Solid Biosciences Inc. appointed new CEO

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


Resignation of Principal Officers 

On September 29, 2022, Ilan Ganot notified the Company of his intention to resign as the Company's Chief Executive Officer and President, subject to, and contingent and effective upon, the closing of the Merger (such date, the "Effective Date"). Following the resignation, Mr. Ganot will continue to serve on the Board. 

On September 29, 2022, Erin Powers Brennan also notified the Company of her intention to resign as the Company's Chief Legal Officer and Secretary, subject to, and contingent and effective upon, the Effective Date. 


Executive Employment Agreement 

On September 29, 2022, the Company entered into an employment agreement with Alexander Cumbo (the "Cumbo Employment Agreement"), pursuant to which Mr. Cumbo will serve as the Company's President and Chief Executive Officer, subject to his appointment to such position by the Board and subject to, and contingent and effective upon, the Effective Date. 

The Cumbo Employment Agreement sets forth the terms of Mr. Cumbo's compensation, including his base salary, and annual performance bonus opportunity. In addition, the Cumbo Employment Agreement provides that, subject to eligibility requirements under the plan documents governing such programs and the Company's policies, Mr. Cumbo is entitled, on the same basis as other Company employees, to participate in and receive benefits under, any medical, vision and dental insurance policy maintained by the Company and the Company will pay, consistent with its then current employee benefit policy, a portion of the cost of the premiums for any such insurance policy in which the executive elects to participate. Mr. Cumbo will also be eligible to receive paid vacation time, sick time, and Company holidays consistent with the Company's policies as then in effect from time to time and equity awards at such times and on such terms and conditions as the Board may determine. 

Pursuant to the Cumbo Employment Agreement, Mr. Cumbo will be entitled to receive an annual base salary of $585,000. His base salary will be reviewed by the Board from time to time and is subject to change in the discretion of the Board. 

Under the Cumbo Employment Agreement, Mr. Cumbo is also eligible to earn an annual performance bonus, with a target bonus amount equal to a specified percentage of his annual base salary, based upon the Board's assessment of his performance and the Company's attainment of targeted goals as set by the Board in its sole discretion. The bonus may be in the form of cash, equity award(s), or a combination of cash and equity. Beginning on January 1, 2023, Mr. Cumbo will be eligible for an annual discretionary bonus of up to 55% of his base salary. Mr. Cumbo must be employed on the date that bonuses are paid in order to receive the bonus, provided that if such executive is terminated by the Company without cause (as "cause" is defined in the Cumbo Employment Agreement) between January 1 following the performance year and the date of payment, he will be entitled to the same bonus that he would have received had he remained employed through the payment date. 

Effective as of the Effective Date and subject to Board approval, the Company will grant Mr. Cumbo a nonstatutory stock option (the "Option") to purchase 3,433,500 shares of the Company's Common Stock, at an exercise price per share equal to the closing price of the Common Stock on the Nasdaq Global Select Market on the Effective Date, which will vest as to 25% of the shares underlying the Option on the first anniversary of the Effective Date and, following that, as to an additional 1/48th of the total shares underlying the Option upon his completion of each additional month of service over the 36-month period measured from the first anniversary of the Effective Date. Effective as of the Effective Date and subject to Board approval, the Company will also grant Mr. Cumbo restricted stock units with respect to 1,716,749 shares of the Company's Common Stock (the "RSU"), which will vest as to 25% of the shares underlying the RSU on each anniversary of the Effective Date, subject to continued service. The Option and the RSU will be granted as an inducement material to Mr. Cumbo's acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). 

Mr. Cumbo will be bound by proprietary rights, non-disclosure, developments, non-competition and non-solicitation obligations pursuant to the restrictive covenants provided for in his employment agreement. Under these restrictive covenants, he will agree not to compete with the Company during his employment and for a period of one year after the termination of his employment, not to solicit the Company's employees, consultants, or actual or prospective customers or business relations during his employment and for a period of one year after the termination of his employment, and to protect the Company's confidential and proprietary information indefinitely. In addition, under these restrictive covenants, he will agree that the Company owns all inventions that are developed by him during a specified period of time with respect to any inventions made by him that are related to his activities while employed by the Company. 

The Cumbo Employment Agreement and the employment of Mr. Cumbo may be terminated as follows: (1) upon the death of the executive or at the election of the Company due to the executive's "disability" (as disability is defined in the applicable employment agreement); (2) at the Company's election, with or without "cause"; and (3) at such executive's election, with or without "good reason" (as good reason is defined in the applicable employment agreement). 


In the event of the termination of Mr. Cumbo's employment by the Company without cause, or by such executive for good reason, prior to or more than twelve months following a "change in control" (as change in control is defined in the applicable employment agreement), the executive is entitled to receive his base salary that has accrued and to which he is entitled as of the termination date, to the extent consistent with Company policy, accrued but unused paid time off through and including the termination date, unreimbursed business expenses for which expenses the executive has timely submitted appropriate documentation, and other amounts or benefits to which the executive is entitled in accordance with the terms of the benefit plans then-sponsored by the Company (collectively, the "Accrued Obligations"). In addition, subject to the executive's execution and nonrevocation of a release of claims in the Company's favor, the executive is entitled to (1) continued payment of his base salary, in accordance with the Company's regular payroll procedures, for a period of 12 months and (2) provided he is eligible for and timely elects to continue receiving group medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by the Company of the portion of health coverage premiums the Company pays for similarly-situated, active employees who receive the same type of coverage, for a period of up to 12 months following his date of termination. 

In the event of the termination of Mr. Cumbo's employment by the Company without cause, or by such executive for good reason within twelve months following a change in control, the executive is entitled to receive the Accrued Obligations. In addition, subject to the executive's execution and nonrevocation of a release of claims in the Company's favor, the executive is entitled to (1) continued payment of his base salary, in accordance with the Company's regular payroll procedures, for a period of 18 months, (2) provided the executive is eligible for and timely elects to continue receiving group medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by the Company of the portion of health coverage premiums the Company pays for similarly-situated, active employees who receive the same type of coverage, for a period of up to 18 months following his date of termination, (3) a lump sum payment equal to 150% of the executive's target bonus for the year in which his employment is terminated or, if higher, the executive's target bonus immediately prior to the change in control and (4) full vesting acceleration of any then-unvested equity awards that vest based solely based on the passage of time held by the executive, such that any such equity awards held by the executive become fully exercisable or non-forfeitable as of the termination date. 

If Mr. Cumbo's employment is terminated for any other reason, including as a result of his death or disability, for cause, or voluntarily by him without good reason, the Company's obligations under the employment agreement cease immediately, and the executive is only entitled to receive the Accrued Obligations. 

Executive Transition Agreements 

Ilan Ganot 

On September 29, 2022, the Company entered into an Executive Transition and Separation Agreement with Ilan Ganot (the "Ganot Transition Agreement"), which will be subject to, and contingent and effective upon, the Effective Date (such date, the "Separation Date"). Pursuant to the Ganot Transition Agreement, Mr. Ganot will be entitled to receive all unpaid base salary earned through the Separation Date, any amounts for accrued unused paid time off to which he is entitled through such date in accordance with Company policy, and reimbursement of any properly incurred unreimbursed business expenses incurred through such date. In addition, Mr. Ganot will be entitled to (1) continued payment of his base salary, in accordance with the Company's regular payroll procedures, for a period of 18 months, (2) provided he is eligible for and timely elects to continue receiving group medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by the Company of the portion of health coverage premiums the Company pays for similarly-situated, active employees who receive the same type of coverage, for a period of up to 18 months following the Separation Date, and (3) $477,427, less applicable taxes and withholdings, which is a lump sum payment equal to 150% of his target bonus for 2022. In the event that the Separation Date occurs in 2023, the Company shall also provide Mr. Ganot with a pro-rated bonus for 2023, calculated by multiplying his target bonus by a fraction, the numerator of which is the number of days Mr. Ganot was employed by the Company in 2023 and denominator of which is 365, less applicable taxes and withholding. Mr. Ganot's outstanding equity awards will continue to vest and be exercisable in accordance with the terms of the applicable equity award agreement and the equity plan under which such award was granted. 


The Ganot Transition Agreement also provides for, among other things, a release of claims by Mr. Ganot, non-disclosure and non-disparagement obligations applicable to Mr. Ganot and non-disparagement obligations applicable to the Company. In addition, the Ganot Transition Agreement provides that the confidentiality, assignment of inventions, non-competition and non-solicitation provisions of the Employment Agreement, dated as of January 25, 2019, between the Company and Mr. Ganot remain in effect in accordance with their terms. 

On September 29, 2022, the Company and Mr. Ganot also entered into a Consulting Agreement (the "Ganot Consulting Agreement"), to be effective as of the Separation Date, pursuant to which Mr. Ganot will assist with the transition of his duties to Mr. Cumbo and provide other consulting and advisory services, as requested from time to time by the Company. Mr. Ganot shall devote up to 415 hours (up to 8 hours weekly) over 12 months following the Separation Date. Mr. Ganot will be compensated at a rate of $20,833 per month for his services under the Ganot Consulting Agreement. In addition, in respect of his services as a consultant, the Company anticipates granting, subject to Board approval, Mr. Ganot an option to purchase 200,000 shares of the Company's Common Stock (the "Ganot Stock Options") and 95,000 restricted stock units with respect to the Company's Common Stock (the "Ganot RSUs"). The Ganot Stock Options and the Ganot RSUs will vest in equal quarterly installments with the first installment vesting three months from the date of grant and the final installment vesting date being the date that is 12 months from the Separation Date, subject to Mr. Ganot's continued provision of services under the Ganot Consulting Agreement. In addition, in the event of a change in control (as defined in the Ganot Consulting Agreement), the unvested Ganot Stock Options and Ganot RSUs will accelerate in full. The term of the Ganot Consulting Agreement will continue for 12 months following the Separation Date. Either party will be able to terminate the Ganot Consulting Agreement, for any or no reason, upon at least 10 days prior notice, and the Company may terminate for cause (as defined therein) immediately upon notice; provided that if the Company terminates the Ganot Consulting Agreement without cause and Mr. Ganot executes a release of claims in a form provided by the Company, then (i) the monthly consulting fees will continue to be paid to Mr. Ganot for the remainder of the term of the Ganot Consulting Agreement, (ii) the vesting of the Ganot Stock Options will accelerate in full as of the date of the termination and (iii) the Ganot RSUs will continue to settle in accordance with the vesting schedule notwithstanding Mr. Ganot's cessation of service. 

Erin Powers Brennan 

On September 29, 2022, the Company entered into an Executive Transition and Separation Agreement with Erin Powers Brennan (the "Brennan Transition Agreement"), which will be subject to, and contingent and effective upon, the Separation Date. Pursuant to the Brennan Transition Agreement, Ms. Brennan will be entitled to receive all unpaid base salary earned through the Separation Date, any amounts for accrued unused paid time off to which she is entitled through such date in accordance with Company policy, and reimbursement of any properly incurred unreimbursed business expenses incurred through such date. In addition, Ms. Brennan will be entitled to (1) continued payment of her base salary, in accordance with the Company's regular payroll procedures, for a period of 12 months, (2) provided she is eligible for and timely elects to continue receiving group medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by the Company of the portion of health coverage premiums the Company pays for similarly-situated, active employees who receive the same type of coverage, for a period of up to 12 months following the Separation Date, and (3) $172,200, which is a lump sum payment equal to 100% of her target bonus for 2022, as well as an additional $66,106 payment, which represents the retention bonus Ms. Brennan would have received on May 1, 2023 pursuant to the April 28, 2022 Retention Bonus Opportunity letter had she remained employed by the Company on that date, both amounts less applicable taxes and withholdings. In the event that the Separation Date occurs in 2023, the Company shall also provide Ms. Brennan with a pro-rated bonus for 2023, calculated by multiplying her target bonus by a fraction, the numerator of which is the number of days Ms. Brennan was employed by the Company in 2023 and denominator of which is 365, less applicable taxes and withholdings. Ms. Brennan's outstanding restricted stock units will vest in full as of the Separation Date, and her outstanding option awards will continue to vest and be exercisable in accordance with the terms of the applicable option award agreement and the equity plan under which such award was granted. 

The Brennan Transition Agreement also provides for, among other things, a release of claims by Ms. Brennan, non-disclosure and non-disparagement obligations applicable to Ms. Brennan and non-disparagement obligations applicable to the Company. In addition, the Brennan Transition Agreement provides that the confidentiality, assignment of inventions, non-competition and non-solicitation provisions of the Employment Agreement, dated as of March 1, 2021, between the Company and Ms. Brennan remain in effect in accordance with their terms. 


On September 29, 2022, the Company and Ms. Brennan also entered into a Consulting Agreement (the "Brennan Consulting Agreement"), to be effective as of the Separation Date, pursuant to which Ms. Brennan will assist with the transition of her duties and provide other consulting and advisory services, as requested from time to time by the Company. Ms. Brennan will provide up to eight (8) hours of services weekly over the first six (6) months of the term of the agreement and shall provide services on an ad hoc basis for the remainder of the term (but shall at no time provide more than eight (8) hours of services per week). Ms. Brennan will be compensated at a rate of $400 per hour for her services under the Brennan Consulting Agreement. The term of the Consulting Agreement will continue for nine months following the Separation Date. Either party will be able to terminate the Brennan Consulting Agreement at any time, for any or no reason, upon at least 10 days prior notice, and the Company may terminate for cause (as defined therein) immediately upon notice; provided that if the Company terminates the Brennan Consulting Agreement without cause and Ms. Brennan executes a release of claims in a form provided by the Company, then any unvested options that were outstanding as of the Separation Date shall become vested in full as of the termination. 

The foregoing summaries of the Cumbo Employment Agreement, the Ganot Transition Agreement, the Ganot Consulting Agreement, the Brennan Transition Agreement and the Brennan Consulting Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of each such agreement, which are filed as Exhibits 10.5, 10.6, 10.7, 10.8 and 10.9 to this Current Report on Form 8-K, respectively, and which are incorporated herein by reference.