text of Dr. Durrant’s new agreement, and change of control provisions.
The SEC Form 8-K filed overnight contains only the running text summary, below:
“…Designation of Morgan Lam as Chief Scientific Officer
On September 13, 2016, the Board of Directors (the “Board”) of KaloBios Pharmaceuticals, Inc. (the “Company”) appointed Morgan Lam, formerly the Chief Operating Officer of the Company, as the Company’s Chief Scientific Officer. The change in Mr. Lam’s position was in recognition of Mr. Lam’s role in the Company’s scientific efforts in pursuit of its product candidates.
Employment Agreement with Dr. Durrant
Also on September 13, 2016, the Company entered into a new employment agreement with Cameron Durrant, MD, the Company’s chairman and chief executive officer (the “Agreement”). The Agreement provides for an initial annual base salary for Dr. Durrant of $600,000 as well as eligibility for an annual bonus targeted at 60% of his salary based on the achievements of objectives set and agreed to by the Board. For 2016, Dr. Durrant’s bonus opportunity will be pro-rated for the period commencing July 1, 2016 and ending on December 31, 2016. Dr. Durrant is entitled to participate in the Company’s benefit plans available to other executives, including its retirement plan and health and welfare programs. The Agreement also provides for an award of stock options to purchase 1,043,022 shares of the Company’s common stock, which option was granted on September 13, 2016. Dr. Durrant’s option will vest and become exercisable in 12 equal quarterly installments beginning on December 13, 2016.
Under the Agreement, Dr. Durrant is entitled to receive certain benefits upon termination of employment under certain circumstances. If the Company terminates Dr. Durrant’s employment for any reason other than “Cause”, or if Dr. Durrant resigns for “Good Reason” (each as defined in the Agreement), Dr. Durrant will receive twelve months of base salary then in effect and the amount of the actual bonus earned by Dr. Durrant under the agreement for the year prior to the year of termination, pro-rated based on the portion of the year Dr. Durrant was employed by the Company during the year of termination.
The Agreement additionally provides that if Dr. Durrant resigns for Good Reason or the Company or its successor terminates his employment within the three month period prior to and the 12 month period following a Change in Control (as defined in the Agreement), the Company must pay or cause it successor to pay Dr. Durrant a lump sum cash payment equal to two times (a) his annual salary as of the day before his resignation or termination plus (b) the aggregate bonus received by Dr. Durrant for the year preceding the Change in Control or, if no bonus had been received, at minimum 50% of the target bonus. In addition, upon such a resignation or termination, all outstanding stock options held by Dr. Durrant will immediately vest and become exercisable….
So now we wait, again. Three Q’s will soon be overdue. Two already are. Onward — Namaste.