SEC Filings

S-1
AVEXIS, INC. filed this Form S-1 on 01/15/2016
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Table of Contents


AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

14. Employment Agreements (Continued)

common stock on a nationally-recognized stock exchange in the United States), the awards will be immediately recognized at fair value. Subsequent changes in fair value will be recognized through earnings each reporting period.

          On June 8, 2015 (unaudited), the Company entered into an employment agreement with its new chief executive officer, Mr. Sean P. Nolan. The agreement provides for an annual salary, discretionary bonus as determined by the Company's Board of Directors, severance obligations in the event of termination of employment by the Company without cause or by the employee for good reason, as defined in the agreement, and an initial grant of 535,000 stock options with an exercise price of $22.00 per common share. These options shall vest 25% on the first anniversary of the grant date, with the remaining 75% vesting in equal amounts at the end of each calendar month for the ensuing 36-month period. In the event the Company shall experience a sale event, as defined in the agreement, during the first four months of Mr. Nolan's employment, 50% of his options will vest as of the closing of the sale event. In the event the Company shall experience a sale event, as defined in the agreement, after the first four months of Mr. Nolan's employment, all of his unvested options shall become vested upon the closing of the sale event. As of September 30, 2015 (unaudited), the Company had recognized $1,472,239 in employee stock compensation expense related to Mr. Nolan's stock option grant. Such amount is included in general and administrative expense for the nine months ended September 30, 2015.

          In July and August 2015 (unaudited), the Company entered into employment agreements with five members of its management team. The terms of these agreements range between 2-3 years. Each of the agreements provides for an annual salary, a discretionary bonus as determined by the Company's Board of Directors, and severance benefits payable in the event of the termination of their employment by the Company with or without cause or by the employee for good reason, as defined in the agreements.

          Pursuant to such agreements the Company granted an aggregate of 382,479 stock options to these employees (unaudited). The exercise price of such options is $25.08 per share. These options will vest as follows: 25% of the options will vest on the one year anniversary of the employee's employment start date; and the remaining 75% shall vest in equal amounts at the end of each calendar month for the ensuing 36 month period (unaudited). In the event of a sale event, as defined in the option agreements, all of the unvested options shall become vested upon the closing of the sale event. As of September 30, 2015 (unaudited), the Company had recognized $633,155 in employee stock compensation expense related to these option grants. Of such amount, $354,417 is included in research and development expense and $278,738 is included in general and administrative expense for the nine months ended September 30, 2015.

15. Separation Agreement (unaudited)

          On April 22, 2015, Mr. Carbona ceased to be an employee of the Company. In connection with the termination of his employment, the Company agreed to pay Mr. Carbona the amount of $535,000, consisting of a $500,000 severance benefit (the "Severance") and $35,000 of accrued and unused vacation (the "Vacation Pay").

          The Severance is to be paid over a 12 month period in equal monthly installments. However, under the terms of the separation agreement, in the event Mr. Carbona were to resign, or be removed from, his service on the Company's Board, then (i) 50% of the then unpaid portion of

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