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of the Securities Exchange Act of 1934
Filed by a party other than the Registranto
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to § 240.14a-12 |
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Plymouth, Minnesota 55441
/s/ Robert J. Palmisano | /s/ Daniel J. Levangie | |||||
President and Chief Executive Officer | Chairman of the Board |
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TO BE HELD ON MAY 25, 2010
1. | To elect three directors, each to serve for a term of three years. | ||
2. | To consider a proposal to approve the ev3 Inc. Third Amended and Restated 2005 Incentive Plan. | ||
3. | To consider a proposal to approve the ev3 Inc. Amended and Restated Employee Stock Purchase Plan. | ||
4. | To consider a proposal to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2010. | ||
5. | To transact such other business as may properly come before the meeting or any adjournment of the meeting. |
By Order of the Board of Directors, | ||||
/s/ Kevin M. Klemz | ||||
Kevin M. Klemz | ||||
Senior Vice President, Secretary and Chief Legal Officer | ||||
Plymouth, Minnesota
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Plymouth, Minnesota 55441
ANNUAL MEETING OF STOCKHOLDERS
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• | Vote by Internet, by going to the web address http://www.proxyvote.com and following the instructions for Internet voting shown on the Notice of Internet Availability of Proxy Materials or on your proxy card. | ||
• | Vote by Telephone, by dialing 1-800-690-6903 and following the instructions for telephone voting. | ||
• | Vote by Proxy Card, by completing, signing, dating and mailing the enclosed proxy card in the envelope provided if you received a paper copy of these proxy materials. If you vote by Internet or telephone, please do not mail your proxy card. |
• | VoteFORany one or more of the three nominees for director, | ||
• | VoteAGAINSTany one or more of the three nominees for director or | ||
• | ABSTAINfrom voting on any one or more of the three nominees for director. |
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• | VoteFORthe proposal, | ||
• | VoteAGAINSTthe proposal or | ||
• | ABSTAINfrom voting on the proposal. |
• | Submitting another proper proxy with a more recent date than that of the proxy first given by following the Internet or telephone voting instructions or completing, signing, dating and returning a proxy card to us. | ||
• | Sending written notice of revocation to our Corporate Secretary. | ||
• | Attending the Annual Meeting and voting by ballot. |
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Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
Warburg, Pincus Equity Partners, L.P.(1) | 27,151,570 | 24.0 | % | |||||
FMR LLC(2) | 16,838,219 | 14.9 | % | |||||
Individuals and Entities Affiliated with John B. Simpson, Ph.D., M.D.(3) | 8,428,581 | 7.5 | % | |||||
D.E. Shaw Valence Portfolios, L.L.C.(4) | 7,323,417 | 6.5 | % |
(1) | According to a Schedule 13D/A filed with the SEC on August 4, 2009, each of Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership, Warburg Pincus Partners LLC, a New York limited liability company, Warburg Pincus & Co., or WP, a New York general partnership, and Warburg Pincus LLC, or WP LLC, a New York limited liability company (collectively referred to as the “Warburg Pincus Entities”), shares with the other Warburg Pincus Entities the voting and investment control of all of the shares of common stock such Warburg Pincus Entity may be deemed to beneficially own. Charles R. Kaye and Joseph P. Landy are each managing general partners of WP and co-presidents and managing members of WP LLC and may be deemed to control each of the Warburg Pincus Entities. Each of these individuals disclaims beneficial ownership of all shares of common stock of ev3 that the Warburg Pincus Entities may be deemed to beneficially own. The address of the Warburg Pincus Entities is 450 Lexington Avenue, New York, New York 10017. | |
(2) | According to a Schedule 13G/A filed with the SEC on February 16, 2010, FMR LLC had sole power to vote 113,842 shares and FMR LLC and Edward C. Johnson, III had sole power to dispose of 16,838,219 shares. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is also deemed to beneficially own 16,724,377 shares in its capacity as an investment adviser to various investment companies. The address of FMR LLC and Edward C. Johnson, III is 82 Devonshire Street, Boston, MA 02109. | |
(3) | According to the most recent Schedule 13D/A filed by Dr. Simpson with the SEC on November 28, 2007 and information known to ev3. Includes: (i) 541 shares directly held by Dr. Simpson, (ii) 6,629,180 shares held by The Simpson Family Trust, of which John B. Simpson, Ph.D., M.D. and his spouse Rita Lynn Simpson serve as co-trustees and share voting and investment control; (iii) 800,263 shares held by the John David Simpson Trust II, a trust for the benefit of Dr. and Ms. Simpson’s son, of which Dr. and Mrs. Simpson serve as co-trustees and share voting and investment control; (iv) 292,787 shares held by FoxHollow, a California limited partnership, of which Dr. and Mrs. Simpson serve as co-general partners and share voting and investment control; (v) 53,832 shares personally held by Ms. Simpson, individually, which shares she shares voting and investment control with her spouse, Dr. Simpson; (vi) 325,989 shares held by the John Bush Simpson Annuity Trust III, of which Dr. Simpson serves as sole trustee; and (vii) 325,989 shares held by the Rita Lynn Simpson Annuity Trust III, of which Dr. Simpson serves as sole trustee. Dr. and Mrs. Simpson disclaim beneficial ownership of the shares, except to the extent of their individual respective pecuniary interest therein. The address of Dr. and Mrs. Simpson and their affiliated entities is 309 Manuella Avenue, Woodside, California 94062. | |
(4) | According to a Schedule 13G/A filed with the SEC on February 16, 2010, David E. Shaw and D.E. Shaw & Co., L.P. each beneficially own 7,323,417 shares in the name of D. E. Shaw Valence Portfolios, L.L.C., each with shared voting power. David E. Shaw does not own any shares directly. By virtue of David E. Shaw’s 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 the managing member of D. E. Shaw Valence Portfolios, L.L.C., David E. Shaw may be deemed to have the shared power to vote or direct the vote of, and the shared power to dispose or direct the disposition of, the 7,323,417 shares as described above and, therefore, David E. Shaw may be deemed to be the beneficial owner of such shares. David E. Shaw disclaims beneficial ownership of such 7,323,417 shares. The address of D.E. Shaw Valence Portfolios, L.L.C. is 120 W. 45th Street, Tower 45, 39th Floor, New York, New York 10036. |
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• | each of our current directors and nominees for directors; | ||
• | our current President and Chief Executive Officer, our current Senior Vice President and Chief Financial Officer, our former Senior Vice President and Chief Financial Officer and other current executive officers named in the Summary Compensation Table under the heading “Executive Compensation—Summary of Cash and Other Compensation” (we collectively refer to these persons as our “named executive officers”); and | ||
• | all of our current directors and executive officers as a group. |
Shares Beneficially Owned(1)(2) | ||||||||
Name | Number | Percentage | ||||||
Directors: | ||||||||
John K. Bakewell | 96,488 | * | ||||||
Jeffrey B. Child | 130,524 | * | ||||||
Richard B. Emmitt(3) | 2,005,352 | 1.8 | % | |||||
Douglas W. Kohrs | 100,379 | * | ||||||
Daniel J. Levangie | 146,488 | * | ||||||
John L. Miclot | 32,359 | * | ||||||
Robert J. Palmisano | 730,862 | * | ||||||
Thomas E. Timbie | 166,488 | * | ||||||
Elizabeth H. Weatherman(4) | 27,233,298 | 24.1 | % | |||||
Named Executive Officers: | ||||||||
Robert J. Palmisano | 730,862 | * | ||||||
Shawn McCormick | 98,204 | * | ||||||
Patrick D. Spangler(5) | 90,942 | * | ||||||
Pascal E.R. Girin | 512,757 | * | ||||||
Stacy Enxing Seng | 476,690 | * | ||||||
Brett A. Wall | 154,407 | * | ||||||
All directors and executive officers as a group (18 persons) (6) | 32,514,114 | 28.2 | % |
* | Represents beneficial ownership of less than one percent of our common stock. |
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(1) | Includes for the persons listed below the following shares subject to options held by that person that are currently exercisable or become exercisable within 60 days of March 29, 2010, shares subject to restricted stock grants which vest over time and/or upon the achievement of certain milestones and are subject to forfeiture until vested, and shares subject to restricted stock units which vest over time and/or upon the achievement of certain milestones and will become issuable within 60 days of March 29, 2010: |
Name | Stock Options | Restricted Stock | Restricted Stock Units | |||||||||
Directors: | ||||||||||||
John K. Bakewell | 80,617 | 4,148 | — | |||||||||
Jeffrey B. Child | 110,337 | 4,148 | — | |||||||||
Richard B. Emmitt | 65,857 | 4,148 | — | |||||||||
Douglas W. Kohrs | 84,621 | 7,897 | — | |||||||||
Daniel J. Levangie | 80,617 | 4,148 | — | |||||||||
John L. Miclot | 16,768 | 7,796 | — | |||||||||
Robert J. Palmisano | 626,353 | 79,743 | — | |||||||||
Thomas E. Timbie | 150,617 | 4,148 | — | |||||||||
Elizabeth H. Weatherman | 65,857 | 4,148 | — | |||||||||
Named Executive Officers: | ||||||||||||
Robert J. Palmisano | 626,353 | 79,743 | — | |||||||||
Shawn McCormick | 46,667 | 45,303 | — | |||||||||
Patrick D. Spangler | 78,906 | 12,036 | — | |||||||||
Pascal E.R. Girin | 311,904 | 25,941 | 123,388 | |||||||||
Stacy Enxing Seng | 349,411 | 90,170 | — | |||||||||
Brett A. Wall | 113,498 | 34,429 | — | |||||||||
All directors and executive officers as a group (18 persons) | 2,472,665 | 501,291 | 123,388 |
(2) | Includes 3,196,750 shares held by Ms. Weatherman in a securities brokerage account, which in certain circumstances under the terms of the standard brokerage account form may involve a pledge of such shares as collateral. | |
(3) | Vertical Fund I., L.P. (“VF-I”) and Vertical Fund II, L.P. (“VF-II”), each of which is a Delaware limited partnership, own shares of ev3’s common stock. Mr. Emmitt is a member and manager of The Vertical Group GP, LLC, a limited liability company, that, through other entities, controls the investment decisions made on behalf of VF-I and VF-II (collectively, the “Funds”), and Mr. Emmitt may therefore be deemed to be a beneficial owner of the shares owned by the Funds. Mr. Emmitt disclaims beneficial ownership of the shares owned by the Funds except to the extent of his indirect pecuniary interest therein. Mr. Emmitt’s address is c/o The Vertical Group, 25 DeForest Avenue, Summit, New Jersey 07901. | |
(4) | Ms. Weatherman is a managing director and member of WP LLC and a general partner of WP. 27,151,570 shares indicated as owned by Ms. Weatherman are included because of her affiliation with the Warburg Pincus Entities. Ms. Weatherman disclaims beneficial ownership of all shares owned by the Warburg Pincus Entities. Ms. Weatherman’s address is c/o Warburg Pincus LLC, 450 Lexington Avenue, New York, New York 10017. See note (1) to the significant stockholders ownership table above. | |
(5) | Mr. Spangler resigned as Senior Vice President and Chief Financial Officer effective January 19, 2009. | |
(6) | Includes shares beneficially owned by our current directors and executive officers. |
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Class III Directors — | ||||
Class II Directors — Term Ending | Term Ending at 2011 | Class I Directors — Term Ending | ||
at 2010 Annual Meeting | Annual Meeting | at 2012 Annual Meeting | ||
John K. Bakewell | Daniel J. Levangie | Jeffrey B. Child | ||
Richard B. Emmitt | Robert J. Palmisano | John L. Miclot | ||
Douglas W. Kohrs | Elizabeth H. Weatherman | Thomas E. Timbie |
• | two persons designated by Warburg Pincus and the Vertical Funds if Warburg Pincus and the Vertical Funds collectively beneficially own 20 percent or more of our common stock; or | ||
• | one person designated by Warburg Pincus and the Vertical Funds if Warburg Pincus and the Vertical Funds collectively beneficially own at least 10 percent but less than 20 percent of our common stock. |
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Name of Nominee/Director | Age | Principal Occupation | Director Since | |||||||
Nominees for election as Class II directors for three-year terms expiring 2013 | ||||||||||
John K. Bakewell(1) | 48 | Executive Vice President and Chief Financial Officer of RegionalCare Hospital Partners, Inc. | 2006 | |||||||
Richard B. Emmitt(2) | 65 | General Partner of The Vertical Group, L.P. | 2005 | |||||||
Douglas W. Kohrs(3) | 52 | President and Chief Executive Officer of Tornier B.V. | 2008 | |||||||
Class III directors not standing for election this year whose terms expire in 2011 | ||||||||||
Daniel J. Levangie(1) | 59 | Chairman of the Board of ev3 Inc. and President and Chief Executive Officer of Keystone Dental, Inc. | 2007 | |||||||
Robert J. Palmisano | 65 | President and Chief Executive Officer of ev3 Inc. | 2008 | |||||||
Elizabeth H. Weatherman(1)(3) | 50 | Managing Director of Warburg Pincus LLC | 2005 | |||||||
Class I directors not standing for election this year whose terms expire in 2012 | ||||||||||
Jeffrey B. Child(1) (2) | 50 | Chief Financial Officer of a Family Office of an Unaffiliated Third Party | 2007 | |||||||
John L. Miclot(3) | 51 | President and Chief Executive Officer of CCS Medical, Inc. | 2008 | |||||||
Thomas E. Timbie(2) | 52 | President of Timbie & Company, LLC | 2005 |
(1) | Member of nominating, corporate governance and compliance committee |
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(2) | Member of audit committee | |
(3) | Member of compensation committee |
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• | Board size, composition and qualifications | ||
• | Majority voting for directors and resignation policy | ||
• | Board leadership and lead independent director duties | ||
• | Board and committee meetings | ||
• | Executive sessions of independent directors | ||
• | Appropriate information and access | ||
• | Conflicts of interest | ||
• | Change of principal occupation and board memberships | ||
• | Board compensation | ||
• | Loans to directors and executive officers | ||
• | Board and committee evaluations | ||
• | Succession planning | ||
• | Selection of director nominees | ||
• | Director attendance at annual meetings of stockholders | ||
• | Meeting attendance by directors and non-directors | ||
• | Limitations on other directorships | ||
• | Board committees | ||
• | Ability to retain advisors | ||
• | Retirement and term limits | ||
• | Stock ownership by directors and executive officers | ||
• | Board interaction with corporate constituencies | ||
• | CEO evaluation | ||
• | Director continuing education | ||
• | Communication with directors |
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• | chairing the executive sessions of the board’s independent directors and calling meetings of the independent directors; | ||
• | determining the agenda for the executive sessions of the independent directors, and participating with the Chairman of the Board in establishing the agenda for board meetings;. | ||
• | coordinating feedback among the independent directors and our chief executive officer; | ||
• | overseeing the development of appropriate responses to communications from stockholders and other interested persons addressed to the independent directors as a group; and | ||
• | retaining, on behalf of the independent directors, legal counsel or other advisors as they deem appropriate in the conduct of their duties and responsibilities. |
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Nominating, | ||||||
Corporate Governance | ||||||
Director | Audit | Compensation | and Compliance | |||
John K. Bakewell | — | — | ü | |||
Jeffrey B. Child | ü | — | Chair | |||
Richard B. Emmitt | ü | — | — | |||
Douglas W. Kohrs | — | ü | — | |||
Daniel J. Levangie | — | — | ü | |||
John L. Miclot | — | Chair | — | |||
Robert J. Palmisano | — | — | — | |||
Thomas E. Timbie | Chair | — | — | |||
Elizabeth H. Weatherman | — | ü | ü |
• | assist our board of directors in monitoring the integrity of our financial statements, our compliance with legal and regulatory requirements as they relate to our financial statements and financial reporting obligations, our independent registered public accounting firm’s qualifications and independence, and the performance of our internal audit function and independent registered public accounting firm; | ||
• | assume direct responsibility for the appointment, compensation, retention and oversight of the work of any independent registered public accounting firm engaged for the purpose of performing any audit, review or attest services and for dealing directly with any such independent registered public accounting firm; | ||
• | provide a medium for consideration of matters relating to any audit issues; and | ||
• | prepare the audit committee report that the SEC rules require be included in our annual proxy statement or annual report on Form 10-K. |
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Jeffrey B. Child
Richard B. Emmitt
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• | review and approve goals and objectives relevant to our chief executive officer and executive officer compensation and evaluate our chief executive officer and other executive officers’ performance in light of those goals and objectives; | ||
• | review and approve any and all compensation for our chief executive officer and other executive officers; | ||
• | review and make recommendations to our board concerning the adoption of and any amendment to our compensation plans for all directors and executive officers, including incentive compensation plans and equity-based plans, and perform the administrative functions of such plans; | ||
• | review and discuss with management the “Compensation Discussion and Analysis” section of our annual meeting proxy statement and based on such review and discussions make a recommendation to our board as to whether the “Compensation Discussion and Analysis” section should be included in our annual report on Form 10-K and annual meeting proxy statement in accordance with applicable rules and regulations of the SEC and any other applicable regulatory bodies; | ||
• | review and make recommendations to our board concerning compensation for non-employee members of our board, including retainers, meeting fees, committee fees, committee chair fees, equity compensation, benefits and perquisites; and | ||
• | review and discuss with our chief executive officer and report periodically to the board of directors plans for executive officer development and corporate succession plan for our chief executive officer and other key executive officers and employees. |
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• | review and make recommendations to our board regarding the structure and composition of the board and its members; |
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• | identify individuals qualified to become members of our board; | ||
• | make recommendations to the board regarding nominees for director for each annual meeting of our stockholders and to fill any vacancies that may occur between meetings of our stockholders; | ||
• | make recommendations to our board regarding corporate governance matters and practices, including any revisions to our corporate governance guidelines; and | ||
• | oversee our compliance efforts with respect to legal and regulatory requirements and relevant policies and procedures, including our Code of Business Conduct and Corporate Compliance Program, other than with respect to matters relating to our financial statements and financial reporting obligations and any accounting, internal accounting controls or auditing matters (which are within the purview of the audit committee). |
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• | whether the candidate is an “independent director” under the Listing Rules of the NASDAQ Stock Market and meets any other applicable independence tests under the federal securities laws and rules and regulations of the SEC; | ||
• | whether the candidate is “financially sophisticated” and otherwise meets the requirements for serving as a member of an audit committee under the Listing Rules of the NASDAQ Stock Market; | ||
• | whether the candidate is an “audit committee financial expert” under the rules and regulations of the SEC; | ||
• | the needs of our company with respect to the particular talents and experience of our directors; | ||
• | the personal and professional integrity and reputation of the candidate; | ||
• | the candidate’s level of education and business experience; | ||
• | the candidate’s broad-based business acumen; | ||
• | the candidate’s level of understanding of our business and its industry and other industries relevant to our business; | ||
• | the candidate’s ability and willingness to devote adequate time to work of our board and its committees; |
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• | the fit of the candidate’s skills and personality with those of other directors and potential directors in building a board that is effective, collegial and responsive to the needs of our company; | ||
• | whether the candidate possesses strategic thinking and a willingness to share ideas; | ||
• | the candidate’s diversity of experiences, expertise and background; and | ||
• | the candidate’s ability to represent the interests of all stockholders and not a particular interest group. |
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Fees Earned or Paid | Stock | Option | All Other | |||||||||||||||||
Name | in Cash ($) | Awards ($)(1)(2) | Awards ($)(3)(4) | Compensation($)(5) | Total ($) | |||||||||||||||
John K. Bakewell | $ | 63,500 | $ | 74,996 | $ | 75,948 | $ | — | $ | 214,444 | ||||||||||
Jeffrey B. Child | 41,000 | 74,996 | 75,948 | — | 191,944 | |||||||||||||||
Richard B. Emmitt | 43,500 | 74,996 | 75,948 | — | 194,444 | |||||||||||||||
Douglas W. Kohrs | 41,000 | 74,996 | 75,948 | — | 191,944 | |||||||||||||||
Daniel J. Levangie | 71,833 | 74,996 | 75,948 | — | 222,777 | |||||||||||||||
John L Miclot | 43,917 | 74,996 | 75,948 | — | 194,861 | |||||||||||||||
Thomas E. Timbie | 58,500 | 74,996 | 75,948 | — | 209,444 | |||||||||||||||
Elizabeth H. Weatherman | 46,000 | 74,996 | 75,948 | — | 196,944 |
(1) | On May 26, 2009, each director received a stock award for 8,296 shares of common stock granted under the ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan, the material terms of which are described in more detail under the heading “Executive Compensation — Grants of Plan-Based Awards — ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan.” Such shares vest with respect to 50 percent of the underlying shares of our common stock on each of the following dates, so long as the individual remains a director of our company as of such date: May 1, 2010 and May 1, 2011. Amount reported represents the aggregate grant date fair value for stock awards granted to each director in 2009 computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). The grant date fair value for stock awards is determined based on the closing sale price of our common stock on the date of grant. | |
(2) | The following table provides information regarding the aggregate number of unvested stock awards outstanding at December 31, 2009 and held by each of the directors listed in the above table: |
Number of Shares to | Number of Shares to | Number of Shares to | Number of Shares to | |||||||||||||||||||
Grant | Total Number of | Vest on | Vest on | Vest on | Vest on | |||||||||||||||||
Name | Date | Unvested Shares | May 1, 2010 | August 1, 2010 | December 2, 2010 | May 1, 2011 | ||||||||||||||||
John K. Bakewell | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
05/20/08 | 3,788 | 3,788 | — | — | — | |||||||||||||||||
Jeffrey B. Child | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
05/20/08 | 3,788 | 3,788 | — | — | — | |||||||||||||||||
Richard B. Emmitt | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
05/20/08 | 3,788 | 3,788 | — | — | — | |||||||||||||||||
Douglas W. Kohrs | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
08/01/08 | 3,731 | — | 3,731 | — | — | |||||||||||||||||
Daniel J. Levangie | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
05/20/08 | 3,788 | 3,788 | — | — | — | |||||||||||||||||
John L. Miclot | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
12/02/08 | 3,648 | — | — | 3,648 | — | |||||||||||||||||
Thomas E. Timbie | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
05/20/08 | 3,788 | 3,788 | — | — | — | |||||||||||||||||
Elizabeth H. Weatherman | 05/26/09 | 8,296 | 4,148 | — | — | 4,148 | ||||||||||||||||
05/20/08 | 3,788 | 3,788 | — | — | — |
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(3) | On May 26, 2009, each director received a stock option to purchase 19,841 shares of our common stock at an exercise price of $9.04 per share granted under the ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan, the material terms of which are described in more detail under the heading “Executive Compensation — Grants of Plan-Based Awards — ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan.” Such option expires on May 25, 2019 and vests with respect to 50 percent of the underlying shares of our common stock on each of the following dates, so long as the individual remains a director of our company as of such date: May 1, 2010 and May 1, 2011. Amount reported represents the aggregate grant date fair value for option awards granted to each director in 2009 computed in accordance with FASB ASC Topic 718. The grant date fair value is determined based on our Black-Scholes option pricing model. The grant date value per share for the option granted on May 26, 2009 was $3.8278 and was determined using the following specific assumptions: |
Expected | ||||||||||||
Risk Free | Expected | Expected | Dividend | |||||||||
Interest Rate | Life | Volatility | Yield | |||||||||
1.72% | 3.85 years | 54.0% | 0 |
(4) | The following table provides information regarding the aggregate number of options to purchase shares of our common stock outstanding at December 31, 2009 and held by each of the directors listed in the above table: |
Aggregate Number of | Range of | Range of | ||||||||||||||
Securities | Exercisable/ | Exercise | Expiration | |||||||||||||
Name | Underlying Options | Unexercisable | Price(s) | Date(s) | ||||||||||||
John K. Bakewell | 90,537 | 55,348/35,189 | $ | 9.04-17.71 | 04/05/2016-05/26/2019 | |||||||||||
Jeffrey B. Child | 125,257 | 90,068/35,189 | 9.04-23.65 | 06/20/2015-05/26/2019 | ||||||||||||
Richard B. Emmitt | 75,777 | 40,588/35,189 | 6.47-16.66 | 07/26/2011-05/26/2019 | ||||||||||||
Douglas W. Kohrs | 105,942 | 72,589/33,353 | 8.82-16.66 | 03/01/2015-05/26/2019 | ||||||||||||
Daniel J. Levangie | 90,537 | 47,848/42,689 | 9.04-20.06 | 02/23/2017-05/26/2019 | ||||||||||||
John L. Miclot | 39,175 | 4,833/34,342 | 5.14-9.04 | 12/02/2018-05/26/2019 | ||||||||||||
Thomas E. Timbie | 227,201 | 192,012/35,189 | 8.82-16.66 | 03/09/2014-05/26/2019 | ||||||||||||
Elizabeth H. Weatherman | 75,777 | 40,588/35,189 | 6.47-16.66 | 07/26/2011-05/26/2019 |
(5) | We do not generally provide perquisites and other personal benefits to our directors. Any perquisites or personal benefits actually provided to any director were less than $10,000 in the aggregate. |
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Description | Annual Cash Retainer | |||
Board Member | $ | 36,000 | ||
Chairman of the Board* | 25,000 | |||
Lead Independent Director* | 10,000 | |||
Audit Committee Chair | 20,000 | |||
Compensation Committee Chair | 10,000 | |||
Nominating, Corporate Governance and Compliance Committee Chair | 10,000 | |||
Audit Committee Member (including Chair) | 7,500 | |||
Compensation Committee Member (including Chair) | 5,000 | |||
Nominating, Corporate Governance and Compliance Committee Member (including Chair) | 5,000 |
* | Annual cash retainer is paid to ev3’s Chairman of the Board or ev3’s Lead Independent Director if the Chairman of the Board is also ev3’s Chief Executive Officer. |
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• | our current President and Chief Executive Officer, Robert J. Palmisano; |
• | our current Senior Vice President and Chief Financial Officer, Shawn McCormick; |
• | our former Senior Vice President and Chief Financial Officer, Patrick D. Spangler; |
• | our current Executive Vice President and Chief Operating Officer, Pascal E.R. Girin; |
• | our current Executive Vice President and President, Worldwide Peripheral Vascular, Stacy Enxing Seng; and |
• | our current Senior Vice President and President, International, Brett A. Wall. |
• | attract and retain executives important to the success of our company and the creation of value for our stockholders; |
• | reinforce our corporate mission, vision and values; |
• | motivate our executives to help fulfill our corporate mission and vision, including more specific and focused company performance objectives, while incorporating our shared values; |
• | align the interest of our executives with the interests of our stockholders; and |
• | reward our executives for progress toward our corporate mission and vision, the achievement of company performance objectives, the creation of stockholder value in the short and long term and their contributions, in general, to the success of our company. |
• | We target base compensation and total compensation at the 50th to 75th percentile of companies in our peer group, with the opportunity to earn total compensation above the market median when the performance of our business meets or exceeds our plan targets. |
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• | As a performance-driven company, we favor having a significant component of compensation that is variable and tied to results and achievement over solely fixed compensation. |
• | The portion of an executive’s total compensation that varies with performance and is therefore at risk should increase with the level of an individual’s responsibility. |
• | In order to foster cooperation and communication among our executives and among their respective teams, our compensation committee places primary emphasis on company and business unit performance as measured against goals approved by our compensation committee rather than individual performance. |
• | We seek to align the interests of our executives with those of our stockholders by providing a significant portion of compensation in stock-based awards. |
• | We seek to limit the use of perquisites and believe they should not be a significant component of executive compensation. Perquisites are provided when customary in a specific geography (non-U.S. executives) or when necessary to attract and retain key executive talent. |
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• | each executive’s position within the company and the level of responsibility; |
• | the ability of the executive to impact key business initiatives; |
• | the executive’s individual experience and qualifications; |
• | compensation paid to executives of comparable positions by companies similar to ev3; |
• | an assessment of the risk that the executive would leave our company and the harm to our company’s business initiatives if the executive left; |
• | company performance, on an overall basis and, in the case of some executives on a divisional basis, as compared to specific pre-established objectives; |
• | individual performance, generally and as compared to specific pre-established objectives; |
• | the executive’s current and historical compensation levels; |
• | advancement potential and succession planning considerations; |
• | the retention value of executive equity holdings, including outstanding stock options and stock grants; |
• | the dilutive effect on our shareholders of equity-based long-term incentive awards; |
• | anticipated compensation expense as determined under applicable accounting rules; and |
• | “tally” sheets which detail for each executive his or her annual compensation for the last two years and an estimate for the current year, vested and unvested values of all outstanding equity awards at an assumed stock price and change in control and severance benefits potentially payable in the event of a change in control and under a termination without cause scenario, as described in more detail below under the heading “—Use of Tally Sheets.” |
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Steris Corp. ($1,240)
Cooper Companies Inc. ($976)
Conmed Corp. ($694)
Integra Lifesciences Hldgs. ($550)
American Medical Systems Hldgs ($464)
Mentor Corp. ($354)
Symmetry Medical Inc. ($256)
Edwards Lifesciences Corp. ($1,091)
Hologic Inc. ($947)
Sirona Dental Systems Inc. ($685)
Haemonetics Corp. ($495)
Gen-Probe Inc. ($393)
Zoll Medical Corp. ($336)
Thoratec Corp. ($235)
Advanced Medical Optics Inc. ($1,091)
Resmed Inc. ($763)
Intuitive Surgical Inc. ($601)
Orthofix International NV ($490)
Wright Medical Group Inc. ($387)
Arthrocare ($319)
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Edwards Lifesciences Corp. ($1,238)
Intuitive Surgical Inc. ($875)
Integra Lifesciences Hldgs. ($655)
American Medical Systems Hldgs ($502)
Symmetry Medical Inc. ($423)
Thoratec Corp. ($314)
Accuray Inc. ($223)
Cooper Companies Inc. ($1,069)
Sirona Dental Systems Inc. ($748)
Haemonetics Corp. ($584)
Wright Medical Group Inc. ($466)
Zoll Medical Corp. ($394)
Nuvasive Inc. ($250)
Icu Medical Inc. ($205)
Resmed Inc. ($888)
Conmed Corp. ($742)
Orthofix International NV ($520)
Gen-Probe Inc. ($456)
Arthrocare ($337)
Merit Medical Systems Inc. ($227)
• | A summary of annual compensation, including target total cash compensation, the total estimated value of annual long-term incentive awards and the value of benefits and perquisites received by each named executive officer, for the last two years and an estimate for the current year; |
• | A summary of the vested and unvested values of all outstanding equity awards held by each named executive officer at an assumed stock price; and |
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• | A summary of the change in control and severance benefits potentially payable to each named executive officer in the event of a change in control and under a termination without cause scenario. |
• | base salary; |
• | short-term cash incentive compensation; |
• | long-term equity-based incentive compensation, in the form of stock options and restricted stock awards (or units); and |
• | other compensation arrangements, such as benefits made generally available to our other employees, limited executive benefits and perquisites, and severance and change in control arrangements. |
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Total Compensation Mix | ||||||||||||||||||||||||
(base salary, short-term cash incentives, long-term | ||||||||||||||||||||||||
equity incentives and executive benefits and perquisites) | ||||||||||||||||||||||||
% of Total | % of Performance Based | % of Total | ||||||||||||||||||||||
Compensation that is: | Total Compensation that is: | Compensation that is: | ||||||||||||||||||||||
Equity | ||||||||||||||||||||||||
Performance Based(1) | Fixed(2) | Annual(3) | Long-Term(4) | Cash Based(5) | Based(6) | |||||||||||||||||||
Robert J. Palmisano | 70 | % | 30 | % | 35 | % | 65 | % | 55 | % | 45 | % | ||||||||||||
Shawn McCormick | 77 | % | 23 | % | 38 | % | 62 | % | 52 | % | 48 | % | ||||||||||||
Patrick D. Spangler | 0 | % | 100 | % | N/A | N/A | 100 | % | 0 | % | ||||||||||||||
Pascal E.R. Girin | 50 | % | 50 | % | 42 | % | 58 | % | 71 | % | 29 | % | ||||||||||||
Stacy Enxing Seng | 77 | % | 23 | % | 19 | % | 81 | % | 38 | % | 62 | % | ||||||||||||
Brett A. Wall | 73 | % | 27 | % | 20 | % | 80 | % | 41 | % | 59 | % |
(1) | Short-term cash incentives plus long-term equity incentives divided by total compensation | |
(2) | Base salary plus executive benefits and perquisites divided by total compensation | |
(3) | Short-term cash incentives divided by short-term cash incentives plus long-term equity incentives | |
(4) | Long-term equity incentives divided by short-term cash incentives plus long-term equity incentives | |
(5) | Base salary plus short-term cash incentives and executive benefits and perquisites divided by total compensation | |
(6) | Long-term equity incentives divided by total compensation |
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Total Grant Date | ||||||||||||||||||||
% of Base | Dollar Amount of | Fair Value of | ||||||||||||||||||
Salary Merit | Merit Increase for | Shares Underlying | Shares Underlying | Long-Term Equity | ||||||||||||||||
Increase for 2009 | 2009 | Stock Option | Stock Grant | Incentives | ||||||||||||||||
Robert J. Palmisano | 3.500 | % | $ | 21,000 | 4,173 | 1,669 | $ | 21,000 | ||||||||||||
Shawn McCormick | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Patrick D. Spangler | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Pascal E.R. Girin(1) | 3.750 | % | 18,005 | 3,578 | 1,431 | 18,005 | ||||||||||||||
Stacy Enxing Seng | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Brett A. Wall | 3.575 | % | 9,653 | N/A | N/A | N/A |
(1) | The conversion into U.S. dollars was based on the conversion rate as of January 30, 2009, which was one Euro to $1.30852. |
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% of Base | Dollar Amount of | Value of Long-Term | ||||||||||||||||||
Salary Merit | Merit Increase for | Shares Underlying | Shares Underlying | Equity | ||||||||||||||||
Increase for 2010 | 2010 | Stock Option | Stock Grant | Incentives(1) | ||||||||||||||||
Robert J. Palmisano | 4.00 | % | $ | 24,000 | 5,102 | 2,041 | $ | 60,000 | ||||||||||||
Shawn McCormick | 3.25 | % | 11,375 | 2,418 | 967 | 28,438 | ||||||||||||||
Patrick D. Spangler | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Pascal E.R. Girin | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Stacy Enxing Seng | 3.50 | % | 12,460 | 2,649 | 1,060 | 31,150 | ||||||||||||||
Brett A. Wall | 3.50 | % | 10,500 | 2,232 | 893 | 26,250 |
(1) | The value of long-term equity incentives is based on the value calculated under our long-term incentive grant guidelines and does not necessarily match the grant date fair value of the equity awards under applicable accounting rules and as set forth in the “Grants of Plan Based Awards” table found later in this proxy statement. |
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Rating | Achievement Level | |
4 = Exceeded | Executive’s performance is exceptional and is a role model for the assigned section | |
3 = Achieved | Executive consistently performs at the expected level of contribution. Employee has a solid skill foundation that will allow the executive to succeed | |
2 = Partially Achieved | Executive is progressing toward expected performance | |
1 = Not Achieved | Executive’s overall performance does not meet the expected level of contribution |
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Incentive Target | Annual Bonus Opportunity for Each Executive | |||||||||||||||
Named Executive Officer | (% of Base Salary) | Threshold (50%) | Target (100%) | Maximum (150%) | ||||||||||||
Robert J. Palmisano | 100 | % | $ | 300,000 | $ | 600,000 | $ | 900,000 | ||||||||
Shawn McCormick | 60 | % | 99,534 | 199,068 | 298,602 | |||||||||||
Patrick D. Spangler | N/A | — | — | — | ||||||||||||
Pascal E.R. Girin(1) | 65 | % | 174,908 | 349,816 | 524,724 | |||||||||||
Stacy Enxing Seng | 65 | % | 115,700 | 231,400 | 347,100 | |||||||||||
Brett A. Wall | 40%/60 | % | 66,987 | 133,973 | 200,960 |
(1) | The conversion into U.S. dollars was based on the conversion rate of one Euro to $1.50. |
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Financial Performance Objectives | Weighting | |||
Revenue | 50 | % | ||
Operating Profit | 30 | % | ||
Days Sales Outstanding (DSO) | 10 | % | ||
Inventory Days on Hand (DOH) | 10 | % |
% Plan | Incentive % | |||||||||||
Threshold | $400.0 million | 92.6 | % | 50.0 | % | |||||||
Target | $431.9 million | 100.0 | % | 100.0 | % | |||||||
Maximum | $475.1 million | 110.0 | % | 150.0 | % | |||||||
Actual | $431.7 million | 100.0 | % | 99.8 | % |
% Plan | Incentive % | |||||||||||
Threshold | $17.6 million | 80.0 | % | 50.0 | % | |||||||
Target | $22.0 million | 100.0 | % | 100.0 | % | |||||||
Maximum | $28.6 million | 130.0 | % | 150.0 | % | |||||||
Actual | $31.1 million | 141.4 | % | 150.0 | % |
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% Plan | Incentive % | |||||||||||
Threshold | 75 | 80.0 | % | 50.0 | % | |||||||
Target | 60 | 100.0 | % | 100.0 | % | |||||||
Maximum | 50 | 120.0 | % | 150.0 | % | |||||||
Actual | 62 | 96.8 | % | 91.9 | % |
% Plan | Incentive % | |||||||||||
Threshold | 253 | 80.0 | % | 50.0 | % | |||||||
Target | 202 | 100.0 | % | 100.0 | % | |||||||
Maximum | 168 | 120.0 | % | 150.0 | % | |||||||
Actual | 193 | 104.7 | % | 111.7 | % |
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Named Executive Officer | MBOs Component | Final MBO Rating | ||||||
Robert J. Palmisano | 0% | N/A | ||||||
Shawn McCormick | 10% | 3.6 | ||||||
Patrick D. Spangler | N/A | N/A | ||||||
Pascal E.R. Girin | 25% | 3.6 | ||||||
Stacy Enxing Seng | 25% | 3.0 | ||||||
Brett A. Wall | 25% | 4.0 |
Dollar Amount of | Final Incentive Percentage | |||||||
Named Executive Officer | 2009 Annual Bonus Payout | or Percent of Target | ||||||
Robert J. Palmisano(1) | $ | 691,200 | 115.2 | % | ||||
Shawn McCormick | 229,377 | 115.2 | % | |||||
Patrick D. Spangler | N/A | N/A | ||||||
Pascal E.R. Girin(2) | 458,958 | 121.2 | % | |||||
Stacy Enxing Seng | 233,627 | 101.0 | % | |||||
Brett A. Wall | 162,061 | 121.0 | % |
(1) | Mr. Palmisano’s annual bonus amount does not include the $100,000 value of discretionary long-term equity incentives consisting of an option to purchase 8,503 shares of common stock and a stock grant for 3,401 shares of common stock that he received at the end of January 2010 in special recognition of our corporate financial performance during 2009. | |
(2) | Mr. Girin’s annual bonus amount payout includes an upward adjustment of $34,850 or 8.2 percent. His final incentive percentage does not reflect this upward adjustment. Including this upward adjustment, Mr. Girin’s final incentive percentage would be 131.2 percent. |
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MBO %/ | ||||||||||||||||||||||||
Named | MBO Rating/ | US PV%/ | Worldwide Neuro %/ | International %/ | Overall Corporate %/ | Final Incentive | ||||||||||||||||||
Executive Officer | % Payout | % Payout | % Payout | % Payout | % Payout | % Payout | ||||||||||||||||||
Robert J. Palmisano | 0.0 | % | N/A | N/A | N/A | 100.0 | % | 115.2 | % | |||||||||||||||
115.2 | % | |||||||||||||||||||||||
Shawn McCormick | 10.0 | % | N/A | N/A | N/A | 90.0 | % | 115.2 | % | |||||||||||||||
3.60/115.0 | % | 115.2 | % | |||||||||||||||||||||
Patrick D. Spangler | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||
Pascal E.R. Girin | 25.0 | % | N/A | 50.0 | % | N/A | 25.0 | % | 121.2 | %(1) | ||||||||||||||
3.60/115.0 | % | 127.4 | % | 115.2 | % | |||||||||||||||||||
Stacy Enxing Seng | 25.0 | % | 50.0 | % | N/A | N/A | 25.0 | % | 101.0 | % | ||||||||||||||
3.00/100.0 | % | 94.3 | % | 115.2 | % | |||||||||||||||||||
Brett A. Wall | 25.0 | % | N/A | 38.0 | % | 12.0 | % | 25.0 | % | 121.0 | % | |||||||||||||
4.00/125.0 | % | 127.4 | % | 104.3 | % | 115.2 | % |
(1) | Mr. Girin’s final incentive payout does not reflect the upward adjustment to his final bonus payout. |
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Incentive Target | Annual Bonus Opportunity for Each Executive | |||||||||||||||
Named Executive Officer | (% of Base Salary) | Threshold (50%) | Target (100%) | Maximum (150%) | ||||||||||||
Robert J. Palmisano | 100% | $ | 300,000 | $ | 600,000 | $ | 900,000 | |||||||||
Shawn McCormick | 60% | 105,000 | 210,000 | 315,000 | ||||||||||||
Pascal E.R. Girin | 75% | 201,817 | 403,634 | 605,450 | ||||||||||||
Stacy Enxing Seng | 65% | 115,700 | 231,400 | 347,100 | ||||||||||||
Brett A. Wall | 60% | 90,000 | 180,000 | 270,000 |
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Incentive Grant Guideline | Incentive Grant Guideline | |||||||||||
Expressed as % of Base | Dollar Value of | |||||||||||
Named Executive Officer | Grade Level | Salary for Grade Level | Long-Term Incentives | |||||||||
Robert J. Palmisano | 11 | 300 | % | $ | 1,800,000 | |||||||
Shawn McCormick | 9 | 175 | % | 612,500 | ||||||||
Patrick D. Spangler | 9 | N/A | N/A | |||||||||
Pascal E.R. Girin(1) | 10 | 200 | % | 938,955 | ||||||||
Stacy Enxing Seng | 10 | 200 | % | 712,000 | ||||||||
Brett A. Wall(2) | 7 | 60% | 131,700 | |||||||||
(prior to 10/5/09) | (prior to 10/5/09) | (prior to 10/5/09) | ||||||||||
9 | 175 | % | 525,000 | |||||||||
(10/5/09 and after) | (10/5/09 and after) | (10/5/09 and after) |
(1) | The conversion into U.S. dollars was based on the conversion rate as of January 30, 2009, which was one Euro to $1.30852. | |
(2) | Mr. Wall’s grade level, incentive grant guideline expressed as a percentage of base salary for grade level and incentive grant guideline dollar value of long-term incentives increased in connection with his promotion to Senior Vice President and President, International on October 5, 2009. |
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Value of Actual | Value of | |||||||||||||||||||
Performance | Long-Term | Difference | ||||||||||||||||||
Stock | Restricted Stock | Recognition | Incentive Grant | Between Actual | ||||||||||||||||
Named Executive Officer | Options | (or Units) | Grants(1) | Guideline | and Guideline | |||||||||||||||
Robert J. Palmisano | 243,494 | 97,398 | $ | 1,207,733 | $ | 1,800,000 | $ | (592,267 | ) | |||||||||||
Shawn McCormick | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Patrick D. Spangler | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Pascal E.R. Girin | 129,896 | 51,959 | 609,995 | 938,955 | (328,960 | ) | ||||||||||||||
Stacy Enxing Seng | 96,315 | 38,526 | 477,722 | 712,000 | (234,278 | ) | ||||||||||||||
Brett A. Wall | 17,825 | 7,125 | 88,381 | 131,700 | (43,319 | ) |
(1) | The value of actual performance recognition grants is based on the value calculated under our long-term incentive grant guidelines and does not necessarily match the grant date fair value of the equity awards under applicable accounting rules and as set forth in the “Grants of Plan Based Awards” table found later in this proxy statement. |
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Value of | ||||||||||||||||||||
Value of Actual | Long-Term | Difference | ||||||||||||||||||
Stock | Restricted Stock | Promotional | Incentive Grant | Between Actual | ||||||||||||||||
Named Executive Officer | Options | (or Units) | Grants(1) | Guideline | and Guideline(2) | |||||||||||||||
Stacy Enxing Seng | 96,350 | 38,550 | $ | 477,958 | $ | 712,000 | $ | (234,042 | ) | |||||||||||
Brett A. Wall | 56,200 | 22,500 | 544,258 | 525,000 | 19,258 |
(1) | The value of actual promotional grants is based on the value calculated under our long-term incentive grant guidelines and does not necessarily match the grant date fair value of the equity awards under applicable accounting rules and as set forth in the “Grants of Plan Based Awards” table found later in this proxy statement. | |
(2) | The difference between the value of Mr. Wall’s actual promotional grants and his long-term incentive grant guideline is due to the rounding up of his equity awards to the nearest 100 shares. |
Value of Actual | Value of | |||||||||||||||||||
Talent | Long-Term | Difference | ||||||||||||||||||
Stock | Restricted Stock | Acquisition | Incentive Grant | Between Actual | ||||||||||||||||
Named Executive Officer | Options | (or Units) | Grants(1) | Guideline | and Guideline | |||||||||||||||
Shawn McCormick | 140,000 | 56,000 | $ | 697,760 | $ | 1,225,000 | $ | (527,240 | ) |
(1) | The value of actual talent acquisition grants is based on the value calculated under our long-term incentive grant guidelines and does not necessarily match the grant date fair value of the equity awards under applicable accounting rules and as set forth in the “Grants of Plan Based Awards” table found later in this proxy statement. |
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Douglas W. Kohrs
Elizabeth H. Weatherman
Non-Equity | ||||||||||||||||||||||||||||||||
Incentive Plan | All Other | |||||||||||||||||||||||||||||||
Stock | Option | Compen- | Compen- | |||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary(1) | Bonus(2) | Awards(3) | Awards(4) | sation(5) | sation(6) | Total | ||||||||||||||||||||||||
Robert J. Palmisano(7) | 2009 | $ | 600,000 | $ | — | $ | 614,215 | $ | 642,324 | $ | 691,200 | $ | 236,483 | $ | 2,784,222 | |||||||||||||||||
President and Chief Executive Officer | 2008 | 441,153 | — | — | 3,351,404 | 451,809 | 170,527 | 4,414,893 | ||||||||||||||||||||||||
Shawn McCormick(8) Senior Vice President and Chief Financial Officer | 2009 | 334,294 | 210,000 | 348,880 | 364,840 | 229,377 | 7,350 | 1,494,741 | ||||||||||||||||||||||||
Patrick D. Spangler(9) | 2009 | 15,538 | — | — | — | — | 344,328 | 359,866 | ||||||||||||||||||||||||
Former Senior Vice President | 2008 | 314,800 | — | 249,300 | — | 193,522 | 6,900 | 764,522 | ||||||||||||||||||||||||
and Chief Financial Officer | 2007 | 298,654 | — | 655,534 | 582,236 | 57,897 | 8,852 | 1,603,173 | ||||||||||||||||||||||||
Pascal E.R. Girin(10) | 2009 | 375,707 | — | 313,399 | 327,732 | 458,958 | 710,467 | 2,186,263 | ||||||||||||||||||||||||
Executive Vice President and | 2008 | 365,198 | 114,575 | 859,661 | 445,670 | 267,735 | 194,801 | 2,247,640 | ||||||||||||||||||||||||
Chief Operating Officer | 2007 | 355,617 | 64,820 | 752,418 | 671,285 | 73,790 | 108,858 | 2,026,788 | ||||||||||||||||||||||||
Stacy Enxing Seng | 2009 | 356,000 | — | 477,871 | 499,677 | 233,627 | 12,351 | 1,579,526 | ||||||||||||||||||||||||
Executive Vice President and | 2008 | 325,973 | — | 249,300 | — | 200,915 | 21,900 | 798,088 | ||||||||||||||||||||||||
President, Worldwide Peripheral Vascular | 2007 | 307,498 | — | 583,681 | 521,274 | 50,127 | 11,010 | 1,473,590 | ||||||||||||||||||||||||
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Non-Equity | ||||||||||||||||||||||||||||||||
Incentive Plan | All Other | |||||||||||||||||||||||||||||||
Stock | Option | Compen- | Compen- | |||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary(1) | Bonus(2) | Awards(3) | Awards(4) | sation(5) | sation(6) | Total | ||||||||||||||||||||||||
Brett A. Wall(11) | 2009 | 283,935 | — | 316,425 | 332,782 | 162,061 | 10,637 | 1,105,840 | ||||||||||||||||||||||||
Senior Vice President and | ||||||||||||||||||||||||||||||||
President, International |
(1) | Includes amounts paid for accrued but previously unpaid time off. | |
(2) | For 2009, reflects a signing bonus of $100,000 and a cash retention bonus equal to $110,000 paid to Mr. McCormick in January 2009. For 2008, reflects a special retention bonus of $75,000 paid to Mr. Girin in February 2008 and a special retention bonus of $39,575 paid to Mr. Girin in April 2008. The amount of the April 2008 cash bonus, which bonus was based in part on the performance of our international business during first quarter 2008, was deducted from Mr. Girin’s payout under our 2008 annual performance incentive plan. For 2007, reflects the guaranteed portion of Mr. Girin’s bonus under our 2007 annual performance incentive plan. | |
(3) | Amount reported represents the aggregate grant date fair value for stock awards granted to each named executive officer computed in accordance with FASB ASC Topic 718. The grant date fair value is determined based on the closing sale price of our common stock on the date of grant. | |
(4) | Amount reported represents the aggregate grant date fair value for option awards granted to each named executive officer computed in accordance with FASB ASC Topic 718. The grant date fair value is determined based on our Black-Scholes option pricing model. The following table sets forth the specific assumptions used in the valuation of each such option award: |
Grant Date | Expected | |||||||||||||||||||
Grant | Fair Value | Risk Free | Expected | Expected | Dividend | |||||||||||||||
Date | Per Share | Interest Rate | Life | Volatility | Yield | |||||||||||||||
10/05/2009 | $ | 5.10 | 1.99 | % | 3.85 years | 53.2 | % | 0 | ||||||||||||
03/10/2009 | 2.46 | 1.57 | % | 3.85 years | 53.5 | % | 0 | |||||||||||||
02/12/2009 | 2.59 | 1.57 | % | 3.85 years | 53.5 | % | 0 | |||||||||||||
01/19/2009 | 2.61 | 1.57 | % | 3.85 years | 53.5 | % | 0 | |||||||||||||
08/12/2008 | 4.46 | 3.05 | % | 3.85 years | 44.6 | % | 0 | |||||||||||||
04/06/2008 | 3.18 | 2.39 | % | 3.85 years | 44.5 | % | 0 | |||||||||||||
10/04/2007 | 6.30 | 4.16 | % | 3.85 years | 42.7 | % | 0 | |||||||||||||
01/22/2007 | 7.12 | 4.77 | % | 3.85 years | 45.3 | % | 0 |
(5) | Represents amounts paid under our annual performance incentive compensation plan, which is described in more detail under the headings “—Grants of Plan-Based Awards—ev3 Inc. Employee Performance Incentive Compensation Plan” and “Compensation Discussion and Analysis.��� For Mr. Girin, the amount shown for 2008 does not include the portion of Mr. Girin’s bonus that was paid in April 2008 and based in part on the performance of our international business, which discretionary bonus is reflected in the “Bonus” column. In addition, for Mr. Girin, the amount shown for 2007 does not include the guaranteed portion of Mr. Girin’s bonus, which is reflected in the “Bonus” column. | |
(6) | The amounts shown in this column for 2009 include the following with respect to each named executive officer: |
Perquisites and | ||||||||||||||||||||||||
401(k) | International | Severance | Other Personal | Tax Gross- | ||||||||||||||||||||
Name | Match | Benefits | Benefits | Benefits | Ups | Total | ||||||||||||||||||
Robert J. Palmisano | $ | 7,350 | $ | — | $ | — | $ | 137,968 | (a) | $ | 91,165 | (b) | $ | 236,483 | ||||||||||
Shawn McCormick | 7,350 | — | — | — | — | 7,350 | ||||||||||||||||||
Patrick D. Spangler | — | — | 344,328 | (c) | — | — | 344,328 | |||||||||||||||||
Pascal E.R. Girin | — | 144,522 | (d) | — | 565,945 | (e) | — | 710,467 | ||||||||||||||||
Stacy Enxing Seng | 7,350 | — | — | 5,001 | (f) | — | 12,351 | |||||||||||||||||
Brett A. Wall | 7,350 | — | — | 3,287 | (g) | — | 10,637 |
(a) | Represents: (i) $59,968 in commuting expenses; (ii) a $60,000 housing allowance; and (iii) a $18,000 automobile allowance. | |
(b) | Represents: (i) a tax gross-up of $29,129 for income tax incurred by Mr. Palmisano for reimbursement for commuting expenses; (ii) a tax gross-up of $47,720 for income tax incurred by Mr. Palmisano for his housing |
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allowance; and (iii) a tax gross-up of $14,316 for income tax incurred by Mr. Palmisano for his automobile allowance. | ||
(c) | Represents: (i) $314,800 in severance pay and (ii) $29,528 in reimbursement of health care coverage premiums. | |
(d) | Represents mobility premium payments under French tax law relating to travel by Mr. Girin outside of France. | |
(e) | Represents: (i) housing lease payments of $51,750; (ii) an automobile allowance of $18,622; (iii) $61,394 in reimbursement of family travel expenses; (iv) $18,280 in reimbursement of family education expenses; (v) a relocation allowance of $84,000; and (vi) $331,899 in tax equalization payments. | |
(f)Represents a $5,001 cash value of travel expenses incurred in connection with attending a sales award trip. | ||
(g) | Represents a $3,287 cash value of travel expenses incurred in connection with attending a sales award trip. |
(7) | Mr. Palmisano was appointed as President and Chief Executive Officer effective April 6, 2008. | |
(8) | Mr. McCormick was appointed as Senior Vice President and Chief Financial Officer effective January 19, 2009. | |
(9) | Mr. Spangler resigned as Senior Vice President and Chief Financial Officer effective January 19, 2009. | |
(10) | Reflected in U.S. dollars but paid in Euros for all payments prior to October 2009. Conversion into U.S. dollars based on conversion rates as of December 31, 2007, 2008 and 2009, respectively. Conversion rate as of December 31, 2007 was one Euro to $1.4603, as of December 31, 2008 was one Euro to $1.4094, and as of December 31, 2009 was one Euro to $1.4333 for amounts paid in France and one Euro to $1.50 for amounts paid in U.S. dollars from the United States. | |
(11) | Mr. Wall was appointed as Senior Vice President and President, International effective October 5, 2009. |
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All Other | All Other | Grant Date Fair | ||||||||||||||||||||||||||||||||||
Stock Awards: | Option Awards: | Value | ||||||||||||||||||||||||||||||||||
Number of | Number of | Exercise or Base | Stock and | |||||||||||||||||||||||||||||||||
Board | Estimated Future Payouts Under Non-Equity | Shares of | Securities | Price of | Option | |||||||||||||||||||||||||||||||
Grant | Approval | Incentive Plan Awards(2) | Stock or Units | Underlying | Option | Awards | ||||||||||||||||||||||||||||||
Name | Date | Date(1) | Threshold ($) | Target ($) | Maximum ($) | (#)(3) | Options(#)(4) | Awards ($/Sh) | ($)(5) | |||||||||||||||||||||||||||
Robert J. Palmisano | 01/01/09 | 02/18/09 | $ | 300,000 | $ | 600,000 | $ | 900,000 | — | — | $ | — | $ | — | ||||||||||||||||||||||
02/12/09 | 02/12/09 | — | — | — | 99,067 | — | — | 614,215 | ||||||||||||||||||||||||||||
02/12/09 | 02/12/09 | — | — | — | — | 247,667 | 6.20 | 642,324 | ||||||||||||||||||||||||||||
Shawn McCormick | 01/19/09 | 02/18/09 | 99,534 | 199,068 | 298,602 | — | — | — | — | |||||||||||||||||||||||||||
01/19/09 | 12/19/08 | — | — | — | 56,000 | — | — | 348,880 | ||||||||||||||||||||||||||||
01/19/09 | 12/19/08 | — | — | — | — | 140,000 | 6.23 | 364,840 | ||||||||||||||||||||||||||||
Patrick D. Spangler | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Pascal E.R. Girin | 01/01/09 | 02/18/09 | 174,908 | 349,816 | 524,724 | — | — | — | — | |||||||||||||||||||||||||||
03/10/09 | 02/12/09 | — | — | — | 53,390 | — | — | 313,399 | ||||||||||||||||||||||||||||
03/10/09 | 02/12/09 | — | — | — | — | 133,474 | 5.87 | 327,732 | ||||||||||||||||||||||||||||
Stacy Enxing Seng | 01/01/09 | 02/18/09 | 115,700 | 231,400 | 347,100 | — | — | — | — | |||||||||||||||||||||||||||
02/12/09 | 02/12/09 | — | — | — | 77,076 | — | — | 477,871 | ||||||||||||||||||||||||||||
02/12/09 | 02/12/09 | — | — | — | — | 192,665 | 6.20 | 499,677 | ||||||||||||||||||||||||||||
Brett A. Wall | 01/01/09 | 02/18/09 | 66,987 | 133,973 | 200,960 | — | — | — | — | |||||||||||||||||||||||||||
02/12/09 | 02/12/09 | — | — | — | 7,125 | — | — | 44,175 | ||||||||||||||||||||||||||||
02/12/09 | 02/12/09 | — | — | — | — | 17,825 | 6.20 | 46,229 | ||||||||||||||||||||||||||||
10/05/09 | 09/29/09 | — | — | — | 22,500 | — | — | 272,250 | ||||||||||||||||||||||||||||
10/05/09 | 09/29/09 | — | — | — | — | 56,200 | 12.10 | 286,553 |
(1) | In most cases, the grant date and the board approval date are identical. However, in the case of ev3’s non-equity incentive plan awards, the grant date, in each case, was effective as of January 1, 2009, the beginning of the relevant performance period, but the board approval date was different. See note (2) below. In addition, in the case of equity-based incentive awards granted to new executives or in connection with promotions, the grant date may not necessarily be the board approval date since the grant date is often tied to the first date of employment or the effective date of the promotion. Furthermore, in the case of equity-based incentive awards granted to Mr. Girin, the grant date was not necessarily the board approval date since the grant date, in some cases, was the first trading day after 10 full trading days had elapsed after the public release of our then most recent financial results, in accordance with our equity grant procedures for French residents. | |
(2) | Represents amounts payable under our annual performance incentive compensation plan for 2009, which was approved by our compensation committee in February 2009. The threshold, target and maximum estimated future payouts for Mr. McCormick under the plan have been prorated to reflect his January 19, 2009 start date. Mr. Spangler did not have an incentive target under the plan since he had departed prior to the adoption of the plan. The threshold, target and maximum estimated future payouts for Mr. Wall have been prorated to reflect his increased incentive target and increased base salary received in connection with his promotion to Senior Vice President and President, International on October 5, 2009. | |
(3) | Represents restricted stock grants in the case of Messrs. Palmisano, McCormick and Wall and Ms. Enxing Seng, and a restricted stock unit, in the case of Mr. Girin granted under the ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan. The restricted stock grants vest and become non-forfeitable over time, with the last tranche becoming non-forfeitable on November 15, 2012, in each case, so long as the individual remains an employee or consultant of our company. The restricted stock units vest and become issuable over time, with the last tranche becoming issuable on November 15, 2012, in each case, so long as the individual remains an employee or consultant of our company. | |
(4) | Represents options granted under the ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan. All options have a ten-year term and vest over a four-year period, with 25 percent of the underlying shares vesting on the one-year anniversary of the date of grant and 1/36 of the remaining 75 percent of the underlying shares vesting during each of the next 36 months after the one-year anniversary date, in each case, so long as the individual remains an employee or consultant of our company. | |
(5) | We refer you to notes (3) and (4) to the Summary Compensation Table for a discussion of the assumptions made in calculating the grant date fair value of stock awards and option awards. |
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• | immediately terminate if the executive’s employment or service relationship with our company terminated for “cause”; | ||
• | continue for a period of one year if the executive’s employment or service relationship with our company terminated as a result of his or her death or disability; or | ||
• | continue for a period of 90 days if the executive’s employment or service relationship with our company terminated for any reason, other than for cause or upon death or disability. |
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Option Awards | Stock Awards | |||||||||||||||||||||||
Number of Securities | Market Value of | |||||||||||||||||||||||
Underlying | Number of Securities | Number of Shares or | Shares or Units | |||||||||||||||||||||
Unexercised Options | Underlying Unexercised | Units of Stock That | That Have Not | |||||||||||||||||||||
(#) | Options (#) | Option Exercise | Option Expiration | Have Not Vested | Vested | |||||||||||||||||||
Name | Exercisable | Unexercisable(1) | Price ($) | Date(2) | (#)(3) | ($)(4) | ||||||||||||||||||
Robert J. Palmisano | 0 | 247,667 | $ | 6.20 | 02/12/2019 | — | $ | — | ||||||||||||||||
314,167 | (5) | 439,833 | (5) | 8.64 | 04/06/2018 | — | — | |||||||||||||||||
125,000 | 175,000 | 8.64 | 04/06/2018 | — | — | |||||||||||||||||||
— | — | — | — | 74,301 | 991,175 | |||||||||||||||||||
Shawn McCormick | 0 | 140,000 | 6.23 | 01/19/2019 | — | — | ||||||||||||||||||
— | — | — | — | 44,336 | 591,442 | |||||||||||||||||||
Patrick D. Spangler(6) | 27,083 | 0 | 16.64 | 03/31/2010 | — | — | ||||||||||||||||||
27,344 | 0 | 17.67 | 03/31/2010 | — | — | |||||||||||||||||||
24,479 | 0 | 16.05 | 03/31/2010 | — | — | |||||||||||||||||||
66,000 | 0 | 14.00 | 03/31/2010 | — | — | |||||||||||||||||||
59,000 | 0 | 8.82 | 03/31/2010 | — | — | |||||||||||||||||||
Pascal E.R. Girin | 0 | 133,474 | 5.87 | 03/10/2019 | — | — | ||||||||||||||||||
33,333 | 66,667 | 11.82 | 08/12/2018 | — | — | |||||||||||||||||||
27,083 | 22,917 | 16.64 | 10/04/2017 | — | — | |||||||||||||||||||
36,458 | 13,542 | 17.67 | 01/22/2017 | — | — | |||||||||||||||||||
24,479 | 521 | 16.05 | 01/20/2016 | — | — | |||||||||||||||||||
88,000 | 0 | 14.00 | 07/01/2015 | — | — | |||||||||||||||||||
6,666 | 0 | 8.82 | 01/07/2015 | — | — |
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Option Awards | Stock Awards | |||||||||||||||||||||||
Number of Securities | Market Value of | |||||||||||||||||||||||
Underlying | Number of Securities | Number of Shares or | Shares or Units | |||||||||||||||||||||
Unexercised Options | Underlying Unexercised | Units of Stock That | That Have Not | |||||||||||||||||||||
(#) | Options (#) | Option Exercise | Option Expiration | Have Not Vested | Vested | |||||||||||||||||||
Name | Exercisable | Unexercisable(1) | Price ($) | Date(2) | (#)(3) | ($)(4) | ||||||||||||||||||
5,000 | 0 | 8.82 | 07/19/2014 | — | — | |||||||||||||||||||
30,600 | 0 | 8.82 | 08/15/2013 | — | — | |||||||||||||||||||
— | — | — | — | 155,888 | 2,079,546 | |||||||||||||||||||
Stacy Enxing Seng | 0 | 96,350 | 6.20 | 02/12/2019 | — | — | ||||||||||||||||||
0 | 96,315 | 6.20 | 02/12/2019 | — | — | |||||||||||||||||||
20,313 | 17,187 | 16.64 | 10/04/2017 | — | — | |||||||||||||||||||
29,167 | 10,833 | 17.67 | 01/22/2017 | — | — | |||||||||||||||||||
19,583 | 417 | 16.05 | 01/20/2016 | — | — | |||||||||||||||||||
99,072 | 0 | 14.00 | 07/01/2015 | — | — | |||||||||||||||||||
25,000 | 0 | 8.82 | 02/01/2015 | — | — | |||||||||||||||||||
8,333 | 0 | 8.82 | 01/07/2015 | — | — | |||||||||||||||||||
2,916 | 0 | 8.82 | 07/19/2014 | — | — | |||||||||||||||||||
12,500 | 0 | 8.82 | 05/07/2014 | — | — | |||||||||||||||||||
15,300 | 0 | 8.82 | 04/07/2013 | — | — | |||||||||||||||||||
27,097 | 0 | 8.82 | 08/07/2012 | — | — | |||||||||||||||||||
8,574 | 0 | 3.54 | 06/20/2012 | — | — | |||||||||||||||||||
12,860 | 0 | 8.82 | 06/20/2012 | — | — | |||||||||||||||||||
— | — | — | — | 89,110 | 1,188,727 | |||||||||||||||||||
Brett A. Wall | 0 | 56,200 | 12.10 | 10/05/2019 | — | — | ||||||||||||||||||
0 | 17,825 | 6.20 | 02/12/2019 | — | — | |||||||||||||||||||
3,460 | 7,615 | 12.21 | 09/01/2018 | — | — | |||||||||||||||||||
5,417 | 4,583 | 16.64 | 10/04/2017 | — | — | |||||||||||||||||||
8,203 | 3,047 | 17.67 | 01/22/2017 | — | — | |||||||||||||||||||
18,000 | 0 | 13.54 | 12/06/2015 | — | — | |||||||||||||||||||
1,488 | 0 | 12.70 | 07/03/2011 | — | — | |||||||||||||||||||
379 | 0 | 9.35 | 05/02/2011 | — | — | |||||||||||||||||||
692 | 0 | 9.35 | 05/02/2011 | — | — | |||||||||||||||||||
4,400 | 0 | 10.30 | 04/04/2011 | — | — | |||||||||||||||||||
5,125 | 0 | 10.30 | 04/04/2011 | — | — | |||||||||||||||||||
16,373 | 0 | 15.74 | 09/15/2010 | — | — | |||||||||||||||||||
1,090 | 0 | 15.74 | 09/15/2010 | — | — | |||||||||||||||||||
— | — | — | — | 33,536 | 447,370 |
(1) | Except as otherwise noted, all stock options vest over a four-year period, with 25 percent of the underlying shares vesting on the one-year anniversary of the date of grant and 1/36 of the remaining 75 percent of the underlying shares vesting during each of the next 36 months after the one-year anniversary date. Upon the occurrence of a change in control, the unvested and unexercisable options described in this table may be accelerated and become fully vested and immediately exercisable as of the date of the change in control. For more information, we refer you to the discussion under the heading “—Potential Payments Upon Termination or Change in Control.” | |
(2) | All option awards have a 10-year term, but may terminate earlier if the recipient’s employment or service relationship with our company terminates. The option expiration dates for Mr. Spangler reflect the fact that his consulting arrangement with ev3 ended on December 31, 2009 and his option awards expired 90 days thereafter. For more information, we refer you to the discussion under the heading “—Potential Payments Upon Termination or Change in Control—Severance Arrangement—Patrick D. Spangler.” | |
(3) | The release dates and release amounts for the unvested restricted stock grants, in the case of Messrs. Palmisano, McCormick and Wall and Ms. Enxing Seng, and restricted stock unit grants, in the case of Mr. Girin, are as follows: |
• | Mr. Palmisano: November 15, 2010 (24,766 shares), November 15, 2011 (24,766 shares) and November 15, 2012 (24,769 shares). | ||
• | Mr. McCormick: November 15, 2010 (14,778 shares), November 15, 2011 (14,778 shares) and November 15, 2012 (14,780 shares). |
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• | Mr. Girin: March 1, 2010 (17,500 shares), April 30, 2010 (15,000 shares), August 12, 2010 (19,275 shares), March 10, 2011 (26,695 shares), November 15, 2010 (28,103 shares), November 15, 2011 (35,967 shares) and November 15, 2012 (13,348 shares). | ||
• | Ms. Enxing Seng: November 15, 2010 (36,844 shares), November 15, 2011 (32,458 shares) and November 15, 2012 (19,808 shares). | ||
• | Mr. Wall: November 15, 2010 (12,820 shares), November 15, 2011 (11,590 shares) and November 15, 2012 (9,126 shares). |
If there is a change in control of our company, then, under the terms of our existing equity incentive plan, all issuance or forfeiture conditions on all outstanding stock grants and stock unit grants will be deemed satisfied; provided if any such issuance or forfeiture condition relates to satisfying any performance goal and there is a target for the goal, the issuance or forfeiture condition will be deemed satisfied generally only to the extent of the stated target. | ||
(4) | The market value of restricted stock or restricted stock units that had not vested as of December 31, 2009 is based on the closing sale price of our common stock on December 31, 2009 ($13.34). | |
(5) | This option was granted outside the terms of our existing equity incentive plan, was approved by the compensation committee of our board of directors, and was granted pursuant to an exemption from NASDAQ’s stockholder approval requirements under former NASDAQ Marketplace Rule Section 4350(i)(1)(A)(iv). | |
(6) | Upon the termination of Mr. Spangler’s consulting arrangement on December 31, 2009, all of Mr. Spangler’s unvested option awards and stock awards terminated at that time. |
Option Awards | Stock Awards | |||||||||||||||
Number of Shares | Value Realized on | Number of Shares Acquired on Vesting | Value Realized on | |||||||||||||
Name | Acquired onExercise (#) | Exercise($)(1) | (#) | Vesting($)(2) | ||||||||||||
Robert J. Palmisano | — | $ | — | 24,766 | $ | 311,309 | ||||||||||
Shawn McCormick | — | — | 11,664 | 146,616 | ||||||||||||
Patrick D. Spangler | 16,000 | 50,304 | — | — | ||||||||||||
Pascal E.R. Girin | — | — | 29,912 | 280,726 | ||||||||||||
Stacy Enxing Seng | — | — | 43,450 | 546,167 | ||||||||||||
Brett A. Wall | — | — | 5,944 | 74,716 |
(1) | The aggregate dollar value realized upon exercise is the difference between the market price of the underlying shares of our common stock on the date of exercise, based on the closing sale price of our common stock on the date of exercise, and the exercise price of the options. | |
(2) | The aggregate dollar value realized upon vesting is equal to the market value of the underlying shares of our common stock, based on the closing sale price of our common stock on the date of vesting. |
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• | payments by us to Mr. Spangler in an aggregate amount equal to his annual base salary of $314,800, paid in the form of salary continuation over the 12 months following his resignation; | ||
• | payment by us to Mr. Spangler of a lump sum cash payment equal to $193,522, which represented Mr. Spangler’s annual performance incentive plan payout (which was 60 percent of his annual base salary) for 2008 in accordance with the terms of ev3’s 2008 performance incentive compensation plan; | ||
• | if timely elected, payment of COBRA continuation coverage premiums for a period through no later than December 31, 2009; and | ||
• | payment of outplacement services for a period of up to one year from the date of his resignation. |
• | the sale, lease, exchange or other transfer, directly or indirectly, of all or substantially all of our assets, in one transaction or in a series of related transactions, to a third party; | ||
• | any third party, other than a bona fide underwriter, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities (x) representing 50 percent or more of the combined voting power of our outstanding securities ordinarily having the right to vote at elections of directors, or (y) resulting in such third party becoming an affiliate of our company, including pursuant to a transaction described in the next bullet below; |
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• | the consummation of any transaction or series of transactions under which we are merged or consolidated with any other company, other than a merger or consolidation which would result in our stockholders immediately prior thereto continuing to own (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50 percent of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation; or | ||
• | the “continuity directors” cease for any reason to constitute at least a majority of our board of directors. |
• | the acquisition (other than from ev3) by any person, entity or group, subject to certain exceptions, of 20 percent or more of either the then-outstanding shares of our common stock or the combined voting power of our then-outstanding shares entitled to vote generally in the election of directors; | ||
• | the “continuity directors” cease for any reason to constitute at least a majority of our board of directors; or | ||
• | approval by our stockholders of any reorganization, merger or consolidation with respect to which persons who were our stockholders immediately prior to such transaction do not immediately thereafter own more than 50 percent of the combined voting power entitled to vote generally in the election of directors of the surviving corporation’s then-outstanding voting securities, a liquidation or dissolution of our company or the sale of all or substantially all of our assets. |
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Dollar Amount of | ||||||||
Description of Payments | Potential Maximum | |||||||
Name | and Executive Benefits | Payments/Benefits | ||||||
Robert J. Palmisano | Pro Rata Portion of 2009 Bonus(1) | $ | 691,200 | |||||
Lump Sum Payment Based on Base Salary | 1,800,000 | |||||||
Lump Sum Payment Based on Annual Bonus Plan | 1,800,000 | |||||||
Unvested and Accelerated Stock Options(2) | 4,658,059 | |||||||
Unvested and Accelerated Restricted Stock(3) | 991,175 | |||||||
Group Health Plan Benefits(4) | 28,968 | |||||||
Accrued Paid Time Off(5) | 73,846 | |||||||
Housing Allowance(6) | 180,000 | |||||||
Automobile Allowance | 54,000 | |||||||
Housing and Automobile Tax Gross-up Payment | 168,771 | |||||||
Fringe Benefit Tax Gross-up Payment(7) | 89,097 | |||||||
280G Tax Gross-up Payment(8) | 2,541,309 | |||||||
Total: | 13,076,425 | |||||||
Shawn McCormick | Pro Rata Portion of 2009 Bonus(1) | 229,377 | ||||||
Lump Sum Payment Based on Base Salary | 350,000 | |||||||
Lump Sum Payment Based on Annual Bonus Plan(1)(9) | 210,000 | |||||||
Accelerated Sign On and Retention Bonuses | 210,000 | |||||||
Unvested and Accelerated Stock Options(2) | 995,400 | |||||||
Unvested and Accelerated Restricted Stock(3) | 591,442 | |||||||
Group Health Plan Benefits(4) | 21,966 | |||||||
Outplacement Services | 20,000 | |||||||
Accrued Paid Time Off(5) | 10,826 | |||||||
280G Tax Gross-up Payment(8) | — | |||||||
Total: | 2,639,011 | |||||||
Pascal E.R. Girin(10) | Pro Rata Portion of 2009 Bonus(1) | 458,958 | ||||||
Lump Sum Payment Based on Base Salary | 514,218 | |||||||
Lump Sum Payment Based on Annual Bonus Plan(1)(9) | 334,242 | |||||||
Unvested and Accelerated Stock Options(2) | 1,098,384 | |||||||
Unvested and Accelerated Restricted Stock Units(3) | 2,079,546 | |||||||
Group Health Plan Benefits(4) | 41,167 | |||||||
Outplacement Services | 20,000 | |||||||
Accrued Paid Time Off(5) | 81,658 | |||||||
280G Tax Gross-up Payment(8) | 754,133 | |||||||
Total: | 5,382,306 | |||||||
Stacy Enxing Seng | Pro Rata Portion of 2009 Bonus(1) | 233,627 | ||||||
Lump Sum Payment Based on Base Salary | 356,000 | |||||||
Lump Sum Payment Based on Annual Bonus Plan(1)(9) | 231,400 | |||||||
Unvested and Accelerated Stock Options(2) | 1,375,628 | |||||||
Unvested and Accelerated Restricted Stock(3) | 1,188,727 | |||||||
Group Health Plan Benefits(4) | 21,966 | |||||||
Outplacement Services | 20,000 | |||||||
Accrued Paid Time Off(5) | 30,355 | |||||||
280G Tax Gross-up Payment(8) | — | |||||||
Total: | 3,457,703 | |||||||
Brett A. Wall | Pro Rata Portion of 2009 Bonus(1) | 162,061 | ||||||
Lump Sum Payment Based on Base Salary | 300,000 | |||||||
Lump Sum Payment Based on Annual Bonus Plan(1)(9) | 180,000 | |||||||
Unvested and Accelerated Stock Options(2) | 205,562 | |||||||
Unvested and Accelerated Restricted Stock(3) | 447,370 | |||||||
Group Health Plan Benefits(4) | 14,484 | |||||||
Outplacement Services | 20,000 | |||||||
Accrued Paid Time Off(5) | 36,923 | |||||||
280G Tax Gross-up Payment(8) | — | |||||||
Total: | 1,366,400 |
(1) | Assumes performance milestones were satisfied at target. | |
(2) | The value of the automatic acceleration of the vesting of unvested stock options held by a named executive officer is based on the difference between: (i) the market price of the shares of our common stock underlying the unvested stock options held by such officer as of December 31, 2009 ($13.34), and (ii) the exercise price of the options. The range of exercise prices of unvested stock options held by our named executive officers included in the table as of December 31, 2009 was $5.87 to $17.67. | |
(3) | The value of the automatic acceleration of the vesting of restricted stock or restricted stock units held by a named executive officer is based on: (i) the number of unvested shares of restricted stock or restricted stock units held by such officer as of December 31, 2009, multiplied by (ii) the market price of our common stock on December 31, 2009 ($13.34). | |
(4) | The value of the group health plan benefits is based on premiums rates in effect in December 2009. |
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(5) | Represents amounts paid for accrued time off in excess of the accrual cap under our Paid Time Off Policy for U.S. Employees. | |
(6) | Mr. Palmisano would be entitled to a housing allowance, but only to the extent necessary to pay lease or rental obligations existing on the date of termination for up to 36 months. Amount assumes that Mr. Palmisano’s lease or rental obligations equal his housing allowance of $5,000 per month and extend for 36 months. | |
(7) | The value of the gross-up payment assumes a 35 percent U.S. federal income tax rate, a 7.85 percent state income tax rate and a 1.45 percent Medicare tax. | |
(8) | These payments are only payable in the case that the executive’s payments following a change in control result in excess parachute payments under Internal Revenue Code Section 280G. The named executive officers’ change in control agreements provide that any excise tax and gross-up payments will equal only that amount required to assure that the executive receives payment at least equal to the expected severance payment without the executive incurring golden parachute excise tax out of pocket. The estimated calculations incorporate the following tax rates: 280G excise tax rate of 20 percent, a statutory 35 percent federal income tax rate, a 1.45 percent Medicare tax rate and the applicable state income tax rate. In the case of a change in control with no termination of employment, none of the executives would receive payments in an amount that would require an excise tax gross-up. | |
(9) | Amount based on base salary and target bonus percentage in effect on December 31, 2009. Assumes performance milestones were satisfied at target. | |
(10) | For purposes of determining the value of payments to Mr. Girin, it is assumed that any notice requirements under applicable law will have been satisfied. |
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• | John K. Bakewell is Executive Vice President and Chief Financial Officer of RegionalCare Hospital Partners, Inc. a privately-held company, acquirer and operator of acute care hospitals in non-urban markets. | ||
• | Douglas W. Kohrs is President and Chief Executive Officer of Tornier B.V., a privately-held global orthopedic company. | ||
• | Daniel J. Levangie is President and Chief Executive Officer of Keystone Dental, Inc., a privately-held dental implant medical device company, and a Managing Partner of Constitution Medical Investors, Inc., a Boston-based private investment firm focused on healthcare sector-related acquisitions. | ||
• | John L. Miclot is President and Chief Executive Officer of CCS Medical, Inc., a privately-held provider of home healthcare products, such as insulin pumps, incontinence products and respiratory equipment. |
• | two persons designated by Warburg Pincus and the Vertical Funds if Warburg Pincus and the Vertical Funds collectively beneficially own 20 percent or more of our common stock; or | ||
• | one person designated by Warburg Pincus and the Vertical Funds if Warburg Pincus and the Vertical Funds collectively beneficially own at least 10 percent but less than 20 percent of our common stock. |
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• | use our reasonable best efforts to effect up to two registered offerings of at least $10 million each upon the demand of the holders of not less than a majority of the shares of our common stock then held by the holders; | ||
• | use our best efforts to effect up to three registrations of at least $1 million each on Form S-3, once we become eligible to use such form, if any holder so requests; and | ||
• | maintain the effectiveness of each such registration statement for a period of 120 days or until the distribution of the registrable securities pursuant to the registration statement is complete. |
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• | the related party’s relationship to us and his or her interest in the transaction; | ||
• | the material facts of the proposed related party transaction, including the proposed aggregate value of such transaction or, in the case of indebtedness, the amount of principal that would be involved; | ||
• | the purpose and benefits of the proposed related party transaction with respect to us; | ||
• | if applicable, the availability of other sources of comparable products or services; and | ||
• | an assessment of whether the proposed related party transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally. |
• | the purpose of the transaction; | ||
• | the benefits of the transaction to us; | ||
• | the impact on a director’s independence in the event the related party is a non-employee director, an immediate family member of a non-employee director or an entity in which a non-employee director is a partner, shareholder or executive officer; | ||
• | the availability of other sources for comparable products or services; | ||
• | the terms of the transaction; and | ||
• | the terms available to unrelated third parties or to employees generally. |
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AND RESTATED 2005 INCENTIVE PLAN
• | Aligns directors, employee and stockholder interests. We currently provide long-term incentives primarily in the form of stock grants (in the form of restricted stock or restricted stock units) and stock option grants to our outside directors, executive officers and other key employees. We believe that our stock-based compensation programs, along with our stock ownership guidelines for our directors and executives, help align the interests of our directors, executive officers and other key employees with our stockholders. We believe that our long-term stock-based incentives help promote long-term retention of our employees and encourage significant ownership of our common stock. We also provide short-term incentives under our annual performance incentive compensation plan that reinforce achievement of specified financial and other business goals by linking a significant portion of a participant’s compensation to the achievement by our company, and in certain cases, a particular business or individual, of performance goals. If the Amended and Restated 2005 |
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Plan is approved, we will be able to maintain our means of aligning the interests of our directors, executive officers and other key employees with the interests of our stockholders. |
• | Attracts and retains talent. Talented, motivated and effective directors, executives and employees are essential to executing our business strategies. Stock-based and annual cash incentive compensation has been an important component of total compensation at our company for many years because such compensation enables us to effectively recruit executives and other employees while encouraging them to act and think like owners of our company. If the Amended and Restated 2005 Plan is approved, we believe we will maintain our ability to offer competitive compensation packages to both retain our best performers and attract new talent. | ||
• | Supports our pay-for-performance philosophy. We believe that stock-based compensation, by its very nature, is performance-based compensation. The largest component of total compensation for our executives is incentive compensation in the form of both stock-based and cash-based incentives that are tied to the achievement of financial and other business results. We use incentive compensation to help reinforce desired financial and other business results to our executives and to motivate them to make decisions to produce those results. | ||
• | Avoids disruption in our compensation programs. The approval of the Amended and Restated 2005 Plan by our stockholders is critical because there is an insufficient number of shares of our common stock available for issuance under the currently existing 2005 plan. If the Amended and Restated 2005 Plan is approved, we will not have to restructure our existing compensation programs for reasons that are not directly related to the achievement of our financial and other business objectives. To remain competitive without stock-based compensation arrangements, it likely will be necessary to replace components of compensation previously awarded in equity with cash or with other instruments that may not necessarily align director, executive officer and employee interests with those of our stockholders as well as stock-based awards do. Additionally, replacing equity with cash will increase cash compensation expense and use cash that would be better utilized toward other strategic purposes, such as research and development of new products, improvements in the quality and performance of existing products and strategic acquisitions. | ||
• | Will be implemented consistent with a new burn rate policy. In connection with the approval of the Amended and Restated 2005 Plan and in order to address potential stockholder concerns regarding the number of stock-based awards we intend to grant in a given year, our compensation committee commits to adopt a burn rate policy for fiscal years 2010, 2011 and 2012. During this three-year period, beginning with 2010 and ending with 2012, the new burn rate policy will limit the number of shares that we grant subject to stock-based awards over the three-year period to an annual average of 4.02% of our outstanding common stock (which is equal to the average of the 2009 and 2010 “burn rate” limit for Russell 3000 companies in our Global Industry Classification Standards Peer Group (3510 – Health Care Equipment and Services), as established by RiskMetrics Group). Our annual burn rate will be calculated as the number of shares subject to stock-based awards (including stock options, stock appreciation rights, stock grants, stock unit grants, performance awards, non-employee director awards and other stock-based awards) granted during our fiscal year and the number of shares subject to performance shares that are paid out during a fiscal year divided by our weighted average outstanding common stock, measured as of the last day of each fiscal year, both as reported in our periodic filings with the SEC. Awards that are settled in cash, awards that are granted pursuant to a stockholder approved exchange programs, awards sold under our employee stock purchase plan and awards assumed or substituted in acquisitions will be |
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excluded from our burn rate calculation. For purposes of our calculation, each share subject to a “full value” award (i.e., stock grants, stock unit grants, performance shares and any other award that does not have an exercise price per share equal to the per share fair market value of our common stock on the grant date) will be counted as two shares. Our burn rates for the fiscal years ended December 31, 2009 was 3.66%. |
• | Protects stockholder interests and embraces sound stock-based compensation practices. As described in more detail below under the heading “Summary of Sound Governance Features of the Amended and Restated 2005 Plan,” the Amended and Restated 2005 Plan includes a number of features that are consistent with the interests of our stockholders and sound corporate governance practices. |
• | No “evergreen” provision. The number of shares of our common stock available for issuance under the Amended and Restated 2005 Plan is fixed and will not adjust based upon the number of outstanding shares of our common stock. We currently expect the number of shares authorized for issuance under the Amended and Restated 2005 Plan will last between three and four years, at which time we expect to ask our stockholders to approve an additional share authorization. | ||
• | Will not be excessively dilutive to our stockholders. Subject to adjustment, the maximum number of shares of our common stock authorized for issuance under the Amended and Restated 2005 Plan is 14,500,000 shares, plus the number of shares subject to awards outstanding under our predecessor equity-based compensation plans as of the date of stockholder approval of the Amended and Restated 2005 Plan but only to the extent that such outstanding awards are forfeited, expire or otherwise terminate without the issuance of such shares. As of March 29, 2010, an aggregate of 1,746,562 shares of common stock were available for issuance under the currently existing 2005 plan. As of March 29, 2010, 186 shares of common stock were available for issuance under the ev3 Inc. Employee Stock Purchase Plan. As described in more detail under the heading “Proposal Three – Approval of ev3 Inc. Amended and Restated Employee Stock Purchase Plan,” we also are seeking the approval by our stockholders of an Amended and Restated Employee Stock Purchase Plan that will authorize the issuance of an additional 1,000,000 shares under that plan. Other than the ev3 Inc. Amended and Restated Employee Stock Purchase Plan, we do not have any other equity-based compensation plans under which shares of our common stock are available for issuance but not subject to any outstanding awards. As of March 29, 2010, we had total (including plan and non-plan) outstanding options to purchase an aggregate of 9,201,416 shares of our common stock with a weighted average exercise price of $11.6162 and a weighted average remaining term of 6.45 years, and 1,510,834 unvested “full value” awards outstanding. No new awards will be granted under the 2005 plan or otherwise between March 29, 2010 and the Annual Meeting, except for anticipated grants of options to purchase up to an aggregate of 120,000 shares of our common stock and up to an aggregate of 68,000 “full value” awards for new hire, retention and recognition purposes. | ||
• | Limit on number of “full value” awards. No more than 7,500,000 of the shares authorized for issuance under the Amended and Restated 2005 Plan may be issued pursuant to “full |
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value” awards, which are awards other than stock options or SARs that are settled by the issuance of shares of our common stock. |
• | No “recycling” of shares from exercised stock options or SARs. Shares withheld to satisfy tax withholding obligations on awards or to pay the exercise price of awards and any shares not issued or delivered as a result of a “net exercise” of a stock option will not become available for issuance as future award grants under the Amended and Restated 2005 Plan. | ||
• | No reload stock options or SARs. Reload stock options and SARs are not authorized under the Amended and Restated 2005 Plan. | ||
• | Stock option and SAR exercise prices will not be lower than the fair market value on the grant date. The Amended and Restated 2005 Plan prohibits granting stock options and SARs with exercise prices lower than the fair market value of a share of our common stock on the grant date, except in connection with certain mergers, consolidations, acquisitions of property or stock, reorganizations or other similar transactions. | ||
• | No repricing or exchange without stockholder approval. The Amended and Restated 2005 Plan prohibits the repricing of outstanding “underwater” stock options or SARs without stockholder approval, except for any adjustments required in connection with certain corporate transactions. Repricing is broadly defined to include amendments or modifications to the terms of an outstanding stock option or SAR to lower the exercise or grant price or cancelling an outstanding stock option or SAR in exchange for cash, other awards or other stock options or SARs having a lower exercise price. | ||
• | Stock options, SARs and unvested performance awards are not entitled to dividend equivalent rights. Stock option, SAR and unvested performance award holders have no rights as stockholders with respect to the shares underlying their awards until their stock options, SARs or unvested performance awards are exercised or vested and shares are issued. As a result, stock options and SARs and unvested performance awards, the vesting of which is based on the achievement of performance goals, under the Amended and Restated 2005 Plan have no dividend equivalent rights associated with them. | ||
• | Minimum vesting and performance period requirements. The Amended and Restated 2005 Plan provides that any stock options, SAR, stock grants and stock unit grants under the plan will vest on a pro rata basis (which may be determined on a monthly, annual or other basis and may be tied to a specific vesting date each year, such as November 15) over a vesting term of not less than three years after the grant date of the award or no more rapidly than ratably over a three-year period after the grant date and performance-based stock-based awards will have a minimum performance period of one year, except under certain limited circumstances. | ||
• | Stockholder approval is required for material revisions to the plan. The Amended and Restated 2005 Plan requires stockholder approval of material revisions to the plan, as well as certain additional revisions to the plan that do not require stockholder approval under the NASDAQ rules. | ||
• | Members of the committee administering the plan are non-employee, independent and outside directors. The Amended and Restated 2005 Plan will be administered by the compensation committee or a subcommittee of the compensation committee. All members of the committee administering the plan will be “non-employee directors” within the meaning |
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of Rule 16b-3 under the Exchange Act, “independent directors” under the listing standards of NASDAQ, the rules and regulations of the SEC and applicable law, and “outside directors” within the meaning of Section 162(m) of the Code. |
• | “Clawback” provisions. The Amended and Restated 2005 Plan contains “clawback” provisions, which provide that if a participant is determined by the committee to have taken action that would constitute “cause” or an “adverse action,” as those terms are defined in the Amended and Restated 2005 Plan, during or within one year after the termination of the participant’s employment or other service, all rights of the participant under the plan and any agreements evidencing an award then held by the participant will terminate and be forfeited and the committee may require the participant to surrender and return to us any shares received, and/or to disgorge any profits or any other economic value made or realized by the participant in connection with any awards or any shares issued upon the exercise or vesting of any awards during or within one year after the termination of the participant’s employment or other service. |
• | Types of Awards. The Amended and Restated 2005 Plan permits the grant of several incentive awards, including nonqualified and incentive stock options, SARs, stock grants, stock unit grants, performance awards, annual performance cash awards, non-employee director awards and other cash-based and stock-based awards; whereas, the currently existing 2005 Plan only permits the grant of nonqualified and incentive stock options, SARs, stock grants (in the form of restricted stock or restricted stock units) and stock unit grants. | ||
• | Number of Shares Available. The number of shares of our common stock authorized for issuance under the Amended and Restated 2005 Plan will be 14,500,000 shares plus the number of shares subject to awards outstanding under our predecessor equity-based compensation plans as of the date of stockholder approval of the Amended and Restated 2005 Plan but only to the extent that such outstanding awards are forfeited, expire or otherwise terminate without the issuance of such shares. The currently existing 2005 Plan authorizes 8,000,000 shares of our common stock for issuance. | ||
• | Limits on “Full Value” Awards. The Amended and Restated 2005 Plan will limit the number of “full value” awards; whereas the currently existing 2005 Plan does not contain limitations on “full value” awards. | ||
• | “Clawback” Provisions and Sarbanes-Oxley Forfeiture Standard. Unlike the currently existing 2005 Plan, the Amended and Restated 2005 Plan provides for the “clawback” provisions discussed above and expressly incorporates the Sarbanes-Oxley Act of 2002 automatic forfeiture standard for certain participants in connection with material noncompliance, as a result of misconduct, resulting in an accounting restatement. | ||
• | Definition of a Change in Control. The definition of “change in control” in the Amended and Restated 2005 Plan is narrower than the definition in the currently existing 2005 Plan since the change in control provisions will not be triggered unless we consummate certain |
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reorganizations, mergers or consolidations, as opposed to being triggered when our stockholders merely approve such a transaction that is never consummated. |
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• | 1,500,000 shares subject to stock options, SARs, stock grants, stock unit grants, performance awards and other stock-based awards; and | ||
• | $5,000,000 in annual performance cash awards or other cash-based awards. |
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• | All outstanding stock options and SARs held by the participant will, to the extent exercisable as of such termination, remain exercisable for a period of one year after such termination, but not later than the date the stock options or SARs expire, and options and SARs not exercisable as of such termination will terminate and be forfeited; | ||
• | All outstanding stock grants and stock unit grants held by the participant that then have not vested will terminate and be forfeited; | ||
• | All outstanding, but unpaid, performance awards and other cash-based or stock-based awards held by the participant will terminate and be forfeited, provided, however, that with |
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respect to any such awards that vest based on the achievement of performance goals, if a participant’s employment or other service with our company or any subsidiary, as the case may be, is terminated by death or disability prior to the end of the performance period of such award, but after the conclusion of a portion of the performance period (but in no event less than one year), the committee may, in its sole discretion, cause shares to be delivered or payment made with respect to the participant’s award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on full fiscal years only and no shares to be delivered for partial fiscal years; and |
• | If the effective date of such termination is before the end of the time period to which an annual performance cash award relates, then any such annual performance cash award held by a participant will terminate and be forfeited, but if the effective date of such termination is on or after the end of the time period to which an annual performance cash award relates, then any such annual performance cash award held by a participant will be paid to the participant in accordance with the payment terms of such award. |
• | All outstanding stock options and SARs held by the participant that then are exercisable will remain exercisable for three months after the date of termination, but those that are not exercisable will terminate and be forfeited; | ||
• | All outstanding stock grants and stock unit grants held by the participant that then have not vested will terminate and be forfeited; | ||
• | All outstanding, but unpaid, performance awards and other cash-based or stock-based awards held by the participant will terminate and be forfeited; | ||
• | If the effective date of such termination is before the end of the time period to which an annual performance cash award relates, then any such annual performance cash award held by a participant will terminate and be forfeited, but if the effective date of such termination is on or after the end of the time period to which an annual performance cash award relates, then any such annual performance cash award held by a participant will be paid to the participant in accordance with the payment terms of such award. |
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Number of Shares | Number of Restricted | |||||||
Name and Position | Underlying Options | Shares/Units | ||||||
Robert J. Palmisano | 561,272 | 104,509 | ||||||
President and Chief Executive Officer | ||||||||
Shawn McCormick | 142,418 | 56,967 | ||||||
Senior Vice President and Chief Financial Officer | ||||||||
Patrick D. Spangler | 178,500 | 68,377 | ||||||
Former Senior Vice President and Chief Financial Officer | ||||||||
Pascal E.R. Girin | 511,327 | 214,241 | ||||||
Executive Vice President and Chief Operating Officer | ||||||||
Stacy Enxing Seng. | 391,886 | 195,440 | ||||||
Executive Vice President and President Worldwide Peripheral Vascular | ||||||||
Brett A. Wall | 126,582 | 44,113 | ||||||
Senior Vice President and President of International | ||||||||
Executive Group | 2,291,143 | 917,663 | ||||||
Non-Executive Director Group | 652,506 | 126,575 | ||||||
All Other Employee Group | 5,164,715 | 2,027,683 |
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(c) | ||||||||||||
Number of Securities | ||||||||||||
(a) | (b) | Remaining Available for | ||||||||||
Number of Securities to | Weighted-Average | Future Issuance Under | ||||||||||
be Issued Upon Exercise | Exercise Price of | Equity Compensation Plans | ||||||||||
of Outstanding Options, | Outstanding Options, | (excluding securities | ||||||||||
Plan Category | Warrants and Rights | Warrants and Rights | reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | 8,839,309 | (1)(2)(5)(6) | $ | 9.60 | (3) | 3,010,110 | (4) | |||||
Equity compensation plans not approved by security holders | 754,000 | (7) | 8.64 | 0 | ||||||||
Total | 9,593,309 | $ | 9.53 | 3,010,110 |
(1) | Amount includes shares of our common stock issuable upon the exercise of stock options outstanding as of December 31, 2009 under the ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan and the ev3 LLC Amended and Restated 2003 Incentive Plan and shares of our common stock issuable upon the vesting of restricted stock units outstanding as of December 31, 2009 under the ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan. | |
(2) | Excludes employee stock purchase rights under the ev3 Inc. Employee Stock Purchase Plan. Under such plan, each eligible employee may purchase up to 2,500 shares of our common stock at semi-annual intervals on June 30th and December 31st each year at a purchase price per share equal to 85% of the lower of (i) the closing sales price per share of our common stock on the first day of the offering period or (ii) the closing sales price per share of our common stock on the last day of the offering period. | |
(3) | Included in the weighted-average exercise price calculation are 1,429,795 restricted stock units with an exercise price of $0.00. The weighted-average exercise price of all outstanding stock options as of December 31, 2009 and reflected in column (a) was $11.19. | |
(4) | Amount includes 2,009,924 shares remaining available at December 31, 2009 for future issuance under the ev3 Inc. Second Amended and Restated 2005 Incentive Stock Plan and 1,000,186 shares remaining available at December 31, 2009 for future issuance under the ev3 Inc. Employee Stock Purchase Plan, of which 1,000,000 shares remaining available under the ev3 Inc. Employee Stock Purchase Plan are subject to approval by ev3’s stockholders at the next annual meeting of stockholders. No shares remain available for grant under the ev3 LLC Amended and Restated 2003 Incentive Plan since such plan was terminated with respect to future grants in June 2005. | |
(5) | Excludes options assumed by us in connection with our acquisitions of Micro Therapeutics, Inc. and FoxHollow Technologies, Inc. As of December 31, 2009, a total of 1,360,489 shares of our common stock were issuable upon exercise of the assumed options. The weighted average exercise price of the outstanding assumed options as of such date was $12.86 per share and they have an average weighted life remaining of 5.18 years. All of the 520,087 options outstanding in connection with our acquisition of Micro Therapeutics, Inc. were exercisable as of December 31, 2009. 798,618 of the 840,644 options assumed and outstanding in connection with our acquisition of FoxHollow Technologies, Inc. were exercisable as of December 31, 2009. No additional options, restricted stock units or other equity incentive awards may be granted under the assumed Micro Therapeutics, Inc. and FoxHollow Technologies, Inc. plans. | |
(6) | Excludes shares issuable upon the vesting of restricted stock units assumed by us in connection with our acquisition of FoxHollow Technologies, Inc. As of December 31, 2009, a total of 242 shares of our common stock were issuable upon the vesting of the assumed restricted stock units. | |
(7) | Consists of a non-plan option to purchase 754,000 shares of our common stock granted outside of the terms of our existing stockholder-approved equity incentive plans to Robert J. Palmisano, our President and Chief Executive Officer, as an inducement grant in April 2008 pursuant to an exemption from NASDAQ’s shareholder approval requirements under former NASDAQ Marketplace Rule Section 4350(i)(1)(A)(iv). |
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EMPLOYEE STOCK PURCHASE PLAN
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Benefits Since February 1, 2010 | ||||
Number of Shares to be Purchased | ||||
Assuming Approval by Stockholders | ||||
Name and Position | of Amended and Restated ESPP | |||
Robert J. Palmisano | 0 | |||
President and Chief Executive Officer | ||||
Shawn McCormick | 0 | |||
Senior Vice President and Chief Financial Officer | ||||
Patrick D. Spangler | 0 | |||
Former Senior Vice President and Chief Financial Officer | ||||
Pascal E.R. Girin | 856 | |||
Executive Vice President and Chief Operating Officer | ||||
Stacy Enxing Seng | 0 | |||
Executive Vice President and President, Worldwide Peripheral Vascular | ||||
Brett A. Wall | 596 | |||
Senior Vice President and President, International | ||||
Executive Group | 1,200 | |||
Non-Executive Director Group | 0 | |||
All Other Employees Group | 85,321 |
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Benefits Since May 9, 2006 | ||||||||
Number of Shares | Average Purchase | |||||||
Name and Position | Purchased | Price Per Share | ||||||
Robert J. Palmisano | 0 | $ | N/A | |||||
President and Chief Executive Officer | ||||||||
Shawn McCormick | 0 | N/A | ||||||
Senior Vice President and Chief Financial Officer | ||||||||
Patrick D. Spangler | 0 | N/A | ||||||
Former Senior Vice President and Chief Financial Officer | ||||||||
Pascal E.R. Girin | 836 | 12.24 | ||||||
Executive Vice President and Chief Operating Officer | ||||||||
Stacy Enxing Seng | 0 | N/A | ||||||
Executive Vice President and President, Worldwide Peripheral Vascular | ||||||||
Brett A. Wall | 3,898 | 7.24 | ||||||
Senior Vice President and President, International | ||||||||
Executive Group | 9,858 | 7.83 | ||||||
Non-Executive Director Group | 0 | N/A | ||||||
All Other Employees Group | 749,814 | 7.45 |
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Aggregate Amount Billed by | ||||||||
Ernst & Young LLP | ||||||||
2009 | 2008 | |||||||
Audit Fees(1) | $ | 1,198,540 | $ | 1,288,336 | ||||
Audit-Related Fees(2) | 62,615 | 28,400 | ||||||
Tax Fees(3) | 90,000 | 175,500 | ||||||
All Other Fees(4) | 1,995 | — |
(1) | These fees consisted of the audit of our annual consolidated financial statements, including the audit of internal control over financial reporting, reviews of our consolidated condensed financial statements included in our quarterly reports on Form 10-Q and services provided in connection with our statutory and regulatory filings. For 2009, audit fees also included fees in connection with the review of our Form S-3 registration statement in connection with our acquisition of Chestnut Medical Technologies, Inc. | |
(2) | These fees consisted of assurance and related services including due diligence related to mergers and acquisitions and other attest services not required by statute or regulation. | |
(3) | These fees consisted of sales and property tax compliance and calculations related to tax attributes of acquired companies. The audit committee of our board of directors has considered whether the provision of these services is compatible with maintaining Ernst & Young LLP’s independence and has determined that it is. | |
(4) | These fees consisted of a subscription to an on-line accounting research tool. The audit committee of our board of directors has considered whether the provision of these services is compatible with maintaining Ernst & Young LLP’s independence and has determined that it is. |
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By Order of the Board of Directors, | ||||
/s/ Kevin M. Klemz | ||||
Kevin M. Klemz | ||||
Senior Vice President, Secretary and Chief Legal Officer | ||||
Plymouth, Minnesota
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2005 INCENTIVE PLAN
Appendix A-1
Table of Contents
Page | ||||
1. BACKGROUND AND PURPOSE | 3 | |||
2. DEFINITIONS | 3 | |||
3. SHARES AVAILABLE FOR ISSUANCE; GRANT LIMITS AND ADJUSTMENTS | 9 | |||
4. EFFECTIVE DATE | 11 | |||
5. COMMITTEE | 12 | |||
6. ELIGIBILITY | 13 | |||
7. OPTIONS | 13 | |||
8. STOCK APPRECIATION RIGHTS | 15 | |||
9. STOCK GRANTS AND STOCK UNIT GRANTS | 16 | |||
10. PERFORMANCE AWARDS | 18 | |||
11. ANNUAL PERFORMANCE CASH AWARDS | 19 | |||
12. NON-EMPLOYEE DIRECTOR AWARDS | 20 | |||
13. OTHER CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS | 21 | |||
14. PERFORMANCE MEASURES | 22 | |||
15. DIVIDEND EQUIVALENTS | 24 | |||
16. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE | 24 | |||
17. CHANGE IN CONTROL | 28 | |||
18. PAYMENT OF WITHHOLDING TAXES | 29 | |||
19. NON-TRANSFERABILITY | 30 | |||
20. SECURITIES REGISTRATION | 30 | |||
21. LIFE OF PLAN | 31 | |||
22. AMENDMENT, MODIFICATION OR TERMINATION | 31 | |||
23. DEFERRED COMPENSATION | 32 | |||
24. MISCELLANEOUS | 32 |
Appendix A-2
Table of Contents
Appendix A-3
Table of Contents
Appendix A-4
Table of Contents
Appendix A-5
Table of Contents
Appendix A-6
Table of Contents
Appendix A-7
Table of Contents
Appendix A-8
Table of Contents
(a) | 14,500,000; | ||
(b) | The number of shares of Stock subject to Awards outstanding under the Predecessor Plans as of the Effective Date but only to the extent that such outstanding Awards are forfeited, expire or otherwise terminate without the issuance of such shares of Stock; | ||
(c) | The number of shares issued or Awards granted under the Plan in connection with the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of the Company and/or any Subsidiar(ies) acquiring, merging or consolidating with another entity; and | ||
(d) | The number of shares that are unallocated and available for grant under a stock plan assumed by the Company or any Subsidiary(ies) in connection with the merger, consolidation, or acquisition of another entity by the Company and/or any of its Subsidiaries, based on the applicable exchange ratio and other transaction terms, but only to the extent that such shares may be utilized by the Company or its Subsidiaries following the transaction pursuant to the rules and regulations of the Nasdaq Stock Market (or other applicable market or exchange on which the Company’s Stock may be quoted or traded), including the shares previously transferred pursuant to this Section 3.1(d) of this Plan in connection with the Company’s acquisition of FoxHollow Technologies, Inc.; |
Appendix A-9
Table of Contents
(a) | The maximum aggregate number of shares of Stock subject to Options and Stock Appreciation Rights granted to any one Participant in any one calendar year shall be 1,500,000 shares. | ||
(b) | The maximum aggregate number of shares of Stock subject to Stock Grants and Stock Unit Grants granted to any one Participant in any one calendar year shall be 1,500,000 shares. | ||
(c) | The maximum aggregate number of shares of Stock subject to Performance Awards granted to any one Participant in any one calendar year shall be 1,500,000 shares. |
Appendix A-10
Table of Contents
(d) | The maximum aggregate dollar amount granted with respect to Annual Performance Cash Awards to any one Participant in any one calendar year shall not exceed $5,000,000, determined as of the date of payout. | ||
(e) | The maximum aggregate dollar amount granted with respect to Other Cash-Based Awards to any one Participant in any one calendar year shall not exceed $5,000,000, determined as of the date of payout. | ||
(f) | The maximum aggregate number of shares of Stock granted with respect to Other Stock-Based Awards to any one Participant in any one calendar year shall not exceed 1,500,000 shares, determined as of the date of payout. |
(a) | In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin off) or any other similar change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) shall make appropriate adjustment (which determination shall be conclusive) as to: (i) the number and kind of securities or other property (including cash) available for issuance or payment under this Plan, including the sub-limits set forth in Section 3.1 and the Annual Award Limits set forth in Section 3.5, and (ii) in order to prevent dilution or enlargement of the rights of Participants, the number and kind of securities or other property (including cash) subject to outstanding Awards and the exercise price of outstanding Awards. The determination of the Committee as to the foregoing adjustments, if any, shall be final, conclusive and binding on Participants under this Plan. | ||
(b) | Notwithstanding anything else herein to the contrary, without affecting the number of shares of Stock reserved or available hereunder, the sublimits in Section 3.1 and the Annual Award Limits in Section 3.5, the Committee may authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with the rules under Sections 422 and 424 of the Code, as and where applicable. |
Appendix A-11
Table of Contents
Appendix A-12
Table of Contents
Appendix A-13
Table of Contents
(a) | The exercise price of an Option shall be payable in full upon the exercise of such Option in cash (including check, bank draft or money order);provided,however, that the Committee, in its sole discretion, may allow such payments to be made, in whole or in part, by (i) by tender, or attestation as to ownership, of Shares that are already owned by the Participant that are acceptable to the Committee (“Previously Acquired Shares”); (ii) by a “net exercise” of the Option (as further described in paragraph (b), below); (iii) through cashless exercise procedure which is effected by an unrelated broker through a sale of Stock in the open market; (iv) by a combination of such methods; or (v) any other method approved or accepted by the Committee in its sole discretion. | ||
(b) | In the case of a “net exercise” of an Option, the Company shall not require a payment of the exercise price of the Option from the Participant but shall reduce the number of shares of Stock issued upon the exercise by the largest number of whole shares that has a Fair Market Value that does not exceed the aggregate exercise price for the shares exercised under this method. Shares of Stock shall no longer be outstanding under an Option (and shall therefore not thereafter be exercisable) following the exercise of such Option to the extent of (i) shares used to pay the exercise price of an Option under the “net exercise,” (ii) shares actually delivered to the Participant as a result of such exercise and (iii) any shares withheld for purposes of tax withholding. | ||
(c) | Previously Acquired Shares tendered or covered by an attestation as payment of the exercise price of an Option shall be valued at their Fair Market Value on the exercise date. |
Appendix A-14
Table of Contents
Appendix A-15
Table of Contents
(a) | The excess of the Fair Market Value of a share of Stock on the date of exercise over the per share exercise price; by | ||
(b) | The number of shares of Stock with respect to which the Stock Appreciation Right is exercised. |
(a) | Conditions to Issuance of Stock. The Committee acting in its sole discretion may make the issuance of Stock under a Stock Grant subject to the satisfaction of one or more conditions which the Committee deems appropriate under the circumstances for Participants generally or for a Participant in particular, and the related Award Agreement shall set forth each such condition and the deadline for satisfying each such condition. Stock subject to a Stock Grant shall be issued in the name of a Participant only after each such condition, if any, has been timely satisfied, and any Stock which is so issued shall be held by the Company pending the satisfaction of the forfeiture conditions, if any, under Section 9.2(b) for the related Stock Grant. |
Appendix A-16
Table of Contents
(b) | Conditions on Forfeiture of Stock or Cash Payment. The Committee acting in its sole discretion may make any cash payment due under a Stock Unit Grant or Stock issued in the name of a Participant under a Stock Grant non-forfeitable subject to the satisfaction of one or more conditions, including the achievement of one or more Performance Goals, that the Committee acting in its sole discretion deems appropriate under the circumstances for Participants generally or for a Participant in particular, and the related Award Agreement shall set forth each such condition, if any, and the deadline, if any, for satisfying each such condition. A Participant’s non-forfeitable interest in the shares of Stock underlying a Stock Grant or the cash payable under a Stock Unit Grant shall depend on the extent to which he or she timely satisfies each such condition. If a share of Stock is issued under this Section 9.2(b) before a Participant’s interest in such share of Stock is non-forfeitable, (1) such share of Stock shall not be available for re-issuance under Section 3 until such time, if any, as such share of Stock thereafter is forfeited as a result of a failure to timely satisfy a forfeiture condition and (2) the Company shall have the right to condition any such issuance on the Participant first signing an irrevocable stock power in favor of the Company with respect to the forfeitable shares of Stock issued to such Participant in order for the Company to effect any forfeiture called for under the related Award Agreement. | ||
(c) | Minimum Period of Service. If a Stock Grant or Stock Unit Grant vests solely based on the continued service of the Participant, the Award Agreement shall provide that such Stock Grant or Stock Unit Grant shall vest on a pro rata basis (which may be determined on a monthly, annual or other basis and may be tied to a specific vesting date each year, such as November 15) over a vesting term of not less than three years after the Grant Date of the Stock Grant or Stock Unit Grant or no more rapidly than ratably over a three-year period after the Grant Date of the Stock Grant or Stock Unit Grant, except (a) in connection with the death, Disability or Retirement of the Participant or a Change in Control; or (b) for any such Stock Grant or Stock Unit Grant granted to a Participant who within six months of the Grant Date is first appointed or elected as an officer of the Company, hired as an Employee, elected as a Director or retained as a Consultant. If a Stock Grant or Stock Unit Grant vests solely on the achievement of one or more Performance Goals, the Award Agreement shall provide that the Performance Period for the achievement of such Performance Goals shall be at least one year, except in connection with the death or Disability of the Participant or a Change in Control. |
(a) | Regular Cash Dividends. Except as otherwise provided in Section 15 or as otherwise set forth in an Award Agreement, if a regular dividend is paid in cash on a share of Stock after such Stock has been issued under a Stock |
Appendix A-17
Table of Contents
Grant but before the first date that a Participant’s interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable, the Company shall hold such dividend subject to the same conditions under Section 9.2(b) as the related Stock Grant. |
(b) | Stock Dividends. Except as otherwise provided in Section 15, if a dividend is paid on a share of Stock in Stock after such Stock has been issued under a Stock Grant but before the first date that a Participant’s interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable, the Company shall hold such dividend Stock subject to the same conditions under Section 9.2(b) as the related Stock Grant. | ||
(c) | Other. Except as otherwise provided in Section 15, if a dividend (other than a dividend described in Section 9.3(a) or Section 9.3(b)) is paid with respect to a share of Stock after such Stock has been issued under a Stock Grant but before the first date that a Participant’s interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable, the Company shall hold such dividend in accordance with such rules as the Committee shall adopt with respect to each such dividend. | ||
(d) | Voting. Except as otherwise set forth in an Award Agreement, a Participant shall have the right to vote the Stock issued under his or her Stock Grant during the period which comes after such Stock has been issued under a Stock Grant but before the first date that a Participant’s interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable. |
Appendix A-18
Table of Contents
Appendix A-19
Table of Contents
Appendix A-20
Table of Contents
Appendix A-21
Table of Contents
Appendix A-22
Table of Contents
Appendix A-23
Table of Contents
(a) | All outstanding Options and Stock Appreciation Rights held by the Participant as of the effective date of such termination shall, to the extent exercisable as of such termination, remain exercisable for a period of one year after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right) and Options and Stock |
Appendix A-24
Table of Contents
Appreciation Rights not exercisable as of such termination shall be terminated and forfeited; |
(b) | All outstanding Stock Grants and Stock Unit Grants held by the Participant as of the effective date of such termination that have not vested as of the date of such termination shall be terminated and forfeited; | ||
(c) | All outstanding but unpaid Performance Awards, Other Cash-Based Awards and Other Stock-Based Awards held by the Participant as of the effective date of such termination shall be terminated and forfeited;provided,however, that with respect to any such Awards the vesting of which is based on the achievement of Performance Goals, if a Participant’s employment or other service with the Company or any Subsidiary, as the case may be, is terminated by reason of death or Disability prior to the end of the Performance Period of such Award, but after the conclusion of a portion of the Performance Period (but in no event less than one year), the Committee may, in its sole discretion, cause shares of Stock to be delivered or payment made with respect to the Participant’s Award, but only if otherwise earned for the entire Performance Period and only with respect to the portion of the applicable Performance Period completed at the date of such event, with proration based on full fiscal years only and no shares to be delivered for partial fiscal years. The Committee shall consider the provisions of Section 16.5 and shall have the discretion to consider any other fact or circumstance in making its decision as to whether to deliver such shares of Stock or other payment, including whether the Participant again becomes employed; and | ||
(d) | If the effective date of such termination is before the end of the Performance Period to which an Annual Performance Cash Award relates, then any such Annual Performance Cash Award held by a Participant shall be terminated and forfeited; if the effective date of such termination is on or after the end of the Performance Period to which an Annual Performance Cash Award relates, then any such Annual Performance Cash Award held by a Participant shall be paid to the Participant in accordance with the payment terms of such Award. |
(a) | All outstanding Options and Stock Appreciation Rights held by the Participant as of the effective date of such termination shall, to the extent exercisable as of such termination, remain exercisable for a period of three months after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right) and Options and Stock |
Appendix A-25
Table of Contents
Appreciation Rights not exercisable as of such termination shall be terminated and forfeited. |
(b) | All Stock Grants and Stock Unit Grants held by the Participant as of the effective date of such termination that have not vested as of such termination shall be terminated and forfeited; | ||
(c) | All outstanding unpaid Performance Awards, Other Cash-Based Awards and Other Stock-Based Awards held by the Participant as of the effective date of such termination shall be terminated and forfeited; and | ||
(d) | If the effective date of such termination is before the end of the Performance Period to which an Annual Performance Cash Award relates, then any such Annual Performance Cash Award held by a Participant shall be terminated and forfeited; if the effective date of such termination is on or after the end of the Performance Period to which an Annual Performance Cash Award relates, then any such Annual Performance Cash Award held by a Participant shall be paid to the Participant in accordance with the payment terms of such Award. |
Appendix A-26
Table of Contents
(a) | Effect of Actions Constituting Cause or Adverse Action. Notwithstanding anything in this Plan to the contrary and in addition to the other rights of the Committee under this Section 16.5, if a Participant is determined by the Committee, acting in its sole discretion, to have taken any action that would constitute Cause or an Adverse Action during or within one year after the termination of employment or other service with the Company or a Subsidiary, irrespective of whether such action or the Committee’s determination occurs before or after termination of such Participant’s employment or other service with the Company or any Subsidiary and irrespective of whether or not the Participant was terminated as a result of such Cause or Adverse Action, (i) all rights of the Participant under this Plan and any Award Agreements evidencing an Award then held by the Participant shall terminate and be forfeited without notice of any kind, and (ii) the Committee in its sole discretion shall have the authority to rescind the exercise, vesting or issuance of, or payment in respect of, any Awards of the Participant that were exercised, vested or issued, or as to which such payment was made, during such period and to require the Participant to pay to the Company, within ten (10) days of receipt from the Company of notice of such rescission, any amount received or the amount of any gain realized as a result of such rescinded exercise, vesting, issuance or payment (including any dividends paid or other distributions made with respect to any shares subject to any Award). The Company may defer the exercise of any Option or Stock Appreciation Right for a period of up to six (6) months after receipt of the Participant’s written notice of exercise or the issuance of share certificates upon the vesting of any Award for a period of up to six (6) months after the date of such vesting in order for the Committee to make any determination as to the existence of Cause or an Adverse Action. The Company shall be entitled to withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary) or make other arrangements for the collection of all amounts necessary to satisfy such payment obligations. Unless otherwise provided by the Committee in an applicable Award Agreement, this Section 16.5(a) shall not apply to any Participant following a Change in Control. | ||
(b) | Forfeiture of Awards under Sarbanes-Oxley Act. If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then any |
Appendix A-27
Table of Contents
Participant who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any Award received by such individual under this Plan during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission, as the case may be, of the financial document embodying such financial reporting requirement. |
Appendix A-28
Table of Contents
Appendix A-29
Table of Contents
Appendix A-30
Table of Contents
Appendix A-31
Table of Contents
Appendix A-32
Table of Contents
Appendix A-33
Table of Contents
Appendix A-34
Table of Contents
EMPLOYEE STOCK PURCHASE PLAN
subject to approval by the stockholders of ev3 Inc.)
Appendix B-1
Table of Contents
Appendix B-2
Table of Contents
Appendix B-3
Table of Contents
Appendix B-4
Table of Contents
Appendix B-5
Table of Contents
Appendix B-6
Table of Contents
Appendix B-7
Table of Contents
Appendix B-8
Table of Contents
Appendix B-9
Table of Contents
EMPLOYEE STOCK PURCHASE PLAN
Change in Payroll Deduction Amount
1. | hereby elects to participate in the ev3 Inc. Employee Stock Purchase Plan (the “Plan”) and subscribes to purchase shares of the Company’s Common Stock (the “Shares”) according to this Agreement and the Plan. | |
2. | I hereby authorize payroll deductions, beginning , 20___, from each paycheck in the amount of $ (may not exceed 10% of total compensation on each payday) in accordance with the Plan. | |
3. | I understand that such payroll deductions will be accumulated to purchase shares according to the Plan, and that shares will be purchased for me automatically at the end of each offering period under the Plan unless I withdraw my accumulated payroll deductions, withdraw from the Plan, or both, by giving written notice to the Company prior to the end of the offering period, as provided in the Plan. | |
4. | Shares purchased for me under the Plan should be issued or held in an account in the name(s) of: |
(name(s)) | ||||
(address) | ||||
(social security number) |
5. | I understand that if I dispose of any shares I receive under the Plan within two years after the first day of the offering period during which I purchased the shares, I may be treated for U.S. 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 on the date purchased over the option price paid for the shares.I hereby agree to notify the Company in writing within 30 days after the date of any such disposition. However, if I dispose of any such shares at any time after the expiration of the two-year holding period, I understand that I will be treated for U.S. federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (a) the excess of the fair market value of the shares at the time of such disposition over the amount paid for the shares under the option, or (b) the excess of the fair market value of the shares on the |
Appendix B-10
Table of Contents
first day of the offering period during which I purchased such shares over the option price. The remainder of the gain, if any, recognized on such disposition will be taxed at capital gains rates. |
6. | I have read the current prospectus for the ev3 Inc. Employee Stock Purchase Plan. | |
7. | In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and Shares due me under the Plan: |
Name (Please Print) | ||||||||||
First | Middle | Last | ||||||||
Relationship | ||||||||||
Address | ||||||||||
Name (Please Print) | ||||||||||
First | Middle | Last | ||||||||
Relationship | ||||||||||
Address | ||||||||||
Date: | ||
Signature of Employee |
Appendix B-11
Table of Contents
ev3 INC. ATTN: KEVIN KLEMZ 3033 CAMPUS DRIVE PLYMOUTH, MN 55441 | VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | M22472-P90711 | KEEP THIS PORTION FOR YOUR RECORDS | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
ev3 INC. | ||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following proposals: | ||||||||||||||||||||||||||
1. | Election of the following three nominees as directors for a three-year term. | |||||||||||||||||||||||||
For | Against | Abstain | ||||||||||||||||||||||||
Nominees: | ||||||||||||||||||||||||||
1a. | John K. Bakewell | o | o | o | ||||||||||||||||||||||
1b. | Richard B. Emmitt | o | o | o | ||||||||||||||||||||||
1c. | Douglas W. Kohrs | o | o | o | ||||||||||||||||||||||
For | Against | Abstain | ||||
2. To consider a proposal to approve the ev3 Inc. Third Amended and Restated 2005 Incentive Plan. | o | o | o | |||
3. To consider a proposal to approve the ev3 Inc. Amended and Restated Employee Stock Purchase Plan. | o | o | o | |||
4. To consider a proposal to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2010. | o | o | o | |||
This proxy when properly executed, will be voted as directed or, if no direction is given, will be voted FOR all nominees for director and FOR proposals 2, 3 and 4. | ||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Table of Contents
ANNUAL MEETING OF STOCKHOLDERS
Tuesday, May 25, 2010
2:00 p.m., CDT
3033 Campus Drive
Plymouth, MN 55441