Century Therapeutics, Inc. appointed Gregory Russotti as new CEO

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


Departure of President and Chief Executive Officer; Appointment of Interim President and Chief Executive Officer


Pursuant to notice provided on April 11, 2023, Osvaldo Flores, Ph.D. stepped down as the President and Chief Executive Officer of Century Therapeutics, Inc. (the "Company") and as a member of the Board of Directors of the Company (the "Board") effective April 11, 2023. In connection with Dr. Flores' resignation from the Board, the Board reduced its size to seven members. There was no disagreement between Dr. Flores and the Company on any matter related to the Company's operations, policies or practices that led to Dr. Flores' resignation from the Board.


The Company intends to enter into a separation agreement with Dr. Flores as soon as practicable, with such separation agreement to be filed as an exhibit to an amendment to this Current Report on Form 8-K.


On April 11, 2023, the Board appointed Gregory Russotti as Interim President and Chief Executive Officer. Dr. Russotti was previously the Company's Chief Technology Officer and is party to an Executive Employment Agreement with the Company, dated as of May 26, 2021 (the "Employment Agreement"), which agreement is filed as Exhibit 10. 37 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022.


In connection with Dr. Russotti's appointment, the Company and Dr. Russotti entered into a Side Letter to Executive Employment Agreement, dated as of April 12, 2023 (the "Side Letter"). Pursuant to the terms of the Side Letter, the term of Dr. Russotti's service as Interim President and Chief Executive Officer will continue until the Company successfully hires a new President and Chief Executive Officer, provided however, the Company may terminate Dr. Russotti as Interim President and Chief Executive Officer and restore Dr. Russotti to his position as Chief Technology Officer of the Company at any time upon (i) hiring of a new President and Chief Executive Officer, or (ii) otherwise upon ten days' written notice to Dr. Russotti (the "Term").


Pursuant to the Side Letter, Dr. Russotti's annual base salary has been raised to $614,092.50 (the "Base Salary"). Dr. Russotti's target cash bonus percentage will be calculated as a sum of the following under terms of the Side Letter: (i) 40% of Dr. Russotti's base salary in effect as of immediately prior to April 11, 2023, multiplied by a fraction the numerator of which is the number of days in such calendar year that are not part of the Term and the denominator of which is 365, and (ii) 55% of the Base Salary applicable during the Term multiplied by a fraction the numerator of which is the number of days during the Term and the denominator of which is 365. In addition, on April 11, 2023, the Board granted Dr. Russotti a one-time stock option grant to purchase 318,750 shares of the Company's common stock, par value $0.0001 per share, with an exercise price of $3.16 per share (the "Option"). The Option will vest 25% on the one-year anniversary of the grant date, with the remaining 75% vesting in 36 equal monthly installments, in each case subject to Dr. Russotti's continued employment with the Company and subject to the terms of the Company's 2021 Equity Incentive Plan.


Except as contemplated by the Side Letter, all other terms of the Employment Agreement remain unmodified and in full force and effect. The description of the Side Letter does not purport to be complete and is qualified in its entirety by reference to the Side Letter, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.


Dr. Russotti's biography can be found in the Company's proxy statement filed with the Securities and Exchange Commission ("SEC") on April 21, 2022, which is incorporated herein by reference. There are no family relationships between Dr. Russotti and the Company's existing directors and officers. In addition, Dr. Russotti is not a party to any transaction, or series of transactions, required to be disclosed pursuant to Item 404(a) of Regulation S-K.


Appointment of Chief Financial Officer


On April 11, 2023, the Board promoted Michael Diem to Chief Financial Officer. Dr. Diem was previously the Company's Chief Business Officer and is party to an Executive Employment Agreement with the Company, dated as of May 26, 2021, filed as Exhibit 10. 33 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022. All terms of the Dr. Diem's employment agreement remain unmodified and in full force and effect. The Board has not yet made any determination with respect to Dr. Diem's compensation related to the promotion. The Company will file an amendment to this Current Report on Form 8-K with respect to any material change in Dr. Diem's compensation.


Dr. Diem's biography can be found in the Company's proxy statement filed with the SEC on April 21, 2022, which is incorporated herein by reference. There are no family relationships between Dr. Diem and the Company's existing directors and officers. In addition, Dr. Diem is not a party to any transaction, or series of transactions, required to be disclosed pursuant to Item 404(a) of Regulation S-K.