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
15, 2010
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 15, 2010, the Compensation Committee of our Board of Directors approved
2010 base salaries and a process for the determination of 2010 cash bonuses for
our named executive officers. The 2010 salary information and a
description of the 2010 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 also approved the payment of 2009 cash bonuses to our
named executive officers as described below:
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Name and Position
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2009
Cash Bonus
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|||
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Arthur
T. Sands, M.D., Ph.D.
President
and Chief Executive Officer
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$ | 210,000 | ||
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Alan
J. Main, Ph.D.
Executive
Vice President of Pharmaceutical Research
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$ | 90,000 | ||
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Jeffrey
L. Wade, J.D.
Executive
Vice President and General Counsel
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$ | 90,000 | ||
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Brian
P. Zambrowicz, Ph.D.
Executive
Vice President and Chief Scientific Officer
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$ | 120,000 | ||
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James
F. Tessmer
Vice
President, Finance and Accounting
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$ | 45,000 | ||
The
Compensation Committee also approved the grant of restricted stock unit (phantom
stock) awards to our named executive officers under our Equity Incentive
Plan. The right of our named executive officers to receive the shares
subject to such restricted stock awards vest upon the dosing of the first
patient in a pivotal human clinical trial in any country the results of which
could be used to establish safety and efficacy of a pharmaceutical product
discovered or developed by us (whether or not licensed by us to a third party)
as a basis for a New Drug Application with the U.S. Food and Drug Administration
or that would otherwise satisfy the requirements of 21 CFR 312.21(c) or its
foreign equivalent; provided that the right of
our named executive officers to receive the shares shall become fully vested
upon (i) the termination of the named executive officer’s employment by us
without cause or by the named executive officer for good reason following a
change in control of our company or (ii) the named executive officer’s death or
disability.
The form
of restricted stock unit agreement applicable to such restricted stock units 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 2010 Named Executive Officer Cash Compensation
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10.2
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—
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Form
of Restricted Stock Unit Agreement with Officers under the 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, 2010
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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 2010 Named Executive Officer Cash Compensation
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10.2
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—
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Form
of Restricted Stock Unit Agreement with Officers under the Equity
Incentive Plan
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Exhibit
10.1
Summary of 2010 Named
Executive Officer Cash Compensation
The
Compensation Committee of our Board of Directors has approved 2010 base salaries
for our named executive officers as set forth below.
The
Compensation Committee has also approved a process for the determination of 2010
cash bonuses for our named executive officers, pursuant to which bonuses, if
any, will be determined in the discretion of the Compensation Committee based on
the achievement of certain corporate goals and individual performance in
2010. The corporate goals include objectives relating to the
development of existing drug candidates, the identification of additional drug
candidates and the achievement of certain financial and business
goals. Achievement of these corporate goals will be evaluated by the
Compensation Committee in making determinations regarding bonuses for 2010
performance. However, the Compensation Committee retains broad
discretion over the amount and payment of cash bonuses and is not bound by any
pre-determined agreement, formula or other standard with respect to such
decisions.
The
Compensation Committee has established a bonus target, expressed as a percentage
of base salary, for each of our named executive officers, assuming full
achievement of corporate goals and a high level of individual
performance. 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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2010
Base Salary
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2010
Bonus Target
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Arthur
T. Sands, M.D., Ph.D.
President
and Chief Executive Officer
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$ | 580,000 | 50 | % | ||||
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Alan
J. Main, Ph.D.
Executive
Vice President of Pharmaceutical Research
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$ | 350,000 | 35 | % | ||||
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Jeffrey
L. Wade, J.D.
Executive
Vice President and General Counsel
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$ | 365,000 | 35 | % | ||||
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Brian
P. Zambrowicz, Ph.D.
Executive
Vice President and Chief Scientific Officer
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$ | 400,000 | 40 | % | ||||
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James
F. Tessmer
Vice
President, Finance and Accounting
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$ | 235,000 | 25 | % | ||||
Exhibit
10.2
RESTRICTED
STOCK UNIT AGREEMENT
This Restricted Stock Unit
Agreement (this “Agreement”), effective as of February ___, 2010
(the “Grant Date”), is by and between Lexicon Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), and «FirstName» «LastName»
(“Employee”).
To carry
out the purposes of the Company’s 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 Phantom Stock
Award (as defined in the Plan) 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”), in order to provide Employee with incentives to
exert maximum efforts for the Company’s success by providing Employee the
opportunity to benefit from increases in the value of the 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 Phantom Stock
Award. The Company hereby grants to Employee a Phantom Stock
Award, on the terms and conditions set forth in this Agreement and in the Plan,
consisting of the right to receive an aggregate of «RestrictedShares» shares of
Stock (the “Shares”).
2. Vesting. (a)
Subject to the terms and conditions set forth in this Agreement and the Plan,
the right of Employee to receive the Shares shall vest upon the dosing of the
first patient in a pivotal human clinical trial in any country the results of
which could be used to establish safety and efficacy of a pharmaceutical product
discovered or developed by the Company (whether or not licensed by the Company
to a third party) as a basis for a New Drug Application with the U.S. Food and
Drug Administration or that would otherwise satisfy the requirements of 21 CFR
312.21(c) or its foreign equivalent; provided that, if not already
vested in accordance with the foregoing, the right of Employee to receive the
Shares shall become vested upon (i) a termination of Employee’s Continuous
Service (as defined in the Plan) by the Company without Cause (as defined below)
or by Employee for Good Reason (as defined below) that occurs after the
occurrence of a Change in Control (as defined below) or (ii) the termination of
Employee’s Continuous Service as a result of Employee’s death or Disability (as
defined in the Plan).
(b) For
purposes of the foregoing:
(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 upon Termination
of Service. Simultaneously with termination of Employee’s
Continuous Service for any reason other than as a result of Employee’s death or
Disability (as defined in the Plan) prior to the vesting of Employee’s rights to
receive the Shares in accordance with Section 2 of this Agreement, Employee
shall automatically forfeit all rights to receive the Shares, unless and except
to the extent otherwise agreed by the Company, in its sole
discretion.
4. Issuance of Shares upon
Vesting. Subject to the provisions of Sections 3 and 6 of this
Agreement, upon vesting of the Shares in accordance with Section 2 of this
Agreement, the Company shall (a) provide Employee with prompt notice of such
vesting event and (b) issue the Shares to Employee for no additional
consideration.
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 issued to Employee unless and until Employee shall have paid or
otherwise satisfied the withholding tax obligations with respect
thereto.
7. Dividend Equivalents;
Voting. If the Board declares any dividends with respect to
the Stock prior to the vesting of Employee’s rights to receive the Shares in
accordance with Section 2 of this Agreement, dividend equivalents shall be
credited to Employee in respect of the Shares and shall be converted into
additional shares of Stock covered by this Agreement and such additional shares
shall be subject to all of the terms and conditions of the underlying
Shares. Employee shall have no voting rights with respect to the
Phantom Stock Award or the Shares subject thereto until such time as the Shares
are issued to Employee pursuant to Section 4 of this Agreement.
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8. 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.
9. 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.
10. 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.
11. 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.
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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.
| Lexicon Pharmaceuticals, Inc. | |||
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By:
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| Arthur T. Sands, M.D., Ph.D. | |||
| President and Chief Executive Officer | |||
| Employee | |||
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«FirstName» «LastName»
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