UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form
_____________________
CURRENT REPORT
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As a result of Akorn, Inc.’s (the “Company’s”) on-going exploration of strategic alternatives, on February 4, 2020, the compensation committee of the board of directors (the “Board”) of the Company recommended, and the Board approved, retention programs for the Company’s executive officers and all other U.S. salaried exempt employees for 2020.
The 2020 retention program for the Company’s executive officers (the “Participants”) provides a prepaid retention payment (the “Retention Bonus”) to each Participant, subject to the terms of a letter agreement (the “Letter Agreement”).
Pursuant to the Letter Agreement, a portion of the Retention Bonus is subject to repayment by the Participant if the Company’s Quality Metric (as defined in the Letter Agreement) is not satisfied as of December 31, 2020 (the “Completion Date”). In addition, in the event that the Participant’s employment with the Company terminates for any reason other than a Qualifying Termination (as defined in the Letter Agreement) prior to the Completion Date and a Change of Control (as defined in the Letter Agreement), such Participant will be required to repay the Participant’s Retention Bonus to the Company, net of certain tax adjustments.
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A total aggregate of approximately $39.4 million was approved for payment under the retention programs for the Company’s U.S. salaried exempt employees for 2020, including for the Company’s executive officers named below. The amount of the Retention Bonuses paid to our President and CEO and named executive officers were: (1) $3,600,000 for President and Chief Executive Officer Douglas Boothe; (2) $1,489,500 for Chief Financial Officer Duane Portwood; (3) $1,451,400 for General Counsel Joseph Bonaccorsi; and (4) $1,155,000 for Chief Commercial Officer Jonathan Kafer. The retention programs for the Company's executive officers and other U.S. salaried exempt employees replace the traditional incentive compensation programs for 2020.
The above summary of the Retention Program is qualified in its entirety by reference to the complete terms and conditions as set forth in the Letter Agreement, the form of which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 5.02.
Item 9.01. Financial Statements and Exhibits.
| 10.1 | Form Letter Agreement |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
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Exhibit No. |
Description of Exhibit |
| 10.1 | Form Letter Agreement |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
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SIGNATURES
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.
Dated: February 10, 2020
| Akorn, Inc. | ||
| By: | /s/ Duane A. Portwood | |
| Name: Duane A. Portwood | ||
| Title: Chief Financial Officer | ||
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