UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 15, 2004
ENCYSIVE PHARMACEUTICALS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-20117 13-3532643
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6700 WEST LOOP, 4TH FLOOR, BELLAIRE, TEXAS 77401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 713-796-8822
Not Applicable
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 OTHER EVENTS.
On December 9, 2004, the Compensation and Corporate Governance
Committee of the Board of Directors (the "Committee") of Encysive
Pharmaceuticals Inc. (the "Company") approved individual and Corporate goals for
the calendar year 2005 for executive officers and certain other key members of
management (the "Participants"). The Board of Directors approved the CEO and
Corporate goals. These goals will be considered along with other factors listed
below in determining participation in the Company's 2005 Bonus Plan (the
"Plan"). The total amount of bonuses payable pursuant to the Plan (the "Bonus
Pool") is determined by the creation of a bonus pool, which is the sum of base
annual earnings of each Participant multiplied by the Participant's target bonus
percentage, which ranges from 10 percent to 75 percent. This sum is then
multiplied by the percentage of attainment of the Corporate goals by the Company
that have been determined by the Committee and the Board of Directors for 2005.
The Bonus Pool is then subject to upward and downward adjustments by the
Committee as it deems appropriate. The amount of a Participant's participation
in the Bonus Pool is determined by an evaluation of the attainment of individual
goals ("Goal Score"), the judgment of the CEO (or direct supervisor), and
Committee adjustment and approval.
Corporate goals, which are a factor in the Plan, are determined by the
Committee and are subject to approval by the full Board of Directors. The
Corporate goals for 2005 include the attainment of development milestones for
Thelin and other compounds in the Company's pipeline, achievement of increases
in share value of the Company's common stock, financial goals relating to
earnings before interest, taxes, depreciation and amortization and liquidity,
administrative and research facility planning, and corporate readiness for the
commercialization of Thelin. Participant goals are also approved by the
Committee and reflect individual achievements deemed to be appropriate for each
person's job description and consistent with the Corporate goals.
Bonuses under the Plan are paid 2/3 in cash and 1/3 in shares of
restricted common stock that vest in three equal amounts over a three year
period beginning one year after the date of grant. The number of shares of
restricted stock is determined by dividing the dollar value of the stock portion
of the bonus payment by the fair market value of the Company's common stock on
the date of the determination of the bonus payable.
In addition to the Plan, Participants are eligible to receive an annual
grant of stock options that is determined in a similar manner to the Plan. The
total number of stock options issuable to all Participants is established by
taking the sum of the annual option target (the "Option Target") for each
Participant, as established by the Committee, multiplied by the percentage of
attainment of Corporate goals discussed above (the "Option Pool"). The amount of
a Participant's participation in the Option Pool is determined by looking at a
Participant's Goal Score, Option Target, judgment of the CEO (or direct
supervisor), and Committee adjustment and approval. Options vest in three equal
amounts over a three-year period beginning one year after date of grant and have
an option exercise price based on the fair market value of the Company's common
stock on date of grant.
All awards of restricted stock and stock options are made under the
Company's incentive stock plans, which have been approved by the stockholders of
the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENCYSIVE PHARMACEUTICALS INC.
(Registrant)
Date: December 15, 2004 /s/ Stephen L. Mueller
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Stephen L. Mueller
Vice President, Finance and
Administration Secretary and Treasurer