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): August 20, 2014 ( August 18, 2014)
Array BioPharma Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
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001-16633 |
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84-1460811 |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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3200 Walnut Street, Boulder, Colorado |
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80301 |
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(Address of principal executive offices) |
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(Zip Code) |
303-381-6600
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 18, 2014, and on the recommendation of the Compensation Committee, the independent directors of the Board of Directors of Array BioPharma Inc. (the “Company”) approved the performance bonus program for annual bonus awards that may be earned by employees of the Company, including the Company’s executive officers, for fiscal 2015. Under the bonus program, certain of the Company’s employees, including its executive officers, will be entitled to earn a bonus payable in cash, stock or stock option equivalents based upon the achievement of certain specified performance goals and objectives relating to the Company and to each individual participant. To the extent the corporate and individual performance goals are met, each participant may be eligible to receive a target bonus calculated by multiplying the participant’s base salary by a percentage value later assigned to the participant or to his or her position with the Company by the Compensation Committee. A percentage of this target bonus amount may be awarded following the end of the fiscal year to the extent the Compensation Committee determines the corporate and individual performance goals are met. The plan can be amended in whole or in part by the Compensation Committee at any time until paid. The Compensation Committee recommended, and the independent directors of the Board, approved the specific performance goals for fiscal 2015 under the performance bonus program. The performance bonuses for 2015 will be based both on individual performance and on the Company’s performance relative to the following performance criteria: revenues, earnings per share, license revenue, year-end cash, discovery research goals and clinical development goals. Threshold, target and stretch targets were established for each of the goals, with threshold achievement resulting in 70% payout, target achievement resulting in 100% payout and stretch achievement resulting in 150% payout under the program. In determining the bonus awards for fiscal 2015, the foregoing goals will be weighted at the target level as follows: financial goals 20%; discovery research goals 20%; clinical development goals 60%. A description of the performance bonus program is filed with this report as Exhibit 10.1 and is incorporated herein by reference.
On August 18, 2014, the Compensation Committee also approved the grant of restricted stock units, or RSU’s, to the Company’s chief executive officer, chief financial officer and next three most highly compensated executive officers during fiscal 2013 (collectively referred to as our named executive officers) as well as to certain other executive officers of the Company. The RSU’s were issued under the Array BioPharma Inc. Amended and Restated Stock Incentive Plan and a form of Restricted Stock Unit Agreement, a copy of which is attached hereto as exhibit 10.2. The number of RSU’s granted to the Company’s named executive officers who remain employed by the Company is as follows: Mr. Ron Squarer, 155,762, Mr. Michael Carruthers, 25,655, Dr. David Snitman, 22,906, and Dr. Mike Needle, 32,069. The RSU’s only vest upon achievement of certain milestones relating to a program licensed by the Company to Novartis International Pharmaceutical Ltd., with one half vesting upon achievement of the first milestone relating to the return of commercialization rights for binimetinib to the Company that have been licensed to Novartis International Pharmaceutical Ltd. and one half vesting upon achievement of the second milestone on or prior to the fourth anniversary of the grant date, in each case subject to continued service with the Company as of each vesting date.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 — Description of performance bonus program
10.2 — Form of Restricted Stock Unit Agreement
SIGNATURE
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 hereunto duly authorized.
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Date: August 20, 2014 |
Array BioPharma Inc. |
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By: |
/s/ R. Michael Carruthers |
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R. Michael Carruthers |
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Chief Financial Officer |
Exhibit 10.1
ARRAY BIOPHARMA INC.
DESCRIPTION OF PERFORMANCE BONUS PROGRAM
Array BioPharma Inc. (the “Company”) has established an annual performance bonus program for employees, including the Company’s executive officers. Through this program, employees can receive an annual bonus payable in cash, stock or stock option equivalents based on achievement of key Company and individual goals. There is no guarantee that bonuses will be awarded in any given year. The bonus program is intended to strengthen the connection between individual compensation and Company success; reinforce the Company’s pay-for-performance philosophy by awarding higher bonuses to higher performing employees; and help ensure that the Company’s cash compensation is competitive.
The Compensation Committee recommends for approval by the independent directors of the Board the minimum, target and stretch corporate performance goals, and the relative weighting of these goals, for the upcoming fiscal year. The goals generally are based on the following objective performance criteria: revenues, earnings per share, license revenue, year-end cash, discovery research goals and clinical development goals. Each participant in the bonus program may be eligible to receive a target bonus amount calculated by multiplying the participant’s base salary by a percentage value later assigned to the participant or his or her position with the Company by the Compensation Committee.
Following the end of each fiscal year, the Compensation Committee determines in its discretion the extent to which the company-wide and individual performance goals were attained. Based on this assessment, the Compensation Committee will award bonuses equal to a varying percentage of an employee’s target bonus amount. The Compensation Committee may award a bonus in an amount less than or greater than the amount earned by a participant under the bonus program.
Individual bonuses can vary significantly based on performance. Any bonuses for a particular year are paid as a lump sum in cash, stock or stock option equivalents (or any combination thereof), less applicable payroll and other withholdings, in the quarter following that year. The plan can be amended in whole or in part by the Compensation Committee at any time until paid.
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Exhibit 10.2
Array BioPharma Inc.
Notice of Grant of Restricted Stock Units
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Participant Name: |
[Name] |
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Employee Number: |
[SW Data] |
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Grant Name: |
[SW Data] |
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Grant Date: |
[Date] |
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Expiration Date: |
[Date] |
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Number of Stock Units: |
[SW Data] |
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Vesting Start Date: |
[Date] |
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Vesting Schedule: |
[ Vesting Schedule or Conditions ] |
ATTACHMENT
Restricted Stock Unit Agreement
This cover sheet and the attached Restricted Stock Unit Agreement are not
a stock certificate or a negotiable instrument.
ARRAY BIOPHARMA INC.
AMENDED AND RESTATED STOCK OPTION AND INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
Array BioPharma Inc., a Delaware corporation (the “ Company ”), hereby grants to the participant named on the attached cover sheet a number of restricted stock units set forth on such cover sheet (the “ Stock Units ”). The terms and conditions of the Stock Units are set forth on the attached cover sheet, this Restricted Stock Unit Agreement (the “ Agreement ”) and in the Amended and Restated Array BioPharma Inc. Stock Option and Incentive Plan (the “ Plan ”).
By clicking “Accept” at the end of this Agreement, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which is available by accessing the link at the end of this Agreement. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.
Array BioPharma Inc.
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By: |
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Ron Squarer, Chief Executive Officer |
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Capitalized terms used in this Agreement that are not otherwise defined in this Agreement have the meaning given such terms in the Plan.
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Stock Unit Transferability |
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This grant is an award of stock units in the number of units set forth on the cover sheet, subject to the vesting conditions described below (“ Stock Units ”). Your Stock Units may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Stock Units be made subject to execution, attachment or similar process. |
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Vesting Schedule |
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Provided you continue in Service on each vesting date and subject to the deceleration provisions in the following paragraph and the acceleration provisions below, your Stock Units shall vest as indicated in the Vesting Schedule on the attached cover sheet.
For Time-Based Stock Units (defined below) only, notwithstanding the foregoing, if you work less than your scheduled annualized hours (as determined by the Company on the Grant Date and which equal either 1,664, 1,872 or 2,080 hours per year) (“ Annualized Hours ”) during the year ending on the anniversary of the Vesting Start Date (the “ Anniversary Date ”) or any subsequent one-year anniversary of the Anniversary Date, then the number of Stock Units that vest during such year, if any, shall be reduced by a factor equal to the actual number of hours worked during the year divided by your Annualized Hours.
Any Stock Units that vest solely as a result of your continued Service to the Company (“ Time-Based Stock Units ”) and that do not vest prior to expiration of the Vesting Schedule set forth above because of the application of the foregoing paragraph shall be eligible for vesting on each Anniversary Date thereafter at the rate set forth in the Vesting Schedule above, provided that you remain in Service as of any such date. The maximum number of Time-Based Stock Units that may vest in any such year shall be 100% of the Time-Based Stock Units, provided that you work at least your Annualized Hours during the preceding year, and if you work less than your Annualized Hours during the preceding year, the number of Time-Based Stock Units that vest during such year shall be the lesser of (i) 100% of the Time-Based Stock Units reduced by the formula set forth in the foregoing paragraph, or (ii) the remaining unvested Stock Units.
The resulting aggregate number of vested Stock Units will be rounded to the nearest whole number. You cannot vest in more than the number of Stock Units covered by this grant.
No additional Stock Units will vest after your Service has terminated for any reason, except as may be provided in the section below entitled “Acceleration of Vesting”. |
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Acceleration of Vesting |
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Notwithstanding any other provision of this Agreement or the Plan, the following acceleration provisions shall apply to the vesting of the Stock Units:
[ Insert accelerated vesting provisions, if any, consistent with the acceleration of vesting provisions contained in any employment agreement with the recipient. ] |
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Leaves of Absence |
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For purposes of this Agreement, your Service does not terminate when you go on a bona fide leave of absence (i) that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or (ii) when continued Service crediting is required by applicable law. However, your Service will be treated as terminating for purposes of the “Vesting” sections of this Agreement in accordance with the then effective policies of the Company relating to leaves of absence, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.
The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan. |
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Delivery of Stock Pursuant to Units |
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A certificate for the shares of Common Stock represented by your this Agreement shall be delivered to you, or to your eligible beneficiary or your estate, on the date on which all or the applicable portion of your Stock Units have vested.
Notwithstanding the preceding paragraph:
· If you are a “key employee” within the meaning of Section 409A of the Code and shares would otherwise be delivered to you on account of your separation from Service, then such shares shall not be delivered to you until six months after your separation from Service; and · If the shares relating to the vested Stock Units would otherwise be delivered during a period in which you are (i) subject to a lock-up agreement restricting your ability to sell shares of Common Stock in the open market or (ii) restricted from selling shares of Common Stock in the open market because you are not then eligible to sell under the Company’s insider trading or similar plan as then in effect (whether because a trading window is not open or you are otherwise restricted from trading), delivery of the shares related to the vested Stock Units may be delayed until no earlier than the first date on which you are no longer prohibited from selling shares of Common Stock due to a lock-up agreement or insider trading plan restriction, but, in any event, not beyond June 30 of the calendar year following the year in which you vested in the Stock Units. |
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Withholding Taxes |
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You agree, as a condition of this grant, that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of vesting in Stock Units or your acquisition of Common Stock under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to this grant, unless you shall have provided funds to the Company to satisfy any required federal, state, local or foreign tax or withholding payment, then the |
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Company will cause an immediate forfeiture of shares of Common Stock subject to the Stock Unit granted pursuant to this Agreement having a Fair Market Value equal to the withholding or other taxes due. |
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No Employment or Service Contract |
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This Agreement does not give you the right to be retained or employed by the Company (or any Parent or Subsidiary) in any capacity or for any period of time. The Company (and any Parent or Subsidiary) reserves the right to terminate your Service at any time and for any reason. |
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Shareholder Rights |
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You do not have any of the rights of a shareholder with respect to the Stock Units unless and until the Common Stock relating to the Stock Units has been delivered to you. |
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Adjustments |
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In the event of a stock split, a stock dividend or a similar change in the Common Stock, the number of Stock Units covered by this grant will be adjusted (and rounded down to the nearest whole number) in accordance with the terms of the Plan. |
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Applicable Law |
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This Agreement will be interpreted and enforced under the laws of the State of Colorado, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. |
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Consent to Electronic Delivery |
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The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Company’s annual report and proxy statement to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to receive, the Company would be pleased to provide copies. Please contact Human Resources to request paper copies of these documents. |
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The Plan and Other Rights |
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The text of the Plan is incorporated in this Agreement by reference. This Agreement, the attached cover sheet and the Plan constitute the entire understanding between you and the Company regarding this grant of Stock Units. Any prior agreements, commitments or negotiations concerning this grant are superseded. The Plan will control in the event any provision of this Agreement or the attached cover sheet should appear to be inconsistent with the terms of the Plan. |
By clicking “Accept” below, you agree to all of the terms and conditions described above and in the Plan.
[INSERT ‘ACCEPT’ AND ‘DO NOT ACCEPT’ LINKS]
[INSERT LINKS TO THE PLAN, PROSPECTUS AND ANNUAL REPORT]