Item 1.01 Amendment of a Material Definitive Agreement.
In connection with his appointment as acting Chief Executive Officer of Kosan Biosciences Incorporated, a Delaware corporation (the “Company”), as discussed below, on February 14, 2006 the Company granted Robert G. Johnson, Jr., M.D., Ph.D. an option to purchase 25,000 shares of the Company’s common stock, at an exercise price of $4.875 per share and vesting ratably over 48 months. The Company also increased Dr. Johnson’s 2006 cash bonus target from 30% to 45% of his annual salary, effective as of January 1, 2006.
In addition, on February 14, 2006, the Company increased the 2006 cash bonus target for Margaret A. Horn, the Company’s Senior Vice President, General Counsel and Secretary, from 30% to 35% of her annual salary, effective as of January 1, 2006.
Item 5.02 Departure of Directors or Principal Officers; Election of Officers; Appointment of Officers.
Effective February 13, 2006, Daniel V. Santi, M.D., Ph.D. resigned as Chief Executive Officer and Chairman of the Board of Directors of the Company, and the Company’s Board of Directors (the “Board”) appointed Robert G. Johnson, Jr., M.D., Ph.D., the Company’s then current Executive Vice President, Development and Chief Medical Officer, as acting Chief Executive Officer on an interim basis until a permanent CEO is appointed by the Board. Dr. Santi continues to serve as a Director of the Company.
Dr. Johnson, 54, joined the Company in September 2000 and has served as Executive Vice President, Development since April 2004 and as Chief Medical Officer since January 2003. From January 2002 to April 2004, Dr. Johnson served as the Company’s Senior Vice President, Medical Affairs and Corporate Development and from September 2000 to January 2002, served as Vice President, Medical Affairs and Corporate Development. From 1998 to September 2000, Dr. Johnson was employed by Chiron Corporation, where he served as Vice President, Pharmacology and Preclinical Affairs through 1999 and most recently as Vice President, Corporate Development. From 1991 to 1998, Dr. Johnson was Director of Pharmacology at Merck & Co., Inc., a pharmaceutical company. In addition, Dr. Johnson was a member of the faculty at the University of Pennsylvania from 1987 to 1991 and at Harvard Medical School from 1985 to 1987. Dr. Johnson received his B.A. and Ph.D. in biophysics and an M.D. from the University of Pennsylvania.
Pursuant to the terms of the offer letter between Dr. Johnson and the Company dated September 5, 2000 (the “Offer Letter”), in the event of the involuntary termination of Dr. Johnson’s employment without Cause (as such term is defined in the Offer Letter), Dr. Johnson will receive separation pay in the form of continuation of his base salary (subject to standard withholdings and deductions) in regular payment installments for a period of six months following the date of termination of employment, subject to Dr. Johnson’s execution of a general release of the Company. The Company’s obligation to continue to pay such base salary shall cease as of the date Dr. Johnson commences employment with another business entity.
Dr. Johnson’s base salary for 2006 is $365,000 and his target cash bonus is 45% of his 2006 base salary. The actual bonus payable to Dr. Johnson (if any) will depend on the extent to which the Company’s and Dr. Johnson’s actual performance meets, exceeds or falls short of specified corporate objectives and individual performance objectives approved by the Compensation Committee of the Board and on the level of the Company’s then current or anticipated cash reserves.
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