Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 21, 2021, Avidity Biosciences, Inc. (the "Company") announced the
appointment of W. Michael Flanagan, Ph.D. as Chief Technical Officer, effective
immediately.
Dr. Flanagan, age 59, has extensive experience developing multiple therapeutic
modalities, including RNA therapeutics, antibody drug conjugates, and bispecific
antibodies. Prior to joining the Company, Dr. Flanagan served as Senior Director
and Project Team Leader, Oncology and Immunology for Genentech, Inc. from
January 2012 to January 2021, where he advanced programs through late-stage
research to end of Phase 2 development. Prior to Genentech, Dr. Flanagan served
in roles of increasing responsibility in the biology groups at Sunesis
Pharmaceuticals, Inc., Gilead Sciences, Inc. and Merck & Co. Inc., where he was
Senior Director of RNA Sciences. Dr. Flanagan received a B.S. in Genetics from
the University of California at Davis, a Ph.D. in Biological Sciences from the
University of California at Irvine and was an American Cancer Society
postdoctoral fellow at the Howard Hughes Medical Institute, Stanford University.
There are no family relationships between Dr. Flanagan and any director or
executive officer of the Company, and he has no direct or indirect material
interest in any transaction required to be disclosed pursuant to
Item 404(a) of Regulation S-K.
In connection with his appointment, the Company entered into an employment
agreement with Dr. Flanagan (the "Employment Agreement"). Under the Employment
Agreement, Dr. Flanagan will be entitled to receive an annual base salary of
$400,000. Dr. Flanagan will also be eligible to receive an annual incentive
bonus with a target amount equal to 40% of his then-current annual base salary
(which bonus will be pro-rated for 2021 for partial year service), as determined
by the Company's Board of Directors (the "Board") or an authorized committee
thereof in its sole discretion.
In addition, pursuant to the Employment Agreement, Dr. Flanagan will be eligible
to receive a one-time bonus of $350,000 (the "Sign-On Bonus") and a one-time
relocation reimbursement payment and tax gross-up of up to an aggregate of
$150,000 (the "Relocation Reimbursement"). The Sign-On Bonus is subject to
repayment of a pro-rated portion if Dr. Flanagan's employment is terminated by
the Company for "cause" or by him without "good reason" (each as defined in the
Employment Agreement) prior to the second anniversary of his employment start
date. If Dr. Flanagan is terminated by the Company for cause or by him without
good reason prior to the first anniversary of his relocation date, his
Relocation Reimbursement is subject to full repayment. If Dr. Flanagan is
terminated by the Company for cause or by him without good reason after the
first anniversary of his relocation date but before the second anniversary of
his relocation date, fifty percent of his Relocation Reimbursement is subject to
repayment.
Under the Employment Agreement, if the Company terminates Dr. Flanagan's
employment without cause or if Dr. Flanagan resigns for good reason outside of a
change of control period (as defined below), Dr. Flanagan is entitled to:
(1) continuation of his base salary for 12 months; and (2) continuation of his
health benefits for a period of up to 12 months following the termination date.
If Dr. Flanagan is terminated without cause or resigns for good reason within 59
days prior to or 12 months after a change of control (as defined in the
Employment Agreement) (such period, the "change of control period), Dr. Flanagan
is entitled to: (1) continuation of his base salary for 12 months, (2) an amount
equal to his target annual bonus for the year in which termination occurs, paid
in a lump sum, (3) continuation of his health benefits for a period of up to 12
months following the termination date, and (4) accelerated vesting of any
unvested time-based vesting equity awards.
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Under the Employment Agreement, Dr. Flanagan will be granted options to purchase
150,000 shares of common stock of the Company pursuant to the Company's 2020
Incentive Award Plan, which provides for the granting of equity awards to new
employees of the Company. The options have a ten-year term and an exercise price
equal to the fair market value of the Company's common stock on the date of
grant. The options will vest over a four-year period, with 25% of the options
vesting on the first anniversary of his employment start date and the remainder
vesting in equal monthly installments over the three years thereafter, subject
to continuous employment through the applicable vesting date.
The foregoing description of the Employment Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of such
agreement, which will be filed by the Company as an exhibit to its Annual Report
on Form 10-K for the year ended December 31, 2020.
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AVIDITY BIOSCIENCES, INC. 
