EXICURE, INC. appointed Brian C. Bock as new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain 

Officers; Compensatory Arrangements of Certain Officers.


Management Changes


The Board of Directors of the Company (the "Board") appointed Brian C. Bock, the Company's Chief Financial Officer, as the Company's Chief Executive Officer, replacing David Giljohann, effective December 10, 2021. The Board appointed Dr. Giljohann to the position of Chief Technology Officer of the Company effective December 10, 2021. Dr. Giljohann will serve as Chief Technology Officer of the Company through January 30, 2022, at which time he will separate from the Company. In connection with his transition to the position of Chief Technology Officer, Dr. Giljohann resigned as a member of the Board, effective December 10, 2021. Mr. Bock was appointed as a member of the Board, effective December 10, 2021, to fill the vacancy created by Dr. Giljohann. 


In connection with Mr. Bock's appointment as Chief Executive Officer, on the approval and recommendation of the Compensation Committee of the Board (the "Compensation Committee"), and following subsequent approval of the Board, effective December 10, 2021, the Company and Mr. Bock entered into an amendment (the "Bock Amendment") to his employment agreement dated April 16, 2021. Under the terms of the Bock Amendment, Mr. Bock's initial annual base salary was increased to $525,000 and is eligible to earn an annual cash incentive bonus, which is initially set at a target aggregate bonus amount of 50% of Mr. Bock's base salary, upon achievement of certain individual and/or Company performance goals set by the Compensation Committee.


Under the terms of the Bock Amendment the Company entered into with Mr. Bock: 


-Subject to Mr. Bock's continued employment through January 31, 2022, the Company will pay Mr. Bock a one-time retention award of $180,000, subject to applicable tax withholdings, as soon as practicable and no later than five business days after January 31, 2022. 


-In the event of termination of Mr. Bock's employment by the Company without "Cause" or by Mr. Bock with "Good Reason" (as such terms are defined in Mr. Bock's original employment agreement), Mr. Bock's cash severance payment shall be increased to twelve (12) months of base salary, payable in the form of salary continuation payments during the applicable severance period. Such severance period reflects an increase from the prior six (6) month period.


-In the event of termination of Mr. Bock's employment by the Company without "Cause" or by Mr. Bock with "Good Reason" (as such terms are defined in Mr. Bock's original employment agreement) within twelve (12) months following a "Change in Control" of the Company (as such term is defined in Mr. Bock's original employment agreement), Mr. Bock's severance period shall be increased to an eighteen (18) month period from the date of termination. Such severance period reflects an increase from the prior fifteen (15) month period. The Company also agreed to pay Mr. Bock an annual cash bonus equal to his annual target bonus opportunity for the year in which the termination of employment occurs, payable no later than 30 days after the effective date of the release contemplated by the Bock Amendment. In addition, if Mr. Bock timely elects to receive continued coverage under the Company's group health care plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), then he will be entitled to receive payment of the employer portion of his COBRA premiums until the earlier of (a) eighteen (18) months from his termination date or (b) the date he obtains or becomes eligible for health care coverage from a new employer or otherwise. 


-Furthermore, Mr. Bock has voluntarily waived his right to the second tranche of his previously negotiated sign-on bonus. This payment, an amount of $60,000, would have been paid by the Company in December 2022 pursuant to the terms of Mr. Bock's original employment agreement, assuming Mr. Bock's continued employment.


Mr. Bock was also appointed as the Company's principal executive officer and will retain the designation of principal financial officer. He will receive no additional compensation for this designation.


A future Current Report on Form 8-K will be filed to discuss compensation terms for Dr. Giljohann's appointment as Chief Technology Officer and separation from the Company.


The Board appointed Matthias Schroff, the Company's Chief Operating Officer, to the position of Chief Scientific Officer of the Company effective December 10, 2021. In connection with Dr. Schroff's appointment as Chief Scientific Officer, on the approval and recommendation of the Compensation Committee, and following subsequent approval of the Board, effective December 10, 2021, the Company and Dr. Schroff entered into an amendment (the "Schroff Amendment") to his employment agreement dated December 10, 2019 as amended by that certain side letter dated June 9, 2020. Subject to Dr. Schroff's continued employment in good standing through May 31, 2022, the Company will pay Dr. Schroff a one-time retention award of $140,000 (the "Schroff Retention Award"), subject to applicable tax withholdings. Fifty percent (50%) of the Schroff Retention Award will be paid on February 15, 2022 (the "February 2022 Portion"), and fifty percent (50%) of the Schroff Retention Award will be paid to Dr. Schroff within ten (10) days after May 31, 2022. Both such portions of the Schroff Retention Award shall become earned upon May 31, 2022. If Dr. Schroff voluntarily terminates his employment or his employment is terminated for "Cause" (as such term is defined in Dr. Schroff's original employment agreement) prior to May 31, 2022, but after receipt of the February 2022 Portion, Dr. Schroff will be required to repay the February 2022 Portion. Dr. Schroff's annual base salary and initial annual bonus target were not amended in connection with his new role.


As part of the workforce reduction described in Item 2.05, Douglas Feltner, the Company's Chief Medical Officer, is separating from the Company effective January 30, 2022. In connection with his separation, Mr. Feltner will receive (i) a severance payment of approximately $200,000, which will be payable in the form of salary continuation payments and (ii) his annual cash bonus for 2022, based on the actual achievement of the performance targets, pro-rated for one-month portion of 2022 that he will be employed by the Company, and the bonus will be payable at the same time bonuses are paid to senior management (which is currently expected to occur in the first quarter of 2023).


The foregoing descriptions of the Bock Amendment and Schroff Amendment do not purport to be complete and are qualified in their entirety by reference to the full texts of the Bock Amendment and Schroff Amendment, each of which is included herewith as Exhibit 10.2 and 10.3 to this Current Report on Form 8-K, respectively, and each of which is incorporated herein by reference.