Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
Performance and Retention Agreements
On October 13, 2017, the Compensation Committee of the Board of Directors (the Committee) of Orexigen Therapeutics, Inc. (the
Company) approved the entry into performance and retention agreements (each, a Performance Retention Agreement and collectively, the Performance Retention Agreements) with its executive officers, including Michael
Narachi, Thomas Cannell and Thomas Lynch, who were the named executive officers listed in the Companys definitive proxy statement for its 2017 annual meeting of stockholders, as well as Jason Keyes, its Chief Financial Officer
(CFO). Under the Performance Retention Agreements, each of the executive officers is entitled to earn a retention bonus (the Performance Retention Bonus) equal to fifty-percent (50%) of his 2018 annual target bonus
amount, subject to (A) the Companys achievement of a specified sales-based performance goal for the first calendar quarter of 2018 (the Performance Period) and (B) the executive officers continued employment with
the Company in Good Performance Standing (as defined in the Performance Retention Agreement) through July 31, 2018 (the Performance Retention Date). The Committee has the full and final authority to determine whether the performance
goal has been achieved as of the end of the Performance Period. Any earned Performance Retention Bonus will be paid on the first administratively practicable payroll period following the Performance Retention Date. Under the Performance Retention
Agreements, Mr. Narachi, Dr. Cannell, Mr. Lynch and Mr. Keyes are entitled to earn a Performance Retention Bonus of up to $262,510, $142,140, $95,275 and $78,000, respectively, subject to the terms and conditions of the
Performance Retention Agreements.
Payment of the Performance Retention Bonus would be made in the event of a Change in Control (as
defined in the Performance Retention Agreement), subject to the executive officers continued employment in Good Performance Standing through the consummation of the Change in Control (and, in certain circumstances, the achievement of the
performance goal prior to such Change in Control) as well as his execution and non-revocation of a release. In addition, if the Company terminates the executive officers employment without Cause (as defined in the Performance Retention
Agreement) following the end of the Performance Period (but prior to the Performance Retention Date), and the Committee has determined that the performance goal was achieved as of the date of termination, such executive officer would be eligible to
receive the Performance Retention Bonus (subject to the executive officers execution and non-revocation of a release).
The above
summary of the terms of the Performance Retention Agreement is qualified in its entirety by reference to the form of Performance Retention Agreement, which will be filed as an exhibit to the Companys Form 10-Q for the quarter ended
September 30, 2017.
Amendments to Employment Agreements
On October 13, 2017, the Committee approved the entry into amendments (each an Amendment) to the employment agreements of each
of its executive officers, including its named executive officers and its CFO. In each case, the Amendment provides that in addition to the current severance benefits provided under his employment agreement, each executive officer would also receive
payment of a pro-rata portion of his annual performance bonus in the event that, during a Change in Control Period, the executive officer is Involuntarily Terminated Without Cause or experiences a Constructive Termination (in each case, as such
terms are defined in the applicable executive officers employment agreement). Under the Amendment, the amount of the bonus payment would be equal to the respective executive officers annual target bonus (as of the year of termination),
pro-rated for the period in which the executive officer was employed during the year in which the termination occurs.
In addition, the
Amendment to Mr. Lynchs employment agreement reflects Mr. Lynchs promotion to the title of Executive Vice President, Chief Administrative Officer, General Counsel and Secretary, as approved by the Committee on October 13,
2017. The Amendment to Mr. Keyes employment agreement reflects Mr. Keyes promotion to the title of Executive Vice President and Chief Financial Officer, as approved by the Committee on October 13, 2017.
The above summary of the terms of the Amendments is qualified in its entirety by reference to each of the Amendments, which will be filed as
exhibits to the Companys Form 10-Q for the quarter ended September 30, 2017.