10-K: Harrow Inc. Appoints Amir Shojaei as Chief Scientific Officer, Bolsters Leadership Team

Harrow, Inc. extends an employment offer to Amir Shojaei to serve as Chief Scientific Officer, effective January 6, 2025, with a focus on strengthening its scientific leadership.

Summary

• Harrow, Inc. has offered Amir Shojaei the position of Chief Scientific Officer, reporting to Chairman and CEO Mark L. Baum, with a target start date of January 6, 2025.
• Shojaei's annual compensation will be $450,000, with a discretionary target bonus of 50% of his salary based on agreed-upon targets.
• Harrow will advance $30,000 of Shojaei's potential 2025 target bonus at the time the 2024 bonus payment is made, requiring repayment if he voluntarily terminates employment before December 31, 2025.
• If Harrow terminates Shojaei's employment without cause after 12 months of service, he will receive 12 months of base compensation as an involuntary severance payment.
• Subject to board approval, Shojaei will be granted a stock option to purchase 30,000 shares of Harrow common stock, vesting over four years with quarterly installments after the first year.
• Shojaei will be eligible for medical, dental, and vision plans after 30 days of employment, and will accrue 20 days/160 hours of personal time off (PTO) bi-weekly.
• He will be eligible to participate in the 401(k) plan after six months of employment and 500 hours of work, provided he is 21 years of age or older.
• The offer is contingent upon signing confidentiality, arbitration, and proprietary information agreements, establishing identity and work authorization, and successful completion of background and drug screening tests.
• Shojaei's employment with Harrow will be at-will, meaning he may resign at any time and for any reason, and Harrow may terminate the employment relationship at any time, with or without cause or advanced notice.

Sentiment

Score: 7

Explanation: The document presents a straightforward employment offer with standard terms and conditions, indicating a positive but neutral sentiment.

Positives

• Harrow secures an experienced Chief Scientific Officer.
• Shojaei's compensation package includes a competitive salary and bonus potential.
• The offer includes severance benefits, providing security for Shojaei.
• The stock option grant aligns Shojaei's interests with the company's long-term success.
• Comprehensive benefits and PTO are offered, enhancing the attractiveness of the position.

Negatives

• The bonus is discretionary and not guaranteed.
• The advanced bonus payment is subject to repayment under certain conditions.
• The stock option grant is subject to board approval.
• The employment is at-will, providing limited job security.

Risks

• Failure to meet performance targets could impact bonus earnings.
• Voluntary termination before December 31, 2025, requires repayment of the advanced bonus.
• The stock option grant is contingent on board approval.
• The at-will employment relationship allows for termination at any time, with or without cause.

Future Outlook

Based on performance, other reasonable metrics, and factors determined by the Board of Directors, Shojaei may become eligible for additional equity awards in the future.

Management Comments

• Mark L. Baum, Chairman & CEO: 'We hope your employment with Harrow will prove mutually rewarding.'

Industry Context

The appointment of a Chief Scientific Officer reflects Harrow's commitment to innovation and development within the ophthalmic pharmaceutical industry, aligning with the industry's focus on research and development to address unmet needs in eye care.

Comparison to Industry Standards

• Compensation packages for Chief Scientific Officers in the pharmaceutical industry typically include a base salary, performance-based bonuses, and equity awards.
• The specific terms of Shojaei's offer, such as the salary, bonus structure, and equity grant, are likely benchmarked against industry standards for similar roles and experience levels.
• Companies like Alcon, Bausch + Lomb, and Novartis, which are major players in the ophthalmic space, likely offer comparable compensation packages to attract and retain top scientific talent.
• The vesting schedule for the stock options is fairly standard, aligning with typical equity incentive plans in the industry.

Management Changes

Stakeholder Impact

• Shareholders: The appointment of a CSO could positively impact investor confidence.
• Employees: The addition of a CSO could enhance the company's scientific capabilities and innovation.
• Customers: The appointment could lead to the development of new and improved products.
• Suppliers: The appointment could influence the company's research and development strategies.

Next Steps

• Amir Shojaei to sign and return the offer letter by November 20, 2024.
• Harrow Board of Directors to approve the stock option grant.
• Amir Shojaei to complete background check and drug screening tests.
• Amir Shojaei to start employment on January 6, 2025.

Key Dates

Keywords

Chief Scientific Officer, employment offer, Harrow Inc., stock options, compensation, Amir Shojaei, severance, bonus, benefits, at-will employment