UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
February
26, 2009
Date of
Report (date of earliest event reported)
SENORX,
INC.
(Exact
name of Registrant as specified in its charter)
Delaware
|
001-33382
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33-0787406
|
(State
or other jurisdiction of
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(Commission
File Number)
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
Number)
|
|
3
Morgan, Irvine, California 92618
(Address
of principal executive offices)
(949)
362-4800
(Registrant’s
telephone number, including area code)
N/A
(
Former name or former address, if
changed since last report
)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Executive
Compensation
At a
meeting of the Compensation Committee of our Board of Directors held on February
26, 2009, a number of matters relating to the compensation of our Executive
Officers were discussed and approved. The chart below summarizes increases to
base salary, our Cash Bonus Plan for 2009 and the granting of stock options and
RSU awards to our Executive Officers that were approved by the Compensation
Committee.
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2009
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Restricted
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Cash
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Total
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Stock
Option
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Stock
Unit
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Bonus
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Cash
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Grants
–
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Grants
–
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Name
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Position
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Salary
(1)
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Plan
(2)
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Compensation
(3)
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Shares
(4)
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Shares
(5)
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Lloyd
H. Malchow
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President
and Chief Executive Officer
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$
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341,149
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50%
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$
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575,689
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219,127
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23,818
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Kevin
J. Cousins
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Vice
President of Finance and Chief Financial Officer
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$
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233,376
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40%
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$
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361,733
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52,140
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5,521
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William
F. Gearhart
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Vice
President, Global Marketing and Corporate Development
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$
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247,042
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40%
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$
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382,915
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35,198
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3,826
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Paul
Lubock
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Chief
Technical Officer
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$
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244,114
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40%
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$
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378,376
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56,105
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6,098
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Eben
S. Gordon
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Vice
President of Regulatory Affairs and Quality Assurance
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$
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183,310
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40%
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$
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284,131
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35,198
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3,826
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John
T. Buhler
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Vice
President of Global Sales and Business Development
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$
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243,780
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40%
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$
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377,859
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56,105
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6,098
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(1)
All salary amounts are retroactive to January 1, 2009 and are based on a
percentage increase over 2008 base salaries of 2.0%.
(2) Bonus
amounts are calculated as a percentage of salary. The percentages listed on the
table for each Executive Officer reflect maximum possible payouts assuming
achievement of the underlying 2009 Cash Bonus Plan quantitative corporate target
goals at 125% full achievement of the target level, such goals comprising of
gross revenue and cash-flow components. In addition, the Compensation Committee
has also reserved the right in its discretion to increase or decrease an
individual’s bonus payments by up to 10% of the bonus amount payable assuming
the full achievement (but not over achievement) of corporate the target goals.
To the extent Executive Officers are eligible to receive a bonus under the 2009
Cash Bonus Plan, such bonuses may be made in the form of cash or an equivalent
value of Restricted Stock Units and in either case, will be paid following the
audit of our financial statements for the 2009 fiscal year.
(3) The
amount represents the target for total cash compensation, including salary and
maximum bonus payout under the 2009 Cash Bonus Plan (such maximum bonus payout
amount based on 125% achievement of the quantitative target goals and the
additional 10% available to an individual on a discretionary
basis).
(4)
The stock options were granted pursuant to our 2006 Equity Incentive Plan and
shall vest over four (4) years from the vesting commencement date of February
26, 2009, with 1/48
th
of the
shares vesting on March 31, 2009 and an additional 1/48
th
of the
shares vesting each month thereafter, subject to optionee continuing to be a
service provider on each such date. The strike price of each option was $3.00
per share, the closing sale price of our Common Stock on February 26,
2009.
(5) The
shares subject to the Restricted Stock Unit awards, or RSUs, vest as follows:
50% on the first anniversary of the date of grant and 50% on the second
anniversary of the date of grant, subject to the officer’s continued service on
each relevant vesting date.
The
primary goal of our compensation program is to help us attract and retain
talented, qualified employees. Executive compensation is comprised of (i) a
cash-based salary component, which we have just adjusted pursuant to our normal
annual review by our Compensation Committee based on the individual performance
of the executive, (ii) annual cash incentive bonus payments upon achievement of
corporate objectives, which we have just set for 2009 and (iii) an equity
component providing long-term compensation based on company performance. The
long-term component of executive compensation is designed to align management’s
incentives with the generation of long-term stockholder value. Additionally, our
compensation programs are designed to be competitive with other companies in our
industry.
As stated above, on February 26, 2009
we granted stock options and RSUs to our Executive Officers, as well as other
officers, as part of our long-term equity compensation strategy. These grants
are outside of our historical practice of granting long-term equity compensation
to our Executive Officers once annually near the end of the fiscal year, which
we did in November 2008. In addition, it has been our historical practice only
to issue stock options.
After
discussion by the Compensation Committee and the full Board at a number of
meetings, it was proposed and recommended that a special long-term equity
incentive grant, including a grant of RSUs, be made to Executive Officers at
this time. It is intended that the grants made on February 26, 2009 not be in
addition to our normal compensation, but instead, a one-time “acceleration” of
the annual grants that would have otherwise been made later in 2009. Although
the Compensation Committee will retain the discretion to reconsider whether any
further grants will be made in 2009, it is the Compensation Committee’s
intention not to grant additional long-term equity awards in 2009 and instead
return to historical practices with grants near the end of 2010. In connection
with the grants of RSUs, it is the Compensation Committee’s intention to
continue to use such instruments on a going-forward basis.
The
Compensation Committee’s rationale for making these grants at the present time
are as follows:
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·
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Provide
immediate and meaningful additional economic alignment of management
incentives with the building of long-term shareholder
value
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·
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Provide
meaningful additional retention and incentives for key employees who are
building the business and achieving key corporate
goals
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·
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Take
advantage of potential deferred compensation expense savings by granting
awards now instead of at the end of 2009, and, in the case of RSUs, a
complete savings of such
expense
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·
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In
the case of the RSUs, since the exercise price of many of our prior year
grants of stock options now exceed the market price of stock underlying
the awards, the Compensation Committee determined that a grant
of RSUs, full-value awards with guaranteed value, would provide
additional and necessary retention value for our Executive
Officers
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·
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Achieve
the average of total compensation targets established in our benchmarking
of comparable companies
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Director
Compensation
Upon the
recommendation of the Compensation Committee, and formal approval of such
recommendations by the Board of Directors at its meeting held on February 26,
2009, we adjusted the annual compensation for our non-employee directors, which
we refer to as our outside directors, as summarized in the chart
below.
Component
|
Previous
Level of
Compensation
(Fees/Awards)
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Newly
Approved Level of
Compensation
(Fees/Awards)
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Annual
Board Retainer Fees
(1)
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-
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$18,000
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Board
of Directors Meeting Fees
(2)
In
Person
Telephonic
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$3,750
$1,500
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$2,000
(3)
$500
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Committee
Retainer Fees
(1)
Audit
Committee Chairperson
Compensation
Committee Chairperson
Governance
Committee Chairperson
(4)
Non-chair
committee members
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$8,500
$4,250
-
-
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$8,500
$4,250
$2,500
$1,000
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Committee
Meeting Fees
(2)
In
Person
Telephonic
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$1,000
$500
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$1,000
$500
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Annual
Equity Awards
(5)
Stock
Options
RSUs
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6,750
shares
-
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12,000
shares
1,305
shares
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Initial
Equity Awards
(6)
Stock
Options
RSUs
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20,000
shares
-
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15,000
shares
6,522
shares
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(1) The
Board of Directors and Committee retainer fees are retroactive to January 1,
2009 and will be paid on a quarterly basis.
(2) These
meeting attendance fees are for all of our current and any future committees
that our Board of Directors may create. Directors will also be reimbursed for
expenses incurred in connection with their in-person attendance at Board and
Committee meetings.
(3) In
the event that an outside director does not reside in Southern California and is
required to overnight in the area for an in-person Board meeting, an additional
$750 meeting attendance fee will be paid.
(4) We do
not currently have a Corporate Governance or Nominating Committee, but may
institute such a committee in the future and the fees referenced above shall
apply at such a time.
(5) On
February 26, 2009, all of our outside directors who had been directors for at
least six months (which were all such directors) were granted the annual option
to purchase 12,000 shares of our common stock and the annual Restricted Stock
Unit, or RSU, grant for 1,305 share of our common stock. We had previously
granted an annual stock option award of 6,750 shares on the date of each annual
meeting of our stockholders, and have, commencing with this grant, permanently
moved the annual director equity award date to the first open trading window
each fiscal year. The grant on February 26, 2009 replaces any grant that may
have otherwise been made pursuant to our 2006 Equity Incentive Plan on the date
of our annual meeting in 2009. These option grants become exercisable as to
1
/36
of the shares each month following the date of grant, subject to the director’s
continued service on each relevant vesting date. The shares subject to the RSU
grants will vest as follows: 50% on the first anniversary of the date of grant
and 50% on the second anniversary of the date of grant, subject to the
director’s continued service on each relevant vesting date. Our 2006 Equity
Incentive Plan was amended to implement these changes.
(6)
Effective as of February 26, 2009, each person who is elected or appointed for
the first time to be an outside director will be granted an initial option to
purchase 15,000 shares of our common stock and an initial RSU grant of 6,522
share of our common stock. The initial option grants and initial RSUs have the
same vesting schedule as the annual awards. Our 2006 Equity Incentive Plan was
amended to implement these changes.
Our
Compensation Committee relied on a commissioned third-party industry
compensation survey and their experience with and knowledge of other companies
in our industry to make recommendations to our Board of Director on cash fee and
long-term equity compensation for our outside directors. Our Compensation
Committee utilized this data to set compensation for our outside directors at
levels targeted at or around the average of the compensation amounts provided to
outside directors at comparable companies. It also relied on management to make
recommendations for it to review and consider in connection with determining
appropriate compensation levels. We retained a compensation consultant to help
us determine and implement these changes in outside director compensation, and
may continue to do so in the future, to help us evaluate our compensation
philosophy and provide guidance to us in administering our compensation program.
We expect to continue to compensate our outside directors at levels targeted at
or around the average of the compensation amounts provided to outside directors
at comparable companies.
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.
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SENORX,
INC.
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Date: March
4, 2009
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By:
/s/ Kevin J.
Cousins
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Kevin
J. Cousins
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Chief
Financial Officer,
Vice President,
Finance
|
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