<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Cor Therapeutics, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Registrant intends to file the definitive proxy statement and release the
proxy statement to security holders on or about April 27th, 2000.
<PAGE>
COR THERAPEUTICS, INC.
256 East Grand Avenue
South San Francisco, CA 94080
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2000
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TO THE STOCKHOLDERS OF COR THERAPEUTICS, INC.:
Notice Is Hereby Given that the Annual Meeting of Stockholders of COR
Therapeutics, Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, May 23, 2000 at 9:00 a.m. local time at the Embassy Suites Hotel, 250
Gateway Boulevard, South San Francisco, California for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve an amendment to the Company's 1991 Equity Incentive Plan
to increase the aggregate number of shares of Common Stock authorized for
issuance under the plan by 900,000 shares.
3. To approve an amendment to the Company's Certificate of Incorporation
to increase the aggregate number of shares of Common Stock authorized for
issuance by 80,000,000 shares.
4. To ratify the selection of Ernst & Young LLP as independent auditors
of the Company for its fiscal year ending December 31, 2000.
5. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on Monday, March 27,
2000, as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ Patrick A. Broderick
Secretary
South San Francisco, California
April 17, 2000
All stockholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, please complete, date, sign
and return the enclosed proxy as promptly as possible in order to ensure your
representation at the meeting. A return envelope (which is postage prepaid if
mailed in the United States) is enclosed for that purpose. Even if you have
given your proxy, you may still vote in person if you attend the meeting.
Please note, however, that if your shares are held of record by a broker, bank
or other nominee and you wish to vote at the meeting, you must obtain from the
record holder a proxy issued in your name.
<PAGE>
COR THERAPEUTICS, INC.
256 East Grand Avenue
South San Francisco, CA 94080
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PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of COR Therapeutics, Inc., a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders to be held on Tuesday, May 23,
2000, at 9:00 a.m. local time (the "Annual Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting. The Annual Meeting will be held at the
Embassy Suites Hotel, 250 Gateway Boulevard, South San Francisco, California.
The Company intends to mail this proxy statement and accompanying proxy card
on or about April 17, 2000, to all stockholders entitled to vote at the Annual
Meeting.
Solicitation
The Company will bear the entire cost of solicitation of proxies including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of the Company's
common stock ("Common Stock") beneficially owned by others to forward to such
beneficial owners. The Company may reimburse persons representing beneficial
owners of Common Stock for their costs of forwarding solicitation materials to
such beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, facsimile or personal solicitation by directors,
officers, other employees of the Company or, at the Company's request, D.F.
King & Co. No additional compensation will be paid to directors, officers or
other employees for such services, but D.F. King & Co. will be paid its
customary fee, estimated to be approximately $4,000, if it renders
solicitation services.
Voting Rights and Outstanding Shares
Only holders of record of Common Stock at the close of business on Monday,
March 27, 2000 (the "Record Date") will be entitled to notice of and to vote
at the Annual Meeting. At the close of business on the Record Date, the
Company had outstanding and entitled to vote 26,409,092 shares of Common
Stock.
Each holder of record of Common Stock on such date will be entitled to one
vote for each share held on all matters to be voted upon at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter
has been approved.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 256 East
Grand Avenue, South San Francisco, California 94080, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
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Stockholder Proposals
Proposals of stockholders that are intended to be presented at the
Company's annual meeting of stockholders to be held in the year 2001 must be
received by the Company no later than December 18, 2000 in order to be
included in the proxy statement and proxy relating to that annual meeting
pursuant to Rule 14-a-8 of the Securities and Exchange Commission (the "SEC").
Unless a stockholder who wishes to bring a matter before the stockholders of
the Company' annual meeting of stockholders to be held in the year 2001
notifies the Company of such matter prior to March 3, 2001, management will
have discretionary authority to vote all shares for which it has proxies in
opposition to such matter.
PROPOSAL 1
ELECTION OF DIRECTORS
In March 2000, the Board, pursuant to authority granted under the Company's
Restated Bylaws ("Bylaws"), set the number of Board positions at six,
effective May 23, 2000. There are six nominees for the six Board positions
presently authorized by the Board pursuant to the Bylaws. Each director to be
elected will hold office until the next annual meeting of stockholders and
until his successor is elected and has qualified, or until such director's
earlier death, resignation or removal. Each of the nominees listed below is
currently a director of the Company, all having been previously elected by the
stockholders.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the six nominees named below. In the
event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected, and management has no reason to
believe that any nominee will be unable to serve.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
Nominees
The names of the nominees and certain information about them are set forth
below:
<TABLE>
<CAPTION>
Principal Occupation/
Name Age Position Held with the Company
---- --- ------------------------------
<C> <C> <S>
Vaughn M. Kailian................. 55 President and Chief Executive Officer
Shaun R. Coughlin, M.D., Ph.D. ... 45 Professor of Medicine and Cellular and
Molecular Pharmacology, University of
California, San Francisco
James T. Doluisio, Ph.D.(1)....... 64 Hoechst-Roussel Professor of Pharmacy,
University of Texas at Austin
Charles J. Homcy, M.D. ........... 51 Executive Vice President, Research and
Development
Jerry T. Jackson(1)(2)............ 58 Retired Executive Vice President, Merck
& Co., Inc.
Ernest Mario, Ph.D.(2)............ 61 Chairman and Chief Executive Officer,
ALZA Corporation
</TABLE>
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(1) Member of the Audit Committee
(2) Member of the Compensation Committee
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Vaughn M. Kailian has served as President, Chief Executive Officer and a
director of the Company since March 1990. From 1967 to 1990, Mr. Kailian was
employed by Marion Merrell Dow, Inc., a pharmaceutical company, and its
predecessor companies in various U. S. and international general management,
product development, marketing and sales positions. Mr. Kailian is also a
director of Amylin Pharmaceuticals and Axys Pharmaceuticals, Inc. as well as
the Biotechnology Industry Organization and the California Healthcare
Institute.
Shaun R. Coughlin, M.D., Ph.D., has served as a director of the Company
since September 1994. Dr. Coughlin is a Professor of Medicine and Cellular and
Molecular Pharmacology at the University of California, San Francisco
("UCSF"), and Director of the Cardiovascular Research Institute at UCSF, where
he was an Associate Professor of Medicine from 1992 through 1996. Dr. Coughlin
acted as a consultant to the Company from its inception to March 1, 1999. Dr.
Coughlin is also a member of the editorial boards of Trends in Cardiovascular
Medicine, Molecular Medicine and Journal of Clinical Investigation.
James T. Doluisio, Ph.D., has served as a director of the Company since
January 1994. Dr. Doluisio is the Hoechst-Roussel Professor of Pharmacy at the
University of Texas at Austin. From 1973 to 1998, he was Dean of Pharmacy at
the University of Texas at Austin. From 1990 to 1995, Dr. Doluisio served as
Chairman of the United States Pharmacopeial Convention Board of Trustees. From
1967 to 1973, Dr. Doluisio was Professor and Assistant Dean of the College of
Pharmacy at the University of Kentucky.
Charles J. Homcy, M.D., has been a director of the Company since January
1998 and has served as Executive Vice President, Research and Development of
the Company since March 1995. Since 1997, Dr. Homcy has been Clinical
Professor of Medicine at the University of California, San Francisco Medical
School and Attending Physician at the San Francisco VA Hospital. From 1994
until he joined the Company, Dr. Homcy was President of the Medical Research
Division of American Cyanamid Company-Lederle Laboratories, a pharmaceutical
company (now a division of Wyeth-Ayerst Laboratories). From 1990 until 1994,
Dr. Homcy was Executive Director of the Cardiovascular and Central Nervous
System Research Section at Lederle Laboratories, a pharmaceutical company.
From 1991 to 1995, Dr. Homcy also served as an attending physician at The
Presbyterian Hospital, College of Physicians and Surgeons, at Columbia
University in New York. From 1979 to 1990, he was an attending physician at
Massachusetts General Hospital and an Associate Professor of Medicine at
Harvard Medical School.
Jerry T. Jackson has served as a director of the Company since March 1995.
Mr. Jackson was employed by Merck & Co., Inc., a pharmaceutical company
("Merck"), from 1965 until his retirement in 1995. From 1993 until his
retirement, he served as Executive Vice President of Merck. During this time,
he had responsibility for Merck's International Human Health, Worldwide Human
Vaccines, the AgVet Division, Astra/Merck U. S. Operations, as well as
worldwide marketing. During 1993, he also was President of Merck's Worldwide
Human Health Division. Mr. Jackson served as Senior Vice President of Merck
from 1991 to 1992 and previously was President of Merck Sharp & Dohme
International. Mr. Jackson is also a director of Alexion Pharmaceuticals,
Inc., Crescendo Pharmaceuticals Corporation, and Molecular Biosystems, Inc.
Ernest Mario, Ph.D., has served as a director of the Company since
September 1995. Dr. Mario served as Co-Chairman and Chief Executive Officer of
ALZA Corporation from July 1993 to November 1997 at which time he was
appointed Chairman and Chief Executive Officer. From 1989 to 1993, he was
Deputy Chairman and Chief Executive of Glaxo Holdings in London. Prior to
1989, Dr. Mario served as Chief Executive of Glaxo, Inc. in the United States.
Dr. Mario is also non-executive chairman of Pharmaceutical Product
Development, Inc. and a director of Catalytica Inc. and SonoSite, Inc.
Changes in Board of Directors
Robert Momsen, who has served on the Company's Board since April 1989, and
Lloyd Hollingsworth Smith, Jr., who has served on the Company's Board since
January 1993, separately notified the Board that they would be retiring as
Board members at the end of their current term effective May 23, 2000. The
Company has accepted the resignations of these two Board members. In March
2000, the Board, pursuant to authority granted under the Bylaws, set the
number of Board positions at six effective May 23, 2000.
3
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Board Committees and Meetings
During the fiscal year ended December 31, 1999, the Board held six
meetings. The Board has an Audit Committee and a Compensation Committee.
The Audit Committee meets with the Company's independent auditors at least
annually to review the results of the annual audit and discuss the financial
statements; recommends to the Board the independent auditors to be retained;
and receives and considers the auditors' comments as to financial controls,
adequacy of staff, and management performance and procedures in connection
with the annual audit and financial controls. During fiscal 1999, the Audit
Committee, composed of Dr. Doluisio and Messrs. Jackson and Momsen, held one
meeting.
The Compensation Committee makes recommendations to the Board concerning
salaries and incentive compensation, stock option grants and stock awards to
executive officers, employees and consultants under the Company's stock option
and award plans and otherwise determines compensation levels, and performs
such other functions regarding compensation as the Board may delegate. The
Compensation Committee, composed of Messrs. Jackson and Momsen and Dr. Mario,
held six meetings during fiscal 1999.
During the fiscal year ended December 31, 1999, each director attended at
least 75% of the aggregate of the meetings of the Board and of the committees
on which he served, held during the period for which he was a director or
committee member, respectively.
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE 1991 EQUITY INCENTIVE PLAN
In May 1991, the Board adopted, and the stockholders subsequently approved,
the Company's 1991 Equity Incentive Plan (the "1991 Plan"). In January 2000,
there were 244,418 shares of Common Stock available for grant under the 1991
Plan.
In January 2000, the Board amended the 1991 Plan, subject to stockholder
approval, to increase by 900,000 the number of shares of Common Stock
authorized for issuance under the 1991 Plan. As a result of a series of
amendments (including the 900,000 shares now proposed for stockholder
approval), a total of 5,700,000 shares have been reserved for issuance under
the 1991 Plan. The Board adopted this amendment in order to ensure that the
Company can continue to grant stock options and other stock awards at levels
determined appropriate by the Board.
Stockholders are requested in this Proposal 2 to approve the amendment to
the 1991 Plan to increase the shares available for issuance under the 1991
Plan by 900,000 shares. The affirmative vote of the holders of a majority of
the shares present in person or represented by proxy and entitled to vote at
the meeting will be required to approve the amendment to the 1991 Plan.
Abstentions will be counted toward the tabulation of votes cast on the
proposal and will have the same effect as negative votes. Broker non-votes are
counted towards a quorum, but are not counted for any purpose in determining
whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
The essential features of the 1991 Plan are outlined below.
General
The 1991 Plan provides for the grant of incentive stock options,
nonstatutory stock options, stock bonuses, and restricted stock purchase
awards (collectively "awards"). Incentive stock options granted under the 1991
Plan are intended to qualify as "incentive stock options" within the meaning
of Section 422 of the Internal
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Revenue Code ("Code"). Nonstatutory stock options granted under the 1991 Plan
are not intended to qualify as incentive stock options under the Code. See
"Federal Income Tax Information" for a discussion of the tax treatment of
awards. To date, the Company has granted incentive stock options, nonstatutory
stock options, and stock bonuses under the 1991 Plan.
Purpose
The Board adopted the 1991 Plan to provide a means by which employees,
directors and consultants of the Company and its affiliates may be given an
opportunity to purchase stock in the Company, to assist in retaining the
services of such persons, to secure and retain the services of persons capable
of filling such positions, and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its affiliates. All of the
approximately 320 employees, the directors, and consultants of the Company and
its affiliates are eligible to participate in the 1991 Plan.
Administration
Subject to the provisions of the 1991 Plan, the Board has the power to
construe and interpret the 1991 Plan and to determine the persons to whom and
the dates on which awards will be granted, the number of shares of Common
Stock to be subject to each award, the time or times during the term of each
award within which all or a portion of such award may be exercised, the
exercise price, the type of consideration, and other terms of the award.
The Board administers the 1991 Plan. The Board has the power to delegate
administration of the 1991 Plan to a committee composed of not fewer than two
members of the Board. In the discretion of the Board, a committee may consist
solely of two or more outside directors in accordance with Section 162(m) of
the Code or solely of two or more non-employee directors in accordance with
Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As used herein with respect to the 1991 Plan, the "Board" refers to any
committee the Board appoints as well as to the Board itself.
The regulations under Section 162(m) of the Code require that the directors
who serve as members of the committee administering the 1991 Plan must be
"outside directors." The 1991 Plan provides that, in the Board's discretion,
directors serving on the committee administering the 1991 Plan may be "outside
directors" within the meaning of Section 162(m). This limitation would exclude
from the committee directors who are:
. current employees of the Company or an affiliate,
. former employees of the Company or an affiliate receiving compensation
for past services (other than benefits under a tax-qualified pension
plan),
. current and former officers of the Company or an affiliate,
. directors currently receiving direct or indirect remuneration from the
Company or an affiliate in any capacity (other than as a director), and
. any other person who is otherwise not considered an "outside director"
for purposes of Section 162(m).
The definition of an "outside director" under Section 162(m) is generally
narrower than the definition of a "non-employee director" under Rule 16b-3 of
the Exchange Act. See also "Federal Income Tax Information."
Eligibility
The Board may grant incentive stock options under the 1991 Plan only to
employees (including officers) of the Company and its affiliates. Employees
(including officers), directors, and consultants of both the Company and its
affiliates are eligible to receive all other types of awards under the 1991
Plan.
5
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The Board may not grant an incentive stock option under the 1991 Plan to
any person who, at the time of the grant, owns (or is deemed to own) stock
possessing more than 10% of the total combined voting power of the Company or
any affiliate of the Company, unless the exercise price is at least 110% of
the fair market value of the stock subject to the option on the date of grant
and the term of the option does not exceed five years from the date of grant.
In addition, the aggregate fair market value, determined at the time of grant,
of the shares of Common Stock with respect to which incentive stock options
are exercisable for the first time by a participant during any calendar year
(under the 1991 Plan and all other such plans of the Company and its
affiliates) may not exceed $100,000.
No person is eligible to receive awards under the 1991 Plan for more than
500,000 shares of Common Stock during any calendar year ("Section 162(m)
Limitation").
Stock Subject to the 1991 Plan
Subject to this Proposal, the Board has reserved an aggregate of 5,700,000
shares of Common Stock for issuance under the 1991 Plan. If awards granted
under the 1991 Plan expire or otherwise terminate without being exercised, the
shares of Common Stock not acquired pursuant to such awards again become
available for issuance under the 1991 Plan. If the Company reacquires unvested
stock issued under the 1991 Plan pursuant to any repurchase right reserved by
the Company, the reacquired stock will not again become available for
reissuance under the 1991 Plan. See "Terms of Options--Option Exercise" and
"Terms of Stock Bonuses and Purchases of Restricted Stock."
Terms of Options
The following is a description of the permissible terms of options under
the 1991 Plan. Individual option grants may be more restrictive as to any or
all of the permissible terms described below.
Exercise Price; Payment. The exercise price of incentive stock options may
not be less than 100% of the fair market value of the stock subject to the
option on the date of the grant and, in some cases (see "Eligibility" above),
may not be less than 110% of such fair market value. Likewise, the exercise
price of nonstatutory options may not be less than 100% of the fair market
value of the stock on the date of grant. If options were granted with exercise
prices below market value, deductions for compensation attributable to the
exercise of such options could be limited by Section 162(m) of the Code. See
"Federal Income Tax Information." As of March 1, 2000, the closing price of
the Company's Common Stock as reported on the Nasdaq National Market System
was $93.41 per share.
The participant must pay the exercise price of options granted under the
1991 Plan as determined by the Board and as provided in individual stock
option agreements, which may consist of:
. cash or check,
. promissory note,
. other shares of the Company's Common Stock having a fair market value on
the date of surrender equal to the aggregate exercise price of the
shares as to which the option is exercised,
. payment pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which, prior to the issuance of
the shares, results in either the receipt of cash (or check) by the
Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds,
. any combination of such methods of payment, or
. such other consideration and method of payment for the issuance of such
shares to the extent permitted under applicable law.
6
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Repricing. In the event of a decline in the value of the Company's Common
Stock, the Board has the authority to offer participants the opportunity to
replace outstanding higher priced options with new lower priced options. To
the extent required by Section 162(m) of the Code, a repriced option is deemed
to be canceled and a new option granted. Both the option deemed to be canceled
and the new option deemed to be granted will be counted against the Section
162(m) Limitation.
Option Exercise. Options granted under the 1991 Plan may become exercisable
in cumulative increments ("vest") as determined by the Board. Shares covered
by currently outstanding options under the 1991 Plan typically vest ratably on
a monthly basis over a period of 60 months during the participant's employment
by, or service as a director of or consultant to, the Company or an affiliate
(collectively, "service"). Shares covered by options granted in the future
under the 1991 Plan may be subject to different vesting terms. The Board has
the power to accelerate the time during which an option may vest or be
exercised. In addition, options granted under the 1991 Plan may permit
exercise prior to vesting, but in such event the participant may be required
to enter into an early exercise stock purchase agreement that allows the
Company to repurchase unvested shares, generally at the participant's exercise
price, should the participant's service terminate before vesting. To the
extent provided by the terms of an option, a participant may satisfy any
federal, state or local tax withholding obligation relating to the exercise of
such option by a cash payment upon exercise, by authorizing the Company to
withhold a portion of the stock otherwise issuable to the participant, by
delivering already-owned Common Stock of the Company or by a combination of
these means.
Term. The maximum term of options under the 1991 Plan is 10 years, except
that in certain cases (see "Eligibility") the maximum term is five years.
Options under the 1991 Plan generally terminate three months after termination
of the participant's service unless:
. such termination is due to the participant's permanent and total
disability (as defined in the Code), in which case the option may, but
need not, provide that it may be exercised (to the extent the option was
exercisable at the time of the termination of service) at any time
within 12 months of such termination;
. the participant dies before the participant's service has terminated, or
within three months after termination of such service, in which case the
option may, but need not, provide that it may be exercised (to the
extent the option was exercisable at the time of the participant's
death) within 18 months of the participant's death by the person or
persons to whom the rights to such option pass by will or by the laws of
descent and distribution; or
. the option by its terms specifically provides otherwise.
Individual option grants by their terms may provide for exercise within a
longer or shorter period of time following termination of service.
Terms of Stock Bonuses and Purchases of Restricted Stock
Payment. The Board determines the purchase price under a restricted stock
purchase agreement. The Board may award stock bonuses in consideration of past
services without a purchase payment. The participant must pay the purchase
price of stock acquired pursuant to a restricted stock purchase agreement
under the 1991 Plan:
. in cash at the time of purchase;
. at the discretion of the Board, according to a deferred payment or other
arrangement; or
. in any other form of legal consideration that may be acceptable to the
Board.
Vesting. Shares of stock sold or awarded under the 1991 Plan may, but need
not, be subject to a repurchase option in favor of the Company in accordance
with a vesting schedule as determined by the Board. The Board has the power to
accelerate the vesting of stock acquired pursuant to a restricted stock
purchase agreement or stock bonus award under the 1991 Plan.
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Restrictions on Transfer
The participant may not transfer an incentive stock option, a stock bonus
agreement, or a restricted stock purchase agreement otherwise than by will or
by the laws of descent and distribution. However, the Board may grant
nonstatutory stock options that are transferable. Shares subject to repurchase
by the Company under an early exercise stock purchase agreement, a stock bonus
agreement, or a restricted stock purchase agreement may be subject to
restrictions on transfer that the Board deems appropriate.
Adjustment Provisions
Transactions not involving receipt of consideration by the Company, such as
through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, or change in corporate
structure, may change the class and number of shares of Common Stock subject
to the 1991 Plan and outstanding awards. In that event, the Board will
appropriately adjust the 1991 Plan as to the class and the maximum number of
shares of Common Stock subject to the 1991 Plan, and will adjust outstanding
awards as to the class, number of shares and price per share of Common Stock
subject to such awards.
Effect of Certain Corporate Events
The 1991 Plan provides that in the event of a Change of Control (as defined
in the 1991 Plan), at the sole discretion of the Board and to the extent
permitted by applicable law, any surviving corporation will assume the rights
and obligations of the Company under any awards outstanding under the 1991
Plan or will substitute similar awards for those outstanding under the 1991
Plan; the time during which such awards become vested or may be exercised will
be accelerated and any outstanding unexercised rights under any awards
terminated if not exercised prior to such event; or such awards will continue
in full force and effect.
For purposes of the 1991 Plan, a "Change of Control" is deemed to have
occurred at any of the following times:
. Upon the acquisition (other than from the Company) by any person, entity
or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (excluding, for this purpose, the Company or its
affiliates, or any employee benefit plan of the Company or its
affiliates which acquires beneficial ownership of voting securities of
the Company), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the then
outstanding shares of Common Stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally
in the election of directors.
. At the time individuals who, as of May 14, 1991, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to May 14, 1991 whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) are, for purposes of the 1991 Plan, considered as though such
person were a member of the Incumbent Board.
. Immediately prior to the consummation by the Company of a
reorganization, merger, consolidation, (in each case, with respect to
which persons who were the stockholders of the Company immediately prior
to such reorganization, merger or consolidation do not, immediately
thereafter, own more than 50% of the combined voting power entitled to
vote generally in the election of directors of the reorganized, merged
or consolidated company's then outstanding voting securities) or a
liquidation or dissolution of the Company or of the sale of all or
substantially all of the assets of the Company.
. The occurrence of any other event that the Incumbent Board determines
constitutes a Change of Control.
8
<PAGE>
The acceleration of an award in the event of a Change in Control may be
viewed as an anti-takeover provision, which may have the effect of
discouraging a proposal to acquire or otherwise obtain control of the Company.
Duration, Amendment and Termination
The Board may suspend or terminate the 1991 Plan without stockholder
approval or ratification at any time or from time to time. Unless sooner
terminated, the 1991 Plan will terminate on May 13, 2001.
The Board may also amend the 1991 Plan at any time or from time to time.
However, no amendment will be effective unless approved by the stockholders of
the Company to the extent stockholder approval is necessary for the 1991 Plan
to satisfy the requirements of Section 422 of the Code, Rule 16b-3 under the
Exchange Act or any Nasdaq or securities exchange listing requirements. The
Board may submit any other amendment to the 1991 Plan for stockholder
approval, including, but not limited to, amendments intended to satisfy the
requirements of Section 162(m) of the Code regarding the exclusion of
performance-based compensation from the limitation on the deductibility of
compensation paid to certain employees.
Federal Income Tax Information
Long-term capital gains currently are generally subject to lower tax rates
than ordinary income or short-term capital gains. The maximum long-term
capital gains rate for federal income tax purposes is currently 20% while the
maximum ordinary income rate and short-term capital gains rate is effectively
39.6%. Slightly different rules may apply to participants who acquire stock
subject to certain repurchase options or who are subject to Section 16(b) of
the Exchange Act.
Incentive Stock Options. Incentive stock options under the 1991 Plan are
intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code.
There generally are no federal income tax consequences to the participant
or the Company by reason of the grant or exercise of an incentive stock
option. However, the exercise of an incentive stock option may increase the
participant's alternative minimum tax liability, if any.
If a participant holds stock acquired through exercise of an incentive
stock option for at least two years from the date on which the option is
granted and at least one year from the date on which the shares are
transferred to the participant upon exercise of the option, any gain or loss
on a disposition of such stock will be a long-term capital gain or loss.
Generally, if the participant disposes of the stock before the expiration
of either of these holding periods (a "disqualifying disposition"), then at
the time of disposition the participant will realize taxable ordinary income
equal to the lesser of (i) the excess of the stock's fair market value on the
date of exercise over the exercise price, or (ii) the participant's actual
gain, if any, on the purchase and sale. The participant's additional gain or
any loss upon the disqualifying disposition will be a capital gain or loss,
which will be long-term or short-term depending on whether the stock was held
for more than one year.
To the extent the participant recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) of the
Code and the satisfaction of a tax reporting obligation) to a corresponding
business expense deduction in the tax year in which the disqualifying
disposition occurs.
Nonstatutory Stock Options, Restricted Stock Purchase Awards and Stock
Bonuses. Nonstatutory stock options, restricted stock purchase awards and
stock bonuses granted under the 1991 Plan generally have the following federal
income tax consequences.
9
<PAGE>
There are no tax consequences to the participant or the Company by reason
of the grant of nonstatutory stock options, restricted stock purchase awards
or stock bonuses. Upon acquisition of the stock, the participant normally will
recognize taxable ordinary income equal to the excess, if any, of the stock's
fair market value on the acquisition date over the purchase price. However, to
the extent the stock is subject to certain types of vesting restrictions, the
taxable event will be delayed until the vesting restrictions lapse unless the
participant elects to be taxed on receipt of the stock. With respect to
employees, the Company is generally required to withhold from regular wages or
supplemental wage payments an amount based on the ordinary income recognized.
Subject to the requirement of reasonableness, the provisions of Section 162(m)
of the Code and the satisfaction of a tax reporting obligation, the Company
will generally be entitled to a business expense deduction equal to the
taxable ordinary income realized by the participant.
Upon disposition of the stock, the participant will recognize a capital
gain or loss equal to the difference between the selling price and the sum of
the amount paid for such stock plus any amount recognized as ordinary income
upon acquisition (or vesting) of the stock. Such gain or loss will be long-
term or short-term depending on whether the stock was held for more than one
year. Slightly different rules may apply to participants who acquire stock
subject to certain repurchase options or who are subject to Section 16(b) of
the Exchange Act.
Potential Limitation on Company Deductions. Section 162(m) of the Code
denies a deduction to any publicly-held corporation for compensation paid to
certain "covered employees" in a taxable year to the extent that compensation
to such covered employee exceeds $1 million. It is possible that compensation
attributable to awards, when combined with all other types of compensation
received by a covered employee from the Company, may cause this limitation to
be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options will qualify as performance-based compensation
if the award is granted by a compensation committee comprised solely of
"outside directors" and either (i) the plan contains a per-employee limitation
on the number of shares for which such awards may be granted during a
specified period, the per-employee limitation is approved by the stockholders,
and the exercise price of the award is no less than the fair market value of
the stock on the date of grant, or (ii) the award is granted (or exercisable)
only upon the achievement (as certified in writing by the compensation
committee) of an objective performance goal established in writing by the
compensation committee while the outcome is substantially uncertain, and the
award is approved by stockholders.
Compensation attributable to restricted stock and stock bonuses will
qualify as performance-based compensation, provided that the award is granted
by a compensation committee comprised solely of "outside directors," and the
purchase price of the award is no less than the fair market value of the stock
on the date of grant. Stock bonuses qualify as performance-based compensation
under the Treasury regulations only if:
. the award is granted by a compensation committee comprised solely of
"outside directors,"
. the award is granted (or exercisable) only upon the achievement of an
objective performance goal established in writing by the compensation
committee while the outcome is substantially uncertain,
. the compensation committee certifies in writing prior to the granting
(or exercisability) of the award that the performance goal has been
satisfied, and
. prior to the granting (or exercisability) of the award, stockholders
have approved the material terms of the award (including the class of
employees eligible for such award, the business criteria on which the
performance goal is based, and the maximum amount--or formula used to
calculate the amount--payable upon attainment of the performance goal).
10
<PAGE>
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Restated Certificate of Incorporation to increase
the authorized number of shares of Common Stock from 40,000,000 shares to
120,000,000 shares. The authorized number of shares of Preferred Stock remains
at 5,000,000. Accordingly, the aggregate number of shares of capital stock
(including both Common Stock and Preferred Stock) authorized under the
amendment would increase from 45,000,000 shares to 125,000,000 shares.
The additional Common Stock to be authorized by adoption of the amendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the proposed amendment and issuance of the Common Stock
would not affect the rights of the holders of currently outstanding Common
Stock of the Company, except for effects incidental to increasing the number
of shares of the Company's Common Stock outstanding. If the amendment is
adopted, it will become effective upon filing of a Certificate of Amendment of
the Company's Restated Certificate of Incorporation with the Secretary of
State of the State of Delaware, in substantially the form attached hereto as
Exhibit A.
At March 1, 2000, there were 26,285,267 shares of the Company's Common
Stock outstanding. In addition, at the same date, 3,939,792 shares were
issuable upon exercise of options and rights outstanding under the Company's
stock option and stock purchase plans and 848,347 shares remained available
for future grants. In addition, 4,440,840 shares of the Company's authorized
Common Stock have been reserved for issuance upon conversion of the Company's
$300,000,000 5% convertible subordinated notes due March 1, 2007 (the
"Notes"). The Notes may be converted by the note holders into shares of the
Company's Common Stock at a conversion rate of 14.8028 shares per $1,000
principal amount of the Notes, which is equivalent to a conversion price of
$67.56 per share. The conversion rate is subject to adjustment in certain
events.
Although at present the Board of Directors has no other plans to issue
additional shares of Common Stock, it desires to have such shares available to
provide additional flexibility to use its capital stock for business and
financial purposes in the future. The additional shares may be used, without
further stockholder approval, for various purposes including, without
limitation, raising capital, providing equity incentives to employees,
officers or directors, stock splits, stock dividends, establishing strategic
relationships with other companies, and expanding the Company's business or
product lines through the acquisition of other businesses or products.
The additional shares of Common Stock that would become available for
issuance if the proposal were adopted could also be used by the Company to
oppose a hostile takeover attempt or delay or prevent changes in control or
management of the Company. For example, without further stockholder approval,
the Board could strategically sell shares of Common Stock in a private
transaction to purchasers who would oppose a takeover or favor the current
Board. Although this proposal to increase the authorized Common Stock has been
prompted by business and financial considerations and not by the threat of any
hostile takeover attempt (nor is the Board currently aware of any such
attempts directed at the Company), nevertheless, stockholders should be aware
that approval of this proposal could facilitate future efforts by the Company
to deter or prevent changes in control of the Company, including transactions
in which the stockholders might otherwise receive a premium for their shares
over then current market prices.
The affirmative vote of the holders of a majority of the shares of Common
Stock outstanding at the Record Date will be required to approve this
amendment to the Company's Restated Certificate of Incorporation. As a result,
abstentions and broker non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 3.
11
<PAGE>
PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board has selected Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending December 31, 2000 and has further directed
that management submit the selection of independent auditors for ratification
by the stockholders at the Annual Meeting. Ernst & Young LLP has audited the
Company's financial statements since its inception in 1988. Representatives of
Ernst & Young LLP are expected to be present at the Annual Meeting, will have
an opportunity to make a statement, if they so desire, and will be available
to respond to appropriate questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the selection, the Audit Committee and the
Board will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board in its discretion may
direct the appointment of different independent auditors at any time during
the year if it determines that such a change would be in the best interests of
the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote on the proposal at the
meeting will be required to ratify the selection of Ernst & Young LLP.
Abstentions will be counted toward the tabulation of votes cast on the
proposal and will have the same effect as negative votes. Broker non-votes are
counted towards a quorum, but are not counted for any purpose in determining
whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 4.
12
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of March 1, 2000 by (i) each nominee for
director, (ii) each of the executive officers named in the Summary
Compensation Table, (iii) all executive officers and directors of the Company
as a group, and (iv) all those known by the Company to be beneficial owners of
more than five percent of its Common Stock.
<TABLE>
<CAPTION>
Beneficial
Ownership(1)(2)
------------------
Number Percent
Beneficial Owner of Shares of Total
---------------- --------- --------
<S> <C> <C>
FMR Corp. and affiliates (3)............................... 2,802,027 10.6%
82 Devonshire Street
Boston, MA 02109
Capital Group International, Inc. and affiliate (4)........ 2,316,600 8.8%
11100 Santa Monica Boulevard
Los Angeles, CA 90025
Vaughn M. Kailian.......................................... 594,451 2.2%
Mark D. Perrin............................................. 238,417 *
Charles J. Homcy........................................... 199,638 *
Robert R. Momsen (5)....................................... 79,073 *
Shaun R. Coughlin.......................................... 71,587 *
Lee M. Rauch............................................... 52,083 *
James T. Doluisio.......................................... 36,000 *
Patrick A. Broderick....................................... 33,543 *
Ernest Mario............................................... 17,916 *
Jerry T. Jackson........................................... 10,000 *
Lloyd Hollingsworth Smith, Jr.............................. 10,000 *
All executive officers and directors as a group (11 people)
(6) 1,342,708 4.9%
</TABLE>
- --------
* Less than one percent
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedule 13G filed with the SEC. Unless
otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, each of the stockholders named
in this table has sole voting and investment power with respect to the
shares indicated as beneficially owned. Applicable percentages are based
on 26,285,267 shares outstanding on March 1, 2000, adjusted as required
by rules promulgated by the SEC.
(2) Includes shares that certain officers and directors of the Company have
the right to acquire within 60 days after the date of this table pursuant
to outstanding options as follows (number of shares): Vaughn M. Kailian,
431,308; Mark D. Perrin, 238,327; Charles J. Homcy, 154,417; Robert R.
Momsen, 35,000; Shaun R. Coughlin, 49,000; Lee M. Rauch, 52,083; James T.
Doluisio, 35,000; Patrick A. Broderick, 32,083; Ernest Mario, 17,916;
Jerry T. Jackson, 10,000; Lloyd Hollingsworth Smith, Jr., 10,000; and all
executive officers and directors as a group, 1,065,134.
(3) Based on a Schedule 13G filed with the SEC dated March 10, 2000. Includes
2,587,077 shares (9.8%) beneficially owned by Fidelity Management &
Research Company, a wholly owned subsidiary of FMR Corp. ("Fidelity"), as
a result of acting as investment advisor to several investment companies
registered under Section 8 of the Investment Company Act of 1940, of
which 1,645,290 shares (6.2%) are owned by Select Biotechnology Fund, one
of Fidelity's investment companies, and of which 164,017 shares are based
upon assumed conversion of $11,080,000 principal amount of COR
Therapeutics, Inc. 5% convertible subordinated notes (14.8028 shares for
each $1,000 principal amount). Also includes 81,300 shares beneficially
owned by Fidelity Management Trust Company, a wholly-owned subsidiary of
FMR Corp., as a result of its serving as investment manager of
institutional accounts. FMR Corp. has sole power to dispose
13
<PAGE>
of 2,802,027 shares and sole power to vote or direct the voting of 214,950
shares. The following listed entities and individuals filed a joint
statement on Schedule 13G, with FMR Corp. listed as a parent holding
company: Fidelity Management & Research Company, Select Biotechnology Fund,
Edward C. Johnson 3d and Abigail P. Johnson.
(4) Based on a Schedule 13G filed with the SEC dated February 10, 2000.
Includes 2,316,600 shares beneficially owned by Capital Guardian Trust
Company ("CGTC") as a result of acting as investment manager of various
institutional accounts, with dispositive power over 2,316,600 shares and
power to direct the voting of 1,452,000 shares on behalf of various
individual and institutional investors. CGTC disclaims beneficial
ownership of all of the these shares pursuant to Rule 13d-4.
(5) Includes 20,277 shares owned for the benefit of Mr. Momsen by InterWest
Venture Management Company PSRP. Mr. Momsen disclaims beneficial
ownership of such 20,277 shares, except to the extent of his pecuniary
interest therein.
(6) Includes 1,065,134 shares that certain officers and directors of the
Company have the right to acquire within 60 days after the date of this
table pursuant to outstanding options.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than 10% of a registered class of
the Company's equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than 10%
stockholders are required by the SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1999, its
officers, directors and greater than 10% beneficial owners complied with all
applicable Section 16(a) filing requirements.
14
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Directors
Directors who are neither employees of nor consultants to the Company
("non-employee directors") receive an annual directors' fee of $10,000, paid
on a quarterly basis. In accordance with Company policy, directors may also be
reimbursed for certain expenses in connection with attendance at Board and
committee meetings. An aggregate of $60,000 was paid to Dr. Coughlin, Dr.
Doluisio, Mr. Jackson, Dr. Mario, Mr. Momsen and Dr. Smith for services as
directors of the Company during 1999.
In January 1994, the Board adopted, and the stockholders subsequently
approved, the Company's 1994 Non-Employee Directors' Stock Option Plan (the
"Directors' Plan"). Under the Directors' Plan, each non-employee director of
the Company is automatically granted a non-qualified option to purchase 25,000
shares of Common Stock on the date of adoption of the Directors' Plan, or if
later, the date of such non-employee director's election to the Board. The
exercise price of such options granted under the Director's Plan is 100% of
the fair market value of the Common Stock on the date of the option grant.
Such options granted under the Directors' Plan vest ratably over 60 months and
have a term of ten years. During 1999, no options to purchase shares were
granted under this provision of the Directors' Plan to non-employee directors
for services rendered as directors of the Company during 1999.
In March 1999, the Board approved an amendment to the Directors' Plan to
provide for automatic supplemental grants of stock options to each non-
employee director, commencing after the full vesting of the initial option
grant to each such director under the Directors' Plan as described above (the
"Plan Amendment"). Pursuant to the Plan Amendment, each non-employee director
of the Company will automatically be granted a non-qualified option to
purchase 10,000 shares of Common Stock on the date of the first Board meeting
held both (i) on or after the date of the adoption of the Plan Amendment and
(ii) most closely prior to the date on which the option granted to such non-
employee director in his or her initial option grant under the Directors' Plan
is fully vested, and biannually thereafter. The exercise price of stock
options granted pursuant to the Plan Amendment is 100% of the fair market
value of the Common Stock on the date of the option grant. Options granted
pursuant to the Plan Amendment are fully vested on the date of grant and have
a maximum term of ten years. During 1999, each of the Company's non-employee
directors, Drs. Coughlin, Doluisio, Mario and Smith and Messrs. Jackson and
Momsen, received a 10,000 share grant under this provision of the Directors'
Plan.
In 1988, the Company and Dr. Coughlin entered into a consulting agreement
which provided that, among other things, Dr. Coughlin would perform consulting
services for the Company. This consulting agreement was mutually terminated
effective March 1, 1999. The Company paid Dr. Coughlin's consulting fee
directly to UCSF on behalf of Dr. Coughlin. During 1999, UCSF received
consulting payments totaling $5,000 on behalf of Dr. Coughlin.
Compensation of Executive Officers
Summary of Compensation
The following table shows, for the fiscal years ended December 31, 1999,
1998 and 1997, compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its four other most highly compensated officers
(the "Named Executive Officers") at December 31, 1999.
15
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
--------------------------------- ----------------------
Restricted
Other Annual Stock Securities All Other
Name and Principal Salary Bonus Compensation Awards Underlying Compensation
Position Year ($)(1) ($)(2) ($)(3) ($)(4) Options (#) ($)(5)
------------------ ---- ------- ------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vaughn M. Kailian........ 1999 430,000 113,500 40,000 6,735
President and Chief 1998 427,500 102,600 43,000 40,000 3,762
Executive Officer 1997 400,000 128,000 110,500 1,940
Charles J. Homcy......... 1999 330,000 65,000 80,000 3,598
Executive Vice
President, 1998 327,917 59,025 33,000 30,000 3,330
Research and Development 1997 305,000 73,200 167,629 (6) 101,500 709
Mark D. Perrin........... 1999 292,000 45,000 30,000 1,865
Executive Vice
President, 1998 290,167 52,230 29,200 30,000 1,444
Commercial Operations 1997 270,000 64,800 193,874 (7) 93,500 500
Lee M. Rauch............. 1999 230,128 33,000 102,860 100,000 2,058
Senior Vice President,
Corporate Development
Patrick A. Broderick..... 1999 220,923 36,500 100,000 1,623
Senior Vice President,
General Counsel and
Secretary
</TABLE>
- --------
(1) Includes amounts earned but deferred at the election of the Named
Executive Officer.
(2) Bonus payments for 1999 (paid in March 2000) resulting from the Company's
Incentive Pay Program. These bonuses do not include the value of
restricted stock bonus awards granted, which are included under the
heading "Restricted Stock Awards" in this table.
(3) As permitted by rules promulgated by the SEC, no amounts are shown with
respect to "perquisites" under "Other Annual Compensation" where such
amounts for each Named Executive Officer do not exceed the lesser of 10%
of such executive's bonus plus salary or $50,000.
(4) Represents the dollar value of the shares awarded. This number is
calculated by multiplying the fair market value on the date of grant
($11.25 in 1999 and $7.97 in 1998, based on the average of the high and
low sale prices on the date of grant as reported on the Nasdaq National
Market) by the number of shares granted. Restricted shares granted to Ms.
Rauch in 1999 and to Mr. Kailian, Dr. Homcy and Mr. Perrin in 1998 vest in
full on January 1, 2000. At the end of fiscal 1999, the aggregate unvested
restricted stock holdings of the Named Executive Officers and the value
thereof at year end based on the then fair market value of $26.56, without
giving effect to the diminution of value attributable to the restrictions
on such stock, were as follows: $143,331 for Mr. Kailian (5,396 shares),
$109,995 for Dr. Homcy (4,141 shares), $97,325 for Mr. Perrin (3,664
shares), and $242,861 for Ms. Rauch (9,143 shares). Dividends on these
shares of restricted stock will be paid when, as, and if declared by the
Company's Board of Directors. The Company has not paid any dividends to
date and does not anticipate paying any dividends on its Common Stock in
the foreseeable future.
(5) Includes premiums on life insurance payable for each Named Executive
Officer. Also, includes $1,000 in matching contributions by the Company to
its tax-qualified employee savings and retirement plans for all Named
Executive Officers in 1999 and $500 in matching contributions by the
Company to its tax-qualified employee savings and retirement plans for Mr.
Kailian, Dr. Homcy and Mr. Perrin in 1998 and 1997.
(6) Consists of reimbursement of expenses paid by the Company in connection
with Dr. Homcy's relocation.
(7) Consists of reimbursement of expenses paid by the Company in connection
with Mr. Perrin's relocation.
16
<PAGE>
Stock Option Grants and Exercises
The Company has granted stock options to its executive officers, employees
and consultants under its 1988 Employee Stock Option Plan (the "1988 Employee
Plan"), its 1991 Equity Incentive Plan (the "1991 Plan") and its 1998 Non-
Officer Equity Incentive Plan (the "1998 Equity Plan"), and to consultants
under its 1988 Consultant Stock Option Plan (the "1988 Consultant Plan"). As
of March 1, 2000, options to purchase 98,668 shares were outstanding under the
1988 Employee Plan and options to purchase 14,000 shares were outstanding
under the 1988 Consultant Plan. Both of these plans were terminated in 1991
and no further options were granted after that date under either plan. As of
March 1, 2000, options to purchase 3,036,939 shares were outstanding under the
1991 Plan, and 27,560 shares remained available for future grants. As of March
1, 2000, options to purchase 670,185 shares were outstanding under the 1998
Equity Plan, and 460,438 shares remained available for future grants.
The following tables show, for the fiscal year ended December 31, 1999,
certain information regarding all options granted to, exercised by, and held
at year end by, the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Number of Percentage of Price
Securities Total Options Appreciation for
Underlying Granted to Option Term ($)
Options Employees in Exercise (3)
Granted Fiscal Year Price Expiration -----------------
Name (#) (1) (%) (2) ($/Sh) Date 5% 10%
---- ---------- ------------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Vaughn M. Kailian....... 40,000 5.39 10.94 1/29/09 295,503 729,684
Charles J. Homcy........ 30,000 4.04 10.94 1/29/09 221,627 547,263
50,000 6.73 13.28 5/25/09 437,984 1,090,764
Mark D. Perrin.......... 30,000 4.04 10.94 1/29/09 221,627 547,263
Lee M. Rauch............ 100,000 13.47 10.94 1/29/09 738,756 1,824,210
Patrick A. Broderick.... 100,000 13.47 10.94 1/29/09 738,756 1,824,210
</TABLE>
- --------
(1) Reflects options granted in 1999 to the Named Executive Officers under the
1991 Plan. Options granted to Mr. Kailian, Mr. Perrin, and Dr. Homcy on
January 29, 1999 vest in their entirety on January 31, 2002. Options
granted to Mr. Broderick and Ms. Rauch on January 29, 1999 vest as
follows: 20,000 shares vest ratably over the first three months following
the date of their employment, 23,750 shares vest ratably over the
subsequent three months, and the remaining 56,250 shares vest ratably over
the next 54 months. The option granted to Dr. Homcy on May 25, 1999 vests
in equal monthly installments over a five-year period following the date
of grant, which is generally consistent with the terms of options granted
to other employees under the 1991 Plan. The 1991 Plan also contains
provisions for the Board of Directors, among other things, to reprice
options and to accelerate vesting of options in the event of a change in
control of the Company.
(2) Based on options to purchase 742,600 shares of Common Stock granted to
employees, including executive officers, in the fiscal year ended
December 31, 1999.
(3) The potential realizable value is based on the term of the option at the
date of the grant (10 years). It is calculated by assuming that the stock
price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term, and that the option is exercised
and sold on the last day of the option term for the appreciated stock
price. These amounts represent certain assumed rates of appreciation only
and do not reflect the Company's estimate or projection of future stock
price performance. Actual gains, if any, are dependent on the actual
future performance of the Common Stock. There can be no assurance that
the amounts reflected in this table will be achieved.
17
<PAGE>
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares
Acquired Number of Securities Value of Unexercised In-the-
on Value Underlying Unexercised Money Options at FY-End
Exercise Realized Options At FY-End Exercisable/Unexercisable
Name (#) ($) Exercisable/Unexercisable (#) ($)(2)
---- -------- -------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Vaughn M. Kailian....... 75,000 762,660(1) 444,610 / 165,890 7,724,223 / 2,418,655
Charles J. Homcy........ -- -- 230,987 / 175,513 3,258,506 / 2,504,994
Mark D. Perrin.......... -- -- 183,926 / 154,574 2,738,623 / 2,298,988
Lee M. Rauch............ -- -- 47,916 / 52,084 748,688 / 813,813
Patrick A. Broderick.... -- -- 47,916 / 52,084 748,688 / 813,813
</TABLE>
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(1) Fair market value of the Common Stock on the date of exercise ($10.47,
based on the average of the high and the low sale prices as reported on
the Nasdaq National Market) less the exercise price and multiplied by the
number of shares exercised.
(2) Fair market value of the Common Stock on December 31, 1999 ($26.56, based
on the average of the high and the low sale prices as reported on the
Nasdaq National Market) less the exercise price and multiplied by the
number of shares that are in the money.
Key Employee Change in Control Severance Plan
In May 1999, the Compensation Committee of the Board approved the Company's
Key Employee Change in Control Severance Plan (the "Severance Plan"). The
Severance Plan provides separation pay and benefits to members of the
Company's Executive Committee and Vice Presidents of the Company whose
employment is involuntarily terminated without cause or voluntarily terminated
for good reason within 12 months following a change in control of the Company.
Specifically, the Severance Plan provides for continuation of the employee's
base salary for a period of 18 months, payment of the pro rata portion of the
employee's target bonus for the year in which termination occurs equal to the
portion of the year in which the employee is employed by the Company, and
payment by the Company of premiums for COBRA coverage for 12 months.
COMPENSATION COMMITTEE REPORT (1)
The Compensation Committee (the "Committee") consists of Jerry T. Jackson,
Ernest Mario, Ph.D. and Robert R. Momsen, none of whom is an employee of or a
consultant to the Company. The Committee is responsible for setting the
Company's policies regarding compensation for all employees and executive
officers and for administering the Company's 1991 Plan, 1998 Equity Plan and
1991 Employee Stock Purchase Plan. In particular, the Committee evaluates the
performance of management and determines the compensation of executive
officers.
The Company's executive compensation philosophy is to attract and retain
executive officers capable of leading the Company to fulfillment of its
business objectives by offering competitive compensation opportunities that
reward individual contributions as well as corporate performance. Accordingly,
the Company's executive compensation policies include:
. competitive pay practices, taking into account the pay practices of life
science and pharmaceutical companies with which the Company competes for
talented executives, with special weight to California companies of
comparable size;
- --------
(1) The material in this report is not "soliciting material," is not deemed
"filed" with the SEC and is not to be incorporated by reference in any
filing of the Company under the Securities Act of 1933, as amended, or the
Exchange Act, whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
18
<PAGE>
. annual incentive programs which are designed to encourage executives to
focus on the achievement of specific short-term strategic goals, as well
as longer-term corporate objectives; and
. equity-based incentives designed to motivate executives over the long
term, to align the interests of management and stockholders and to ensure
that management is appropriately rewarded for benefits which it achieves
for the Company's stockholders.
Total compensation for the Company's executive officers includes a base
salary component and may include two other components: annual incentives and
long-term incentives. Annual incentive compensation may consist of cash
incentive bonuses and stock bonus or restricted stock bonus awards, or other
equity components, each based on satisfying corporate goals established for
the year by the Committee as well as on meeting individual performance
objectives. In addition, executive officers of the Company may receive long-
term incentive compensation in the form of grants of options to purchase
shares of Common Stock, with exercise prices typically set at fair market
value on the date of grant. Restricted stock bonus awards may also provide
long-term incentives for executives.
In the biopharmaceutical industry, traditional measures of corporate
performance, such as earnings per share or sales growth, may not readily apply
in reviewing performance of executives. In addition to traditional measures of
performance, in determining the compensation of the Company's executives, the
Committee looks to other indicia of performance, such as the progress of the
Company's research and development programs, regulatory developments and
corporate development activities, as well as the Company's success in securing
capital sufficient to assist the Company in completing product development and
increasing product revenues.
As a result, in many instances these qualitative factors necessarily
involve a subjective assessment by the Committee of corporate performance.
Moreover, the Committee does not base its considerations on any single
performance factor nor does it specifically assign relative weights to
factors, but rather considers a mix of factors and evaluates both Company and
individual performance against that mix. In addition, total compensation paid
by the Company to its executive officers is designed to be comparable to
compensation packages paid to the management of other companies of comparable
size in the biopharmaceutical industry. Toward that end, the Committee may
review both independent survey data as well as data gathered internally.
In January 1999, the Committee met to consider the compensation of the
Company's executive officers for fiscal 1999. The Committee considered a
variety of factors, including both individual and corporate factors, in
evaluating the performance of the Company's executive officers. The Committee
reviewed the results of independent surveys that provided information
regarding management compensation for approximately 200 companies in the
biopharmaceutical industry, categorized by geographic area and management
position. The surveys included a broader group of companies than those
companies included in the American Stock Exchange Biotechnology Index used in
the performance measurement comparison graph included in this proxy statement.
The Committee also reviewed other publicly available information, gathered
informally, pertaining to compensation of executive officers in the
biopharmaceutical industry. Based on these survey results, as well as the
other foregoing factors, for 1999, the Committee determined that the base
compensation of Mr. Kailian and the other executive officers should remain at
1998 levels, reflecting, in part, the change in incentive compensation targets
for 1999 discussed below.
The Company has used the grant of stock options under its 1991 Plan to
underscore the common interests of stockholders and management. Options
granted to executive officers are intended to provide a continuing financial
incentive to maximize long-term value to stockholders and to help make the
executive's total compensation opportunity competitive. In addition, because
stock options generally become exercisable over a period of several years,
options encourage executives to remain in the long-term employ of the Company.
In determining the size of an option to be granted to an executive officer,
the Committee takes into account the officer's position and level of
responsibility within the Company, the officer's existing stock and unvested
option holdings, and the potential reward to the officer if the stock price
appreciates in the public market. Based on these factors, in January 1999, the
Committee granted to Mr. Kailian an option to purchase an aggregate of
19
<PAGE>
40,000 shares of Common Stock, at an exercise price of $10.94 per share, the
fair market value on the date of the grant. This option granted to Mr. Kailian
vests entirely in January 2002. In January 1999, the Committee granted to Dr.
Homcy and Mr. Perrin options to purchase 30,000 shares of Common Stock at an
exercise price of $10.94 per share, the fair market value on the date of the
grants. These options granted to Dr. Homcy and Mr. Perrin vest in their
entirety in January 2002. In May 1999, the Committee granted to Dr. Homcy an
option to purchase 50,000 shares of Common Stock at an exercise price of
$13.28 per share. This additional option granted to Dr. Homcy vests in equal
monthly installments over a period of five years. The Committee considered the
number of shares and options already received by each executive in making
these grants.
The Committee also approved a 1999 Incentive Pay Program for executive
officer pay, which provides for the payment of cash bonuses to the executive
committee. Mr. Kailian was eligible to receive a cash bonus of up to 80% of
his eligible 1999 compensation, and the other executive officers were each
eligible to receive a cash bonus of up to 50% of such officer's eligible 1999
compensation, if the Company achieved its goals for 1999. Determinations of
the amount of cash bonuses eligible to be awarded under the 1999 Incentive Pay
Program were based on the extent of achievement of certain corporate goals
established by the Board for 1999. The goals established for the 1999
Incentive Pay Program were: (i) continued successful commercialization of
INTEGRILIN(TM) (eptifibatide) Injection, (ii) advancement of other potential
products in research and development, specifically the Oral GP IIb-IIIa
product candidate, and (iii) financial, operational and general corporate
management objectives.
In January 2000, the Committee met to evaluate performance against the
goals established for the 1999 Incentive Pay Program. The Committee determined
that, although not all 1999 corporate objectives were fully satisfied, the
Company had success in achieving many of its objectives. As a result, based on
corporate performance, the Committee recommended that Mr. Kailian receive a
cash bonus of 26% of his eligible compensation, and that the other executive
officers of the Company receive cash bonuses of 14% to 20% of such officer's
eligible 1999 compensation.
The Committee has not adopted a policy with respect to the application of
Section 162(m) of the Internal Revenue Code, which generally imposes an annual
corporate deduction limitation of $1,000,000 on the compensation of certain
executive officers. However, pursuant to Section 162(m), compensation from
options granted under the 1991 Plan at no less than 100% of fair market value
may be excluded from the Section 162(m) limitations.
Jerry T. Jackson Ernest Mario, Ph.D. Robert R. Momsen
Compensation Committee Interlocks and Insider Participation
Jerry T. Jackson, Robert R. Momsen and Dr. Ernest Mario served as members
of the Board of Directors' compensation committee during the fiscal year ended
December 31, 1999.
None of the Company's executive officers serves as a member of the board of
directors or compensation committee of any entity that has one or more
executive officers serving as a member of the Company's Board of Directors or
compensation committee.
20
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON (1)
The following graph shows total stockholder return of the CRSP Total Return
Index for the Company, the American Stock Exchange Biotechnology Index ("AMEX
Index") and the Nasdaq Stock Market (United States Companies) ("Nasdaq Index").
Comparison of Total Cumulative Return on Investment (2)
<TABLE>
<CAPTION>
12/31/94 6/30/95 12/31/95 6/30/96 12/31/96 12/31/97 6/30/98 6/30/98 12/31/98 6/30/99 12/31/99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COR 100 81.25 76.14 103.41 89.77 96.59 204.55 126.14 120.45 134.09 244.32
AMEX 100 109.60 163.01 171.44 175.85 173.68 197.93 178.94 225.60 261.20 477.02
NASDAQ 100 124.14 139.92 157.59 171.69 191.77 208.83 251.97 291.60 357.22 541.16
</TABLE>
- --------
(1) This section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the Company
under the Securities Act of 1933, as amended, or the Exchange Act, whether
made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
(2) The total return on investment (change in stock price plus reinvested
dividends) for the Company, the AMEX Index and the Nasdaq Index, based on
December 31, 1994 = 100. The AMEX Index is calculated using an equal-dollar
weighting methodology.
21
<PAGE>
CERTAIN TRANSACTIONS
The Company has entered into indemnity agreements with certain officers and
directors which provide, among other things, that the Company will indemnify
such officer or director, under the circumstances and to the extent provided
for therein, for expenses, damages, judgments, fines and settlements he or she
may be required to pay in actions or proceedings to which he or she is or may
be made a party by reason of his or her position as a director, officer or
other agent of the Company, and otherwise to the fullest extent permitted
under Delaware law and the Company's Bylaws. See also "Executive
Compensation--Compensation of Directors."
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Patrick A. Broderick
Secretary
April 17, 2000
A copy of the Company's Annual Report to the SEC on Form 10-K for the
fiscal year ended December 31, 1999 is available without charge upon written
request to: Investor Relations, COR Therapeutics, Inc., 256 East Grand Avenue,
South San Francisco, CA 94080. A copy of the report can also be viewed by
visiting the Company's Web site, http://www.corr.com.
22
<PAGE>
COR THERAPEUTICS, INC.
1991 EQUITY INCENTIVE PLAN
(ADOPTED BY BOARD OF DIRECTORS MAY 14, 1991)
(AMENDED JANUARY 21, 1994)
(AMENDED JANUARY 6, 1995)
(AMENDED JANUARY 19, 1996)
(AMENDED JANUARY 24, 1997)
(AMENDED JANUARY 28, 2000)
1. PURPOSE.
(a) The purpose of the 1991 Equity Incentive Plan (the "Plan") is to
provide a means by which employees, directors and consultants of COR
Therapeutics, Inc., a Delaware corporation (the "Company"), and its Affiliates,
as defined in subparagraph 1(b), may be given an opportunity to benefit from
increases in value of the stock of the Company through the granting of (i)
incentive stock options, (ii) nonqualified stock options, (iii) stock bonuses,
and (iv) rights to purchase restricted stock, all as defined below.
(b) "Affiliate" as used in the Plan means any parent corporation or
subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
(the "Code").
(c) "Covered Executive" as used in the Plan means each employee of or
consultant to the Company or an Affiliate subject to Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), with respect
to the Company or an Affiliate.
(d) The Company, by means of the Plan, seeks to retain the services
of persons now employed by or serving as consultants to the Company, to secure
and retain the services of persons capable of filling such positions, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(e) The Company intends that the rights issued under the Plan ("Stock
Awards") shall, in the discretion of the Board of Directors of the Company (the
"Board") or any committee to which responsibility for administration of the Plan
has been delegated pursuant to subparagraph 2(c), be either (i) stock options
granted pursuant to paragraph 5 hereof, including incentive stock options as
that term is used in Section 422 of the Code ("Incentive Stock Options"), or
options which do not qualify as Incentive Stock Options ("Nonqualified Stock
Options") (together hereinafter referred to as "Options"), or (ii) stock bonuses
or rights to purchase restricted stock granted pursuant to paragraph 6 hereof.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a committee, as provided in subparagraph 2(c).
1.
<PAGE>
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how Stock Awards shall be
granted; whether a Stock Award will be an Incentive Stock Option, a Nonqualified
Stock Option, a stock bonus, a right to purchase restricted stock, or a
combination of the foregoing; the provisions of each Stock Award granted (which
need not be identical), including the time or times when a person shall be
permitted to purchase or receive stock pursuant to a Stock Award; and the number
of shares with respect to which Stock Awards shall be granted to each such
person.
(2) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award, in a manner
and to the extent it shall deem necessary or expedient to make the Plan fully
effective.
(3) To amend the Plan as provided in paragraph 13.
(4) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of two (2) or more members of the Board (the "Committee"), all of the
members of which Committee may (but need not) be, in the discretion of the
Board, non-employee directors and/or outside directors. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. Notwithstanding any
provision in this paragraph 2 to the contrary, the Board or the Committee may
delegate to a committee of one or more members of the Board the authority to
grant options to eligible persons who are not then Covered Executives.
(d) (1) The term "non-employee director", as used in this Plan,
shall mean a member of the Board who either (i) is not a current employee or
officer of the Company or its parent or subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K ("Regulation S-K") promulgated pursuant to
the Securities Act of 1933 (the "Securities Act")), does not possess an interest
in any other transaction as to which disclosure would be required under Item
404(a) of Regulation S-K, and is not engaged in a business relationship as to
which disclosure would be required under Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a "non-employee director" for purposes of Rule 16b-3
promulgated under the Exchange Act.
2.
<PAGE>
(2) The term "outside director", as used in this
Plan shall mean a director who either (i) is not a current employee of the
Company or an "affiliated corporation", is not a former employee of the Company
or an affiliated corporation receiving compensation for prior services (other
than benefits under a tax qualified pension plan), was not an officer of the
Company or an affiliated corporation at any time, and is not currently
receiving compensation for personal services in any capacity other than as a
director, or (ii) is otherwise considered an "outside director" for purposes of
Section 162(m) of the Code.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 11 relating to adjustments
upon changes in stock, the stock that may be issued pursuant to Stock Awards
granted under the Plan shall not exceed in the aggregate five million seven
hundred thousand (5,700,000) shares of the Company's $0.0001 par value common
stock (the "Common Stock"). If any Stock Award granted under the Plan shall for
any reason expire or otherwise terminate without having been exercised in full,
the Common Stock not acquired under such Stock Award shall again become
available for the Plan. Shares repurchased by the Company pursuant to any
repurchase rights reserved by the Company pursuant to the Plan shall not be
available for subsequent issuance under the Plan.
(b) The Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to employees
(including officers) of the Company or its Affiliates. A director of the Company
shall not be eligible to receive Incentive Stock Options unless such director is
also an employee of the Company or any Affiliate. Stock Awards other than
Incentive Stock Options may be granted only to employees (including officers),
directors of and consultants to the Company or any Affiliate.
(b) No person shall be eligible for the grant of an Incentive Stock
Option under the Plan if, at the time of grant, such persons owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates unless the exercise price of such Incentive
Stock Option is at least one hundred and ten percent (110%) of the fair market
value of the Common Stock at the date of grant and the Incentive Stock Option is
not exercisable after the expiration of five (5) years from the date of grant.
(c) No person shall be eligible to be granted Stock Awards under the
Plan covering more than five hundred thousand (500,000) shares of the Company's
Common Stock in any calendar year.
3.
<PAGE>
5. TERMS OF STOCK OPTIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate Options need not be identical, but each Option shall include
(through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions:
(a) No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) The exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the fair market value of the Common
Stock subject to the Option on the date the Option is granted. The exercise
price of each Nonqualified Stock Option shall be not less than fifty percent
(50%) of the fair market value of the Common Stock subject to the Option on the
date the Option is granted.
(c) The purchase price of Common Stock acquired pursuant to an Option
shall be paid, to the extent permitted by applicable statutes and regulations,
either: (i) in cash at the time the Option is exercised; or (ii) at the
discretion of the Board or the Committee, either at the time of grant or
exercise of the Option (A) by delivery to the Company of shares of Common Stock
of the Company that have been held for the period required to avoid a charge to
the Company's reported earnings and valued at the fair market value on the date
of exercise, (B) according to a deferred payment or other arrangement (which may
include, without limiting the generality of the foregoing, the use of other
Common Stock of the Company) with the person to whom the Option is granted or to
whom the Option is transferred pursuant to subparagraph 5(d), or (C) in any
other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion.
In the case of any deferred payment arrangement, interest shall be payable
at least annually and shall be charged at not less than the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
(d) An Incentive Stock Option shall not be transferable except by
will or by the laws of descent and distribution, and shall be exercisable during
the lifetime of the optionee to whom the Option is granted only by such
optionee. A Nonqualified Stock Option may be transferable to the extent provided
in the Option Agreement; provided, however, that if the Option Agreement does
not specifically provide for transferability, then such Nonqualified Stock
Option shall not be transferable except by will or by the laws of descent and
distribution or pursuant to a domestic relations order. Notwithstanding the
foregoing, the person to whom the Option is granted may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionee, shall thereafter be
entitled to exercise the Option.
(e) The total number of shares of Common Stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). From
4.
<PAGE>
time to time during each of such installment periods, the Option may become
exercisable ("vest") with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the shares allotted
to such period and/or any prior period as to which the Option was not fully
exercised. During the remainder of the term of the Option (if its term extends
beyond the end of the installment periods), the Option may be exercised from
time to time with respect to any shares then remaining subject to the Option.
The provisions of this subparagraph 5(e) are subject to any Option provisions
governing the minimum number of shares as to which an Option may be exercised.
(f) The Company may require any optionee, or any person to whom an
Option is transferred under subparagraph 5(d), as a condition of exercising any
such Option: (i) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative who has such knowledge and experience in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser's representative, the merits and risks of
exercising the Option; and (ii) to give written assurances satisfactory to the
Company stating that such person is acquiring the Common Stock subject to the
Option for such person's own account and not with any present intention of
selling or otherwise distributing the Common Stock. These requirements, and any
assurances given pursuant to such requirements, shall be inoperative if: (x) the
issuance of the shares upon the exercise of the Option has been registered under
a then currently effective registration statement under the Securities Act; or
(y) as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities law.
(g) An Option shall terminate three (3) months after termination of
the optionee's employment or relationship as a consultant or director with the
Company or an Affiliate, unless: (i) such termination is due to such person's
permanent and total disability, within the meaning of Section 422(c)(6) of the
Code, in which case the Option may, but need not, provide that it may be
exercised at any time within one (1) year following such termination of
employment or relationship as a consultant or director; (ii) the optionee dies
while in the employ of or while serving as a consultant or director to the
Company or an Affiliate, or within not more than three (3) months after
termination of such employment or relationship as a consultant or director, in
which case the Option may, but need not, provide that it may be exercised at any
time within eighteen (18) months following the death of the optionee by the
person or persons to whom the optionee's rights under such Option pass by will
or by the laws of descent and distribution; or (iii) the Option by its term
specifies either (A) that it shall terminate sooner than three (3) months after
termination of the optionee's employment or relationship as a consultant or
director with the Company or an Affiliate; or (B) that it may be exercised more
than three (3) months after termination of the optionee's employment or
relationship as a consultant or director with the Company or an Affiliate. This
subparagraph 5(g) shall not be construed to extend the term of any Option or to
permit anyone to exercise the Option after expiration of its term, nor shall it
be construed to increase the number of shares as to which any Option is
exercisable from the amount exercisable on the date of termination of the
optionee's employment or relationship as a consultant or director.
5.
<PAGE>
(h) The Option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment or
relationship as a consultant or director with the Company or any Affiliate to
exercise the Option as to any part or all of the shares subject to the Option
prior to the stated vesting dates of the Option. Any shares so purchased from
any unvested installment or Option may be subject to a repurchase right in favor
of the Company or to any other restriction the Board or the Committee determines
to be appropriate.
(i) To the extent provided by the terms of an Option, each optionee
may satisfy, in whole or in part, any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold from the shares of the Common Stock
otherwise issuable to the optionee as a result of the exercise of the Option a
number of shares having a fair market value less than or equal to the amount of
the withholding tax obligation; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock having a fair market value less than or
equal to the amount of the withholding tax obligation.
6. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus or restricted stock purchase agreement shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate agreements need not be identical, but each stock
bonus or restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions as appropriate:
(a) The purchase price under each stock purchase agreement shall be
such amount as the Board or Committee shall determine and designate in such
agreement. Notwithstanding the foregoing, the Board or the Committee may
determine that eligible participants in the Plan may be awarded stock pursuant
to a stock bonus agreement in consideration for past services actually rendered
to the Company or for its benefit.
(b) No rights under a stock bonus or restricted stock purchase
agreement shall be transferable except by will or by the laws of descent and
distribution so long as stock awarded under such agreement remains subject to
the terms of the agreement.
(c) The purchase price of stock acquired pursuant to a stock purchase
agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board or the Committee, according to a deferred payment or
other arrangement with the person to whom the Common Stock is sold; or (iii) in
any other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion.
6.
<PAGE>
(d) Shares of Common Stock sold or awarded under the Plan may, but
need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee.
(e) In the event a person ceases to be an employee of or ceases to
serve as a director of or consultant to the Company or an Affiliate, the Company
may repurchase or otherwise reacquire any or all of the shares of Common Stock
held by that person which have not vested as of the date of termination under
the terms of the stock bonus or restricted stock purchase agreement between the
Company and such person.
7. CANCELLATION AND RE-GRANT OF OPTIONS.
(a) The Board or the Committee shall have the authority to effect, at
any time and from time to time, with the consent of the affected holders of
Options, (i) the repricing of any outstanding Options under the Plan and/or (ii)
the cancellation of any outstanding Options and the grant in substitution
therefor of new Options under the Plan covering the same or different numbers of
shares of Common Stock, but having an exercise price per share not less than
fifty percent (50%) of the fair market value (one hundred percent (100%) of the
fair market value in the case of an Incentive Stock Option or, in the case of a
10% stockholder (as defined in subparagraph 4(b)), not less than one hundred and
ten percent (110%) of the fair market value) per share of Common Stock on the
new grant date.
(b) Shares subject to an option canceled under this Section 7 shall
continue to be counted against the maximum award of options permitted to be
granted to any person pursuant to subsection 4(c) of the Plan. The repricing of
an option under this Section 7, resulting in a reduction of the exercise price,
shall be deemed to be a cancellation of the original option and the grant of a
substitute option; in the event of such repricing, both the original and the
substituted options shall be counted against the maximum awards of options
permitted to be granted to any person pursuant to subsection 4(c) of the Plan.
The provisions of this subsection 7(b) shall be applicable only to the extent
required by Section 162(m) of the Code.
8. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards granted under the Plan, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards up to the number of shares of Common Stock
authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of Common Stock under the Stock Awards granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Stock Award granted under
the Plan or any Common Stock issued or issuable pursuant to any such Stock
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority that counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan,
the
7.
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Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Stock Awards unless and until such authority
is obtained.
9. USE OF PROCEEDS FROM COMMON STOCK.
Proceeds from the sale of Common Stock pursuant to Stock Awards
granted under the Plan shall constitute general funds of the Company.
10. MISCELLANEOUS.
(a) The Board or Committee shall have the power to accelerate the
time during which a Stock Award may be exercised or the time during which a
Stock Award or any part thereof will vest, notwithstanding the provisions in the
Stock Award stating the time during which it may be exercised or the time during
which it will vest.
(b) Neither an optionee, Option holder nor any person to whom an
Option is transferred under the provisions of the Plan shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
subject to such Option unless and until such person has satisfied all
requirements for exercise of the Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any eligible employee, consultant,
director, optionee or holder of Stock Awards under the Plan any right to
continue in the employ of the Company or any Affiliate or to continue acting as
a consultant or director or shall affect the right of the Company or any
Affiliate to terminate the employment or consulting relationship or directorship
of any eligible employee, consultant, director, optionee or holder of Stock
Awards under the Plan with or without cause. In the event that a holder of Stock
Awards under the Plan is permitted or otherwise entitled to take a leave of
absence, the Company shall have the unilateral right to (i) determine whether
such leave of absence will be treated as a termination of employment or
relationship as consultant or director for purposes hereof, and (ii) suspend or
otherwise delay the time or times at which exercisability or vesting would
otherwise occur with respect to any outstanding Stock Awards, or related
repurchase rights thereunder, under the Plan.
(d) To the extent that the aggregate fair market value (determined at
the time of grant) of stock with respect to which incentive stock options (as
defined in the Code) are exercisable for the first time by any optionee during
any calendar year under all plans of the Company and its Affiliates exceeds one
hundred thousand dollars ($100,000), the options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as Nonqualified Stock Options.
11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
If any change is made in the Common Stock subject to the Plan, or
subject to any Stock Award granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or
8.
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otherwise), the Plan and outstanding Stock Awards will be appropriately adjusted
in the class(es) and maximum number of shares subject to the Plan and the
class(es) and number of shares and price per share of stock subject to
outstanding Stock Awards.
12. CHANGE OF CONTROL.
(a) Notwithstanding anything to the contrary in this Plan, in the
event of a Change of Control (as hereinafter defined), then, at the sole
discretion of the Board and to the extent permitted by applicable law: (i) any
surviving corporation shall assume the rights and obligations of the Company
under any Stock Awards outstanding under the Plan or shall substitute similar
Stock Awards for those outstanding under the Plan; (ii) the time during which
such Stock Awards become vested or may be exercised shall be accelerated and any
outstanding unexercised rights under any Stock Awards terminated if not
exercised prior to such event; or (iii) such Stock Awards shall continue in full
force and effect.
(b) For purposes of the Plan, a "Change of Control" shall be deemed
to have occurred at any of the following times:
(i) Upon the acquisition (other than from the Company) by any
person, entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act (excluding, for this purpose, the Company or its affiliates, or
any employee benefit plan of the Company or its affiliates which acquires
beneficial ownership of voting securities of the Company), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of fifty percent (50%) or more of either the then outstanding shares of common
stock or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors; or
(ii) At the time individuals who, as of May 14, 1991, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to May 14, 1991, whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of the Plan, considered as though
such person were a member of the Incumbent Board; or
(iii) Immediately prior to the consummation by the Company of a
reorganization, merger, consolidation, (in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or consolidated
company's then outstanding voting securities) or a liquidation or dissolution of
the Company or of the sale of all or substantially all of the assets of the
Company; or
9.
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(iv) The occurrence of any other event which the Incumbent Board
in its sole discretion determines constitutes a Change of Control.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 11 relating to adjustments upon changes
in the Common Stock, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary for
the Plan to satisfy the requirements of Section 422 of the Code, Rule 16b-3
under the Exchange Act or any Nasdaq or securities exchange listing
requirements.
(b) The Board may in its sole discretion submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments
to the Plan intended to satisfy the requirements of Section 162(m) of the Code
and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee Incentive Stock
Options and/or to bring the Plan and/or Options granted under it into compliance
therewith.
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan, unless: (i) the Company requests the consent of the person to whom the
Stock Award was granted; and (ii) such person consents in writing.
14. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on May 13, 2001. No Stock Awards may
be granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any Stock Awards granted while the
Plan is in effect shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom the Stock Award was
granted.
15. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
Stock Awards granted under the Plan shall be exercised unless and until the Plan
has been approved by the stockholders of the Company and, if required, an
appropriate permit has been issued by the Commissioner of Corporations of the
State of California.
10.
<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
COR THERAPEUTICS, INC.
COR THERAPEUTICS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware does hereby
certify that:
FIRST: At a meeting of the Board of Directors of the corporation,
resolutions were duly adopted setting forth a proposed amendment of the
Restated Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of said
corporation for consideration thereof. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the Restated Certificate of Incorporation of this
corporation be amended by changing the Article thereof numbered "Fourth" so
that, as amended, said Article shall be and read in its entirety as follows:
"FOURTH. The total number of shares of all classes of capital stock
which the corporation shall have authority to issue is One Hundred
Twenty-Five Million (125,000,000) shares, comprised of One Hundred
Twenty Million (120,000,000) shares of Common Stock, $0.0001 par value
(the "Common Stock"), and Five Million (5,000,000) shares of Preferred
Stock, $0.001 par value (the "Preferred Stock").
The board of directors is expressly authorized, subject to the
limitations prescribed by law and the provisions of the Restated
Certificate of Incorporation, to provide for the issuance of all or any
shares of any wholly unissued series of Preferred Stock, each with such
designations, preferences, voting powers (or no voting powers),
relative, participating, optional or other special rights and
privileges and such qualifications, limitations or restrictions thereof
as shall be stated in the resolution or resolutions adopted by the
board of directors to create such series, and a certificate of
designations setting forth a copy of said resolution or resolutions
shall be filed in accordance with the General Corporation Law of the
State of Delaware. The authority of the board of directors with respect
to each such series shall include without limitation of the foregoing
the right to specify the number of shares of each such series and to
authorize an increase or decrease in such number of shares and the
right to provide that the shares of each such series may be: (i)
subject to redemption at such time or times and at such price or
prices; (ii) entitled to receive dividends (which may be cumulative or
non-cumulative) at such rates, on such conditions, and at such times,
and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or any other series; (iii)
entitled to such rights upon the dissolution of, or upon any
distribution of the assets of, the corporation; (iv) convertible into,
or exchangeable for, shares of any other class or classes of stock, or
of any other series of the same or any other class or classes of stock
of the corporation at such price or prices or at such rates of exchange
and with such adjustments, if any; (v) entitled to the benefit of such
limitations, if any, on the issuance of additional shares of such
series or shares of any other series of Preferred Stock; or (vi)
entitled to such other preferences, powers, qualifications, rights and
privileges, all as the board of directors may deem advisable and as are
not inconsistent with law and the provisions of the Restated
Certificate of Incorporation. All preferences, voting powers, relative,
participating, optional or other special rights and privileges, and
qualifications, limitation, or restrictions of the Common Stock are
expressly made subject and subordinate to those that are fixed and
those that may be fixed with respect to any shares of the Preferred
Stock."
SECOND: Thereafter, pursuant to resolution of its Board of Directors, a
meeting of the stockholders of said corporation was duly called and held, upon
notice in accordance with Section 222 of the General Corporation law of the
State of Delaware at which meeting the necessary number of shares as required
by statute were voted in favor of the amendment.
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THIRD: Said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Corporation has caused this certificate to be
signed by Vaughn M. Kailian, its President, and Patrick A. Broderick, its
Secretary, this day of , 2000.
By:__________________________________
Vaughn M. Kailian
President
Attest:______________________________
Patrick A. Broderick
Secretary
24
<PAGE>
The Board of Directors recommends a vote FOR the nominees for director listed
below.
Proposal 1:
To elect directors to hold office until the next Annual Meeting of Stockholders
and until their successors are elected.
FOR all nominees listed (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees: Vaughn M. Kailian, Shaun R. Coughlin, James T. Doluisio, Charles J.
Homcy, Jerry T. Jackson, and Ernest Mario
To withhold authority to vote for any nominee(s), write such nominee(s) name(s)
below:
________________________________________________________________________________
The Board of Directors recommends a vote FOR Proposal 2, FOR Proposal 3, and FOR
Proposal 4.
<TABLE>
<CAPTION>
Proposal 2:
<S> <C> <C> <C>
To approve an amendment to the Company's 1991 Equity Incentive Plan For Against Abstain
to increase the aggregate number of shares of Common Stock authorized
for issuance under the plan by 900,000 shares. __ ___ ___
Proposal 3:
To approve an amendment to the Company's Certificate of Incorporation to For Against Abstain
increase the aggregate number of shares of Common Stock authorized for
issuance by 80,000,000 shares. __ ___ ___
Proposal 4:
To ratify the selection of Ernst & Young LLP as independent auditors of For Against Abstain
the Company for its fiscal year ending December 31, 2000. __ ___ ___
</TABLE>
Date __________________, 2000 Signature(s) ___________________________
___________________________
Printed Name(s) ___________________________
Title ___________________________
Please sign exactly as your name appears hereon. If the stock is registered in
the names of two or more persons, each should sign. Executors, administrators,
trustees, guardians, and attorneys-in-fact should add their titles. If signer
is a corporation, please give full corporate name and have a duly authorized
officer sign, stating title. If signer is a partnership, please sign in
partnership name by an authorized person.
Please vote, date and promptly return this proxy in the enclosed return envelope
which is postage prepaid if mailed in the United States.
<PAGE>
PROXY
COR THERAPEUTICS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2000
The undersigned hereby appoints Vaughn M. Kailian and Patrick A. Broderick, and
each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of COR Therapeutics, Inc. which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders of
COR Therapeutics, Inc. to be held at the Embassy Suites Hotel, 250 Gateway
Boulevard, South San Francisco, California on Tuesday, May 23, 2000 at 9:00 a.m.
local time, and at any and all postponements, continuations and adjournments
thereof, with all powers that the undersigned would possess if personally
present, upon and in respect of the following matters and in accordance with the
following instructions, with discretionary authority as to any and all other
matters that may properly come before the meeting.
Unless a contrary direction is indicated, this Proxy will be voted FOR all
nominees listed in Proposal 1 and FOR Proposal 2, Proposal 3, and Proposal 4 as
more specifically described in the Proxy Statement. If specific instructions
are indicated, this Proxy will be voted in accordance therewith.
(Continued and to be signed on other side)
. FOLD AND DETACH HERE .
