Exhibit 10.20

Neurocrine Biosciences, Inc.

12780 El Camino Real

San Diego, CA 92130

December 20, 2016

Timothy P. Coughlin

 

Re:

Transition Agreement

Dear Tim:

In acknowledgment of your voluntary resignation as Vice President and Chief
Financial Officer of Neurocrine Biosciences, Inc., a Delaware corporation (the
“Company”), effective as of the Officer Resignation Date (as defined below),
this letter agreement (the “Agreement”) sets forth our mutual understanding
regarding your transition and employment status with the Company.

1.     RESIGNATION AS OFFICER. You have informed the Company of your voluntary
resignation as the Company’s Vice President and Chief Financial Officer,
effective as of the first business day following the date on which the Company
files its Annual Report on Form 10-K for the fiscal year ending December 31,
2016 with the Securities and Exchange Commission (the “Officer Resignation
Date”).

2.     TRANSITION PERIOD DUTIES. During the period between the Officer
Resignation Date and the Employment Termination Date (as defined below) (the
“Transition Period”), you shall continue to serve as an employee of the Company
but will no longer have the powers, duties and responsibilities commensurate
with the position of Vice President and Chief Financial Officer. During the
Transition Period, you will assist the Company in transitioning your former
duties and responsibilities as Vice President and Chief Financial Officer of the
Company to your successor and/or other Company employees, and you will provide
such other services and transition assistance as may be reasonably requested by
the Company.

3.     COMPENSATION. Prior to the Transition Period, you will continue to
receive your current base salary of $434,400, and during the Transition Period,
you will receive a reduced base salary of $310,000, in each case payable
semi-monthly in equal installments in accordance with the Company’s normal
payroll practices. You will remain eligible to receive your annual cash
incentive bonus payment for 2016, with a target bonus percentage of 50% and a
maximum bonus percentage of 60%, as determined by the Company’s Board of
Directors and/or its Compensation Committee based on the Company’s achievement
of its performance goals for 2016. You will also remain eligible to participate
in the Company’s cash incentive bonus program for 2017, as determined by the
Company’s Board of Directors and/or its Compensation Committee, with a reduced
target bonus percentage of 40% and a reduced maximum bonus percentage of 48%.
You will not be entitled to any further stock awards or equity grants from the
Company but any stock awards and equity grants previously granted to you in
accordance with their terms will continue to vest and become exercisable during
the Transition Period. Prior to and during the Transition Period, you shall
continue to be eligible for vacation and other benefits and expense
reimbursement under Article 4 of the Employment Agreement (as defined below).

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4.     TERMINATION OF EMPLOYMENT. Effective as of December 31, 2017, or such
earlier date following the Officer Resignation Date that you and the Company
mutually designate in writing (the “Employment Termination Date”), your
employment with the Company shall terminate. Upon the Employment Termination
Date, the Company shall pay you all Accrued Compensation (as defined in the
Employment Agreement), but no other compensation or reimbursement of any kind,
including without limitation, any severance compensation or benefits, will be
paid, and thereafter the Company’s obligations under the Employment Agreement
will terminate; provided, however, that the equity awards granted to you under
the Company’s 2011 Equity Incentive Plan and then held by you, other than the
performance-based restricted stock units granted to you on February 5, 2016 (the
“Covered Awards”) shall be deemed to have been amended such that they shall
continue to vest and become exercisable following the Employment Termination
Date as if you had remained in “Continuous Service” (as defined in the 2011
Equity Incentive Plan) to the Company, and any such equity award that is a stock
option shall remain exercisable until three months following the last vesting
date with respect to any of the Covered Awards (i.e., the date on which the
final tranche of vesting occurs with respect to the Covered Awards, taken as a
whole), but no later than the end of the original full term of such stock
option. For the sake of avoidance of doubt, such Covered Awards held by you as
of the date hereof are listed on Exhibit A hereto, and such Exhibit shall be
revised and updated as of the Employment Termination Date.

5.     RELEASE. As a condition to the benefits provided in Section 4 of this
Agreement to which you would not otherwise be entitled, you agree, on the
Employment Termination Date, to execute and return to the Company the General
Release attached hereto as Exhibit B (the “Release”), and to allow the releases
contained therein to become effective.

6.     EFFECT ON EMPLOYMENT AGREEMENT. Except as expressly modified by this
Agreement, your Amended and Restated Employment Agreement dated August 1, 2007
(the “Employment Agreement”) shall remain in full force and effect in accordance
with its terms until the Employment Termination Date. However, neither your
voluntary resignation as the Company’s Vice President and Chief Financial
Officer, nor the termination of your employment pursuant to Section 4 of this
Agreement, will give rise to any severance benefits under the Employment
Agreement.

7.     GENERAL. This Agreement, including its exhibits, and the Employment
Agreement constitute the complete, final and exclusive embodiment of the entire
agreement between you and the Company with regard to this subject matter. This
Agreement may not be modified or amended except in a writing signed by both you
and a duly authorized officer of the Company. This Agreement will be deemed to
have been entered into and will be construed and enforced in accordance with the
laws of the State of California as applied to contracts made and to be performed
entirely within California. Any ambiguity in this Agreement shall not be
construed against either party as the drafter. Any waiver of a breach of this
Agreement, or rights hereunder, shall be in writing and shall not be deemed to
be a waiver of any successive breach or rights hereunder. This Agreement may be
executed in counterparts which shall be deemed to be

 

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part of one original, and facsimile signatures and signatures transmitted by PDF
shall be equivalent to original signatures. The terms of any payments or
benefits to be provided pursuant to this Agreement will be construed to the
greatest extent possible so as to be exempt from or compliant with the
provisions of Section 409A of the Internal Revenue Code and the regulations
promulgated thereunder.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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If this Agreement is acceptable to you, please sign below and return the
original to me.

Sincerely,

 

NEUROCRINE BIOSCIENCES, INC. By:   /s/ Kevin Gorman   Kevin C. Gorman, Ph.D.  
Chief Executive Officer

 

ACCEPTED AND AGREED: /s/ Timothy Coughlin Timothy P. Coughlin           12/20/16
Date

 

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EXHIBIT A

LIST OF COVERED AWARDS

 

Grant Date (1)

  

Type

   Strike      Granted      Exercised or
RSU Vested
at 12/19/16      Options
Vested at
12/19/16      Vested
Outstanding
at 12/19/16      To Vest
During 2017 (2)     Unvested at
12/31/17 (2)  

  2/5/2016

   Option    $ 35.99         48,500         —           10,104         10,104   
     12,124        26,272   

  2/5/2016

   RSU    $ —           10,200         —           —           —           2,550
       7,650   

  2/3/2015

   Option    $ 32.99         80,000         —           36,666         36,666   
     19,999        23,335   

  2/3/2015

   RSU    $ —           12,000         3,000            —           3,000       
6,000   

1/16/2014

   Option    $ 19.59         86,000         —           62,707         62,707   
     21,499        1,794   

1/16/2014

   RSU    $ —           14,000         7,000            —           3,500       
3,500   

1/16/2014

   PRSU    $ —           75,000         50,000         —           —          
25,000 (3)   

1/10/2013

   Option    $ 8.65         86,000            84,206         84,206        
1,794        —     

1/10/2013

   RSU    $ —           14,000         10,500         —           —          
3,500        —     

1/12/2012

   Option    $ 8.66         120,000         —           120,000         120,000
        —          —     

8/25/2011

   Option    $ 5.76         125,000         40,000         125,000        
85,000         —          —              

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

             670,700         110,500         438,683         398,683        
92,966        68,551            

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

(1)

Does not include PRSU granted on February 5, 2016, which are not Covered Awards.

(2)

Assumes the Employment Termination Date occurs on December 31, 2017.

(3)

Assumes the Company obtains FDA approval of a New Drug Application prior to the
Employment Termination Date.

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EXHIBIT B

GENERAL RELEASE

Pursuant to the terms of the letter agreement between Neurocrine Biosciences,
Inc. (the “Company”) and Timothy P. Coughlin (“Executive”) dated December 20,
2016, to which this General Release (the “Release”) is attached (the
“Agreement”), the parties hereby enter into the following:

1.    General Release. Executive hereby generally and completely releases the
Company and its directors, officers, employees, stockholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively the “Released Parties”) of and from any
and all claims, liabilities and obligations, both known and unknown, arising out
of or in any way related to events, acts, conduct, or omissions occurring at any
time prior to or at the time that Executive signs this Release (collectively,
the “Released Claims”).

2.    Scope of Release. This general release includes, but is not limited to:
(1) all claims arising out of or in any way related to Executive’s employment
with the Company or the termination of that employment; (2) all claims related
to Executive’s compensation or benefits from the Company, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership or equity
interests in the Company; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing
(including claims based on or arising under the Agreement); (4) all tort claims,
including claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (5) all federal, state, and local statutory
claims, including claims for discrimination, harassment, retaliation, attorneys’
fees, or other claims arising under the federal Civil Rights Act of 1964 (as
amended), the federal Americans with Disabilities Act of 1990, the federal Age
Discrimination in Employment Act (as amended) (“ADEA”), the federal Family and
Medical Leave Act, the California Labor Code (as amended), the California Family
Rights Act, and the California Fair Employment and Housing Act (as amended).

3.    ADEA Waiver. Executive acknowledges that Executive is knowingly and
voluntarily waiving and releasing any rights Executive may have under the ADEA,
and that the consideration given for the waiver and release in the preceding
paragraph is in addition to anything of value to which Executive is already
entitled. Executive further acknowledges that Executive has been advised by this
writing that: (1) Executive’s waiver and release do not apply to any rights or
claims that may arise after the date Executive signs this Release; (2) Executive
should consult with an attorney prior to signing this Release (although
Executive may choose voluntarily not to do so); (3) Executive has twenty-one
(21) days to consider this Release (although Executive may choose voluntarily to
sign it earlier); (4) Executive has seven (7) days following the date Executive
signs this Release to revoke it by providing written notice of revocation to the
Company’s Chief Executive Officer; and (5) this Release will not be effective
until the date upon which the revocation period has expired, which will be the
eighth calendar day after the date Executive signs it provided that Executive
does not revoke it.

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4.    Section 1542 Waiver. EXECUTIVE UNDERSTANDS THAT THIS AGREEMENT INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. Executive acknowledges that Executive
has read and understands Section 1542 of the California Civil Code which reads
as follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her
settlement with the debtor.” Executive hereby expressly waives and relinquishes
all rights and benefits under that section and any law or legal principle of
similar effect in any jurisdiction with respect to Executive’s respective
release of claims herein, including but not limited to Executive’s release of
unknown and unsuspected claims.

5.    Excluded Claims. Executive understands that notwithstanding the foregoing,
the following are not included in the Released Claims (the “Excluded Claims”):
(i) any rights or claims for indemnification Executive may have pursuant to any
written indemnification agreement to which he is a party, the charter, bylaws,
or operating agreements of any of the Released Parties, or under applicable law;
(ii) any rights or claims Executive may have under the Agreement; or (iii) any
rights which are not waivable as a matter of law. In addition, Executive
understands that nothing in this release prevents Executive from filing,
cooperating with, or participating in any proceeding before the Equal Employment
Opportunity Commission, the Department of Labor, or the California Department of
Fair Employment and Housing, except that Executive acknowledges and agrees that
Executive shall not recover any monetary benefits in connection with any such
claim, charge or proceeding with regard to any claim released herein. Executive
hereby represents and warrants that, other than the Excluded Claims, Executive
is not aware of any claims he has or might have against any of the Released
Parties that are not included in the Released Claims.

6.    Executive Representations. Executive hereby represents that Executive has
been paid all compensation owed and for all hours worked; Executive has received
all the leave and leave benefits and protections for which Executive is
eligible, pursuant to the Family and Medical Leave Act, the California Family
Rights Act, or otherwise; and Executive has not suffered any on-the-job injury
for which Executive has not already filed a workers’ compensation claim.

7.    Nondisparagement. Executive agrees not to disparage the Company, its
parent, or its or their officers, directors, employees, stockholders, affiliates
and agents, in any manner likely to be harmful to its or their business,
business reputation, or personal reputation (although Executive may respond
accurately and fully to any question, inquiry or request for information as
required by legal process).

 

NEUROCRINE BIOSCIENCES, INC.:     TIMOTHY P. COUGHLIN: By:         By:     Date:
      Date:  

 

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