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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COR THERAPEUTICS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
COR THERAPEUTICS, INC.
256 East Grand Avenue
South San Francisco, CA 94080
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Notice of Annual Meeting of Stockholders
to be held on June 12, 2001
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TO THE STOCKHOLDERS OF COR THERAPEUTICS, INC.:
Notice Is Hereby Given that the Annual Meeting of Stockholders of COR
Therapeutics, Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, June 12, 2001, at 9:00 a.m. local time at the Embassy Suites Hotel,
250 Gateway Boulevard, South San Francisco, California for the following
purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve amendments to the Company's 1991 Equity Incentive Plan to
increase the aggregate number of shares of Common Stock authorized for
issuance under the plan by 1,000,000 shares and to extend the termination
date of the plan until February 13, 2011.
3. To approve amendments to the Company's 1994 Non-Employee Directors'
Stock Option Plan to increase the aggregate number of shares of Common
Stock authorized for issuance under the plan by 300,000 shares and
eliminate a fixed termination date.
4. To approve an amendment to the Company's 1991 Employee Stock Purchase
Plan to increase the aggregate number of shares of Common Stock authorized
for issuance under the plan by 450,000 shares.
5. To ratify the selection of Ernst & Young LLP as independent auditors
of the Company for its fiscal year ending December 31, 2001.
6. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on Monday, April 16,
2001, as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ Patrick A. Broderick
Patrick A. Broderick
Secretary
South San Francisco, California
April 26, 2001
All stockholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, please complete, date, sign
and return the enclosed proxy as promptly as possible in order to ensure your
representation at the meeting. A return envelope (which is postage prepaid if
mailed in the United States) is enclosed for that purpose. If your shares are
held of record by a broker or bank or other nominee, you may be able to vote
via the Internet or by telephone by following the instructions provided with
your voting form. Even if you have given your proxy, you may still vote in
person if you attend the meeting. Please note, however, that if your shares
are held of record by a broker, bank or other nominee and you wish to vote at
the meeting, you must obtain from the record holder a proxy issued in your
name.
COR THERAPEUTICS, INC.
256 East Grand Avenue
South San Francisco, CA 94080
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PROXY STATEMENT
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FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 12, 2001
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of COR Therapeutics, Inc., a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders to be held on Tuesday, June 12,
2001, at 9:00 a.m. local time (the "Annual Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting. The Annual Meeting will be held at the
Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California.
The Company intends to mail this proxy statement and accompanying proxy card
on or about April 26, 2001, to all stockholders entitled to vote at the Annual
Meeting.
All share numbers and share prices included in this Proxy Statement have
been adjusted as necessary to reflect the two-for-one split of Common Stock
effected on August 15, 2000 by means of a stock dividend.
Solicitation
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
card, and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries, and custodians holding in their names shares of the Company's
common stock ("Common Stock") beneficially owned by others to forward to such
beneficial owners. The Company may reimburse persons representing beneficial
owners of Common Stock for their costs of forwarding solicitation materials to
such beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, facsimile, or personal solicitation by directors,
officers, other employees of the Company or, at the Company's request, D. F.
King & Co., Inc. No additional compensation will be paid to directors,
officers, or other employees for such services, but D. F. King & Co., Inc.
will be paid its customary fee, estimated to be approximately $8,500, if it
renders solicitation services.
Voting Rights and Outstanding Shares
Only holders of record of Common Stock at the close of business on Monday,
April 16, 2001 will be entitled to notice of and to vote at the Annual
Meeting. At the close of business on April 16, 2001, the Company had
outstanding and entitled to vote 55,240,302 shares of Common Stock. Each
holder of record of Common Stock on such date will be entitled to one vote for
each share held on all matters to be voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions, and broker non-votes. Abstentions will be counted toward the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted toward a
quorum, but are not counted for any purpose in determining whether a matter
has been approved.
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Voting Via the Internet or by Telephone For Shares Registered in the Name of a
Bank or Broker
Most beneficial owners whose shares are registered in the name of a
brokerage firm or a bank (stock held in street name) receive voting
instruction forms from their brokers, banks, or other agents rather than the
Company's proxy card. A number of brokerage firms and banks participate in a
program provided through ADP Investor Communication Services that offers
telephone and Internet voting options. If your shares are held in an account
with a brokerage firm or bank that is participating in the ADP Investor
Communication Services program, you may vote those shares telephonically by
calling the telephone number shown on the voting form received from your
brokerage firm or bank, or via the Internet at ADP Investor Communication
Services' voting Web site. If your voting form does not reference telephone or
Internet voting information or if you prefer to vote the paper proxy provided
by ADP Investor Communication Services, please complete and return the paper
proxy card in the self-addressed, postage-paid envelope provided.
Votes submitted via telephone or the Internet must be received by ADP
Investor Communication Services prior to midnight Eastern Daylight Time on the
day before the Annual Meeting. Submitting your proxy via telephone or the
Internet will not affect your right to vote in person should you decide to
attend the Annual Meeting.
The telephone and Internet voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to give their voting
instructions, and to confirm that stockholders' instructions have been
recorded properly. Stockholders voting via the Internet should understand that
there may be costs associated with electronic access, such as usage charges
from Internet access providers and telephone companies, that must be borne by
the stockholder.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation, including
telephone or Internet voting, has the power to revoke it at any time before it
is voted. It may be revoked by filing with the Secretary of the Company at the
Company's principal executive office, 256 East Grand Avenue, South San
Francisco, California 94080, a written notice of revocation or a duly executed
proxy bearing a later date, or it may be revoked by attending the meeting and
voting in person. Attendance at the meeting will not, by itself, revoke a
proxy.
Stockholder Proposals
Proposals of stockholders that are intended to be presented at the
Company's annual meeting of stockholders to be held in the year 2002 must be
received by the Company no later than December 27, 2001 in order to be
included in the proxy statement and proxy relating to that annual meeting
pursuant to Rule 14a-8 of the Securities and Exchange Commission (the "SEC").
Unless a stockholder who wishes to bring a matter before the stockholders of
the Company' annual meeting of stockholders to be held in the year 2002
notifies the Company of such matter prior to March 12, 2002, management will
have discretionary authority to vote all shares for which it has proxies in
opposition to such matter.
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PROPOSAL 1
ELECTION OF DIRECTORS
There are eight nominees for the eight Board positions presently authorized
pursuant to the Company's Bylaws. Each director to be elected will hold office
until the next annual meeting of stockholders and until his or her successor is
elected and has qualified, or until such director's earlier death, resignation,
or removal. Each of the nominees listed below is currently a director of the
Company, all having been previously elected by the stockholders, except for Ms.
Graham and Mr. McCaffery.
On May 23, 2000, Robert Momsen, who had served on the Company's Board since
April 1989, and Lloyd Hollingsworth Smith, Jr., who had served on the Company's
Board since January 1993, retired as Board members. On February 14, 2001, the
Board, pursuant to authority granted under the Bylaws, elected Ginger L. Graham
and Michael G. McCaffery to the Board.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the eight nominees named below. In the
event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected, and management has no reason to
believe that any nominee will be unable to serve.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote.
The Board Of Directors Recommends
A Vote In Favor Of Each Named Nominee.
Nominees
The names of the nominees and certain information about them are set forth
below.
Principal Occupation/
Name Age Position Held with the Company
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Vaughn M. Kailian................ 56 President and Chief Executive Officer
Shaun R. Coughlin, M.D., Ph.D. .. 46 Professor of Medicine and Molecular and
Cellular Pharmacology, University of
California, San Francisco
James T. Doluisio, Ph.D. (1)(2).. 65 Hoechst-Roussel Professor of Pharmacy,
University of Texas at Austin
Ginger L. Graham................. 45 Group Chairman, Guidant Corporation
Charles J. Homcy, M.D. .......... 52 Executive Vice President, Research and
Development
Jerry T. Jackson (1)(2).......... 59 Retired Executive Vice President, Merck
& Co., Inc.
Ernest Mario, Ph.D. (1)(2)....... 62 Chairman and Chief Executive Officer,
ALZA Corporation
Michael G. McCaffery............. 47 President and Chief Executive Officer,
Stanford Management Company
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(1) Member of the Audit Committee
(2) Member of the Compensation Committee
Vaughn M. Kailian has served as President, Chief Executive Officer and a
director of the Company since March 1990. From 1967 to 1990, Mr. Kailian was
employed by Marion Merrell Dow, Inc., a pharmaceutical company, and its
predecessor companies in various U. S. and international general management,
product development, marketing and sales positions. Mr. Kailian is also a
director of Amylin Pharmaceuticals and Axys Pharmaceuticals, Inc. as well as
the Biotechnology Industry Organization and the California Healthcare
Institute.
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Shaun R. Coughlin, M.D., Ph.D., has served as a director of the Company
since September 1994. Dr. Coughlin has been Professor of Medicine since 1996
and Professor of Molecular and Cellular Pharmacology since 1997 at the
University of California, San Francisco ("UCSF") and Director of the
Cardiovascular Research Institute at UCSF since 1997. He was an Associate
Professor of Medicine at UCSF from 1992 through 1996. Dr. Coughlin is a
director of Gorilla Genomics and is also a member of the editorial boards of
Trends in Cardiovascular Medicine, Molecular Medicine and Journal of Clinical
Investigation.
James T. Doluisio, Ph.D., has served as a director of the Company since
January 1994. Dr. Doluisio has been the Hoechst-Roussel Professor of Pharmacy
at the University of Texas at Austin since 1980. From 1973 to 1998, he was
Dean of Pharmacy at the University of Texas at Austin. From 1990 to 1995, Dr.
Doluisio served as Chairman of the United States Pharmacopeial Convention
Board of Trustees. From 1967 to 1973, Dr. Doluisio was Professor and Assistant
Dean of the College of Pharmacy at the University of Kentucky.
Ginger L. Graham has served as a director of the Company since February
2001. Ms. Graham has been Group Chairman, Office of the President, for Guidant
Corporation, a medical device company, since 2000. From 1995 to 2000 she was
President of the Vascular Intervention Group of Guidant Corporation and from
1993 to 1995 she was President and Chief Executive Officer of Advanced
Cardiovascular Systems. Ms. Graham is a director of Amylin Pharmaceuticals and
is a director and chairman of the California Healthcare Institute.
Charles J. Homcy, M.D., has been a director of the Company since January
1998 and has served as Executive Vice President, Research and Development of
the Company since March 1995. Since 1997, Dr. Homcy has been Clinical
Professor of Medicine at the University of California, San Francisco Medical
School and Attending Physician at the San Francisco VA Hospital. From 1994
until he joined the Company, Dr. Homcy was President of the Medical Research
Division of American Cyanamid Company-Lederle Laboratories, a pharmaceutical
company (now a division of Wyeth-Ayerst Laboratories). From 1990 until 1994,
Dr. Homcy was Executive Director of the Cardiovascular and Central Nervous
System Research Section at Lederle Laboratories, a pharmaceutical company.
From 1991 to 1995, Dr. Homcy also served as an attending physician at The
Presbyterian Hospital, College of Physicians and Surgeons, at Columbia
University in New York. From 1979 to 1990, he was an attending physician at
Massachusetts General Hospital and an Associate Professor of Medicine at
Harvard Medical School.
Jerry T. Jackson has served as a director of the Company since March 1995.
Mr. Jackson was employed by Merck & Co., Inc., a pharmaceutical company
("Merck"), from 1965 until his retirement in 1995. From 1993 until his
retirement, he served as Executive Vice President of Merck. During that time,
he had responsibility for Merck's International Human Health, Worldwide Human
Vaccines, the AgVet Division, Astra/Merck U.S. Operations, as well as
worldwide marketing. During 1993, he also was President of Merck's Worldwide
Human Health Division. Mr. Jackson served as Senior Vice President of Merck
from 1991 to 1992 and previously was President of Merck Sharp & Dohme
International. Mr. Jackson is also a director of Alexion Pharmaceuticals,
Inc., ALZA Corporation, and MDEdge, Inc.
Ernest Mario, Ph.D., has served as a director of the Company since
September 1995. Dr. Mario served as Co-Chairman and Chief Executive Officer of
ALZA Corporation from July 1993 to November 1997 at which time he was
appointed Chairman and Chief Executive Officer of ALZA. From 1989 to 1993, he
was Deputy Chairman and Chief Executive Officer of Glaxo Holdings plc, a
pharmaceutical company, in London. Prior to 1989, Dr. Mario served as Chief
Executive Officer of Glaxo, Inc., a pharmaceutical company, in the United
States. Dr. Mario is also a director of Catalytica Energy Systems, Inc.,
Cepheid, Inc., Orchid Biosciences, Inc., Pharmaceutical Product Development,
Inc., and SonoSite, Inc.
Michael G. McCaffery has served as a director of the Company since February
2001. Mr. McCaffery has been President and Chief Executive Officer of the
Stanford Management Company, an investment management company, since 2000.
From 1993 to 2000, he was Chairman and Chief Executive Officer of Robertson
Stephens, an investment banking company. Mr. McCaffery is a director of Off
Road Capital, Western Technology Ventures, and The Investment Fund for
Foundations.
4
Board Committees and Meetings
During the fiscal year ended December 31, 2000, the Board held six
meetings. The Board has an Audit Committee and a Compensation Committee. The
Board does not have a standing nominating committee.
The Audit Committee meets with the Company's independent auditors to review
the results of the annual audit and discuss the financial statements;
recommends to the Board the independent auditors to be retained; and receives
and considers the auditors' comments as to financial controls, adequacy of
staff, and management performance and procedures in connection with the annual
audit and financial controls. During fiscal 2000, the Audit Committee, when
composed of Dr. Doluisio, Mr. Jackson, and Mr. Momsen, held one meeting, and
when composed of Dr. Doluisio, Mr. Jackson, and Dr. Mario, held two meetings.
The Compensation Committee makes recommendations to the Board concerning
salaries and incentive compensation for executive officers. The Compensation
Committee also approves stock option grants and stock awards to executive
officers, employees, and consultants under the Company's stock option and
award plans and otherwise determines compensation levels, and performs such
other functions regarding compensation as the Board may delegate. The
Compensation Committee, when composed of Mr. Jackson, Mr. Momsen, and
Dr. Mario, held two meetings, and when composed of Dr. Doluisio, Mr. Jackson,
and Dr. Mario, held four meetings, during fiscal 2000.
During the fiscal year ended December 31, 2000, each director attended at
least 75% of the aggregate of the meetings of the Board and of the committees
on which he served, held during the period for which he was a director or
committee member, respectively.
PROPOSAL 2
APPROVAL OF AMENDMENTS TO THE
1991 EQUITY INCENTIVE PLAN, AS AMENDED
In May 1991, the Board adopted, and the stockholders subsequently approved,
the Company's 1991 Equity Incentive Plan (the "1991 Plan"). In February 2001,
the Board amended the 1991 Plan, subject to stockholder approval, to increase
by 1,000,000 the number of shares of Common Stock authorized for issuance
under the 1991 Plan and to extend the termination date of the 1991 Plan to
February 13, 2011.
The Board also adopted several amendments that are not subject to
stockholder approval. These amendments provide for automatic option grants to
non-employee directors in the event that the share reserve under the Company's
1994 Non-Employee Directors' Stock Option Plan (the "Directors' Plan") is
insufficient to cover grants provided for in the Directors' Plan, provide for
the automatic accelerated vesting of stock awards granted under the 1991 Plan
upon certain changes in control of the Company if an acquiring company does
not assume outstanding awards under the 1991 Plan or substitute similar awards
or in the event that the service of a participant is involuntarily terminated
without cause or voluntarily terminated for good reason within one month
before or 24 months after a change in control of the Company, eliminate the
Company's ability to reprice options without stockholder approval, and limit
the number of shares of common stock issuable under the 1991 Plan as stock
bonuses and restricted stock purchase awards. The Board adopted these
amendments in order to ensure that the Company can continue to grant stock
awards at levels and terms deemed appropriate by the Board and to assist in
obtaining and retaining the services of employees, directors and consultants.
As of March 1, 2001, awards (net of canceled or expired awards) covering an
aggregate of 9,462,391 shares of Common Stock had been granted under the 1991
Plan since 1991 and only 1,937,609 shares of Common Stock (plus any shares
that might in the future be returned to the 1991 Plan as a result of
cancellations or expiration of awards or the reacquisition by the Company of
issued shares) remained available for future grant under the 1991 Plan.
Stockholders are requested in this Proposal 2 to approve the amendments to
the 1991 Plan increasing the shares available for issuance under the 1991 Plan
by 1,000,000 shares and extending its term as discussed above.
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The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the meeting will be
required to approve the amendments to the 1991 Plan. Abstentions will be
counted toward the tabulation of votes cast on the proposal and will have the
same effect as negative votes. Broker non-votes are counted toward a quorum,
but are not counted for any purpose in determining whether this matter has
been approved.
The Board Of Directors Recommends
A Vote In Favor Of Proposal 2.
The essential features of the 1991 Plan, as amended, are outlined below.
General
The 1991 Plan provides for the grant of incentive stock options,
nonstatutory stock options, stock bonuses, and restricted stock purchase
awards (collectively "awards"). Incentive stock options granted under the
1991 Plan are intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). Nonstatutory stock options granted under the 1991 Plan are not
intended to qualify as incentive stock options under the Code. See "Federal
Income Tax Information" for a discussion of the tax treatment of awards. To
date, the Company has granted incentive stock options, nonstatutory stock
options, and restricted stock awards under the 1991 Plan.
Purpose
The Board adopted the 1991 Plan to provide a means by which employees,
directors and consultants of the Company and any affiliates may be given an
opportunity to purchase stock in the Company, to assist in retaining the
services of such persons, to secure and retain the services of persons capable
of filling such positions, and to provide incentives for such persons to exert
maximum efforts for the success of the Company and any affiliates. All of the
approximately 311 employees, and the directors and consultants of the Company
are eligible to participate in the 1991 Plan.
Administration
The Board administers the 1991 Plan. Subject to the provisions of the 1991
Plan, the Board has the power to construe and interpret the 1991 Plan and to
determine the persons to whom and the dates on which awards will be granted,
the number of shares of Common Stock to be subject to each award, the time or
times during the term of each award within which all or a portion of such
award may be exercised, the exercise price, the type of consideration, and
other terms of the award.
The Board has the power to delegate administration of the 1991 Plan to a
committee composed of one or more members of the Board. In the discretion of
the Board, a committee may alternatively consist solely of two or more outside
directors in accordance with Section 162(m) of the Code or solely of two or
more non-employee directors in accordance with Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). As used herein with
respect to the 1991 Plan, the "Board" refers to any committee the Board
appoints as well as to the Board itself. The Board has delegated
administration of the 1991 Plan to the Compensation Committee.
Compliance with Section 162(m) of the Code enables a company to recognize a
business expense deduction in connection with compensation recognized by
"covered employees". See "Federal Income Tax Information--Potential Limitation
on Company Deductions". To comply with Section 162(m) of the Code the
committee administering the 1991 Plan must be comprised solely of two or more
"outside directors". Excluded from such committee are directors who are (a)
current employees of the Company or an affiliate, (b) former employees of the
Company or an affiliate receiving compensation for past services (other than
benefits under a tax-qualified retirement plan) during the taxable year, (c)
current and former officers of the Company or an affiliate, (d) directors
currently receiving direct or indirect remuneration from the Company or an
affiliate in any capacity (other than as a director),
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and (e) any other person who is otherwise not considered an "outside director"
for purposes of Section 162(m). The definition of an "outside director" under
Section 162(m) is generally narrower than the definition of a "non-employee
director" under Rule 16b-3 of the Exchange Act.
Eligibility
The Board may grant incentive stock options under the 1991 Plan only to
employees (including officers) of the Company and its affiliates. Employees
(including officers), directors, and consultants of both the Company and its
affiliates are eligible to receive all other types of awards under the 1991
Plan.
The Board may not grant an incentive stock option under the 1991 Plan to
any person who, at the time of the grant, owns (or is deemed to own) stock
possessing more than 10% of the total combined voting power of the Company or
any affiliate of the Company, unless the exercise price is at least 110% of
the fair market value of the stock subject to the option on the date of grant
and the term of the option does not exceed five years from the date of grant.
In addition, the aggregate fair market value, determined at the time of grant,
of the shares of Common Stock with respect to which incentive stock options
are exercisable for the first time by a participant during any calendar year
(under the 1991 Plan and all other such plans of the Company and its
affiliates) may not exceed $100,000.
No person is eligible to receive awards under the 1991 Plan for more than
1,000,000 shares of Common Stock during any calendar year ("Section 162(m)
Limitation").
The 1991 Plan also provides for automatic non-discretionary option grants
to the Company's non-employee directors only if and to the extent that there
are insufficient shares of the Company's Common Stock reserved under the
Directors' Plan to make a timely option grant required by the terms of the
Directors' Plan. In that event, such grant or grants, in whole or in part,
will be made from shares reserved under the 1991 Plan. If there are
insufficient shares available under both the 1991 Plan and the Directors' Plan
to cover such grant, the grant will be delayed to the extent of the share
deficit until such shares are available to cover the grant.
Stock Subject to the 1991 Plan
Subject to this Proposal, an additional 1,000,000 shares of Common Stock
have been authorized for issuance under the 1991 Plan. Since its inception in
1991, an aggregate of 12,400,000 shares of Common Stock (including the
additional shares) have been authorized for issuance under the 1991 Plan. As
of March 1, 2001, options to purchase 4,327,483 shares were outstanding under
the 1991 Plan and 2,937,609 shares (including the additional shares) remain
available for future grant, of which a maximum of 200,000 shares could be used
for stock bonuses and restricted stock purchase awards. If awards granted
under the 1991 Plan expire or otherwise terminate without being exercised, the
shares of Common Stock not acquired pursuant to such awards again become
available for issuance under the 1991 Plan. If the Company reacquires unvested
stock issued under the 1991 Plan, the reacquired stock will again become
available for reissuance under the 1991 Plan for awards other than incentive
stock options.
Terms of Options
The following is a description of the permissible terms of options under
the 1991 Plan. Individual option grants may be more restrictive as to any or
all of the permissible terms described below.
Exercise Price; Payment. The exercise price of incentive stock options may
not be less than 100% of the fair market value of the stock subject to the
option on the date of the grant and, in some cases (see "Eligibility" above),
may not be less than 110% of such fair market value. Likewise, the exercise
price of nonstatutory options may not be less than 100% of the fair market
value of the stock on the date of grant. As of March 1, 2001, the closing
price of the Company's Common Stock as reported on the Nasdaq Stock Market was
$31.63 per share.
The exercise price of options granted under the 1991 Plan must be paid
either in cash at the time of exercise, or at the discretion of the Board (a)
by delivery of other shares of Common Stock, (b) pursuant to a deferred
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payment arrangement, (c) pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board, (d) any combination of such methods,
or (e) in any other form of legal consideration acceptable to the Board.
Repricing. Without the prior approval of the Company's stockholders, the
Board may not reprice outstanding options under the 1991 Plan, either by
amending the terms of outstanding options to reduce the exercise price,
canceling outstanding options and substituting options with a lower exercise
price, or making any modification of an option that would be deemed to be a
repricing for financial accounting purposes.
To the extent required by Section 162(m) of the Code, a repriced option is
deemed to be canceled and a new option granted. Both the option deemed to be
canceled and the new option deemed to be granted will be counted against the
Section 162(m) Limitation.
Option Exercise. Options granted under the 1991 Plan may become exercisable
in cumulative increments ("vest") as determined by the Board. Shares covered
by currently outstanding options under the 1991 Plan typically vest ratably on
a monthly basis over a period of 60 months (except that for newly hired
employees the first three months do not vest until the end of the third month)
during the participant's employment by, or service as a director of or
consultant to, the Company (collectively, "service"). Certain options granted
to officers typically are not exercisable until three years after the date of
grant at which time they become fully vested. Shares covered by options
granted in the future under the 1991 Plan may be subject to different vesting
terms.
Unless otherwise determined for good cause shown by a committee composed
solely of non-employee directors and/or outside directors or unless pursuant
to the change of control provisions of the 1991 Plan (see "Effect of Certain
Corporate Events"), acceleration of the time during which an option may vest
or be exercised will occur only in connection with a significant personal
event for the participant, such as the death or disability of the participant.
In addition, options granted under the 1991 Plan may permit exercise prior
to vesting, but in such event the participant may be required to enter into an
early exercise stock purchase agreement that allows the Company to repurchase
unvested shares should the participant's service terminate before vesting.
To the extent provided by the terms of an option, a participant may satisfy
any federal, state or local tax withholding obligation relating to the
exercise of such option by a cash payment upon exercise, by authorizing the
Company to withhold a portion of the stock otherwise issuable to the
participant, by delivering already-owned Common Stock of the Company, or by a
combination of these means.
Term. The maximum term of options under the 1991 Plan is 10 years, except
that in certain cases (see "Eligibility" above) the maximum term is five
years. Options under the 1991 Plan generally terminate three months after
termination of the participant's service unless:
. such termination is due to the participant's permanent and total
disability (as defined in the Code), in which case the option may, but
need not, provide that it may be exercised (to the extent the option was
exercisable at the time of the termination of service) at any time
within 12 months of such termination;
. the participant dies before the participant's service has terminated, or
within three months after termination of such service, in which case the
option may, but need not, provide that it may be exercised (to the
extent the option was exercisable at the time of the participant's
death) within 18 months of the participant's death by the transferee, if
there is one, or the person or persons to whom the rights to such option
pass by will or by the laws of descent and distribution; or
. individual option grants by their terms provide for exercise within a
longer or shorter period of time following termination of service.
8
Terms of Stock Bonuses and Purchases of Restricted Stock
Limitation on Number of Shares. Any new grants of stock bonuses or
restricted stock awards after April 12, 2001 may not exceed in the aggregate
200,000 shares of Common Stock. There are currently no unvested restricted
stock awards outstanding.
Payment. The Board determines the purchase price under a restricted stock
purchase agreement. The Board may award stock bonuses in consideration of past
services without a purchase payment. The participant must pay the purchase
price of stock acquired pursuant to a restricted stock purchase agreement under
the 1991 Plan (a) in cash at the time of purchase, (b) at the discretion of the
Board, according to a deferred payment or other arrangement, or (c) in any
other form of legal consideration that may be acceptable to the Board.
Vesting. Unless otherwise determined for good cause shown by a committee
composed solely of outside directors and/or non-employee directors, shares of
stock sold or awarded under the 1991 Plan shall be subject to a repurchase
option in favor of the Company in accordance with a vesting schedule of at
least three years. The repurchase option shall provide for payment for unvested
shares at not less than the minimum amount necessary to avoid a charge to
earnings for financial accounting purposes.
Unless otherwise determined for good cause shown by a committee composed
solely of non-employee directors and/or outside directors or unless pursuant to
the change of control provisions of the 1991 Plan (see "Effect of Certain
Corporate Events"), acceleration of the time during which a stock bonus or
restricted stock purchase award may vest or be exercised will occur only in
connection with a significant personal event for the participant, such as the
death or disability of the participant.
Restrictions on Transfer
The participant may not transfer an incentive stock option, rights under a
stock bonus agreement, or a restricted stock purchase agreement otherwise than
by will or by the laws of descent and distribution. However, the Board may
grant nonstatutory stock options that are transferable. Shares subject to
repurchase by the Company under an early exercise stock purchase agreement, a
stock bonus agreement, or a restricted stock purchase agreement may be subject
to restrictions on transfer that the Board deems appropriate.
Adjustment Provisions
Transactions not involving receipt of consideration by the Company, such as
certain mergers, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares or change in corporate
structure, may change the class and number of shares of Common Stock subject to
the 1991 Plan and outstanding awards. In that event, the Board will
appropriately adjust the 1991 Plan as to the class and the maximum number of
shares of Common Stock subject to the 1991 Plan and the Section 162(m)
Limitation, and will adjust outstanding awards as to the class, number of
shares and price per share of Common Stock subject to such awards.
Effect of Certain Corporate Events
For purposes of the 1991 Plan, a change of control is deemed to have
occurred at any of the following times:
. Upon the acquisition (other than from the Company) by any person, entity
or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, (excluding, for this purpose, the Company or its
affiliates, or any employee benefit plan of the Company or its
affiliates which acquires beneficial ownership of voting securities of
the Company), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the then
outstanding shares of Common Stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally
in the election of directors;
9
. At the time individuals who, as of May 14, 1991, constituted the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to May 14, 1991, whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) are, for purposes of the 1991 Plan, considered as though such
persons were a member of the Incumbent Board;
. Immediately prior to the consummation by the Company of a
reorganization, merger, consolidation (in each case, with respect to
which persons who were the stockholders of the Company immediately prior
to such reorganization, merger, or consolidation do not, immediately
thereafter, own more that 50% of the combined voting power entitled to
vote generally in the election of directors of the reorganized, merged,
or consolidated company's then outstanding voting securities), or a
liquidation or dissolution of the Company or of the sale of all or
substantially all of the assets of the Company (a "reorganization"); or
. The occurrence of any other event that the Incumbent Board determines
constitutes a change of control.
In the event of a reorganization initiated and occurring on or after August
15, 2001, then any surviving corporation or acquiring corporation will assume
any awards outstanding under the 1991 Plan or will substitute similar awards.
If it refuses to do so, then with respect to awards held by a participant in
the 1991 Plan whose service has not terminated, the vesting of such awards
(and, if applicable, the time during which such awards may be exercised) will
be accelerated in full. The awards will terminate if not exercised at or prior
to the event.
In the event of any other change of control, then, at the discretion of the
Board:
. any surviving corporation will assume the rights and obligations of the
Company under any awards outstanding under the 1991 Plan or will
substitute similar awards for those outstanding under the 1991 Plan;
. the time during which such awards become vested or may be exercised will
be accelerated and any outstanding unexercised rights under any awards
terminated if not exercised prior to such event; or
. such awards will continue in full force and effect.
In addition, if within one month before or 24 months after a change of
control a participant's service is terminated involuntarily without cause or
voluntary by the participant due to a constructive termination (in each case
as defined in the 1991 Plan), then the vesting and exercisability of all
awards held by that participant will be accelerated, and any reacquisition or
repurchase rights held by the Company with respect to an award will lapse.
The acceleration of an award in the event of a change in control may be
viewed as an anti-takeover provision, which may have the effect of
discouraging a proposal to acquire or otherwise obtain control of the Company.
Duration, Amendment and Termination
The Board may suspend or terminate the 1991 Plan without stockholder
approval or ratification at any time or from time to time. Unless sooner
terminated, the 1991 Plan will terminate on February 13, 2011.
The Board may also amend the 1991 Plan at any time or from time to time.
However, no amendment will be effective unless approved by the stockholders of
the Company to the extent stockholder approval is necessary for the 1991 Plan
to satisfy the requirements of Section 422 of the Code, Rule 16b-3 under the
Exchange Act, or any Nasdaq Stock Market or applicable securities exchange
listing requirements. The Board may submit any other amendment to the 1991
Plan for stockholder approval, including, but not limited to, amendments
intended to satisfy the requirements of Section 162(m) of the Code regarding
the exclusion of performance-based compensation from the limitation on the
deductibility of compensation paid to certain employees.
10
Federal Income Tax Information
Long-term capital gains currently are generally subject to lower tax rates
than ordinary income or short-term capital gains. The maximum long-term
capital gains rate for federal income tax purposes is currently 20% while the
maximum ordinary income rate and short-term capital gains rate is effectively
39.6%. Slightly different rules may apply to participants who acquire stock
subject to certain repurchase options or who are subject to Section 16(b) of
the Exchange Act.
Incentive Stock Options. Incentive stock options under the 1991 Plan are
intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code.
There generally are no federal income tax consequences to the participant
or the Company by reason of the grant or exercise of an incentive stock
option. However, the exercise of an incentive stock option may increase the
participant's alternative minimum tax liability, if any.
If a participant holds stock acquired through exercise of an incentive
stock option for at least two years from the date on which the option was
granted and more than one year from the date on which the shares were
transferred to the participant upon exercise of the option, any gain or loss
on a disposition of such stock will be a long-term capital gain or loss.
Generally, if the participant disposes of the stock before the expiration
of either of these holding periods (a "disqualifying disposition"), then at
the time of disposition the participant will realize taxable ordinary income
equal to the lesser of (i) the excess of the stock's fair market value on the
date of exercise over the exercise price, or (ii) the participant's actual
gain, if any, on the purchase and sale. The participant's additional gain or
any loss upon the disqualifying disposition will be a capital gain or loss,
which will be long-term or short-term depending on whether the stock was held
for more than one year.
To the extent the participant recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) of the
Code, and the satisfaction of a tax reporting obligation) to a corresponding
business expense deduction in the tax year in which the disqualifying
disposition occurs.
Nonstatutory Stock Options, Restricted Stock Purchase Awards, and Stock
Bonuses. Nonstatutory stock options, restricted stock purchase awards, and
stock bonuses granted under the 1991 Plan generally have the following federal
income tax consequences.
There are no tax consequences to the participant or the Company by reason
of the grant. Upon acquisition of the stock, the participant normally will
recognize taxable ordinary income equal to the excess, if any, of the stock's
fair market value on the acquisition date over the purchase price. However, to
the extent the stock is subject to certain types of vesting restrictions, the
taxable event will be delayed until the vesting restrictions lapse unless the
participant elects to be taxed on receipt of the stock. With respect to
employees, the Company is generally required to withhold from regular wages or
supplemental wage payments an amount based on the ordinary income recognized.
Subject to the requirement of reasonableness, the provisions of Section 162(m)
of the Code, and the satisfaction of a tax reporting obligation, the Company
will generally be entitled to a business expense deduction equal to the
taxable ordinary income realized by the participant.
Upon disposition of the stock, the participant will recognize a capital
gain or loss equal to the difference between the selling price and the sum of
the amount paid for such stock plus any amount recognized as ordinary income
upon acquisition (or vesting) of the stock. Such gain or loss will be long-
term or short-term depending on whether the stock was held for more than one
year. Slightly different rules may apply to participants who acquire stock
subject to certain repurchase options or who are subject to Section 16(b) of
the Exchange Act.
Potential Limitation on Company Deductions. Section 162(m) of the Code
denies a deduction to any publicly held corporation for compensation paid to
certain "covered employees" (the chief executive officer and
11
the four other most highly compensated officers) in a taxable year to the
extent that compensation to such covered employee exceeds $1 million. It is
possible that compensation attributable to awards, when combined with all
other types of compensation received by a covered employee from the Company,
may cause this limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options will qualify as performance-based compensation
if the award is granted by a compensation committee comprised solely of
"outside directors" and either (i) the plan contains a per-employee limitation
on the number of shares for which such awards may be granted during a
specified period, the per-employee limitation is approved by the stockholders,
and the exercise price of the award is no less than the fair market value of
the stock on the date of grant, or (ii) the award is granted (or exercisable)
only upon the achievement (as certified in writing by the compensation
committee) of an objective performance goal established in writing by the
compensation committee while the outcome is substantially uncertain, and the
award is approved by stockholders.
Compensation attributable to restricted stock purchase awards and stock
bonuses will qualify as performance-based compensation, provided that the
award is granted by a compensation committee comprised solely of "outside
directors" and the purchase price of the award is no less than the fair market
value of the stock on the date of grant. Stock bonuses qualify as performance-
based compensation under the Treasury regulations only if
. the award is granted by a compensation committee comprised solely of
"outside directors",
. the award is granted (or exercisable) only upon the achievement of an
objective performance goal established in writing by the compensation
committee while the outcome is substantially uncertain,
. the compensation committee certifies in writing prior to the granting
(or exercisability) of the award that the performance goal has been
satisfied, and
. prior to the granting (or exercisability) of the award, stockholders
have approved the material terms of the award (including the class of
employees eligible for such award, the business criteria on which the
performance goal is based, and the maximum amount--or formula used to
calculate the amount--payable upon attainment of the performance goal).
1998 Non-Officer Equity Incentive Plan
The Company also grants options to non-officers under its 1998 Non-Officer
Equity Incentive Plan (the "1998 Plan"). The Company's 1998 Plan, adopted in
February 1998, provides for grants of nonstatutory stock options to employees
and consultants who are not officers or directors of the Company. Since its
inception in 1998, an aggregate of 3,000,000 shares of Common Stock have been
reserved for issuance under the 1998 Plan. As of March 1, 2001, options to
purchase 1,315,027 shares were outstanding under the 1998 Plan, and 1,259,081
shares remain available for future grants. The exercise price of options
granted under the 1998 Plan may not be less than 100% of the fair market value
on the date of grant and all options granted have a maximum term of ten years.
Options generally vest over five years. The 1998 Plan also contains the
adjustment and change of control provisions described above with respect to
the 1991 Plan under Proposal 2. Without the prior approval of the Company's
stockholders, the Board may not reprice outstanding options under the 1998
Plan, either by amending the terms of outstanding options to reduce the
exercise price, canceling outstanding options and substituting options with a
lower exercise price, or making any modification of an option that would be
deemed to be a repricing for financial accounting purposes.
12
PROPOSAL 3
APPROVAL OF AMENDMENTS TO THE
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN, AS AMENDED
In January 1994, the Board adopted, and the stockholders subsequently
approved, the Company's 1994 Non-Employee Directors' Stock Option Plan (the
"Directors' Plan"). In February 2001, the Board amended the Directors' Plan,
subject to stockholder approval, to increase by 300,000 the number of shares
of Common Stock authorized for issuance under the Directors' Plan and to
eliminate the fixed termination date of January 20, 2004.
The Board also amended the Directors' Plan to provide for automatic option
grants to non-employee directors to be made on a pro rata basis in the event
that the share reserve under the Directors' Plan is insufficient to cover such
grants with the balance of such grants to be made under the 1991 Plan to the
extent sufficient shares are available under the 1991 Plan. This amendment
does not require approval of the stockholders. The Board adopted these
amendments in order to ensure that the Company can continue to grant options
at levels set forth in the Directors' Plan and to assist in obtaining and
retaining the services of non-employee directors.
As of March 1, 2001, options (net of canceled or expired options) covering
an aggregate of 400,000 shares of the Company's Common Stock had been granted
under the Directors' Plan and no shares of Common Stock (plus any shares that
might in the future be returned to the Directors' Plan as a result of
cancellations or expiration of options) remained available for future grant
under the Directors' Plan.
Stockholders are requested in this Proposal 3 to approve the amendments to
the Directors' Plan increasing the shares available for issuance under the
Directors' Plan by 300,000 shares and removing a fixed termination date. The
affirmative vote of the holders of a majority of the shares present in person
or represented by proxy and entitled to vote at the meeting will be required
to approve the amendments to the Directors' Plan. Abstentions will be counted
toward the tabulation of votes cast on the proposal and will have the same
effect as negative votes. Broker non-votes are counted toward a quorum, but
are not counted for any purpose in determining whether this matter has been
approved.
The Board Of Directors Recommends
A Vote In Favor Of Proposal 3.
The essential features of the Directors' Plan, as amended, are outlined
below.
General
The Directors' Plan provides for the automatic grant of nonstatutory stock
options. Options granted under the Directors' Plan are not intended to qualify
as "incentive stock options" within the meaning of Section 422 of the Code.
See "Federal Income Tax Information" for a discussion of the tax treatment of
nonstatutory stock options.
Purpose
The Board adopted the Directors' Plan to provide a means by which non-
employee directors of the Company may be given an opportunity to purchase
stock in the Company, to assist in retaining the services of such persons, to
secure and retain the services of persons capable of filling such positions,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company. All of the current non-employee directors of the
Company are eligible to participate in the Directors' Plan.
Administration
The Board administers the Directors' Plan. The Board has the power to
construe and interpret the Directors' Plan but not to determine the persons to
whom or the dates on which options will be granted, the number of shares to be
subject to each option, the time or times during the term of each option
within which all or a portion of such option may be exercised, the exercise
price, or the type of consideration.
13
The Board has the power to delegate administration of the Directors' Plan
to a committee composed of not fewer than two members of the Board. As used
herein with respect to the Directors' Plan, the "Board" refers to any
committee the Board appoints as well as to the Board itself. The Board has
delegated administration of the Directors' Plan to the Compensation Committee.
Stock Subject to the Directors' Plan
Subject to this Proposal, an additional 300,000 shares of Common Stock have
been authorized for issuance under the Directors' Plan. Since its inception,
700,000 shares of Common Stock (including the additional shares) have been
authorized for issuance under the Directors' Plan. As of March 1, 2001,
options to purchase 121,940 shares were outstanding under the Directors' Plan
and 300,000 shares (including the additional shares) remain available for
future grant. If options granted under the Directors' Plan expire or otherwise
terminate without being exercised, the shares of Common Stock not acquired
pursuant to such options again become available for issuance under the
Directors' Plan.
Eligibility
The Directors' Plan provides that options may be granted only to non-
employee directors of the Company. A "non-employee director" is defined in the
Directors' Plan as a director of the Company who is not otherwise an employee
of or consultant to the Company or any affiliate.
Terms of Options
The following is a description of the terms of options under the Directors'
Plan.
Automatic Grants. All option grants under the Directors' Plan are automatic
and non-discretionary. Each person who was a non-employee director on January
21, 1994 or who thereafter is elected for the first time to be a non-employee
director is granted an initial option to purchase 50,000 shares of Common
Stock.
Each person who, on or after March 19, 1999, serves as a non-employee
director receives a supplemental grant to purchase 20,000 shares of Common
Stock. The first supplemental grant is made on the date of the first Board
meeting held both on or after March 19, 1999 and after the date on which such
person has completed three years of service as a director of the Company.
Additional supplemental grants are made every two years thereafter on the
anniversary date of the first supplemental grant.
If there are insufficient shares of the Company's Common Stock reserved
under the Directors' Plan to make a timely option grant required by the
Directors' Plan, then such option, in whole or in part, will be granted from
shares reserved under the 1991 Plan. If there are insufficient shares
available under both the 1991 Plan and the Directors' Plan to cover such
option grant, the grant will be delayed to the extent of the share deficit
until such shares are available to cover the grant.
Exercise Price; Payment. The exercise price of options may not be less than
100% of the fair market value of the stock subject to the option on the date
of the grant. At March 1, 2001, the closing price of the Company's Common
Stock as reported on the Nasdaq Stock Market was $31.63 per share.
Payment of the exercise price of each option is due in full in cash upon
any exercise when the number of shares being purchased is less than 2,000
shares. However, when the number of shares being purchased is 2,000 or more,
the optionee may elect to make payment of the exercise price under one of the
following alternatives:
. Payment of the exercise price per share in cash at the time of exercise;
or
. Payment by delivery of shares of Common Stock already owned by the
optionee, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interest, which Common Stock shall be
valued at fair market value on the date preceding the date of exercise;
or
14
. A combination of the above two alternatives; or
. Payment pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that results in the receipt of
cash (or check) by the Company prior to the issuance of shares of the
Company's Common Stock.
Repricing. In the event of a decline in the value of the Company's Common
Stock, the Board does not have the authority to offer optionees the
opportunity to replace outstanding higher priced options with new lower priced
options.
Option Exercise. Initial options granted under the Directors' Plan vest in
equal cumulative monthly increments over a period of 60 months during the
optionee's service as a non-employee director of the Company ("service") but
not during any subsequent employment of the optionee by and/or service by the
optionee as an employee director or a consultant to the Company or an
affiliate. Initial grants do not permit exercise prior to vesting.
Supplemental grants are fully vested and exercisable upon grant.
Term. The term of options under the Directors' Plan is 10 years. Options
under the Directors' Plan terminate three months after termination of the
optionee's service as a non-employee director. However, if such termination is
due to the optionee's permanent and total disability (as defined in the Code),
the option may be exercised (to the extent the option was exercisable at the
time of the termination of service) at any time within 12 months of such
termination. If the optionee dies before the optionee's service has
terminated, the option may be exercised (to the extent the option was
exercisable at the time of the optionee's death) within 18 months of the
optionee's death by the person or persons to whom the rights to such option
have been transferred or to whom the rights to such option pass by will or by
the laws of descent and distribution. An optionee may designate a beneficiary
who may exercise the option following the optionee's death. The option term is
not extended in the event that exercise of the option within these periods is
prohibited.
Other Provisions. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the Directors' Plan as
determined by the Board.
Restrictions on Transfer
Options are transferable to the extent permitted in the stock option grant
agreement. Otherwise, they are not transferable except by will or the laws of
descent and distribution or pursuant to a domestic relations order.
Adjustment Provisions
Transactions not involving receipt of consideration by the Company, such as
certain mergers, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, or change in corporate
structure, may change the class and number of shares of Common Stock subject
to the Directors' Plan and outstanding options. In that event, the Board will
appropriately adjust the Directors' Plan as to the class and the maximum
number of shares of Common Stock subject to the Directors' Plan, and will
adjust outstanding options as to the class, number of shares and price per
share of Common Stock subject to such options.
Effect of Certain Corporate Events
If there is a merger or consolidation in which the Company is not the
surviving corporation, a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, or any other capital reorganization in which more than 50% of
the shares of the Company entitled to vote are exchanged, then any surviving
corporation, other than the Company, will be required to assume any options
outstanding under the Directors' Plan or substitute similar options for those
outstanding under the Directors' Plan. If the Company is the surviving
corporation, the options will continue in full force and effect.
15
Duration, Amendment and Termination
The Board may suspend or terminate the Directors' Plan without stockholder
approval or ratification at any time or from time to time. Currently, the
Directors' Plan will terminate on January 20, 2004. Subject to this Proposal,
the Directors' Plan will not have any set termination date.
The Board may amend the Directors' Plan. However, no amendment will be
effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary for the Directors' Plan to satisfy the
requirements of Rule 16b-3 under the Exchange Act or any Nasdaq Stock Market
or applicable securities exchange listing requirements.
Federal Income Tax Information
Nonstatutory Stock Options. Nonstatutory stock options granted under the
Directors' Plan have the same federal income tax consequences as those granted
under the 1991 Plan. See Proposal 2.
PROPOSAL 4
APPROVAL OF AMENDMENT TO THE
1991 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
In May 1991, the Board adopted, and the stockholders subsequently approved,
the Company's 1991 Employee Stock Purchase Plan (the "Purchase Plan"). In
February 2001, the Board amended the Purchase Plan, subject to stockholder
approval, to increase by 450,000 the number of shares of Common Stock
authorized for issuance under the Purchase Plan.
The Board also amended the Purchase Plan to permit the designation of a
beneficiary and to eliminate a fixed termination date, which amendments do not
require approval by the stockholders. The Board adopted these amendments in
order to ensure that the Company can continue to grant purchase rights at
levels and on terms deemed appropriate by the Board in order to attract and
retain employees subject to the Purchase Plan.
As of March 1, 2001, an aggregate of 1,722,273 shares of Common Stock had
been purchased under the Purchase Plan and 377,727 shares of Common Stock
(plus any shares that might in the future be returned to the Purchase Plan as
a result of cancellations or expiration of purchase rights) remained available
for future purchase under the Purchase Plan.
Stockholders are requested in this Proposal 4 to approve the amendment to
the Purchase Plan increasing the shares available for issuance under the
Purchase Plan by 450,000 shares. The affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and entitled
to vote at the meeting will be required to approve the amendment to the
Purchase Plan. Abstentions will be counted toward the tabulation of votes cast
on the proposal and will have the same effect as negative votes. Broker non-
votes are counted toward a quorum, but are not counted for any purpose in
determining whether this matter has been approved.
The Board Of Directors Recommends
A Vote In Favor Of Proposal 4.
The essential features of the Purchase Plan, as amended, are outlined
below.
Purpose
The purpose of the Purchase Plan is to provide a means by which employees
of the Company (and any parent or subsidiary of the Company designated by the
Board to participate in the Purchase Plan) may be given an opportunity to
purchase Common Stock of the Company through payroll deductions, to assist the
Company
16
in retaining the services of its employees, to secure and retain the services
of new employees, and to provide incentives for such persons to exert maximum
efforts for the success of the Company. All of the Company's approximately 311
employees are eligible to participate in the Purchase Plan.
The rights to purchase Common Stock granted under the Purchase Plan are
intended to qualify as options issued under an "employee stock purchase plan"
as that term is defined in Section 423(b) of the Code.
Administration
The Board administers the Purchase Plan and has the final power to construe
and interpret both the Purchase Plan and the rights granted under it. The
Board has the power, subject to the provisions of the Purchase Plan, to
determine when and how rights to purchase Common Stock of the Company will be
granted, the provisions of each offering of such rights (which need not be
identical), and whether employees of any parent or subsidiary of the Company
will be eligible to participate in the Purchase Plan.
The Board has the power to delegate administration of the Purchase Plan to
a committee of one or more members of the Board. As used herein with respect
to the Purchase Plan, the "Board" refers to any committee appointed by the
Board as well as to the Board itself. The Board has delegated administration
of the Purchase Plan to the Compensation Committee.
Stock Subject to Purchase Plan
Subject to this Proposal, an additional 450,000 shares of Common Stock have
been authorized for issuance under the Purchase Plan. Since its inception,
2,550,000 shares of Common Stock (including these additional shares) have been
authorized for issuance under the Purchase Plan, of which 827,727 remain
available for future purchase. If rights granted under the Purchase Plan
expire, lapse or otherwise terminate without being exercised, the shares of
Common Stock not purchased under such rights again become available for
issuance under the Purchase Plan.
Offerings
The Purchase Plan is implemented by offerings of rights to all eligible
employees from time to time by the Board. The maximum length for an offering
under the Purchase Plan is 27 months. Currently, under the Purchase Plan, each
offering is 12 months long with an exercise date every three months.
Eligibility
Any person who is customarily employed at least 20 hours per week and five
months per calendar year by the Company (or by any parent or subsidiary of the
Company designated by the Board) on the first day of an offering is eligible
to participate in that offering.
However, no employee is eligible to participate in the Purchase Plan if,
immediately after the grant of purchase rights, the employee would own,
directly or indirectly, stock possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or of any parent
or subsidiary of the Company (including any stock which such employee may
purchase under all outstanding rights and options). No employee may purchase
more than $25,000 worth of Common Stock (determined at the fair market value
of the shares at the time such rights are granted) under all employee stock
purchase plans of the Company and its parent and subsidiary corporations in
any calendar year. In addition to the preceding limitation, under the current
offering no employee may purchase more than 4,000 shares of Common Stock
during the offering.
Participation in the Purchase Plan
Eligible employees enroll in the Purchase Plan by delivering to the
Company, prior to the date selected by the Board as the offering date for the
offering, an agreement authorizing payroll deductions of up to 15% of such
employees' total compensation during the offering.
17
Purchase Price
The purchase price per share at which shares of Common Stock are sold in an
offering under the Purchase Plan is the lower of 85% of the fair market value
of a share of Common Stock on first day of the offering or 85% of the fair
market value of a share of Common Stock on the applicable exercise date during
the offering.
Payment of Purchase Price; Payroll Deductions
The purchase price of the shares is accumulated by payroll deductions over
the offering. At any time during the offering, a participant may reduce or
terminate his or her payroll deductions as the Board provides in the offering.
A participant may increase or begin such payroll deductions after the
beginning of the offering. All payroll deductions made for a participant are
credited to his or her account under the Purchase Plan and deposited with the
general funds of the Company. A participant may not make additional payments
into such account.
Purchase of Stock
By executing an agreement to participate in the Purchase Plan, the employee
is entitled to purchase shares under the Purchase Plan. In connection with
offerings made under the Purchase Plan, the Board specifies a maximum number
of shares of Common Stock an employee may be granted the right to purchase and
the maximum aggregate number of shares of Common Stock that may be purchased
pursuant to such offering by all participants. If the aggregate number of
shares to be purchased upon exercise of rights granted in the offering would
exceed the maximum aggregate number of shares of Common Stock available, the
Board would make a pro rata allocation of available shares in an uniform and
equitable manner. Unless the employee's participation is discontinued, his or
her right to purchase shares is exercised automatically on each of the four
exercise dates during the offering at the applicable price. See "Withdrawal"
below.
Withdrawal
While each participant in the Purchase Plan is required to sign an
agreement authorizing payroll deductions, the participant may withdraw from a
given offering by terminating his or her payroll deductions and by delivering
to the Company a notice of withdrawal from the Purchase Plan. Such withdrawal
may be elected at any time prior to the end of the offering.
Upon any withdrawal from an offering by the employee, the Company will
distribute to the employee his or her accumulated payroll deductions without
interest, less any accumulated deductions previously applied to the purchase
of shares of Common Stock on the employee's behalf during such offering, and
such employee's interest in the offering will be automatically terminated. The
employee is entitled to again participate in that offering on the next date
when new employees may enroll, and an employee's withdrawal from an offering
will not have any effect upon such employee's eligibility to participate in
subsequent offerings under the Purchase Plan.
Termination of Employment
Rights granted pursuant to any offering under the Purchase Plan terminate
immediately upon cessation of an employee's employment for any reason, and the
Company will distribute to such employee all of his or her accumulated payroll
deductions not previously applied to the purchase of shares of Common Stock,
without interest.
Restrictions on Transfer
Rights granted under the Purchase Plan are not transferable and may be
exercised only by the person to whom such rights are granted. The Purchase
Plan provides for the designation by the participant of a beneficiary in the
event of the participant's death.
18
Adjustment Provisions
Transactions not involving receipt of consideration by the Company, such as
a merger, consolidation, reorganization, stock dividend or stock split, may
change the type(s), class(es) and number of shares of Common Stock subject to
the Purchase Plan and to outstanding purchase rights. In that event, the
Purchase Plan will be appropriately adjusted in the type(s), class(es) and
maximum number of shares subject to the Purchase Plan and the outstanding
purchase rights granted under the Purchase Plan will be appropriately adjusted
in the type(s), class(es), number of shares and purchase limits of such
purchase rights.
Effect of Certain Corporate Events
If there is a dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving corporation, a reverse
merger in which the Company is the surviving corporation but the shares of the
Company's Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, or any other capital
reorganization in which more than 50% of the shares of the Company entitled to
vote are exchanged, then, as determined by the Board in its sole discretion
any surviving corporation may assume outstanding rights or substitute similar
rights for those under the Purchase Plan, such rights may continue in full
force and effect, or participants' accumulated payroll deductions may be used
to purchase Common Stock immediately prior to such transaction and the
participants' rights under the ongoing offering terminated.
Duration, Amendment and Termination
The Board may suspend, terminate or amend the Purchase Plan at any time.
However, generally no amendment will be effective if such modification
requires stockholder approval in order for the Purchase Plan to obtain
employee stock purchase plan treatment under Section 423 of the Code or to
comply with the requirements of Rule 16b-3 promulgated under the Exchange Act
or any Nasdaq Stock Market or applicable securities exchange listing
requirements.
Rights granted before amendment or termination of the Purchase Plan will
not be altered or impaired by any amendment or termination of the Purchase
Plan without consent of the employee to whom such rights were granted.
Federal Income Tax Information
Rights granted under the Purchase Plan are intended to qualify for
favorable federal income tax treatment associated with rights granted under an
employee stock purchase plan which qualifies under provisions of Section 423
of the Code.
A participant will be taxed on amounts withheld for the purchase of shares
of Common Stock as if such amounts were actually received. Other than this, no
income will be taxable to a participant until disposition of the acquired
shares, and the method of taxation will depend upon the holding period of the
acquired shares.
If the stock is disposed of at least two years after the beginning of the
offering period and at least one year after the stock is transferred to the
participant, then the lesser of the excess of the fair market value of the
stock at the time of such disposition over the exercise price or the excess of
the fair market value of the stock as of the beginning of the offering period
over the exercise price (determined as of the beginning of the offering
period) will be treated as ordinary income. Any further gain or any loss will
be taxed as a long-term capital gain or loss. Such capital gains currently are
generally subject to lower tax rates than ordinary income.
If the stock is sold or disposed of before the expiration of either of the
holding periods described above, then the excess of the fair market value of
the stock on the exercise date over the exercise price will be treated as
ordinary income at the time of such disposition. The balance of any gain will
be treated as capital gain. Even if the stock is later disposed of for less
than its fair market value on the exercise date, the same amount of
19
ordinary income is attributed to the participant, and a capital loss is
recognized equal to the difference between the sales price and the fair market
value of the stock on such exercise date. Any capital gain or loss will be
short-term or long-term, depending on how long the stock has been held.
There are no federal income tax consequences to the Company by reason of
the grant or exercise of rights under the Purchase Plan. The Company is
entitled to a deduction to the extent amounts are taxed as ordinary income to
a participant (subject to the requirement of reasonableness and the
satisfaction of tax reporting obligations).
PROPOSAL 5
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board has selected Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending December 31, 2001 and has further directed
that management submit the selection of independent auditors for ratification
by the stockholders at the Annual Meeting. Ernst & Young LLP has audited the
Company's financial statements since its inception in 1988. Representatives of
Ernst & Young LLP are expected to be present at the Annual Meeting, will have
an opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the selection, the Audit Committee and the
Board will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board in its discretion may
direct the appointment of different independent auditors at any time during
the year if it determines that such a change would be in the best interests of
the Company and its stockholders.
Audit Fees
The aggregate fees billed for professional services by the independent
auditors for the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2000, and for the review of the Company's
financial statements for the quarterly reports during the fiscal year ended
December 31, 2000 were $157,000.
Financial Information Systems Design and Implementation Fees
The aggregate fees billed by the independent auditors for professional
services for financial information systems design and implementation during
the fiscal year ended December 31, 2000 were zero.
All Other Fees
The aggregate fees billed by the independent auditors for all other matters
for the fiscal year ended December 31, 2000 were $124,000, of which $89,000
was for audit related activities.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote on the proposal at the
meeting will be required to ratify the selection of Ernst & Young LLP.
Abstentions will be counted toward the tabulation of votes cast on the
proposal and will have the same effect as negative votes. Broker non-votes are
counted toward a quorum, but are not counted for any purpose in determining
whether this matter has been approved.
The Board Of Directors Recommends
A Vote In Favor Of Proposal 5.
20
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Unless otherwise indicated, the following table sets forth certain
information regarding the ownership of the Company's Common Stock as of March
1, 2001 by (i) each nominee for director, (ii) each of the executive officers
named in the Summary Compensation Table (see "Compensation of Executive
Officers"), (iii) all executive officers and directors of the Company as a
group, and (iv) all those known by the Company to be beneficial owners of more
than five percent of its Common Stock.
Beneficial
Ownership (1)(2)
------------------
Number Percent
Beneficial Owner of Shares of Total
- ---------------- --------- --------
FMR Corp. and affiliates (3)............................... 5,284,427 9.6%
82 Devonshire Street
Boston, MA 02109
Franklin Resources, Inc. (4)............................... 2,966,750 5.4%
777 Mariners Island Boulevard
San Mateo, CA 94404
Vaughn M. Kailian.......................................... 1,254,912 2.2%
Charles J. Homcy........................................... 407,700 *
Mark D. Perrin............................................. 306,642 *
Shaun R. Coughlin.......................................... 103,174 *
Lee M. Rauch............................................... 103,402 *
Patrick A. Broderick....................................... 25,746 *
Jerry T. Jackson........................................... 20,000 *
Ernest Mario............................................... 16,500 *
James T. Doluisio.......................................... 7,440 *
Ginger L. Graham........................................... 1,666 *
Michael G. McCaffery....................................... 1,666 *
All executive officers and directors as a group
(12 people) (5)........................................... 2,283,630 4.0%
- --------
* Less than one percent
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedule 13G filed with the SEC. Unless
otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, the Company believes that each
of the stockholders named in this table has sole voting and investment
power with respect to the shares indicated as beneficially owned.
Applicable percentages are based on 55,101,845 shares outstanding on March
1, 2001, adjusted as required by rules promulgated by the SEC.
(2) Includes shares that certain officers and directors of the Company have
the right to acquire within 60 days after the date of this table pursuant
to outstanding options as follows (number of shares): Vaughn M. Kailian,
906,816; Charles J. Homcy, 296,118; Mark D. Perrin, 237,802; Shaun R.
Coughlin, 40,000; Lee M. Rauch, 99,166; Patrick A. Broderick, 19,166;
Jerry T. Jackson, 20,000; Ernest Mario, 16,500; James T. Doluisio, 5,440;
Ginger L. Graham, 1,666; Michael G. McCaffery, 1,666; and all executive
officers and directors as a group, 1,670,402.
(3) Based on a Schedule 13G filed with the SEC dated February 13, 2001.
Includes 4,829,833 shares (8.7%) beneficially owned by Fidelity Management
& Research Company, a wholly owned subsidiary of FMR Corp. ("Fidelity"),
as a result of acting as investment advisor to several investment
companies
21
registered under the Investment Company Act of 1940, of which 136,183 shares
are based upon assumed conversion of $4,600,000 principal amount of COR
Therapeutics, Inc. 5% convertible subordinated notes (29.6056 shares for
each $1,000 principal amount). Also includes 387,740 shares beneficially
owned by Fidelity Management Trust Company, a wholly-owned subsidiary of FMR
Corp., as a result of its serving as investment manager of institutional
accounts. Edward C. Johnson 3d and FMR Corp. through its control of Fidelity
each has sole power to dispose of 4,829,833 shares. Sole power to vote or
direct the voting of such shares resides with the Board of Trustees of the
funds. The following listed entities and individuals filed a joint statement
on Schedule 13G, with FMR Corp. listed as a parent holding company: Fidelity
Management & Research Company, Edward C. Johnson 3d, and Abigail P. Johnson.
(4) Based on a Schedule 13G filed with the SEC dated Janaury 26, 2001. Includes
2,966,750 shares beneficially owned by Franklin Advisors, Inc., an
investment advisor subsidiary of Franklin Resources, Inc. ("FRI"), with
dispositive power and power to direct the voting of all such shares and of
which 59,200 shares are based upon assumed conversion of $2,000,000
principal amount of COR Therapeutics, Inc. 5% convertible subordinated
notes (29.6056 shares for each $1,000 principal amount). FRI and its
principal shareholders, Charles B. Johnson and Rupert H. Johnson, Jr.,
disclaim beneficial ownership of all of these shares pursuant to
Rule 13d-4.
(5) Includes 1,670,402 shares that certain officers and directors of the
Company have the right to acquire within 60 days after the date of this
table pursuant to outstanding options.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than 10% of a registered class of
the Company's equity securities to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors, and greater than 10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2000, its
officers, directors, and greater than 10% beneficial owners complied with all
applicable Section 16(a) filing requirements except that (i) two Form 4s
related to a gift of 900 (1,800 post split) shares in August 1999 and the
disposition of 10,000 (20,000 post split) shares in February 2000 were filed
late by Dr. Homcy, and (ii) the gift of 500 (1,000 post split) shares in
December 1999 which had previously been timely reported by Mr. Roddy on Form 5
as 400 shares was corrected, and a Form 4 which had been timely filed by
Mr. Roddy in February 2000 was subsequently amended to reflect the additional
disposition of 8,169 (16,338 post split) shares of which 1,500 (3,000 post
split) shares were indirectly owned.
22
EXECUTIVE COMPENSATION
Compensation of Directors
Directors who are neither employees of nor consultants to the Company
("non-employee directors") receive an annual directors' fee of $10,000, paid
on a quarterly basis. In accordance with Company policy, directors may also be
reimbursed for certain expenses in connection with attendance at Board and
committee meetings. An aggregate of $40,000 was paid to Dr. Coughlin, Dr.
Doluisio, Mr. Jackson, and Dr. Mario for services as directors of the Company
during 2000, and an aggregate of $5,000 was paid to Mr. Momsen and Dr. Smith
for their services as directors of the Company during 2000 prior to their
retirement.
Each non-employee director of the Company receives automatic non-
discretionary stock option grants under the Directors' Plan and may receive
option grants under the 1991 Plan under certain circumstances. See Proposals 2
and 3 for descriptions of the 1991 Plan and the Directors' Plan. During the
fiscal year ended December 31, 2000, no options were granted under the
Directors' Plan or the 1991 Plan to non-employee directors for services
rendered as directors of the Company during 2000.
Compensation of Executive Officers
Summary of Compensation
The following table shows, for the fiscal years ended December 31, 2000,
1999 and 1998, compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its four other most highly compensated executive
officers (the "Named Executive Officers") at December 31, 2000.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
--------------------------------- ------------------------
Other Annual Restricted Securities All Other
Name and Salary Bonus Compensation Stock Awards Underlying Compensation
Principal Position Year ($)(1) ($)(2) ($)(3) ($)(4) Options (#) ($)(5)
------------------ ---- ------- ------- ------------ ------------ ----------- ------------
Vaughn M. Kailian....... 2000 452,917 326,100 100,000 5,210
President and Chief 1999 430,000 113,500 80,000 6,735
Executive Officer 1998 427,500 102,600 43,000 80,000 3,762
Charles J. Homcy........ 2000 357,500 160,880 60,000 2,744
Executive Vice 1999 330,000 65,000 160,000 3,598
President, Research and 1998 327,917 59,025 33,000 60,000 3,330
Development
Mark D. Perrin (6)...... 2000 304,833 50,000 1,641
Executive Vice 1999 292,000 45,000 60,000 1,865
President, Commercial 1998 290,167 52,230 29,200 60,000 1,444
Operations
Lee M. Rauch............ 2000 259,167 116,630 40,000 1,805
Senior Vice President, 1999 230,128 33,000 102,860 200,000 2,058
Corporate Development 1998
Patrick A. Broderick.... 2000 251,000 112,950 40,000 1,517
Senior Vice President, 1999 220,923 36,500 200,000 1,623
General Counsel and 1998
Secretary
- --------
(1) Includes amounts earned but deferred at the election of the Named
Executive Officer.
(2) Bonus payments for the year indicated (actually paid in the following
year) resulting from the Company's Incentive Pay Program. These bonuses do
not include the value of restricted stock bonus awards granted, which are
included under the heading "Restricted Stock Awards" in this table.
(3) As permitted by rules promulgated by the SEC, no amounts are shown with
respect to "perquisites" under "Other Annual Compensation" where such
amounts for each Named Executive Officer do not exceed the lesser of 10%
of such executive's bonus plus salary or $50,000.
23
(4) Represents the dollar value of the restricted bonus shares awarded. This
number is calculated by multiplying the fair market value on the date of
grant ($5.63 in 1999 and $3.98 in 1998, based on the average of the high
and low sale prices on the date of grant as reported on the Nasdaq Stock
Market) by the number of shares granted. Restricted bonus shares granted
to Ms. Rauch in 1999 and to Mr. Kailian, Dr. Homcy and Mr. Perrin in 1998
vested in full on January 1, 2000. At the end of fiscal 2000, the
aggregate unvested restricted bonus stock holdings of the Named Executive
Officers was zero. The Company has not paid any dividends to date and does
not anticipate paying any dividends on its Common Stock in the foreseeable
future.
(5) Includes premiums on life insurance payable for each Named Executive
Officer. Also, includes $1,000 in matching contributions by the Company to
its tax-qualified employee savings and retirement plan for all Named
Executive Officers in 2000 and 1999, and $500 in matching contributions by
the Company to its tax-qualified employee savings and retirement plan for
Mr. Kailian, Dr. Homcy and Mr. Perrin in 1998.
(6) Mr. Perrin resigned from the Company effective February 1, 2001.
Stock Option Grants and Exercises
The Company grants stock options to executive officers under the 1991 Plan.
See Proposal 2 for a description of the 1991 Plan. The following tables show,
for the fiscal year ended December 31, 2000, certain information regarding all
options granted to, exercised by, and held at year end by, the Named Executive
Officers.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants (1)
--------------------------------------------
Potential Realizable
Number of Percentage of Value at Assumed
Securities Total Options Annual Rates of Stock
Underlying Granted to Price Appreciation for
Options Employees in Exercise Option Term ($)(4)
Granted Fiscal Year Price Expiration -----------------------
Name (#)(2) (%)(3) ($/Sh) Date 5% 10%
---- ---------- ------------- -------- ---------- ---------- ------------
Vaughn M. Kailian....... 100,000 7.98 12.84 1/28/10 716,111 1,901,065
Charles J. Homcy........ 60,000 4.79 12.84 1/28/10 429,667 1,140,639
Mark D. Perrin.......... 50,000 3.99 12.84 1/28/10 358,056 950,532
Lee M. Rauch............ 40,000 3.19 12.84 1/28/10 286,444 760,426
Patrick A. Broderick.... 40,000 3.19 12.84 1/28/10 286,444 760,426
- --------
(1) All shares and prices have been adjusted for the 2-for-1 stock split by
the Company effected on August 15, 2000 by means of a stock dividend.
(2) Reflects options granted in 2000 to the Named Executive Officers under the
1991 Plan. Options granted to Mr. Kailian, Dr. Homcy, Mr. Perrin, Ms.
Rauch, and Mr. Broderick on January 28, 2000 vest in their entirety on
January 31, 2003. See Proposal 2 for terms of options granted under the
1991 Plan.
24
(3) Based on options to purchase a total of 1,253,300 shares of Common Stock
granted to employees, including executive officers, in the fiscal year
ended December 31, 2000 under all stock option plans.
(4) The potential realizable value is based on the term of the option at the
date of the grant (10 years). It is calculated by assuming that the stock
price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term of the option, and that the option
is exercised and sold on the last day of the option term for the
appreciated stock price. These amounts represent certain assumed rates of
appreciation only and do not reflect the Company's estimate or projection
of future stock price performance. Actual gains, if any, are dependent on
the actual future performance of the Common Stock. There can be no
assurance that the amounts reflected in this table will be achieved.
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION VALUES
Shares Number of Securities
Acquired on Value Underlying Unexercised Value of Unexercised
Exercise Realized Options At FY-End In-the-Money Options at FY-End
Name (#)(1) ($)(2) Exercisable/Unexercisable (#) Exercisable/Unexercisable ($)(3)
---- ----------- ---------- ----------------------------- --------------------------------
Vaughn M. Kailian....... 200,000 4,867,875 816,750 / 304,250 25,911,170 / 8,807,427
Charles J. Homcy........ 368,198 8,521,060 220,819 / 283,983 6,954,056 / 8,419,322
Mark D. Perrin.......... 320,000 14,156,879 207,050 / 199,950 6,548,436 / 5,894,956
Lee M. Rauch............ 30,000 1,225,938 90,833 / 119,167 2,909,495 / 3,522,068
Patrick A. Broderick.... 110,000 3,299,583 10,833 / 119,167 346,995 / 3,522,068
- --------
(1) All shares and prices have been adjusted for the 2-for-1 stock split by
the Company effected on August 15, 2000 by means of a stock dividend.
(2) Based on the fair market value of the Common Stock on the date of exercise
less the exercise price paid for such shares and multiplied by the number
of shares exercised.
(3) Based on the fair market value of the Common Stock on December 29, 2000
($37.50, the average of the high and the low sale prices as reported on
the Nasdaq Stock Market) less the exercise price and multiplied by the
number of shares that were in the money.
Employment Contracts and Termination of Employment and Change of Control
Arrangements
In May 1999, the Compensation Committee of the Board approved the Company's
Key Employee Change in Control Severance Plan (the "Severance Plan"). The
Severance Plan provides separation pay and benefits to members of the
Company's Executive Committee and Vice Presidents of the Company whose
employment is involuntarily terminated without cause or voluntarily terminated
for good reason within 12 months following a change in control of the Company.
Specifically, the Severance Plan provides for continuation of the employee's
base salary for a period of 18 months, payment of the pro rata portion of the
employee's target bonus for the year in which termination occurs equal to the
portion of the year in which the employee is employed by the Company, and
payment by the Company of premiums for COBRA coverage for 12 months. The
Company's stock option plans also provide for the acceleration of the vesting
of options in connection with certain change of control events. See Proposal 2
"Effect of Certain Corporate Events".
25
AUDIT COMMITTEE REPORT (1)
The Audit Committee currently consists of James T. Doluisio, Ph.D., Jerry
T. Jackson, and Ernest Mario, Ph.D., each of whom is an "independent director"
and is "financially literate" as defined under the recently adopted Nasdaq
Stock Market listing standards. The Board has adopted a formal written Audit
Committee charter, a copy of which is attached to this proxy statement as
Exhibit A.
Management is responsible for the Company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes.
The Audit Committee has met and held discussions with management and the
Company's independent auditors. Management represented to the Audit Committee
that the Company's financial statements were prepared in accordance with
generally accepted accounting principles, and the Audit Committee has reviewed
and discussed the financial statements with management and the independent
auditors. The Audit Committee discussed with the independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees". The Company's independent auditors also
provided the Audit Committee with the written disclosures required by
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees", and the Audit Committee discussed with the independent
auditors the auditor's independence. The Audit Committee has considered the
services, other than the audit services, provided by the independent auditors
and determined that the provision of the services described in this proxy
statement under the captions "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" is compatible with maintaining the
independent auditor's independence.
Based upon the Audit Committee's discussion with management and the
independent auditors and the Audit Committee's review of the representations
of management and the report of the independent auditors to the Audit
Committee, the Audit Committee recommended to the Board that the audited
financial statements be included in the Company's annual report to the SEC on
Form 10-K for the fiscal year ended December 31, 2000.
James T. Doluisio, Ph.D. Jerry T. Jackson Ernest Mario, Ph.D.
- --------
(1) The material in this report is not "soliciting material," is not deemed
"filed" with the SEC, and is not to be incorporated by reference in any
filing of the Company under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, whether made before or after the
date hereof and irrespective of any general incorporation language in any
such filing.
26
COMPENSATION COMMITTEE REPORT (1)
The Compensation Committee currently consists of James T. Doluisio, Ph.D.,
Jerry T. Jackson, and Ernest Mario, Ph.D., none of whom is an employee of or a
consultant to the Company. Prior to May 2000, the Compensation Committee
consisted of Jerry T. Jackson, Ernest Mario, Ph.D., and Robert R. Momsen. The
Compensation Committee is responsible for setting the Company's policies
regarding compensation for all employees and executive officers and for
administering the Company's 1991 Equity Incentive Plan, 1998 Non-Officer
Equity Incentive Plan, 1994 Non-Employee Directors' Stock Option Plan, and
1991 Employee Stock Purchase Plan. In particular, the Compensation Committee
evaluates the performance of management and determines the compensation of
executive officers.
The Company's executive compensation philosophy is to attract and retain
executive officers capable of leading the Company to fulfillment of its
business objectives by offering competitive compensation opportunities that
reward individual contributions as well as corporate performance. Accordingly,
the Company's executive compensation policies include:
. competitive pay practices, taking into account the pay practices of life
science and pharmaceutical companies with which the Company competes for
talented executives, with special weight to California companies of
comparable size;
. annual incentive programs which are designed to encourage executives to
focus on the achievement of specific short-term strategic goals, as well
as longer-term corporate objectives; and
. equity-based incentives designed to motivate executives over the long
term, to align the interests of management and stockholders and to
ensure that management is appropriately rewarded for benefits which it
achieves for the Company's stockholders.
Total compensation for the Company's executive officers includes a base
salary component and may include two other components: annual incentives and
long-term incentives. Annual incentive compensation may consist of cash
incentive bonuses and stock bonus or restricted stock purchase awards, or
other equity components, each based on satisfying corporate goals established
for the year by the Compensation Committee as well as on meeting individual
performance objectives. In addition, executive officers of the Company may
receive long-term incentive compensation in the form of grants of options to
purchase shares of Common Stock, with exercise prices typically set at fair
market value on the date of grant and which typically vest over a period of
years. Stock bonus and restricted stock purchase awards may also provide long-
term incentives for executives.
In the biopharmaceutical industry, traditional measures of corporate
performance, such as earnings per share or sales growth, may not readily apply
in reviewing performance of executives. In addition to, or as alternatives to,
traditional measures of performance, in determining the compensation of the
Company's executives, the Compensation Committee looks to other indicia of
performance, such as the progress of the Company's research and development
programs, regulatory developments and corporate development activities, as
well as the Company's success in securing capital sufficient to assist the
Company in completing product development and increasing product revenues.
As a result, in many instances these qualitative factors necessarily
involve a subjective assessment by the Compensation Committee of corporate
performance. Moreover, the Compensation Committee does not base its
considerations on any single performance factor nor does it specifically
assign relative weights to factors, but rather considers a mix of factors and
evaluates both Company and individual performance against that mix. In
addition, total compensation paid by the Company to its executive officers is
designed to be comparable to compensation
- --------
(1) The material in this report is not "soliciting material," is not deemed
"filed" with the SEC, and is not to be incorporated by reference in any
filing of the Company under the Securities Act or the Exchange Act,
whether made before or after the date hereof and irrespective of any
general incorporation language in any such filing.
27
packages paid to the management of other companies of comparable size in the
biopharmaceutical industry. Toward that end, the Compensation Committee may
review both independent survey data as well as data gathered internally.
In January 2000, the Compensation Committee met to consider the
compensation of the Company's executive officers for fiscal 2000. The
Compensation Committee considered a variety of factors, including both
individual and corporate factors, in evaluating the performance of the
Company's executive officers. The Compensation Committee reviewed the results
of independent surveys that provided information regarding management
compensation for approximately 200 companies in the biopharmaceutical
industry, categorized by geographic area and management position. The surveys
included a broader group of companies than those companies included in the
American Stock Exchange Biotechnology Index used in the performance
measurement comparison graph included in this proxy statement. The
Compensation Committee also reviewed other publicly available information,
gathered informally, pertaining to compensation of executive officers in the
biopharmaceutical industry. Based on these survey results, as well as the
other foregoing factors, for 2000, the Compensation Committee determined that
the base compensation of Mr. Kailian should be increased by 5.8% and the other
executive officer's base compensation should be increased between 4% and 9%.
The Company has used the grant of stock options under its 1991 Equity
Incentive Plan to underscore the common interests of stockholders and
management. Options granted to executive officers are intended to provide a
continuing financial incentive to maximize long-term value to stockholders and
to help make the executive's total compensation opportunity competitive. In
addition, because stock options generally become exercisable over a period of
several years, options encourage executives to remain in the long-term employ
of the Company. In determining the size of an option to be granted to an
executive officer, the Compensation Committee takes into account the officer's
performance, as well as position and level of responsibility within the
Company, the officer's existing stock and unvested option holdings, and the
potential reward to the officer if the stock price appreciates in the public
market. Based on these factors, the Compensation Committee granted to Mr.
Kailian an option to purchase an aggregate of 100,000 shares of Common Stock,
at an exercise price of $12.84 per share, the fair market value on the date of
the grant. This option granted to Mr. Kailian vests entirely in January 2003.
The Compensation Committee granted to Dr. Homcy an option to purchase 60,000
shares of Common Stock, and to Mr. Perrin an option to purchase 50,000 shares
of Common Stock, and to Ms. Rauch and Mr. Broderick options to purchase 40,000
shares each. Each of these grants to Dr. Homcy, Mr. Perrin, Ms. Rauch, and
Mr. Broderick have an exercise price of $12.84 per share and vest entirely in
January 2003.
The Compensation Committee also approved a 2000 Incentive Pay Program for
employees of the Company, which includes the payment of cash bonuses to the
executive committee. Mr. Kailian was eligible to receive a cash bonus of up to
80% of his eligible 2000 compensation, and the other executive officers were
each eligible to receive a cash bonus of up to 50% of such officer's eligible
2000 compensation, if the Company achieved its goals for 2000. Determinations
of the amount of cash bonuses eligible to be awarded under the 2000 Incentive
Pay Program were based on the extent of achievement of certain corporate goals
established by the Board for 2000. The goals established for the 2000
Incentive Pay Program were: (i) continued successful commercialization of
INTEGRILIN(TM) (eptifibatide) Injection with certain sales and financial
performance targets, (ii) entering into a strategic partnership, (iii)
completion and submission to the FDA of the ESPRIT clinical trial, (iv)
advancement of other potential products in research and development, and (v)
achievement of financial, operational, and general corporate management
objectives.
In February 2001, the Compensation Committee met to evaluate performance
against the goals established for the 2000 Incentive Pay Program. The
Compensation Committee determined that substantial portions of the 2000
corporate objectives were fully satisfied. As a result, based on this
corporate performance, the Compensation Committee recommended that Mr. Kailian
receive a cash bonus of $326,100 or 72% of his eligible compensation, and that
the other executive officers of the Company receive cash bonuses totaling
$472,900, or 45% of such officer's eligible 2000 compensation.
The Compensation Committee has not adopted a policy with respect to the
application of Section 162(m) of the Code, which generally imposes an annual
corporate deduction limitation of $1,000,000 on the compensation
28
of certain executive officers. However, pursuant to Section 162(m),
compensation from options granted under the 1991 Equity Incentive Plan at no
less than 100% of fair market value may be excluded from the Section 162(m)
limitations.
James T. Doluisio, Ph.D. Jerry T. Jackson Ernest Mario, Ph.D.
Compensation Committee Interlocks and Insider Participation
None of the Company's executive officers serves as a member of the board of
directors or compensation committee of any entity that has one or more
executive officers serving as a member of the Company's Board of Directors or
compensation committee.
29
PERFORMANCE MEASUREMENT COMPARISON (1)
The following graph shows total stockholder return of the CRSP Total Return
Index for the Company, the American Stock Exchange Biotechnology Index ("AMEX
Biotech Index") and the Nasdaq Stock Market (United States Companies) ("Nasdaq
Index").
Comparison of Total Cumulative Return on Investment (2)
[PERFORMANCE GRAPH]
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
- ---------------------------------------------------------------------------------
COR Therapeutics, Inc... 100.00 117.91 268.66 158.21 320.90 840.30
- ---------------------------------------------------------------------------------
American Stock Exchange
Biotechnology Index.... 100.00 107.87 121.42 138.39 292.62 474.19
- ---------------------------------------------------------------------------------
Nasdaq Stock Market
Index.................. 100.00 122.71 149.25 208.40 386.77 234.81
- --------
(1) This section is not "soliciting material," is not deemed "filed" with the
SEC, and is not to be incorporated by reference in any filing of the
Company under the Securities Act or the Exchange Act, whether made before
or after the date hereof and irrespective of any general incorporation
language in any such filing.
(2) The total return on investment (change in stock price plus reinvested
dividends) for the Company, the AMEX Biotech Index and the Nasdaq Index,
assuming an investment of $100 on December 31, 1995. The AMEX Biotech
Index is calculated using an equal-dollar weighting methodology.
CERTAIN TRANSACTIONS
The Company has entered into indemnity agreements with certain officers and
directors which provide, among other things, that the Company will indemnify
such officer or director, under the circumstances and to the extent provided
for therein, for expenses, damages, judgments, fines and settlements he or she
may be required to pay in actions or proceedings to which he or she is or may
be made a party by reason of his or her position as a director, officer, or
other agent of the Company, and otherwise to the fullest extent permitted
under Delaware law and the Company's Bylaws. See also "Executive
Compensation--Compensation of Directors".
30
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Patrick A. Broderick
Patrick A. Broderick
Secretary
April 26, 2001
A copy of the Company's Annual Report to the SEC on Form 10-K for the
fiscal year ended December 31, 2000 is available without charge upon written
request to: Investor Relations, COR Therapeutics, Inc., 256 East Grand Avenue,
South San Francisco, CA 94080. A copy of the report can also be viewed by
visiting the Company's Web site, http://www.corr.com.
31
EXHIBIT A
COR Therapeutics, Inc.
AUDIT COMMITTEE CHARTER
Adoption Date: May 23, 2000
Organization
This charter governs the operations of the Audit Committee. The committee
shall review and reassess the charter at least annually and obtain the
approval of the board of directors for the Audit Committee Charter. The Audit
Committee shall be appointed by the board of directors and shall comprise at
least three directors, each of whom are independent of management and the
Company. Members of the Audit Committee shall be considered independent if
they have no relationship that may interfere with the exercise of their
independence from management and the Company. All Audit Committee members
shall be financially literate, or shall become financially literate within a
reasonable period of time after appointment to the committee, and at least
one member shall have accounting or related financial management expertise.
Statement of Policy
The Audit Committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the annual independent audit of
the Company's financial statements, and the legal compliance and ethics
programs as established by management and the board. In so doing, it is the
responsibility of the Audit Committee to maintain free and open communication
between the Audit Committee, independent auditors and management of the
Company. In discharging its oversight role, the Audit Committee is empowered
to investigate any matter brought to its attention with full access to all
books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.
Responsibilities and Processes
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the board and report the
results of their activities to the board. Management is responsible for
preparing the Company's financial statements, and the independent auditors are
responsible for auditing those financial statements. The Audit Committee
believes its policies and procedures should remain flexible, in order to best
react to changing conditions and circumstances. The Audit Committee should
take the appropriate actions to set the overall corporate "tone" for quality
financial reporting, sound business risk practices, and ethical behavior.
The following shall be the principal recurring processes of the Audit
Committee in carrying out its oversight responsibilities. The processes are
set forth as a guide with the understanding that the Audit Committee may
supplement them as appropriate.
. The Audit Committee shall have a clear understanding with management and
the independent auditors that the independent auditors are ultimately
accountable to the board and the Audit Committee, as representatives of
the Company's shareholders. The Audit Committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The Audit Committee shall discuss with the
auditors their independence from management and the Company and the
matters included in the written disclosures required by the Independence
Standards Board. Annually, the Audit Committee shall review and
recommend to the board the selection of the Company's independent
auditors, subject to shareholders' ratification.
. The Audit Committee shall discuss with the independent auditors the
overall scope and plans for their respective audits including the
adequacy of staffing and compensation. Also, the Audit Committee shall
discuss with management and the independent auditors the adequacy and
effectiveness of the accounting and financial controls, including the
Company's system to monitor and manage business
32
risk, and legal and ethical compliance programs. Further, the Audit
Committee shall meet separately with the independent auditors, with and
without management present, to discuss the results of their
examinations. The Audit Committee may review the interim financial
statements with management and the independent auditors prior to the
filing of the Company's Quarterly Report on Form 10-Q. Also, the Audit
Committee shall discuss the results of the quarterly review and any
other matters required to be communicated to the Audit Committee by the
independent auditors under generally accepted auditing standards. The
chair of the Audit Committee may represent the entire Audit Committee
for the purposes of this review.
. The Audit Committee shall review with management and the independent
auditors the financial statements to be included in the Company's Annual
Report on Form 10-K (or the annual report to shareholders if distributed
prior to the filing of Form 10-K), including their judgment about the
quality, not just acceptability, of accounting principles, the
reasonableness of significant judgments, and the clarity of the
disclosures in the financial statements. Also, the Audit Committee shall
discuss the results of the annual audit and any other matters required
to be communicated to the committee by the independent auditors under
generally accepted auditing standards.
33
COR THERAPEUTICS, INC.
1991 EQUITY INCENTIVE PLAN
(Adopted by Board of Directors May 14, 1991)
(Amended January 21, 1994)
(Amended January 6, 1995)
(Amended January 19, 1996)
(Amended January 24, 1997)
(Amended January 28, 2000)
(Amended July 28, 2000)
(Adjusted for 2-for-1 Stock Split August 15, 2000)
(Amended February 14, 2001)
(Amended April 12, 2001)
Termination Date: February 13, 2011
1. Purpose.
(a) The purpose of the 1991 Equity Incentive Plan (the "Plan") is to
provide a means by which employees, directors and consultants of COR
Therapeutics, Inc., a Delaware corporation (the "Company"), and its Affiliates,
as defined in subparagraph 1(b), may be given an opportunity to benefit from
increases in value of the stock of the Company through the granting of (i)
incentive stock options, (ii) nonqualified stock options, (iii) stock bonuses,
and (iv) rights to purchase restricted stock, all as defined below.
(b) "Affiliate" as used in the Plan means any parent corporation or
subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
(the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
persons now employed by or serving as consultants to the Company, to secure and
retain the services of persons capable of filling such positions, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company.
(d) The Company intends that the rights issued under the Plan ("Stock
Awards") shall, in the discretion of the Board of Directors of the Company (the
"Board") or any committee to which responsibility for administration of the Plan
has been delegated pursuant to subparagraph 2(c), be either (i) stock options
granted pursuant to paragraph 5 hereof, including incentive stock options as
that term is used in Section 422 of the Code ("Incentive Stock Options"), or
options which do not qualify as Incentive Stock Options ("Nonqualified Stock
Options") (together hereinafter referred to as "Options"), or (ii) stock bonuses
or rights to purchase restricted stock granted pursuant to paragraph 6 hereof.
1
2. Administration.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a committee, as provided in subparagraph 2(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how Stock Awards shall be
granted; whether a Stock Award will be an Incentive Stock Option, a Nonqualified
Stock Option, a stock bonus, a right to purchase restricted stock, or a
combination of the foregoing; the provisions of each Stock Award granted (which
need not be identical), including the time or times when a person shall be
permitted to purchase or receive stock pursuant to a Stock Award; and the number
of shares with respect to which Stock Awards shall be granted to each such
person.
(ii) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award, in a manner
and to the extent it shall deem necessary or expedient to make the Plan fully
effective.
(iii) To amend the Plan as provided in paragraph 13.
(iv) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of one (1) or more members of the Board (the "Committee"), all of the
members of which Committee may (but need not) be, in the discretion of the
Board, non-employee directors and/or outside directors. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board.
(d) Certain terms shall have the following meanings:
(i) The term "non-employee director", as used in this Plan, shall
mean a member of the Board who either (A) is not a current employee or officer
of the Company or its parent or subsidiary, does not receive compensation
(directly or indirectly) from the Company or its parent or subsidiary for
services rendered as a consultant or in any capacity other than as a director
(except for an amount as to which disclosure would not be required under Item
404(a) of Regulation S-K ("Regulation S-K") promulgated pursuant to the
Securities Act of 1933, as amended (the "Securities Act")), does not possess an
interest in any other transaction as to which disclosure would be required under
Item 404(a) of Regulation S-K, and is not engaged in a business relationship as
to which disclosure would be required under Item 404(b) of Regulation
2
S-K; or (B) is otherwise considered a "non-employee director" for purposes of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(ii) The term "outside director", as used in this Plan shall mean a
director who either (A) is not a current employee of the Company or an
"affiliated corporation", is not a former employee of the Company or an
affiliated corporation receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company
or an affiliated corporation at any time, and is not currently receiving
compensation for personal services in any capacity other than as a director, or
(B) is otherwise considered an "outside director" for purposes of Section 162(m)
of the Code.
3. Shares Subject To The Plan.
(a) Subject to the provisions of paragraph 11 relating to adjustments
upon changes in stock, the stock that may be issued pursuant to Stock Awards
granted under the Plan shall not exceed in the aggregate twelve million four
hundred thousand (12,400,000) shares/1/ of the Company's $0.0001 par value
common stock (the "Common Stock"). If any Stock Award granted under the Plan
shall for any reason expire or otherwise terminate without having been exercised
in full, the Common Stock not acquired under such Stock Award shall again become
available for the Plan. Shares repurchased by the Company pursuant to any
repurchase rights reserved by the Company pursuant to the Plan shall be
available for subsequent issuance under the Plan other than Incentive Stock
Options.
(b) The Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. Eligibility.
(a) Incentive Stock Options may be granted only to employees (including
officers) of the Company or its Affiliates. A director of the Company shall not
be eligible to receive Incentive Stock Options unless such director is also an
employee of the Company or any Affiliate. Stock Awards other than Incentive
Stock Options may be granted only to employees (including officers), directors
of and consultants to the Company or any Affiliate.
(b) No person shall be eligible for the grant of an Incentive Stock
Option under the Plan if, at the time of grant, such person owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates unless the exercise price of such Incentive
Stock Option is at least one hundred ten percent (110%) of the fair market value
of the Common Stock at the date of grant and the Incentive Stock Option is not
exercisable after the expiration of five (5) years from the date of grant.
_____________________
/1/ Pursuant to paragraph 11, the aggregate of 5,700,000 shares of Common Stock
in the share reserve was adjusted to an aggregate of 11,400,000 shares of Common
Stock to reflect the 2-for-1 stock split on August 15, 2000. On February 14,
2001 the Board of Directors increased this number by 1 million shares, to a
total aggregate of 12,400,000 shares of Common Stock.
3
(c) No person shall be eligible to be granted Stock Awards under the
Plan covering more than one million (1,000,000) shares/2/ of the Company's
Common Stock in any calendar year.
(d) At any such time or times that the number of shares of Common Stock
reserved for issuance under COR Therapeutics, Inc. 1994 Non-Employee Directors'
Stock Option Plan (the "Directors' Plan") pursuant to subparagraph 3(a) thereof
that have been approved by the stockholders of the Company are insufficient to
make a timely non-discretionary Initial Grant and/or a Supplemental Grant as
specified in paragraph 5 of the Directors' Plan (a "Grant"), then, without any
further action of the Board, such Grant shall be made in the following manner:
(i) The number of shares of Common Stock remaining in the share
reserve of the Directors' Plan, as provided in subparagraph 3(a) thereof, that
have been approved by the stockholders of the Company shall be applied to the
Grants on a pro-rated basis.
(ii) To the extent that there are insufficient shares of
stockholder-approved Common Stock available under the Directors' Plan to cover
the Grants, any additional number of shares of Common Stock required for the
Grants shall be deemed to have been made under the Plan and shall be applied to
the Grants on a pro-rated basis to the extent that such shares of Common Stock
remaining in the share reserve of the Plan, as provided in subparagraph 3(a)
hereof, have been approved by the stockholders of the Company. Notwithstanding
the foregoing, no Grants shall be made under the Plan pursuant to the preceding
sentence which give the right to purchase fractional shares.
(iii) The Grants otherwise shall be made on the terms and conditions
specified in paragraph 6 of the Directors' Plan.
(iv) To the extent that there are insufficient shares of
stockholder-approved Common Stock available under both the Plan and the
Directors' Plan to cover the Grants, the Grants shall be delayed, in whole or in
part, as the case may be, until such time as shares of stockholder-approved
Common Stock under the Plan and/or the Directors' Plan are available to cover
the Grants.
(v) In the event of any conflict between the terms and conditions
of the Plan and the Directors' Plan, the terms and conditions of the Directors'
Plan shall control.
(vi) Notwithstanding anything in the Plan or the Directors' Plan to
the contrary, the terms and conditions of the Directors' Plan shall survive the
termination of the Directors' Plan as to any Grant made pursuant to this
subparagraph 4(d).
___________________
/2/ Pursuant to paragraph 11, the aggregate of 500,000 shares of Common Stock
was adjusted to an aggregate of 1,000,000 shares of Common Stock to reflect the
2-for-1 stock split on August 15, 2000.
4
5. Terms Of Stock Options.
Each Option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate Options need not be identical, but each Option shall include
(through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions:
(a) No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) The exercise price of each Incentive Stock Option shall be not less
than one hundred percent (100%) of the fair market value of the Common Stock
subject to the Option on the date the Option is granted. The exercise price of
each Nonqualified Stock Option shall be not less than one hundred percent (100%)
of the fair market value of the Common Stock subject to the Option on the date
the Option is granted.
(c) The purchase price of Common Stock acquired pursuant to an Option
shall be paid, to the extent permitted by applicable statutes and regulations,
either: (i) in cash at the time the Option is exercised; or (ii) at the
discretion of the Board or the Committee, either at the time of grant or
exercise of the Option (A) by delivery to the Company of shares of Common Stock
of the Company that have been held for the period required to avoid a charge to
the Company's reported earnings and valued at the fair market value on the date
of exercise, (B) according to a deferred payment or other arrangement (which may
include, without limiting the generality of the foregoing, the use of other
Common Stock of the Company) with the person to whom the Option is granted or to
whom the Option is transferred pursuant to subparagraph 5(d), (C) payment
pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board which, prior to the issuance of the Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from
the sales proceeds, (D) any combination of such methods of payment, or (E) in
any other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion.
Unless otherwise specifically provided in the Option, in the case of any
deferred payment arrangement, interest shall be payable at least annually and
shall be charged at not less than the minimum rate of interest necessary to
avoid the treatment as interest, under any applicable provisions of the Code, of
any amounts other than amounts stated to be interest under the deferred payment
arrangement.
(d) An Incentive Stock Option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during the
lifetime of the optionee to whom the Option is granted only by such optionee. A
Nonqualified Stock Option may be transferable to the extent provided in the
Option Agreement; provided, however, that if the Option Agreement does not
specifically provide for transferability, then such Nonqualified Stock Option
shall not be transferable except by will or by the laws of descent and
distribution or pursuant to a domestic relations order. Notwithstanding the
foregoing, the person to whom the Option is granted may, by delivering written
notice to the Company, in a form satisfactory to the
5
Company, designate a third party who, in the event of the death of the optionee,
shall thereafter be entitled to exercise the Option.
(e) The total number of shares of Common Stock subject to an Option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the Option
may become exercisable ("vest") with respect to some or all of the shares
allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the Option
was not fully exercised. During the remainder of the term of the Option (if its
term extends beyond the end of the installment periods), the Option may be
exercised from time to time with respect to any shares then remaining subject to
the Option. The provisions of this subparagraph 5(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.
(f) The Company may require any optionee, or any person to whom an
Option is transferred under subparagraph 5(d), as a condition of exercising any
such Option: (i) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative who has such knowledge and experience in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser's representative, the merits and risks of
exercising the Option; and (ii) to give written assurances satisfactory to the
Company stating that such person is acquiring the Common Stock subject to the
Option for such person's own account and not with any present intention of
selling or otherwise distributing the Common Stock. These requirements, and any
assurances given pursuant to such requirements, shall be inoperative if: (x) the
issuance of the shares upon the exercise of the Option has been registered under
a then currently effective registration statement under the Securities Act; or
(y) as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities law.
(g) An Option shall terminate three (3) months after termination of the
optionee's employment or relationship as a consultant or director with the
Company or an Affiliate, unless: (i) such termination is due to such person's
permanent and total disability, within the meaning of Section 422(c)(6) of the
Code, in which case the Option may, but need not, provide that it may be
exercised at any time within one (1) year following such termination of
employment or relationship as a consultant or director; (ii) the optionee dies
while in the employ of or while serving as a consultant or director to the
Company or an Affiliate, or within not more than three (3) months after
termination of such employment or relationship as a consultant or director, in
which case the Option may, but need not, provide that it may be exercised at any
time within eighteen (18) months following the death of the optionee by the
person or persons to whom the optionee's rights under such Option pass by will
or by the laws of descent and distribution; or (iii) the Option by its term
specifies either (A) that it shall terminate sooner than three (3) months after
termination of the optionee's employment or relationship as a consultant or
director with the Company or an Affiliate, or (B) that it may be exercised more
than three (3) months after termination of the optionee's employment or
relationship as a consultant or director with the Company or an Affiliate. This
subparagraph 5(g) shall not be
6
construed to extend the term of any Option or to permit anyone to exercise the
Option after expiration of its term, nor shall it be construed to increase the
number of shares as to which any Option is exercisable from the amount
exercisable on the date of termination of the optionee's employment or
relationship as a consultant or director.
(h) The Option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment or
relationship as a consultant or director with the Company or any Affiliate to
exercise the Option as to any part or all of the shares subject to the Option
prior to the stated vesting dates of the Option. Any shares so purchased from
any unvested installment or Option may be subject to a repurchase right in favor
of the Company or to any other restriction the Board or the Committee determines
to be appropriate.
(i) To the extent provided by the terms of an Option, each optionee may
satisfy, in whole or in part, any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold from the shares of the Common Stock
otherwise issuable to the optionee as a result of the exercise of the Option a
number of shares having a fair market value less than or equal to the amount of
the withholding tax obligation, provided, however, that no shares of Common
Stock are withheld with a value exceeding the minimum amount of tax required to
be withheld by law; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock having a fair market value less than or equal to the
amount of the withholding tax obligation.
6. Terms Of Stock Bonuses And Purchases Of Restricted Stock.
The maximum aggregate number of shares of Common Stock which may be
issued under the Plan on or after April 12, 2001 either as stock bonuses or
pursuant to restricted stock purchase rights shall be two hundred thousand
(200,000) shares.
Each stock bonus or restricted stock purchase agreement shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. The terms and conditions of stock bonus or restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate agreements need not be identical, but each stock bonus or
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions as appropriate:
(a) The purchase price under each restricted stock purchase agreement
shall be such amount as the Board or Committee shall determine and designate in
such agreement. Notwithstanding the foregoing, the Board or the Committee may
determine that eligible participants in the Plan may be awarded stock pursuant
to a stock bonus agreement in consideration for past services actually rendered
to the Company or for its benefit.
7
(b) No rights under a stock bonus or restricted stock purchase agreement
shall be transferable except by will or by the laws of descent and distribution
so long as stock awarded under such agreement remains subject to the terms of
the agreement.
(c) The purchase price of Common Stock acquired pursuant to a stock
purchase agreement shall be paid either: (i) in cash at the time of purchase;
(ii) at the discretion of the Board or the Committee, according to a deferred
payment or other arrangement with the person to whom the Common Stock is sold;
or (iii) in any other form of legal consideration that may be acceptable to the
Board or the Committee in their discretion.
(d) Unless otherwise determined for good cause shown by a Committee
composed solely of non-employee directors and/or outside directors, shares of
Common Stock sold or awarded under a stock bonus or restricted stock purchase
agreement awarded under the Plan shall be subject to a repurchase option in
favor of the Company in accordance with a vesting schedule of at least three (3)
years.
(e) In the event a person ceases to be an employee of or ceases to serve
as a director of or consultant to the Company or an Affiliate, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held
by that person which have not vested as of the date of termination under the
terms of the stock bonus or restricted stock purchase agreement between the
Company and such person.
7. Repricings And Cancellation And Re-grant Of Options.
(a) Except with prior approval of stockholders of the Company, the Board
or the Committee shall not have the authority to effect (i) the repricing of any
outstanding Options under the Plan, (ii) the cancellation of any outstanding
Options and the grant in substitution therefor of new Options under the Plan
covering the same or different numbers of shares of Common Stock, but having an
exercise price per share less than one hundred percent (100%) of the exercise
price of the cancelled Options, or (iii) the modification of an Option which
would be deemed to be a repricing pursuant to FASB Interpretation No. 44,
Accounting for Certain Transactions Involving Stock Compensation, March 2000, as
amended from time to time.
(b) Shares subject to an Option canceled under subparagraph 7(a) shall
continue to be counted against the maximum award of options permitted to be
granted to any person pursuant to subparagraph 4(c) of the Plan. The repricing
of an option under subparagraph 7(a), resulting in a reduction of the exercise
price, shall be deemed to be a cancellation of the original option and the grant
of a substitute option; in the event of such repricing, both the original and
the substituted options shall be counted against the maximum awards of options
permitted to be granted to any person pursuant to subparagraph 4(c) of the Plan.
The provisions of this subparagraph 7(b) shall be applicable only to the extent
required by Section 162(m) of the Code.
8
8. Covenants Of The Company.
(a) During the terms of the Stock Awards granted under the Plan, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards up to the number of shares of Common Stock
authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of Common Stock under the Stock Awards granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Stock Award granted under
the Plan, or any Common Stock issued or issuable pursuant to any such Stock
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority that counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan,
the Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Stock Awards unless and until such authority
is obtained.
9. Use Of Proceeds From Common Stock.
Proceeds from the sale of Common Stock pursuant to Stock Awards granted
under the Plan shall constitute general funds of the Company.
10. Miscellaneous.
(a) The Board or Committee shall have the power to accelerate the time
during which a Stock Award may be exercised or the time during which a Stock
Award or any part thereof will vest, notwithstanding the provisions in the Stock
Award stating the time during which it may be exercised or the time during which
it will vest.
(b) Unless otherwise determined for good cause shown by a Committee
composed solely of non-employee directors and/or outside directors, the Board or
Committee shall exercise its power to accelerate the time during which a Stock
Award may be exercised or the time during which a Stock Award or any part
thereof will vest only in connection with a significant personal event for the
optionee, such as the death or disability of the optionee.
(c) The limitation on the power of the Board or Committee to accelerate
the time during which a Stock Award may be exercised or the time during which a
Stock Award or any part thereof will vest contained in subparagraph 10(b) shall
not be deemed to adversely affect either the acceleration provisions of
paragraph 12 of the Plan or any acceleration rights previously granted under any
outstanding Stock Award under the Plan.
(d) Neither an optionee, Option holder nor any person to whom an Option
is transferred under the provisions of the Plan shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such Option unless and until such person has satisfied all requirements for
exercise of the Option pursuant to its terms.
9
(e) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any eligible employee, consultant,
director, optionee or holder of Stock Awards under the Plan any right to
continue in the employ of the Company or any Affiliate or to continue acting as
a consultant or director or shall affect the right of the Company or any
Affiliate to terminate the employment or consulting relationship or directorship
of any eligible employee, consultant, director, optionee or holder of Stock
Awards under the Plan with or without cause. In the event that a holder of Stock
Awards under the Plan is permitted or otherwise entitled to take a leave of
absence, the Company shall have the unilateral right to (i) determine whether
such leave of absence will be treated as a termination of employment or
relationship as consultant or director for purposes hereof, and (ii) suspend or
otherwise delay the time or times at which exercisability or vesting would
otherwise occur with respect to any outstanding Stock Awards, or related
repurchase rights thereunder, under the Plan.
(f) To the extent that the aggregate fair market value (determined at
the time of grant) of stock with respect to which incentive stock options (as
defined in the Code) are exercisable for the first time by any optionee during
any calendar year under all plans of the Company and its Affiliates exceeds one
hundred thousand dollars ($100,000), the options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as Nonqualified Stock Options.
11. Adjustments Upon Changes In Common Stock.
If any change is made in the Common Stock subject to the Plan, or
subject to any Stock Award granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Plan and outstanding Stock Awards will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan and the class(es) and
number of shares and price per share of stock subject to outstanding Stock
Awards.
12. Change Of Control.
(a) For purposes of the Plan, a "Change of Control" shall be deemed to
have occurred at any of the following times:
(i) Upon the acquisition (other than from the Company) by any
person, entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act (excluding, for this purpose, the Company or its Affiliates, or
any employee benefit plan of the Company or its Affiliates which acquires
beneficial ownership of voting securities of the Company), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of fifty percent (50%) or more of either the then outstanding shares of Common
Stock or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors; or
(ii) At the time individuals who, as of May 14, 1991, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the
10
Board, provided that any person becoming a director subsequent to May 14, 1991,
whose election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall be, for purposes of the Plan, considered as though such
person were a member of the Incumbent Board; or
(iii) Immediately prior to the consummation by the Company of a
reorganization, merger, consolidation (in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or consolidated
company's then outstanding voting securities) or a liquidation or dissolution of
the Company or of the sale of all or substantially all of the assets of the
Company; or
(iv) The occurrence of any other event which the Incumbent Board in
its sole discretion determines constitutes a Change of Control.
(b) Notwithstanding anything to the contrary in this Plan, in the event
of a Change of Control as defined in subparagraph 12(a)(iii) that occurs on or
after August 15, 2001, which shall not be deemed to include any such event
initiated prior to August 15, 2001 ("Reorganization"), then any surviving
corporation or acquiring corporation shall assume any Stock Awards outstanding
under the Plan or shall substitute similar stock awards (including an award to
acquire the same consideration paid to the shareholders in the Reorganization)
for those outstanding under the Plan. In the event any surviving corporation or
acquiring corporation refuses to assume such Stock Awards or to substitute
similar stock awards for those outstanding under the Plan, then with respect to
Stock Awards held by participants in the Plan whose service has not terminated,
the vesting of such Stock Awards (and, if applicable, the time during which such
Stock Awards may be exercised) shall be accelerated in full, and the Stock
Awards shall terminate if not exercised (if applicable) at or prior to the
Reorganization.
(c) Notwithstanding anything to the contrary in this Plan, in the event
of a Change of Control as defined in subparagraph 12(a) other than a
Reorganization as defined in subparagraph 12(b), then, at the sole discretion of
the Board and to the extent permitted by applicable law: (i) any surviving
corporation shall assume the rights and obligations of the Company under any
Stock Awards outstanding under the Plan or shall substitute similar stock awards
for those outstanding under the Plan; (ii) the time during which such Stock
Awards become vested or may be exercised shall be accelerated and any
outstanding unexercised rights under any Stock Awards terminated if not
exercised prior to such event; or (iii) such Stock Awards shall continue in full
force and effect.
(d) Notwithstanding any other provisions of this Plan to the contrary,
in the event of a Change of Control as defined in subparagraph 12(a), including
a Reorganization as defined in subparagraph 12(b), and if within one (1) month
before or twenty-four (24) months
11
after the date of such Change of Control the service of a participant to the
Company (or, if applicable, with any successor entity) terminates due to an
involuntary termination (not including death or disability) without Cause (as
such term is defined below) or a voluntary termination by the participant due to
a Constructive Termination (as such term is defined below), then the vesting and
exercisability of all Stock Awards held by such participant shall be
accelerated, or any reacquisition or repurchase rights held by the Company with
respect to a Stock Award shall lapse, as follows: With respect to those Stock
Awards held by a participant at the time of such termination, one hundred
percent (100%) of the unvested shares covered by such Stock Awards shall vest
and become exercisable (or reacquisition or repurchase rights held by the
Company shall lapse with respect to one hundred percent (100%) of the shares
still subject to such rights, as appropriate) as of the date of such
termination.
(e) For the purposes of subparagraph 12(d) only, "Cause" means that, in
the reasonable determination of the Company: (i) the participant has committed
an act that materially injures the business of the Company; (ii) the participant
has refused or failed to follow lawful and reasonable directions of the Board or
the appropriate individual to whom the participant reports; (iii) the
participant has willfully or habitually neglected the participant's duties for
the Company; or (iv) the participant has been convicted of a felony involving
moral turpitude that is likely to inflict or has inflicted material injury on
the business of the Company. Notwithstanding the foregoing, Cause based on the
conduct described in clause (ii) or clause (iii) shall not exist unless the
conduct described in such clause has not been cured within fifteen (15) days
following the participant's receipt of written notice from the Company or the
Board, as the case may be (or such longer period as agreed in writing between
the participant and the Company), specifying the particulars of the
participant's conduct constituting Cause. For the purposes of this subparagraph
12(e), the term "Company" shall mean a successor entity, if applicable.
(f) For purposes of subparagraph 12(d) only, "Constructive Termination"
means that the participant voluntarily terminates his or her employment with the
Company after any of the following are undertaken by the Company without the
participant's express written consent: (i) substantial diminution in the
participant's duties and/or level of responsibility (but not merely a change in
title) as in effect immediately prior to the effective date of the Change of
Control; (ii) a fifteen percent (15%) or greater reduction by the Company in the
participant's annual base salary as in effect immediately prior to the effective
date of the Change of Control or as increased thereafter; (iii) any failure by
the Company to continue in effect any substantial benefit plan or program,
including incentive plans or plans with respect to the receipt of securities of
the Company, in which the participant is participating immediately prior to the
effective date of the Change of Control (hereinafter referred to as "Benefit
Plans"); or the taking of any action by the Company that would adversely affect
the participant's participation in or reduce the participant's benefits under
the Benefit Plans or deprive the participant of any fringe benefit that the
participant enjoyed immediately prior to the effective date of the Change of
Control; provided, however, that a "Constructive Termination" shall not exist
under this paragraph following a Change of Control if the Company offers a range
of benefit plans and programs which, taken as a whole, are comparable to the
Benefit Plans; or (iv) the relocation of the participant's principal business
office, or the relocation of the Company's principal executive
12
offices if the participant's principal business office is at such offices, to a
location more than fifty (50) miles from the location at which the participant
was performing his or her duties immediately prior to the effective date of the
Change of Control, except for required travel on the Company's business to an
extent substantially consistent with the participant's business travel
obligations immediately prior to the effective date of the Change of Control,
provided that such relocation also increases the participant's commute distance
to and from such office by more than fifty (50) miles. For the purposes of this
subparagraph 12(f), the term "Company" shall mean a successor entity, if
applicable.
(g) In the event that the acceleration of the vesting and exercisability
of the Stock Awards or lapse of reacquisition or repurchase rights held by the
Company with respect to Stock Awards provided for in subparagraph 12(d) and
benefits otherwise payable to a participant (i) constitute a "parachute payment"
("Payment") within the meaning of Section 280G (as it may be amended or
replaced) of the Code, and (ii) but for this subparagraph 12(g) would be subject
to the excise tax imposed by Section 4999 (as it may be amended or replaced) of
the Code (the "Excise Tax"), then such Payment shall be either (x) the full
amount of such Payment or (y) such lesser amount (with cash payments being
reduced before stock option compensation) as would result in no portion of the
Payment being subject to the Excise Tax, whichever of the foregoing amounts,
taking into account the applicable federal, state and local employment taxes,
income taxes, and the Excise Tax results in the participant's receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. Unless the
Company and the participant otherwise agree in writing, any determination
required under this subparagraph 12(g) shall be made in writing in good faith by
the accountants selected by the Company. For purposes of making the calculations
required by this subparagraph 12(g), the accountants selected by the Company may
make reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the application of
the Code. The Company and such participants shall furnish to the accountants
such information and documents as the accountants may reasonably request in
order to make a determination under this subparagraph 12(g). The Company shall
bear all costs the accountants may reasonably incur in connection with any
calculations contemplated by this subparagraph 12(g).
13. Amendment Of The Plan.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 11 relating to adjustments upon changes
in the Common Stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary for
the Plan to satisfy the requirements of Section 422 of the Code, Rule 16b-3
under the Exchange Act, or any Nasdaq or securities exchange listing
requirements.
(b) The Board may in its sole discretion submit any other amendment to
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated
13
thereunder regarding the exclusion of performance-based compensation from the
limit on corporate deductibility of compensation paid to certain executive
officers.
(c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee Incentive Stock
Options and/or to bring the Plan and/or Options granted under it into compliance
therewith.
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan, unless: (i) the Company requests the consent of the person to whom the
Stock Award was granted; and (ii) such person consents in writing.
14. Termination Or Suspension Of The Plan.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on February 13, 2011. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any Stock Awards granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom the Stock Award was
granted.
15. Effective Date Of Plan.
The Plan shall become effective as determined by the Board, but no Stock
Awards granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company.
14
COR THERAPEUTICS, INC.
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(Adopted on January 21, 1994)
(Approved by Stockholders on May 20, 1994)
(Amended on January 24, 1997)
(Amended on March 19, 1999)
(Adjusted for 2-for-1 Stock Split on August 15, 2000)
(Amended on February 14, 2001)
Termination Date: None
1. Purpose.
(a) The purpose of the 1994 Non-Employee Directors' Stock Option Plan (the
"Plan") is to provide a means by which each director of COR Therapeutics, Inc.,
a Delaware corporation (the "Company"), who is not otherwise an employee or a
consultant of the Company or of any Affiliate of the Company (each such person
being hereafter referred to as a "Non-Employee Director") will be given an
opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent corporation
or subsidiary corporation of the Company as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
from time to time (the "Code").
(c) The word "Fair Market Value" as used in the Plan means, as of any date,
the average of the high and low sales prices of a share of the Company's common
stock as quoted on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System, on the last market trading
day prior to the day of determination, as reported in The Wall Street Journal or
such other source as the Board of Directors of the Company (the "Board") deems
reliable.
(d) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
2. Administration.
(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a committee, as provided in subparagraph 2(b).
(b) The Board may delegate administration of the Plan to a committee
composed of two (2) or more members of the Board (the "Committee"), all of the
members of which Committee may (but need not) be, in the discretion of the
Board, "non-employee directors" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by
1
the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. Shares Subject To The Plan.
(a) Subject to the provisions of paragraph 10 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to options granted under
the Plan shall not exceed in the aggregate seven hundred thousand (700,000)
shares/1/ of the Company's common stock. If any option granted under the Plan
shall for any reason expire or otherwise terminate without having been exercised
in full, the stock not purchased under such option shall again become available
under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. Eligibility.
Options shall be granted only to Non-Employee Directors of the Company.
5. Non-Discretionary Grants.
(a) Upon the date of the approval of the Plan by the Board (the "Adoption
Date"), each person who is then a Non-Employee Director shall be granted an
option to purchase fifty thousand (50,000) shares/2/ of common stock of the
Company on the terms and conditions set forth herein (an "Initial Grant").
(b) Each person who is, after the Adoption Date, elected for the first time
to be a Non-Employee Director shall, upon the date of such person's initial
election to be a Non-Employee Director by the Board or stockholders of the
Company, be granted an Initial Grant.
(c) Each person who, on or after March 19, 1999, is serving as a
Non-Employee Director shall be granted options to purchase twenty thousand
(20,000) shares/3/ of common stock of the Company on the terms and conditions
set forth herein (i) on the date of the first Board meeting held both on or
after March 19, 1999 and after the date on which the Non-Employee Director has
completed three (3) years of service as a director of the Company; and (ii)
every two years thereafter on the anniversary date of the grant made under the
foregoing clause (i) (each grant described in clauses (i) and (ii), a
"Supplemental Grant").
________________
/1/ Pursuant to subparagraph 10(a), the aggregate of 200,000 shares of common
stock in the share reserve was adjusted to 400,000 shares of common stock to
reflect the 2-for-1 stock split on August 15, 2000. On February 14, 2001 the
Board of Directors increased this number by 300,000 shares, to a total aggregate
of 700,000 shares of common stock.
/2/ Pursuant to subparagraph 10(a), the 25,000 shares of common stock were
adjusted to 50,000 shares of common stock to reflect the 2-for-1 stock split on
August 15, 2000.
/3/ Pursuant to subparagraph 10(a), the 10,000 shares of common stock were
adjusted to 20,000 shares of common stock to reflect the 2-for-1 stock split on
August 15, 2000.
2
6. Option Provisions.
Each option shall contain the following terms and conditions:
(a) The term of each option commences on the date it is granted and, unless
sooner terminated as set forth herein, expires on the date ("Expiration Date")
ten (10) years from the date of grant. If the optionee's service as a
Non-Employee Director of the Company terminates for any reason or for no reason,
the option shall terminate on the earlier of the Expiration Date or the date
three (3) months following the date of termination of service; provided,
however, that (i) if such termination is due to such person's permanent and
total disability, within the meaning of Section 422(c)(6) of the Code, the
option shall terminate on the earlier of the Expiration Date or twelve (12)
months following such termination; or (ii) if such termination of service is due
to the optionee's death, the option shall terminate on the earlier of the
Expiration Date or eighteen (18) months following the date of the optionee's
death. In any and all circumstances, an option may be exercised following
termination of the optionee's service as a Non-Employee Director of the Company
only as to that number of shares as to which it was exercisable on the date of
termination of such service under the provisions of subparagraph 6(e).
(b) The exercise price of each option shall be one hundred percent (100%)
of the Fair Market Value of the stock subject to such option on the date such
option is granted.
(c) Payment of the exercise price of each option is due in full in cash
upon any exercise when the number of shares being purchased upon such exercise
is less than two thousand (2,000) shares;/4/ but when the number of shares being
purchased upon an exercise is two thousand (2,000) or more shares,/5/ the
optionee may elect to make payment of the exercise price under one of the
following alternatives:
(i) Payment of the exercise price per share in cash at the time of
exercise; or
(ii) Provided that at the time of the exercise the Company's common
stock is publicly traded and quoted regularly in The Wall Street Journal,
payment by delivery of shares of common stock of the Company already owned by
the optionee, held for the period required to avoid a charge to the Company's
reported earnings, and owned free and clear of any liens, claims, encumbrances
or security interest, which common stock shall be valued at Fair Market Value
(with the "day of determination" being the date of exercise); or
(iii) Payment by a combination of the methods of payment specified in
subparagraph 6(c)(i) and 6(c)(ii) above; or
(iv) Payment pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which results in the receipt of cash
(or check) by the Company prior to the issuance of shares of the Company's
common stock.
_______________
/4/ Pursuant to subparagraph 10(a), the 1,000 shares of common stock were
adjusted to 2,000 shares of common stock to reflect the 2-for-1 stock split on
August 15, 2000.
/5/ Pursuant to subparagraph 10(a), the 1,000 shares of common stock were
adjusted to 2,000 shares of common stock to reflect the 2-for-1 stock split on
August 15, 2000.
3
(d) An option shall not be transferable except by will or by the laws of
descent and distribution or pursuant to a domestic relations order, and shall be
exercisable during the lifetime of the person to whom the option is granted only
by such person or by his or her guardian or legal representative, unless
otherwise specified in the option, in which case the option may be transferred
upon such terms and conditions as are set forth in the option, as the Board or
the Committee shall determine in its discretion at the time of grant. The person
to whom the option is granted may, by delivering written notice to the Company,
in a form satisfactory to the Company, designate a third party who, in the event
of the death of the optionee, shall thereafter be entitled to exercise the
option.
(e) Each Initial Grant shall become exercisable in installments over a
period of sixty (60) months from the date of grant at the rate of eight hundred
thirty-three and one-third (833 1/3) shares/6/ per month in sixty (60) equal
monthly installments commencing on the date one month after the date of grant of
the option, provided that the optionee has, during the entire period prior to
such vesting date, continuously served as a Non-Employee Director of the
Company, whereupon such option shall become fully exercisable in accordance with
its terms with respect to that portion of the shares represented by that
installment. Each Supplemental Grant shall be fully vested and exercisable on
the date on which it is granted.
(f) The Company may require any optionee, or any person to whom an option
is transferred under subparagraph 6(d), as a condition of exercising any such
option: (i) to give written assurances satisfactory to the Company as to the
optionee's knowledge and experience in financial and business matters; and (ii)
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the option for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then-currently-effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii), as to any particular requirement, a determination is made by counsel
for the Company that such requirement need not be met in the circumstances under
the then-applicable securities laws. The Company may, upon advice of counsel to
the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.
(g) Notwithstanding anything to the contrary contained herein, an option
may not be exercised unless the shares issuable upon exercise of such option are
then registered under the Securities Act or, if such shares are not then so
registered, the Company has determined that such exercise and issuance would be
exempt from the registration requirements of the Securities Act.
________________
/6/ Pursuant to subparagraph 10(a), each monthly installment of 416 2/3 shares
of common stock was adjusted to 833 1/3 shares of common stock to reflect the 2-
for-1 stock split on August 15, 2000.
4
7. Covenants Of The Company.
(a) Subject to the provisions of subparagraph 7(b) hereof, during the terms
of the options granted under the Plan, the Company shall keep available at all
times the number of shares of stock required to satisfy such options.
(b) Notwithstanding the provisions of subparagraph 7(a) hereof, at any such
time or times that the number of shares of common stock reserved for issuance
under the Plan pursuant to subparagraph 3(a) hereof that have been approved by
the stockholders of the Company are insufficient to make a timely
non-discretionary Initial Grant and/or a Supplemental Grant as specified in
paragraph 5 hereof (a "Grant"), then, without any further action of the Board,
such Grant shall be made in the following manner:
(i) The number of shares of common stock remaining in the share
reserve of the Plan, as provided in subparagraph 3(a) hereof, that have been
approved by the stockholders of the Company shall be applied to the Grants on a
pro-rated basis.
(ii) To the extent that there are insufficient shares of
stockholder-approved common stock available under the Plan to cover the Grants,
any additional number of shares of common stock required for the Grants shall be
deemed to have been made under the COR Therapeutics, Inc. 1991 Equity Incentive
Plan ("Equity Incentive Plan") and shall be applied to the Grants on a pro-rated
basis to the extent that such shares of common stock remaining in the share
reserve of the Equity Incentive Plan, as provided in subparagraph 3(a) of the
Equity Incentive Plan, have been approved by the stockholders of the Company.
Notwithstanding the foregoing, no Grants shall be made under the Plan or the
Equity Incentive Plan pursuant to paragraph 5 which give the right to purchase
fractional shares.
(iii) The Grants otherwise shall be made on the terms and conditions
specified in paragraph 6 hereof.
(iv) To the extent that there are insufficient shares of
stockholder-approved common stock available under both the Plan and the Equity
Incentive Plan to cover the Grants, the Grants shall be delayed, in whole or in
part, as the case may be, until such time as shares of stockholder-approved
common stock under the Plan and/or the Equity Incentive Plan are available to
cover the Grants.
(v) In the event of any conflict between the terms and conditions of
the Plan and the Equity Incentive Plan, the terms and conditions of the Plan
shall control.
(vi) Notwithstanding anything in the Plan or the Equity Incentive Plan
to the contrary, the terms and conditions of the Plan shall survive the
termination of the Plan as to any Grant made pursuant to this subparagraph 7(b).
(c) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan,
5
any option granted under the Plan, or any stock issued or issuable pursuant to
any such option. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue and
sell stock upon exercise of such options.
8. Use Of Proceeds From Stock.
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.
9. Miscellaneous.
(a) Neither an optionee nor any person to whom an option is transferred
under subparagraph 6(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
(b) Throughout the term of any option granted pursuant to the Plan, the
Company shall make available to the holder of such option, not later than one
hundred twenty (120) days after the close of each of the Company's fiscal years
during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the stockholders of the
Company provided for in the Bylaws of the Company and such other information
regarding the Company as the holder of such option may reasonably request.
(c) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the service
of the Company or any Affiliate or shall affect any right of the Company, its
Board or stockholders or any Affiliate to terminate the service of any
Non-Employee Director with or without cause.
(d) No Non-Employee Director, individually or as a member of a group, and
no beneficiary or other person claiming under or through such person, shall have
any right, title or interest in or to any option reserved for the purposes of
the Plan except as to such shares of common stock, if any, as shall have been
reserved for such person pursuant to an option granted to such person.
(e) In connection with each option granted pursuant to the Plan, it shall
be a condition precedent to the Company's obligation to issue or transfer shares
to a Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal or other withholding tax
required to be withheld with respect to such sale or transfer, or such removal
or lapse, is made available to the Company for timely payment of such tax.
10. Adjustments Upon Changes In Stock.
(a) If any change is made in the stock subject to the Plan, or subject to
any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock
6
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Plan and outstanding options will be appropriately
adjusted in the class(es) and maximum number of shares subject to the Plan and
the class(es) and number of shares and price per share of stock subject to
outstanding options.
(b) In the event of: (i) a merger or consolidation in which the Company is
not the surviving corporation; (ii) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise; or (iii)
any other capital reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged, then any surviving
corporation, other than the Company, shall assume any options outstanding under
the Plan or shall substitute similar options for those outstanding under the
Plan or, if the Company is the surviving corporation, such options shall
continue in full force and effect.
11. Amendment Of The Plan.
(a) The Board at any time, and from time to time, may amend the Plan.
Except as provided in paragraph 10 relating to adjustments upon changes in
stock, no amendment shall be effective unless approved by the stockholders of
the Company to the extent stockholder approval is necessary for the Plan to
satisfy the requirements of Rule 16b-3 under the Exchange Act or any Nasdaq or
securities exchange listing requirements.
(b) Rights and obligations under any option granted before any amendment of
the Plan shall not be impaired by such amendment unless (i) the Company requests
the consent of the person to whom the option was granted and (ii) such person
consents in writing.
(c) The Board at any time, and from time to time, may amend the terms of
any one or more options; provided, however, that the rights and obligations
under any option shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.
12. Termination Or Suspension Of The Plan.
(a) The Board may suspend or terminate the Plan at any time. No options may
be granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
13. Effective Date Of Plan; Conditions Of Exercise.
(a) The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the Plan is approved by the
stockholders of the Company.
7
(b) No option granted under the Plan shall be exercised or exercisable
unless and until the condition of subparagraph 13(a) above has been met.
8
COR THERAPEUTICS, INC.
1991 EMPLOYEE STOCK PURCHASE PLAN
(Adopted May 14, 1991)
(Amended 1992)
(Amended 1993)
(Amended January 6, 1995)
(Amended November 15, 1996)
(Amended January 24, 1997)
(Amended November 20, 1998)
(Adjusted for 2-for-1 Stock Split August 15, 2000)
(Amended February 14, 2001)
Termination Date: None
1. Purpose.
(a) The purpose of the 1991 Employee Stock Purchase Plan ("the Plan")
is to provide a means by which employees of COR Therapeutics, Inc., a Delaware
corporation (the "Company"), and its Affiliates, as defined in subparagraph
1(b), which are designated as provided in subparagraph 2(b), may be given an
opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. Administration.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the
Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
(ii) To designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a Committee
composed of one (1) or more members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. Shares Subject to the Plan.
Subject to the provisions of paragraph 12 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to rights granted under
the Plan shall not exceed in the aggregate two million five hundred fifty
thousand (2,550,000) shares/1/ of the Company's $0.0001 par value common stock
(the "Common Stock"). If any right under the Plan shall for any reason terminate
without having been exercised, the Common Stock not purchased under such right
shall again become available for the Plan.
4. Grant of Rights; Offering.
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. If an employee has more than one right outstanding under the Plan,
unless he or she otherwise indicates in agreements or notices delivered
hereunder (a) each agreement or notice delivered by that employee will be deemed
to apply to all of his or her rights under the Plan, and (b) a right with a
lower exercise price (or an earlier-granted right,
_________________
/1/ Pursuant to paragraph 12(a), the aggregate of 1,050,000 shares of Common
Stock in the share reserve was adjusted to an aggregate of 2,100,000 shares of
Common Stock to reflect the 2-for-1 stock split on August 15, 2000. On February
14, 2001 the Board of Directors increased this number by 450,000 shares, to a
total aggregate of 2,550,000 shares of Common Stock.
2
if two rights have identical exercise prices), will be exercised to the fullest
possible extent before a right with a higher exercise price (or a later-granted
right, if two rights have identical exercise prices) will be exercised. The
provisions of separate Offerings need not be identical, but each Offering shall
include (through incorporation of the provisions of this Plan by reference in
the Offering or otherwise) the substance of the provisions contained in
paragraphs 5 through 8, inclusive.
5. Eligibility.
(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the
Plan, unless, on the Offering Date, such employee's customary employment with
the Company or such Affiliate is at least twenty (20) hours per week and at
least five (5) months per calendar year.
(b) The Board or the Committee may provide that each person who, during
the course of an Offering, first becomes an eligible employee of the Company or
designated Affiliate will, on a date or dates specified in the Offering which
coincides with the day on which such person becomes an eligible employee or
occurs thereafter, receive a right under that Offering, which right shall
thereafter be deemed to be a part of that Offering. Such right shall have the
same characteristics as any rights originally granted under that Offering, as
described herein, except that:
(i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right;
(ii) the Purchase Period (as defined below) for such right shall
begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board or the Committee may provide that if such person
first becomes an eligible employee within a specified period of time before the
end of the Purchase Period (as defined below) for such Offering, he or she will
not receive any right under that Offering.
(c) No employee shall be eligible for the grant of any rights under the
Plan if, immediately after any such rights are granted, such employee owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Affiliate. For purposes of this
subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such employee
may purchase under all outstanding rights and options shall be treated as stock
owned by such employee.
3
(d) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock of
the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at the
time such rights are granted) for each calendar year in which such rights are
outstanding at any time.
6. Rights; Purchase Price.
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase the number
of shares of Common Stock of the Company purchasable with up to fifteen percent
(15%) (or such lower percentage as the Board determines for a particular
Offering) of such employee's Earnings (as defined in paragraph 7(a)) during the
period which begins on the Offering Date (or such later date as the Board
determines for a particular Offering) and ends on the date stated in the
Offering, which date shall be no more than twenty-seven (27) months after the
Offering Date (the "Purchase Period"). In connection with each Offering made
under this Plan, the Board or the Committee shall specify a maximum number of
shares which may be purchased by any employee as well as a maximum aggregate
number of shares which may be purchased by all eligible employees pursuant to
such Offering. In addition, in connection with each Offering which contains more
than one Exercise Date (as defined in the Offering), the Board or the Committee
may specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Exercise Date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee shall
make a pro rata allocation of the shares available in as nearly a uniform manner
as shall be practicable and as it shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Exercise Date.
7. Participation; Withdrawal; Termination.
(a) An eligible employee may become a participant in an Offering by
delivering a participation agreement to the Company within the time specified in
the Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to fifteen percent (15%) (or such lower
percentage as the Board determines for a particular Offering) of such employee's
Earnings during the Purchase Period. "Earnings" is defined as an employee's
total compensation, including all salary, wages and other remuneration paid to
an employee (including amounts elected to be deferred by the employee, that
would otherwise have been paid, under any cash or deferred arrangement
established by the Company), overtime pay, commissions, bonuses, profit sharing,
and any special payments for extraordinary services,
4
provided, however, that the Board in its sole discretion may limit the above
definition from time to time with respect to each Offering. The payroll
deductions made for each participant shall be credited to an account for such
participant under the Plan and shall be deposited with the general funds of the
Company. A participant may reduce, increase or begin such payroll deductions
after the beginning of any Purchase Period only as provided for in the Offering.
A participant may make additional payments into his or her account only if
specifically provided for in the Offering and only if the participant has not
had the maximum amount withheld during the Purchase Period.
(b) At any time during a Purchase Period a participant may terminate
his or her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Purchase Period. Upon such withdrawal from the Offering by a participant, the
Company shall distribute to such participant all of his or her accumulated
payroll deductions (reduced to the extent, if any, such deductions have been
used to acquire stock for the participant) under the Offering, without interest
unless the terms of the Offering specifically so provide, and such participant's
interest in that Offering shall be automatically terminated. A participant's
withdrawal from an Offering will have no effect upon such participant's
eligibility to participate in any other Offerings under the Plan but such
participant will be required to deliver a new participation agreement in order
to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company or an Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee) under the Offering, without interest
unless the terms of the Offering specifically so provide.
(d) Rights granted under the Plan shall not be transferable otherwise
than by will or the laws of descent and distribution, or by a beneficiary
designation as provided below and, otherwise during his or her lifetime, shall
be exercisable only by the person to whom such rights are granted.
(i) A participant under the Plan may file a written designation
of a beneficiary who is to receive any shares and/or cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to the end of an Offering but prior to delivery to the participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death during an Offering.
(ii) The participant may change such designation of beneficiary
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its sole discretion, may deliver such shares
and/or cash to the
5
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
8. Exercise.
(a) On each exercise date as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions (without any
increase for interest unless the terms of the Offering specifically so provide)
will be applied to the purchase of whole shares of stock of the Company, up to
the maximum number of shares permitted pursuant to the terms of the Plan and the
applicable Offering, at the purchase price specified in the Offering. No
fractional shares shall be issued upon the exercise of rights granted under the
Plan. The amount, if any, of accumulated payroll deductions remaining in each
participant's account after the purchase of shares which is less than the amount
required to purchase one share of stock on the final Exercise Date of an
Offering shall be held in each such participant's account for the purchase of
shares under the next Offering under the Plan, unless such participant withdraws
from such next Offering, as provided in subparagraph 7(b), or is no longer
eligible to be granted rights under the Plan, as provided in paragraph 5, in
which case such amount shall be distributed to the participant after said final
Exercise Date, without interest unless the terms of the Offering specifically so
provide. The amount, if any, of accumulated payroll deductions remaining in any
participant's account after the purchase of shares which is equal to the amount
required to purchase whole shares of stock on the final Exercise Date of an
Offering shall be distributed in full to the participant after such Exercise
Date, without interest unless the terms of the Offering specifically so provide.
(b) No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended. If on
an Exercise Date of any Offering hereunder the Plan is not so registered, no
rights granted under the Plan or any Offering shall be exercised on said
Exercise Date and all payroll deductions accumulated during the Purchase Period
(reduced to the extent, if any, such deductions have been used to acquire stock)
shall be distributed to the participants, without interest unless the terms of
the Offering specifically so provide.
9. Covenants of the Company.
(a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.
10. Use of Proceeds from Stock.
6
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
11. Rights as a Stockholder.
A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until certificates representing such shares shall have
been issued.
12. Adjustments upon Changes in Stock.
(a) If any change is made in the stock subject to the Plan, or subject
to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
rights will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding rights.
(b) In the event of: (i) a dissolution or liquidation of the Company;
(ii) a merger or consolidation in which the Company is not the surviving
corporation; (iii) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (iv) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, as determined by the Board in its
sole discretion (A) any surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (B) such rights may continue
in full force and effect, or (C) participants' accumulated payroll deductions
may be used to purchase Common Stock immediately prior to the transaction
described above and the participants' rights under the ongoing Offering
terminated.
13. Amendment of the Plan.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company if such modification requires stockholder approval in order for the
Plan to obtain employee stock purchase plan treatment under Section 423 of the
Code or to comply with the requirements of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, or any Nasdaq or securities
exchange listing requirements. It is expressly contemplated that the Board may
amend the Plan in any respect the Board deems necessary or advisable to provide
eligible employees with the maximum benefits provided or to be provided under
the provisions of the Code and the regulations promulgated thereunder relating
to employee stock purchase plans and/or to bring the Plan and/or rights granted
under it into compliance therewith.
(b) Rights and obligations under any rights granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom such rights were granted.
7
14. Termination or Suspension of the Plan.
(a) The Board may suspend or terminate the Plan at any time. No rights
may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any rights granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom such rights were granted.
15. Effective Date of Plan.
The Plan shall become effective as determined by the Board, but no
rights granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company.
8
- --------------------------------------------------------------------------------
PROXY
COR THERAPEUTICS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 12, 2001
The undersigned hereby appoints Vaughn M. Kailian and Peter S. Roddy, and each
of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of COR Therapeutics, Inc. which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders of
COR Therapeutics, Inc. to be held at the Embassy Suites Hotel, 250 Gateway
Boulevard, South San Francisco, California on Tuesday, June 12, 2001, at 9:00
a.m., local time, and at any and all postponements, continuations and
adjournments thereof, with all powers that the undersigned would possess if
personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as to
any and all other matters that may properly come before the meeting.
Unless a contrary direction is indicated, this Proxy will be voted FOR all
nominees in Proposal 1 and FOR Proposal 2, Proposal 3, Proposal 4, and Proposal
5 as more specifically described in the Proxy Statement. If specific
instructions are indicated, this Proxy will be voted in accordance therewith.
(Continued and to be signed on other side)
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FOLD AND DETACH HERE
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Please mark
your votes as [X]
indicated in
this example.
The Board of Directors recommends a vote FOR the FOR all WITHHOLD
nominees for director listed below. nominees AUTHORITY
listed to vote for
below all nominees
listed below
[_] [_]
Proposal 1:
To elect directors to hold office until the next Annual Meeting of Stockholders
and until their successors are elected. Nominees: Vaughn M. Kailian, Shaun R.
Coughlin, James T. Doluisio,
Ginger L. Graham, Charles J.
Homcy, Jerry T. Jackson,
Ernest Mario, and Michael G.
McCaffery
FOR ALL NOMINEES EXCEPT FOR SUCH NOMINEES AS NOTED BELOW:
_________________________________________________________ [_]
The Board of Directors recommends a vote
FOR Proposal 2, FOR Proposal 3, FOR
Proposal 4, and FOR Proposal 5.
FOR AGAINST ABSTAIN
Proposal 2: To approve amendments to the Company's
1991 Equity Incentive Plan to increase the aggregate
number of shares of Common Stock authorized for [_] [_] [_]
issuance under the plan by 1,000,000 shares and to
extend the termination date of the plan until February
13, 2011.
Proposal 3: To approve amendments to the Company's
1994 Non-Employee Directors' Stock Option Plan to
increase the aggregate number of shares of Common [_] [_] [_]
Stock authorized for issuance under the plan by
300,000 shares and eliminate a fixed termination
date.
Proposal 4: To approve an amendment to the Company's
1991 Employee Stock Purchase Plan to increase the [_] [_] [_]
aggregate number of shares of Common Stock authorized
for issuance under the plan by 450,000 shares.
Proposal 5: To ratify the selection of Ernst & Young
LLP as independent auditors of the Company for its [_] [_] [_]
fiscal year ending December 31, 2001.
Please sign exactly as your name appears hereon.
If the stock is registered in the names of two
or more persons, each should sign. Executors,
administrators, trustees, guardians, and
attorneys-in-fact should add their titles. If
signer is a corporation, please give full
corporate name and have a duly authorized
officer sign, stating title. If signer is a
partnership, please sign in partnership name by
an authorized person.
Signature(s)____________________________________________ Date __________________
Printed Names(s) _______________________________________ Title _________________
Please vote, date and promptly return this proxy in the enclosed return envelope
which is postage prepaid if mailed in the United States.
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