def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to §240.14a-12
Emisphere Technologies, Inc.
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required
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Fee computed on table below per Exchange Act
Rules 14a-6(i)
(4) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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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)
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Proposed aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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TABLE OF CONTENTS
EMISPHERE
TECHNOLOGIES, INC.
240 Cedar
Knolls Road
Suite 200
Cedar Knolls, NJ 07927
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON June 24,
2009
Cedar
Knolls, NJ
May 29, 2009
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders (the Annual Meeting) of Emisphere
Technologies, Inc., a Delaware corporation (the
Company or Emisphere), to be held on
Wednesday, June 24, 2009 at 10 a.m., Eastern Daylight
Time, at the Park Avenue Club located at 184 Park Avenue,
Florham Park, New Jersey for the following purposes:
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1.
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To consider the election of two members of the Board of
Directors for a term expiring at the third succeeding annual
meeting of stockholders after their election;
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2.
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To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
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In addition, at the Annual Meeting, the Companys
management will discuss the Companys 2008 performance and
its current activities.
Only those stockholders of record at the close of business on
Tuesday, May 19, 2009 will be entitled to receive notice
of, and vote at, the Annual Meeting. A list of stockholders
entitled to vote at the Annual Meeting will be open for
examination by any stockholder during the ten (10) days
prior to the Annual Meeting at our principal offices located at
240 Cedar Knolls Road, Suite 200, Cedar Knolls, NJ 07927.
The Board of Directors appreciates and encourages stockholder
participation in our Annual Meeting and looks forward to your
attendance. It is important that your shares be represented,
whether or not you choose to attend the meeting. Registered
stockholders can vote their shares (a) via the Internet or
(b) by using a toll-free telephone number or (c) by
promptly completing, signing, dating and mailing a proxy card
using the enclosed envelope; or (d) by voting your shares
at the meeting in person. Instructions for using these
convenient services appear on the notice mailed to shareholders
of record, as well as on the Internet and on the proxy card.
Proxy votes are tabulated by an independent agent appointed by
the Company and reported at the Annual Meeting. You may revoke
your proxy at any time prior to its exercise. Your prompt
attention to the proxy will be of assistance in preparing for
the Annual Meeting. Your cooperation related to this matter is
appreciated.
By order of the Board of Directors,
Michael V. Novinski
President and Chief Executive Officer
EMISPHERE
TECHNOLOGIES, INC.
240 Cedar
Knolls Road
Suite 200
Cedar Knolls, NJ 07927
PROXY
STATEMENT
GENERAL
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
What is
the purpose of this Proxy Statement?
This Proxy Statement (the Proxy Statement) and the
Proxy Card (the Proxy Card) are made available and
furnished to all stockholders of record of Emisphere
Technologies, Inc., which we sometimes refer to as the
Company or Emisphere, as of the close of
business on May 19, 2009 in connection with the
solicitation of proxies on behalf of the Board of Directors for
use at the Annual Meeting of Stockholders on Wednesday,
June 24, 2009 (the Annual Meeting).
This Proxy Statement and form of Proxy will be available to be
mailed to stockholders at their request on or about May 29,
2009. It will also be available for review on the Internet. The
information included in the Proxy Statement relates to the
proposal to be voted on at the Annual Meeting, the voting
process, the compensation for directors and our most highly paid
executive officers, and other required information. Copies of
our 2008 Annual Report to Stockholders and the Companys
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008 (the 2008
Fiscal Year) are also available on the Internet and will
be mailed at the request of a shareholder with a copy of this
Proxy Statement, but are not incorporated herein by reference
and should not be deemed to be part of the Proxy Statement.
Who can
attend the Annual Meeting and who is entitled to vote?
All stockholders of the Company as of May 19, 2009 (the
Record Date), their authorized representatives and
guests of Emisphere will be able to attend the Annual Meeting.
All holders of record of Emispheres common stock,
$0.01 par value per share, which we sometimes refer to as
Common Stock, on the Record Date will be entitled to
vote at the Annual Meeting. Each share of Common Stock is
entitled to one vote on each matter properly brought before the
meeting.
What
proposals will be voted upon at the Annual Meeting?
The Annual Meeting has been called to consider and take action
on the following items:
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The election of the Director Nominees Franklin M. Berger and
John D. Harkey, Jr. as directors for a term expiring at the
third succeeding annual meeting of stockholders after their
election (Class I Directors); and
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The transaction of such other business as may properly come
before the meeting or any adjournment or postponement thereof.
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What are
the Board of Directors voting recommendations with respect
to the proposals to be voted at the Annual Meeting?
The Board of Directors recommends a vote:
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FOR the election of the Class I Director
Nominees as directors for the term expiring at the third
succeeding annual meeting of stockholders after their election.
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If any other matter is properly presented at the Annual Meeting
or any adjournments or postponements thereof, your proxy will be
voted in accordance with the discretion of the person holding
the proxy. At the time this Proxy Statement went to press,
Emisphere knew of no matters that needed to be acted on at the
Annual Meeting other than those discussed in this Proxy
Statement.
How do I
vote in person?
If you plan to attend the Annual Meeting on June 24, 2009,
please bring proof of identification and the enclosed Proxy
Card. However, if your shares are held in the name of your
broker, bank or other nominee, you must bring a power of
attorney executed by the broker, bank or other nominee that owns
the shares of record for your benefit, authorizing you to vote
the shares.
How do I
vote by proxy?
If you are a registered holder as of the Record Date, you can
vote your proxy via the Internet, by telephone, by mail or in
person at the Annual Meeting on June 24, 2009.
If you are a beneficial stockholder, you have the right to
direct your broker or nominee on how to vote your shares. You
should complete a voting instruction card which your broker or
nominee is obligated to provide you. If you wish to vote in
person at the Annual Meeting, you must first obtain from the
record holder a proxy issued in your name.
How do I
vote via the Internet?
If you wish to vote via the Internet, follow the Internet voting
instructions enclosed with the Notice of Internet Availability.
A control number, located on the mailing, is designated to
verify your identity and allow you to vote the shares and
confirm that the voting instructions have been recorded properly.
How do I
vote via telephone?
If you wish to vote via telephone, use the toll-free telephone
number enclosed with the Notice of Internet Availability and
follow the voting instructions located on the mailing. A control
number, located on the Proxy Card, is designated to verify your
identity, allow you to vote the shares and confirm that the
voting instructions have been recorded properly.
How do I
vote my shares on the Proxy Card?
If you are a registered stockholder, you can specify how you
want your shares voted on each proposal by marking the
appropriate boxes on the Proxy Card. Please review the voting
instructions on the Proxy Card and read the entire text of the
proposals. Please review the recommendation of the Board of
Directors in the Proxy Statement prior to marking your vote.
If your Proxy Card is signed and returned without specifying a
vote or an abstention on a proposal, it will be voted according
to the recommendation of the Board of Directors on that
proposal. That recommendation is shown for each proposal on the
Proxy Card.
What
constitutes a quorum?
As of the Record Date, 30,341,078 shares of Common Stock
were outstanding. A majority of the total number of our
outstanding shares present or represented by proxy constitutes a
quorum for the purpose of adopting proposals at the Annual
Meeting. If you submit a properly executed proxy, then you will
be considered part of the quorum.
Who
counts the vote?
Tabulation of proxies and the votes cast at the meeting are
conducted by an independent agent appointed by Emisphere and
certified by an independent inspector of elections.
May I
revoke my proxy?
You may revoke your Proxy at any time before it is voted at the
Annual Meeting by: (i) giving timely written notice of the
revocation to the Secretary of the Company; (ii) executing
and delivering a Proxy with a
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later date; or (iii) voting in person at the Annual
Meeting. Attendance at the Annual Meeting will not in and of
itself constitute revocation of a proxy.
What vote
is required to approve each proposal?
A plurality of the votes cast at the Annual Meeting is required
to elect the Director Nominees.
At the Annual Meeting, abstentions will be counted as votes cast
on proposals presented to stockholders, but broker non-votes
will not be considered votes cast and the shares represented by
broker non-votes with respect to any proposal will be considered
present but not eligible to vote on such proposal. Withheld
votes and broker non-votes will have no effect on the election
of the Director Nominees, which is by plurality vote.
Who bears
the cost of soliciting the proxies?
We will pay all costs of preparing, assembling, printing and
distributing the proxy materials. We may solicit proxies on
behalf of the Board of Directors through the mail, in person,
and by telecommunications. We will, upon request, reimburse
brokerage firms and others for their reasonable expenses
incurred for forwarding solicitation material to beneficial
owners of stock.
Where are
Emispheres Executive Offices?
Our principal executive offices are located at 240 Cedar Knolls
Road, Suite 200, Cedar Knolls, NJ, 07927 and our telephone
number is
(973) 532-8000.
How can I
get additional information about Emisphere?
We will, upon written request of any stockholder, furnish
without charge a copy of this Proxy Statement, our Annual Report
on
Form 10-K
and our
Form 10-K/A
for the 2008 Fiscal Year, as filed with the SEC. Please address
your requests to Emisphere Technologies, Inc., 240 Cedar Knolls
Road, Suite 200, Cedar Knolls, NJ, 07927 Attention:
Investor Relations. Electronic copies of this Proxy Statement,
the Companys Annual Report on
Form 10-K
and our
Form 10-K/A
for the 2008 Fiscal Year are located within the Investor
Relations section of our website at www.emisphere.com and
are also available at the SECs website at
www.sec.gov. The contents of our website are not
incorporated herein by reference and the website address
provided in this Proxy Statement is intended to be an inactive
textual reference only.
If you are a beneficial owner and your shares are held in a
stock brokerage account or by a bank or other nominee, please
refer to the information provided by your broker, bank or
nominee for instructions on how to elect to access future proxy
statements and annual reports on the Internet. Most beneficial
owners who elect electronic access will receive an
e-mail
message next year containing the Internet address for access to
the Proxy Statement and Annual Report.
Emisphere is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, (the Exchange
Act), which require that the Companys Annual Report
on
Form 10-K,
the Proxy Statement and other information be filed with the SEC.
These filings may be inspected and copied at the public
reference facilities of the SEC. Call (800) SEC-0330 for
more information regarding public reference facilities. Copies
of the material may also be obtained upon request and upon
payment of the appropriate fee from the Public Reference Section
of the SEC, 100F Street N.E., Room 1580, Washington, DC
20549. In addition, the SEC maintains a website at
www.sec.gov that contains reports, proxy and information
statements, as well as other information regarding registrants,
including Emisphere, which file electronically with the SEC.
Householding
of Annual Meeting Materials
Some banks, brokers and other nominee record holders may be
participating in the practice of householding proxy
statements and annual reports. This means that only one copy of
our Proxy Statement and Annual Report may have been sent to
multiple stockholders in each household. We will promptly
deliver a separate copy of the Proxy Materials and Annual Report
to any stockholder upon written or oral request
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made to our Investor Relations Department, Emisphere
Technologies, Inc., 240 Cedar Knolls Road, Suite 200, Cedar
Knolls, NJ, 07927, telephone:
(973) 532-8000.
Any stockholder who wants to receive separate copies of our
Proxy Statement and Annual Report or any stockholder who is
receiving multiple copies and would like to receive only one
copy per household must make an election on the Internet,
telephone or proxy card or contact the stockholders bank,
broker, or other nominee record holder. Stockholders may also
contact us at the above address and phone number with their
election.
DIRECTORS
AND EXECUTIVE OFFICERS
Our business is overseen by the Board of Directors. It is the
duty of the Board of Directors to oversee the Chief Executive
Officer and other senior management in the competent and ethical
operation of the Company on a
day-to-day
basis and to assure that the long-term interests of the
stockholders are being served. To satisfy this duty, our
directors take a proactive, focused approach to their position,
and set standards to ensure that the Company is committed to
business success through maintenance of the highest standards of
responsibility and ethics. The Board of Directors is kept
advised of our business through regular verbal or written
reports, Board of Directors meetings, and analysis and
discussions with the Chief Executive Officer and other officers
of the Company.
Members of the Board of Directors bring to us a wide range of
experience, knowledge and judgment. Our governance organization
is designed to be a working structure for principled actions,
effective decision-making and appropriate monitoring of both
compliance and performance.
The Board of Directors has affirmatively determined that
Dr. Stephen K. Carter, Mr. John D. Harkey, Jr.,
Dr. Mark H. Rachesky, Mr. Kenneth I. Moch,
Dr. Michael Weiser and Mr. Franklin M. Berger are
independent directors within the meaning of Rule 4200 of
the Marketplace Rules of the Nasdaq Stock Market, Inc.
(Nasdaq). The independent directors meet in separate
sessions at the conclusion of board meetings and at other times
as deemed necessary by the independent directors, in the absence
of Dr. Michael M. Goldberg and Mr. Michael V.
Novinski, the non-independent directors. Dr. Goldberg
resigned from the Board of Directors effective March 11,
2008. Mr. Pack passed away on December 9, 2008.
Mr. Moch was appointed to the Board of Directors to fill
the vacancy created by Mr. Packs death.
Dr. Carter resigned from the Board of Directors effective
April 30, 2009. Mr. Berger was appointed to the Board
of Directors on May 15, 2009.
Committees
of the Board of Directors
The Board of Directors has established an Audit Committee, a
Compensation Committee and a Governance and Nominating
Committee. Each of the committees of the Board of Directors acts
pursuant to a separate written charter adopted by the Board of
Directors. On February 12, 2007, the Board of Directors
also established an executive committee consisting of
Drs. Rachesky, Weiser and Carter, Mr. Pack and
Mr. Harkey. Mr. Pack passed away on December 9,
2008. Dr. Carter resigned from the Board of Directors
effective April 30, 2009.
The Audit Committee is currently comprised of Mr. Harkey
(chairman), Mr. Moch and Dr. Weiser. Mr. Pack
served as a member of the Audit Committee until his death on
December 9, 2008. Mr. Moch became a member of the
Audit Committee on December 23, 2008. All of the members of
the Audit Committee are independent within the meaning of
Rule 4200 of the Nasdaq. The Board of Directors has
determined that Mr. Harkey is an Audit Committee
financial expert, within the meaning of Item 401(h)
of
Regulation S-K.
The Audit Committees responsibilities and duties are
summarized in the report of the Audit Committee and in the Audit
Committee charter which is available on our website
(www.emisphere.com).
The Compensation Committee is currently comprised of
Dr. Weiser (chairman), Mr. Moch and Dr. Rachesky.
Mr. Pack served as the chairman of the Compensation
Committee until his death on December 9, 2008.
Dr. Carter served on the Compensation Committee until
February 12, 2009. Mr. Moch became a member of the
Compensation Committee on February 12, 2009. All members of
the Compensation Committee are independent within the meaning of
Rule 4200 of the Nasdaq, non-employee directors within the
meaning of the rules of the Securities and Exchange Commission
and outside directors within the meaning set forth
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under Internal Revenue Code Section 162(m). The
Compensation Committees responsibilities and duties are
summarized in the report of the Compensation Committee and in
the Compensation Committee charter also available on our website.
The Governance and Nominating Committee is currently comprised
of Dr. Weiser (chairman), Mr. Moch and
Dr. Rachesky. Mr. Pack served on the Governance and
Nominating Committee until his death on December 9, 2008.
Dr. Carter served on the Governance and Nominating
Committee until February 12, 2009. Mr. Moch became a
member of the Governance and Nominating Committee on
February 12, 2009. All members of the Governance and
Nominating Committee are independent within the meaning of
Rule 4200 of the Nasdaq. The Governance and Nominating
Committees responsibilities and duties are set forth in
the Governance and Nominating Committee charter on our website.
Among other things, the Governance and Nominating Committee is
responsible for recommending to the board the nominees for
election to our Board of Directors and the identification and
recommendation of candidates to fill vacancies occurring between
annual stockholder meetings.
The table below provides membership information for each
committee of the Board of Directors during 2008:
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Governance and
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Executive
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Audit
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Compensation
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Nominating
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Howard M. Pack(1)(5)
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X
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X
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X
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*
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X
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Kenneth I. Moch(1)(6)
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X
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X
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Stephen K. Carter, M.D.(8)
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X
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X
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X
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X
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Franklin M. Berger, C.F.A.(2)(9)
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X
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John D. Harkey, Jr.(2)
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X
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X
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*
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Michael M. Goldberg, M.D.(3)(4)
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X
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Michael V. Novinski(3)
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X
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Mark H. Rachesky, M.D.(3)
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X
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X
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X
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Michael Weiser, M.D.(3)(7)
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X
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X
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Chair |
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Class II directors: Term as director is expected to expire
in 2010 |
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Class I directors: Term as director is expected to expire
in 2009 |
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Class III directors: Term as director is expected to expire
in 2011 |
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Dr. Goldberg resigned from the Board of Directors effective
March 11, 2008 |
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Mr. Pack passed away on December 9, 2008 |
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Mr. Moch was appointed to the Board of Directors on
December 23, 2008 to fill the vacancy created by the death
of Mr. Pack. He was appointed to the Audit Committee on
December 23, 2008 and was appointed to the Compensation
Committee and Governance and Nominating Committee on
February 12, 2009. |
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On February 12, 2009, Dr. Weiser was appointed to the
Compensation Committee and Governance and Nominating Committee
and assumed the role of chairman of both committees. |
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Dr. Carter resigned from the Board of Directors effective
April 30, 2009. |
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Mr. Berger was appointed to the Board of Directors on
May 15, 2009. |
Meetings
Attendance
During the 2008 fiscal year, our Board of Directors held 3
meetings. With the exception of Dr. Carter, who attended
less than 75% of the meetings, each director attended
100 percent of the aggregate number of Board of Directors
meetings and committees of which he was a member that were held
during the period of his service as a director.
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The Executive Committee met 1 time during the 2008 fiscal year.
The Audit Committee met 4 times during the 2008 fiscal year.
The Compensation Committee met 1 time during the 2008 fiscal
year.
The Governance and Nominating Committee met 1 time during the
2008 fiscal year.
The Company does not have a formal policy regarding attendance
by members of the Board of Directors at the Companys
annual meeting of stockholders, although it does encourage
attendance by the directors. One member of the Board of
Directors attended the prior years annual meeting of
stockholders.
Code of
Conduct for Officers and Employees and Code of Business Conduct
and Ethics for Directors
The Company has a Code of Conduct that applies to all of our
officers and employees as well as a Code of Business Conduct and
Ethics that applies specifically to the members of the Board of
Directors. The directors are surveyed annually regarding their
compliance with the policies as set forth in the Code of Conduct
for Directors. The Code of Conduct and the Code of Business
Conduct and Ethics for Directors are available on the Corporate
Governance section of our website at www.emisphere.com.
The contents of our website are not incorporated herein by
reference and the website address provided in this Proxy
Statement is intended to be an inactive textual reference only.
The Company intends to disclose on its website any amendment to,
or waiver of, a provision of the Code of Conduct that applies to
the Chief Executive Officer, Chief Financial Officer, or
Controller. Our Code of Conduct contains provisions that apply
to our Chief Executive Officer, Chief Financial Officer and all
other finance and accounting personnel. These provisions comply
with the requirements of a company code of ethics for financial
officers that were promulgated by the SEC pursuant to the
Exchange Act.
Stockholder
Communications
We have established an Investor Relations Office for all
stockholder inquiries and communications. The Investor Relations
Office facilitates the dissemination of accurate and timely
information to our stockholders. In addition, the Investor
Relations Office ensures that outgoing information is in
compliance with applicable securities laws and regulations. All
investor queries should be directed to our internal Director of
Corporate Communications or our Corporate Secretary.
ELECTION
OF DIRECTORS
Nominations for the election of directors may be made by the
Board of Directors or the Governance and Nominating Committee.
The committee did not reject any candidates recommended within
the preceding year by a beneficial owner of, or from a group of
security holders that beneficially owned, in the aggregate, more
than five percent (5%) of the Companys voting stock.
Although it has no formal policy regarding stockholder nominees,
the Governance and Nominating Committee believes that
stockholder nominees should be viewed in substantially the same
manner as other nominees. Stockholders may make a recommendation
for a nominee by complying with the notice procedures set forth
in our by-laws. The Governance and Nominating Committee will
give nominees recommended by stockholders in compliance with
these procedures the same consideration that it gives to any
board recommendations. To date, we have not received any
recommendation from stockholders requesting that the Governance
and Nominating Committee (or any predecessor) consider a
candidate for inclusion among the committees slate of
nominees in the Companys proxy statement, and the Director
Nominees have been nominated by the Governance and Nominating
Committee.
To be considered by the committee, a Director nominee must have
broad experience at the strategy/policy-making level in a
business, government, education, technology or public interest
environment, high-level managerial experience in a relatively
complex organization or experience dealing with complex
problems. In addition, the nominee must be able to exercise
sound business judgment and provide insights and practical
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wisdom based on experience and expertise, possess proven ethical
character, be independent of any particular constituency, and be
able to represent all stockholders of the Company.
The committee will also evaluate whether the nominees
skills are complimentary to the existing board members
skills, and the boards needs for operational, management,
financial, technological or other expertise; and whether the
individual has sufficient time to devote to the interests of
Emisphere. The prospective board member cannot be a board member
or officer at a competing company nor have relationships with a
competing company. He/she must be clear of any investigation or
violations that would be perceived as affecting the duties and
performance of a director
The Governance and Nominating Committee identifies nominees by
first evaluating the current members of the Board of Directors
willing to continue in service. Current members of the board
with skills and experience that are relevant to the business and
who are willing to continue in service are considered for
re-nomination, balancing the value of continuity of service by
existing members of the board with that of obtaining a new
perspective. If any member of the board does not wish to
continue in service, or if the Governance and Nominating
Committee or the board decides not to nominate a member for
re-election, the Governance and Nominating Committee identifies
the desired skills and experience of a new nominee and discusses
with the board suggestions as to individuals that meet the
criteria.
Compensation
of Non-Employee Directors
A director who is a full-time employee of the Company receives
no additional compensation for services provided as a director.
It is the Companys policy to provide competitive
compensation and benefits necessary to attract and retain high
quality non-employee directors and to encourage ownership of
Company stock to further align their interests with those of
stockholders. The following represents the compensation of the
non-employee members of the Board of Directors:
|
|
|
|
|
Prior to June 24, 2009, each non-employee director
received, on the date of each regular annual stockholders
meeting, a stock option to purchase 7,000 shares of our
Common Stock under the 2007 Stock Award and Incentive Plan. The
stock options vest on the six month anniversary of the grant
date provided the director continuously serves as a director
from the grant date through such vesting date. Notwithstanding
the foregoing, any director who holds any stock options granted
before April 1, 2004 which remain unvested was ineligible
to receive the annual 7,000-share stock option grant described
in this paragraph unless and until all such prior options had
vested. Stock options granted in 2008 have a stated expiration
date of ten years after the date of grant, and are subject to
accelerated vesting upon a change in control of Emisphere. If
the holder of an option ceases to serve as a director, all
previously granted options may be exercised to the extent vested
within six months after termination of directorship (one year if
the termination is by reason of death), except that, after
April 1, 2004 (unless otherwise provided in an option
agreement), if a director becomes an emeritus
director of Emisphere immediately following his Board
service, the vested options may be exercised for six months
after termination of service as an emeritus
director. All unvested options expire upon termination of
Board service.
|
|
|
|
On May 15, 2009, in recognition of the roles and
responsibilities of the Board of Directors and current market
data, the non-employees members of the Board of Directors
compensation was revised to include a special one-time grant of
50,000 options to purchase shares of Emispheres Common
Stock granted on May 15, 2009, an annual retainer of
$35,000, payable quarterly in cash, and an annual stock option
grant of 40,000 options to purchase shares of Emispheres
Common Stock. The annual stock option grants are granted
annually on the date of the annual meeting of stockholders of
the Company. The director must be an eligible director on the
dates the retainers are paid and the stock options are granted.
The options subject to the special one-time stock option grant
and annual stock option grant would vest over three years in
equal amounts on each anniversary of the grant date provided the
director continuously serves as a director from the grant date
through such vesting date, subject to accelerated vesting upon a
change in control of Emisphere. Such options, once vested,
remain exercisable through the period of the option term.
|
7
|
|
|
|
|
In the future, newly appointed directors shall receive an
initial stock option grant on the date of appointment of 50,000
options to purchase shares of Common Stock. The options subject
to the initial stock option grant would vest over three years in
equal amounts on each anniversary of the grant date provided the
director continuously serves as a director from the grant date
through such vesting date, subject to accelerated vesting upon a
change in control of Emisphere. Such options, once vested,
remain exercisable through the period of the option term.
|
|
|
|
On May 15, 2009, Messrs. Moch and Berger, who serve on
the Special Committee of the Board of Directors, each received a
one-time special stock option grant of 25,000 shares of
Common Stock and a one-time fee of $10,000. Also on May 15,
2009, Messrs. Weiser, Harkey and Rachesky received a
one-time special stock option grant of 25,000 shares of
Common Stock and a one-time fee of $10,000 in recognition for
their length of service on the Board of Directors. The options
subject to these one-time stock option grants vest over three
years in equal amounts on each anniversary of the grant date
provided the director continuously serves as a director from the
grant date through such vesting date, subject to accelerated
vesting upon a change in control of Emisphere. Such options,
once vested, remain exercisable through the period of the option
term.
|
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|
Additional committee and chairperson fees are paid quarterly as
follows:
|
|
|
|
|
|
$10,000 audit committee chairperson fee;
|
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|
$2,500 audit committee member fee;
|
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|
|
$5,000 compensation committee chairperson fee;
|
|
|
|
$1,000 compensation committee member fee;
|
|
|
|
$2,500 governance and nominating committee chairperson
fee; and
|
|
|
|
$500 governance and nominating committee member fee.
|
The director must be an eligible director on the dates such fees
are paid.
For each board meeting attended prior to April 1, 2004,
non-employee directors had the right to receive, under our
Directors Deferred Compensation Stock Plan, shares of
Common Stock, based on a fee of $1,000 and the closing price of
the Common Stock on the date of the meeting (the Annual
Board Retainer). Under that plan, Emisphere maintained a
share account for each eligible director and is
obligated to issue the shares within six months of a
directors retirement from the board or other termination
as a director. Dr. Carter, who resigned from the Board of
Directors effective April 30, 2009, has 355 shares in
accordance with the Directors Deferred Compensation Stock
Plan, which are available to him following his termination of
service to the Board of Directors. Mr. Pack, who passed
away on December 9, 2008, had 2,767 shares in
accordance with the Directors Deferred Compensation Stock
Plan, which will be delivered to Mr. Packs estate in
accordance therewith.
8
DIRECTOR
COMPENSATION TABLE 2008
The table below represents the compensation paid to our
non-employee directors during the year ended December 31,
2008:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
|
|
or Paid
|
|
|
Stock Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
|
|
Name
|
|
in Cash ($)
|
|
|
($)(1)
|
|
|
($)(1)
|
|
|
($)
|
|
|
Total ($)
|
|
|
Howard M. Pack
|
|
|
23,000
|
|
|
|
2,084
|
|
|
|
1,751
|
|
|
|
|
|
|
|
26,835
|
|
Kenneth I. Moch(2)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen K. Carter, M.D.(3)
|
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|
16,000
|
|
|
|
2,084
|
|
|
|
27,911
|
|
|
|
|
|
|
|
45,995
|
|
John D. Harkey, Jr.
|
|
|
19,000
|
|
|
|
2,084
|
|
|
|
1,751
|
|
|
|
|
|
|
|
22,835
|
|
Michael M. Goldberg, M.D.(4)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark H. Rachesky, M.D.
|
|
|
16,000
|
|
|
|
2,084
|
|
|
|
1,114
|
|
|
|
|
|
|
|
19,198
|
|
Michael Weiser, M.D.
|
|
|
17,000
|
|
|
|
2,084
|
|
|
|
1,751
|
|
|
|
|
|
|
|
20,835
|
|
|
|
|
(1) |
|
The value listed in the above table represents the fair value of
the options recognized as expense under FAS 123R during
2008, including unvested options granted before 2007 and those
granted in 2008. Fair value is calculated as of the grant date
using a Black-Scholes-Merton (Black-Scholes)
option-pricing model. The determination of the fair value of
share-based payment awards made on the date of grant is affected
by our stock price as well as assumptions regarding a number of
complex and subjective variables. Our assumptions in determining
fair value are described in note 12 to our audited
financial statements for the year ended December 31, 2008,
included in our Annual Report on Form
10-K. |
|
(2) |
|
Mr. Moch was appointed to the Board of Directors on
December 23, 2008; as a result, Mr. Moch did not
receive an annual retainer, committee fees, option or stock
awards during the year ended December 31, 2008. |
|
(3) |
|
Dr. Carter resigned from the Board of Directors effective
April 30, 2009. |
|
(4) |
|
Dr. Goldberg previously served as Chairman and Chief
Executive Officer. His employment was terminated on
January 16, 2007. On April 26, 2007 the Board of
Directors held a special hearing at which it was determined that
Dr. Goldbergs termination was for cause. On
March 22, 2007, Dr. Goldberg, through counsel, filed a
demand for arbitration asserting that his termination was
without cause. Depending on the ultimate conclusion of this
arbitration, Dr. Goldberg may be entitled to additional
options granted when he was Chief Executive Officer.
Accordingly, the outcome of the arbitration could also affect,
among other items disclosed or discussed in this Proxy, the
number of shares available for grant under the Companys
option plans. Dr. Goldberg resigned from the Board of
Directors effective March 11, 2008. |
9
The following table summarizes the aggregate number of option
awards and stock awards held by each non-employee director at
December 31, 2008.
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|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
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|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Number of
|
|
|
Securities
|
|
|
Awards: Number
|
|
|
|
|
|
|
|
|
Number
|
|
|
Value of
|
|
|
|
Securities
|
|
|
Underlying
|
|
|
of Securities
|
|
|
|
|
|
|
|
|
of Shares of
|
|
|
Shares or
|
|
|
|
Underlying
|
|
|
Unexercised
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
Unexercised
|
|
|
Unearned
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Stock That
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have
|
|
|
Have Not
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Not Vested (#)
|
|
|
Vested ($)
|
|
|
Howard M. Pack(1)
|
|
|
21,000
|
|
|
|
|
|
|
|
|
|
|
|
41.06
|
|
|
|
4/28/2010
|
|
|
|
2,638
|
|
|
|
2,084
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
13.00
|
|
|
|
5/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
21,000
|
|
|
|
|
|
|
|
|
|
|
|
2.89
|
|
|
|
4/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
8.97
|
|
|
|
5/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
3.76
|
|
|
|
4/20/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
3.79
|
|
|
|
8/8/2018
|
|
|
|
|
|
|
|
|
|
Kenneth I. Moch(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen K. Carter, M.D.(3)
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
5.75
|
|
|
|
12/11/2013
|
|
|
|
2,638
|
|
|
|
2,084
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
3.79
|
|
|
|
8/8/2018
|
|
|
|
|
|
|
|
|
|
John D. Harkey, Jr.
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
8.97
|
|
|
|
5/26/2016
|
|
|
|
2,638
|
|
|
|
2,084
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
3.76
|
|
|
|
4/20/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
3.79
|
|
|
|
8/8/2018
|
|
|
|
|
|
|
|
|
|
Mark H. Rachesky, M.D.
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
3.76
|
|
|
|
4/20/2017
|
|
|
|
2,638
|
|
|
|
2,084
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
3.79
|
|
|
|
8/8/2018
|
|
|
|
|
|
|
|
|
|
Michael Weiser, M.D.
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
8.97
|
|
|
|
5/26/2016
|
|
|
|
2,638
|
|
|
|
2,084
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
3.76
|
|
|
|
4/20/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
3.79
|
|
|
|
8/8/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Pack passed away on December 9, 2008.
Mr. Packs unvested options and shares vested in
accordance with the plan and will be delivered to his estate. |
|
(2) |
|
Mr. Moch was appointed to the Board of Directors on
December 23, 2008; as a result, Mr. Moch did not
receive option or stock awards during the year ended
December 31, 2008. |
|
(3) |
|
Dr. Carter resigned from the Board of Directors effective
April 30, 2009. |
10
SECURITIES
AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY PLANS
The following table provides information as of December 31,
2008 about the Common Stock that may be issued upon the exercise
of options granted to employees, consultants or members of our
Board of Directors under our existing equity compensation plans,
including the 1991 Stock Option Plan, 1995 Stock Option Plan,
2000 Stock Option Plan, the 2002 Broad Based Plan, the 2007
Stock Award and Incentive Plan (collectively the
Plans) the Stock Incentive Plan for Outside Directors and
the Directors Deferred Compensation Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
|
(c)
|
|
|
|
Number of
|
|
|
(b)
|
|
|
Number of Securities
|
|
|
|
Securities to be
|
|
|
Weighted
|
|
|
Remaining Available for
|
|
|
|
Issued upon
|
|
|
Average
|
|
|
Future Issuance Under
|
|
|
|
Exercise of
|
|
|
Exercise Price
|
|
|
Equity Compensation Plans
|
|
|
|
Outstanding
|
|
|
of Outstanding
|
|
|
(Excluding Securities
|
|
Plan Category
|
|
Options
|
|
|
Options
|
|
|
Reflected in Column (a))
|
|
|
Equity Compensation Plans Approved by Security Holders
|
|
|
|
|
|
|
|
|
|
|
|
|
The Plans
|
|
|
2,032,854
|
|
|
$
|
8.30
|
|
|
|
2,757,859
|
|
Stock Incentive Plan for Outside Directors
|
|
|
156,000
|
|
|
|
13.38
|
|
|
|
|
|
Directors Deferred Compensation Plan
|
|
|
|
|
|
|
|
|
|
|
3,122
|
|
Equity Compensation Plans not approved by Security
Holders(1)
|
|
|
20,000
|
|
|
|
14.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,208,854
|
|
|
$
|
8.72
|
|
|
|
2,760,981
|
|
|
|
|
(1) |
|
Our Board of Directors has granted options which are currently
outstanding for a former consultant. The Board of Directors
determines the number and terms of each grant (option exercise
price, vesting and expiration date). These grants were made on
7/12/2001, 7/12/2002 and 7/14/2003. |
VOTING
SECURITIES AND PRINCIPAL HOLDERS THEREOF
At the close of business on the Record Date, there were
approximately 30,341,078 shares of Common Stock outstanding
and entitled to vote. The presence, either in person or by
proxy, of persons entitled to vote a majority of our outstanding
Common Stock is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and
broker non-votes are counted for purposes of determining a
quorum. Abstentions are counted as if they were no
votes in tabulations of the votes cast, whereas broker
non-votes, are not considered as having voted for the purposes
of determining the outcome of a vote. Holders of Common Stock
have one vote for each share on any matter that may be presented
for consideration and action by the stockholders at the Annual
Meeting.
11
COMMON
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
AND
PRINCIPAL HOLDERS
Directors
and Executive Officers
The following table sets forth certain information, as of
April 1, 2009, regarding the beneficial ownership of the
Common Stock by (i) each director, including the Director
Nominees; (ii) each Executive Officer; and (iii) all
of our directors and Executive Officers as a group. The number
of shares beneficially owned by each director or Executive
Officer is determined under the rules of the SEC, and the
information is not necessarily indicative of beneficial
ownership for any other purpose. Under these rules, beneficial
ownership includes any shares as to which the individual has the
sole or shared voting power (which includes power to vote, or
direct the voting of, such security) or investment power (which
includes power to dispose of, or direct the disposition of, such
security). In computing the number of shares beneficially owned
by a person and the percentage ownership of that person, shares
of Common Stock subject to options, warrants or convertible
notes held by that person that are currently exercisable or
convertible into Common Stock or will become exercisable or
convertible into Common Stock within 60 days after
April 1, 2009 are deemed outstanding, while such shares are
not deemed outstanding for purposes of computing percentage
ownership of any other person. Unless otherwise indicated, all
persons named as beneficial owners of Common Stock have sole
voting power and sole investment power with respect to the
shares indicated as beneficially owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
|
|
|
|
|
|
|
|
|
|
Beneficially Owned
|
|
|
Common Shares
|
|
|
Percent
|
|
Name and Address(a)
|
|
(b)
|
|
|
Underlying Options
|
|
|
of Class
|
|
|
Michael V. Novinski
|
|
|
565,000
|
|
|
|
500,000
|
|
|
|
1.8
|
%
|
Michael R. Garone
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
*
|
|
Paul Lubetkin(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary Riley, DVM, Ph.D.
|
|
|
75,000
|
|
|
|
25,000
|
|
|
|
*
|
|
Nicholas Hart
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark H. Rachesky, M.D.
|
|
|
11,393,247
|
(d)
|
|
|
6,722,587
|
(e)
|
|
|
30.7
|
%
|
Howard M. Pack(f)
|
|
|
202,599
|
|
|
|
91,000
|
|
|
|
*
|
|
Kenneth I. Moch(g)
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Carter, M.D.(h)
|
|
|
50,824
|
|
|
|
42,000
|
|
|
|
*
|
|
Michael Weiser, M.D.
|
|
|
24,775
|
|
|
|
21,000
|
|
|
|
*
|
|
John D. Harkey, Jr.
|
|
|
24,775
|
|
|
|
21,000
|
|
|
|
*
|
|
Franklin M. Berger, C.F.A.(i)
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group
|
|
|
12,351,220
|
|
|
|
7,437,587
|
|
|
|
32.7
|
%
|
|
|
|
* |
|
Less than 1% |
|
(a) |
|
Unless otherwise specified, the address of each beneficial owner
is
c/o Emisphere
Technologies, Inc., 240 Cedar Knolls Road, Suite 200,
Cedar Knolls, New Jersey 07927. |
|
(b) |
|
The number of shares set forth for each Director and Executive
Officer consists of direct and indirect ownership of shares,
including stock options, deferred common share units, restricted
stock and, in the case of Dr. Rachesky, shares of Common
Stock that can be obtained upon conversion of convertible notes
and exercise of warrants, as further described in footnote
(d) below. |
|
(c) |
|
Mr. Lubetkin served as Vice President, General Counsel and
Corporate Secretary from September 4, 2007 through
October 24, 2008. |
|
(d) |
|
This number consists of: |
|
|
|
|
|
4,670,660 Shares of Common Stock held for the accounts of
the following entities:
|
|
|
|
|
|
3,123,626 shares held for the account of MHR Capital
Partners Master Account LP (Master Account)
|
12
|
|
|
|
|
424,818 shares held for the account of MHR Capital Partners
(100) LP (Capital Partners (100))
|
|
|
|
317,369 shares held for the account of MHR Institutional
Partners II LP (Institutional Partners II)
|
|
|
|
799,549 shares held for the account of MHR Institutional
Partners IIA LP (Institutional Partners IIA)
|
|
|
|
5,298 shares held directly by Mark H. Rachesky, M.D.
|
|
|
|
|
|
5,612,929 shares of Common Stock that can be obtained by
the following entities upon conversion of the Convertible Notes,
including 250,333 shares of Common Stock issuable to the
following entities as payment for accrued but unpaid interest on
the Convertible Notes since the most recent interest payment
date (December 31, 2008) through the date that is
60 days after April 1, 2009:
|
|
|
|
|
|
1,130,262 shares held by Master Account
|
|
|
|
154,566 shares held by Capital Partners (100)
|
|
|
|
1,229,817 shares held by Institutional Partners II
|
|
|
|
3,098,284 shares held by Institutional Partners IIA
|
|
|
|
|
|
1,095,658 shares of Common Stock that can be obtained by
the following entities upon exercise of warrants:
|
|
|
|
|
|
836,896 held by Master Account
|
|
|
|
115,961 held by Capital Partners (100)
|
|
|
|
40,576 held by Institutional Partners II
|
|
|
|
102,225 held by Institutional Partners IIA
|
|
|
|
|
|
7,000 shares of Common Stock that can be obtained by
Dr. Rachesky upon the exercise of currently vested stock
options at a price of $3.76 per share
|
|
|
|
7,000 shares of Common Stock that can be obtained by
Dr. Rachesky upon the exercise of currently vested stock
options at a price of $3.79 per share
|
|
|
|
|
|
MHR Advisors LLC (Advisors) is the general partner
of each of Master Account and Capital Partners (100), and, in
such capacity, may be deemed to beneficially own the shares of
Common Stock held for the accounts of each of Master Account and
Capital Partners (100). MHR Institutional Advisors II LLC
(Institutional Advisors II) is the general partner
of each of Institutional Partners II and Institutional
Partners IIA, and, in such capacity, may be deemed to
beneficially own the shares of Common Stock held for the
accounts of each of Institutional Partners II and
Institutional Partners IIA. MHR Fund Management LLC
(Fund Management) is a Delaware limited
liability company that is an affiliate of and has an investment
management agreement with Master Account, Capital Partners
(100), Institutional Partners II and Institutional Partners
IIA, and other affiliated entities, pursuant to which it has the
power to vote or direct the vote and to dispose or to direct the
disposition of the shares of Common Stock reported herein and,
accordingly, Fund Management may be deemed to beneficially own
the shares of Common Stock reported herein which are held for
the account of each of Master Account, Capital Partners (100),
Institutional Partners II and Institutional Partners IIA.
Dr. Rachesky is the managing member of Advisors,
Institutional Advisors II, and Fund Management, and, in
such capacity, may be deemed to beneficially own the shares of
Common Stock held for the accounts of each of Master Account,
Capital Partners (100), Institutional Partners II and
Institutional Partners IIA. |
|
(e) |
|
This number consists of (i) 5,612,929 shares of Common
Stock that can be obtained by Master Account, Capital Partners
(100), Institutional Partners II and Institutional Partners
IIA upon conversion of the Convertible Notes,
(ii) 1,095,658 shares of Common Stock that can be
obtained by Master Account, Capital Partners (100),
Institutional Partners II and Institutional Partners IIA
upon exercise of warrants, and |
13
|
|
|
|
|
(iii) 14,000 share of Common Stock that can be
obtained by Dr. Rachesky upon the exercise of currently
vested stock options. |
|
(f) |
|
Howard M. Pack passed away on December 9, 2008. |
|
(g) |
|
Kenneth I. Moch was appointed to the Board of Directors on
December 23, 2008. |
|
(h) |
|
Dr. Stephen Carter resigned from the Board of Directors
effective April 30, 2009. |
|
(i) |
|
Franklin M. Berger was appointed to the Board of Directors on
May 15, 2009. |
Principal
Holders of Common Stock
The following table sets forth information regarding beneficial
owners of more than five (5%) percent of the outstanding shares
of Common Stock as of April 1, 2009:
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
Percent
|
|
Name and Address
|
|
Beneficially Owned
|
|
|
of Class(a)
|
|
|
Brandon Fradd
|
|
|
2,194,441(b
|
)
|
|
|
7.2
|
%
|
68 Jane Street
New York, NY 10014
|
|
|
|
|
|
|
|
|
Mark H. Rachesky, M.D.
|
|
|
11,393,247(c
|
)
|
|
|
30.7
|
%
|
40 West 57th Street, 24th Floor
New York, NY 10019
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Applicable percentage ownership is based on
30,341,078 shares of Common Stock outstanding as of
April 1, 2009. In computing the number of shares
beneficially owned by a person and the percentage ownership of
that person, shares of Common Stock subject to options, warrants
or convertible notes held by that person that are currently
exercisable or convertible into Common Stock or will become
exercisable or convertible into Common Stock within 60 days
after April 1, 2009 are deemed outstanding, while such
shares are not deemed outstanding for purposes of computing
percentage ownership of any other person. |
|
(b) |
|
Information based on Amendment Number 2 to
Schedule 13-G
filed with the SEC on February 17, 2009. |
|
(c) |
|
This number consists of: |
|
|
|
|
|
4,670,660 Shares of Common Stock held for the accounts of
the following entities:
|
|
|
|
|
|
3,123,626 shares held for the account of MHR Capital
Partners Master Account LP (Master Account)
|
|
|
|
424,818 shares held for the account of MHR Capital Partners
(100) LP (Capital Partners (100))
|
|
|
|
317,369 shares held for the account of MHR Institutional
Partners II LP (Institutional Partners II)
|
|
|
|
799,549 shares held for the account of MHR Institutional
Partners IIA LP (Institutional Partners IIA)
|
|
|
|
5,298 shares held directly by Mark H. Rachesky, M.D.
|
|
|
|
|
|
5,612,929 shares of Common Stock that can be obtained by
the following entities upon conversion of the Convertible Notes,
including 250,333 shares of Common Stock issuable to the
following entities as payment for accrued but unpaid interest on
the Convertible Notes since the most recent interest payment
date (December 31, 2008) through the date that is
60 days after April 1, 2009:
|
|
|
|
|
|
1,130,262 shares held by Master Account
|
|
|
|
154,566 shares held by Capital Partners (100)
|
|
|
|
1,229,817 shares held by Institutional Partners II
|
|
|
|
3,098,284 shares held by Institutional Partners IIA
|
14
|
|
|
|
|
1,095,658 shares of Common Stock that can be obtained by
the following entities upon exercise of warrants:
|
|
|
|
|
|
836,896 held by Master Account
|
|
|
|
115,961 held by Capital Partners (100)
|
|
|
|
40,576 held by Institutional Partners II
|
|
|
|
102,225 held by Institutional Partners IIA
|
|
|
|
|
|
7,000 shares of Common Stock that can be obtained by
Dr. Rachesky upon the exercise of currently vested stock
options at a price of $3.76 per share
|
|
|
|
7,000 shares of Common Stock that can be obtained by
Dr. Rachesky upon the exercise of currently vested stock
options at a price of $3.79 per share
|
15
COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee operates under a written charter
adopted by the Board of Directors. The Compensation Committee
charter can be found on our website at www.emisphere.com.
The contents of our website are not incorporated herein by
reference and the website address provided in this Proxy
Statement is intended to be an inactive textual reference only.
The Compensation Committee is responsible for the consideration
of stock plans, performance goals and incentive awards, and the
overall coverage and composition of the compensation
arrangements related to executive officers. The Compensation
Committee may delegate any of the foregoing duties and
responsibilities to a subcommittee of the Compensation Committee
consisting of not less than two members of the committee. The
Compensation Committee has the authority to retain, at the
expense of the Company, such outside counsel, experts and other
advisors as deemed appropriate to assist it in the full
performance of its functions. The Companys Chief Executive
Officer is involved in making recommendations to the
Compensation Committee for compensation of executive officers
(except for himself) as well as recommending compensation levels
for directors.
Our executive compensation program is administered by the
Compensation Committee of the Board of Directors. The
Compensation Committee, which is composed of non-employee
independent directors, is responsible for reviewing with Company
management and approving compensation policy and all forms of
compensation for executive officers and directors in light of
the Companys current business environment and the
Companys strategic objectives. In addition, the
Compensation Committee acts as the administrator of the
Companys stock option plans. The Compensation
Committees practices include reviewing and establishing
executive officers compensation to ensure that base pay
and incentive compensation are competitive to attract and retain
qualified executive officers, and to provide incentive systems
reflecting both financial and operating performance, as well as
an alignment with stockholder interests. These policies are
based on the principle that total compensation should serve to
attract and retain those executives critical to the overall
success of Emisphere and should reward executives for their
contributions to the enhancement of stockholder value.
The Compensation Committee has reviewed the Compensation
Discussion and Analysis presented herein under
Compensation Plans with the management of the
Company. Based on that review and discussion, the Compensation
Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in the
Form 10-K
and Proxy Statement of the Company.
The
Members of the Compensation Committee
Michael
Weiser, M.D., Ph.D. (Chairman)
Kenneth I. Moch
Mark H. Rachesky, M.D.
16
AUDIT
COMMITTEE REPORT
The Audit Committee operates under a written charter adopted by
the Board of Directors. The Audit Committee has reviewed the
relevant standards of the Sarbanes-Oxley Act of 2002, the rules
of the SEC, and the corporate governance listing standards of
the Nasdaq regarding committee policies. The committee intends
to further amend its charter, if necessary, as the applicable
rules and standards evolve to reflect any additional
requirements or changes. The updated Audit Committee charter can
be found on our website at www.emisphere.com. The
contents of our website are not incorporated herein by reference
and the website address provided in this Proxy Statement is
intended to be an inactive textual reference only.
The Audit Committee is currently comprised of John D.
Harkey, Jr., (chairman), Kenneth I. Moch and Michael
Weiser, M.D. Howard M. Pack served on the Audit Committee
until his death on December 9, 2008. All of the members of
the Audit Committee are independent within the meaning of
Rule 4200 of the Nasdaq. The Board of Directors has
determined that John D. Harkey, Jr. is an Audit
Committee financial expert, within the meaning of
Item 401(h) of
Regulation S-K.
Management has primary responsibility for the Companys
financial statements and the overall reporting process,
including the Companys system of internal control over
financial reporting. PricewaterhouseCoopers LLP
(PwC), the Companys independent registered
public accountants, audit the annual financial statements
prepared by management, express an opinion as to whether those
financial statements fairly present the consolidated financial
position, results of operations and cash flows of the Company
and its subsidiaries in conformity with accounting principles
generally accepted in the United States, and report on internal
control over financial reporting. PwC reports to the Audit
Committee as members of the Board of Directors and as
representatives of the Companys stockholders.
The Audit Committee meets with management periodically to
consider the adequacy of the Companys internal control
over financial reporting and the objectivity of its financial
reporting. The Audit Committee discusses these matters with the
appropriate Company financial personnel. In addition, the Audit
Committee has discussions with management concerning the process
used to support certifications by the Companys Chief
Executive Officer and Chief Financial Officer that are required
by the SEC and the Sarbanes-Oxley Act to accompany the
Companys periodic filings with the SEC.
On an as needed basis, the Audit Committee meets privately with
PwC. The Audit Committee also appoints the independent
registered public accounting firm, approves in advance their
engagements to perform audit and any non-audit services and the
fee for such services, and periodically reviews their
performance and independence from management. In addition, when
appropriate, the Audit Committee discusses with PwC plans for
the audit partner rotation required by the Sarbanes-Oxley Act.
Pursuant to its charter, the Audit Committee assists the board
in, among other things, monitoring and reviewing (i) our
financial statements, (ii) our compliance with legal and
regulatory requirements and (iii) the independence,
performance and oversight of our independent registered public
accounting firm. Under the Audit Committee charter, the Audit
Committee is required to make regular reports to the board.
During the 2008 Fiscal Year, the Audit Committee of the Board of
Directors reviewed and assessed:
|
|
|
|
|
the quality and integrity of the annual audited financial
statements with management, including issues relating to
accounting and auditing principles and practices, as well as the
adequacy of internal controls, and compliance with regulatory
and legal requirements;
|
|
|
|
the qualifications and independence of the independent
registered public accounting firm; and
|
|
|
|
managements, as well as the independent auditors,
analysis regarding financial reporting issues and judgments made
in connection with the preparation of our financial statements,
including those prepared quarterly and annually, prior to filing
our quarterly reports on
Form 10-Q
and annual report on
Form 10-K.
|
The Audit Committee has reviewed the audited financial
statements and has discussed them with both management and PwC,
the independent registered public accounting firm. The Audit
Committee has discussed
17
with the independent auditors matters required to be discussed
by the applicable Auditing Standards as periodically amended
(including significant accounting policies, alternative
accounting treatments and estimates, judgments and
uncertainties). In addition, the independent auditors provided
to the Audit Committee the written disclosures required by the
applicable requirements of the Public Company Accounting
Oversight Board regarding the independent auditors
communications with the Audit Committee concerning independence,
and the Audit Committee and the independent auditors have
discussed the auditors independence from the Company and
its management, including the matters in those written
disclosures. The Audit Committee also received reports from PwC
regarding all critical accounting policies and practices used by
the Company, any alternative treatments of financial information
used, generally accepted accounting principles that have been
discussed with management, ramifications of the use of
alternative treatments and the treatment preferred by PwC and
other material written communications between PwC and
management, including management letters and schedules of
adjusted differences.
In making its decision to select PwC as Emispheres
independent registered public accounting firm for 2009, the
Audit Committee considers whether the non-audit services
provided by PwC are compatible with maintaining the independence
of PwC.
Based upon the review and discussions referenced above, the
Audit Committee, as comprised at the time of the review and with
the assistance of the Companys Chief Financial Officer,
recommended to the Board of Directors that the audited financial
statements be included in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008 and be filed
with the SEC.
The
Members of the Audit Committee
John
D. Harkey, Jr. (Chairman)
Kenneth I. Moch
Michael Weiser, M.D.
18
INDEPENDENT
AUDITOR FEES
The following table presents fees for professional audit
services rendered by PricewaterhouseCoopers LLP
(PwC) for the audit of our annual financial
statements for the years ended December 31, 2008 and
December 31, 2007, and fees billed for other services
rendered by PwC during the respective periods.
|
|
|
|
|
|
|
|
|
Types of Fees
|
|
2008
|
|
|
2007
|
|
|
Audit Fees(1)
|
|
$
|
787,000
|
|
|
$
|
819,000
|
|
Audit-Related Fees
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees(2)
|
|
|
|
|
|
|
98,230
|
|
|
|
|
(1) |
|
Audit fees for 2008 and 2007 were for professional services
rendered for the audit of the Companys financial
statements for the fiscal year, including attestation services
required under Section 404 of the Sarbanes-Oxley Act of
2002, and reviews of the Companys quarterly financial
statements included in its
Form 10-Q
filings. |
|
(2) |
|
All other fees are for services related to our registration
statements on
Form S-3
and S-8 and
financing transactions during 2007. |
The Audit Committee has determined that the independent
registered public accounting firm did not provide non-audit
services in 2008 and that the registered public accounting
firms independence was not impaired. All decisions
regarding selection of independent registered public accounting
firms and approval of accounting services and fees are made by
our Audit Committee in accordance with the provisions of the
Sarbanes-Oxley Act of 2002 and related SEC rules.
The Audit Committee pre-approves all audit and permissible
non-audit services provided by the independent registered public
accounting firm; these services may include audit services,
audit related services, tax services and other services. The
committee has adopted a policy for the pre-approval of services
provided by the independent registered public accounting firm,
where pre-approval is generally provided for up to one year and
any pre-approval is detailed as to the particular service or
category of services and is subject to a specific budget. For
each proposed service, the independent auditor is required to
provide detailed communication at the time of approval. The
committee may delegate pre-approval authority to one or more of
its members, who must report same to the committee members at
the next meeting. The Audit Committee, after discussion with
PwC, agreed that any additional audit or tax service fees could
be paid by us, subject to the pre-approval of the Audit
Committee chairman.
The Audit Committee intends to select PwC to serve as
independent registered public accounting firm for the fiscal
year ending December 31, 2009. PwC has served as
Emispheres independent registered public accounting firm
since November 1991.
COMPENSATION
DISCUSSION AND ANALYSIS
Executive
Summary
The discussion that follows outlines the compensation awarded
to, earned by or paid to the named executive officers of the
Company including a review of the principal elements of
compensation, the objectives of the Companys compensation
program, what the program is designed to reward and why and how
each element of compensation is determined.
In general, the Company operates in a marketplace where
competition for talented executives is significant. The Company
is engaged in the long-term development of its technology and of
drug candidates, without the benefit of significant current
revenues, and therefore its operations require it to raise
capital in order to continue its activities. Our operations
entail special needs and risks and require that the Company
attempt to implement programs that promote strong individual and
group performance and retention of excellent employees. The
Companys compensation program for named executive officers
consists of cash
19
compensation as base salary, medical, basic life insurance, long
term disability, flexible spending accounts, paid time off, and
defined contribution retirement plans as well as long term
equity incentives offered through stock option plans. This
program is developed in part by benchmarking against other
companies in the biotechnology/pharmaceutical sectors, as well
as by the judgment and discretion of our Board.
Employee salaries are benchmarked against Radford survey
information. Radford is part of the Aon family brands. For more
than 30 years, Radford has been the leading provider of
compensation market intelligence to the high-tech and life
sciences industries. Radford emphasizes data integrity and
online access to data, tools and resources, as well as client
service geared towards life sciences. Radford includes more than
2,000 participating companies globally. Their services offer
full compensation consulting, reliable, current data analysis
and reporting, customized data for competitive insight, and web
access to data via the Radford Network.
Discussion
and Analysis
Objectives of the compensation and reward
program The biopharmaceutical marketplace is
highly competitive and includes companies with far greater
resources than ours. Our work involves the difficult,
unpredictable, and often slow development of our technology and
of drug candidates. Continuity of scientific knowledge,
management skills, and relationships are often critical success
factors to our business. The objectives of our compensation
program for named executive officers is to provide competitive
cash compensation, competitive health, welfare and defined
benefit retirement benefits as well as long-term equity
incentives that offer significant reward potential for the risks
assumed and for each individuals contribution to the
long-term performance of the Company. Individual performance is
measured against long-term strategic goals, short-term business
goals, scientific innovation, regulatory compliance, new
business development, development of employees, fostering of
teamwork and other Emisphere values designed to build a culture
of high performance. These policies and practices are based on
the principle that total compensation should serve to attract
and retain those executives critical to the overall success of
Emisphere and are designed to reward executives for their
contributions toward business performance that is designed to
build and enhance stockholder value.
Elements of compensation and how they are
determined The key elements of the executive
compensation package are base salary (as determined by the
competitive market and individual performance), the executive
long term disability plan and other health and welfare benefits
and long-term incentive compensation in the form of periodic
stock option grants. The base salary (excluding payment for
accrued but unused vacation) for the named executive officers
for 2008 ranged from $230,000 for its Vice President and Chief
Financial Officer to $550,000 for its President and Chief
Executive Officer. In determining the compensation for each
named executive officer, the Company generally considers
(i) data from outside studies and proxy materials regarding
compensation of executive officers at companies believed to be
comparable, (ii) the input of other directors and the
President and Chief Executive Officer (other than for his own
compensation) regarding individual performance of each named
executive officer and (iii) qualitative measures of
Emispheres performance, such as progress in the
development of the Companys technology, the engagement of
corporate partners for the commercial development and marketing
of products, effective corporate governance, fiscal
responsibility, the success of Emisphere in raising funds
necessary to conduct research and development, and the pace at
which the Company continues to advance its technologies in
various clinical trials. Our board of directors and Compensation
Committees consideration of these factors is subjective
and informal. However, in general, it has determined that the
compensation for executive officers should be competitive with
market data reflected within the 50th-75th percentile of
biotechnology companies for corresponding senior executive
positions. 2008 compensation levels were set in 2006 and were
based in part by information received from executive
compensation consultants, Pearl Myer and Partners, based in
New York, N.Y. Compensable factors benchmarked include
market capitalization, head count and location. While the
Company has occasionally paid cash bonuses in the past, there is
no consistent annual cash bonus plan for named executive
officers. When considering the compensation of the
Companys President and Chief Executive Officer, the
Company receives information and analysis prepared or secured by
the Companys outside executive compensation experts and
survey data prepared by human resources management personnel as
well as any additional outside information it may have available.
20
The compensation program also includes periodic awards of stock
options. The stock option element is considered a long-term
incentive that further aligns the interests of executives with
those of our stockholders and rewards long-term performance and
the element of risk. Stock option awards are made at the
discretion of the Board of Directors based on its subjective
assessment of the individual contribution of the executive to
the attainment of short and long-term Company goals, such as
collaborations with partners, attainment of successful
milestones under such collaborations and other corporate
developments which advance the progress of our technology and
drug candidates. Option grants, including unvested grants, for
our named executive officers range from 75,000 for our current
Vice President, Chief Financial Officer and Corporate Secretary;
Vice President of Non-Clinical Development and Applied Biology;
and Vice President, Strategy and Development, to 1,000,000 for
President and Chief Executive Officer as indicated in the
accompanying tables. The only stock option grants to named
executive officers in 2008 were made in connection retaining the
newly hired Vice President, Strategy and Development. With the
exception of grants made to the Companys President and
Chief Executive Officer (described in Transactions with Officers
and Directors), the Companys policy with respect to stock
options granted to executives is that grant prices should be
equal to the fair market value of the Common Stock on the date
of grant, that employee stock options should generally vest over
a four or five-year period and expire in ten years from date of
grant, and that options previously granted at exercise prices
higher than the current fair market value should not be
re-priced. Once performance bonuses or awards are issued, there
are currently no policies in place to reduce, restate or
otherwise adjust awards if the relevant performance measures on
which they are based are restated or adjusted. The Company has
no policy to require its named executive officers to hold any
specific equity interest in the Company. The Company does not
offer its named executive officers any nonqualified deferred
compensation, a defined benefit pension program or any post
retirement medical or other benefits.
Section 162(m) of the Internal Revenue Code of 1986, as
amended, provides that compensation in excess of $1,000,000 paid
to the Chief Executive Officer or to any of the other four most
highly compensated executive officers of a publicly held company
will not be deductible for federal income tax purposes, unless
such compensation is paid pursuant to one of the enumerated
exceptions set forth in Section 162(m). The Companys
primary objective in designing and administering its
compensation policies is to support and encourage the
achievement of the Companys long-term strategic goals and
to enhance stockholder value. In general, stock options granted
under the Companys 2000 and 2007 Stock Option Plans are
intended to qualify under and comply with the performance
based compensation exemption provided under
Section 162(m) thus excluding from the Section 162(m)
compensation limitation any income recognized by executives at
the time of exercise of such stock options. Because salary and
bonuses paid to our Chief Executive Officer and four most highly
compensated executive officers have been below the $1,000,000
threshold, the Compensation Committee has elected, at this time,
to retain discretion over bonus payments, rather than to ensure
that payments of salary and bonus in excess of $1,000,000 are
deductible. The Compensation Committee intends to review
periodically the potential impacts of Section 162(m) in
structuring and administering the Companys compensation
programs.
The Company has an employment contract with its current
President and Chief Executive Officer, Michael V. Novinski as
described under Transactions with Executive Officers and
Directors. Mr. Novinskis employment contract
called for compensation and specific benefits that were
negotiated at the time of execution, including expenses of an
automobile up to $1,500 per month and reimbursement for life
insurance up to $15,000 per year. These additional benefits are
not offered to the other named executive officers.
Mr. Novinskis contract also called for an annual cash
bonus up to $550,000 (based on a full calendar year). For 2008,
in view of the financial situation of the Company, the
Compensation Committee, with the consent of Mr. Novinski,
has agreed that no bonus will be paid to Mr. Novinski
pursuant to his employment agreement with the Company in respect
of the Companys 2008 fiscal year. In light of the
Companys current business environment and strategic
objectives, the Compensation Committee determined and
recommended to the Board of Directors, and on May 15, 2009
the Board of Directors granted to Mr. Novinski stock
options to purchase 300,000 shares Common Stock, at a
purchase price equal to the market price of the Common Stock on
the date of grant. Such options shall vest in three equal
installments on the date of grant, on December 31, 2009 and
on December 31, 2010. The Compensation Committee also
recommended and the Board of Directors approved that, subject to
the successful completion of a financing in 2009 where the
Company raises an
21
amount in excess of $8 million, a special one-time cash
bonus of $150,000 shall be paid to Mr. Novinski.
Mr. Novinskis Employment Contract allows for
severance payments to Mr. Novinski in the event of certain
terminations which call for payment of base salary plus bonus
(depending on the circumstances) plus the continuity of health
and life insurance benefits for specified time periods. In
addition, certain unvested options would vest immediately upon
such termination. The events which would trigger such payment by
the Company are defined in the agreement.
SUMMARY
COMPENSATION TABLE 2008 and 2007
The following table sets forth information regarding the
aggregate compensation Emisphere paid during 2008 and 2007 to
our Principal Executive Officer, our Principal Financial
Officer, and the two other highest paid Executive Officers, as
well as one other officer who would have been included had he
been employed at the end of 2008:
|
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|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Option
|
|
|
|
|
|
|
|
Name and Principal
|
|
|
|
|
Salary
|
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|
Bonus
|
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Stock
|
|
|
Awards
|
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All Other
|
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|
|
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Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
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Awards ($)
|
|
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($)(1)
|
|
|
Compensation($)
|
|
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Total ($)
|
|
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Michael V. Novinski,
|
|
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2008
|
|
|
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554,231
|
|
|
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357,123
|
(2)
|
|
|
|
|
|
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744,001
|
|
|
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18,000
|
(3)
|
|
|
1,673,355
|
|
President and CEO
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2007
|
|
|
|
359,615
|
|
|
|
|
|
|
|
|
|
|
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1,286,689
|
|
|
|
11,077
|
(3)
|
|
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1,657,381
|
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Michael R. Garone,
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2008
|
|
|
|
231,794
|
|
|
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|
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|
|
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|
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51,648
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|
|
|
|
|
|
|
283,417
|
|
VP, Chief Financial Officer and
Corporate Secretary(4)
|
|
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2007
|
|
|
|
78,731
|
|
|
|
|
|
|
|
|
|
|
|
21,530
|
|
|
|
|
|
|
|
100,261
|
|
M. Gary I. Riley DVM, Ph.D.,
|
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2008
|
|
|
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267,039
|
|
|
|
40,000
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(5)
|
|
|
|
|
|
|
85,786
|
|
|
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14,000
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(6)
|
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406,825
|
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VP of Non-Clinical Development
and Applied Biology(6)
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2007
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|
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40,769
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|
|
|
|
|
|
|
|
|
|
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14,283
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|
|
|
45,060
|
(6)
|
|
|
100,112
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Nicholas J. Hart,
|
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2008
|
|
|
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104,308
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|
|
|
16,872
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(8)
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|
|
|
|
|
|
16,261
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|
|
|
|
|
|
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137,441
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|
VP, Strategy and Development(7)
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|
|
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|
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|
|
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|
|
|
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|
|
|
|
|
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|
|
|
|
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|
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Paul Lubetkin,
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2008
|
|
|
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220,048
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|
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|
|
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|
|
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37,860
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|
|
|
|
|
|
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257,908
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|
Former VP, General Counsel and
Corporate Secretary(9)
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2007
|
|
|
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81,731
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|
|
|
|
|
|
|
|
|
|
|
18,679
|
|
|
|
20,833
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(10)
|
|
|
121,243
|
|
|
|
|
(1) |
|
The value listed in the above table represents the fair value of
the options recognized as expense under FAS 123R during
2008, including unvested options granted before 2007 and those
granted in 2008. Fair value is calculated as of the grant date
using a Black-Scholes-Merton (Black-Scholes)
option-pricing model. The determination of the fair value of
share-based payment awards made on the date of grant is affected
by our stock price as well as assumptions regarding a number of
complex and subjective variables. Our assumptions in determining
fair value are described in note 11 to our audited
financial statements for the year ended December 31, 2008,
included in our Annual Report on Form
10-K. |
|
(2) |
|
Mr. Novinski was paid a bonus in 2008 for performance in
2007 in accordance with the terms of his employment contract. |
|
(3) |
|
All other compensation for Mr. Novinski represents an
allowance for the use of a personal automobile in accordance
with the terms of his employment contract. |
|
(4) |
|
Mr. Garone was appointed Corporate Secretary effective
October 24, 2008. |
|
(5) |
|
In accordance with the terms of his employment contract,
Dr. Riley received a signing bonus, payable during 2008,
when he joined the Company. |
|
(6) |
|
All other compensation for Mr. Riley represents payments
for relocation expenses. |
|
(7) |
|
Mr. Hart accepted the position as Vice President, Strategy
and Development effective July 28, 2008. |
|
(8) |
|
Mr. Hart received a signing bonus when he joined the
Company. |
|
(9) |
|
Mr. Lubetkin served as Vice President, General Counsel and
Corporate Secretary from September 4, 2007 through
October 24, 2008. |
|
(10) |
|
All other compensation for Mr. Lubetkin represents payments
for relocation expenses. |
22
GRANTS OF
PLAN-BASED AWARDS 2008
The following table sets forth information regarding grants of
plan-based awards in 2008:
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|
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|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Exercise or
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Base Price of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Option
|
|
|
Grant Date
|
|
|
|
|
|
|
Underlying
|
|
|
Awards
|
|
|
Fair Value of
|
|
Name
|
|
Grant Date
|
|
|
Options(#)
|
|
|
($/Sh)
|
|
|
Option Awards
|
|
|
Nicholas J. Hart
|
|
|
7/14/2018
|
|
|
|
75,000
|
|
|
$
|
2.71
|
|
|
$
|
173,550
|
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2008
The following table sets forth information as to the number and
value of unexercised options held by the Executive Officers
named above as of December 31, 2008. There are no
outstanding stock awards with executive officers:
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|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
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Plan Awards:
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Securities
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Underlying
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Unexercised
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unearned
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Michael V.Novinski,
|
|
|
250,000
|
|
|
|
250,000
|
(1)
|
|
|
|
|
|
$
|
3.19
|
|
|
|
4/6/2017
|
|
President and CEO
|
|
|
250,000
|
|
|
|
250,000
|
(2)
|
|
|
|
|
|
$
|
6.38
|
|
|
|
4/6/2017
|
|
Michael R. Garone,
|
|
|
15,000
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
$
|
4.03
|
|
|
|
8/29/2017
|
|
VP, Chief Financial Officer and Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Gary I. Riley, DVM, Ph.D.
|
|
|
25,000
|
|
|
|
50,000
|
(4)
|
|
|
|
|
|
$
|
4.02
|
|
|
|
11/6/2017
|
|
VP of non-Clinical Development and Applied Biology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas J. Hart,
|
|
|
|
|
|
|
75,000
|
(5)
|
|
|
|
|
|
$
|
2.71
|
|
|
|
7/14/2018
|
|
Vice President, Strategy and Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul Lubetkin,
|
|
|
15,000
|
(6)
|
|
|
|
|
|
|
|
|
|
$
|
4.37
|
|
|
|
9/4/2017
|
|
Former VP, General Counsel and Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
125,000 exercisable on each 4/6/2009 and 4/6/2010, respectively |
|
(2) |
|
125,000 exercisable on each 4/6/2009 and 4/6/2010, respectively |
|
(3) |
|
15,000 exercisable on each 8/29/2009, 8/29/2010, 8/29/2011 and
8/29/2012, respectively |
|
(4) |
|
25,000 exercisable on each 11/6/2009 and 11/6/2010, respectively |
|
(5) |
|
15,000 exercisable on each 7/14/2009, 7/14/2010, 7/14/2011,
7/14/2012 and 7/14/2013, respectively |
|
(6) |
|
Mr. Lubetkin served as Vice President, General Counsel and
Corporate Secretary from September 4, 2007 through
October 24, 2008; the vested portion of his options award
expired January 22, 2009 in accordance with the terms of
the Plan. |
23
OPTION
EXERCISES AND STOCK VESTED 2008
There were no stock options exercised by Executive Officers
during 2008.
TRANSACTIONS
WITH EXECUTIVE OFFICERS AND DIRECTORS
Employment
Agreement with Michael V. Novinski, President and Chief
Executive Officer
On April 6, 2007, the Company entered into an Employment
Agreement with Michael V. Novinski, setting forth the terms and
conditions of his employment as President and Chief Executive of
the Company. The Agreement is for a term of three years,
renewable annually thereafter. Under the Agreement,
Mr. Novinski will receive a base salary of $550,000 per
year, less applicable local, state and federal withholding
taxes. Mr. Novinski was also granted options to purchase
1,000,000 shares of the Companys Common Stock; the
exercise price for 500,000 of the shares was $3.19, the fair
market value of the Common Stock on the date of grant, and the
exercise price for the remaining 500,000 shares is equal to
two times the fair market value of the Common Stock on the date
of grant. At December 31, 2008, options to purchase
500,000 shares are vested, another twenty-five percent
(250,000 shares) will vest on the second, and third
anniversaries of the date of grant respectively. In addition, he
will be eligible for an annual cash bonus up to $550,000 (based
on a full calendar year). For 2008, in view of the financial
situation of the Company, the Compensation Committee, with the
consent of Mr. Novinski, has agreed that no bonus will be
paid to Mr. Novinski pursuant to his employment agreement
with the Company in respect of the Companys 2008 fiscal
year. In light of the Companys current business
environment and strategic objectives, the Compensation Committee
determined and recommended to the Board of Directors, and on
May 15, 2009 the Board of Directors granted to
Mr. Novinski stock options to purchase 300,000 shares
Common Stock, at a purchase price equal to the market price of
the Common Stock on the date of grant. Such options shall vest
in three equal installments on the date of grant, on
December 31, 2009 and on December 31, 2010. The
Compensation Committee also recommended and the Board of
Directors approved that, subject to the successful completion of
a financing in 2009 where the Company raises an amount in excess
of $8 million, a special one-time cash bonus of $150,000
shall be paid to Mr. Novinski.
In addition, Mr. Novinskis Employment Agreement
provides that he will be provided (a) four weeks paid
vacation, a car allowance of $18,000 per year (up to $1,500 per
month), and reimbursement of up to $15,000 of life insurance
payments per year. If Emisphere terminates Mr. Novinski
without Cause or if Mr. Novinski terminates his employment
for Good Reason (each capitalized term as defined in the
Employment Agreement), subject to certain conditions,
Mr. Novinski will be entitled to (a) payment of salary
through the termination date, (b) payment of pro-rata bonus
based on the target bonus for the year of termination,
(c) payment equal to nine months of salary,
(d) acceleration of the next two scheduled vesting dates of
the above option grants, (all options will be accelerated in the
event of a Change in Control as defined in the Employment
Agreement), (e) continued participation in Emispheres
health benefit plan for up to 12 months, and
(f) payment of benefits or other amounts earned, accrued,
or owning under Emispheres plans or programs.
If Emisphere terminates Mr. Novinskis employment due
to Death or Long-Term Disability (each capitalized term as
defined in the Employment Agreement), subject to certain
conditions, Mr. Novinski will be entitled to
(a) payment of salary through the termination date,
(b) payment of pro-rata bonus based on the target bonus for
the year of termination, (c) acceleration of the scheduled
vesting dates of the above option grants, (d) continued
participation in Emispheres health benefit plan for up to
12 months, and (e) payment of benefits or other
amounts earned, accrued or owning under Emispheres plans
or programs.
Agreement
with M. Gary I. Riley, Vice President on Non-Clinical
Development and Applied Biology
The Company has an agreement with M. Gary I. Riley by which in
the event that there is a Change in Control during
executives first twenty four months (two years) of
employment at Emisphere resulting in termination of employment
during that twenty four month period, a severance amount,
equivalent to one years base salary (excluding bonus and
relocation assistance) will be provided to the executive. In the
event there is
24
a Change in Control after executives first twenty four
months of employment, a severance amount, equivalent to six
months base salary will be provided to him.
In addition, in the event that there is a Change in Control
during his employment at Emisphere resulting in termination of
employment, subject to approval by the Board of Directors, he
shall receive, in addition to the options already vested,
immediate vesting of all remaining options as set forth in the
Plan.
Agreement
with Nicholas J. Hart, Vice President, Strategy and
Development
The Company has an agreement with Nicholas J. Hart by which in
the event that there is a Change in Control during
executives term of employment at Emisphere resulting in
termination of employment, a severance amount, equivalent to six
months base salary (excluding bonus) will be provided to
the executive.
In addition, in the event that there is a Change in Control
during his employment at Emisphere resulting in termination of
employment, subject to approval by the Board of Directors, he
shall receive, in addition to the options already vested,
immediate vesting of all remaining options as set forth in the
Plan.
Employment
Agreement with Michael M. Goldberg, former President and Chief
Executive Officer
In April 2005, the Company entered into an amended and restated
employment agreement with its then Chief Executive Officer,
Dr. Michael M. Goldberg, for services through July 31,
2007. On January 16, 2007, the Board of Directors
terminated Dr. Goldbergs services. On April 26,
2007, the Board of Directors held a special hearing at which it
determined that Dr. Goldbergs termination was for
cause. On March 22, 2007, Dr. Goldberg, through his
counsel, filed a demand for arbitration asserting that his
termination was without cause and seeking $1,048,000 plus
attorneys fees, interest, arbitration costs and other
relief alleged to be owed to him in connection with his
employment agreement with the Company.
Dr. Goldbergs employment agreement provides, among
other things, that in the event he is terminated without cause,
Dr. Goldberg would be paid his base salary plus bonus, if
any, monthly for a severance period of eighteen months or, in
the event of a change of control, twenty-four months, and he
would also be entitled to continued health and life insurance
coverage during the severance period and all unvested stock
options and restricted stock awards would immediately vest in
full upon such termination. Dr. Goldbergs employment
agreement provided that in the event he is terminated with
cause, he will receive no additional compensation.
During the year ended December 31, 2007, the Company
accrued costs to settle this matter. No settlement has been
reached and the dispute continues. In February 2008, the Company
received $0.5 million as a result of a cancellation of a
split dollar life insurance policy on Dr. Goldberg.
Dr. Goldberg claimed approximately $0.2 million was
due him as a return of policy premium. In June 2008,
Dr. Goldberg commenced a separate lawsuit in the New York
State Supreme Court (New York County) claiming that the Company
breached his employment agreement by not remitting to
Dr. Goldberg that portion of the cash value of the life
insurance policy. On January 29, 2009, after transfer from
the New York State Supreme Court (New York County) to an
independent arbitrator, the Company received a finding from such
arbitrator awarding a partial summary judgment to
Dr. Goldberg for compensatory damages in an amount equal to
$240,101. The company paid Dr. Goldberg such amount on
February 5, 2009. All remaining claims were deferred by the
Arbitrator pending further proceedings between the parties. The
Company believes the remaining claims are without merit and will
vigorously defend itself against Dr. Goldbergs claims.
Agreements
with other former Officers
The Company had an agreement with Steven M. Dinh, formerly VP of
Research Technology and Development, by which in the event that
there is a Change in Control resulting in his
termination, or a material lessening in job responsibilities and
he elects to terminate his employment within 6 months after
such change, he shall receive, in addition to the options
already vested, (a) a lump sum amount equal to his annual
base salary at the time his employment ends, less applicable
taxes and deductions; (b) immediate vesting of all
remaining options as stipulated by the Plan; and (c) other
benefits earned by him in accordance with Emispheres
standard policies (i.e. accrued vacation). In addition, if
Mr. Dinh is terminated for any reason
25
other than cause, he will receive a lump sum amount equal to his
annual base salary at the time his employment ends, less
applicable taxes and deductions. Mr. Dinh was terminated on
August 31, 2007. Pursuant to an Agreement and General
Release, Mr. Dinh received severance pay of $10,397 from
September 3, 2007 through February 28, 2008, less
lawful deductions, a portion of medical insurance premiums paid
by Emisphere at same levels he had prior to separation, and
certain outplacement services. In addition, the vesting of
certain options granted to Mr. Dinh was accelerated to be
fully vested on August 31, 2007 and such options will
remain exercisable for the term of such grants.
The Company terminated Shepard Goldberg, Senior Vice President
of Operations as of June 8, 2007. Pursuant to an
Agreement and General Release, Mr. Goldberg received
severance pay of $10,496 bi-weekly from June 11,
2007-December 31,
2007, less lawful deductions, a portion of medical insurance
premiums paid by Emisphere at same levels he had prior to
separation, and certain outplacement services. In addition, the
vesting of certain options granted to Mr. Goldberg was
accelerated to be fully vested on June 8, 2007 and such
options will remain exercisable through March 30, 2008.
The Company terminated Lewis H. Bender, Chief Technology
Officer, as of December 7, 2007. Pursuant to an Agreement
and General Release, Mr. Bender received severance pay of
$13,677 bi-weekly from December 10, 2007-June 6, 2008,
less lawful deductions, a portion of medical insurance premiums
paid by Emisphere at same levels he had prior to separation, and
certain outplacement services. In addition, all of
Mr. Benders option agreements will continue in full
force and effect in accordance with their original terms.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the
Exchange Act), and the rules of the Securities and
Exchange Commission (the SEC) require our directors,
Executive Officers and persons who own more than 10% of Common
Stock to file reports of their ownership and changes in
ownership of Common Stock with the SEC. Our employees sometimes
prepare these reports on the basis of information obtained from
each director and Executive Officer. Based on written
representations of the Companys directors and Executive
Officers and on confirmation that no Form 5 was required to
be filed, we believe that all reports required by
Section 16(a) of the Exchange Act to be filed by its
directors, Executive Officers and greater than ten (10%) percent
owners during the last fiscal year were filed on time, with the
exception of a Form 3 filing made on behalf of Kenneth Moch
on May 19, 2009.
RELATED
PARTY TRANSACTION APPROVAL POLICY
In February 2007, our Board of Directors adopted a written
related party transaction approval policy, which sets forth our
Companys polices and procedures for the review, approval
or ratification of any transaction required to be reported in
our filings with the Securities and Exchange Commission. The
Companys policy with regard to related party transactions
is that all material transactions non-compensation related are
to be reviewed by the Audit Committee for any possible conflicts
of interest. The Compensation Committee will review all material
transactions that are related to compensation. All related party
transactions approved by either the Audit Committee or
Compensation Committee shall be disclosed to the Board of
Directors at the next meeting.
PROPOSAL 1:
ELECTION
OF DIRECTORS
(Item #1
on the Proxy Card)
Our Board of Directors is currently comprised of six
(6) members and is divided into three classes with
staggered terms so that the term of one class expires at each
annual meeting of stockholders.
Each of our Class I directors whose term is expiring at the
Annual Meeting has been nominated by the Board of Directors for
election at the Annual Meeting for a term expiring at the third
succeeding annual meeting of stockholders after his election and
until his successor is duly elected and qualified. At the
26
recommendation of our Governance and Nominating Committee,
Franklin M. Berger and John D. Harkey, Jr. have been
nominated for election.
The proxies given pursuant to this solicitation will be voted,
unless authority is withheld, in favor of the Director Nominees.
The Director Nominees have consented to be named and, if
elected, to serve. In the event that a Director Nominee is
unable or declines to serve as a director at the time of the
Annual Meeting, the proxies may be voted in the discretion of
the persons acting pursuant to the proxy for the election of
other nominees. Proxies cannot be voted for a greater number of
persons than the number of nominees named.
Voting
The Director Nominee receiving a plurality of the votes cast at
the Annual Meeting will be elected as a director.
The Board of Directors deems the election of Franklin M.
Berger and John D. Harkey, Jr. as directors for a term
expiring at the third succeeding annual meeting of stockholders
after their election (Class I Director) to be in the best
interest of Emisphere and its stockholders and recommends a vote
FOR his election.
Information
Concerning Director Nominee, Continuing Directors and Executive
Officers
Information regarding the Director Nominee, those directors
serving unexpired terms, and our current Executive Officers, all
of who are currently serving open-ended terms, including their
respective ages, the year in which each first joined the Company
and their principal occupations or employment during the past
five years, is provided below:
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Year
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Joined
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Name
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Age
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Emisphere
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Position with the Company
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Michael V. Novinski
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2007
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President and Chief Executive Officer, Class III Director
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Michael R. Garone
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2007
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Vice President, Chief Financial Officer and Corporate Secretary
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M. Gary I. Riley, DVM, Ph.D.
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2007
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Vice President of Non-Clinical Development and Applied Biology
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Franklin M. Berger, C.F.A.
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2009
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Class I Director
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John D. Harkey, Jr.
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2006
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Class I Director
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Kenneth I. Moch
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2008
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Class II Director
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Mark H. Rachesky, M.D.
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2005
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Class III Director
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Michael Weiser, M.D.
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2005
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Class III Director
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Michael V. Novinski joined Emisphere in 2007 as President
and Chief Executive Officer. Mr. Novinski has been a
Director of the Company since 2008. Immediately before joining
the Company, Mr. Novinski was President and a member of the
Board of Directors of Organon USA Inc., a business unit of
Organon BioSciences Inc. Mr. Novinski served as
Organons Director of Marketing beginning in 1992 and held
several senior executive positions within Organon BioSciences
prior to becoming President of Organon USA in 2003.
Mr. Novinski earned a Bachelors degree with a major
in Biology from Washington and Jefferson College in Washington,
PA. He also studied under fellowship at the University of
Pittsburgh Medical School, Department of Microbiology.
Michael R. Garone joined Emisphere in 2007 as Vice
President and Chief Financial Officer. Mr. Garone has also
served as the Companys Corporate Secretary since October
2008. Mr. Garone previously served as Interim Chief
Executive Officer and Chief Financial Officer of Astralis, Ltd.
(OTC BB: ASTR.OB) Mr. Garone spent 20 years at
AT&T (NYSE: T), where he held several positions, including
Chief Financial Officer of AT&T Alascom. Mr. Garone
received a MBA from Columbia University and a BA in Mathematics
from Colgate University, Hamilton, NY.
27
M. Gary I. Riley DVM, Ph.D. joined Emisphere in
November 2007 as Vice-President of Nonclinical Development and
Applied Biology. He was previously Vice President of Toxicology
and Applied Biology at Alkermes, Inc., Cambridge, MA, where he
spent 14 years working in the field of specialized drug
delivery systems. He holds board certifications in veterinary
pathology and toxicology. He was previously employed as Director
of Pathobiology at Lederle Laboratories and earlier in his
career held positions as a veterinary pathologist in academia
and industry.
Franklin M. Berger, C.F.A. has served as a director of
the Company since May 2009. Mr. Berger is a biotechnology
industry consultant with over 25 years of experience in
capital markets and financial analysis. He served most recently
as Senior Investment Manager at Sectoral Asset Management from
May 2007 through June 2008. Previously, he was Senior Managing
Director, Equity Research and Senior Biotechnology Analyst at
J.P. Morgan Securities, Inc. from May 1998 to March 2003.
In this position, he initiated team coverage of 26 biotechnology
companies and was responsible for technical, scientific and
clinical due diligence as well as company selection. Previously,
Mr. Berger served in similar capacities at Salomon Smith
Barney and Josephthal & Co. Mr. Berger holds an
M.B.A. from the Harvard Graduate School of Business
Administration and an M.A. in International Economics and a B.A.
in International Relations both from Johns Hopkins University.
Mr. Berger also serves on the Board of Director of Seattle
Genetics, Inc. (NASDAQ: SGEN), VaxGen, Inc. (OTCBB: VXGN),
Isotechnika, Inc. (ISTKF) and Thallion Pharmaceuticals, Inc..
John D. Harkey, Jr. has been a Director of the
Company since 2006. Mr. Harkey is Chairman and Chief
Executive Officer of Consolidated Restaurant Companies, Inc.,
which owns, operates and franchises full-service restaurants in
the U.S., the Middle East and the United Kingdom.
Mr. Harkey obtained a B.B.A. from the Business Honors
Program at the University of Texas at Austin. He earned an M.B.A
from Stanford University School of Business and a J.D. from the
University of Texas School of Law. Mr. Harkey also serves
on the Board of Directors of Leap Wireless International, Inc.
(NASDAQ:LEAP), Energy Transfer companies (NYSE:ETE and ETP),
Loral Space & Communications, Inc. (NASDAQ:LORL) and
the Baylor Health Care System Foundation. Mr. Harkey also
serves on the Executive Board of Circle Ten Council of the Boy
Scouts of America and is a member of the Young Presidents
Organization
Kenneth I. Moch has served as a Director of the Company
since December 2008. Mr. Moch is the President &
CEO of BioMedical Enterprises, Inc., a medical device company
which markets orthopaedic memory metal implants. He is also is
the Founder and President of Euclidean Life Science Advisors,
which provides strategic advisory services to life sciences
companies. He is a former Managing Director, Healthcare
Investment Banking, of ThinkEquity Partners, an investment bank
focusing on high-growth companies, and former Chairman,
President and Chief Executive Officer of Alteon, a biotech
company specializing in small molecule therapeutics for
cardiovascular aging and diabetic complications. He previously
served as President and Chief Executive Officer of Biocyte
Corporation, the cellular therapy company that pioneered the
collection and commercial application of cord blood stem cells
in transplantation and cellular therapy. Mr. Moch holds a
degree in biochemistry from Princeton University and received
his MBA from the Stanford Graduate School of Business.
Mr. Moch also serves on the Board of Directors of M2Gen, a
joint venture between Merck & Company and the Moffitt
Cancer Center, and Virgin Health Bank QSTP.
Mark H. Rachesky, M.D. has been a Director of the
Company since 2005. Dr. Rachesky is the co-founder and
President of MHR Fund Management LLC and affiliates,
investment managers of various private investment funds that
invest in inefficient market sectors, including special
situation equities and distressed investments. From 1990 through
June 1996, Dr. Rachesky was employed by Carl C. Icahn,
initially as a senior investment officer and for the last three
years as sole Managing Director of Icahn Holding Corporation,
and acting chief investment advisor. Dr. Rachesky is a
graduate of Stanford University School of Medicine and Stanford
University School of Business. Dr. Rachesky graduated from
the University of Pennsylvania with a major in Molecular Aspects
of Cancer. Dr. Rachesky is currently the Non-Executive
Chairman of the Board of Loral Space & Communications,
Inc. (NASDAQ:LORL), Telesat Canada and Leap Wireless
International, Inc. (NASDAQ: LEAP) and is a member of the Board
of Directors of Nations Health, Inc. (NASDAQ: NHRX).
Michael Weiser, M.D., Ph.D. has been a Director
of the Company since 2005. Dr. Weiser is the founder and
co-chairman at Actin Biomed, a healthcare investment firm.
Before joining Actin, Dr. Weiser was the
28
Director of Research of Paramount BioCapital, Inc.
Dr. Weiser completed his Ph.D. in Molecular Neurobiology at
Cornell University Medical College and received his M.D. from
New York University School of Medicine, where he also completed
a Postdoctoral Fellowship in the Department of Physiology and
Neuroscience. Dr. Weiser serves on the boards of Manhattan
Pharmaceuticals, Inc. (OTCBB: MHA), Hana Biosciences, Inc.
(AMEX: HNAB), Chelsea Therapeutics International Ltd. (NASDAQ:
CHTP), Ziopharm Oncology, Inc. (NASDAQ: ZIOP), VioQuest
Pharmaceuticals, Inc. (OTCBB: VQPH) and several privately-held
biotechnology companies.
PROPOSALS OF
STOCKHOLDERS FOR 2010 ANNUAL MEETING
Stockholders may submit proposals on matters appropriate for
stockholder action at our annual stockholder meetings. To be
considered for inclusion in next years proxy statement,
stockholder proposals must be received by us at our principal
executive office no later than January 29, 2010.
For any proposal that is not submitted for inclusion in next
years proxy statement (as described in the preceding
paragraph), but is instead sought to be presented directly at
next years annual stockholder meeting (the 2010
Annual Meeting), the stockholder must also give Emisphere
written notice of the proposal. Our By-Laws provide that in
order to be timely, a stockholders notice must be received
by Emisphere at the principal executive offices not less than
30 days or more than 60 days prior to the meeting.
Notice of intention to present proposals at the 2010 Annual
Meeting should be addressed to: Corporate Secretary, Emisphere
Technologies, Inc., 240 Cedar Knolls Road, Suite 200, Cedar
Knolls, NJ 07927.
OTHER
BUSINESS
The Board of Directors knows of no other business to be acted
upon at the meeting. However, if any other business properly
comes before the meeting, it is the intention of the persons
named in the enclosed proxy to vote on such matters in their
discretion.
The prompt return of your proxy will be appreciated and helpful
in obtaining the necessary vote. Therefore, whether or not you
intend to attend the meeting, please vote your shares by
internet, by phone, or by signing the proxy and returning it in
the enclosed envelope.
By order of the Board of Directors
Michael R. Garone
Secretary
29
VOTE BY INTERNET www.proxyvote.com |
Use the Internet to transmit your voting instructions and for electronic delivery of
information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have
your proxy ATTN: INVESTOR RELATIONS card in hand when you access the web site and follow the
instructions to obtain your records and to create an electronic 240 CEDAR KNOLLS ROAD voting
instruction form. |
SUITE 200
CEDAR KNOLLS, NJ 07927 VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 PM Eastern Time
the day before the cut-off date or meeting date. Have your proxy card in hand when you call and
then follow the instructions.
VOTE BY MAIL
Mark, sign, and date your proxy card and return it in the Postage-paid envelope we have provided.
The Internet and Telephone voting facilities will close at 11:59 PM Eastern Time on Tuesday, June
23, 2009.
IF YOU HAVE VOTED OVER THE INTERNET OR BY TELEPHONE, THERE IS NO NEED FOR YOU TO MAIL BACK YOUR
PROXY.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M14779-TBD KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
EMISPHERE TECHNOLOGIES, INC. For Withhold For All To withhold authority to vote for any individual
All All Except nominee(s), mark For All Except and write the number(s) of the nominee(s) on the
line below.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ALL THE ITEMS LISTED BELOW 0 0 0
1. Election of Directors
Nominees:
01) Mr. Franklin M. Berger 02) Mr. John D. Harkey, Jr.
Vote on Proposal
2. The transaction of such other business as may properly come before the meeting or any
adjournment or postponement thereof.
Please sign below, exactly as name or names appear(s) on this proxy. When signing as attorney,
executor, administrator, trustee, custodian, guardian or corporate officer, give full title. If
more than one trustee, all should sign.
Please indicate if you plan to attend this meeting. 0 0
Yes No
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement/Annual Report Combo is available at www.proxyvote.com.
240 CEDAR KNOLLS ROAD
SUITE 200 CEDAR KNOLLS, NJ 07927
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Emisphere Technologies, Inc., a Delaware corporation (Emisphere),
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders (Annual Meeting) and
Proxy Statement with respect to the Annual Meeting to be held at the Park Avenue Club, 184 Park
Avenue, Florham Park, New Jersey on Wednesday, June 24, 2009 promptly at 10:00 AM Eastern Time, and
hereby appoints Mike Garone as proxy with power of substitution and revocation, and with all powers
that the undersigned would possess if personally present, to vote the Emisphere Common Stock of the
undersigned at such meeting, and at any postponements or adjournments of such meeting, as set forth
below, and in his discretion, upon any other business that may properly come before the meeting
(and any such postponements or adjournments).
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, FOR PROPOSAL 1, AND BY THE
DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING, AND AT ANY
POSTPONEMENTS OR ADJOURNMENTS THEREOF.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE, OR VOTE
THROUGH THE INTERNET OR THE TELEPHONE.
IMPORTANT TO BE SIGNED AND DATED ON REVERSE SIDE |