Biostage, Inc. appointed Mr. Green as new CEO

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

Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Interim Chief Executive Officer


Effective as of November 26, 2021, the Company appointed Mr. Green as Interim Chief Executive Officer. Mr. Green, age 57, is the founder and CEO of Zero Carbon LLC, a company that offers green-tech consulting services. Mr. Green is also the founder and former Chairman and CEO of the Company, as well as co-founder and former director, President and CEO of Harvard Bioscience, Inc. Mr. Green graduated from Oxford University with a B.A. Honors degree in physics and holds a M.B.A. degree with distinction from Harvard Business School. Mr. Green does not have any family relationship with any director or executive officer of the Company or any person nominated or chosen by the Company to become a director or officer.


2


In connection with such appointment, the Company entered into an employment agreement (the "Employment Agreement") with Mr. Green with a commencement date of November 26, 2021 (the "Commencement Date"). The Employment Agreement will continue until terminated by the Company or Mr. Green. Pursuant to the Employment Agreement, Mr. Green's initial compensation as Interim Chief Executive Officer will include base salary and the nonqualified stock option grant described below. The annual base salary is set at the minimum required by applicable law, being $35,568, and is subject to annual review, provided that such base salary shall not be decreased without Mr. Green's consent. Mr. Green will receive on the Commencement Date, a nonqualified stock option to purchase 374,094 shares of common stock of the Company. Subject to continued employment or service on the Board through the applicable vesting dates, of such amount, (i) 106,884 shares will vest monthly in twelve equal monthly installments on each monthly anniversary of the Commencement Date, and (ii) up to 267,210 which shall vest in three increments, two for 80,163 shares each and the third for 106,884 shares, each such vesting subject to certain performance milestones set by the Board of Directors of the Company (the "Board") . The option has an exercise price equal to the closing price of the Company's common stock on the date of grant, being the Commencement Date, and portions of the option are subject to acceleration of vesting and extended post-termination exercise period under certain circumstances in relation to the Company terminating Mr. Green without cause.


Mr. Green shall also be eligible to participate in such incentive compensation plans as the Board or a Committee thereof shall determine from time to time for employees of the same status within the hierarchy of the Company.


The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference into this Item 5.02. The disclosure under Item 1.01 of this Form 8-k is also incorporated by reference into this Item 5.02.


Board of Director Changes


On November 26, 2021, in connection with his appointment as Interim Chief Executive Officer, Mr. Green also joined the Board as a Class II director and was appointed Chairman of the Board. In connection with such appointment, the Company's existing Chairman, Jason Chen, was appointed Vice Chairman of the Board. Mr. Green's appointment to the Board was effective immediately. As a Class II director, the initial term of Mr. Green as director will run until the Company's 2024 annual meeting of stockholders and until his successor is duly elected and qualified, or until his resignation or removal.


The Board has also previously named Junli He, an existing director, to the Compensation Committee, as Chairman, and the Governance Committee.


On November 30, 2021, the Company issued a press release regarding the appointment and election of Mr. Green and related matters. The full text of the press release is attached as Exhibit 99.1 hereto and incorporated by reference into this Item 5.02.