Item 5. Other Information
ITEM 5. OTHER INFORMATION
(a) Severance and Change of Control Agreements
The Company entered into Severance and Change of Control Agreements with each of Daniel Apel and James Hamilton on May 8, 2025 and each of Christopher Anzalone and Patrick O’Brien on May 9, 2025 (the “Severance Agreements”). Under the Severance Agreements, upon a termination of the executive’s employment by the Company without “Cause” (and not as a result of the executive’s death or disability) or due to the executive’s “Resignation for Good Reason” (each quoted term as defined in each Severance Agreement), the Company will provide the following severance benefits: (i) payment of accrued but unpaid base salary, accrued but unused vacation, and any annual cash bonus earned but unpaid for the preceding fiscal year; (ii) a lump sum severance payment equal to six months’ worth of the executive’s base salary (or, for Dr. Anzalone, 12 months’ worth of his base salary, plus a pro-rated portion of his target annual cash bonus for the year in which the termination occurs) (the “Severance Payment”); and (iii) reimbursement of health care continuation premiums for the 12-month period (or, for Dr. Anzalone, the 18-month period) following the termination date.
If the termination of employment described above occurs within the period beginning three months prior to the signing of a definitive agreement that would result in a “Change of Control” (as defined in each Severance Agreement) through the first anniversary of such Change of Control, the Company will provide the following severance benefits in lieu of the benefits described above: (i) payment of accrued but unpaid base salary, accrued but unused vacation, and any annual cash bonus earned but unpaid for the preceding fiscal year; (ii) a lump sum severance payment equal to (a) 12 months’ worth (or, for Dr. Anzalone, 24 months’ worth) of the executive’s base salary, plus (b) one and one-half times (or, for Dr. Anzalone, two times) the executive’s target annual cash bonus for the year in which the termination occurs (the “COC Severance Payment”); provided, however, that if the executive has received a Severance Payment, the COC Severance Payment shall be reduced by the amount of such Severance Payment; (iii) reimbursement of health care continuation premiums for the 18-month period following the termination date; and (iv) accelerated vesting of all outstanding equity awards, with any performance-based vesting criteria deemed achieved at the target level of performance (and, if the termination occurs within the permitted period prior to the Change of Control, a lump sum cash payment equal to the value of any equity awards that would have vested had the executive remained employed through the Change of
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Control).
The severance benefits provided under the Severance Agreements are subject to each executive’s execution and non-revocation of a release of claims in favor of the Company and its affiliates. Further, in the event that any payments or benefits provided under the Severance Agreements or otherwise constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the executive will receive the portion of such payments and benefits that results in the greatest after-tax benefit to the executive (including after payment of any excise tax under Section 4999 of the Code).
CFO Retirement Letter
As previously announced, Ken Myszkowski is expected to retire as Chief Financial Officer of the Company, effective as of May 13, 2025 (the “Effective Date”). In connection therewith, on May 9, 2025, the Company entered into a transition agreement with Mr. Myszkowski (the “CFO Retirement Letter”). Under the CFO Retirement Letter, Mr. Myszkowski will remain an employee of the Company following the Effective Date through January 31, 2026 (the “Transition Period”) to be reasonably available for consultation at the request of his successor, Mr. Apel, and to assist Mr. Apel with certain regulatory filings. In consideration for his services, Mr. Myszkowski will receive a base salary at an annualized rate of $200,000 through the end of the Transition Period, subject to his continued employment. If the Company terminates Mr. Myszkowski’s employment without cause prior to the end of the Transition Period, Mr. Myszkowski will receive (i) a lump sum payment equal to three months’ worth of his annualized base salary and (ii) an amount equal to the cost of three months of healthcare insurance.
The foregoing descriptions of the Severance Agreements and the CFO Retirement Letter are not complete and are qualified in their entirety by reference to the full texts of the Severance Agreements and the CFO Retirement Letter, copies of which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this Quarterly Report on Form 10-Q and are incorporated herein by reference.
(c) Trading Plans
During the quarter ended March 31, 2025, no director or officer (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated trading plans intended to satisfy Rule 10b5-1(c), except as set forth in the following table:
Name Title Adoption or Termination Date Plan Start Date Plan End Date Shares
Vesting and
Subject to
Sell-To-
Cover (1)
Other
Shares
Being Sold
(Subject to
Certain
Conditions)
Ken Myszkowski Chief Financial Officer Terminated on 1/6/2025
6/11/2024 2/28/2025 n/a 115,000
Ken Myszkowski Chief Financial Officer 1/7/2025 4/10/2025 12/31/2025 n/a 170,599
James Hamilton Chief Medical Officer, Head of R&D 2/24/2025 5/28/2025 11/30/2026 n/a 60,000
Christopher Anzalone Chief Executive Officer Terminated on 3/12/2025
12/4/2024 12/31/2026 2,082,892 n/a
(1) This column indicates the total number of shares vesting in connection with equity awards, not the number of shares to be sold. The actual number of shares to be sold will be a smaller number based on whatever is required to satisfy payment of applicable withholding taxes under sell-to-cover arrangements.
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ITEM 6. EXHIBITS
Exhibit
Number Document Description
3.1 Amended and Restated Certificate of Incorporation (incorporated by reference from Exhibit 3.3 of the Company’s Form 8-K filed on April 6, 2016)
3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Arrowhead Pharmaceuticals, Inc . (incorporated by reference from Exhibit 3.2 of the Company’s Form 10-Q filed on May 2, 2023)
3.3
Second Amended and Restated Bylaws of Arrowhead Pharmaceuticals, Inc., as amended January 24, 2023(incorporated by reference from Exhibit 3.3 of the Company’s Form 10-Q filed on May 2, 2023)
10.1*
Severance and Change of Control Agreement by and between Company and Christopher Anzalone, dated May 9 , 2025
10.2*
Severance and Change of Control Agreement by and between Company and Daniel Apel, dated May 8 , 2025
10.3*
Severance and Change of Control Agreement by and between Company and Patrick O'Brien, dated May 9 , 2025
10.4*
Severance and Change of Control Agreement by and between Company and James Hamilton, dated May 8 , 2025
10.5*
CF O Retirement Letter by and between Company and Ken Myszkowski , dated May 9 , 2025
31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1** Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2** Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS* Inline XBRL Instance Document
101.SCH* Inline XBRL Taxonomy Extension Schema Document
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
104* The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL (included as Exhibit 101)
_________________
* Filed herewith.
** Furnished herewith.
† Certain portions of this exhibit were redacted by means of marking such portions with asterisks because the identified portions are (i) not material and (ii) treated as private or confidential by the Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May 12, 2025
ARROWHEAD PHARMACEUTICALS, INC.
By: /s/ Kenneth A. Myszkowski
Kenneth A. Myszkowski
Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)
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