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UNITED STATES |
OMB APPROVAL |
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SECURITIES AND EXCHANGE COMMISSION |
OMB Number: 3235-0059 |
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Washington, D.C. 20549 |
Expires: January 31, 2008 |
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SCHEDULE 14A |
Estimated average burden hours per response... 14 |
Proxy
Statement Pursuant to Section 14(a) of
the Securities
Exchange Act of 1934
Filed by the Registrant x | |
Filed by a Party other than the Registrant o | |
Check the appropriate box: | |
o | Preliminary Proxy Statement |
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x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Pursuant to Rule §240.14a-12 |
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4. | Proposed maximum aggregate value of transaction: | |
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SEC 1913 (04-05) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
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2. | Form, Schedule or Registration Statement No.: | |
3. | Filing Party: | |
4. | Date Filed: | |
May 10, 2005
1. |
to elect ten directors; |
2. |
to amend the 1998 Stock Incentive Plan to increase the number of shares that may be subject to awards granted thereunder from 25,000,000 to 31,000,000 and to decrease the number of shares that may be used for awards of restricted stock or performance-based awards denominated in shares of common stock from 1,700,000 to 750,000; |
3. |
to amend the 1995 Non-Employee Directors Incentive Plan to increase the number of shares that may be subject to options granted thereunder from 3,600,000 to 3,850,000, and to extend the period under which options may be granted until June 30, 2015; |
4. |
to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2005; and |
5. |
to transact any such other business as may properly come before the Annual Meeting and at any adjournment or postponement thereof. |
Please mark, sign and date the enclosed
proxy card and return it promptly
in the enclosed self-addressed, stamped envelope.
Record Date and Voting Securities
Revocability of Proxies
Other Matters
Solicitation Expenses
Voting Procedures; Abstentions
Name |
Age |
Position |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
John W.
Jackson |
60 | Chairman of the Board and Chief Executive Officer |
||||||||
Sol J. Barer,
Ph.D. |
58 | President, Chief Operating Officer and Director |
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Robert J.
Hugin |
50 | Chief Financial Officer, Senior Vice President and Director |
||||||||
Jack L.
Bowman |
72 | Director |
||||||||
Frank T.
Cary |
84 | Director |
||||||||
Michael D.
Casey |
59 | Director |
||||||||
Arthur Hull
Hayes, Jr., M.D. |
71 | Director |
||||||||
Gilla Kaplan,
Ph.D. |
58 | Director |
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Richard C.E.
Morgan |
60 | Director |
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Walter L. Robb,
Ph.D. |
77 | Director |
2
3
Security Ownership of Certain Beneficial Owners and Management
Name and Address of Beneficial Ownership |
Amount and Nature of Beneficial Ownership |
Percent of Class |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
John W.
Jackson. |
4,524,326 | (1)(2)(3) | 2.7 | % | ||||||
Sol J. Barer,
Ph.D. |
2,663,222 | (1)(2)(4) | 1.6 | % | ||||||
Robert J.
Hugin |
1,831,841 | (1)(2)(5) | 1.1 | % | ||||||
Jack L.
Bowman. |
228,700 | (1) | * | |||||||
Frank T.
Cary |
929,180 | (1)(6) | * | |||||||
Michael D.
Casey |
80,500 | (1) | * | |||||||
Arthur Hull
Hayes, Jr., M.D. |
282,500 | (1) | * | |||||||
Gilla Kaplan,
Ph.D. |
214,498 | (1) | * | |||||||
Richard C.E.
Morgan |
227,424 | (1) | * |
4
Name and Address of Beneficial Ownership |
Amount and Nature of Beneficial Ownership |
Percent of Class |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Walter L.
Robb, Ph.D. |
465,500 | (1) | * | |||||||
All our
directors and current executive officers as a group (ten persons) |
11,447,691 | (7) | 6.6 | % | ||||||
FMR Corp.
(FMR) 82 Devonshire Street Boston, MA 02109 |
24,725,314 | (8) | 14.8 | % | ||||||
Janus Capital
Management LLC (Janus Capital) 151 Detroit Street Denver, CO 80206 |
18,075,170 | (9) | 10.85 | % |
* |
Less than one percent (1%). |
(1) |
Includes shares of Common Stock that the directors and executive officers have the right to acquire through the exercise of warrants and/or options within 60 days of March 31, 2005 as follows: John W. Jackson 2,909,598; Sol J. Barer 2,208,820; Robert J. Hugin 1,543,200; Jack Bowman 222,700; Frank T. Cary 7,500; Michael D. Casey 72,500; Arthur Hull Hayes, Jr. 282,500; Gilla Kaplan 214,498; Richard C.E. Morgan 92,500; and Walter L. Robb 372,500. Does not include shares of Common Stock that the directors and executive officers have the right to acquire through the exercise of options not exercisable within 60 days of March 31, 2005, as follows: John W. Jackson 0; Sol J. Barer 0; Robert J. Hugin 0; Jack L. Bowman 22,500; Frank T. Cary 22,500; Michael D. Casey 42,500; Arthur Hull Hayes, Jr. 22,500; Gilla Kaplan 22,500; Richard C.E. Morgan 22,500; and Walter L. Robb 22,500. |
(2) |
Includes shares of Common Stock reflecting matching contributions under our 401(k) Plan in which the executive officers will vest within 60 days of April 7, 2004. |
(3) |
Includes with respect to Mr. Jackson 400,000 shares owned by Mr. Jacksons spouse, as to which shares Mr. Jackson disclaims beneficial ownership, and 125,000 shares owned by a foundation in which Mr. Jackson is a trustee. |
(4) |
Includes with respect to Dr. Barer 250,000 shares owned by his spouse, as to which shares Dr. Barer disclaims beneficial ownership. |
(5) |
Includes with respect to Mr. Hugin 47,400 shares owned by a family foundation in which Mr. Hugin is a trustee and 2,400 shares owned by Mr. Hugins children. |
(6) |
Includes with respect to Mr. Cary 150,000 shares owned by a trust in which Mr. Cary is one of the trustees, 75,988 shares owned by a family limited liability company of which Mr. Cary is a member and 328,000 shares held in GRATS held by Mr. Cary and his spouse. |
(7) |
Includes or excludes, as the case may be, shares of Common Stock as indicated in the preceding footnotes and shares of Common Stock subject to warrants and/or options that are currently exercisable or exercisable within 60 days of March 31, 2005. |
(8) |
Information regarding FMR was obtained from a Schedule 13G/A, filed by FMR with the Securities and Exchange Commission on February 14, 2005. Such Schedule 13G/A states that, through three wholly owned subsidiaries (Fidelity Management & Research Company, Fidelity Management Trust Company and Strategic Advisers, Inc.), FMR beneficially owns 24,725,314 shares of Common Stock, and has sole dispositive power over all 24,725,314 shares and sole voting power over 152,120 of such shares. |
5
(9) |
Information regarding Janus Capital was obtained from a Schedule 13G, filed by Janus Capital with the Securities and Exchange Commission on January 10, 2005. Janus Capital has sole voting and dispositive power over 18,032,030 shares of Common Stock and shared voting and dispositive power over 43,140 shares of Common Stock with its indirect subsidiary Enhanced Investment Technologies LLC (Intech). Janus Capital and its subsidiaries Bay Isle Financial LLC and Intech serve as investment advisors to various investment company clients. No one client accounts for more than 5% of the total outstanding Common Stock. |
Director Compensation
6
Board Independence
Board Meetings; Committees and Membership
7
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our needs with respect to the particular talents and experience of our directors; |
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the knowledge, skills and experience of nominees, including experience in business or finance, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board of Directors; |
8
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familiarity with our business and businesses similar or analogous to ours; |
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experience with accounting rules and practices and corporate governance principles; and |
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such other factors as the Nominating Committee deems are in our best interests and the best interests of our stockholders. |
Code of Ethics
Stockholder Nominations
9
Stockholder Communications
Section 16(a) Beneficial Ownership Reporting Compliance
Audit Committee Report
10
Audit Committee Report to Stockholders
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR THE
ELECTION OF EACH OF THE NOMINEES
11
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
Annual Compensation |
Long-Term Compensation |
||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Other Annual Compensation ($) |
Restricted Stock Award(s) ($) |
Securities Underlying Options # |
All Other Compensation ($) |
||||||||||||||||||||||||
John W. Jackson
|
2004 | 770,000 | 924,000 | 204,800 | (1) | 0 | 350,000 | 0 | (2) | ||||||||||||||||||||||
Chairman
and |
2003 | 690,313 | 1,131,606 | 187,578 | (1) | 0 | 500,000 | 13,390 | (2) | ||||||||||||||||||||||
Chief Executive
Officer |
2002 | 531,562 | 525,582 | 149,250 | (1) | 0 | 650,000 | 13,390 | (2) | ||||||||||||||||||||||
Sol J. Barer,
Ph.D. |
2004 | 616,000 | 554,400 | 135,500 | (1) | 0 | 210,000 | 0 | |||||||||||||||||||||||
President
and |
2003 | 552,250 | 678,964 | 124,400 | (1) | 0 | 315,000 | 0 | |||||||||||||||||||||||
Chief Operating
Officer |
2002 | 425,250 | 300,333 | 102,000 | (1) | 0 | 385,000 | 0 | |||||||||||||||||||||||
Robert J. Hugin
|
2004 | 539,000 | 388,080 | 93,150 | (1) | 0 | 140,000 | 0 | |||||||||||||||||||||||
Sr. V. P. &
Chief |
2003 | 483,219 | 475,275 | 86,794 | (1) | 0 | 227,500 | 0 | |||||||||||||||||||||||
Financial
Officer |
2002 | 372,094 | 210,233 | 71,625 | (1) | 0 | 272,400 | 0 |
(1) |
Reflects value of matching contributions under our 401(k) plan and the non-qualified deferred compensation plans. |
(2) |
Reflects the imputed value of life insurance premiums relating to our split-dollar insurance policy for Mr. Jackson that was terminated in 2004 to comply with the provisions of the Sarbanes-Oxley Act of 2002. |
Employment Agreements and Termination of Employment Arrangements
12
Stock Option Grants for Fiscal 2004
OPTION GRANTS DURING FISCAL 2004
Date of | Number of Securities Underlying Options |
% of Total Options Granted to Employees in |
Exercise Price |
Expiration | Potential Realizable Value Assumed Annual Rates of Price Appreciation for Option Term |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Grant |
Granted (1) |
2004 (2) |
Per Share |
Date |
5% |
10% |
|||||||||||||||||||||||||||
John W.
Jackson |
10/05/04 | 50,000 | 1.2 | % | $ | 30.98 | 10/05/14 | $ | 974,158 | $ | 2,468,707 | |||||||||||||||||||||||
07/06/04 | 50,000 | 1.2 | % | $ | 28.33 | 07/06/14 | $ | 890,672 | $ | 2,257,138 | ||||||||||||||||||||||||
04/06/04 | 50,000 | 1.2 | % | $ | 26.19 | 04/06/14 | $ | 823,380 | $ | 2,086,607 | ||||||||||||||||||||||||
01/21/04 | 200,000 | 4.9 | % | $ | 22.25 | 01/21/14 | $ | 2,798,581 | $ | 7,092,154 | ||||||||||||||||||||||||
Sol J. Barer,
Ph.D. |
10/05/04 | 30,000 | * | $ | 30.98 | 10/05/14 | $ | 584,495 | $ | 1,481,224 | ||||||||||||||||||||||||
07/06/04 | 30,000 | * | $ | 28.33 | 07/06/14 | $ | 534,403 | $ | 1,354,283 | |||||||||||||||||||||||||
04/06/04 | 30,000 | * | $ | 26.19 | 04/06/14 | $ | 494,028 | $ | 1,251,964 | |||||||||||||||||||||||||
01/21/04 | 120,000 | 2.9 | % | $ | 22.25 | 01/21/14 | $ | 1,679,149 | $ | 4,255,292 | ||||||||||||||||||||||||
Robert J.
Hugin |
10/05/04 | 20,000 | * | $ | 30.98 | 10/05/14 | $ | 389,663 | $ | 987,483 | ||||||||||||||||||||||||
07/06/04 | 20,000 | * | $ | 28.33 | 07/06/14 | $ | 356,269 | $ | 903,855 | |||||||||||||||||||||||||
04/06/04 | 20,000 | * | $ | 26.19 | 04/06/14 | $ | 329,352 | $ | 834,643 | |||||||||||||||||||||||||
01/21/04 | 80,000 | 2.0 | % | $ | 22.25 | 01/21/14 | $ | 1,119,432 | $ | 2,836,862 |
* |
Less than one percent (1%) |
(1) |
All options granted in 2004 were granted pursuant to our 1998 Stock Incentive Plan. The grants to Mr. Jackson, Dr. Barer and Mr. Hugin are vested in annual increments of 33 1/3% of each total grant, beginning on the date of grant. All options were granted at the fair market value of Common Stock on the effective date of grant. |
(2) |
The total number of options granted to employees in 2004 was 4,073,768. |
13
Option Exercises and Values for Fiscal 2004
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION
VALUES
Number of Securities Underlying Unexercised Options at December 31, 2004 |
Value of Unexercised in-the-Money Options at December 31, 2004(2) |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Shares Acquired on Exercise (#) |
Value Realized ($)(1) |
Exercisable(3) |
Unexercisable |
Exercisable(3) |
Unexercisable |
||||||||||||||||||||||
John W.
Jackson |
| | 3,283,640 | | $ | 42,724,082 | | |||||||||||||||||||||
Sol J. Barer,
Ph.D. |
24,480 | $ | 477,337 | 2,231,044 | | $ | 31,939,703 | | ||||||||||||||||||||
Robert J.
Hugin |
38,400 | $ | 879,198 | 1,593,200 | | $ | 23,143,595 | |
(1) |
Represents the difference between the average high and low trading price of the Common Stock on the NASDAQ National Market on the date the shares were acquired upon exercise and the exercise price of the options exercised multiplied by the number of shares acquired upon exercise. |
(2) |
Represents the difference between the closing market price of the Common Stock as reported by NASDAQ on December 31, 2004 of $26.52 per share and the exercise price per share of the in-the-money options multiplied by the number of shares underlying the in-the-money options. |
(3) |
Represents vested options under the 1992 Long-Term Incentive Plan and vested and unvested options under the 1998 Stock Incentive Plan, which may be exercised under the provisions of each of the plans. Shares of stock underlying unvested options which may be acquired upon exercise of such option (with a value of in-the-money options of $2,009,678.90 for Mr. Jackson, $1,254,369.42 for Dr. Barer and $892,880.76 for Mr. Hugin) may not be sold until such options are fully vested. |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |
Remaining Available Number of Securities For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Plan Category | (a) | (b) | (c) | ||||||||||||||||||||||||||
Equity
compensation plans approved by security holders |
23,939,754 | $ | 15.51 | 1,823,735 | |||||||||||||||||||||||||
Equity
compensation plans not approved by security holders |
1,539,256 | $ | 8.15 | 97,664 | |||||||||||||||||||||||||
Total |
25,476,010 | $ | 15.07 | 1,921,399 |
14
Compensation Committee Report
Executive Compensation Policies and Programs
15
16
Compensation Committee Interlocks and Insider Participation
Performance Graph
17
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG CELGENE
CORPORATION, THE S & P 500 INDEX,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE NASDAQ
PHARMACEUTICAL INDEX
Cumulative Total Return |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
12/99 |
12/00 |
12/01 |
12/02 |
12/03 |
12/04 |
||||||||||||||||||||||
CELGENE
CORPORATION |
100.00 | 139.29 | 136.80 | 92.01 | 192.34 | 227.40 | |||||||||||||||||||||
S & P
500 |
100.00 | 90.89 | 80.09 | 62.39 | 80.29 | 89.02 | |||||||||||||||||||||
NASDAQ STOCK
MARKET (U.S.) |
100.00 | 60.30 | 45.49 | 26.40 | 38.36 | 40.51 | |||||||||||||||||||||
NASDAQ
PHARMACEUTICAL |
100.00 | 120.50 | 109.11 | 72.38 | 104.08 | 111.76 |
* |
$100 INVESTED ON 12/31/99 IN STOCK OR INDEX INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31. |
18
Selected Related Securities Data |
As of 3/31/05 |
|||||
---|---|---|---|---|---|---|
Total Options
Outstanding* |
24,425,605 | |||||
Weighted
Average Strike Price |
$ | 15.62 | ||||
Weighted
Average Remaining Life (Yrs) |
6.5 | |||||
Total Options
available for grant under all plans |
1,185,686 |
* |
The following number of shares of our Common Stock are currently available for grants under our various equity incentive plans: 1998 Stock Incentive Plan 890,347; Directors Incentive Plan 220,600; the Anthrogenesis Corporation Qualified Employee Incentive Stock Option Plan 74,739. |
|
$400.0 million of unsecured convertible notes are convertible into 16,511,840 shares of our common stock at a conversion price of approximately $24.225 per share. |
Background of the Proposal to Amend the 1998 Stock Incentive Plan
19
Summary of the 1998 Stock Incentive Plan.
20
21
22
Certain U.S. Federal Income Tax Consequences.
23
24
New Plan Benefits
Name and Position |
Dollar Value ($) |
Number of Shares Underlying Options |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
John W.
Jackson, Chief Executive Officer |
(1) | (2) | ||||||||
Sol J. Barer,
Ph.D., President and Chief Operating Officer |
(1) | (2) | ||||||||
Robert J.
Hugin, Senior Vice President and Chief Financial Officer |
(1) | (2) | ||||||||
All Executive
Officers as a Group |
(1) | (2) | ||||||||
Non-Executive
Directors as a Group |
(3) | (3) | ||||||||
Non-Executive
Officer Employees as a Group |
(4) | (4) |
(1) |
Options are to be granted at the fair market value of the underlying shares of Common Stock on the effective date of the grant, with a ten-year expiration date for each option. |
(2) |
We anticipate that options may be granted to the named individual under the 1998 Stock Incentive Plan on a quarterly basis. However, the amount of options that may be granted to the named individual are based upon various prospective factors and cannot be determined at this time. |
(3) |
Non-executive directors do not participate in the 1998 Stock Incentive Plan and are not qualified to receive any benefits thereunder. |
(4) |
No new options have been granted at this time to any employees. Because the grant of awards under the 1998 Stock Incentive Plan will be based upon prospective factors including the nature of services to be rendered by our key employees and officers and employees and officers of our affiliates, and their potential contributions to our success, actual awards to be granted under the 1998 Stock Incentive Plan cannot be determined at this time. |
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR THE
ELECTION OF EACH OF THE NOMINEES
25
Selected Related Securities Data |
As of 3/31/05 |
|||||
---|---|---|---|---|---|---|
Total Options
Outstanding* |
24,425,605 | |||||
Weighted
Average Strike Price |
$ | 15.62 | ||||
Weighted
Average Remaining Life (Yrs) |
6.5 | |||||
Total Options
available for grant under all plans |
1,185,686 |
* |
The following number of shares of our Common Stock are currently available for grants under our various equity incentive plans: 1998 Stock Incentive Plan 890,347; Directors Incentive Plan 220,600; the Anthrogenesis Corporation Qualified Employee Incentive Stock Option Plan 74,739. |
|
$400.0 million of unsecured convertible notes are convertible into 16,511,840 shares of our common stock at a conversion price of approximately $24.225 per share. |
Background of the Proposal to Amend the Directors Incentive Plan
26
Summary of the Directors Incentive Plan
27
Certain Federal Income Tax Consequences
28
New Plan Benefits
Name and Position |
Dollar Value ($) |
Number of Shares Underlying Options |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
John W.
Jackson, Chief Executive Officer |
(1 | ) | (1 | ) | ||||||
Sol J. Barer,
Ph.D., President and Chief Operating Officer |
(1 | ) | (1 | ) | ||||||
Robert J.
Hugin, Senior Vice President and Chief Financial Officer |
(1 | ) | (1 | ) | ||||||
All Executive
Officers as a Group |
(1 | ) | (1 | ) | ||||||
Non-Executive
Directors as a Group |
(2 | ) | (3)(4 | ) | ||||||
Non-Executive
Officer Employees as a Group |
(1 | ) | (1 | ) |
(1) |
Our executive officers and other employees do not participate in the Directors Incentive Plan and are not qualified to receive any benefits thereunder. |
(2) |
Options are granted to our Non-Employee Directors at the fair market value of the underlying shares of Common Stock, with a ten-year expiration date for each option. |
(3) |
Subject to the approval by stockholders to amend the Directors Incentive Plan, we anticipate that options will be granted to our Non-Employee Directors under the Directors Incentive Plan as a group to purchase an aggregate 26,250 shares of Common Stock on a quarterly basis (105,000 shares of Common Stock annually). |
(4) |
The Directors Incentive Plan also provides for certain discretionary grants to Non-Employee Directors upon the date of each annual meeting in the amounts and under the circumstances as described in the section entitled Director Compensation under Proposal One. However, because these additional grants are discretionary and will be based upon various prospective factors, the actual awards or amounts thereof cannot be determined at this time. |
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE
ADOPTION OF THIS PROPOSAL
29
PROPOSAL FOUR: Registered Public Accounting Firm
Principal Accountant Fees and Services
2004 |
2003 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Audit
Fees |
$ | 963,390 | $ | 447,504 | ||||||
Audit-Related
Fees |
$ | 134,875 | $ | 53,540 | ||||||
Tax
Fees |
$ | 50,500 | $ | 166,292 | ||||||
All Other
Fees |
$ | 0 | $ | 51,950 |
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
30
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE
ADOPTION OF THIS PROPOSAL
31
STOCKHOLDER PROPOSALS
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
32
OTHER MATTERS
33
Appendix A
AMENDMENT NUMBER FOUR
TO THE
CELGENE CORPORATION
1995 NON EMPLOYEE DIRECTORS INCENTIVE PLAN
(AMENDED AND RESTATED AS OF JUNE 22, 1999
AND AS FURTHER AMENDED)
WHEREAS, the Celgene Corporation (the Company) maintains the Celgene Corporation 1995 Non Employee Directors Incentive Plan, as amended and restated as of June 22, 1999 and as further amended (the Plan);
WHEREAS, pursuant to Article 11 of the Plan, the Board of Directors of the Company (the Board) may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan; and
WHEREAS, the Board desires to amend the Plan, effective as of April 5, 2005.
NOW, THEREFORE, pursuant to Article 11 of the Plan, the Plan is hereby amended, subject to stockholder approval, effective as of April 5, 2005, as follows:
1. The first sentence of Section 3 of the Plan is amended in its entirety to read as follows:
The maximum number of shares of Common Stock which may be issued pursuant to the Plan shall not exceed 3,850,000 shares of Common Stock, subject to adjustment as provided in Section 9.
2. Section 12 of the Plan is amended in its entirety to read as follows:
The Plan shall terminate upon the earlier to occur of (a) the adoption of a resolution of the Board termination the Plan, (b) June 30, 2015, and (c) April 5, 2005 if the Plan has not been approved by the Corporations stockholders at the 2005 Annual Meeting.
WHEREAS, the Celgene Corporation (the Company) maintains the Celgene Corporation 1998 Stock Incentive Plan, as amended and restated as of April 23, 2003 and as further amended (the Plan);
WHEREAS, pursuant to Article 12 of the Plan, the Board of Directors of the Company (the Board) may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan; and
WHEREAS, the Board desires to amend the Plan, effective as of April 14, 2005.
NOW, THEREFORE, pursuant to Article 12 of the Plan, the Plan is hereby amended, effective as of April 14, 2005, subject to stockholder approval in the case of paragraph 3 below, as follows:
1. The first sentence of Section 2.7 of the Plan is amended in its entirety to read as follows:
Committee shall mean a Management Compensation and Development Committee or such other committee or subcommittee appointed from time to time by the Board, which shall be intended to consist of two (2) or more non-employee directors, each of whom shall be, to the extent required by Rule 16b-3 (as defined herein), a non-employee director as defined in Rule 16b-3 and, to the extent required by Section 162(m) of the Code and any regulations thereunder, an outside director as defined under Section 162(m) of the Code and to the extent required by NASD Rule 4200(a)(15) or such other applicable stock exchange rule, an independent director.
2. Section 2.30 of the Plan is amended by adding the following language at the end thereof:
Notwithstanding the foregoing, Stock Appreciation Rights granted on or after January 1, 2005 shall be settled solely in shares of Common Stock.
3. The first sentence of Section 4.1(a) of the Plan is amended in its entirety to read as follows:
The aggregate number of shares of Common Stock which may be issued or used for reference purposes under this Plan or with respect to which all Awards may be granted shall not exceed 31,000,000 shares (subject to any
increase or decrease pursuant to Section 4.2); provided, however, that notwithstanding the foregoing, no more than 750,000 shares (subject to any increase or decrease pursuant to Section 4.2) shall be subject to Awards of Restricted Stock or Performance-Based Awards denominated in shares of Common Stock.
4. Section 6.3(h) of the Plan is amended by adding the following language at the end thereof:
Notwithstanding the foregoing, Stock Options granted on or after October 1, 2004 may not permit reloads.
5. The first sentence of Section 7.3(a)(i) of the Plan is amended in its entirety to read as follows:
The Participant shall not be permitted to Transfer shares of Restricted Stock awarded under this Plan during a period set by the Committee (the Restriction Period) commencing with the date of such Award, as set forth in the Restricted Stock Award agreement and such agreement shall set forth a vesting schedule and any events which would accelerate vesting of the shares of Restricted Stock; provided, however, that shares of Restricted Stock shall be subject to a minimum vesting schedule of at least one year, subject to acceleration in the event of the Participants Retirement, Disability, death or involuntary termination without Cause.
6. Section 9.2(b) of the Plan is amended in its entirety to read as follows:
(b) Vesting. Any Award under this Article 9 and any Common Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award agreement, as determined by the Committee, in its sole discretion; provided, however, that such Awards and Common Stock shall be subject to a minimum vesting schedule of at least one year, subject to, subject to acceleration in the event of the Participants Retirement, Disability, death or involuntary termination without Cause.
7. Section 9.2(c) of the Plan is amended in its entirety to read as follows:
(c) Waiver of Limitation. Subject to the limitations of Section 9.2(b), in the event of the Participants Retirement, Disability, death or involuntary termination without Cause, the Committee may, in its sole discretion, waive in whole or in part any or all of the limitations imposed hereunder (if any) with respect to any or all of an Award under this Article.
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VOTE BY INTERNET - www.proxyvote.com |
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Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. |
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VOTE BY PHONE - 1-800-690-6903 |
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Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. |
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VOTE BY MAIL |
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Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Celgene Corporation, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717. |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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CGENE1 |
KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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CELGENE CORPORATION |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE |
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Vote On Directors |
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1. |
PROPOSAL TO ELECT TEN DIRECTORS |
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For All |
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To withhold authority to vote for any individual, mark For All Except and write the
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Vote On Proposal |
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2. |
To amend the 1998 Stock Incentive Plan to increase the number of shares that may be subject to awards granted thereunder from 25,000,000 to 31,000,000 and to decrease the number of shares that may be used for awards of restricted stock or performance-based awards denominated in shares of common stock from 1,700,000 to 750,000; |
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To amend the 1995 Non-Employee Directors Incentive Plan to increase the number of shares that may be subject to options granted thereunder from 3,600,000 to 3,850,000, and to extend the period under which options may be granted until June 30, 2015; |
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To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2005; and |
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In their discretion, upon such other matters as may properly come before the meeting. |
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Please sign exactly as names appear on this proxy. Where shares are held by joint tenants, both should sign. If signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized person. If a partnership, please sign in partnership name by an authorized person. |
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Please indicate if you plan to attend this meeting. |
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HOUSEHOLDING ELECTION - Please indicate if you consent to receive certain future investor communications in a single package per household |
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Signature [PLEASE SIGN WITHIN BOX] |
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Signature (Joint Owners) |
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CELGENE CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John W. Jackson, Sol J. Barer and Robert J. Hugin, and each of them, with power of substitution and resubstitution, to represent and to vote on behalf of the undersigned all of the shares of Celgene Corporation (the Company) which the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at the offices of Celgene Corporation, 86 Morris Avenue, Summit, New Jersey 07901 on Wednesday, June 15, 2005, beginning at 1:00 p.m., local time, and at any adjournment or adjournments thereof, hereby revoking all proxies heretofore given with respect to such stock, upon the proposals listed on the reverse side, more fully described in the notice of and proxy statement for the meeting (receipt of which is hereby acknowledged).
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF ALL NOMINEES FOR DIRECTOR LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2, 3 AND 4.