On May 4, 2022 Natera (NTRA), a diagnostics and molecular testing company, changed the severance provisions in CEO Steve Chapman’s employment agreement. The amendment accelerates the vesting of Chapman’s outstanding unvested time-based and performance-based equity in the event he’s fired without cause or resigns for good reason.

Regarding the time-based awards, Chapman is now eligible to receive the greater of 50% of his then-unvested equity awards or vesting as if he had completed an additional 12 months. The performance-based awards vest if the company achieves its goals within 18-months of Chapman’s departure.

Of particular interest though is the new provision related to a change in control. The accelerated vesting in the event of a termination related to a change in control appears more generous. Specifically, if the termination occurs within 18-months after a change in control, Chapman is entitled to accelerated vesting of 100% of his then-unvested time-based and performance-based equity awards.

DuDil has asked Natera’s CFO Mike Brophy for additional detail regarding the timing of the amendment to Chapman’s employment agreement. Specifically, we asked if Natera has recently been approached about a potential acquisition and, if not, why the change was made now. We’ll update investors when we have new information.