DURECT CORPORATION (NASDAQ:DRRX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

DURECT CORPORATION (NASDAQ:DRRX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

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Executive Officer Compensation

The following sets forth a summary of the compensation for fiscal year 2019, and bonuses awarded for fiscal year 2018, approved on January23, 2019 by the Compensation Committee of DURECT Corporation (“the Company”) for the Company’s Chief Executive Officer, the Chief Financial Officer, and the other named executive officers of the Company for whom compensation disclosure was required in the Company’s most recent proxy statement filed with the Securities and Exchange Commission.

Bonus Awarded for

Performance in 2018

Name and Position

Fiscal year

2019 Base

Salary (1)

Cash

Stock Options

(Number of

Shares subject

tooptiongrant)(2)

Number of

Shares subject

toannualoption

grant (3)

TargetBonusfor

Performance

in 2019

(Percentage of

Base Salary) (4)

James E. Brown, D.V.M.,

President & Chief Executive

Officer

$

531,289

$

221,755

150,000

%

Michael H. Arenberg, Chief

Financial Officer

$

350,175

$

4,413

86,335

110,000

%

Judy Joice, Senior

Vice President, Operations

$

15,805

N/A

Matthew J. Hogan,

Corporate Finance Advisor (Former Chief Financial Officer) (6)

$

$

3,312

64,803

N/A

Notes:

(1)

The Fiscal Year 2019 Base Salaries shown reflect the weighted average salary for 2019. The 2019 base salary for Dr. Brown reflects no increase as compared to his base salary in 2018. Effective April 1, 2019, Mr. Arenberg’s base salary will increase by 2% to $351,900 from $345,000 at December 31, 2018 and Ms. Joice’s base salary will increase by 2% to $308,404 from $302,357 at December 31, 2018.

(2)

The bonus awarded for performance in 2018 as determined by the Compensation Committee on January23, 2019 was established to be paid 10% in cash and 90% in stock options, except for Dr. Brown, whose bonus was to be paid 50% in stock options and for Dr. Theeuwes, whose bonus was to be paid 50% in cash. The total shares subject to each bonus option was determined by using a standard Black-Scholes option-pricing model. The exercise price per share of such option grant is $0.58, the closing price of the Company’s common stock on the NASDAQ Global Market on the date of grant. The shares subject to the bonus options are fully vested upon grant. In the event of the optionee’s termination of service with the Company for a reason other than cause, the post termination exercise period for the options shall be one (1)year, subject to the ten (10)year term of the option.

(3)

The 2019 annual options were granted by the Compensation Committee on January23, 2019. The exercise price per share of such option grant is $0.58, the closing price of the Company’s common stock on the NASDAQ Global Market on the date of grant. The vesting associated with the options is as follows: one-sixteenth (1/16)of the total shares subject to the option shall vest quarterly over four (4)years following the date of grant, subject to continued service. In the event of the optionee’s termination of service with the Company for a reason other than cause, the post termination exercise period for the options shall be one (1)year, subject to the ten (10)year term of the option.

(4)

The actual bonus to be awarded will be at the Committee’s complete discretion based on the Company’s performance against specified corporate objectives and other factors to be taken into account at the discretion of the Committee.

(5)

Effective December 31, 2018, Dr. Theeuwes retired as Chairman of the Board and from the Board and the Company.

(6)

Effective October 15, 2018, Mr. Hogan retired as Chief Financial Officer of the Company and entered into a consulting arrangement with the Company, to which Mr. Hogan will provide corporate finance support through April 2019.

About DURECT CORPORATION (NASDAQ:DRRX)

Durect Corporation is a biopharmaceutical company with research and development programs. The Company’s products candidates include DUR-928, oral for metabolic/lipid disorders, and DUR-928, injectable for acute organ injuries. Its other product candidates include POSIMIR (controlled release injection of bupivacaine), REMOXY (oral controlled release oxycodone), ORADUR-ADHD, ELADUR (controlled release injection of bupivicane), Relday (risperidone), ORADUR-based opioid (hydromorphone) and SABER-based ophthalmic. The Company’s ALZET product line consists of miniature, implantable osmotic pumps and accessories used for experimental research in mice, rats and other laboratory animals. The Company also manufactures and sells osmotic pumps used in laboratory research and design; and develops and manufactures a range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products.

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