Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 28, 2014 (the “Effective Date”), Retrophin, Inc. (the “Company”) entered into an employment agreement (the “Employment Agreement”) with Stephen Aselage, pursuant to which Mr. Aselage will serve as President and Chief Operations Officer of the Company, effective as of the Effective Date.
In accordance with the terms of the Employment Agreement, Mr. Aselage will be paid (i) a base salary in the amount of $295,000 (subject to increase at the discretion of the Board of Directors of the Company (the “Board”) after each anniversary of the Effective Date), and (ii) at the discretion of the Company’s Chief Executive Officer and the Board, an annual cash bonus award of up to 75% of Mr. Aselage’s then-applicable salary. Mr. Aselage will also be awarded options to purchase 300,000 shares of common stock, par value $0.0001 per share, of the Company, a pro rata portion of which will vest quarterly during the 2 years following the Effective Date.
The Employment Agreement contemplates that Mr. Aselage’s employment will be for a two-year term and may be automatically extended for successive one-year periods unless (i) Mr. Aselage gives notice of non-extension to the Company no later than ninety (90) days prior to the expiration of the Employment Agreement, (ii) Mr. Aselage’s employment is terminated or (iii) the Company delivers notice to Mr. Aselage no later than thirty (30) days prior to the expiration of the Employment Agreement.
In the event Mr. Aselage’s employment is terminated (i) by the Company other than for cause (as such term is defined in the Employment Agreement) or a regulatory determination termination (as such term is defined in the Employment Agreement) or (ii) by Mr. Aselage’s resignation following a material breach of a material term of the Employment Agreement by the Company which has not been cured within 10 days following notice thereof, Mr. Aselage will be entitled to receive a severance payment in an amount equal to $50,000, any expenses owed to him under the Employment Agreement, accrued vacation pay and payment of incentive compensation (as such term is defined in the Employment Agreement) payable on the same schedule as if Mr. Aselage had remained employed by the Company. If Mr. Aselage chooses to resign for reasons other than a material breach of the Employment Agreement by the Company, then Mr. Aselage will forfeit any unvested stock options that he received and will not be entitled to severance or any additional payments.
If Mr. Aselage’s employment is terminated for cause then Mr. Aselage will not be entitled to any further payments of any kind, except for payment of base salary plus reimbursement of certain expenses.
In the event that Mr. Aselage is no longer employed by the Company, any options that have not vested prior to the date of termination will immediately be cancelled and not subject to further vesting.
Mr. Aselage has served as a director of the Company since December 17, 2012 and will continue to serve as a director during the term of his employment. In connection with the execution of the Employment Agreement and in accordance with the rules of The NASDAQ Stock Market LLC, Mr. Aselage resigned as a member of the Compensation and Talent Development Committee of the Board and as the Chairman of the Nominating and Corporate Governance Committee of the Board. In connection with Mr. Aselage’s resignation from the Nominating and Corporate Governance Committee of the Board, the Board appointed Jeffrey Paley to serve as the Chairman of the Nominating and Corporate Governance Committee of the Board.
