Change in Directors or Principal Officers, Financial Statements a
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In early January 2013, Scott Cormack, the President and Chief Executive Officer of OncoGenex Pharmaceuticals, Inc. (the "Company") and Michelle Burris, the Executive Vice President of Operations, Chief Financial Officer, Principal Accounting Officer, Treasurer and Secretary of the Company, disclosed to the Company's board of directors that they have a developing personal relationship with one another that warranted consideration of their reporting relationship and duties. After consideration and discussion by the independent members of the Company's board of directors, as well as consultations with Mr. Cormack and Ms. Burris, the Company's board of directors determined that it would be advisable for Ms. Burris to transfer her executive duties to others and to continue portions of her work in operations as a consultant to the Company, reporting directly to the board of directors.
On February 1, 2013, Ms. Burris resigned as the Company's Principal Accounting Officer, Chief Financial Officer, Secretary and Treasurer. From February 1, 2013 to March 31, 2013, Ms. Burris will continue to serve as the Company's Executive Vice President of Operations. During such time, Ms. Burris will continue to receive her regular base salary and will be eligible to participate in benefits customarily afforded to other employees. In addition, her outstanding stock options and restricted stock units will continue to vest.
Effective March 31, 2013, Ms. Burris will resign as the Company's Executive Vice President of Operations, and the Company has agreed to pay all wages, bonuses, vacation, reimbursable expenses and similar payments due to Ms. Burris as of such date. If Ms. Burris agrees to release all claims against the Company, the Company has agreed to engage Ms. Burris as a consultant for a period of one year, beginning on the date she agrees to release all claims. The term of the consultancy may be extended by mutual agreement of the parties. As a consultant to the Company, Ms. Burris will receive a monthly retainer of approximately $34,000 and reimbursement of health insurance coverage. Ms. Burris will also be eligible to receive an incentive payment of up to 40% of the aggregate amounts paid to Ms. Burris from the Company during the 2013 fiscal year, which will be based on a percentage according to the Company's achievement of corporate objectives, as well as continued vesting of all of her outstanding stock options and restricted stock units through the term of the consultancy.
Following the end of the consultancy, if Ms. Burris agrees to release all claims against the Company, the Company will pay Ms. Burris a lump sum payment of approximately $410,000, which is consistent with the severance payment in her prior employment contract, or, if the consultancy ends within three months before or within 12 months after a change of control of the Company, a lump sum payment of approximately $511,000, plus a bonus based on the average of bonus and incentive payments paid to Ms. Burris in the 24 months prior to the end of the consultancy, which is consistent with the change in control provisions in her prior employment contract. Additionally, the Company will accelerate the vesting of Ms. Burris's outstanding stock options and restricted stock units that would have vested over a 12-month period had she continued to provide services to the Company. If the consultancy ends within three months before or within 12 months after a change of control of the Company, all of Ms. Burris's outstanding stock options and restricted stock units will immediately vest. The Company will also pay Ms. Burris a lump sum payment to continue her existing health benefits for 12 months or, if the consultancy ends within three months before or within 12 months after a change of control of the Company, for 15 months. However, the Company will not pay the foregoing payments or accelerate the vesting of outstanding stock options and restricted stock units if Ms. Burris terminates the consultancy early for convenience, or the Company terminates the consultancy as a result of Ms. Burris's uncured breach of her consulting agreement
But on the positive side, there may be more analysts than usual on the next CC, just to hear what Cormack has to say about this.
I never understood why they didn't just promote Cameron Lawrence, who seemed to be doing a fine job filling in while the CFO position was vacant. I guess I understand now.
I saw an announcement somewhere that Lawrence has taken a job elsewhere so they can't bring him back now. Given how much they'll be paying Ms. Burris, they probably can't afford to hire a replacement anyway.
As I recall, a few years ago Burris resigned as DNDN's CFO after only a few months on the job, with no explanation given. Not that I want to make unsubstantiated allegations that anything scandalous was going on there (or maybe I do). But this doesn't speak well of our past and present CEO, who I believe is married. Couldn't he have restrained himself until after the SYNERGY results were announced?