UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 6, 2012
AMAG PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
001-10865 |
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04-2742593 |
(Commission File Number) |
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(IRS Employer Identification No.) |
100 Hayden Avenue |
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Lexington, Massachusetts |
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02421 |
(Address of principal executive offices) |
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(Zip Code) |
(617) 498-3300
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
Amendment to Rights Agreement
On May 10, 2012, AMAG Pharmaceuticals, Inc., or the Company, entered into an amendment, or the Rights Agreement Amendment, to that certain Rights Agreement dated as of September 4, 2009, as amended, or the Rights Agreement, by and among the Company and American Stock Transfer & Trust Company, LLC, or the Rights Agent.
The purpose of the Rights Agreement Amendment is to amend the definition of Acquiring Person in Section 1(a) of the Rights Agreement to provide that Adage Capital Management, L.P., or Adage, will not be deemed an Acquiring Person unless Adage, together with its affiliates and associates, have acquired beneficial ownership of 25% or more of the Companys outstanding common stock (other than solely from repurchases of stock by the Company which increases Adages percentage ownership above 25%). This provision will terminate and Adage will return being subject to the 20% limit applied to the Companys other stockholders upon the earlier of (a) the termination of the Stockholder Agreement, dated May 9, 2012, by and among Adage and the Company, or the Adage Stockholder Agreement, and (b) Adage reducing its beneficial ownership of the Companys common stock below 20% after it first increases its beneficial ownership above 20%.
A copy of the Rights Agreement Amendment is filed herewith as Exhibit 4.1 and is incorporated herein by reference.
Stockholder Agreement with Adage
On May 10, 2012, the Company and Adage entered into the Adage Stockholder Agreement. Under this agreement, in connection with the Rights Agreement Amendment described above, Adage agreed to vote any shares of the Companys common stock it owns in excess of 20% of the Companys outstanding stock (the Excess Shares) in the manner in which the Companys Board of Directors has recommended to the stockholders generally in any proxy or consent solicitation to the stockholders of the Company. Adage also agreed to certain customary standstill provisions. Additionally, Adage agreed that it would give the Company advance notice of any attempt to sell the Excess Shares and such sale would be subject to the Companys consent. The advance notice and consent will not apply to any sale of Excess Shares by Adage effected through a broker-dealer where Adage does not know the purchaser of the shares or has not negotiated with the purchaser or any representative of the purchaser. The Adage Stockholder Agreement will terminate on the earlier of (a) Adage reducing its beneficial ownership of the Companys common stock below 20% after it first increases its beneficial ownership above 20% or (b) if Adage never beneficially owned at least 20% of the Companys outstanding stock during the period between the date of the Adage Stockholder Agreement and 120 days after the date of the Adage Stockholder Agreement, then such 120 th day.
A copy of the Adage Stockholder Agreement is filed herewith as Exhibit 10.5 and is incorporated herein by reference.
Item 3.03. Material Modifications to Rights of Security Holders.
The disclosure in Item 1.01 under the heading Amendment to Rights Agreement is hereby incorporated by reference in this Item 3.03.
Item 5.02 Departures of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of President and Chief Executive Officer and Appointment to Board of Directors
On May 9, 2012, the Company, announced that William K. Heiden, age 52, will join the Company as its President and Chief Executive Officer effective as of May 14, 2012. In connection with his appointment as the Companys President and Chief Executive Officer, the Companys Board of Directors, or the Board, pursuant to the Companys amended and restated certificate of incorporation and bylaws, increased the size of the Board from seven to eight directors and elected Mr. Heiden to fill the vacancy created by this increase, effective as of May 14, 2012. Mr. Heiden will serve as a director until the Companys annual meeting to be held on May 23, 2012, or his earlier death, resignation or removal. Mr. Heiden will be nominated for election as a director at such annual meeting. Mr. Heiden is not expected to join any committee of the Board in connection with his appointment.
Prior to joining the Company, Mr. Heiden was the President and Chief Executive Officer of GTC Biotherapeutics, Inc., a pharmaceutical company, from June 2010 until May 2012. Mr. Heiden has served and will continue to serve as Chairman of GTC Biotherapeutics following commencement of his employment with the Company. Prior to joining GTC Biotherapeutics, Mr. Heiden was the President and Chief Executive Officer and a member of the Board of Directors of Elixir Pharmaceuticals, Inc., a pharmaceutical company, from September 2004 until December 2008. Prior to joining Elixir Pharmaceuticals, Mr. Heiden served as President and Chief Operating Officer of Praecis Pharmaceuticals Incorporated (which was acquired by GlaxoSmithKline plc), from 2002 to 2004. From 1987 to 2002, Mr. Heiden progressed through various positions of increasing responsibility at Schering-Plough Corporation (now Merck & Co.), including managing a number of businesses in the United States, Europe and Canada. Mr. Heiden serves on the Board of Directors of LFB Biotechnologies S.A.S., a private French biotechnology company. Mr. Heiden holds an M.B.A from Cornell Universitys Johnson Graduate School of Management, a M.I.M. degree from the University of Louvain and a B.A. degree from the University of Florida.
Employment Agreement with Mr. Heiden
On May 6, 2012, the Company entered into an employment agreement with Mr. Heiden in connection with his joining the Company as President and Chief Executive Officer. The term of the employment agreement is for three years and will automatically renew for additional three year terms following the initial term and any renewal term thereafter, unless either party provides at least sixty days prior written notice of its desire not to renew the agreement.
A copy of the employment agreement is filed herewith as Exhibit 10.1 and is incorporated by reference herein.
Annual Base Salary and Bonus Opportunity
The annual base salary for Mr. Heiden is $500,000, subject to annual increases at the discretion of the Board or the Compensation Committee. Mr. Heiden is eligible to receive an annual performance bonus of up to 75% of Mr. Heidens base salary for each fiscal year during the term of his agreement. Mr. Heidens annual performance bonus is based on the extent to which, in the discretion of the Board in consultation with Mr. Heiden, Mr. Heiden achieves or exceeds certain performance objectives. For the fiscal year ended December 31, 2012, Mr. Heidens bonus opportunity will be pro rated for the length of Mr. Heidens employment for such year.
Additionally, Mr. Heiden will receive a signing bonus of $75,000 payable on the first payroll date after his joining the Company.
Severance Due After Termination of Employment
The employment agreement with Mr. Heiden provides that in the event that the Company terminates Mr. Heidens employment, other than for death, disability or cause, or he resigns for good reason, each as defined in his employment agreement, and he has complied with all his obligations under all agreements with the Company and signs a general release of claims in a form acceptable to the Company, then the Company is obligated to pay severance to Mr. Heiden in an amount equal to 24 months of his then-current base salary, paid in equal installments over the severance period in accordance with its usual payroll schedule. This provision does not apply during the one-year period following a change of control.
Payments and Benefits Due Upon a Change of Control
In the event that within one year from the date a change of control of the Company occurs, the Company or its successor terminates Mr. Heidens employment other than for death, disability or cause, or he resigns for good reason, each as defined in his employment agreement, and he has complied with all his obligations under all agreements with the Company and signs a general release of claims in a form acceptable to the Company or its successor, then the Company or its successor, is obligated to provide him with the following benefits post-termination:
· severance pay equal to (i) 12 months of his then-current base salary if the change of control occurs prior to the six month anniversary of his first day of employment, (ii) 18 months of his then-current base salary if the change of control occurs after the six month anniversary but prior to the 12 month anniversary of his first day of employment, or (iii) 24 months of his then-current base salary if the change of control occurs after the 12 month anniversary of his first day of employment, in each case paid in equal installments over the severance period in accordance with our usual payroll schedule;
· a lump sum equal to (i) one times his target annual bonus amount for the year in which the change of control occurs if the change of control occurs prior to the six month anniversary of his first day of employment, (ii) 1.5 times his target annual bonus amount for the year in which the change of control occurs if the change of control occurs after the six month anniversary but prior to the 12 month anniversary of his first day of employment or (iii) two times his target annual bonus amount for the year in which the change of control occurs if the change of control occurs after the 12 month anniversary of his first day of employment;
· payment or reimbursement of the premiums for continued health and dental benefits until the earlier of (i) 12 months post termination and (ii) health and dental coverage being provided to him under another employers health and dental plan; and
· the full acceleration of vesting of any then unvested outstanding stock options, restricted stock units and other equity incentives that were granted before such change of control.
280G Matters
In addition, the employment agreement with Mr. Heiden contains a provision which allows any payments otherwise due to him in connection with a change of control to be reduced to the extent necessary so that no excise taxes would be due on any such payments.
Death or Disability
The employment agreement with Mr. Heiden also provides that, in the event of his death or permanent disability, all unvested equity awards then held by him shall become immediately vested in full.
Legal Expenses
The Company also agreed in the employment agreement with Mr. Holden to reimburse him for up to $10,000 in legal expenses incurred in connection with the negotiation and execution of his employment agreement.
Equity Grant
In connection with his entry into the employment agreement, effective on the first day of Mr. Heidens employment with the Company, Mr. Heiden will be granted an option to purchase 300,000 shares of common stock at an exercise price equal to the then fair market value of a share of the Companys common stock. The option will be exercisable in four equal annual installments beginning on the first anniversary of the grant date. Also effective on the first day of Mr. Heidens employment with the Company, Mr. Heiden will be granted 100,000 restricted stock units, which will vest in four equal annual installments beginning on the first anniversary of the grant date. The foregoing grants will be made pursuant to the inducement grant exception set forth in NASDAQ Listing Rule 5635(c)(4). Such grants will not be issued under the
Companys existing equity incentive plans, therefore the stock option granted to Mr. Heiden will not qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended. Mr. Heiden will be eligible to receive additional stock options or other equity compensation in the future under the Companys equity incentive plans as determined by the Board or the Compensation Committee from time to time.
Copies of the form of Non-Plan Restricted Stock Unit Agreement and form of Non-Plan Stock Option Agreement expected to be entered into between the Company and Mr. Heiden with respect to such grants are filed herewith at Exhibits 10.2 and 10.3, respectively, and are incorporated herein by reference.
The Company has also entered into an indemnification agreement with Mr. Heiden, in substantially the same form entered into with the Companys other executive officers which was previously filed with the Securities and Exchange Commission.
Retention Bonus for Chief Operating Officer
On May 9, 2012, the Company agreed with its Chief Operating Officer, Frank Thomas, to provide Mr. Thomas a retention bonus equal to $150,000 if he remains employed with the Company on September 15, 2012.
If prior to September 15, 2012 Mr. Thomass employment is terminated by the Company without cause, as defined in his existing employment agreement, or he terminates his employment for good reason, as defined in the existing employment agreement, and complies with certain requirements including delivery of the general release, the Company will pay Mr. Thomas a prorated portion of the retention bonus based on the number of days elapsed between May 9, 2012 and September 15, 2012. This is in addition to Mr. Thomass existing potential severance arrangements under his employment agreement with the Company.
A copy of the letter agreement between the Company and Mr. Thomas is filed herewith as Exhibit 10.4 and is incorporated herein by reference.
Departure of Chief Administrative Officer and General Counsel
On May 9, the Companys Chief Administrative Officer and General Counsel, Joseph Farmer, informed the Company that he intends to resign from the Company effective as of early June.
The Company hereby files the following exhibits:
4.1 |
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Amendment to Rights Agreement, dated May 10, 2012, by and between the Company and American Stock Transfer & Trust Company, LLC. |
10.1 |
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Employment Agreement, dated May 6, 2012, by and between the Company and William K. Heiden. |
10.2 |
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Form of Non-Plan Restricted Stock Unit Agreement, by and between the Company and William K. Heiden. |
10.3 |
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Form of Non-Plan Stock Option Agreement, by and between the Company and William K. Heiden. |
10.4 |
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Letter Agreement, dated May 9, 2012 by and between the Company and Frank Thomas. |
10.5 |
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Stockholder Agreement, dated May 9, 2012, by and between the Company and Adage Capital Management, L.P. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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AMAG PHARMACEUTICALS, INC. |
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By: |
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/s/ Joseph L. Farmer |
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Joseph L. Farmer |
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Chief Administrative Officer and
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Date: May 10, 2012 |
Exhibit Index
4.1 |
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Amendment to Rights Agreement, dated May 10, 2012, by and between the Company and American Stock Transfer & Trust Company, LLC. |
10.1 |
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Employment Agreement, dated May 6, 2012, by and between the Company and William K. Heiden. |
10.2 |
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Form of Non-Plan Restricted Stock Unit Agreement, by and between the Company and William K. Heiden. |
10.3 |
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Form of Non-Plan Stock Option Agreement, by and between the Company and William K. Heiden. |
10.4 |
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Letter Agreement, dated May 9, 2012 by and between the Company and Frank Thomas. |
10.5 |
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Stockholder Agreement, dated May 9, 2012, by and between the Company and Adage Capital Management, L.P. |
Exhibit 4.1
AMENDMENT TO RIGHTS AGREEMENT
This Amendment dated as of May 10, 2012 (this Amendment ) to the Rights Agreement, dated as of September 4, 2009 (the Rights Agreement ), is entered into between AMAG PHARMACEUTICALS, INC. , a Delaware corporation (the Company ), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC , as Rights Agent (the Rights Agent ). Capitalized terms used herein and not defined shall have the meanings specified in the Rights Agreement.
WHEREAS , the Company and the Rights Agent are parties to the Rights Agreement;
WHEREAS , the Company is entering into a Stockholder Agreement, dated as of May 9, 2012, with Adage Capital Management, L.P. ( Adage ), pursuant to which, among other things, the shares of the Companys Common Stock, $0.01 par value per share (the Common Stock ) held by Adage shall be subject to certain restrictions;
WHEREAS , Adage has indicated to the Company that it desires to purchase additional shares of Common Stock on behalf of its clients and itself that would cause Adages Beneficial Ownership to exceed 20% of the issued and outstanding shares of the Common Stock;
WHEREAS , Section 27 of the Rights Agreement permits the Company to amend the Rights Agreement on the terms set forth in this Amendment;
WHEREAS , the Board of Directors of the Company (the Board ) has determined that one or more purchases of additional shares of Common Stock by Adage as provided herein would not be inconsistent with the purpose and intent of the Board in adopting the Rights Agreement;
WHEREAS , the Board has determined that it is in the best interests of the Company and its stockholders to modify the terms of the Rights Agreement as set forth herein, and in connection therewith the Company is entering into this Amendment and directing the Rights Agent to enter into this Amendment.
NOW, THEREFORE , in consideration of the promises and mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Company and the Rights Agent hereby agree as follows:
1. Amendment to the Rights Agreement .
(a) Section 1(a) of the Rights Agreement is hereby amended by inserting the following new paragraph immediately after the existing paragraph in such Section 1(a):
Notwithstanding the foregoing, Adage Capital Management, L.P. ( Adage ), shall not be deemed to be an Acquiring Person for purposes of this Agreement unless and until Adage, together with all Affiliates and Associates thereof, is the Beneficial Owner of
25% or more of the Common Shares then outstanding; provided, however , that Adage shall also not become an Acquiring Person as the result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by Adage to 25% or more of the Common Shares then outstanding; and provided further, that if Adage shall become the Beneficial Owner of 25% or more of the Common Shares then outstanding by reason of share purchases by the Company and shall, following written notice from, or public disclosure by the Company of such share purchases by the Company, become the Beneficial Owner of any additional Common Shares without the prior consent of the Company and shall then beneficially own more than 25% of the Common Shares then outstanding, then Adage shall be deemed to be an Acquiring Person. The provisions of this paragraph shall terminate and be of no further force and effect upon the earlier of (a) the termination of the Stockholder Agreement dated May 9, 2012 by and among Adage and the Company and (b) Adage reducing its Beneficial Ownership below 20% of the Common Shares then outstanding after it increases its Beneficial Ownership to 20% or more of the Common Shares then outstanding.
2. Miscellaneous .
(a) Except as expressly set forth herein, the Rights Agreement shall not by implication or otherwise be supplemented or amended by virtue of this Amendment, but shall remain in full force and effect, as amended hereby. This Amendment shall be construed in accordance with and as a part of the Rights Agreement, and all terms, conditions, representations, warranties, covenants and agreements set forth in the Rights Agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed. To the extent that there is a conflict between the terms and provisions of the Rights Agreement and this Amendment, the terms and provisions of this Amendment shall govern for purposes of the subject matter of this Amendment only.
(b) If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
(c) This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.
(d) This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
(e) This Amendment shall be deemed effective as of the date first written above, as if executed on such date.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.
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AMAG PHARMACEUTICALS, INC. |
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By: |
/s/ Joseph L. Farmer |
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Name: |
Joseph L. Farmer |
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Title: |
Chief Administrative Officer & General Counsel |
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AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AS RIGHTS AGENT |
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By: |
/s/ Carlos Pinto |
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Name: |
Carlos Pinto |
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Title: |
Senior Vice President |
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Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement) is entered into as of May 6, 2012 by and between AMAG Pharmaceuticals, Inc., a Delaware corporation with offices at 100 Hayden Avenue, Lexington, MA 02421 (the Company), and William K. Heiden of [Address] (you).
Now therefore, in consideration of the premises and mutual agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Position; Duties .
a) Position . You shall serve as President and Chief Executive Officer of the Company.
b) Duties . You shall perform for the Company the duties customarily associated with the office of President and Chief Executive Officer and such other duties as may be assigned to you from time to time by the Companys Board of Directors (the Board) that are consistent with the duties normally performed by those performing the role of the most senior executives of similar entities. You shall devote substantially your full business time and best efforts to the performance of your duties hereunder and the business and affairs of the Company and will not undertake or engage in any other employment, occupation or business enterprise; provided, however, that you may participate as a member of the board of directors or advisory board of other entities and in professional organizations and civic and charitable organizations; provided further, that any such positions are disclosed to the Board or the Audit Committee thereof and do not materially interfere with your duties and responsibilities as President and Chief Executive Officer. You shall be based in the Companys principal offices, which currently are in Lexington, Massachusetts
2. Term . The term of this Agreement shall be for a three (3) year period commencing on the Effective Date unless terminated earlier pursuant to Section 4 below (the Initial Term). The term of this Agreement shall automatically renew for additional three-year terms (each, a Renewal Term) following the Initial Term and any Renewal Term unless either party provides written notice to the other party at least sixty (60) days before the end of the Initial Term or any Renewal Term, as applicable, that it does not desire to renew this Agreement, in which case this Agreement shall expire at the end of the Initial Term or any Renewal Term, as applicable. The Initial Term and any Renewal Term are referred to herein collectively as the Term. The Effective Date of this Agreement shall be the first day of your employment with the Company, provided that such first day of employment occurs prior to May 31, 2012. For avoidance of doubt, if your first day of employment does not occur by such date, then this Agreement shall terminate and be of no further force or effect.
3. Compensation and Benefits . The Company shall pay you the following compensation and benefits for all services rendered by you under this Agreement:
a) Base Salary . The Company will pay you a base salary at the annualized rate of at least $500,000 (Base Salary), minus withholdings as required by law and other deductions authorized by you, which amount shall be paid in equal installments at the Companys regular payroll intervals, but not less often than monthly. Your base salary may be increased annually by the Board or the Compensation Committee in their sole discretion.
b) Bonus . You will be eligible to receive an annual performance bonus (the Annual Bonus) of up to 75% of Base Salary for each fiscal year during the Term of this Agreement beginning with the fiscal year ending December 31, 2012 based on the extent to which, in the discretion of the Board in consultation with you, you achieve or exceed specific and measurable individual and Company performance objectives established by the Board in consultation with you and communicated to you in advance. Notwithstanding the foregoing, your bonus opportunity with respect to the 2012 fiscal year shall be pro rated based on the length of your employment during such fiscal year. The exact amount of the bonus for any year during the Term shall be determined by the Board in its sole discretion and may be more than the target bonus in the event you achieve all of your personal and Company performance objectives or less than the target bonus if you do not achieve all of your personal and Company performance objectives. The Company shall pay the Annual Bonus no later than two and a half months after the end of the fiscal year to which the applicable bonus relates. Unless otherwise provided herein, no bonus shall be deemed to have been earned by you for any year in which you are not actively employed by the Company on the last day of the fiscal year to which the bonus relates. In addition to the foregoing, effective on the first payroll date after the Effective Date, the Company shall pay you a signing bonus of $75,000, minus withholdings as required by law.
c) Equity Compensation . As a material inducement to you accepting employment with the Company, effective on the first day of your employment with the Company, you shall be granted an option with respect to 300,000 shares of Common Stock of the Company with an exercise price equal to the then fair market value of the Common Stock, and you shall be granted restricted stock units with respect to 100,000 shares of Common Stock. The foregoing equity incentive awards shall be granted pursuant to the inducement grant exception set forth in NASDAQ Listing Rule 5635(c)(4). Such equity incentive awards will not be issued under the Companys existing equity incentive plans and therefore, the stock option granted will not qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the Code). These equity incentive grants shall vest in equal annual installments over a four year period commencing on the Effective Date. You shall be eligible to receive additional stock options or other equity compensation in the future under the Companys equity incentive plans as determined by the Board or the Compensation Committee from time to time.
d) Vacation . You will receive four (4) weeks of paid vacation per calendar year which shall accrue ratably on a monthly basis.
e) Benefits . You will be eligible to participate in all group health, dental, 401(k), and other insurance and/or benefit plans that the Company may offer to similarly situated executives of the Company from time to time on the same terms as offered to such other executives.
f) Business Expenses . The Company will reimburse you for all reasonable and usual business expenses incurred by you in the performance of your duties hereunder in accordance with the Companys expense reimbursement policy.
4. Termination . Your employment with the Company may be terminated prior to the expiration of the Term as follows:
a) Death . This Agreement shall terminate automatically upon your death.
b) Disability . The Company may terminate your employment in accordance with applicable laws in the event that you shall be prevented, by illness, accident, disability or any other physical or mental condition (to be determined by means of a written opinion of a competent medical doctor chosen by mutual agreement of the Company and you or your personal representative(s)) from substantially performing your duties and responsibilities hereunder for one or more periods totaling one hundred and twenty (120) days in any twelve (12) month period.
c) By the Company for Cause . The Company may terminate your employment for Cause upon written notice to you. For purposes of this Agreement, Cause shall mean any of: (i) fraud, embezzlement or theft against the Company or any of its affiliates; (ii) you are convicted of, or plead guilty or no contest to, a felony; (iii) willful nonperformance by you (other than by reason of illness) of your material duties hereunder and failure to remedy such nonperformance within thirty (30) business days following written notice from the Board identifying the nonperformance and the actions required to cure it; or (iv) you commit an act of gross negligence, engage in willful misconduct or otherwise act with willful disregard for the Companys best interests, and you fail to remedy such conduct within thirty (30) business days following written notice from the Board identifying the gross negligence, willful misconduct or willful disregard and the actions required to cure it (if such conduct can be cured).
d) By the Company Other Than For Death, Disability or Cause . The Company may terminate your employment other than for Cause, disability or death upon thirty (30) days prior written notice to you.
e) By You For Good Reason or Any Reason . You may terminate your employment at any time without Good Reason upon thirty (30) days prior written notice to the Company and with Good Reason as described in this Section 4(e). For purposes of this Agreement, Good Reason shall mean that any of the following occurs without your prior written consent: (i) a material adverse change in your title, position, duties or responsibilities; (ii)
a material reduction by the Company in your Base Salary or your target Annual Bonus opportunity in the total annual amount that you are then eligible to receive, unless such reduction is in connection with a proportionate reduction of compensation applicable to all other executive officers; (iii) any relocation of your principal place of business to a location more than 50 miles from the Companys current executive offices in Lexington, MA; provided, however , that this clause (iii) will not apply to the extent that any new office location is less than 50 miles from your residence; or (iv) a material breach by the Company of any of the terms or provisions of this Agreement. Before you may resign for Good Reason, (i) you must provide written notice to the Company describing the event, condition or conduct giving rise to Good Reason within 30 days of the initial occurrence of the event, condition or conduct; (ii) the Company must fail to remedy or cure the alleged Good Reason within the 30 day period after receipt of such notice; and (iii) you must resign effective not later than 30 days after the end of the cure period.
5. Payment Upon Termination . In the event that your employment with the Company terminates, you will be paid the following:
a) Termination for Any Reason. In the event that your employment terminates for any reason, the Company shall pay you for the following items that were earned and accrued but unpaid as of the date of your termination: (i) your Base Salary; (ii) a cash payment for all accrued, unused vacation calculated at your then Base Salary rate; (iii) reimbursement for any unpaid business expenses; and (iv) such other benefits and payments to which you may be entitled by law or pursuant to the benefit plans of the Company then in effect. In addition, if your employment terminates due to your death, the Board shall determine the extent to which any of the individual performance objectives established by the Board pursuant to Section 3(b) above were met as of the time of your death. If, based on that determination, the Board determines that a bonus is due, the Company shall pay your estate an amount equal to such bonus, pro-rated for the portion of the fiscal year elapsed as of the time of your death.
b) Termination Without Cause or for Good Reason . In addition to the payments provided for in Section 5(a), in the event that (i) the Company terminates your employment other than for death, disability or Cause pursuant to Section 4(d) or you terminate your employment for Good Reason pursuant to Section 4(e); (ii) you comply fully with all of your obligations under all agreements between the Company and you; and (iii) you execute, deliver to the Company, within 60 days of the termination of your employment, and do not revoke a general release (in a form acceptable to the Company) releasing and waiving any and all claims that you have or may have against the Company, its directors, officers, employees, agents, successors and assigns with respect to your employment (other than any obligation of the Company set forth herein which specifically survives the termination of your employment), then the Company will provide you with twenty-four (24) months of severance pay based on your then current Base Salary minus withholdings as required by law. The foregoing severance shall be paid in equal installments over the severance period in accordance with the Companys usual payroll schedule, commencing on the date that the release referred to above may no longer be revoked. This Section 5(b) shall not apply during the one year period following a Change of
Control (as defined below), in which case Section 5(c) shall apply. Notwithstanding anything to the contrary herein, if any of the payments and benefits provided for in this Section 5(b) constitute non-qualified deferred compensation subject to Section 409A of the Code and the sixty (60) day period in which you must execute the release begins in one calendar year and ends in another, the payments and benefits provided for in this Section 5(b) shall commence, be made or become effective in the later calendar year.
c) Change of Control . In the event that (i) within one year from the date a Change of Control (as defined below) of the Company occurs, the Company (for purposes of this section, such term to include its successor) terminates your employment other than for Cause pursuant to Section 4(c), death or disability or you terminate your employment with Good Reason; (ii) you comply fully with all of your obligations under all agreements between the Company and you; and (iii) within 60 days of termination of your employment you execute and deliver to the Company and do not revoke a general release (in a form acceptable to the Company) releasing and waiving any and all claims that you have or may have against the Company and its directors, officers, employees, agents, successors and assigns with respect to your employment (other than any obligation of the Company set forth herein which specifically survives the termination of your employment), then:
· the Company will pay you severance pay equal to the Applicable Number of Months based on your then current Base Salary (minus withholdings as required by law), with such severance to be paid in equal installments over the severance period in accordance with the Companys usual payroll schedule, commencing on the date that the release referred to above may no longer be revoked. The term Applicable Number of Months shall mean 12 months, if the Change of Control occurs prior to the six month anniversary of the Effective Date; 18 months, if the Change of Control occurs after the six month anniversary but prior to the twelve month anniversary of the Effective Date; and 24 months, if the Change of Control occurs after the 12 month anniversary of the Effective Date;
· the Company will pay you, on the first payroll date after the revocation period of the release set forth above expires, in a lump sum, the Applicable Multiple of your target annual bonus amount (minus withholdings as required by law)for the year in which the Change of Control occurs. The term Applicable Multiple shall mean one times (1X), if the Change of Control occurs prior to the six month anniversary of the Effective Date; one and one-half times (1.5X), if the Change of Control occurs after the six month anniversary but prior to the twelve month anniversary of the Effective Date; and two times (2X), if the Change of Control occurs after the 12 month anniversary of the Effective Date;
· the Company will pay or reimburse you for the premiums for continued coverage for you and your eligible dependents in the same amounts and for the same coverage in effect immediately prior to your termination from employment, under the Companys group health and dental plans until the earlier of: (i) twelve (12) months from the date of
termination of your employment; or (ii) the date you are provided with health and dental coverage by another employers health and dental plan (and, for purposes of clarity, if the Company is unable to extend coverage to you under its group health and dental plans due to your termination from active employment status, then, to receive this benefit, you must elect continuation coverage under COBRA and/or purchase an individual insurance policy, and the Company shall have no obligation to pay or reimburse insurance premiums or otherwise provide coverage if you fail to elect COBRA or obtain an individual policy); and
· all unvested outstanding stock options, restricted stock units and other equity incentives that were granted to you before the Change of Control occurred shall, without further action, become vested in full on the date that the release referred to above may no longer be revoked.
For purposes of this Agreement, Change of Control shall mean the first to occur of any of the following: (a) any person or group (as defined in the Securities Exchange Act of 1934, as amended) becomes the beneficial owner of a majority of the combined voting power of the then outstanding voting securities with respect to the election of the Board of Directors of the Company; (b) any merger, consolidation or similar transaction involving the Company; other than a transaction in which the stockholders of the Company immediately prior to the transaction hold immediately thereafter in the same proportion as immediately prior to the transaction not less than 50% of the combined voting power of the then voting securities with respect to the election of the Board of Directors of the resulting entity; (c) any sale of all or substantially all of the assets of the Company; or (d) any other acquisition by a third party of all or substantially all of the business or assets of the Company, as determined by the Board of Directors, in its sole discretion. The payments, benefits and acceleration of vesting of stock options, restricted stock units and other equity incentives provided in this Section 5(c) shall override and replace with respect to you any Company wide policy with respect to payments, benefits and/or acceleration of vesting upon a Change of Control. After the one year period following a Change of Control, this Section 5(c) shall no longer apply, and Section 5(b) shall continue to apply. In the event that upon a Change of Control, the Company or the successor to or acquiror of the Companys business (whether by sale of outstanding stock, merger, sale of substantially all the assets or otherwise) elects not to assume all the then unvested outstanding stock options, restricted stock units and other equity incentives that were granted to you before the Change of Control occurred, such securities shall immediately without further action become vested in full effective no later than the effective date of the Change of Control and you shall receive the value of such stock options, restricted stock units and other equity incentives as provided in the applicable acquisition agreement (or if no such provision is made, in the applicable equity incentive plan).
Notwithstanding anything to the contrary herein, if any of the payments and benefits provided for in this Section 5(c) constitute non-qualified deferred compensation subject to Section 409A and the sixty (60) day period in which you must execute the release begins in one calendar year
and ends in another, the payments and benefits provided for in this Section 5(b) shall commence, be made or become effective in the later calendar year.
d) Death/Disability . In addition to the payments provided for in Section 5(a), in the event of your death or the termination of your employment due to your disability in accordance with Section 4(b) above, all unvested outstanding stock options, restricted stock units and other equity incentives that were held by you at the time of your death or termination of employment due to disability shall immediately become fully vested and, with respect to stock options, exercisable by you or your personal representatives, heirs or legatees, as the case may be, at any time prior to the expiration of one (1) year from the date of your death or disability, but in no event after the expiration of the term of the applicable equity award agreement.
6. Nonsolicitation Covenant . In exchange for the consideration provided by this Agreement, you shall not, for a period of one year following the termination of your employment with the Company for any reason, directly or indirectly, whether through your own efforts, or in any way assisting or employing the assistance of any other person or entity (including, without limitation, any consultant or any person employed by or associated with any entity with which you are employed or associated), recruit, solicit or induce (or in any way assist another in recruiting, soliciting or inducing) any employee or consultant of the Company to terminate his or her employment or other relationship with the Company.
7. Assignment . This Agreement and the rights and obligations of the parties hereto shall bind and inure to the benefit of any successor of the Company by reorganization, merger or consolidation and any assignee of all or substantially all of its business and properties. Neither this Agreement nor any rights or benefits hereunder may be assigned by you, except that, upon your death, your earned and unpaid economic benefits will be paid to your heirs or beneficiaries.
8. Interpretation and Severability . It is the express intent of the parties that (a) in case any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, such provision shall be construed by limiting and reducing it as determined by a court of competent jurisdiction, so as to be enforceable to the fullest extent compatible with applicable law; and (b) in case any one or more of the provisions contained in this Agreement cannot be so limited and reduced and for any reason is held to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein .
9. Notices . Any notice that you or the Company are required to give the other under this Agreement shall be given by personal delivery, recognized overnight courier service, or registered or certified mail, return receipt requested, addressed in your case to you at your last address of record with the Company, or at such other place as you may from time to time designate in writing, and, in the case of the Company, to the Company at its principal office, or
at such other office as the Company may from time to time designate in writing. The date of actual delivery of any notice under this Section 9 shall be deemed to be the date of receipt thereof.
10. Waiver . No consent to or waiver of any breach or default in the performance of any obligation hereunder shall be deemed or construed to be a consent to or waiver of any other breach or default in the performance of any of the same or any other obligations hereunder. No waiver hereunder shall be effective unless it is in writing and signed by the waiving party.
11. Complete Agreement; Modification . This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof, and supersedes any previous oral or written communications, negotiations, representations, understandings, or agreements between them. Any modification of this Agreement shall be effective only if set forth in a written document signed by you and a duly authorized officer of the Company.
12. Headings . The headings of the Sections hereof are inserted for convenience only and shall not be deemed to constitute a part, or affect the meaning, of this Agreement.
13. Counterparts . This Agreement may be signed in two (2) counterparts, each of which shall be deemed an original and both of which shall together constitute one agreement.
14. Choice of Law; Jurisdiction . This Agreement shall be deemed to have been made in the Commonwealth of Massachusetts, and the validity, interpretation and performance of this Agreement shall be governed by, and construed in accordance with, the laws of Massachusetts, without regard to conflict of law principles. You hereby consent and submit without limitation to the jurisdiction of courts in Massachusetts in connection with any action arising out of this Agreement, and waive any right to object to any such forum as inconvenient or to object to venue in Massachusetts. You agree that, in any action arising out of this Agreement, you will accept service of process by registered mail or the equivalent directed to your last known address or by such other means permitted by such court.
15. Advice of Counsel; No Representations . You acknowledge that you have been advised to review this Agreement with your own legal counsel, that prior to entering into this Agreement, you have had the opportunity to review this Agreement with your attorney, and that the Company has not made any representations, warranties, promises or inducements to you concerning the terms, enforceability or implications of this Agreement other than as are contained in this Agreement.
16. I.R.C. § 409A . Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement that constitute deferred compensation within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, the Section 409A) shall not commence in connection with your termination of employment unless and until you have also
incurred a separation from service (as such term is defined in Treasury Regulation Section 1.409A-1(h) (the Separation From Service), unless the Company reasonably determines that such amounts may be provided to you without causing you to incur the additional 20% tax under Section 409A.
It is intended that each installment of severance pay provided for in this Agreement is a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that severance payments set forth in this Agreement satisfy, to the greatest extent possible, the exceptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5), and 1.409A-1(b)(9).
If the Company (or, if applicable, the successor entity thereto) determines that any payments or benefits constitute deferred compensation under Section 409A and you are, on the termination of service, a specified employee of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments and benefits shall be delayed until the earlier to occur of: (a) the date that is six months and one day after your Separation From Service, or (b) the date of your death (such applicable date, the Specified Employee Initial Payment Date). On the Specified Employee Initial Payment Date, the Company (or the successor entity thereto, as applicable) shall (i) pay to you a lump sum amount equal to the sum of the payments and benefits that you would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of such amounts had not been so delayed pursuant to this Section and (ii) commence paying the balance of the payments and benefits in accordance with the applicable payment schedules set forth in this Agreement.
17. Survival . Provisions of this Agreement which by their terms must survive the termination of this Agreement in order to effectuate the intent of the parties will survive any such termination, whether by expiration of the Term, termination of your employment, or otherwise, for such period as may be appropriate under the circumstances. Such provisions include, without limitation, Sections 5 and 6 of this Agreement.
18. Excise Tax-Related Provisions . If any payment or benefit you would receive pursuant to this Agreement or any other agreement (Payment) would (a) constitute a parachute payment within the meaning of Section 280G of the Code, and (b) be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then such Payment shall be adjusted so that it would equal the Reduced Amount. The Reduced Amount shall be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting parachute payments is necessary so that the Payment equals the Reduced Amount, any such reduction will occur in a manner necessary to provide you with the greatest post-reduction economic benefit after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate). If more than one manner of reduction of Payments necessary to arrive at the Reduced Amount yields the greatest economic
benefit to you, the Payments will be reduced pro rata (the Pro Rata Reduction Method). Notwithstanding the foregoing, if the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A of the Code, then the Pro Rata Reduction Method shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events ( e.g. , being terminated without Cause), shall be eliminated before Payments that are not contingent on future events; and (C) as a third priority, Payments that are deferred compensation within the meaning of Section 409A of the Code shall be reduced before Payments that are not deferred compensation within the meaning of Section 409A of the Code.
19. Legal Expenses . The Company hereby agrees to reimburse you for your legal expenses in connection with the negotiation and execution of this Agreement; provided, however , that in no event shall the amount reimbursed under this Section 19 exceed $10,000. You shall submit the invoice for such legal services for reimbursement within 30 days of the Effective Date and the Company shall reimburse you within 30 days after your submission of such invoice. Other than as provided in the preceding sentence, each party shall bear its own expenses in connection with the negotiation and execution of this Agreement.
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IN WITNESS WHEREOF , the Company and you have executed this Agreement as of the day and year first set forth above. |
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AMAG Pharmaceuticals, Inc. |
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By: |
/s/ Michael Narachi |
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Name: Michael Narachi |
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Title: Chairman of the Board |
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/s/ William K. Heiden |
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William K. Heiden |
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Exhibit 10.2
AMAG PHARMACEUTICALS, INC.
Restricted Stock Unit Agreement
(Non-Plan Inducement Grant)
AMAG Pharmaceuticals, Inc. (the Company ) hereby enters into this Restricted Stock Unit Agreement, dated as of the date set forth below, with the Recipient named herein (the Agreement ) and grants to the Recipient the Restricted Stock Units ( RSUs ) specified herein as an inducement grant pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules.
For the avoidance of doubt, this grant is not issued under the Companys Second Amended and Restated 2007 Equity Incentive Plan, as amended from time to time (the 2007 Plan ) and does not reduce the share reserve under the 2007 Plan. However, for purposes of interpreting the applicable provisions of the grant made pursuant to this Agreement, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this grant as if such grant had actually been issued under the 2007 Plan.
Name of recipient (the Recipient ): |
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William K. Heiden |
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Date of this RSU grant ( Grant Date ): |
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[Date] |
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Number of shares of the Companys Common Stock (the Underlying Shares ) underlying the equivalent number of restricted stock units (the RSUs ) granted pursuant to this Agreement: |
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100,000 |
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Number of RSUs that are vested on the Grant Date: |
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- 0 - |
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Number of RSUs that are unvested on the Grant Date: |
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100,000 |
Vesting Schedule:
25% of the RSUs shall vest on the first anniversary of the Grant Date, 25% of the RSUs shall vest on the second anniversary of the Grant Date, 25% of the RSUs shall vest on the third anniversary of the Grant Date, and the remaining 25% of the RSUs shall vest on the fourth anniversary of the Grant Date.
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AMAG PHARMACEUTICALS, INC. |
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Signature of Recipient |
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William K. Heiden |
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By: |
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Title: |
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AMAG PHARMACEUTICALS, INC.
Restricted Stock Unit Agreement Inducement Grant - Terms and Conditions
AMAG Pharmaceuticals, Inc. (the Company ) agrees to award to the recipient specified on the cover page hereof (the Recipient ), and the Recipient agrees to accept from the Company, the number of restricted stock units (the RSUs ) specified on the cover page hereof representing an equivalent number of shares of the Companys Common Stock (the Underlying Shares ), on the following terms:
1. Inducement Grant Not Under 2007 Plan . This Restricted Stock Unit Agreement (the Agreement ) is made as an inducement grant pursuant Rule 5635(c)(4) of the NASDAQ Listing Rules. For the avoidance of doubt, the grant made pursuant to this Agreement is not issued under the Companys Second Amended and Restated 2007 Equity Incentive Plan, as amended from time to time (the 2007 Plan ) and does not reduce the share reserve under the 2007 Plan. However, for purposes of interpreting the applicable provisions of the grant made pursuant to this Agreement, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this grant as if such grant had actually been issued under the 2007 Plan. Unless the context otherwise requires or except as defined herein, capitalized terms used herein shall have the same meanings as in the 2007 Plan.
2. Vesting if Business Relationship Continues .
(a) Vesting Schedule .
(1) If the Recipient has maintained continuously a Business Relationship with the Company through each date specified on the cover page hereof, a portion of the RSUs shall vest on such date in such amounts as are set forth opposite such date on the cover page hereof. Unless otherwise provided in the Employment Agreement, if the Recipients Business Relationship with the Company is terminated by the Company or by the Recipient for any reason, whether voluntarily or involuntarily, no additional RSUs shall become vested RSUs under any circumstances with respect to the Recipient and any unvested RSUs shall be forfeited.
(2) Notwithstanding Section 2(a)(1), under certain circumstances set forth in the Employment Agreement and subject to compliance by the Recipient with the requirements of the Employment Agreement related to such circumstances, the vesting of unvested RSUs may be accelerated as provided in the Employment Agreement. Notwithstanding anything to the contrary herein, if the RSUs constitute deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the Code ), and the regulations and other guidance thereunder and any state law of similar effect (collectively, Section 409A ), and the sixty (60) day period in
which the Recipient must execute the release required under the Employment Agreement begins in one calendar year and ends in another, the Underlying Shares shall be issued in the later calendar year.
(3) Any determination under this Agreement as to Business Relationship status or other matters referred to above shall be made in good faith by the Board, whose decision shall be final and binding on all parties.
Business Relationship means service to the Company or its successor in the capacity of an employee, officer, director, consultant, or advisor.
Employment Agreement shall mean the Employment Agreement, dated as of May 6, 2012, as amended from time to time, by and between the Company and the Recipient.
(b) Termination of Business Relationship . For purposes hereof, a Business Relationship shall not be considered as having terminated during any military leave, sick leave, or other leave of absence if approved in writing by the Company and if such written approval, or applicable law, contractually obligates the Company to continue the Business Relationship of the Recipient after the approved period of absence (an Approved Leave of Absence ). In the event of an Approved Leave of Absence, vesting of RSUs shall be suspended (and all subsequent vesting dates shall be postponed by the length of the period of the Approved Leave of Absence) unless otherwise provided in the Companys written approval of the leave of absence that specifically refers to this Agreement. For purposes hereof, a Business Relationship shall include a consulting arrangement between the Recipient and the Company that immediately follows termination of employment, but only if so stated in a written consulting agreement executed by the Company that specifically refers to this Agreement.
(c) Acceleration . The Board may at any time provide that the RSUs awarded pursuant to this Agreement shall become immediately exercisable in full or in part, shall be free of some or all restrictions, or otherwise realizable in full or in part, as the case may be, despite the fact that the foregoing actions may cause the application of Sections 280G and 4999 of the Code if a change in control of the Company occurs.
3. Issuance of Underlying Shares . With respect to any RSUs that become vested RSUs pursuant to Section 2, subject to Sections 5, 6 and 8, the Company shall issue to the Recipient, as soon as practicable following the applicable vesting date (as specified on the cover page hereof with respect to any RSUs that become vested pursuant to Section 2(a)(1) and as specified in Section 2(a)(2) with respect to any RSUs that become vested pursuant to Section 2(a)(2), if applicable), the number of Underlying Shares equal to the number of RSUs vesting on such vesting date, provided that, if the vesting date of any portion of the RSUs shall occur during either a regularly scheduled or special blackout period of the Company wherein Recipient is precluded from selling shares of the Companys Common Stock, the receipt of the corresponding Underlying Shares issuable with respect to such vesting date pursuant to this Agreement shall be deferred until after the expiration of such blackout period, unless such Underlying Shares are
covered by a previously established Company-approved 10b5-1 plan of the Recipient, in which case the Underlying Shares shall be issued in accordance with the terms of such 10b5-1 plan. The Underlying Shares the receipt of which was deferred as provided above shall be issued to Recipient as soon as practicable after the expiration of the blackout period. Notwithstanding the above, subject to Section 8, (i) in no event may the Underlying Shares with respect to any RSUs that become vested pursuant to Section 2(a)(1) be issued to the Recipient later than the later of: (a) December 31st of the calendar year in which vesting occurs, or (b) the fifteenth (15th) day of the third calendar month following such vesting date, and (ii) in no event may the Underlying Shares with respect to any RSUs that become vested pursuant to Section 2(a)(2) be issued to the Recipient later than the 90 th day following the Recipients Separation from Service; provided that the Recipient acknowledges and agrees that if the Underlying Shares are issued to the Recipient pursuant to this sentence while either a regularly scheduled or special blackout period is still in effect with respect to the Company or the Recipient, neither the Company nor the Recipient may sell any shares of the Companys Common Stock to satisfy any Tax Obligations except in compliance with the Companys insider trading policies and requirements and applicable laws. The form of such issuance ( e.g. , a stock certificate or electronic entry evidencing such Underlying Shares) shall be determined by the Company.
4. Restrictions on Transfer . The Recipient shall not sell, assign, transfer, pledge, encumber or dispose of all or any of his or her RSUs. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, the Recipient may designate a third party who, in the event of the Recipients death, shall thereafter be entitled to receive any distributions of Underlying Shares to which the Recipient is entitled at the time of his or her death pursuant to this Agreement.
5. Compliance with Law . The Recipients Award, and the issuance of the Underlying Shares pursuant to the Award, must comply with all applicable laws and regulations governing the Award, and with the applicable regulations of any stock exchange on which the Underlying Shares may be listed for trading at the time of issuance. The Company shall not issue the Underlying Shares to the Recipient if the Company determines that such issuance would not be in material compliance with all applicable laws and regulations (in which case issuance of the Underlying Shares shall occur at the earliest date at which the Company determines that delivery of the Underlying Shares will not cause any such violation or non-compliance).
6. Withholding Taxes . All grants made pursuant to this Agreement shall be subject to withholding of all applicable federal, state, local and foreign income, employment, payroll, social insurance or other taxes resulting from the issuance or vesting of the RSUs or the delivery of the Underlying Shares (the Tax Obligations ). The Recipient agrees to pay to the Company, or otherwise make adequate provisions satisfactory to the Company for the payment of, any sums required to satisfy the Tax Obligations at the time such Tax Obligations arise. The Company may, in its discretion, and the Recipient hereby agrees that and authorizes the Company on its behalf to, withhold, sell, and/or arrange for the sale of such number of Underlying Shares otherwise issuable to the Recipient pursuant to this Agreement as deemed necessary by the Company, in its sole discretion, to ensure that the Tax Obligations can be satisfied, including the right to sell shares having a fair market value greater than the Tax Obligations; provided , however , that for this purpose the Tax Obligations shall be computed
based on the minimum statutory withholding rates for federal, state, local, and foreign income and employment tax purposes; provided , further , however , that if the Company decides to satisfy the Tax Obligations by withholding shares otherwise issuable hereunder (rather than by selling or arranging for the sale of shares on behalf of the Recipient), the Company shall not withhold shares having a fair market value greater than the Tax Obligations. The Recipient further agrees that, if the Company elects not to withhold, sell, or arrange for the sale of the amount of Underlying Shares sufficient to satisfy the full amount of the Tax Obligations, the Company may withhold such shortfall in cash from wages or other remuneration or the Recipient will deliver to the Company, in cash, the amount of such shortfall. The Recipient further agrees that the Recipient shall not sell any of the Underlying Shares during the period of time that the Company is acting on the Recipients behalf to withhold, sell, and/or arrange for the sale of the number of Underlying Shares necessary to satisfy the Recipients Tax Obligations. Notwithstanding the preceding sentences, the Recipient may, by written notice to the Company at least ten business days before the applicable vesting date specified on the cover page hereof, elect to pay in cash the applicable Tax Obligations, or make other appropriate provisions acceptable to the Company for the payment of the applicable Tax Obligations, including the withholding from any payroll or other amounts due to the Recipient. The Company may refuse to issue the Underlying Shares if the Recipient fails to comply with his or her obligations in connection with the Tax Obligations as described in this Section.
Recipient further agrees to take any further actions and execute any additional documents as may be necessary to effectuate the provisions of this Section 6 and the Recipient hereby grants the Company a irrevocable power of attorney to sign such additional documents on the Recipients behalf if the Company is unable after reasonable efforts to obtain Recipients signature on such additional documents. This power of attorney is coupled with an interest and is irrevocable by the Recipient.
7. Provision of Documentation to Recipient . By signing the cover page of this Agreement, the Recipient acknowledges receipt of a copy of this entire Agreement, a copy of the 2007 Plan, and a copy of the 2007 Plans related prospectus.
8. Section 409A of the Internal Revenue Code . The RSUs granted hereunder are intended to avoid the potential adverse tax consequences to the Recipient of Section 409A, and the Board may make such modifications to this Agreement as it deems necessary or advisable to avoid such adverse tax consequences. If the RSUs constitute deferred compensation subject to Section 409A, any issuance of Underlying Shares under this Agreement because of a termination of the Business Relationship (i) will only occur if such termination is also a separation from service (as such term is defined in Treasury Regulation Section 1.409A-1(h)) under Section 409A (Separation from Service), and (ii) will be delayed until the earlier of (a) the date that is six months and one day after the Recipients Separation from Service or (b) the date of the Recipients death if the Recipient is, upon such Separation from Service, a specified employee of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code.
9. Rights as Stockholder . The Recipient shall have no voting or any other rights as a stockholder of the Company with respect to any RSUs covered by this Agreement until the issuance of the Underlying Shares.
10. Miscellaneous .
(a) Notices . All notices hereunder shall be in writing and shall be deemed given when sent by certified or registered mail, postage prepaid, return receipt requested, if to the Recipient, to the address set forth on the cover page hereof or at the address shown on the records of the Company, and if to the Company, to the Companys principal executive offices, attention of the Corporate Secretary.
(b) Entire Agreement; Modification . This Agreement constitutes the entire agreement between the parties relative to the subject matter hereof, and supersedes all proposals, written or oral, and all other communications between the parties relating to the subject matter of this Agreement. This Agreement may be modified, amended or rescinded only by a written agreement executed by both parties signatories to this Agreement. In the event of a conflict between the terms of this Agreement and the Plan, the terms of this Agreement shall control.
(c) Fractional RSUs or Underlying Shares . All fractional RSUs or Underlying Shares resulting from the adjustment provisions contained in the 2007 Plan shall be rounded down to the nearest whole unit or share.
(d) Severability . The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision.
(e) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, subject to the limitations set forth herein.
(f) Governing Law . This Agreement shall be governed by and interpreted in accordance with the laws of Delaware without giving effect to the principles of the conflicts of laws thereof.
(g) No Obligation to Continue Business Relationship . Neither the 2007 Plan, nor this Agreement, nor any provision hereof imposes any obligation on the Company to continue a Business Relationship with the Recipient.
(h) For purposes of Sections 2, 6 and 10(g), the Company shall mean the Company as defined in Section 9(a) of the 2007 Plan.
Exhibit 10.3
Non-Statutory Stock Option Grant
(Non-Plan Inducement Grant)
1. Grant of Option
AMAG Pharmaceuticals, Inc., a Delaware corporation (the Company), hereby grants to William K. Heiden (the Recipient), an option to purchase 300,000 shares of Common Stock, $.01 par value per share, of the Company as hereinafter set forth (the Option), as an inducement grant made pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules. The date of grant of this Option is [Date] .
For the avoidance of doubt, this Option is not issued under the Companys Second Amended and Restated 2007 Equity Incentive Plan, as amended from time to time (the 2007 Plan) and does not reduce the share reserve under the 2007 Plan. However, for purposes of interpreting the applicable provisions of this Option, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this Option as if such Option had actually been issued under the 2007 Plan. All terms which are defined in the 2007 Plan shall have the same meanings herein.
2. Vesting of Option
This Option shall be exercisable in cumulative monthly installments on each of the following dates, as follows:
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On date of grant |
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300,000 |
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No additional shares shall vest and become exercisable between each of the vesting dates set forth above.
3. Term of Option
Unless terminated earlier as provided in Section 6 below, this Option shall terminate in ten (10) years on [Date] .
Inducement Grant Stock Option Agreement |
Confidential Document |
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100 Hayden Avenue, Lexington, MA 02421 Tel: (617) 498-3300 Fax: (617) 499-3362 |
4. Exercise Price
The exercise price of this Option shall be $ [Price] per share.
5. Exercise and Payment
(a) Method of Payment . This Option shall be exercisable by delivery to the Company of written notice of exercise, specifying the number of shares for which this Option is being exercised (subject to Section 2 hereof), together with (i) payment to the Company for the total exercise price thereof in cash, by check, (ii) subject to the Companys approval, by Common Stock of the Company already owned by the Recipient, (iii) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, (iv) delivery by the Recipient to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price, or (v) by some combination thereof; provided that methods (iii) and (iv) shall only be permissible if the Companys Common Stock is listed on the Nasdaq Global Select Market or other national securities exchange at such time.
(b) Valuation of Shares Tendered in Payment of Purchase Price . For the purposes hereof, the fair market value of any share of the Companys Common Stock which may be delivered to the Company in exercise of this Option shall be determined in good faith by the Board of Directors of the Company, or, in the absence of such determination, shall be equal to the closing price of a share of the Companys Common Stock as reported on the Nasdaq Global Select Market (or other national securities exchange or automated marketplace upon which the Companys Common Stock is then traded) on the date of exercise of this Option.
(c) Delivery of Shares Tendered in Payment of Purchase Price . If the Company permits the Recipient to exercise Options by delivery of shares of Common Stock of the Company, the certificate or certificates representing the shares of Common Stock of the Company to be delivered shall be duly executed in blank by the Recipient or shall be accompanied by a stock power duly executed in blank suitable for purposes of transferring such shares to the Company. Fractional shares of Common Stock of the Company will not be accepted in payment of the purchase price of shares acquired upon exercise of this Option.
6. Effect of Termination of Employment, Board Membership, or Service Provision or Death
This Option shall not be assignable or transferable either voluntarily or by operation of law, except as set forth in this Section 6. Notwithstanding the foregoing, an Option may be transferred pursuant to a domestic relations order. Further, notwithstanding the foregoing, the Recipient may, by delivering written notice to the
Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the Recipient, shall thereafter be the beneficiary of an Option with the right to exercise the Option and receive the Common Stock or other consideration resulting from an Option exercise.
In the event the Recipient during his or her lifetime ceases to be an employee, member of the Board of Directors, or other service provider of the Company or of any subsidiary for any reason, other than death or disability, any unexercised portion of this Option which was otherwise exercisable on the date of termination of Recipients employment, Board membership or other service, as the case may be, shall expire unless exercised within three months of that date, but in no event after the expiration of the term hereof.
In the event of termination of employment, Board membership, or service in any other capacity because of the death or disability of the Recipient (i) while an employee, Board member, or service provider of the Company or any subsidiary, or (ii) during the three-month period following termination of his or her employment, status as a director, or status as a service provider for any reason other than death or disability, this Option shall be exercisable for the number of shares otherwise exercisable on the date of death, disability or termination, by the Recipient or his or her personal representatives, heirs or legatees, as the case may be, at any time prior to the expiration of one year from the date of the death or disability of the Recipient, but in no event after the expiration of the term hereof.
Notwithstanding the foregoing, if the Recipient, prior to the termination date of this Option, (i) violates any provision of any employment agreement or any confidentiality or other agreement between the Recipient and the Company, (ii) commits any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof, (iii) attempts to commit, or participate in, a fraud or act of dishonesty against the Company, or (iv) commits gross misconduct, the right to exercise this Option shall terminate immediately upon written notice to the Recipient from the Company describing such violation or act.
7. Employment, Board Membership or Service
Nothing contained in this Option shall be construed as giving the Recipient any right to be retained in the employ, board membership, or service of the Company or any of its subsidiaries.
8. Withholding Taxes
The Recipient acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Recipient any federal, state or local taxes of any kind required by law to be withheld with respect to exercise of this Option.
9. 2007 Plan Provisions
As stated above, this Option is not granted pursuant to the 2007 Plan. Instead, this Option is granted as an inducement grant pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules. However, for purposes of interpreting the applicable provisions of this Option, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this Option as if such Option had actually been issued under the 2007 Plan.
10. Recipient Representation; Stock Certificate Legend
If the Recipient is an affiliate of the Company (as defined in Rule 144 promulgated under the Securities Act of 1933), all stock certificates representing shares of Common Stock issued to such Recipient pursuant to this Option shall have affixed thereto legends substantially in the following form:
The shares represented by this certificate may be deemed to be held by an affiliate as defined by the Securities Act of 1933, as amended (the Act) and may not be sold, transferred or assigned unless such sale is pursuant to an effective registration statement under the Act or an opinion of counsel, satisfactory to the corporation, is obtained to the effect that such sale, transfer or assignment is exempt from the registration requirements of the Act.
11. Notice
Any notice required to be given under the terms of this Option shall be properly addressed as follows: to the Company at its principal executive offices, and to the Recipient at his or her address set forth below, or at such other address as either of such parties may hereafter designate in writing to the other.
12. Non-Qualified Stock Option
It is understood that this Option is not intended to qualify as an incentive stock option as defined in Section 422 of the Internal Revenue Code.
13. Enforceability
This Option shall be binding upon the Recipient, his or her estate, and his or her personal representatives and beneficiaries.
14. Effective Date
The effective date of this Option is [Date] .
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, this Option has been executed by a duly authorized officer of the Company as of the effective date.
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Recipients Acceptance:
The undersigned hereby accepts this Option and agrees to the terms and provisions set forth in this Option and in the 2007 Plan (a copy of which has been delivered to him/her).
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(Signature of Recipient) |
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(Print Name of Recipient) |
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Address: |
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Exhibit 10.4
[AMAG PHARMACEUTICALS, INC. LETTERHEAD]
May 9, 2012
Frank Thomas
[Address]
Re: Retention Bonus
Mr. Thomas:
Reference is made to that certain Employment Agreement, dated as of August 1, 2011, by and between AMAG Pharmaceuticals, Inc. (the Company), which was amended by the Amendment to Employment Agreement dated as of November 3, 2011, and the Second Amendment to Employment Agreement dated as of November 25, 2011 (as amended, the Employment Agreement).
The Company hereby agrees with you that if you remain employed by the Company on September 15, 2012, the Company shall pay you a one time retention bonus equal to $150,000 on the first payroll cycle after September 15, 2012 (the Retention Bonus).
If (i) your employment with the Company is terminated by the Company without Cause (as defined in the Employment Agreement) or by you for Good Reason (as defined in the Employment Agreement) prior to September 15, 2012; (ii) you comply fully with all of your obligations under all agreements between the Company and you; and (iii) you execute, deliver to the Company, within 60 days of the termination of your employment, and do not revoke a general release (in a form acceptable to the Company) releasing and waiving any and all claims that you have or may have against the Company, its directors, officers, employees, agents, successors and assigns with respect to your employment (other than any obligation of the Company set forth in the Employment Agreement which specifically survives the termination of your employment), then the Company shall pay you a prorated portion of the Retention Bonus in one lump sum payment occurring on the first regular Company payroll date occurring after the release referred to above may no longer be revoked. The prorated portion of the Retention Bonus shall equal (a) $150,000 mulitplied by (b) the fraction obtained by dividing (i) the number of days from the date of this letter agreement until and including the date of your termination of employment by (ii) the number of days from the date of this letter agreement until and including September 15, 2012. Any payment pursuant to this paragraph shall be subject to Section 16 of the Employment Agreement as if such section were incorporated herein by reference. For the avoidance doubt, any payment pursuant to this paragraph shall be separate and apart from any payments which may be payable to you pursuant to Section 5 of the Employment Agreement.
Nothing contained in this letter agreement shall impact your annual performance bonus eligibility under the terms of the Employment Agreement.
This letter agreement shall be deemed to be a contract made under the laws of the Commonwealth of Massachusetts, and the validity, interpretation and performance of this letter agreement shall be governed by, and construed in accordance with, the laws of Massachusetts, without regard to conflict of law principles.
This letter agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
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AMAG PHARMACEUTICALS, INC. |
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/s/ Joseph L. Farmer |
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Joseph L. Farmer |
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General Counsel/Chief Administrative Officer |
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Agreed and Acknowledged: |
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/s/ Frank Thomas |
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Frank Thomas |
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Exhibit 10.5
STOCKHOLDER AGREEMENT
This Agreement (this Agreement) is entered into effective as of May 9, 2012 by and between Adage Capital Management, L.P. (Adage) and AMAG Pharmaceuticals, Inc., a Delaware corporation (the Company). Capitalized terms not defined herein will have the meaning given in the Rights Agreement between the Company and American Stock Transfer & Trust Company, as Rights Agent, dated as of September 4, 2009 (the Rights Agreement).
A. As of the date of this Agreement, Adage had Beneficial Ownership in the aggregate, of 4,135,330 shares of the Companys Common Stock, $0.01 par value per share (the Common Stock) or 19.36% of the Companys outstanding Common Stock.
B. Adage has indicated to the Company that it desires to purchase additional shares of the Common Stock that would cause Adages Beneficial Ownership to exceed 20% of the issued and outstanding shares of the Common Stock.
C. Pursuant to Section 1(a) of the Rights Agreement, a Person who becomes the Beneficial Owner of 20% or more of the issued and outstanding Common Stock is an Acquiring Person for purposes of the Rights Agreement.
D. The Company has determined that purchases of a limited number of additional shares of Common Stock by Adage pursuant to the terms of this Agreement would not be inconsistent with the purpose and intent of the Board of Directors in adopting the Rights Agreement.
Accordingly, in consideration of the foregoing premises and the mutual covenants, representations and warranties contained in this Agreement, Adage and the Company agree as follows:
1. Representations and Warranties of Adage . Adage represents and warrants to, and agree with, the Company as follows:
(a) As of the date hereof, Adage is the Beneficial Owner of an aggregate of 4,135,330 shares of the Common Stock consisting of approximately 19.36% of the issued and outstanding shares of the Common Stock (the Original Shares).
(b) As of the date hereof, Adages Beneficial Ownership of the Common Stock does not exceed 20% of the issued and outstanding Common Stock.
(c) Adage is familiar with the terms of the Rights Agreement.
(d) The Original Shares were originally acquired (i) in the ordinary course of business solely for investment purposes, (ii) not for the purpose of, and do not have the effect of, changing or influencing the control of the Company and (iii) not in connection with or as a participant in any transaction having such purposes or effect, and subsequent to such acquisition, Adage filed a Schedule 13D indicating a possible change in its status as a passive investor.
(e) No Person other than Adage is a Beneficial Owner of any of the Original Shares.
(f) Any additional shares of the Common Stock purchased by Adage or their Affiliates after the date hereof (the Additional Shares, and together with the Original Shares, the Adage Shares) will be acquired (i) in the ordinary course of business solely for investment purposes, (ii) not for the purpose of, or with the effect of, changing or influencing the control of the Company and (iii) not in connection with or as a participant in any transaction having such purpose or effect.
(g) The Company has not induced, and is not inducing, Adage or its Affiliates to purchase any additional shares of the Common Stock and has not made and is not making any representation to Adage as to the value of the Common Stock, the suitability of the Common Stock for investment by Adage, or the past or future results of the Companys business and operations.
2. Voting of Shares .
(a) To the extent and for so long as Adage is or becomes the Beneficial Owner of 20% or more of the issued and outstanding Common Stock, Adage shall cause any shares in excess of 20% of the issued and outstanding Common Stock (the Excess Shares) to be voted in the manner in which the Board of Directors has recommended to the stockholders generally in any proxy or consent solicitation to the stockholders of the Company.
(b) To secure Adages obligations to vote the Excess Shares in accordance with Section 2(a) above during the term of this Agreement, Adage hereby irrevocably (to the fullest extent permitted by law) appoints the Chairman of the Board of Directors and the Chief Executive Officer of the Company, or either of them from time to time, or their designees, as Adages true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote all of such Excess Shares in accordance with Section 2(a) above and to execute all appropriate instruments consistent with Section 2(a) above on behalf of Adage if, and only if, Adage fails to vote all of the Excess Shares in accordance with Section 2(a) above. The proxy and power granted by Adage pursuant to this Section are coupled with an interest and are given to secure the performance of its duties under this Agreement. Each such proxy and power will be irrevocable until the termination of this Agreement. The proxy and power, so long as any party hereto is an individual, will survive the death, incompetency and disability of such party, and, so long as any party hereto is an entity, will survive the merger or reorganization of such party or any other entity holding any Excess Shares. The proxy and power shall be binding upon the successors and assigns of Adage (including any transferee of any of the Excess Shares, so long as they remain Excess Shares pursuant to the terms of this Agreement). Adage shall, at its own expense, perform such further acts and execute such further proxies and other documents and instruments as may reasonably be required to vest in the Company the power to carry out and give effect to the provisions of this Section 2.
3. Sale of Shares . In the event that Adage proposes to sell in a bona fide transaction any Excess Shares of the Common Stock (other than a sale in a brokers transaction or in a transaction directly with a market maker, in either case as defined in and in a manner of sale consistent with paragraphs (f) and (g) of Rule 144 promulgated under the Securities Act of 1933,
as amended), then Adage shall provide to the Company not less than ten (10) days prior written notice of such proposed transaction, specifying the number of shares of the Common Stock proposed to be sold, the price at which such shares are to be sold and the proposed purchaser of such shares, and shall only complete such sale with the prior written consent of the Company (the Consent), such Consent to be provided or withheld at the Companys sole discretion and without regard to the economic consequences of providing or withholding such Consent. Notwithstanding the foregoing, and for the avoidance of doubt, sales effected through a broker-dealer where Adage does not know the purchaser of the shares or has not negotiated with the purchaser or any representative of the purchaser shall not be restricted by this Section 3.
4. Standstill . Adage agrees that it shall not and it shall cause its Affiliates not to, directly or indirectly:
(a) make, effect, initiate, cause or participate in (i) any acquisition of Beneficial Ownership of the Common Stock resulting in an increase in its aggregate Beneficial Ownership of the Common Stock to a number of shares representing 25% or more of the outstanding shares of the Common Stock at any time without the prior written consent of the Company, (ii) any acquisition of any assets of the Company or any assets of any subsidiary or other Affiliate of the Company, (iii) any tender offer, exchange offer, merger, business combination, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction involving the Company or any subsidiary or other Affiliate of the Company, or involving any securities or assets of the Company or any securities or assets of any subsidiary or other Affiliate of the Company, other than (x) any tender of shares of the Common Stock in an issuer tender offer under the Securities Exchange Act of 1934, as amended (the Exchange Act) or a third party tender offer under the Exchange Act that is recommended by a majority of the current directors of the Company (the Current Directors), directors appointed or elected upon the recommendation of the current directors (Subsequent Directors) and directors appointed or elected upon the recommendation of the Current Directors and Subsequent Directors (collectively, the Incumbent Board) or (y) any merger, business combination, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction not proposed or initiated, directly or indirectly, by Adage that is recommended by a majority of the Incumbent Board, or (iv) any solicitation of proxies or stockholder consents (as such terms are defined under Regulation 14A of the Exchange Act) with respect to any securities of the Company or any of its subsidiaries;
(b) form, join or in any way participate in a group (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any securities of the Company or any of its subsidiaries;
(c) whether alone or together with third parties, seek or vote to remove any Board members, unless such actions have been recommended in writing by the Incumbent Board;
(d) initiate or propose one or more stockholders proposals, as described in Rule 14a-8 under the Exchange Act, with respect to the Company;
(e) take any action that might require the Company to make a public announcement regarding any of the types of matters set forth in clause (a), (c) or (d) of this sentence;
(f) agree or offer to take, or encourage or propose (publicly or otherwise) the taking of, any action referred to in clause (a), (b), (c) (d) or (e) of this sentence;
(g) assist, induce or encourage any other Person to take any action of the type referred to in clause (a), (b), (c) (d), (e), or (f) of this sentence; or
(h) enter into any discussions, negotiations, arrangement or agreement with any other Person relating to any of the foregoing.
Nothing in Section 4(a), shall restrict Adage from tendering or, subject to Section 2, voting its shares of Common Stock as a passive participant in any such transaction.
5. Amendment to Rights Agreement . Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Adage contained in this Agreement, the Company agrees to amend the definition of Acquiring Person in the Rights Agreement to provide that the percentage Beneficial Ownership of the outstanding Common Stock used to determine whether a Person constitutes an Acquiring Person will be 25% or more in the case of Adage. As soon as reasonably practicable following the effective date of this Agreement, appropriate officers of the Company will execute an amendment to the Rights Agreement in substantially the form attached hereto as Exhibit A (the Amendment), instruct the Rights Agent to execute the Amendment and notify Adage when the Amendment has been fully executed.
6. Certain Statutory Matters . Adage understands and agrees that the provisions of Section 203 of the Delaware General Corporation Law, as amended, will continue to apply to Adage and that execution and delivery of this Agreement and the Amendment on behalf of the Company do not constitute approval of any acquisition of shares of the Common Stock by Adage, or any other transaction, for the purposes of such Section 203 and do not result in Adage not being, collectively or individually, an interested stockholder or associate as defined therein.
7. Entire Agreement and Amendment . This Agreement contains the entire agreement among the parties with respect to the subject matter of this Agreement. All prior and contemporaneous agreements, discussions or understandings, whether oral or written, are expressly superseded by this Agreement and are null and void. This Agreement may not be modified, waived, discharged or amended, in whole or in part, except in writing signed by the parties.
8. Termination and Effect Thereof .
(a) This Agreement will terminate automatically on the earlier of (1) the date on which, after Adage has become the Beneficial Owner of 20% or more of the Companys outstanding shares of Common Stock, Adage becomes the Beneficially Owner of less than 20% of the outstanding shares of the Common Stock on any day as of the close of trading on the principal stock exchange on which the Common Stock is then listed and (2) one hundred twenty (120) days following the date of this Agreement provided that Adage has not and did not become the Beneficial Owner of 20% or more of the Companys outstanding shares of Common Stock at any time since the date of this Agreement.
(b) If Adage breaches its covenants, representations or agreements in this Agreement, the Company will have the right to terminate this Agreement; provided, however, that Section 4 hereof shall survive any such termination for as long as Adage beneficially owns 20% or more of the outstanding shares of the Common Stock and that any such termination will not prejudice any claim that the Company may have with respect to any breach of any representation, warranty or covenant hereunder occurring prior to such termination.
9. No Third Party Beneficiaries . This Agreement is solely for the benefit of the parties hereto and is not intended to confer upon any other person any rights or remedies hereunder.
10. Governing Law and Venue . This Agreement and the legal relations among the parties hereto will be governed by, construed and enforced according to the internal laws of the State of Delaware (without regard to the laws of conflict of any jurisdiction) as to all matters, including, without limitation, matters of validity, interpretation, construction, effect, performance and remedies. The parties to this Agreement hereby consent to the personal jurisdiction of the state and federal courts located in the State of Delaware in connection with any controversy related to this Agreement.
11. Injunctive Relief . Adage acknowledges that its failure to abide by the terms of this Agreement would cause the Company irreparable harm and that any material breach or threatened material breach of this Agreement by Adage will entitle the Company to seek injunctive relief and reasonable attorneys fees, in addition to any other legal remedies available to it, in any court of competent jurisdiction without the obligation to prove damages or post any bond.
12. Counterparts; Facsimile . This Agreement may be executed in one or more counterparts, and each such counterpart will be deemed an original, but all such counterparts together will constitute one and the same instrument. Facsimile signatures shall be treated the same as originals.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
The parties have caused this Agreement to be duly executed as of the day and year first above written.
ADAGE CAPITAL MANAGEMENT, L.P. |
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AMAG PHARMACEUTICALS, INC. |
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Dan Lehan |
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Frank Thomas |
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Dan Lehan |
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Frank Thomas |
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Its: Chief Operating Officer |
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Its: Interim Chief Executive Officer, Chief Operating Officer |
EXHIBIT A
AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT TO RIGHTS AGREEMENT
This Amendment dated as of May , 2012 (this Amendment ) to the Rights Agreement, dated as of September 4, 2009 (the Rights Agreement ), is entered into between AMAG PHARMACEUTICALS, INC. , a Delaware corporation (the Company ), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC , as Rights Agent (the Rights Agent ). Capitalized terms used herein and not defined shall have the meanings specified in the Rights Agreement.
WHEREAS , the Company and the Rights Agent are parties to the Rights Agreement;
WHEREAS , the Company is entering into a Stockholder Agreement, dated as of May 9, 2012, with Adage Capital Management, L.P. ( Adage ), pursuant to which, among other things, the shares of the Companys Common Stock, $0.01 par value per share (the Common Stock ) held by Adage shall be subject to certain restrictions;
WHEREAS , Adage has indicated to the Company that it desires to purchase additional shares of Common Stock on behalf of its clients and itself that would cause Adages Beneficial Ownership to exceed 20% of the issued and outstanding shares of the Common Stock;
WHEREAS , Section 27 of the Rights Agreement permits the Company to amend the Rights Agreement on the terms set forth in this Amendment;
WHEREAS , the Board of Directors of the Company (the Board ) has determined that one or more purchases of additional shares of Common Stock by Adage as provided herein would not be inconsistent with the purpose and intent of the Board in adopting the Rights Agreement;
WHEREAS , the Board has determined that it is in the best interests of the Company and its stockholders to modify the terms of the Rights Agreement as set forth herein, and in connection therewith the Company is entering into this Amendment and directing the Rights Agent to enter into this Amendment.
NOW, THEREFORE , in consideration of the promises and mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Company and the Rights Agent hereby agree as follows:
1. Amendment to the Rights Agreement .
(a) Section 1(a) of the Rights Agreement is hereby amended by inserting the following new paragraph immediately after the existing paragraph in such Section 1(a):
Notwithstanding the foregoing, Adage Capital Management, L.P. ( Adage ), shall not be deemed to be an Acquiring Person for purposes of this Agreement unless and until Adage, together with all Affiliates and Associates thereof, is the Beneficial Owner of 25% or more of the Common Shares then outstanding; provided, however , that Adage
shall also not become an Acquiring Person as the result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by Adage to 25% or more of the Common Shares then outstanding; and provided further, that if Adage shall become the Beneficial Owner of 25% or more of the Common Shares then outstanding by reason of share purchases by the Company and shall, following written notice from, or public disclosure by the Company of such share purchases by the Company, become the Beneficial Owner of any additional Common Shares without the prior consent of the Company and shall then beneficially own more than 25% of the Common Shares then outstanding, then Adage shall be deemed to be an Acquiring Person. The provisions of this paragraph shall terminate and be of no further force and effect upon the earlier of (a) the termination of the Stockholder Agreement dated May 9, 2012 by and among Adage and the Company and (b) Adage reducing its Beneficial Ownership below 20% of the Common Shares then outstanding after it increases its Beneficial Ownership to 20% or more of the Common Shares then outstanding.
2. Miscellaneous .
(a) Except as expressly set forth herein, the Rights Agreement shall not by implication or otherwise be supplemented or amended by virtue of this Amendment, but shall remain in full force and effect, as amended hereby. This Amendment shall be construed in accordance with and as a part of the Rights Agreement, and all terms, conditions, representations, warranties, covenants and agreements set forth in the Rights Agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed. To the extent that there is a conflict between the terms and provisions of the Rights Agreement and this Amendment, the terms and provisions of this Amendment shall govern for purposes of the subject matter of this Amendment only.
(b) If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
(c) This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.
(d) This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
(e) This Amendment shall be deemed effective as of the date first written above, as if executed on such date.