DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to Section 240.14a 12
Section 240.14a-2.
Cambrex Corporation
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required.
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o
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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o
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Fee paid previously with preliminary materials:
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o
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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CAMBREX
CORPORATION
March 24, 2008
Dear Stockholder,
You are cordially invited to attend the Annual Meeting of
Stockholders of Cambrex Corporation. This years meeting
will be held on April 24, 2008 at 1:00 P.M. at the
Sheraton Meadowlands Hotel, Two Meadowlands Plaza, East
Rutherford, New Jersey. Your Board of Directors and management
look forward to greeting personally those stockholders that are
able to attend.
At this years meeting, you will be asked to (1) elect
four (4) directors and (2) ratify the selection of the
Companys auditors, BDO Seidman, LLP as the Companys
independent accountant for the fiscal year ending
December 31, 2008.
Your vote is important. Whether you plan to attend the meeting
or not, please complete the enclosed proxy card and return it as
promptly as possible. The enclosed proxy card contains
instructions regarding voting. If you attend the meeting, you
may continue to have your shares voted as instructed in the
proxy, or you may withdraw your proxy at the meeting and vote
your shares in person.
Sincerely,
James A. Mack
Chairman
CAMBREX
CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 2008
Notice Is Hereby Given that the 2008 Annual Meeting of
Stockholders of Cambrex Corporation (the Company)
will be held at the Sheraton Meadowlands Hotel, Two Meadowlands
Plaza, East Rutherford, New Jersey on April 24, 2008
at 1:00 P.M. for the following purposes:
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1.
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to elect four (4) directors in Class III to hold
office until the 2009 Annual Meeting of Stockholders and until
their successors shall be elected and qualified;
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2.
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To consider and act upon the ratification of the appointment of
BDO Seidman, LLP as independent accountants for the fiscal year
ending December 31, 2008; and
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3.
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To transact such other business as may properly come before the
meeting or any adjournment thereof.
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Only stockholders of record of Common Stock of the Company at
the close of business on March 14, 2008 will be entitled to
vote at the meeting. The list of such stockholders will be
available for inspection by stockholders during the ten days
prior to the meeting in accordance with Section 219 of the
Delaware General Corporation Law at One Meadowlands Plaza, East
Rutherford, New Jersey 07073 and will also be available at the
Annual Meeting. Stockholders may make arrangements for such
inspection by contacting Peter E. Thauer, Senior Vice President,
General Counsel & Secretary, Cambrex Corporation, One
Meadowlands Plaza, East Rutherford, New Jersey 07073.
By Order of the Board of Directors,
Peter E. Thauer,
Secretary
March 24, 2008
THE VOTE
OF EACH STOCKHOLDER IS IMPORTANT.
PLEASE DATE AND SIGN THE ACCOMPANYING PROXY CARD AND PROMPTLY
RETURN IT IN THE POSTAGE PAID ENVELOPE PROVIDED.
CAMBREX
CORPORATION
2008
ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
PROXY
SOLICITATION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Cambrex
Corporation (the Company) for use at the 2008 Annual
Meeting of Stockholders to be held on April 24, 2008, and
at any adjournment of the meeting. The address of the
Companys principal executive office is One Meadowlands
Plaza, East Rutherford, New Jersey 07073. This Proxy Statement
and the form of proxy are being mailed to stockholders
commencing on or about March 24, 2008.
The costs of soliciting proxies will be borne by the Company.
Brokerage houses, banks, custodians, nominees and fiduciaries
are being requested to forward the proxy material to beneficial
owners, and their reasonable expenses therefore will be
reimbursed by the Company. Solicitation will be made by mail and
also may be made personally, by telephone or electronic mail by
the Companys officers, directors and employees without
special compensation for such activities.
REVOCABILITY
AND VOTING OF PROXY
A proxy given by a stockholder may be revoked at any time before
it is exercised by giving another proxy bearing a later date or
by notifying the Company in writing of such revocation or by a
vote in person at the Annual Meeting. The execution of a proxy
will not affect a stockholders right to attend the Annual
Meeting and vote in person, but attendance at the Annual Meeting
will not, by itself, revoke a proxy. Properly executed proxies
received by the Company will be voted in accordance with the
instructions indicated thereon and if no instructions are
indicated, will be voted for the election of the four
(4) nominees for director named herein; and for the
selection of BDO Seidman, LLP as independent accountants for the
Company. The Company knows of no reason why any of the nominees
named herein would be unable to serve for the terms indicated.
In the event, however, that any such nominee should, prior to
the election, become unable to serve as a director, unless the
Board of Directors decides to decrease the size of the Board,
the proxy will be voted for such substitute nominee as the Board
of Directors shall propose.
The Board of Directors knows of no matters to be presented at
the meeting other than those set forth in the foregoing Notice
of Annual Meeting. The Proxy Card conveys discretionary
authority to vote on any other matter not presently known by
management that may properly come before the Annual Meeting. If
other matters properly come before the meeting, the persons
named in the accompanying form of proxy intend to vote the
shares subject to such proxies in accordance with their best
judgment.
RECORD
DATE AND VOTING RIGHTS
The Company has only one class of voting securities, which is
the Common Stock, par value $0.10 (Common Stock).
Only holders of Common Stock of the Company of record at the
close of business on March 14, 2008 will be entitled to
vote at the meeting. On such record date there were outstanding
and entitled to vote 29,078,420 shares of Common Stock and
each such share is entitled to one vote.
2
PRINCIPAL
STOCKHOLDERS
The following sets forth information with respect to the only
persons of which the Company is aware as of February 15,
2008, who may be deemed to beneficially own more than 5% of the
outstanding Common Stock of the Company:
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Number of Shares
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Percent of
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Name and Address
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Beneficially Owned(1)
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Class(2)
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Snyder Capital Management, L.P.
Snyder Capital Management, Inc.
One Market Plaza
Steuart Tower, Suite 1200
San Francisco, CA 94105
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2,219,808
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(3)
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7.7
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%
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Barclays Global Investors, NA
45 Fremont Street
San Francisco, CA 94105
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2,167,845
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(4)
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7.48
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%
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Renaissance Technologies LLC
James H. Simons
800 Third Avenue
New York, New York 10022
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1,475,300
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(5)
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5.09
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%
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Westwood Management Corp.
200 Crescent Court, Suite 1200
Dallas, Texas 75201
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1,462,120
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(6)
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5.04
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%
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(1) |
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Unless otherwise indicated (a) share ownership is based
upon information furnished to the Company as of
February 15, 2008, by the beneficial owner and
(b) each beneficial owner has sole voting and investment
power with respect to the shares shown. |
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(2) |
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For the purpose of this table, the percent of issued and
outstanding shares of Common Stock of the Company held by each
beneficial owner has been calculated on the basis of
(i) 29,015,631 shares of Common Stock issued and
outstanding (excluding treasury shares) on February 15,
2008, and (ii) 23,922 shares still to be issued in
connection with the 1993 conversion of the Companys
9% Convertible Subordinated Notes. |
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(3) |
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In a Schedule 13G under the Securities Exchange Act of 1934
dated February 13, 2008 and filed by Snyder Capital
Management, L.P. (SCMLP) and Snyder Capital
Management, Inc. (SCMI), SCMLP and SCMI reported
that they have shared voting power over 1,972,598 shares
and shared dispositive power over 2,219,808 shares. SCMLP
and SCMI have reported the shares as beneficially owned as a
result of acting as an investment advisor. SCMI and its direct
parent company, Natixis Global Asset Management, L.P. (formerly
known as IXIS Asset Management North America, L.P.) operate
under an understanding that all investment and voting decisions
regarding managed accounts are to be made by SCMI and SCMLP and
not by Natixis Global Asset Management, L.P. or any entity
controlling it. Accordingly, SCMI and SCMLP do not consider
Natixis Global Asset Management, L.P. or any entity controlling
it to have any direct or indirect control over the securities
held in managed accounts. |
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In a Schedule 13G under the Securities Exchange Act of 1934
dated January 10, 2008 and filed by Barclays Global
Investors NA (Barclays), Barclays reported that it
has sole voting power over 1,843,747 shares and sole
dispositive power over 2,167,845 shares held by Barclays in
trust accounts for the economic benefit of the beneficiaries of
those accounts. |
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In a Schedule 13G under the Securities Exchange Act of 1934
dated February 12, 2008 and filed by Renaissance
Technologies LLC (RTC) and James H. Simons
(Simons), RTC and Simons reported that they have
sole voting power over 1,390,000 shares and sole
dispositive power over 1,475,300 shares. RTC and Simmons
have reported the shares as beneficially owned as a result of
acting as an investment advisor and because of Simons
position as a control person of RTC. |
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(6) |
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In a Schedule 13G under the Securities Exchange Act of 1934
dated February 13, 2008 and filed by Westwood Management
Corp. (Westwood), Westwood reported that it has sole
voting power over 1,228,210 shares, sole |
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dispositive power over 1,277,320 shares and shared
dispositive power over 184,800 shares. Westwood has
reported the shares as beneficially owned as a result of acting
as an investment advisor. |
EXECUTIVE
OFFICERS OF THE REGISTRANT
The following table lists the officers of the Company:
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Name
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Age
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Office
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James A. Mack*
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70
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Chairman of the Board of Directors, President and Chief
Executive Officer
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Steven M. Klosk*
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50
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Executive Vice President, Chief Operating Officer &
President, Pharmaceutical Products and Services
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Paolo Russolo*
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63
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President, Profarmaco Milano
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Gregory P. Sargen*
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42
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Vice President & Chief Financial Officer
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Peter E. Thauer*
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68
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Senior Vice President, Law & Environment, General Counsel
and Corporate Secretary
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The following table lists officers who ended employment with the
Company during 2007:
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Luke M. Beshar*
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48
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Executive Vice President, Strategy & Corporate Development
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Thomas N. Bird
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63
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Vice President, Corporate Development
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The Companys executive officers are elected by the Board
of Directors and serve at the Boards discretion.
Mr. Mack joined Cambrex in February 1990 and was
reappointed President and Chief Executive Officer of Cambrex in
February 2006. Mr. Mack had retired as President and Chief
Executive Officer in August 2004. He joined the Company as
President and Chief Operating Officer and was appointed to the
position of President and Chief Executive Officer in April 1995.
Mr. Mack has been a director of the Cambrex Board of
Directors since joining the Company in 1990 and was appointed
Chairman of the Board of Directors in October 1999. Prior to
joining Cambrex, Mr. Mack was Vice President in charge of
the worldwide Performance Chemicals business of Olin
Corporation. Mr. Mack was Executive Vice President of
Oakite Products, Inc. from 1982 to 1984. Prior to joining
Oakite, he held various positions with The Sherwin-Williams
Company, most recently as President and General Manager of the
Chemicals Division from 1977 to 1981. Mr. Mack is a past
Chairman of the Board of Governors of the Synthetic Organic
Chemical Manufacturing Association and is a member of the Board
of Trustees of the Michigan Tech Alumni Fund.
Mr. Klosk joined Cambrex in October 1992 and
currently serves in the role of Executive Vice President, Chief
Operating Officer & President, Pharmaceutical Products
and Services. Mr. Klosk joined the Company as Vice
President, Administration. He was appointed Executive Vice
President, Administration in October 1996 and was promoted to
the position of Executive Vice President, Administration and
Chief Operating Officer for the Cambrex Pharma and
Biopharmaceutical Business Unit in October 2003. In January
2005, Mr. Klosk assumed direct responsibility for the
leadership of the Biopharmaceutical Business Unit as Chief
Operating Officer. In August 2006, Mr. Klosk assumed the
responsibility of the Pharma business as Executive Vice
President and Chief Operating Officer
Biopharma & Pharma and in February 2007 was appointed
to his current position. From 1988 until he joined Cambrex,
Mr. Klosk was Vice President, Administration and Corporate
Secretary for The Genlyte Group, Inc. From 1985 to 1988, he was
Vice President, Administration for Lightolier, Inc., a
subsidiary of The Genlyte Group, Inc.
Dr. Russolo is President, Profarmaco Milano and
joined the Company in 1994 with the acquisition of Profarmaco
Nobel S.r.l. in Milan Italy, where he served as Managing
Director since 1982. Dr. Russolo joined Profarmaco Nobel
S.r.l. in 1971. Upon the acquisition of Profarmaco Nobel S.r.l.,
Dr. Russolo continued serving in the role of Managing
Director until 2000, when he was appointed to President, Cambrex
Profarmaco Business Unit. Dr. Russolo was appointed to his
current position on December 31, 2007.
4
Mr. Sargen joined Cambrex in February 2003 and has
served as Vice President and Chief Financial Officer since
February 2007. Mr. Sargen previously held the position of
Vice President, Finance. Previously, he was with Exp@nets, Inc.
from 1999 through 2002, serving in the roles of Executive Vice
President, Finance/Chief Financial Officer and Vice
President/Corporate Controller. From 1996 to 1998, he was with
Fisher Scientific Internationals Chemical Manufacturing
Division, serving in the roles of Vice President, Finance and
Controller. Mr. Sargen has also held various positions in
finance, accounting and audit with Merck & Company,
Inc., Heat and Control, Inc., and Deloitte & Touche.
Mr. Thauer joined Cambrex in August 1989 and
currently serves in the role of Senior Vice President, Law and
Environment, General Counsel, and Corporate Secretary. He joined
the Company as General Counsel and Corporate Secretary and was
appointed Vice President, Law and Environment in December 1992.
He was appointed to his current position in January 2001. From
1987 until 1989, he was Counsel to the business and finance
group of the firm of Crummy, Del Deo, Dolan, Griffinger and
Vecchione. From 1971 to 1987, Mr. Thauer held various
positions with Avon Products, Inc., including U.S. Legal
Department Head and Corporate Assistant Secretary.
Mr. Beshar terminated his employment with Cambrex on
October 2, 2007 to pursue other interests. Mr. Beshar
joined Cambrex in December 2002 as Senior Vice President and
Chief Financial Officer and in February 2004 was appointed
Executive Vice President and Chief Financial Officer. He was
appointed Executive Vice President, Strategy &
Corporate Development in February 2007. Prior to joining
Cambrex, Mr. Beshar was Senior Vice President and Chief
Financial Officer with Dendrite International. Prior to
Dendrite, he was Executive Vice President, Finance and Chief
Financial Officer for Exp@nets, Inc. from 1998 through 2002.
Mr. Beshar has served as Chief Financial Officer for other
businesses in his career and has been the President and Chief
Financial Officer of a company privately owned by Merrill Lynch
Capital Partners. Mr. Beshar is a member of the Board of
Directors of PNY Technologies, Inc.
Mr. Bird terminated his employment with Cambrex on
March 1, 2007 to pursue other interests. Mr. Bird
joined Cambrex in 1997 and served in the role of Vice President,
Corporate Development. He joined the Company as President and
Chief Operating Officer Nepera, Inc. and was
appointed to the position of President, Biotechnology Group in
July 1998. In December 2000, he was appointed to the position of
Vice President Business Development Life Sciences.
In December 2002, he was appointed to his position of Vice
President, Corporate Development. Prior to joining Cambrex,
Mr. Bird was President of Bavier, Bulger &
Goodyear, a management consulting firm, from 1994 to 1997. From
1989 to 1994, he was with Commercial Intertech Corporation,
serving in various management roles, most recently as Group Vice
President, Fluid Purification Group. From 1984 to 1989, he
served as Founder and President of W.M.A. Incorporated.
Mr. Bird also served in various general management roles
with Sherwin Williams Company from 1979 to 1984.
5
COMMON
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table gives information concerning the beneficial
ownership of the Companys Common Stock on
February 15, 2008, by (i) each director and nominee
for election as a director, (ii) each of the executive
officers named in the Summary Compensation Table (below) and
(iii) all directors and executive officers of the Company
as a group.
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Shares
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Beneficially
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Percent of
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Beneficial Owners
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Owned(1)
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Class(2)
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David R. Bethune
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6,000
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(3)
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*
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Rosina B. Dixon, M.D.
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30,846
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(4)
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*
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Roy W. Haley
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56,622
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(5)
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*
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Kathryn Rudie Harrigan
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35,885
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(6)
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*
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Leon J. Hendrix, Jr.
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68,029
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(7)
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*
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Ilan Kaufthal
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49,608
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(8)
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*
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William B. Korb
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54,742
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(9)
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*
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James A. Mack
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543,778
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(10)
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1.87%
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John R. Miller
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26,273
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(11)
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*
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Peter Tombros
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40,249
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(12)
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*
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Luke M. Beshar
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231,081
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(13)
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*
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Thomas N. Bird
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50,000
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(14)
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*
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Steven M. Klosk
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160,555
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(15)
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*
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Paolo Russolo
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88,400
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(16)
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*
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Gregory P. Sargen
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23,015
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(17)
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*
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Peter E. Thauer
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184,982
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(18)
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*
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All Directors and Executive Officers as a Group (16 Persons)
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1,650,065
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(19)
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5.68%
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* |
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Beneficial Ownership is less than 1% of the Common Stock
outstanding |
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(1) |
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Except as otherwise noted, reported share ownership is as of
February 15, 2008. Unless otherwise stated, each person has
sole voting and investment power with respect to the shares of
Common Stock he or she beneficially owns. |
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(2) |
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For the purpose of this table, the percent of issued and
outstanding shares of Common Stock of the Company held by each
beneficial owner has been calculated on the basis of
(i) 29,015,631 shares of Common Stock issued and
outstanding (excluding treasury shares) on February 15,
2008, (ii) all shares of Common Stock subject to stock
options which are held by such beneficial owner and are
exercisable within 60 days of February 15, 2008, and
(iii) 23,922 shares still to be issued in connection
with the 1993 conversion of the Companys
9% Convertible Subordinated Notes. |
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(3) |
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The number of shares reported is 6,000 shares issuable upon
exercise of options granted under the Companys 1998 and
2004 stock option Plans. |
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(4) |
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The number of shares reported includes 16,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans. |
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(5) |
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The number of shares reported includes 20,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans and 36,622 share equivalents held at February 15,
2008 in the Companys Directors Deferred Compensation
Plan. |
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(6) |
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The number of shares reported includes 14,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans. |
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(7) |
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The number of shares reported includes 20,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans and 40,529 share equivalents held at
February 15, 2008 in the Companys Directors
Deferred Compensation Plan. |
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(8) |
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The number of shares reported includes 20,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans. |
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(9) |
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The number of shares reported includes 20,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans, 1,000 shares held by a family member for which
beneficial ownership of such shares is disclaimed, and
33,742 share equivalents held at February 15, 2008 in
the Companys Directors Deferred Compensation Plan. |
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(10) |
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The number of shares reported includes 337,800 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans, 51,668 restricted stock
units, 65,244 share equivalents held at February 15,
2008 in the Companys Deferred Compensation Plan and
1,061 shares held December 31, 2007 in the
Companys Savings Plan. |
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(11) |
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The number of shares reported includes 20,000 shares
issuable upon exercise of options granted under the
Companys 1996, 1998, 2001 and 2004 stock option Plans. |
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(12) |
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The number of shares reported includes 14,000 shares
issuable upon exercise of options granted under the
Companys 1996, 1998, 2001 and 2004 stock option Plans and
25,249 share equivalents held at February 15, 2008 in
the Companys Directors Deferred Compensation Plan. |
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(13) |
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The number of shares reported includes 230,000 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans and 1,081 shares held at
December 31, 2007 in the Companys Savings Plan. |
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(14) |
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The number of shares reported includes 50,000 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans. |
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(15) |
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The number of shares reported includes 52,125 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans, 44,527 restricted stock
units, 10,623 shares held at December 31, 2007 in the
Companys Savings Plan, and 49,121 share equivalents
held at February 15, 2008 in the Companys Deferred
Compensation Plan. |
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(16) |
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The number of shares reported includes 32,125 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans and 38,515 restricted stock
units. |
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(17) |
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The number of shares reported includes 625 shares issuable
upon exercise of options granted under the Companys Stock
Option Plans, 21,134 restricted stock units and
1,256 shares held at December 31, 2007 in the
Companys Savings Plan. |
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(18) |
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The number of shares reported includes 75,582 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans, 120 shares held at
December 31, 2007 in the Companys Savings Plan, and
81,485 share equivalents held at February 15, 2008 in
the Companys Deferred Compensation Plan. |
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(19) |
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The number of shares reported includes 928,257 shares
issuable upon exercise of options that are currently exercisable
or will become exercisable within 60 days, 155,844
restricted stock units, 14,141 shares held at
December 31, 2007 in the Companys Savings Plan,
136,142 share equivalents held at February 15, 2008 in
the Directors Deferred Compensation Plan and 195,850 share
equivalents held at February 15, 2008 in the Companys
Deferred Compensation Plan. Shares held by immediate family
members are not included and beneficial ownership of such shares
is disclaimed. |
7
PROPOSAL NO. 1
ELECTION
OF DIRECTORS
The Board of Directors of the Company is currently divided into
three classes. However, in accordance with a recent amendment to
our certificate of incorporation, directors elected at and after
this Annual Meeting shall hold office until the first annual
meeting of stockholders following their election and until a
successor shall have been elected and qualified or until the
directors prior death, resignation or removal. That being
the case, at this Annual Meeting four (4) directors in
Class III will be elected to hold office until the 2009
Annual Meeting and until their successors shall be elected and
qualified. Each of the nominees has consented to serve as a
director if elected. To be elected, each nominee for director
requires a majority of the votes cast.
For purposes of electing directors, a majority of the
votes cast means that the number of votes cast
for a director exceeds the number of votes cast
against that director. The Governance Committee has established
procedures under which any director who is not elected (because
the number of votes cast against such directors candidacy
exceed the number of votes cast in favor of that candidacy)
shall offer to tender his or her resignation to the Board of
Directors. In such case, the Governance Committee will make a
recommendation to the Board of Directors on whether to accept or
reject the resignation, or whether other action should be taken.
The Board of Directors will act on the Governance
Committees recommendation and publicly disclose its
decision and the rationale behind it within 90 days from
the date of the certification of the election results.
Abstentions and broker non-votes will not be counted in
connection with the election of directors. A properly executed
proxy marked Withhold with respect to the election
of one or more directors will not be voted with respect to the
director or directors indicated. The following sets forth with
respect to the four persons who have been nominated by the Board
of Directors for election at this Annual Meeting and the other
directors of the Company certain information concerning their
positions with the Company and principal outside occupations and
other directorships held. Except as otherwise disclosed herein,
none of the corporations or organizations listed below is a
parent, subsidiary or other affiliate of the Company.
The Board of Directors recommends a vote FOR the election of
the Nominees.
Nominees
for Election to Serve as Directors Serving
until the 2009 Annual Meeting (Class III)
William B. Korb (age 67). Director since
1999. Member of the Audit and Chairman of the Regulatory Affairs
Committees of the Board of Directors. Director, President and
Chief Executive Officer since 1987 of Marconi Commerce Systems,
Inc., formerly Gilbarco Inc., prior to his retirement on
March 1, 2001. Prior to joining Gilbarco, the worlds
leading gasoline pump and dispenser manufacturing company, was
an Operating Vice President of Reliance Electric Company, a
position he held from 1979 to 1987. Currently serves on the
Board of Premier Farnell plc.
James A. Mack (age 70). Director since
1990, President and Chief Operating Officer of the Company since
joining the Company in February 1990 and Chief Executive Officer
since 1995. Appointed Chairman of the Board of Directors in
October 1999. In August 2004 Mr. Mack retired as President
and Chief Executive Officer and became Executive Chairman of the
Board of Directors. In December 2005 Mr. Mack was named
Acting President and Chief Executive Officer and on
February 1, 2006 he was elected as President and Chief
Executive Officer. Prior thereto Mr. Mack was with Olin
Corporation, a manufacturer of chemical and other products,
since 1984 as Vice President, Specialty Chemicals and, more
recently, Vice President, Performance Chemicals. Mr. Mack
was Executive Vice President of Oakite Products, Inc. from 1982
to 1984. Prior to joining Oakite held various positions with The
Sherwin-Williams Company, most recently as President and General
Manager of the Chemicals Division from 1977 to 1981. Past
Chairman of the Board of Governors of the Synthetic Organic
Chemical Manufacturing Association. Member of the Board of
Trustees of the Michigan Tech Alumni Fund and serves on the
Board of Directors of Research Corporation Technologies Inc.
John R. Miller (age 70). Director since
1998. Lead Director, Member of the Compensation and Governance
Committees of the Board of Directors. Mr. Miller currently
serves as Chairman of the Board of SIRVA, Inc. and
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Chairman of the Board of Graphic Packaging Corporation. He is
also a Director of Eaton Corporation, Past Director and Chairman
of the Federal Reserve Bank of Cleveland. Mr. Miller served
with The Standard Oil Company as a Director, President and Chief
Operating Officer from 1980 until 1986. From 2000 to 2003, he
was Chairman and Chief Executive Officer of Petroleum Partners,
Inc., a provider of outsourcing services to the petroleum
industry.
Peter Tombros (age 65). Director since
2002. Member of the Audit and Governance Committees of the Board
of Directors. Professor, Distinguished Executive in Residence,
Eberly College of Science, Pennsylvania State University. Former
Chairman of the Board and Chief Executive Officer of VivoQuest,
a private biopharmaceutical company from 2001 until 2005. Served
as President and Chief Executive Officer from 1994 to 2001 of
Enzon Pharmaceuticals. Before joining Enzon, he spent
25 years with Pfizer, Inc. as Vice President of Marketing,
Senior Vice President and General Manager and as Executive Vice
President of Pfizer Pharmaceuticals, Inc. He also served as Vice
President Corporate Strategic Planning. Director and
Non-Executive Chairman of the Board of Directors of Alpharma,
Inc., NPS Pharmaceuticals, and PharmaNet Development Group, Inc.
and Director of Protalex.
Directors
Serving until the 2009 Annual Meeting (Class I)
David R. Bethune (age 67). Director since
June 2005. Member of the Compensation and Governance Committees
of the Board of Directors. Retired Chairman and Chief Executive
Officer of Atrix Laboratories, a drug delivery and product
development company, where he has been a director of the company
for the past ten years. Prior to Atrix Laboratories, he was
President and Chief Operating Officer of IVAX Corporation, a
pharmaceutical company. Before joining IVAX, began a
start-up
pharmaceutical company venture formed by Mayo Medical Ventures,
a business unit of Mayo Clinics of Rochester. He previously
served as group Vice President of American Cyanamid Company and
a member of the Executive Committee where he had executive
authority for human biologicals, consumer health products,
pharmaceuticals and ophthalmics as well as global medical
research. He was also President of the Lederle Laboratories
Division of American Cyanamid Company and President of GD
Searles North American operations in the 1980s. He
currently serves as Chairman of the Board of Zila Incorporated
and Board Member of the Female Health Company.
Kathryn Rudie Harrigan (age 56). Director
since 1994. Member of the Audit Committee of the Board of
Directors. Since 1981, Professor, Management of Organizations
Division of the Columbia University Business School, and, since
1993, the Henry R. Kravis Professor of Business Leadership at
Columbia University Business School.
Directors
Serving until 2010 Annual Meeting (Class II)
Rosina B. Dixon, M.D.
(age 65). Director since 1995. Chairperson
of the Compensation Committee and Member of the Regulatory
Affairs Committee of the Board of Directors. Dr. Dixon has
been Sr. Director, Global Pharmacovigilance and Epidemiology at
Sanofi-Aventis, Bridgewater, NJ since September 2006. From May
1986 to September 2006 she was a consultant to the
pharmaceutical industry. Dr. Dixon previously served as
Vice President and Secretary of Medical Market Specialties
Incorporated, as well as a member of its Board of Directors. She
was also previously Medical Director, Schering Laboratories,
Schering-Plough Corporation. Prior to that, Dr. Dixon was
Executive Director Biodevelopment, Pharmaceuticals Division,
CIBA-GEIGY Corporation. Dr. Dixon is a member of the Board
of Directors of Church & Dwight Co., Inc.
Roy W. Haley (age 61). Director since
1998. Chairman of the Audit Committee of the Board of Directors
and Audit Committee Financial Expert. Chairman, President and
Chief Executive Officer of WESCO International, Inc. (NYSE), an
electrical products distribution company. Prior to joining WESCO
in 1994, served as President and Chief Operating Officer of
American General Corporation, one of the nations largest
consumer financial services organizations. Began his career in
1969 with the management consulting division of Arthur
Andersen & Co. and served as a partner from 1980 until
1988. Director of United Stationers, Inc. (NASDAQ), the Federal
Reserve Bank of Cleveland and civic organizations generally
based in Western Pennsylvania.
Leon J. Hendrix, Jr.
(age 66). Director since 1995. Chairman of
the Governance Committee and Member of the Compensation
Committee of the Board of Directors. Retired as Chairman of
Remington Arms Co. in May 2007.
9
Was Chairman of Remington Arms Co. since December 1997 and from
December 1997 until April 1999 was also Chief Executive Officer.
From 1993 to 2000, Mr. Hendrix was a Principal of Clayton,
Dubilier & Rice, Inc., a private investment firm.
Prior thereto, Mr. Hendrix was with Reliance Electric
Company, a manufacturer and seller of industrial and
telecommunications equipment and services, since 1973, where he
held a series of executive level positions, most recently Chief
Operating Officer and a member of the Board of Directors since
1992. Mr. Hendrix is a member of the Board of Directors of
Keithley Instruments, Inc. He is also Chairman of the Clemson
University Board of Trustees.
Ilan Kaufthal (age 60). Director since
the Company commenced business in 1981. Member of the Regulatory
Affairs Committee of the Board of Directors. Vice Chairman of
Investment Banking at Bear, Stearns & Co. Inc. since
joining that firm in May 2000. Until joining Bear,
Stearns & Co. Inc., Mr. Kaufthal was with
Schroder & Co. Incorporated as Vice Chairman and head
of mergers and acquisitions for thirteen years. Prior thereto,
he was with NL Industries, Inc., a firm in the chemicals and
petroleum services businesses, as its Senior Vice President and
Chief Financial Officer.
Transactions
with Related Persons
One of the members of our Board of Directors, Mr. Ilan
Kaufthal, is a Vice Chairman of Bear Stearns & Co.
Inc. (Bear Stearns). Pursuant to an engagement
letter dated September 19, 2005, as amended
October 22, 2006 (the Engagement Letter),
Cambrex, upon authorization of the Board of Directors, retained
Bear Stearns to act as its exclusive financial advisor in
connection with the consideration by the Board of Directors of
the Companys strategic alternatives, including the process
leading to the signing of the Stock Purchase Agreement with
Lonza Group Limited announced on October 24, 2006 with
respect to the Companys Bio Companies Businesses, which
transaction closed on February 6, 2007 (the
Transaction). The Engagement Letter provided for the
payment of a customary fee for Bear Stearns services, a
substantial portion of which was contingent on successful
consummation of the Transaction. In addition, Cambrex agreed to
indemnify Bear Stearns against certain liabilities arising out
of the engagement. Bear Stearns received $4,156,336.74
(including $231,336.74 of out of pocket expenses) in connection
with its services in relation to the Transaction.
In selecting Bear Stearns, our Board of Directors considered,
among other things, the fact that Bear Stearns is an
internationally recognized investment banking firm with
substantial experience advising companies in the health care
products and services industry and companies in the chemicals
and industrial products and services industry, as well as
substantial experience providing strategic advisory services.
Although Mr. Kaufthal is a Vice Chairman of Bear Stearns,
the Board of Directors concluded that Bear Stearns
familiarity with the Company and its business segments and the
industries in which the Company conducts business made Bear
Stearns the logical and appropriate choice as financial advisor.
In light of Mr. Kaufthals dual roles, the Board of
Directors also authorized the Company to retain a second bank to
render, in addition to Bear Stearns, an opinion to the Board of
Directors with respect to the consideration to be received by
the Company in any transaction for which Bear Stearns served as
the Companys financial advisor. Mr. Kaufthal
abstained from the Board of Directors vote related to the
approval of the Transaction.
On May 2, 2007, the Company gave Bear Stearns a one-year
notice of termination of its engagement. As previously
announced, the Company will continue to evaluate strategic
opportunities for the Human Health business as they arise and
the Company may continue using Bear Stearns as financial advisor
to Cambrex with respect to the evaluation of any such
opportunities.
Company Policies and Procedures related to Review, Approval
and Ratification of Transactions with Related Persons
Pursuant to the Companys Corporate Governance
Guidelines, the Board expects Cambrex directors, officers
and employees to act ethically at all times and to adhere to the
Companys Code of Business Conduct and Ethics,
including the companys policies on Business Conduct and
Ethics and Conflicts of Interest. A conflict of
interest occurs when an individuals personal
interests interfere in any way (or even appear to interfere)
with the interests of the Company. A conflict situation can
arise when a director takes actions or has interests that may
make it difficult to perform his or her work objectively and
effectively. Conflicts of interest also arise when a director,
or a member of his or her family, receives improper personal
benefits as a result of his or her position in the Company.
10
A potential conflict of interest with respect to a proposed
transaction is required to be reported to the Companys
General Counsel, Chief Executive Officer and the Boards
Governance Committee. The Governance Committee will evaluate the
circumstances surrounding the potential conflict of interest and
recommend action to the full Board, which will consider any such
recommendation. The Board is responsible for the ultimate
determination as to whether the transaction giving rise to the
potential conflict of interest can proceed.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Companys directors and executive officers,
and persons who own more than ten percent of a registered class
of the Companys securities, to file reports of ownership
and transactions in the Companys securities with the
Securities and Exchange Commission and the New York Stock
Exchange. Such directors, executive officers and ten percent
stockholders are also required to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms received by
it, and on written representation from certain of the
Companys directors and executive officers that no other
reports were required, the Company believes that during 2007 all
Section 16(a) filing requirements applicable to its
directors, executive officers and ten percent stockholders were
complied with during the 2007 fiscal year.
CORPORATE
GOVERNANCE
The Board of Directors is responsible for directing the
management of the business and affairs of the Company. The Board
holds regular meetings five times each year and holds additional
special meetings as required. During 2007 the Board held eight
meetings. While there is no formal policy, directors are
expected to attend board meetings and meetings of committees on
which they serve, and to spend the time needed and meet as
frequently as necessary to properly discharge their
responsibilities. The Board recognizes that occasional meetings
may need to be scheduled on short notice when the participation
of a director is not possible and that conflicts may arise that
may prevent a director from attending a regularly scheduled
meeting. The Board expects, however, that each director will
make every reasonable effort to keep absences to a minimum.
Although participation by conference telephone or other
communications equipment is allowed, personal attendance is
encouraged. Each incumbent director attended at least 75% of the
aggregate of the total number of Board meetings and committee
meetings, as applicable. Eight directors attended the
Companys annual meeting of stockholders in April of 2007.
Our Board has affirmatively determined, after considering all of
the relevant facts and circumstances, that all of the directors,
other than James A. Mack and Ilan Kaufthal, are independent from
our management under the standards set forth in the
Companys Independence Standards for Directors,
which was adopted by the Board in January 2004 and is available
on the Companys website (www.Cambrex.com). This
means that none of the independent directors have any direct or
indirect material relationship with the Company, either directly
or as a partner, stockholder or officer of an organization that
has a relationship with the Company. As a result, the Company
has a majority of independent directors on our Board as required
by the listing standards of the New York Stock Exchange. The
Board of Directors has also adopted the Code of Business
Conduct and Ethics, which is applicable to all directors,
officers and employees of the Company, including the Chief
Executive Officer, the Chief Financial Officer and the principal
accounting officer.
Non-management directors have regularly scheduled executive
sessions in which they meet without the presence of members of
management. These executive sessions occur before or after each
regularly scheduled meeting of our Board and may also occur in
conjunction with special meetings. The Lead Director of these
executive sessions is John R. Miller.
Shareholder Communications with our Board. The
Company is committed to providing stockholders and other
interested persons with an open line of communication for
bringing issues of concern to the Companys non-management
directors. In January 2004, the Board approved the following
process by which such communications may be made and for
handling any such communications received by the Company:
Any stockholder or interested person may communicate with the
Companys non-management directors as a group by sending a
communication to the Board of Directors,
c/o Corporate
Secretary, Cambrex Corporation, One
11
Meadowlands Plaza, 15th Floor, East Rutherford, New Jersey
07073. All communications will be reviewed by the Companys
Corporate Secretary who will send such communications to the
non-management directors unless the Corporate Secretary
determines that the communication does not relate to the
business or affairs of the Company or the function of the Board
or its Committees, or relates to insignificant matters that do
not warrant the non-management directors attention or is
not otherwise appropriate for delivery to the non-management
directors.
The non-management directors who receive such communication will
have discretion to determine the handling of such communication,
and if appropriate, respond to the person sending the
communication, and disclosure, which shall be consistent with
the Companys policies and procedures and applicable law
regarding the disclosure of information.
The Board has established four standing committees: the
Regulatory Affairs Committee, the Governance Committee, the
Audit Committee and the Compensation Committee. Printable
versions of the charters of such Committees as well as the
Corporate Governance Guidelines and Code of Business
Conduct and Ethics are available on our website
(www.cambrex.com), under the Governance link
of the Investors section. The Company will also
provide any of the foregoing information in print without charge
upon written request to the Corporate Secretary, Cambrex
Corporation, One Meadowlands Plaza, 15th Floor, East
Rutherford, New Jersey 07073.
Regulatory
Affairs Committee
The Regulatory Affairs Committee, comprised of three
non-management directors, oversees the Companys compliance
with Food and Drug Regulations and environmental and safety
affairs. The Regulatory Affairs Committee held four meetings
during 2007.
Governance
Committee
The Governance Committee, comprised of four independent
directors as defined by the listing standards of the New York
Stock Exchange and the Companys Independence Standards
for Directors, is responsible for, among other things,
(i) reviewing the composition of the Board to assure that
the proper skills and experience are represented on the Board,
(ii) identifying candidates qualified to become Board
members, and recommending to the Board the nominees to stand for
election as directors to the Board at Annual Stockholder
Meetings and candidates for newly created directorships and
vacancies on the Board, (iii) overseeing the annual
evaluation of the Board and management and (iv) developing
and reviewing corporate governance principles and recommending
changes as necessary. The Charter of the Governance Committee
has been adopted by the Committee and approved by the Board. The
Governance Committee held three meetings in 2007.
Consideration
of Director Nominees
Director
Qualifications
The Companys Corporate Governance Guidelines set
forth Board membership criteria. Under these criteria, members
of the Board should possess the highest personal and
professional ethics, integrity and values and be committed to
representing the long-term interests of the stockholders. Their
skills and backgrounds should include, among other things,
experience in making decisions, a track record of competent
judgment, the ability to function rationally and objectively and
experience in different businesses and professions. Directors
must be willing to devote sufficient time to carrying out their
duties and responsibilities effectively and should be committed
to serve on the Board for an extended period of time. Directors
should not serve on more than four other boards of public
companies in addition to the Cambrex Board. Current positions in
excess of these limits may be maintained unless the Board
determines that doing so would impair the directors
service on the Cambrex Board.
Identifying
and Evaluating Nominees for Directors
The Governance Committee utilizes a variety of methods for
identifying and evaluating nominees for director. The Governance
Committee regularly assesses the appropriate size of the Board,
and whether any vacancies on the Board are expected due to
retirement or otherwise. In the event that vacancies are
anticipated, or otherwise arise, the Governance Committee
considers various candidates for director. Candidates may come
to the attention of the
12
Governance Committee through current Board members, professional
search firms, stockholders or other persons. These candidates
are evaluated at regular or special meetings of the Governance
Committee, and may be considered at any point during the year.
The Governance Committee also considers properly submitted
stockholder nominations for candidates for the Board. In
addition to the standards and qualifications set out in the
Companys Corporate Governance Guidelines, the
Governance Committee also considers such other relevant factors
as it deems appropriate, including the current composition of
the Board, the balance of management and independent directors,
the need for Audit Committee or other expertise and the
evaluations of other prospective nominees. There are no
differences in the manner in which the Governance Committee
evaluates nominees for director based on whether or not the
nominee is recommended by a stockholder.
Stockholder
Nominees
The Governance Committee will consider nominees recommended by
stockholders. Such recommendations for the 2009 Annual Meeting
should be sent to the Corporate Secretary of the Company not
later than January 23, 2009, and should include such
information as specified in the Companys By-Laws. Nominees
recommended by stockholders receive the same consideration as
any other proposed nominees.
Audit
Committee
The Audit Committee consists of four independent directors. The
Board has determined that each member of the Audit Committee is
(i) independent within the meaning of the Securities and
Exchange Commission Rules and the New York Stock Exchange (NYSE)
listing standards and the Companys Independence
Standards for Directors and (ii) satisfies the
financial literacy requirements of the NYSE listing standards.
Further, the Board has determined that at least one member of
the Audit Committee satisfies the financial expertise
requirements of the NYSE listing standards. The Board has also
determined that Mr. Roy Haley, Audit Committee Chairperson,
is an Audit Committee Financial Expert, as that term is defined
by current SEC rules. The charter of the Audit Committee has
been adopted by the Committee and approved by the Board and is
available on the Companys website (www.cambrex.com).
The role of the Audit Committee is to assist the Board in
fulfilling its responsibility to oversee (i) the integrity
of the Companys financial reporting process; (ii) the
Companys systems of internal accounting and financial
controls; (iii) the annual independent audit of the
Companys financial statements; (iv) the independent
auditors qualifications and independence; and (v) the
Companys compliance with legal and regulatory
requirements. The Audit Committees role is one of
oversight and it recognizes that the Companys Management
is responsible for preparing the Companys financial
statements and that the Companys independent auditors are
responsible for auditing those financial statements.
The Audit Committee met ten times in 2007. The Audit Committee
met individually with Management, with PricewaterhouseCoopers
LLP (PwC), the Companys independent public
accountants until April 26, 2007, and thereafter with BDO
Seidman, LLP (BDO), approved by the shareholders on
that date as the Companys independent auditors, and with
the Companys internal auditors, as appropriate.
The Audit Committee reviewed and had discussions with Company
Management, PwC and BDO regarding the audited financial
statements, including a discussion of accounting principles, the
reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
The Audit Committee also reviewed and had discussions with BDO
regarding the matters required to be discussed by Statement of
Auditing Standards No. 61. Further, the Audit Committee
received the letter from BDO required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees) and has discussed with representatives of BDO their
independence.
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Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited
financial statements be included in the Companys Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2007.
AUDIT COMMITTEE
Roy W. Haley, Chairperson
Kathryn Rudie Harrigan
William B. Korb
Peter G. Tombros
Compensation
Committee
The Compensation Committee (the Committee),
comprised of four independent directors, conducts reviews of the
Companys general and executive compensation policies and
strategies and oversees and evaluates the Companys overall
compensation structure and programs. Each member of the
Committee (i) meets the independence requirements specified
by the New York Stock Exchange listing standards and the
Companys Independence Standards for Directors, and
(ii) is a non-employee director for purposes of
Rule 16b-3
of the Securities Exchange Act of 1934 and satisfies the
requirements of an outside director for purposes of
Section 162(m) of the Internal Revenue Code of 1986, as
amended. Each year the Committee develops a calendar-year annual
schedule for the coming year. The Chair reports the
Committees actions and recommendations to the full Board
following each Committee meeting. The Committee held eight
meetings during 2007.
The Charter of the Compensation Committee has been adopted by
the Committee and approved by the Board. The Committees
charter is to work with executive management in developing a
compensation philosophy; to evaluate and approve compensation
and bonus programs for the Chief Executive Officer, other
officers reporting to the Chief Executive Officer, and
subsidiary general managers. The Committee also oversees the
Companys general employee benefit programs, including the
Companys employee equity plans. At its July 2007 meeting
the Committee reviewed and discussed its own performance for the
prior year in order to benefit from self-evaluation and
encourage continuous improvement. For its self-evaluation the
Committee referred to materials provided by the Governance
Committee. The Committee conducts these reviews annually.
Compensation
Committee Interlocks and Insider Participation
The members of the Compensation Committee during 2007 were
Rosina B. Dixon, David R. Bethune,
Leon J. Hendrix, Jr. and John R. Miller, each of
whom is a non-employee independent director. No member of the
Compensation Committee had any direct or indirect material
interest in a transaction of Cambrex or a business relationship
with Cambrex, in each case that would require disclosure under
item 407 of
Regulation S-K
or any other rules or regulations of the SEC.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the
following Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and, based on such review and discussions, the
Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy
Statement.
COMPENSATION COMMITTEE
Rosina B. Dixon, M.D., Chairman
David R. Bethune
Leon J. Hendrix, Jr.
John R. Miller
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COMPENSATION
DISCUSSION AND ANALYSIS
The following is a discussion of our executive compensation
program and compensation decisions made for the fiscal year
ended 2007. This discussion relates to the executive officers
named in the Summary Compensation Table on page 21. We
refer to these officers as the named executive
officers.
The following discussion includes statements regarding
performance targets with respect to our executive compensation
program. These targets and goals are disclosed in the limited
context of Cambrexs compensation programs and should not
be understood to be statements of managements expectations
or estimates of results or other guidance. Cambrex specifically
cautions investors not to apply these statements to other
contexts.
Objectives
of our Executive Compensation Program:
The objectives of our Executive Compensation Program are as
follows:
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Competitive Compensation Package We
seek to attract, motivate and retain high-quality executives
with the requisite skills and abilities to enable the Company to
achieve superior results. We also look to provide incentive
opportunities that are competitive for talent in the labor
markets in which Cambrex participates.
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Rewarding Performance Our compensation
program is intended to be commensurate with the financial goals
of Cambrex and the executives contributions to the
accomplishment of those goals.
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Aligning the interests of our executives with those of our
shareholders A significant portion of our
compensation program is in the form of equity-based
compensation. This serves to tie the interests of our executives
with those of Cambrexs shareholders.
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How our
Compensation Program was Established
Compensation and Benefits Committee, Consultants, and
Management The Compensation Committee
determines compensation for the President and Chief Executive
Officer and reviews and approves compensation for all senior
executives. Compensation recommendations are initiated by the
President and Chief Executive Officer for discussion and
decision by the Committee. The Committee may, in its discretion,
increase or decrease awards and may alter the balance between
the cash and restricted stock portions of certain awards.
Finally, the Committee also reviews other elements of executive
compensation, including retirement benefits, perquisites and
change of control arrangements, on a regular basis. Each of
these is discussed below.
In assembling up-to-date internal compensation information,
Cambrex may seek assistance from the Companys human
resources department and internal legal counsel. In addition,
the Compensation Committee has the authority to delegate any of
its responsibilities to subcommittees of one or more of its
members as the Committee may deem appropriate in its sole
discretion. On occasion the Compensation Committee seeks the
input of outside compensation consultants. Please note that
during fiscal year 2007, Cambrex did not seek advice from any
outside compensation consultants. Should the Committee decide to
retain an outside compensation consultant in the future it will
verify the independence of said consultants.
Compensation & Benefit Program
Features The Chief Executive Officer and
Human Resources are responsible for recommending the elements of
our compensation program. The elements and levels of
compensation are then reviewed and, if satisfactory, approved by
the Compensation Committee. The goal of our compensation program
is to promote a pay-for-performance philosophy which aligns
itself with the interests of our shareholders. In structuring
the 2007 compensation program, the Committee, with the help of
our Chief Executive Officer, considered key financial metrics
and market executive compensation practices in general and at
selected peer companies.
The Company sought to fulfill financial goals in 2007 as they
relate to our compensation program through four key compensation
elements:
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Base Salary
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Annual Incentive Award
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66.7% 70% of this award is paid in cash,
30% 33.3% is paid in restricted stock.
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Restricted Stock granted as part of the Annual Incentive Award
vests ratably over three years and becomes saleable only at the
end of the third year.
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The performance criteria is contingent on the achievement of
certain financial metric(s) determined in advance by the
Committee.
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Long-Term Equity-Based Compensation, which includes
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Stock Options Awards vest ratably over four
years and the value of which is tied to movements in our stock
price.
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Restricted Stock Awards these awards are in
addition to those granted under the annual incentive awards and
cliff vest after three years.
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|
|
|
|
Special Retention Bonus this component of
compensation was put in place in order to retain our key
executives preceding and following the sale of Cambrexs
Biopharma and Bioproducts businesses to Lonza Group Limited.
|
The Committee believes that this combination of base salary,
annual cash bonus and long-term equity compensation is an
appropriate and competitive compensation package for our
executives based on prevailing market practices. The committee
also feels that the use of our Annual Incentive Award, stock
options, and restricted stock has tied a significant portion of
target compensation to financial performance and retention,
which the Compensation Committee believes aligns our
compensation program with our key strategic goals.
The Committee does not adhere to a specific formula to determine
in advance the ratio between fixed and performance-based
compensation, but in general, executive compensation at Cambrex
was more heavily weighted to performance-based pay as a percent
of total compensation for the named executive officers in fiscal
year 2007. Specifically, for fiscal year 2007 and based on the
SFAS No. 123(R) grant date fair values of their
equity-based compensation awards, performance-based compensation
amounted to approximately 59% of total target
compensation for the CEO and all other named executive
officers.1
Furthermore, based on actual 2007 performance and based on the
SFAS No. 123(R) grant date fair values of their
equity-based compensation awards, performance-based compensation
amounted to approximately 67% of total compensation for
the CEO and all other named executive officers.
Peer
Group Comparison Data
The Chief Executive Officer, Human Resources, and Compensation
Committee compared Cambrexs executive compensation target
amounts to that of a group of select peer companies. This peer
group consisted of 10 companies that we believe we compete
with for executive talent. The following companies made up our
peer group in 2007.
|
|
|
Aeterna Zentaris Inc.
|
|
QLT Inc/BC
|
Albany Molecular Research, Inc.
|
|
Reliv International Inc.
|
Kendle International Inc.
|
|
Ribapharm Inc.
|
Mannatech Inc.
|
|
Sangstat Medical Corp.
|
Martek Biosciences Corp.
|
|
Viropharma Inc.
|
Nutraceutical International Corp.
|
|
|
1 Please
note that we did not factor in individual retention bonuses with
respect to this analysis. If we were to include the retention
bonus as non performance compensation for fiscal year 2007 and
based on the SFAS No. 123(R) grant date fair values of
their equity-based compensation awards, performance-based
compensation amounted to approximately 30% of total target
compensation for the other named executive officers other than
the CEO. Furthermore, based on actual 2007 performance and based
on the SFAS No. 123(R) grant date fair values of their
equity-based compensation awards, performance-based compensation
amounted to approximately 38% of total compensation for the four
named executive officers.
16
We analyzed Compensation data from the above peer group to
assist in setting compensation target levels for each of the key
elements of our program (salary, cash incentive and equity-based
compensation) and for the combined total of these elements. We
targeted compensation at the 50th percentile range of the
total compensation of the selected peer companies. In 2008, we
expect to review and revise our peer group as necessary, based
on the quickly changing nature of the industry.
The
Role of Individual Goals
Our annual incentive awards are based on corporate financial and
individual goals. In 2007, the Committee decided that Earnings
Before Interest, Taxes, Debt and Amortization
(EBITDA) would serve as the primary metric for the
annual incentive award. The Compensation Committee decided on
EBITDA to focus management on avoiding further declines in this
important measure of financial success. As such, there were no
individual goals for 2007; 100% was formulated based on EBITDA
(see page 17 for performance results). Financial measures
and goals are still under consideration by the Committee for
Fiscal Year 2008.
Elements
of Executive Compensation
Base Salary. In setting annual salaries, the
Committees objective is to reflect individual job
responsibilities, value to the Company, individual performance
in contributing to improved financial results of the Company and
the competitive nature of the labor market in which the Company
operates.
During the year the Committee approved the following increases:
|
|
|
|
|
Effective fiscal year 2008, Mr. Macks (Chairman,
President, and Chief Executive Officer) base salary was
increased from $500,000 to $600,000. This decision was based on
Macks many prior years of exemplary service.
|
|
|
|
Mr. Klosk received a salary increase from $365,000 to
$400,000 upon his promotion to Chief Operating Officer in
February 2007.
|
|
|
|
Mr. Sargen received a salary increase from $255,000 to
$300,000 upon his election to Chief Financial Officer in
February 2007.
|
|
|
|
All increases were considered competitive with regard to the
executives performance prior to promotion.
|
|
|
|
Messrs. Thauer and Russolo did not receive compensation
increases during the year.
|
|
|
|
Messrs Bird and Beshar terminated employment with Cambrex in
2007. Neither executive received any salary increases prior to
their leaving.
|
Annual Incentive Awards. Each year the
Committee, in consultation with the President and Chief
Executive Officer, sets goals and objectives for the
Companys executives. At year-end the attainment of
results, measured against the executives goals and
objectives, is reviewed by the Compensation Committee subsequent
to review and recommendation from the President and Chief
Executive Officer. During the fiscal year, the Compensation
Committee considered a number of measures for annual bonus
awards, including various financial and individual measures and
goals. In the end, in the face of four years of declining
EBITDA, the Committee, in consultation with the Audit Committee,
determined that improvement in EBITDA without confounding the
analysis by special items, particularly those related to
divestitures, would be most important to shareholders.
Accordingly, the Committee, in consultation with management,
approved a plan under which the following performance goals were
established:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus Compensation
|
|
|
|
|
|
|
Payout Reflected as a
|
|
|
|
|
|
|
Percentage of Base
|
|
|
|
Percent Improvement in
|
|
|
Salary (for all Named
|
|
Performance Level
|
|
EBITDA
|
|
|
Executives)
|
|
|
Threshold
|
|
|
0.8
|
%
|
|
|
10
|
%
|
Target
|
|
|
7.5
|
%
|
|
|
100
|
%
|
Maximum
|
|
|
15.0
|
%
|
|
|
200
|
%
|
17
In 2007 EBITDA improved by 12.4%, as a result our CEO received a
bonus of 150% of his base Salary. All other executive
participants received a bonus of 164.5% of Base Salary.
Under the Annual Incentive Award Program for fiscal year 2007,
EBITDA was computed using GAAP EBITDA before:
(i) non-recurring or special charges;
(ii) cost associated with the evaluation of strategic
alternatives;
(iii) costs of the Rutherford litigation settlement;
(iv) income and expenses related to the Transition Service
Agreement with Lonza and ICIG;
(v) any expenses in 2007 that will not re-occur in 2008 due
to restructuring of the corporate headquarters of Cambrex
Corporation;
(vi) equity compensation expense, and
(vii) costs for environmental remediation of non-operating
sites.
Long-Term Incentive Awards. An integral part
of our compensation program is long-term equity-based
compensation. The long-term incentive awards made to the named
executive officers consist of Restricted Stock and Stock Options.
Equity-based compensation furthers a number of our program
objectives. Specifically, these long-term incentive grants:
|
|
|
|
|
align the interests of our executives with those of our
shareholders, thereby encouraging the creation of shareholder
value;
|
|
|
|
help establish a direct link between compensation amounts and
achievement of performance goals; and
|
|
|
|
allow us to offer a compensation package that is competitive and
enhances our ability to attract and retain executive talent.
|
In July 2007, as is the general practice of Cambrex, the
Committee granted restricted stock and stock options to our
Named Executive Officers and also a substantial number of key
employees at the corporate office and the operating companies.
Eligibility for awards is based on an individuals position
in the Company and the individuals performance. In
determining the number of awards, the Committee also considers
management recommendations in light of peer group awards.
For stock options, the exercise price is set based on the mean
between the highest and lowest publicly traded share price on
the date of the award by the Committee. These awards vest in
equal increments over a four year period (i.e., 25% per year).
Restricted Stock units cliff vest after three years.
Retention Awards. During 2006 the Company was
engaged in a strategic alternatives project designed to divest
one or more of the companys business segments. The Board
of Directors believed this process to be in the best interests
of shareholders in terms of maximizing the value of the company.
In order to minimize the uncertainty and disruption such a
process would inevitably cause for executives and corporate
office employees, the Board, at its April 2006 meeting and on
the advice of the Compensation Committee and executive
compensation consultants Pearl Meyer & Partners,
approved an enhanced severance and retention bonus program for
corporate office employees and a retention award program for
executives including four of the Named Executive Officers.
In accordance with the 2006 executive program, the four Named
Executive Officers would receive the payments listed below if
they remained employed with the company until the completion of
a transaction for the sale of 35% or more of the
enterprise value of the company. (The
enterprise value was defined as the aggregate market
value of the companys outstanding equity securities on a
fully diluted basis plus debt minus cash.)
On October 23, 2006, the company signed a stock purchase
agreement with Lonza Group Limited and its affiliated companies
under which the Companys Biopharma and Bioproducts
companies were sold for
18
approximately $460 million. The transaction, constituting
more than 35% of the Companys enterprise value, was
completed on February 6, 2007, and the retention amounts
listed below were paid.
First
Retention Award
|
|
|
Executive
|
|
Retention Award
|
|
Luke Beshar(1)
|
|
$500,000
|
Gregory Sargen
|
|
$200,000
|
Thomas Bird
|
|
n/a
|
Steven Klosk(1)
|
|
$500,000
|
Paolo Russolo
|
|
$200,000
|
Peter Thauer
|
|
$300,000
|
|
|
|
(1) |
|
Please note that Mr. Beshars and
Mr. Klosks total First Retention Award was $600,000;
they received $100,000 of this award in early 2006. |
Recognizing that the Company would be a significantly diminished
entity following completion of the Lonza transaction and the
severance of a number of corporate employees, including
Mr. Bird, the Compensation Committee, following the
recommendation of management on December 19, 2006, approved
a second retention program for corporate office employees and
executives including certain of the Named Executive Officers.
Under this program the awards listed below were offered to the
Named Executive Officers on the condition that they remain with
the Company until at least September 30, 2007, or, in the
case of Mr. Russolo, until at least December 31, 2007.
All Named Executive Officer participants remained and the awards
were paid on the indicated dates.
Second
Retention Award
|
|
|
Executive
|
|
Retention Award
|
|
James Mack
|
|
n/a
|
Luke Beshar
|
|
$400,000
|
Gregory Sargen
|
|
$300,000
|
Thomas Bird
|
|
n/a
|
Steven Klosk
|
|
$400,000
|
Paolo Russolo
|
|
$400,000
|
Peter Thauer
|
|
$400,000
|
Transaction
Bonus for Mr. Mack
In 2008, Mr. Mack received a transaction Bonus of
$1,000,000 in connection with his efforts with respect to
Cambrexs sale of its Biopharma and Bioproducts businesses
to Lonza Group Limited. Mr. Mack also received a $250,000
special bonus with respect to his accelerating the reduction of
costs at the corporate office. These bonuses were approved by
the Board of Directors.
Pension
Plan and SERP
The Companys pension plan has been closed to new hires for
several years, since January 1, 2003, and as of
August 31, 2007, no credit for future service will be
permitted. When the plan was frozen, those with at least
10 years of service, and being 55 years of age or
older, were granted an additional two years of credited service,
except that Messrs. Mack and Thauer, being the only Named
Executive Officers within this group, declined to accept the
additional service. The foregoing group were also afforded the
opportunity to retire at age 62 on an unreduced benefit.
The benefit under the plan is 1% of each years salary plus
0.6% of the amount above the social security wage base for each
year. Early retirement is permitted at age 55 with
10 years service, the benefit being reduced by 6% for each
year the retiree is below age 65. Similar amounts are
calculated for each year of service and are
19
aggregated to obtain the annual retirement benefit, subject to
the limitations imposed by the Employee Retirement Income
Security Act of 1974 and related regulations
(ERISA). For this purpose, Social Security covered
compensation is the
35-year
average of the Social Security wage bases ending with the wage
base for the year in which the participant reaches age 65.
Although compensation includes the items mentioned above, the
Companys qualified non-contributory pension plan (the
Qualified Plan) limits the maximum amount of
compensation which may be taken into account for the purposes of
calculating benefits to the ERISA limit, which was $225,000
during 2007. Because of such limitation, any compensation
received by any of the Named Executive Officers which exceeds
this amount will not be taken into account in the calculation of
their benefits under the Qualified Plan. As a result, the
Company established a Supplemental Non-Qualified Pension Plan
(Supplemental Plan), which became effective on
January 1, 1994. The Supplemental Plan provides benefits
based on compensation levels above the ERISA maximum
compensation level. As stated above, employees hired after
December 31, 2002, are not eligible to participate in the
Retirement Plan or the Supplemental Plan.
Savings
Plan
The Savings Plan is a tax-qualified retirement savings plan
pursuant to which all Cambrexs U.S. based employees
are able to contribute the lesser of up to 50% of their annual
salary or the limit prescribed by the Internal Revenue Service
to the Savings Plan on a before tax basis. The Company will
match 100% of the first 3% of pay that is contributed to the
Savings Plan and 50% of the next 3% of pay contributed. All
employee contributions to the Savings Plan are fully vested on
contribution; the Company match vests in 20% increments over a
five year period of employment.
Deferred
Compensation Plan
The Company has established a Non-qualified Deferred
Compensation Plan for Key Executives, including the Named
Executive Officers (the Deferred Plan). Under the
Deferred Plan, officers and key employees may elect to defer all
or any portion of their pre-tax annual bonus
and/or
annual base salary (other than the minimum required Social
Security contributions plus $10,000). The deferred amount is
invested in Fidelity Mutual Funds available under the Cambrex
Savings Plan. The Deferred Plan is not funded by the Company,
but the Company has established a Deferred Compensation
Trust Fund to protect the account balance in the case of a
change of control of the Company. The Plan is administered in
compliance with the new rules and guidance under IRC
Section 409A.
Perquisites
The Committee provides benefits to the Companys executive
officers, including an automobile allowance, a supplemental
retirement benefit and the eligibility to participate in the
non-qualified deferred compensation plan.
Tax
Considerations (Policy Regarding Section 162(m))
The Companys policy on the tax deductibility of
compensation is to maximize deductibility to the extent possible
without negating all of its discretionary power. To this end the
Company has submitted complying plans for stockholder approval.
Nevertheless, the Committee has occasionally taken actions that
result in non-deductible compensation and it may do so again in
the future when the Committee determines that such actions are
in the Companys best interests.
20
COMPENSATION
OF EXECUTIVE OFFICERS
Summary
Compensation Table
The following table shows for the fiscal year 2007 the
compensation awarded or paid to, or earned by the Named
Executive Officers.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
qualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name and Principal
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Position
|
|
Year
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
|
Compensation
|
|
|
James A. Mack
|
|
|
2007
|
|
|
$
|
500,000
|
|
|
$
|
1,250,000
|
|
|
$
|
128,825
|
|
|
$
|
57,083
|
|
|
$
|
500,000
|
|
|
|
54,649
|
|
|
$
|
60,618
|
|
|
$
|
2,551,175
|
|
Chairman, President and Chief Executive Officer
|
|
|
2006
|
|
|
$
|
458,333
|
|
|
$
|
0
|
|
|
$
|
229,687
|
|
|
$
|
510,598
|
|
|
$
|
586,425
|
|
|
$
|
21,866
|
|
|
$
|
94,574
|
|
|
$
|
1,901,483
|
|
Gregory P. Sargen
|
|
|
2007
|
|
|
$
|
295,587
|
|
|
$
|
500,000
|
|
|
$
|
15,724
|
|
|
$
|
12,752
|
|
|
$
|
345,450
|
|
|
$
|
0
|
|
|
$
|
21,801
|
|
|
$
|
1,191,313
|
|
VP & CFO
|
|
|
2006
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Steven M. Klosk
|
|
|
2007
|
|
|
$
|
396,567
|
|
|
$
|
900,000
|
|
|
$
|
373,762
|
|
|
$
|
105,393
|
|
|
$
|
460,600
|
|
|
$
|
45,779
|
|
|
$
|
22,928
|
|
|
$
|
2,305,029
|
|
EVP, COO & President Pharma Products &
Services
|
|
|
2006
|
|
|
$
|
358,333
|
|
|
$
|
100,000
|
|
|
$
|
116,031
|
|
|
$
|
7,190
|
|
|
$
|
286,452
|
|
|
$
|
45,932
|
|
|
$
|
21,576
|
|
|
$
|
935,514
|
|
Paolo Russolo(7)
|
|
|
2007
|
|
|
$
|
356,434
|
|
|
$
|
679,829
|
|
|
$
|
134,605
|
|
|
$
|
28,992
|
|
|
$
|
440,732
|
|
|
$
|
0
|
|
|
$
|
33,231
|
|
|
$
|
1,673,823
|
|
President, Cambrex Profarmaco
|
|
|
2006
|
|
|
$
|
337,665
|
|
|
$
|
71,565
|
|
|
$
|
115,163
|
|
|
$
|
7,190
|
|
|
$
|
226,461
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
758,044
|
|
Peter Thauer
|
|
|
2007
|
|
|
$
|
293,000
|
|
|
$
|
700,000
|
|
|
$
|
341,413
|
|
|
$
|
98,611
|
|
|
$
|
481,985
|
|
|
$
|
34,805
|
|
|
$
|
4,234,666
|
|
|
|
6,184,480
|
|
Sr. VP Law/ Environment/General Counsel & Corporate
Secretary
|
|
|
2006
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Luke M. Beshar(8)
|
|
|
2007
|
|
|
$
|
292,492
|
|
|
$
|
900,000
|
|
|
$
|
452,627
|
|
|
$
|
68,180
|
|
|
$
|
0
|
|
|
$
|
44,772
|
|
|
$
|
6,625,589
|
|
|
$
|
8,383,660
|
|
EVP Strategy & Corporate Development
|
|
|
2006
|
|
|
$
|
382,000
|
|
|
$
|
100,000
|
|
|
$
|
155,569
|
|
|
$
|
7,190
|
|
|
$
|
364,053
|
|
|
$
|
29,201
|
|
|
$
|
21,576
|
|
|
$
|
1,059,589
|
|
Thomas Bird(9)
|
|
|
2007
|
|
|
$
|
42,833
|
|
|
$
|
0
|
|
|
$
|
135,654
|
|
|
$
|
4,812
|
|
|
$
|
0
|
|
|
$
|
45,779
|
|
|
$
|
2,554,979
|
|
|
$
|
2,784,057
|
|
Former VP Corporate Development
|
|
|
2006
|
|
|
$
|
253,000
|
|
|
$
|
500,000
|
|
|
$
|
43,241
|
|
|
$
|
2,960
|
|
|
$
|
160,759
|
|
|
$
|
129,052
|
|
|
$
|
21,576
|
|
|
$
|
1,110,588
|
|
|
|
|
(1) |
|
Salary. Cambrexs fiscal year ends
December 31. Mr. Russolos salary is paid in Euro. |
|
(2) |
|
Bonus. Mr. Mack received two bonuses with
respect to the most recent year. The first award was for
$1,000,000 for successfully completing the Lonza transaction,
the second award was for $250,000 in connection with his effort
in accelerating the reduction of costs at the corporate office.
Both bonuses were approved by the Board of Directors.
Mr. Russolos Bonus includes two retention awards
approved by the board of $200,000 and $400,000. |
|
(3) |
|
Stock and Option Awards. The amounts shown in
the Stock Awards column above reflect the amounts
expensed for fiscal year 2007 under SFAS No. 123(R)
for all outstanding restricted stock units held by the named
executive officer (disregarding estimated forfeitures),
including awards made in prior fiscal years. The amounts shown
in the Options Awards column reflect the amounts
expensed for fiscal year 2007 under SFAS No. 123(R)
for all outstanding stock options held by the named executive
officer (disregarding estimated forfeitures), including awards
made in prior fiscal years. The fair value of an award is
expensed on a straight-line basis over the requisite service
period, which is from the grant date to the earliest of the
grantees retirement eligibility date or the vesting date
of the award. Information regarding the
SFAS No. 123(R) fair values of the stock awards and
stock options granted to the named executive officers in fiscal
year 2007 is set forth in the Grants of Plan-Based
Awards table. |
|
(4) |
|
Non-Equity Incentive Compensation. The above
amounts reflect only the cash paid to executives in 2008 related
to 2007 annual incentive awards. The actual amounts awarded
including restricted stock units that vest ratably over the
three year period ending January 24, 2011were as follows:
Mr. Mack $750,000, Mr. Sargen $493,500, Mr. Klosk
658,000, Mr. Russolo 629,617, and Mr. Thauer $481,985. |
|
(5) |
|
Change in Pension Value and Non-Qualified Deferred
Compensation Earnings. This column shows the
aggregate change in the actuarial present value of the named
executive officers accumulated benefits under all of our
defined benefit pension plans in which they participate. For
more information regarding accrued benefits under our pension
plans, see the Pension Benefits table on
page . |
21
|
|
|
(6) |
|
All Other Compensation. The amounts shown in
the All Other Compensation column include the
following benefits provided to the named executive officers: For
Mr. Mack, includes savings plan matching contribution of
$10,125, an automobile allowance of $47,676, and dividends paid
on RSUs of $2,817. For Mr. Sargen, includes savings plan
match of $10,125, automobile allowance of $11,676. For
Mr. Klosk, includes savings plan match of $10,125,
automobile allowance of $11,676, dividends on RSUs of $1,127.
For Mr. Russolo, insurance premiums of 4,825 (
$6,615) automobile allowance 17,051($23,375), phone
allowance 2,364 ($3,241). For Mr. Thauer, includes a
lump sum payment of $3,055,354 pursuant to an agreement signed
in December 2007 to buy-out his previous employment agreement.
Also included is 280G
gross-up of
$1,468,337 savings plan match of $10,125, automobile allowance
of $11,676 and dividends on RSUs of $845. For Mr. Beshar,
includes payments due pursuant to Employment Agreement,
including a pro-rata bonus of $434,941 severance of $3,005,679,
SERP payments of $141,845, lump-sum payments in lieu of benefit
continuance totaling $72,437, dividend equivalents due on RSUs
of $365,333, interest on 409A deferrals of $173,734 and 280G
gross-up in
the amount of $2,411,470. Of the total due, only $680,674 was
paid in 2007. The remaining balance has been deferred until
April 2008. Also included in other compensation are savings plan
match of $10,125, automobile allowance of $8,757 and dividends
paid on RSUs of $1,268. For Mr. Bird, includes savings plan
match of $1,928, automobile allowance of $11,676, dividends on
RSUs of $282. Also includes payments made pursuant to Employment
Agreement, including a pro rata bonus of $36,371, severance
payments of $1,446,027, pension equivalent of $186,332, interest
on 409A deferrals of $78,681, benefit continuance of $27,814 and
280G
gross-up of
$788,717. |
|
(7) |
|
Mr. Russolos Base Salary was 260,000. The cash
portion of his Non Equity Incentive Compensation Bonus was
299,390. In addition, Mr. Russolo received a
discretionary bonus of 54,228. For purposes of disclosing
bonus payments, we used the closing 12/31/07 Euro to dollar
exchange rate of 1.4721, for purposes of computing base salary
we used the average Euro to Dollar exchange rate (for calendar
year 2007) which was 1.3709 |
|
(8) |
|
Mr. Beshars employment with the Company terminated on
10/1/2007. |
|
(9) |
|
Mr. Birds employment with the Company terminated on
2/28/2007. |
Grant of
Plan-Based Awards Table
The following table contains information concerning each grant
of an award made to each of the Named Executive Officers for the
2007 fiscal year under any plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other
|
|
|
All other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Exercise
|
|
|
Exercise or
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Estimated Future
|
|
|
Awards:
|
|
|
Awards:
|
|
|
or Base
|
|
|
Base Price
|
|
|
Grant Date
|
|
|
|
|
|
|
Non- Equity Incentive Plan
|
|
|
Payouts Under Equity
|
|
|
Number of
|
|
|
Number of
|
|
|
Price of
|
|
|
of Option
|
|
|
Fair Value of
|
|
|
|
|
|
|
Awards
|
|
|
Incentive Plan Awards
|
|
|
Shares of
|
|
|
Securities
|
|
|
Option
|
|
|
Awards
|
|
|
Stock and
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Awards
|
|
|
($/Sh)-on
|
|
|
Option
|
|
Name
|
|
Grant Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
Units (#)
|
|
|
Options (#)
|
|
|
($/Sh)
|
|
|
Grant Date
|
|
|
Awards
|
|
|
James A. Mack
|
|
|
1/24/2007
|
|
|
$
|
250,000
|
|
|
$
|
500,000
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,602
|
|
|
|
|
|
|
$
|
21.69
|
|
|
$
|
21.74
|
|
|
$
|
186,577
|
|
|
|
|
7/26/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
17,000
|
|
|
$
|
13.75
|
|
|
$
|
13.72
|
|
|
$
|
223,690
|
|
Gregory P. Sargen
|
|
|
7/26/2007
|
|
|
$
|
150,000
|
|
|
$
|
300,000
|
|
|
$
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
8,500
|
|
|
$
|
13.75
|
|
|
$
|
13.72
|
|
|
$
|
104,970
|
|
Steven M. Klosk
|
|
|
1/24/2007
|
|
|
$
|
200,000
|
|
|
$
|
400,000
|
|
|
$
|
800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,583
|
|
|
|
|
|
|
$
|
21.69
|
|
|
$
|
21.74
|
|
|
$
|
186,165
|
|
|
|
|
7/26/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
10,000
|
|
|
$
|
13.75
|
|
|
$
|
13.72
|
|
|
$
|
119,450
|
|
Paolo Russolo
|
|
|
1/24/2007
|
|
|
$
|
191,373
|
|
|
$
|
382,746
|
|
|
$
|
765,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,540
|
|
|
|
|
|
|
$
|
21.69
|
|
|
$
|
21.74
|
|
|
$
|
141,853
|
|
|
|
|
7/26/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
8,500
|
|
|
$
|
13.75
|
|
|
$
|
13.72
|
|
|
$
|
104,970
|
|
Peter Thauer
|
|
|
1/24/2007
|
|
|
$
|
146,500
|
|
|
$
|
293,000
|
|
|
$
|
586,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,106
|
|
|
|
|
|
|
$
|
21.69
|
|
|
$
|
21.74
|
|
|
$
|
175,819
|
|
|
|
|
7/26/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
8,500
|
|
|
$
|
13.75
|
|
|
$
|
13.72
|
|
|
$
|
104,970
|
|
Luke M. Beshar
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0
|
|
Thomas Bird
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0
|
|
22
Outstanding
Equity Awards at Fiscal Year-End
The following table discloses information regarding unexercised
options, stock that has not vested and equity incentive plan
awards for each Named Executive Officer outstanding as of
December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
No of
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: No.
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Securities
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Shares or
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
|
|
|
|
|
|
Underlying Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock that
|
|
|
Stock that
|
|
|
|
|
|
|
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
|
|
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested
|
|
|
Vested ($)
|
|
|
|
|
|
|
|
|
Mack, James A
|
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
|
13.5630
|
|
|
|
7/23/2008
|
|
|
|
5,843
|
|
|
$
|
48,964
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
6,667
|
|
|
$
|
55,869
|
|
|
|
|
|
|
|
|
|
|
|
|
30,839
|
|
|
|
|
|
|
|
|
|
|
|
20.7500
|
|
|
|
10/26/2010
|
|
|
|
8,602
|
|
|
$
|
72,085
|
|
|
|
|
|
|
|
|
|
|
|
|
32,612
|
|
|
|
|
|
|
|
|
|
|
|
28.8700
|
|
|
|
4/26/2011
|
|
|
|
10,000
|
|
|
$
|
83,800
|
|
|
|
|
|
|
|
|
|
|
|
|
19,934
|
|
|
|
|
|
|
|
|
|
|
|
27.2900
|
|
|
|
4/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,248
|
|
|
|
|
|
|
|
|
|
|
|
23.0700
|
|
|
|
7/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
23.0700
|
|
|
|
7/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
23.0700
|
|
|
|
7/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,167
|
|
|
|
12,500
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,000
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Klosk, Steven M
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
1,386
|
|
|
$
|
11,615
|
|
|
|
|
|
|
|
|
|
|
|
|
2,125
|
|
|
|
6,375
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
4,466
|
|
|
$
|
37,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
3,400
|
|
|
$
|
28,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,583
|
|
|
$
|
71,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
$
|
41,900
|
|
|
|
|
|
|
|
|
|
Sargen, Gregory
|
|
|
625
|
|
|
|
1,875
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
1,000
|
|
|
$
|
8,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
4,500
|
|
|
$
|
37,710
|
|
|
|
|
|
|
|
|
|
Russolo, Paolo
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
1,451
|
|
|
$
|
12,159
|
|
|
|
|
|
|
|
|
|
|
|
|
2,125
|
|
|
|
6,375
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
5,019
|
|
|
$
|
42,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
3,400
|
|
|
$
|
28,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,540
|
|
|
$
|
54,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
$
|
37,710
|
|
|
|
|
|
|
|
|
|
Thauer, Peter E
|
|
|
4,228
|
|
|
|
|
|
|
|
|
|
|
|
32.8500
|
|
|
|
7/26/2011
|
|
|
|
782
|
|
|
$
|
6,553
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
3,317
|
|
|
$
|
27,796
|
|
|
|
|
|
|
|
|
|
|
|
|
2,125
|
|
|
|
6,375
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
5,597
|
|
|
$
|
46,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
3,400
|
|
|
$
|
28,492
|
|
|
|
|
|
|
|
|
|
|
|
|
4,354
|
|
|
|
|
|
|
|
|
|
|
|
32.8500
|
|
|
|
7/26/2011
|
|
|
|
8,106
|
|
|
$
|
67,928
|
|
|
|
|
|
|
|
|
|
Beshar, Luke M
|
|
|
230,000
|
|
|
|
|
|
|
|
|
|
|
|
15.7500
|
|
|
|
12/5/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bird, Thomas
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
Option
Exercises and Stock Vested
The following table discloses each exercise of stock options and
similar instruments, and each vesting of stock (including
restricted stock, RSUs and similar instruments) during fiscal
year 2007 for each Named Executive Officer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Value
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
Realized on
|
|
|
Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Exercise
|
|
|
Acquired on
|
|
|
Value Realized
|
|
Name
|
|
Exercise (#)
|
|
|
($)
|
|
|
Vesting (#)
|
|
|
on Vesting ($)
|
|
|
James A. Mack
|
|
|
|
|
|
$
|
|
|
|
|
8,451
|
|
|
$
|
272,056
|
|
Gregory P. Sargen
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Steven M. Klosk
|
|
|
126,500
|
|
|
$
|
104,261
|
|
|
|
4,663
|
|
|
$
|
100,574
|
|
Paolo Russolo
|
|
|
|
|
|
$
|
|
|
|
|
4,744
|
|
|
$
|
102,198
|
|
Peter Thauer
|
|
|
96,500
|
|
|
$
|
422,825
|
|
|
|
3,752
|
|
|
$
|
80,900
|
|
Luke M. Beshar
|
|
|
8,500
|
|
|
$
|
34,988
|
|
|
|
27,974
|
|
|
$
|
376,317
|
|
Thomas Bird
|
|
|
72,500
|
|
|
$
|
217,040
|
|
|
|
7,729
|
|
|
$
|
173,790
|
|
Pension
Benefits
The following table shows the pension benefits expected by the
Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Present
|
|
|
Payments
|
|
|
|
|
|
Years of
|
|
|
Value of
|
|
|
During Last
|
|
|
|
|
|
Credited
|
|
|
Accumulated
|
|
|
Fiscal Year
|
|
Name
|
|
Plan Name
|
|
Service (#)
|
|
|
Benefits ($)
|
|
|
($)
|
|
|
James A. Mack
|
|
The Cambrex Pension Plan
|
|
|
17
|
|
|
$
|
432,875
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
17
|
|
|
$
|
1,889,136
|
|
|
$
|
0
|
|
Gregory P. Sargen
|
|
The Cambrex Pension Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Steven M. Klosk
|
|
The Cambrex Pension Plan
|
|
|
15
|
|
|
$
|
165,726
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
15
|
|
|
$
|
324,801
|
|
|
$
|
0
|
|
Paolo Russolo(1)
|
|
The Cambrex Pension Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Peter Thauer
|
|
The Cambrex Pension Plan
|
|
|
18
|
|
|
$
|
472,937
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
18
|
|
|
$
|
608,913
|
|
|
$
|
0
|
|
Luke M. Beshar(2)
|
|
The Cambrex Pension Plan
|
|
|
5
|
|
|
$
|
49,274
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
5
|
|
|
$
|
80,262
|
|
|
$
|
0
|
|
Thomas Bird(2)
|
|
The Cambrex Pension Plan
|
|
|
10
|
|
|
$
|
253,902
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
10
|
|
|
$
|
217,708
|
|
|
$
|
0
|
|
|
|
|
(1) |
|
Dr. Russolo is not a participant in the Cambrex Pension Plan or
the Supplemental Executive Retirement Plan. |
|
(2) |
|
Mr. Beshar and Mr. Bird terminated employment on 10/1/2007 and
2/28/2007 respectively. |
On February 6, 2007, Cambrex sold its Bio Businesses to
Lonza Group Limited. Due to this sale and the freeze of the
pension plans as described below, Cambrex has made commitments
to Thomas Bird, Luke Beshar, Steven Klosk and Peter Thauer to
pay out the pension portion of their change in control
agreements. Thomas Bird terminated in February of 2007 and
received a payment of $186,332 under the pension portion of his
change in control agreement. Luke Beshar terminated in October
of 2007 and is scheduled to receive $141,845 under the pension
portion of his change in control agreement. Cambrex paid Peter
Thauer $294,685 in early 2008 and intends to pay Steven Klosk
$128,281 in later 2008 under the pension portions of their
change in control agreements.
All of the above executives participate in Cambrexs Career
Average Pay (CAP) pension plan under which these participants
accrued annually 1.0% of their annual earnings each year while
in employment with Cambrex plus an additional 0.6% for earnings
in excess of the covered compensation limit for each year while
in employment
24
with Cambrex until benefit service exceeds 35 years. The
non-qualified plan provides benefits which can not be paid from
the qualified plan due to IRC limits on pay and benefits.
Effective August 31, 2007, both plans ceased to provide
future benefit accruals to participants. Normal retirement age
under the plans are age 65 and the earlier of either five
years of vesting service or five years of participation.
Participants can receive a reduced early retirement benefit
beginning at age 55 and ten years of eligibility service.
Effective April 26, 2007, for most plan participants who
have accrued ten years of employment as of April 1, 2007,
and who will turn age 55 by December 31, 2007,
unreduced retirement benefits begin at age 62 and a lump
sum option is available. None of this years Named
Executive Officers qualify for these plan enhancements. Covered
earnings include total pay received in each calendar year which
is subject to withholding for federal income tax purposes,
exclusive of relocation allowances, the imputed value of group
life insurance, tuition refunds, foreign service premiums,
distributions from a nonqualified deferred compensation plan and
any income attributable to stock options or other similar fringe
benefits and perquisites. Covered earnings also includes any
amount which is contributed or deferred by the employer at the
election of the participant and which is not includible in the
gross income of the participant by reasons of Sections 125,
132(f)(4) or 402(e)(3) of the IRC Code. Full lump sum payments
are not allowed from the qualified plan or non-qualified plan,
except for the special 55 and 10 group mentioned above, which
does not include any of this years Named Executive
Officers.
Non-Qualified
Deferred Compensation
The following table shows the Non-Qualified Deferred
Compensation amounts earned by the Named Executive Officers
during fiscal 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate Balance
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings in
|
|
|
Withdrawals/
|
|
|
at Last Fiscal Year
|
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
Last FY
|
|
|
Distributions
|
|
|
End
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
James A. Mack
|
|
$
|
1,000,000
|
|
|
$
|
|
|
|
$
|
121,248
|
|
|
$
|
824,499
|
|
|
$
|
2,998,856
|
|
Gregory P. Sargen
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Steven M. Klosk
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(21,889
|
)
|
|
$
|
|
|
|
$
|
1,092,730
|
|
Paolo Russolo
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
no account
|
|
Peter Thauer
|
|
$
|
|
|
|
$
|
|
|
|
$
|
7,182
|
|
|
$
|
|
|
|
$
|
1,856,166
|
|
Luke M. Beshar
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,817
|
|
|
$
|
|
|
|
$
|
110,835
|
|
Thomas Bird
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
no account
|
|
Executive Employment Agreements; Change of
Control Entered after the sale of the BioCompanies
pursuant to the Stock Purchase Agreement with Lonza Group
Limited.
In February 2007, the company entered into employment agreements
with Messrs. Sargen and Russolo. These agreements were
entered into in order to preserve management stability in the
event of a threatened or actual change of control of the Company.
These agreements become effective upon a change of control of
the Company (the Effective Date), which is defined
as:
(i) the acquisition by one person or a group of persons of
15% or more of the Companys outstanding common stock or
combined voting power;
(ii) a change in a majority of the incumbent Board of
Directors unless approved by the incumbent Board of Directors;
(iii) a transaction which results in the stockholders of
the Company immediately before the transaction not owning at
least 50% of the Companys common stock following the
transaction;
(iv) the sale of all or substantially all of the assets of
the Company; or
(v) any other event or series of events determined by the
Board of Directors to constitute a change of control.
25
The phrase sale of all or substantially all is
defined in the agreements as a sale or other disposition
transaction involving assets of the Company, including stock of
any of the Companys subsidiaries, in which the value of
the assets or stock being sold or otherwise disposed of (as
measured by the purchase price being paid) constitutes 35% or
more of the enterprise value of the Company, defined
as the aggregate market value of the Companys then
outstanding stock (on a fully diluted basis) plus aggregate debt
minus cash.
Following a change of control, the Company has agreed to employ
the covered employees for a period of three years from the
Effective Date (the Employment Period) in a
commensurate position at a location not more the 35 miles
from the location at the time of such change of control at a
monthly base salary equivalent to the employees highest
monthly base salary in the 12 months preceding such change
of control. During the employment period, the employee may be
terminated for cause, which is defined as:
(i) personal dishonesty or breach of fiduciary duty
involving personal profit;
(ii) the commission of a criminal act related to the
performance of duties, or the disclosure of confidential
information of the Company to a competitor;
(iii) habitual intoxication by alcohol or drugs during
working hours; or
(iv) conviction of a felony.
During the employment period, the covered employees may
terminate employment for good reason, which is
defined as:
(i) an office relocation of more than 35 miles;
(ii) a substantial reduction in base salary, benefits or
perquisites;
(iii) a substantial reduction in responsibilities,
authorities or functions;
(iv) a substantial change in work conditions; or
(v) failure to require a successor to assume the
Companys obligations under the agreement.
A good faith determination of good reason made by a
covered employee will be conclusive. In addition, the employee
may make a unilateral determination of termination for
good reason with or without any change in employment
conditions during the
30-day
period immediately following the first anniversary of the
Effective Date.
If a covered employee is terminated other than for death,
disability or cause, or if a covered employee terminates for
good reason, the Company shall pay to the employee within
30 days the following:
(i) the employees highest unpaid base salary through
the date of termination; and
(ii) a prorated bonus based on the employees highest
bonus earned during the prior two years; and
(iii) the product of a fraction, the numerator of which is
twenty-four less the number of months worked following the first
anniversary of the Effective Date and the denominator of which
is twelve, multiplied by the employees highest annualized
base salary; and
(iv) the product of a fraction, the numerator of which is
twenty-four less the number of months worked following the first
anniversary of the Effective Date and the denominator of which
is twelve, multiplied by the highest annual bonus earned by the
employee during the prior three years; and
(v) all previously deferred compensation plus any interest
thereon and any accrued but unused vacation.
In addition, the Company shall continue all benefits to the
covered employees for the balance of the Employment Period, and
all outstanding equity awards shall vest and become exercisable
upon termination of employment for good reason.
The change of control employment agreements also provide for a
gross up of any taxes due under section [4999] [280G] of the
Internal Revenue Code, and contain non-competition and
non-disclosure of confidential information restrictions. In the
event that any lump sum cash payment is required to be deferred
due to section 409A of the Internal Revenue Code, such
payments will accrue interest at the rate of prime plus 1%.
26
Executive Employment Agreements; Change of
Control Entered into prior to the sale of the
BioCompanies pursuant to the Stock Purchase Agreement with Lonza
Group Limited.
Mr. Klosk entered into an employment agreement prior to the
Lonza Group Limited transaction. Mr. Klosks agreement
is substantially similar to that of Messrs. Russolo and
Sargen, except where these executives received two years worth
of severance and benefits, Mr. Klosk receives three years.
In addition, Mr. Klosks agreement provides that if he
were to terminate within 30 days after the first
anniversary of a Change of Control, the termination would be
considered for good reason. By agreement dated
March 3, 2008, the period during which Mr. Klosk might
terminate at his option was extended to June 30, 2008.
Executives
with no Employment Agreements
Messrs. Mack and Thauer are not covered by an employment
agreement.
Potential
Payments upon Termination or
Change-in-Control
James A.
Mack(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
Without Good
|
|
|
for Good
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
After Change
|
|
|
|
|
Payments & Benefits
|
|
Reason
|
|
|
Reason
|
|
|
for Cause
|
|
|
Upon Death
|
|
|
Upon Disability
|
|
|
Retirement
|
|
|
in Control
|
|
|
|
|
|
Cash Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Pro Rata Bonus
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Stock Options/SARs
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock/Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Units
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Performance Based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Health Care Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Pension Benefits
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Accrued Vacation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds/Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Perquisites
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Tax Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
$
|
917,000
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Mack is not covered by any termination/change of
Control Agreement. |
|
(2) |
|
Cambrex and Mr. Mack agreed to a consulting/retirement
arrangement in which Mr. Mack will be paid $100,000 per
year for the remainder of his life. We computed the net present
value of this benefit by using the most recent Actuarial Life
Tables used by the Social Security Administration assuming a
discount rate equal to 120% of the December 2007 Mid-Term
Applicable Federal Rate (compounded annually). |
27
Potential
Payments upon Termination or
Change-in-Control
Gregory
P. Sargen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
Termination
|
|
|
|
Without Good
|
|
|
Termination for
|
|
|
Termination
|
|
|
Termination
|
|
|
Upon
|
|
|
|
|
|
After Change
|
|
Payments and Benefits
|
|
Reason
|
|
|
Good Reason
|
|
|
for Cause
|
|
|
Upon Death
|
|
|
Disability
|
|
|
Retirement
|
|
|
in Control
|
|
|
Cash Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
1,587,000
|
|
Pro Rata Bonus
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
493,500
|
|
Stock Options/SARs
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
1,856
|
|
Restricted Stock/Deferred Stock Units
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
46,090
|
|
Performance Based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Health Care Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
17,968
|
|
Pension Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Savings Plan Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
20,925
|
|
Nonqualified Deferred Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds/Disability Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
1,718
|
|
Other Perquisites(1)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
46,704
|
|
Tax
Gross-Up(2)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
715,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,931,624
|
|
|
|
|
(1) |
|
Amount reflects the value for 24 months worth of auto
benefit. |
|
(2) |
|
Tax Gross-up
does not factor in any valuation for covenant not to compete. |
Potential
Payments upon Termination or
Change-in-Control
Steven M.
Klosk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
Termination
|
|
|
|
Without Good
|
|
|
Termination for
|
|
|
Termination
|
|
|
Termination
|
|
|
Upon
|
|
|
|
|
|
After Change
|
|
Payments and Benefits
|
|
Reason(1)
|
|
|
Good Reason
|
|
|
for Cause
|
|
|
Upon Death
|
|
|
Disability
|
|
|
Retirement
|
|
|
in Control
|
|
|
Cash Severance
|
|
$
|
3,284,160
|
|
|
$
|
3,284,160
|
|
|
$
|
3,284,160
|
|
|
$
|
3,284,160
|
|
|
$
|
3,284,160
|
|
|
$
|
|
|
|
$
|
3,284,160
|
|
Pro Rata Bonus
|
|
$
|
656,000
|
|
|
$
|
656,000
|
|
|
$
|
656,000
|
|
|
$
|
656,000
|
|
|
$
|
656,000
|
|
|
$
|
|
|
|
$
|
656,000
|
|
Stock Options/SARs
|
|
$
|
6,311
|
|
|
$
|
6,311
|
|
|
$
|
6,311
|
|
|
$
|
6,311
|
|
|
$
|
6,311
|
|
|
$
|
|
|
|
$
|
6,311
|
|
Restricted Stock/Deferred Stock Units
|
|
$
|
214,877
|
|
|
$
|
214,877
|
|
|
$
|
214,877
|
|
|
$
|
214,877
|
|
|
$
|
214,877
|
|
|
$
|
|
|
|
$
|
214,877
|
|
Performance Based Equity Awards
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Health Care Benefits
|
|
$
|
19,993
|
|
|
$
|
19,993
|
|
|
$
|
19,993
|
|
|
$
|
19,993
|
|
|
$
|
19,993
|
|
|
$
|
|
|
|
$
|
19,993
|
|
Pension Benefits
|
|
$
|
156,875
|
|
|
$
|
156,875
|
|
|
$
|
156,875
|
|
|
$
|
156,875
|
|
|
$
|
156,875
|
|
|
$
|
|
|
|
$
|
156,875
|
|
Nonqualified Deferred Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Accrued Vacation Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds/Disability Benefits
|
|
$
|
2,684
|
|
|
$
|
2,684
|
|
|
$
|
2,684
|
|
|
$
|
2,684
|
|
|
$
|
2,684
|
|
|
$
|
|
|
|
$
|
2,684
|
|
Dividend Equivelents
|
|
$
|
335,998
|
|
|
$
|
335,998
|
|
|
$
|
335,998
|
|
|
$
|
335,998
|
|
|
$
|
335,998
|
|
|
|
|
|
|
$
|
335,998
|
|
Other Perquisites(1)
|
|
$
|
25,853
|
|
|
$
|
25,853
|
|
|
$
|
25,853
|
|
|
$
|
25,853
|
|
|
$
|
25,853
|
|
|
$
|
|
|
|
$
|
25,853
|
|
Tax Gross-Up
|
|
$
|
2,013,152
|
|
|
$
|
2,013,152
|
|
|
$
|
2,013,152
|
|
|
$
|
2,013,152
|
|
|
$
|
2,013,152
|
|
|
$
|
|
|
|
$
|
2,013,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,715,904
|
|
|
$
|
6,715,904
|
|
|
$
|
6,715,904
|
|
|
$
|
6,715,904
|
|
|
$
|
6,715,904
|
|
|
$
|
|
|
|
$
|
6,715,904
|
|
Mr. Klosks agreement provides that he has the right
to terminate for any reason during the 30 day period
immediately following the first anniversary of the of the change
of control (February 2, 2008). This agreement was amended
in March, 2008 to extend this period to June 30, 2008.
28
Potential
Payments upon Termination or
Change-in-Control
Paolo
Russolo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
Termination
|
|
|
|
Without Good
|
|
|
Termination for
|
|
|
Termination
|
|
|
Termination
|
|
|
Upon
|
|
|
|
|
|
After Change
|
|
Payments and Benefits
|
|
Reason
|
|
|
Good Reason
|
|
|
for Cause
|
|
|
Upon Death
|
|
|
Disability
|
|
|
Retirement
|
|
|
in Control
|
|
|
Cash Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,024,726
|
|
Pro Rata Bonus
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
629,617
|
|
Stock Options/SARs
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,311
|
|
Restricted Stock/Deferred Stock Units
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
220,587
|
|
Performance Based Equity Awards
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Health Care Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
13,241
|
|
Pension Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Nonqualified Deferred Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Accrued Vacation Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Life Insurance Proceeds/Disability Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Other Perquisites(1)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
53,279
|
|
Tax Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,947,760
|
|
|
|
|
(1) |
|
Amount reflects the value for 24 months worth of auto
benefits
|
Potential
Payments upon Termination or
Change-in-Control
Peter
Thauer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
Termination
|
|
|
|
Without Good
|
|
|
Termination for
|
|
|
Termination
|
|
|
Termination
|
|
|
Upon
|
|
|
|
|
|
After Change
|
|
Payments and Benefits
|
|
Reason
|
|
|
Good Reason
|
|
|
for Cause
|
|
|
Upon Death
|
|
|
Disability
|
|
|
Retirement
|
|
|
in Control
|
|
|
Cash Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Pro Rata Bonus
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Stock Options/SARs
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Restricted Stock/Deferred Stock Units
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Performance Based Equity Awards
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Health Care Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Pension Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Accrued Vacation Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Life Insurance Proceeds/Disability Benefits Other Perquisites
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Tax Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
In December of 2007, Mr. Thauer entered into an agreement
with Cambrex to be bought out of his change of Control
Agreement. Payments under the buyout were made in January of
2008, and have been disclosed in the Summary Compensation Table
on page 21. Mr. Thauer is no longer covered by any
employment/change of control agreement.
29
COMPENSATION
OF NON-EMPLOYEE DIRECTORS
The fiscal 2007 compensation for non-employee directors
consisted of an annual retainer of $26,000 and the Chair of the
Audit Committee received a further annual retainer of $5,000. In
addition, each non-employee director of the Company
(i) will receive $1,000 for each telephonic Board and
Committee meeting attended, except that the Chairperson of the
Compensation, Audit, Regulatory Affairs and Governance
Committees will each receive $1,500 for each telephonic
Committee meeting chaired; and (ii) will receive $1,500 for
each in-person Board and Committee meeting attended, except that
the Chairperson of the Compensation, Audit, Regulatory Affairs
and Governance Committees will each receive $2,000 for each
in-person Committee meeting chaired and the lead director shall
receive $2,000 for each Board meeting attended. Directors also
receive reimbursement for expenses incurred in connection with
meeting attendance. Employees of the Company who are also
directors will not receive any separate fees for acting as
directors.
Pursuant to the terms of the Non-Employee Director Program of
the 1996, 1998, 2001, and 2003 Performance Stock Option Plan and
the 2004 Incentive Plan (the Plans), each new
non-employee director shall be awarded an option to purchase
2,000 shares of the Companys Common Stock upon
election as a director. The Plans further provide that each
non-employee director will receive a grant of options to
purchase 2,000 shares of Common Stock at the first meeting
of the Board of Directors following each Annual Meeting of
Stockholders of the Company. Each such option will have a per
share exercise price equal to the fair market value of the
Companys Common Stock on the date of grant. Options
granted to non-employee directors shall be non-qualified options
with a seven-year term. Each option will become exercisable six
months after the date of grant, subject to acceleration upon a
change in control.
The amount of cash retainer, meeting fees and Lead Director and
Chair fees each non-employee Board member earned during fiscal
2007 are summarized in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Pension Value and
|
|
|
All Other
|
|
|
|
|
|
|
Fees Earned
|
|
|
($)
|
|
|
Awards
|
|
|
Compensation
|
|
|
Nonqualified Deferred
|
|
|
Compensation
|
|
|
|
|
Name
|
|
($)
|
|
|
(Share Equivalents)
|
|
|
($)
|
|
|
($)
|
|
|
Compensation
|
|
|
($)
|
|
|
Total ($)
|
|
|
David R. Bethune
|
|
$
|
45,000
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
61,600
|
|
Rosina B. Dixon
|
|
$
|
62,500
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
79,100
|
|
Roy W. Haley
|
|
$
|
64,000
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
80,600
|
|
Kathryn Rudie Harrigan
|
|
$
|
52,000
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
68,600
|
|
Leon J. Hendrix, Jr.
|
|
$
|
58,000
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
74,600
|
|
Ilan Kaufthal
|
|
$
|
45,500
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
62,100
|
|
William B. Korb
|
|
$
|
61,000
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
77,600
|
|
John R. Miller
|
|
$
|
55,500
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
72,100
|
|
Peter G.Tombros
|
|
$
|
51,000
|
|
|
|
|
|
|
$
|
16,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
67,600
|
|
|
|
|
(1) |
|
Directors may defer all or a portion of their fees in Company
stock. Directors receive no preferential dividends on Company
stock. |
Under the Non-Employee Directors Deferred Compensation
Plan (the Deferred Compensation Plan) each
non-employee Director may make an election to defer some or all
of his or her cash remuneration for that year. Under the
Deferred Compensation Plan, an unfunded deferred compensation
bookkeeping account is established for each director who elects
to defer cash remuneration otherwise payable during the year.
30
PROPOSAL NO. 2
RATIFICATION
OF APPOINTMENT OF AUDITORS
The Board of Directors, in accordance with the recommendation of
the Audit Committee, has selected BDO Seidman, LLP
(BDO) to be the Companys independent public
accountants for 2008, subject to the ratification of the
stockholders.
On March 16, 2007, the Audit Committee of Cambrex
Corporation (the Company or Cambrex)
selected BDO to be the Companys independent public
accountants for 2007, subject to the completion of BDOs
client acceptance procedures and ratification by the
stockholders which ratification occurred on April 26, 2007
at the Companys Annual Meeting of Stockholders.
During the fiscal years ended December 31, 2006 and
December 31, 2005, and through March 16, 2007, neither
Cambrex nor anyone on its behalf consulted with BDO regarding
any of the matters described in Item 304(a)(2)(i) and
(ii) of
Regulation S-K.
Previous
Independent Registered Public Accounting Firm
On March 16, 2007, the Audit Committee approved the
decision to dismiss PricewaterhouseCoopers LLP (PwC)
as the Companys independent registered public accounting
firm.
During the fiscal years ended December 31, 2006 and
December 31, 2005, PwCs reports on the Companys
financial statements did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope, or accounting principle.
During the fiscal years ended December 31, 2006 and
December 31, 2005 and through March 16, 2007, there
were no disagreements with PwC on any matter of accounting
principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of PwC, would have caused PwC to
make reference thereto in its reports on Cambrexs
financial statements for such years.
Except as noted below, there were no reportable
events, as defined in Item 304(a)(1)(v) of
Regulation S-K
for the fiscal years ended December 31, 2006 and
December 31, 2005 and through March 16, 2007. The
following material weakness in internal controls was disclosed
by the Company in Item 9A of the Companys
Form 10-K
for the year ended December 31, 2005 and in the Item 4
sections of each of the Companys
Forms 10-Q
for 2006:
The Companys management identified a material weakness in
its internal controls over the accounting for income taxes. As
result of this material weakness, management concluded that the
Companys internal controls over financial reporting were
not effective.
During 2006 management carried out an evaluation, with the
participation of the Companys principal executive officer
and principal financial officer, of changes in the
Companys internal control over financial reporting, as
defined in Exchange Act Rule 13a -15(f). Based on this
evaluation, management determined the material weakness had been
remediated as of December 31, 2006 by implementing the
following corrective actions:
|
|
|
|
|
Strengthened procedures whereby the current income tax payable
account and deferred income tax asset and liability accounts are
reconciled on a regular and timely basis;
|
|
|
|
Increased level of review and discussion of significant tax
matters and supporting documentation with senior finance
management;
|
|
|
|
Hired additional permanent personnel in the tax
department; and
|
|
|
|
Identified interim personnel to augment existing corporate tax
staff to ensure there are adequate resources to reconcile all
tax-related accounts for each reporting period.
|
The Company has authorized PwC to respond fully to the inquiries
of the successor accountant concerning the subject matter of
this material weakness.
The Company has provided a copy of the above disclosure related
to PwC and requested that PwC furnish the Company with a letter
addressed to the United States Securities and Exchange
Commission stating whether or not
31
PwC agrees with this disclosure and, if not, stating the
respects in which it does not agree. A copy of PwCs letter
is filed as Exhibit 16.1 to this Proxy Statement.
A representative of BDO is expected to be present at the
meeting, will be afforded an opportunity to make a statement if
such representative desires to do so and is expected to be
available to respond to appropriate questions.
This proposal requires the affirmative vote of holders of a
majority of the votes cast at the meeting. Abstentions and
broker non-votes will have no effect on this vote.
The Board of Directors recommends a vote FOR the proposal.
PRINCIPAL
ACCOUNTING FIRM FEES
The following table sets forth the aggregate fees billed to
Cambrex for each of the fiscal years ended December 31,
2007 and December 31, 2006, by the Companys
independent public accounting firm, BDO Seidman, LLP for the
year ended December 31, 2007 and PricewaterhouseCoopers LLP
for the year ended December 31, 2006 for Audit,
Audit-Related, Tax and All Other Fees:
|
|
|
|
|
|
|
|
|
|
|
BDO Fees
|
|
|
PwCs Fees
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit Fees
|
|
$
|
1,393,741
|
|
|
$
|
5,182,000
|
|
Audit-Related Fees
|
|
$
|
40,000
|
|
|
$
|
630,000
|
|
Tax Fees
|
|
$
|
0
|
|
|
$
|
0
|
|
All Other
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
1,433,741
|
|
|
$
|
5,812,000
|
|
AUDIT
FEES
Aggregate Audit fees billed for professional services rendered
by BDO in connection with its audit of the Companys
financial statements were $1,433,741 for fiscal year ended 2007.
Aggregate Audit fees billed for professional services rendered
by PwC in connection with its audit of the Companys
financial statements for fiscal year ended 2006 were $5,812,000.
Such fees also include BDOs and PwCs internal
control review and attestation now required pursuant to the
Sarbanes-Oxley Act and the securities regulations.
AUDIT-RELATED
FEES
Aggregate Audit-Related fees billed for professional services
rendered by BDO in connection with assurance and related
services reasonably related to the audit and review of the
Companys financial statements were $40,000 for the fiscal
year ended 2007 for agreed upon procedures related to the
Companys intercompany accounting. Aggregate Audit-Related
fees billed for professional services rendered by PwC in
connection with assurance and related services reasonably
related to the audit and review of the Companys financial
statements were $630,000 for the fiscal year-ended 2006 for
financial reporting matters related to the sale of the
businesses that comprise the Bioproducts and Biopharma segments.
TAX
FEES
There were no Tax fees billed for professional tax services
rendered by BDO for the fiscal year ended 2007 or PwC for the
fiscal year ended 2006.
ALL OTHER
FEES
BDO did not perform any services classified as Other Services
during the fiscal year ended 2007 and PwC did not perform any
services classified as Other Services during the fiscal
year-ended 2006, and as such, there were no billings for such
services.
32
Audit
Committee Pre-Approval Policy
In fiscal year 2003, the Audit Committee established a policy
(the Policy) for pre- approval of all audit and
permissible non-audit services performed by the independent
auditors. Under the Policy, the Audit Committee will approve the
following Audit and Audit-Related Services prior to each
engagement, along with a fee amount: (i) domestic quarterly
reviews and the annual financial statement audit;
(ii) statutory or financial audits for international
subsidiaries or affiliates of the Company; (iii) the
attestation engagement for the independent auditors report
on Managements assertion on internal controls for
financial reporting; (iv) financial audits of employee
benefit plans; and (v) due diligence services pertaining to
potential business acquisitions and dispositions. On an annual
basis, the Audit Committee will pre-approve a blanket amount to
authorize the following Audit and Audit-Related Services:
(i) consultations related to accounting, financial
reporting or disclosure matters; (ii) assistance with
understanding and implementing new accounting and financial
reporting guidance; and (iii) assistance with internal
control reporting requirements and also Permissible Non-Audit
Services, including tax services. Further, management will
provide a quarterly update to the Committee detailing actual
spending by quarter and year-to-date for any services rendered
under such pre-approval. Under the Policy, the Audit Committee
has delegated pre-approval authority to the Committee
Chairperson for permissible services and fees up to a maximum of
$25,000. The Committee Chairperson will report to the entire
Audit Committee any services and fees approved pursuant to such
delegation of authority.
During fiscal year 2007, all services rendered were approved
pursuant to the Policy. Further, during fiscal years 2007 and
2006, there were no services performed or fees incurred by PwC
or BDO where pre-approval was waived pursuant to the statutory
de minimis exception.
The Audit Committee has reviewed the billings by PwC and BDO and
has determined that they do not affect the auditors
independence.
STOCKHOLDER
PROPOSALS FOR 2009
Stockholder proposals intended to be presented at the 2009
Annual Meeting must be received by the Company not later than
November 28, 2008, as well as satisfy certain eligibility
requirements established by the Securities and Exchange
Commission, in order to be included in the Companys Proxy
Statement for the 2009 Annual Meeting.
Under the Companys By-laws, any stockholder wishing to
present a nomination for the office of director before the 2009
Annual Meeting for a vote must give notice to the Company on or
prior to January 23, 2009; and any stockholder wishing to
bring a proposal or other business before the 2008 Annual
Meeting for a vote must give the Company not less than
60 days nor more than 90 days advance notice (provided
that in the event that less than 70 days notice or
prior public disclosure of the date of the 2009 Annual Meeting
is given or made to stockholders, notice must be received not
later than the close of business on the 10th day following
the date on which such notice of the date of the 2009 Annual
Meeting was mailed or such public disclosure was made) prior to
the date of the 2009 Annual Meeting (which date has not yet been
determined by the Company), and that both such notices must meet
certain other requirements as stated in the Companys
By-laws. Any stockholder interested in making such a nomination
or proposal should request a copy of such By-law provisions from
the Secretary of Cambrex Corporation. If the Company does not
receive notice of a stockholders proposal within this time
frame, the individuals named in the proxies solicited by the
Board of Directors for that meeting may exercise discretionary
voting power with respect to that proposal.
By Order of the Board of Directors.
Peter E. Thauer,
Secretary
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UPON WRITTEN REQUEST THE COMPANY WILL PROVIDE TO EACH
STOCKHOLDER, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION ON
FORM 10-K
FOR 2007. REQUESTS SHOULD BE DIRECTED TO MR. GREGORY SARGEN,
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, CAMBREX CORPORATION,
ONE MEADOWLANDS PLAZA, EAST RUTHERFORD, NJ 07073. SUCH REPORT
WILL BE FURNISHED WITHOUT EXHIBITS. COPIES OF THE
EXHIBITS TO SUCH ANNUAL REPORT WILL BE FURNISHED TO
REQUESTING STOCKHOLDERS UPON PAYMENT OF THE COMPANYS
REASONABLE EXPENSES IN FURNISHING THE SAME.
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EXHIBIT 16.1
March 21, 2007
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Commissioners:
We have read the statements made by Cambrex Corporation (copy
attached), which we understand will be filed with the Securities
and Exchange Commission, pursuant to Item 4.01 of
Form 8-K,
as part of the
Form 8-K
of Cambrex Corporation dated March 16, 2007. We agree with
the statements concerning our Firm in such
Form 8-K.
Very truly yours,
PricewaterhouseCoopers LLP
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CAMBREX CORPORATION
Solicited by Board of Directors for 2008 Annual Meeting of Stockholders
The undersigned stockholder of Cambrex
Corporation, (the "Company") hereby appoints J.A. Mack, G.P. Sargen and S.M. Klosk, and each of them acting singly and each with power of substitution and
resubstitution, attorneys and proxies of the undersigned, with all the powers the undersigned would possess if personally present, to vote the shares of Common Stock
of the Company which the undersigned is entitled to vote at the 2008 Annual Meeting of Stockholders of the Company to be held on April 24, 2008 at 1:00 p.m. at the
Sheraton Meadowlands Hotel, Meadowlands Plaza, East Rutherford, New Jersey and any adjournment thereof. Without otherwise limiting the general authorization
hereby given, said attorneys and proxies are instructed to vote as indicated on the reverse side hereof on the proposals set forth in the Notice of Annual Meeting of
Stockholders of the Company and accompanying Proxy Statement, each dated March 24, 2008.
THIS PROXY WILL BE VOTED "FOR"
THE ELECTION OF THE 4 NOMINEES FOR DIRECTOR LISTED IN THE PROXY STATEMENT ACCOMPANYING THE NOTICE OF SAID MEETING
(PROPOSAL NO. 1) and "FOR" RATIFICATION OF THE SELECTION OF ACCOUNTANTS (PROPOSAL NO. 2)
(Continued
and to be signed on the reverse side)
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14475 n
ANNUAL MEETING OF STOCKHOLDERS OF
CAMBREX CORPORATION
April 24, 2008
Please date, sign and mail
your proxy card in the
envelope provided as soon as
possible.
â Please detach along perforated line and
mail in the envelope provided. â
n 20430000000000000000 8 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF DIRECTORS FOR PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
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FOR
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AGAINST
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ABSTAIN |
1. Election of Directors: |
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Ratification of the appointment of BDO Seidman, LLP as independent public
accountants for 2008 |
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NOMINEES: |
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FOR ALL NOMINEES
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William B. Korb
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James A. Mack |
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WITHHOLD AUTHORITY FOR ALL NOMINEES
FOR ALL EXCEPT (See
instructions below)
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John R. Miller Peter Tombros |
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INSTRUCTION: To withhold authority to vote for any individual nominee(s),
mark FOR ALL EXCEPT and fill in the circle next to
each nominee you wish to
withhold, as shown here: = |
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To change the address on your account, please check the box
at right and indicate your new address in the address space
above. Please note that changes to the registered name(s)
on the account may not be submitted
via this method. |
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Signature
of Stockholder
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Date:
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Signature
of Stockholder
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Date:
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Note: |
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving
full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
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