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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
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(c)
On March 21, 2019, Akorn, Inc. (the “
Company
”
or “
Akorn
”) announced the appointment of Erislandy (“Dandy”) Dorado-Boladeres to the position of
Executive Vice President of Global Quality, effective March 25, 2019. Mr. Dorado will report directly to Douglas Boothe, President
and Chief Executive Officer. Mr. Dorado, age 56, brings decades of pharmaceutical experience to Akorn having most recently
been Vice President of Quality Affairs at American Regent, where he served on the executive leadership team since September 2018.
From August 2016 to March 2018, Mr. Dorado served as Senior Vice President of Global Commercial Quality and Third-Party Quality
Operations at Teva, and from March 2015 to August 2016, as Vice President of International Quality Operations at Allergan (previously
Actavis Pharmaceuticals). From October 2003 to March 2015, Mr. Dorado served in a variety of roles at Actavis Pharmaceuticals.
Prior to his tenure at Actavis, Mr. Dorado held a number of technical operational roles in the pharmaceuticals industry, including
at Baxter, Wyeth/Esi Lederlee, and Schering Plough Products. Mr. Dorado graduated with a B.S. in Chemistry from the University
of Puerto Rico.
In connection with the above, the Company and Mr. Dorado entered
into an offer letter agreement (the “
Offer Letter
”), dated February 4, 2019.
The Offer Letter provides that Mr. Dorado’s annual base
pay will be $375,000 and he will be eligible for a target annual bonus equal to 50% of base salary and an incremental bonus equal
to 25% of base salary if the Company exceeds applicable financial targets and quality compliance targets for the year.
Mr. Dorado will also be eligible to participate in the Company’s
long-term incentive program reserved for key executives and senior level management pursuant to which he may be granted long-term
incentive awards on an annual basis. The total award value for Mr. Dorado’s initial long-term incentive grant will be equal
to 100% of Mr. Dorado’s base salary. Any long-term incentive awards for which Mr. Dorado would be eligible are subject to
the terms of the applicable Company plan and annual Board approval.
On his start date, Mr. Dorado will be granted nonqualified stock
options with a grant-date value of $375,000 and restricted stock units with a grant-date value of $375,000, in each case vesting
in equal installments on the first four anniversaries of the grant date. These nonqualified stock options and restricted stock
units will be made under the Company’s 2017 Omnibus Incentive Compensation Plan, and the terms of such awards will be consistent
with the terms of such plan and the Company’s previously filed forms of award agreement.
The Offer Letter entitles Mr. Dorado to relocation benefits
in connection with his relocation to Illinois.
In addition, Mr. Dorado will be covered under the Company’s
executive programs for severance, including in connection with a change in control. Under the current programs, if Mr. Dorado’s
employment is terminated by the Company without “cause”, Mr. Dorado would be entitled to a lump-sum payment equal to
a prorated portion of his total eligible annual bonus, a lump-sum cash payment equal to one year of base annual compensation and
total eligible annual bonus, and one year of continued benefits, including life insurance and welfare benefits. Also under the
current programs, if Mr. Dorado’s employment is terminated either by Mr. Dorado for “good reason” or by the Company
without “cause”, within the ninety day period prior to the Company entering into a definitive agreement that would
result in a “change of control”, or within twelve months following a “change in control”, he would be entitled
to a prorated portion of his total eligible annual bonus, a lump-sum cash payment equal to one times his annual base salary and
total eligible annual bonus, and one year of continued benefits, life insurance and welfare benefits. The Company may condition
the payment of severance benefits upon Mr. Dorado’s delivery of a release of employment-related claims in favor of the Company.
The foregoing description of the Offer Letter is qualified in
its entirety by the text of the Offer Letter, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
There are no family relationships between Mr. Dorado and any
of the Company’s current executive officers or directors. Except for his Offer Letter, Mr. Dorado is not a party to any transaction
with the Company that might require disclosure under Item 404(a) of Regulation S-K.