Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Dr. Peter A. Thompson, M.D., FACP as President, Chief Executive Officer and Director
On November 16, 2009, Trubion Pharmaceuticals, Inc. (“Trubion”) issued a news release, a copy of
which is filed with this Current Report on Form 8-K as Exhibit 99.1 (the “News Release”),
announcing that Peter A. Thompson, M.D., FACP, President, Chief Executive Officer and a member of
the board of directors of Trubion (the “Board”), resigned from his executive officer positions at
Trubion, effective November 16, 2009, and as a member of the Board, effective November 14, 2009. On
November 14, 2009, Trubion entered into a Separation and Consulting Agreement and Release (the
“Consulting Agreement”) with Dr. Thompson, which supersedes in all respects the terms of the
existing employment agreement between Dr. Thompson and Trubion, dated March 21, 2008 (as amended,
the “Employment Agreement”), and pursuant to which Dr. Thompson will receive (i) one year of base
pay, which totals $416,000, paid on the first payroll date in January 2010, (ii) a lump-sum payment
of $28,268, for accrued but unused vacation pay, to be paid within two weeks of the date of this
report and (iii) reimbursement of COBRA premium payments, should Dr. Thompson elect to continue his
health benefits, for a period lasting until the earlier of November 16, 2010 or such time as he
obtains other health insurance. In addition, Dr. Thompson has agreed to provide Trubion with
specified consulting services, not to exceed 20 hours per week, until November 16, 2010. Dr.
Thompson will receive $25,000 per month in consideration for these services.
In the event of a change in control, as described in the Employment Agreement, that occurs on or
before February 16, 2010, Dr. Thompson will receive all of the benefits described in the preceding
paragraph, provided that the he will be paid an additional base pay amount of $208,000, paid on the
first payroll date after the consummation of the change in control, and Trubion’s obligation to
reimburse COBRA payments will extend up to 18 months.
Furthermore, pursuant to the Consulting Agreement, Dr. Thompson will be entitled to immediate
vesting of currently-held but unvested stock options representing the right to purchase 59,820
shares of Trubion’s common stock. Thereafter, his remaining unvested stock options will continue to
vest at the rate of 4,653 shares per month and at the end of his consulting service period any
remaining unvested stock options will vest and become exerciseable. Dr. Thompson will be permitted
to exercise any exerciseable stock options during the period he is providing consulting services to
Trubion and through the expiration of the three-month period immediately following the cessation of
his consulting services.
The Consulting Agreement contains customary provisions regarding release of claims and
non-disparagement, and contains customary non-solicitation and non-competition provisions that
extend for a period of 12 months. In addition, for so long as Section 304 of the Sarbanes-Oxley Act
of 2002 remains in effect, Dr. Thompson may be required to reimburse Trubion for incentive- or
equity-based compensation received, or profits from the sale of Trubion securities during, the 12
months following the first public issuance of any financial documents that are materially
non-compliant as of a result of any misconduct by Dr. Thompson.
Appointment of Steven Gillis, Ph.D., as Executive Chairman and acting President
Trubion announced in the News Release that the Board has appointed Steven Gillis, Ph.D., age 56, as
Executive Chairman of the Board and acting President of Trubion, in each case effective as of
November 16, 2009. In these capacities, Dr. Gillis will be Trubion’s principal executive officer.
In addition, he will be resigning his position as lead director and will no longer serve on
Trubion’s compensation and nominating and corporate governance committees and will no longer
receive any related compensation. Lee Brettman and Patrick Heron, both independent members of the
Board, have been appointed by the Board to the compensation and nominating and corporate governance
committees, respectively. Dr. Gillis has served as a member of the Board since January 2006 and as
lead director since February 2009. Since 2005, Dr. Gillis has been a Managing Director with ARCH
Venture Partners, a venture capital firm. From 1994 to 2005, Dr. Gillis served as Chief Executive
Officer and Chairman of the board of directors of Corixa Corporation, a biotechnology company,
which he co-founded in 1994. Prior to 1994, Dr. Gillis served as Executive Vice President of
Research and Development, and then as Chief Executive Officer and Chairman of the board of
directors, of Immunex Corporation, which he co-founded. Dr. Gillis serves on the board of directors
of several privately-held companies. Dr. Gillis received a Ph.D. from Dartmouth College and a B.A.
from Williams College. In connection with his appointment as Executive Chairman and acting
President, Trubion’s compensation committee of the Board has recommended and the Board has approved
monthly cash compensation of $12,500 and the grant of a stock option award to purchase 90,000
shares of Trubion’s common stock with an exercise price of $4.11 that will vest monthly in equal
amounts over three years.