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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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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(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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Fee paid previously with preliminary materials:
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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TABLE OF CONTENTS
CAMBREX
CORPORATION
March 23, 2009
Dear Stockholder,
You are cordially invited to attend the Annual Meeting of
Stockholders of Cambrex Corporation. This years meeting
will be held on April 23, 2009, 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
six (6) directors in Class I and Class III;
(2) to consider and act upon the approval of a Long Term
Incentive Plan; and (3) ratify the selection of the
Companys auditors, BDO Seidman, LLP as the Companys
independent registered public accountant for the fiscal year
ending December 31, 2009.
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,
John R. Miller
Non-executive Chairman
CAMBREX
CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 2009
Notice Is Hereby Given that the 2009 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 23, 2009
at 1:00 P.M. for the following purposes:
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1.
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To elect six (6) directors in Classes I and III
to hold office until the 2010 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 approval of a Long Term Incentive
Plan;
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3.
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To consider and act upon the ratification of the appointment of
BDO Seidman, LLP as independent registered public accountants
for the fiscal year ending December 31, 2009; and
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4.
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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 16, 2009, 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 F. Michael Zachara, Vice President,
General Counsel & Secretary, Cambrex Corporation, One
Meadowlands Plaza, East Rutherford, New Jersey 07073.
By order of the Board of Directors,
F. Michael Zachara,
Secretary
March 23, 2009
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.
Important
Notice Regarding the Availability of Proxy Materials for the
Stockholders Meeting to be held on April 23,
2009.
The Proxy
Statement is available at:
http://ir.cambrex.com/phoenix.zhtml?c=80683&p=irol-proxy
CAMBREX
CORPORATION
2009
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 (Cambrex or the Company) for
use at the 2009 Annual Meeting of Stockholders to be held on
April 23, 2009, 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 23, 2009.
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 six
(6) nominees for director named herein; for the approval of
a Long Term Incentive Plan and for the selection of BDO Seidman,
LLP as independent registered public 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 16, 2009, will be entitled to
vote at the meeting. On such record date there were outstanding
and entitled to vote 29,207,831 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 17,
2009, 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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Neuberger Berman Inc.
Neuberger Berman, LLC
605 3rd Avenue
New York, NY 10158
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2,821,552
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(3)
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9.675
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%
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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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2,169,308
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(4)
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7.4
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%
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Barclays Global Investors, NA
45 400 Howard Street
San Francisco, CA 94105
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2,113,672
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(5)
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7.25
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%
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Wentworth, Hauser & Violich, Inc.
301 Battery Street, Suite 400
San Francisco, CA
94111-3203
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1,931,612
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(6)
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6.62
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%
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Royce & Associates, LLC
1414 Avenue of the Americas
New York, New York 10019
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1,843,563
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(7)
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6.32
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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 17, 2009, 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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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
29,231,753 shares of Common Stock issued and outstanding
(excluding treasury shares) on February 17, 2009. |
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In a Schedule 13G under the Securities Exchange Act of 1934
dated February 12, 2009 and filed by Neuberger Berman Inc.
and Neuberger Berman, LLC (Neuberger), Neuberger
reported that it has sole voting power over
2,802,452 shares and shared dispositive power over
2,821,552 shares. Neuberger is reporting as a Group in
accordance with
Rule 13d-1(b)(1)(ii)(J)
of the Securities Exchange Act of 1934. Neuberger Berman LLC has
reported the shares as beneficially owned since it has shared
power to make decisions whether to retain or dispose, and in
some cases the sole power to vote, the securities of many
unrelated clients. Neuberger Berman, LLC does not, however, have
an economic interest in the securities of those clients. The
clients are the actual owners of the securities and have the
sole right to receive and the power to direct the receipt of
dividends from or proceeds from the sale of such securities.
Neuberger Berman LLC and Neuberger Berman Management LLC are
deemed to be beneficial owners since they both have shared power
to make decisions whether to retain or dispose and vote the
securities. Neuberger Berman, LLC and Neuberger Berman
Management LLC serve as a sub-adviser and investment manager,
respectively, of Neuberger Bermans various Mutual Funds
which hold such shares in the ordinary course of their business
and not with the purpose nor with the effect of changing or
influencing the control of the issuer. The holdings of Lehman
Brothers Asset Management LLC and Lehman Brothers Asset
Management Inc., affiliates of Neuberger Berman LLC, are also
aggregated to comprise the holdings referenced herein. |
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In a Schedule 13G under the Securities Exchange Act of 1934
dated February 12, 2009 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 1,906,098 shares
and shared dispositive power over 2,169,308 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. |
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(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 February 6, 2009 and filed by Barclays Global
Investors NA (Barclays), Barclays reported that it
has sole voting power over 1,670,715 shares and sole
dispositive power over 2,113,672 shares held by Barclays in
trust accounts for the economic benefit of the beneficiaries of
those accounts. |
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In a Schedule 31G under the Securities Exchange Act of 1934
dated February 17, 2009 and filed by Wentworth,
Hauer & Violich, Inc. (Wentworth),
Wentworth reported that it has sole voting power and sole
dispositive power of 1,931,612 shares. Wentworth has
reported the shares as beneficially owned as a result of acting
as an investment advisor. |
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In a Schedule 13G under the Securities Exchange Act of 1934
dated January 23, 2009 and filed by Royce &
Associates, LLC (Royce), Royce reported that it has
sole voting power over 1,843,563 shares and sole
dispositive power over 1,843,563 shares. Royce has reported
the shares as beneficially owned as a result of acting as an
investment advisor. |
4
COMMON
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table gives information concerning the beneficial
ownership of the Companys Common Stock on
February 17, 2009, 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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8,745
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(3)
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*
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Rosina B. Dixon, M.D.
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31,591
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(4)
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*
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Roy W. Haley
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64,221
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(5)
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*
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Kathryn Rudie Harrigan
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36,630
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(6)
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*
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Leon J. Hendrix, Jr.
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74,287
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(7)
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*
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Ilan Kaufthal
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110,353
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(8)
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*
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William B. Korb
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61,705
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(9)
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*
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James A. Mack
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463,227
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(10)
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1.58
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%
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John R. Miller
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27,018
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(11)
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*
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Peter Tombros
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48,822
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(12)
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*
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Steven M. Klosk
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220,965
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(13)
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*
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Aldo Magnini
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34,366
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(14)
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*
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Paolo Russolo
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99,530
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(15)
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*
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Gregory P. Sargen
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31,039
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(16)
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*
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Peter E. Thauer
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176,096
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(17)
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*
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F. Michael Zachara
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2,500
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(18)
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All Directors and Executive Officers as a Group (14 Persons)
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851,772
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(19)
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2.92
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%
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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 17, 2009. 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) 29,231,753 shares of Common Stock issued and
outstanding (excluding treasury shares) on February 17,
2009, and (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 17, 2009. |
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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 and 1,492 restricted stock units. |
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(4) |
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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 and 1,492 restricted stock units. |
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(5) |
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The number of shares reported includes 18,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans, 1,492 restricted stock units and 43,476 share
equivalents held at February 17, 2009 in the Companys
Directors Deferred Compensation Plan. |
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(6) |
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The number of shares reported includes 12,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans and 1,492 restricted stock units. |
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(7) |
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The number of shares reported includes 18,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans, 1,492 restricted stock units and 46,042 share
equivalents held at February 17, 2009 in the Companys
Directors Deferred Compensation Plan. |
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(8) |
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The number of shares reported includes 18,000 shares
issuable upon exercise of options granted under the
Companys 1994, 1996, 1998, 2001 and 2004 stock option
Plans and 1,492 restricted stock units. |
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(9) |
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The number of shares reported includes 18,000 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, 1,492
restricted stock units and 39,960 share equivalents held at
February 17, 2009 in the Companys Directors
Deferred Compensation Plan. |
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(10) |
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The number of shares reported includes 245,688 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans and 29,666 share
equivalents held at February 17, 2009 in the Companys
Deferred Compensation Plan. |
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(11) |
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The number of shares reported includes 18,000 shares
issuable upon exercise of options granted under the
Companys 1996, 1998, 2001 and 2004 stock option Plans and
1,492 restricted stock units. |
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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,
1,492 restricted stock units and 31,077 share equivalents
held at February 17, 2009 in the Companys
Directors Deferred Compensation Plan. |
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(13) |
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The number of shares reported includes 68,500 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans, 10,817 shares held at
December 31, 2008 in the Companys Savings Plan, and
49,121 share equivalents held at February 17, 2009 in
the Companys Deferred Compensation Plan. |
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(14) |
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The number of shares reported includes 2,750 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans and 26,308 restricted stock
units. |
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(15) |
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The number of shares reported includes 36,375 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans and 34,386 restricted stock
units. |
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(16) |
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The number of shares reported includes 3,375 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans, 21,174 restricted stock units
and 1,259 shares held at December 31, 2008 in the
Companys Savings Plan. |
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(17) |
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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, 122 shares held at
December 31, 2008 in the Companys Savings Plan, and
72,597 share equivalents held at February 17, 2009 in
the Companys Deferred Compensation Plan. |
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(18) |
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The number of shares reported includes 2,500 shares
issuable upon exercise of options granted under the
Companys Stock Option Plans. |
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(19) |
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The number of shares reported includes 249,500 shares
issuable upon exercise of options that are currently exercisable
or will become exercisable within 60 days, 95,296
restricted stock units, 12,096 shares held at
December 31, 2008 in the Companys Savings Plan,
160,555 share equivalents held at February 17, 2009 in
the Directors Deferred Compensation Plan and
49,121 share equivalents held at February 17, 2009 in
the Companys Deferred Compensation Plan. Shares held by
immediate family members are not included and beneficial
ownership of such shares is disclaimed. |
6
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 six (6) directors in
Classes I and III will be elected to hold office until
the 2010 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 six 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 2010 Annual Meeting (Class I)
David R. Bethune (age 68). Director since
June 2005. Member of the Compensation and Governance Committees
of the Board of Directors. Mr. Bethune was appointed CEO of
Zila, Inc., a specialty pharmaceutical company focused on the
prevention and treatment of oral cancer on April 1, 2008
and has served as Executive Chairman since August 2007. He has
been a member of the board since 2005 and was appointed chairman
on May 21, 2007. Mr. Bethune is 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, he
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 a Board Member of the Female Health Company.
Kathryn Rudie Harrigan (age 57). Director
since 1994. Member of the Audit Committee of the Board of
Directors. Since 1981, Dr. Harrigan was Professor,
Management of Organizations Division of the Columbia University
Business School. In 1993, Dr. Harrigan became the Henry R.
Kravis Professor of Business Leadership at Columbia University
Business School.
Steven M. Klosk (age 51). Director since
May 2008. In May 2008 Mr. Klosk was appointed President and
Chief Executive Officer of Cambrex and became a member of the
Board of Directors. He was appointed Executive Vice President
and Chief Operating Officer of Cambrex in February 2007 and
assumed the responsibility of the
7
Pharma business as Executive Vice President and Chief Operating
Officer Biopharma & Pharma in August 2006.
He assumed direct responsibility for the leadership of the
Biopharmaceutical Business Unit as Chief Operating Officer in
January 2005. Mr. Klosk joined Cambrex in October 1992 as
Vice President-Administration. He was appointed Executive Vice
President-Administration in October 1996 and was promoted to the
position of Executive Vice President, and Chief Operating
Officer for the Cambrex Pharma and BioPharmaceutical Business
Unit in October 2003. 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. Mr. Klosk currently
serves on the Board of Directors of NPS, a privately held
packaging company and the Foundation Board for St. Josephs
Hospital in Paterson, New Jersey.
Nominees
for Election to Serve as Directors Serving
until the 2010 Annual Meeting (Class III)
William B. Korb (age 68). Director since
1999. Member of the Audit and Chairman of the Regulatory Affairs
Committees of the Board of Directors. Mr. Korb was
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, he was an Operating Vice President of
Reliance Electric Company, a position he held from 1979 to 1987.
Mr. Korb currently serves on the Board of Premier Farnell
plc.
John R. Miller (age 71). Director since
1998. Non-executive Chairman of the Board of Directors and
Member of the Compensation and Governance Committees.
Mr. Miller also serves as Non-Executive Chairman of Graphic
Packaging Holding Company. He is a Director of Eaton
Corporation, former Non-Executive Chairman of SIRVA, Inc., 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.
Peter Tombros (age 66). Director since
2002. Member of the Audit and Governance Committees of the Board
of Directors. Mr. Tombros is Professor, Distinguished
Executive in Residence, Eberly College of Science
BS/MBA
Program, Pennsylvania State University. He is former Chairman of
the Board and Chief Executive Officer of VivoQuest, a private
biopharmaceutical company from 2001 until 2005. He served as
President and Chief Executive Officer from 1994 to 2001 of Enzon
Pharmaceuticals. Before joining Enzon, Mr. Tombros spent
25 years with Pfizer, Inc. as Vice President of Marketing,
Vice President Corporate Strategic Planning, Senior Vice
President and General Manager and as Executive Vice President of
Pfizer Pharmaceuticals, Inc. Mr. Tombros is Director and
Non-Executive Chairman of the Board of Directors of NPS
Pharmaceuticals, and PharmaNet Development Group, Inc. and
Director of Protalex.
Directors
Serving until 2010 Annual Meeting (Class II)
Rosina B. Dixon, M.D.
(age 66). 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 62). Director since
1998. Chairman of the Audit Committee of the Board of Directors
and Audit Committee Financial Expert. Mr. Haley is
Chairman, and Chief Executive Officer of WESCO International,
Inc. (NYSE), an electrical products distribution company. Prior
to joining WESCO in 1994, he served as President and Chief
Operating Officer of American General Corporation, one of the
nations largest consumer financial services organizations.
He began his career in 1969 with the management consulting
division of Arthur Andersen &
8
Co. and served as a partner from 1980 until 1988. He is a
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 67). Director since 1995. Chairman of
the Governance Committee and Member of the Compensation
Committee of the Board of Directors. Mr. Hendrix retired as
Chairman of Remington Arms Co. in May 2007. He was Chairman of
Remington Arms Co. since December 1997 and from December 1997
until April 1999 he 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, he held a
series of executive level positions, most recently Chief
Operating Officer and he was 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 61). Director since
the Company commenced business in 1981. Member of the Regulatory
Affairs Committee of the Board of Directors. Mr. Kaufthal
is currently Senior Advisor at Irving Place Capital, a private
equity firm. He was Vice Chairman of Investment Banking at Bear,
Stearns & Co. Inc. until June 2008. 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.
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.
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 2008 all
Section 16(a) filing requirements applicable to its
directors, executive officers and ten percent stockholders were
complied with during the 2008 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 2008 the Board held eight
meetings. Pursuant to Cambrexs Corporate Governance
Guidlines, directors are expected to attend board meetings
and meetings of committees on which they serve, and to spend the
time needed
9
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. All nine directors attended the
Companys annual meeting of stockholders in April of 2008.
Our Board has affirmatively determined, after considering all of
the relevant facts and circumstances, that all of the directors,
other than Steven M. Klosk 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. This policy can also be found on the
Companys website (www.Cambrex.com).
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 in the first half of 2008 was John R. Miller.
John R. Miller has continued to lead these executive sessions
for the second half of 2008 as non-executive Chairman of the
Board of Directors.
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 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. Each committee
has a charter that has been adopted by such committee and
approved by the Board. 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.
10
Regulatory
Affairs Committee
The Regulatory Affairs Committee, comprised of three
non-management directors, oversees the Companys compliance
with various Food and Drug regulatory requirements and
environmental and safety affairs. The Regulatory Affairs
Committee held three meetings during 2008.
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 two meetings in 2008.
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 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 2010 Annual Meeting
should be sent to the Corporate Secretary of the Company not
later than January 23, 2010, 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.
11
GOVERNANCE
COMMITTEE
Leon J. Hendrix, Jr., Chairperson
David R. Bethune
John R. Miller
Peter G. Tombros
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 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
registered public accountants 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 registered public accountants are responsible for
auditing those financial statements.
The Audit Committee met eight times in 2008. The Audit Committee
met individually with Management, with BDO Seidman, LLP
(BDO), the Companys independent registered
public accountants, and with the Companys outsourced
internal auditors, as appropriate.
The Audit Committee reviewed and had discussions with Company
Management 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 written disclosures and the letter from BDO
required by PCAOB Rule 3526 (Independence Discussions with
Audit Committees) and has discussed such disclosures and letter
with representatives of BDO their independence.
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, 2008.
AUDIT COMMITTEE
Roy W. Haley, Chairperson
Kathryn Rudie Harrigan
William B. Korb
Peter G. Tombros
Compensation
Committee
The Compensation 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 Compensation 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 (the IRC or the Internal Revenue
Code). Each year the Compensation Committee develops a
calendar-year annual schedule for the coming year. The Chair
reports the
12
Compensation Committees actions and recommendations to the
full Board following each Compensation Committee meeting. The
Compensation Committee held five meetings during 2008.
The Compensation 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
Compensation Committee also oversees the Companys general
employee benefit programs, including the Companys employee
equity plans. At its October 2008 meeting the Compensation
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
Compensation Committee referred to materials provided by the
Governance Committee. The Compensation Committee conducts these
reviews annually.
Compensation
Committee Interlocks and Insider Participation
The members of the Compensation Committee during 2008 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., Chairperson
David R. Bethune
Leon J. Hendrix, Jr.
John R. Miller
COMPENSATION DISCUSSION AND ANALYSIS
The following is a discussion of our executive compensation
program and compensation decisions made for the fiscal year
ended 2008. This discussion relates to the executive officers
named in the Summary Compensation Table on page 18. 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 interpreted 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, the
Committee is assisted by 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. During fiscal year 2008, Cambrex
received advice from an independent compensation consultant
regarding senior management compensation.
Compensation & Benefit Program Features
The Chief Executive Officer and human resources department
are responsible for recommending the key elements of our
compensation program. The recommendations 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 2008
compensation program, the Committee, with the help of our Chief
Executive Officer, Chief Financial Officer, and the compensation
consultant, considered key financial metrics and market
executive compensation practices in general and at selected peer
companies.
The Company sought to fulfill financial goals in 2008 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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70% of this award is paid in cash and 30% is paid in restricted
stock units that vest ratably over three years and becomes
saleable only at the end of the third year.
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The performance criteria are 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 one or more
of the following:
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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 Unit Awards in 2008 these
awards were limited to those granted under the Annual Incentive
Awards related to 2007 performance.
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Performance Shares vest over three years
dependent on the Companys level of growth in revenue and
EBITDA as compared to an index of peer companies.
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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 Annual Incentive Award, and long term equity
based compensation ties a significant portion of target
compensation to financial performance and retention, which the
Compensation Committee believes aligns our compensation program
with our stockholders and our key strategic goals.
14
Peer
Group Comparison Data
The Chief Executive Officer, Chief Financial Officer, human
resources department, and Compensation Committee compared
Cambrexs executive compensation target amounts to that of
a group of select life sciences companies chosen by the external
compensation consultant. This peer group consisted of 17
publicly traded life sciences companies similar in size to
Cambrex, some of whom we compete with for executive talent. The
following companies made up the peer group in 2008.
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Alpharma Inc.
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Martek Biosciences Corp
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American Vanguard Corp.
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Nutraceutical Intl Corp.
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AMRI
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Par Pharmaceutical Companies, Inc.
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APP Pharmaceuticals Inc.
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Prestige Brands Holdings
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Balchem Corp.
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QLT Inc.
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Chattem Chemicals, Inc.
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Reliv International Inc.
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Dionex Corp.
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Techne Corp.
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Gen-Probe Inc.
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Viropharma Inc.
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Illumina Inc.
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Compensation data from the above peer group was analyzed 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.
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. Base salary is set to
provide a level of compensation that helps attract and retain
highly qualified executives.
During the year the Committee approved the following increases:
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Mr. Macks base salary was increased from $500,000 to
$600,000. This decision was based on the commitment of
Mr. Mack to continue to manage the business and complete an
orderly and successful transition to a new Chief Executive
Officer in 2008. Mr. Mack retired on June 30, 2008.
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Mr. Klosk received a salary increase from $400,000 to
$450,000 upon his promotion to Chief Executive Officer in May
2008. An annual auto allowance of $11,676 was eliminated when
the increase became effective.
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Mr. Sargen received a salary increase in November 2008 from
$300,000 to $341,676 based on his outstanding performance. An
annual auto allowance of $11,676 was eliminated when the
increase became effective.
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Messrs. Thauer and Russolo did not receive compensation
increases during the year.
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Annual
Incentive Awards
Each year the Committee, in consultation with the President and
Chief Executive Officer and Chief Financial 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 by the President and
Chief Executive Officer. After considering a number of
performance metrics, the Compensation Committee, in consultation
with management, approved the following plan for 2008 which
targeted improvements in Revenue, EBITDA, Operating Profit and a
reduction in Working Capital over the prior year.
15
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Bonus
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Percent
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Payout
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Percent
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Percent
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Percent
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Improvement in
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Reflected as a
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Performance
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Improvement
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Improvement in
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Improvement in
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Average Working
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Percentage of
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Level
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in EBITDA
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Operating Profit
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Revenue
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Capital
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Base Salary
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Minimum
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5.4
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(1.3
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3.7
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%
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15.7
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%
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50
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%
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Target
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8.6
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%
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4.0
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%
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6.3
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%
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10.3
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%
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|
|
75
|
%
|
Maximum
|
|
|
19.2
|
%
|
|
|
21.5
|
%
|
|
|
10.0
|
%
|
|
|
5.0
|
%
|
|
|
200
|
%
|
Operating Profit and EBITDA were computed before Strategic
Alternatives and Restructuring Costs.
Actual 2008 results were below threshold for all financial
measures, therefore no payments were made to any Named Executive
Officer under this plan.
For 2009, an annual incentive award plan has been approved under
which incentive compensation will be awarded for achieving
certain Revenue, EBITDA and Net Debt targets. The amount of the
actual incentive award will be based on a percentage of the
Executives base salary. At the minimum threshold, up to
50% of base salary could be paid; at the target level, up to 75%
of base salary could be paid, and if the improvements meet or
exceed the maximum threshold, up to 200% of base salary could be
paid. 70% of the award will be paid in cash, and 30% will be
paid in the form of restricted stock units that vest ratably
over three years.
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 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.
|
The general practice of Cambrex is to award stock options and
restricted stock units to our Named Executive Officers and a
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 granted in 2008, the exercise price was set at
the average of the highest and lowest publicly traded share
price on the date of the award by the Board. These awards vest
in equal increments over a four year period (i.e., 25% per
year). Restricted Stock units cliff vest after three years.
Upon his promotion to Chief Executive Officer, Mr. Klosk
received a potential award of up to 86,000 performance shares
dependent on the Companys level of growth in revenue and
EBITDA over a three year period beginning July 1, 2008, as
compared to an index of the following peer companies:
|
|
|
Dottikon Exclusive Snythesis
|
|
AMRI
|
Dishman Pharmaceuticals and Chemicals Limited
|
|
Aceto Corporation
|
Kendle International Inc.
|
|
WuXi AppTec, Inc.
|
Shasun Chemicals & Drugs Ltd.
|
|
Siegfried Ltd.
|
The award is subject to pro-rata monthly vesting beginning on
July 1, 2008.
16
Pension
Plan and SERP
The Companys qualified non-contributory pension plan (the
Qualified Plan) has been closed to new hires since
January 1, 2003, and effective August 31, 2007,
provides no future benefit accruals to participants. Normal
retirement age under the Qualified Plan is the later of
age 65 or the fifth anniversary of the date on which a
participant commences participation in the Qualified Plan. The
benefit 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 and 10 years of
eligible 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 aggregated to obtain the annual
retirement benefit, subject to the limitations imposed by the
Internal Revenue Code and related regulations
(Code). For this purpose, Social Security covered
compensation is the
35-year
average of the Social Security wage base ending with the year in
which the participant reaches age 65.
The Companys Qualified Plan limited the maximum amount of
compensation which could be taken into account for the purposes
of calculating benefits to the Code limit. Any compensation
received by any of the Named Executive Officers which exceeded
this amount was not 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
(SERP), which became effective on January 1,
1994. SERP provides benefits based on compensation levels above
the Code maximum compensation level. As stated above, employees
hired after December 31, 2002, are not eligible to
participate in the Qualified Plan or SERP, and effective
August 31, 2007, the Qualified Plan and SERP provide no
future benefit accruals to participants.
In July 2008 the Committee amended SERP effective
January 1, 2009 to pay out accrued pension values
immediately if the lump sum value was under $10,000 or, if the
value was over $10,000, in 10 equal actuarially equivalent
installments.
Savings
Plan
The Savings Plan is a tax-qualified retirement savings plan
pursuant to which all of 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 within the investment options 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
section 409A of the IRC.
Perquisites
The Committee provides benefits to the Companys executive
officers, including an automobile allowance (eliminated for
Messrs. Klosk and Sargen in 2008), a supplemental
retirement benefit for which benefits were frozen during 2007
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
17
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.
COMPENSATION
OF EXECUTIVE OFFICERS
Summary
Compensation Table
The following table shows for fiscal years 2008, 2007 and 2006
the compensation awarded, paid to, or earned by the Named
Executive Officers.
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Change in
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Pension
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Value and
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Non-
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qualified
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Non-Equity
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Deferred
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Stock
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Option
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Incentive Plan
|
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Compensation
|
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All Other
|
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Salary
|
|
|
Bonus
|
|
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Awards
|
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Awards
|
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Compensation
|
|
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Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal
Position
|
|
Year
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(3)
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($)(4)
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($)(5)
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($)(6)
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Compensation
|
|
|
James A. Mack(7)
|
|
|
2008
|
|
|
$
|
300,000
|
|
|
$
|
0
|
|
|
$
|
573,233
|
|
|
$
|
163,693
|
|
|
$
|
0
|
|
|
$
|
108,399
|
|
|
$
|
1,372,647
|
|
|
$
|
2,517,972
|
|
Former Chairman, President and
|
|
|
2007
|
|
|
$
|
500,000
|
|
|
$
|
1,250,000
|
|
|
$
|
128,825
|
|
|
$
|
57,083
|
|
|
$
|
500,000
|
|
|
$
|
54,649
|
|
|
$
|
60,618
|
|
|
$
|
2,551,175
|
|
Chief Executive Officer
|
|
|
2006
|
|
|
$
|
458,333
|
|
|
$
|
0
|
|
|
$
|
229,687
|
|
|
$
|
510,598
|
|
|
$
|
586,425
|
|
|
$
|
21,866
|
|
|
$
|
94,574
|
|
|
$
|
$1,901,483
|
|
Steven M. Klosk
|
|
|
2008
|
|
|
$
|
431,634
|
|
|
$
|
0
|
|
|
$
|
34,470
|
|
|
$
|
45,049
|
|
|
$
|
0
|
|
|
$
|
129,718
|
|
|
$
|
5,434,626
|
|
|
$
|
6,075,497
|
|
President and Chief Executive Officer
|
|
|
2007
|
|
|
$
|
396,567
|
|
|
$
|
900,000
|
|
|
$
|
373,762
|
|
|
$
|
105,393
|
|
|
$
|
460,600
|
|
|
$
|
45,779
|
|
|
$
|
22,928
|
|
|
$
|
2,305,029
|
|
|
|
|
2006
|
|
|
$
|
358,333
|
|
|
$
|
100,000
|
|
|
$
|
116,031
|
|
|
$
|
7,190
|
|
|
$
|
286,452
|
|
|
$
|
45,932
|
|
|
$
|
21,576
|
|
|
$
|
935,514
|
|
Gregory P. Sargen
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|
|
2008
|
|
|
$
|
306,946
|
|
|
$
|
0
|
|
|
$
|
72,994
|
|
|
$
|
47,910
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
20,080
|
|
|
$
|
447,930
|
|
Vice President and Chief Financial Officer
|
|
|
2007
|
|
|
$
|
295,587
|
|
|
$
|
500,000
|
|
|
$
|
15,724
|
|
|
$
|
12,752
|
|
|
$
|
345,450
|
|
|
$
|
0
|
|
|
$
|
21,801
|
|
|
$
|
1,191,314
|
|
Paolo Russolo(8)
|
|
|
2008
|
|
|
$
|
382,538
|
|
|
$
|
0
|
|
|
$
|
204,353
|
|
|
$
|
31,884
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
177,665
|
|
|
$
|
796,440
|
|
President, Cambrex
|
|
|
2007
|
|
|
$
|
356,434
|
|
|
$
|
679,829
|
|
|
$
|
134,605
|
|
|
$
|
28,992
|
|
|
$
|
440,732
|
|
|
$
|
0
|
|
|
$
|
107,572
|
|
|
$
|
1,748,164
|
|
Profarmaco
|
|
|
2006
|
|
|
$
|
337,665
|
|
|
$
|
71,565
|
|
|
$
|
115,163
|
|
|
$
|
7,190
|
|
|
$
|
226,461
|
|
|
$
|
0
|
|
|
$
|
68,105
|
|
|
$
|
826,149
|
|
Aldo Magnini(8)
|
|
|
2008
|
|
|
$
|
316,330
|
|
|
$
|
0
|
|
|
$
|
153,944
|
|
|
$
|
19,818
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
27,980
|
|
|
$
|
518,072
|
|
Managing Director, Cambrex Profarmaco
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter Thauer(9)
|
|
|
2008
|
|
|
$
|
293,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
49,194
|
|
|
$
|
310,190
|
|
|
|
652,384
|
|
Former Sr. VP Law/ Environment/General Counsel & Corporate
Secretary
|
|
|
2007
|
|
|
$
|
293,000
|
|
|
$
|
700,000
|
|
|
$
|
341,413
|
|
|
$
|
98,611
|
|
|
$
|
481,985
|
|
|
$
|
34,805
|
|
|
$
|
4,234,666
|
|
|
|
6,184,480
|
|
|
|
|
(1) |
|
Salary. Cambrexs fiscal year ends
December 31. Messrs. Russolo and Magninis salary
is paid in Euros. |
|
(2) |
|
Bonus. No bonuses were paid to executives in
2008. |
|
(3) |
|
Stock and Option Awards. The amounts shown in
the Stock Awards column above reflect the amounts
expensed for fiscal year 2008 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. For Mr. Klosk,
includes the expense for 43,000 Performance Shares. The amounts
shown in the Option Awards column reflect the
amounts expensed for fiscal year 2008 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 2008 is set forth in the Grants of Plan-Based
Awards table. As the result of agreements to buy-out
Mr. Klosk and Mr. Thauers change of Control
Agreements on May 14, 2008 and December 21, 2007
respectively, expense for all of their outstanding restricted
stock units and stock options was accelerated and recognized in
2007. |
|
(4) |
|
Non-Equity Incentive Plan Compensation. No
awards were paid to executives under the 2008 incentive plan.
Cash awards paid in 2008 related to the 2007 incentive plan were
reported in 2007. |
|
(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. |
18
|
|
|
(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
$10,350, an automobile allowance of $23,838, dividends paid on
RSUs of $250,139, and consulting contract buy-out upon
retirement of $1,088,320. For Mr. Klosk, includes a lump
sum payment of $3,371,132 pursuant to an agreement signed in May
2008 to buy-out his previous employment agreement. Also included
is an IRS section 280G tax
gross-up of
1,989,416, savings plan match of $10,350, automobile allowance
of $4,379, dividends on RSUs of $59,349. For Mr. Sargen,
includes savings plan match of $10,350 and automobile allowance
of $9,730. For Mr. Magnini, insurance premiums of
3,810 ($5,606) automobile allowance of 12,857
($18,916), phone allowance of 2,350 ($3,458). For
Mr. Russolo, insurance premiums of 4,825 ($7,099)
automobile allowance of 17,108 ($25,171), phone allowance
of 2,364 ($3,478), dividends on RSUs of $62,132, and
54,228 ($79,786) paid pursuant to an employment
arrangement assumed by the Company as part of its acquisition of
Cambrex Profarmaco Milano S.r.l. For Mr. Thauer, includes
savings plan match of $10,350, automobile allowance of $11,676
and dividends on RSUs of $288,164. |
|
(7) |
|
Mr. Mack retired on 6/30/2008. |
|
(8) |
|
Messrs. Magnini and Russolos base salary was
215,000 and 260,000 respectively. For purposes of
computing Base Salary we used an average exchange rate (for
calendar year 2008) of 1.4713 dollars per euro. |
|
(9) |
|
Mr. Thauer retired on 12/31/2008. |
Grant of
Plan-Based Awards Table
The following table contains information concerning each grant
of an award made to each of the Named Executive Officers for
2008 under any plan:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other
|
|
|
All other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Exercise
|
|
|
Exercise or
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under
|
|
|
Estimated Future
|
|
|
Awards:
|
|
|
Awards:
|
|
|
or Base
|
|
|
Base Price
|
|
|
Grant Date
|
|
|
|
|
|
|
Non-Equity Incentive Plan
|
|
|
Payouts Under Equity
|
|
|
Number of
|
|
|
Number of
|
|
|
Price of
|
|
|
of Option
|
|
|
Fair Value of
|
|
|
|
|
|
|
Awards
|
|
|
Incentive Plan Awards
|
|
|
Shares of
|
|
|
Securities
|
|
|
Option
|
|
|
Awards
|
|
|
Stock and
|
|
|
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Awards(3)
|
|
|
($/Sh)-on
|
|
|
Option
|
|
Name
|
|
Grant Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
Units(1) (#)
|
|
|
Options(2) (#)
|
|
|
($/Sh)
|
|
|
Grant Date
|
|
|
Awards
|
|
|
Steven M. Klosk
|
|
|
1/24/2008
|
|
|
$
|
225,000
|
|
|
$
|
337,500
|
|
|
$
|
900,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,845
|
|
|
|
|
|
|
$
|
9.47
|
|
|
$
|
9.08
|
|
|
$
|
197,402
|
|
|
|
|
5/14/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
$
|
5.61
|
|
|
$
|
5.54
|
|
|
$
|
283,500
|
|
James A. Mack
|
|
|
1/24/2008
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,399
|
|
|
|
|
|
|
$
|
9.47
|
|
|
$
|
9.08
|
|
|
$
|
249,999
|
|
Gregory P. Sargen
|
|
|
1/24/2008
|
|
|
$
|
170,838
|
|
|
$
|
256,257
|
|
|
$
|
683,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,634
|
|
|
|
|
|
|
$
|
9.47
|
|
|
$
|
9.08
|
|
|
$
|
148,054
|
|
|
|
|
4/23/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
$
|
5.51
|
|
|
$
|
5.60
|
|
|
$
|
185,000
|
|
Paolo Russolo
|
|
|
1/24/2008
|
|
|
$
|
191,269
|
|
|
$
|
286,904
|
|
|
$
|
765,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,946
|
|
|
|
|
|
|
$
|
9.47
|
|
|
$
|
9.08
|
|
|
$
|
188,889
|
|
|
|
|
10/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
$
|
4.40
|
|
|
$
|
4.11
|
|
|
$
|
81,500
|
|
Aldo Magnini
|
|
|
1/24/2008
|
|
|
$
|
158,165
|
|
|
$
|
237,247
|
|
|
$
|
632,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,343
|
|
|
|
|
|
|
$
|
9.47
|
|
|
$
|
9.08
|
|
|
$
|
145,298
|
|
|
|
|
10/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
4.40
|
|
|
$
|
4.11
|
|
|
$
|
40,750
|
|
Peter Thauer
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0
|
|
|
|
|
(1) |
|
Restricted stock units (RSUs) granted as part the annual
incentive plan awards vest ratably over three years, and become
saleable only at the end of the third year. RSUs awarded in
addition to those granted under the annual incentive award
program cliff vest after three years. |
|
(2) |
|
Option awards vest ratably over four years. |
|
(3) |
|
Option exercise price is calculated as an average of the high
and low trading price on the date that the option is awarded. |
19
Outstanding
Equity Awards at Fiscal Year-End
The following table discloses information regarding stock
options, stock that has not vested and equity incentive plan
awards for each Named Executive Officer outstanding as of
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
No of
|
|
|
Market
|
|
|
Awards: No.
|
|
|
Market or Payout
|
|
|
|
|
|
|
|
|
|
Awards: No.
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Value of
|
|
|
of Unearned
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
of Securities
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Shares or
|
|
|
Shares, Units
|
|
|
Unearned
|
|
|
|
Number of Securities
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
or Other
|
|
|
Shares, Units or
|
|
|
|
Underlying Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock that
|
|
|
Stock that
|
|
|
Rights that
|
|
|
Other Rights that
|
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not Yet
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested
|
|
|
Vested ($)
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Klosk, Steven M
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,250
|
|
|
|
4,250
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
2,233
|
|
|
$
|
10,316
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
|
|
7,500
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
3,400
|
|
|
$
|
15,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
5.6050
|
|
|
|
5/14/2015
|
|
|
|
5,722
|
|
|
$
|
26,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
$
|
23,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,845
|
|
|
$
|
96,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,000
|
|
|
$
|
198,660
|
|
|
|
|
|
|
|
|
|
Mack, James A
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,839
|
|
|
|
|
|
|
|
|
|
|
|
20.7500
|
|
|
|
10/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,934
|
|
|
|
|
|
|
|
|
|
|
|
27.2900
|
|
|
|
4/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,248
|
|
|
|
|
|
|
|
|
|
|
|
23.0700
|
|
|
|
7/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
23.0700
|
|
|
|
7/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,667
|
|
|
|
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,000
|
|
|
|
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sargen, Gregory
|
|
|
1,250
|
|
|
|
1,250
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
1,000
|
|
|
$
|
4,620
|
|
|
|
|
|
|
|
|
|
|
|
|
2,125
|
|
|
|
6,375
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
4,500
|
|
|
$
|
20,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
5.5100
|
|
|
|
4/23/2015
|
|
|
|
15,634
|
|
|
$
|
72,229
|
|
|
|
|
|
|
|
|
|
Russolo, Paolo
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
2,510
|
|
|
$
|
11,596
|
|
|
|
|
|
|
|
|
|
|
|
|
4,250
|
|
|
|
4,250
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
3,400
|
|
|
$
|
15,708
|
|
|
|
|
|
|
|
|
|
|
|
|
2,125
|
|
|
|
6,375
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
4,360
|
|
|
$
|
20,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
4.3950
|
|
|
|
10/27/2015
|
|
|
|
4,500
|
|
|
$
|
20,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,946
|
|
|
$
|
92,151
|
|
|
|
|
|
|
|
|
|
Magnini, Aldo
|
|
|
1,250
|
|
|
|
2,500
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
7/27/2013
|
|
|
|
1,769
|
|
|
$
|
8,173
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
|
|
|
4,500
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
7/26/2014
|
|
|
|
2,000
|
|
|
$
|
9,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
4.3950
|
|
|
|
10/27/2015
|
|
|
|
3,977
|
|
|
$
|
18,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
$
|
13,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,343
|
|
|
$
|
70,885
|
|
|
|
|
|
|
|
|
|
Thauer, Peter E
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
29.6250
|
|
|
|
5/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,228
|
|
|
|
|
|
|
|
|
|
|
|
32.8500
|
|
|
|
7/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,354
|
|
|
|
|
|
|
|
|
|
|
|
32.8500
|
|
|
|
7/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
7.3900
|
|
|
|
12/31/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
13.7500
|
|
|
|
12/31/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
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 2008 for each Named Executive Officer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Value
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
Realized on
|
|
|
Shares
|
|
|
Value
|
|
|
|
Acquired on
|
|
|
Exercise
|
|
|
Acquired on
|
|
|
Realized on
|
|
Name
|
|
Exercise (#)
|
|
|
($)
|
|
|
Vesting (#)
|
|
|
Vesting ($)(1)
|
|
|
Steven M. Klosk
|
|
|
|
|
|
$
|
|
|
|
|
6,480
|
|
|
$
|
121,582
|
|
James A. Mack
|
|
|
|
|
|
$
|
|
|
|
|
57,511
|
|
|
$
|
564,855
|
|
Gregory P. Sargen
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Paolo Russolo
|
|
|
|
|
|
$
|
|
|
|
|
6,140
|
|
|
$
|
115,283
|
|
Aldo Magnini
|
|
|
|
|
|
$
|
|
|
|
|
3,758
|
|
|
$
|
70,374
|
|
Peter Thauer
|
|
|
|
|
|
$
|
|
|
|
|
18,977
|
|
|
$
|
291,865
|
|
|
|
|
(1) |
|
Based on 12/31/08 closing stock price plus accrued dividend
equivalents. |
Pension
Benefits
The following table shows the pension benefits expected by the
Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Present
|
|
|
Payments
|
|
|
|
|
|
Years of
|
|
|
Value
|
|
|
During Last
|
|
|
|
|
|
Credited
|
|
|
of Accumulated
|
|
|
Fiscal Year
|
|
Name
|
|
Plan Name
|
|
Service (#)
|
|
|
Benefits ($)(1)
|
|
|
($)
|
|
|
Steven M. Klosk
|
|
The Cambrex Pension Plan
|
|
|
15
|
|
|
$
|
183,653
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
15
|
|
|
$
|
440,177
|
|
|
$
|
0
|
|
James A. Mack(2)
|
|
The Cambrex Pension Plan
|
|
|
17
|
|
|
$
|
455,235
|
|
|
$
|
21,121
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
17
|
|
|
$
|
1,979,647
|
|
|
$
|
0
|
|
Gregory P. Sargen(3)
|
|
The Cambrex Pension Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Paolo Russolo(3)
|
|
The Cambrex Pension Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Aldo Magnini(3)
|
|
The Cambrex Pension Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Peter Thauer(4)
|
|
The Cambrex Pension Plan
|
|
|
18
|
|
|
$
|
467,942
|
|
|
$
|
0
|
|
|
|
Supplemental Executive Retirement Plan
|
|
|
18
|
|
|
$
|
662,103
|
|
|
$
|
0
|
|
|
|
|
(1) |
|
Actual benefit payments that correspond to the elected payment
options are reflected for NEOs who have commenced payments under
the plans; otherwise accrued benefits in the form of single life
annuities as of age 65 (Normal Retirement) or current age,
if later, are shown. Mr. Thauer received $294,685 in
January 2008, and Mr. Klosk received $128,281 in January
2009 as a payout of the pension portion of their 2007 change in
control agreements. These amounts are not included in the
present values shown above. Key Assumptions: 6.00% &
RP-2000 static PPA mortality table as prescribed by IRS. |
|
(2) |
|
Mr. Mack retired on 6/30/2008 and has commenced his
qualified monthly benefit. |
|
(3) |
|
Messrs. Sargen, Magnini, and Russolo do not participant in
the Cambrex Pension Plan or the Supplemental Executive
Retirement Plan. |
|
(4) |
|
Mr. Thauer retired on 12/31/2008 and has commenced his
qualified monthly benefit. |
21
Non-Qualified
Deferred Compensation
The following table shows the Non-Qualified Deferred
Compensation amounts earned by the Named Executive Officers
during fiscal 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings in
|
|
|
Withdrawals/
|
|
|
Balance at Last
|
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
Last FY
|
|
|
Distributions
|
|
|
Fiscal Year End
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Steven M. Klosk
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(385,174
|
)
|
|
$
|
|
|
|
$
|
707,556
|
|
James A. Mack
|
|
$
|
250,000
|
|
|
$
|
|
|
|
$
|
(916,047
|
)
|
|
$
|
619,054
|
|
|
$
|
1,713,755
|
|
Gregory P. Sargen
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Paolo Russolo
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
Aldo Magnini
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
Peter Thauer
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(407,154
|
)
|
|
$
|
|
|
|
$
|
1,449,012
|
|
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 within the investment options available under the
Cambrex Savings Plan. The Plan is administered in compliance
with section 409A of the IRC.
Executive Employment Agreements; Change of Control
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.
Following a change of control, the Company has agreed to employ
the covered employees for a period of two 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 preceeding such change
of control and shall be eligible to receive an annual bonus on
the same basis as any bonus paid in the fiscal year immediately
preceeding the 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.
22
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.
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 of the following a lump sum in cash of the
following amounts:
(i) to the extent not theretofore paid, the Employees
Highest Base Salary through termination date; and
(ii) the product of the highest Annual Bonus earned by the
Employee during the two fiscal years immediately preceding the
Date of Termination, or, if higher, the Employees Target
Bonus after the date of this Agreement until an Annual Bonus has
actually been earned and a fraction, the numerator of which is
the number of days in the current fiscal year through the Date
of Termination and the denominator of which is three hundred
sixty-five (365); and
(iii) the product of a fraction, the numerator of which is
twenty-four minus the number of whole 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 two years provided that the Annual
Bonus shall be his Target Bonus until an Annual Bonus has
actually been earned; 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 contain
non-competition and non-disclosure of confidential information
restrictions. Further, with respect to Mr. Sargen, the
change of control employment agreement also provides for a
gross up of any taxes due under section 4999 of the
Internal Revenue Code, 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%.
23
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 &
Benefits
|
|
Reason
|
|
|
Good Reason
|
|
|
for Cause
|
|
|
Upon Death
|
|
|
Disability
|
|
|
Retirement
|
|
|
in Control
|
|
|
|
|
|
Cash Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
1,670,352
|
|
|
|
|
|
Pro Rata Bonus
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
493,500
|
|
|
|
|
|
Stock Options/SARs
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock/Deferred Stock Units
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
97,639
|
|
|
|
|
|
Performance Based Equity Awards
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Health Care Benefits
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
20,232
|
|
|
|
|
|
Pension Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Savings Plan Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
22,725
|
|
|
|
|
|
Nonqualified Deferred Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds/Disability Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
1,718
|
|
|
|
|
|
Other Perquisites
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Tax Gross-Up
(1)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
644,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,950,391
|
|
|
|
|
|
|
|
|
(1) |
|
Tax Gross-up
does not factor in any valuation for covenant not to compete. |
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 &
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
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,647
|
|
|
|
|
|
Restricted Stock/Deferred Stock Units
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
35,027
|
|
|
|
|
|
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)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
53,435
|
|
|
|
|
|
Tax Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,759,693
|
|
|
|
|
|
|
|
|
(1) |
|
Amount reflects the value for 24 months worth of auto
benefits. |
24
Potential
Payments upon Termination or
Change-in-Control
Steven M.
Klosk1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
Without Good
|
|
|
Termination for
|
|
|
Termination
|
|
|
Termination
|
|
|
Upon
|
|
|
|
|
|
After Change
|
|
|
|
|
Payments &
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(2)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
33,970
|
|
|
|
|
|
Health Care Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Pension Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Nonqualified Deferred Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Life Insurance Proceeds/Disability Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Dividend Equivelents
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
Other Perquisites
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Tax Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
33,970
|
|
|
|
|
|
|
|
|
(1) |
|
In May of 2008, Mr. Klosk entered into an agreement with
Cambrex to retire his Change of Control Agreement. Payments
under the buyout were made in January of 2009, and have been
disclosed in the Summary Compensation Table on page 18).
Mr. Klosk is no longer covered by any employment/change of
control agreement. |
|
(2) |
|
If terminated other than for cause, the vesting of
Mr. Klosks performance shares would accelerate, and
he would be entitled to a pro-rated payment. |
Potential
Payments upon Termination or
Change-in-Control
James A.
Mack
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
Without Good
|
|
|
Termination for
|
|
|
Termination
|
|
|
Termination
|
|
|
Upon
|
|
|
|
|
|
After Change
|
|
|
|
|
Payments &
Benefits
|
|
Reason
|
|
|
Good Reason
|
|
|
for Cause
|
|
|
Upon Death
|
|
|
Disability
|
|
|
Retirement(1)
|
|
|
in Control
|
|
|
|
|
|
Cash Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Pro Rata Bonus
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Stock Options/SARs
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
163,693
|
|
|
$
|
|
|
|
|
|
|
Restricted Stock/Deferred Stock Units
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
573,233
|
|
|
$
|
|
|
|
|
|
|
Performance Based Equity Awards
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Health Care Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Pension Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
Nonqualified Deferred Compensation
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
Life Insurance Proceeds/Disability Benefits Other Perquisites
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,088,320
|
|
|
$
|
|
|
|
|
|
|
Tax Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,825,246
|
|
|
$
|
|
|
|
|
|
|
25
|
|
|
(1) |
|
Upon Mr. Macks retirement on June 30, 2008,
Cambrex agreed to buy out his consulting/retirement arrangement
in which Mr. Mack was to be paid $100,000 per year for the
remainder of his life. The present value of this benefit was
calculated using the applicable PPA mortality table assuming a
discount rate of 4.52%. In addition, the vesting of all of
Mr. Macks unvested restricted stock units and stock
options was accelerated. All of these amounts were paid by
January 2009. |
COMPENSATION
OF NON-EMPLOYEE DIRECTORS
The fiscal 2008 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. The lead director also
received an annual retainer of $5,000 and a lead director fee
for each meeting of $2,000. Mr. John Miller, who served as
lead director during the first half of 2008, received $2,500 in
retainer and $2,000 for each Board meeting attended in that
capacity during that period. He also received meeting fees for
his attendance at Committee meetings of which he was a member
during that period. Effective July 1, 2008, Mr. Miller
was appointed non-executive Chairman of the Board of Directors
and receives $200,000 per year in compensation in that capacity.
Mr. Miller does not receive any separate Board or committee
meeting fees. Mr. Miller, as non-executive Chairman of the
Board of Directors, received $100,000 in compensation for the
second half of 2008. 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 had been awarded an option to purchase
2,000 shares of the Companys Common Stock upon
election as a director. The Plans further provided that each
non-employee director received 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 had 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 are non-qualified options with a seven-year term. Each
option becomes exercisable six months after the date of grant,
subject to acceleration upon a change in control. By unanimous
Consent effective March 31, 2008, the Board of Directors
resolved that effective January 1, 2008, no non-employee
director shall receive a stock option award under the terms of
the Non-Employee Director Program of the 1996, 1998, 2001 and
2003 Stock Option Plans and the 2004 Incentive Plan, as such
option award Program is described above. Such Consent further
established a new Directors Equity Program which provides
that on the last business day of each calendar quarter,
commencing on March 31, 2008, each Non-employee Director
shall receive an award of Restricted Stock Units
(RSUs) equivalent in value to Four Thousand ($4,000)
Dollars, such number of RSUs to be determined by dividing
the sum of Four Thousand ($4,000) Dollars by the closing share
price on the date of the award rounded down to the nearest full
share, provided that such RSUs shall neither vest nor be
available for sale until a period of six (6) months from
the date of grant.
The amount of cash retainer, meeting fees and Lead Director and
Chair fees each non-employee Board member earned during fiscal
2008 are summarized in the table below.
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Change In
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
RSU
|
|
|
Incentive Plan
|
|
|
Pension Value and
|
|
|
All Other
|
|
|
|
|
|
|
Fees Earned
|
|
|
($)
|
|
|
Awards
|
|
|
Compensation
|
|
|
Nonqualified Deferred
|
|
|
Compensation
|
|
|
|
|
Name
|
|
($)
|
|
|
(Share Equivalents)
|
|
|
($)
|
|
|
($)
|
|
|
Compensation
|
|
|
($)
|
|
|
Total ($)
|
|
|
David R. Bethune
|
|
$
|
44,000
|
|
|
|
|
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
60,001
|
|
Rosina B. Dixon
|
|
$
|
58,000
|
|
|
|
|
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
74,001
|
|
Roy W. Haley
|
|
|
|
|
|
$
|
58,000(1
|
)
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,001
|
|
Kathryn Rudie Harrigan
|
|
$
|
48,000
|
|
|
|
|
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
64,001
|
|
Leon J. Hendrix, Jr.
|
|
|
|
|
|
$
|
47,500(1
|
)
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,001
|
|
Ilan Kaufthal
|
|
$
|
46,500
|
|
|
|
|
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
62,501
|
|
William B. Korb
|
|
|
|
|
|
$
|
59,000(1
|
)
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,001
|
|
John R. Miller
|
|
$
|
131,500
|
|
|
|
|
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
147,501
|
|
Peter G. Tombros
|
|
|
|
|
|
$
|
51,000(1
|
)
|
|
$
|
16,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,001
|
|
|
|
|
(1) |
|
The four directors above have elected to defer their cash
remuneration for the year 2008. |
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.
27
PROPOSAL NO. 2
APPROVAL
OF THE 2009 LONG TERM INCENTIVE PLAN
Cambrexs Board of Directors believes it is in
Cambrexs best interest to encourage stock ownership by
Cambrexs employees. Accordingly, the Board of Directors
has adopted the 2009 Long Term Incentive Plan, which is referred
to in this proxy statement as the Incentive Plan,
subject to stockholder approval, to provide for the award of
equity-based compensation to Cambrexs employees, officers,
directors, consultants or other personal service providers. The
Incentive Plan provides for equity-based as well as non-equity
based long-term incentive compensation awards to participants,
as under the 2004 Long Term Incentive Plan, the predecessor to
this plan. The Incentive Plan provides for the award of stock
options, stock appreciation rights, restricted stock, restricted
stock units, performance awards and stock awards. The Incentive
Plan will allow the Company to make awards that qualify as
performance-based compensation under
Section 162(m) of the Internal Revenue Code.
The following is a summary of the material terms of the
Incentive Plan. This summary is qualified by reference to the
full text of the Incentive Plan, which is attached hereto as
Annex A.
Description
of the Incentive Plan
Purpose. The purpose of the Incentive Plan is
to further align the interests of Cambrexs employees,
officers, directors, consultants, advisors and other personal
service providers with those of the stockholders by providing
incentive compensation opportunities tied to the performance of
Common Stock and by promoting increased ownership of Common
Stock by such individuals. The Incentive Plan is also intended
to advance Cambrexs interests and those of Cambrexs
stockholders by helping to attract, retain and motivate
personnel upon whose judgment, initiative and effort the
successful conduct of the Companys business is largely
dependent.
Reservation of Shares. Subject to stockholder
approval at the 2009 Annual Meeting, and subject to adjustments
as described below, the maximum aggregate number of shares of
Common Stock that may be issued pursuant to awards granted under
the Incentive Plan will be 1,000,000 shares. However, no
more than 300,000 shares of Common Stock shall be issued
during the term of the Incentive Plan pursuant to restricted
stock awards, restricted stock units, performance awards and
stock awards, in the aggregate. Any shares of Common Stock
delivered under the Incentive Plan shall consist of authorized
and unissued shares, or treasury shares. To the extent that an
award is canceled, expired, forfeited, surrendered, settled in
cash or otherwise terminated without delivery of the shares to
the participant, in whole or in part, the shares of Common Stock
retained by or returned to the Company will not be deemed to
have been delivered under the Incentive Plan, and will be
available for future awards under the Incentive Plan.
In the event of any recapitalization, reclassification, stock
dividend, extraordinary dividend, stock split, reverse stock
split, or other distribution with respect to Common Stock, or
any merger, reorganization, consolidation, combination, spin-off
or other similar corporate change, or any other change affecting
Common Stock, appropriate and equitable adjustments shall be
made to the number and kind of shares of Common Stock available
for grant, as well as to other maximum limitations under the
Incentive Plan, and the number and kind of shares of Common
Stock or other terms of the awards that are affected by the
event.
As of December 31, 2008, the aggregate number of shares of
Common Stock that remained available under all equity
compensation plans of the Company was 52,592, consisting of
5,546 shares under the Companys 2000 Performance
Stock Option Plan, 1,862 shares under the Companys
2001 Performance Stock Option Plan, and 45,184 shares under
the Companys 2004 Incentive Plan. The weighted average
remaining term of exercise for stock options that were
outstanding as of December 31, 2008 under all equity
compensation plans of the Company was 4.56 years.
Administration. The Incentive Plan is
administered by the Compensation Committee, which is comprised
of at least two members of the Board of Directors who are
appointed by the Board to administer the Incentive Plan. The
Compensation Committee shall, to the extent deemed necessary by
the Board of Directors, be constituted so each committee member
will satisfy the requirements for (i) an independent
director as defined by the New York Stock Exchange,
(ii) a non-employee director for purposes of
Rule 16b-3
under the Securities Exchange Act of 1934 and (iii) an
outside director under Section 162(m) of the
Code. Subject to the limitations set forth in the Incentive
28
Plan, the Compensation Committee has the authority to determine
the persons to whom awards are to be granted, prescribe the
restrictions, terms and conditions of all awards, interpret the
Incentive Plan, adopt rules for the administration,
interpretation and application of the Incentive Plan.
Eligibility. Awards under the Incentive Plan
may be granted to any employees, directors, consultants or other
personal service providers of Cambrex. As of March 16,
2009, the Company had 852 employees.
Stock Options. Stock options granted under the
Incentive Plan may be issued as either incentive stock options,
within the meaning of Section 422 of the Code, or as
nonqualified stock options. The exercise price of an option will
be not less than 100% of the fair market value of a share of
Common Stock on the date of the grant of the option, or such
higher amount as determined by the Compensation Committee. The
Compensation Committee will determine the vesting
and/or
exercisability requirements and the term of exercise of each
option, including the effect of termination of service of a
participant or a change in control. The vesting requirements may
be based on the continued employment or service of the
participant for a specified time period or on the attainment of
specified business performance goals established by the
Compensation Committee. The maximum term of an option will be
ten years from the date of grant. In the case of incentive stock
options, for purposes of Section 422 of the Code, the
maximum value of shares of Common Stock (determined at the time
of grant) that may be subject to incentive stock options that
become exercisable by an employee in any one year is limited to
$100,000. Subject to adjustments as described above, the maximum
number of shares of Common Stock that may be covered under
options granted under the Incentive Plan to any participant in
any calendar year is 250,000 shares of Common Stock.
To exercise an option, the participant must pay the exercise
price, subject to specified conditions, (i) in cash,
(ii) in shares of Common Stock, (iii) through an
open-market broker-assisted transaction, (iv) by
combination of any of the above methods, or (v) by such
other method approved by the Compensation Committee, and must
pay any required tax withholding amounts. All options are
nontransferable except upon death by the participants will
or the laws of descent and distribution or, in the case of
nonqualified options, to a participants family
member (as defined for purposes of the
Form S-8
registration statement under the Securities Act of 1933), or as
otherwise permitted by the Compensation Committee, in each case
as may be approved by the Compensation Committee in its
discretion at the time of the proposed transfer. Without the
prior approval of Cambrexs stockholders, the Incentive
Plan prohibits the repricing of stock options.
Stock Appreciation Rights. A stock
appreciation right may be granted either in tandem with an
option or without a related option. A stock appreciation right
entitles the participant, upon settlement or exercise, to
receive a payment based on the excess of the fair market value
of a share of Common Stock on the date of settlement or exercise
over the base price of the right, multiplied by the number of
shares of Common Stock as to which the right is being settled or
exercised. Stock appreciation rights may be granted on a basis
that allows for the exercise of the right by the participant or
that provides for the automatic payment of the right upon a
specified date or event. The base price of a stock appreciation
right may not be less than the fair market value of a share of
Common Stock on the date of grant. The Compensation Committee
will determine the vesting requirements and the term of exercise
of each stock appreciation right, including the effect of
termination of service of a participant or a change in control.
The vesting requirements may be based on the continued
employment or service of the participant for a specified time
period or on the attainment of specified business performance
goals established by the Compensation Committee. The maximum
term of a stock appreciation right will be ten years from the
date of grant. Subject to adjustments as described above, the
maximum number of shares of Common Stock that may be subject to
stock appreciation rights granted under the Incentive Plan to
any participant during any calendar year is 100,000 shares
of Common Stock. Stock appreciation rights may be payable in
cash or in shares of Common Stock or in a combination of both.
Without the prior approval of Cambrexs stockholders, the
Incentive Plan prohibits the repricing of stock
appreciation rights.
Restricted Stock Awards. A restricted stock
award represents shares of Common Stock that are issued subject
to restrictions on transfer and vesting requirements. The
vesting requirements may be based on the continued service of
the participant for a specified time period or on the attainment
of specified performance goals established by the Compensation
Committee, and vesting may be accelerated in certain
circumstances such as a change in control, as determined by the
Compensation Committee. Subject to the transfer restrictions and
vesting requirements of the award, the participant will have the
rights of a Cambrex stockholder, including all voting and
dividend
29
rights, during the restriction period. Subject to adjustments as
described above, the maximum number of shares of Common Stock
that may be subject to restricted stock awards granted under the
Incentive Plan to any participant during any calendar year is
100,000 shares of Common Stock.
Restricted Stock Units. An award of restricted
stock units provides the participant the right to receive a
payment based on the value of a share of Common Stock.
Restricted stock units may be subject to vesting requirements,
restrictions and conditions to payment. Such requirements may be
based on the continued service of the participant for a
specified time period or on the attainment of specified
performance goals established by the Compensation Committee, and
may be accelerated in certain circumstances such as a change in
control, as determined by the Compensation Committee. A
restricted stock unit award shall become payable to a
participant at the time or times determined by the Compensation
Committee and set forth in the award agreement, which may be
upon or following the vesting of the award. Restricted stock
unit awards are payable in cash or in shares of Common Stock or
in a combination of both. Restricted stock units may also be
granted together with related dividend equivalent rights.
Subject to adjustments as described above, the maximum number of
shares of Common Stock that may be subject to stock units
granted under the Incentive Plan to any participant during any
calendar year is 100,000 shares of Common Stock.
Stock Awards. A stock award represents shares
of Common Stock that are issued free of restrictions on transfer
and free of forfeiture conditions and to which the participant
is entitled all incidents of ownership. A stock award may be
granted for past services, in lieu of bonus or other cash
compensation, directors fees or for any other valid
purpose as determined by the Compensation Committee. The
Compensation Committee will determine the terms and conditions
of stock awards, and such stock awards may be made without
vesting requirements. Upon the issuance of shares of Common
Stock under a stock award, the participant shall have all rights
of a stockholder with respect to such shares of Common Stock,
including the right to vote the shares and receive all dividends
and other distributions on the shares. Subject to adjustments as
described above, the maximum number of shares of Common Stock
that may be subject to stock awards granted under the Incentive
Plan to any participant during any calendar year is
100,000 shares of Common Stock.
Performance Awards. A performance award is
denominated in a cash amount (rather than in shares) and is
payable based on the attainment of specified levels of
attainment of performance goals established by the Compensation
Committee, including, if applicable, specified threshold, target
and maximum performance levels. The requirements for vesting may
be also based upon the continued service of the participant
during the performance period, and vesting may be accelerated in
certain circumstances such as a change in control, as determined
by the Compensation Committee. The Incentive Plan provides that
if the Compensation Committee discovers that any prior
determination as to the achievement of a performance goal was
incorrect, then any affected portion of the performance-based
award will be forfeited. The maximum amount of cash compensation
that may be paid to a participant during any one calendar year
under all performance awards is $1 million.
For purposes of performance awards, as well as for any other
awards under the Incentive Plan that may be established with
performance-based vesting requirements, the Compensation
Committee may set performance goals based upon the achievement
of Company-wide, departmental, or individual goals, or any other
basis determined by the Committee in its discretion. The
performance goals listed under the Incentive Plan:
(1) net earnings; (2) earnings per share; (3) net
debt; (4) sales growth; (5) net income; (6) net
operating profit; (7) return measures (including, but not
limited to, return on assets, capital, equity or sales);
(8) cash flow (including, but not limited to, operating
cash flow and free cash flow); (9) earnings before or after
taxes, interest, depreciation
and/or
amortization; (10) share price (including, but not limited
to growth measures and total shareholder return);
(11) expense targets; (12) customer satisfaction;
(13) market share; (14) economic value added;
(15) working capital; (16) the formation of joint
ventures or the completion of other corporate transactions; or
(17) any combination of or a specified increase in any of
the foregoing.
For purposes of qualifying grants of performance awards as well
as other awards under the Incentive Plan intended to qualify as
performance-based compensation under
Section 162(m) of the Code, the Compensation Committee will
make such determinations and take such actions as may be
necessary to comply with Section 162(m) of the Code. If the
Incentive Plan is approved by Cambrexs stockholders, the
Compensation Committee will be able to grant awards that will be
exempt from the deduction limits of Section 162(m).
30
Effect of Change in Control. Unless otherwise
provided in an award agreement, in the event of a change
in control (as defined in the Incentive Plan),
(i) any outstanding stock options and stock appreciation
rights will become fully vested and immediately exercisable in
their entirety and (ii) any outstanding restricted stock
awards, restricted stock units, stock awards and performance
awards will become fully vested and payable to the participant.
The Compensation Committee may provide in an award agreement for
the effect of a change in control upon the occurrence of another
event in connection with a change in control (such as
termination of employment), or any other consequence of change
in control that the Compensation Committee determines is
consistent with the Incentive Plan.
Forfeiture. The Compensation Committee may
specify in an award agreement that an award will be subject to
reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, including termination of
service for cause (as defined in the Incentive
Plan), violation of material Company policies, breach of
noncompetition, confidentiality or other restrictive covenants
that may apply to the participant, or other conduct by the
participant that is detrimental to the business or reputation of
the Company.
Term: Amendment and Termination. The term of
the Incentive Plan is ten years from the date of its adoption by
the Board of Directors. The Board may amend, modify, suspend or
terminate the Incentive Plan at any time, subject to stockholder
approval under certain circumstances provided in the Incentive
Plan. However, no termination or amendment of the Incentive Plan
will adversely affect the rights of a participant under any
previously granted award.
Stock
Incentive Plan Benefits
During fiscal 2008, stock options and restricted stock units
were granted under the 2004 Long Term Incentive Plan to
Cambrexs named executive officers as set forth in the
table captioned Grants of Plan-Based Awards, below.
Stock options were granted during the year to all of
Cambrexs executive officers as a group to purchase
124,677 shares of Common Stock at a weighted average
exercise price of $5.605 per share; and 98,167 restricted stock
units were granted to all of Cambrexs executive officers
as a group. Stock options were granted to all of Cambrexs
other officers and employees as a group under the Incentive Plan
to purchase 35,000 shares of Common Stock at a weighted
average exercise price of $4.395 per share. Cambrexs
non-employee directors were granted 24,705 restricted stock
units as a group under the Incentive Plan for their service
during 2008. The terms and number of stock options or other
awards to be granted in the future under the Incentive Plan are
to be determined in the discretion of the Compensation
Committee. Since no such determinations have been made, the
benefits or amounts that will be received by or allocated to
Cambrexs executive officers, directors or other eligible
employees cannot be determined at this time. As of
March 19, 2009 the closing price on the New York Stock
Exchange of Common Stock was $2.22 per share.
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All other
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All other
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Stock
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Option
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Exercise
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Exercise or
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Estimated Future Payouts
Under
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Estimated Future
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Awards:
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Awards:
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or Base
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Base Price
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Grant Date
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Non-Equity Incentive Plan
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Payouts Under Equity
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Number of
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Number of
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Price of
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of Option
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Fair Value of
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Awards
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Incentive Plan Awards
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Shares of
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Securities
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Option
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Awards
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Stock and
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Minimum
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Target
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Maximum
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Threshold
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Target
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Maximum
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Stock or
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Underlying
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Awards(3)
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($/Sh) - on
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Option
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Name
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Grant Date
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($)
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($)
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($)
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(#)
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(#)
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(#)
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Units(1) (#)
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Options(2) (#)
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($/Sh)
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Grant Date
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Awards
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Steven M. Klosk(4)
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1/24/2008
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$
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225,000
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$
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337,500
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$
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900,000
|
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20,845
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$
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9.47
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$
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9.08
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$
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197,402
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5/14/2008
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150,000
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$
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5.61
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$
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5.54
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$
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283,500
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James A. Mack
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1/24/2008
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$
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0
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$
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0
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$
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0
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26,399
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$
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9.47
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$
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9.08
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$
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249,999
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Gregory P. Sargen
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1/24/2008
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$
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170,838
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$
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256,257
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$
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683,352
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15,634
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$
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9.47
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$
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9.08
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$
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148,054
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4/23/2008
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100,000
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$
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5.51
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$
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5.60
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$
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185,000
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Paolo Russolo
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1/24/2008
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$
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191,269
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$
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286,904
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$
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765,076
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19,946
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$
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9.47
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$
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9.08
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$
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188,889
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10/27/2008
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50,000
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$
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4.40
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$
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4.11
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$
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81,500
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Aldo Magnini
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1/24/2008
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$
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158,165
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$
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237,247
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$
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632,659
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15,343
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$
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9.47
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$
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9.08
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$
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145,298
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10/27/2008
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25,000
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$
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4.40
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$
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4.11
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$
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40,750
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Peter Thauer
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$
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0
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$
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0
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$
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0
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$
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0.00
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$
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0.00
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$
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0
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(1) |
|
Restricted stock units (RSUs) granted as part the annual
incentive plan awards vest ratably over three years, and become
saleable only at the end of the third year. RSUs awarded in
addition to those granted under the annual |
31
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incentive award program cliff vest after three years. All awards
are granted from the Companys 2004 Incentive Plan. |
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(2) |
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Option awards vest ratably over four years. |
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(3) |
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Option exercise price is calculated as an average of the high
and low trading price on the date that the option is awarded. |
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(4) |
|
The option awarded to Mr. Klosk on 5/14/2008 was granted
from multiple plans. 124,677 shares are from the 2004
Incentive Plan. |
U.S.
Federal Income Tax Consequences
The following summarizes the United States federal income tax
consequences of awards under the Incentive Plan to participants
who are subject to United States tax.
Stock Options. An optionee will not generally
recognize taxable income upon the grant of a nonqualified stock
option to purchase shares of Common Stock. Upon exercise of the
option, the optionee will generally recognize ordinary income
for federal income tax purposes equal to the excess of the fair
market value of the shares of Common Stock over the exercise
price. The tax basis of the shares of Common Stock in the hands
of the optionee will equal the exercise price paid for the
shares of Common Stock plus the amount of ordinary compensation
income the optionee recognizes upon exercise of the option, and
the holding period for the shares of Common Stock for capital
gains purposes will commence on the day the option is exercised.
An optionee who sells any of the shares of Common Stock will
recognize short-term or long-term capital gain or loss measured
by the difference between the tax basis of the shares of Common
Stock and the amount realized on the sale. The Company will be
entitled to a federal income tax deduction equal to the amount
of ordinary compensation income recognized by the optionee. The
deduction will be allowed at the same time the optionee
recognizes the income.
An optionee will not generally recognize income upon the grant
of an incentive stock option to purchase shares of Common Stock
and will not generally recognize income upon exercise of the
option, provided that the optionee is an employee of Cambrex at
all times from the date of grant until three months prior to
exercise. If an optionee who has exercised an incentive stock
option sells the shares of Common Stock acquired upon exercise
more than two years after the grant date and more than one year
after exercise, capital gain or loss will be recognized equal to
the difference between the sales price and the exercise price.
An optionee who sells the shares of Common Stock before the
expiration of the foregoing holding periods will generally
recognize ordinary income upon the sale, and the Company will be
entitled to a corresponding federal income tax deduction at the
same time the participant recognizes ordinary income.
Other Awards. The current United States
federal income tax consequences of other awards authorized under
the Incentive Plan are generally in accordance with the
following: (i) stock appreciation rights are generally
subject to ordinary income tax at the time of exercise or
settlement; (ii) restricted stock is generally subject to
ordinary income tax at the time the restrictions lapse, unless
the recipient elects to accelerate recognition as of the date of
grant; (iii) restricted stock units and performance awards
are generally subject to ordinary income tax at the time of
payment, and (iv) unrestricted stock awards are generally
subject to ordinary income tax at the time of grant. In each of
the foregoing cases, the Company will generally be entitled to a
corresponding federal income tax deduction at the same time the
participant recognizes ordinary income.
Section 162(m). Section 162(m) of
the Code generally disallows the corporate tax deduction for
certain compensation paid in excess of $1,000,000 annually to
each of the chief executive officer and Cambrexs other
most highly paid executive officers of publicly held companies.
Awards that qualify as performance-based
compensation are exempt from Section 162(m), thus
allowing us the full federal tax deduction otherwise permitted
for such compensation.
VOTING
This proposal requires the affirmative vote of a majority of the
votes cast at the meeting, provided that the total votes cast on
the proposal represents over 50% of all shares of Common Stock
entitled to vote on the proposal. Abstentions and broker
non-votes will have no effect on this vote.
32
The Board of Directors recommends a vote FOR
Proposal No. 2.
PROPOSAL NO. 3
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
registered public accountants for 2009, subject to the
ratification of the stockholders.
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,
2008 and December 31, 2007, by the Companys
independent registered public accounting firm, BDO Seidman, LLP
for Audit, Audit-Related, Tax and All Other Fees:
|
|
|
|
|
|
|
|
|
|
|
BDO Fees
|
|
|
BDO Fees
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit Fees
|
|
$
|
1,294,327
|
|
|
$
|
1,393,741
|
|
Audit-Related Fees
|
|
$
|
35,000
|
|
|
$
|
40,000
|
|
Tax Fees
|
|
$
|
0
|
|
|
$
|
0
|
|
All Other
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
1,329,327
|
|
|
$
|
1,433,741
|
|
AUDIT
FEES
Aggregate Audit fees billed for professional services rendered
by BDO in connection with its audit of the Companys
financial statements were $1,294,327 for fiscal year ended 2008
and $1,393,741 for fiscal year ended 2007. Such fees also
include BDOs internal control review and attestation
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 $35,000 for fiscal year
ended 2008 for the agreed upon procedures related to the
Companys intercompany accounting and the Companys
project to streamline its legal structure and $40,000 for the
fiscal year ended 2007 for agreed upon procedures related to the
Companys intercompany accounting.
TAX
FEES
There were no Tax fees billed for professional tax services
rendered by BDO for the fiscal years ended 2008 and 2007.
33
ALL OTHER
FEES
BDO did not perform any services classified as Other Services
during the fiscal years ended 2008 and 2007 and there were no
billings for such services.
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
registered public accountants. 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
registered public accountants 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 2008, all services rendered were approved
pursuant to the Policy. Further, during fiscal years 2008 and
2007, there were no services performed or fees incurred by BDO
where pre-approval was waived pursuant to the statutory de
minimis exception.
The Audit Committee has reviewed the billings by BDO and has
determined that they do not affect the auditors
independence.
STOCKHOLDER
PROPOSALS FOR 2010
To be eligible for inclusion in the Companys Proxy
Statement for the 2010 Annual Meeting, stockholder proposals
must be received by the Companys Secretary no later than
the close of business on November 23, 2009. Proposals must
satisfy certain eligibility requirements established by the
Securities and Exchange Commission.
Under the Companys By-laws, any stockholder wishing to
present a nomination for the office of director before the 2010
Annual Meeting for a vote must give notice to the Company on or
prior to January 23, 2010; and any stockholder wishing to
bring a proposal or other business before the 2010 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 2010 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 2010 Annual
Meeting was mailed or such public disclosure was made) prior to
the date of the 2010 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
34
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.
F. Michael Zachara,
Secretary
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 2008. 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.
35
Exhibit 1
CAMBREX
CORPORATION
2009 LONG
TERM INCENTIVE PLAN
1 Purpose. The purpose of
the Cambrex Corporation 2009 Long Term Incentive Plan is to
further align the interests of eligible participants with those
of the Companys shareholders by providing long-term
incentive compensation opportunities tied to the performance of
the Company and its Common Stock. The Plan is intended to
advance the interests of the Company and increase shareholder
value by attracting, retaining and motivating key personnel upon
whose judgment, initiative and effort the successful conduct of
the Companys business is largely dependent.
2 Definitions. Wherever the
following capitalized terms are used in the Plan, they shall
have the meanings specified below:
Award means an award of a Stock Option, Stock
Appreciation Right, Restricted Stock Award, Restricted Stock
Unit, Performance Award or Stock Award granted under the Plan.
Award Agreement means an agreement entered
into between the Company and a Participant setting forth the
terms and conditions of an Award granted to a Participant.
Board means the Board of Directors of the
Company.
Change in Control shall have the meaning set
forth in Section 12.2 hereof.
Code means the Internal Revenue Code of 1986,
as amended.
Committee means the Compensation Committee of
the Board or such other committee of the Board appointed by the
Board to administer the Plan.
Common Stock means the Companys common
stock, par value $0.01 per share.
Company means Cambrex Corporation, a Delaware
corporation or any successor thereto.
Date of Grant means the date on which an
Award under the Plan is granted by the Committee or such later
date as the Committee may specify to be the effective date of an
Award.
Eligible Person means any person who is an
employee, director, consultant or other personal service
provider of the Company or any of its Subsidiaries.
Exchange Act means the Securities Exchange
Act of 1934, as amended.
Fair Market Value means, with respect to a
share of Common Stock as of a given date, the average of the
highest and lowest reported sales prices as reported on the New
York Stock Exchange or other principal exchange on which the
Common Stock is then listed or if such exchange was closed on
such day or, if it was open but the Common Stock was not traded
on such day, then on the next preceding day that the Common
Stock was traded on such exchange, as reported by such
responsible reporting service as the Committee may select.
Incentive Stock Option means a Stock Option
granted under Section 6 hereof that is intended to meet the
requirements of Section 422 of the Code and the regulations
thereunder.
Nonqualified Stock Option means a Stock
Option granted under Section 6 hereof that is not an
Incentive Stock Option.
Participant means any Eligible Person who
holds an outstanding Award under the Plan.
Performance Award means an Award that is
denominated by a cash amount to an Eligible Person under
Section 10 hereof and payable based upon the attainment of
pre-established business
and/or
individual Performance Goals over a specified performance period.
36
Performance Goals shall have the meaning set
forth in Section 10.3 hereof.
Plan means the Cambrex Corporation 2009 Long
Term Incentive Plan as set forth herein, effective and as may be
amended from time to time as provided in Section 15 hereof.
Restricted Stock Award means a grant of
shares of Common Stock to an Eligible Person under
Section 8 hereof that are issued subject to such vesting
and transfer restrictions as the Committee shall determine, and
such other conditions, as are set forth in the Plan and the
applicable Award Agreement.
Restricted Stock Unit means a contractual
right granted to an Eligible Person under Section 9 hereof
representing notional unit interests equal in value to a share
of Common Stock to be paid or distributed at such times, and
subject to such conditions, as set forth in the Plan and the
applicable Award Agreement.
Service means a Participants employment
with the Company or any Subsidiary or a Participants
service as a director, consultant or other service provider with
the Company, as applicable.
Stock Award means a grant of
shares of Common Stock to an Eligible Person under
Section 11 hereof that are issued free of transfer
restrictions and forfeiture conditions.
Stock Appreciation Right means a contractual
right granted to an Eligible Person under Section 7 hereof
entitling such Eligible Person to receive a payment,
representing the excess of the Fair Market Value of a share of
Common Stock over the base price per share of the right, at such
time, and subject to such conditions, as are set forth in the
Plan and the applicable Award Agreement.
Stock Option means a contractual right
granted to an Eligible Person under Section 6 hereof to
purchase shares of Common Stock at such time and price, and
subject to such conditions, as are set forth in the Plan and the
applicable Award Agreement.
Subsidiary means an entity (whether or not a
corporation) that is wholly or majority owned or controlled,
directly or indirectly, by the Company or any other affiliate of
the Company that is so designated, from time to time, by the
Committee, during the period of such affiliated status;
provided, however, that with respect to Incentive Stock Options,
the term Subsidiary shall include only an entity
that qualifies under Section 424(f) of the Code as a
subsidiary corporation with respect to the Company.
3 Administration.
3.1 Committee Members. The Plan
shall be administered by a Committee comprised of no fewer than
two members of the Board who are appointed by the Board to
administer the Plan. To the extent deemed necessary by the
Board, each Committee member shall satisfy the requirements for
(i) an independent director under rules adopted
by the New York Stock Exchange or other principal exchange on
which the Common Stock is then listed, (ii) a
nonemployee director for purposes of such
Rule 16b-3
under the Exchange Act and (iii) an outside
director under Section 162(m) of the Code.
Notwithstanding the foregoing, the mere fact that a Committee
member shall fail to qualify under any of the foregoing
requirements shall not invalidate any Award made by the
Committee which Award is otherwise validly made under the Plan.
No member of the Committee shall be liable for any action or
determination made in good faith by the Committee with respect
to the Plan or any Award thereunder.
3.2 Committee Authority. It shall
be the duty of the Committee to administer the Plan in
accordance with the Plans provisions. The Committee shall
have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but
not limited to, the power to (i) determine the Eligible
Persons to whom Awards shall be granted under the Plan,
(ii) prescribe the restrictions, terms and conditions of
all Awards, (iii) interpret the Plan and terms of the
Awards, (iv) adopt rules for the administration,
interpretation and application of the Plan as are consistent
therewith, and interpret, amend or revoke any such rules,
(v) make all determinations with respect to a
Participants Service and the termination of such Service
for purposes of any Award, (vi) correct any technical
defect(s) or technical omission(s)or reconcile any technical
inconsistency(ies) in the Plan or any Award thereunder and
(vii) adopt such procedures and subplans as are necessary
or appropriate to permit participation in the Plan by Eligible
Person who are foreign nationals or employed outside of the
United States. The Committees determinations under the
Plan need not be uniform and may be made by the Committee
selectively among Participants and Eligible Persons, whether or
not such persons are similarly situated. The
37
Committee shall, in its discretion, consider such factors as it
deems relevant in making its interpretations, determinations and
actions under the Plan including, without limitation, the
recommendations or advice of any officer or employee of the
Company or such attorneys, consultants, accountants or other
advisors as it may select. All interpretations, determinations,
and actions by the Committee shall be final, conclusive, and
binding upon all parties.
3.3 Delegation of Authority. The
Committee shall have the right, from time to time, to delegate
to one or more officers of the Company the authority of the
Committee to grant and determine the terms and conditions of
Awards granted under the Plan, subject to the requirements of
Section 157(c) of the Delaware General Corporation Law (or
any successor provision) and such other limitations as the
Committee shall determine. In no event shall any such delegation
of authority be permitted with respect to Awards granted to any
member of the Board or to any Eligible Person who is subject to
Rule 16b-3
under the Exchange Act is a covered employee under
Section 162(m) of the Code. The Committee shall also be
permitted to delegate, to any appropriate officer or employee of
the Company, responsibility for performing certain ministerial
functions under the Plan. In the event that the Committees
authority is delegated to officers or employees in accordance
with the foregoing, all provisions of the Plan relating to the
Committee shall be interpreted in a manner consistent with the
foregoing by treating any such reference as a reference to such
officer or employee for such purpose. Any action undertaken in
accordance with the Committees delegation of authority
hereunder shall have the same force and effect as if such action
was undertaken directly by the Committee and shall be deemed for
all purposes of the Plan to have been taken by the Committee.
4 Shares Subject to the Plan.
4.1 Number of Shares
Reserved. Subject to adjustment as provided in
Section 4.3 hereof, the total number of shares of Common
Stock that are reserved for issuance under the Plan shall be
1,000,000. Notwithstanding the foregoing, no more than
300,000 shares of Common Stock shall be issued during the
term of the Plan pursuant to Restricted Stock Awards, Restricted
Stock Units, Performance Awards and Stock Awards, in the
aggregate. Any shares of Common Stock delivered under the Plan
shall consist of authorized and unissued shares or treasury
shares.
4.2 Share Replenishment. To the
extent that an Award is canceled, expired, forfeited,
surrendered, settled in cash or otherwise terminated without
delivery of the shares to the Participant, in whole or in part,
the shares of Common Stock retained by or returned to the
Company will not be deemed to have been delivered under the
Plan, and will be available for future Awards under the Plan.
Shares that are (i) withheld from an Award or separately
surrendered by the Participant in payment of the exercise or
purchase price or taxes relating to such an Award or
(ii) not issued or delivered as a result of the net
settlement of an outstanding Stock Option of Stock Appreciation
Right shall be deemed to constitute delivered shares and will
not be available for future Awards under the Plan.
4.3 Adjustments. If there shall
occur any change with respect to the outstanding shares of
Common Stock by reason of any recapitalization,
reclassification, stock dividend, extraordinary dividend, stock
split, reverse stock split or other distribution with respect to
the shares of Common Stock or any merger, reorganization,
consolidation, combination, spin-off or other similar corporate
change or any other change affecting the Common Stock, the
Committee shall, in the manner and to the extent it considers
equitable to the Participants and consistent with the terms of
the Plan, cause an adjustment to be made to (i) the maximum
number and kind of shares of Common Stock provided in
Sections 4.1, 6.1, 7.1, 8.1, 9.1 and 11.1 hereof,
(ii) the number and kind of shares of Common Stock, units
or other rights subject to then outstanding Awards,
(iii) the exercise or base price for each share or unit or
other right subject to then outstanding Awards and (iv) any
other terms of an Award that are affected by the event.
Notwithstanding the foregoing, (a) any such adjustments
shall, to the extent necessary, be made in a manner consistent
with the requirements of Section 409A of the Code and
(b) in the case of Incentive Stock Options, any such
adjustments shall, to the extent practicable, be made in a
manner consistent with the requirements of Section 424(a)
of the Code.
5 Eligibility and Awards.
5.1 Designation of
Participants. Any Eligible Person may be selected
by the Committee to receive an Award and become a Participant
under the Plan. The Committee has the authority, in its
discretion, to determine and designate from time to time those
Eligible Persons who are to be granted Awards, the types of
Awards to be granted,
38
the number of shares of Common Stock or units subject to Awards
to be granted and the terms and conditions of such Awards
consistent with the terms of the Plan. In selecting Eligible
Persons to be Participants, and in determining the type and
amount of Awards to be granted under the Plan, the Committee
shall consider any and all factors that it deems relevant or
appropriate.
5.2 Determination of Awards. The
Committee shall determine the terms and conditions of all Awards
granted to Participants in accordance with its authority under
Section 3.2 hereof. An Award may consist of one type of
right or benefit hereunder or of two or more such rights or
benefits granted in tandem.
5.3 Award Agreements. Each Award
granted to an Eligible Person under the Plan may be represented
in an Award Agreement. The terms of all Awards under the Plan,
as determined by the Committee, will be set forth in each
individual Award Agreements as described in Section 14.1
hereof.
5.4 No Fractional Shares. No
fractional shares of Common Stock shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities or other property shall
be paid or transferred in lieu of any fractional shares of
Common Stock or whether such fractional shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
6 Stock Options.
6.1 Grant of Stock Options. A Stock Option may be
granted to any Eligible Person selected by the Committee, except
that an Incentive Stock Option may only be granted to an
Eligible Person satisfying the conditions of Section 6.7(a)
hereof. Each Stock Option shall be designated on the Date of
Grant, in the discretion of the Committee, as an Incentive Stock
Option or as a Nonqualified Stock Option. The maximum number of
shares of Common Stock that may be subject to Stock Options
granted to any Participant during any calendar year shall be
limited to 250,000 shares of Common Stock (subject to
adjustment as provided in Section 4.3 hereof).
6.2 Exercise Price. The exercise price per share of
a Stock Option shall not be less than one hundred percent (100%)
of the Fair Market Value of a share of Common Stock on the Date
of Grant. The Committee may in its discretion specify an
exercise price per share that is higher than the Fair Market
Value of a share of Common Stock on the Date of Grant.
6.3 Vesting of Stock Options. The
Committee shall, in its discretion, prescribe the time or times
at which or the conditions upon which, a Stock Option or portion
thereof shall become vested
and/or
exercisable. The requirements for vesting and exercisability of
a Stock Option may be based on the continued Service of the
Participant with the Company or a Subsidiary for a specified
time period (or periods), on the attainment of a specified
Performance Goal(s) or on such other terms and conditions as
approved by the Committee in its discretion. The Committee may
accelerate the vesting or exercisability of any Stock Option
upon a Change in Control or upon termination of Service under
certain circumstances, as set forth in the Award Agreement or
otherwise. If the vesting requirements of a Stock Option are not
satisfied, the Award shall be forfeited.
6.4 Term of Stock Options. The
Committee shall in its discretion prescribe in an Award
Agreement the period during which a vested Stock Option may be
exercised; provided, however, that the maximum
term of a Stock Option shall be ten (10) years from the
Date of Grant. The Stock Option of a Participant whose Service
with the Company or one of its Subsidiaries is terminated for
any reason shall terminate on the earlier of (i) unless
otherwise provided in an Award Agreement, and except for
termination for Cause (as described in Section 13.2
hereof), the date that is ninety (90) days following
termination of Service of the Participant and (ii) the
maximum term of the Stock Option.
6.5 Stock Option Exercise; Tax
Withholding. Subject to such terms and conditions
as specified in an Award Agreement, a Stock Option may be
exercised in whole or in part at any time during the term
thereof by notice in the form required by the Company, together
with payment of the aggregate exercise price and applicable
withholding tax. Payment of the exercise price shall be made in
the manner set forth in the Award Agreement, and unless
otherwise provided by the Committee at the time of payment:
(i) in cash or by cash equivalent acceptable to the
Committee, (ii) in shares of Common Stock valued at the
Fair Market Value of such shares on the date of exercise,
(iii) through an open-market, broker-assisted sales
transaction pursuant to which the Company is promptly delivered
the amount of proceeds necessary to satisfy the exercise price,
(iv) by a combination of the methods
39
described above or (v) by such other method as may be
approved by the Committee and set forth in the Award Agreement.
In addition to and at the time of payment of the exercise price,
the Participant shall pay to the Company the full amount of any
and all applicable income tax, employment tax and other amounts
required to be withheld in connection with such exercise,
payable under such of the methods described above for the
payment of the exercise price as may be approved by the
Committee and set forth in the Award Agreement.
6.6 Limited Transferability of Nonqualified Stock
Options. All Stock Options shall be
nontransferable except (i) upon the Participants
death as provided in Section 14.2 hereof and
(ii) subject to prior approval by the Committee, in the
case of Nonqualified Stock Options only, for the transfer of all
or part of the Stock Option to a Participants family
member (as defined for purposes of the
Form S-8
registration statement under the Securities Act of 1933), as may
be approved by the Committee in its discretion at the time of
proposed transfer. The transfer of a Nonqualified Stock Option
may be subject to such terms and conditions as the Committee may
in its discretion impose from time to time. Subsequent transfers
of a Nonqualified Stock Option shall be prohibited.
6.7 Additional Rules for Incentive Stock
Options.
(a) Eligibility. An Incentive Stock
Option may only be granted to an Eligible Person who is
considered an employee for purposes of Treasury Regulation
§ 1.421-7(h) with respect to the Company or any
Subsidiary that qualifies as a subsidiary
corporation with respect to the Company for purposes of
Section 424(f) of the Code.
(b) Annual Limits. No Incentive Stock
Option shall be granted to a Participant as a result of which
the aggregate Fair Market Value (determined as of the Date of
Grant) of the Common Stock with respect to which incentive stock
options under Section 422 of the Code are exercisable for
the first time in any calendar year under the Plan and any other
stock option plans of the Company or any subsidiary or parent
corporation, would exceed $100,000, determined in accordance
with Section 422(d) of the Code. This limitation shall be
applied by taking Stock Options into account in the order in
which granted.
(c) Termination of Employment. An Award
of an Incentive Stock Option may provide that such Stock Option
may be exercised not later than three (3) months following
termination of employment of the Participant with the Company
and all Subsidiaries or not later than one year following a
permanent and total disability within the meaning of
Section 22(e)(3) of the Code, as and to the extent
determined by the Committee to comply with the requirements of
Section 422 of the Code.
(d) Other Terms and Conditions;
Nontransferability. Any Incentive Stock Option
granted hereunder shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as are
deemed necessary or desirable by the Committee, which terms,
together with the terms of the Plan, shall be intended and
interpreted to cause such Incentive Stock Option to qualify as
an incentive stock option under Section 422 of
the Code. An Award Agreement for an Incentive Stock Option may
provide that such Stock Option shall be treated as a
Nonqualified Stock Option to the extent that certain
requirements applicable to incentive stock options
under the Code shall not be satisfied. An Incentive Stock Option
shall by its terms be nontransferable other than by will or by
the laws of descent and distribution, and shall be exercisable
during the lifetime of a Participant only by such Participant.
(e) Disqualifying Dispositions. If shares
of Common Stock acquired by exercise of an Incentive Stock
Option are disposed of within two years following the Date of
Grant or one year following the transfer of such shares to the
Participant upon exercise, the Participant shall, promptly
following such disposition, notify the Company in writing of the
date and terms of such disposition and provide such other
information regarding the disposition as the Company may
reasonably require.
6.8 Repricing Prohibited. Subject
to the anti-dilution adjustment provisions contained in
Section 4.3 hereof, without the prior approval of the
Companys shareholders, neither the Committee nor the Board
shall cause the cancellation, substitution or amendment of a
Stock Option that would have the effect of reducing the exercise
price of such a Stock Option previously granted under the Plan
or otherwise approve any modification to such a Stock Option,
that would be treated as a repricing under the then
applicable rules, regulations or listing requirements adopted by
the New York Stock Exchange or other principal exchange on which
the Common Stock is then listed.
40
7. Stock Appreciation Rights.
7.1 Grant of Stock Appreciation
Rights. Stock Appreciation Rights may be granted
to any Eligible Person selected by the Committee. Stock
Appreciation Rights may be granted on a basis that allows for
the exercise of the right by the Participant or that provides
for the automatic payment of the right upon a specified date or
event. The maximum number of shares of Common Stock that may be
subject to Stock Appreciation Rights granted to any Participant
during any calendar year shall be limited to 100,000 shares
of Common Stock (subject to adjustment as provided in
Section 4.3 hereof). Stock Appreciation Rights shall be
non-transferable, except as provided in Section 14.2 hereof.
7.2 Stand-Alone Stock Appreciation
Rights. A Stock Appreciation Right may be granted
without any related Stock Option. The Committee shall in its
discretion provide in an Award Agreement the time or times at
which or the conditions upon which, a Stock Appreciation Right
or portion thereof shall become vested
and/or
exercisable. The requirements for vesting and exercisability of
a Stock Appreciation Right may be based on the continued Service
of a Participant with the Company or a Subsidiary for a
specified time period (or periods), on the attainment of a
specified Performance Goal(s) or on such other terms and
conditions as approved by the Committee in its discretion. If
the vesting requirements of a Stock Appreciation Right are not
satisfied, the Award shall be forfeited. The Committee may
accelerate the vesting or exercisability of any Stock
Appreciation Right upon a Change in Control or upon termination
of Service under certain circumstances as set forth in the Award
Agreement or otherwise. A Stock Appreciation Right will be
exercisable or payable at such time or times as determined by
the Committee; provided, that the maximum term of a Stock
Appreciation Right shall be ten (10) years from the Date of
Grant. The base price of a Stock Appreciation Right granted
without any related Stock Option shall be determined by the
Committee in its discretion; provided, however,
that the base price per share of any such freestanding Stock
Appreciation Right shall not be less than one hundred percent
(100%) of the Fair Market Value of a share of Common Stock on
the Date of Grant.
7.3 Tandem Stock Option/Stock Appreciation
Rights. A Stock Appreciation Right may be granted
in tandem with a Stock Option, either on the Date of Grant or at
any time thereafter during the term of the Stock Option. A
tandem Stock Option/Stock Appreciation Right will entitle the
holder to elect, as to all or any portion of the number of
shares subject to the Award, to exercise either the Stock Option
or the Stock Appreciation Right, resulting in the reduction of
the corresponding number of shares subject to the right so
exercised as well as the tandem right not so exercised. A Stock
Appreciation Right granted in tandem with a Stock Option
hereunder shall have a base price per share equal to the per
share exercise price of the Stock Option, will be vested and
exercisable at the same time or times that a related Stock
Option is vested and exercisable, and will expire no later than
the time at which the related Stock Option expires.
7.4 Payment of Stock Appreciation
Rights. A Stock Appreciation Right will entitle
the holder, upon exercise or other payment of the Stock
Appreciation Right, as applicable, to receive an amount
determined by multiplying: (i) the excess of the Fair
Market Value of a share of Common Stock on the date of exercise
or payment of the Stock Appreciation Right over the base price
of such Stock Appreciation Right, by (ii) the number of
shares as to which such Stock Appreciation Right is exercised or
paid. Payment of the amount determined under the foregoing may
be made, as approved by the Committee and set forth in the Award
Agreement, in shares of Common Stock valued at their Fair Market
Value on the date of exercise or payment, in cash or in a
combination of shares of Common Stock and cash, subject to
applicable tax withholding requirements.
7.5 Repricing Prohibited. Subject
to the anti-dilution adjustment provisions contained in
Section 4.3 hereof, without the prior approval of the
Companys shareholders, neither the Committee nor the Board
shall cause the cancellation, substitution or amendment of a
Stock Appreciation Right that would have the effect of reducing
the base price of such a Stock Appreciation Right previously
granted under the Plan or otherwise approve any modification to
such Stock Appreciation Right that would be treated as a
repricing under the then applicable rules,
regulations or listing requirements adopted by the New York
Stock Exchange or other principal exchange on which the Common
Stock is then listed.
8. Restricted Stock Awards.
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8.1 Grant of Restricted Stock
Awards. A Restricted Stock Award may be granted
to any Eligible Person selected by the Committee. The maximum
number of shares of Common Stock that may be subject to
Restricted Stock Awards granted to a Participant during any one
calendar year shall be limited to 100,000 shares of Common
Stock (subject to adjustment as provided in Section 4.3
hereof). The Committee may require the payment by the
Participant of a specified purchase price in connection with any
Restricted Stock Award.
8.2 Vesting Requirements. The
restrictions imposed on shares granted under a Restricted Stock
Award shall lapse in accordance with the vesting requirements
specified by the Committee in the Award Agreement. The
requirements for vesting of a Restricted Stock Award may be
based on the continued Service of the Participant with the
Company or a Subsidiary for a specified time period (or
periods), on the attainment of a specified Performance Goal(s)
designed to meet the requirements for exemption under
Section 162(m) of the Code or on such other terms and
conditions as approved by the Committee in its discretion. The
Committee may accelerate the vesting of a Restricted Stock Award
upon a Change in Control or upon termination of Service under
certain circumstances, as set forth in the Award Agreement. If
the vesting requirements of a Restricted Stock Award shall not
be satisfied, the Award shall be forfeited and the shares of
Stock subject to the Award shall be returned to the Company.
8.3 Transfer Restrictions. Shares
granted under any Restricted Stock Award may not be transferred,
assigned or subject to any encumbrance, pledge or charge until
all applicable restrictions are removed or have expired, except
as provided in Section 14.2 hereof. Failure to satisfy any
applicable restrictions shall result in the subject shares of
the Restricted Stock Award being forfeited and returned to the
Company. The Committee may require in an Award Agreement that
certificates representing the shares granted under a Restricted
Stock Award bear a legend making appropriate reference to the
restrictions imposed, and that certificates representing the
shares granted or sold under a Restricted Stock Award will
remain in the physical custody of an escrow holder until all
restrictions are removed or have expired.
8.4 Rights as Shareholder. Subject
to the foregoing provisions of this Section 8 and the
applicable Award Agreement, the Participant shall have all
rights of a shareholder with respect to the shares granted to
the Participant under a Restricted Stock Award, including the
right to vote the shares and receive all dividends and other
distributions paid or made with respect thereto. The Committee
may provide in an Award Agreement for the payment of cash
dividends and distributions to the Participant at such times as
paid to shareholders generally or at the times of vesting of the
Restricted Stock Award. Any Common Stock received as a stock
divided or distribution will be subject to the same restrictions
as the underlying Restricted Stock Award.
8.5 Section 83(b) Election. If
a Participant makes an election pursuant to Section 83(b)
of the Code with respect to a Restricted Stock Award, the
Participant shall file, within thirty (30) days following
the Date of Grant, a copy of such election with the Company and
with the Internal Revenue Service, in accordance with the
regulations under Section 83 of the Code. The Committee may
provide in an Award Agreement that the Restricted Stock Award is
conditioned upon the Participants making or refraining
from making an election with respect to the Award under
Section 83(b) of the Code.
9. Restricted Stock Units.
9.1 Grant of Restricted Stock
Units. A Restricted Stock Unit may be granted to
any Eligible Person selected by the Committee. The value of each
Restricted Stock Unit is equal to the Fair Market Value of the
Common Stock on the applicable date or time period of
determination, as specified by the Committee. The maximum number
of units that may be subject to Restricted Stock Units granted
to a Participant during any one calendar year shall be limited
to 100,000 shares units (subject to adjustment as provided
in Section 4.3 hereof). Restricted Stock Units shall be
subject to such restrictions and conditions as the Committee
shall determine. Restricted Stock Units shall be
non-transferable, except as provided in Section 14.2 hereof.
9.2 Vesting of Restricted Stock
Units. On the Date of Grant, the Committee shall,
in its discretion, determine any vesting requirements with
respect to Restricted Stock Units, which shall be set forth in
the Award Agreement. The requirements for vesting of a
Restricted Stock Unit may be based on the continued Service of
the Participant with the Company or a Subsidiary for a specified
time period (or periods), on the attainment of a specified
Performance Goal(s) designed to meet the requirements for
exemption under Section 162(m) of the Code or on such other
terms and conditions as approved by the Committee in its
discretion. The Committee may
42
accelerate the vesting of a Restricted Stock Unit upon a Change
in Control or upon termination of Service under certain
circumstances, as set forth in the Award Agreement.
9.3 Payment of Restricted Stock
Units. Restricted Stock Units shall become
payable to a Participant at the time or times determined by the
Committee and set forth in the Award Agreement, which may be
upon or following the vesting of the Award. Payment of a
Restricted Stock Unit may be made, as approved by the Committee
and set forth in the Award Agreement, in cash or in shares of
Common Stock or in a combination thereof, subject to applicable
tax withholding requirements. Any cash payment of a Restricted
Stock Unit shall be made based upon the Fair Market Value of the
Common Stock, determined on such date or over such time period
as determined by the Committee.
9.4 Dividend Equivalent
Rights. Restricted Stock Units may be granted
together with a Dividend Equivalent Right with respect to the
shares of Common Stock subject to the Award, which may be
accumulated and may be deemed reinvested in additional
Restricted Stock Units or may be accumulated in cash, as
determined by the Committee in its discretion, and will be paid
at the time the underlying Restricted Stock Unit is payable.
Dividend Equivalent Rights shall be subject to forfeiture under
the same conditions as apply to the underlying Restricted Stock
Units.
9.5 No Rights as Shareholder. The Participant
shall not have any rights as a shareholder with respect to the
shares subject to an Restricted Stock Unit until such time as
shares of Common Stock are delivered to the Participant pursuant
to the terms of the Award Agreement.
10. Performance Awards.
10.1 Grant of Performance Awards. A
Performance Award may be granted to any Eligible Person selected
by the Committee. Payment amounts may be based on the attainment
of specified levels of attainment with respect to the
Performance Goals, including, if applicable, specified
threshold, target and maximum performance levels. The
requirements for vesting may be also based upon the continued
Service of the Participant with the Company or a Subsidiary
during the respective performance period and on such other
conditions as determined by the Committee and set forth in an
Award Agreement. The maximum amount of cash compensation that
may be paid to a Participant during any one calendar year under
Performance Awards shall be $1 million. Performance Awards
shall be non-transferable, except as provided in
Section 14.2 hereof.
10.2 Award Agreements. Each
Performance Award shall be evidenced by an Award Agreement that
shall specify the performance period and such other terms and
conditions as the Committee, in its discretion, shall determine.
The performance period of a Performance Award shall be greater
than one (1) year and shall in no event exceed five
(5) years. The Committee may accelerate the vesting of a
Performance Award upon a Change in Control or termination of
Service under certain circumstances, as set forth in the Award
Agreement.
10.3 Performance Goals. For
purposes of Performance Awards, as well as for other Awards
under the Plan, the Committee may set Performance Goals based
upon the achievement of Company-wide, departmental or individual
goals or any other basis determined by the Committee in its
discretion. For purposes hereof, Performance Goals
means the goal(s) (or combined goal(s)) determined by the
Committee, in its discretion, to be applicable to a Participant
with respect to an Award. As determined by the Committee, the
Performance Goals applicable to an Award may provide for a
targeted level or levels of achievement using one or more of the
following measures: (1) net earnings; (2) earnings per
share; (3) net debt; (4) sales growth; (5) net
income; (6) net operating profit; (7) return measures
(including, but not limited to, return on assets, capital,
equity or sales); (8) cash flow (including, but not limited
to, operating cash flow and free cash flow); (9) earnings
before or after taxes, interest, depreciation
and/or
amortization; (10) share price (including, but not limited
to growth measures and total shareholder return);
(11) expense targets; (12) customer satisfaction;
(13) market share; (14) economic value added;
(15) working capital; (16) the formation of joint
ventures or the completion of other corporate transactions; or
(17) any combination of or a specified increase in any of
the foregoing. Notwithstanding the achievement of any
Performance Goal, the Committee, in its discretion, may, to the
extent provided in an Award Agreement, reduce or eliminate some
or all of the amount payable to any Participant with respect to
a Performance Award or other such performance-based Award under
the Plan that would otherwise be payable in respect of the
Performance Award, based on such factors as the Committee may
deem relevant, but the Committee may not increase any such
amount
43
above the amount established in accordance with the relevant
Award Agreement or the Plan. The Committee may adjust, change or
eliminate the Performance Goals or the applicable performance
period of the Award as it deems appropriate, in its discretion.
The Committee may exercise the discretion provided for by the
foregoing sentence in a non-uniform manner among Participants.
10.4 Section 162(m)
Compliance. For purposes of qualifying grants of
Performance Awards as well as other Awards under the Plan
intended to qualify as performance-based
compensation under Section 162(m) of the Code, the
Committee shall make such determinations with respect to a
Performance Award or such other Award as required by
section 162(m) of the Code within ninety (90) days
after the beginning of the performance period (or such other
time period as is required under section 162(m) of the
Code). As and to the extent required by section 162(m) of
the Code, the terms of a Performance Award or other Award under
the Plan that is intended to qualify as performance-based
compensation under Section 162(m) of the Code must
state, in terms of an objective formula or standard, the method
of computing the amount of compensation payable under such
Award, and must preclude discretion to increase the amount of
compensation payable under the terms of such Award (but may
allow the Committee discretion to decrease the amount of
compensation payable).
10.5 Payment of Performance
Awards. Payment of Performance Awards or other
such performance-based Awards will generally be made as soon as
practicable after the expiration of the applicable performance
period if the applicable Performance Goals have been achieved or
partially achieved, as determined by the Committee in its
discretion, by the Company or the Participant during the
relevant performance period; provided, however,
that a deferred payment date may be established by the Committee
and set forth in the Award Agreement. Payment of the Performance
Awards or other such performance-based Awards may be made in
cash or in shares of Common Stock or in a combination thereof,
subject to applicable tax withholding requirements. Any payment
of a Performance Award or other such performance-based Awards in
Common Stock shall be made based upon the Fair Market Value
thereof, determined on such date or over such time period as
determined by the Committee.
10.6 Adjustments of Incorrect
Determinations. If at any time after the date on
which a Participant has been granted or becomes vested in a
Performance Award or other Award under the Plan based upon the
achievement of a Performance Goal, the Committee determines that
the earlier determination as to the achievement of the
Performance Goal was based on incorrect data and that in fact
the Performance Goal had not been achieved or had been achieved
to a lesser extent than originally determined and a portion of a
Performance Award or other such Award would not have been
granted, vested or paid given the correct data, then
(i) such portion of the Performance Award or other such
Award that was granted shall be forfeited and any related shares
of Common Stock (or, if such shares were disposed of, the cash
equivalent) shall be returned to the Company as provided by the
Committee, (ii) such portion of the Performance Award or
other such Award that became vested shall be deemed to be not
vested and any related shares of Common Stock (or, if such
shares were disposed of, the cash equivalent) shall be returned
to the Company as provided by the Committee and (iii) such
portion of the Performance Award or other such Award paid to the
Participant shall be paid by the Participant to the Company upon
notice from the Company as provided by the Committee.
11. Stock Awards.
11.1 Grant of Stock Awards. A Stock
Award may be granted to any Eligible Person selected by the
Committee. A Stock Award may be granted for past Services, in
lieu of bonus or other cash compensation, as directors
compensation or for any other valid purpose as determined by the
Committee. The Committee shall determine the terms and
conditions of such Awards, and such Awards may be made without
vesting requirements. In addition, the Committee may, in
connection with any Stock Award, require the payment of a
specified purchase price. The maximum number of shares of Common
Stock that may be subject to Stock Awards granted to a
Participant during any one calendar year shall be limited to
100,000 shares (subject to adjustment as provided in
Section 4.3 hereof).
11.2 Rights as Shareholder. Subject
to the foregoing provisions of this Section 11 and the
applicable Award Agreement, upon the issuance of the Common
Stock under a Stock Award the Participant shall have all rights
of a shareholder with respect to the shares of Common Stock,
including the right to vote the shares and receive all dividends
and other distributions paid or made with respect thereto.
44
12. Change in Control.
12.1 Effect on Grants. Unless
otherwise provided in an Award Agreement with respect to an
Award, in the event of a Change in Control and as of the date
such Change in Control is effected, (i) any outstanding
Stock Options and Stock Appreciation Rights, which are not then
vested and exercisable, shall become fully vested and
immediately exercisable in their entirety and (ii) any
outstanding Restricted Stock Awards, Restricted Stock Units,
Stock Awards and Performance Awards, which are not then vested
or payable, shall become fully vested and payable to the
Participant. The Committee shall also have the authority, in its
discretion, to provide in an Award Agreement for the effect of a
Change in Control on an Award, including the application of any
of the foregoing upon the occurrence of another event in
connection with a Change in Control (such as termination of
employment) or any other consequence that the Committee
determines is consistent with the terms of the Plan.
12.2 Definition of Change in
Control. For purposes of the Plan, unless
otherwise defined in an Award Agreement, Change in
Control shall mean the occurrence of (i) a change in
ownership of the Company under paragraph (a) below,
(ii) a change in effective control of the Company under
paragraph (b) below or (iii) a change in the ownership
of a substantial portion of the assets of the Company under
paragraph (c) below.
(a) Change in the Ownership of the
Company. A change in the ownership of the
Company shall occur on the date that any one person or more than
one person acting as a group (as defined in paragraph (d)),
acquires ownership of stock of the Company that, together with
stock held by such person or group, constitutes more than fifty
percent (50%) of the total fair market value or total voting
power of the stock of the Company. However, if any one person or
more than one person acting as a group, is considered to own
more than fifty percent (50%) of the total fair market value or
total voting power of the stock of the Company, the acquisition
of additional stock by the same person or persons is not
considered to cause a change in the ownership of the Company (or
to cause a change in the effective control of the corporation
(within the meaning of paragraph (b) below). An increase in
the percentage of stock owned by any one person or persons
acting as a group, as a result of a transaction in which the
Company acquires its stock in exchange for property will be
treated as an acquisition of stock for purposes of this section.
This paragraph (a) applies only when there is a transfer of
stock of the Company and stock in the Company remains
outstanding after the transaction.
(b) Change in the Effective Control of the
Company. A change in the effective control of
the Company shall occur on the date that either (i) any one
person or more than one person acting as a group (within the
meaning of Sections 13(d) and 14(d) of the 1934 Act;
provided, that in no event shall a person be deemed to be
acting as a group if such person would not otherwise be
considered to be acting as a group, within the meaning of
paragraph (d) hereof), acquires (or has acquired during the
12-month
period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the Company possessing
thirty percent (30%) or more of the total voting power of the
stock of the Company; provided, however, that an
acquisition of Voting Stock directly from the Company shall not
constitute a change in effective control of the Company; or
(b) a majority of members of the Companys board of
directors is replaced during any
12-month
period by directors whose appointment or election is not
endorsed by a majority of the members of the Companys
board of directors prior to the date of the appointment or
election.
(c) Change in the Ownership of a Substantial Portion
of the Companys Assets. A change in the
ownership of a substantial portion of the Companys assets
shall occur on the date that any one person or more than one
person acting as a group (as defined in paragraph (d)), acquires
(or has acquired during the
12-month
period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total
gross fair market value equal to or more than forty percent
(40%) of the total gross fair market value of all of the assets
of the Company immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means
the value of the assets of the Company or the value of the
assets being disposed of, determined without regard to any
liabilities associated with such assets. There is no Change in
Control event under this paragraph (c) when there is a
transfer to an entity that is controlled by the shareholders of
the transferring corporation immediately after the transfer. A
transfer of assets by the Company is not treated as a change in
the ownership of such assets if the assets are transferred to
(i) a shareholder of the Company (immediately before the
asset transfer) in exchange for or with respect to its stock,
(ii) an entity, fifty percent (50%) or more of the total
value or voting power of which is owned, directly or indirectly,
by the Company, (iii) a person or more than one person
acting as a group, that owns, directly or
45
indirectly, fifty percent (50%) or more of the total value or
voting power of all the outstanding stock of the Company or
(iv) an entity, at least fifty percent (50%) of the total
value or voting power of which is owned, directly or indirectly,
by a person described in paragraph (d). For purposes of this
paragraph (c), a persons status is determined immediately
after the transfer of the assets.
(d) Persons Acting As a Group. For
the purposes of paragraphs (a), (b) and (c), persons will
not be considered to be acting as a group solely because they
purchase or own assets or stock of the same corporation at the
same time or as a result of the same public offering. However,
persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of assets or stock or
similar business transaction with the corporation. If a person,
including an entity, owns stock in both corporations that enter
into a merger, consolidation, purchase or acquisition of assets
or stock or similar transaction, such shareholder is considered
to be acting as a group with other shareholders in a corporation
only with respect to the ownership in that corporation before
the transaction giving rise to the change and not with respect
to the ownership interest in the other corporation.
(e) Interpretation. Each of the
sub-paragraphs (a) through (d) above shall be
construed and interpreted consistent with the requirements of
Section 409A of the Code and any Treasury Department
regulations or other guidance issued thereunder.
13. Forfeiture Events.
13.1 General. The Committee may
specify in an Award Agreement at the time of the Award that the
Participants rights, payments and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture
or recoupment upon the occurrence of certain specified events,
in addition to any otherwise applicable vesting or performance
conditions of an Award. Such events shall include, but shall not
be limited to, termination of Service for Cause, violation of
material Company policies, breach of noncompetition,
confidentiality or other restrictive covenants that may apply to
the Participant or other conduct by the Participant that is
detrimental to the business or reputation of the Company.
13.2 Termination for Cause. Unless
otherwise provided by the Committee and set forth in an Award
Agreement, if a Participants employment with the Company
or any Subsidiary shall be terminated for Cause (as
such term may be defined in the relevant Award Agreement), such
Participants rights, payments and benefits with respect to
an Award shall be subject to cancellation, forfeiture
and/or
recoupment, as provided in Section 13.3 below. The Company
shall have the power to determine whether the Participant has
been terminated for Cause and the date upon which such
termination for Cause occurs. Any such determination shall be
final, conclusive and binding upon the Participant. In addition,
if the Company shall reasonably determine that a Participant has
committed or may have committed any act which could constitute
the basis for a termination of such Participants
employment for Cause, the Company may suspend the
Participants rights to exercise any option, receive any
payment or vest in any right with respect to any Award pending a
determination by the Company of whether an act has been
committed which could constitute the basis for a termination for
Cause as provided in this Section 13.2.
13.3 Right of Recapture. If at any
time within one (1) year after the date on which a
Participant exercises a Stock Option or Stock Appreciation Right
or on which Restricted Stock vests or becomes payable or on
which a Performance Award is paid to a Participant or on which
income otherwise is realized by a Participant in connection with
an Award, (i) a Participant terminates from Service for
Cause or (ii) after termination of Service for any other
reason, the Committee determines in its discretion either that,
(a) while employed, the Participant had engaged in an act
which would have warranted termination from Service for Cause or
(b) after termination, the Participant has engaged in
conduct that violates any continuing obligation or duty of the
Participant in respect of the Company or any Subsidiary, then
any gain realized by the Participant from the exercise, vesting,
payment or other realization of income by the Participant in
connection with an Award, shall be paid by the Participant to
the Company upon notice from the Company. Such gain shall be
determined as of the date on which the gain is realized by the
Participant, without regard to any subsequent change in the Fair
Market Value of a share of Common Stock. The Company shall have
the right to offset such gain against any amounts otherwise owed
to the Participant by the Company (whether as wages, vacation
pay or pursuant to any benefit plan or other compensatory
arrangement).
14. General Provisions.
46
14.1 Award Agreement. To the extent
deemed necessary by the Committee, an Award under the Plan shall
be evidenced by an Award Agreement in a written or electronic
form approved by the Committee setting forth the number of
shares of Common Stock or Restricted Stock Units subject to the
Award, the exercise price, base price or purchase price of the
Award, the time or times at which an Award will become vested,
exercisable or payable and the term of the Award. The Award
Agreement may also set forth the effect on an Award of a Change
in Control or a termination of Service under certain
circumstances. The Award Agreement shall be subject to and
incorporate, by reference or otherwise, all of the applicable
terms and conditions of the Plan, and may also set forth other
terms and conditions applicable to the Award as determined by
the Committee consistent with the limitations of the Plan. The
grant of an Award under the Plan shall not confer any rights
upon the Participant holding such Award other than such terms,
and subject to such conditions, as are specified in the Plan as
being applicable to such type of Award (or to all Awards) or as
are expressly set forth in the Award Agreement. The Committee
need not require the execution of an Award Agreement by a
Participant, in which case, acceptance of the Award by the
Participant shall constitute agreement by the Participant to the
terms, conditions, restrictions and limitations set forth in the
Plan and the Award Agreement as well as the administrative
guidelines of the Company in effect from time to time.
14.2 No Assignment or Transfer;
Beneficiaries. Except as provided in
Section 6.7 hereof, Awards under the Plan shall not be
assignable or transferable by the Participant, and shall not be
subject in any manner to assignment, alienation, pledge,
encumbrance or charge. Notwithstanding the foregoing, in the
event of the death of a Participant while employed by the
Company or any of its Subsidiaries, except as otherwise provided
by the Committee in an Award Agreement, an outstanding Award may
be exercised by or shall become payable to the
Participants beneficiary as designated by the Participant
in the manner prescribed by the Committee or, in the absence of
an authorized beneficiary designation, by the a legatee or
legatees of such Award under the participants last will or
by such Participants executors, personal representatives
or distributees of such Award in accordance with the
Participants will or the laws of descent and distribution.
The Committee may provide in the terms of an Award Agreement or
in any other manner prescribed by the Committee that the
Participant shall have the right to designate a beneficiary or
beneficiaries who shall be entitled to any rights, payments or
other benefits specified under an Award following the
Participants death.
14.3 Deferrals of Payment. The
Committee may in its discretion permit a Participant to defer
the receipt of payment of cash or delivery of shares of Common
Stock that would otherwise be due to the Participant by virtue
of the exercise of a right or the satisfaction of vesting or
other conditions with respect to an Award; provided,
however, that such discretion shall not apply in the case
of a Stock Option or Stock Appreciation Right. If any such
deferral is to be permitted by the Committee, the Committee
shall establish rules and procedures relating to such deferral
in a manner intended to comply with the requirements of
Section 409A of the Code, including, without limitation,
the time when an election to defer may be made, the time period
of the deferral and the events that would result in payment of
the deferred amount, the interest or other earnings attributable
to the deferral and the method of funding, if any, attributable
to the deferred amount.
14.4 No Right to Employment or Continued
Service. Nothing in the Plan, in the grant of any
Award or in any Award Agreement shall confer upon any Eligible
Person or any Participant any right to continue in the Service
of the Company or any of its Subsidiaries or interfere in any
way with the right of the Company or any of its Subsidiaries to
terminate the employment or other service relationship of an
Eligible Person or a Participant for any reason at any time.
14.5 Rights as Shareholder. A
Participant shall have no rights as a holder of shares of Common
Stock with respect to any unissued securities covered by an
Award until the date the Participant becomes the holder of
record of such securities. Except as provided in
Section 4.3 hereof, no adjustment or other provision shall
be made for dividends or other shareholder rights, except to the
extent that the Award Agreement provides for dividend payments
or dividend equivalent rights. The Committee may determine in
its discretion the manner of delivery of Common Stock to be
issued under the Plan, which may be by delivery of stock
certificates, electronic account entry into new or existing
accounts or any other means as the Committee, in its discretion,
deems appropriate. The Committee may require that the stock
certificates be held in escrow by the Company for any shares of
Common Stock or cause the shares to be legended in order to
comply with the securities laws or other applicable restrictions
or should the shares of Common Stock be represented by book or
electronic account entry rather than a certificate,
47
the Committee may take such steps to restrict transfer of the
shares of Common Stock as the Committee considers necessary or
advisable.
14.6 Section 409A
Compliance. To the extent applicable, it is
intended that the Plan and all Awards hereunder comply with the
requirements of Section 409A of the Code and the Treasury
Regulations and other guidance issued thereunder, and that the
Plan and all Award Agreements shall be interpreted and applied
by the Committee in a manner consistent with this intent in
order to avoid the imposition of any additional tax under
Section 409A of the Code. In the event that any
(i) provision of the Plan or an Award Agreement,
(ii) Award, payment, transaction or (iii) other action
or arrangement contemplated by the provisions of the Plan is
determined by the Committee to not comply with the applicable
requirements of Section 409A of the Code and the Treasury
Regulations and other guidance issued thereunder, the Committee
shall have the authority to take such actions and to make such
changes to the Plan or an Award Agreement as the Committee deems
necessary to comply with such requirements; provided,
that no such action shall adversely affect any outstanding Award
without the consent of the affected Participant.
14.7 Securities Law Compliance. No
shares of Common Stock will be issued or transferred pursuant to
an Award unless and until all then applicable requirements
imposed by Federal and state securities and other laws, rules
and regulations and by any regulatory agencies having
jurisdiction, and by any exchanges upon which the shares of
Common Stock may be listed, have been fully met. As a condition
precedent to the issuance of shares pursuant to the grant or
exercise of an Award, the Company may require the Participant to
take any reasonable action to meet such requirements. The
Committee may impose such conditions on any shares of Common
Stock issuable under the Plan as it may deem advisable,
including, without limitation, restrictions under the Securities
Act of 1933, as amended, under the requirements of any exchange
upon which such shares of the same class are then listed, and
under any blue sky or other securities laws applicable to such
shares. The Committee may also require the Participant to
represent and warrant at the time of issuance or transfer that
the shares of Common Stock are being acquired only for
investment purposes and without any current intention to sell or
distribute such shares.
14.8 Non-United
States Participants and
Jurisdictions. Notwithstanding any provision in
the Plan to the contrary, in order to foster and promote
achievement of the purposes of the Plan or to comply with
provisions of laws in other countries in which the Company
operates or has employees, the Committee, in its discretion,
shall have the power and authority, to the extent not
inconsistent with the intent of the Plan, to (i) determine
which Eligible Persons who are foreign nationals or who are
employed outside of the United States are eligible to
participate in the Plan, (ii) modify the terms and
conditions of any Awards made to such Eligible Persons and
(iii) establish subplans and modify exercise and payment
procedures and other Award terms and procedures to the extent
such actions may be necessary or advisable to comply with any
tax, securities, regulatory or other laws of other jurisdictions
with respect to Awards that may be subject to such laws.
Moreover, the Committee may approve such supplements to or
amendments, restatements or alternative versions of the Plan,
not inconsistent with the intent of the Plan, as it may consider
necessary or appropriate for such purposes, without thereby
affecting the terms of the Plan as in effect for any other
purpose.
14.9 Substitute Awards in Corporate
Transactions. Nothing contained in the Plan shall
be construed to limit the right of the Committee to grant Awards
under the Plan in connection with the acquisition, whether by
purchase, merger, consolidation or other corporate transaction,
of the business or assets of any corporation or other entity.
Without limiting the foregoing, the Committee may grant Awards
under the Plan to an employee or director of another corporation
who becomes an Eligible Person by reason of any such corporate
transaction in substitution for awards previously granted by
such corporation or entity to such person. The terms and
conditions of the substitute Awards may vary from the terms and
conditions that would otherwise be required by the Plan solely
to the extent the Committee deems necessary for such purpose.
14.10 Tax Withholding. The
Participant shall be responsible for payment of any taxes or
similar charges required by law to be paid or withheld from an
Award or an amount paid in satisfaction of an Award. Any
required withholdings shall be paid by the Participant on or
prior to the payment or other event that results in taxable
income in respect of an Award. The Award Agreement may specify
the manner in which the withholding obligation shall be
satisfied with respect to the particular type of Award.
48
14.11 Unfunded Plan. The adoption
of the Plan and any reservation of shares of Stock or cash
amounts by the Company to discharge its obligations hereunder
shall not be deemed to create a trust or other funded
arrangement. Except upon the issuance of Common Stock pursuant
to an Award, any rights of a Participant under the Plan shall be
those of a general unsecured creditor of the Company, and
neither a Participant nor the Participants permitted
transferees or estate shall have any other interest in any
assets of the Company by virtue of the Plan. Notwithstanding the
foregoing, the Company shall have the right to implement or set
aside funds in a grantor trust, subject to the claims of the
Companys creditors or otherwise, to discharge its
obligations under the Plan.
14.12 Other Compensation and Benefit
Plans. The adoption of the Plan shall not affect
any other share incentive or other compensation plans in effect
for the Company or any Subsidiary, nor shall the Plan preclude
the Company from establishing any other forms of share incentive
or other compensation or benefit program for employees of the
Company or any Subsidiary. The amount of any compensation deemed
to be received by a Participant pursuant to an Award shall not
constitute includable compensation for purposes of determining
the amount of benefits to which a Participant is entitled under
any other compensation or benefit plan or program of the Company
or a Subsidiary, including, without limitation, under any
pension or severance benefits plan, except to the extent
specifically provided by the terms of any such plan.
14.13 Plan Binding on
Transferees. The Plan shall be binding upon the
Company, its transferees and assigns, and the Participant, the
Participants executor, administrator and permitted
transferees and beneficiaries.
14.14 Severability. If any
provision of the Plan or any Award Agreement shall be determined
to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall
be severable and enforceable in accordance with their terms, and
all provisions shall remain enforceable in any other
jurisdiction.
14.15 Governing Law. The Plan and
all rights hereunder shall be subject to and interpreted in
accordance with the laws of the State of Delaware, without
reference to the principles of conflicts of laws, and to
applicable Federal securities laws.
15. Term; Amendment and Termination;
Shareholder Approval.
15.1 Term. The Plan shall become
effective immediately following the approval of the
Companys shareholders following its adoption by the Board.
The term of the Plan will be ten (10) years from the date
of adoption by the Board, subject to Section 15.2 hereof.
15.2 Amendment and Termination. The
Board may from time to time and in any respect, amend, modify,
suspend or terminate the Plan. Notwithstanding the foregoing, no
amendment, modification, suspension or termination of the Plan
shall adversely affect any Award theretofore granted without the
consent of the Participant or the permitted transferee of the
Award.
15.3 Shareholder Approval. The
Plan, as adopted by the Board shall be subject to the approval
of the Companys shareholders. The Board may seek the
approval of any amendment, modification, suspension or
termination by the Companys shareholders to the extent it
deems necessary or advisable in its discretion for purposes of
compliance with Section 162(m) or Section 422 of the
Code, the listing requirements of the New York Stock Exchange or
other exchange or securities market or for any other purpose. At
the discretion of the Board, for purposes of compliance with
Section 162(m) of the Code, the Performance Goals (or other
designated performance goals) shall again be subject to approval
by the Companys shareholders no later than the first
shareholder meeting that occurs in the year following the fifth
(5th) anniversary of the date on which the Plan first becomes
effective.
49
CAMBREX CORPORATION
Solicited by Board of Directors for 2009 Annual Meeting of Stockholders
The undersigned stockholder of Cambrex Corporation, (the Company) hereby appoints S.M. Klosk G.P.
Sargen and F. M. Zachara, 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 2009 Annual Meeting of Stockholders of the Company to be held on April 23,
2009 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 23, 2009.
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE 6 NOMINEES FOR DIRECTOR LISTED IN THE PROXY STATEMENT
ACCOMPANYING THE NOTICE OF SAID MEETING (PROPOSAL NO. 1), FOR THE LONG TERM INCENTIVE PLAN (PROPOSAL NO. 2)
and FOR RATIFICATION OF THE SELECTION OF ACCOUNTANTS (PROPOSAL NO. 3)
(Continued and to be signed on the reverse side) |
ANNUAL MEETING OF STOCKHOLDERS OF CAMBREX CORPORATION April 23, 2009 NOTICE OF
INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and
proxy card are available at http://ir.cambrex.com/phoenix.zhtml?c=80683&p=irol-proxy
Please sign, date and mail your proxy card in the envelope provided as soon as possible.
Please detach along perforated line and mail in the envelope provided. 20633000000000000000 3
042309 THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS, FOR PROPOSALS 2
AND 3. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE
OR BLACK INK AS SHOWN HERE x FOR AGAINST ABSTAIN 1. Election of Directors: 2. Approval of the Long Term
Incentive Plan NOMINEES: FOR ALL NOMINEES O David R. Bethune 3. Ratification of the appointment of BDO
Seidman, LLP as O Kathryn Rudie Harrigan independent registered public accountants for 2009 WITHHOLD AUTHORITY
O Steven M. Klosk FOR ALL NOMINEES O William B. Korb O John R. Miller FOR ALL EXCEPT O Peter G. Tombros
(See instructions below) INSTRUCTIONS: 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: 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.
Signature of Stockholder Date: Signature of Stockholder Date: Note: 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. |