Armata Pharmaceuticals, Inc. appointed Dr. Deborah Birx as new CEO

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 


On July 10, 2023, the Company terminated Dr. Brian Varnum as its Chief Executive Officer, at which time he was deemed to have resigned from the Board pursuant to the terms of his offer letter.


On July 11, 2023, the Company announced that the Board of Directors (the "Board") had appointed Dr. Deborah Birx, 67, to the position of Chief Executive Officer and as a member of the Board, in each case effective as of Mr. Varnum's termination as Chief Executive Officer (the "Effective Date").


Prior to her appointment as Chief Executive Officer of the Company, Dr. Birx resigned as a member of the Board of Directors of Innoviva, Inc. ("Innoviva"), the Company's largest shareholder, a position she assumed in March 2021. Dr. Birx most recently served as the response coordinator of the White House Coronavirus Task Force, where she made recommendations to the vice president using data integration to drive decision making, as well as worked closely with state officials across the country to provide state-specific advice and guidance. In 2014, Dr. Birx became an Ambassador-at-Large, when she assumed the role of the Coordinator of the United States Government Activities to Combat HIV/AIDS and U.S. Special Representative for Global Health Diplomacy, a position she served in until January 2021. As the U.S. Global AIDS Coordinator, Dr. Birx oversaw the President's Emergency Plan for AIDS Relief (PEPFAR), the largest commitment by any nation to combat a single disease in history, at the CDC as well as all U.S. Government engagement with the Global Fund to Fight AIDS, Tuberculosis and Malaria. From 2005 until 2014, Dr. Birx served successfully as the Director of CDC's Division of Global HIV/AIDS (DGHA) in the CDC Center for Global Health. From 1996 until 2005, she served as the Director of the U.S. Military HIV Research Program (USMHRP) at the Walter Reed Army Institute of Research. During this time, she also rose to the rank of Colonel. Then known as Colonel Birx, she was awarded two prestigious U.S. Meritorious Service Medals and the Legion of Merit Award for her groundbreaking research, leadership and management skills during her tenure at the DoD. In 1985, Dr. Birx began her career with the Department of Defense (DoD) as a military trained clinician in immunology, focusing on HIV/AIDS vaccine research. Dr. Birx has published over 230 manuscripts in peer-reviewed journals, authored nearly a dozen chapters in scientific publications, as well as developed and patented vaccines. Dr. Birx currently serves as a member of the Board of Directors of Nanolive SA.


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Dr. Birx received her medical degree from the Hershey School of Medicine, Pennsylvania State University in 1980 and her B.S. from Houghton College in 1976. Dr. Birx is board certified in internal medicine, allergy and immunology, and diagnostic and clinical laboratory immunology. Dr. Birx is a world renowned medical expert and leader whose long career has focused on clinical and basic immunology, infectious diseases, pandemic preparedness, vaccine research, and global health.


In connection with her appointment as Chief Executive Officer, the Company entered into an employment offer letter with Dr. Birx dated as of July 10, 2023 (the "Agreement"). The Agreement has no specified term, and Dr. Birx's employment with the Company will be on an at-will basis.


The Agreement provides for an initial annual base salary of $525,000, with a target annual bonus opportunity equal to 50% of her base salary (pro-rated for the 2023 fiscal year). Subject to the approval of the Compensation Committee of the Board, Dr. Birx will be granted a stock option to purchase 400,000 shares of common stock of the Company pursuant to the Company's 2016 Equity Incentive Plan (the "Plan"), with an exercise price that is no less than the fair market value of a share of common stock of the Company on the date of grant. Subject to her continued employment with the Company through each applicable vesting date, 25% of the option shares will vest on the first anniversary of the Effective Date and the remainder will vest in equal annual installments during the three-year period following the first anniversary of the Effective Date. She will also be eligible to participate in the benefit and expense reimbursement programs made available by the Company to its senior executives.


The Agreement provides that if the Company terminates Dr. Birx's employment other than for "cause" (as defined in the Agreement), death or disability, or Dr. Birx terminates her employment for "good reason" (as defined in the Agreement), then she shall be entitled to the following severance benefits (the "Severance Benefits"):


(i) continuation of her then-current base salary for (x) if such termination occurs on or prior to the date that is six (6) months following the Effective Date, a period of six months, (y) if such termination occurs on or following the date that is twelve months following the Effective Date, a period of twelve months, or (z) if such termination occurs between the date that is six months following the Effective Date and the date that is twelve months following the Effective Date, the number of full months that have elapsed from the Effective Date through the date of termination, 


(ii) a pro-rated annual incentive for the year of termination, based on actual performance results for the year of termination, and 


(iii) only if such termination occurs on or following a "change in control" (as defined in the Plan), and provided that she does not receive a written offer of continued employment as an executive officer, or service as member of the board of directors, of the surviving company (or its ultimate parent) following such change in control and vesting would continue during such continued employment or service, as applicable, then all of her then-outstanding and unvested equity awards that are subject exclusively to time-based vesting requirements shall accelerate in full. 


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In exchange for the Severance Benefits, Dr. Birx must (x) execute a separation agreement that includes a release of claims in favor of the Company and its affiliates, as well as post-termination non-disparagement, cooperation and other obligations requested by the Company, and (y) continue to comply with the terms of the Restrictive Covenant Agreement.


On July 10, 2023, Dr. Birx also executed and delivered to the Company the restrictive covenant agreement attached as an Exhibit to the Agreement (the "Restrictive Covenant Agreement"), which contains customary confidentiality, assignment of works, non-interference, non-disparagement and cooperation provisions.


The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated by reference herein.


There are no arrangements or understandings between Dr. Birx and any other persons pursuant to which she was selected as Chief Executive Officer. There are also no family relationships between Dr. Birx and any director or executive officer of the Company and she has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.


The Company and Dr. Varnum are in the process of negotiating the material terms of Dr. Varnum's separation and release agreement and intend to enter into such agreement as soon as practicable. The separation and release agreement will be filed as an exhibit to a subsequent current report on Form 8-K.