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SEC Filings

OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 02/16/2007
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compensation” exception if the awards are made by a qualifying compensation committee. The 2007 plan sets the maximum number of shares that can be granted to any person within a specified period and the compensation is based solely on an increase in the stock price after the grant date. Specifically, the option exercise price must be equal to or greater than the fair market value of the stock subject to the award on the grant date. Under a Section 162(m) transition rule for compensation plans of corporations which are privately held and which become publicly held in an initial public offering, the 2007 plan will not be subject to Section 162(m) until a specified transition date, which is the earlier of (i) the first material modification of the 2007 plan, (ii) the issuance of all employer stock that has been allocated under the 2007 plan, (iii) the expiration of the 2007 plan, (iv) the first annual meeting of stockholders at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the initial public offering occurs, or (v) such other date required by Section 162(m) of the Internal Revenue Code. After the transition date, rights or awards granted under the 2007 plan, other than options and SARs, will not qualify as “performance-based compensation” for purposes of Section 162(m) unless such rights or awards are granted or vest upon pre-established objective performance goals, the material terms of which are disclosed to and approved by our stockholders.
We have attempted to structure the 2007 plan in such a manner that, after the transition date, the compensation attributable to stock options and SARs which meet the other requirements of Section 162(m) will not be subject to the $1,000,000 limitation. We have not, however, requested a ruling from the Internal Revenue Service, or IRS, or an opinion of counsel regarding this issue.
Amendment and Termination of the 2007 Plan.  Our compensation committee, with the approval of our board of directors, may terminate, amend or modify the 2007 plan. However, stockholder approval of any amendment to the 2007 plan will be obtained to the extent necessary and desirable to comply with any applicable law, regulation or stock exchange rule, or for any amendment to the 2007 plan that increases the number of shares available under the 2007 plan, permits our compensation committee (or our board of directors, in the case of awards to non-employee directors) to grant options with an exercise price that is below the fair market value on the date of grant, or permits our compensation committee (or our board of directors, in the case of awards to non-employee directors) to extend the exercise period for an option beyond ten years from the date of grant. If not terminated earlier by the compensation committee or the board of directors, the 2007 plan will terminate on the tenth anniversary of the date of its initial approval by our board of directors.
Non-Employee Director Awards.  The 2007 plan permits our board to grant awards to our non-employee directors pursuant to a written non-discretionary formula established by the plan administrator. Pursuant to this authority, our board has adopted the Independent Director Compensation Policy. For a further description of non-employee director awards see “Director Compensation.”
2004 Stock Plan
Our 2004 stock plan, or 2004 plan, was initially adopted by our board of directors and approved by our stockholders in January 2004. As amended to date, we have reserved a total of 6,318,550 shares of common stock for issuance under the 2004 plan. As of December 31, 2006, options to purchase 207,946 shares of common stock had been exercised, options to purchase 4,594,125 shares of common stock were outstanding and 1,516,479 shares of common stock remained available for grant. As of December 31, 2006, the outstanding options were exercisable at a weighted average exercise price of approximately $0.62 per share. The material terms of the 2004 plan are summarized below. The 2004 plan is filed as an exhibit to the registration statement of which this prospectus is a part.
No Further Grants.  After the effective date of the 2007 plan, no additional awards will be granted under the 2004 plan.
Administration.  Our board of directors administers the 2004 plan, and it may in turn delegate authority to administer the plan to a committee. Subject to the terms and conditions of the 2004 plan, the administrator has the authority to determine the terms and conditions of the awards granted under the 2004 plan, and to make all other determinations and to take all other actions necessary or advisable for the