From the recent filing:
See the bold print (highlighted by me.) Man, do you love that language or what?!?!
----------------------------------------------------------------
Change in Directors or Principal Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Approval of 2008 Senior Executive Incentive Structure
On April 16, 2008, the Compensation Committee of Halozyme Therapeutics, Inc.
(the "Company"), as previously authorized by the Company's Board of Directors,
finalized cash and equity incentive policies (the "2008 Incentive Structure")
applicable to the Company's executive officers for 2008. The material terms of
the 2008 Incentive Structure are summarized as follows:
Senior Executive Incentive Structure
The 2008 Incentive Structure is comprised of potential cash and equity awards
for the Company's senior executive officers subject to the accomplishment of
certain individual and Company goals in 2008.
The aggregate amount of cash awards for senior executive officers will be
determined by the amount that the Company's stock appreciates during the course
of 2008. If the Company's stock does not appreciate during 2008, there will be
no cash award pool for senior executive officers. If the Company's stock does
appreciate during 2008, the size of the cash pool will equal a percentage of the
overall increase to market capitalization (as adjusted to remove the impact of
any shares issued during the course of 2008). The applicable percentage will not
be a flat percentage, but will instead represent one-one hundredth of the
year-over-year increase to the adjusted market capitalization with a maximum
applicable percentage of 2% (based on increases to market capitalization of 200%
or greater). For example, a 10% increase in adjusted market capitalization will
result in a cash award pool of approximately $50,000 while a 40% increase in
adjusted market capitalization will result in a cash award pool of roughly
$850,000. Once the size of the cash pool is established, the Company's Chief
Executive Officer will make a recommendation to the Compensation Committee on
the allocation of the pool among the senior executive officers eligible to
participate in the pool. The Compensation Committee will ultimately make a
recommendation to the full Board of Directors on the amount of senior executive
cash awards, and the Board of Directors will have the flexibility of approving
an aggregate amount of cash awards that is higher or lower than the aggregate
amount determined pursuant to the calculation described above.
Maximum equity awards were also established for each executive officer
(amounts for selected members of senior management are set forth in the table
below), and the actual amount to be awarded will be based upon the
accomplishment of individual performance criteria during 2008. The individual
performance criteria for specific members of senior management varies from
position to position. If a member of senior management does not meet all
individual performance criteria, that person will still be eligible to receive a
portion of their maximum equity award; provided, however, that at least 75% of
that person's performance criteria must be met in order to receive an equity
award.
Maximum
Stock Option Grant
Jonathan E. Lim (President and Chief Executive Officer) 150,000
David A. Ramsay (Chief Financial Officer) 40,000
Robert Little (Vice President - Chief Commercial Officer) 40,000
Richard Yocum (Vice President - Clinical Development) 40,000
Gregory I. Frost (Chief Scientific Officer) 40,000
William Fallon (Vice President - Manufacturing and Operations) 40,000
Matthew Hooper (Vice President - General Counsel) 40,000
As with cash awards, the Board of Directors will have the flexibility of
approving equity awards that are higher or lower than the amounts determined
pursuant to the formula described above.
Adoption of Change in Control Policy
Last, in addition to finalizing the 2008 Incentive Structure, the Board has
also adopted a Change in Control Policy applicable to senior executive officers.
This policy provides for cash payments, continued healthcare coverage and
accelerated vesting of subsequently granted equity awards for any senior
executive officer who is terminated for a reason other than cause within twelve
months of a change in control transaction. The cash payments, to be made in a
lump sum payment, will equal a multiple of the senior executive's then-current
base salary (twice the salary of the Company's Chief Executive Officer and one
and a half times the salary of all
other senior executives). The Company will also pay for continued healthcare coverage post-termination for a period of eighteen months for the Chief Executive Officer and twelve months for all other senior executives. Last, equity awards granted to senior executives following the adoption of the policy will provide for the full acceleration of any unvested component of such award in the event that the senior executive is terminated without cause within twelve months of a change in control transaction. The Change of Control Policy also provides that the gross amount payable to a senior executive officer under the policy may be reduced in the event that such reduction will result in a greater net payment (after taking into account the effect of tax laws applicable to such change in control payments) to the senior executive officer. Going forward, the Company will enter into agreements with each senior executive officer that document the specific terms of the Change in Control Policy applicable to such officer.
The more you know, the less you don't know.
