Praxis Precision Medicines Inc. filed SEC Form 8-K: Leadership Update, Financial Statements and Exhibits
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In October 2024, Praxis Precision Medicines, Inc. (the “Company”) entered into amendments (the “Amendments”) to the Company’s employment agreements (the “Employment Agreements”) with each of the Company’s named executive officers, Marcio Souza, President and Chief Executive Officer, Timothy Kelly, Chief Financial Officer, and Alex Nemiroff, General Counsel (collectively, the “Executives”).
Amendments to Severance in Connection with a Change-in-Control
Pursuant to the Amendments, in the event an Executive’s termination of employment by the Company without “cause” or due to the Executive’s resignation for “good reason” (as each such term is defined in the applicable Employment Agreement) (each, a “qualifying termination”) occurs within three months before or 18 months after a “change of control” (as defined in the applicable Employment Agreement), then, in lieu of the payments and benefits described in the section below, the Executive will be eligible to receive (i) a lump sum in cash in an amount equal to (x) one (1) times (or 1.75 times for Mr. Souza) the sum of (A) the Executive’s then current annual base salary (or the annual base salary in effect immediately prior to the change of control, if higher) plus (B) the Executive’s target annual bonus for the year of termination (or the target annual bonus in effect immediately prior to the change of control, if higher); plus (y) a prorated portion of the Executive’s target annual bonus for the year of termination; (ii) any earned but unpaid annual bonus for the year prior to the year of the Executive’s qualifying termination; (iii) subject to the Executive’s co-payment of premium amounts at the applicable active employees’ rate and proper election to continue COBRA health coverage, the Company will cover the portion of the premium amount equal to the amount that the Company would have paid to provide health insurance to the Executive had the Executive remained employed with the Company (the “COBRA Payments”) until the earliest of (x) 12 months (or 18 months for Mr. Souza) following termination, (y) the date the Executive becomes eligible for group health insurance coverage through a new employer, or (z) the date the Executive ceases to be eligible for COBRA; and (iv) accelerated vesting of the Executive’s stock options and other stock-based awards in the Company that are subject solely to time-based vesting, with any stock options and other stock-based awards that vest in whole or in part based on the attainment of performance-vesting conditions being governed by the terms of the applicable award agreement.
Amendments to Severance Outside of a Change-in-Control
In the event of an Executive’s qualifying termination, the Executive will be eligible to receive (i) base salary continuation for nine months (or 12 months for Mr. Souza) following termination; (ii) any earned but unpaid annual bonus for the year prior to the year of the Executive’s termination; (iii) a prorated portion of the Executive’s annual bonus for the calendar year in which the termination occurs, based on actual performance for the year and payable when bonuses for such year are paid to actively employed senior executives of the Company; and (iv) the COBRA Payments until the earliest of (x) nine months (or 12 months for Mr. Souza) following termination, (y) the date the Executive becomes eligible for group health insurance coverage through a new employer, or (z) the date the Executive ceases to be eligible for COBRA.
The applicable Executive’s receipt of the severance payments and benefits described above is subject to the Executive’s execution and non-revocation of a general release of claims in favor of the Company and, if the payments would be subject to the golden parachute excise tax under Section 4999 of the Internal Revenue Code, potential reduction if it results in a higher net after-tax benefit to the Executive.
The foregoing description of the Amendments is qualified in its entirety by reference to the full text of each Amendment, which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. |
Description | |
| 10.1 | Employment Agreement Amendment Letter, dated October 11, 2024, by and between Marcio Souza and Praxis Precision Medicines, Inc. | |
| 10.2 | Employment Agreement Amendment Letter, dated October 11, 2024, by and between Timothy Kelly and Praxis Precision Medicines, Inc. | |
| 10.3 | Employment Agreement Amendment Letter, dated October 11, 2024, by and between Alex Nemiroff and Praxis Precision Medicines, Inc. | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
SIGNATURE
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 hereunto duly authorized.
| PRAXIS PRECISION MEDICINES, INC. | ||
| Date: October 15, 2024 | By: | /s/ Marcio Souza |
| Marcio Souza | ||
| Chief Executive Officer | ||