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): May
4, 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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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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(b) In
connection with the appointment of Ajay Bansal as our executive vice president,
corporate development and chief financial officer (as described in Item 5.02(c)
below), James F. Tessmer, our vice president, finance and accounting,
relinquished his function as our principal financial officer, effective as of
June 2, 2009. Mr. Tessmer will continue his function as our principal
accounting officer.
(c) Effective
as of June 2, 2009, Ajay Bansal was appointed as our executive vice president,
corporate development and chief financial officer, in which capacity he will
function as our principal financial officer.
Mr.
Bansal, 47, was chief financial officer and executive vice president of
corporate and business development for Tercica, Inc. until its acquisition by
Ipsen in October 2008. From February 2003 to January 2006, Mr. Bansal
served as chief financial officer of Nektar Therapeutics and from July 2002
until February 2003, he was director of operations analysis at Capital One
Financial. Mr. Bansal previously served in a variety of financial
advisory, product management and strategy, and management consulting roles with
Mehta Partners LLC, Novartis AG, Arthur D. Little, Inc., McKinsey & Company,
Inc. and ZS Associates. He received his B.S. from the Indian
Institute of Technology and his M.S. and M.B.A. from Northwestern
University.
In
connection with his appointment, we entered into an offer letter with Mr. Bansal
dated May 4, 2009. Under the terms of the offer letter, Mr. Bansal
will receive an initial annual base salary of $340,000 and will be eligible to
receive an annual cash bonus, with a bonus target of 35% of his base
salary. The actual cash bonus, if any, will be determined in the
discretion of the compensation committee of our board of directors based on the
achievement of certain corporate and individual goals and in accordance with the
process applicable to all named executive officers. If we terminate
Mr. Bansal’s employment without “cause,” as defined in the offer letter, we will
pay Mr. Bansal his then-current salary for twelve months following such
termination. The offer letter also provides that we will provide Mr.
Bansal with $75,000 for his relocation expenses and additional reimbursements
for two trips to The Woodlands, Texas to locate housing.
In
addition, we have granted Mr. Bansal an option under our Equity Incentive Plan
(the “Plan”) to purchase 250,000 shares of our common stock at an exercise price
equal to $1.53, the fair market value of our common stock on the grant date, as
determined in accordance with the terms of the Plan. The option
expires on the tenth anniversary of the grant date and vests with respect to 25%
of the shares underlying the option on the first anniversary of the grant date
and 1/48th per
month for each month of service thereafter. The option becomes fully
vested with respect to all remaining unvested shares upon a change in control of
our company.
There are
no family relationships involving Mr. Bansal which would require disclosure
under Item 401(d) of Regulation S-K. There are no current or proposed
transactions in which Mr. Bansal or any member of his immediate family has, or
will have, a direct or indirect material interest which would require disclosure
under Item 404(a) of Regulation S-K.
Copies of
the offer letter with Mr. Bansal and a press release announcing Mr. Bansal’s
appointment are each attached to this current report on Form 8-K as Exhibits
10.1 and 99.1, respectively.
(e) The
information set forth in the third and fourth paragraphs of Item 5.02(c) is
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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Offer
Letter, dated May 4, 2009, with Ajay Bansal
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99.1
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Press
Release of Lexicon Pharmaceuticals, Inc. dated June 2,
2009
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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: June
2, 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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Offer
Letter, dated May 4, 2009, with Ajay Bansal
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99.1
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—
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Press
Release of Lexicon Pharmaceuticals, Inc. dated June 2,
2009
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Exhibit
10.1
[LEXICON
PHARMACEUTICALS LETTERHEAD]
May 4,
2009
Personal
and Confidential
Mr. Ajay
Bansal
[Address]
Dear
Ajay:
The
management and board of directors of Lexicon believe you have the personal and
professional attributes required to make a significant contribution to the
future of medicine as a member of our team. Therefore, I am
pleased to offer you the position of executive vice president,
corporate development and chief financial officer to support Lexicon in
fulfilling its mission: to discover and develop breakthrough treatments for
human disease.
In this
position, you will be responsible for leading Lexicon’s finance and corporate
development efforts. You will be an executive officer reporting to the president
and chief executive officer, and will serve as a member of Lexicon’s executive
management committee. Your place of employment will be at Lexicon’s
headquarters in The Woodlands, Texas.
The terms
under which we are offering you this position are outlined below:
Base
Salary
You will
receive a monthly base salary of $28,333.33 ($340,000 per year), paid in
accordance with our standard payroll policies. We currently pay
salaried employees on the 15th and
last day of each month.
Bonus Arrangements
You will
be eligible for an annual bonus with a bonus target (i.e., the amount payable if
all objectives are fully achieved) of 35% of your annual base
salary. The actual amount of your bonus will be determined by the
compensation committee of the board of directors in consultation with the
president and chief executive officer, based upon achievement of individual and
corporate objectives established at the beginning of each year. As is
the case with all Lexicon officers, decisions regarding the payment of bonuses
are subject to the discretion of the compensation committee of the board of
directors.
We expect
typically to make bonus determinations following the end of the calendar year to
which the bonus relates, and to pay bonuses, if any, shortly after such
determinations are made.
Stock
Options
Subject
to the approval by the compensation committee of the board of directors, you
will receive options under our equity incentive plan giving you the right to
purchase 250,000 shares of Lexicon’s common stock at an exercise price equal to
the fair market value of the common stock (as fair market value is defined in
the plan) on the date you commence employment with the company. The
options will vest and become exercisable with respect to (1) 25% of the shares
subject to the option on the first anniversary of your employment with the
company and (2) 1/48th of the
shares subject to the option each month thereafter. The options will have a
ten-year term and will be subject to the terms and conditions of the plan and
our standard form of stock option agreement for company officers, which you will
receive when the options are granted.
Benefits
You will
be eligible to participate in the employee benefit plans we make available to
our employees generally, which currently include health, dental, vision, life
and disability insurance, as well as a 401(k) retirement plan. We
currently make matching contributions under our 401(k) plan in an amount equal
to 50% of an employee’s contributions up to five percent of
salary. We will provide you with life insurance coverage under our
group term policy that provides for a death benefit of two times your annual
salary.
Paid
Time Off
You will
be entitled to four weeks paid time off under our employee paid time off
policy.
Severance
In the
event your employment is terminated without “cause” by the company, you will be
entitled to receive, and the company shall be obligated to pay, salary
continuation payments (pursuant to the company’s normal payroll procedures) in
an amount equal to your then-current base salary for a period of 12 months
following such termination. For purposes of the foregoing,
termination for “cause” shall mean termination of employment directly resulting
from (1) intentional misconduct causing a material violation by the company of
any state or federal laws, (2) a theft of corporate funds or corporate assets or
in a material act of fraud upon the company, (3) an act of personal
dishonesty that was intended to result in personal enrichment at the expense of
the company, (4) conviction of a felony; and
Subject
to the payment obligations of the company, if any, under the preceding paragraph
of this letter, this letter does not create any term of employment, and both you
and the company will be free to terminate your employment at any time for any
reason.
Start
Date
We expect
that you will begin work on or about June 1, 2009, or at an earlier date to be
mutually agreed upon.
Relocation
Assistance
Lexicon
will provide you with a total of $75,000 to assist you in your relocation to The
Woodlands, payable promptly following your start date. This amount
will include the company’s payment or reimbursement of your moving expenses that
may be excluded from your taxable income, with the balance, less applicable
taxes, to be used at your discretion.
In
addition to the foregoing amounts, Lexicon will pay the expenses of two trips of
reasonable duration for you and your family to locate suitable housing in The
Woodlands.
Preexisting
Business and Personal Obligations
We
understand that you have an existing consulting obligation that may require you
to take a brief unpaid leave in order to make a trip in June 2009, completing
this consultancy and all associated work within the quarter. Subject
to this exception due to a preexisting obligation, you will be subject to the
same policy that applies to all Lexicon officers which requires pre-approval for
any arrangement involving service on the board of directors (or similar
governing body) of, or as a consultant to, any third party
business.
We also
understand that you expect to take approximately one week of unpaid leave in
connection with a family trip in July 2009 that is not expected to overlap with
Lexicon’s board of directors’ meeting scheduled for July 22 and 23,
2009.
Proprietary
Information Agreement
We
consider the protection of our confidential information and proprietary rights
to be very important. As a result, our offer of employment is
conditioned upon your signing our standard form of Employee Proprietary
Information Agreement.
If you
have any questions regarding this offer or our employee benefits plans, please
contact Steven A. Tragash, vice president of corporate affairs, at (281)
863-3787. If you find this offer to be acceptable, please indicate your
acceptance by signing and returning one of the two copies of this letter on or
before May 15, 2009.
We
believe that this offer represents an excellent opportunity, and that you have
the experience, intellect, drive, engaging personality, appreciation for team
play and demonstrated effectiveness which make you a “natural” to join Lexicon
on its profound mission. Ajay, I believe you will enjoy you working with us and
that you will thrive at Lexicon. I hope you sense the same.
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Sincerely,
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/s/
Arthur T. Sands
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Arthur
T. Sands, M.D., Ph.D.
President
and Chief Executive Officer
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Accepted
and agreed:
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/s/
Ajay Bansal
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Ajay
Bansal
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Date: May
5, 2009
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Exhibit
99.1
LEXICON
NAMES AJAY BANSAL
EXECUTIVE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
The Woodlands, Texas, June 2,
2009 – Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX) announced today
the appointment of Ajay Bansal as executive vice president, corporate
development and chief financial officer. Mr. Bansal has more than 20
years of experience in the biotechnology and pharmaceutical industry in
corporate finance, corporate and business development, strategic planning, and
commercial operations.
Prior to
joining Lexicon, Mr. Bansal was chief financial officer and executive vice
president of corporate and business development for Tercica, Inc., which was
acquired by Ipsen in 2008. From February 2003 to January 2006, he was
chief financial officer of Nektar Therapeutics. From July 2002 until
joining Nektar, Mr. Bansal was director of operations analysis at Capital
One Financial and, from August 1998 to June 2002, he was with Mehta Partners
LLC, a financial advisory firm where he was named partner in January 2000.
Before joining Mehta Partners, Mr. Bansal spent more than 10 years in
product management and strategy roles at Novartis AG and as a management
consultant with Arthur D. Little, Inc., McKinsey & Company, Inc. and ZS
Associates. He received his B.S. in mechanical engineering from the
Indian Institute of Technology in New Delhi, India, and both his M.S. in
operations research and M.B.A. from Northwestern University.
“Ajay
will be a great asset to the Lexicon management team with his impressive
background in corporate finance, business development and product
commercialization,” said Dr. Arthur T. Sands, president and chief executive
officer of Lexicon. “As we continue to advance our pipeline of drug
candidates through clinical development, Ajay will play an important leadership
role in maximizing the value of our commercialization
opportunities.”
About
Lexicon
Lexicon
is a biopharmaceutical company focused on discovering and developing
breakthrough treatments for human disease. Lexicon currently has five
drug candidates in development for autoimmune disease, carcinoid syndrome,
diabetes, glaucoma and irritable bowel syndrome, all of which were discovered by
Lexicon’s research team. Lexicon has used its proprietary gene
knockout technology to identify more than 100 promising drug
targets. Lexicon has focused drug discovery efforts on these
biologically-validated targets to create its extensive pipeline of clinical and
preclinical programs. For additional information about Lexicon and
its programs, please visit www.lexpharma.com.
Safe
Harbor Statement
This
press release contains “forward-looking statements,” including statements
relating to Lexicon’s growth and future operating results, discovery and
development of products, strategic alliances and intellectual property, as well
as other matters that are not historical facts or information. All
forward-looking statements are based on management’s current assumptions and
expectations and involve risks, uncertainties and other important factors that
may cause Lexicon’s actual results to be materially different from any future
results expressed or implied by such forward-looking
statements. Information identifying such important factors is
contained under “Factors Affecting Forward-Looking Statements” and “Risk
Factors” in Lexicon’s annual report on Form 10-K for the year ended
December 31, 2008, as filed with the Securities and Exchange
Commission. Lexicon undertakes no obligation to update or revise any
such forward-looking statements, whether as a result of new information, future
events or otherwise.
# # #
Contact for
Lexicon:
Jason
Ray
Manager,
Corporate Communications and Investor Relations
281/863-3225
jray@lexpharma.com