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SEC Filings

S-1/A
OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 04/09/2007
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In determining the number of stock options to be granted to executives, we generally take into account the range of ownership, on a percentage basis, granted to executives in similar positions in the biotechnology industry, the individual’s ownership relative to other executives within the company, the individual’s position, scope of responsibility, ability to positively affect shareholder value, and the individual’s historic and recent performance. More specifically, initial stock option grants to Dr. Tollefson and Mr. McKinney were set judgmentally, based on negotiations with Mr. Weber. Subsequent awards for Dr. Tollefson and Mr. McKinney were made in recognition of their outstanding performance, in order to offset equity dilution and to recalibrate based on option grants made to newly hired executives. Option grants for Mr. Cooper, Dr. Dunayevich and Dr. Landbloom were based on negotiations with Dr. Tollefson, preliminarily using the Thelander Survey as a reference point.
 
Restricted Stock and Restricted Stock Units.  Our 2007 plan authorizes us to grant restricted stock and restricted stock units and our 2004 plan authorizes us to grant restricted stock. To date, we have not granted any restricted stock or restricted stock units. While we have no current plans to grant restricted stock and/or restricted stock units under our 2007 plan, we may choose to do so in order to implement the long-term incentive goals of the compensation committee.
 
Other Compensation.  Consistent with our compensation philosophy, we intend to continue to maintain our current benefits for our executive officers, including medical, dental, vision and life insurance coverage; however, the compensation committee in its discretion may revise, amend or add to the officer’s executive benefits if it deems it advisable. We have no current plans to change the levels of benefits currently provided to our executives.
 
Change in Control and Severance Arrangements.  As of the date of this prospectus, we will have in place amended employment agreements with each member of our senior executive management team, including Dr. Tollefson, Mr. McKinney, Mr. Cooper, Dr. Dunyavich and Dr. Landbloom, which provide change in control and severance arrangements. We believe that granting these arrangements to our key executive officers is an important element in the retention of such executive officers.
 
Pursuant to each of such employment agreements, if the executive is terminated by us other than for “cause,” as defined in the agreements and described below, or if the executive’s employment is terminated by us other than for cause, or is terminated by the executive due to “constructive termination,” as defined in the employment agreements and described below, within the one-month period before the effective date of a change in control and the six-month period immediately following the effective date of a change in control, the executive shall receive any accrued but unpaid base salary as of the date of termination, and, provided that he first executes and does not revoke a general release, he shall also be entitled to continue to be compensated by us, at his annual base salary as then in effect, for a period of nine months. Further, the employment agreements also provide that, in connection with a change in control, 50% of the unvested underlying shares of common stock subject to the options held by the executive will become vested and exercisable, or our right of repurchase will expire and lapse with respect to 50% of the shares of common stock then subject to such right of repurchase, as applicable. (Such rights of repurchase provide that our company has the right to repurchase an executive’s shares of our common stock subject to an early exercised stock option upon the executive’s termination of service with us.) Thereafter, remaining shares of common stock subject to such options will vest and become exercisable, or our right of repurchase will expire with respect to any shares of common stock remaining subject to the right of repurchase, as applicable, in equal monthly installments over the 12 months following the effective date of the change in control; provided, however, that in the event that fewer than 12 months remain until an option is fully vested and exercisable, or the right of repurchase has lapsed in full, the vesting period of such option or the lapsing period of the right of repurchase, as applicable, will remain unchanged by the change in control. In addition, if the executive’s employment is terminated by us or a successor company of us other than for cause or is terminated by the executive due to a constructive termination within the period beginning on the first day of the calendar month immediately preceding the calendar month in which the effective date of a change in control occurs and ending on the last day of the twelfth calendar month following the calendar month in which the effective date of a change in control occurs, then the option will vest and become exercisable, or the right of repurchase will expire, as applicable, in full with respect to all shares of our common stock, as of the date of such termination of employment.


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