UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________________
FORM
8-K
__________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event
reported): February
12, 2009
Lexicon
Pharmaceuticals, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-30111
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76-0474169
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
Number)
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8800
Technology Forest Place
The
Woodlands, Texas 77381
(Address
of principal executive
offices
and Zip Code)
(281)
863-3000
(Registrant’s
telephone number,
including
area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions:
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□
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
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□
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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□
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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□
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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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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(e) On
February 12, 2009, the Compensation Committee of our Board of Directors approved
2009 base salaries and a process for the determination of 2009 cash bonuses for
our named executive officers. The 2009 salary information and a
description of the 2009 cash bonus determination process is attached to this
current report on Form 8-K as Exhibit 10.1 and incorporated herein by
reference.
The
Compensation Committee determined not to award cash bonuses for 2008 performance
to our officers in light of current economic conditions, the state of the
financial markets, and a desire to conserve our cash and investments
resources. Instead, the Compensation Committee approved the grant of
restricted stock bonus awards under our 2000 Equity Incentive Plan to our named
executive officers as described below:
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Name and Position
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Number
of Restricted Stock Bonus Shares Granted in Lieu of 2008 Cash Bonus
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Arthur
T. Sands, M.D., Ph.D.
President
and Chief Executive Officer
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103,400
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Alan
J. Main, Ph.D.
Executive
Vice President of Pharmaceutical Research
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44,800
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Jeffrey
L. Wade, J.D.
Executive
Vice President and General Counsel
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44,800
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Brian
P. Zambrowicz, Ph.D.
Executive
Vice President and Chief Scientific Officer
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55,200
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James
F. Tessmer
Vice
President, Finance and Accounting
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24,100
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The
dollar amounts of such awards were determined by the Compensation Committee
based on its assessment of the achievement of the corporate and individual goals
originally established for purposes of determining 2008 cash
bonuses. The number of shares subject to each restricted stock bonus
award was then determined based on the closing price of our common stock, as
quoted on the Nasdaq Global Market, on the last trading day prior to the grant
date, in accordance with the process for determination of fair market value
under our 2000 Equity Incentive Plan.
The
shares subject to such restricted stock bonus awards are subject to the
following vesting schedule: (a) fifty percent (50%) of the shares on
the six-month anniversary of the grant date and (b) fifty percent (50%) of the
shares on the one year anniversary of the grant date; provided that the shares
shall become fully vested upon (y) a change of control of our company or (z) the
termination of the named executive officer’s employment by us without cause, by
the named executive officer for good reason or as a result of the named
executive officer’s death or disability.
The form
of restricted stock bonus agreement applicable to such restricted stock bonus
awards is attached to this current report on Form 8-K as Exhibit 10.2
and incorporated herein by reference.
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Item
9.01
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Financial Statements and
Exhibits
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(d) Exhibits
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Exhibit No.
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Description
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10.1
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—
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Summary
of 2009 Named Executive Officer Cash Compensation
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10.2
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—
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Form
of Restricted Stock Bonus Agreement with Officers under the 2000 Equity
Incentive Plan
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Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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Lexicon
Pharmaceuticals, Inc.
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Date: February
19, 2009
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By:
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/s/
Jeffrey L. Wade
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Jeffrey
L. Wade
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Executive Vice President
and
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General
Counsel
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Index
to Exhibits
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Exhibit No.
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Description
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10.1
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—
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Summary
of 2009 Named Executive Officer Cash Compensation
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10.2
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—
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Form
of Restricted Stock Bonus Agreement with Officers under the 2000 Equity
Incentive Plan
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Exhibit
10.1
Summary of 2009 Named
Executive Officer Cash Compensation
The
Compensation Committee of our Board of Directors has approved 2009 base salaries
for our named executive officers as set forth below.
The
Compensation Committee has also approved a process for the determination of 2009
cash bonuses for our named executive officers, pursuant to which bonuses will be
determined in the discretion of the Compensation Committee based on the
achievement of certain corporate and individual goals in 2009. The
corporate goals include objectives relating to the development of drug
candidates and the achievement of specified financial targets. The
achievement of these goals will be evaluated by the Compensation Committee in
making determinations regarding bonuses for 2009 performance. The
Compensation Committee has established a bonus target, expressed as a percentage
of base salary, for each of our named executive officers, assuming that
corporate and individual goals are fully achieved. The bonus target
percentage for each of our named executive officers is set forth
below.
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Name and Position
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2009
Base Salary
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2009
Bonus Target
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Arthur
T. Sands, M.D., Ph.D.
President
and Chief Executive Officer
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$560,000
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50%
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Alan
J. Main, Ph.D.
Executive
Vice President of Pharmaceutical Research
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$340,000
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35%
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Jeffrey
L. Wade, J.D.
Executive
Vice President and General Counsel
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$340,000
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35%
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Brian
P. Zambrowicz, Ph.D.
Executive
Vice President and Chief Scientific Officer
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$365,000
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40%
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James
F. Tessmer
Vice
President, Finance and Accounting
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$225,000
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25%
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Exhibit
10.2
RESTRICTED
STOCK BONUS AGREEMENT
This
Restricted Stock Bonus Agreement (this “Agreement”), effective as of «GrantDate»
(the “Grant Date”), is by and between Lexicon Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and «Name» (“Employee”).
To carry
out the purposes of the Company’s 2000 Equity Incentive Plan (the “Plan”), and
the determination of the compensation committee (the “Compensation Committee”)
of the Company’s board of directors (the “Board”) to award Employee a stock
bonus under the Plan, subject to the terms and conditions of this Agreement, of
shares of the Company’s Common Stock, par value $0.001 per share (“Stock”), and
in consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Employee hereby agree as follows:
1. Grant of
Shares. The Company hereby grants to Employee a stock bonus,
on the terms and conditions set forth in this Agreement and in
the Plan, consisting of an aggregate of «Shares» shares of Stock (the
“Shares”).
2. Vesting. (a)
Subject to the terms and conditions set forth in this Agreement and the Plan,
the interest of Employee in the Shares shall vest with respect to (i) 50% of the
total number of Shares on «VestingDate» and (ii) the remaining Shares on the
first anniversary of the Grant Date; provided that the interest of
Employee in the Shares
shall become fully vested upon (x) a Change in Control (as defined below) or (y)
the termination of Employee’s Continuous Service (as defined in the Plan) by the
Company without Cause (as defined below), by Employee for Good Reason (as
defined below), or as a result of Employee’s death or Disability (as defined in
the Plan).
(b) For
purposes of the foregoing, the following terms shall have the meanings indicated
below:
(i) A
“Change in Control” shall be deemed to have occurred if any of the following
shall have taken place: (A) any “person” (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other
than Invus, L.P. and its affiliates (collectively, “Invus”) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, or any
successor provisions thereto), directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company’s
then-outstanding voting securities; (B) Invus becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act, or any successor provisions
thereto), directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Company’s then-outstanding voting
securities; (C) the consummation of a reorganization, merger, or consolidation,
in each case with respect to which persons who were stockholders of the Company
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own or control more than 50% of the combined voting
power of the reorganized, merged or consolidated Company’s then-outstanding
securities entitled to vote generally in the election of directors in
substantially the same proportions as their ownership of the Company’s
outstanding voting securities prior to such reorganization, merger or
consolidation; (D) a liquidation or dissolution of the Company or the sale of
all or substantially all of the Company’s assets; or (E) following the election
or removal of directors, a majority of the Board consists of individuals who
were not members of the Board two years before such election or removal, unless
the election of each director who is not a director at the beginning of such
two-year period has been approved in advance by directors representing at least
a majority of the directors then in office who were directors at the beginning
of the two-year period. The Compensation Committee, in its
discretion, may deem any other corporate event affecting the Company to be a
“Change in Control” hereunder.
(ii) “Cause”
means a termination of Employee’s employment directly resulting from (A)
Employee having engaged in intentional misconduct causing a material violation
by the Company of any state or federal laws, (B) Employee having engaged in a
theft of Company funds or Company assets or in a material act of fraud upon the
Company, (C) an act of personal dishonesty taken by Employee that was
intended to result in personal enrichment of Employee at the expense of the
Company, (D) Employee’s final conviction (or the entry of any plea other than
not guilty) in a court of competent jurisdiction of a felony, or (E) a breach by
Employee of any contractual or fiduciary obligation to the Company, if such
breach results in a material injury to the Company.
(iii) “Good
Reason” means the occurrence of any of the following events without Employee’s
express written consent: (A) a material diminution in Employee’s base salary,
(B) a material diminution in Employee’s authority, duties, or responsibilities,
or (C) any other action or inaction that constitutes a material breach by the
Company of any contractual obligation to Employee.
3. Forfeiture of Unvested
Shares upon Termination of Service. Simultaneously with
termination of Employee’s Continuous Service, Employee shall automatically
forfeit, and the Company shall reacquire, for no consideration, all of the
Shares as to which the interest of Employee has not vested in accordance with
Section 2 of this Agreement, unless the Company, in its sole discretion, agrees
to waive such right as to some or all of such unvested Shares.
4. Escrow. The
certificate or certificates evidencing the Shares shall be delivered to and
deposited with the Secretary of the Company as escrow agent (the “Escrow
Agent”). The Shares may also be held in a restricted book entry account in the
name of Employee. Such certificates or such book entry shares shall
be held by the Escrow Agent until the interest of Employee in the Shares
represented thereby vests in accordance with Section 2 of this Agreement,
at which time such certificates or book entry shares shall be released by said
Escrow Agent to Employee. Pending such release, all certificates representing
Shares subject to the provisions of this Agreement shall have endorsed thereon
the following legend: “The shares represented by this certificate are subject to
an agreement between the Corporation and the registered holder, a copy of which
is on file at the principal office of this Corporation.” Employee shall have all
the rights of a stockholder with respect to the Shares held in escrow, including
the right to vote such Shares and to receive any cash dividends paid to or made
with respect to such Shares, except for the right to transfer such Shares as
provided in Section 5.
5. Non-Transferability. Employee’s
rights under this Agreement, including with respect to any Shares as to which
the interest of Employee has not vested in accordance with Section 2 of this
Agreement, may not be transferred by Employee otherwise than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
(as defined in Title I of the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder).
6. Withholding of
Tax. Employee shall be liable for any and all taxes,
including withholding taxes, arising out of the grant or vesting of Shares
hereunder. Employee may elect to satisfy such withholding tax obligation by
having the Company retain Shares having a Fair Market Value (as defined in the
Plan) equal to the Company’s minimum withholding obligation. No
Shares shall be released from escrow unless Employee shall have paid or
otherwise satisfied the withholding tax obligations with respect
thereto.
7. No Right to Continued
Employment. Nothing in this Agreement or the Plan shall confer upon
Employee any right to continue in the employ of the Company or shall interfere
with or restrict in any way the right of the Company, which is hereby expressly
reserved, to terminate Employee’s employment at any time for any reason
whatsoever, with or without Cause and with or without advance
notice.
8. Equity Incentive
Plan. The Plan, a copy of which is available for inspection by
Employee at the Company’s principal executive office during business hours, is
incorporated by reference in this Agreement. This Agreement is
subject to, and the Company and Employee agree to be bound by, all of the terms
and conditions of the Plan. In the event of a conflict between this Agreement
and the Plan, the terms of the Plan shall control. Subject to the
terms of the Plan, the administrator of the Plan shall have authority to
construe the terms of this Agreement, and the determinations of the
administrator of the Plan shall be final and binding on Employee and the
Company.
9. Binding
Agreement. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
10. Governing
Law. This Agreement and all actions taken hereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and
Employee has executed this Agreement effective for all purposes as of the Grant
Date.
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Lexicon
Pharmaceuticals, Inc.
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By:
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Arthur
T. Sands, M.D., Ph.D.
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President
and Chief Executive Officer
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Employee
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Name
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