DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
THE MEDICINES COMPANY
(Name of Registrant as Specified In Its Charter)
Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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April 30,
2009
To our
stockholders:
We are pleased to invite you to our 2009 annual meeting of
stockholders. The meeting will take place on Thursday,
May 28, 2009 at 10:00 a.m., local time, at our
principal executive offices, located at 8 Sylvan Way,
Parsippany, New Jersey 07054. Annual meetings play an important
role in maintaining communications and understanding among our
management, board of directors and stockholders, and we hope you
will join us.
Enclosed with this letter you will find the notice of our 2009
annual meeting of stockholders, which lists the matters to be
considered at the meeting, and the proxy statement, which
describes the matters listed in the notice and provides other
information you may find useful in deciding how to vote. We have
also enclosed our annual report to stockholders, which contains
our annual report on
Form 10-K
for the year ended December 31, 2008 as filed with the
Securities and Exchange Commission, including our audited
consolidated financial statements for 2008, and other
information of interest to our stockholders.
The ability to have your vote counted at the meeting is an
important stockholder right. Regardless of the number of shares
you hold, and whether or not you plan to attend the meeting, we
hope that you will cast your vote. If you are a stockholder of
record, you may vote by mailing the enclosed proxy card in the
envelope provided. You will find voting instructions in the
proxy statement and on the enclosed proxy card. If your shares
are held in street name that is, held
for your account by a bank, broker or other holder of
record you will receive instructions from the holder
of record that you must follow for your shares to be voted.
Thank you for your ongoing support and continued interest in The
Medicines Company.
Sincerely,
CLIVE A.
MEANWELL
Chairman and Chief Executive Officer
THE
MEDICINES COMPANY
8 Sylvan Way
Parsippany, New Jersey 07054
NOTICE OF
2009 ANNUAL MEETING OF STOCKHOLDERS
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Time and Date
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10:00 a.m., local time, on Thursday, May 28, 2009
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Place
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8 Sylvan Way, Parsippany, New Jersey 07054
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Items of Business
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At the meeting, we will ask you and our other stockholders to:
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(1) elect three Class 3 directors for terms to
expire at the 2012 annual meeting of stockholders;
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(2) approve an amendment to the 2000 Employee Stock
Purchase Plan to increase the number of shares of common stock
authorized for issuance under such plan from 505,500 shares
to 805,500 shares;
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(3) ratify the appointment of Ernst & Young LLP
as our independent registered public accounting firm for the
year ending December 31, 2009; and
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(4) transact any other business as may properly come before
the meeting or any postponement or adjournment of the meeting.
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The board of directors has no knowledge of any other business to
be transacted at the annual meeting.
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Record Date
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You may vote if you were a stockholder of record at the close of
business on April 3, 2009.
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Proxy Voting
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It is important that your shares be represented and voted at the
meeting. Whether or not you plan to attend the meeting, please
mark, sign, date and promptly mail your proxy card in the
enclosed postage-paid envelope. You may revoke your proxy at any
time before its exercise at the meeting if you follow specified
procedures.
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By
order of
the Board of Directors,
Secretary
April 30,
2009
Parsippany, New Jersey
TABLE OF
CONTENTS
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THE
MEDICINES COMPANY
8 Sylvan Way
Parsippany, New Jersey 07054
PROXY
STATEMENT
For our
Annual Meeting of Stockholders to be held on May 28,
2009
The Medicines Company, a Delaware corporation (often referred to
as we or us in this document), is
sending you this proxy statement and the enclosed proxy card
because our board of directors is soliciting your proxy to vote
at our 2009 annual meeting of stockholders. The annual meeting
will be held on Thursday, May 28, 2009, at 10:00 a.m.,
local time, at our principal executive office at 8 Sylvan Way,
Parsippany, New Jersey 07054. You may obtain directions to the
location of the annual meeting by contacting Investor Relations,
8 Sylvan Way, Parsippany, New Jersey 07054, email:
investor.relations@themedco.com. If the annual meeting is
adjourned for any reason, then the proxies may be used at any
adjournments of the annual meeting.
This proxy statement summarizes information about the proposals
to be considered at the meeting and other information you may
find useful in determining how to vote. The proxy card is the
means by which you actually authorize another person to vote
your shares in accordance with your instructions.
We are mailing this proxy statement and the enclosed proxy card
to stockholders on or about April 30, 2009. In this
mailing, we are also including a copy of our annual report to
stockholders for the year ended December 31, 2008.
Important Notice Regarding the Availability of Proxy
Materials for the Stockholder Meeting to be Held on May 28,
2009: The Proxy Statement and Annual Report are available at
http://materials.proxyvote.com/584688.
Our annual report on
Form 10-K
for the year ended December 31, 2008, as filed with the
Securities and Exchange Commission and including our audited
financial statements, is included in our annual report to
stockholders in this mailing and is also available free of
charge at our website at www.themedicinescompany.com
or through the Securities and Exchange Commissions
(SEC) electronic data system at www.sec.gov. To request a
printed copy of our
Form 10-K
(including exhibits), which we will provide to you free of
charge, either: write to Investor Relations, The Medicines
Company, 8 Sylvan Way, Parsippany, New Jersey 07054, or email
Investor Relations at
investor.relations@themedco.com.
You may request a copy of the materials relating to our annual
meetings of stockholders, including the proxy statement and form
of proxy for the 2009 annual meeting and the annual report to
stockholders for the fiscal year ended December 31, 2008,
at the website listed above or by sending an email to us at
investor.relations@themedco.com or by calling (800)
388-1183.
INFORMATION
ABOUT THE ANNUAL MEETING
Who may
vote?
Holders of record of our common stock at the close of business
on April 3, 2009, the record date for the annual meeting,
are entitled to one vote per share on each matter properly
brought before the meeting. As of the close of business on
April 3, 2009, we had 52,743,274 shares of our common
stock outstanding.
A list of stockholders entitled to vote will be available at the
meeting. In addition, you may contact our Secretary, Paul M.
Antinori, at our principal executive office address set forth
above, to make arrangements to review a copy of the stockholder
list at our principal executive offices, for any purpose germane
to the meeting, between the hours of 8:30 A.M. and
5:00 P.M., local time, on any business day from
May 18, 2009 up to the time of the meeting.
How may I
vote?
If you are a stockholder of record (meaning that you hold shares
in your name in the records of our transfer agent, American
Stock Transfer & Trust Company), you may vote
your shares at the meeting in person or by proxy:
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to vote in person, you must attend the meeting, and then
complete and submit the ballot provided at the meeting.
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to vote by proxy, you must mark, sign and date the
enclosed proxy card and then mail the proxy card in the enclosed
postage-paid envelope. Your proxy will be valid only if you
complete and return the proxy card to us before the meeting. By
completing and returning the proxy card, you will direct the
designated persons to vote your shares at the meeting in the
manner you specify in the proxy card. If you complete the proxy
card but do not provide voting instructions, then the designated
persons named in your proxy card will vote your shares FOR the
election of the nominated directors, FOR the proposed amendment
to our 2000 employee stock purchase plan and FOR the
ratification of the appointment of Ernst & Young LLP
as our independent registered public accounting firm for the
year ending December 31, 2009.
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The proxy card states the number of shares you are entitled to
vote if you are a stockholder of record.
How may I
vote my shares if I hold them in street
name?
If the shares you own are held in street name by a
bank or brokerage firm, your bank or brokerage firm, as the
record holder of your shares, is required to vote your shares
according to your instructions. In order to vote your shares,
you will need to follow the directions your bank or brokerage
firm provides you. Many banks and brokerage firms may solicit
voting instructions over the Internet or by telephone.
Under applicable stock exchange rules, if you do not give
instructions to your bank or brokerage firm, it will still be
able to vote your shares with respect to certain
discretionary items, but will not be allowed to vote
your shares with respect to certain
non-discretionary items. The election of directors
(proposal one) and the ratification of the appointment of our
independent registered public accounting firm (proposal three)
are considered discretionary items under applicable stock
exchange rules. The approval of the proposed amendment to our
2000 employee stock purchase plan (proposal two) is a
non-discretionary item. Accordingly, if you do not give
instructions to your bank or brokerage firm with respect to
proposal two, or if your bank or brokerage firm does not
exercise its discretionary authority with respect to proposal
one or proposal three, your shares will be treated as
broker non-votes on that particular matter.
Broker non-votes are shares with respect to which a
bank or brokerage firm does not receive voting instructions from
the beneficial holder and does not have or exercise
discretionary authority in voting on a proposal.
Regardless of whether your shares are held in street name, you
are welcome to attend the meeting. You may not vote shares held
in street name in person at the meeting, however, unless you
obtain a proxy, executed in your favor, from the holder of
record (i.e., your brokerage firm or bank).
How may I
change my vote?
If you are a stockholder of record, even if you complete and
return a proxy card, you may revoke it at any time before the
taking of the vote by taking one of the following actions:
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send written notice of revocation bearing a later date than your
proxy card to Paul M. Antinori, our Secretary, at our principal
executive office address above;
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send us another signed proxy card with a later date; or
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attend the meeting and vote in person.
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If you own shares in street name, your bank or brokerage firm
should provide you with instructions for changing your vote.
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What
constitutes a quorum?
In order for business to be conducted at the meeting, a quorum
must be present. A quorum consists of the holders of at least
26,367,138 shares, representing a majority of the shares of
common stock issued, outstanding and entitled to vote at the
meeting.
Shares of common stock present in person or represented by proxy
(including broker non-votes and shares that abstain or are
withheld, or with respect to which no voting instructions are
provided for one or more of the matters to be voted upon) will
be counted as present for the purpose of determining whether a
quorum exists.
If a quorum is not present, the meeting will be adjourned until
a quorum is obtained.
What vote
is required to approve each matter?
Proposal One
Election of Directors
Directors will be elected by a plurality of the votes cast by
our stockholders entitled to vote on the election. In other
words, the three nominees for director receiving the highest
number of votes FOR election will be elected as directors,
regardless of whether any of those numbers represents a majority
of the votes cast.
You may vote FOR all of the nominees, WITHHOLD your vote from
all of the nominees or WITHHOLD your vote from any one or more
of the nominees.
Proposal Two
Approval of an Amendment to Our 2000 Employee Stock Purchase
Plan
The affirmative vote of the holders of a majority of the shares
of common stock present or represented and voting on the matter
is needed to approve the proposed amendment to our
2000 employee stock purchase plan to increase from
505,500 shares to 805,500 shares the number of shares
of common stock authorized for issuance under such plan.
Proposal Three
Ratification of Appointment of Independent Registered Public
Accounting Firm
The affirmative vote of the holders of a majority of the shares
of common stock present or represented and voting on the matter
is needed to ratify the appointment of Ernst & Young
LLP as our independent registered public accounting firm for the
year ending December 31, 2009.
How will
votes be counted?
Each share of common stock is entitled to one vote. Shares will
not be voted in favor of a matter, and will not be counted as
voting on a matter (1) if the holder of the shares
withholds authority to vote for a particular director nominee or
nominees or abstains from voting on a particular matter or
(2) if the shares are broker non-votes. As a result,
withheld shares, abstentions and broker non-votes will have no
effect on the outcome of voting on any of the proposals.
How does
the board of directors recommend that I vote?
Our board of directors recommends that you vote:
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FOR proposal one elect our three nominees to
the board of directors;
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FOR proposal two approve the proposed
amendment to our 2000 employee stock purchase plan; and
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FOR proposal three ratify the appointment of
Ernst & Young LLP as our independent registered public
accounting firm for the year ending December 31, 2009.
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Will any
other business be conducted at the annual meeting?
Our board of directors does not know of any other business to be
conducted or matters to be voted upon at the meeting. Under our
by-laws, the deadline for stockholders to notify us of any
proposals or nominations
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for director to be presented for action at the annual meeting
has passed. If any other matter properly comes before the
meeting, the persons named in the proxy card that accompanies
this proxy statement will exercise their judgment in deciding
how to vote, or otherwise act, at the meeting with respect to
that matter.
Who pays
for the solicitation of proxies?
We will bear the costs of soliciting proxies. In addition to
solicitations by mail, our directors, officers and regular
employees, without additional remuneration, may solicit proxies
by telephone, facsimile, email, personal interviews and other
means. We have requested brokerage houses, custodians, nominees
and fiduciaries to forward copies of the proxy materials to the
persons for whom they hold shares and request instructions for
voting the shares. We will reimburse the brokerage houses and
other persons for their reasonable out-of-pocket expenses in
connection with this distribution.
How and
when may I submit a proposal for the 2010 annual
meeting?
If you are interested in submitting a proposal for inclusion in
the proxy statement and proxy card for our 2010 annual meeting,
you need to follow the procedures outlined in
Rule 14a-8
of the Securities Exchange Act of 1934. We must receive your
proposal intended for inclusion in the proxy statement at our
principal executive offices, 8 Sylvan Way, Parsippany, New
Jersey 07054 Attention: Paul M. Antinori, Secretary, no later
than December 31, 2009.
If you wish to present a proposal at the 2010 annual meeting,
but do not wish to have the proposal considered for inclusion in
the proxy statement and proxy card, you must give written notice
to us at our principal executive office address noted above. Our
by-laws specify the information that must be included in any
such notice, including a brief description of the business to be
brought before the annual meeting and the name of the
stockholder proposing such business. We must receive this notice
at least 60 days, but not more than 90 days, prior to
May 28, 2010. However, if the date of the 2010 annual
meeting is prior to April 28, 2010 or after June 28,
2010, we must receive your notice no earlier than the
90th day prior to the 2010 annual meeting and no later than
the close of business on the later of (1) the 60th day
prior to the 2010 annual meeting and (2) the 10th day
following the date on which notice of the date of the meeting
was mailed or public disclosure of the date of the meeting was
made, whichever occurs first. If you fail to provide timely
notice of a proposal to be presented at the 2010 annual meeting,
the chairman of the meeting may exclude the proposal from being
brought before the meeting.
How may I
request to receive future proxy statements
electronically?
If you would like to reduce the costs incurred by The Medicines
Company in mailing proxy materials, you can consent to receiving
or accessing future proxy statements, form of proxy, annual
report or notices of Internet availability electronically via
e-mail or
the Internet. To sign up for electronic delivery, please contact
Investor Relations, 8 Sylvan Way, Parsippany, New Jersey 07054,
telephone:
(973) 290-6000,
email: investor.relations@themedco.com.
HOUSEHOLDING
OF ANNUAL MEETING MATERIALS
Some banks, brokers and other record holders may be
participating in the practice of householding proxy
statements and annual reports. This means that only one copy of
our proxy statement and annual report or notice of Internet
availability of proxy materials may have been sent to multiple
stockholders in your household. We will promptly deliver a
separate copy of these documents to you if you call or write us
at the following address or phone number: The Medicines Company,
8 Sylvan Way, Parsippany, New Jersey 07054, Attention: Investor
Relations,
(973) 290-6000.
In addition, this proxy statement and our annual report are
available at
http://materials.proxyvote.com/584688.
If you would like to receive separate copies of the annual
report and proxy statement or notice of Internet availability of
proxy materials in the future, or if you are receiving multiple
copies and would like to receive only one copy for your
household, you should contact your bank, broker, or other
nominee record holder, or you may contact us at the above
address and phone number.
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DISCUSSION
OF PROPOSALS
Proposal One:
Election of Class 3 Directors
Our board of directors is divided into three classes and
currently consists of four class 1 directors (William
W. Crouse, T. Scott Johnson, John P. Kelley, and Hiroaki
Shigeta), three class 2 directors
(Robert J. Hugin, Clive A. Meanwell and Elizabeth H.S.
Wyatt) and three class 3 directors (Armin M. Kessler,
Robert G. Savage and Melvin K. Spigelman). The term of each
class of directors is three years, and the terms of the three
classes are staggered so that only one class is elected each
year. At each annual meeting of stockholders, directors are
elected to serve for a three-year term to succeed the directors
of the same class whose terms are then expiring. The
class 1, class 2 and class 3 directors were
elected to serve until the annual meeting of stockholders to be
held in 2010, 2011 and 2009, respectively, and until their
respective successors are elected and qualified.
Our board of directors, on the recommendation of our nominating
and corporate governance committee, has nominated Armin M.
Kessler, Robert G. Savage and Melvin K. Spigelman for election
as class 3 directors at the annual meeting. The
persons named in the enclosed proxy card will vote to elect each
of these nominees as a class 3 director, unless the
proxy is marked otherwise. Each class 3 director will
be elected to hold office until the 2012 annual meeting of
stockholders and until his or her successor is elected and
qualified. Each of the nominees is presently a director, and
each has indicated a willingness to continue to serve as
director, if elected. If a nominee becomes unable or unwilling
to serve, however, the proxies may be voted for substitute
nominees selected by our board of directors.
No director or executive officer of ours, or person chosen by us
to become a director or executive officer of ours, is related by
blood, marriage or adoption to any other director or executive
officer of ours, or person chosen by us to become a director or
executive officer of ours. No director or executive officer of
ours, or any associate of any such director or officer, is a
party adverse to us or any of our subsidiaries, or has a
material interest adverse to us or any of our subsidiaries, in
any legal proceeding.
Our board of directors recommends a vote FOR the election
of each of the nominees.
Director
Nominees
Set forth below are the names of each nominee for
class 3 director, the year in which each first became
a director, their ages as of April 1, 2009, their positions
and offices with us, if any, their principal occupations and
business experience for at least the past five years, the names
of other public companies for which they serve as a director and
their education.
ARMIN M.
KESSLER
Age: 71
Armin M. Kessler has been a director since October 1998.
Dr. Kessler joined us after a
35-year
career in the pharmaceutical industry, which included senior
management positions at Sandoz Pharma Ltd. (now Novartis Pharma
AG) in Switzerland, the United States and Japan and, most
recently, at Hoffmann-La Roche, in Basel, Switzerland,
where he was Chief Operating Officer and Head of the
Pharmaceutical Division until he retired in 1995.
Dr. Kessler currently also serves as a director of
Gen-Probe Incorporated and Actelion Pharmaceuticals Ltd., a
Swiss publicly traded company. Dr. Kessler received degrees
in physics and chemistry from the University of Pretoria, a
degree in chemical engineering from the University of Cape Town,
a law degree from Seton Hall and an honorary doctorate in
business administration from the University of Pretoria.
ROBERT G.
SAVAGE
Age: 55
Robert G. Savage has been a director since April 2003.
Since May 2003, Mr. Savage has served as President of
Strategic Imagery LLC, a consulting company he owns. From
February 2002 to April 2003, Mr. Savage was Group Vice
President and President for the General Therapeutics and
Inflammation Business
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of Pharmacia Corporation, a research-based pharmaceutical firm
acquired by Pfizer Inc. in April 2003. From September 1996 to
January 2002, Mr. Savage held several senior positions with
Johnson & Johnson, including Worldwide Chairman for
the Pharmaceuticals Group during 2001, Company Group Chairman
responsible for the North America pharmaceuticals business from
2000 to 2001, President, Ortho-McNeil Pharmaceuticals from 1998
to 2000 and Vice President Sales & Marketing from 1996
to 1998. Mr. Savage also serves as a director for Noven
Pharmaceuticals and EpiCept Corporation. Mr. Savage
received a B.S. in biology from Upsala College and an M.B.A.
from Rutgers University.
MELVIN K.
SPIGELMAN
Age: 60
Melvin K. Spigelman has been a director since September
2005. Since January 2009, Dr. Spigelman has served as
President and Chief Executive Officer of the Global Alliance for
TB Drug Development, a non-profit organization which seeks to
accelerate the discovery and development of faster-acting and
affordable drugs to fight tuberculosis. From June 2003 to
January 2009, Dr. Spigelman served as Director of Research
and Development of the Global Alliance for TB Drug Development.
Before joining the Global Alliance for TB Drug Development,
Dr. Spigelman was the President of Hudson-Douglas Ltd, a
consulting company, from June 2001 to June 2003. From 2000 to
2001, Dr. Spigelman served as a Vice President, Global
Clinical Centers at Knoll Pharmaceuticals, a pharmaceutical unit
of BASF Pharma, and from 1992 to 2000, Dr. Spigelman was
the Vice President of Research and Development at Knoll.
Dr. Spigelman serves as a director of Synergy
Pharmaceuticals Inc. Dr. Spigelman received a B.A. in
engineering from Brown University and an M.D. from The Mount
Sinai School of Medicine.
Other
Current Directors
Set forth below are the names of each of our other current
directors, the year in which each first became a director, their
ages as of April 1, 2009, their positions and offices with
us, if any, their principal occupations and business experience
for at least the past five years, the names of other public
companies for which they serve as a director and their education.
Directors
Whose Terms Expire in 2010
(Class 1 Directors)
WILLIAM W.
CROUSE
Age: 66
William W. Crouse has been a director since April 2003.
Since January 1994, Mr. Crouse has been a Managing Director
of HealthCare Ventures, a venture capital firm with a focus on
biotechnology companies. From 1987 to 1993, Mr. Crouse
served as Worldwide President of Ortho Diagnostic Systems, a
subsidiary of Johnson & Johnson that manufactures
diagnostic tests for hospitals, and a Vice President of
Johnson & Johnson International. Before joining
Johnson & Johnson, Mr. Crouse was a
Division Director of DuPont Pharmaceuticals Company, a
pharmaceutical firm, where he was responsible for international
operations and worldwide commercial development activities.
Before joining Dupont, he served as President of Revlon Health
Care Groups companies in Latin America, Canada, and
Asia/Pacific. He also held numerous management positions at E.R.
Squibb & Sons, a pharmaceutical company.
Mr. Crouse is currently the chairman of the board of
directors of Uluru, Inc., a specialty pharmaceutical company and
is a member of the Boards of Trustees of Lehigh University and
the New York Blood Center. Mr. Crouse received a B.S. in
finance and economics from Lehigh University and an M.B.A. from
Pace University.
T. SCOTT
JOHNSON
Age: 61
T. Scott Johnson has been a director since September
1996. Dr. Johnson is a partner in Gilliam Capital LLC, an
investment management company that he founded in June 2007.
Since July 1999, Dr. Johnson has also been a partner at JSB
Partners, L.P., an investment bank that he founded in 1999,
which focuses on mergers and acquisitions, private financings
and corporate alliances within the healthcare sector. From
6
September 1991 to July 1999, Dr. Johnson served as a
founder and managing director of MPM Capital, L.P., a venture
capital firm. Dr. Johnson received both a B.S. in chemistry
and mathematics and an M.D. from the University of Alabama.
JOHN P.
KELLEY
Age: 55
John P. Kelley has been our President and Chief Operating
Officer since December 2004 and a director since February 2005.
Prior to joining us, Mr. Kelley held a series of positions
at Aventis, an international pharmaceutical company. From
September 2003 until September 2004, Mr. Kelley served as
Senior Vice President, Global Marketing and Medical at Aventis,
where he was accountable for worldwide brand management of
Aventis core strategic brands and managed strategic
alliances with partner companies. From September 2002 to
September 2003, he served as Senior Vice President, Strategic
Risk Officer for Aventis, advising the Management Board and
Chief Executive Officer. From January 2000 to September 2002,
Mr. Kelley served as Vice President, Head of Strategic
Development of Aventis where he was responsible for leading the
strategic planning process of the pharmaceutical division of
Aventis as well as merger and acquisition activity. Prior to the
formation of Aventis, he served as a Vice President, Commercial
Director, U.S. at Hoechst Marion Roussel, Inc., a life
sciences firm focused on pharmaceuticals and agriculture, from
March 1998 through December 1999 and Mr. Kelley served as
Vice President of Marketing of Hoechst Marion Roussel from 1995
to 1998. Mr. Kelley also serves as a director for Acorda
Therapeutics, Inc. Mr. Kelley received a B.S. in biology
from Wilkes University and an M.B.A. from Rockhurst University.
HIROAKI
SHIGETA
Age: 65
Hiroaki Shigeta has been a director since April 2007.
Mr. Shigeta served as a consultant to us from
July 2006 to December 2007. From January 2005 until June
2006, he served as a consultant to various Japanese
pharmaceutical companies. From October 1993 to December 2004,
Mr. Shigeta served in a variety of senior management
positions with Hoffman-La Roche, Inc. and its affiliates.
From January 2003 to December 2004, Mr. Shigeta was the
U.S. Head, Far East Relations of Hoffman-La Roche and
from June 2002 to April 2003, he was a Member of the Board of
Chugai Seiyaku KK, Tokyo, a majority-owned affiliate of Roche
Holding of Switzerland. From January 2001 to May 2002,
Mr. Shigeta served as Chairman and Representative Director
of Nippon Roche KK, a pharmaceutical company and a Japanese
affiliate of Roche Holding of Switzerland. From October 1993 to
December 2000, Mr. Shigeta was the President and Chief
Executive Officer of Nippon Roche KK. Mr. Shigeta received
a B.A. in economics from Momoyama Gakuin University in Osaka,
Japan and a B.Sc from Haas Business School, University of
California at Berkeley.
Directors
Whose Terms Expire in 2011
(Class 2 Directors)
ROBERT J.
HUGIN
Age: 54
Robert J. Hugin has been a director since April 2003.
Since May 2006, Mr. Hugin has served as the President and
Chief Operating Officer of Celgene Corporation, a
biopharmaceutical company focused on cancer and immunological
diseases. From June 1999 to May 2006, Mr. Hugin served as
the Senior Vice President and Chief Financial Officer of
Celgene. From 1985 to 1999, Mr. Hugin held positions with
J.P. Morgan & Co. Inc., an investment banking
firm, serving most recently as a Managing Director.
Mr. Hugin is a director of Celgene Corporation and Atlantic
Health System, Inc. Mr. Hugin received an A.B. from
Princeton University and an M.B.A. from the University of
Virginia.
CLIVE A.
MEANWELL
Age: 51
Clive Meanwell has been a director since 1996. He has
served as our Chief Executive Officer since August 2004, and he
served as our President from August 2004 to December 2004, as
our Executive Chairman
7
from September 2001 to August 2004 and as our Chief Executive
Officer and President from 1996 to September 2001. From 1995 to
1996, Dr. Meanwell was a Partner and Managing Director at
MPM Capital, L.P., a venture capital firm. From 1986 to 1995,
Dr. Meanwell held various positions at
Hoffmann-La Roche, Inc., a pharmaceutical company,
including Senior Vice President from 1992 to 1995, Vice
President from 1991 to 1992 and Director of Product Development
from 1986 to 1991. Dr. Meanwell also serves as a director
of Endo Pharmaceuticals Holdings Inc. Dr. Meanwell received
an M.D. and a Ph.D. from the University of Birmingham, United
Kingdom.
ELIZABETH
H.S. WYATT
Age: 61
Elizabeth H.S. Wyatt has been a director since March
2005. Prior to her retirement in 2000, Ms. Wyatt held
several senior positions at Merck & Co., Inc., a
pharmaceutical company, over the course of 20 years,
including most recently, Vice President, Corporate Licensing.
Previously she had been a consultant and academic administrator,
responsible for the Harvard Business Schools first formal
marketing of its executive education programs. She also serves
as a member of the Board of Sweet Briar College and recently
chaired the Search Committee for the next President of Sweet
Briar College. Ms. Wyatt received a B.A. from Sweet Briar
College, a M.Ed. from Boston University and an M.B.A. from
Harvard Business School.
Proposal Two:
Approval of an Amendment to our 2000 Employee Stock Purchase
Plan
On February 11, 2009, our board of directors adopted,
subject to stockholder approval, an amendment to our
2000 employee stock purchase plan, which we refer to in
this proxy statement as the ESPP, increasing the number of
shares of our common stock authorized for issuance under the
ESPP from 505,500 shares to 805,500 shares. The ESPP
is intended to encourage our employees to become stockholders in
our company, to stimulate increased interest in our affairs and
success, to afford our employees the opportunity to share in our
earnings and growth and to promote systematic savings by them.
We believe that our future success depends, in large part, upon
our ability to maintain a competitive position in attracting,
retaining and motivating key personnel, and we believe that the
ability to participate in our ESPP is an attractive feature for
our employees and potential employees.
Our board of directors originally adopted, and our stockholders
approved, the ESPP in August 2000. In 2006, our board of
directors adopted, and our shareholders approved, an amendment
to the ESPP which increased the shares authorized for issuance
under the plan from 255,500 shares to 505,500 shares.
As of April 1, 2009, 504,146 shares had been issued
under the ESPP. As a result, we had only 1,354 shares
available for future issuance as of April 1, 2009.
Our board of directors believes the proposed amendment is
necessary to assure that we will have a sufficient reserve of
common stock available for future purchase under the ESPP.
Our board of directors recommends a vote FOR this
proposal.
Description
of the ESPP
The following is a brief summary of the ESPP. The following
description is only a summary of the material terms of the ESPP.
For more information, we refer you to the full text of the ESPP
as proposed to be amended, which is included as Appendix I
to the electronic copy of this proxy statement filed with the
SEC and may be accessed from the SECs home page
www.sec.gov. In addition, a copy of the ESPP may be
obtained from our Secretary.
The ESPP permits eligible employees to purchase shares of our
common stock at a discount. On the first day of each six-month
offering period between March 1 and August 31 and September 1
and the last day of February, each employee who is enrolled in
the ESPP will automatically receive an option to purchase on the
last day of the offering period the largest whole number of
shares of common stock that does not exceed the number
determined by multiplying $2,083 by the number of full months in
the offering period and dividing the result by the value of a
share of common stock on the first day of the offering period.
The offering price
8
of each of the shares purchased in a given offering period is
the lower of 85% of the fair market value of a share of common
stock on the first or last day of the offering period. If an
employee withdraws from participation during an offering period,
the amounts contributed to the ESPP are refunded immediately
without interest and the employees option granted for such
offering period automatically terminates.
Pursuant to the terms of the ESPP, our board of directors has
delegated its authority under the ESPP to its compensation
committee. Accordingly, the compensation committee, consisting
of independent directors, administers the ESPP. The compensation
committee has the authority to interpret all provisions of the
ESPP.
Generally, employees who have been employed for at least seven
days prior to the first day of an offering period are eligible
to participate in the ESPP. As of April 1, 2009,
approximately 494 employees were eligible to participate in
the ESPP, including our five named executive officers. Eligible
employees may elect to participate by completing a subscription
agreement, filing it with our payroll office and authorizing
after-tax payroll deductions from their pay. The payroll
deduction may not exceed ten percent of the employees
gross pay. In addition, no employee can be granted an option
under the plan that would (1) result in the employee owning
common stock
and/or
options to purchase common stock making up five percent or more
of our outstanding capital stock, or (2) permit such
employee to purchase in excess of $25,000 in fair market value
(based on the value of the stock on the offering commencement
date) of common stock in any given year under the ESPP.
All payroll deductions for the ESPP are placed in a general
corporate account. No interest accrues on the payroll
deductions, and an employee participating in the ESPP may not
make any additional payments into the account. Employees may
purchase common stock under the ESPP only through payroll
deductions.
The board of directors may amend the ESPP at any time. However,
the ESPP may not be amended in any way that will cause rights
issued thereunder to fail to meet the requirements for employee
stock purchase plans as defined in Section 423 of the
Internal Revenue Code of 1986, as amended, or the code,
including stockholder approval if required.
The board of directors can terminate the ESPP at any time and
will likely terminate the ESPP on the date that participating
employees become entitled to purchase an aggregate number of
shares greater than the number of shares remaining available for
purchase, which would occur if the proposed amendment is not
approved at this annual meeting.
Participation in the ESPP is discretionary, and participants can
contribute up to ten percent of their gross pay, subject to the
limitations described above. Additionally, the value of the
common stock purchased will vary based on the fair market value
of our common stock on the first and last days of the offering
period. Accordingly, the dollar value and the number of shares
that may be purchased in the future pursuant to the ESPP are not
currently determinable.
9
The table below sets forth information as of April 3, 2009
with regard to participation in the ESPP by the individuals and
groups listed below since the adoption of the ESPP.
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number of
|
Name and Position
|
|
Dollar Value(1)
|
|
Shares Purchased
|
|
Clive A. Meanwell
|
|
$
|
103,977.59
|
|
|
|
7,362
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
John P. Kelley
|
|
|
|
|
|
|
|
|
President and Chief Operating Officer
|
|
|
|
|
|
|
|
|
Glenn Sblendorio
|
|
$
|
34,332.26
|
|
|
|
2,764
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
Paul M. Antinori
|
|
$
|
41,522.02
|
|
|
|
3,287
|
|
Senior Vice President and General Counsel
|
|
|
|
|
|
|
|
|
Catharine Newberry(2)
|
|
$
|
49,039.34
|
|
|
|
3,039
|
|
Former Senior Vice President and Chief Human Strategy
Officer
|
|
|
|
|
|
|
|
|
All current executive officers, as a group
|
|
$
|
228,871.21
|
|
|
|
16,452
|
|
All current directors who are not executive officers, as a group
|
|
|
(3
|
)
|
|
|
(3
|
)
|
All employees, including all current officers who are not
executive officers, as a group
|
|
$
|
7,321,913.20
|
|
|
|
487,694
|
|
|
|
|
(1) |
|
Based on the number of shares purchased multiplied by the
closing price of our common stock on the purchase date reported
by the NASDAQ Global Select Market. |
|
(2) |
|
Ms. Newberrys employment with us terminated as of
January 26, 2009. |
|
(3) |
|
Our non-employee directors are not eligible to participate in
the ESPP. |
Since its inception, no shares have been purchased under the
ESPP by any associate of any current director, nominee or
executive officer, and no other person has purchased five
percent or more of the total amount of stock issued under the
ESPP.
On April 27, 2009, the last reported sale price of our
common stock on The NASDAQ Global Select Market was
$10.55 per share.
Federal
Income Tax Consequences
The following generally summarizes the United States federal
income tax consequences that will arise with respect to
participation in the ESPP and with respect to the sale of common
stock acquired under the plan. This summary is based on the tax
laws in effect as of the date of this proxy statement. This
summary assumes that the ESPP complies with Section 423 of
the code. Changes to these laws could alter the tax consequences
described below.
Tax Consequences to Participants. A
participant will not have income upon enrolling in the ESPP or
upon purchasing stock at the end of an offering.
A participant may have both compensation income and a capital
gain or loss upon the sale of stock that was acquired under the
ESPP. The amount of each type of income and loss will depend on
when the participant sells the stock.
If the participant sells the stock more than two years after the
commencement of the offering during which the stock was
purchased and more than one year after the date that the
participant purchased the stock, at a profit (the sales proceeds
exceed the purchase price), then the participant will have
compensation income equal to the lesser of:
|
|
|
|
|
15% of the value of the stock on the day the offering
commenced; and
|
|
|
|
the participants profit.
|
10
Any excess profit will be long-term capital gain. If the
participant sells the stock at a loss (if sales proceeds are
less than the purchase price) after satisfying these waiting
periods, then the loss will be a long-term capital loss.
If the participant sells the stock prior to satisfying these
waiting periods, then he or she will have engaged in a
disqualifying disposition. Upon a disqualifying disposition, the
participant will have compensation income equal to the value of
the stock on the day he or she purchased the stock less the
purchase price. The participant also will have a capital gain or
loss equal to the difference between the sales proceeds and the
value of the stock on the day he or she purchased the stock.
This capital gain or loss will be long-term if the participant
has held the stock for more than one year and otherwise will be
short-term.
Tax Consequences to the Company. There will be
no tax consequences to us except that we will be entitled to a
deduction when a participant has compensation income upon a
disqualifying disposition. Any such deduction will be subject to
the limitations of Section 162(m) of the code.
Proposal Three:
Ratification of Appointment of Independent Registered Public
Accounting Firm
Our audit committee, consisting of independent members of our
board of directors, has appointed the firm of Ernst &
Young LLP as our independent registered public accounting firm
for the year ending December 31, 2009, subject to
ratification by our stockholders at the annual meeting.
Ernst & Young LLP has been our independent registered
public accounting firm since our inception in 1996. If this
proposal is not approved at the meeting, our audit committee
will reconsider this appointment.
We expect representatives of Ernst & Young LLP to be
present at the annual meeting. They will have the opportunity to
make a statement if they desire to do so and will also be
available to respond to appropriate questions.
Our board of directors recommends a vote FOR this
proposal.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FEES AND OTHER
MATTERS
The following table sets forth the fees billed to us for the
fiscal years ended December 31, 2008 and December 31,
2007 by Ernst & Young LLP:
|
|
|
|
|
|
|
|
|
Fee Category
|
|
2008
|
|
|
2007
|
|
|
Audit Fees(1)
|
|
$
|
980,000
|
|
|
$
|
820,850
|
|
Audit-Related Fees(2)
|
|
|
700,000
|
|
|
|
75,000
|
|
Tax Fees(3)
|
|
|
|
|
|
|
2,000
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
1,680,000
|
|
|
$
|
897,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit fees consist of fees for the audit of our annual financial
statements, the review of the interim financial statements
included in our quarterly reports on
Form 10-Q
and transfer pricing, and other professional services provided
in connection with statutory and regulatory filings or
engagements. |
|
(2) |
|
Audit-related fees consist of fees for assurance and related
services that are reasonably related to the performance of the
audit or the review of our financial statements and which are
not reported under Audit Fees. In 2008,
audit-related fees also consisted of fees for a transfer pricing
project and due diligence projects related to our business
development activities. Accounting consultations accounted for
all of the audit-related fees in 2007. |
|
(3) |
|
Tax fees consist of fees for tax compliance, tax advice and tax
planning services. Tax compliance services, which relate to
preparation of original and amended tax returns, accounted for
all of the tax fees in 2007. |
The audit committee has adopted policies and procedures relating
to the approval of all audit and non-audit services that are to
be performed by our independent registered public accounting
firm. This policy generally provides that we will not engage our
independent registered public accounting firm to render audit
11
or non-audit services unless the service is specifically
approved in advance by the audit committee or the engagement is
entered into pursuant to the pre-approval procedure described
below.
From time to time, the audit committee may pre-approve specified
types of services that are expected to be provided to us by our
independent registered public accounting firm during the next
12 months. Any such pre-approval is detailed as to the
particular service or type of services to be provided and is
also generally subject to a maximum dollar amount.
From time to time, the audit committee may delegate pre-approval
authority to a committee member for specified types of services.
Any such pre-approval must be reported to the committee at its
next scheduled meeting. We did not approve any services provided
to us by Ernst & Young LLP in 2008 or 2007 using the
de minimis exception under the SEC rules.
REPORT OF
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee reviewed The Medicines Companys
audited financial statements for the year ended
December 31, 2008 and discussed these financial statements
with the companys management and Ernst & Young
LLP, The Medicines Companys independent registered public
accounting firm for the year ended December 31, 2008. The
Medicines Companys management is primarily responsible for
the financial reporting process, including maintaining an
adequate system of disclosure controls and procedures and
internal control over financial reporting, and for the
preparation of consolidated financial statements in accordance
with generally accepted accounting principles. The Medicines
Companys independent registered public accounting firm is
responsible for performing an independent audit of, and issuing
a report on, those financial statements and the effectiveness of
internal control over our financial reporting. The audit
committee is responsible for providing independent, objective
oversight of these processes. The audit committees duties
and responsibilities do not include conducting audits or
accounting reviews.
The audit committee also reviewed and discussed the matters
required by Statement on Auditing Standards No. 61 as
amended (AICPA, Professional Standards, Vol. 1, AU
Section 308) (Communication with Audit Committees) with
Ernst & Young LLP. This Statement requires
Ernst & Young LLP to discuss with The Medicines
Companys audit committee, among other things, the
following:
|
|
|
|
|
methods to account for significant unusual transactions;
|
|
|
|
the effect of significant accounting policies in controversial
or emerging areas for which there is a lack of authoritative
guidance or consensus;
|
|
|
|
the process used by management in formulating particularly
sensitive accounting estimates and the basis for the registered
public accounting firms conclusions regarding the
reasonableness of those estimates; and
|
|
|
|
disagreements with management over the application of accounting
principles, the basis for managements accounting estimates
and the disclosures in the financial statements.
|
Ernst & Young LLP provided to the audit committee the
written disclosures and the letter required by the current
version of Public Company Accounting Oversight Board (PCAOB)
Rule 3526 (Communications with Audit Committees concerning
Independence), and the audit committee discussed with the
independent registered public accounting firm that firms
independence.
12
Based on its review of the audited financial statements,
discussions with management and the independent registered
public accounting firm, and its review of the representations
and information provided by management and the independent
registered public accounting firm including those described
above, the audit committee recommended to the board of directors
that the audited financial statements be included in The
Medicines Companys annual report on
Form 10-K
for the year ended December 31, 2008.
By the Audit Committee of the Board of Directors
Robert J. Hugin (Chair)
T. Scott Johnson
Elizabeth H.S. Wyatt
PRINCIPAL
STOCKHOLDERS
The following table presents information we know regarding the
beneficial ownership of our common stock as of April 1,
2009 for each person, entity or group of affiliated persons whom
we know to beneficially own more than 5% of our common stock.
The table also sets forth such information for each of our
directors and named executive officers and for our directors and
executive officers as a group.
Beneficial ownership is determined in accordance with the rules
of the SEC. Except as indicated by footnote, to our knowledge,
the persons named in the table have sole voting and investment
power with respect to all shares of common stock shown as
beneficially owned by them. Options to purchase shares of common
stock that are exercisable within 60 days of April 1,
2009 are deemed to be beneficially owned by the person holding
such options for the purpose of computing ownership of such
person, but are not treated as outstanding for the purpose of
computing the ownership of any other person. Percentage
beneficially owned is calculated using 52,743,274 shares of
common stock outstanding as of April 1, 2009.
Unless otherwise indicated in the footnotes, the address of each
of the individuals named below is:
c/o The
Medicines Company, 8 Sylvan Way, Parsippany, New Jersey 07054.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares of
|
|
|
Percentage of
|
|
|
Common Stock
|
|
|
Common Stock
|
Beneficial Owner:
|
|
Beneficially Owned
|
|
|
Beneficially Owned
|
|
Named Executive Officers
|
|
|
|
|
|
|
|
|
Clive A. Meanwell(1)
|
|
|
1,207,615
|
|
|
|
2.3
|
%
|
Glenn P. Sblendorio(2)
|
|
|
253,324
|
|
|
|
*
|
|
John P. Kelley(3)
|
|
|
541,865
|
|
|
|
1.0
|
%
|
Paul M. Antinori(4)
|
|
|
233,399
|
|
|
|
*
|
|
Catharine S. Newberry(5)
|
|
|
134,226
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Employee Directors
|
|
|
|
|
|
|
|
|
William W. Crouse(6)
|
|
|
97,500
|
|
|
|
*
|
|
Robert J. Hugin(7)
|
|
|
97,500
|
|
|
|
*
|
|
T. Scott Johnson(8)
|
|
|
126,783
|
|
|
|
*
|
|
Armin M. Kessler(9)
|
|
|
182,185
|
|
|
|
*
|
|
Robert G. Savage(10)
|
|
|
110,514
|
|
|
|
*
|
|
Hiroaki Shigeta(11)
|
|
|
42,500
|
|
|
|
*
|
|
Melvin K. Spigelman(12)
|
|
|
57,500
|
|
|
|
*
|
|
Elizabeth H.S. Wyatt(13)
|
|
|
72,500
|
|
|
|
*
|
|
13
|
|
|
|
|
|
|
|
|
|
|
Number of Shares of
|
|
|
Percentage of
|
|
|
Common Stock
|
|
|
Common Stock
|
Beneficial Owner:
|
|
Beneficially Owned
|
|
|
Beneficially Owned
|
|
5% Stockholders
|
|
|
|
|
|
|
|
|
Wellington Management Company, LLP(14)
|
|
|
7,232,558
|
|
|
|
13.7
|
%
|
D.E. Shaw & Co, L.P.(15)
|
|
|
5,087,275
|
|
|
|
9.7
|
%
|
Lord, Abbett & Co. LLC(16)
|
|
|
4,391,419
|
|
|
|
8.3
|
%
|
T. Rowe Price Associates, Inc.(17)
|
|
|
3,881,245
|
|
|
|
7.4
|
%
|
Deerfield Capital, L.P.(18)
|
|
|
3,140,300
|
|
|
|
6.0
|
%
|
Barclays Global Investors, NA(19)
|
|
|
3,072,356
|
|
|
|
5.8
|
%
|
Westfield Capital Management Company, LP(20)
|
|
|
2,782,100
|
|
|
|
5.3
|
%
|
All current directors and executive officers as a group
(14 persons)(21)
|
|
|
3,187,781
|
|
|
|
6.0
|
%
|
|
|
|
* |
|
Represents beneficial ownership of less than 1%. |
|
(1) |
|
Includes options to purchase 910,288 shares. |
|
(2) |
|
Includes options to purchase 184,825 shares. |
|
(3) |
|
Includes options to purchase 486,250 shares. |
|
(4) |
|
Includes options to purchase 213,713 shares. |
|
(5) |
|
Includes options to purchase 131,187 shares. Such options
terminated on April 24, 2009, in connection with her
employment terminating with us on January 26, 2009. |
|
(6) |
|
Includes options to purchase 90,000 shares. |
|
(7) |
|
Includes options to purchase 71,667 shares. |
|
(8) |
|
Includes 5,000 shares held by Dr. Johnson as trustee
and options held by Dr. Johnson to purchase
85,000 shares. |
|
(9) |
|
Includes 3,000 shares held by Dr. Kesslers wife
and options held by Dr. Kessler to purchase
85,000 shares. |
|
(10) |
|
Includes options to purchase 103,014 shares. |
|
(11) |
|
Includes options to purchase 35,000 shares. |
|
(12) |
|
Includes options to purchase 50,000 shares. |
|
(13) |
|
Includes options to purchase 65,000 shares. |
|
(14) |
|
Includes shares owned by various investors for which Wellington
Management Company, LLP serves as investment advisor with shared
power to direct investments and/or to vote the shares. The
address of Wellington Management Company, LLP is 75 State
Street, Boston, Massachusetts 02109. This information is based
on a Schedule 13G/A filed by Wellington Management Company,
LLP with the SEC on February 17, 2009. |
|
(15) |
|
Consists of 5,087,030 shares beneficially owned by D. E.
Shaw Valence Portfolios, L.L.C., 5,087,275 beneficially owned by
D. E. Shaw & Co., L.P. (this is composed of
(i) 5,087,030 shares in the name of D. E. Shaw Valence
Portfolios, L.L.C. and (ii) 245 shares in the name of
D. E. Shaw Synoptic Portfolios 2, L.L.C.), and
5,087,275 shares beneficially owned by David E. Shaw (this
is composed of (i) 5,087,030 shares in the name of D.
E. Shaw Valence Portfolios, L.L.C. and (ii) 245 shares
in the name of D. E. Shaw Synoptic Portfolios 2, L.L.C.). David
E. Shaw does not own any shares directly. By virtue of David E.
Shaws position as President and sole shareholder of D. E.
Shaw & Co., Inc., which is the general partner of D.
E. Shaw & Co., L.P., which in turn is the investment
adviser and managing member of D. E. Shaw Valence Portfolios,
L.L.C. and the investment adviser of D. E. Shaw Synoptic
Portfolios 2, L.L.C., and by virtue of David E. Shaws
position as President and sole shareholder of D. E.
Shaw & Co. II, Inc., which is the managing member of
D. E. Shaw & Co., L.L.C., which in turn is the
managing member of D. E. Shaw Synoptic Portfolios 2, L.L.C.,
David E. Shaw may be deemed to have the shared |
14
|
|
|
|
|
power to vote or direct the vote of, and the shared power to
dispose or direct the disposition of, the 5,087,275 shares
as described above constituting 9.7% of the outstanding shares
and, therefore, David E. Shaw may be deemed to be the beneficial
owner of such shares. David E. Shaw disclaims beneficial
ownership of such 5,087,275 shares. The business address
for these entities and for Shaw is
120 W. 45th
Street, Tower 45,
39th
Floor, New York, NY 10036. This information is based on a
Schedule 13G/A filed with the SEC on February 17, 2009. |
|
(16) |
|
The address of Lord, Abbett & Co. LLC is 90 Hudson
Street, Jersey City, NJ 07302. This information is based on a
Schedule 13G/A filed with the SEC on February 13, 2009. |
|
(17) |
|
These securities are owned by various individual and
institutional investors which T. Rowe Price Associates, Inc.
(Price Associates) serves as investment adviser with power to
direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities
Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however Price Associates
expressly disclaims that it is, in fact, the beneficial owner of
such securities. The address for Price Associates is
100 E. Pratt Street, Baltimore, Maryland 21202. This
information is based on a Schedule 13G filed with the SEC
on February 10, 2009. |
|
(18) |
|
Includes 1,149,831 shares beneficially owned by Deerfield
Capital, LP; 1,149,931 shares beneficially owned by
Deerfield Partners, LP; 1,990,469 shares beneficially owned
by Deerfield Management Company, L.P.; 1,990,496 shares
beneficially owned by Deerfield International Limited; and all
3,140,300 shares beneficially owned by James E. Flynn, the
managing member and a control person of the foregoing entities.
The address of Deerfield Capital, LP is 780 Third Avenue, 37th
Floor, New York, NY 10017. This information is based on a
Schedule 13G/A filed with the SEC on February 13, 2009. |
|
(19) |
|
Includes shares held by Barclays Global Investors, N.A. in trust
accounts for the economic benefit of the beneficiaries of those
accounts and for which Barclays Global Investors, N.A. has sole
dispositive and voting power. The address of Barclays Global
Investors, N.A. is 400 Howard Street, San Francisco, CA
94105. This information is based on a Schedule 13G/A filed with
the SEC on February 5, 2009. |
|
(20) |
|
The address of Westfield Capital Management Company, LP is 1
Financial Center, Boston, Massachusetts 02111. This information
is based on a Schedule 13G/A filed with the SEC on
February 4, 2009. |
|
(21) |
|
Group consists of our current non-employee directors and
executive officers. Includes options to purchase an aggregate of
2,536,072 shares. |
INFORMATION
ABOUT CORPORATE GOVERNANCE
We believe that good corporate governance is important to ensure
that we are managed for the long-term benefit of our
stockholders. In assessing and implementing our corporate
governance practices, we have been mindful of the provisions of
the Sarbanes-Oxley Act of 2002, the rules of the SEC, and the
listing standards of The NASDAQ Stock Market. We expect to
continue to review and, when appropriate, further strengthen our
corporate governance procedures in the future.
We describe below our corporate governance structure and the key
corporate governance practices that we have adopted.
Board of
Directors
Our board of directors is responsible for establishing our broad
corporate policies and overseeing the management of the company.
Our chief executive officer, our president and chief operating
officer and our other executive officers are responsible for our
day-to-day operations. Our board evaluates our corporate
performance and approves, among other things, our corporate
strategies and objectives, operating plans, major commitments of
corporate resources and significant policies. Our board also
evaluates and appoints our executive officers.
Our board of directors met 14 times during 2008, including
regular, special and telephonic meetings. Each director who
served as a director during 2008 attended at least 75% of the
aggregate of: (1) the total number of board meetings held
during the period of 2008 during which he or she was a director
and (2) the
15
total number of meetings held by all board committees on which
he or she served during the period of 2008 during which he or
she was a member of such committees.
Board
Independence
Under the rules of The NASDAQ Stock Market, a director will only
qualify as an independent director if, in the
opinion of our board of directors, that person does not have a
relationship which would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director.
Our board of directors has determined that none of our
directors, except Clive Meanwell and John Kelley, has a
relationship that would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director and that each of these directors is an
independent director as defined under
Rule 4200(a)(15) of The NASDAQ Stock Market Marketplace
Rules. Dr. Meanwell and Mr. Kelley are both employees
and are therefore not independent. Only independent directors
serve on our standing board committees.
Robert Savage has been the lead director of the board of
directors since October 2006. As the lead director,
Mr. Savage is responsible for:
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|
|
|
|
chairing any meeting of the independent directors in executive
session;
|
|
|
|
working with the chairman of the board in preparation of the
agenda for each meeting of the board of directors and in
determining the need for special meetings of our board of
directors;
|
|
|
|
consulting with the chairman of the board and chief executive
officer on matters relating to corporate governance and board
performance;
|
|
|
|
facilitating communications between other members of our board
of directors and our chairman of the board and chief executive
officer; and
|
|
|
|
meeting with any director who is not adequately performing his
or her duties as a member of our board of directors or any
committee.
|
Under our corporate governance guidelines, our board of
directors is obligated to review this appointment annually.
Board
Committees
Our board of directors has a standing audit committee,
compensation committee and nominating and corporate governance
committee. The members of these committees are as follows:
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|
|
|
|
|
|
|
|
Nominating and
|
Audit
|
|
Compensation
|
|
Corporate Governance
|
|
Robert J. Hugin (Chair)
|
|
Elizabeth H.S. Wyatt (Chair)*
|
|
William W. Crouse (Chair)
|
T. Scott Johnson
|
|
Armin M. Kessler
|
|
Hiroaki Shigeta
|
Elizabeth H.S. Wyatt
|
|
Robert G. Savage
|
|
Melvin K. Spigelman
|
|
|
|
* |
|
Ms. Wyatt was appointed chair of the compensation committee
on May 29, 2008. Prior to May 29, 2008, Robert Savage
served as chair of the compensation committee. |
Each of the audit committee, compensation committee and
nominating and corporate governance committee operates under a
charter and each such committee reviews its respective charter
at least annually. A current copy of the charters of the audit
committee, the compensation committee, and the nominating and
corporate governance committee is posted on the corporate
governance section of Investor Relations on our
website, www.themedicinescompany.com.
16
Audit
Committee
Our audit committees responsibilities include:
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|
|
|
|
appointing, approving the compensation of, and assessing the
independence of our independent registered public accounting
firm;
|
|
|
|
overseeing the work of our independent registered public
accounting firm, including through the receipt and consideration
of certain reports from such firm;
|
|
|
|
reviewing and discussing with management and the independent
registered public accounting firm our annual and quarterly
financial statements and related disclosures;
|
|
|
|
monitoring our internal control over financial reporting,
disclosure controls and procedures and code of business conduct
and ethics;
|
|
|
|
discussing our risk management policies;
|
|
|
|
establishing policies regarding hiring employees from the
independent registered public accounting firm and procedures for
the receipt, retention and treatment of accounting-related
complaints and concerns;
|
|
|
|
meeting independently with our independent registered public
accounting firm and management; and
|
|
|
|
preparing the audit committee report (which is included
elsewhere in this proxy statement) required by the SEC.
|
Our board of directors has determined that all of the audit
committee members are independent as defined under the rules of
The NASDAQ Stock Market, including the independence requirements
contemplated by
Rule 10A-3
under the Securities Exchange Act of 1934.
Our board of directors has also determined that Robert J. Hugin
qualifies as an audit committee financial expert. In deciding
whether members of our audit committee qualify as financial
experts within the meaning of the SEC regulations and the
listing standards of The NASDAQ Stock Market, our board
considered the nature and scope of experiences and
responsibilities members of our audit committee have previously
had with reporting companies. Mr. Hugin, like all members
of our audit committee, is an independent director as defined
under the rules of The NASDAQ Stock Market, including the
independence requirements contemplated by
Rule 10A-3
under the Securities Exchange Act of 1934.
The audit committee met seven times during 2008, including
regular, special and telephonic meetings.
Compensation
Committee
Our compensation committees responsibilities include:
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|
|
|
|
annually reviewing and approving corporate goals and objectives
relevant to the compensation of our chief executive officer and
our other executive officers;
|
|
|
|
overseeing the evaluations of our senior executives;
|
|
|
|
determining the compensation of our chief executive officer;
|
|
|
|
reviewing and approving, or making recommendations to the board
with respect to, the compensation of our other executive
officers;
|
|
|
|
reviewing and making recommendations to the board relating to
management succession planning;
|
|
|
|
overseeing and administering our cash and equity incentive
plans; and
|
|
|
|
reviewing and making recommendations to the board with respect
to director compensation.
|
The compensation committee may form, and delegate authority to,
one or more subcommittees as it deems appropriate from time to
time under the circumstances.
17
The compensation committee met 12 times during 2008, including
regular, special and telephonic meetings.
Information concerning the compensation committees
processes and procedures regarding director compensation is set
forth under Compensation of Directors in this proxy
statement. Information concerning the compensation
committees processes and procedures regarding compensation
for our named executive officers is set forth under
Compensation Discussion and Analysis in this proxy
statement.
Our board of directors has the authority to grant awards and to
adopt, amend and repeal the administrative rules, guidelines and
practices relating to our Amended and Restated 2004 Stock
Incentive Plan, which we refer to in this Proxy Statement as the
2004 plan, and to interpret the provisions of the 2004 plan.
Pursuant to the terms of the 2004 plan, our board of directors
has delegated its authority under the 2004 plan to its
compensation committee. Accordingly, the compensation committee
administers the 2004 plan, including granting options and other
awards under the 2004 plan. In addition, pursuant to the terms
of the 2004 plan, our board of directors has delegated to our
officers limited authority to grant stock options to employees
without further action by our board of directors or the
compensation committee. Our officers are not, however,
authorized to grant options:
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|
|
|
|
with terms differing from the terms set forth in our standard
forms of stock option agreement;
|
|
|
|
unless the exercise price of such options is equal to the
closing price of the common stock on the date of grant;
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|
|
|
to themselves, to any other executive officer, to certain vice
presidents, to members of the board of directors or to any
person designated by our board of directors or the compensation
committee;
|
|
|
|
with respect to more than 2,400,000 shares of our common
stock in the aggregate; or
|
|
|
|
to any person in an amount that would result in the person
having been granted options to purchase more than
75,000 shares of our common stock under any of our stock
option plans.
|
In addition, the officers must maintain a list of the options
granted pursuant to the delegated authority and report to the
compensation committee regarding the options granted, at such
times and in such form as the compensation committee may from
time to time request. The delegation of authority to the
officers is intended to avoid the expense and administrative
burden of convening a meeting of the compensation committee in
connection with stock option grants to newly hired employees and
promoted employees.
Except as noted above, the compensation committee generally
selects the recipients of awards and, subject to the terms of
the 2004 plan, determines:
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|
|
|
|
the number of shares of common stock covered by options and the
dates upon which such options become exercisable;
|
|
|
|
the exercise price of options (which, in accordance with the
2004 plan, may not be less than 100% of the fair market value of
our common stock on the date of grant);
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|
|
|
the duration of options (which, in accordance with the 2004
plan, may not be longer than 10 years); and
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|
|
|
the number of shares of common stock subject to any restricted
stock or other stock-based awards and the terms and conditions
of such awards, including issue price, conditions for repurchase
and repurchase price.
|
Nominating
and Corporate Governance Committee
The nominating and corporate governance committee identifies
individuals qualified to become board members and recommends to
the board the persons to be nominated by the board for election
as directors at the annual meeting of stockholders. In addition,
the nominating and corporate governance committee oversees the
evaluation of the board of directors and develops corporate
governance principles. Our board of directors has adopted a
series of corporate governance guidelines to assist the board in
the exercise of its duties and
18
responsibilities, which is posted on the corporate governance
section of Investor Relations on our website,
www.themedicinescompany.com.
The nominating and corporate governance committee met three
times in 2008, including regular, special and telephonic
meetings.
Director
Candidates and Nomination Process
The process followed by our nominating and corporate governance
committee to identify and evaluate director candidates includes
requests to board members and others for recommendations,
meetings from time to time to evaluate biographical information
and background material relating to potential candidates and
interviews of selected candidates by members of the committee
and the board.
The nominating and corporate governance committee evaluates
director candidates based upon a number of criteria including:
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|
reputation for integrity, honesty and high ethical standards;
|
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|
demonstrated business acumen, experience and ability to exercise
sound judgments in matters that relate to our current and
long-term objectives and willingness and ability to contribute
positively to our decision-making process;
|
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|
|
commitment to understanding our business and our industry;
|
|
|
|
adequate time to attend and participate in meetings of the board
of directors and its committees;
|
|
|
|
ability to understand the sometimes conflicting interests of the
various constituencies of our company, which include
stockholders, employees, customers, governmental units,
creditors and the general public and to act in the interest of
all stockholders;
|
|
|
|
demonstrated experience or skill set in particular management
disciplines that complements, in the opinion of the members of
the nominating and corporate governance committee, the existing
members of the board of directors to provide a desirable
balance; and
|
|
|
|
such other attributes, including independence, that satisfy
requirements imposed by the SEC and The NASDAQ Stock Market.
|
The nominating and corporate governance committee does not
assign specific weights to particular criteria and no particular
criterion is a prerequisite for a prospective nominee. We
believe that the backgrounds and qualifications of our
directors, considered as a group, should provide a composite mix
of experience, knowledge and abilities that will allow the board
to fulfill its responsibilities.
Stockholder
Nominees
Stockholders may recommend individuals to the nominating and
corporate governance committee for consideration as potential
director candidates. Any such proposals should be forwarded to
the nominating and corporate governance committee in writing at
our executive offices at 8 Sylvan Way, Parsippany, New Jersey
07054 Attention: Paul M. Antinori, Secretary and should include
the following information:
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|
all information relating to such candidate that is required to
be disclosed pursuant to Regulation 14A of the Securities
Exchange Act of 1934, including such persons written
consent to being named in the proxy statement as a nominee and
to serving as a director, if elected;
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|
any information reasonably necessary to determine whether the
candidate is qualified to serve on our audit committee;
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|
|
the number of shares of our stock beneficially owned by such
candidate, if any;
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|
as to the stockholder proposing the candidate:
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|
such stockholders name and address;
|
19
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|
|
the number of shares of our common stock beneficially owned by
such stockholder;
|
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|
|
a description of all arrangements and understandings between
each stockholder and the candidate and any other person relating
to the proposal to nominate the candidate; and
|
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|
|
a representation that such stockholder intends to appear in
person or by proxy to nominate the person proposed.
|
Assuming that appropriate biographical and background material
has been provided on a timely basis, any recommendations
received from stockholders will be evaluated in the same manner
as potential nominees proposed by the nominating and corporate
governance committee. If our board of directors determines to
nominate a stockholder-recommended candidate and recommends his
or her election, then his or her name will be included in our
proxy card for the next annual meeting.
Stockholders also have the right under our by-laws to directly
nominate director candidates, without any action or
recommendation on the part of the nominating and corporate
governance committee or the board, by following the procedures
set forth under Information About The Annual
Meeting How and when may I submit a proposal for the
2010 annual meeting? in this proxy statement. Candidates
nominated by stockholders in accordance with the procedures set
forth in our by-laws will not be included in our proxy card for
the next annual meeting.
Code of
Business Conduct and Ethics
We have adopted a written code of business conduct and ethics
applicable to all of our directors and employees, including our
principal executive officer, our principal financial officer and
our controller. The code of business conduct and ethics is
available on the corporate governance section of Investor
Relations on our website,
www.themedicinescompany.com.
Any waiver of the code of business conduct and ethics for
directors or executive officers, or any amendment to the code
that applies to directors or executive officers, may only be
made by the board of directors. We intend to post on our
website, at the address and location specified above, all
disclosures that are required by law or The NASDAQ Stock Market
listing standards concerning an amendment to, or waiver from, a
provision of this code of ethics. To date, no such waivers have
been requested or granted.
Stockholder
Communications with the Board of Directors
Any stockholder may contact the board of directors or a
specified individual director by writing to the attention of the
board of directors or a specified individual director and
sending such communication to our executive offices at 8 Sylvan
Way, Parsippany, New Jersey 07054 Attention: Paul M. Antinori,
Secretary. Each communication from a stockholder should include
the following information in order to permit stockholder status
to be confirmed and to provide an address to forward a response
if deemed appropriate:
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|
|
the name, mailing address and telephone number of the
stockholder sending the communication;
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|
the number of shares held by the stockholder; and
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|
if the stockholder is not a record owner of our securities, the
name of the record owner of our securities beneficially owned by
the stockholder.
|
Our Secretary will forward all appropriate communications to the
board of directors or individual members of the board of
directors as specified in the communication.
Director
Attendance at the Annual Meeting
As set forth in our corporate governance guidelines, all
directors are expected to attend the annual meeting of
stockholders. All of our directors attended the annual meeting
of stockholders in 2008.
20
Compensation
of Directors
Compensation
Program
Every two years, our compensation committee reviews and makes
recommendations to the board regarding the level of compensation
of our non-employee directors. To determine the appropriate
level of compensation for our non-employee directors, our
compensation committee has historically obtained data from a
number of different sources including:
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|
publicly available data describing director compensation in peer
companies; and
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|
information obtained directly from other companies.
|
Our compensation program for non-employee directors consists of
a cash component, which includes an annual retainer and meeting
and committee fees and is paid on a quarterly basis, and an
equity component, which includes stock option grant awards and
restricted stock awards. Each of these components is shown in
the table below. We do not pay directors who are also our
employees any additional compensation for serving on our board.
In March 2007, our compensation committee reviewed our board
compensation program and recommended modifications to this
program to our board of directors. On April 17, 2007, our
board of directors, based upon the recommendation of our
compensation committee, approved modifications to the cash and
equity portions of the compensation program. In evaluating these
changes, the committee relied on data from the Radford Survey +
Consulting, an AON Consulting Company, and sought to align board
cash compensation at or near the 50th percentile of cash
compensation paid to directors at companies included in the data
from Radford and board equity compensation with a value at or
near the 75th percentile of the value of equity
compensation paid to directors at the companies included in the
data from Radford. Our compensation committee is currently
reviewing the compensation payable to our directors and will
make a recommendation to the board regarding the level of
compensation of our non-employee directors following such review.
Cash
Compensation
The following table describes the cash compensation for each
non-employee director. The cash compensation is payable on a
quarterly basis.
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|
|
Type of Fee
|
|
Current
|
|
|
Annual retainer
|
|
$
|
25,000
|
|
Additional annual retainer for lead director
|
|
$
|
10,000
|
|
Attendance for each board meeting attended in person
|
|
$
|
3,000
|
|
Attendance for each board meeting attended by telephone
|
|
$
|
1,000
|
|
Annual retainer for committee members:
|
|
|
|
|
Audit committee
|
|
$
|
4,000
|
|
Compensation committee
|
|
$
|
3,000
|
|
Nominating and corporate governance committee
|
|
$
|
2,000
|
|
Additional annual retainer for committee chairs:
|
|
|
|
|
Audit committee
|
|
$
|
12,000
|
|
Compensation committee
|
|
$
|
9,000
|
|
Nominating and corporate governance committee
|
|
$
|
6,000
|
|
Attendance for each committee and board strategic advisory team
meeting attended in person
|
|
$
|
1,500
|
|
Attendance for each committee and board strategic advisory team
meeting attended by telephone
|
|
$
|
500
|
|
In addition, directors are reimbursed for travel and
out-of-pocket expenses in connection with their attendance at
board meetings.
21
Equity
Compensation
Each non-employee director is eligible to receive stock options
and shares of restricted stock under our 2004 plan. The
following table describes the initial equity compensation and
annual equity compensation for each non-employee director, as
well as the additional equity compensation to our lead director:
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Number of
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|
|
|
|
|
|
Number of
|
|
|
Restricted
|
|
|
|
|
|
Type of Grant
|
|
Options
|
|
|
Shares
|
|
|
Grant Date
|
|
Vesting Schedule
|
|
Initial equity grant
|
|
|
25,000
|
|
|
|
|
|
|
The date the director is initially elected to the board
|
|
36 equal monthly installments beginning on the date one month
after the grant date
|
Annual equity grant
|
|
|
7,500
|
|
|
|
3,750
|
|
|
The date of the annual meeting of stockholders
|
|
Stock options vest in 12 equal monthly installments beginning on
the date one month after the grant date. Restricted stock vests
in one installment 12 months after the grant date
|
Additional annual equity grant to our lead director
|
|
|
5,000
|
|
|
|
|
|
|
The date of the annual meeting of stockholders
|
|
Stock options vest in 12 equal monthly installments beginning on
the date one month after the grant date
|
These options have an exercise price equal to the closing price
of our common stock on the NASDAQ Global Select Market on the
date of grant and have a ten-year term. All vested options will
be exercisable at any time prior to the first anniversary of the
date the director ceases to be a director and all unvested
options will be forfeited.
The following table shows the compensation for fiscal year 2008
for each non-employee director that served as a director during
2008.
2008 Director
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
|
|
|
All Other
|
|
|
|
|
in Cash
|
|
Stock Awards
|
|
Option Awards
|
|
Compensation
|
|
Total
|
Name
|
|
($)
|
|
($)(1)
|
|
($)(2)
|
|
($)
|
|
($)
|
|
William W. Crouse
|
|
$
|
57,000
|
(3)
|
|
$
|
70,118
|
|
|
$
|
61,273
|
|
|
|
|
|
|
$
|
188,391
|
|
Robert J. Hugin
|
|
$
|
66,500
|
(4)
|
|
$
|
70,118
|
|
|
$
|
61,273
|
|
|
|
|
|
|
$
|
197,891
|
|
T. Scott Johnson
|
|
$
|
56,000
|
(5)
|
|
$
|
70,118
|
|
|
$
|
61,273
|
|
|
|
|
|
|
$
|
187,391
|
|
Armin M. Kessler
|
|
$
|
57,000
|
(6)
|
|
$
|
70,118
|
|
|
$
|
61,273
|
|
|
|
|
|
|
$
|
188,391
|
|
Robert G. Savage
|
|
$
|
71,375
|
(7)
|
|
$
|
70,118
|
|
|
$
|
102,122
|
(11)
|
|
|
|
|
|
$
|
243,615
|
|
Hiroaki Shigeta
|
|
$
|
51,500
|
(8)
|
|
$
|
70,118
|
|
|
$
|
140,341
|
(12)
|
|
|
|
|
|
$
|
261,959
|
|
Melvin K. Spigelman
|
|
$
|
53,000
|
(9)
|
|
$
|
70,118
|
|
|
$
|
61,273
|
|
|
|
|
|
|
$
|
184,391
|
|
Elizabeth H.S. Wyatt
|
|
$
|
73,125
|
(10)
|
|
$
|
70,118
|
|
|
$
|
61,273
|
|
|
|
|
|
|
$
|
204,516
|
|
|
|
|
(1) |
|
The amounts in this column represent the dollar amount
recognized for financial statement reporting purposes with
respect to the 2008 fiscal year in accordance with Financial
Accounting Standards Board Statement No. 123 (revised 2004),
Share-Based Payment (FAS 123(R)), excluding any
adjustments for forfeitures relating to service-based vesting
conditions. The grant date fair value of the award granted to
each non-employee director on the date of our 2008 annual
meeting of stockholders was $68,625. See Note 2 to our
notes to our consolidated financial statements in our Annual
Report on
Form 10-K
filed on March 2, 2009 for a discussion of all assumptions
we made in determining the FAS 123(R) values of equity
awards. At December 31, 2008, each of our non-employee
directors held 3,750 shares of unvested restricted stock. |
22
|
|
|
(2) |
|
The amounts in this column represent the dollar amount
recognized for financial statement reporting purposes with
respect to the 2008 fiscal year in accordance with
FAS 123(R), excluding any adjustments for forfeitures
relating to service-based vesting conditions. The grant date
fair value of the award granted to each non-employee director on
the date of our 2008 annual meeting of stockholders was $60,171.
See Note 2 to our notes to our consolidated financial
statements in our Annual Report on
Form 10-K
filed on March 2, 2009 for a discussion of all assumptions
we made in determining the FAS 123(R) values of equity
awards. At December 31, 2008, the total number of shares
subject to options held by each of our non-employee directors
was: Mr. Crouse, 86,875; Mr. Hugin, 68,542;
Dr. Johnson, 81,875; Dr. Kessler, 81,875;
Mr. Savage, 97,806; Mr. Shigeta, 22,986;
Dr. Spigelman, 46,875 and Ms. Wyatt, 61,875. |
|
(3) |
|
Mr. Crouse is chair of the nominating and corporate
governance committee and a member of the board strategic
advisory team. This amount includes the annual board and
nominating and corporate governance committee retainers, the
nominating and corporate governance committee chair annual
retainer and fees paid for attendance at four board meetings in
person, eight board meetings by telephone, two committee
meetings in person and two committee and team meetings by
telephone. |
|
(4) |
|
Mr. Hugin is the chair of the audit committee. This amount
includes the annual board and audit committee retainers, the
audit committee chair annual retainer and fees paid for
attendance at four board meetings in person, nine board meetings
by telephone, one committee meeting in person and six committee
meetings by telephone. |
|
(5) |
|
Dr. Johnson is a member of the audit committee and the
board strategic advisory team. This amount includes the annual
board and audit committee retainers and fees paid for attendance
at four board meetings in person, ten board meetings by
telephone, one committee meeting in person and seven committee
and team meetings by telephone. |
|
(6) |
|
Dr. Kessler is a member of the compensation committee. This
amount includes the annual board and compensation committee
retainers and fees paid for attendance at four board meetings in
person, ten board meetings by telephone, two committee meetings
in person and eight committee meetings by telephone. |
|
(7) |
|
Mr. Savage is the lead director of our board of directors
and a member of the compensation committee and the board
strategic advisory team. Mr. Savage also served as chairman
of the compensation committee until May 29, 2008. This
amount includes the annual board and compensation committee
retainers, the annual retainer for his role as lead director,
pro rata compensation committee chair annual retainer and fees
paid for attendance at four board meetings in person, ten board
meetings by telephone, two committee meetings in person and ten
committee and team meetings by telephone. |
|
(8) |
|
Mr. Shigeta is a member of the nominating and corporate
governance committee. This amount includes the pro rated annual
board and nominating and corporate governance committee
retainers and fees paid for attendance at four board meetings in
person, nine board meetings by telephone, two committee meetings
in person and one committee meeting by telephone. |
|
(9) |
|
Dr. Spigelman is a member of the nominating and corporate
governance committee and strategic advisory committee. This
amount includes the annual board and nominating and corporate
governance committee retainers and fees paid for attendance at
four board meetings in person, ten board meetings by telephone,
two committee meetings in person and two committee meetings by
telephone. |
|
(10) |
|
Ms. Wyatt is the chairman of the compensation committee as
of May 29, 2008 and a member of the audit committee. This
amount includes the annual board, audit committee and
compensation committee retainers, the pro rata compensation
committee chair annual retainer and fees paid for attendance at
four board meetings in person, nine board meetings by telephone,
five committee meetings in person and 14 committee meetings by
telephone. |
|
(11) |
|
As the lead director, Mr. Savage is awarded an annual
additional stock option grant of 5,000 shares of our common
stock on the date of our annual meeting of stockholders. The
grant date fair value of this award to Mr. Savage was
$40,114. |
|
(12) |
|
Mr. Shigeta received a stock option grant of
20,000 shares upon election to the board of directors in
2007, which vest over a three-year period. This amount includes
the dollar amount recognized for such |
23
|
|
|
|
|
grant for financial statement reporting purposes with respect to
the 2008 fiscal year in accordance with FAS 123(R). The
grant date fair value of the award granted to Mr. Shigeta
on the date of his election in 2007 was $252,847. |
Certain
Related-Party Transactions
In accordance with our audit committee charter, our audit
committee is responsible for reviewing and approving the terms
and conditions of all related party transactions.
On February 24, 2009, we acquired more than 98% of the
outstanding shares of Targanta Therapeutics Corporation, or
Targanta, through a tender offer for all outstanding shares of
Targanta. On February 25, 2009 we completed our acquisition
of Targanta through a short-form merger of one of our
subsidiaries with and into Targanta, with Targanta as the
surviving entity and wholly owned subsidiary of ours.
Targanta stockholders who tendered their shares in the tender
offer and whose shares we accepted for payment promptly received
the offer consideration consisting of (1) $2.00 per share,
net in cash plus (2) the contractual right to receive up to
$4.55 per share in contingent cash payments if specified
regulatory and commercial milestones are achieved within agreed
upon time periods. In the merger, each remaining outstanding
share of Targanta common stock was automatically cancelled and
converted into the right to receive the same consideration per
share paid in the tender offer.
The total consideration payable for the shares of Targanta that
we acquired in the tender offer and the merger, including fees
and expenses, consists of approximately $50 million in cash
at closing plus contractual rights to receive up to
$95.5 million in the aggregate in contingent cash payments
if specified regulatory and commercial milestones are achieved
within agreed upon time periods. The terms and conditions of the
contingent cash payment rights are set forth in a Contingent
Payment Rights Agreement, or CPR Agreement, dated
February 24, 2009, entered into by us and American Stock
Transfer & Trust Company, as rights agent.
William W. Crouse, who serves as one of our directors,
was also a director and stockholder of Targanta and served as
Chairman of the compensation committee of Targantas board
of directors. Mr. Crouse recused himself from all board
meetings, both ours and Targantas, in which the tender
offer and merger were discussed. Upon the effectiveness of the
merger, Mr. Crouse ceased to be a director of Targanta.
In the tender offer, in exchange for the 58,539 shares of
Targanta common stock held by him, Mr. Crouse received
approximately $117,078 in cash plus the contractual right to
receive up to a maximum of approximately $266,352 in contingent
cash payments if all of the milestones set forth in the CPR
Agreement are achieved within the agreed upon time periods.
Pursuant to an agreement between Mr. Crouse and Targanta,
Mr. Crouses options and warrants for shares of
Targanta capital stock terminated immediately prior to the
effectiveness of the merger.
Compensation
Committee Interlocks and Insider Participation
During 2008, none of the members of our compensation committee
was a current or former employee and none had any related person
transaction involving us required to be reported under
Item 404(a) of
Regulation S-K.
Compensation
Committee Report
The Compensation Committee of the Company has reviewed and
discussed the Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and, based on such review and discussions, the
Compensation Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in
this proxy statement on Schedule 14A.
By the Compensation Committee of the Board of Directors
Elizabeth H.S. Wyatt (Chair)
Armin M. Kessler
Robert G. Savage
24
INFORMATION
ABOUT OUR EXECUTIVE OFFICERS
Compensation
Discussion and Analysis
The compensation committee of our board of directors oversees
our executive compensation program. In this role, the
compensation committee reviews and approves all compensation
decisions relating to our named executive officers and also
reviews recommendations for members of our senior management.
The compensation committee also reviews and approves annually
our salary, bonus and equity pools in the aggregate for
employees below the senior management level.
Objectives
and Philosophy of Our Executive Compensation
Program
The primary objectives of the compensation committee with
respect to executive compensation are to:
|
|
|
|
|
attract, retain and motivate the best possible executive talent;
|
|
|
|
ensure that executive compensation is aligned with our corporate
strategies and business objectives;
|
|
|
|
promote the achievement of key strategic and financial
performance measures by linking cash and equity incentives to
the achievement of measurable corporate and individual
performance goals; and
|
|
|
|
align executives incentives with the creation of long-term
stockholder value.
|
To achieve these objectives, the compensation committee
evaluates our executive compensation program with the goal of
setting compensation at levels the committee believes are
competitive with those of other companies in our industry and
our region that compete with us for executive talent. In
addition, our executive compensation program ties a substantial
portion of each executives overall compensation to key
strategic, financial and operational goals such as clinical
trial progress, new product indication initiatives, the
development of our global organization and our financial and
operational performance as measured by metrics such as revenue
and profitability. Our executive compensation consists of a base
salary, an annual cash incentive and a long-term compensation
component, such as stock options and restricted stock grants
that vest over time. We believe that the long-term compensation
component helps to retain our executives and aligns their
interests with those of our stockholders by allowing them to
participate in the longer term success of our company as
reflected in stock price appreciation.
The compensation committee retained the consulting firm Radford
Consultants + Survey, an AON Consulting Company, to advise the
committee in connection with the committees consideration
of the appropriate peer group, base salaries, the percentage
bonus targets and equity awards for our named executive
officers. In addition, for 2009, Radford provided the
compensation committee with tally sheets for reference in
considering the total compensation package of each named
executive officer. The compensation committee consulted with our
chief executive officer and other senior executives in
determining compensation packages. However, neither our chief
executive officer nor any other senior executive was present for
the compensation committee executive session when decisions were
made regarding compensation for our named executive officers.
In making compensation decisions, the compensation committee
compares the overall as well as each component of our executive
compensation program to that paid by a peer group of publicly
traded companies that the committee believes have business life
cycles, revenues, market capitalizations, products, research and
development investment levels, and number and capabilities of
employees that are roughly comparable to ours and against which
the committee believes we compete for executive talent. The
compensation committee reviews the peer group as necessary to
determine whether any adjustments to the composition of the
group are needed and as a result, our peer group might change
from year to year. The compensation committee works with Radford
and our senior management to determine the peer group, and
Radford analyzes the executive compensation programs of these
companies. The companies included in the peer group considered
by the compensation committee in establishing 2008 base salaries
and bonus targets were:
|
|
|
|
|
Adams Respiratory Therapeutics, Inc.
|
25
|
|
|
|
|
Affymetrix, Inc.
|
|
|
|
Alkermes, Inc.
|
|
|
|
Amylin Pharmaceuticals, Inc.
|
|
|
|
Cepheid
|
|
|
|
Cubist Pharmaceuticals, Inc.
|
|
|
|
Cytyc Corp.
|
|
|
|
Endo Pharmaceuticals Holdings Inc.
|
|
|
|
Enzon Pharmaceuticals, Inc.
|
|
|
|
ImClone Systems Incorporated
|
|
|
|
Intermune, Inc.
|
|
|
|
Medicis Pharmaceutical Corporation
|
|
|
|
MGI Pharma Inc.
|
|
|
|
Millennium Pharmaceuticals, Inc.
|
|
|
|
OSI Pharmaceuticals, Inc.
|
|
|
|
PDL BioPharma, Inc.
|
|
|
|
Pharmion Corp.
|
|
|
|
Techne Corporation and
|
|
|
|
United Therapeutics Corporation
|
In November 2008, the compensation committee, working with
Radford and our senior management, adjusted the composition of
the peer group to reflect changes to our business and to certain
of the companies in the peer group. As a result, the peer group
considered by the compensation committee in reviewing cash
compensation and making its equity awards for 2008, which it
made in February 2009, were:
|
|
|
|
|
Abraxis Biosciences Inc.
|
|
|
|
Affymetrix, Inc.
|
|
|
|
Alkermes, Inc.
|
|
|
|
Amylin Pharmaceuticals, Inc.
|
|
|
|
BioMarin Pharmaceuticals Inc.
|
|
|
|
Cepheid
|
|
|
|
Cubist Pharmaceuticals, Inc.
|
|
|
|
Endo Pharmaceuticals Holdings Inc.
|
|
|
|
Enzon Pharmaceuticals, Inc.
|
|
|
|
ImClone Systems Incorporated
|
|
|
|
Isis Pharmaceuticals
|
|
|
|
Medicis Pharmaceutical Corporation
|
|
|
|
Myriad Genetics, Inc.
|
|
|
|
Onyx Pharmaceuticals
|
26
|
|
|
|
|
OSI Pharmaceuticals, Inc.
|
|
|
|
Regeneron Pharmaceuticals Inc.
|
|
|
|
Sepracor Inc.
|
|
|
|
Techne Corporation
|
|
|
|
United Therapeutics Corporation and
|
|
|
|
Vertex Pharmaceuticals Incorporated
|
References in this proxy statement to our peer group
mean the applicable peer group or peer groups listed above.
We compete with many other companies for executive personnel.
Accordingly, the compensation committee generally targets base
salary and bonus compensation for executives at the
50th percentile of compensation paid to similarly situated
executives of the companies in our peer group. In order to
underscore the value of ownership of equity compensation as a
component of our overall compensation, the compensation
committee generally targets equity compensation for executives
at the 75th percentile of equity compensation paid to
similarly situated executives of the companies in our peer
group. The committee may vary these general targets with respect
to executives based on the job responsibilities, experience and
performance levels of the individuals and our overall company
performance. For example, the compensation committee determined,
on the advice of Radford, that our chief financial
officers level of responsibility exceeds that of similarly
situated executives of the companies in our peer group,
primarily due to his business development and operating
responsibilities, and therefore applied a 15% premium to his
target compensation compared to chief financial officers of the
companies in our peer group.
Components
of our Executive Compensation Program
The primary elements of our executive compensation program are:
|
|
|
|
|
base salary;
|
|
|
|
annual cash bonus;
|
|
|
|
stock option and restricted stock awards;
|
|
|
|
health and life insurance, and other employee benefits; and
|
|
|
|
severance and change-of-control benefits.
|
We do not have any formal or informal policy or target for
allocating compensation between long-term and short-term
compensation, between cash and non-cash compensation or among
the different forms of non-cash compensation. Instead, the
compensation committee, after reviewing information provided by
Radford, determines what it believed to be the appropriate level
and mix of the various compensation components within the
targeted percentiles for cash and equity compensation.
Base
Salary
The committee uses base salary to recognize the experience,
skills, knowledge and responsibilities required of all our
employees, including our executives. Base salaries of our named
executive officers are reviewed at least annually by the
compensation committee, and are adjusted from time to time to
realign salaries with market levels after taking into account
individual responsibilities, performance and experience. Base
salaries also may be increased for merit reasons, based on the
executives success in meeting or exceeding individual
performance objectives, promoting our core values and
demonstrating leadership abilities. The compensation committee
also adjusts base salaries as warranted throughout the year for
promotions, market changes or other changes in the scope or
breadth of an executives role or responsibilities.
In establishing base salaries for 2008, the compensation
committee considered the survey data of compensation in our peer
group, the level of the individuals responsibility and the
individuals past
27
performance and experience. As noted above, the committee
generally targets executive base salaries at the
50th percentile of salaries for executives in similar
positions at companies in our peer group. In considering the
base salaries for 2008, the compensation committee agreed that
base salary is a function of providing adequate compensation for
the responsibilities of the respective positions, and any
increase to base salary should be based upon those
responsibilities and individual performance in addition to
competitive data. In January 2008, the compensation committee
approved base salary increases for our named executive officers,
which were based on merit reasons for their performance in 2007
as well as market adjustments to more closely align their
salaries to the 50th percentile of companies in our peer
group.
The following table presents each named executive officers
2007 and 2008 base salary, the percentile increase in base
salary from 2007 to 2008 and each named executive officers
2008 base salary variance to the 50th percentile of our
peer group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 Salary
|
|
|
|
|
|
|
|
|
|
|
|
|
Variance to 50th
|
|
|
|
|
|
|
|
|
|
Percent Increase
|
|
|
Percentile of Peer
|
|
Named Executive
Officer
|
|
2007 Salary
|
|
|
2008 Salary
|
|
|
from 2007 to 2008
|
|
|
Group
|
|
|
Clive A. Meanwell
|
|
$
|
566,000
|
|
|
$
|
588,640
|
|
|
|
4
|
%
|
|
|
-10
|
%
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John P. Kelley
|
|
$
|
450,000
|
|
|
$
|
463,500
|
|
|
|
3
|
%
|
|
|
+8
|
%
|
President and Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenn P. Sblendorio
|
|
$
|
375,000
|
|
|
$
|
421,875
|
|
|
|
12.5
|
%
|
|
|
-3
|
%
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Antinori
|
|
$
|
315,000
|
|
|
$
|
346,500
|
|
|
|
10
|
%
|
|
|
-10
|
%
|
Senior Vice President and General Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catharine S. Newberry(1)
|
|
$
|
285,000
|
|
|
$
|
299,250
|
|
|
|
5
|
%
|
|
|
+9
|
%
|
Former Senior Vice President and Chief Human Strategy Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Ms. Newberrys employment with us terminated
January 26, 2009. |
In establishing Dr. Meanwells 2008 base salary, the
compensation committee recognized Dr. Meanwells
contributions in the planning, oversight and direction of our
competitive, human and financial strategy in 2007. These
included our overall operating performance, developing and
building our product portfolio, creating and advancing our
international business plan, acquiring human talents and
developing our employees, and growth in our financial
performance and in stockholder value. For 2008, we increased his
annual base salary to $588,640, which represented a 4% merit
increase. The compensation committee recognized
Mr. Kelleys contributions to increasing
stockholders long term value by improving our operating
capabilities, recruiting strong people, organizing our resources
effectively and playing an important role in a variety of
strategic projects in 2007. As a result, the committee
established Mr. Kelleys annual base salary for 2008
at $463,500, which consisted of a 3% merit increase. In
establishing Mr. Sblendorios 2008 base salary, the
compensation committee recognized Mr. Sblendorios
contributions in 2007, including his building of a business
development department at our company, his communication efforts
with our stockholders, his role in the area of talent
acquisition, such as his recruitment of new members to
strengthen our finance department, his effective management of
resources and his work with Dr. Meanwell to improve our
relationship with investment banks. As a result, the committee
established Mr. Sblendorios annual base salary for
2008 at $421,875, which consisted of a 7% increase for merit
reasons and 5.5% increase as a market adjustment. The
compensation committee noted Mr. Antinoris efforts in
2007 to develop and focus our government affairs initiatives,
including efforts to restore the term of the principal Angiomax
patent, as well as his management of our ongoing legal affairs
and increased his annual base salary for 2008 to $346,500, which
represented a 5.5% increase for merit reasons and 4.5% increase
as a market adjustment. The compensation committee recognized
Ms. Newberrys accomplishments in focusing on key
strategic and tactical elements of our human strategy in 2007.
As a result, the committee increased Ms. Newberrys
annual base salary for 2008 to $299,250, which represented a 5%
increase for merit reasons.
28
In establishing base salaries for fiscal 2009, our senior
management recommended and the compensation committee determined
that no merit increases in base salary would be given to any of
our employees, including our named executive officers, in
recognition of the global economic condition and our 2008
performance. Our employees, including our named executive
officers, continue to be eligible for such adjustments for
promotions, market changes or other changes in the scope or
breadth of their role or responsibilities.
Annual
Cash Bonus Plan
We have an annual cash bonus plan for our named executive
officers. The annual cash bonus plan is intended to motivate our
named executive officers to work toward the achievement of
company strategic, operational and financial goals and
individual performance objectives, and to reward our named
executive officers when their efforts result in success for us.
Bonus targets under the annual cash bonus plan are calculated as
a percentage of the applicable named executive officers
base salary, with targets corresponding to the position of the
executive. The bonus target percentages for our named executive
officers are based on their respective grade level except for
Dr. Meanwell, whose bonus target percentage exceeds that of
our other executives at the same grade level. For 2008,
Dr. Meanwells bonus target percentage increased from
50% to 75% of his base salary to better align his bonus target
percentage with those of other chief executive officers in our
peer group. Mr. Sblendorios bonus target percentage
increased from 40% to 50% of his base salary in connection with
his elevation in grade level as a result of his additional
business development and operating responsibilities. The bonus
target percentage for Mr. Kelley remained at 50% of his
base salary and the bonus target percentage for each of
Mr. Antinori and Ms. Newberry remained at 40% of their
respective base salaries.
The compensation committee approves corporate goals for each
year and determines potential bonus amounts based on achievement
of these goals and individual performance goals. Under the
annual cash bonus plan, the corporate goals comprise 60% of the
total cash bonus and the individual objectives comprise 40% of
the total cash bonus. The corporate goals generally conform to
the financial metrics contained in the internal business plan
adopted by the board of directors relating to revenue, earnings
per share and certain operational goals. The compensation
committee works with the chief executive officer to develop
challenging but achievable goals, which we refer to as stretch
corporate goals, which they believe are challenging but can be
reasonably achieved over the next year. For 2008, the
compensation committee approved the corporate goals and the
relative weighting of such corporate goals to be considered in
determining payments under the annual cash bonus plan based on
achievement of those goals for 2008. The goals that the
compensation committee approved for 2008 were:
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a minimum sales revenue for Angiomax in the United States;
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the commercial launch of Cleviprex and minimum sales revenue for
Cleviprex in the United States;
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the development of our global organization, with a primary focus
on the European Union during 2008, to enable us to operate in
Germany, France, Italy and the United Kingdom, the approval to
market Angiox for acute coronary syndrome, or ACS, in the
European Union, the complete transition of the distribution of
Angiox from Nycomed Danmark ApS and a minimum sales performance
in the European Union with respect to Angiox;
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FDA approval of the supplemental new drug application, or sNDA,
that we filed in 2007 relating to an additional indication for
Angiomax for an additional dosing regimen in the treatment of
ACS initiated in the emergency department;
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progression of the CHAMPION clinical trials to achieve minimum
recruitment levels; and
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a minimum earnings per share (non-GAAP) for 2008.
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Each corporate goal is weighted based upon the priority
attributed to such goal by the committee and based on such
weighting, each goal is given a corporate goal award value. When
the compensation committee approves corporate goals, it also
approves minimum, target and maximum levels for such corporate
goals. The
29
committee determines the company bonus factor, which is used in
determining payouts under the annual cash bonus plan and the
size of annual equity awards, by using such minimum, target and
maximum levels and allocating credits for each corporate goal in
the following manner:
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no credit for a corporate goal unless we achieve a minimum
performance level;
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a credit of at least 50% but less than 100% of the corporate
goal award if we achieve the minimum performance level but do
not achieve the target performance level;
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a credit of at least 100% but less than 150% of the corporate
goal award if we achieve or exceed the target performance level
but do not attain the maximum performance level; and
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a credit of 150% of the corporate goal award if we achieve or
exceed the maximum performance level.
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Individual objectives are tied to the particular area of
expertise of the employee and his or her performance in
attaining those objectives. Achievement of these objectives is
measured relative to external forces, internal resources
utilized and overall individual effort. Except with respect to
our chief executive officer and our president and chief
operating officer, individual objectives are based on a variety
of factors, including the achievement of corporate goals. The
individual performance objectives are determined by the
executive officer to whom the named executive officer reports.
In the case of our chief executive officer and our president and
chief operating officer, the individual objectives are reviewed
with our lead independent director and the compensation
committee and are based on the achievement of corporate goals.
For each individual objective, the named executive officers must
accomplish at least 80% of each objective to receive a cash
bonus payment for such objective. If the named executive officer
achieves this threshold, then the individual is eligible to
receive a relative portion of the payout ranging from 0% to 150%
of the individuals target award.
In February 2009, the compensation committee evaluated our 2008
performance against our 2008 corporate goals approved by the
committee. The compensation committee determined that our
overall results were positive, when taking into account our
completion of certain strategic projects in addition to our
established goals. The primary strategic project completed in
2008 was the acquisition of Curacyte Discovery GmbH, which was
not contemplated in our 2008 corporate goals. The committee gave
credit for this accomplishment when the committee reviewed our
2008 performance against our 2008 corporate goals. In addition,
the committee further credited us with the filing of our
HORIZONS-AMI
clinical trial data in the European Union, which was not
anticipated in 2008. The committee determined that we exceeded
our goal for Angiomax revenue and our goal related to global
expansion, primarily due to our European Union marketing
authorization application for ACS being approved two months
ahead of our expected schedule. The compensation committee also
determined that we partially met our CHAMPION enrollment targets
and our earnings per share goal. Finally, the committee
determined that we did not meet our Angiomax ACS sNDA submission
goal and our Cleviprex sales goal, but the compensation
committee awarded us partial credit for the overall Cleviprex
goal since we launched Cleviprex in 2008.
Based on our overall 2008 performance against our 2008 corporate
goals, taking into account our achievement of the additional
goals noted above, the compensation committee determined the
company bonus factor was 75%. As a result, bonus awards for 2008
were generally lower than for 2007 when our bonus factor was
87.5%. As a result, as shown in the table below, the committee
granted cash bonuses for 2008 to the named executive officers
that were less than each named executive officers bonus
target amount.
For the 2008 annual cash bonuses, the compensation committee
calculated the bonuses for our named executive officers by
multiplying the dollar amount of each such officers bonus
target by the company bonus factor. The result was then
allocated 60% for corporate goals and 40% for individual goals.
The dollar amount allocated to the named executive
officers individual goals was then multiplied by such
officers individual performance rating, and the resulting
dollar amount was added to the dollar amount allocated to the
corporate goals. See footnote (2) to the table below for an
example calculation.
Dr. Meanwells 2008 salary was $588,640 and his bonus
target was 75% of his salary, or $441,480. The compensation
committee recognized Dr. Meanwells contributions in
the planning, oversight and direction of
30
our competitive, human and financial strategy in 2008. These
included our overall operating performance, developing and
building our product portfolio, creating and advancing our
international business plan, acquiring human talents and
developing our employees and growth in our financial performance
and in stockholder value. Overall, the compensation committee
determined that Dr. Meanwell exceeded performance
expectations on his individual performance goals with an
individual performance rating of 120%, which was used to
determine his 2008 equity award as described below and the
compensation committee awarded Dr. Meanwell a bonus payment
of $357,599. Dr. Meanwells bonus payment equaled 81%
of his 2008 bonus target.
Mr. Kelleys 2008 salary was $463,500 and his bonus
target was 50% of his salary, or $231,750. The compensation
committee recognized Mr. Kelleys contributions in
improving our operating capabilities, recruiting strong people
and organizing our resources effectively. The compensation
committee also believed that Mr. Kelley had played an
important role in a variety of strategic projects, including
analysis of European opportunities and options. Overall, the
compensation committee determined that Mr. Kelley met
performance expectations on his individual performance goals
with an individual performance rating of 100%. The compensation
committee awarded Mr. Kelley a bonus payment of $173,813.
Mr. Kelleys bonus payment equaled 75% of his 2008
bonus target.
Mr. Sblendorios 2008 salary was $421,875 and his
bonus target was 50% of his salary, or $210,938. The
compensation committee recognized Mr. Sblendorio for
leading and completing the Curacyte Discovery transaction; his
role in the acquisition of Targanta Therapeutics Corporation
acquisition (which acquisition was ultimately completed in
February 2009), his communication efforts with our stockholders,
his role in the area of talent acquisition, such as his
recruitment of new members to strengthen our finance and
business development departments, his effective management of
resources, his leading the evaluations of many business
development projects and his work with Dr. Meanwell to
improve our relationships with investment banks. In considering
Mr. Sblendorios bonus payment, the committee also
recognized Mr. Sblendorios contributions managing our
financial programs. Overall, the compensation committee
determined that Mr. Sblendorio far exceeded performance
expectations on his individual performance goals with an
individual performance rating of 120%. The compensation
committee used its discretion to award Mr. Sblendorio a
bonus of $170,859. Mr. Sblendorios bonus payment
equaled 81% of his bonus target.
Mr. Antinoris 2008 salary was $346,500 and his bonus
target was 40% of his salary, or $138,600. The compensation
committee noted Mr. Antinoris efforts to develop and
focus our government affairs initiatives, including efforts to
restore the term of the principal Angiomax patent, as well as
the management of our ongoing legal affairs and his support of
the establishment of our legal entities in the European Union,
lifecycle management projects and business development projects.
Overall, the compensation committee determined that
Mr. Antinori met performance expectations on his individual
performance goals with an individual performance rating of 100%.
The compensation committee awarded Mr. Antinori a bonus of
$103,950, which equaled 75% of his bonus target.
Ms. Newberrys 2008 salary was $299,250 and her bonus
target was 40% of her salary, or $119,700. The compensation
committee determined that Ms. Newberry did not meet
performance expectations on her individual performance goals
with an individual performance rating of 0%. The compensation
committee awarded Ms. Newberry a bonus of $53,865, which
equaled 45% of her bonus target. Ms. Newberrys
employment with us terminated January 2009.
31
The 2008 salaries, 2008 bonus target percentages and amounts,
the adjusted 2008 bonus target reflecting the companys
bonus factor for 2008 and the actual bonus payments for our
named executive officers are as follows:
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Adjusted
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2008 Bonus
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2008
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2008 Annual
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Target
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2008 Bonus
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Bonus
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Cash Bonus
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Named Executive
Officer
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2008 Salary
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Percentage
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Target
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Target(1)
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Payments(2)
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Clive A. Meanwell
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$
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588,640
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75
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%
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$
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441,480
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$
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331,110
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$
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357,599
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Chief Executive Officer
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John P. Kelley
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$
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463,500
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50
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%
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$
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231,750
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$
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173,813
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$
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173,813
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President and Chief Operating Officer
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Glenn P. Sblendorio
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$
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421,875
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50
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%
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$
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210,938
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$
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158,204
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$
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170,859
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Executive Vice President and Chief Financial Officer
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Paul M. Antinori
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$
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346,500
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40
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%
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$
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138,600
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$
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103,950
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$
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103,950
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Senior Vice President and General Counsel
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Catharine S. Newberry
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$
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299,250
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40
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%
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$
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119,700
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$
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89,775
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$
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53,865
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Former Senior Vice President and Chief Human Strategy Officer
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(1) |
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This column represents the 2008 bonus target, as adjusted based
on the compensation committees determination of a company
bonus factor of 75% of the bonus target, as discussed above. |
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(2) |
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This column represents the actual cash bonus payment made to the
named executive officer. Such amount is based on the company
bonus factor and the individual performance rating of the named
executive officer, calculated as described above. For example,
Dr. Meanwells adjusted bonus target of $331,110 was
allocated $198,666 for corporate targets (60%) and $132,444 for
individual targets (40%). The dollar amount allocated to
individual performance goals, $132,444, was multiplied by his
individual performance rating of 120% and the result, $158,933,
was added to the dollar amount allocated to the corporate
targets, $198,666. |
Stock
Option and Restricted Stock Awards
Our equity award program is the primary vehicle for offering
long-term incentives to our executives, including our named
executive officers. We believe that equity grants provide our
executives with a strong link to our long-term performance,
create an ownership culture and help to align the interests of
our named executive officers and our stockholders. Equity grants
are intended as both a reward for contributing to the long-term
success of our company and an incentive for future performance.
The vesting feature of our equity grants is intended to further
our goal of executive retention by providing an incentive to our
named executive officers to remain in our employ during the
vesting period. In determining the size of equity grants to our
executives, our compensation committee considers comparable
equity awards of executives in our peer group, our company-level
performance, the applicable executives performance, the
amount of equity previously awarded to the executive, the
vesting schedule of such previous awards and the recommendations
of management and consultants to the compensation committee.
The compensation committee typically makes initial stock option
awards to new executives and annual equity grants as part of our
overall compensation program. All equity grants to our named
executive officers are approved by the compensation committee.
The compensation committee reviews all components of the
executives compensation when determining annual equity
awards to ensure that an executives total compensation
conforms to our overall philosophy and objectives. The
compensation committee has an equity compensation policy for the
use of stock options and restricted stock awards. Our equity
compensation philosophy is to reward all employees at the
75th percentile of our peer group for equity compensation.
However, for 2008, the compensation committee reduced the equity
benchmark to the 50th percentile primarily due to our
depleted equity pool. In February 2009, the committee decided to
grant a mix of 25% options and 75% restricted stock to all
employees, including the named executive officers, with the
exception of Dr. Meanwell, who received all restricted
stock.
32
In general, our initial option grants to new named executive
officers vest over 48 months with 25% of the option vesting
12 months after the named executive officers start
date and the remainder of the option vesting in 36 equal monthly
installments. In 2008, no named executive officer was eligible
for an initial option grant. Our annual grants to named
executive officers generally vest in 48 equal monthly
installments commencing one month after the date of the grant.
Vesting and exercise rights cease 90 days after termination
of employment except in the case of death or disability.
In February 2009, we granted all employees, including the named
executive officers, shares of restricted stock as part of their
2008 compensation. We typically grant restricted stock awards at
no cost to the employee. Because the shares have a built-in
value at the time the restricted stock grants are made, we
generally grant significantly fewer shares of restricted stock
than the number of shares underlying stock options we would
grant for a similar purpose. In 2009, the compensation committee
used a valuation method to determine the amount of shares to be
granted. This approach was reflected in grants made to named
executive officers in February 2009, which related to their
respective performances in 2008. Restricted shares vest in
annual increments of 25% over a period of four years, commencing
on the first anniversary of the date of grant.
We do not have any equity ownership guidelines for our named
executive officers.
Stock awards to our named executive officers are typically
granted annually in conjunction with the review of their
individual performance. This review typically occurs at the
regularly scheduled meeting of the compensation committee held
in the first quarter of each year for determination of grants
for the previous year. This allows the compensation committee to
receive audited financial statements of the previous year prior
to making award determinations. Therefore, annual cash bonuses
and equity awards relating to performance during 2008 for all of
our employees, including our named executive officers, were
granted in February 2009. The compensation committee has
established a policy of not approving annual equity grants to
any employees, including named executive officers, at a time
when our company is in possession of material non-public
information. We generally time annual stock option and
restricted stock grants to named executive officers so that such
grants occur three trading days after the release of our
financial results for the previous fiscal year.
In connection with the annual equity awards to our named
executive officers, the compensation committee considered the
75th percentile of our peer group companies in determining
a target aggregate value based on the Black-Scholes valuation
for the total equity awards for each named executive officer.
When determining annual equity awards, the committee used a
similar formula to the one used to determine annual cash
bonuses. In February 2009, the committee calculated the economic
value of the equity awards for each named executive officer by
starting with an amount equal to the value of equity
compensation at the 50th percentile for similarly situated
executives of the companies in our peer group, multiplied by
61%, which reflects both our depleted equity pool and our
performance for 2008, multiplied by the officers
individual performance rating. That amount was then allocated
between options and restricted stock as described above. Our
2009 equity awards were granted effective February 20,
2009, which was three trading days after the release of our 2008
financial results.
In February 2009, the compensation committee approved the
following equity awards to our named executive officers:
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Number of Shares
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Number of Shares of
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Named Executive
Officer
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Underlying Options
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Restricted Stock
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Clive A. Meanwell
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76,738
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John P. Kelley
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16,801
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21,895
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Glenn P. Sblendorio
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16,415
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21,392
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Paul M. Antinori
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9,290
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12,106
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Catharine S. Newberry(1)
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(1) |
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Ms. Newberrys employment with us terminated
January 26, 2009. |
33
Because the equity awards made to our named executive officers
relating to their respective individual performances in 2008
were granted in 2009, these awards have not been included under
the caption, Information About Our Executive
Officers Compensation of Our Executive
Officers.
Benefits
and Other Compensation
We maintain broad-based benefits that are provided to all
employees, including health and dental insurance, life and
disability insurance and a 401(k) plan. Named executive officers
are eligible to participate in all of our employee benefit
plans, in each case on the same basis as other employees. We do
not match employee contributions to our 401(k) plan.
In particular circumstances, we sometimes award cash signing
bonuses when executives first join us. Such cash signing bonuses
typically must be repaid in full if the executive voluntarily
terminates employment with us prior to the first anniversary of
the date of hire. Whether a signing bonus is paid and the amount
of the bonus is determined on a
case-by-case
basis under the specific hiring circumstances. For example, we
will consider paying signing bonuses to compensate for amounts
forfeited by an executive upon terminating prior employment, to
assist with relocation expenses or to create additional
incentive for an executive to join our company in a position
where there is high market demand. For 2008, no named executive
officer was eligible for a cash signing bonus.
We limit the perquisites that we make available to our named
executive officers. Our named executive officers are not
entitled to any benefits that are not otherwise available to all
of our employees. For example, we do not provide pension
arrangements, post-retirement health coverage or similar
benefits to our named executive officers or our employees.
Similarly, our health and insurance plans are the same for all
employees.
Severance
and Change-of-Control Benefits
Pursuant to severance agreements we have entered into with
certain executive officers, including our named executive
officers, and provisions of our 1998 stock incentive plan and
our 2004 plan, our executives are entitled to specified benefits
in the event of the termination of their employment under
specified circumstances, including termination following a
change of control of our company. We have provided more detailed
information about these benefits, along with estimates of their
value under various circumstances, under the caption
Information About Our Executive Officers
Potential Payments Upon Termination or Change of Control
below.
We believe providing these benefits help us compete for
executive talent. We believe that our severance and change of
control benefits are generally in line with severance packages
offered to executives by the companies in our peer group.
Our practice in the case of change-of-control benefits has been
to structure these as double trigger benefits. In
other words, the change of control does not itself trigger
benefits; rather, benefits are paid only if the employment of
the executive is terminated by us or our successor without cause
or by the executive for good reason during a one-year period
after the change of control. We believe a double
trigger maximizes stockholder value because it avoids an
unintended windfall to executives in the event of a friendly
change of control, while still providing executives appropriate
incentives to cooperate in negotiating any potential change of
control in which they believe they may lose their jobs.
Tax
and Accounting Considerations
The Internal Revenue Service, pursuant to Section 162(m) of
the Internal Revenue Code of 1986, as amended, generally
disallows a tax deduction for compensation in excess of
$1.0 million paid to our chief executive officer and to
each other officer (other than our chief executive officer and
our chief financial officer) whose compensation is required to
be reported to our stockholders pursuant to the Exchange Act by
reason of being among the three most highly paid executive
officers. Certain compensation, including qualified
performance-based compensation, will not be subject to the
deduction limit if certain requirements are met. We periodically
review the potential consequences of Section 162(m) and we
generally intend to structure the
34
performance-based portion of our executive compensation, where
feasible, to comply with exemptions in Section 162(m) so
that the compensation remains tax deductible to us. However, the
compensation committee may, in its judgment, authorize
compensation payments that do not comply with the exemptions in
Section 162(m) when it believes that such payments are
appropriate to attract and retain executive talent.
In addition, in determining the size and type of equity awards,
the compensation committee also considered the potential impact
of FAS 123(R).
Our
Current Executive Officers
Below is information about each of our executive officers other
than Clive Meanwell, our Chief Executive Officer, and John
Kelley, our President and Chief Operating Officer. The
information below includes each officers age as of
April 1, 2009, his or her position with us, the length of
time he or she has held each position and his or her business
experience for at least the past five years and their education.
Similar information for Clive Meanwell and John Kelley, who are
also directors, is included under the caption
Proposal One: Election of
Class 3 Directors Other Current
Directors. Our board of directors elects our officers
annually, and officers serve until they resign or we or the
board terminate their position. There are no family
relationships among any of our directors, nominees for director
and executive officers.
GLENN P.
SBLENDORIO
Age: 53
Glenn P. Sblendorio has been our Chief Financial Officer
and Executive Vice President since March 2006. From November
2005 until he joined us, Mr. Sblendorio served as a
consultant to a company in the pharmaceutical industry. Prior to
joining us, Mr. Sblendorio was Executive Vice President and
Chief Financial Officer of Eyetech Pharmaceuticals, Inc. from
February 2002 until it was acquired by OSI Pharmaceuticals, Inc.
in November 2005. From July 2000 to February 2002,
Mr. Sblendorio served as our Senior Vice President of
Business Development. From 1998 to July 2000,
Mr. Sblendorio was the Chief Executive Officer and Managing
Director of MPM Capital Advisors, LLC, an investment bank
specializing in healthcare related transactions.
Mr. Sblendorios pharmaceutical experience also
includes 12 years at Hoffmann-LaRoche, Inc., a
pharmaceutical company, in a variety of senior financial
positions, including V.P. Finance of Roche Molecular Systems and
Head of Finance-Controller for Amgen/Roche Europe.
Mr. Sblendorio currently serves as a director of Amicus
Therapeutics, Inc., a biopharmaceutical company and Chairman of
the Board of NuLens Ltd., a private ophthalmology company.
Mr. Sblendorio received his B.B.A. from Pace University and
his M.B.A. from Fairleigh Dickinson University.
PAUL M.
ANTINORI
Age: 55
Paul M. Antinori has been our General Counsel since May
2002 and a Senior Vice President since September 2006. He also
served as Vice President from August 2004 to August 2006. From
March 1998 to April 2002, Mr. Antinori was General Counsel
and a consultant to Physician Computer Network, Inc., a
healthcare information technology company. Prior to March 1998,
Mr. Antinori was a partner at the law firm of Gibbons, Del
Deo, Dolan, Griffinger & Vecchione in Newark, New
Jersey. Mr. Antinori received his B.A. from Boston College
and his J.D. from the University of Virginia School of Law.
WILLIAM
OCONNOR
Age: 50
William OConnor is our Chief Accounting Officer. He
joined us in April 2006 as our Vice President, Finance and
Controller. From April 2000 to February 2006, he was the Vice
President of Finance for Eyetech Pharmaceuticals, Inc. From 1996
to April 2000, Mr. OConnor worked for Trophix
Pharmaceuticals, Inc., a biotech company that specialized in
pain medications. Mr. OConnor is a certified public
accountant and received a B.S. in accounting from Fairleigh
Dickinson University.
35
KELLI
WATSON-PACICCO
Age: 47
Kelli Watson-Pacicco has been our Senior Vice President,
Global Communications and Human Strategy since November 2007.
She also served as Senior Vice President, Human Strategy from
January 2007 to November 2007. Prior to January 2007,
Ms. Watson-Pacicco held various positions at Pfizer, Inc.
over 19 years including Vice President, Strategic Planning
for the Global Human Resources function. She also led Human
Resources, Strategic Planning and Communications for the
Corporate Affairs division and held a variety of positions in
the Global Manufacturing Group. Ms. Watson-Pacicco holds a
B.A. in sociology/psychology from Hamline University and a M.A.
in industrial relations from the University of Minnesota.
Compensation
of Our Executive Officers
Summary
Compensation
The following table presents summary information for the year
ended December 31, 2008 for our chief executive officer,
our chief financial officer and our three other most highly
compensated executive officers who were serving as executive
officers as of December 31, 2008. We refer to these five
individuals collectively as our named executive
officers.
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Deferred
|
|
All Other
|
|
|
Name and Principal
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Compensation
|
|
|
Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)(1)
|
|
($)(1)
|
|
($)
|
|
Earnings ($)
|
|
($)(2)
|
|
Total ($)
|
|
Clive A. Meanwell,
|
|
|
2008
|
|
|
$
|
588,640
|
|
|
$
|
357,599
|
|
|
$
|
564,655
|
|
|
$
|
1,345,781
|
|
|
|
|
|
|
|
|
|
|
$
|
1,794
|
|
|
$
|
2,858,469
|
|
Chairman and Chief
|
|
|
2007
|
|
|
$
|
566,000
|
|
|
$
|
260,360
|
|
|
$
|
648,526
|
|
|
$
|
1,052,236
|
|
|
|
|
|
|
|
|
|
|
$
|
1,794
|
|
|
$
|
2,528,916
|
|
Executive Officer
|
|
|
2006
|
|
|
$
|
516,000
|
|
|
$
|
387,000
|
|
|
|
|
|
|
$
|
562,410
|
|
|
|
|
|
|
|
|
|
|
$
|
1,170
|
|
|
$
|
1,466,580
|
|
Glenn P. Sblendorio,
|
|
|
2008
|
|
|
$
|
421,875
|
|
|
$
|
170,859
|
|
|
$
|
316,816
|
|
|
$
|
808,371
|
|
|
|
|
|
|
|
|
|
|
$
|
1,794
|
|
|
$
|
1,719,715
|
|
Executive Vice
|
|
|
2007
|
|
|
$
|
375,000
|
|
|
$
|
183,750
|
|
|
$
|
398,617
|
|
|
|
790,805
|
|
|
|
|
|
|
|
|
|
|
$
|
1,780
|
|
|
$
|
1,749,952
|
|
President and Chief
|
|
|
2006
|
|
|
$
|
272,673
|
(3)
|
|
$
|
165,000
|
|
|
$
|
198,908
|
|
|
$
|
514,569
|
|
|
|
|
|
|
|
|
|
|
$
|
1,403
|
|
|
$
|
1,152,554
|
|
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John P. Kelley,
|
|
|
2008
|
|
|
$
|
463,500
|
|
|
$
|
173,813
|
|
|
$
|
241,134
|
|
|
$
|
833,035
|
|
|
|
|
|
|
|
|
|
|
$
|
3,354
|
|
|
$
|
1,714,848
|
|
President and Chief
|
|
|
2007
|
|
|
$
|
450,000
|
|
|
$
|
216,000
|
|
|
$
|
241,252
|
|
|
$
|
684,807
|
|
|
|
|
|
|
|
|
|
|
$
|
1,794
|
|
|
$
|
1,593,853
|
|
Operating Officer
|
|
|
2006
|
|
|
$
|
400,000
|
|
|
$
|
250,000
|
|
|
|
|
|
|
$
|
493,567
|
|
|
|
|
|
|
|
|
|
|
$
|
1,786
|
|
|
$
|
1,145,353
|
|
Paul M. Antinori,
|
|
|
2008
|
|
|
$
|
346,500
|
|
|
$
|
103,950
|
|
|
$
|
43,084
|
|
|
$
|
530,698
|
|
|
|
|
|
|
|
|
|
|
$
|
3,277
|
|
|
$
|
1,027,515
|
|
Senior Vice President
|
|
|
2007
|
|
|
$
|
315,000
|
|
|
$
|
121,275
|
|
|
|
|
|
|
$
|
621,705
|
|
|
|
|
|
|
|
|
|
|
$
|
1,590
|
|
|
$
|
1,059,570
|
|
and General Counsel
|
|
|
2006
|
|
|
$
|
272,333
|
(4)
|
|
$
|
139,200
|
|
|
|
|
|
|
$
|
212,220
|
|
|
|
|
|
|
|
|
|
|
$
|
2,341
|
|
|
$
|
625,117
|
|
Catharine S. Newberry,
|
|
|
2008
|
|
|
$
|
299,250
|
|
|
$
|
53,865
|
|
|
$
|
26,693
|
|
|
$
|
337,871
|
|
|
|
|
|
|
|
|
|
|
$
|
2,814
|
|
|
$
|
720,496
|
|
Former Senior Vice
|
|
|
2007
|
|
|
$
|
285,000
|
|
|
$
|
104,738
|
|
|
|
|
|
|
$
|
434,649
|
|
|
|
|
|
|
|
|
|
|
$
|
2,667
|
|
|
$
|
827,054
|
|
President and Chief
|
|
|
2006
|
|
|
$
|
249,792
|
|
|
$
|
109,000
|
|
|
|
|
|
|
$
|
356,812
|
|
|
|
|
|
|
|
|
|
|
$
|
1,365
|
|
|
$
|
717,945
|
|
Human Strategy Officer(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
|
|
(1) |
|
The amounts in this column represent the dollar amount
recognized for financial statement reporting purposes with
respect to the 2008 fiscal year in accordance with
FAS 123(R), excluding any adjustments for forfeitures
relating to service-based vesting conditions. See Note 2 to
our notes to our consolidated financial statements in our Annual
Report on
Form 10-K
filed on March 2, 2009 for a discussion of all assumptions
we made in determining the FAS 123(R) values of equity
awards. |
|
(2) |
|
The dollar amount in the All Other Compensation
column represents life insurance premium payments made by us on
behalf of the named executive officer for his or her benefit. |
|
(3) |
|
Mr. Sblendorio joined us in March 2006. |
|
(4) |
|
Effective September 1, 2006, Mr. Antinori received a
promotion and base salary increase from $260,000 to $300,000. |
|
(5) |
|
Ms. Newberry joined us in February 2006 and her employment
with us terminated as of January 26, 2009. |
Employment
Arrangements
Clive Meanwell serves as our Chief Executive Officer
pursuant to the terms of an employment agreement dated
September 5, 1996. This agreement renews automatically on a
yearly basis unless either party provides written notice of
non-renewal at least 90 days prior to the expiration of the
then-current term. Pursuant to the terms of the agreement,
Dr. Meanwells annual compensation is determined by
our board of directors. Pursuant to a noncompetition agreement,
Dr. Meanwell has agreed not to compete with us during the
term of his employment and for a period of one year after his
termination. Dr. Meanwell is eligible to receive, at the
discretion of our board of directors, an annual cash bonus
targeted to be 75 percent of his annual base salary,
subject to meeting company and personal performance goals.
John Kelley serves as our Chief Operating Officer and
President pursuant to the terms of a letter agreement dated
December 1, 2004. Mr. Kelleys employment is
at will and his annual compensation is determined by
our board of directors. Mr. Kelley is eligible to receive,
at the discretion of our board of directors, an annual cash
bonus targeted to be 50 percent of his annual base salary,
subject to meeting company and personal performance goals.
Pursuant to a noncompetition agreement, Mr. Kelly has
agreed not to compete with us during the term of his employment
and for a period of one year after his termination.
Glenn Sblendorio serves as our Executive Vice President
and Chief Financial Officer pursuant to the terms of a letter
agreement dated March 3, 2006. Mr. Sblendorios
employment is at will and his annual compensation is
determined by our board of directors. In 2007,
Mr. Sblendorio was eligible to receive, at the discretion
of our board of directors, an annual cash bonus targeted to be
40 percent of his annual base salary, subject to meeting
company and personal performance goals. In January 2008,
Mr. Sblendorio was elevated a grade level for his
performance and, as a result, Mr. Sblendorio is eligible to
receive, at the discretion of our board of directors, an annual
cash bonus targeted to be 50 percent of his annual base
salary, subject to meeting company and personal performance
goals. Pursuant to a noncompetition agreement,
Mr. Sblendorio has agreed not to compete with us during the
term of his employment and for a period of one year after his
termination.
Paul Antinori serves as our Senior Vice President and
General Counsel. Mr. Antinoris employment is at
will and his annual compensation is determined by our
board of directors. Mr. Antinori is eligible to receive, at
the discretion of our board of directors, an annual cash bonus
targeted to be 40 percent of his annual base salary,
subject to meeting company and personal performance goals.
Pursuant to a noncompetition agreement, Mr. Antinori has
agreed not to compete with us during the term of his employment
and for a period of one year after his termination.
Catharine Newberry served as our Senior Vice President
for Human Resources and Chief Human Strategy Officer pursuant to
the terms of a letter agreement dated December 30, 2005.
Ms. Newberrys employment with us was terminated on
January 26, 2009. Pursuant to a noncompetition agreement,
Ms. Newberry has agreed not to compete with us for a period
of one year after her termination.
We have also entered into severance agreements with our current
named executive officers as described below.
37
Potential
Payments Upon Termination or Change of Control
Severance
Agreements
In November 2008, we entered into amended and restated
management severance agreements with certain of our senior
officers, including our named executive officers, in order to
induce each of these officers to maintain his or her continued
commitment to us.
The agreements generally provide for severance pay,
reimbursement of health care premiums, payment of reasonable
outplacement assistance and accelerated stock option vesting in
the event that (i) we terminate the officers
employment without cause, as defined in the agreements, or
(ii) the officer terminates his or her employment for good
reason, as defined in the agreements. If an officers
employment is terminated for cause, no benefits are provided to
the officer under the agreements. These severance agreements
supersede any similar provisions in any employment agreement or
letter agreement we previously entered into with the officer.
The agreements provide as follows:
|
|
|
|
|
Termination prior to a change in control. If
we terminate the employment of the officer without cause, or if
the officer resigns for good reason, before a change in control
event, as defined in the agreements, he or she would be entitled
to severance pay equal to one year of annual base salary, paid
in a lump sum, one year of health care premium reimbursement and
payment of reasonable outplacement assistance (or reimbursement
and/or
payment for a shorter period if the officer commences employment
with a new employer before the end of the one-year period),
payment for any accrued but unused vacation days and one year of
accelerated vesting for options previously granted and
outstanding prior to the termination date. In the case of each
of Clive Meanwell, John Kelley or Glenn Sblendorio under these
circumstances, he would be entitled to severance pay equal to
two years of annual base salary, paid in a lump sum, one year of
health care premium reimbursement and payment of reasonable
outplacement assistance (or reimbursement
and/or
payment for a shorter period if the officer commences employment
with a new employer before the end of the one-year period),
payment for any accrued but unused vacation days and two years
of accelerated vesting for options previously granted and
outstanding prior to the termination date.
|
|
|
|
Termination after a change in control. If we
terminate the employment of the officer without cause, or if the
officer resigns for good reason, during the one year period
following a change in control event, then, in addition to the
severance pay, health care premium reimbursement, payment of
reasonable outplacement assistance and payment for any accrued
but unused vacation days described above, the officer would be
entitled to receive an amount equal to 40 percent of his or
her then current annual base salary instead of any other bonus
payment payable for the year in which termination occurs and
such officers options would be accelerated in full. In the
case of Clive Meanwell under these circumstances, he would be
entitled to receive an amount equal to two times 75 percent
of his then current annual base salary. In the case of either
John Kelley or Glenn Sblendorio under these circumstances, he
would be entitled to receive an amount equal to two times
50 percent of his then current annual base salary.
|
|
|
|
In addition to any other amounts that may be payable to the
officer under the severance agreements, if we terminate the
employment of the officer for any reason, the officer will
receive payment for unreimbursed business expenses incurred
through the termination date, as defined in the agreement and,
except if we terminate the employment of the officer for cause,
for any bonus earned but not yet paid prior to the termination
date.
|
|
|
|
In order to receive any of these benefits, the officer must
deliver a general release in favor of us.
|
On February 19, 2009, we entered into a severance letter
agreement with Catharine Newberry, pursuant to which
Ms. Newberry is entitled to receive the following severance
benefits:
|
|
|
|
|
a lump sum payment equal to one year of her current annual base
salary, less all applicable statutory tax withholdings and
deductions;
|
38
|
|
|
|
|
a lump sum bonus payment in the amount of $53,865 earned in
accordance with our annual cash bonus plan;
|
|
|
|
for the shorter of a period of twelve months after the
termination date or until Ms. Newberry commences employment
with a new employer, reimbursement of COBRA health insurance
premiums actually paid by Ms. Newberry and payment for
reasonable outplacement services; and
|
|
|
|
accelerated vesting of all stock options that Ms. Newberry
held immediately prior to termination which would have vested
within one year after the termination date if Ms. Newberry
had continued to be employed by us during such one-year period.
|
As part of the severance agreement, Ms. Newberry has also
entered into a general release of us, including our affiliates,
successors and assigns for all claims through the date of
termination of her employment. Ms. Newberry remains subject
to the non-compete, non-solicitation, confidentiality and
related provisions of her invention and nondisclosure agreement
and non-competition and non-solicitation agreement with us.
Stock
Option Agreements
The stock option agreements governing options awarded under our
2004 plan to all of our employees provide for accelerated
vesting of 50 percent of an optionholders unvested
options upon such optionholders death or disability
(within the meaning of Section 22(e)(3) of the code). All
of such optionholders vested options are exercisable for a
period of one year following the date of the death or disability
of the optionholder, provided, that the options have not expired
and, in the case of disability, such optionholder has not been
terminated for cause.
The table below reflects the potential payments and benefits to
which the named executive officers would be entitled under the
management severance agreements and stock option agreements with
our named executive officers if the named executive
officers employment with us was terminated for cause or
due to death or disability or the officer resigned for good
reason. The amounts shown in the table below assume that each
termination was effective as of December 31, 2008, and that
all eligibility requirements under the management severance
agreements or stock option agreements were met. The closing
price per share of our common stock on the NASDAQ Global Select
Market on December 31, 2008 was $14.73.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus for
|
|
|
|
|
|
Value of
|
|
Health
|
|
|
|
|
Year of
|
|
Cash
|
|
Vacation
|
|
Accelerated
|
|
and
|
|
|
Name
|
|
Termination
|
|
Severance
|
|
Payout
|
|
Options(1)
|
|
Welfare
|
|
Total(2)
|
|
Clive A. Meanwell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
|
|
|
|
$
|
1,177,280
|
|
|
$
|
11,320
|
|
|
|
|
|
|
$
|
37,204
|
|
|
$
|
1,225,804
|
|
Within One Year After a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
$
|
882,960
|
|
|
$
|
1,177,280
|
|
|
$
|
11,320
|
|
|
|
|
|
|
$
|
37,204
|
|
|
$
|
2,108,764
|
|
Termination due to Death or Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John P. Kelley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
|
|
|
|
$
|
927,000
|
|
|
$
|
8,913
|
|
|
|
|
|
|
$
|
25,465
|
|
|
$
|
961,378
|
|
Within One Year After a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
$
|
463,500
|
|
|
$
|
927,000
|
|
|
$
|
8,913
|
|
|
|
|
|
|
$
|
25,465
|
|
|
$
|
1,424,878
|
|
Termination due to Death or Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus for
|
|
|
|
|
|
Value of
|
|
Health
|
|
|
|
|
Year of
|
|
Cash
|
|
Vacation
|
|
Accelerated
|
|
and
|
|
|
Name
|
|
Termination
|
|
Severance
|
|
Payout
|
|
Options(1)
|
|
Welfare
|
|
Total(2)
|
|
Glenn P. Sblendorio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
|
|
|
|
$
|
843,750
|
|
|
$
|
8,113
|
|
|
|
|
|
|
$
|
37,204
|
|
|
$
|
889,067
|
|
Within One Year After a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
$
|
421,875
|
|
|
$
|
843,750
|
|
|
$
|
8,113
|
|
|
|
|
|
|
$
|
37,204
|
|
|
$
|
1,310,942
|
|
Termination due to Death or Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Antinori
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
|
|
|
|
$
|
346,500
|
|
|
$
|
6,663
|
|
|
|
|
|
|
$
|
12,892
|
|
|
$
|
366,055
|
|
Within One Year After a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
$
|
138,600
|
|
|
$
|
346,500
|
|
|
$
|
6,663
|
|
|
|
|
|
|
$
|
12,892
|
|
|
$
|
504,655
|
|
Termination due to Death or Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catharine S. Newberry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
|
|
|
|
$
|
299,250
|
|
|
$
|
5,755
|
|
|
|
|
|
|
|
|
|
|
$
|
305,005
|
|
Within One Year After a Change of Control:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination without Cause or Resignation for Good Reason
|
|
$
|
119,700
|
|
|
$
|
299,250
|
|
|
$
|
5,755
|
|
|
|
|
|
|
|
|
|
|
$
|
424,705
|
|
Termination due to Death or Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Calculated by multiplying the number of shares subject to
options for which vesting would be accelerated by the difference
between $14.73, the closing price per share of our common stock
on the NASDAQ Global Select Market on December 31, 2008,
and the per share exercise prices for such options. No dollar
amounts have been added to this column because all of the named
executive officers options that would be subject to
accelerated vesting were not in-the-money at December 31,
2008. |
|
(2) |
|
Excludes any payments related to outplacement services, which we
have agreed to pay under the severance agreements. |
40
Grant of
Plan-Based Awards
The following table summarizes information regarding restricted
stock awards and options granted to each of the named executive
officers during the year ended December 31, 2008. Options
granted in 2008 to the named executive officers were made under
our 2004 plan and become exercisable in 48 equal monthly
installments, commencing one month after the vesting
commencement date, which is typically the grant date. All
options were granted with an exercise price equal to the closing
price per share of our common stock on the NASDAQ Global Select
Market on the date of grant. The shares of restricted stock were
also granted under our 2004 plan and vest in annual increments
of 25% over four years commencing on the first anniversary of
the date of grant.
2008
Grants of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
All Other
|
|
|
|
|
|
|
|
|
Awards:
|
|
Option
|
|
Exercise
|
|
Grant Date
|
|
|
|
|
Number of
|
|
Awards:
|
|
or Base
|
|
Fair Value of
|
|
|
|
|
Shares of
|
|
Number of
|
|
Price of
|
|
Stock
|
|
|
|
|
Stock
|
|
Securities
|
|
Option
|
|
and
|
|
|
|
|
or Units
|
|
Underlying
|
|
Awards
|
|
Option
|
Name
|
|
Grant Date
|
|
(#)
|
|
Options (#)
|
|
($/Sh)(1)
|
|
Awards(2)
|
|
Clive A. Meanwell
|
|
|
2/15/08
|
|
|
|
|
|
|
|
200,920
|
(3)
|
|
$
|
19.36
|
|
|
$
|
8.31
|
|
|
|
|
2/15/08
|
|
|
|
21,875
|
(4)
|
|
|
|
|
|
|
|
|
|
$
|
19.36
|
|
Glenn P. Sblendorio
|
|
|
2/15/08
|
|
|
|
|
|
|
|
99,495
|
(3)
|
|
$
|
19.36
|
|
|
$
|
8.31
|
|
|
|
|
2/15/08
|
|
|
|
10,835
|
(4)
|
|
|
|
|
|
|
|
|
|
$
|
19.36
|
|
John P. Kelley
|
|
|
2/15/08
|
|
|
|
|
|
|
|
111,310
|
(3)
|
|
$
|
19.36
|
|
|
$
|
8.31
|
|
|
|
|
2/15/08
|
|
|
|
12,120
|
(4)
|
|
|
|
|
|
|
|
|
|
$
|
19.36
|
|
Paul M. Antinori
|
|
|
2/15/08
|
|
|
|
|
|
|
|
50,690
|
(3)
|
|
$
|
19.36
|
|
|
$
|
8.31
|
|
|
|
|
2/15/08
|
|
|
|
5,520
|
(4)
|
|
|
|
|
|
|
|
|
|
$
|
19.36
|
|
Catharine S. Newberry
|
|
|
2/15/08
|
|
|
|
|
|
|
|
31,390
|
(3)
|
|
$
|
19.36
|
|
|
$
|
8.31
|
|
|
|
|
2/15/08
|
|
|
|
3,420
|
(4)
|
|
|
|
|
|
|
|
|
|
$
|
19.36
|
|
|
|
|
(1) |
|
The exercise price of the stock option awards is equal to the
closing price of our common stock on the grant date reported by
the NASDAQ Global Select Market. |
|
(2) |
|
Based on the fair value of each option on the date of grant
using the Black-Scholes closed-form option-pricing model. |
|
(3) |
|
The options vest in 48 equal monthly installments beginning
March 15, 2008. The options are subject to accelerated
vesting upon a termination without cause or a
resignation for good reason, as each is defined in
our severance agreements. See Potential
Payments Upon Termination or Change of Control. |
|
(4) |
|
The shares of restricted stock vest in annual increments of 25%
over four years commencing on the first anniversary of the date
of grant. |
41
Outstanding
Equity Awards at 2008 Fiscal Year-end
Except as noted in the table below, the options listed in the
table below become exercisable in 48 equal monthly installments,
commencing one month after the grant date. The options expire
ten years after the grant date. The shares of restricted stock
vest in annual increments of 25% over four years commencing on
the first anniversary of the date of grant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Market or
|
|
|
Option Awards
|
|
|
|
|
|
Plan
|
|
Payout
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Value of
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
Market
|
|
Number of
|
|
Unearned
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
Number
|
|
Value of
|
|
Unearned
|
|
Shares,
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
of Shares
|
|
Shares
|
|
Shares,
|
|
Units or
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
or Units
|
|
or Units
|
|
Units or
|
|
Other
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
of Stock
|
|
of Stock
|
|
Other
|
|
Rights
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
That
|
|
that
|
|
Rights that
|
|
that
|
|
|
Options
|
|
Options
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
|
Exercisable
|
|
Unexercisable
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)(5)
|
|
(#)
|
|
($)
|
|
Clive A. Meanwell
|
|
|
237,000
|
|
|
|
|
|
|
|
|
|
|
$
|
4.79
|
|
|
|
5/15/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
$
|
26.00
|
|
|
|
12/12/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
$
|
24.25
|
|
|
|
12/15/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
$
|
10.11
|
|
|
|
12/11/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123,000
|
|
|
|
|
|
|
|
|
|
|
$
|
15.50
|
|
|
|
12/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
28.01
|
|
|
|
12/23/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
28.02
|
|
|
|
12/14/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115,625
|
|
|
|
34,375
|
|
|
|
|
|
|
$
|
18.27
|
|
|
|
11/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,833
|
|
|
|
54,167
|
|
|
|
|
|
|
$
|
28.60
|
|
|
|
2/16/2017
|
|
|
|
37,500
|
|
|
$
|
552,375
|
|
|
|
|
|
|
|
|
|
|
|
|
41,858
|
|
|
|
159,062
|
|
|
|
|
|
|
$
|
19.36
|
|
|
|
2/15/2018
|
|
|
|
21,875
|
|
|
$
|
322,219
|
|
|
|
|
|
|
|
|
|
Glenn P. Sblendorio
|
|
|
103,125
|
(2)
|
|
|
46,875
|
|
|
|
|
|
|
$
|
20.11
|
|
|
|
3/3/2016
|
|
|
|
12,500
|
|
|
$
|
184,125
|
|
|
|
|
|
|
|
|
|
|
|
|
18,333
|
|
|
|
21,667
|
|
|
|
|
|
|
$
|
28.60
|
|
|
|
2/16/2017
|
|
|
|
13,950
|
|
|
$
|
205,484
|
|
|
|
|
|
|
|
|
|
|
|
|
8,854
|
|
|
|
16,146
|
|
|
|
|
|
|
$
|
17.04
|
|
|
|
7/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,728
|
|
|
|
78,767
|
|
|
|
|
|
|
$
|
19.36
|
|
|
|
2/15/2018
|
|
|
|
10,835
|
|
|
$
|
159,600
|
|
|
|
|
|
|
|
|
|
John P. Kelley
|
|
|
225,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
25.25
|
|
|
|
12/1/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,625
|
|
|
|
34,375
|
|
|
|
|
|
|
$
|
18.27
|
|
|
|
11/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,500
|
(3)
|
|
|
|
|
|
|
|
|
|
$
|
18.27
|
|
|
|
11/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,333
|
|
|
|
21,667
|
|
|
|
|
|
|
$
|
28.60
|
|
|
|
2/16/2017
|
|
|
|
13,950
|
|
|
$
|
205,484
|
|
|
|
|
|
|
|
|
|
|
|
|
7,083
|
|
|
|
12,917
|
|
|
|
|
|
|
$
|
17.04
|
|
|
|
7/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,190
|
|
|
|
88,120
|
|
|
|
|
|
|
$
|
19.36
|
|
|
|
2/15/2018
|
|
|
|
12,120
|
|
|
$
|
178,528
|
|
|
|
|
|
|
|
|
|
Paul M. Antinori
|
|
|
23,750
|
|
|
|
|
|
|
|
|
|
|
$
|
9.13
|
|
|
|
5/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
|
|
|
|
|
|
|
$
|
15.50
|
|
|
|
2/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
27.81
|
|
|
|
12/19/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
23.77
|
|
|
|
8/3/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,500
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
28.02
|
|
|
|
12/14/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,125
|
|
|
|
6,875
|
|
|
|
|
|
|
$
|
18.27
|
|
|
|
11/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
(3)
|
|
|
|
|
|
|
|
|
|
$
|
18.27
|
|
|
|
11/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,167
|
|
|
|
20,833
|
|
|
|
|
|
|
$
|
22.47
|
|
|
|
8/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,917
|
|
|
|
27,083
|
|
|
|
|
|
|
$
|
28.60
|
|
|
|
2/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,771
|
|
|
|
3,229
|
|
|
|
|
|
|
$
|
17.04
|
|
|
|
7/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,560
|
|
|
|
40,130
|
|
|
|
|
|
|
|
19.36
|
|
|
|
2/15/2018
|
|
|
|
5,520
|
|
|
$
|
81,310
|
|
|
|
|
|
|
|
|
|
Catharine S. Newberry
|
|
|
70,833
|
(4)
|
|
|
29,167
|
|
|
|
|
|
|
$
|
19.09
|
|
|
|
2/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,458
|
|
|
|
13,542
|
|
|
|
|
|
|
$
|
28.60
|
|
|
|
2/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,540
|
|
|
|
24,850
|
|
|
|
|
|
|
$
|
19.360
|
|
|
|
2/15/2018
|
|
|
|
3,420
|
|
|
$
|
50,377
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
On December 23, 2005, our board of directors approved the
full acceleration of the vesting of this option. As a condition
of this acceleration, the option holder entered enter into a
lock-up
agreement between the option holder and us under which the
option holder has agreed not to sell, transfer, pledge or
otherwise dispose of the shares underlying the option, except as
set forth in the
lock-up
agreement. The
lock-up will
expire on the date on which the exercise would have been
permitted under the pre-acceleration vesting |
42
|
|
|
|
|
schedule set forth in the option agreement. In addition, the
lock-up will
expire if the option holder ceases to be employed by us for any
reason or upon consummation of a change of control
event as defined in our 2004 plan. |
|
(2) |
|
The option vests as follows: 25% of the shares underlying the
option vested on March 3, 2007 (the one-year anniversary of
the vesting commencement date), and the remainder vests in 36
equal monthly installments beginning April 3, 2007. The
option is subject to accelerated vesting upon a termination
without cause or a resignation for good
reason, as each is defined in our severance agreements.
See Potential Payments Upon Termination or
Change of Control. |
|
(3) |
|
This option was vested and fully exercisable on the grant date,
but is subject to the terms of a
lock-up
agreement between the option holder and us under which the
option holder has agreed not to sell, transfer, pledge or
otherwise dispose of the shares underlying the option, except as
set forth in the
lock-up
agreement. The
lock-up will
expire with respect to one-forty eighth (1/48th) of the original
number of shares underlying the option on the 30th day of each
calendar month, beginning on December 30, 2005. In
addition, the lock up will expire if the option holder ceases to
be employed by us for any reason or upon consummation of a
change of control event as defined in our 2004 plan. |
|
(4) |
|
The option vests as follows: 25% of the shares underlying the
option vested on February 1, 2007 (the one-year anniversary
of the vesting commencement date), and the remainder vest in 36
equal monthly installments beginning March 1, 2007. The
option is subject to accelerated vesting upon a termination
without cause or a resignation for good
reason, as each is defined in our severance agreements.
See Potential Payments Upon Termination or
Change of Control. |
|
(5) |
|
Calculated by multiplying the number of unvested shares by
$14.73, the closing price per share of our common stock on the
NASDAQ Global Select Market on December 31, 2008. |
Option
Exercises and Stock Vested in 2008
The following table sets forth information regarding options
exercised by the named executive officers during the fiscal year
ended December 31, 2008. Amounts shown under the column
Value Realized on Exercise represent the difference
between the option exercise price and the closing sale price of
our common stock on the date of exercise multiplied by the
number of shares for which the option was exercised.
The amounts shown under the column Value Realized on
Vesting represent the number of shares of restricted stock
that vested multiplied by the closing sale price of our common
stock on the vesting date.
Option
Exercises and Stock Vested in Fiscal 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
|
Number of
|
|
|
|
Stock Awards
|
|
|
Shares
|
|
|
|
Number of
|
|
|
|
|
Acquired on
|
|
Value Realized
|
|
Shares Acquired
|
|
Value Realized
|
Name
|
|
Exercise (#)
|
|
on Exercise ($)
|
|
on Vesting (#)
|
|
on Vesting ($)
|
|
Clive A. Meanwell
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
$
|
242,000
|
|
Glenn P. Sblendorio
|
|
|
|
|
|
|
|
|
|
|
10,835
|
|
|
$
|
204,962
|
|
John P. Kelley
|
|
|
|
|
|
|
|
|
|
$
|
4,650
|
|
|
$
|
90,024
|
|
Catharine S. Newberry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Antinori
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides information, as of
December 31, 2008, about the securities authorized for
issuance under:
|
|
|
|
|
our 1998 stock incentive plan;
|
|
|
|
our ESPP;
|
43
|
|
|
|
|
our 2000 outside director stock option plan;
|
|
|
|
our 2001 non-officer,
non-director
stock incentive plan, or 2001 plan; and
|
|
|
|
our 2004 plan.
|
This table excludes 1,300,000 shares issuable under the
2009 equity inducement plan, or 2009 plan, which was adopted by
our board of directors on February 10, 2009 and has not
been approved by our shareholders.
The information below is categorized according to whether or not
the equity plan was previously approved by stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
|
|
|
|
|
|
Available for
|
|
|
|
Number of
|
|
|
|
|
|
Future Issuance
|
|
|
|
Securities to be
|
|
|
|
|
|
Under Equity
|
|
|
|
Issued upon
|
|
|
Weighted-Average
|
|
|
Compensation Plans
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
(Excluding Securities
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Reflected in Column
|
|
Plan Category
|
|
Options
|
|
|
Options
|
|
|
(a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
10,113,080
|
(1)(2)
|
|
$
|
21.13
|
|
|
|
2,652,866
|
(3)
|
Equity compensation plans not approved by security holders
|
|
|
832,401
|
(4)
|
|
$
|
17.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
10,945,481
|
|
|
$
|
20.88
|
|
|
|
2,652,866
|
(3)
|
|
|
|
(1) |
|
Includes shares of common stock issuable under our 1998 stock
incentive plan, 2004 plan and 2000 outside director stock option
plan. |
|
(2) |
|
Excludes shares issuable at the end of the then-current offering
period ending February 27, 2008 under our ESPP. |
|
(3) |
|
Includes shares available for issuance as of December 31,
2008 under our ESPP plan (which includes 80,467 shares that
were subsequently issued on February 27, 2009 at the close
of the then-current offering period. This amount excludes the
additional 300,000 shares that would be available for
issuance if proposal two to amend our ESPP is approved at this
annual meeting. |
|
(4) |
|
Consists of shares of common stock issuable under our 2001
non-officer,
non-director
stock incentive plan and our 2007 equity inducement plan. |
2009
Equity Inducement Plan
In February 2009, our board of directors adopted the 2009 plan,
which provides for the grant of stock options, restricted stock
awards, stock appreciation rights and other stock based awards
to any person who (a) was not previously our employee or
director or (b) is commencing employment with us following
a bona fide period of non-employment by us, as an inducement
material to the individual entering into employment with us. The
purpose of the 2009 plan is to advance the interests of our
stockholders by enhancing our ability to attract, retain and
motivate persons who are expected to make important
contributions to us and providing such persons with equity
ownership opportunities that are intended to better align their
interests with those of our stockholders. The 2009 plan is
administered by our compensation committee, which has the
authority to grant awards under the 2009 plan. Under the 2009
plan, we are authorized to issue up to 1,500,000 shares of
common stock, subject to adjustment in the event of stock splits
and other similar events, pursuant to awards granted under the
2009 plan. Options granted under the 2009 plan generally have a
10-year term
and vest 25% one year after grant and the remaining options vest
in equal monthly installments over a three-year period. The 2009
plan will terminate in May 2010.
44
2001
Non-Officer,
Non-Director
Stock Incentive Plan
In May 2001, our board of directors approved the 2001 plan,
which provided for the grant of non-statutory stock options to
our employees, consultants and advisors, including individuals
who accepted an offer of employment, other than those employees
who were our officers or directors. The 2001 plan provided for
the issuance of up to 1,250,000 shares of common stock.
Shares awarded under the 2001 plan that were subsequently
cancelled were available to be granted again under the 2001
plan. Our board of directors delegated its authority under the
2001 plan to our compensation committee, which administered the
2001 plan, including granting options under the 2001 plan. In
addition, pursuant to the terms of the 2001 plan, our board of
directors delegated to our chief executive officer limited
authority to grant stock options to employees without further
action by our board of directors or our compensation committee.
Options granted under the 2001 plan generally have a
10-year term
and commence vesting one year after grant and vest in equal
monthly installments over a three-year period. We ceased making
grants under the 2001 plan following adoption of an amendment to
the 2004 plan at our annual stockholders meeting on
May 25, 2006.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our directors, executive officers and holders of more
than ten percent of our common stock to file with the SEC
initial reports of ownership and reports of changes in ownership
of common stock and other equity securities. Based solely on our
review of copies of reports filed by the reporting persons
furnished to us, or written representations from reporting
persons, we believe that from January 1, 2008 to the date
of this proxy statement, the reporting persons complied with all
Section 16(a) filing requirements with the exception of one
Form 4 filed on January 30, 2009, which was not filed
on a timely basis to report a disposition by Catharine Newberry
of 3,420 shares of restricted stock on January 26,
2009.
Our board hopes that stockholders will attend the meeting.
Whether or not you plan to attend, you are urged to complete,
date, sign and return the enclosed proxy in the accompanying
envelope. Prompt response will greatly facilitate arrangements
for the meeting and your cooperation will be appreciated.
Stockholders who attend the meeting may vote their stock
personally.
By
order of
the Board of Directors,
Paul M. Antinori
Secretary
April 30, 2009
45
Appendix I
THE MEDICINES COMPANY
2000 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 2000 Employee Stock Purchase Plan of The
Medicines Company.
1. PURPOSE. The purpose of the Plan is to provide employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated
payroll deductions. It is the intention of the Company to have the Plan qualify as an Employee
Stock Purchase Plan under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in
a manner consistent with the requirements of that section of the Code.
2. DEFINITIONS.
a. BOARD shall mean the Board of Directors of the Company.
b. CODE shall mean the Internal Revenue Code of 1986, as amended.
c. COMMON STOCK shall mean the Common Stock of the Company.
d. COMPANY shall mean The Medicines Company and any Designated Subsidiary of the Company.
e. COMPENSATION means the amount of money reportable on an Employees Federal Income Tax
Withholding Statement (Form W-2) before any withholdings for health insurance or under a Section
401(k), 125, 129 or similar plan, including without limitation, salary, wages, overtime, shift
differentials, bonuses and incentive compensation, but excluding third party sick or disability
pay, allowances and reimbursements for expenses such as relocation allowances or travel expenses,
whether specifically designated as such or designated as signing bonuses, income or gains
attributable to restricted stock, stock options, stock appreciation rights or other similar equity
based compensation, imputed income for non cash items, such as life insurance premiums, and similar
items, whether or not specifically itemized on the Form W-2.
f. DESIGNATED SUBSIDIARY shall mean any Subsidiary which has been designated by the Board
from time to time in its sole discretion as eligible to participate in the Plan.
g. EMPLOYEE shall mean any individual who is an employee of the Company for tax purposes
whose customary employment with the Company is more than five (5) months in any calendar year. For
purposes of the Plan, the employment relationship shall be treated as continuing intact while the
individual is on sick leave or other bona fide leave of absence approved by the Company. If a sick
leave or other leave of absence exceeds 90 days and the individuals right to reemployment is not
guaranteed either by statute or by contract, the individuals employment relationship with the
Company shall be deemed to have terminated on the 91st day of such leave.
h. ENROLLMENT DATE shall mean the first day of each Offering Period.
i. EXERCISE DATE shall mean the last Trading Day of each Offering Period.
1
j. FAIR MARKET VALUE shall mean the value of the Common Stock on any given date of
determination, determined as follows:
(1) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation The Nasdaq National Market or The Nasdaq Small Cap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system on the date of
such determination, as reported in The Wall Street Journal or such other source as the Board deems
reliable; or
(2) If the Common Stock is regularly quoted on the over-the- counter market, its Fair Market
Value shall be the mean of the closing bid and asked price for such stock as quoted on such market
on the date of such determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable; or
(3) In the absence of an established market for the Common Stock, the Fair Market Value of the
Common Stock shall be determined in good faith by the Board.
k. OFFERING PERIODS shall mean the periods of approximately six (6) months during which
payroll deductions will be made and held for the purchase of Common Stock at the end of the
Offering Period, commencing on the first Trading Day on or after September 1 and March 1 of each
year and terminating on the last Trading Day in the periods ending six (6) months later; provided,
however, that the first Offering Period under the Plan shall commence with the first Trading Day of
the month first commencing after the date on which the Common Stock is first traded on the Nasdaq
National Market (such date referred to as the First Offering Commencement Date); and provided
further that if the number of days between the date the Common Stock is first traded and the First
Offering Commencement Date is less than 15 days, then the first Offering Period shall commence on
the first Trading Day of the following month. The duration and timing of Offering Periods may be
changed pursuant to Section 4 of this Plan.
l. PLAN shall mean this Employee Stock Purchase Plan.
m. PURCHASE PRICE shall mean eighty-five percent (85%) of the Fair Market Value of a share
of Common Stock on the Enrollment Date on an Offering Period or on the Exercise Date for such
Offering Period, whichever is lower.
n. RESERVES shall mean the number of shares of Common Stock covered by each outstanding
option under the Plan which has not yet been exercised and the number of shares of Common Stock
which have been authorized for issuance under the Plan but not yet placed under option.
o. SUBSIDIARY shall mean a corporation, partnership, limited liability company or similar
entity, whether domestic or foreign, of which not less than 50% of the voting interests are held by
the Company or a Subsidiary, whether or not such entity now exists or is hereafter organized or
acquired by the Company or a Subsidiary.
p. TRADING DAY shall mean a day on which the established stock exchange, the national market
system or the over-the-counter market on which the Common Stock is traded is open for trading.
3. ELIGIBILITY.
-2-
a. Any Employee who shall be employed by the Company at least seven (7) calendar days prior to
a given Enrollment Date shall be eligible to participate in the Offering Period commencing on such
Enrollment Date.
b. Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an
option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any
other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the
Code) would own capital stock of the Company and/or hold outstanding options to purchase such stock
possessing five percent (5%) or more of the total combined voting power or value of all classes of
the capital stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights
to purchase stock under all employee stock purchase plans of the Company and its Subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined
at the Fair Market Value of a share of Common Stock at the time such option is granted) for each
calendar year in which such option is outstanding at any time. In the event that an Employee may
not be granted an option under the Plan because of the foregoing restrictions, the Employee shall
be granted an option to purchase the maximum number of shares that would not violate the foregoing
restrictions.
4. OFFERING PERIODS AND PURCHASE PERIODS. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with respect to future
offerings without stockholder approval if such change is announced at least five (5) days prior to
the scheduled beginning of the Offering Period to be affected thereafter.
5. PARTICIPATION.
a. An eligible Employee may become a participant in the Plan by completing a subscription
agreement in the form of EXHIBIT A or such other form as the Company may deem satisfactory and
filing it with the Companys payroll office or such other office as the Company may direct prior to
the Enrollment Date for the applicable Offering Period.
b. Payroll deductions for a participant shall commence on the first payroll following the
Enrollment Date for the applicable Offering Period and shall end on the last payroll in such
Offering Period, unless sooner terminated by the participant as provided in Section 9 hereof.
6. PAYROLL DEDUCTIONS.
a. At the time a participant files his or her subscription agreement, he or she shall elect to
have payroll deductions made on each payday during the Offering Period in an amount not exceeding
ten percent (10%) of the Compensation which he or she receives on each payday during the Offering
Period.
b. All payroll deductions made for a participant shall be credited to his or her account under
the Plan and shall be withheld in whole percentages only. A participant may not make any additional
payments into such account.
c. A participant may discontinue his or her participation in the Plan as provided in Section 9
hereof, or may increase or decrease the rate of his or her payroll deductions to not more than ten
percent (10%) or less than zero percent (0%) not more than one (1) time during each Offering Period
by completing or filing with the Company a new subscription agreement authorizing such change in
payroll deduction rate. The Board may, in its discretion, increase or decrease the number of
participation rate changes that may be made by a participant during any Offering Period. The change
in rate shall be effective with the first full payroll period following the fifth (5th) business
day after the Companys
receipt of the new subscription agreement. A participants subscription agreement shall remain
in effect for successive Offering Periods unless terminated as provided in Section 9 hereof.
-3-
d. At the time the option is exercised, in whole or in part, or at the time any of the
Companys Common Stock issued under the Plan is disposed of, the participant must make adequate
provision for the Companys federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At any time, the
Company may, but shall not be obligated to, withhold from the participants compensation the amount
necessary for the Company to meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.
7. GRANT OF OPTION. On the Enrollment Date for each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase (at the applicable
Purchase Price) up to a whole number of shares of the Companys Common Stock (the Option Shares)
determined by multiplying $2,083 by the number of full months in the Offering Period and dividing
the result by the Fair Market Value of a share of Common Stock on the Enrollment Date (subject to
any adjustment pursuant to Section 16), and provided that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 9 hereof.
The option shall expire on the last day of the Offering Period.
8. EXERCISE OF OPTION. Unless a participant withdraws from the Plan as provided in Section 9
hereof, his or her option for the purchase of shares shall be exercised automatically on the
Exercise Date applicable to the particular Offering Period, and a number of full shares not
exceeding the number of shares as to which such participants option is exercisable on such
Exercise Date shall be purchased for such participant at the applicable Purchase Price with the
accumulated payroll deductions in his or her account. No fractional shares shall be purchased. Any
balance remaining in the participants payroll deduction account after such Exercise Date shall be
automatically refunded to the participant, except that any balance that is less than the Purchase
Price of one share of Common Stock will be carried forward into the participants payroll deduction
account for the following Offering Period, unless the participant elects not to participate in the
following Offering Period under the Plan, in which case the balance in the participants account
shall be refunded. During a participants lifetime, a participants option to purchase shares
hereunder is exercisable only by him or her.
9. WITHDRAWAL.
a. A participant may withdraw all but not less than all the payroll deductions credited to his
or her account and not yet used to exercise his or her option under the Plan at any time by giving
written notice to the Company in the form of EXHIBIT B to this Plan; provided that no Employee may
withdraw his or her payroll deductions less than ten (10) Trading Days prior to an Exercise Date.
All of the participants payroll deductions credited to his or her account shall be paid to such
participant promptly after receipt of notice of withdrawal and such participants option for the
Offering Period shall be automatically terminated upon receipt of such notice, and no further
payroll deductions from such participant for the purchase of shares shall be made for such Offering
Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at
the beginning of the succeeding Offering Period unless the participant delivers to the Company a
new subscription agreement.
b. A participants withdrawal from an Offering Period shall not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods.
-4-
10. TERMINATION OF EMPLOYMENT. Upon a participants ceasing to be an Employee, for any reason,
he or she shall be deemed to have elected to withdraw from the Plan, such participants option
shall be automatically terminated and the accumulated payroll deductions credited to such
participants account during the Offering Period but not yet used to exercise his or her option
shall be returned to such participant or, in the case of his or her death, to the executor or
administrator of the Employees estate or if no such executor or administrator has been appointed
to the knowledge of the Company, to such other person(s) as the Company may, in its discretion,
designate. If, prior to the last day of the Offering Period, the Designated Subsidiary by which an
Employee is employed shall cease to be a Subsidiary of the Company, or if the Employee is
transferred to a Subsidiary of the Company that is not a Designated Subsidiary, the Employee shall
be deemed to have terminated employment for the purposes of this Plan.
11. INTEREST. No interest shall accrue on the payroll deductions of a participant in the
Plan.
12. STOCK.
a. Subject to adjustment upon changes in capitalization of the Company as provided in Section
16 hereof, the maximum number of shares of the Companys Common Stock which shall be made available
for sale under the Plan shall be 805,500 shares. If, on a given Exercise Date, the number of shares
with respect to which options are to be exercised exceeds the number of shares then available under
the Plan, the Company shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.
b. The participant shall have no interest or voting right in shares covered by his or her
option until such option has been exercised.
13. ADMINISTRATION. The Plan shall be administered by the Board or a committee of members of
the Board appointed by the Board. The Board or its committee shall have full and exclusive
discretionary authority to construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent permitted by law, be
final and binding upon all parties.
14. TRANSFERABILITY. Neither payroll deductions credited to a participants account nor any
rights with regard to the exercise of an option or to receive shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws
of descent and distribution by the participant). Any such attempt at assignment, transfer, pledge
or other disposition shall be without effect, except that the Company may treat such act as an
election to withdraw funds from an Offering Period in accordance with Section 9 hereof.
15. USE OF FUNDS. All payroll deductions received or held by the Company under the Plan may be
used by the Company for any corporate purpose, and the Company shall not be obligated to segregate
such payroll deductions.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION, MERGER OR ASSET
SALE.
a. CHANGES IN CAPITALIZATION. Subject to any required action by the stockholders of the
Company, the maximum number of shares of Common Stock available for sale under the Plan, the
Reserves, the maximum number of shares each participant may purchase during each Offering Period
(pursuant to Section 7), as well as the price per share and the number of shares of
Common Stock covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock. Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
-5-
b. DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or liquidation of the
Company, the Board shall shorten any Offering Period then in progress by setting a new Exercise
Date (the NEW EXERCISE DATE), and such Offering Period shall terminate on the New Exercise Date.
The New Exercise Date shall be before the date of the Companys proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten (10) days prior to
the New Exercise Date, that the Exercise Date for the participants option has been changed to the
New Exercise Date and that the participants option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as
provided in Section 9 hereof.
c. MERGER OR ASSET SALE. If the Company shall at any time merge or consolidate with another
corporation and the holders of the capital stock of the Company immediately prior to such merger or
consolidation continue to hold at least sixty percent (60%) by voting power of the capital stock of
the surviving corporation (Continuity of Control), the holder of each option then outstanding
will thereafter be entitled to receive at the next Exercise Date upon the exercise of such option
for each share as to which such option shall be exercised the securities or property which a holder
of one share of Common Stock was entitled to upon and at the time of such merger or consolidation,
and the Board shall take such steps in connection with such merger or consolidation as the Board
shall deem necessary to assure that the provisions of Section 16(a) shall thereafter be applicable,
as nearly as reasonably may be, in relation to the said securities or property as to which such
holder of such option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into another corporation
which does not involve Continuity of Control, or which involves a sale of all or substantially all
of the assets of the Company (an Acquisition), while unexercised options remain outstanding under
the Plan, all options outstanding as of the effective date of the Acquisition shall be deemed
assumed or substituted for and each holder of an outstanding option shall be entitled, upon
exercise of such option, to receive in lieu of shares of Common Stock, shares of such stock or
other securities as the holders of shares of Common Stock received pursuant to the terms of the
Acquisition. Notwithstanding the foregoing, in the event that the acquiring or succeeding
corporation (or an affiliate thereof) does not agree to assume or substitute for the options, then
the Board shall shorten any Offering Period then in progress by setting a New Exercise Date, and
such Offering Period then in progress shall terminate on the New Exercise Date. The New Exercise
Date shall be before the effective date of the Acquisition. The Board shall notify each participant
in writing, at least ten (10) days prior to the New Exercise Date, that the Exercise Date for the
participants option has been changed to the New Exercise Date and that the participants option
shall be exercised automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 9 hereof.
17. AMENDMENT OR TERMINATION.
a. The Board of Directors of the Company may at any time and for any reason terminate or amend
the Plan. Except as provided in Section 16 hereof, no such termination can affect options
previously granted, provided that an Offering Period may be terminated by the Board of Directors if
the Board determines that the termination of the Plan is in the best interests of the Company and
its stockholders, and upon termination of the Plan all amounts in the accounts of participating
employees shall be promptly refunded. Except as provided in Section 16 hereof, no amendment may
make any change in any option theretofore granted which adversely affects the rights of any
participant without the consent of the participant. To the extent necessary to comply with Section
423 of the Code (or any successor rule or provision or any other applicable law, regulation or
stock exchange rule), if applicable, the Company shall obtain stockholder approval in such a manner
and to such a degree as required.
-6-
b. Without stockholder consent and without regard to whether any participant rights may be
considered to have been adversely affected, the Board (or its committee) shall be entitled to
change the Offering Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by
a participant in order to adjust for delays or mistakes in the Companys processing of properly
completed withholding elections, establish reasonable waiting and adjustment periods and/or
accounting and crediting procedures to ensure that amounts applied toward the purchase of Common
Stock for each participant properly correspond with amounts withheld from the participants
Compensation, and establish such other limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent with the Plan.
18. NOTICES. All notices or other communications by a participant to the Company under or in
connection with the Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.
19. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with respect to an option
unless the exercise of such option and the issuance and delivery of such shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the person exercising
such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
20. GOVERNMENTAL REGULATIONS. The Companys obligation to sell and deliver Common Stock under
this Plan is subject to listing on an established stock exchange or quotation on a national market
system or an over-the-counter market (to the extent the Common Stock is then so listed or quoted)
and the approval of all governmental authorities required in connection with the authorization,
issuance or sale of such stock.
21. GOVERNING LAW. The Plan shall be governed by Massachusetts law except to the extent that
such law is preempted by federal law.
22. SOURCE OF SHARES. Shares may be issued upon exercise of an option from authorized but
unissued Common Stock, from shares held in the treasury of the Company, or from any other proper
source.
-7-
23. NOTIFICATION UPON SALE OF SHARES. Each Employee agrees, by entering the Plan, to promptly
give the Company notice of any disposition of shares purchased under the Plan where such
disposition occurs within two years after the date of grant of the option pursuant to which such
shares were purchased.
24. EFFECTIVE DATE. The Plan shall take effect upon the date of the Companys initial public
offering of its equity securities registered on Form S-1 with the Securities and Exchange
Commission, subject to approval by the stockholders of the Company. It shall continue in effect for
a term of ten (10) years unless sooner terminated under Section 17 hereof.
-8-
EXHIBIT A
THE MEDICINES COMPANY
2000 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
Original Application Enrollment Date: Change in
Payroll Deduction Rate (Complete only Section 2 and date and sign).
1. hereby elects to participate in T
he Medicines Company 2000
Employee Stock Purchase Plan (the EMPLOYEE STOCK PURCHASE PLAN) and subscribes to purchase shares
of the Companys Common Stock in accordance with this Subscription Agreement and the Employee Stock
Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of ___% of my
Compensation on each payday (not to exceed ten percent (10%)) during the Offering Period in
accordance with the Employee Stock Purchase Plan. (Please note that no fractional percentages are
permitted.)
3. I understand that said payroll deductions shall be accumulated for the purchase of shares
of Common Stock at the applicable Purchase Price determined in accordance with the Employee Stock
Purchase Plan. I understand that if I do not withdraw from an Offering Period, any accumulated
payroll deductions will be used to automatically exercise my option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I understand that my
participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the
Plan.
5. I understand that if I dispose of any shares received by me pursuant to the Plan within two
years after the Enrollment Date (the first day of the Offering Period during which I purchased such
shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in an amount equal to the excess of
the fair market value of the shares at the time such shares were purchased by me over the price
which I paid for the shares. I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS AFTER
THE DATE OF ANY DISPOSITION OF MY SHARES AND I WILL MAKE ADEQUATE PROVISION FOR FEDERAL, STATE OR
OTHER TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON THE DISPOSITION OF THE COMMON STOCK.
The Company may, but will not be obligated to, withhold from my compensation the amount necessary
to meet any applicable withholding obligation including any withholding necessary to make available
to the Company any tax deductions or benefits attributable to sale or early disposition of Common
Stock by me.
6. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan. The
effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the
Employee Stock Purchase Plan.
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NAME: (Please Print) |
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Address |
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Employees Social |
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Security Number: |
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Employees Address:
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I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING
PERIODS UNLESS TERMINATED BY ME.
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Dated: |
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Signature of Employee
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Spouses Signature (If beneficiary
other than Spouse)
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EXHIBIT B
THE MEDICINES COMPANY
2000 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of The Medicines Company 2000 Employee
Stock Purchase Plan which began on , 2000 (the ENROLLMENT DATE) hereby notifies
the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the
Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned understands and agrees
that his or her option for such Offering Period will be automatically terminated. The undersigned
understands further that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate in succeeding
Offering Periods.
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Name and Address of Participant: |
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Signature: |
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Date: |
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THE
MEDICINES COMPANY
Proxy for
the Annual Meeting of Stockholders To Be Held May 28,
2009
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby revoke(s) all prior proxies and
appoint(s) Clive A. Meanwell, John P. Kelley and Glenn P.
Sblendorio (the proxy holders), and each of them,
attorneys of the undersigned, with full power of substitution in
them and each of them, for and in the name(s) of the undersigned
to (1) attend the Annual Meeting of Stockholders (the
Meeting) of The Medicines Company (the
Company) to be held at the principal executive
offices of the Company, 8 Sylvan Way, Parsippany, New Jersey
07054, at 10:00 a.m. (local time), on Thursday,
May 28, 2009, and any adjourned sessions thereof, and
(2) vote and otherwise act upon the following matters in
respect of all shares of common stock of the Company that the
undersigned would be entitled to vote or act upon, with all
powers the undersigned would possess if personally present. Each
of the following matters is proposed by the Company, and none of
the matters is related to or conditioned on the approval of the
other matters.
In their discretion, the proxy holders are authorized to vote on
such other matters as may properly come before the Meeting or
any adjournment thereof.
FOLD AND
DETACH HERE
ANNUAL MEETING OF STOCKHOLDERS OF
THE MEDICINES COMPANY
May 28, 2009
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL DIRECTOR NOMINEES AND FOR
PROPOSALS 2 AND 3. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE T
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WITHHOLD |
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FOR ALL |
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FOR ALL EXCEPT |
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NOMINEES |
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FOR ALL NOMINEES |
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(see instructions below) |
1.
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Elect three class 3
directors for terms
to expire at the
2012 annual meeting
of stockholders.
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Nominees: |
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Armin M. Kessler |
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Robert G. Savage |
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Melvin K. Spigelman |
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(Instructions: To withhold authority to vote for any individual nominee(s), mark FOR ALL EXCEPT
and fill in the circle next to each nominee you wish to withhold, as shown here: l
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FOR |
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AGAINST |
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ABSTAIN |
2.
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Approve an amendment to the
Companys 2000 Employee Stock
Purchase Plan to increase the
number of shares of common
stock authorized for issuance
under the plan from 505,500
shares to 805,500 shares.
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3.
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Ratify the appointment of Ernst
& Young LLP as our independent
registered public accounting
firm for the year ending
December 31, 2009.
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If this proxy is properly executed, the shares represented by this
proxy will be voted as directed by the undersigned. If no direction is
given with respect to any of the director nominees or proposal three
specified above, this proxy will be voted FOR each director nominee
or proposal three.
Attendance of the undersigned at the Meeting or at any adjourned
session thereof will not be deemed to revoke this proxy unless the
undersigned shall affirmatively indicate thereat the intention of the
undersigned to vote said shares in person. If the undersigned hold(s)
any of our shares in a fiduciary, custodial or joint capacity or
capacities, this proxy is signed by the undersigned in every such
capacity as well as individually.
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To change the address on your
account, please check the box at
right and indicate your new address
in the address space above. Please
note that changes to the registered
name(s) on the account may not be
submitted via this method. o
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PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY PROMPTLY USING THE
ENCLOSED POSTAGE-PAID ENVELOPE.
MARK HERE IF YOU PLAN TO ATTEND THE
MEETING o |
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Signature of
Stockholder
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Date:
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Signature of
Stockholder
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Date:
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Note: Please sign exactly as your name or names appear on this proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.